EXHIBIT 10.20


 


[Execution Copy]


 


 


ASSET
PURCHASE AGREEMENT


 


BETWEEN


 


LAROSE
TRUCK PLAZA & CASINO, L.L.C.,


 


MIDWAY RECREATION, L.L.C.


 


JOE F. PENN, JR.


 


MELISSA PENN


 


AND


 


GAMECO
HOLDINGS, INC.


 


DATED:  November 2, 2005


 


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STATE OF LOUISIANA


 


PARISH OF
LAFOURCHE


 


ASSET PURCHASE AGREEMENT


 


BE IT KNOWN, that before
the undersigned Notaries Public, and in the presence of the undersigned
competent witnesses, personally came and appeared:


 


LAROSE TRUCK PLAZA &
CASINO, LLC, a
Louisiana limited liability company (“Larose” and sometimes referred to
herein as “Device Owner”), domiciled and having its principal place of business
in the Parish of Lafourche and whose mailing address is declared to be P.O. Box
99, Larose, Louisiana 70373, herein represented by its duly authorized agent
Joe F. Penn, Jr.;


 


MIDWAY RECREATION, L.L.C., a Louisiana limited liability company (“Midway”),
domiciled and having its principal place of business in the Parish of Lafourche
and whose mailing address is declared to be P.O. Box 99, Larose, Louisiana
70373, herein represented by its duly authorized agent Joe F. Penn, Jr.;


 


JOE F. PENN, JR.,
a Louisiana resident, whose mailing address is declared to be 4411 Cherokee
Rose Drive, Zachary, Louisiana 70791;


 


MELISSA PENN, a
Louisiana resident, whose mailing address is declared to be 4411 Cherokee Rose
Drive, Zachary, Louisiana 70791 (Joe F. Penn, Jr. and Melissa Penn are
collectively, “Penn”);


 


(Larose, Midway and Penn
shall collectively be referred to herein as “Sellers” and each individually as “Seller”);


 


and


 


GAMECO HOLDINGS, INC,
a Delaware corporation (the “Purchaser”), domiciled and having a place of
business in the County of New Kent, State of Virginia and whose mailing address
is declared to be 1869 Mills Highway, Breaux Bridge, Louisiana 70517, herein
represented by its duly authorized agent Jeffrey P. Jacobs,


 


each of whom did execute
this Asset Purchase Agreement (“Agreement”), to be effective as of this 2nd day
of November, 2005 (the “Agreement Date”).


 


INTRODUCTION


 


A.                                   Sellers
own the assets of a truck stop located at 1825 Hwy 308, Lockport, Louisiana
70374 (the “Truck Stop”).


 


B.                                     The
Truck Stop, inter alia, provides retail motor and
diesel fuels, convenience store and restaurant operations for sale to or use by
the general public as well as video draw poker devices for play by the general
public.


 


C.                                     Buyer,
for itself and its designees, desires to purchase and Sellers desire to sell
the Truck Stop.


 


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NOW, THEREFORE, in
consideration of the promises, obligations, representations and warranties
contained herein, the receipt and sufficiency of which are hereby acknowledged,
and upon the terms and subject to the conditions hereinafter set forth, the
parties agree as follows:


 


Section 1.                                            Definitions
and Related Matters.


 


1.1                                 Definitions.
For the purposes of this Agreement, the following terms have the meanings set
forth below (such meanings to be applicable to both the singular and plural
forms of the terms defined):


 


“Acquired Assets”
shall mean all assets, accounts receivable arising or accruing after the
Closing Date, privileges, rights, real property, Devices, Intellectual Property
Rights, licenses, interests and claims (whether personal, tangible or
intangible) of every type and description owned by Sellers (subject only to the
leases identified on Schedule 6.9(a) and the Permitted
Encumbrances) and used in the operation of the Business, other than the
Excluded Assets. Acquired Assets, include, but are not limited to, each of the
following:


 


(a)                              fee
simple title (subject to Permitted Encumbrances hereinafter defined) in and to
certain improved real property located at 11825 Hwy 308, Lockport, Louisiana
70374 (the “Real Property”), consisting of approximately                                   
(                  )
acres, more or less, together with all improvements, buildings, structures,
issues, profits and rents, fixtures and all rights pursuant to any leases,
recorded or unrecorded, respecting all or any part of the Real Property;
together with, to the extent legally transferable, all approvals,
authorizations, consents, licenses, permits, privileges, rights, variances and
waivers relating to the Real Property from any Governmental Body having jurisdiction
over the Real Property, if any, including, but not by way of limitation, those
with respect to building, effluent control, environmental protection, fire,
foundation, pollution control, use, utilities and zoning heretofore held by or
granted to Sellers; together with any and all easements, rights and privileges
appurtenant thereto, including all right, title and interest of the Sellers in
and to any land lying in the bed of any street, road or avenue currently
adjoining, lying across or adjacent to or to be opened or proposed in front of
or adjoining the Real Property, and all riparian rights; all of the foregoing
being collectively referred to as the Premises (the “Premises”) and being
further described in Exhibit A;


 


(b)                                 all
machinery, equipment, display cases, refrigerators, coolers, sinks, ovens,
stoves, telephones, cash registers, furniture and other equipment, chattels and
fixtures used in or supporting the Business, including, but not limited to,
those items identified on Schedule 1.1(b);


 


(c)                                  all
inventories of any kind related to or purchased for the operation of the
Business, including, but not limited to, those items identified on Schedule 1.1(c);


 


(d)                                 all
Intellectual Property Rights, subject to the qualifications in Section 6.10,
used in or for the benefit of the Business;


 


(e)                                  accurate,
certified copies of all books and records relating to the Business, including,
without limitation: (i) lists of all known potential or past customers and
suppliers; (ii) records with respect to all equipment, including
warranties and service agreements, inventory and machinery; (iii) any and
all business plans and/or models; (iv) all financial records and reports; (v) all
employee records; and (vi) all other books and records used by Sellers in
the operation of the Business;


 


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(f)                                    all
approvals, authorizations, consents, licenses, permits, registrations,
certificates, privileges, rights, variances and waivers relating to or
necessary for the operation of the Business from any Governmental Body having
jurisdiction over the Business, to the extent the same are transferable;


 


(g)                                 all
fixtures and improvements located on the Premises;


 


(h)                                 all
goodwill of the Business;


 


(i)                                     those
Contracts identified on Schedule 6.9(b), under terms and conditions
contained in Schedule 6.9(b); and


 


(j)                                     the
Listed Devices, together with any and all parts, spare parts, paper readers or
other equipment used therein or in support thereof.


 


“Affiliate” of any
particular Person means any other Person directly or indirectly controlling,
controlled by or under common control with such particular Person. The term “control”
means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of
securities, by contract or otherwise.


 


“Annualized EBITDA”
shall mean the sum of all monthly EBITDA (as defined below) arising from the
operation of the Facility, calculated for the twelve (12) full calendar months
prior to the month in which the Closing shall occur, after making appropriate
adjustments for any non-recurring transactions.


 


 “Assumed Contracts” shall mean the
contracts specifically identified in Schedule 6.9(b).


 


“Business” shall
mean all of the operations and business of the Truck Stop located at 1825 Hwy
308, Lockport, Louisiana 70374, including, but not limited to, its gaming
operations, convenience store, restaurant facility and its motor and diesel
fuel sales.


 


“Business Day”
means any day other than a Saturday, Sunday or public holiday under the laws of
the State of Louisiana or any other day on which banking institutions are
obligated to close in Baton Rouge, Louisiana.


 


“Capital Expenditures”
means all expenditures for any capital or fixed assets or improvements, or for
replacements, substitutions or additions thereto, which have a useful life of
more than one (1) year (including expenditures with respect to Capitalized
Lease Obligations but excluding expenditures which are fully expensed in the
period incurred in accordance with GAAP consistently applied).


 


“Capitalized Lease”
means a lease under which the obligations of the lessee should, in accordance
with GAAP consistently applied, be included in determining total liabilities as
shown on the liability side of a balance sheet of the lessee.


 


“Capitalized Lease
Obligations” means the amount of the liability reflecting the aggregate
discounted amount of future payments under all Capitalized Leases calculated in
accordance with GAAP consistently applied and Statement of Financial Accounting
Standards No. 13.


 


 “Closing” has the meaning set forth in Section 2.2.


 


“Closing Certificate”
has the meaning set forth in Section 7.1(c).


 


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“Closing Date” has
the meaning set forth in Section 2.2.


 


“Closing Reports”
shall mean (i) the “coin-in”,
prize and pay-out sheets generated by the Business; (ii) the fuel sales
reports of the Business; and (iii) the financial reports of the Business
setting forth the income, expenses, assets, liabilities and cashflow of the
Business monthly, from January 1, 2004 through the Closing Date.


 


“Code” means the
Internal Revenue Code of 1986, as amended, and any reference to any particular
Code section shall be interpreted to include any revision of or successor
to that section regardless of how numbered or classified.


 


“Contract” has the
meaning set forth in Section 6.9(a).


 


“Deposit” shall
mean the sum of Fifty Thousand and no/100 Dollars ($50,000.00).


 


 “Devices” shall mean “Video Draw Poker
Devices” as defined in the Video Draw Poker Devices Control Law, Louisiana
Revised Statutes, Title 27:301 et seq.,
as amended from time to time.


 


“EBITDA”
shall mean for any one (1) calendar month period the sum of: (i) net
income, plus (ii) interest expenses, plus (iii) the aggregate amount
of federal, state and local taxes on or measured by income (whether or not
payable during that period), and plus (iv) depreciation and amortization,
all as shall be computed by the Purchaser’s accountants which computation shall
be made strictly in accordance with GAAP, consistently applied, and verified by
an accountant chosen by the Sellers. Notwithstanding the past practices of the
Sellers, when calculating EBITDA hereunder, the parties agree to use the
accrual method of accounting, including, but not limited to, accruing for all
licenses, permits, any gaming licenses and occupational fees, insurance costs,
vacation benefits and real property taxes. In addition, the Purchaser and the
Sellers will mutually agree on the treatment in the calculation of Annualized
EBITDA of those expenses currently being deducted by any of the Sellers but
which the parties agree will not continue after the Closing.


 


 “Environmental and Safety Requirements”
means all federal, state, parish and local statutes, regulations, rules,
ordinances and similar provisions having the force or effect of law, all
licenses, permits, authorizations, approvals, covenants or criteria having the
force or effect of law, all guidelines having the force or effect of law, all
judicial and administrative orders and determinations, all contractual
obligations and all common law and equitable doctrines (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability), in each case concerning public health and
safety, worker health and safety and pollution or protection of the environment
(including, without limitation, all those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous or otherwise regulated materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation), each as amended and as now or
hereafter in effect, including, by way of illustration and not limitation, the
Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651, et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§9601, et seq.,
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901, et seq., the Clean Air Act, 42 U.S.C. §§ 7401, et seq., the Solid Waste Disposal Act, 42 U.S.C. §§ 6901,
et seq., the Clean Water Act, 33 U.S.C.
§§1251, et seq., and the 


 


5

















 


Toxic Substances
Control Act, 15 U.S.C. §§ 2601, et seq., and
any similar or corresponding state, local, municipal and/or parish ordinance,
rule, regulation, law or act, (or any successor legislation thereto).


 


“ERISA” shall mean
the Employee Retirement Income Security Act of 1974 (or any successor
legislation thereto), as amended from time to time and any regulations
promulgated thereunder.


 


“Escrow Agent”
shall mean Lawyer’s Title of Baton Rouge, having an address at 8352 Bluebonnet
Boulevard, Baton Rouge, Louisiana 70810-2825.


 


“Escrow Hold Back”
shall equal Fifty Thousand and no/100 Dollars ($50,000.00).


 


“Establishment License”
shall mean a Type V license to operate Devices at a qualified truck stop
facility as defined in the Video Draw Poker Devices Control Law, Louisiana
Revised Statutes, Title 27:301 et seq.,
and in Chapter 42 of the Louisiana Administrative Code, both as amended from
time to time, for the Premises.


 


“Excluded Assets”
shall mean the following:


 


(a)                                  The
original copies of all books and records of the Sellers and related to the
Truck Stop;


 


(b)                                 Rights
of the Sellers pursuant to or under this Agreement;


 


(c)                                  Any
federal, state or local tax refunds or tax credits of the Sellers;


 


(d)                                 Any
leases, not necessary to or used in the operation of the Business, by Sellers
of any personal property other than the Assumed Contracts;


 


(e)                                  All
notes, bonds, guarantees or other evidence of indebtedness of any Person held
by the Sellers;


 


(f)                                    All
cash, cash equivalents, investments and all deposits of the Sellers, excepting
there from, all cash, cash equivalents, investments and all deposits arising
from or related to the Business on or after the Closing Date which shall be the
property of the Purchaser;


 


(g)                                 Any
and all insurance policies of the Sellers or any of their Affiliates and all
rights to any refunds in connection therewith; provided,
however, the Purchaser shall have no responsibility for any loss of
prepaid premiums or other costs, expenses or charges arising from or associated
with the foregoing;


 


(h)                                 The
license held by the Sellers, or any Affiliates, and necessary for the ownership
of the Devices (commonly referred to as a “Device Owners License”);


 


(i)                                     All
accounts receivable, and all rights, claims or security interests arising out
of or in connection therewith, relating to the Business and arising or existing
at any time prior to the Closing Date (collectively, the “Sellers’ Accounts
Receivable”);


 


(j)                                     All
rights, claims and causes of action relating to any of the property included in
the preceding description of Excluded Assets.


 


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“GAAP” means
United States generally accepted accounting principles as promulgated by the
Financial Accounting Standards Board, as in effect from time to time.


 


“Governmental Body”
means any federal, state, parish, municipal or other governmental or
quasi-governmental agency, department, board, commission, bureau or other like
entity or instrumentality.


 


“Indebtedness”
means at a particular time, any indebtedness in any form, nature or type
whatsoever, including but not limited to: (i) any indebtedness for
borrowed money or issued in substitution for or exchange of indebtedness for
borrowed money; (ii) any indebtedness evidenced by any note, bond,
debenture or other debt instrument; (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise; (iv) any
commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement obligations with respect to
letters of credit); (v) any obligations for which a Person is obligated
pursuant to a guarantee; (vi) any obligations under Capitalized Leases
with respect to which a Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or with respect to which obligations a Person
assures a creditor against loss; (vii) any indebtedness secured by a Lien
on a Person’s assets; and (viii) net obligations under hedging
arrangements (including, without limitation, derivatives) designed to protect a
Person against fluctuations in interest rates, currency exchange rates,
commodity prices or other financial transactions.


 


“Intellectual Property
Rights” means all (i) patents, patent applications, patent disclosures
and inventions, (ii) trademarks, service marks, trade dress, trade names,
logos and business names and registrations and applications for registration
thereof, together with all of the goodwill associated therewith, (iii) copyrights
(registered or unregistered) and copyrightable works and registrations and
applications for registration thereof, (iv) mask works and registrations
and applications for registration thereof, (v) computer software, data,
databases and documentation thereof, (vi) trade secrets and other confidential
information (including, without limitation, ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial and marketing plans
and customer and supplier lists and other information), (vii) other
intellectual property rights and (viii) copies and tangible embodiments
thereof (in whatever form or medium).


 


“Investment” as
applied to any Person means (i) any direct or indirect ownership, purchase
or other acquisition by such Person of any notes, obligations, instruments,
stock, securities or ownership interests (including partnership interests,
membership interests and joint venture interests) of any other Person and (ii) any
capital contribution by such Person to any other Person.


 


“Knowledge” or any
derivation thereof whether or not capitalized, shall mean, actual knowledge of
a condition or set of facts as has been obtained from any source, including,
regardless of any common law or statutory definition of the foregoing,
information which would cause a reasonable person to inquire further.


 


“Lien” means any
mortgage, deed of trust, pledge, security interest, encumbrance, lien, claims,
charge or other restriction of any kind whatsoever (including any conditional
sale or other title retention agreement or lease in the nature thereof), any
sale of receivables with recourse against the Business, any filing of or
agreement to file a financing statement as debtor under the Uniform Commercial
Code or any 


 


7

















 


similar statute
other than to reflect ownership by a third party of property leased to the
Sellers for use in the Business under a lease which is not in the nature of a
conditional sale or title retention agreement.


 


“Liquor and Gaming
Laws of the State of Louisiana” shall mean the laws promulgated in the
Louisiana Revised Statutes Title 27:1 et seq.,
and Title 26:1 et seq., as
amended from time to time and the Louisiana Administrative Code provisions
interpreting the same.


 


“Listed Devices”
shall mean those Devices listed on Schedule 1.1(Listed Devices).


 


“Material Adverse
Effect” or “Material Adverse Change” means any matter or matters
which would, alone or in the aggregate, have an adverse effect on (i) the
financial condition, operating results, assets, liabilities, operations,
condition (financial or otherwise), business or prospects of the Sellers, the
Business or any Affiliate of the Sellers, (ii) the ability of the Sellers
or the Business to perform any of their obligations related to the
operations of the Business (each, a “Material Adverse Effect”), or (iii) the
ability of the Premises to qualify as a truck stop facility under the Liquor
and Gaming Laws of the State of Louisiana. Material Adverse Effect or Material
Adverse Change specifically includes, but is not limited to: (a) any
violation by the Sellers or the Business, in any form and for any reason,
of the Liquor and Gaming Laws of the State of Louisiana; or (ii) the
revocation or suspension, for any period of time, of any liquor or gaming
license issued by the State of Louisiana to the Sellers or the Business and
used in the operations of the Business, or (iii) the ability of the
Premises to qualify as a truck stop facility under the Liquor and Gaming Laws
of the State of Louisiana.


 


“Permitted
Encumbrances” means:


 


(a)                                  real
estate and ad valorem taxes not yet due and
payable;


 


(b)                                 interests
or title of a lessor or lessee under any lease identified in Schedule 6.9(b);
and


 


(c)                                  to
the extent existing on the Closing Date hereof, matters which are described on Schedule 1.1(Permitted
Encumbrances), and approved of in writing by the Purchaser prior to the
Closing.


 


“Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity or any department, agency or
political subdivision thereof and any other entity.


 


“Purchase Price”
shall mean Six Million and no/100 Dollars ($6,000,000.00).


 


“Purchaser” means
Gameco Holdings, Inc., a Delaware corporation, its successors, assigns
and/or designees, in its sole discretion.


 


 “Settlement Statement” shall mean a
statement, signed by the Sellers and the Purchaser and to be received by the
Escrow Agent at least twenty-four (24) hours prior to the Closing, identifying
all funds to be received by the Escrow Agent as of the Closing and further
identifying how and to whom all such funds are to be paid by the Escrow Agent,
such that all Acquired Assets are transferred to the Purchaser free and clear
of any and all Liens whatsoever, except Permitted Encumbrances.


 


“Survey” shall
have the meaning given it in Section 3.4.


 


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“Tax” or “Taxes”
means any federal, state, county, parish, local, foreign or other income, gross
receipts, ad valorem, franchise, profits, sales or use, transfer, registration,
excise, utility, gaming, environmental, communications, real or personal
property, capital stock, membership interest, license, payroll, wage or other
withholding, employment, social security, severance, stamp, occupation,
alternative or add-on minimum, estimated and other taxes or fees of any kind
whatsoever (including deficiencies, penalties, additions to tax or fees, and
interest attributable thereto) whether disputed or not.


