<PAGE>

                                                                    EXHIBIT 10.2




    OPTION TO PURCHASE THE GOLD RANCH CASINO PROPERTY AND IMPROVEMENTS, THE
 LEACH FIELD PROPERTY, THE FRONTAGE PARCEL, THE CALIFORNIA LOTTERY STATION AND
        THE CALIFORNIA LOTTERY PROPERTY, AND THE RIGHT OF FIRST REFUSAL


                                     BETWEEN


                       PROSPECTOR GAMING ENTERPRISE, INC.
                              A Nevada Corporation


                                       AND


                           TARGET INVESTMENTS, L.L.C.
                       A Nevada Limited Liability Company


                                       AND


                               LAST CHANCE, INC.,
                              A Nevada Corporation


<PAGE>





       OPTION TO PURCHASE THE GOLD RANCH CASINO PROPERTY AND IMPROVEMENTS,
 THE LEACH FIELD PROPERTY, THE FRONTAGE PARCEL, THE CALIFORNIA LOTTERY STATION
        AND THE CALIFORNIA LOTTERY PROPERTY, AND RIGHT OF FIRST REFUSAL


        This Option to Purchase the Gold Ranch Casino Property and Improvements,
the Leach Field Property, the Frontage Parcel, the California Lottery Station
and the California Lottery Property, and Right of First Refusal ("Agreement") is
made this 27th day of December, 2001, by and between Prospector Gaming
Enterprises, Inc., a Nevada corporation (PGE), Target Investments, L.L.C., a
Nevada limited liability company (Target) and Last Chance, Inc., a Nevada
corporation (Last Chance).

RECITALS

        A. Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings ascribed to such terms in Section 1.

        B. PGE is the owner of the Gold Ranch Casino Property and Improvements;

        C. Target is the owner of the Leach Field Property, the Frontage Parcel,
the California Lottery Station and the California Lottery Property.

        D. Last Chance desires to acquire an option to purchase the Gold Ranch
Casino Property and Improvements, the Leach Field Property, the Frontage Parcel,
the California Lottery Station and the California Lottery Property and a right
of first refusal with respect thereto and PGE and Target are willing to grant
such option and right of first refusal to Last Chance on the terms and
conditions set forth in this Agreement.

        E. This Agreement is one of the Integrated Agreements by and between
Last Chance and Prospector Gaming Enterprises, Inc., and its Affiliates, for the
acquisition by Last Chance of all of the Integral Properties and Assets of the
Gold Ranch Casino and RV Resort.

            NOW, THEREFORE, in consideration of the foregoing recitals and
of the mutual covenants and agreements provided below, the execution and
delivery of the Integrated Agreements and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:

1.      DEFINITIONS.

        1.1     "Affiliate" means as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any member of
the immediate family (including


                                       2
<PAGE>


parents, spouse, children, grandchildren, brothers and sisters, of such
individual and any trust the principal beneficiary of which is such individual
or one or more members of such individual's immediate family and any Person who
is controlled by any such member or trust. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common control
with") means possession, directly or indirectly, of power to direct or cause the
direction of the management or policies, whether through the ownership of
securities, limited liability company or partnership or other ownership
interests, by contract or otherwise.

        1.2     "Asset Purchase Agreement" means the Asset Purchase Agreement by
and between Prospector Gaming Enterprises, Inc., a Nevada Corporation and Last
Chance, Inc., a Nevada Corporation, executed contemporaneously herewith and as
to which this Agreement is an integral part.

        1.3     "California Lottery Property" means the real property described
in Exhibit 1 (APN 038-230-06 and APN 023-100-06) which is owned by Target
Investments, LLC and upon which California Prospectors, Ltd., operates the
California Lottery Station.

        1.4     "California Lottery Station" means the improvements located on
the California Lottery Property from which California Prospectors Ltd. operates
as a California Lottery game retailer, including the building containing the
lottery station and a convenience store, adjacent parking, landscaping and
associated improvements, furniture, fixtures and equipment not otherwise owned
by California Prospectors, Ltd.

        1.5     "California Lottery Station Lease" the lease between California
Prospectors, Ltd., as "Tenant", and Target Investments, LLC, as "Landlord", for
the lease of the California Lottery Property.

