Exhibit No. 10.1


 


ASSET
PURCHASE AND SALE AGREEMENT


 


THIS ASSET PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into this 11th day of
January, 2008, by and between LUCKY LUCY D LLC, a Nevada limited liability
company (“Purchaser”) and SPEAKEASY GAMING OF LAS
VEGAS, INC., a Nevada corporation (“Seller”).  Purchaser and Seller are sometimes
individually referred to as the “Party” and
collectively as the “Parties.”


 


RECITALS


 


A.            Seller
operates a hotel, casino, restaurant, bar and related businesses commonly known
as the Ramada Inn Speedway Hotel and Casino (the “Business”
also referred to as the “Hotel”)
located at 3227 Civic Center Drive, in the City of North Las Vegas, County of
Clark, State of Nevada (the “Real Property”).


 


B.            Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller all
of the tangible and intangible assets of Seller used in the ownership and
operation of Seller’s Business, including the Gaming Assets (as defined in Section 1.1).


 


C.            Concurrent
with the execution of this Agreement, Ganaste LLC (“Ganaste”)
as purchaser and Seller entered into that Real Property Purchase and Sale
Agreement (“Real Property Purchase Agreement”)
pursuant to which Ganaste agreed to purchase the Real Property from Seller,
Seller agreed to sell the Real Property to Ganaste, and Ganaste agreed to lease
the Real Property to Seller and enter into a Master Lease Agreement as of the
closing date of the Real Property Purchase Agreement.


 


AGREEMENT


 


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


 


1.             Definitions.


 


1.1           Terms.  For the purposes of this Agreement, the following
terms shall have the respective meanings set forth below:


 


“Accounts Receivable”
means all accounts receivable (including receivables for food, beverages,
telephone and casino credit), notes receivable and indebtedness for borrowed
money or overdue accounts receivable, in each case, due and owing by any third
party, but not including the Tray Ledger.


 


“Agreement” has
the meaning ascribed to it in the introductory paragraph.

















 


“Americans With
Disabilities Act” means 42 USC § 12101, et seq. and all laws or
regulations from time to time applicable to the Business governing use, access
and accommodations.


 


“Assignment Agreement”
has the meaning ascribed to it in Section 9.1(b).


 


“Assignment of Master Lease”
has the meaning ascribed to it in Section 9.2(c).


 


“Assumed Liabilities”
has the meaning ascribed to it in Section 7(a).


 


“Benefit Plans”
has the meaning ascribed to it in Section 6.15.


 


“Business” has
the meaning ascribed to it in Recital A.


 


“Business Day”
means any day other than a Saturday, Sunday, or other day on which commercial
banks are authorized or required to close under the laws of the State of
Nevada.


 


“Casino” means
that portion of the Business consisting of licensed gaming.


 


“Closing” shall
mean the closing of the purchase and sale of the Purchased Assets in accordance
with Section 11.1.


 


“Closing Date”
shall mean the date of Closing provided for in Section 11.1.


 


“Closing Statement”
shall mean the statement prepared by the Parties in accordance with Section 12.1.


 


“Condemnation Event”
has the meaning ascribed to it in Section 4.2(e).


 


“Contracts”
means all contracts, agreements and obligations currently in force relating to
the Purchased Assets, including, without limitation, all sale, management,
construction, insurance, commission, architectural, engineering, operating,
employment, service, supply and maintenance agreements.


 


“Deposit” has
the meaning ascribed to it in Section 2.1.


 


“Effective Date”
means the date on which all of the Parties have executed this Agreement.


 


“Election to Build Notice”
has the meaning ascribed to it in Section 4.2(c).


 


“Electronic Books and
Records” has the meaning ascribed to it in Section 3.4.


 


“ERISA” has the
meaning ascribed to it in Section 6.15.


 


“Excluded Assets”
has the meaning ascribed to it in Section 3.2.


 


“Excluded Liabilities”
has the meaning ascribed to it in Section 5.2.

















 


“Extension Fee”
has the meaning ascribed to it in Section 11.2.


 


“Extension Period”
has the meaning ascribed to it in Section 11.2.


 


“Federal Tax Law”
means the Federal Foreign Investment in Real Property Tax Act of 1980 and the
1986 Tax Reform Act, as amended.


 


“FF&E” has
the meaning ascribed to it in Section 3.1(a).


 


“Financial Information”
has the meaning ascribed to it in Section 6.8.


 


“Gaming Approvals”
means all regulatory registrations, findings of suitability, licenses,
consents, approvals, waivers and authorizations that are necessary for Seller
to sell and Purchaser to acquire the Gaming Assets and  to conduct nonrestricted gaming operations at
the Casino.


 


“Gaming Assets”
means all Gaming Equipment and means all Contracts that Purchaser agrees to
assume pursuant to Section 5.1 specifically relating to, or
specifically used in connection with, the operation of the Casino.


 


“Gaming Equipment”
means any and all gaming devices (as defined in NRS 463.0155), gaming device
parts inventory and other related gaming equipment and supplies used in
connection with the operation of a casino, including, without limitation, slot
machines, gaming tables, cards, dice, chips, tokens, player tracking systems,
cashless wagering systems (as defined in NRS 463.014), mobile gaming systems
(as defined in NGC Regulation 14.010(11)) and associated equipment (as defined
in NRS 463.0136), which are now located at the Casino as of the date of this
Agreement and used or usable exclusively in the present or future operation of
all or any portion of the Casino, or ordered for future use at the Casino as of
the Closing.


 


“Gaming Liabilities”
means the Assumed Liabilities specifically relating to the operation of the
Casino.


 


“Gaming Taxes”
means the quarterly fee for a gaming license for a restricted operation (NRS
463.373), the annual excise tax on slot machines (NRS 463.385), and any and all
other license fees or taxes imposed on the operation of the Gaming Assets by
any governmental agency having jurisdiction over the Purchased Assets.


 


“Ganaste” has
the meaning ascribed to it in Recital C.


 


“Governmental Authorities”
has the meaning ascribed in Section 6.7.


 


“Governmental Authorities”
shall mean any governmental or quasi-governmental body or agency having
jurisdiction over the Purchased Assets and/or Seller, including, without
limitation, the State of Nevada, City of North Las Vegas and Clark County,
Nevada.


 


“Governmental Regulation”
shall mean any laws, ordinances, rules, requirements, resolutions, policy
statements and regulations (including, without limitation, those relating to
land use, subdivision, zoning, environmental, toxic or hazardous waste,
occupational health and 

















 


safety, water, earthquake hazard reduction, and building and fire
codes) of the Governmental Authorities bearing on the construction, alteration,
rehabilitation, maintenance, use, operation or sale of the Purchased Assets.


 


“Gross Revenues”
shall mean all revenues and receipts of every kind received from operating the
Business and all departments and parts thereof, including but not limited to,
the net win from gaming activities, income from both cash and credit
transactions, income from the rental of rooms, stores, offices, banquet rooms,
conference rooms, exhibits or sale space of every kind, license, lease and
concession fees and rentals (not including gross receipts of licensees, lessees
and concessionaires), vending machines, health club membership fees, food and
beverage sales, wholesale and retail sales of merchandise, service charges, and
proceeds, if any, from business interruption or other loss of income insurance;
provided, however, Gross Revenues shall not include (i) gratuities to the
employees of the Business, (ii) federal, state or municipal excise, sales
or use taxes or similar impositions collected directly from customers, patrons
or guests or included as part of the sales prices of any goods or services paid
over to federal, state or municipal governments, (iii) property insurance
or condemnation proceeds (excluding proceeds from business interruption or
other loss of income coverage), (iv) proceeds from the sale or refinance
of assets other than sales in the ordinary course of business, (v) judgments,
awards and any proceeds from settlement of legal proceedings, other than for
lost business, (vi) the amount of all credits, rebates or refunds (which
shall be deductions from Gross Revenues) to customers, patrons or guests, (vii) receipts
of licensees, concessionaires, and tenants, (viii) the value of
complimentary rooms, food and beverage, (ix) interest income, and (x) security
deposits.  For purposes of the definition
of Gross Revenues, the net win from gaming activities shall be the difference
between gaming wins and gaming losses without deducting other gaming-related
costs and expenses. Gross Revenues shall be determined on an accrual basis and
in accordance with generally accepted accounting principles, consistently
applied.


 


“Hazardous Substances”
means any substance:  (i) the
presence of which requires investigation, remediation or disclosure under any
present federal, state or local statute, regulation, ordinance, order, action,
policy or common law; (ii) the presence of which causes or threatens to
cause a nuisance or other harm upon the Property or to adjacent properties or
poses or threatens to pose a hazard to the health or safety of persons on or
about the Real Property; and/or (iii) including, without limitation,
waste, pollutants, oil or other hazardous substances, including, without
limitation, petroleum or petroleum products, radioactive, flammable or
explosive substances, asbestos or asbestos-containing materials,
polychlorinated biphenyls and all materials and wastes which are or become
classified as “hazardous substances”, “hazardous materials” and/or “toxic
substances” under any applicable law, as the same may be amended
from time to time, including, but not limited to the Resource Conservation and
Recovery Act, (RCRA) (42 U.S.C. § 6901, et seq.), the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C.
§ 9601, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601,
et seq.), the Clean Water Act (33 U. S. C. § 1251, et. seq.), and the
Clean Air Act (42 U. S. C. § 7401, et. seq.).


 


“House Funds”
means all of Seller’s cash and cash equivalents located at the Hotel,
including, without limitation, cash, negotiable instruments, and other cash
equivalents located in cages, drop boxes, slot machines and other gaming devices,
cash on hand for the property manager’s petty cash fund and cashiers’ banks,
coins and slot hoppers, carousels, slot 

















 


vault and poker bank; and the funds in any
bank accounts maintained by Seller that do not relate to the Casino operations.