 


“Tax Return” means
any return, information report or filing with respect to Taxes, including any
schedules attached thereto and including any amendment thereof.


 


“Title Company”
shall mean Lawyer’s Title of Baton Rouge having an address at 8352 Bluebonnet
Boulevard, Baton Rouge, Louisiana 70810-2825.


 


“Title Evidence”
shall mean the Title Policy and the Survey, as defined in Sections 3.3 and
3.4, respectively.


 


1.2                                 Accounting
Principles. The classification, character and amount of all assets,
liabilities, capital accounts and reserves and of all items of income and
expense to be determined, and any consolidation or other accounting computation
to be made, and the interpretation of any definition containing any financial
term, pursuant to this Agreement shall be determined and made in accordance
with GAAP consistently applied.


 


1.3                                 Other
Interpretive Matters. In this Agreement, unless a clear contrary intention
appears:  (a) the singular number
includes the plural number and vice versa; (b) reference to any Person
includes such Person’s successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement and reference to a
Person in a particular capacity excludes such Person in any other capacity; (c) reference
to any gender includes each other gender; (d) reference to any agreement
(including this Agreement and the Schedules and Exhibits hereto), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof (and without giving effect to any amendment or
modification that would not be permitted in accordance with the terms hereof); (e) reference
to any applicable law means such applicable law as amended, modified, codified
or reenacted, in whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder and reference to any particular provision of
any applicable law shall be interpreted to include any revision of or successor
to that provision regardless of how numbered or classified; (f) reference
to any Article, Section or Exhibit means such Article or Section hereof
or such Exhibit hereto; (g) “hereunder,” “hereof,” “hereto” and words
of similar import shall be deemed references to this Agreement as a whole and
not to any particular Section or other provision hereof; and (h) ”including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term.


 


Section 2.                                            Purchase
of Assets and Closing.


 


2.1                                 Purchase
and Sale of the Acquired Assets .


 


(a)                                  At
the Closing, subject to the terms and conditions contained in this Agreement,
the Sellers, as applicable, shall sell, assign, set-over, convey, deliver and
transfer to the Purchaser, or its designee, free and clear of any and all Liens
and Indebtedness whatsoever, excepting only Permitted 


 


9

















 


Encumbrances, and
the Purchaser shall purchase from the Sellers, as applicable, all of their
rights, title and interests in and to the Acquired Assets for the Purchase
Price.


 


(b)                                 Within
ten (10) days following the execution of this Agreement by all parties
hereto, the Purchaser shall deliver the Deposit to the Escrow Agent. The
Deposit shall be applied as a credit toward the Purchase Price by the Escrow
Agent at the Closing. In the event Purchaser shall terminate this Agreement for
any reason in the Purchaser’s sole discretion prior to the Closing Date, other
than a default by the Purchaser, upon notice to the Escrow Agent and the
Sellers of the Purchaser’s election to terminate this Agreement, the Escrow
Agent shall release the Deposit to the Purchaser. Should the Purchaser breach
any provisions of this Agreement and not otherwise cure such breach pursuant to
the terms and conditions hereof, the Deposit shall be forfeited by the
Purchaser to the Sellers as the full and final measure of their liquidated
damages hereunder, and not as a penalty, and, with the exception of the
Purchaser’s indemnity set forth in Section 3.1(b) below,
thereafter this Agreement shall be null and void and of no further force and
effect.


 


(c)                                  The
Closing of the purchase and sale of the Acquired Assets shall take place at the
offices of the Title Company or at such other place as may be mutually
agreeable to the Sellers and the Purchaser. At the Closing, upon payment of the
Purchase Price, the Sellers, as applicable, shall deliver to the Purchaser the
Acquired Assets, together with such bills of sale, powers of assignment,
certificates, deed(s) and other documents and instruments of conveyance as
shall be reasonably satisfactory to the Purchaser and its counsel to transfer
record ownership of the Acquired Assets, including, but not limited to, those items
identified in Section 10 below.


 


(d)                                 Sellers
each acknowledge and agree that Purchaser may pay the entire Purchase
Price to any one of the Sellers as directed by all of the Sellers at the
Closing and that payment of the Purchase Price pursuant to the directions of
the Sellers shall satisfy any and all of the Purchaser’s obligations for
payment of the Purchase Price hereunder to each of the Sellers. Notwithstanding
the foregoing, the parties agree that ten percent (10%) of the Purchase Price,
allocated equally between the Sellers is the monetary consideration paid for
the “covenant not to do” as contained in Section 11.21. The parties
acknowledge and agree that this allocation is a reasonable allocation given the
entities’ and their relative abilities and experience in the gaming industry. The
parties each further acknowledge and agree that payment of the Purchase Price
to the Sellers as outlined on the Settlement Statement is appropriate
consideration and reasonably related to the value of the interests each party
is transferring under this Agreement.


 


2.2                                 Closing.


 


(a)                                  The
sale and transfer of the Acquired Assets from the Sellers, as applicable, to
the Purchaser (“Closing”), pursuant to the terms and subject to the conditions
hereof shall take place on a date determined by the Purchaser which date shall
not be later than December 19, 2005 (“Closing Date”).


 


(b)                                 It shall be a condition of the Closing that
the Annualized EBITDA as of the Closing Date shall be not less than One
Million Three Hundred Thousand and no/100 Dollars ($1,300,000.00).


 


2.3                                 Release
of Sellers’ Interest and Claims against the Business and the Acquired Assets.
Sellers agree, concurrently with the Closing, to release all of their interests
in and to and any claims against any of the Business or the Acquired Assets. Sellers
shall deliver to the Escrow Agent a fully executed assignment, termination
and/or modification agreement, to be effective as of and only upon the 


 


10

















 


Closing, in form and
substance reasonably acceptable to the Purchaser, terminating all interests and
claims of the Sellers in the Business to the Acquired Assets as of the Closing
Date. Nothing contained in the foregoing is intended to nor shall it operate to
release any claims or causes of action the Sellers’ or any one of them may have
arising out of or under this Agreement.


 


2.4                                 Non-Assumption
of Liabilities by Purchaser. Except for the Assumed Obligations (as
hereinafter defined), the Purchaser does not assume and shall not be liable for
any of the Indebtedness, debts, obligations, expenses, claims, liabilities or
commitments, of any nature whatsoever (collectively “Obligations”) of the
Sellers, whether arising prior to, on or after the Closing, including, but not
limited to, Obligations arising from or related to the Acquired Assets and/or
the Business. The Sellers agree, individually, that all Obligations, other than
Obligations under the Assumed Contracts that accrue after the transfer of the
Acquired Assets (collectively, the “Assumed Obligations”), shall remain the
obligations of the Sellers, as applicable. The Sellers, jointly and severally,
do hereby indemnify, defend and hold Purchaser harmless from and against any
and all claims, losses, expenses, damages or liabilities asserted against or
suffered by Purchaser arising out of or resulting from the Obligations (other
than the Assumed Obligations).


 


2.5                                 Release
of Funds.


 


(a)                                  Upon
completion of the transfers and deliveries described in Sections 2.1, 2.2,
2.3 and 2.4 above and the discharge of all Liens and Indebtedness, the
Escrow Agent shall release, pursuant to the Settlement Statement, any and all
funds then on deposit hereunder. Any fees charged by the Escrow Agent for its
services hereunder shall be borne solely by the Purchaser.


 


(b)                                 Notwithstanding
the foregoing, the parties agree that this Agreement and the Closing Date shall
be subject to the issuance to or receipt by the Purchaser of the Consents (as
defined on Schedule 6.13 below). If the Consents have not been
received or issued as of the Closing Date, the Closing Date shall be extended
from day to day for no more than thirty (30) Business Days until the third (3rd)
day following the date each such Consent is received, satisfied or waived. In
such an event, the Sellers shall continue to operate the Business and the
gaming and other operations thereof in accordance with the requirements of this
Agreement. Notwithstanding the foregoing, nothing contained in this paragraph
shall delay the Closing for more than thirty (30) Business Days. After the
expiration of such thirty (30) days period, any party may upon written
notice terminate this Agreement, and with the exception of the Purchaser’s
indemnity under Section 3.1(b) below, thereafter this
Agreement shall be null and void and of no further force and effect.


 


Section 3.                                            Due
Diligence. Beginning on the Agreement Date and continuing to and including December 10,
2005 (the “Due Diligence Period”), Purchaser shall have the right to perform the
following due diligence pursuant to the terms and conditions hereof.


 


3.1                                 General
Testing and Inspections.


 


(a)                                  During
the Due Diligence Period, Purchaser shall have the right to conduct such
engineering, environmental, general business and feasibility studies,
inspections, testing, audits and/or reviews of the Acquired Assets, the
Premises and the Business and its assets, liabilities, operations (including
gaming operations and records), financial performance and affairs as Purchaser
deems necessary, including soil tests, borings, drainage tests and similar
tests on any land or improvement owned by the Sellers and used in the Business,
and audits and reviews of all of the Business’s or Sellers’


 


11

















 


financial and business
records, operations, documents and instruments, including a financial and tax
audit of the Business. Such studies shall be conducted by Purchaser and its
agents at the Purchaser’s sole cost and expense.


 


(b)                                 Subject
to reasonable advance notice, the Sellers agree to allow Purchaser and/or its
agents access to all assets, records, documents and instruments of the Business
or the Acquired Assets to conduct such studies, tests, inspections, reviews and
audits, provided such access shall not unreasonably interfere with the
activities of the Sellers. Purchaser shall save, defend, indemnify and hold the
Sellers harmless from and against all claims, lawsuits, judgments, losses,
liabilities or expenses of any kind or nature which may be asserted
against or incurred by the Sellers as the result of the examination, tests,
inspections, reviews, audits or studies of the Acquired Assets, the Premises or
the Business by the Purchaser or any of its manager’s, members, employees,
agents, contractors or designees (excluding the discovery of any preexisting
condition on the Premises and any consequential damages arising from the
foregoing). Notwithstanding anything contained herein to the contrary,
Purchaser’s indemnity obligations set forth in this Section 3.1(b) shall
survive any termination of this Agreement.


 


3.2                                 Zoning.
Prior to Closing, Purchaser shall have confirmed that the Premises and the
current and intended uses thereof will be in compliance, as of the Closing
Date, with all applicable building and zoning codes and any restrictions unique
thereto.


 


3.3                                 Title
Commitment; Defects.


 


(a)                                  Within
twenty (20) days following the Agreement Date, the Purchaser shall cause the
Title Company to issue and deliver its commitment (the “Commitment”) for
issuance of an ALTA Owners Policy (Form B - revised 10-17-70) of title
insurance covering the Premises in the full amount of the Purchase Price, which
Commitment shall show marketable, fee simple title to the Premises to be vested
in the Sellers, subject only to the Permitted Encumbrances. Copies of the
Commitment together with copies of each document affecting title to the
Premises referenced therein, except for monetary encumbrances which are to be
released at Closing, shall be delivered to Purchaser and the Sellers.


 


(b)                                 Purchaser
shall notify Sellers of Purchaser’s disapproval of any matter contained in the
Title Evidence within five (5) days after Purchaser’s receipt of all of
the Title Evidence and copies of the documents referred to in the Title
Evidence as exceptions or exclusions from coverage. If the Title Evidence is
not satisfactory to Purchaser (collectively, “Defects”), those Defects shall,
as a condition to Purchaser’s obligations under this Agreement, be cured or
removed from the Title Evidence at or prior to the Closing. If Sellers elect
not to or are otherwise unable to cure and remove all Defects at or prior to
the Closing Date (or any extension thereof), this Agreement may be
terminated, at Purchaser’s sole election, by written notice given to Sellers
within five (5) days after expiration of the period allowed for cure and
the Deposit shall be promptly released by the Escrow Agent to the Purchaser, or
Purchaser may, at Purchaser’s sole election, waive such uncured Defects and
proceed to close this transaction with no diminution of the Purchase Price.


 


(c)                                  Notwithstanding
any provision of this Section 3.3 to the contrary, Sellers shall
have the obligation, on or prior to the Closing Date, to secure releases,
discharges or satisfactions, or otherwise cure at no cost to Purchaser, any Defect
which is a Lien for the payment of money only (except real estate and ad valorem taxes and assessments which shall be prorated in
accordance with Section 10), including, without limitation, all
mortgages, any Lien or encumbrance which may be released or discharged by
the 


 


12

















 


payment of a
definite sum of money or any exception to title which arose as the result of
the act or violation of Sellers or anyone claiming by, from, through or under
Sellers.


 


(d)                                 It
shall be a condition precedent to Purchaser’s obligation to consummate the
transaction contemplated hereby that the Title Company will, upon filing the
instruments for conveyance of record, issue its ALTA Owner’s Fee Policy (Form B
revised 10-17-70) of title insurance (the “Title Policy”) in the full amount of
the Purchase Price, at standard rates, insuring Purchaser in fee simple title
to the Premises subject only to the Permitted Encumbrances, and without the
exception for certain of the standard printed exceptions (encroachments,
overlaps, boundary line dispute, or any other matters which would be disclosed
by an accurate survey or inspection of the Premises, easements or claims of
easements not shown by the public records, or any lien or right to a lien for
services, labor or materials furnished to the Premises, imposed by law, and not
shown by the public records), unless and except to the extent that any such
matters included in the so-called standard printed exceptions have been
approved or waived by Purchaser. The Title Policy shall also affirmatively
insure:  (i) Purchaser’s right to
use any appurtenant easements in accordance with their terms and conditions; (ii) contiguity
of the parcels described in Exhibit A (if more than one parcel); (iii) that
the Premises have the benefit of full and free ingress and egress, both
pedestrian and vehicular, directly to and from a public highway; and (iv) such
other and additional endorsements or conditions as the Purchaser may require.
Sellers agree to execute and deliver to the Title Company such affidavits and
instruments as may be reasonably required to permit the Title Company to
issue Purchaser’s Title Evidence in the form required by this subsection and
to provide a copy of such affidavits and instruments to Purchaser. The cost and
expense of such Owner’s Policy shall be borne solely by the Purchaser.


 


3.4  Survey. Within ten (10) days of
the Agreement Date, Sellers shall deliver to the Purchaser any surveys of the
Premises in Sellers’ possession, together with a copy of any reports,
documents, notices, citations or records of any type or form in the
possession of the Sellers relating to or identifying: (i) a physical
deficiency in the Premises; (ii) an adverse effect on the Premises,
including, but not limited to, any records, notices or citations relating to or
concerning any aspect of the environmental condition of the Premises; or (iii) a
change in the current, zoning, accessibility, physical characteristics,
insurability, damage, condemnation, takings of or to any portion of the
Premises. Following the Agreement Date, Purchaser shall have the right, at its
sole election, to cause a registered surveyor or professional engineer to
prepare a survey (the “Survey”) in form sufficient to enable the Title
Company to delete from the Title Policy the so-called standard exception for
matters disclosed by an accurate Survey. A perimeter legal description of the
Premises as prepared by such surveyor or engineer shall be used to describe the
Premises in the Deed and in Exhibit A. The cost and expense of such
Survey shall be borne by the Purchaser. A copy of the Survey shall be furnished
to the Sellers. In the event the Survey discloses any encroachments, overlaps,
boundary line disputes or any other matter affecting the Premises or which
violates any law, rule or regulation or is otherwise unacceptable to the
Purchaser, such matter(s) shall be considered to be a Defect(s) and the
relative rights and obligations of the parties with respect thereto shall be
governed by the provisions of Section 3.3 hereof.


 


3.5                                 Environmental
Matters.


 


Purchaser, at its sole
election, may cause an environmental evaluation and/or consulting firm
(the “Consultant”) selected by Purchaser to conduct an environmental inspection
and audit of the Premises (the “Audit”), including, without limitation, a Phase
I, II or III site assessment study. The cost and expense of such Audit
shall be borne by the Purchaser. To the extent environmental audits for the
Premises have been previously obtained by Sellers; Sellers, as applicable,
shall deliver copies of same to 


 


13

















 


Purchaser within
fifteen (15) days of the Agreement Date. Purchaser and Sellers shall cooperate
in an attempt to achieve the result that the Audit is performed as soon as
practicable and is completed no later than the expiration of the Due Diligence
Period. In addition to providing any information reasonably requested by the
Consultant, Sellers shall cooperate with Purchaser and the Consultant throughout
the course of the Audit and shall cooperate in any other way reasonably
requested by Purchaser or the Consultant.


 


3.6                                 Other
Records and Documents.


 


(a)                                  In
addition to the foregoing and to the extent the below-listed documents are in
the possession of the Sellers, the Sellers agree to deliver to the Purchaser,
within fifteen (15) days of the Agreement Date, a full and accurate list and
reasonably complete details concerning each item described below and a copy of
each document to the extent such copies are in the possession or control of the
Sellers:


 


(i)                                     copies
of any and all certificates of title, liens, encumbrances, deeds of trust,
mortgages, judgments, rights-of-way, easements, covenants, conditions or
restrictions, other exceptions or matters of record relating to or affecting
any real or personal property used in the Business;


 


(ii)                                  copies
of all certificates of occupancy, zoning variances, licenses, permits,
authorizations and approvals relating to the Premises or the Business from any
Governmental Body having jurisdiction over the Premises or the Business,
together with any other notices and agreements related thereto, including, but
not limited to, any and all gaming and liquor licenses and permits and renewals
of the same or applications therefore;


 


(iii)                               to
the extent not already required above, copies of any and all environmental
permits, notices, demands, action letters, reports, assessments, audits,
directives from any Governmental Body, documentation of any environmental
matter related to the Premises; identification of which portion of the Premises
has ever been or is now being used for the storage, generation, treatment,
manufacture, disposal or release of any “hazardous substance” as defined by the
Comprehensive Environmental Response Compensation and Liability Act,
identification of all waste disposal sites and the location of all underground
storage tanks or lines, whether in use or abandoned; a summary of all
environmental testing done by the Sellers; and identification of any event of
non-compliance with an Environmental and Safety Requirement;


 


(iv)                              copies
of all real estate, personal property, fuel and ad valorem
taxes, assessments, general and special, bills and returns, gaming and liquor
license fees and renewals and any and all notices of violations, delinquencies
and/or assessments of the same received by the Sellers within twenty-four (24)
months preceding the Agreement Date;


 


(v)                                 copies
of any and all leases affecting the Premises or the Business in any manner;


 


(vi)                              copies
of all fuel sales reports whether maintained for the Business’s sole use or
submitted to any federal, state or local governmental agency (and will continue
to provide Purchaser this information within fifteen (15) days of the end of
each calendar month during the term of this Agreement);


 


14

















 


(vii)                           copies
of monthly financial statements, including an income and balance sheet
statement for each of the twenty-four (24) months preceding the Agreement Date,
showing the financial condition of every aspect of the Business (and will
continue to provide Purchaser this information within fifteen (15) days of the
end of each calendar month during the term of this Agreement);


 


(viii)                        copies of
any and all Contracts (as defined hereinafter) affecting the Premises or the
Business in any manner; and


 


(ix)                                any
other documents and information reasonably requested by the Purchaser.