        1.6     "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

        1.7     "Closing" means the completion of the transaction contemplated
by the Integrated Agreements on the Closing Date.

        1.8     "Closing Date" means the last day of the month in which all
conditions precedent to the Closing have occurred as provided in the Asset
Purchase Agreement.

        1.9     "Environmental Claim" means, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other person alleging or asserting such person's liability for
investigatory costs, cleanup costs, Governmental Authority response costs,
damages to natural resources or other Premises, personal injuries, fines or
penalties arising out of, based on or resulting from (A) the presence, or
release into the environment, of any Hazardous Material at any location, whether
or not owned by such person, or (B) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental




                                       3
<PAGE>


Authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any applicable Environmental Law, and any claim by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.

        1.10    "Environmental Law" means any law, regulation or order relating
to the regulation or protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment (including without limitation ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

        1.11    "FF&E" means any and all furniture, fixtures and equipment
installed or used, or to be installed or used, in connection with the operation
of the Gold Ranch Casino Property and Improvements which is not owned by Last
Chance, including, but not limited to, the plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping and irrigation systems.

        1.12    "Frontage Parcel" means a portion of that certain parcel of real
property (APN 038-241-08) located in Washoe County, Nevada, as more particularly
described in Exhibit 1.

        1.13    "Gold Ranch Casino Property and Improvements" means the real
property located in Washoe County, Nevada, as more particularly described in
Exhibit 1 (APN 038-230-24) and the improvements and FF&E located thereon at the
time of the exercise by Last Chance of the rights granted by Sections 2 or 3 of
this Agreement.

        1.14    "Governmental Authority" shall mean any federal, state,
regional, county or municipal governmental agency, board, commission, officer or
official having or exercising or purporting to have or exercise jurisdiction
over the Option Assets or the Parties with respect to the Option Assets.

        1.15    "Hazardous Materials" includes (A) any "hazardous substance," as
defined by CERCLA or any other similar substance or waste regulated pursuant to
any similar state or local law, regulation or ordinance; (B) any "waste" or
"hazardous waste," as defined by the Resource Conservation and Recovery Act, as
amended, or any other similar substance or waste regulated pursuant to any
similar state or local law, regulation or ordinance; (C) any pollutant,
contaminant, material, substance or waste regulated by the Clean Water Act, as
amended, or any other similar substance or waste regulated pursuant to any
similar state or local law, regulation or ordinance; (D) any pollutant,
contaminant, material, substance or waste regulated by the Clean Air Act, as
amended, or any other similar substance or waste regulated pursuant to any
similar




                                       4
<PAGE>


state or local law, regulation or ordinance; (E) any petroleum product; (F) any
polychlorinated biphenyls; or (G) any radioactive material or substances.

        1.16    "Index" means the Consumer Price Index, All Urban Consumers --
(CPI-U), U.S. City Average, All Items, 1982-84=100." If the Index should cease
to be compiled and published by the Bureau of Labor Statistics and if other
indexes are published by U.S. governmental agencies for which tables are
available to correlate the discontinued Index with such other index, then such
other index and correlation tables shall be employed to make the inflation
adjustments required under this Agreement. If no such correlation tables are
available, then the parties shall utilize such other indexes as may be available
in such manner as may fairly and reasonably carry out and effectuate the
purposes of this Section to reflect the effects of inflation upon the payments
required to be adjusted under this Agreement.

        1.17    "Integral Properties and Assets" means all of the assets, real
and personal, tangible and intangible, which constitute integral parts of the
businesses operated by Prospector Gaming Enterprises, Inc., and its Affiliates,
as the Gold Ranch Casino & RV Resort, and as that term is more particularly
described in the Asset Purchase Agreement.

        1.18    "Integrated Agreements" means this Agreement and each of the
agreements and documents described as a component of that term in the Asset
Purchase Agreement, which constitute integral parts of the single transaction by
which Last Chance, Inc., will acquire the businesses and assets (real, personal,
tangible and intangible) operated by Prospector Gaming Enterprises, Inc. and its
Affiliates, as the Gold Ranch Casino & RV Resort.

        1.19    "Leach Field Property" means a portion of that certain parcel of
real property (APN 038-230-02) located in Washoe County, Nevada as more
particularly described in Exhibit 1.

