<PAGE>

                                                                   EXHIBIT 10.28

                                                                  Execution Copy
                                                                  --------------



       _________________________________________________________________

                               PURCHASE AGREEMENT
       _________________________________________________________________



                                  $16,800,000

                     10 7/8% First Mortgage Notes due 2001

                                       of

                         COAST HOTELS AND CASINOS, INC.

                                 Guaranteed by

                              COAST RESORTS, INC.



        ________________________________________________________________

                               November 21, 1997
        ________________________________________________________________
<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>
                                                                                      PAGE
<S>                                                                                   <C>
SECTION 1.  DEFINITIONS..............................................................  1

SECTION 2.  PURCHASE AND SALE OF SECURITIES..........................................  6
     2.1.   Issuance of Securities...................................................  6
            2.1.1.  Issuance of Notes and Guaranties.................................  6
     2.2.   Sale and Purchase of the Securities; the Closing.........................  6
            2.2.1.  Sale and Purchase of Notes.......................................  6
            2.2.2.  Closing..........................................................  7
     2.3.   Purchaser Representations................................................  7
            2.3.1.  Authorization and Authority......................................  8
            2.3.2.  Investment Intent; Transfer of Securities........................  8
            2.3.3.  ERISA............................................................  9
            2.3.4.  Qualified Institutional Buyer.................................... 10
            2.3.5.  Securities Not Registered........................................ 10
     2.4.   Expenses................................................................. 10
     2.5.   Indemnification.......................................................... 11
            2.5.1.  Scope of Indemnification......................................... 11
            2.5.2.  Indemnification Procedures....................................... 12
     2.6.   Contribution............................................................. 13
            2.6.1.  Indemnification Provisions Unenforceable......................... 13
            2.6.2.  No Pro Rata Allocation........................................... 14
            2.6.3.  Survival of Obligations.......................................... 14
     2.7.   Further Actions.......................................................... 14

SECTION 3.  CLOSING CONDITIONS....................................................... 14
     3.1.   Conditions to Your Obligations........................................... 14
            3.1.1.  Opinions of Counsel.............................................. 15
            3.1.2.  Officers' and Secretary's Certificates........................... 15
            3.1.3.  Issue of Securities.............................................. 15
            3.1.4.  Representations and Warranties True; No Event of Default......... 16
            3.1.5.  Compliance with Agreements....................................... 16
            3.1.6.  Your Purchase Permitted by Applicable Laws; Legal Investment..... 16
            3.1.7.  The Indenture.................................................... 16
            3.1.8.  Consents and Permits............................................. 17
            3.1.9.  Proceedings Satisfactory......................................... 17
            3.1.10. No Material Adverse Change....................................... 17
            3.1.11. No Material Judgment or Order.................................... 17
            3.1.12. Execution and Delivery of Documents.............................. 17
</TABLE>
                                      -i-
<PAGE>

<TABLE>
<S>                                                                                  <C>
            3.1.13. Security Documents, etc.......................................... 18
     3.2.   Conditions to the Obligations of the Company and the Guarantor........... 19
            3.2.1.  Sale of Securities............................................... 19
            3.2.2.  Purchasers' Representations and Warranties....................... 19
            3.2.3.  No Material Judgment or Order.................................... 19
            3.2.4.  The Sale by the Company Permitted by Applicable Laws............. 19
            3.2.5.  Consents and Permits............................................. 19

SECTION 4.  PURCHASERS' RIGHTS....................................................... 20
     4.1.   Delivery Expenses........................................................ 20
     4.2.   Issue Taxes.............................................................. 20
     4.3.   Direct Payment........................................................... 20
     4.4.   Inspection............................................................... 21
     4.5.   Financial Statements..................................................... 21
            4.5.1.  Delivery......................................................... 21
            4.5.2.  Additional Information........................................... 22
     4.6.   Usury Laws............................................................... 22
     4.7.   Gaming Control Board..................................................... 22

SECTION 5.  REPRESENTATIONS AND WARRANTIES........................................... 22
     5.1.   Organization, Standing and Qualification................................. 22
            5.1.1.  Organization; Standing........................................... 22
            5.1.2.  Authority........................................................ 23
            5.1.3.  Subsidiaries..................................................... 23
            5.1.4.  Stock............................................................ 23
     5.2.   Capitalization........................................................... 23
     5.3.   Authorization of Agreement and Other Documents........................... 24
     5.4.   No Violation............................................................. 24
            5.4.1.  Existing Violations.............................................. 24
            5.4.2.  Execution of Agreement........................................... 24
     5.5.   Use of Proceeds.......................................................... 25
     5.6.   No Default............................................................... 25
     5.7.   Financial Statements..................................................... 25
            5.7.1.  Fair Presentation................................................ 25
            5.7.2.  Projections...................................................... 26
            5.7.3.  No Material Adverse Change....................................... 26
            5.7.4.  Liabilities...................................................... 26
     5.8.   Accounting Controls, etc................................................. 26
     5.9.   Full Disclosure.......................................................... 27
            5.9.1.  No Untrue Statement.............................................. 27
            5.9.2.  Projections...................................................... 27
     5.10.  Litigation............................................................... 27
            5.10.1.  No Material Proceedings......................................... 27
</TABLE>
                                     -ii-
<PAGE>

<TABLE>
<S>                                                                                  <C>
            5.10.2.  No Material Judgments........................................... 28
     5.11.  Taxes.................................................................... 28
     5.12.  Labor.................................................................... 28
     5.13.  ERISA.................................................................... 29
     5.14.  Compliance with Laws..................................................... 29
     5.15.  Governmental Consents.................................................... 29
     5.16.  Permits, etc............................................................. 30
     5.17.  No Violation of Regulations of Board of Governors of Federal
             Reserve System........................................................... 30
     5.18.  Environmental Matters.................................................... 30
     5.19.  Private Offering......................................................... 31
            5.19.1. Sale Exempt...................................................... 31
            5.19.2. No General Solicitation.......................................... 31
     5.20.  Governmental Regulations................................................. 32
     5.21.  Patents, Trademarks, etc................................................. 32
     5.22.  Title to and Condition of Properties..................................... 32
     5.23.  Real Estate.............................................................. 33
     5.24.  Survival of Indemnification and Contribution and Representations
             and Warranties.......................................................... 33

SECTION 6.  MISCELLANEOUS............................................................ 33
     6.1.   Notices.................................................................. 33
     6.2.   Successors and Assigns................................................... 34
     6.3.   Amendment and Waiver..................................................... 34
     6.4.   Counterparts............................................................. 34
     6.5.   Headings................................................................. 34
     6.6.   Governing Law............................................................ 35
     6.7.   Entire Agreement......................................................... 35
     6.8.   Severability............................................................. 35

Exhibit A Form of Indenture.......................................................... 38

Exhibit B Form of Opinion of Gibson, Dunn & Crutcher LLP............................. 39

Exhibit C Form of Opinion of Barry Lieberman......................................... 40

Exhibit D Form of Opinion of McDonald Carano WilsonMcCune Bergin Frankovich & Hicks.. 41
</TABLE>
                                     -iii-
<PAGE>

                         Coast Hotels and Casinos, Inc.
                           4500 West Tropicana Avenue
                             Las Vegas, NV   89103


                              Coast Resorts, Inc.
                           4500 West Tropicana Avenue
                             Las Vegas, NV   89103


                            As of November 21, 1997


To Each of the Purchasers
Who Are Signatories Hereto

Ladies and Gentlemen:

     Each of Coast Hotels and Casinos, Inc., a Nevada corporation (the
"Company"), and Coast Resorts, Inc., a Nevada corporation (the "Guarantor"),
hereby agrees with each of you as follows:

SECTION 1.  DEFINITIONS
            -----------

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

     "accumulated funding deficiency" shall have the meaning specified in
Section 5.13 hereof.