 


Section 4.                                            Termination. Notwithstanding anything
contained in this Agreement to the contrary and in addition to any other rights
of termination of the Purchaser under this Agreement, if at any time prior to
the Closing Date, any of the studies, Title Evidence, Survey, audits,
inspections, testing, reviews or other activities performed pursuant to Sections
3.1, 3.2, 3.3, 3.4, 3.5 or 3.6, or any other information (including
information related to the Purchaser’s financing), however gathered or
obtained, shall reveal information or conditions unacceptable to the Purchaser,
in its sole discretion, then Purchaser shall have the option to terminate this
Agreement. Upon receipt of such notice, this Agreement shall terminate and
thereafter be null and void and of no further force and effect, and the Escrow
Agent shall promptly return to the Purchaser then deposit.


 


Section 5.                                            Sellers’ Accounts Receivable. Following the Closing, Buyer
shall use its reasonable commercial efforts to collect the Sellers’ Accounts
Receivables. Seller agrees to maintain accurate records of each such Account
Receivable and the balance remaining on the same and to provide such reasonable
documentation as may be requested from time to time by the Purchaser or
any obligor under the same. Seller agrees to forebear taking any legal action,
including the filing of any claim, to collect any Accounts Receivable following
the Closing Date. Purchaser shall, within the first ten (10) days of each
calendar month, remit to Seller all amounts collected on any Seller’s Accounts
Receivable during the immediately preceding calendar month. During any calendar
month, should an obligor under any of the Seller’s Accounts Receivable also
have an account with the Purchaser, the Purchaser shall apply any sums
collected from such obligor first against
such obligor’s Seller’s Accounts Receivable until paid in full and then against
the amounts owed the Purchaser. Notwithstanding anything contained herein to
the contrary, in no event, whatsoever, shall the Purchaser have any liability
for any of the Sellers’ Account Receivable that are uncollected or determined
to be uncollectible, nor shall the Purchaser be obligated to expend any funds
in furtherance of such collection efforts. On and after the first (1st)
anniversary of the Closing Date, Purchaser shall have no further obligations to
collect any sums under any of the Sellers’ Accounts Receivable.


 


Section 6.                                            Representations
and Warranties of the Sellers. As a material inducement to the Purchaser to
enter into this Agreement and purchase the Acquired Assets hereunder, the
Sellers each hereby, jointly and severally, represent and warrant to the
Purchaser as follows:


 


6.1                                 Organization,
Power and Licenses.


 


(a)                                  Larose
is duly formed, validly existing and in full force and effect under the laws of
the State of Louisiana and is qualified to do business in Louisiana and every
other jurisdiction in which its ownership of property or the conduct of
business requires it to qualify. Larose possesses all requisite 


 


15

















 


power and
authority, and all licenses, permits and authorizations necessary, to own and
operate its properties, to carry on its businesses as now conducted and to
carry out the transactions contemplated by this Agreement. Larose is not in
violation of any of the provisions of its Articles of Organization or Operating
Agreements.


 


(b)                                 Each
Penn is a Louisiana resident, of the age of majority and of sound mind. Together,
Penn is the owner of one hundred percent (100%) of all outstanding and issued
membership interests of Larose and no other person has any Investment in Larose,
nor any right, by option, warrant, right of first refusal or by law or in
equity to acquire the same.


 


(c)                                  Sellers,
as applicable, own one hundred percent (100%) of all rights, title and
interests in and to the Acquired Assets, free and clear of any Liens or
Indebtedness, excepting only the Permitted Encumbrances, with full, valid,
unencumbered power and authority to convey the same, excluding only those
assets identified on Schedule 6.9(a). There are no preemptive
rights, warrants, options, or rights of first refusal with respect to the
transfer of the Acquired Assets hereunder. The Acquired Assets are all of the
assets used in or necessary to the operation of the Business.


 


(d)                                 Any
individuals who have any spousal or dower rights in any of the Acquired Assets,
the Premises or the Business, under any federal, state or local law have joined
in the execution of this Agreement and have consented to the transfers
contemplated herein and upon such transfers shall have waived any and all
interests, rights or titles they may have in and to the Acquired Assets or
the Business.


 


6.2                                 Affiliates;
Subsidiaries; Investments. There are no Affiliates or other Persons in
which the Sellers own, of record or beneficially, any direct or indirect
equity, Investment or other interest or any right (contingent or otherwise) to
acquire the same, or in which the Sellers otherwise participate, which would
have or has any interest in the Business or the Acquired Assets.


 


6.3                                 Authorization;
No Breach. The execution, delivery and performance of this Agreement and
all other agreements, instruments and transactions contemplated hereby and
thereby to which any Seller is a party have been duly authorized by all
requisite organizational approvals. This Agreement and all other agreements and
instruments contemplated hereby to which any Seller is a party each constitutes
a valid and binding obligation of the Sellers, as applicable, enforceable in
accordance with its terms. Assuming the payment of all Liens by the Sellers at
the Closing, the execution and delivery by the Sellers of this Agreement and
all other agreements and instruments contemplated hereby to which the Sellers
are a party, the offering and sale of the Acquired Assets hereunder and the
fulfillment of and compliance with the respective terms hereof by the Sellers,
does not and shall not: (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii) result
in the creation of any Lien upon the Acquired Assets pursuant to, (iv) give
any third party the right to modify, terminate or accelerate any obligation
under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or Governmental Body pursuant to, the
Articles of Organization or Operating Agreements of the applicable Sellers or
any law, statute, rule or regulation to which the Sellers are subject or
any agreement, instrument, order, judgment or decree to which the Sellers or
their assets are subject, other than: (a) appropriate notifications to the
Louisiana State Police and Louisiana gaming authorities of the consummations of
the transfers contemplated by this Agreement; and (b) appropriate
licensure and/or findings of suitability of the transferee of the Listed
Devices by the Louisiana Gaming Control Board.


 


16

















 


6.4                                 Closing
Reports and Absence of Liabilities.


 


(a)                                  The
Closing Reports, certified by Penn and attached hereto as Schedule 6.4(a),
are: (i) true, accurate and complete; (ii) contain the same
information as has been actually filed with the Louisiana State Police and any
other Governmental Body; (iii) are reflected in the books and records of
the Sellers; and (iv) fairly and accurately present the financial
condition of the Business as of the dates thereof. After giving effect to the
transactions to occur at the Closing, neither the Business nor the Sellers will
have any liabilities or Indebtedness, including, but not limited to, income tax
liabilities, contingent or otherwise, other than as described on Schedule 6.4(a).
The Closing Reports shall be updated on the Closing Date and shall be true,
accurate and complete and consistent with any and all filings with any federal,
state or local authorities or agencies as of the most recent reporting date
prior to the Closing Date.


 


(b)                                 Except
as described on Schedule 6.4(b), none of the Sellers has:


 


(i)                                     any
liabilities or Indebtedness (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due, whether known or
unknown, and regardless of when asserted) which will remain a Lien upon the
Business or the Acquired Assets following the Closing hereof, nor which will
become a liability, Indebtedness or obligation of the Purchaser on or after the
Closing, other than the Assumed Contracts;


 


(ii)                                  made
any Capital Expenditures for which liability, in any form, will remain after
the Closing Date; or


 


(iii)                               issued:
(a) any notes, bonds or other debt securities which will remain or become
an obligation of the Acquired Assets, the Business or the Purchaser on or after
the Closing Date, or (b) any shareholder/owner interests or other equity
securities, membership interests or any securities convertible, exchangeable or
exercisable into any ownership interests in the Business or Acquired Assets; or


 


(iv)                              sold,
assigned or transferred any of the Business’s Intellectual Property Rights or
other intangible assets, or disclosed any of the Business’s proprietary
confidential information to any Person; or


 


(v)                                 made
any loans or advances to, guarantees for the benefit of, or any Investments in
the Business or the Acquired Assets, that will not have been completely repaid
and/or terminated as of the Closing Date; or


 


(vi)                              knowledge
of, or have caused the Business or any Acquired Asset to suffer any, damage,
destruction or casualty loss which has had or may in the future have a
Material Adverse Effect on the Business, whether or not covered by insurance;
or


 


(vii)                           as
relates to the Business, borrowed any amount of, incurred or become subject to,
any liabilities, except current liabilities consisting solely of accounts
payable and trade payables incurred in the ordinary course of business and
liabilities under leases identified elsewhere in this Agreement; or


 


(viii)                        discharged
or satisfied any Lien or paid any obligation or liability, other than current
liabilities paid in the ordinary course of business; or


 


17

















 


(ix)                                mortgaged
or pledged any of its properties or assets or subjected them to any Lien,
except Permitted Encumbrances; or


 


(x)                                   sold,
assigned or transferred any of its tangible assets, except in the ordinary
course of business, or cancelled any debts or claims; or


 


(xi)                                suffered
any extraordinary losses or waived any rights of value, whether or not in the
ordinary course of business or consistent with past practice; or


 


(xii)                             made
any commitments for Capital Expenditures that have not expired as of the Agreement
Date; or


 


(xiii)                          agreed
to do any of the foregoing.


 


6.5                                 No
Adverse Change. From the Agreement Date to and through the Closing Date,
there has not been nor shall there be any adverse change in the operating
results, operations, condition (financial or otherwise), prospects, employee
relations or customer or supplier relations of the Business or the Acquired
Assets, as applicable. From the Agreement Date to and through the Closing Date,
Sellers shall promptly give Purchaser notice of any adverse change in the
operating results, operations, condition (financial or otherwise), prospects,
employee relations or customer or supplier relations of the Business or the
Acquired Assets, as applicable.


 


6.6                                 Absence
of Undisclosed Liabilities. No Seller nor any Affiliate has any obligation
or liability (whether accrued, absolute, contingent, unliquidated or otherwise,
whether due or to become due and regardless of when asserted) related or
attaching to or affecting in any manner the Business or the Acquired Assets and
arising out of transactions entered into at or prior to the Closing, or any
action or inaction at or prior to the Closing, or any state of facts existing
at or prior to the Closing, other than (a) liabilities set forth on the
Closing Reports, and (b) other liabilities and obligations expressly
disclosed on Schedule 6.6.


 


6.7                                 Business
Property. The Sellers, as applicable, have good, valid and one hundred
percent (100%) complete title to all of the Acquired Assets, free and clear of
any Lien other than Permitted Encumbrances, and have full power and authority
to convey and transfer the same free and clear of any and all claims by any
Person whatsoever. The Acquired Assets constitute all of the assets and real
property and improvements used by any of the Sellers in or necessary for the
operation of the Business as of the Closing Date.


 


6.8                                 Tax
Matters. The Purchaser shall have no liability for or exposure to any Taxes
arising from the operation(s) of the Business prior to the Closing Date. All
necessary and required Tax Returns have been timely filed and are correct in
all material respects as to the amount of tax owed and have been prepared in
compliance with all applicable laws and regulations in all respects; the
Sellers have paid all Taxes due and owing by any of them (whether or not such
Taxes are required to be shown on a Tax Return) and have withheld and paid over
to the appropriate taxing authority all Taxes which it or they are required to
withhold from amounts paid or owing to any employee, member, creditor or other
third party; no Seller has waived any statute of limitations with respect to
any Taxes or agreed to any extension of time with respect to any material Tax
assessment or deficiency; as of the Agreement Date, no foreign, federal, state,
parish or local tax audits or administrative or judicial proceedings are
pending or being conducted with respect to the Business or any of the Acquired
Assets; no information related to Tax 


 


18

















 


matters has been
requested by any foreign, federal, state or local taxing authority and no
written notice indicating an intent to open an audit or other review has been
received by Sellers from any foreign, federal, state, parish or local taxing
authority.


 


6.9                                 Contracts
and Commitments.


 


(a)                                  Except
as listed on Schedule 6.9(a), there are no agreements, contracts,
leases, licenses, commitments or instruments (including any and all amendments
thereto) (collectively, the “Contracts”) to which the Business is a party or by
which the Business or any of the Acquired Assets are bound or subject. There
are no commitments or agreements with any third-party or Governmental Body
affecting the Business or the Acquired Assets which are not listed on Schedule 6.9(a).
Except as otherwise expressly noted on Schedule 6.9(a), each
agreement listed on Schedule 6.9(a) is in full force and
effect and constitutes a legal, valid and binding obligation of Business,
assignable to the Purchaser hereunder, upon Purchaser’s written consent to
assume the same. Except as otherwise expressly noted on Schedule 6.9(a),
no such Contract is in default or breach (with or without the giving of notice
or the passage of time or both) and no other party is in default or breach of
any such Contracts and the Sellers under each such Contract are or will be as
of the Closing Date timely in their payments of any and all sums or any
performance obligations under each such Contract.


 


(b)                                 Sellers
agree to execute and deliver on the Closing Date such documents and instruments
as are necessary and reasonably acceptable to the Purchaser and Purchaser’s
counsel to completely transfer, set-over and assign to the Purchaser those
contracts and only those contracts listed on Schedule 6.9(b).


 


6.10                           Intellectual
Property Rights.


 


(a)                                  Schedule 6.10
contains a complete and accurate list of all Intellectual Property Rights, if
any, owned or used by Sellers in the Business, other than rights under licenses
of any original equipment manufacturers (“OEM”), i.e Windows, etc., or
off-the-shelf software, such as word processing programs, etc.; provided, however, all of the Sellers’
ownership rights, if any, in and to any of the foregoing, shall constitute
Acquired Assets and shall be transferred to the Purchaser hereunder.


 


(b)                                 The
Sellers own all right, title and interest in and to all of the Intellectual
Property Rights listed on Schedule 6.10, free and clear of all
Liens and there have been no claims made against Sellers asserting the
invalidity, misuse or unenforceability of any of such Intellectual Property
Rights.


 


(c)                                  All
Intellectual Property Rights used in or for the Business, whether listed or not
listed on Schedule 6.10, shall be considered Acquired Assets
hereunder and shall be transferred to the Purchaser for the Purchaser Price on
the Closing Date. Sellers agree to execute and deliver on the Closing Date such
documents and instruments as are necessary and acceptable to the Purchaser and
Purchaser’s counsel to completely transfer, set-over and assign each and every
Intellectual Property Right to the Purchaser.


 


6.11                           Litigation,
etc.


 


(a)                                  Except
as set forth on Schedule 6.11, there are no actions, suits,
proceedings, orders, investigations or claims pending or, to the Sellers’
knowledge, threatened against or affecting the Sellers, the Business, the
Acquired Assets or pending or threatened by the Sellers against any third
party, at law or in equity, and affecting in any manner the Business or the
Acquired Assets or the prospects thereof, 


 


19

















 


before or by any
federal, foreign, state, parish or local court, or Governmental Body (including
any actions, suits, proceedings or investigations with respect to or
threatening the transactions contemplated by this Agreement); nor has there
been any such actions, suits, proceedings, orders, investigations or claims
pending against or affecting the Business or the Acquired Assets during the two
(2) years preceding the Agreement Date. None of the Sellers, or any of
their Affiliates involved in the operation of the Business, are subject to any
arbitration proceedings or any governmental investigations or inquiries
(including inquiries as to the qualification to hold or receive any license or
permit, including, but not limited to, the right to have Devices or sell liquor
and sell or store petroleum products or byproducts); and, to the Sellers’
knowledge, there is no basis for any of the foregoing. None of the Sellers nor
any of their Affiliates is subject to any judgment, order or decree of any
court or other governmental agency, and has not received any written opinion or
memorandum from legal counsel to the effect that it or they are exposed, from a
legal standpoint, to any liability which may involve or be related, in any
manner, to the Business or the Acquired Assets.


 


(b)                                 The
Sellers do, jointly and severally, hereby indemnify, defend and hold harmless
the Purchaser, and its owners, shareholders, members, directors, managers,
officers, employees, agents, successors and assigns, from and against any and
all expenses, claims, fees, fines, damages or losses, including reasonable
attorney’s fees, which the Purchaser may suffer as a result of any
litigation matter, claim, investigation or choses in action existing or
accruing as of the Closing Date (whether or not set forth on Schedule 6.11)
or arising or filed at anytime and related, in any manner, to the operation of
the Business or ownership of the Acquired Assets by the Sellers (each, a “Litigation
Matter”). Purchaser shall have the right, at its sole election, to participate
in the defense of any Litigation Matter, including, but not limited to,
requiring the defense to be conducted by legal counsel of its choice.


 


6.12                           Brokerage.
There are no claims for brokerage commissions, finders’ fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon Sellers.


 


6.13                           Required
Consents. Except as listed on Schedule 6.13 (the “Consents”),
no consents, approvals or other like permission are required or necessary from
any Governmental Body or from any third party for the consummation of the
transactions contemplated by this Agreement.


 


6.14                           Insurance.


 


(a)                                  All
assets, properties and risks of the Business or the Acquired Assets are, and for
the period of their operation and/ownership by the Sellers have been, covered
by valid and currently effective insurance policies or binders of insurance
(including general liability and property insurance) issued in favor of the
Sellers, in each case with responsible insurance companies, in such types and
amounts and covering such risks as are consistent with customary practices and
standards of companies engaged in businesses and operations similar to those of
the Business and such coverage shall continue through midnight of the Closing
Date. All refunds or costs associated with the cancellation of such policies
shall be the sole asset of and responsibility of the Sellers.


 


(b)                                 In
the event that any of the Acquired Assets or any portion of the Business is
damaged or otherwise the subject of a casualty or condemnation on or prior to
the Closing Date, and the reduction in the fair market value of the Acquired
Assets or the Business as a result of the casualty or condemnation reasonably
exceeds Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00), then
either the Purchaser or Sellers shall have, in their sole, independent
discretion, the right to terminate this 


 


20

















 


Agreement. If the
reduction in the fair market value as a result of any casualty or condemnation
is less than Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00), only
the Purchaser shall have the right to elect to terminate this Agreement. If
following a condemnation or casualty that occurs on or prior to the Closing
Date, neither party elects to terminate this Agreement, then Purchaser shall
proceed to close without any reduction in the Purchase Price and any and all
insurance proceeds and the right to contest or make a claim for the same shall
become the property of the Purchaser after the Closing Date and no Seller shall
have any right, title or interest in or to the same and each does hereby
relinquish any and all interest therein; provided,
however, each of the foregoing shall fully cooperate in assigning
and securing any and all insurance proceeds on behalf of the Purchaser. In the
event Purchaser or Sellers shall elect to terminate this Agreement pursuant to
this Section 6.14(b) with the exception of the Purchaser’s
indemnity set forth at Section 3.1(b), this Agreement shall thereafter be
null and void and of no further force and effect and no party hereto shall have
any further obligation or liability hereunder, and the Escrow Agent shall
promptly thereafter return the Deposit to the Purchaser.


 


6.15                           Transactions
with Affiliates. Except as disclosed on Schedule 6.15 or as
otherwise provided for herein, the Business has no outstanding contracts,
agreements, loans, obligations, debts or other legally binding arrangement with
the Sellers or any of their Affiliates that will survive the Closing.