        1.20    "Option Assets" means the Gold Ranch Casino Property and
Improvements, the Leach Field Property, the Frontage Parcel (excluding, however,
alterations, improvements and additions made by Last Chance under Section 6.5 of
the Gold Ranch Casino Lease which are the sole property of Last Chance), and the
California Lottery Station and the California Lottery Property (excluding
alterations, improvements and additions made by, and furniture, fixtures and
equipment owned by California Prospectors, Ltd.).

        1.21    "Person" means an individual, firm, corporation, trust,
association, partnership, joint venture, tribunal or other entity.

        1.22    "Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any real or personal
property or any fixture, including the



                                       5
<PAGE>


movement of Hazardous Materials through or in the air, soil, surface water or
groundwater.

2.      OPTION TO PURCHASE. PGE and Target hereby grant to Last Chance an
exclusive option, right and privilege to purchase the Option Assets at any time
after the 18th anniversary of the Closing and prior to the expiration of the
term of this Agreement as provided in Section 4. The option must be exercised,
if at all, as to all of the Option Assets and simultaneously as to all option
agreements contained in the Integrated Agreements.

        2.1     Notice of Exercise of Option. Last Chance shall exercise the
option by written notice thereof to PGE and Target (Notice of Exercise). Upon
receipt of the Notice of Exercise by PGE and Target, the parties shall open an
escrow with the title company selected by PGE and Target under Section 2.5.

        2.2     Purchase Price, Calculation and Payment. The purchase price for
the Option Assets shall be $6,000,000.00 (Base Price) adjusted as provided in
Section 2.2(A).

                (A) Base Price Adjustment. The Purchase Price for the Option
Assets shall be calculated as follows: The Base Price shall be increased or
decreased effective on each anniversary of the Commencement Date of the Gold
Ranch Casino Lease (Adjustment Date) preceding the date of exercise of the
option, by an amount equal to the increase or decrease in the Index for the
calendar year last concluded prior to the applicable Adjustment Date, PROVIDED,
HOWEVER, that no annual increase or decrease shall exceed 5% regardless of the
actual increase or decrease in the Index. The product of that calculation shall
be the Base Price for the next Adjustment Date. In the event that any of the
Option Assets, or any portion of any of them, are taken by condemnation, or
destroyed or damaged and not repaired or replaced (whether or not such failure
constitutes a breach of any of the Integrated Agreements) the base price at the
Adjustment Date next preceding the condemnation, damage or destruction, shall be
reduced by (i) the amount of the condemnation award, or (ii) the insurance
proceeds, received by PGE or Target, or their Affiliates, as the case may be,
and not paid over to Last Chance. The product of that calculation shall be the
Base Price for the next Adjustment Date.

                (B) Terms of Payment. The purchase price shall be paid on terms
mutually agreeable to PGE and Target and Last Chance, however, if the parties
cannot reach an agreement thereon, Last Chance shall either pay cash or obtain
its own third party financing.

        2.3     Title. PGE and Target shall convey good and marketable title to
the Option Assets to Last Chance free and clear of all liens, claims and
encumbrances of any kind whatever, all other defects in title and any
Environmental Claims, except for those caused, permitted or suffered by Last
Chance or approved by Last Chance as




                                       6
<PAGE>


provided in Section 2.4. The real property portion of the Option Assets shall be
conveyed to Last Chance by grant, bargain and sale deed and any personal
property shall be transferred by bill of sale. In either case, the grantor or
transferor shall warrant that title is conveyed free and clear of all liens,
claims and encumbrances of any kind whatever, all other defects in title and any
Environmental Claims, with any exceptions for those caused, permitted or
suffered by Last Chance being set forth in detail reasonably sufficient for
identification.