     "Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person.  For the purposes of this definition,
"control", when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

     "Agent" means any Person authorized to act and who acts on behalf of the
Purchasers

                                      -1-
<PAGE>

with respect to the transactions contemplated by this Agreement and the other
Documents. "Agent" shall also include the Placement Agent and its agents.

     "Agreement" means this Purchase Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.

     "Applicable Law" means any Federal, state, local or foreign statute, law,
ordinance, governmental rule or regulation or any judgment, decree, rule or
order of any court or governmental agency or authority applicable to the
Company, the Guarantor or any of their respective Subsidiaries or any of their
respective properties, assets or operations.

     "Business Day" means a day that is not a Saturday, a Sunday or a day on
which banking institutions in the State of New York or the State of Nevada are
not required to be open.

     "Capital Stock" means any capital stock of any Person and shares,
interests, participations or other ownership interests (however designated), of
any Person and any rights (other than debt securities convertible into capital
stock), warrants or options to purchase any thereof.

     "Charter Documents" means the Articles or Certificate of Incorporation and
By-Laws or similar organizational documents, as amended to the Closing Date, of
the applicable Person.

     "Closing" shall have the meaning specified in Section 2.2.2 hereof.

     "Closing Date" shall have the meaning specified in Section 2.2.2 hereof.

     "Coast West" means Coast West, Inc., a Nevada corporation.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Collateral" shall have the meaning specified in Section 2.1.1 hereof.

     "Commission" means the Securities and Exchange Commission.

     "Common Stock" shall mean the Common Stock, $1.00 par value per share, of
the Company.

     "Company" shall mean Coast Hotels and Casinos, Inc., a Nevada corporation,
and any successor thereto.

     "Default" means any event, act or condition that is, or after notice or
passage of time or both would, constitute an Event of Default.

     "disqualified person" shall have the meaning specified in Section 2.3.3
hereof.

                                      -2-
<PAGE>

     "Documents" means this Agreement, the Notes, the Guaranties, the Security
Documents and the Indenture, collectively, or each of such documents singularly,
and any documents or instruments contemplated by or executed in connection with
any of them or any of the transactions contemplated hereby or thereby.

     "employee benefit plan" shall have the meaning specified in Section 2.3.3
hereof.

     "Environmental Laws" shall have the meaning specified in Section 5.18
hereof.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

     "ERISA Affiliate" shall mean "affiliates" as defined in Section 407(d)(7)
of ERISA.

     "Event of Default" shall mean any event defined as an Event of Default in
the Indenture.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.

     "Exchange Act Reports" means, collectively, (i) the Annual Report on Form
10-K of the Company and the Guarantor for the fiscal year ended December 31,
1996 and (ii) the Quarterly Reports on Form 10-Q of the Company and the
Guarantor for each of (a) the fiscal quarter ended June 30, 1997, (b) the fiscal
quarter ended March 31, 1997, and (c) the fiscal quarter ended September 30,
1997.

     "Guarantor" shall mean Coast Resorts, Inc., a Nevada corporation and each
of its respective successors and assigns.

     "Guaranty" or "Guaranties" shall have the meaning specified in Section
2.1.1 hereof.

     "Indemnified Parties" shall have the meaning specified in Section 2.5.1
hereof.

     "Indenture" means the Indenture, dated as of the date hereof, by and among
the Company, the Guarantor and the Trustee (initially as substantially in the
form attached hereto as Exhibit A), as the same may be amended from time to
time, in accordance with the terms thereof.

     "Intellectual Property" shall have the meaning specified in Section 5.21
hereof.

     "Lien" shall have the meaning specified in the Indenture.

     "Losses" shall have the meaning specified in Section 2.5.1 hereof.

     "Material Adverse Effect" shall mean a material adverse effect on the
properties,

                                      -3-
<PAGE>

business, operations, earnings, assets, liabilities or financial condition of
the Company, the Guarantor and their Subsidiaries taken as a whole, or on the
ability of the Company, the Guarantor and their Subsidiaries taken as a whole to
perform their respective obligations under this Agreement, the Securities or any
of the other Documents.

     "Material Permits" shall have the meaning specified in Section 5.16 hereof.

     "Notes" shall have the meaning specified in Section 2.1.1 hereof.

     "Intercreditor Agreement" means the Pari Passu Intercreditor Agreement,
dated as of the date hereof by and among Firstar Bank of Minnesota, N.A., as
trustee for the benefit of the holders of the 13% First Mortgage Notes due 2002,
issued by the Company in the aggregate principal amount of $175,000, the
Company, the Guarantor and the Trustee.

     "Party in interest" shall have the meaning specified in Section 2.3.3
hereof.

     "Pension Plan" shall have the meaning specified in Section 5.13 hereof.

     "Permit" shall have the meaning specified in Section 5.16 hereof.

     "Permitted Liens" shall have the meaning specified in the Indenture.

     "Permitted Investments" shall have the meaning specified in the Indenture.

     "Person" shall mean any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.

     "Placement Agent" shall mean BTM Financial Services, Inc.

     "Placement Memorandum" shall mean the Confidential Offering Memorandum
prepared by the Company dated September 1997 relating to the Securities and all
attachments and appendices thereto, and any and all amendments and supplements
thereto.

     "Privately Outstanding Securities" shall mean the Notes upon the original
issuance thereof and at all times subsequent thereto until, in the case of any
Note, (i) the sale or other public distribution of such Note shall have been
registered pursuant to the Securities Act and such Note shall have been disposed
of by the Purchaser thereof in accordance with such registration, or (ii) such
Note shall have been resold by the Purchaser thereof pursuant to Rule 144, Rule
144A or other resale exemption from the registration requirements of the
Securities Act.

     "Proceeding" shall mean an action, claim, suit or proceeding (including,
without

                                      -4-
<PAGE>

limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or to the knowledge of the Company or the Guarantor, as the
case may be, threatened.

     "Prohibited transaction" shall have the meaning defined in section 406 of
ERISA or Section 4975 of the Code.

     "Projections" shall have the meaning specified in Section 5.7.2 hereof.

     "Purchasers" shall mean those Persons who have executed a counterpart of
this Agreement on any one of the signature pages hereto who are to be purchasers
of the Securities.

     "qualified trust" shall have the meaning specified in Section 2.3.3 hereof.

     "Rule 144" means Rule 144 as promulgated by the Commission pursuant to the
Securities Act, and any successor rule or regulation thereto.

     "Rule 144A" means Rule 144A as promulgated by the Commission pursuant to
the Securities Act, and any successor rule or regulation thereto.

     "Securities" means, collectively, the Notes and the Guaranties.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission pursuant thereto.

     "Security Documents" shall have the meaning specified in Section 2.2.1
hereof.

     "Security Interests" shall have the meaning specified in Section 2.1.1
hereof.