 


6.16                           Employees,
Officer and Directors.


 


(a)                                  No
Seller, on behalf of the Business, has ever maintained or contributed to, any
employee benefit plan (as defined in Section 3(3) of ERISA) or any
bonus, incentive, retirement, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, or any employment, termination, severance or other contracts
or agreements, and, except as set forth on Schedule 6.16(a), there
exists no employee benefit plan for which the Sellers could incur liability on
behalf of the Business under Section 4069 of ERISA in the event such plan
has been or were to be terminated. Any employee of the Business may be
terminated without cause at any time for any lawful reason without obligation
on the part of the Sellers to make any payment therefore.


 


(b)                                 The
Sellers, as appropriate, agree to terminate and dismiss, for any lawful reason,
without creating any financial or other obligation to the Business or the
Purchaser any employee or agent of the Business, as may be requested by
the Purchaser, which termination shall be effective not later than midnight on
the Closing Date.


 


(c)                                  Notwithstanding
the foregoing, nothing contained in this Agreement shall prohibit the
Purchaser, or its designee, from entering into an employment relationship under
such terms and conditions as are acceptable to the Purchaser, with any
employee, manager or agent of the Business.


 


6.17                           Labor
Matters. Except as set forth in Schedule 6.17, the Sellers
employ all personnel working at the Premises or in the Business and none of the
foregoing is a party to any collective bargaining or other labor union contract
applicable to persons employed for the benefit of the Business, no collective
bargaining agreement is being negotiated by the Sellers and none of the Sellers
has knowledge of any activities or proceedings (a) involving any
unorganized employees of the Business seeking to certify a collective
bargaining unit or (b) of any labor union to organize any of the employees
of the Business. There is no labor dispute, strike or work stoppage against
the Sellers affecting or threatening to affect the Business pending or
threatened which may interfere with the operation of the Premises or the
Business.


 


21

















 


6.18                           Compliance
with Laws.


 


(a)                                  To
each of the Sellers’ or their Affiliates knowledge, each Seller and the
Business is now and at all times has been in material compliance (provided the
lack of any compliance will not have or have had a Material Adverse Effect on
the Business or the Acquired Assets) with all applicable federal, state and
local statutes, ordinances, rules, regulations, permits, consents, licenses,
orders or other authorizations governing or related to the Acquired Assets or
the Business and the Business’s liquor and gaming related activities,
including, but not limited to, the Liquor and Gaming Laws of the State of
Louisiana, as amended, and the rules and regulations promulgated
thereunder, and no Seller nor any Affiliates thereof, have received any notice,
demand, complaint or order from any Governmental Body asserting that a license
of or related to the Business should be revoked, suspended, not issued or
issued with qualifications, or that they or the Business are not in full
compliance with the same. Larose, both as of the Agreement Date and the Closing
Date, has a validly issued Device Owner’s License permitting the ownership and
operation of Devices at the Premises and such Device Owner’s License is not
currently subject to any investigation or notice of investigation, suspension
or revocation from any state, federal, local or parish agency or authority. Purchaser
acknowledges that the Louisiana State Police have not yet issued an
Establishment License to Larose and/or Midway, as applicable, and that at
present there is still pending an investigation by the Louisiana State Police
as part of the issuance of an Establishment License for the operation of
Devices at the Truck Stop.


 


(b)                                 Except
as set forth in Section 6.18(a), to each of the Sellers’ or their
Affiliates’ knowledge, there is no investigation or review of the Acquired
Assets or the Business now underway or threatened by any Governmental Body,
including, without limitation, any investigation or review by any gaming
authority, nor has any of the foregoing indicated an intention to conduct the
same.


 


6.19                           Environmental
and Safety Matters. Except as set forth on Schedule 6.19, with
respect to the Business, the Premises and the Acquired Assets:


 


(a)                                  the
Sellers and their Affiliates, as applicable, have complied and are in material
compliance, in all respects (provided the lack of any compliance will not have
or have had a Material Adverse Effect on the Business or the Acquired Assets),
with all Environmental and Safety Requirements;


 


(b)                                 without
limiting the generality of the foregoing, each of the Sellers and any of their
Affiliates have obtained and complied with, and are in material compliance, in
all respects (provided the lack of any compliance will not have or have had a
Material Adverse Effect on the Business or the Acquired Assets), with all
permits, licenses and other authorizations that may be required pursuant
to Environmental and Safety Requirements for the occupation of the Premises and
the operation of the Business, including, but not limited to, the sale and
storage of fuel and fuel oil and the disposal of the Business’s waste water, a
list of all such permits, licenses and other authorizations is set forth on Schedule 6.19(b);


 


(c)                                  none
of the Sellers nor any of their Affiliates have received any written or oral
notice, report or other information or has any knowledge regarding any actual
or alleged violation of Environmental and Safety Requirements, including any
investigatory, remedial or corrective obligations, relating to the Business,
the Premises or any Acquired Asset arising under Environmental and Safety
Requirements;


 


22

















 


(d)                                 to
each of the Seller’s knowledge, none of the following exists at the
Premises:  (i) asbestos-containing
material in any form or condition; (ii) materials or equipment
containing polychlorinated biphenyls; or (iii) landfills, surface impoundments
(i.e. ground disposals areas, covered or uncovered, in which trash or any other
materials are stored or disposed of) or similar disposal areas;


 


(e)                                  none
of the Sellers nor any of their Affiliates have caused, will not knowingly
cause, and there has not occurred during the time the Sellers have owned or
operated the Premises, any of the Acquired Assets or the Business, the release
of any “hazardous substance” on the Premises in violation of any Environmental
and Safety Requirements;


 


(f)                                    none
of the Sellers or any of their Affiliates has, either expressly or by operation
of law, assumed or undertaken any liability, including any obligation for
corrective or remedial action, of any other Person relating to Environmental
and Safety Requirements; and


 


(g)                                 to
each of the Seller’s knowledge, Schedule 6.19(g) is a full,
complete and accurate list of all Underground Storage and Aboveground Storage
Tanks (UST’s and AST’s, respectively) on the Premises, each of which is now and
has at all times prior hereto been operated and maintained in full compliance
with all applicable Environmental and Safety Requirements.


 


6.20                           Governmental
Authorizations. Any registration, declaration or filing with, or consent,
approval, license, permit or other authorization or order by, any Governmental
Body, domestic or foreign, that is required in connection with the valid
execution, delivery, acceptance and performance by the Sellers under this
Agreement or the consummation by the Sellers of any transaction contemplated
hereby or as otherwise necessary for the operation of the Business has been or
will be completed, made or obtained on or before the Closing Date, except any
such filings or approvals that may be required of the transfer
contemplated hereunder by the Louisiana State Police and the Louisiana Gaming
Control Board.


 


6.21                           Premises.
To the best of the Sellers’ knowledge, information and belief, there is not now
pending nor threatened: (a) any litigation or proceeding to take all or
any portion of the Premises by eminent domain or other condemnation proceeding;
(b) any street widening or changes in any highway or traffic lanes or
patterns in the immediate vicinity of the Premises; or (c) other change or
modification by a Governmental Body which would adversely affect the Premises,
the Business or any of the Acquired Assets. Further, to the best of the Sellers’
knowledge, information and belief, (i) the Premises are connected to and
serviced by adequate water, gas, sewage disposal and electric facilities; (ii) all
material systems of the Premises, including, but not limited to, heating,
ventilation, air conditioning, electrical, plumbing, roof, fuel pumps and
lines, etc., are in good operating condition, subject to reasonable and
ordinary wear and tear; and (iii) the Premises and all improvements
located thereon are in full compliance with current building and zoning laws. Sellers
have no information or knowledge that any portion of the Premises are being
condemned or otherwise taken for use as part of any street widening process.


 


6.22                           Disclosure.
To the best of the Sellers’ knowledge, information and belief, neither this
Agreement, nor any of the exhibits, schedules, attachments, written statements,
documents, certificates, reports or other items prepared or supplied to the Purchaser
by or on behalf of the Sellers or any of their Affiliates with respect to the
transactions contemplated hereby contain any untrue statement of a material
fact or omit a material fact necessary to make each statement contained herein
or therein not misleading.


 


23

















 


6.23                           Operations.


 


(a)                                  The
Business and the Acquired Assets, including, but not limited to, the fuel and
gaming activities conducted therein, have been and shall be, at all times from
and after the Agreement Date through the Closing, operated pursuant to sound
business practices as are necessary to preserve, protect,  and provide maintenance for the Business and
the Acquired Assets and in no event following the Agreement Date, shall the
amount of the Business’s inventory for any item of inventory, including, but
not limited to fuel, food or convenience items, be less than the average amount
of inventory for that item at any time during the twelve (12) month period
preceding the Closing Date. All of the Acquired Assets, both as of the
Agreement Date and as of the Closing Date, shall be in good operating condition
and repair, reasonable wear and tear excepted.


 


(b)                                 All
Devices currently placed in the Premises are owned by Larose. There is no
separate agreement with any third party to operate the Listed Devices or manage
any portion of the Business. Larose, for itself and any Affiliates, agrees, as
a part of the Closing, to timely request a coordinated transfer of the
Devices from the Louisiana gaming regulatory authorities and to cooperate in
the transfer of said Devices and to timely provide all documentation and
information as shall be necessary to ensure the orderly and proper transfer of
Devices at the Premises, including ensuring that there is no period of time
during such a transfer when at least forty (40) Devices are not legally
operating on the Premises and available for play by the general public. Concurrently
herewith, Larose, for itself and for its Affiliates, agrees to execute a
purchase agreement with Southern Trading Corporation, a Louisiana corporation,
or any other designee of the Purchaser who is also a holder of a valid
Louisiana device owner’s license, under which all of Larose’s interest in the
Listed Devices shall be transferred to Southern Trading Corporation, or such
designee, for a total consideration equal to One Dollar ($1.00) per Listed
Device; provided, however, in no
event shall the total consideration paid for the Listed Devices and the
acquired Assets exceed the Purchase Price. It is the purpose of this Agreement
and the intent of the Purchaser and Sellers that the total monetary
consideration to be paid by the Purchaser and the acquirer of the Listed
Devices for all of the Acquired Assets, including the Listed Devices, shall
equal, but not exceed, the Purchase Price.


 


(c)                                  The
amount and type of fuel sales at the Premises, at all times for the last twelve
(12) months, have been sufficient to qualify the Premises, pursuant to the
Liquor and Gaming Laws of the State of Louisiana, as a truck stop facility
approved to operate not less than fifty (50) Devices. None of the Sellers has
any knowledge of any information that would lead any party to reasonably
anticipate any change in the foreseeable future in the level and type of fuel
sales at the Premises. Not more than one (1) percent of all fuel sales at
the Premises during any twelve (12) month period were made to the Sellers or
any Affiliate of the foregoing.


 


6.24                           Certain
Payments. No officer, director, employee or agent of the Business, the
Sellers or any of their Affiliates, nor any other person acting with or on
behalf of the Business has directly or indirectly (a) offered, agreed to
make or made any contribution, gift, bribe, rebate, payoff, influence payment,
kickback or other payment to any Person, private or public, regardless of form,
whether in money, property or services (i) to obtain favorable treatment
in securing business, permits or licenses, (ii) to pay for favorable
treatment for business, permits or licenses secured, (iii) to obtain any
special concessions or for special concessions already obtained or (iv) in
violation of any legal requirement or (b) established or maintained any
fund or asset related to the Business, the Acquired Assets or their operations.


 


24

















 


6.25                           Interest
in Competitors, Suppliers and Customers. Except as set forth on Schedule 6.25,
none of the Sellers nor any Affiliates of the foregoing, have any ownership
interest in any competitor, supplier or customer of the Business.


 


6.26                           No-Shop.
Sellers, for themselves and for any
Affiliates, agree that until the termination or expiration of this Agreement,
neither they nor any of their Affiliates shall enter into any agreements nor
have discussions with any third parties for the sale of the Acquired Assets nor
grant any rights of first refusal or options to acquire the same in any form whatsoever.
Sellers acknowledge for themselves and for their Affiliates during the term of
this Agreement, Purchaser shall have the sole and exclusive right to purchase
the Acquired Assets.


 


6.27                           Representations
and Warranties of the Purchaser. As a material inducement to the Sellers to
enter into this Agreement and sell the Acquired Assets hereunder, the Purchaser
represents and warrants to each of the Sellers as follows:


 


(a)                                  Purchaser
is duly formed, validly existing and in good standing under the laws of the
State of Delaware. Purchaser possesses all requisite power and authority, and
all licenses, permits and authorizations necessary, to own and operate its
properties, to carry on its businesses as now conducted and presently proposed
to be conducted and to carry out the transactions contemplated by this
Agreement. Purchaser is not in violation of any of the provisions of its
Articles of Incorporation or By-Laws.


 


(b)                                 The
execution, delivery and performance of this Agreement and all other agreements,
instruments and transactions contemplated hereby and thereby to which the
Purchaser is a party have been duly authorized by all requisite company
approvals. This Agreement and all other agreements and instruments contemplated
hereby to which the Purchaser is a party each constitutes a valid and binding
obligation of the Purchaser enforceable in accordance with its terms. The execution
and delivery by the Purchaser of this Agreement and all other agreements and
instruments contemplated hereby to which the Purchaser is a party, the purchase
of the Acquired Assets hereunder and the fulfillment of and compliance with the
respective terms hereof by the Purchaser, does not and shall not: (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in a violation of, the Articles of
Incorporation or By-Laws of the Purchaser, or any law, statute, rule or
regulation to which the Purchaser is subject.


 


Section 7.                                            Conditions
Precedent.


 


7.1                                 Conditions
to the Purchaser’s Obligations. The obligation of the Purchaser to purchase
the Acquired Assets shall be expressly subject to the satisfaction and
fulfillment, at or before the Closing, of each of the following conditions
precedent and any other such conditions stated elsewhere in this Agreement.


 


(a)                                  Prohibition.
There shall have been no lawsuit, judgment, order, suit, complaint or
preliminary or permanent injunction entered, pending or threatened in any
action or proceeding before any United States federal, state, parish or local
court, or any foreign court, of competent jurisdiction or Governmental Body
threatening or enjoining, in whole or in part, the Business’s current
operations, making illegal or prohibiting the consummation of the transactions
hereunder, including the transfer of the Acquired Assets and the operation of
Devices on the Premises.


 


25

















 


(b)                                 Related
Agreements. To be effective as of the Closing Date: (i) Larose shall
have executed a purchase agreement between Larose and Southern Trading
Corporation, or any other properly licensed designee of the Purchaser,
transferring to Southern Trading Corporation, or such other designee, all of
the Listed Devices; (ii) Purchaser and Penn shall have entered into the
Independent Contractor Agreement set forth in Exhibit E; and (iii) Purchaser,
Penn and the third parties referred to therein shall have entered into the
Right of First Refusal Agreement set forth in Exhibit F.


 


(c)                                  Representations
True. The representations and warranties of the Sellers set forth in this
Agreement and the exhibits, schedules, attachments, written statements,
documents, certificates, Closing Reports, financial statements or other items
prepared or supplied to the Purchaser by or on behalf of the Sellers, shall be
true and correct in all respects on the Closing Date with the same effect as
though all such items had been made on and as of such date, and the Sellers
shall each deliver to the Purchaser a certificate certified by an officer of
the Sellers, and Penn, individually, certifying such or identifying any changes
as of the Closing Date (the “Closing Certificate”).


 


(d)                                 Good
Standing Certificate. The Purchaser shall have received a good standing
certificate for each of the applicable Sellers dated within fifteen (15) days
prior to the Closing Date.


 


(e)                                  Condition
of Assets. The Acquired Assets shall be in good physical and operating
condition, excepting normal wear and tear only, as existed on the Agreement
Date. No damage or casualty shall have occurred to the Acquired Assets, Devices
or operations of the Business prior to the Closing Date.


 


(f)                                    Legal
Opinion. Purchaser shall have received a legal opinion, substantially in
the form of Exhibit G attached hereto, from legal counsel for
the Sellers.


 


(g)                                 No
Adverse Change. As of the Closing Date, there shall be no adverse change in
the operating results, operations, condition (financial or otherwise), employee
relations or customer or supplier relations of the Business or the Acquired
Assets, as applicable.


 


(h)                                 Additional
Documents. The Purchaser shall have received from the Sellers, as
appropriate, each of the instruments and other documents referred to elsewhere
in this Agreement.


 


(i)                                     Assumed
Contract Consents. The Purchaser shall have received the consent(s) of the
lessors under the leases and/or contracts identified on Schedule 6.9(b).


 


(j)                                     Title
Policy. The Title Company shall be unconditionally prepared to issue the
Title Policy in the name of the Purchaser or its designee, in the amount of the
Purchase Price.


 


(k)                                  Financing.
The Purchaser shall have received the funds from any financing for the
contemplated purchase of the Acquired Assets.


 


(l)                                     Larose
or Midway, as applicable, shall have been issued an Establishment License by
the Louisiana State Police and/or Gaming Control Board.


 


7.2                                 Conditions
to the Sellers’ Obligations. The obligation of the Sellers to sell the
Acquired Assets to the Purchaser shall be subject to the satisfaction and
fulfillment, at or before the Closing, of the following conditions precedent:


 


26

















 


(a)                                  There
shall have been no lawsuit, judgment, order, suit, complaint or preliminary or
permanent injunction entered, pending or threatened in any action or proceeding
before any United States federal, state, Parish or local court, or any foreign
court, of competent jurisdiction or Governmental Body (which has jurisdiction
over the enforcement of any applicable laws) making illegal or prohibiting the
consummation of the transactions hereunder, including the transfer of the
Acquired Assets or the operation of Devices on the Premises;


 


(b)                                 Purchaser
has timely delivered or caused to be delivered the Purchase Price, plus or
minus any applicable prorations hereunder, to the Escrow Agent;


 


(c)                                  Purchaser
shall have performed all obligations and complied with all agreements and
covenants required hereunder to be performed by Purchaser on or before the
Closing Date;


 


(d)                                 Purchaser’s
representations and warranties contained herein and in any documents furnished
to the Sellers on or prior to the Closing Date shall be true and correct in all
respects as of the Closing Date;


 


(e)                                  The
Title Company has confirmed to Sellers that the Title Company is
unconditionally prepared to disburse the Purchase Price (plus or minus all
applicable prorations and less the Escrow Hold Back) to the Sellers or its
designees subject only to the performance by the Sellers of their respective
obligations under this Agreement;


 


(f)                                    Sellers
shall have received the Agreements referred to in Section 7.1(b).


 


(g)                                 The
Sellers shall have received the consent(s) of the lessors under the leases
and/or contracts identified on Schedule 6.9(b).


 


(h)                                 Except
for the consents under item (g) above, if any of the foregoing conditions
are not satisfied on or prior to the Closing Date for a reason other than a
default under this Agreement by the Sellers, Sellers shall give the Purchaser
written notice of the foregoing conditions not satisfied and Purchaser shall
have thirty (30) Business Days during which to cure the same. In the event the
Purchaser is unable to cure the conditions within such period, the Sellers may terminate
this Agreement and the Escrow Agent shall promptly release the Deposit to the
Seller. Acceptance by any of the Sellers of any portion of the Purchase Price
shall be evidence of the waiver by each of the Sellers of the foregoing
conditions precedent.