        2.4     Approval of Conditions of Title.

                (A) Within fifteen (15) days following the receipt by PGE and
Target of the Notice of Exercise, PGE and Target shall deliver to Last Chance,
at PGE and Target 's sole cost and expense: (i) a CLTA preliminary title report
for the Option Assets issued by a reputable title company, and (ii) the results
of a search conducted of the public records of the State of Nevada and Washoe
County, Nevada, and the State of California and Sierra County, California, for
personal property security interests and liens by the public officials
responsible for such records, together with full and complete copies of all
documents referenced in the title report and the results of such searches, and
(iii) copies of all liens, claims, encumbrances and financing statements
affecting the Option Assets and not otherwise produced by PGE and Target
pursuant to Section 2.4(A)(i) or (ii). Any obligation of Last Chance to purchase
the Option Assets upon its election to exercise the Option is contingent on Last
Chance's approval of the condition of title thereto. Last Chance shall have
thirty (30) business days following its receipt of all of the materials required
by Section 2.4(A)(i), (ii) and (iii), within which to give written notice to PGE
and Target of Last Chance's objections to the condition of title to the Option
Assets (Title Defects).

                (B) Last Chance's notice of objection shall either state that:
(i) Last Chance elects to revoke its exercise of the option and to cancel the
escrow established following the Notice of Exercise, or (ii) that PGE and Target
shall have until the close of escrow to remove the Title Defects at their
expense. If PGE and Target do not remove all of the Title Defects, Last Chance
shall notify PGE and Target that: (iii) Last Chance elects to revoke its
exercise of the option and to cancel the escrow established following the Notice
of Exercise, or (vi) the Title Defects or one or more of them are waived and
shall constitute Permitted Exceptions, or (v) that Last Chance will cure any
remaining Title Defect(s) and deduct the cost thereof from the Purchase Price,
or (vi) that Last Chance will seek specific performance of PGE and Target 's
agreement to convey title to the Option Assets in the condition provided in
Section 2.3.

                (C) All matters shown in the materials produced pursuant to
Section 2.4(A)(i), (ii) and (iii), which are not objected to by Last Chance,
shall be deemed to be Permitted Exceptions.

3.      RIGHT OF FIRST REFUSAL. In the event that PGE and Target receive an
arms-length, good faith, bona fide offer from a third party to purchase the
Option Assets during the Term of this Agreement, or any extension thereof, Last
Chance shall have



                                       7
<PAGE>


the right of first refusal to meet any such offer on terms and conditions
identical thereto and in accordance with the provisions of this Section 3. PGE
and Target agree that they will not sell, transfer or dispose of any of the
Option Assets separately and acknowledge that the right of sale, transfer or
disposition hereby reserved is limited to a sale, transfer or disposition of all
of the Option Assets, in toto, in a single transaction. In the event that Last
Chance exercises its right of first refusal but a purchase is not consummated,
for any reason, this Section 3 and the rights and obligations of the parties
thereunder, shall survive.

        3.1     Notice. Within ten (10) days following their receipt of an offer
to purchase the Option Assets, PGE and Target shall deliver a written notice
(Notice) to Last Chance stating: (A) PGE and Target 's bona fide intention to
sell the Option Assets, (B) the name and address of the proposed purchaser, (C)
the date of the proposed sale, (D) copies of any drafted documents evidencing
the proposed transaction, including letters of intent, and (E) the purchase
price and terms for or upon which PGE and Target propose to sell the Option
Assets.

        3.2     Exercise. Within thirty (30) days following receipt of the
Notice Last Chance shall have the right, but not the obligation, to elect to
purchase the Option Assets for the price and/or upon the terms set forth in the
Notice subject, however, to Section 3.3 in the event that the third party offer
includes non-cash consideration. Within thirty (30) days after the receipt of
the Notice, Last Chance shall notify PGE and Target in writing of its election
to exercise the right of first refusal granted by this Section 3 (Notice of
Election). The failure of Last Chance to give a timely Notice of Election shall
constitute an election by Last Chance not to exercise. In the event that Last
Chance elects to exercise its right of first refusal, PGE and Target and Last
Chance shall execute such documents and instruments and make such deliveries as
may be reasonably required to consummate such purchase and sale.

        3.3     Non-Cash Consideration. If the Notice provides for the payment
of non-cash consideration, Last Chance may elect to provide the non-cash
consideration or to pay cash in lieu of the non-cash consideration in an amount
equal to the good faith estimate of the present fair market value of the
non-cash consideration offered as determined by an independent appraiser of Last
Chance's choice. Notwithstanding the date specified in the Notice for the
closing of the proposed sale, in the event that Last Chance elects to provide
the non-cash consideration, it shall have until close of business on the later
of (A) forth-five (45) days from the date of receipt of the Notice of Election
by PGE and Target, or (B) the date specified in the Notice for the closing of
the sale, within which to provide such non-cash consideration.