     "Subsidiary" means with respect to any Person, (i) a corporation a majority
of whose capital stock with voting power, under ordinary circumstances, to elect
directors is owned, directly or indirectly, by such Person or by one or more
other Subsidiaries of such Person, or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person, or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, has
at least a majority equity ownership and power to direct the policies,
management and affairs thereof.

     "Trustee" shall have the meaning specified in Section 3.1.7 hereof.

SECTION 2.  PURCHASE AND SALE OF SECURITIES

     2.1. Issuance of Securities
          ----------------------

          2.1.1.  Issuance of Notes and Guaranties
                  --------------------------------

                                      -5-
<PAGE>

               The Company has taken all necessary corporate action to authorize
          the issuance and sale of up to $16,800,000 aggregate original
          principal amount of its 10 7/8% First Mortgage Notes due 2001 to be
          issued pursuant to the Indenture (collectively, the "Notes").  The
          Guarantor has taken all necessary action to authorize the
          unconditional guaranty of the principal of, premium (if any) and
          interest on the Notes when and as due under the Notes and the
          Indenture (the "Guaranty" or "Guaranties").  The Notes will be issued
          in denominations of $1,000 and any integral multiple of $1,000
          thereof, will otherwise be substantially in the form of Note included
          as Exhibit A to the Indenture, and will bear the Guaranty endorsed
          thereon substantially in the form set out in the Indenture.  The
          obligations under the Notes and Guaranties will be secured by security
          interests in or pledges of (collectively, the "Security Interests")
          certain assets (the "Collateral") as set forth in the Security
          Documents.  Under the terms of the Intercreditor Agreement, the
          Purchasers' rights under the Indenture, the Notes and Guaranties and
          the Security Documents will rank pari passu with the rights of holders
          of the 13% First Mortgage Notes due 2002 in the aggregate original
          principal amount of $175,000,000 issued by the Company and guaranteed
          by the Guarantor and Coast West under the Indenture dated as of
          January 30, 1996 among the Company, the Guarantor and American Bank
          National Association, as trustee.

     2.2. Sale and Purchase of the Securities; the Closing
          ------------------------------------------------

          2.2.1.  Sale and Purchase of Notes
                  --------------------------

               Subject to the terms and conditions set forth herein, the Company
          hereby agrees to sell to each Purchaser the aggregate original
          principal amount of Notes set forth opposite the name of such
          Purchaser on Schedule 2.2.1 hereto (and, in order to induce such
          Purchaser to purchase such Notes, the Guarantor agrees to issue the
          Guaranties).  All of the Notes shall be sold at a price equal to 100%
          of the original principal amount thereof.

               In reliance upon the representations and warranties of the
          Company and the Guarantor contained herein and in the other Documents,
          and subject to the terms and conditions set forth herein and therein,
          each of the Purchasers hereby agrees, severally and not jointly or
          jointly and severally, to purchase the Notes to be purchased by such
          Purchaser at the purchase price set forth in this Section.  Each
          Purchaser shall, severally and not jointly or jointly and severally,
          be liable for only the purchase of that portion of such Notes
          indicated on the execution page hereof that relates to such Purchaser.

               The Notes and the Guaranties will be secured obligations, and
          each of the

                                      -6-
<PAGE>

          Company and the Guarantor will enter into security agreements, a deed
          of trust, a pledge agreement, environmental indemnifications and
          certain other collateral agreements each in the form attached as an
          exhibit to the Indenture (collectively, the "Security Documents")
          dated as of the Closing Date in favor of the Trustee that will provide
          for the grant of Security Interests in the collateral to the Trustee
          for the benefit of the Purchasers. The Security Interests will secure
          the payment and performance when due of all the respective obligations
          of the Company and the Guarantor under the Indenture, the Notes, the
          Guaranties and the Security Documents.

          2.2.2.  Closing
                  -------

               The sale and purchase of the Securities shall take place at a
          closing (the "Closing") at the offices of Ropes & Gray, special
          counsel to the Purchasers, at One International Place, Boston,
          Massachusetts  02110-2624, commencing at 9:00 A.M., Boston time, on
          November 21, 1997, or such other place, Business Day and time as may
          be agreed upon by the Purchasers, the Company and the Guarantor (such
          time and date being referred to as the "Closing Date").  At the
          Closing, the Company will deliver to the Trustee a Global Note (as
          defined in the Indenture) in the original principal amount of
          $16,800,000 such Global Note bearing evidence of the Guaranty endorsed
          thereon pursuant to the terms of the Indenture, against payment of the
          purchase price therefor by Federal funds bank wire transfer to such
          bank account as the Company shall designate at least two Business Days
          prior to the Closing Date.

     2.3. Purchaser Representations
          -------------------------

          Each of the Purchasers, severally and not jointly or jointly and
     severally, makes the following representations and warranties to the
     Company and the Guarantor:

          2.3.1.  Authorization and Authority.
                  ---------------------------

               You represent to the Company and the Guarantor that you are
          authorized to enter into this Agreement, to perform your obligations
          hereunder and to consummate the transactions contemplated hereby.  You
          further represent that, when executed, this Agreement will be a legal,
          valid and binding obligation of you, enforceable against you in
          accordance with its terms, subject to applicable bankruptcy,
          insolvency, fraudulent conveyance, reorganization, moratorium and
          similar laws affecting creditors' rights and remedies generally and
          subject, as to enforceability, to general principles of equity
          (regardless of whether such enforcement is sought in a proceeding in
          equity or at law).

          2.3.2.  Investment Intent; Transfer of Securities.
                  -----------------------------------------

                                      -7-
<PAGE>

               You further represent to the Company and the Guarantor that you
          are purchasing the Securities being purchased by you hereunder for
          your own account, and with no intention of distributing or reselling
          said Securities or any part thereof in any transaction that would be
          in violation of the securities laws of the United States of America or
          any state thereof, without prejudice, however, to your right at all
          times to sell or otherwise dispose of all or any part of said
          Securities pursuant to an effective registration statement under the
          Securities Act and in compliance with applicable state securities
          laws, or under an exemption from such registration available under the
          Securities Act and other applicable state securities laws and subject,
          nevertheless, to the disposition of your property being at all times
          within your control.

               If you desire to offer, sell or otherwise transfer, pledge or
          hypothecate all or any part of the Securities (other than pursuant to
          an effective registration statement under the Securities Act or
          pursuant to Rule 144 or Rule 144A) you shall deliver to the Company
          and the Guarantor a written opinion of counsel (who may be in-house or
          special counsel), reasonably satisfactory in form and substance to the
          Company, that there is available therefor an exemption from the
          registration requirements of the Securities Act.  Upon original
          issuance thereof, and until such time as no longer required by law,
          each certificate evidencing the Securities (and all securities issued
          in exchange therefor or substitution thereof) shall bear a legend in
          substantially the following form:

               THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
               ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
               OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
               "ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED,
               SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
               OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THE
               SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
               BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
               THE ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION
               FROM THE REQUIREMENTS OF THE ACT.  THE HOLDER OF THE SECURITY
               EVIDENCED HEREBY, BY PURCHASING THIS SECURITY, AGREES FOR THE
               BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
               PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
               STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
               QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
               ACT) IN A

                                      -8-
<PAGE>

               TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN A
               TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE ACT,
               OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
               REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL IF
               THE COMPANY OR ANY GUARANTOR SO REQUESTS), (b) OUTSIDE THE UNITED
               STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
               REQUIREMENTS OF RULE 904 UNDER THE ACT, (c) TO THE COMPANY, OR
               (d) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
               AND, (2) IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
               SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
               APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH
               SUBSEQUENT HOLDER WILL BE REQUIRED TO, NOTIFY ANY PURCHASER OF
               THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
               FORTH IN (A) ABOVE.