 


Section 8.                                            Omitted.


 


Section 9.                                            Non-Solicitation.


 


9.1                                 Notwithstanding
anything contained in this Agreement to the contrary, each of the Sellers, for
themselves and their Affiliates, agrees for a period of three (3) years
following the Closing and as partial consideration for the Purchase Price, that
neither they, nor their Affiliates, shall employ, solicit for employment or
induce to leave their employment or other relationship, any employee, customer,
vendor or supplier of the Purchaser, its Affiliates or the Business, nor any
employee who may be permanently hired by the Purchaser or Southern Trading
Corporation.


 


27

















 


9.2                                 Nothing
contained in this Section is intended or shall it be construed as
prohibiting any party from running “help wanted” ads or other general
solicitations for employees or from hiring respondents to such general
solicitations, regardless of whether such respondents are or have been employed
by one of the parties to this Agreement.


 


Section 10.                                      Deed,
Adjustments and Prorations, Closing.


 


10.1                           Deed.                 Subject to
Purchaser’s review and acceptance of Title Evidence, Sellers shall convey the
Premises to Purchaser by an Act of Cash Sale (the “Deed”), attached hereto as Exhibit H,
conveying good, marketable and indefeasible fee simple title to the Premises
subject only to the following:


 


(a)                                  Zoning
laws;


 


(b)                                 Current
real estate and ad valorem taxes and assessments,
if any, not yet due and payable; and


 


(c)                                  Permitted
Encumbrances.


 


Such Deed shall contain a
legal description of the Premises which is based upon and consistent with the
Survey and approved of by the Purchaser.


 


10.2                           Taxes
and Assessments: Closing Costs.


 


(a)                                  Real
estate and ad valorem taxes, general and special
and assessments (collectively “Real Estate Taxes”),  utilities, costs, charges and expenses
generated by the operations of the Acquired Assets and other similar charges,
as well as revenues generated by the Acquired Assets, shall be prorated between
the Sellers and the Purchaser as of the Closing Date, such that credits,
charges, costs, expenses and revenues up to noon local time on the Closing Date
and all days preceding the Closing Date shall be allocated to Sellers, as
applicable, and credits, charges, costs, expenses and revenues after noon local
time on the Closing Date shall be allocated to Purchaser. The Purchase Price
shall be adjusted at the Closing to reflect the prorations, in accordance with
the Settlement Statement.


 


(b)                                 The
parties agree that, in accordance with Louisiana law, all revenue from the
Listed Devices shall be collected during the last normally scheduled “drop” or
collection prior to or on the Closing Date and that the proration of all
revenue generated from each Listed Device shall be calculated from the time of
the foregoing “drop” and adjusted for the balance of the Closing Date until
noon local time by using the print out of all coin-in and prizes paid as
generated by each Listed Device from the time of the drop to noon local time on
the Closing Date.


 


(c)                                  If
the actual amount of Real Estate Taxes is not known on the Closing Date, Real
Estate Taxes shall be prorated on the basis of the rate shown for the Premises
on the last available tax duplicate; provided, that there shall be deducted
therefrom all applicable credits. Sellers represent and warrant that there are
no special assessments with regard to the Premises. Upon receipt of the final
tax duplicate for the period encompassing the Closing Date, the parties shall
adjust, outside of the escrow, the proration of Real Estate Taxes based upon
the actual tax duplicate.


 


28

















 


(d)                                 If
any errors or omissions are made regarding adjustments and prorations as
aforesaid, the parties shall make the appropriate corrections promptly upon the
discovery thereof. Any corrected adjustment or proration shall be paid in cash
to the party entitled thereto.


 


(e)                                  Sellers
shall not assign any policies of liability or property damage insurance
covering the Premises. No insurance premiums shall be prorated. Purchaser shall
pay for recording fees. Purchaser shall pay any Louisiana transfer taxes and
conveyance fees associated with the conveyance of the Real Property. Escrow
fees shall be paid by the Purchaser. Each party shall pay its own attorneys’
fees and all expenses incurred by it other than expenses specifically addressed
elsewhere in this Agreement. All revenues and expenses arising from the
operation of the Acquired Assets and the Business (collectively, the “Operating
Charges”) accruing, earned or incurred on or prior to the Closing Date shall be
the sole responsibility of the Sellers (regardless of when an invoice is issued
or payment for such charges and expenses is due), including but not limited, to
any salaries, utilities, Taxes or other costs. All Operating Charges arising
from the operation of the Acquired Assets and the Business and incurred after
the Closing Date shall be the sole responsibility of the Purchaser. The parties
shall make a reasonable proration of the Operating Charges at Closing based
upon the most recent invoice for each Operating Charges and shall adjust such
proration upon receipt of the final invoice encompassing the Closing Date for
each such Operating Charges.


 


(f)                                    Closing.
This transaction shall be closed through an escrow that is to be held by the
Title Company, in accordance with the general provisions of the usual form of
escrow agreement then in use by such Title Company for transactions similar to
this with such special provisions inserted as may be required to conform with
this Agreement. Each party shall execute and deliver on a timely basis all
escrow instructions, deeds, funds, the Settlement Statement and other documents
reasonably necessary to accomplish Closing. In addition to, and not in limitation
of, the foregoing:


 


(i)                                     On
or before the Closing Date, Sellers shall execute, deliver or cause to be
delivered to the Title Company all of the items listed below:


 


(a)                                  The
Deed;


 


(b)                                 Any
other instruments then required pursuant to any other sections of this
Agreement;


 


(c)                                  Mechanics
Lien Affidavit required by the Title Company; and


 


(d)                                 Each
Seller’s affidavit of non-foreign status, as contemplated by Section 1445
of the Code attached hereto as Exhibit D.


 


(ii)                                  On
or before the Closing Date, Purchaser shall deliver or cause to be delivered to
Title Company the Purchase Price, subject to the prorations and credits as
herein provided, and execute and deliver to the Sellers an assumption agreement
in form and substance reasonably satisfactory to Sellers and their counsel
under which the Purchaser, or its designee, assumes and agrees to perform all
obligations under the Assumed Contracts that accrue after the Closing Date.


 


(iii)                               The
transactions provided for in this Agreement shall be completed by the Title
Company on the Closing Date by doing each of the following:


 


29

















 


(a)                                  by
filing the Deed for record in the Deed Records of Lafourche Parish, Louisiana;


 


(b)                                 by
causing the issuance of the Title Policy, subject only to the Permitted
Encumbrances, and forwarding the Title Policy to Purchaser with a copy to
Sellers;


 


(c)                                  by
prorating taxes, assessments and other amounts, in accordance with this
Agreement and the Settlement Statement with respect to the Premises, and paying
and charging Purchaser or Sellers for those costs and expenses to be paid by
Sellers or Purchaser pursuant hereto;


 


(d)                                 by
delivering to Purchaser: (i) the Seller’s/Owner’s Affidavit and Indemnity,
fully executed by the applicable Sellers, and attached hereto as Exhibit I;
and (ii) the FIRPTA Affidavit attached hereto as Exhibit D;  and


 


(e)                                  by
preparing and forwarding to Purchaser and Sellers four (4) signed copies
of the Settlement Statement setting forth all receipts and disbursements provided
for herein.


 


In addition to the
obligations required to be performed hereunder by Sellers at the Closing,
Sellers agree to perform such other acts, and/or to execute and deliver to
Purchaser such further instruments, documents and other materials, as are
reasonably requested by Purchaser at or subsequent to Closing in order to
effect the consummation of the transaction contemplated herein and to vest
title to the Premises and the Acquired Assets in Purchaser, including, without
limitation, the assignment of all rights of Sellers in and to any easements for
the benefit of the Premises; provided,
however, that the foregoing instruments and other materials, if any,
shall not enlarge the scope of Sellers’ obligations hereunder.


 


(g)                                 In
the event the Title Company is unable to simultaneously perform all
instructions set forth in Section 10(f)(iii)(a) through (e) on
the Closing Date, the Title Company shall so notify Sellers and Purchaser, and
shall retain, unless otherwise instructed by the party depositing the same, all
documents and funds deposited with the Title Company until receipt by the Title
Company of written instructions executed by Sellers and Purchaser or by a Court
of competent jurisdiction.


 


(h)                                 If
the Purchaser (i) disapproves any condition referred to in this Agreement
within the applicable time period and in the manner set forth in the Agreement,
or (ii) is otherwise allowed to terminate this Agreement and cancel the
Escrow, without thereby committing an act of default under this Agreement or the
Escrow and does so, all obligations of the parties under this Agreement shall,
except as otherwise set forth, terminate and none of the parties hereto shall
have any further obligation to the other under this Agreement. In such event,
Escrow Agent shall return all funds (after deducting its charges, if its
charges are to be borne by the party depositing such funds) and documents then
in Escrow to the party depositing same and each party shall promptly return all
documents in the possession of such party to the other party.


 


(i)                                     Possession.                                At
noon local time on the Closing Date, subject in all events to the payment by
the Purchaser of the Purchase Price, Sellers shall cease operation of the
Acquired Assets and 


 


30

















 


shall deliver possession
thereof to the Purchaser, and all risk of loss with respect thereto shall pass
to the Purchaser or its designee.


 


(j)                                     Inventory
Count. The Sellers and Purchaser agree that at 7:00 a.m. local time on
the Closing Date, a representative from each of them (the “Representatives”)
shall meet at the Truck Stop and shall jointly perform the following
functions:


 


(i)                                     count
any food stuffs and convenience items held by the Sellers for sale to the
general public;


 


(ii)                                  shall
jointly verify the amount of motor and diesel fuels remaining in any
underground storage tanks;


 


(iii)                               shall
jointly verify the amount of all currency contained in the Listed Devices as of
7:00 a.m. local time on the Closing Date;


 


(iv)                              shall
jointly verify the amount of all currency kept in the safe located in the
casino; and


 


(v)                                 shall
further cooperate to turn over, at noon local time, subject in all events to
the payment of the Purchase Price by the Purchaser, all keys, passwords,
accounts, and copies of all records, documents, instruments and any other items
necessary for the immediate and complete operation of the Acquired Assets.


 


(k)                                  Inventory
Adjustment.


 


(i)                                     Purchaser
agrees to pay to the Sellers, on the Closing Date: (i) a good faith,
reasonable estimate (the “Estimate”) of the actual cost of those items
remaining on the Premises and described in Section 10(j)(i) and (ii) above;
provided, however, each such item
must be in good, usable, saleable condition; (ii) the dollar value of the
of currency remaining in the safe located in the casino; and (iii) the
dollar value of the currency contained in the Listed Devices as verified under Section 10(j)(iii) above,
less any and all unclaimed payouts, Taxes or fees, which currency shall remain
in the safe and the Listed Devices following the Closing and shall become the
property of the Purchaser.


 


(ii)                                  Within
sixty (60) Business Days of the Closing Date, the parties shall adjust the
Estimate made in Section 10(k)(i) above, if necessary, to equal the
actual verifiable cost incurred by any Seller of those items remaining on the
Premises as of 7:00 a.m. local time on the Closing Date and described in Section 10(j)(i) and
(ii) above. Seller must be able to provide Purchaser with verification, in
a form reasonably acceptable to Purchaser, of a Seller’s actual, incurred
cost for the items in Section 10(j)(i) and (ii) which remained
on the Premises on the Closing Date. Any Seller shall only be entitled to be
reimbursed for their actual cost of such items without premium or interest. Any
items, determined by the Purchaser as not being in good, usable, saleable
condition or for which the actual verifiable cost cannot be demonstrated to the
Purchaser’s satisfaction, shall be removed by Sellers, within five (5) Business
Days of such determination, at their sole cost and expense.


 


31

















 


(l)                                     Escrow
Hold Back. From and after the Closing Date, Escrow Agent shall withhold the
Escrow Hold Back from the Sellers’ proceeds hereunder and shall hold such funds
in escrow. In the event: (i) the Purchaser shall receive any invoice, bill
or letter demanding payment for any Operating Charges that accrued or relate to
any period of time on or prior to the Closing Date; or (ii) any account
receivable transferred hereunder is not collected in full by the thirtieth day
(30) prior to the Hold Back Expiration Date (as hereinafter defined), Purchaser
shall send evidence of such Operating Charges to the Escrow Agent and to the
Sellers (“Hold Back Notice”).


 


(i)                                     Sellers
shall have ten (10) Business Days following their receipt of the Hold Back
Notice to serve, in writing to both the Escrow Agent and the Purchaser, any
objections they may have to the same. If no objection is timely served by
the Sellers, Escrow Agent is herewith authorized, without further action by any
party, to promptly pay such Operating Charges out of the Escrow Hold Back.


 


(a)                                  If
Sellers shall timely object to any payment out of the Escrow Hold Back and the
basis for an objection is that the Operating Charges that are the subject of
the Hold Back Notice arose after the Closing Date, then the Escrow Agent shall
hold such amount as is identified in the Hold Back Notice until such time as it
receives written instructions from all parties to disburse the same; or


 


(b)                                 If
Sellers shall timely object to any payment out of the Escrow Hold Back and the
basis for an objection is anything other than an objection based upon Section 10(i)(i)(a) above,
the Escrow Agent shall hold the funds identified in the Hold Back Notice for an
additional thirty (30) calendar days, after which it shall disburse such funds
as directed by the Purchaser.


 


(ii)                                  Promptly
after that date which is one hundred twenty (120) days after the Closing Date (“Hold
Back Expiration Date”), Escrow Agent shall release any funds then remaining in
the Escrow Hold Back to the Sellers, unless such funds have been the subject of
a Hold Back Notice and subsequent objection in which event such funds shall
remain in escrow until the Escrow Agent has received written instructions from
both the Purchaser and the Sellers.


 


Section 11.                                      Miscellaneous.


 


11.1                           Expenses.
Unless specifically allocated by this Agreement, each of the parties shall be
obligated to pay its own expenses (including all fees and expenses of legal
counsel, environmental consultants and accountants).


 


11.2                           Sellers’
Resignation. Sellers shall and shall cause their owners, shareholders,
members, managers, officers, employees and agents to, resign, effective as of
the Closing Date, any positions they may hold within the Business,
including, but not limited to, the positions of agent or employee.


 


11.3                           Update
to Schedules and Exhibits. The Sellers, as appropriate, shall promptly
notify the Purchaser, prior to the Closing Date, of any changes or
modifications to the information contained on the schedules or exhibits
attached to this Agreement or in any document, record or instrument supplied to
the Purchaser or any of its agents as a part of the transactions
contemplated herein and provide in written form an amended schedule,
exhibit, document, record or instrument, as the case may be. Notwithstanding
anything contained herein to the contrary, Sellers shall update the attached
Schedules within thirty (30) days of the Agreement Date. Notwithstanding the
foregoing, upon receipt of any change or modification 


 


32

















 


to any schedule or exhibit or
in any record, document or instrument described above which shall have or
identify a Material Adverse Effect, Purchaser shall have the right, in its sole
discretion, to terminate this Agreement and upon such termination the Escrow
Agent shall promptly release the Deposit to the Purchaser.


 


11.4                           Remedies.


 


(a)                                  In
the event of any actual or alleged default by any party hereto (the “Defaulting
Party”), the non-defaulting party (the “Non-Defaulting Party”) shall provide
written notice to the Defaulting Party (“Default Notice”) specifying the
default; setting forth the Non-Defaulting Party’s claim that the matter constitutes
a default; and identifying the steps or actions that the Non-Defaulting Party
believes should be taken in order to cure the alleged default. The Defaulting
Party shall have a period of seven (7) days, or such additional time as may be
reasonably required, to cure the alleged default (the “Cure Period”). The
Defaulting Party shall have no liability for any actual or alleged default that
is cured within the Cure Period.


 


(b)                                 Each
of the parties hereto shall have all rights and remedies set forth in this Agreement
and any other documents or instruments relating to the consummation of the
transactions contemplated under this Agreement, and all rights and remedies
which such parties have been granted at any time under any other agreement or
contract and all of the rights which such parties have under any law. No remedy
hereunder or thereunder conferred is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or thereunder or now or
hereafter existing at law or in equity or by statute or otherwise. The Sellers
and Purchaser having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.


 


11.5                           Amendments
and Waivers. No oral modification hereof shall be binding upon the parties;
all modifications and amendments shall be in writing and signed by the parties.
Failure by any party to insist upon or enforce any of its respective rights,
benefits or remedies shall not constitute a waiver thereof. Any party hereto may waive
the benefit of any provision or condition for such party’s benefit contained in
this Agreement; provided, however,
such a waiver must be specifically expressed in writing.


 


11.6                           Survival
of Agreement. All covenants, representations and warranties contained in
this Agreement or made in writing by any party in connection herewith shall
survive the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.


 


11.7                           Successors
and Assigns. All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective heirs, personal representatives, executors, administrators,
successors and assigns of the parties hereto whether or not so expressed;
provided that none of the Sellers shall be permitted to assign their rights or
obligations under this Agreement. Except as otherwise expressly provided
herein, nothing expressed in or implied from this Agreement is intended to
give, or shall be construed to give, any Person, other than the parties hereto
and their permitted successors and assigns, any benefit or legal or equitable
right, remedy or claim under or by virtue of this Agreement or any such other
document.


 


33

















 


11.8                           Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement.


 


11.9                           Counterparts.
This Agreement may be executed in two or more counterparts, any one of
which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.


 


11.10                     Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a substantive part of
this Agreement.


 


11.11                     Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Louisiana, without regard to principles of conflict of
laws.


 


11.12                     Notices.
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered personally to the recipient, (b) one
(1) Business Day after being sent to the recipient by reputable overnight
courier service (charges prepaid), (c) three (3) Business Days after
posting in the United States mail having been mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid, or (d) when
sent via facsimile if a copy is delivered personally, couriered or mailed to
the recipient as set forth above. Such notices, demands and other
communications shall be sent to the parties at the addresses indicated below:


 


If to
any of the Sellers, to:


 


Larose
Truck Plaza and Casino, L.L.C.


c/o
Joe F. Penn, Jr.


4411
Cherokee Rose Drive


Zachary,
Louisiana 70791


Facsimile:


 


with a
required copy to:


 


David
M. Culpepper, Esq.


David
M. Culpepper, L.L.C.


400
Poydras Street, Suite 1710


New Orleans, Louisiana 70130


Facsimile:
504-680-6080


 


If to the Purchaser, to:


 


Gameco
Holdings, Inc.


c/o
Colonial Downs


1869
Mills Highway


Breaux
Bridge, Louisiana 70517


Attn:
Stan Guidroz


Facsimile:
337-507-2282


 


34

















 


with a
required copy to:


 


Hahn
Loeser & Parks LLP


3300
BP Tower


200
Public Square


Cleveland,
Ohio 44114


Attn:
Stanley R. Gorom III, Esq.


Facsimile:
216-274-2460


 


or to such other address
or to the attention of such other person as the recipient party has specified
by prior written notice to the sending party.


 


11.13                     Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement. The
parties intend that each representation, warranty and covenant contained herein
shall have independent significance. If any party has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which
such party has not breached shall not detract from or mitigate the fact that
such party is in breach of the first representation, warranty or covenant.