        3.4     Non-exercise. If Last Chance elects or is deemed to have elected
not to exercise its right of first refusal or, having exercised that right, a
purchase of the Option Assets is not consummated due to the fault of Last
Chance, PGE and Target may (A) seek specific performance of the election by Last
Chance to exercise its right of first refusal, or (B) sell the Option Assets to
the proposed purchaser, provided that such sale is: (i) completed within the
time specified in the Notice and if none is specified, within




                                       8
<PAGE>



one (1) year after the expiration of Last Chance's right of first refusal, (ii)
made on terms identical to those specified in the Notice, (iii) the transferee
takes, and acknowledges in writing that it takes title to the Option Assets
subject to Last Chance's rights under this Agreement, specifically including,
without limitation, the rights of Last Chance under Sections 2 and 3 of this
Agreement, and the Integrated Agreements, and (iv) all deeds and other documents
by which the Option Assets are conveyed or transferred recite that title thereto
is taken subject to the rights of Last Chance under Sections 2 and 3 of this
Agreement, and the other Integrated Agreements (with specific reference to all
pertinent recording information) and that the grantee, transferee or assignee of
the Option Assets, as the case may be, is bound thereby. If a sale of the Option
Assets as herein provided is not consummated, PGE and Target must give notice
anew in accordance with Section 3.1 prior to any other sale of the Option
Assets. Any sale or transfer in violation of Section 3 shall be voidable by Last
Chance, in its absolute discretion. In the event that Last Chance elects to void
a sale or transfer under this Section 3.4, PGE and Target shall, jointly and
severally and at their sole cost and expense, indemnify, protect and defend Last
Chance (including costs and attorneys' fees incurred by Last Chance) from and
against the claims of any such transferee and shall, upon demand by Last Chance,
take such actions as may be necessary, including the commencement of an action
to quiet title to the Option Assets, or any portion thereof as may have been
transferred in violation of Section 3, to free the Option Assets of any claim or
encumbrance other than the rights of Last Chance under this Agreement.

4.      TERM. The Term of this Agreement shall commence on the Closing and shall
continue so long as any of the Integrated Agreements remain in force and effect.

5.      REPRESENTATIONS AND WARRANTIES.

        5.1     PGE and Target's Representations and Warranties. Except as
provided in Exhibit 2, PGE and Target represent and warrant to Last Chance that
each of the following representations and warranties are true and correct as of
the date hereof and, except as otherwise expressly provided herein, will be true
and correct on the Closing and the close of escrow in the event of a purchase of
the Option Assets by Last Chance pursuant to Sections 2 or 3 of this Agreement.

                (A) Organization. (i) PGE is a corporation validly existing and
in good standing under the laws of the State of Nevada and every other
jurisdiction in which it does business, owns property or has employees and has
all requisite power and authority to own the Gold Ranch Casino Property and
Improvements and to grant the option to purchase and right of first refusal as
provided in Sections 3 and 4 of this Agreement; (ii) Target is limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Nevada and every other jurisdiction in which it does business, owns
property or has employees, and has all requisite power and authority to own the
Leach Field Property, the Frontage Parcel, the California Lottery Station and
the California Lottery Property and to grant the option to purchase and right of
first refusal as provided in Sections 3 and 4 of this Agreement.




                                       9
<PAGE>


                (B) Articles, By Laws, Operating Agreement. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, conflict with the terms and provisions of the
Articles of Incorporation, By Laws or Articles of Organization or Operating
Agreement, of either PGE or Target.

                (C) Proper Authority and Action, Binding Obligation. Each of PGE
and Target has had since its formation, does have currently, and will have at
the Closing and the closing of any transaction under Sections 2 and 3, all
necessary registrations, licenses, filings, permits, exemptions, certificates,
approvals, and other authorizations required of them by any Governmental
Authority, to own, use and operate the Option Assets, at the places and in the
manner in which the Option Assets have been and are being owned, used, and
operated. Each of PGE and Target has taken all action necessary under their
respective organizational documents and applicable corporate and limited
liability company laws, to authorize the execution and delivery of this
Agreement and the performance of their respective obligations thereunder and has
duly executed and delivered this Agreement. The Agreement is the valid and
binding obligation of each of PGE and Target, enforceable against each of them
in accordance with its terms.