               At such time that any such legend is no longer required by law to
          be borne by such certificate, the Company shall, at the request of the
          holder thereof, cause such legend to be removed or replace such
          certificate with an unlegended security.

          2.3.3.  ERISA.
                  -----

               You further represent that either (i) no part of the funds to be
          used to purchase the Securities to be purchased by you constitutes
          assets allocated to any employee benefit plan or any trust, insurance
          company general or special account, or other investment vehicle that
          contains the assets of any employee benefit plan, in either case with
          respect to which the Company or any ERISA Affiliates is a party in
          interest or disqualified person or (ii) the use of such assets would
          not constitute a non-exempt prohibited transaction.  The terms
          "employee benefit plan" and "party in interest" shall have the
          meanings assigned to such terms in Section 3 of ERISA, the term
          "disqualified person" shall have the meaning assigned to such term in
          section 4975 of the Code.

                                      -9-
<PAGE>

          2.3.4.  Qualified Institutional Buyer.
                  -----------------------------

               You further represent that you are a Qualified Institutional
          Buyer as that term is defined in Rule 144A.

          2.3.5.  Securities Not Registered.
                  -------------------------

               You further represent that you understand that (i) the Securities
          have not been registered under the Securities Act and are being
          offered and sold under an exemption from registration thereunder, (ii)
          you must bear the economic risk of your investment in the Securities
          for an indefinite period of time because it is not anticipated that
          there will be any market for the Securities and because the Securities
          cannot be resold unless subsequently registered under the Securities
          Act or unless an exemption from such registration is available, and
          (iii) no federal or state agency has passed on or made any
          recommendations or endorsements of the Securities.

     2.4. Expenses
          --------

          If the Securities are sold, the Company and the Guarantor shall pay
     all reasonable expenses relating to this Agreement and the other Documents,
     including, but not limited to:

               a)    the cost of automated production, reproducing and filing
          this Agreement, the other Documents and any other documents
          contemplated hereby or thereby;

               (b)   the reasonable out-of-pocket expenses incurred by the
          Trustee in connection with the negotiation and execution of the
          Documents and the transactions contemplated hereby and thereby;

               (c)   the reasonable fees and related charges and disbursements
          of Ropes & Gray, your special counsel, or such other counsel as you
          may employ on your behalf with the consent of the Company;

               (d)   the cost of delivering to your home office or the office of
          your designee the Securities purchased by you at the Closing upon the
          issuance thereof;

               (e)   all reasonable out-of-pocket expenses relating to any
          amendment to, or modification of, or any waiver, or consent or
          preservation of rights under, this Agreement or any of the Documents;
          and

               (f)   all other reasonable expenses, including without limitation
          reasonable

                                      -10-
<PAGE>

          attorneys' fees, title search fees, title insurance premiums, UCC
          filing fees incurred by the Company and the Guarantor in connection
          with the transactions contemplated by this Agreement and the other
          Documents.

     2.5. Indemnification
          ---------------

          2.5.1.  Scope of Indemnification.
                  ------------------------

               In addition to all other sums due hereunder or provided for in
          this Agreement or any of the other Documents and any and all
          obligations of the Company and the Guarantor to indemnify each of you
          hereunder or under any of the other Documents, the Company and the
          Guarantor, jointly and severally, shall, without limitation as to
          time, indemnify and hold harmless you, your Affiliates, and the
          employees, officers, directors, and Agents of each of you and your
          Affiliates, including attorneys and consultants (individually, an
          "Indemnified Party" and collectively, the "Indemnified Parties"), to
          the fullest extent lawful, from and against any and all losses,
          claims, damages, liabilities, costs (including, without limitation,
          reasonable costs of preparation and reasonable attorneys' fees) and
          expenses, including expenses of investigation (collectively,
          "Losses"), incurred by any Indemnified Party, as a consequence of any
          claim by or obligation to a third party which arises out of or in
          connection with this Agreement or the other Documents or the
          transactions contemplated hereby or thereby (or any other document or
          instrument executed herewith or pursuant hereto or thereto), whether
          or not the transactions contemplated by this Agreement are consummated
          and whether or not any Indemnified Party is a formal party to any
          Proceeding; provided, however, that the Company and the Guarantor
                      --------  -------
          shall not be liable to any Indemnified Party for any Losses (i)
          resulting from a violation by such Indemnified Party of a legal
          restriction on its investment powers, (ii) to the extent that it shall
          be finally determined by a court of competent jurisdiction (which
          determination is not subject to appeal or review) that such Losses
          arose from the negligence or willful misconduct of such Indemnified
          Party and (iii) arising out of or based upon any untrue statement of a
          material fact furnished to the Company in writing by any Indemnified
          Party, or upon any omission of a material fact in such writing
          required to make the statements therein not misleading, and such
          writing is stated to be specifically for use in any registration
          statement, prospectus or form of prospectus or in any amendment or
          supplement thereto or in any preliminary prospectus.  Subject to the
          provisions of the last sentence of Section 2.5.2, the Company and the
          Guarantor agree promptly to reimburse any Indemnified Party for all
          such Losses as they are incurred and disclosed to the Company in
          writing by such Indemnified Party.  The obligations of the Company and
          the Guarantor to each Indemnified Party hereunder shall be separate
          obligations, and the liability of the Company and the Guarantor to any
          Indemnified Party hereunder shall not be extinguished solely because
          any other Indemnified Party is not entitled to

                                      -11-
<PAGE>

          indemnity hereunder.

          2.5.2.  Indemnification Procedures.
                  --------------------------

               If any proceeding shall be brought or asserted against any
          Indemnified Party in respect of which indemnity may be sought from the
          Company and the Guarantor hereunder, such Indemnified Party promptly
          shall notify the Company in writing, and the Indemnifying Party shall
          assume the defense thereof, including the employment of counsel
          reasonably satisfactory to the Indemnified Party and the payment of
          all reasonable fees and expenses incurred in connection with the
          defense thereof; provided, that the failure of any Indemnified Party
          to give such notice shall not relieve the Company and the Guarantor of
          its obligations pursuant to this Agreement, except to the extent that
          it shall be finally determined by a court of competent jurisdiction
          (which determination is not subject to appeal or review) that such
          failure shall have materially prejudiced the Company.