 


“Hotel” has the
meaning ascribed to it in Recital A.


 


“Indemnifying Party”
has the meaning ascribed to it in Section 19.4.


 


“Indemnitee” has
the meaning ascribed to it in Section 19.4.


 


“Intangible Property”
has the meaning ascribed to it in Section 3.1(h).


 


“Key Persons”
has the meaning ascribed to it in Section 6.12.


 


“Leases” means
all leases or other agreements permitting the use or occupancy of space on,
under, over or about the Real Property, including all amendments and exhibits
thereto and assignments thereof.


 


“Losses” has the
meaning ascribed to it in Section 23(a).


 


“Markers” means,
as it relate to Seller, any credit instrument as defined in NRS 463.0147.


 


“Master Lease”
has the meaning ascribed to it in Section 9.2(c).


 


“Modified Outside
Computation Date” has the meaning ascribed to it in Section 4.2(d).


 


“Nevada Gaming Authorities”
means the Nevada Gaming Control Board, the Nevada Gaming Commission and the
City of North Las Vegas.


 


“New Master Lease”
has the meaning ascribed to it in Section 9.2(c).


 


“NRS” means the
Nevada Revised Statutes.


 


“Operating Supplies”
has the meaning ascribed to it in Section 3.1(b).


 


“Outside Computation Date”
has the meaning ascribed to it in Section 4.2(b)


 


“Permits” has
the meaning ascribed to it in Section 6.12.


 


“Person” means
an individual, partnership, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture, limited liability company,
limited liability partnership, governmental authority, or other entity of
whatever nature.


 


“Personal Property”
has the meaning ascribed to it in Section 3.1(f).


 


“Post-Closing Purchase
Price Payment” has the meaning ascribed to it in Section 4.3(a).

















 


“Post-Closing Purchase
Price Payment Cap” has the meaning ascribed to it in Section 4.3(a).


 


“Project Capital
Expenditures” has the meaning ascribed to it in Section 12.8(a).


 


“Purchased Assets”
has the meaning ascribed to it in Section 3.1.


 


“Purchase Price”
has the meaning ascribed to it in Section 4.1.


 


“Purchaser” has
the meaning ascribed to it in the introductory paragraph.


 


“Purchaser’s Closing Deliveries” has the meaning
ascribed to it in Section 9.2.


 


“Ramada” has the
meaning ascribed to it in Section 5.2(g).


 


“Ramada Agreements”
shall mean the License Agreement dated as of September 4, 1998, as amended
as of March 22, 1999, and as further amended as of January 27, 2005,
by and between Ramada Franchise Systems, Inc., Speakeasy Gaming of Las
Vegas, Inc., and MTR Gaming Group, Inc., and the ancillary agreements
executed in connection therewith, relating to a license to operate a Ramada®
System Unit located at 3227 Civic Center Drive, Las Vegas, NV 89030, designated
as Unit #5692-85312.


 


“Real Property”
has the meaning ascribed to it in Recital A.


 


“Real Property Purchase
Agreement” has the meaning ascribed to it in Recital C.


 


“Seller” has the
meaning ascribed to it in the introductory paragraph.


 


“Seller’s Affiliates”
has the meaning ascribed to it in Section 6.18(b).


 


“Seller’s Closing
Deliveries” has the meaning ascribed to it in Section 9.1.


 


“Seller’s Deposits”
means any deposits for rooms and/or services furnished relating to the
pre-closing period, including, but not limited to, all security and other
deposits, advance or prepaid rents or other amounts and key money or deposits
(including any interest thereon) and all money stored on deposit at the Hotel
belonging to, and stored in an account for a person.


 


“Seller’s Employees”
has the meaning ascribed to it in Section 6.14.


 


“Serta Expenditure”
has the meaning ascribed to it in Section 12.8(a).


 


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

















 


taxes, and shall include any Liability for the taxes of any other
Person under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), or as a transferee or successor, by
contract, or otherwise.


 


“Escrow Holder”
shall mean Nevada Title Company, 2500 N. Buffalo, Suite 150, Las Vegas,
Nevada 89128 (Attention: Troy Lochhead) or such other nationally recognized
Escrow Holder that may be designated by Purchaser.


 


“Tray Ledger”
means any accounts receivable of registered guests who have not checked out and
who are occupying rooms at the Hotel on the evening of the Closing Date.


 


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


 


1.2           Interpretation.  Whenever required by the context of this
Agreement, the singular shall include the plural and the masculine shall
include the feminine and vice versa.


 


2.             Deposit.


 


2.1           Deposit.  Contemporaneously with the execution by
Purchaser of this Agreement, subject to the terms and conditions set forth
herein, Purchaser will deliver to the Escrow Holder the nonrefundable amount of
Six Hundred Fifty Thousand Dollars ($650,000) to be held by the Escrow Holder
as a deposit (together with any interest earned thereon, the “Deposit”). 
Upon Closing, the Deposit shall be applicable to the Purchase
Price.  Upon termination of this
Agreement, the Deposit shall be payable pursuant to Section 11.  All interest earned on the Deposit shall
inure to the benefit of the party entitled to the Deposit.  The Escrow Holder shall hold the Deposit in
an interest-bearing account in a federally insured commercial bank, money
market account, overnight repurchase agreements, or other similar investments,
so long as the funds are available on one (1) business day’s notice.


 


2.2           Disputes.  If there is a dispute between the Parties
concerning Seller’s or Purchaser’s right to receive the Deposit, the Escrow
Holder shall continue to hold the Deposit in an interest-bearing account, in
accordance with the terms of this Section 2, until the dispute is
resolved by Seller and Purchaser or until otherwise directed by a court of
competent jurisdiction.  In the
alternative, the Escrow Holder may interplead the Deposit with any Court having
jurisdiction over the Parties and located in the State of Nevada.  In the event of the exercise by Escrow Holder
of its obligations or rights hereunder, both Seller and Purchaser, each on its
respective behalf, covenant and agree to indemnify and hold the Escrow Holder
harmless from and against any Losses, claims, damage or costs (including
counsel and filing fees) incurred under this Agreement except to the extent
caused by the gross negligence or willful misconduct of Escrow Holder.


 


3.             Purchased Assets and Excluded Assets.


 


3.1           Purchased
Assets.  On the terms and
subject to the conditions contained in this Agreement, Purchaser agrees to
purchase and accept from Seller, and Seller agrees to sell, assign, transfer,
convey and deliver to Purchaser at Closing, all of Seller’s right, title and
interest in and to the following assets free and clear of all liens and
security interests (the “Purchased Assets”):





















 


(a)           Furniture,
furnishings, fixtures, televisions, kitchen and other equipment and
non-consumable items located in the Hotel or used in the operation of the
Business (collectively, “FF&E”);


 


(b)           An
assortment of operating inventories and supplies consisting of housekeeping and
laundry supplies, food and beverage stock, paper and accounting supplies and
similar consumable items (collectively, the “Operating
Supplies”);


 


(c)           All
of Seller’s right, title and interest in and to all advance reservations, bookings
for use of banquet facilities, the restaurant and any meeting rooms, and other
deposits;


 


(d)           Any
telephone numbers, facsimile numbers, email addresses, websites or other
communication assets used primarily in connection with Seller’s Business;


 


(e)           All
computer hardware, software and accessories;


 


(f)            The
Gaming Assets (the “Gaming Assets”)
(together with items (a) through (e) collectively, the “Personal Property”);


 


(g)           Any
Contracts and Leases which Purchaser agrees to assume pursuant to Section 5.1;


 


(h)           All
intangible personal property owned by Seller and used primarily or exclusively
in connection with the operation of Seller’s Business, including without
limitation all rights to the name “Speedway Hotel and Casino”,
and all other plans, specifications, drawings, engineering reports, surveys,
player and customer lists, vendor lists, records and information and all
patents, inventions, trade secrets and licenses owned by Seller with respect to
the foregoing (collectively, the “Intangible Property”);


 


(i)            Subject
to Section 3.2, all books, records, ledgers, files, information,
data and other written materials to the extent related to the ownership or
operation of Seller’s Business, including, without limitation, books and
records relating to Taxes which are payable in connection with the ownership or
operation of Seller’s Business, including, without limitation, accounting and
tax records and information pertaining to events occurring in connection with
Seller’s ownership or operation of Seller’s Business on or prior to the Closing
Date (collectively, the “Books and Records);


 


(j)            The
Tray Ledger;


 


(k)           The
House Funds;


 


(l)            The
Accounts Receivable;


 


(m)          The
Seller’s Deposits; and





















 


(n)           The
Markers.


 


3.2           Excluded
Assets.  Notwithstanding any
other provision hereof to the contrary, the Purchased Assets shall not include
any of the following property or assets owned by Seller (the “Excluded Assets”):


 


(a)           The
Real Property and all improvements;


 


(b)           Any
insurance policies relating to Seller’s Business and rights thereunder;


 


(c)           Causes
of action, claims (other than warranty claims relating to any of the Personal
Property, which warranty claims shall be included in the Personal Property
transferred to Purchaser hereunder) and litigation with respect to matters
arising prior to the Closing;


 


(d)           All
rights of indemnification, claims and causes of action which relate to the
operation of Seller’s Business prior to the Closing, including, without
limitation, those arising by operation of law or in equity or otherwise, but
excluding warranty claims with respect to the Personal Property or product
liability claims against the suppliers or manufacturers thereof;


 


(e)           Any
Contracts or Leases not listed on Schedule 5.1 attached hereto and made
a part hereof or which Purchaser does not agree to assume pursuant to Section 5.1;


 


(f)            Receivables
and revenues earned and accrued for the period of time prior to tie Closing
Date; and


 


(g)           The
use of the “Ramada” name, reservation system, or any
computer programs or equipment that belongs to or is used by Seller pursuant to
a license or other agreement with Ramada Franchise Systems, Inc. or its
affiliates.