                (D) Ownership, Authority and Compliance. PGE represents and
warrants that it is the legal owner of the Gold Ranch Casino Property and
Improvements and Target represents and warrants that it is the legal owner of
the Leach Field Property, the Frontage Parcel, the California Lottery Station
and the California Lottery Property; that this Agreement does not violate any
contractual obligations with any third party, including recorded documents such
as deeds of trust, mortgages, security agreements, liens or other encumbrances,
or violate or contravene any law, governmental rule, regulation, order, writ,
injunction or decree applicable to either PGE or Target, that there are no
consents necessary from any person, association, entity, or Governmental
Authority necessary to render this Agreement lawful, or effective in accordance
with its terms, and that each of PGE and Target is in compliance with all
federal, state and local laws, rules and regulations applicable to the Option
Assets.

                (E) Want of Notice. Neither PGE nor Target has received any
notice from any Governmental Authority: (i) requiring either of them to make any
material repairs or changes to any of the Option Assets which have not been
made, or (ii) giving notice of any material governmental actions pending or
threatened relating to any of the Option Assets. All of the Option Assets are in
material compliance with applicable laws, regulations and ordinances and, to the
best of Optionors' knowledge, all current building and health codes to the
extent applicable. Neither PGE nor Target has received any notice of any
material violations of any laws, regulations, ordinances or building or health
codes with respect to the Option Assets.

                (F) Licenses and Permits. Each of PGE and Target represents and
warrants that they hold all licenses and permits necessary to their ownership
and use of the Option Assets and are in compliance with all such licenses and
permits.




                                       10
<PAGE>


                (G)     Condition and Compliance. PGE and Target warrant and
represent that all of the Option Assets: (A) comply with, and are operated in
accordance with, all material applicable laws, (B) that the Option Assets are in
good operating condition and repair, free from latent and patent defects and
adequate for the uses to which they are being put, and (C) that none of the
Option Assets is in need of maintenance or repair, except for ordinary, routine
maintenance and repairs that are not material in nature or cost.

                (H)     Environmental Matters.

                        (i) Each of PGE and Target represents and warrants that,
except as provided in Exhibit 2, the Option Assets have all times been, and
continue to be, used and operated in material compliance with all Environmental
Laws;

                        (ii) Except as provided in Exhibit 3, there have been no
past, and there are no pending or threatened: (a) Environmental Claims,
complaints, notices, requests for information or investigations with respect to
any alleged material violation of any Environmental Law by either PGE or Target,
or (b) complaints, notices or inquiries to or investigations of PGE or Target
regarding potential liability under any Environmental Law;

                        (iii) Except as provided in Section 5.1(H)(vi), there
have not been, at or on any of the Option Assets any Releases of Hazardous
Materials and there are no citations, notices or orders of noncompliance issued
and outstanding to PGE or Target under any Environmental Law;

                        (iv) Each of PGE and Target is the holder of and is in
material compliance with all permits, certificates, approvals, licenses and
other governmental authorizations relating to environmental matters and
necessary for the ownership, operation, lease and use of the Option Assets, and
no order has been issued, no Environmental Claim has been made, no penalty has
been assessed and no investigation or review has occurred or is pending or
threatened, by any Governmental Authority or any Person with respect to any
alleged failure by either PGE or Target to have any license or permit required
under applicable Environmental Laws in connection with the use of the Option
Assets or to comply with any Environmental Laws or with respect to any
generation, treatment, storage, recycling, transportation, discharge, disposal
or release of any Hazardous Material generated or Released by them;

                        (v) Each of PGE and Target warrant that, except as
provided in Exhibit 2 and Section 5.1(H)(vi), no condition exists with respect
to the Option Assets that would represent an environmental liability to Last
Chance, and that if such a condition does exist, that PGE and Target shall
indemnify, defend, and hold harmless, Last Chance for any losses associated with
such liability, including, but not limited to, any and all claims, judgments,
damages, penalties, fines, costs, liabilities or other




                                       11
<PAGE>



losses, sums paid in settlement of claims, attorney fees, consultant fees and
expert fees.