               Any such Indemnified Party shall have the right to employ
          separate counsel in any such action, claim or proceeding and to
          participate in the defense thereof, but the fees and expenses of such
          counsel shall be at the expense of such Indemnified Party or Parties
          unless: (1) the Company or the Guarantor have agreed to pay such fees
          and expenses; or (2) the Company or the Guarantor shall have failed
          promptly to assume the defense of such action, claim or proceeding and
          to employ counsel reasonably satisfactory to such Indemnified Party in
          any such action, claim or proceeding; or (3) the named parties to any
          such action, claim or proceeding (including any impleaded parties)
          include both such Indemnified Party and the Company or the Guarantor,
          and such Indemnified Party shall have been advised by counsel that an
          actual conflict of interest would likely arise or exist and such
          conflict would make it impossible for such counsel under professional
          rules of conduct applicable to it to continue such dual representation
          if such counsel were to represent such Indemnified Party and the
          Indemnifying Party (and in the case of any of (1), (2) or (3), if such
          Indemnified Party notifies the Company and the Guarantor in writing
          that it elects to employ separate counsel at the expense of the
          Company, the Company and the Guarantor shall not have the right to
          assume the defense thereof and the reasonable fees and expenses of
          such counsel shall be at the expense of the Company and the
          Guarantor), it being understood, however, that, the Company and the
          Guarantor shall not, in connection with any one such action or
          proceeding or separate but substantially similar or related actions or
          proceedings in the same jurisdiction arising out of the same general
          allegations or circumstances, be liable for the fees and expenses of
          more than one separate firm of attorneys (in addition to any local
          counsel) at any time for all such Indemnified Parties, which firm
          shall be designated in writing by such Indemnified Parties.  The
          Company and the Guarantor shall have the right to employ separate
          counsel in, and to participate in the defense of, any action or

                                      -12-
<PAGE>

          proceeding with respect to which it has no right to assume the
          defense, but the fees and expenses of such counsel shall be at the
          expense of the Company and the Guarantor.  No Indemnified Party will
          be subject to any liability for any settlement made without its
          consent (but such consent will not be unreasonably withheld).  The
          Company and the Guarantor shall not consent to entry of any judgment
          or enter into any settlement that does not include as an unconditional
          term thereof the giving by the claimant or plaintiff to such
          Indemnified Party of a release, in form and substance satisfactory to
          the Indemnified Party, from all liability in respect of such action,
          claim or proceeding for which such Indemnified Party would be entitled
          to indemnification hereunder (whether or not any Indemnified Party is
          a party thereto).  All fees and expenses of the Indemnified Party
          (including reasonable fees and expenses to the extent incurred in
          connection with investigating or preparing to defend such action or
          proceeding in a manner not inconsistent with this Section 2.5) shall
          be paid to the Indemnified Party, as incurred, upon written notice
          thereof to the Company; provided, that the Company and the Guarantor
          may require such Indemnified Party to undertake to reimburse all such
          fees and expenses to the extent it is finally judicially determined by
          a court of competent jurisdiction (which determination is not subject
          to appeal or review) that such Indemnified Party is not entitled to
          indemnification hereunder.

     2.6. Contribution
          ------------

          2.6.1.  Indemnification Provisions Unenforceable.
                  ----------------------------------------

               If a claim by an Indemnified Party for indemnification under
          Section 2.5 is found unenforceable in a final judgment by a court of
          competent jurisdiction (not subject to further appeal or review) even
          though the express provisions hereof provide for indemnification in
          such case, then the Company and the Guarantor, in lieu of indemnifying
          such Indemnified Party, shall, jointly and severally, contribute to
          the amount paid or payable by such Indemnified Party as a result of
          such Losses in such proportion as is appropriate to reflect the
          relative fault of the Company and the Guarantor, on the one hand, and
          such Indemnified Party, on the other hand, in connection with the
          actions, statements or omissions that resulted in such Losses as well
          as any other relevant equitable considerations.  The relative fault of
          the Company and the Guarantor, on the one hand, and any Indemnified
          Party, on the other hand, shall be determined by reference to, among
          other things, whether any action in question, including any untrue or
          alleged untrue statement of a material fact or omission or alleged
          omission to state a material fact, has been made by, or relates to
          information supplied by, the Company, and the Guarantor on the one
          hand or such Indemnified Party on the other hand, and the parties'
          relative intent, knowledge, access to information and opportunity to
          correct or prevent any such action, statement or omission.  The amount
          paid or payable by a party as a result of any Losses shall be deemed
          to include any legal or other fees

                                      -13-
<PAGE>

          or expenses incurred by such party in connection with any proceeding.

          2.6.2.  No Pro Rata Allocation.
                  ----------------------

               The parties hereto agree that it would not be just and equitable
          if contribution pursuant to this Section 2.6 were determined by pro
                                                                          ---
          rata allocation or by any other method of allocation that does not
          ----
          account for the equitable considerations referred to in Section 2.6.1
          hereof.  Notwithstanding the provisions of this Section 2.6, no
          Indemnified Party shall be required to contribute any amount in excess
          of the amount by which the price at which the Securities sold by such
          Indemnified Party and distributed to the public exceeds the amount of
          any damages that such Indemnified Party has otherwise been required to
          pay by reason of such statement or omission.  No Person guilty of
          fraudulent misrepresentation (within the meaning of Section 11(f) of
          the Securities Act) shall be entitled to contribution from any Person
          who is not guilty of such fraudulent misrepresentation.

          2.6.3.  Survival of Obligations.
                  -----------------------

               The obligations of the Company and the Guarantor under Section
          2.5 and this Section 2.6 shall survive the payment or prepayment of
          the Securities, at maturity, upon redemption or otherwise, any
          transfer of the Securities by you, and any termination of this
          Agreement or the other Documents.

     2.7. Further Actions
          ---------------

          During the period from the date hereof to the Closing Date, the
     Company and each of the Guarantor shall take all commercially reasonable
     actions necessary or appropriate to cause their representations and
     warranties contained in Section 5 hereof to be true and correct in all
     material respects as of the Closing Date, after giving effect to the
     transactions contemplated by this Agreement, as if made on and as of such
     date.

SECTION 3.  CLOSING CONDITIONS
            ------------------

     3.1. Conditions to Your Obligations
          ------------------------------

          Your obligation to purchase and pay for the Securities to be delivered
     to you at the Closing shall be subject to the satisfaction of the following
     conditions as of the Closing Date.

          3.1.1.  Opinions of Counsel
                  -------------------

               You shall have received the following opinions:

                                      -14-
<PAGE>

                    (a)   a favorable opinion, dated the Closing Date and
               addressed to you, from (i) Gibson, Dunn & Crutcher, special
               counsel to the Company and the Guarantor, (ii) Barry Lieberman,
               Esq., General Counsel of the Company and the Guarantor, and (iii)
               McDonald Carano Wilson McCune Bergin Frankovich & Hicks, special
               counsel to the Company and the Guarantor, each in form and
               substance reasonably satisfactory to you and in each case,
               substantially in the respective forms set forth as Exhibit B,
               Exhibit C and Exhibit D hereto.

          3.1.2.  Officers' and Secretary's Certificates
                  --------------------------------------

               (a)   The Purchasers shall have received a certificate, dated the
          Closing Date and in form and substance satisfactory to the Purchasers,
          signed on behalf of the Company and Coast Resorts by Michael J.
          Gaughan, Chairman and Chief Executive Officer, and Harlan D. Braaten,
          President and Chief Operating Officer, (i) confirming as of the
          Closing Date the satisfaction of the conditions set forth in Sections
          3.1.4, 3.1.5, 3.1.8, 3.1.10, 3.1.11, 3.1.12 hereof.