 


11.14                     Complete
Agreement. This Agreement, those documents expressly referred to herein,
and the other documents of even date herewith, or dated as of the Closing Date,
delivered or executed in connection with the transactions contemplated hereby
embody the complete agreement and understanding among the parties and supersede
any prior agreements or representations by or among the parties, written or
oral, including the Letter of Intent dated October 3, 2005, and executed
by the parties prior to the Agreement Date, which may have related to the
subject matter hereof in any way.


 


11.15                     Indemnification.


 


(a)                                  In
consideration of the Purchaser’s execution and delivery of this Agreement and
purchase of the Acquired Assets hereunder, and in addition to all of each of
Sellers’ other obligations under this Agreement and in addition to all other
rights and remedies available at law or in equity, each of the Sellers agree,
jointly and severally, to defend, protect and indemnify the Purchaser and all
of its officers, directors, shareholders, members, managers, partners,
Affiliates, employees, agents, representatives, successors and assigns
(including those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Purchaser Indemnitees”), and save and hold each of them harmless from and
against, and pay on behalf of or reimburse such party on demand as and when
incurred, any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities, damages and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys’ fees and
disbursements, interest and penalties and all amounts paid in investigation,
defense or settlement of any of the foregoing and claims relating to any of the
foregoing (the “Purchaser Liabilities”),
incurred by the Purchaser Indemnitees or any one of them as a result of,
arising out of, or relating to: (a) the breach by any Seller of any
representation, warranty, covenant, obligation or term contained herein; (b) any
claim, debt, cause of action, expense, obligation or liability arising or
related to the period of time prior to the 


 


35

















 


Closing Date and
related in any manner to the operation of the Business and/or the Acquired
Assets by the Sellers; or (c) any breach or default by any Seller arising
out of the execution, delivery, performance or enforcement of this Agreement
and any other instrument, document or agreement executed pursuant hereto,
except to the extent any such Purchaser Liabilities are caused by the
particular Purchaser Indemnitee’s own acts or omissions.


 


(b)                                 In
consideration of each Sellers’ execution and delivery of this Agreement and
sale of the Acquired Assets hereunder, and in addition to all of the Purchaser’s
other obligations under this Agreement and in addition to all other rights and
remedies available at law or in equity, 
the Purchaser agrees to defend, protect and indemnify each Seller and
all of their officers, directors, shareholders, members, partners, Affiliates,
employees, managers, agents, representatives, successors and assigns (including
those retained in connection with the transactions contemplated by this
Agreement) (collectively, the “Seller Indemnitees”), and save and hold
each of them harmless from and against, and pay on behalf of or reimburse such
party on demand as and when incurred, any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities, damages and
expenses in connection therewith (irrespective of whether any such Seller
Indemnitee is a party to the action for which indemnification hereunder is
sought), including reasonable attorneys’ fees and disbursements, interest and
penalties and all amounts paid in investigation, defense or settlement of any
of the foregoing and claims relating to any of the foregoing (the “Seller
Liabilities”), incurred by the Seller Indemnitees or any of them as a
result of, arising out of, or relating to: (a) the breach by the Purchaser
of any representation, warranty, covenant, obligation or term contained herein;
or (b) any claim, debt, cause of action, expense or liability arising
after the Closing Date and related in any manner to the operation of the
Business and/or the Acquired Assets by the Purchaser; or (c) any breach or
default by the Purchaser arising out of the execution, delivery, performance or
enforcement of this Agreement and any other instrument, document or agreement
executed pursuant hereto, except to the extent any such Seller Liabilities are
caused by the particular Seller Indemnitee’s own acts or omissions.


 


11.16                     Prevailing
Party Fees. In the event of a default of any condition or obligation of
this Agreement on the part of any party hereto which results in any legal
proceeding, the non-prevailing party shall pay to the prevailing party of the
litigation all reasonable costs and expenses of the legal proceeding and any
appeal therefrom, including reasonable attorney’s fees.


 


11.17                     Incorporation. Any and all Schedules, Exhibits
or other documents referred to herein or attached hereto are incorporated
herein as if fully rewritten in this Agreement.


 


11.18                     Tax
Treatment Election.


 


(a)                                  The
parties agree that this Agreement is for the purchase and sale of assets and
that Purchase Price shall be allocated among the Acquired Assets in accordance
with Section 1060 of the Code. Purchaser and Sellers agree that as a
condition to the Closing they shall, by mutual agreement, allocate the value of
the Acquired Assets pursuant to the Code. Not less than ten (10) days
prior to the Closing, the Purchaser and Sellers, as applicable, shall complete
and sign three (3) copies of form 8594, and each agrees to act in
accordance with the allocation contained therein in the course of any Tax
audit, tax review, the filing and preparation of any Tax Returns or tax
litigation. Neither Purchaser nor Sellers shall assert that the allocation as
agreed upon was not separately bargained for at arm’s length and in good faith.


 


36

















 


(b)                                 If
the parties fail to reach a mutually agreeable determination with respect to
the values to be utilized in the completion of Exhibit C within five (5) days prior to the
Closing, the disputed item(s) shall be submitted to a certified public
accountant employed by PricewaterhouseCoopers in New Orleans, Louisiana (the “Independent
Accountant”) for resolution. The Independent Accountant’s determination shall
be made using GAAP and shall be final and binding on both parties. The costs
and expenses of the Independent Accountant will be split equally between the
Purchaser and the Sellers. The Closing Date shall be extended day to day until
the third (3rd) day following the Independent Accountant’s determination of the
foregoing.


 


11.19                     Additional
Instruments and Information. All
parties agree and do hereby obligate themselves to promptly execute any
additional documents and instruments and take any other actions necessary and
proper for the complete and expeditious implementation and satisfaction of the
provisions and intent of this Agreement. In addition, Sellers agree that during
and subsequent to the sale transaction, Sellers shall have a continuing duty to
supply such information and documentation and to perform such acts as may be
required by any Governmental Body or under the Liquor and Gaming Laws of the
State of Louisiana.


 


11.20                     Monthly
Financial Statements. Sellers agree to
provide, from and after the Agreement Date through the Closing Date, within
fifteen (15) days following the close of each calendar month, financial
statements, including a statement of income and expenses and a balance sheet
prepared in manner consistent with the internal accounting and reporting practices
used by the Sellers beginning on and after January 1, 2005, reflecting the
operations and results of the Business for the prior month.


 


11.21                     Future
Development.


 


(a)                                  In
further consideration of the purchase of the Acquired Assets and the Business,
each of the Sellers (“Selling Parties”) obligate themselves and their
Affiliates not to directly or indirectly, within a fifteen (15) mile radius (“Exclusion
Zone”) of the Truck Stop commencing on the Closing Date and continuing
thereafter uninterrupted for a period of five (5) years: (i) own,
manage, operate, control, be employed by, participate in or be connected with
any aspect of a video poker truck stop facility or other business which derives
any portion of its revenues from legal or illegal gaming, whether as a sole
proprietor, owner, partner, stockholder, member, director, officer, employee,
agent, consultant, joint venturer, contractor, investor or other participant;
or (ii) be otherwise involved or connected in any manner with the
ownership, management, operation, promotion, advertisement, solicitation of
customers, marketing or sales efforts or control of any enterprise that carries
on or engages in a business directly or indirectly in competition with the
gaming, fueling (diesel and motor fuel), restaurant or convenience-store
activities of the Business.


 


(b)                                 The
foregoing restriction is an obligation not to do an act or take an action. The
Selling Parties, each for themselves and their Affiliates, acknowledge that the
foregoing obligation not to do an act is a material inducement for the
Purchaser to enter into this Agreement and is a necessary, reasonable and
appropriate restriction.


 


(c)                                  Given
the unique and competitive nature of the video poker industry and the operation
of truck stop facilities, the parties hereto acknowledge and agree that the
restrictions contained in this Section 11.21 are reasonable and
necessary to protect the Business from competition for which it otherwise has
little or no ability to defend itself. The parties hereto further acknowledge
and agree that 


 


37

















 


the restrictions
contained herein do not impose a burden upon one party which is not
commensurate with the risk to any other party.


 


(d)                                 If
a court of competent jurisdiction determines that the restrictions contained
herein are too restrictive to be enforced, in whole or in part, this provision
shall not be invalid, and all parties agree that the court shall modify the
restrictions contained herein to the extent necessary to permit their
enforcement.


 


(e)                                  In
the event of a breach or threatened breach of the provisions of this section,
the Purchaser shall be entitled to an injunction restraining each of the
Selling Parties from competing against the Purchaser or from rendering any
services to any person, firm, corporation, association, partnership or other
entity that is competing against the Purchaser. Nothing contained in this section shall
be construed as prohibiting the Purchaser from pursuing any other remedies
available for a breach or threatened breach of the restrictions contained in
this section, including the recovery of damages from the any of the Selling
Parties.


 


(f)                                    Ten
Percent (10%) of the Purchase Price is specifically allocated as payment to the
foregoing entities and individuals as consideration for their obligations and
covenants under this Section 11.21.


 


(g)                                 Notwithstanding
the foregoing, Seller’s are currently and shall remain the owners and operators
of that certain truck stop facility commonly referred to as Hollywood Truck
Plaza & Casino (“Hollywood Truck Stop”) located in Bayou Vista,
Louisiana. Seller’s continued ownership and operation of the Hollywood Truck
Stop shall not be a violation of the foregoing “obligation not to do” and shall
be the sole exception thereto.


 


11.22                     Time of
the Essence. TIME IS OF THE ESSENCE WITH RESPECT TO EACH PROVISION OF THIS
AGREEMENT. The parties acknowledge and agree that the preceding sentence is a
central, indispensable element of this Agreement.


 


11.23                     Force
Majure. Any time period or obligation to timely perform imposed upon
any party hereunder shall be extended as necessary when performance of such
obligation(s) is rendered impossible or unreasonably difficult as a result of
any acts of God, war, labor strikes or unrest, weather, acts of terrorism,
general disruptions to the economy or day-to-day operations of the government
of the Parish of Lafourche, the State of Louisiana or the United States of
America which make conducting business unreasonably difficult or impossible.


 


11.24                     SUBMISSION TO JURISDICTION AND VENUE, CONSENT TO
SERVICE OF PROCESS, ETC. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PURCHASER AND EACH OF THE SELLING PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY:


 


(A)                              AGREES
THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO
THIS AGREEMENT, THE TRANSFER CONTEMPLATED HEREIN OR ANY STATEMENT, COURSE OF
CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING
(COLLECTIVELY, “RELATED LITIGATION”) TO WHICH EITHER IS OR MAY BE A PARTY MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN
BATON ROUGE, LOUISIANA,


 


38

















 


AND SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED LITIGATION IN
ANY OTHER FORUM;


 


(B)                                ACKNOWLEDGES
THAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY RELATED LITIGATION,
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT
IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO
OBJECT, WITH RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT; AND


 


(C)                                CONSENTS
AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY
RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO IT
AT THE ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS
SERVED IN ANY OTHER MANNER PERMITTED BY LAW).


 


11.25                     JURY WAIVER  TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
OF THE PURCHASER AND EACH OF THE SELLING PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES THEIR RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS,
CAUSES OF ACTION OR SUITS ARISING FROM OR RELATED TO THE SUBJECT MATTER OF THIS
AGREEMENT.


 


11.26                     Use of storage building located on the Premises. For not more than six (6) calendar
months following the Closing Date, Purchaser shall permit the Seller, without
charge, to store any of the sellers’ video draw poker devices in the separate
storage building located on the Premises; provided, however,
in no event shall the Purchaser have any obligation to maintain the security of
such building or the contents thereof during such six (6) month period and
all risk of damage, theft or loss to any of the Sellers’ property stored on the
Premises shall remain solely with the Sellers.


 


[The
remainder of this page is left intentionally blank.]


 


39

















 


THUS DONE AND
PASSED on the 9th day of November, 2005, at the City of Lockport,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  SELLERS:

  
	
   

  	
  LAROSE TRUCK
  PLAZA & CASINO, L.L.C., a

  Louisiana limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stan Guidor

  	
   

  	
  By:

  	
  /s/ Joe F. Penn, Jr.

  	
   

  
	
  Printed Name:  Stan Guidor

  	
  Joe F. Penn, Jr.,
  Authorized Officer

  
	
  /s/ Charlene Hancock

  	
   

  	
   

  
	
  Printed Name: Charlene
  Hancock

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Sheila P. St.
  Pierre

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  THUS
  DONE AND PASSED on the 9th day of November, 2005, at the City of
  Lockport, State of Louisiana, the undersigned party having affixed its
  signature in the presence of me, Notary, and the undersigned competent
  witnesses, after due reading of the whole.

  
	
   

  	
   

  
	
  WITNESSES:

  	
  SELLERS:

  
	
   

  	
  MIDWAY
  RECREATION, L.L.C., a Louisiana limited

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stan Guidor

  	
   

  	
  By:

  	
  /s/ Joe F. Penn, Jr.

  	
   

  
	
  Printed Name:  Stan Guidor

  	
  Joe F. Penn, Jr.,
  Authorized Officer

  
	
  /s/ Charlene Hancock

  	
   

  	
   

  
	
  Printed Name: Charlene
  Hancock

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Sheila P. St.
  Pierre

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
								



 


40

















 


THUS DONE AND
PASSED on the 9th day of November, 2005, at the City of Lockport,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


 


	
  WITNESSES:

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stan Guidor

  	
   

  	
  /s/ Joe F. Penn, Jr.,

  	
   

  
	
  Printed Name:

  	
  /s/ Stan Guidor

  	
   

  	
  Joe F. Penn, Jr.,
  Individually and as the spouse of

  
	
   

  	
  Melissa Penn

  
	
  /s/ Charlene Hancock

  	
   

  	
   

  
	
  Printed Name:  Charlene Hancock

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Sheila P. St.
  Pierre

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
							



 


THUS DONE AND
PASSED on the 9th day of November, 2005, at the City of Lockport,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


 


	
  WITNESSES:

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stan Guidor

  	
   

  	
  /s/ Melissa Penn

  	
   

  
	
  Printed Name:

  	
  /s/ Stan Guidor

  	
   

  	
  Melissa Penn,
  Individually and as the spouse of Joe F. 

  
	
   

  	
  Penn

  
	
  /s/ Charlene Hancock

  	
   

  	
   

  
	
  Printed Name:  Charlene Hancock

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Sheila P. St.
  Pierre

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
							



 


41

















 


THUS DONE AND PASSED on
the ___ day of November, 2005, at the City of West Palm Beach, State of
Florida, the undersigned party having affixed its signature in the presence of
me, Notary, and the undersigned competent witnesses, after due reading of the
whole.


 


	
  WITNESSES:

  	
  PURCHASER:

  
	
   

  	
  Gameco Holdings, Inc.,
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas Che

  	
   

  	
  By:

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
  Printed Name:

  	
  Thomas Che

  	
   

  	
  Jeffrey P. Jacobs, CEO

  
	
  /s/ Jay Christianson

  	
   

  	
   

  
	
  Printed Name:  Jay Christianson

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Chrissy A. DeNitto

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
								



 


42

















 


LIST
OF SCHEDULES AND EXHIBITS


 


	
  1.

  	
   

  	
  Schedule 1.1(b)

  	
   

  	
  -
  Machinery/Equipment/Fixtures

  
	
  2.

  	
   

  	
  Schedule 1.1(c)

  	
   

  	
  - Inventories

  
	
  3.

  	
   

  	
  Schedule 1.1(Listed
  Devices)

  	
   

  	
  - Listed Devices

  
	
  4.

  	
   

  	
  Schedule 1.1(Permitted
  Encumbrances)

  	
   

  	
  - Permitted
  Encumbrances

  
	
  5.

  	
   

  	
  Schedule 6.4(a)

  	
   

  	
  - Closing Report

  
	
  6.

  	
   

  	
  Schedule 6.4(b)

  	
   

  	
  - Exceptions

  
	
  7.

  	
   

  	
  Schedule 6.6

  	
   

  	
  - Undisclosed
  Liabilities

  
	
  8.

  	
   

  	
  Schedule 6.9(a)

  	
   

  	
  - Contracts

  
	
  9.

  	
   

  	
  Schedule 6.9(b)

  	
   

  	
  - Assumed
  Contracts

  
	
  10.

  	
   

  	
  Schedule 6.10

  	
   

  	
  - Intellectual
  Property Rights

  
	
  11.

  	
   

  	
  Schedule 6.11

  	
   

  	
  - Litigation

  
	
  12.

  	
   

  	
  Schedule 6.13

  	
   

  	
  - Required
  Consents

  
	
  13.

  	
   

  	
  Schedule 6.15

  	
   

  	
  - Transactions
  with Affiliates

  
	
  14.

  	
   

  	
  Schedule 6.16(a)

  	
   

  	
  - Employee and
  Officer - Employment Contracts

  
	
  15.

  	
   

  	
  Schedule 6.17

  	
   

  	
  - Labor Matters

  
	
  16.

  	
   

  	
  Schedule 6.19

  	
   

  	
  - Environmental
  and Safety Matters

  
	
  17.

  	
   

  	
  Schedule 6.19(b)

  	
   

  	
  - List of
  Permits

  
	
  18.

  	
   

  	
  Schedule 6.19(g)

  	
   

  	
  - UST’s and AST’s

  
	
  19.

  	
   

  	
  Schedule 6.25

  	
   

  	
  - Interest in
  Competitors, Suppliers and Customers

  
	
  20.

  	
   

  	
  EXHIBIT A

  	
   

  	
  - Legal
  Description - Premises

  
	
  21.

  	
   

  	
  EXHIBIT B

  	
   

  	
  - Omitted

  
	
  22.

  	
   

  	
  EXHIBIT C

  	
   

  	
  - Form 8594

  
	
  23.

  	
   

  	
  EXHIBIT D

  	
   

  	
  - Certification
  of Non-foreign Status

  
	
  24.

  	
   

  	
  EXHIBIT E

  	
   

  	
  - Independent
  Contractor Agreement

  
	
  25.

  	
   

  	
  EXHIBIT F

  	
   

  	
  - Right of First
  Refusal Agreement

  
	
  26.

  	
   

  	
  EXHIBIT G

  	
   

  	
  - Legal Opinion

  
	
  27.

  	
   

  	
  EXHIBIT H

  	
   

  	
  - Deed

  
	
  28.

  	
   

  	
  EXHIBIT I

  	
   

  	
  - Seller’s/Owner’s
  Affidavit and Indemnity

  



 


43

















 


SCHEDULE 1.1(b)


 


[Machinery/Equipment/Fixtures]


 


List being prepared, to
be attached within twenty (20) days of the Agreement Date. 


 


44

















 


SCHEDULE 1.1(c)


 


[Inventories]


 


List being prepared, to
be attached within twenty (20) days of the Agreement Date. 


 


45

















 


SCHEDULE 1.1 -
Listed Devices


 


[Listed Devices]


 


List being prepared, to
be attached within twenty (20) days of the Agreement Date. 


 


46

















 


SCHEDULE 1.1 -
Permitted Encumbrances


 


[Permitted Encumbrances]


 


To be determined and
approved of by Purchaser prior to the Closing.