 


3.3           Conveyance.  Seller agrees that it will, at any time and
from time-to-time after the Closing Date, upon request and at the expense of
Purchaser, do, execute, acknowledge or deliver, all such further acts, deeds,
assignments, conveyances and assurances as may reasonably be required for the
better conveying, transferring, assigning, assuring and confirming the
Purchased Assets to Purchaser.


 


3.4           Electronic
Books and Records.  Certain
books and records, including the following, are maintained in electronic form
on the computer system of Seller and its parent corporation, MTR Gaming Group, Inc.,
a Delaware corporation;  (i) general
ledger, (ii) disbursement journals and (iii) payroll records
maintained in connection with the processing of payroll through ADP, Inc.
(collectively, the “Electronic Books and
Records”).  Purchaser
acknowledges that, notwithstanding anything in this Agreement to the contrary,
Seller may retain the originals of such Electronic Books and Records; provided, however, that Seller agrees at
the Closing and subsequent thereto Seller shall, at no charge to Purchaser, (y) immediately
upon reasonable request by a Purchasing Party provide a Purchasing Party with a
hard copy of the Electronic Books and Records certified by Seller to be true,
accurate and complete to the best of 





















 


Seller’s
knowledge and belief and (z) immediately upon request by the Nevada Gaming
Authorities make available the originals of the Electronic Books and Records to
the Nevada Gaming Authorities.  Upon the
reasonable requests of Seller made from time to time, Seller shall immediately
provide a Purchasing Party, at no charge to Purchasing Party, with copies of
the Books and Records requested by a Purchaser that pertain to periods prior to
the Closing Date.


 


4.             Consideration.


 


4.1           Purchase
Price and Terms of Payment for Purchased Assets.  In exchange for the transfer and conveyance
of the Purchased Assets, subject to the terms and conditions set forth herein,
the purchase price for the Purchased Assets shall be Six Million Seven Hundred
Seventy Five Thousand Dollars ($6,775,000) (the “Purchase Price”).  The
Purchase Price shall be payable as follows: 
(a) Two Million Dollars ($2,000,000), adjusted as provided for
prorations and costs associated with the Closing as set forth herein, shall be
payable at Closing in immediately available funds and (b) the Post-Closing
Purchase Price Payment shall be payable in accordance with this Section 4.


 


4.2           Post-Closing
Purchase Price Payment.


 


(a)           In
the event that Average Annual Gross Revenue (as defined below) for the four (4) calendar
year period commencing on January 1, 2008 and ending on December 31,
2011 exceeds the sum of Fourteen Million Dollars ($14,000,000), Seller shall be
entitled to receive (as the “Post-Closing Purchase
Price Payment”) an amount equal to the excess (if any) of the
Average Annual Gross Revenues for such four (4) calendar year period over
Fourteen Million Dollars ($14,000,000). 
To illustrate, if the Average Annual Gross Revenues for such four (4) calendar
year period were equal to Fifteen Million Dollars ($15,000,000), Seller would
be entitled to a Post-Closing Purchase Price Payment equal to One Million
Dollars ($1,000,000).  If Average Annual
Gross Revenues for such four (4) calendar year period were less then or
equal to Fourteen Million Dollars ($14,000,000), Seller would not be entitled
to any Post-Closing Purchase Price Payment. 
Notwithstanding the foregoing, (i) the aggregate Post-Closing
Purchase Price Payment shall not exceed Four Million Seven Hundred Seventy Five
Thousand Dollars ($4,775,000) (the “Post-Closing Purchase
Payment Cap”) and (ii) the Post-Closing Purchase Price Payment
shall be computed without regard to the actual Average Annual Gross Revenues in
the circumstances set forth in this Section 4.2.


 


(b)           Average
Annual Gross Revenues for the four (4) calendar year period commencing on January 1,
2008 and ending on December 31, 2011 (“Outside Computation Date”)
shall be computed by dividing the aggregate Gross Revenues with respect to the
2008, 2009, 2010 and 2011 calendar years by four (4).  Gross Revenues for the 2008 calendar year
shall be computed by aggregating the Gross Revenues for the period in which the
Business was owned and/or operated by Seller with the Gross Revenues for the
period in which the Business was owned and/or operated by Purchaser.


 


(c)           On
or before March 31, 2012, Purchaser shall deliver to Seller a computation
of the amount of the Post-Closing Purchase Price Payment (if any) to which
Seller is entitled to under this Agreement. 
Purchaser shall pay the Post-Closing Purchase Price Payment to Seller in
four (4) annual equal installments, the first of which shall be due on March 





















 


31,
2012 and the remaining three (3) installments of which shall be due on March 31st
of the three (3) successive years. 
Notwithstanding the foregoing and except as otherwise provided herein,
Purchaser shall pay to Seller Post-Closing Purchase Price Payment in an amount
equal to the Post-Closing Purchase Payment Cap (subject to adjustment in
accordance with Section 4.2(f) below) (i) on December 31,
2009 or December 31, 2011, as the case may be, if Purchaser fails to make
the Project Capital Expenditures required by Section 12.8(b), (ii) immediately
upon Purchaser’s failure to maintain the property insurance required by Section 4.2(h),
(iii) concurrently with Purchaser’s sale or other disposition of all or
the substantially all of the assets of the Business in the event that Purchaser
sells or otherwise disposes of all of the assets of the Business on or before
the Outside Computation Date and (iv) concurrently with Purchaser’s
receipt of insurance proceeds, if substantially all of the improvements are
damaged by fire or other casualty except in the event that Purchaser provides
Seller written notice within sixty (60) days of such casualty that Purchaser or
Ganaste, as landlord, has elected to repair such damage or rebuild the
improvements on the Property (“Election to Build Notice”).


 


(d)           If
Purchaser delivers an Election to Build Notice as provided in Section 4.2(c),
the Outside Computation Date shall be extended by the number of days necessary
in order that Average Annual Gross Revenues are calculated over a period of
Fourteen Hundred Sixty Days (1,460) commencing on January 1, 2008 during
which the hotel and casino were open to the public (“Modified
Outside Computation Date”) which shall then be divided by four
(4).  In such case, Purchaser shall pay
the Post-Closing Purchase Price Payment to Seller in four (4) annual equal
installments, the first of which shall be due on the last day of the third (3) month
after the Modified Outside Computation Date and the remaining three (3) installments
of which shall be due on the anniversary of such initial payment for the three (3) successive
years.


 


(e)           In
addition, in the event that substantially all of the leasehold interest of the
Real Property is taken by condemnation, eminent domain or similar governmental
action and the Master Lease is terminated in accordance with the terms thereof
(“Condemnation Event”), Purchaser shall,
concurrently with its receipt of condemnation proceeds, if any, pay to Seller
the Post-Closing Purchase Payment in an amount equal to the aggregate
condemnation proceeds paid to Purchaser and Ganaste over Thirteen Million Four
Hundred Thousand Dollars ($13,400,000); provided, however,
such Post-Closing Purchase Payment shall not exceed Post-Closing Purchase
Payment Cap.


 


(f)            In
computing the Post-Closing Purchase Price Payment, the revenues reflected in
the audited financial statements of Seller (for the period prior to the Closing
Date) and the audited financial statements of Purchaser (for periods subsequent
to the Closing Date) which are filed with the Nevada Gaming Authorities shall
be controlling, absent manifest error (including any errors and omissions made
by the independent auditors and differences in the definition of revenues used
in such financial statements and the definition of Gross Revenues).  Each Party shall be entitled, at its own
expense, at reasonable times and upon reasonable notice, to audit the books and
records of other party pertaining to the Business for the purpose of verifying
the proper amount of Gross Revenues.  A
Party’s right to audit the books and records of the other party may be
conditioned upon the execution by the party wishing to conduct an audit of a
normal and customary confidentiality and non-disclosure agreement.





















 


(g)           Until
the later of (i) March 31, 2012 or (i) the time that all
Post-Closing Purchase Price Payment has been paid as set forth herein,
Purchaser will maintain or cause to maintain all property insurance insuring
the improvements located on the Real Property and the Assets as required under
the Master Lease (as defined in Section 9.2(c)); such coverage
shall be equal to full replacement cost with no coinsurance.  Seller shall be named as an additional
insured under any insurance policies maintained by Purchaser pursuant to this Section 4.2(g) and
shall be provided with a certificate of insurance evidence requiring that
Seller be given at least thirty (30) days written notice prior to the
cancellation of such policies.


 


5.             Assumed Liabilities and Excluded Liabilities.


 


5.1           Assumed
Liabilities of Purchaser. 
Subject to the terms and conditions set forth herein, from and after the
Closing, Purchaser shall assume and agree to discharge and perform when due
only the future obligations, commitments and liabilities under those Contracts
and Leases listed on Schedule 5.1 attached hereto which Seller agrees to
assign to Purchaser, and Purchaser agrees to assume, but only to the extent the
same relate to performance on or after the Closing Date (“Assumed Liabilities”); provided, however, that Purchaser shall
not be required to assume any Contract or Lease (i) entered into by Seller
after the date of this Agreement without Purchaser’s prior written consent, or (ii) that
is not listed on Schedule 5.1. 
The Ramada Agreements shall be listed on Schedule 5.1.