               (b)   The Purchasers shall have received (i) certificates of the
          Secretaries of the Company and the Guarantor, dated the Closing Date
          and in form and substance satisfactory to the Purchasers, certifying
          as true, accurate and complete, the by-laws, resolutions with respect
          to the transactions contemplated herein and incumbency of certain
          officers; and (ii) certified copy of Certificates of Articles of
          Incorporation issued as of a recent date by the Secretary of State of
          the state of incorporation of the Company and the Guarantor; and (iii)
          appropriate certificates of qualification to do business and of good
          standing, issued on a recent date by the Secretary of State of each
          jurisdiction, if any, in which the failure of the Company or the
          Guarantor, as the case may be, to be qualified to do business would
          have a Material Adverse Effect.

          3.1.3.  Issue of Securities
                  -------------------

               Simultaneously with the sale to each of you of the Securities to
          be purchased by such one of you at the Closing, the Company shall have
          issued and sold to the others of you and received payment for the
          Securities.

          3.1.4.  Representations and Warranties True; No Event of Default
                  --------------------------------------------------------

               The representations and warranties of each of the Company and the
          Guarantor contained herein and in each of the other Documents shall be
          true and correct at and as of the Closing Date, after giving effect to
          the transactions contemplated by this Agreement and the other
          Documents, as if made on and as of

                                      -15-
<PAGE>

          such date. There shall exist at and as of the Closing Date (after
          giving effect to the transactions contemplated by this Agreement and
          the other Documents) no Default or Event of Default.

          3.1.5.  Compliance with Agreements
                  --------------------------

               Each of the Company and the Guarantor shall have performed and
          complied with all agreements, covenants and conditions contained
          herein that are required to be performed or complied with by the
          Company or the Guarantor, as applicable, on or before the Closing
          Date.

          3.1.6.  Your Purchase Permitted by Applicable Laws; Legal Investment
                  ------------------------------------------------------------

               Your purchase of and payment for the Securities to be purchased
          by you (a) shall not be prohibited by any law or governmental
          regulation, release, interpretation or opinion (including, without
          limitation, Regulations G, T, U and X of the Board of Governors of the
          Federal Reserve System), (b) shall not subject you to any penalty or
          other materially onerous condition under or pursuant to any applicable
          law or governmental regulation, and (c) shall be permitted by the laws
          and regulations of the jurisdictions to which you are subject.  The
          Company or the Guarantor shall have delivered to you factual
          certificates or other evidence as you shall reasonably request, in
          form and substance reasonably satisfactory to you, to enable you to
          establish compliance with this condition.  The Placement Agent shall
          have delivered to you a copy of a letter or letters, addressed to the
          Company and the Guarantor, in form and substance reasonably
          satisfactory to you, confirming certain matters set forth in Section
          5.19.2.

          3.1.7.  The Indenture
                  -------------

               The Company, the Guarantor and Firstar Bank of Minnesota, N.A.,
          as trustee for the benefit of the holders of the Notes (the
          "Trustee"), shall have duly entered into the Indenture, and you shall
          have received counterparts, conformed as executed, of the Indenture.

                                      -16-
<PAGE>

          3.1.8.  Consents and Permits
                  --------------------

               The Company and the Guarantor shall have received all consents,
          permits and other authorizations, and made all such filings and
          declarations, as may be required by them to consummate the transaction
          pursuant to any law, statute, regulation or rule (Federal, state,
          local and foreign), contemplated by this Agreement and the other
          Documents, including the issuance and sale of the Securities to the
          Purchasers, and pursuant to all other material agreements, orders and
          decrees to which any of them is a party or to which any of them is
          subject, in connection with the transactions to be consummated on or
          prior to the Closing Date contemplated by this Agreement and the other
          Documents.

          3.1.9.  Proceedings Satisfactory
                  ------------------------

               All corporate proceedings taken in connection with the sale of
          the Securities and all documents relating thereto, shall be reasonably
          satisfactory in form and substance to you.  You and Ropes & Gray shall
          have received copies of such documents as you or they may reasonably
          request in connection with the Closing, or as a basis for the Closing
          opinions, all in form and substance reasonably satisfactory to you and
          them.  Each Document shall be reasonably satisfactory in form and
          substance to you.

          3.1.10.  No Material Adverse Change
                   --------------------------

               There shall not have occurred any Material Adverse Change in the
          operations, business, properties, financial condition or results of
          operations of the Company, the Guarantor and their subsidiaries, taken
          as a whole, subsequent to the date of the Placement Memorandum.

          3.1.11.  No Material Judgment or Order
                   -----------------------------

               There shall not be on the Closing Date any judgment or order of a
          court of competent jurisdiction or any ruling of any agency of the
          Federal, state or local government that, in the reasonable judgment of
          you or your special counsel, would prohibit the sale or issuance of
          the Securities hereunder or subject the Company or the Guarantor to
          any material penalty if the Securities were to be issued and sold
          hereunder.

          3.1.12.  Execution and Delivery of Documents
                   -----------------------------------

               The Documents shall have been executed and delivered by all
          parties thereto and be in full force and effect and all conditions
          precedent to the consummation of the transactions contemplated by the
          Documents shall have

                                      -17-
<PAGE>

          been satisfied and each of the Purchasers shall have received a fully-
          executed original of each Document, other than the Deed of Trust (as
          defined in the Indenture), in which case the Purchasers shall be
          supplied a copy of such Deed of Trust.

          3.1.13.  Security Documents, etc.
                   ------------------------

               (a)   The Trustee shall have received (i) a certificate of
          insurance demonstrating insurance coverage of types, in amounts, with
          insurers and with other terms required by the terms of the Documents,
          (ii) executed copies of each UCC-1 financing statement signed by the
          Company and the Guarantor, naming the Trustee as secured party and
          filed in such jurisdictions as the Purchasers may reasonably require,
          and (iii) to the extent required by the Documents, the original stock
          certificates, promissory notes and other instruments pledged to the
          Trustee pursuant to the Documents, together with undated stock powers
          or endorsements duly executed in blank connection therewith.

               (b)   All documents and agreements shall have been filed, and
          other actions shall have been taken, as may be required to perfect the
          Security Interests of the Trustee in the Collateral of the Company and
          the Guarantor, and to accord the Trustee the priorities over other
          creditors of either of the Company or the Guarantor as contemplated by
          the Placement Memorandum and the Documents.

               (c)   The Trustee shall have received irrevocable commitments for
          title insurance from National Title Company, in a form and substance
          reasonably satisfactory to the Initial Purchasers, subject only to
          Liens permitted under the Indenture, for the title insurance for each
          of the properties listed on Schedule 3.1.13 hereto.

               (d)   Counsel for the Purchasers shall have been furnished with
          such documents as are necessary to confirm that there are no liens
          against any of the personal or real property of the Company or the
          Guarantor unless such liens are permitted under the Indenture or have
          otherwise been approved by the Purchasers.

          3.1.14.  Counsel Fees
                   ------------

               All reasonable fees and related charges and disbursements of
          Ropes & Gray, special counsel to the Purchasers, to the extent
          reimbursable hereunder and invoiced on or before two business days
          prior to the Closing Date, shall have been paid in full by the
          Company.

     3.2. Conditions to the Obligations of the Company and the Guarantor
          --------------------------------------------------------------

                                      -18-
<PAGE>

          The obligations of the Company and the Guarantor to sell the
     Securities to be delivered to you at the Closing shall be subject to the
     satisfaction of the following conditions:

          3.2.1.  Sale of Securities
                  ------------------

               The Purchasers shall have delivered payment to the Company, in
          respect of the several purchases of the Securities, in an aggregate
          amount of $16,800,000.