 


47

















 


SCHEDULE 6.4


 


[Closing Report]


 


To be attached within
twenty (20) days following the Agreement Date. 


 


48

















 


SCHEDULE 6.6


 


[Undisclosed Liabilities]


 


None.


 


49

















 


SCHEDULE 6.9(a)


 


[Contracts]


 


None.


 


50

















 


SCHEDULE 6.9(b)


 


[Assumed Contracts]


 


None.


 


51

















 


SCHEDULE 6.10


 


[Intellectual Property
Rights]


 


1. “Larose Truck Plaza &
Casino” name and trademark and any variation of same.


 


52

















 


SCHEDULE 6.11


 


[Litigation]


 


None.


 


53

















 


SCHEDULE 6.13


 


[Required Consents]


 


1.                                       The
issuance of appropriate permits from the LaFourche Parish Health Department.


 


2.                                       The
issuance of a state and parish liquor license/permit to sell alcoholic
beverages on the Premises by the Purchaser.


 


3.                                       The
receipt of funds from the Purchaser’s financing source.


 


54

















 


SCHEDULE 6.15


 


[Transactions with Affiliates]


 


None.


 


55

















 


SCHEDULE 6.16(a)


 


[Employee and Officer -
Employment Contracts]


 


None.


 


56

















 


SCHEDULE 6.17


 


[Labor Matters]


 


None.


 


57

















 


SCHEDULE 6.19


 


[Environmental and Safety
Matters]


 


None.


 


58

















 


SCHEDULE 6.19(b)


 


[List of Permits]


 


	
  1.

  	
   

  	
  Gaming
  Establishment License

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Parish Retail
  License

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Parish Device
  License

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Sales Tax
  Certificate

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Department of
  Health

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  UST Registration

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Outside Beer
  License

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Beer &
  Liquor License

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Tobacco License

  



 


List being prepared, to
be attached within twenty (20) days of the Agreement Date. 


 


59

















 


SCHEDULE 6.19(g)


 


[UST’s and AST’s]


 


1.               See the following
registration documents for all Underground Storage Tanks. List being prepared,
to be attached within twenty (20) days of the Agreement Date.


 


2.               There are no
Above-Ground Storage Tanks on the Premises.


 


60

















 


SCHEDULE 6.25


 


[Interest in Competitors,
Suppliers and Customers]


 


None.


 


61

















 


EXHIBIT A


 


[Legal Description of the
Premises]


 


62

















 


EXHIBIT B


 


[Management Agreements]


 


No Management Agreements.


 


63

















 


EXHIBIT C


 


[IRS Form 8594]


 


64

















 


EXHIBIT D


 


TRANSFEROR’S CERTIFICATION
OF NONFOREIGN STATUS


 


To inform Gameco Holdings, Inc., a
Delaware corporation (“Transferee”), that withholding of tax under Section 1445
of the Internal Revenue Code of 1954, as amended (“Code”), will not be required
upon the transfer of certain real property to the Transferee by Larose Truck
Plaza & Casino, L.L.C., each a Louisiana limited liability company (“Transferor”),
the undersigned hereby certifies the following:


 


1.                                       The Transferor is not a foreign person,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined in the Code and the Income Tax Regulations promulgated hereunder),


 


2.                                       The Transferor’s U.S. employer identification
number is                        
and


 


3.                                       The Transferor’s office address is:


 


1825 Highway 308


Lockport, Louisiana 
70374


 


The Transferor understands that this Certification may be
disclosed to the Internal Revenue Service by the Transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.


 


The Transferor understands that the Transferee is
relying on this Certification in determining whether withholding is required
upon said transfer.


 


Under penalty of perjury, I declare that I have
examined this Certificate and, to the best of my knowledge and belief, it is
true, correct, and complete, and I further declare that I have authority to
sign this document on behalf of the Transferor.


 


Date of this           
day of                                              ,
2005.


 


TRANSFEROR:


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Joe F. Penn, Jr., Authorized Officer

  	
   

  



 


65

















 


EXHIBIT E


 


STATE
OF LOUISIANA


 


PARISH
OF ST. MARY’S


 


INDEPENDENT CONTRACTOR AGREEMENT 


 


BE IT KNOWN, that before
the undersigned Notaries Public, in the State of Louisiana, and in the presence
of the undersigned competent witnesses, personally came and appeared:


 


JOE F. PENN, JR.,
a Louisiana resident (“Contractor”), whose mailing address is declared to be
4411 Cherokee Rose Drive, Zachary, Louisiana 70791;


 


and


 


GAMECO HOLDINGS, INC.,
a Delaware corporation (“Gameco”), domiciled and having a place of business in
the Parish of St. Martin, State of Louisiana and whose mailing address is
declared to be 1869 Mills Hwy, Breaux Bridge, Louisiana 70517, herein
represented by its duly authorized agent Jeffrey P. Jacobs,


 


both of whom did execute
this Independent Contractor Agreement (“Agreement”), to be effective as of this
    day of                               ,
2005 (the “Agreement Date”).


 


RECITALS


 


A.                                   Gameco,
on the Agreement Date, has or anticipates purchasing the assets of a business
known as the Larose Truck Plaza & Casino, L.L.C., and 1825 Hwy 308,
Lockport, Louisiana 70375 (the “Business”);


 


B.                                     Contractor
has special skills, training, experience, knowledge and ability to perform advisory
and consulting services with respect to the Business and Gameco desires
Contractor to provide such services; and


 


C.                                     Contractor
seeks to be retained by Gameco and Gameco seeks to retain Contractor under the
terms and subject to the conditions set forth below.


 


NOW,
THEREFORE, in consideration of the mutual promises and agreements hereinafter
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


 


1.                                       Incorporation. The foregoing recitals are
incorporated herein as if fully rewritten herein.


 


66

















 


2.                                       Independent Contractor. At all times during the Term (as
hereinafter defined) of this Agreement, Contractor shall perform the
duties and responsibilities identified in this Agreement as an independent
contractor and not as an agent, employee, member, joint venturer or partner of
Gameco. Gameco shall not withhold any federal, state or local taxes, social
security, unemployment compensation or other payments from the Payments (as
hereinafter defined) paid to Contractor. Contractor shall pay all federal,
state and local income taxes, social security contributions and all other taxes
and charges levied or assessed with respect to the Payments received by
Contractor pursuant to this Agreement. Gameco and Contractor agree that Gameco
shall not provide Contractor with a paid vacation period, or with medical, life
or any other benefits, except as expressly provided in this Agreement. Contractor
agrees to abide by all applicable federal, state and local laws, ordinances, rules and
regulations in performing the duties and responsibilities required of him
hereunder. Contractor shall be obligated to pay any and all costs and expenses
that Contractor deems necessary or appropriate to fulfill his obligations
hereunder.


 


3.                                       Term and Termination. This Agreement shall be deemed to have
commenced on the Agreement Date and shall continue thereafter until December 31,
2007, unless terminated prior to such date as hereinafter provided (the “Term”). Notwithstanding the foregoing, this
Agreement may terminate immediately, at Gameco’s reasonable discretion,
upon the occurrence of any of the following events (each a “Termination”):  (i) Contractor being convicted of a
felony or act of moral turpitude; (ii) Contractor breaches or defaults
under any of the terms and conditions of Section 6 of this Agreement; or (iii) Gameco
is directed to disassociate itself from any relationship or contact with
Contractor by any state gaming authority. A Termination under Sections 3(i), (ii) or
(iii) shall constitute a Termination for “Cause”. Gameco and Contractor acknowledge and agree that no
provision contained in this Agreement offers, guarantees or otherwise obligates
Gameco to retain Contractor following the end of the Term or the Termination of
this Agreement. Following the Termination of this Agreement for Cause, Gameco
shall pay Contractor the Payments accruing prior to the effective date of the
Termination as outlined below. Contractor acknowledges and agrees that no other
compensation, of any nature or type, shall be payable hereunder following the
Termination of this Agreement for Cause.


 


4.                                       Duties and Responsibilities of Contractor. Commencing on and
after the Agreement Date and continuing for the remainder of the Term,
Contractor shall be available to the officers, agents and employees of Gameco
on an “as-needed and when-needed” basis with reasonable advance notice and
shall be physically at the Business with reasonable advance notice and at
reasonable times. Contractor agrees to conduct himself, at all times while
rendering services hereunder, in a professional manner and shall use his best
efforts to make recommendations hereunder for the purpose of benefiting the
financial success of the Business. 


 


67

















 


Except as identified in Section 6(i) below,
Contractor agrees not to accept any engagement during the Term that would place
him in a position of conflict of interest with respect to the financial success
of the Business. Nothing contained in this Agreement is intended to, nor shall
it be construed as granting Contractor any exclusive rights to provide the
services and duties described herein.


 


5.                                       Compensation. So long this Agreement has not been terminated
for cause, Gameco will make the following payments to Contractor as and for
full and complete consideration and payment for any and all services rendered
or obligations under this Agreement whether rendered on or after the Agreement
Date (collectively, the “Payments”):
Seventy-Five Thousand and 00/100 Dollars ($75,000.00) to be paid on the second
day of the calendar months of January and July in each of 2006 and
2007. The death, illness or physical or mental incapacity of Contractor shall
in no way relieve, excuse or diminish the obligations of Gameco to make the
Payments to Contractor as set forth herein, and Contractor’s rights to receive
the Payments shall inure to his heirs, administrators, executors, successors or
assigns. The Payments shall be the subject of a separate guarantee by Gameco. Should
Gameco sell or otherwise transfer all or substantially all of its ownership
interests in the Business to Jacobs Entertainment, Inc. (“JEI”), such
guarantee of the Payments hereunder shall also transfer concurrently therewith
to JEI.


 


6.                                       Business’s Proprietary Interest in Trade Secrets AND
Non-Compete.


 


a.               Contractor
acknowledges that he may have access to and become familiar with the
Business’s records, documents, files, policies, business plans, strategies,
customers, suppliers, products, marketing processes and plans, financial
information, employees, officers, agents, unique data and the like regarding the
Business and its operations (collectively referred to herein as “Trade Secrets”). Contractor acknowledges
that the Trade Secrets are special, valuable and unique assets of Gameco and
that Gameco would suffer great loss and damage if, during or after the Term,
Contractor were to disclose, reveal, divulge or make available, either directly
or indirectly, to any person, firm, partnership, corporation, association or
any other third-party, the Trade Secrets. Accordingly, Contractor agrees that
the Trade Secrets, in their entirety or any portion thereof, shall not be
disclosed, revealed, divulged, or made available to any person, firm,
partnership, corporation, association or any other third-party, either directly
or indirectly, during or after the Term, unless Contractor is authorized to do
so in writing by Gameco, which authorization, if given, may be revoked by
Gameco at any time in its sole discretion. Contractor agrees that, upon
termination of this Agreement for any reason, Contractor shall immediately return
to Gameco all Trade Secrets previously held by, retained or under the control
of Contractor (including, but not limited to, any analyses, compilations,
studies or documents prepared 


 


68

















 


during the review of
Trade Secrets by Contractor or his agents), and Contractor agrees not to make
and/or retain any copies of any Trade Secrets.


 


b.              In
consideration of the fees, payments, promises and benefits accruing hereunder,
Contractor agrees for a period of five (5) years following the Agreement
Date (the “Non-Compete Period”)
not to, directly or indirectly, own (in any form in whole or in part),
operate, manage, control, be employed by, participate in, provide advice,
financial aid or other assistance, in any form, to any aspect of a business, or
conduct, carry on or engage in any activity, any of which is directly or
indirectly competitive with any aspect of the Business within a fifteen (15)
mile radius of the Business. In addition to the foregoing, Contractor agrees,
during the Non-Compete Period, not to induce any of Gameco’s employees to leave
their employment, nor to employ either directly or indirectly any of Gameco’s
employees. Further, Contractor agrees he shall not solicit any customers,
suppliers, sponsors, advertisers or licensees/ors of Gameco for the purpose of
inducing, directly or indirectly, the termination such entity or individual’s
relationship with Gameco.


 


c.               The
parties hereto further stipulate that, as between them, all of the items
referred to in Section 6 are important, material and confidential and
gravely affect the effective and successful conduct of the Business, its
goodwill and reputation. Any breach of the terms and provisions of Section 6
hereof shall constitute a material and irreparable breach of this Agreement and
will subject the Business to immeasurable loss of revenue, business
opportunities and goodwill. The parties further acknowledge that the provisions
of Section 6 are each supported by new and valuable consideration.


 


d.              In
the event that any provision of Section 6 shall be found by a court of
competent jurisdiction to be invalid or unenforceable as against public policy,
such court shall exercise its discretion in reforming such provision to the end
that the Contractor shall be subject to non-disclosure, non-competition and
non-interference covenants to the fullest extent permissible under the
circumstances and enforceable by Gameco.


 


e.               The parties acknowledge that Gameco will
suffer material and irreparable damage if the Contractor violates any of the
covenants contained in Section 6. It is hereby agreed that in the event of
such breach or an apparent danger of such breach by the Contractor, Gameco
shall be entitled, in addition to such other remedies available to it, to an immediate
injunction to restrain the violation of any or all such provisions by the
Contractor. In the event that Gameco shall institute any action or proceeding
to enforce the provisions of Section 6, the Contractor hereby agrees, in
advance, to waive the claim or defense that there is an adequate remedy at law;
the Contractor shall not urge, or be heard to urge, in any such action or
proceeding, the claim or defense that 


 


69

















 


such
remedy at law exists.


 


f.                 The
covenants and promises made by the Contractor in favor of Gameco under Section 6
are being executed and delivered by the Contractor in consideration of Gameco’s
obligations hereunder, including, without limitation, the Payments.


 


g.              Contractor
has carefully considered the obligations and restrictions contained in this
Agreement and has had adequate time and opportunity to consult with his own
legal counsel and other advisors regarding the nature and extent of the
restrictions upon him, and the rights, remedies and obligations contained in
the Agreement. Contractor hereby acknowledges and agrees that such obligations
and restrictions: (i) are reasonable in time, territory and scope; (ii) are
designed to eliminate competition which otherwise would be unfair to Gameco; (iii) do
not stifle the inherent skill and experience of the Contractor; (iv) would
not operate as a bar to the Contractor’s sole means of support; (v) are
fully required to protect the legitimate interests of Gameco; and (vi) do
not confer a benefit upon Gameco disproportionate to the detriment to the
Contractor.


 


h.              In the event that Contractor breaches any
provision of this Agreement, such violation (i) shall toll the running of
the five (5) year period set forth in Section 6 from the date of
commencement of such violation until such violation ceases, and (ii) shall
relieve Gameco of any obligations to the Contractor under this Agreement.


 


i.                  Notwithstanding
the foregoing, Contractor is currently and shall remain an owner and operator
of that certain truck stop facility commonly referred to as Hollywood Truck
Plaza & Casino (“Hollywood Truck Stop”) located in Bayou Vista,
Louisiana. Contractor’s continued ownership and operation of the Hollywood
Truck Stop shall not be a violation of the terms of this Section 6 and
shall be the sole exception thereto.


 


70

















 


7.                                       Notice. Notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given when
delivered by recognized overnight courier, by facsimile with electronic
confirmation of receipt or three (3) days after being mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the last known address of the respective parties, provided that all notices to
Gameco shall be directed to the attention of Stan Guidroz, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.


 


8.                                       Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Louisiana without
giving effect to the conflicts of law principles thereof. The parties agree
that they shall be estopped from raising any defenses or claims regarding
venue, including any conflicts of laws provisions to which any party would be
otherwise entitled.


 


9.                                       Validity. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.


 


10.                                 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.


 


11.                                 Entire Agreement. This Agreement and the Asset Purchase
Agreement, also between the parties hereto among others, and dated as of even
date herewith, constitutes the entire agreement between Contractor and Gameco
with respect to the subject matter hereof and no agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by any party that are not set forth expressly in this
Agreement or in the foregoing Asset Purchase Agreement . No provisions of this
Agreement may be modified, waived or discharged unless such modification,
waiver or discharge is agreed to in writing signed by you and such officer as may be
specifically designated by Gameco. No waiver by any party at any time of any
breach by another party of, or compliance with, any condition or provision of
this Agreement to be performed by the other parties shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.


 


12.                                 Indemnification. Contractor shall
indemnify, defend and hold harmless Gameco and its officers, members, managers,
employees, agents, contractors, successors and assigns from and against any and
all damages, liabilities, costs, expenses, claims, and/or judgments, including,
without limitation, legal costs and reasonable attorneys’ fees and
disbursements (collectively, “Claims”)
which any of them may suffer from (i) any negligence or misconduct of
Contractor arising from or 


 


71

















 


connected with Contractor’s
carrying out of his duties under this Agreement, or (ii) the breach by
Contractor of any of his representations, duties, obligations, agreements or
duties under this Agreement, including, but not limited to, Contractor’s
obligations to withhold and remit any and all payroll taxes and other
withholdings.


 


13.                                 Indemnification. Gameco shall indemnify,
defend and hold harmless Contractor and his employees, agents, contractors,
successors and assigns from and against any and all damages, liabilities,
costs, expenses, claims, and/or judgments, including, without limitation, legal
costs and reasonable attorneys’ fees and disbursements (collectively, “Claims”) which any of them may suffer
from (i) any negligence or misconduct of Gameco arising from or connected
with Gameco’s carrying out of its duties under this Agreement, or (ii) the
breach by Gameco of any of its representations, duties, obligations, agreements
or duties under this Agreement.


 


14.                                 Compliance with Law. Both parties hereto
agree that if the manner of payment to the Contractor, or payment by Gameco to
the Contractor or any other provision of this Agreement, becomes violative of
any law, including, but not limited to, federal or state taxation laws, rules or
regulations, the parties shall negotiate a revision in the terms of the
Agreement such that the purpose for the Agreement and the benefits contemplated
to be obtained by each shall be preserved to the greatest extent practicable.


 


15.                                 Miscellaneous.


 


(a)                               Negation of Agency. Nothing
herein contained shall be deemed to create an agency, joint venture or
partnership relation between the parties hereto and it is acknowledged that the
parties hereto have only a relationship of independent contractor.


 


(b)                               Construction. The language of
this Agreement and of each and every article, paragraph, section, term and/or
provision of this Agreement, shall in all cases, for any and all purposes and
in any and all circumstances, be construed as a whole according to its meaning
and not strictly for or against Gameco or Contractor, without no regard
whatsoever to the identity or status of any person or persons who drafted all
or any portion of this Agreement.


 


(c)                                Headings. The section headings
used in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.


 


72

















 


16.                                 SUBMISSION TO JURISDICTION AND VENUE, CONSENT TO
SERVICE OF PROCESS, ETC. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PURCHASER AND CONTRACTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:


 


(A)                              AGREES
THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO
THIS AGREEMENT, THE TRANSFER CONTEMPLATED HEREIN OR ANY STATEMENT, COURSE OF
CONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING
(COLLECTIVELY, “RELATED LITIGATION”) TO WHICH EITHER IS OR MAY BE A PARTY MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN BATON ROUGE, LOUISIANA, AND SUBMITS TO THE JURISDICTION
OF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED LITIGATION IN ANY OTHER
FORUM;


 


(B)                                ACKNOWLEDGES
THAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY RELATED LITIGATION,
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT
IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO
OBJECT, WITH RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT; AND


 


(C)                                CONSENTS
AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY
RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO IT
AT THE ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS
SERVED IN ANY OTHER MANNER PERMITTED BY LAW).