 


5.2           Excluded
Liabilities.  Notwithstanding
any provision hereof to the contrary, Purchaser shall not assume nor otherwise
be responsible for any of the liabilities and obligations of Seller other than
the Assumed Liabilities (the “Excluded
Liabilities”), which Excluded Liabilities shall remain the
responsibility and obligation of Seller, and shall not be assumed by
Purchaser.  Without limiting the
generality of the foregoing, Excluded Liabilities shall include:


 


(a)           Any
liabilities for legal, accounting, audit and investment banking fees, and any
other fees or expenses incurred by Seller in connection with the negotiation
and preparation of this Agreement and the sale of the Purchased Assets to
Purchaser;


 


(b)           Any
liabilities of Seller for Taxes, but subject to the prorations and adjustments
set forth herein;


 


(c)           Any
liabilities relating to Excluded Assets;


 


(d)           Any
liabilities relating to pending litigation;


 


(e)           All
of Seller’s indebtedness or accounts payable which arose prior to the date of
Closing; and


 


(f)            Except
as expressly provided in this Agreement, (i) any liabilities. including,
without limitation, back pay or fringe benefits of Seller’s Employees or any
obligation under the Benefit Plans, fines, penalties, attorney’s fees and costs
or other liabilities, including, without limitation, WARN liabilities, relating
to Seller’s Employees (as defined below), (ii) any dispute with any labor
organizations, or (iii) any dispute or cost liability relating thereto,
with any past or present employee of Seller arising on or prior to the Closing
Date.





















 


(g)           Ramada Agreements. 
Purchaser may seek to assume the Ramada Agreements and shall pay all
application and initiation fees and other costs in connection with such
assumption.  Purchaser acknowledges under
the Ramada Agreements, Ramada Franchise Systems, Inc. (“Ramada”) must consent to the assumption by Purchaser of the
Ramada Agreements.  In the event that
Purchaser elects not to or is unable to assume the Ramada Agreements for any
reason, Purchaser’s liability as to the Ramada Agreements (which shall be the
joint and several liability of the Purchaser pursuant to this Section 5(g) and
of Ganaste pursuant to Section 21 of the Real Property Purchase Agreement)
shall be limited to One Hundred Thousand Dollars ($100,000), and Seller shall
pay all other amounts due thereunder as a result of such termination.


 


6.             Representations and Warranties of Seller.  Seller represents and warrants to each of the
Purchaser that, to the best of Seller’s knowledge and belief, the following
shall be true and complete in all material respects:


 


6.1           Organization.  Seller is duly organized and validly existing
under the laws of its state of incorporation and has all requisite power and
authority to carry on its business as now being conducted.  Seller is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary.


 


6.2           Litigation.  No attachment, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization, or other proceedings are pending or threatened against Seller.


 


6.3           Authority.  Seller has the legal power, right and
authority to enter into this Agreement and the instruments referenced herein
and to consummate the transactions contemplated hereby.


 


6.4           Requisite
Action.  All requisite action
(corporate, partnership or otherwise) has been taken by Seller in connection
with entering into this Agreement, the instruments referenced herein and the
consummation of the transactions contemplated hereby.


 


6.5           Validity.  This Agreement and all documents required
hereby to be executed by Seller arc and shall be valid, legal, binding
obligations of, and enforceable against, Seller in accordance with their terms,
subject only to applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws, or equitable principles affecting or limiting the rights of
contracting parties generally.


 


6.6           No
Breach.  The execution and
delivery of this Agreement by Seller does not, and the consummation by Seller
of the transactions to which it is a party that are contemplated by this
Agreement will not, (i) conflict with, or result in any violation or
breach of, any provision of the articles of incorporation, bylaws or other
organizational documents of Seller or (ii) as of the Closing Date, result
in any violation or breach of, or constitute (with or without notice or lapse
of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
or require an approval under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, contract or obligation to which Seller
is a party or by which Seller or any of the Purchased Assets may be bound.





















 


6.7           Consents.  No approval of or from any court, arbitrator
or governmental, administrative or regulatory authority, agency, commission,
body or instrumentality, domestic or foreign, other than the Gaming Authorities
(each, a “Governmental Authorities”)
and other than Gaming Approvals is required by or with respect to Seller in
connection with the execution and delivery of this Agreement by Seller or the
consummation by Seller of the transactions to which it is a party that are
contemplated hereby.


 


6.8           Financials.  The audited financial statements as of December 31,
2002 and for the year ending December 31, 2002; the audited financial
statements as of December 31, 2003 and for the year ending December 31,
2003; the audited financial statements as of December 31, 2004 and for the
year ending December 31, 2004; the audited financial statements as of December 31,
2005 and for the year ending December 31, 2005; and the unaudited income
statement for the twelve months ending September 30, 2006, attached hereto
and made a part hereof as Exhibit “A”, contain a true and complete
copy of the audited or unaudited financial reports relating to the Hotel for
such time periods (collectively, the “Financial
Information”).  The Financial
Information was prepared in accordance with generally accepted accounting
principles in effect at the time of such preparation applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements) and fairly presented in all material respects the
consolidated financial position of the Hotel as of such date subject, in the
case of unaudited statements, to normal year-end adjustments and the absence of
footnotes.


 


6.9           Liabilities.  Except as set forth in the Financial
Information and the information set forth on Schedule 6.9, Seller has no
liabilities.


 


6.10         Contracts.  Each Contract and Lease is valid and binding
upon Seller (and, to Seller’s knowledge, on all other parties thereto), in
accordance with its terms and is in full force and effect.  There is no breach or violation of or default
by Seller, or to the best of Seller’s knowledge, by the other parties thereto,
under any of the Contracts or Leases, whether or not such breach, violation or
default has been waived.


 


6.11         No
Proceedings.  There is no
proceeding against Seller, pending before any Governmental Authorities, or as
to which Seller has received any written notice of assertion or, to the
knowledge of Seller any proceeding threatened, relating to the Purchased
Assets.


 


6.12         Governmental
Approvals.  Each of its
directors, officers, stockholders, Persons performing management functions
similar to officers (collectively, “Key
Persons”) hold all approvals of all Governmental Authorities
(including all Gaming Approvals) necessary to conduct the business and
operations conducted at the Business, including, but not limited to, Seller’s grandfathered
non-conforming unrestricted gaming license, and to ensure that the present
structure, use, operation and maintenance of the Business is authorized by, and
in compliance with Governmental Regulations, including, but not limited to,
true and correct legible copies of any or all certificates of occupancy (or the
equivalent), any or all permits, licenses and other authorizations and
entitlements issued with respect to the Business, and each 





















 


portion
of space in the Business occupied by hotel guests (collectively, the “Permits”), each of which is in full force
and effect and no event has occurred which may cause, or upon the giving of
notice or passage of time or both, would cause, revocation, non-renewal,
modification, suspension, limitation or termination of any Permit that
currently is in effect.  Seller and, to
the knowledge of Seller, Key Persons, are in compliance with the terms of the
Permits.  The Business is not being
conducted in violation of any law of any Governmental Authorities. Seller has
not received a notice of any investigation or review by any Governmental
Authorities with respect to the Purchased Assets that is pending, and, to the
knowledge of Seller, no investigation or review is threatened, nor has any
Governmental Authority indicated any intention to conduct the same.  Seller has not received any written claim,
demand, notice, complaint, order from any Governmental Authority in the past
three (3) years relating to any violation or possible violation of any
Gaming Laws which did or would be reasonably likely to result in fines or
penalties of Fifty Thousand Dollars ($50,000) or more.  To Seller’s knowledge, there are no facts,
which if known to the Gaming Authorities, would be reasonably likely to result
in the revocation, limitation or suspension of a Permit under the Gaming Laws.


 


6.13         Gaming
Assets.  Schedule 6.13
hereof is a true and complete listing of the Gaming Assets located at the Hotel
as of the Effective Date.


 


6.14         Employees.  Schedule 6.14 hereof sets forth as of February 9,
2007, the names and job titles (or positions held) of each of the employees of
the Business (the “Seller’s Employees”)
and the current annual base salary (or hourly rate) and most recent bonus paid
to each of Seller’s Employees.  Seller is
not a party to any collective bargaining agreement applicable to employees at
the Hotel and to the knowledge of Seller there are no activities or proceedings
of any labor union to organize any non-unionized employees at the Hotel.  There are no unfair labor practice charges,
complaints or petitions for elections pending against Seller before the
National Labor Relations Board, or any similar labor relations governmental
bodies, or, of which Seller has received notice.  There is no strike, slowdown, work stoppage or
lockout, or, to the knowledge of Seller, threat thereof, by or with respect to
any employees that work at the Hotel.


 


6.15         Benefit
Plan.  Schedule 6.15
hereof sets forth an accurate and complete list as of February 9, 2007 of
all (i) “employee welfare benefit plans,”
within the meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations thereunder
(“ERISA”) and (ii) material
bonus, stock option, stock purchase, restricted stock, incentive, fringe
benefit, profit-sharing, pension or retirement, deferred compensation, medical,
life insurance, disability, accident, salary continuation, severance, accrued
leave, vacation, sick pay, sick leave, supplemental retirement and unemployment
benefit plans, programs, arrangements, commitments and/or practices (whether or
not insured) for Seller’s Employees (all of the foregoing plans, programs,
arrangements, commitments, practices and Contracts referred to in (i) and (ii) above
are referred to, the “Benefit Plans”).  True and complete copies of each of the
Benefit Plans (or a summary thereof) have been made available by Seller to
Purchaser. Seller does not maintain “employee
pension benefit plans,” within the meaning of Section 3(2) of
ERISA or a 401(k)Plan.