          3.2.2.  Purchasers' Representations and Warranties
                  ------------------------------------------

               Each Purchaser's payment of the purchase price for the Securities
          purchased by him or it at the Closing shall constitute a certification
          by that Purchaser that all of its representations and warranties made
          herein and in the other Documents shall be true and correct in all
          material respects at and as of the Closing Date, after giving effect
          to the transactions contemplated by this Agreement and the other
          Documents, as if made at and as of such date.

          3.2.3.  No Material Judgment or Order
                  -----------------------------

               There shall not be on the Closing Date any judgment or order of a
          court of competent jurisdiction or any ruling of any agency of the
          Federal, state or local government that, in the reasonable judgment of
          the Company and the Guarantor, would prohibit the sale or issuance of
          the Securities hereunder or subject the Company or the Guarantor to
          any material penalty if the Securities were to be issued and sold
          hereunder.

          3.2.4.  The Sale by the Company Permitted by Applicable Laws
                  ----------------------------------------------------

               The sale by the Company and your payment for the Securities to be
          purchased by you (a) shall not be prohibited by any applicable law or
          governmental regulation, release, interpretation or opinion
          (including, without limitation, Regulation G, T, U or X of the Board
          of Governors of the Federal Reserve System), (b) shall not subject the
          Company or the Guarantor to any penalty under or pursuant to any
          applicable law or governmental regulation, and (c) shall be permitted
          by the laws and regulations of the jurisdictions to which the Company
          or the Guarantor is subject.

                                      -19-
<PAGE>

          3.2.5.  Consents and Permits
                  --------------------

               Each Purchaser shall have received all consents, permits and
          other authorizations, and made all such filings and declarations, as
          may be required pursuant to any law, statute, regulation or rule
          (Federal, state, local and foreign), contemplated by this Agreement
          and the other Documents, including the purchase of the Securities by
          such Purchaser, and pursuant to all other agreements, orders and
          decrees to which such Purchaser is a party or to which such Purchaser
          is subject, in connection with the transactions to be consummated on
          or prior to the Closing Date contemplated by this Agreement and the
          other Documents.

SECTION 4.  PURCHASERS' RIGHTS
            ------------------

     4.1. Delivery Expenses
          -----------------

          If a holder of a Privately Outstanding Security surrenders such
     Security to the Company or the Trustee for substitution, replacement or
     exchange, the Company will pay the cost of delivering to and from such
     holder's home office (or to and from the office of such holder's
     designee(s)) and the office of the Company or the Trustee, as the case may
     be, insured to such holder's satisfaction, the surrendered Security and
     each Security issued in substitution, replacement or exchange therefor.

     4.2. Issue Taxes
          -----------

          The Company shall pay all stamp, transfer and other similar taxes and
     governmental fees in connection with (a) the issuance, sale, delivery or
     transfer by the Company to the Purchasers of the Privately Outstanding
     Securities, (b) the execution and delivery of the Documents, and (c) any
     modification of the Documents.  The Company and the Guarantor will hold
     each holder of Privately Outstanding Securities harmless, without
     limitation as to time, against any and all liabilities with respect to all
     such taxes and fees.  The obligations of the Company and the Guarantor
     under this Section 4.2 shall survive the payment or prepayment of the
     Securities, at maturity, upon redemption or otherwise, any transfer of the
     Securities by the holder thereof, and the termination of this Agreement.

     4.3. Direct Payment
          --------------

          The Company shall instruct the Trustee to pay or cause to be paid all
     interest payments with respect to any Privately Outstanding Security held
     by each of the Purchasers (if the registered holder) or the registered
     nominee(s) thereof (without any presentment of such Privately Outstanding
     Security and without any notation of such payment being made thereon) by
     crediting such amount, before 12:00 Noon, New York time, on the date such
     amount is payable, by Federal funds bank wire transfer in same day

                                      -20-
<PAGE>

     available funds, to the registered holder's account in any bank in the
     United States of America as may be designated by such holder or such
     nominee(s), as the case may be, not less than two Business Days prior to
     such payment.  The initial bank account for this purpose of each of the
     Purchasers is set forth on the signature page hereof.  Each registered
     holder of the Securities is solely responsible for advising the Company of
     any changes in its designated bank account and the Company shall not have
     any responsibility for delays in transfers because of any registered
     holder's failure to advise the Company of any such change.  Each of the
     Purchasers agrees, before any sale, transfer or other disposition of any
     Security that is a Privately Outstanding Security, to make a notation
     thereon, or submit the same to the Trustee under the Indenture for notation
     thereon, of the date to which interest has been paid thereon and the amount
     of all redemption payments previously made in respect thereof.

     4.4. Inspection
          ----------

          So long as any of the Purchasers shall hold Privately Outstanding
     Securities in an aggregate principal amount of at least $5 million, the
     Company will permit any person designated by any of the Purchasers in
     writing and reasonably acceptable to the Company, at such designating
     Purchaser's expense, upon reasonable notice during normal business hours,
     to visit and inspect any of the properties, the corporate books or
     financial records of the Company, and to discuss their affairs, finances
     and accounts with the principal officers of the Company and (with notice to
     the Company) their independent public accountants, all at such reasonable
     times and as often as such Purchaser may reasonably request.  Each such
     Purchaser agrees that any information obtained by them as a result of such
     visits, inspections and discussions or pursuant to this Agreement shall be
     confidential and shall be kept confidential by such Purchaser, unless (i)
     disclosure of such information is required by court or administrative
     order, provided that prior to disclosing any confidential information
     pursuant to this clause, such Purchaser agrees to provide notice to the
     Company and to cooperate with the Company if the Company reasonably
     determines to contest such disclosure, (ii) disclosure of such information
     is required by law, provided that prior to disclosing any confidential
     information pursuant to this clause, such Purchaser agrees to provide
     notice to the Company and to cooperate with the Company if the Company
     reasonably determines to contest such disclosure, (iii) such information
     becomes available to the public other than as a result of a disclosure or
     failure to safeguard by such Purchaser, or (iv) such information becomes
     available to such Purchaser from a source other than the Company, which
     source is not, to its knowledge, subject to a confidentiality agreement
     with, or duty of confidentiality to, the Company.

                                      -21-
<PAGE>

     4.5. Financial Statements
          --------------------

          4.5.1.  Delivery
                  --------

               The Company will deliver or cause the Trustee to deliver to each
          holder of record of Privately Outstanding Securities the SEC Reports
          (as defined in the Indenture) described by Section 4.3 of the
          Indenture in the time periods and manner prescribed therein.

          4.5.2.  Additional Information
                  ----------------------

               The Company shall, from time to time, deliver such additional
          information regarding the financial position or business of the
          Company as the holders of a majority of the outstanding principal
          amount of Notes that are Privately Outstanding Securities may
          reasonably request, subject in each case to the confidentiality
          provisions set forth in Section 4.4 hereof.

     4.6. Usury Laws.
          ----------

          The Company and the Guarantor agrees not to insist upon, plead or in
     any manner whatsoever claim or take the benefit or advantage of any usury
     law wherever enacted, now or at any time hereafter in force, that may
     affect the covenants or the performance of the Indenture.