                        (vi) PGE and Target acknowledge that a petroleum Release
from an underground storage tank on the Gold Ranch Casino Property was
discovered in 1995. That Release resulted in the contamination of the well(s)
(Permit No. 48834 and Permit No. 49019; Certificate No. 12799 and Certificate
No. 12801) located inside the Casino building. Subsequent examination and
characterization led PGE to cease using these wells and to install numerous
monitoring wells, ground water recovery wells, soil vapor extraction points, and
a treatment system, which continue to operate. It is expected that remediation
will be concluded within twelve (12) months following the Closing. PGE and
Target shall indemnify Last Chance from and against liability for this Release
to the extent provided in Section 4(g)(vi) of the Asset Purchase Agreement.

                (I)     Full and Accurate Disclosure, Reliance. No statement of
fact made by PGE and/or Target in this Agreement contains any untrue statement
of a material fact or omits to state any material fact necessary to make
statements contained herein not misleading in all material respects. There is no
material fact presently known to PGE and/or Target which has not been disclosed
to Last Chance which adversely affects, nor as far as PGE and Target can
foresee, would reasonably be expected to have a material adverse effect upon the
Option Assets or Last Chance's willingness to enter into this Agreement. All
representations, warranties, covenants and agreements made in this Agreement by
PGE and Target shall be deemed to have been relied upon by Last Chance
notwithstanding any investigation made by Last Chance or on its behalf.

                (J)     No Material Adverse Change. Since June 30, 2001, there
has not been any material adverse change in the Option Assets or the results of
operation thereof (financial or otherwise), including customer or employee or
supplier relations or relations with any Governmental Authority.

        5.2     Last Chance's Representations and Warranties. Last Chance
represents and warrants to PGE and Target as set forth in this Section 5.2. and
that all such representations and warranties are true and correct as of the date
hereof and, except as otherwise expressly provided herein, will be true and
correct on the as of the Closing and the close of escrow in the event of a
purchase of the Option Assets by Last Chance as provided for in Sections 2 or 3.

                (A)     Organization. Last Chance is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and every other jurisdiction in which the Last Chance does business, owns
property or has employees, and has all requisite power and authority to acquire
the rights granted or created by this Agreement.

                (B)     Articles and By Laws. The execution and delivery of this
Agreement does not, and the consummation of the transaction contemplated hereby
will not,



                                       12
<PAGE>



conflict with the terms and provisions of the Articles of Incorporation or the
By Laws of Last Chance.

                (C)     Proper Authority and Action, Binding Obligation. Last
Chance has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations thereunder. Last Chance has taken all
action necessary under its organizational documents and applicable corporate law
to authorize the execution and delivery of this Agreement and the performance of
its obligations thereunder and has duly executed and delivered this Agreement.
The Agreement is the valid and binding obligation of Last Chance, enforceable
against Last Chance in accordance with its terms. Neither this Agreement nor
Last Chance's performance of its obligations thereunder, will violate any
contractual obligations with any third party or contravene any law, governmental
rule, regulation, order, writ, injunction or decree applicable to Last Chance.

6.      MISCELLANEOUS PROVISIONS.

        6.1.    Covenants and Conditions. All of the terms and conditions of
this Agreement are expressly intended to be construed as covenants as well as
conditions.

        6.2.    Notice. Whenever under this Agreement a provision is made for
any demand, notice or declaration of any kind, or whether it is deemed advisable
or necessary by either party to give or serve any such notice, demand or
declaration to the other party, the notice shall be in writing and served either
personally or sent by certified or registered mail, return receipt requested,
postage prepaid, addressed to addresses set forth below:

    To PGE and
    Target:                  Peter Stremmel
                             Prospector Gaming Enterprises, Inc.
                             1400 S. Virginia
                             Reno, Nevada 89502

        With a copy to:      David R. Grundy, Esq.
                             Lemons, Grundy & Eisenberg
                             6005 Plumas Street, Suite 300
                             Reno, Nevada 89509

        To Last Chance:      Ferenc B. Szony, President
                             Last Chance, Inc.
                             345 Arlington Ave.
                             Reno, Nevada 89501





                                       13
<PAGE>


        With a copy to:      David R. Wood, Treasurer
                             The Sands Regent
                             345 Arlington Ave.
                             Reno, Nevada 89501

                             and

                             Paul A. Bible, Esq.
                             Bible, Hoy & Trachok
                             201 West Liberty Street, Third Floor
                             Reno, Nevada  89501.