 


6.16         Taxes.  All material tax returns required to be filed
with respect to the Business for all periods through and including the Closing
Date have been duly and timely filed
















 


with
the appropriate Governmental Authorities in all jurisdictions in which such tax
returns are required to be filed, and such tax returns are true, correct and
complete in all material respects.  All
Taxes shown as due on such tax returns have been timely paid.  All material Taxes required to be withheld
and paid with respect to (i) Seller’s Business; or (ii) any amounts
owed by Seller to any employee, creditor, independent contractor or other third
party have been duly and timely withheld and paid.  To the knowledge of Seller, there are no
pending or threatened audits or investigations with respect to Taxes relating
to the Real Property or Seller’s Business.


 


6.17         Hazardous
Substances.  To Seller’s
knowledge, no Hazardous Substances have been stored on the Real Property, and
Seller is not subject to any pending or, to Seller’s knowledge, threatened
enforcement or investigatory action by any Governmental Authorities regarding
Hazardous Substances with respect to the Real Property.


 


6.18         “As
Is” Sale.


 


(a)           Purchaser
expressly acknowledges and agrees to accept the Purchased Assets on an “as-is-where-is and with all faults” basis, except as
otherwise provided in this Agreement.


 


(b)           This
Agreement, as written, contains all the terms of the agreement entered into
between the parties as of the date hereof, and Purchaser acknowledges that
neither Seller nor any person controlling, controlled by or under common
control with Seller (collectively, “Seller’s Affiliates”),
nor any of their agents or representatives, has made any representations or
warranties or held out any inducements to Purchaser, and Seller hereby
specifically disclaims any representation or warranty, oral or written, past,
present or future, other than those specifically set forth in this Agreement.  Without limiting the generality of the
foregoing, neither Seller nor any of Seller’s Affiliates, nor any of Seller’s
agent or representatives has or is willing to make any representations or
warranties, express or implied, other than as may be expressly set forth
herein, as to the actual or projected income or operating expenses of the
Business.


 


(c)           Purchaser
acknowledges that Seller has afforded and will afford Purchaser the opportunity
for full and complete investigations, examinations and inspections of the
Purchased Assets and all pertinent information. 
Purchaser acknowledges and agrees that the information delivered or made
available to Purchaser and Purchaser’s representatives by Seller or Seller’s
Affiliates, or any of their agents or representatives may have been prepared by
third parties and may not be the work product of Seller and/or any of Seller’s
Affiliates.


 


7.             Representations and Warranties of Purchaser.  Purchaser hereby represents and warrants to
Seller as follows:


 


7.1           Bankruptcy.  No attachment, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization, or other such proceedings arc pending or, to the best of its
knowledge, threatened against Purchaser or its principals.


 


7.2           Power. 
Purchaser has the legal power, right and authority to enter into this
Agreement and the instruments referenced herein and to consummate the
transactions contemplated hereby.





















 


7.3           Requisite Action.  All requisite action (corporate, partnership
or otherwise) has been taken by Purchaser in connection with entering into this
Agreement, the instruments referenced herein and the consummation of the
transactions contemplated hereby, and no consent of officer, director,
shareholder, is required to enter into the transactions contemplated hereby.


 


7.4           Validity. 
This Agreement and all documents required hereby to be executed by
Purchaser are and shall be valid, legal, binding obligations of, and
enforceable against, Purchaser in accordance with their terms, subject only to
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws,
or equitable principles affecting or limiting the rights of contracting parties
generally.


 


7.5           No Breach. 
Neither the execution and delivery of this Agreement and the documents
referenced herein nor the consummation of the transactions contemplated herein
nor compliance with the terms of this Agreement and the documents referenced
herein conflict or result in the material breach of any terms, conditions or
provisions of, or constitute a default under, any bond, note or other evidence
of indebtedness or any contract, indenture, mortgage, deed of trust, loan,
lease or other agreements or instruments to which Purchaser is a party or by
which Purchaser may be bound.


 


8.             No Knowledge. 
Purchaser knows of no reason why it would be denied any license or
permit required for the consummation of the transactions contemplated by this
Agreement.


 


9.             Closing Deliveries.


 


9.1           Seller’s Closing Deliveries.  On or before the Closing Date, Seller shall
execute, acknowledge and deliver (as appropriate) to the Escrow Holder the
following (“Seller’s Closing Deliveries”):


 


(a)           A
bill of sale conveying to Purchaser the Personal Property and the Intangible
Property;


 


(b)           An
assignment and assumption agreement to transfer the Contracts and Leases
assumed by Purchaser as provided herein (the “Assignment
Agreement”);


 


(c)           A
bill of sale conveying to Purchaser the Gaming Assets; and the delivery of the
physical possession thereof to Purchaser; and


 


(d)           All
such other instruments or documents as may be reasonably required by Purchaser
or the Escrow Holder in order to consummate the transactions contemplated
hereby.


 


9.2           Purchaser’s Closing Deliveries.  On or before the Closing Date, Purchaser
shall execute, acknowledge and deliver (as appropriate) to the Escrow Holder
the following (“Purchaser’s Closing
Deliveries”):


 


(a)           The
Two Million Dollar ($2,000,000) portion of the Purchase Price payable pursuant
to Section 4.1;





















 


(b)           The
Assignment Agreement;


 


(c)           (i) Evidence
of termination of the Lease between Seller and Ganaste which is to be entered
into between Seller and Ganaste as of the date that Ganaste acquires the Real
Property pursuant to the Real Property Purchase Agreement (“Master Lease”) and an executed copy of a Master Lease
between Ganaste as landlord and Purchaser as tenant pursuant to which Purchaser
shall have a right to lease the Real Property and operate the Real Property (“New Master Lease”); or (ii) an assignment of such
Master Lease to Purchaser as tenant and the assumption by Purchaser of the
obligations thereunder (“Assignment of Master Lease”);
All such other instruments or documents as may be reasonably required by Seller
or the Escrow Holder in order to consummate the transactions contemplated
hereby.


 


9.3           Post
Closing Deliveries.  The
Escrow Holder shall deliver to Purchaser each of the other documents and
instruments delivered to the Escrow Holder by Seller promptly following the
Closing.


 


10.           Conditions Precedent.


 


10.1       Conditions Precedent to Purchaser’s Obligations.  The obligation of Purchaser to purchase the
Purchased Assets shall be subject to the following conditions (all or any of
which may be waived, in whole or in part, by Purchaser):


 


(a)           The
representations and warranties made by Seller in Section 6, except
those representations and warranties which arc expressly limited to facts and
circumstances as of the Effective Date, shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of such
date, and Seller shall have executed and delivered to Purchaser a certificate
dated as of the Closing Date to the foregoing effect;


 


(b)           Seller
shall have performed all covenants and obligations required by this Agreement
to be performed or complied with by Seller on or before the Closing Date;


 


(c)           Seller
shall have terminated the employment of all employees and provided all notices
required under WARN with respect to such termination;


 


(d)           Purchaser
shall have received all necessary Gaming Approvals;


 


(e)           Purchaser
shall have entered into a New Master Lease or shall have evidence of an
Assignment of Master Lease;


 


(f)            Seller
shall have operated and maintained the Business and the Purchased Assets in the
ordinary course of business until the Closing. 
The quantity and condition of the Personal Property on the Closing Date
shall, in all material respects, be the same as on the Effective Date,
reasonable wear and tear excepted; and


 


(g)           Seller shall have delivered to the Escrow Holder all of
Seller’s Closing Deliveries.





















 


10.2         Conditions to Seller’s Obligations.  The obligation of Seller to sell the
Purchased Assets shall be subject to the following conditions (all or any of
which may be waived, in whole or in part, by Seller):


 


(a)           Purchaser
shall have performed all covenants and obligations required by this Agreement
to be performed or complied with by Purchaser on or before the Closing Date;


 


(b)           Purchaser
shall have received all necessary approvals from the Nevada Gaming Authorities;


 


(c)           MTR
Gaming Group, Inc. shall have obtained a release from Ramada Franchise
Systems, Inc. of its guaranty of Seller’s obligations under the License
Agreement between Seller and Ramada Franchise Systems, Inc.; and


 


(d)           Purchaser
shall have delivered to the Escrow Holder all of Purchaser’s Closing
Deliveries.


 


11.           Closing.


 


11.1         Closing
Date.  Closing of the
transactions contemplated herein (the “Closing”)
shall take place on the earlier of (i) two hundred forty (240) days after
the execution of this Agreement or (ii) thirty (30) business days after
the receipt by the parties of all Gaming Approvals (the “Closing Date”).  Closing shall take place at the office of the
Escrow Holder or at such other location as the Parties shall designate
jointly.  The delivery to the Escrow
Holder of Seller’s Closing Deliveries and Purchaser’s Closing Deliveries shall
be deemed to be a good and sufficient tender of performance of the terms
hereof.


 


11.2         Extensions.  [Intentionally
Deleted].


 


11.3         Non-Gaming
Closing.  [Intentionally Deleted]


 


11.4         Closing
Costs.  The Closing costs
shall be paid as follows:


 


(a)           Seller
shall pay:


 


(i)            One-half (1/2) of the escrow
fees;  and


 


(ii)           The cost of any other obligations of
Seller hereunder.


 


(b)           Purchaser
shall pay:


 


(i)            One-half (1/2) of the escrow fees;
and


 


(ii)           The cost of any other obligations of
Purchaser hereunder.


 


11.5         Other
Costs.  All other costs and
expenses attendant to settlement, including Escrow Holder charges, shall be
shared equally by the parties. 
Notwithstanding the 





















 


foregoing,
each party shall pay its own attorneys fees. 
If clear title cannot be tendered by Seller at Closing then Seller shall
pay all Escrow Holder charges.