 


17.                                 JURY WAIVER  TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
OF THE PURCHASER AND CONTRACTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
THEIR RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS, CAUSES OF ACTION OR SUITS
ARISING FROM OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT.


 


73

















 


THUS DONE AND
PASSED on the            day
of November, 2005, at the City of Lockport, State of Louisiana, the undersigned
party having affixed its signature in the presence of me, Notary, and the
undersigned competent witnesses, after due reading of the whole.


 


	
  WITNESSES:

  	
  CONTRACTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Joe F. Penn, Jr.,
  Individually

  
	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  NOTARY PUBLIC

  
								



 


 


THUS DONE AND PASSED on
the      day of November, 2005, at the City of West Palm
Beach, State of Florida, the undersigned party having affixed its signature in
the presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  PURCHASER:

  
	
   

  	
  Gameco Holdings, Inc.,
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Jeffrey P. Jacobs, CEO

  
	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
										



 


74

















 


EXHIBIT F


 


STATE
OF LOUISIANA


 


PARISH
OF ST. MARY’S


 


RIGHT OF FIRST REFUSAL AGREEMENT 


 


BE IT KNOWN, that before
the undersigned Notaries Public, in the States of Louisiana and                       ,
and in the presence of the undersigned competent witnesses:


 


Hollywood Truck Plaza &
Casino, L.L.C, a Louisiana limited liability company (“Hollywood”
and sometimes referred to as the “Company”), domiciled and having its principal
place of business in the Parish of St. St. Mary’s and whose mailing address is
declared to be P.O. Box 58, Berwick, Louisiana 70342, herein represented
by its duly authorized agent: Joe F. Penn, Jr.;


 


JOE F. PENN, JR.,
a Louisiana resident (“JFPenn”), whose mailing address is declared to be 4411
Cherokee Rose Drive, Zachary, Louisiana 70791;


 


MELISSA PENN, a
Louisiana resident (“MPenn”), whose mailing address is declared to be 4411
Cherokee Rose Drive, Zachary, Louisiana 70791;


 


WILLIAM J. HAMPTON,
a Louisiana resident (“WJHampton”), whose mailing address is declared to be                                                         ;


 


CYNTHIA M. HAMPTON,
a Louisiana resident (“CMHampton”), whose mailing address is declared to be                                                         ;


 


(Hollywood, JFPenn,
MPenn, WJHampton and CMHampton shall collectively be referred to herein as “Sellers”
and each individually as “Seller”);


 


and


 


GAMECO HOLDINGS, INC.,
a Delaware corporation (the “Purchaser”), domiciled and having a place of
business in the Parish of St. Martin, State of Louisiana and whose mailing
address is declared to be 1869 Mills Hwy, Breaux Bridge, Louisiana, herein
represented by its duly authorized agent Jeffrey P. Jacobs,


 


all of whom did execute
this Right of First Refusal Agreement (“Agreement”), to be effective as of this
    day of                               ,
2005 (the “Agreement Date”).


 


INTRODUCTION


 


A.                                   Sellers
own the assets of a truck stop located at                                                               ,
Louisiana                 ,
and commonly referred to as the Hollywood Truck Plaza & Casino (the “Truck
Stop”).


 


75

















 


B.                                     The
Truck Stop, inter alia, provides retail motor and
diesel fuels, convenience store and restaurant operations for sale to or use by
the general public as well as video draw poker devices for play by the general
public.


 


NOW, THEREFORE, in consideration of the
covenants and agreements contained herein, for Ten Dollars and no/100 Dollars
($10.00) in hand paid by the Purchaser to the Sellers, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sellers and Purchaser agree as follows:


 


1.                                     Incorporation.   The
foregoing recitals are incorporated by reference herein.


 


2.                                     Right
of First Refusal.  Should any one of or all the Sellers, on or before
that date which is ten (10) years after the Agreement Date, receive a
bona-fide, arm’s length, good faith offer to purchase any of the assets of the
Truck Stop (excluding the sale of any asset determined by the Company to no
longer be necessary to the operation of the Truck Stop or otherwise sold in the
ordinary course of the operation of the Truck Stop (i.e. fuel and inventory) or
any of the membership interests in the Company from an unrelated third-party
(the “Offer”), Purchaser shall have the right, but not the obligation, to first
purchase the Truck Stop or the Company under the same terms and conditions
contained in the Offer.


 


(a)          Sellers shall provide Purchaser,
within fifteen days (15) of their receipt of any Offer, a copy of the Offer
(the “Offer Notice”).


 


(b)         Purchaser shall have
thirty (30) Business Days (the “Offer Period”) following its receipt of the
Offer Notice to elect, in a writing delivered to the Sellers, to exercise its
right to purchase under this Right of First Refusal Agreement. If Purchaser
shall fail to make the election described herein within the Offer Period,
Sellers may sell the Truck Stop or the Company to the third-party offeror
identified in the Offer Notice (“Offeror”), and Purchaser’s rights hereunder
shall cease and be of no further force and effect. During the Offer Period,
Sellers shall grant Purchaser access to all of the books, records and premises
of the Truck Stop or the Company in order to evaluate the Offer and the current
performance of the Truck Stop or the Company.


 


(c) Should
the sale to the Offeror fail to be consummated, this Right of First Refusal
shall continue to be effective and any other offers to purchase the Truck Stop
or the Company shall be subject to this right of first refusal.


 


(d) Notwithstanding
any terms of the Offer, should Purchaser elect to exercise its right to
purchase the Truck Stop or the Company under this Right of First Refusal
Agreement, Purchaser shall have ninety days (90) to close the purchase of the
Truck Stop or the Company under such terms and conditions as are contained in
the Offer.


 


76

















 


3. Notices. All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given: (a) when delivered personally to the recipient;
(b) one (1) Business Day after being sent to the recipient by
reputable overnight courier service (charges prepaid); (c) three (3) Business
Days after posting in the United States mail having been mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid; or (d) when sent via facsimile if a copy is delivered personally,
couriered or mailed to the recipient as set forth above. Such notices, demands
and other communications shall be sent to the parties at the addresses
indicated below:


 


If to
any of the Sellers, to:


 


c/o Joe
F. Penn, Jr.


4411
Cherokee Rose Drive


Zachary,
Louisiana 70791


Facsimile:



 


with a
required copy to:


 


David
M. Culpepper, Esq.


David
M. Culpepper, L.L.C.


400
Poydras Street, Suite 1710


New
Orleans, Louisiana 70130


Facsimile:
504-680-6080


 


If to the Purchaser, to:


 


Gameco
Holdings, Inc.


c/o
Colonial Downs


1869
Mill Hwy


Breaux
Bridge, Louisiana 70517


Attn:
Stan Guidroz


Facsimile:
337-507-2282


 


with a
required copy to:


 


Hahn
Loeser & Parks LLP


3300
BP Tower


200
Public Square


Cleveland,
Ohio 44114


Attn:
Stanley R. Gorom III, Esq.


Facsimile:
216-274-2460


 


or to such other address
or to the attention of such other person as the recipient party has specified
by prior written notice to the sending party.


 


4.                                     Each
of the Sellers, jointly and severally, represents and warrants to the Purchaser
each of the following:


 


77

















 


(a)                             The
consideration paid above has separate economic significance to each Seller, has
been received and is good and sufficient consideration for the promises,
covenants and representations and warranties contained herein.


 


(b)                            Sellers
jointly own one hundred percent (100%) of all rights, title and interests in
and to the Company and the Company owns one hundred percent (100%) of all
rights, title and interests in all the assets of the Truck Stop. There are no
preemptive rights, options, warrants or rights of first refusal with respect to
the transfer of the Truck Stop or the Company except the right of first refusal
granted hereunder.


 


5.                                  Each
party warrants and represents to the others that it, he or she has full right,
power and authority to enter into this Agreement and to perform its, his
or her obligations hereunder.


 


6.                                  This
Agreement shall be construed in accordance with the laws of the State of Louisiana,
without regard to principles of conflicts of laws.


 


7.                                  This
Agreement may be executed in multiple original counterparts, all of which,
when taken together, shall constitute one original.


 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  Hollywood Truck
  Plaza & Casino, L.L.C., a

  
	
   

  	
  Louisiana
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
											



 


78

















 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  JFPenn:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Joe F. Penn, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
										



 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  MPenn:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Melissa Penn.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
										



 


79

















 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  WJHampton:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  William J. Hampton

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
										



 


 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  CMHampton:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Cynthia M. Hampton

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
										



 


80

















 


THUS DONE AND PASSED on the       
day of                         ,
2005, at the City of                             ,
State of Louisiana, the undersigned party having affixed its signature in the
presence of me, Notary, and the undersigned competent witnesses, after due
reading of the whole.


 


	
  WITNESSES:

  	
  Gameco Holdings, Inc.,
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  Jeffrey P. Jacobs, CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  
											



 


81

















 


EXHIBIT G


 


[Legal Opinion]


 


[Letterhead]


 


                                          ,
2004


 


Gameco Holdings, Inc.


10515 Colonial Downs
Parkway


New Kent, Virginia 23124


 


Re:                               Asset
Purchase Agreement, dated as of                                   ,
2005


 


Ladies and Gentlemen:


 


We have acted as counsel
for Larose Truck Plaza & Casino, L.L.C. a Louisiana limited liability
company (“Company”), and Joe F. Penn, Jr.
(“Penn”) in connection with the transactions contemplated by the Asset Purchase
Agreement, dated                                           ,
2005 (the “Agreement”), by and among the
Company, Penn, and Gameco Holdings, Inc., a Delaware corporation (the “Purchaser”). Capitalized terms used but not
defined herein are used as defined in the Agreement.


 


In rendering the opinions
set forth herein, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Agreement and certain of the
other Transaction Documents as listed on Exhibit A (attached hereto and
incorporated herein by reference) and referred to collectively as the “Transaction
Documents,” (ii) such Company records and other agreements, documents and
instruments necessary to give the opinions set forth below and (iii) such
certificates or comparable documents of public officials and officers and
representatives of the Company, as the case may be, and we have made such
inquiries of such officers and representatives and considered such matters of
law as we have deemed appropriate.


 


In all cases, we have
assumed the genuineness of signatures on all documents except those of the Company
and Penn, the legal competence of each person signing on behalf of each party,
the authenticity and completeness of documents submitted to us as originals and
the conformity to authentic original documents of documents submitted to us as
copies. As to the opinions expressed in Section 4 below, only, we have
entirely relied upon certificates of Officers of the Company and Penn,
originals of which are attached hereto (the “Certificates”). We have no
independent knowledge of any information, circumstances or set of facts that
would cause us to question the veracity of the information contained in the
Certificates.


 


Based upon the foregoing,
we are of the opinion, as of the date hereof, that:


 


1.               The Company is duly
organized, in full force and effect and in good standing under the laws of the
State of Louisiana, with all requisite corporate power and authority to own its
properties and to conduct business as described in the Agreement. The Company
is duly qualified to carry on its business as currently being conducted in each
jurisdiction where such qualification is required.


 


82

















 


2.               The Agreement has
been duly authorized, executed and delivered by the Company and Penn, and the
Agreement constitutes the legal, valid and binding obligations of the Company
and Penn, enforceable against the Company and Penn in accordance with its
terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws in effect from time to
time relating to or affecting the enforcement of the rights of creditors
generally.


 


3.               The execution and
delivery by the Company and Penn of the Agreement and the performance of their
obligations there under will not, as applicable, (a) result in the
violation of any Louisiana corporate or federal or state securities statutes or
regulations, or any order or decree known to us to have been issued by any
court or governmental authority which is binding upon either the Company or
Penn or any of their respective property, or (b) conflict with or result
in a breach or violation of any of the terms or provisions of the Company’s
Articles of Organization or Operating Agreements or violate, conflict with or
result in a breach or termination of, or otherwise give any Person additional
rights or compensation under, or the right to terminate or accelerate, or
constitute (with notice or lapse of time, or both) a default under the terms of
any material agreement or instrument to which the Company or Penn is a party or
by which any of the Company’s assets or properties are bound or result in
creation of a lien upon any of the properties or assets of the Company, under
any agreement of the Company or Penn.


 


4.               No actions, suits,
claims or proceedings against the Company or Penn are pending nor are any
actions, suits, proceedings or claims threatened, that if adversely determined
would, either in any single case or in the aggregate, question the validity of
or prevent the consummation of the transactions contemplated by the Agreement
or have a Material Adverse Effect on the financial conditions, properties or
operations of the Acquired Assets or the Company or Penn.


 


5.               Please note that no
title examination of the Company’s assets has been requested of or performed by
the undersigned.


 


6.               This opinion letter
is given solely to the Purchaser and its designee and may be relied upon
only by the Purchaser and its designees and may not be relied upon by any
other party or entity, except for the Purchaser’s lender, for any purpose
whatsoever. This opinion letter may not be quoted, circulated or published
without the prior written consent of the issuer, except among the Purchaser’s
officers, agents, lender and representatives and as necessary to enforce the
terms of this opinion letter or the Agreement. The opinions stated herein are
made as of the date hereof, and we assume no obligation to advise you of any
changes to the foregoing.


 


Very truly yours,


 


83

















 


EXHIBIT H


 


[Deed]


 


STATE OF LOUISIANA


 


PARISH OF
LAFOURCHE


 


ACT OF CASH SALE OF IMMOVABLE PROPERTY


 


BE IT KNOWN, that, before the undersigned Notary(ies)
Public in the State of Louisiana, and in the presence of the undersigned
competent witnesses, personally came and appeared:


 


Larose
Truck Plaza & Casino, L.L.C., a limited liability company of the State
of Louisiana, domiciled and with its principal place of business in the Parish
of Lafourche, with federal tax identification number                                                     ,
and whose mailing address is declared to be 1825 Highway 308, Lockport,
Louisiana 70374, hereinafter referred to as the “Seller”,


 


who declared that for and in consideration of the sum
of               
Dollars ($                  ),
and other good and valuable consideration, in cash paid, the receipt and
sufficiency of which are hereby acknowledged by the Seller, Seller does hereby
grant, bargain, sell, convey, transfer, assign, deliver, and set over with full
guarantee and with full warranty of title, and with subrogation to all rights
and actions of warranty against all previous owners that Seller may otherwise
have, unto:


 


[            ],
a              of
the State of             ,
domiciled and with its principal place of business in the             ,
with federal tax identification number             ,
and whose mailing address is declared to be 1869 Mills Hwy, Breaux Bridge,
Louisiana 70517, hereinafter referred to as “Purchaser”,


 


purchasing and accepting for itself, its successors and
assigns, and acknowledging the delivery and possession thereof, the following
described property, with all of its component parts, including all rights,
ways, privileges, servitudes and appurtenances thereto belonging, to-wit:


 


 


 


TO HAVE AND TO HOLD the above described property unto
the said Purchaser, the Purchaser’s successors and assigns, forever. The Seller declares that all taxes on the
property through the year 2004 have been timely paid by the Seller. Taxes for
the current year have been pro-rated between Seller and Purchaser as of the
date of closing. The Purchaser hereby agrees to pay all future and
subsequent taxes.


 


84

















 


The Seller hereby declares that the property herein
conveyed has not been heretofore alienated by the said Seller and that as of
the Closing there shall be no mortgages, liens or encumbrances of record
against the said property.


 


The Seller declares that in the federal, state or
local courts there are no judgments, general or particular, of record against
the said property.


 


The Seller hereby agrees to deliver possession of the
above described property to the Purchaser on even date herewith.


 


All
parties signing the within instrument, whether as parties or as witnesses, have
declared themselves to be of full legal capacity.


 


All
agreements and stipulations herein and all of the obligations assumed herein
shall inure to the benefit of and be binding upon the successors and assigns of
the respective parties, and the Purchaser, its successors and assigns shall
have and hold the above described property in full ownership forever.


 


No
title examination has been requested of or performed by me, Notary. The title
description is provided by the parties, and the Notary appears solely and only
for the purpose of notarizing this document.


 


Both
parties agree and obligate themselves to promptly execute any additional acts,
documents and/or instruments necessary and proper for the complete and
expeditious implementation and satisfaction of the provisions and intent of
this Act of Cash Sale.


 


The
parties hereto have participated jointly in the negotiation and drafting of
this Act of Cash Sale. In the event any ambiguity or questions of intent or
interpretation arise, this Act of Cash Sale shall be construed as if jointly
drafted by the parties and no presumption or burden of proof shall arise
favoring any of the parties by virtue of authorship of any of the provisions of
this Act of Cash Sale.


 


In the
event of a default of any condition or obligation of this Act of Cash Sale on
the part of any of the parties hereto which results in the institution of
any legal proceeding, the non-prevailing party shall pay to the prevailing
party of the litigation all reasonable costs and expenses of the legal
proceeding, and any appeal there from, including attorney’s fees.


 


No
change or modification hereof shall be valid or binding unless the same is in
writing and signed by the party intended to be bound. No waiver of any
provisions of this Act of Cash Sale shall be valid unless the same is in
writing and signed by the party against whom such waiver is sought to be
enforced; moreover, no valid waiver of any provisions of this Act of Cash Sale
at any time shall be deemed a waiver of any other provision of this Act of Cash
Sale at such time, nor will it be deemed a valid waiver of such.


 


No
determination by any court, governmental body or otherwise that any provision
of this Act of Cash Sale or any amendment hereof is invalid or unenforceable in
any instance shall affect the validity or enforceability of (a) any other
provision thereof, or (b) that provision in any circumstance not
controlled by the determination. Each such provision shall be valid and
enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law.


 


85

















 


All
questions concerning the construction, validity, and interpretation of this Act
of Cash Sale and the performance of the obligations imposed hereby shall be
governed by the laws of the State of Louisiana.


 


The
parties do not intend, nor shall this Act of Cash Sale be construed as,
creating any resolutory conditions, vender’s lien(s), or stipulation pour autri
and if any of the foregoing are deemed created by this instrument the same are
herewith waived by the parties hereto.


 


[The remainder of this page is left intentionally blank.]


 


86

















 


THUS
DONE AND PASSED on the               
day of                                     ,
2005, at the City of                               ,
Parish of                                           ,
State of                                       ,
the undersigned party having affixed her signature in the presence of me, Notary,
and the undersigned competent witnesses, after due reading of the whole.


 


	
  WITNESSES:

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
									



 


 


	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  



 


 


THUS
DONE AND PASSED on the               
day of                                     ,
2005, at the City of                               ,
Parish of                                           ,
State of                                       ,
the undersigned party having affixed her signature in the presence of me, Notary,
and the undersigned competent witnesses, after due reading of the whole.


 


	
  WITNESSES:

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
									



 


 


	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  



 


87

















 


EXHIBIT I


 


[Seller’s/Owner’s Affidavit and Indemnity]


 


To be prepared by Escrow Agent prior to the Closing Date and approved
by Sellers.


 


88