        6.3     Parties Bound; Assignment. This Agreement shall be binding on
and inure to the benefit of and be enforceable by the parties and their
respective successors and assigns, provided, however, that this Agreement may
not be assigned by Last Chance without the prior written consent of PGE and
Target or by PGE and Target without the prior written consent of Last Chance,
which consent, by any party, shall not be unreasonably withheld or delayed.

        6.4     Effect of Partial Invalidity. Should any section or any part of
any section of this Agreement be rendered void, invalid or unenforceable for any
reason by any court of law exercising competent jurisdiction, such a
determination shall not render void, invalid or unenforceable any other section
or any part of any section in this agreement.

        6.5     Choice of Law and Venue . This Agreement shall be interpreted,
governed and controlled by the laws of the State of Nevada and venue for any
litigation arising out of or related to this Agreement shall be in Washoe
County, Nevada.

        6.6     Attorney's Fees. In the event a party must retain an attorney to
enforce this Agreement or in the event of litigation which arises as a result of
any controversy, dispute, breach or construction of this Agreement, the
prevailing party shall be entitled to recover, from the other party, all costs,
expenses and reasonable attorney's fees incurred in connection with the
enforcement efforts or litigation.

        6.7     Modification. This agreement may not be modified unless such
modification is in writing and signed by both parties to this Agreement.

        6.8     Headings. The headings of this Agreement are inserted for
convenience and identification only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.

        6.9     Waivers. No waiver by any party hereto of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by the respective party of the same or any other provision. Any party's
consent to or approval



                                       14
<PAGE>


of any act shall not be deemed to render unnecessary the obtaining of that
party's consent to or approval of any subsequent act by the breaching party.

        6.10    Recording. The parties hereto shall execute a memorandum of
option to purchase and right of first refusal in recordable form and either
party may record the memorandum.

        6.11    Approvals. This Agreement shall be contingent upon Last Chance
receiving any and all required government approvals. In the event that Last
Chance is unable to secure the required approvals, this Agreement shall
terminate with no damages claimed by any party against the other.

        6.12    Additional Documents. The parties hereto agree to execute any
additional documents, as may be reasonable and necessary to carry out the
provisions of this Agreement.

        6.13    No Construction Against Drafting Party. This Agreement is not
being offered on a take-it-or-leave-it basis. Each party has been given an
opportunity to negotiate each term, propose new language or edits to existing
language, and has been given an opportunity to have the Agreement reviewed by an
independent attorney. This Agreement is a joint product of all parties and not
one party. Therefore, the rule of construction that an ambiguous contract should
be construed against the drafting party shall not apply to this Agreement.

        6.14    Expenses. Each party shall pay its own attorneys' fees incurred
to document or negotiate this Agreement.

        6.15    Covenant Running With Land. All of the covenants, conditions,
and terms of this Agreement shall (i) be of benefit to the parties, (ii)
constitute a covenant running with the Option Assets, and (iii) bind and inure
to the benefit of the Parties and any Person acquiring any interest in the
Option Assets.




                                       15
<PAGE>




        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.


Target Investments, L.L.C.,                  Last Chance, Inc.
a Nevada limited liability company           a Nevada corporation.


By:     /s/ Peter Stremmel                    By:    /s/ Ferenc Szony
Its:    Partner                               Its:   Pres/CEO


Prospector Gaming Enterprises, Inc.
a Nevada corporation



By:     /s/ Peter Stremmel
Its:    President



                                       16
<PAGE>




State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Peter Stremmel, the Partner of Target Investments, LLC.


                                                   /s/ Yvonne Cody
                                                   Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Peter Stremmel, the President of Prospector Gaming Enterprises, Inc.


                                                   /s/ Yvonne Cody
                                                   Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Ferenc Szony, the President/CEO of Last Chance, Inc.


                                                   /s/ Yvonne Cody
                                                   Notary Public


                                       17