 


12.           Prorations; Withholding; Adjustments.


 


12.1         Prorations.  Unless otherwise provided herein
or otherwise agreed to by , all items, including, but not limited to the
following, shall be pro-rated, allocated or adjusted as of 11:59 p.m. on
the Closing Date.


 


(a)           Sales,
use, and personal property taxes with respect to the Business;


 


(b)           Water
and sewer service charges and charges for electricity, telephone and all other
public utilities;


 


(c)           Room rental
income from hotel guests for the night of the Closing Date (to be divided
equally between Seller and Purchaser);


 


(d)           Revenues
from hotel guests other than room rental income (to be allocated one hundred
percent (100%) to Seller, and


 


(e)           Income
and expenses accrued pursuant to the Contracts and Leases.


 


Seller and Purchaser shall prepare a closing
statement reflecting the prorations set forth above (the “Closing
Statement”).  If the Closing
Statement reflects a net amount due and owing to Seller, Purchaser shall pay
such net amount to Seller on the Closing Date. 
If, in contrast, the Closing Statement reflects a net amount due and
owing to Purchaser, Seller shall pay such amount to Purchaser on the Closing
Date.  In the event Seller and Purchaser
agree that additional items shall be pro-rated, allocated or adjusted, any such
items shall be prorated, adjusted or allocated consistent with this Section 12.1.  In the event that the parties do not agree on
all of the items with respect to the Closing Statement, the parties shall
include nondisputed items on the Closing Statement.  The items reflected on the Closing Statement
shall be subject to adjustment subsequent to the Closing Date; provided, however, that no claim for an adjustment may be
made more than one (1) year following the Closing Date.


 


12.2         Taxes
Withheld: Deficiency Determinations for Gaming Taxes.  In order to comply with NRS 360.525 (relating
to taxes administered by the Nevada Department of Taxation), NRS 612.695
(relating to unemployment taxes), NRS 244.335 (relating to county license
taxes) and NRS 244.3352 (relating to county room taxes), such amounts as Seller
and Purchaser reasonably estimate are necessary to comply with the provisions
of the above mentioned and similar statutes providing for the payment of taxes
will be withheld by the Escrow Holder and will be payable to Seller after
Closing at such time as Seller furnishes Purchaser and the Escrow Holder
receipts or certificates provided for in such statutes, or if not so provided
for, such evidence as Purchaser may reasonably require to assure Purchaser that
the applicable obligations have been paid. 
If Seller does not produce such receipts or certificates within the time
period provided for in such statutes or if any lien or claim therefore is
asserted against Purchaser, the Escrow Holder shall pay such withheld sums to
the appropriate 





















 


Governmental
Authorities or other applicable taxing authority.  Seller shall remain responsible for payment
of any fees or taxes due pursuant to any subsequent deficiency determination
made pursuant to Chapter 463 of the NRS which encompass any period of time
before the Closing, and shall hold Purchaser harmless therefrom.


 


12.3         Seller’s
Credits.  Prior to the Closing
Date, Purchaser and Seller shall mutually agree on a procedure for counting and
determining the value of the following for which Seller shall receive a credit
at Closing:


 


(a)           The
Tray Ledger;


 


(b)           The
House Funds;


 


(c)           The
Operating Supplies;


 


(d)           All
Accounts Receivable;


 


(c)           Seller’s Deposits; and


 


(d)           The Markers.


 


12.4         Adjustment for Progressive Liabilities.  Seller shall, on the Closing Statement,
credit Purchaser for an amount equal to the amounts shown as of the Closing
Date on the meters of:


 


(a)           The
Hotel’s in-house progressive slot machines;


 


(b)           The
Hotel’s table games with an in-house progressive jackpot feature as of the
Closing Date; and


 


(c)           The
Hotel’s other games with an in-house progressive feature.


 


12.5         Room Reservations.  Purchaser will honor the terms and rates of
all pre-Closing Date room reservations (in accordance with their terms) at the
Hotel made in the ordinary course of business by guests or customers, including
advance reservation cash deposit, for rooms or services confirmed by Seller for
dates after the Closing Date.  Purchaser
shall receive a credit for such deposit at Closing. Purchaser recognizes that
such reservations may include discounts or other benefits, including, without
limitation, benefits under frequent player or casino awards programs, group
discounts, other discounts or requirements that food, beverage or other
benefits be delivered by Purchaser to the guest(s) holding such
reservations.  Purchaser will honor all
room allocation agreements and banquet facility and service agreements which
have been granted to groups, persons or other customers for periods after the
Closing Date at the rates and terms provided in such agreements provided that
such agreements were made in the ordinary course of business.  Purchaser agrees that Seller cannot make and
has made no representation or warranty that any party holding a reservation or
agreement for rooms, facilities or services will utilize such reservation or
honor such agreement.  Purchaser, by the
execution hereof, assumes the risk of non-utilization of reservations and
non-performance of such agreements from and after the Closing Date.





















 


12.6         Guests’ Safe Deposit Boxes.  Purchaser shall be responsible for all guest
safety deposit boxes from and after the Closing Date.


 


12.7         Guests’ Vehicles and Baggage.  Prior to the Closing Date, Seller and
Purchaser shall take inventory of:  (i) all
baggage, suitcases, luggage, valises and trunks of hotel guests checked or left
in the care of Seller; (ii) all luggage or other property of guests
retained by Seller as security for unpaid accounts receivable; (iii) the
contents of the baggage storage room and (iv) all motor vehicles that were
checked and placed in the care of Seller at the Hotel; provided, however, that no such baggage,
suitcases, luggage, valises or trunks shall be opened. Except for the property
referred to in (ii) above, which shall be removed from the Real Property
by Seller within ten (10) days after the Closing Date, all such baggage
and other items shall be marked or sealed in a manner to be agreed upon by the
parties and listed in an inventory prepared and signed jointly by said representatives
of Seller and Purchaser as of the Closing Date. 
Said baggage and other items shall be stored as Purchaser shall choose,
and Purchaser shall be responsible for claims with respect thereto.


 


12.8         Project Capital Expenditures.


 


(a)           Purchaser
covenants and agrees to reimburse Seller for fifty percent (50%) of all Project
Capital Expenditures (as defined below) incurred by Seller with respect to the
Business, provided that (i) Purchaser consent in writing, in advance, to
each such Project Capital Expenditure (such consent to include Purchaser’s
approval of the work to be done and/or items to be purchased, the budget and
the contractor with respect thereto), (ii) Purchaser’s obligations under
this Section 12.8 shall be payable only upon, and simultaneously
with, the Closing of the transactions contemplated by this Agreement and (iii) notwithstanding
anything to the contrary in this Agreement. 
Purchaser’s consent with respect to any Project Capital Expenditures
shall be required and obtained, for the purposes of this Section 12.8,
only to the extent permitted or not prohibited by law.  “Project Capital
Expenditures” shall mean (a) the previously consummated
purchase of approximately one hundred seventy two (172) queen size Serta
mattresses and six (6) king size Serta mattresses for a cost of
approximately Fifty Seven Thousand Four Hundred Eighteen Dollars ($57,418.00)
plus shipping (the “Serta Expenditure”);
(b) the previously consummated purchase of a new Micros server and
ancillary equipment at a cost of approximately Twenty Six Thousand Dollars
($26,000.00) (the “Micros Expenditure”) and (c) all other expenditures for
new equipment, Fixtures and other capital improvements (excluding maintenance
expenses) with respect to the Business of Seller.  Purchaser’s execution of this Agreement shall
be deemed to be consent to reimbursement of fifty percent (50%) of the Serta
Expenditure and the Micros Expenditure.


 


(b)           Covenant.  Prior to December 31,
2011, Purchaser shall make aggregate Project Capital Expenditures of at least
Three Million Dollars ($3,000,000). 
Purchaser shall make at least Two Million Dollars ($2,000,000) of such
Project Capital Expenditures on or before December 31, 2009.


 


13.           Termination and Remedies.


 


13.1         Termination.  This Agreement may be terminated and the
transactions contemplated hereby abandoned:





















 


(a)           By
mutual written consent of Seller and Purchaser;


 


(b)           By
either Seller or Purchaser if not in default of its obligations hereunder and
any Governmental Authorities shall have issued an order, decree or ruling or
taken any other action (other than the denial of Gaming Approvals by the Nevada
Gaming Authorities) restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;


 


(c)           By
Seller if there shall have been any material breach of a representation,
warranty, covenant or obligation of Purchaser and, if such breach is curable
such default shall not have been remedied within ten (10) days after
receipt of notice in writing from Seller specifying such breach and requesting
that it be remedied;


 


(d)           By
Purchaser if there shall have been any material breach of a representation,
warranty, covenant or obligation of Seller and, if such breach is curable such
default shall not have been remedied within ten (10) days after receipt of
notice in writing from Purchaser specifying such breach and requesting that it
be remedied;


 


(e)           By
either Seller or Purchaser if the Nevada Gaming Commission has not approved the
transaction on or before the time for the Closing Date, if Purchaser has opted
not to exercise any of its extension options as set forth in Section 11.2
or if Purchaser has exercised its right to one or more extensions pursuant to Section 11.2,
at the expiration of the last extension period elected by Purchaser;


 


(f)            If
it is not in default under this Agreement, by either Seller or Purchaser if
Purchaser has obtained all necessary Gaming Approvals but the Closing has not
occurred by the later of (i) thirty (30) business days following the
receipt by Purchaser of all necessary Gaming Approvals or (ii) the Closing
Date; or


 


(g)           By
Purchaser, pursuant to Section 13.4(a) or 13.4(b).


 


 provided, however,
that nothing contained in this Section 13.1 shall relieve or limit
the liability of either party to this Agreement for any fraudulent or willful
breach of this Agreement.  The denial of
Gaming Approvals by the Nevada Gaming Authorities shall not constitute grounds
to terminate this Agreement pursuant to Section 13.1(b).


 


13.2         Effect
of Termination.


 


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


 


(b)           Upon
the termination of this Agreement pursuant to Sections 13.1(c) and
13.1(f), the Deposit shall be paid to Seller.  Upon termination of this Agreement pursuant
to Sections 13.1(a), 13.1(b), 13.1(d) or 13.1(g), the Deposit shall
be paid to Purchaser without the need of any further instruction from Seller.





















 


13.3         Remedies.  Seller shall retain the Deposit as liquidated
damages as its sole and exclusive remedy (other than Section 13.1.6) in
the event that either all conditions precedent to Purchaser’s obligation to
close purchase the Purchased Assets have been satisfied and Purchaser defaults
on purchasing the Purchased Assets on the Closing Date as required by this
Agreement.  Seller shall also retain the
Deposit as its sole and exclusive remedy in the event that Purchaser fails to
obtain all necessary Gaming Approvals within the time allowed herein and either
Seller or Purchaser terminates the Agreement pursuant to Section 13.1(e).   The
Parties hereby agree and acknowledge that Seller’s damages as a result thereof
would be extremely difficult or impossible to determine but that the Deposit
represents the parties’ best good faith estimate thereof.  The parties agree that the retention of the
Deposit by Seller pursuant to this Agreement is in no way intended as a penalty
or forfeiture.  Upon the termination by
Seller of this Agreement and the retention by Seller of the Deposit the parties
shall be released from any further obligations to each other under this
Agreement.  In the event all conditions
precedent to Seller’s obligation to Close have been satisfied and Seller
defaults on selling the Purchased Assets on the Closing Date as required by
this Agreement, Purchaser shall be entitled to all remedies available to it at
law or in equity, including, without limitation, a decree of specific
performance.  The foregoing termination
rights and any and all other rights and remedies given to Purchaser in this
Agreement are distinct, separate and cumulative; and no one such right or
remedy, whether or not exercised, shall be deemed to be to the exclusion of
others herein granted or given by law or in equity.


 


13.4         Condemnation
or Damage by Fire or Other Casualty.


 


(a)           Condemnation.  If
prior to the Closing, more than ten percent (10%) of the acreage, which
includes any exterior space, parking spaces or tenants right to any parking
spaces or area, of the leasehold interest in the Real Property is taken by
condemnation, eminent domain or similar governmental action (or is the subject
of a pending, threatened or contemplated taking which has not been consummated)
or if the access thereto is materially reduced or restricted, Seller shall
immediately upon becoming aware of it notify Purchaser of such fact.  In such event, Purchaser shall have the
option, in its sole and absolute discretion, to (i) terminate this
Agreement upon written notice to Seller given not later than thirty (30) days
after receipt of Seller’s notice, or (ii) purchase all of the Purchased
Assets pursuant to this Agreement without modification of the terms of this
Agreement.  If Purchaser timely and
properly elects to terminate this Agreement pursuant to its option to terminate
as set forth above, at such time the Parties shall be released from further
obligations under this Agreement and the Deposit shall be returned to Purchaser.  If Purchaser elects to purchase all of the
Assets despite the condemnation at Closing, Seller shall assign and turn over
to the Gaming Assets to Purchaser, and Purchaser shall be entitled to receive
and keep all awards for the taking which accrued to Seller, and the Parties
shall proceed to the Closing pursuant to the terms hereof without modification
of the terms of this Agreement and without any reduction in the Purchase Price.


 


(b)           Unrepaired Damage.  At
the time of Closing, and as a condition precedent to the obligation of
Purchaser to purchase the Purchased Assets pursuant to this Agreement, there
shall be no unrepaired damage by fire or other casualty to any portion of the 





















 


Purchased
Assets, the estimated cost of repair of which is more than One Hundred Thousand
Dollars ($100,000.00).  If (i) any
portion of the Purchased Assets is damaged by fire or casualty after the date
of this Agreement that is not repaired and restored substantially to its
condition as of the date of this Agreement prior to Closing, and (ii) the
estimated cost of repairs is One Hundred Thousand Dollars ($100,000.00) or
less, Purchaser shall be required to purchase the Purchased Assets in
accordance with the terms of this Agreement and, at Closing, Seller shall
assign to Purchaser all insurance claims and proceeds with respect thereto and
shall pay or credit to Purchaser the amount of any deductible or uninsured loss
with respect to such casualty.  If such
casualty is not insured, Seller shall restore the Purchased Assets and may
extend the Closing Date for up to sixty (60) days until such restoration is
complete.  If Seller cannot complete the
restoration within such period, Purchaser may terminate this Agreement,
Purchaser and Seller shall be released from further obligation hereunder and
the Deposit shall be returned to Purchaser. 
If the estimated cost of repairing such damage is more than One Hundred
Thousand Dollars ($100,000.00) and such damage is insured, Purchaser may, at
its sole option:  (i) postpone the
Closing until such time as Seller shall have repaired all such damage; (ii) elect
to proceed with the Closing, in which case at Closing Seller shall assign to
Purchaser all insurance claims and proceeds with respect to such damage and
shall pay or credit to Purchaser the amount of any deductible with respect to
such casualty; or (iii) terminate this Agreement, in which event neither
party shall have any further liability to the other and the Deposit shall be
returned to Purchaser.  If the estimated
cost of repairing the damage to the Purchased Assets exceeds One Hundred
Thousand Dollars ($100,000.00) and the damage is not covered by Seller’s
insurance, then either Seller or Purchaser may terminate this Agreement, in
which event neither party shall have any further liability hereunder and the
Deposit shall be returned to Purchaser. 
If a casualty to any part of the Purchased Assets has occurred and
Purchaser is required or elects to complete the purchase of the Purchased
Assets, Seller shall cooperate with Purchaser in prosecuting all insurance
claims assigned to Purchaser at Closing.


 


14.           Brokers & Investment Bankers.


 


14.1         Seller’s
Representation and Indemnification. 
Seller represents and warrants to Purchaser, that it has not been
represented by any broker or investment banker in connection with this
Agreement or the transactions contemplated by this Agreement other than Lazard
Freres & Co., LLC. Seller will indemnify and hold Purchaser harmless
from any claim by any broker, agent or finder purporting to have acted on behalf
of Seller.


 


14.2         Purchaser’s Representation and Indemnification.  Purchaser represents and warrants to Seller
that it has not been represented by any broker in connection with this
Agreement or the transactions contemplated by this Agreement.  Purchaser will indemnify and hold Seller
harmless from any claim by any broker, agent or finder purporting to have acted
on behalf of Purchaser.


 


15.           Entire Agreement.  No
change or modification of this Agreement shall be valid unless in writing and
signed by the parties hereto.  No waiver
of any of the provisions of this Agreement shall be valid unless in writing and
signed by the party against whom it is sought to be enforced.  This Agreement contains the entire agreement
between the parties relating to the purchase and sale of the Purchased Assets,
all prior negotiations between the parties are merged in this Agreement and
there are no promises, agreements, conditions, undertakings, warranties or
representations, oral or written, express or implied, between them other than
as set forth in this Agreement.





















 


16.           Assignment; Benefits and Burdens.  Seller may assign its rights and obligations
under this Agreement prior to the Closing Date with the prior written consent
of the other party, not to be unreasonably conditioned, delayed or withheld; provided, however, Purchaser shall not have a right to
assign or transfer this Agreement without the prior written consent of Seller,
which may not withheld for any reason. 
All terms of this Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective legal representatives,
successors and assigns.


 


17.           Governing Law; Prevailing Party Attorney Fees.   This Agreement concerns properly located in
the State of Nevada, and shall be construed and enforced in accordance with the
laws of the State of Nevada. 
Notwithstanding any provision in this Agreement to the contrary, in the
event of a dispute with respect to the subject matter of this Agreement, the prevailing
Party in any proceeding, including arbitration commenced to resolve such
disputes, shall be entitled to an award of its reasonable attorney fees and
court or arbitration costs incurred in resolving or settling the dispute, in
addition to any and all other damages or relief which the court or arbitrator
may deem proper.


 


18.           Notices.  All notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally or via
facsimile if a copy is also deposited in the United States mail, properly
addressed and postage prepaid, or delivered by Federal Express or other
recognized overnight delivery service, (i) if to Purchaser, Mandekic
Companies, LLC, 1035 Via Sanguinella Street, Henderson, Nevada 89011 Attention:
Ted Mandekic, with a copy to Jenica Yurcic, Esquire, Schreck Brignone, 300 S.
Fourth Street, Suite 1200, Las Vegas, Nevada 89101; (ii) if to
Seller, MTR Gaming Group, Inc., Route 2 South, P.O. Box 356, Chester,
West Virginia 26034, Attention: Edson R. Arneault, with a copy to Robert L.
Ruben, Esquire, Ruben & Aronson, LLP., 4800 Montgomery Lane Suite 150,
Bethesda, MD 20814; (iii) if to Purchaser, Luck Lucy D LLC, Attention:
Bruce Deifik, c/o Integrated Properties, Inc., 3900 E. Mexico Avenue, Suite 1400,
Denver, CO 80210, with a copy to Jeffrey A. Silver, Esquire, 3960 Howard Hughes
Parkway, 9th Floor, Las Vegas, NV 89169;
(iv) at such other address as may be given by either party to the other
party by notice in writing pursuant to provisions of this Section 18.


 


19.           Indemnification.


 


19.1         Indemnification
by Purchaser.  Subject to the
limits set forth in Section 19.4, 
Purchaser agrees to indemnify, defend and hold Seller and its officers,
directors and agents, harmless from and in respect of any and all losses, damages,
liability, costs and expenses (including, without limitation, reasonable
expenses of investigation and defense fees and disbursements of counsel and
other professionals) (collectively, “Losses”),
arising directly or indirectly out of or directly or indirectly due to (i) any
inaccuracy of any representation or the breach of any warranty, covenant,
undertaking, assumption of liabilities (including, without limitation,
contractual obligations) or other agreement of Purchaser contained in this
Agreement, or (ii) any property damage or personal injuries occurring at
the Hotel prior to the Closing.





















 


19.2         Indemnification by Seller.  Subject to the limits set forth in this Section 19,
Seller agrees to indemnify, defend and hold Purchaser and its officers, directors
and agents, harmless from and in respect of any and all Losses, including
reasonable attorney’s fees, arising directly or indirectly out of or directly
or indirectly due to (i) any inaccuracy of any representation or the
breach of any warranty, covenant, undertaking or other agreement of Seller
contained in this Agreement, or (ii) any property damage or personal
injuries occurring at the Hotel prior to the Closing.  Seller shall also indemnify Purchaser, and
hold Purchaser harmless against, all claims, losses, damages and expenses
(including reasonable attorneys’ fees) attributable to violations by Seller of
applicable environmental laws and regulations during the period of Seller’s
ownership of its Real Property.


 


19.3         Survival of Representations, Warranties and
Covenants: Limitations on Indemnity. 
The representations and warranties of the Parties contained in this
Agreement or in any instrument delivered pursuant to this Agreement will
survive the Closing Date and will remain in full force and effect thereafter
for a period of twelve (12) months; provided,
however, that such representations or warranties shall survive (if
at all) beyond such period with respect to any inaccuracy therein or breach
thereof, notice of which shall have been duly given within such time period in
accordance with this Section 19.3. 
Notwithstanding anything to the contrary contained herein, Purchaser
shall not be entitled to recover Losses from Seller nor shall Seller be
entitled to recover Losses from such Purchaser Party unless and until the total
of all claims for Losses with respect to any inaccuracy or breach of any such
representations or warranties or breach of any covenants, undertakings or other
agreements, whether such claims are brought under this Section 19.3
or otherwise, exceeds One Hundred Fifty Thousand Dollars ($150,000)  in the aggregate.  If the total amount of such Losses exceeds
One Hundred Fifty Thousand Dollars ($150,000), then the Party entitled to
recover hereunder shall be entitled to recover the full amount of such losses
and not merely the portion of such damages exceeding One Hundred Fifty Thousand
Dollars ($150,000); provided, however,
that the aggregate amount of Losses that may be recovered by Purchaser from
Seller shall not exceed five percent (5%) of the Purchase Price. For purposes of applying the limitations set forth in this Section 18.3,
the Losses of the Purchaser under this Agreement and of Ganaste under the Real
Property Purchase Agreement shall be aggregated.  Similarly, the Purchase Price under this
Agreement and under the Real Property Purchase Agreement shall be aggregated.


 


19.4         Notice and Opportunity to Defend.  If an event occurs which a Party asserts is
an indemnifiable event pursuant to Sections 19.1 or 19.2, the party
seeking indemnification (the “Indemnitee”)
shall promptly notify the other party obligated to provide indemnification (the
“Indemnifying Party”).  If such event involves (i) any claim or (ii) the
commencement of any action or proceeding by a third Person, the indemnitee will
give such Indemnifying Party prompt written notice of such claim or the
commencement of such action or proceeding; provided,
however, that the Indemnitee’s failure to provide prompt notice as
provided herein will relieve the Indemnifying Party of its obligations
hereunder only to the extent that such failure prejudices the Indemnifying
Party hereunder.  If any such action is
brought against any Indemnitee and it notifies the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
therein and, to the extent that it wishes, to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee.  Notwithstanding anything to the contrary in
this Agreement, after notice from the Indemnifying Party to the Indemnitee of
such election to so assume the defense thereof, the Indemnifying Party 





















 


shall
not be liable to the Indemnitee for any legal expenses of other counsel or any
other expenses subsequently incurred by the Indemnitee in connection with the
defense thereof, and the Indemnitee agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
liability.  The Indemnitee shall have the
right to participate at its own expense in the defense of such asserted
liability.  In no event shall an
Indemnifying Party be liable for any settlement effected by the Indemnitee
without the consent of the Indemnifying Party, which will not be unreasonably
withheld.  In no event shall an
Indemnifying Party effect any settlement without the consent of the Indemnitee,
which will not be unreasonably withheld.


 


19.5         Mitigation of Loss.  Each Indemnitee is obligated to use
reasonable efforts to mitigate to the fullest extent practicable the amount of
any Losses for which it is entitled to seek indemnification hereunder.


 


19.6         Subrogation.  Upon making any payment of Losses of the
Indemnitee, the Indemnifying Party will, to the extent of such payment, be
subrogated to all rights of the Indemnitee against any third party in respect
of the Losses to which the payment relates; provided,
however, that until the Indemnitee recovers full payment of its
Losses, any and all claims of the Indemnifying Party against any such third
party on account of such payment are hereby made expressly subordinated and
subjected in right of payment of the Indemnitee’s rights against such third
party.  Without limiting the generality
of any other provision hereof, each such Indemnitee and Indemnifying Party will
duly execute upon request all instruments reasonably necessary to evidence and
perfect the above described subrogation and subordination rights.


 


20.           Allocation of the Purchase Price.  Not more than seven (7) Business Days
prior to the Closing Date, Purchaser shall deliver to Seller a draft of its
proposed allocation of the Purchase Price to the Purchased Assets.  Seller and Purchaser shall thereafter
negotiate in good faith to agree on the final allocation.  Within three (3) days after receipt of
such document, Seller shall, in writing, either agree or state its objections.
Seller and Purchaser shall negotiate in good faith to attempt to resolve any
objections.  If Seller and Purchaser are
unable to resolve Seller’s objections, the objections shall be submitted to an
independent accounting firm mutually agreed upon by the parties; provided,
however, such resolution shall occur no later than thirty (30) days after the
Closing.  Such accounting firm’s
determination shall be final (such determination to be based solely on the
written submissions by Purchaser and Seller and not on any independent
investigation by the accounting firm). 
The costs of the independent accounting firm shall be borne equally by
Purchaser and Seller.  Seller and
Purchaser agree to properly file Form 8594 and report the purchase price
allocation as agreed to or determined set forth therein for purposes of all
U.S. federal and state and local income and franchise Tax returns.


 


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


 


22.           No Trial by Jury. 
Each Party acknowledges and agrees that any controversy which may arise
under this Agreement is likely to involve complicated and difficult issues, and
therefore each Party hereby irrevocably and unconditionally waives any right it
may have to a trial by jury in respect of any litigation directly or indirectly
arising out of or relating to this Agreement and any of the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby.





















 


23.           Miscellaneous.


 


23.1         Business Day.  If the date on which cither Purchaser or
Seller is required to take action under this Agreement is not a Business Day,
the action shall be taken on the next succeeding Business Day.


 


23.2         Captions. 
The captions of the various sections and paragraphs of this Agreement
have been inserted only for the purpose of convenience; such captions are not a
part of this Agreement and shall not be deemed in any manner to modify,
explain, enlarge or restrict any of the provisions of this Agreement.


 


23.3         Disclosure.  Seller and Purchaser agree that the proposed
terms and conditions, and all information (other than information which is a
matter of public record or is provided by other sources readily available to
the public) shared or developed in the context of this transaction shall be
kept strictly confidential, except that Purchaser acknowledges that Seller’s
parent company may describe the terms hereof (as well as provide copies of this
Agreement) in reports that the parent is required to file with Governmental
Authorities, the United States Securities and Exchange Commission, and Seller’s
financiers, attorneys and accountants.  Any
public disclosures, press releases, or announcements concerning this agreement
and the sale contemplated herein shall be approved unanimously by the parties
in writing in the exercise of each parties reasonably discretion.  Either party may disclose any items required
by Nevada Gaming Authorities, or any other gaming regulators having
jurisdiction over Seller.  Purchaser may
disclose such non-public information its attorneys, surveyors, engineers,
financial advisors, investors and lenders as necessary to evaluate the
Purchased Assets.  Purchaser agrees that
while in possession of material non-public information concerning Seller.  Purchaser will not trade in the securities of
Seller nor tip or advise others with respect to such trading.


 


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


 


23.5         Successors and Assigns.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied is
intended to or shall confer upon any other person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.  Purchaser may assign its interest in this
agreement to a replacement operator that has been licensed by the Nevada Gaming
Authorities to operate the Business on the Real Property 





















 


provided
that such replacement operator assumes the Purchaser’s obligations hereunder,
including the obligation to pay the Purchase Price pursuant to Section 4.


 


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


 


23.7         Time of the Essence.  Time is of the essence with respect to the
time periods set forth in this Agreement.


 


[Signatures appear on the following page.]





















 


IN WITNESS WHEREOF, Purchaser and Seller have
signed this Agreement on the day and year first above written.


 


PURCHASER:


 


LUCKY LUCY D LLC,

a Nevada limited liability company


 




	
  /s/

  
	
  By:

  	
   

  
	
  Its:

  	
   

  
	
  Date:

  	
   

  
	
   

  
	
  SELLER:

  
	
   

  
	
  SPEAKEASY GAMING OF LAS VEGAS, INC.,

  a Nevada corporation

  
	
   

  
	
  /s/ Edson R. Arneault

  
	
  By:

  	
  Edson R. Arneault

  
	
  Its:

  	
  President

  
	
  Date:

  	
  January 11, 2008