     4.7. Gaming Control Board
          --------------------

          The Company and the Guarantor shall timely file all reports with the
     Nevada State Gaming Control Board pursuant to Nevada Gaming Commission
     Regulation 8.130 in respect to the sale of the Notes and receipt of the
     proceeds therefrom.

SECTION 5.  REPRESENTATIONS AND WARRANTIES
            ------------------------------

     The Company and the Guarantor, jointly and severally, represent and warrant
to each of you as follows:

     5.1. Organization, Standing and Qualification
          ----------------------------------------

          5.1.1.  Organization; Standing
                  ----------------------

               Each of the Company and the Guarantor is a corporation duly
          incorporated, validly existing and in good standing under the laws of
          its respective jurisdiction of incorporation; has all requisite
          corporate power and authority to own or lease, and operate its
          respective properties and assets, and to carry on its

                                      -22-
<PAGE>

          respective businesses as now conducted and as proposed to be
          conducted; and is duly qualified or licensed to do business and is in
          good standing as a foreign corporation in all jurisdictions in which
          it owns or leases property or in which the conduct of its respective
          businesses requires it so to qualify or be licensed, except where the
          failure so to qualify would not, singly or in the aggregate, have a
          Material Adverse Effect.

          5.1.2.  Authority
                  ---------

               Each of the Company and the Guarantor has all requisite corporate
          power and authority to enter into and perform all of its respective
          obligations under this Agreement and the other Documents to which it
          is a party, to issue, sell and deliver the Securities to be issued by
          it, and to carry out the transactions contemplated by this Agreement
          or any other Document.

          5.1.3.  Subsidiaries
                  ------------

               As of the Closing, the Company will have no direct or indirect
          subsidiaries.  The Company does not own, directly or indirectly, any
          Capital Stock of any other Person.  Except for the Capital Stock of
          the Company and Coast West, Coast Resorts does not own, directly or
          indirectly, any of the Capital Stock or other equity interest in any
          other Person.

          5.1.4.  Stock
                  -----

               All of the issued and outstanding shares of Capital Stock of the
          Company and the Guarantor have been duly and validly authorized and
          issued and are fully paid and non-assessable and were not issued in
          violation of any preemptive or similar rights, and all of the shares
          of Capital Stock of each of the Company and Coast West are owned
          directly by Coast Resorts.  All of the shares of Capital Stock of
          Coast Resorts are owned directly by the Persons set forth on Schedule
          5.1.4 hereto.  All shares of Capital Stock of the Company are fully
          paid and nonassessable, and are owned free and clear of any Liens
          other than Permitted Liens.  Except as disclosed in the Exchange Act
          Reports, there are no outstanding subscriptions, rights, warrants,
          options, calls, convertible securities, commitments of sale or Liens
          related to or entitling any person to purchase or otherwise to acquire
          any shares of the capital stock of, or other ownership interest in,
          the Company or the Guarantor.

     5.2. Capitalization
          --------------

          The total authorized Capital Stock of the Company on the Closing Date
     will consist of 25,000 shares of Common Stock, 1,000 shares of which will
     be issued and

                                      -23-
<PAGE>

     outstanding. The total authorized Capital Stock of Coast West on the
     Closing Date will consist of 25,000 shares of common stock, 1,010 of which
     will be issued and outstanding. On the Closing Date, each respective share
     of the Company's and Coast West's Capital Stock that is issued and
     outstanding will have been duly authorized and validly issued, and will be
     fully paid and nonassessable. There are no outstanding (i) securities
     convertible into or exchangeable for any Capital Stock of the Company or
     Coast West, (ii) options, warrants or other rights to purchase or subscribe
     to Capital Stock of the Company or Coast West, or securities convertible
     into or exchangeable for Capital Stock of the Company or Coast West, (iii)
     contracts, commitments, agreements, understandings, arrangements, calls or
     claims of any kind relating to the issuance of any Capital Stock of the
     Company or the Coast West, any such convertible or exchangeable securities
     or any such options, warrants or rights or (iv) any voting trust,
     agreement, contract, commitment, understanding or arrangement with respect
     to the voting of any Capital Stock of the Company or Coast West.

     5.3. Authorization of Agreement and Other Documents
          ----------------------------------------------

          Each of the Company and the Guarantor has taken all corporate actions
     necessary to authorize it to enter into and perform its respective
     obligations under each of this Agreement and the other Documents to which
     it is a party and to consummate the transactions contemplated hereby and
     thereby (including, without limitation, the issuance and sale of the
     Securities).  This Agreement is, and, as of the Closing Date (assuming
     payment of the purchase price for the Securities by the Purchasers), each
     of the Documents to which the Company or the Guarantor is a party will be,
     a legal, valid and binding obligation of the Company or the Guarantor, as
     the case may be, enforceable against the Company or the Guarantor, as the
     case may be, in accordance with its terms, except as such enforcement may
     be subject to (i) applicable bankruptcy, insolvency, fraudulent conveyance,
     reorganization, moratorium and similar laws now or hereafter affecting
     creditors' rights and remedies generally and (ii) general principles of
     equity (regardless of whether such enforcement is sought in a proceeding in
     equity or at law).

     5.4. No Violation
          ------------

          5.4.1.  Existing Violations
                  -------------------

               Neither the Company nor the Guarantor is (i) in violation of its
          respective Charter Documents or (ii) in default in the performance of
          any obligation, agreement or condition contained in any bond,
          debenture, note or any other evidence of indebtedness or in any
          indenture, mortgage, deed of trust or any other agreement or
          instrument to which any of them is a party other than such defaults
          that could not, singly or in the aggregate, reasonably be expected to
          result in a Material Adverse Effect.

                                      -24-
<PAGE>

          5.4.2.  Execution of Agreement
                  ----------------------

               Neither the execution or delivery by the Company or the Guarantor
          of this Agreement or the other Documents to which any of them is a
          party, the issuance, sale or delivery of the Securities, the
          performance by the Company or the Guarantor of any of their
          obligations pursuant to this Agreement and the other Documents, nor
          the consummation of the transactions contemplated hereby or thereby
          will conflict with, violate, constitute a breach of or a default (with
          the passage of time or otherwise) under, require the consent of any
          Person (other than consents already obtained) under, or result in the
          imposition of a Lien (other than Liens permitted under the Indenture)
          on any properties of the Company or of the Guarantor or an
          acceleration of indebtedness or other obligation pursuant to, (i) the
          Charter Documents of the Company or the Guarantor, (ii) any bond,
          debenture, note or any other evidence of indebtedness or any
          indenture, mortgage, deed of trust or any other agreement or
          instrument to which the Company or the Guarantor is a party or by
          which either of them is bound or to which any of the property or
          assets of the Company or the Guarantor is subject, or (iii) any
          Applicable Law, except in any case where such violation, default,
          breach or conflict, or the absence of such consent or the creation of
          such Lien, would not, singly or in the aggregate, reasonably be
          expected to have a Material Adverse Effect.

     5.5. Use of Proceeds
          ---------------

          The net proceeds from the sale of the Securities shall be used by the
     Company for working capital purposes.

     5.6. No Default
          ----------

          Were the Indenture in effect as of the date hereof, after giving
     effect to the transactions contemplated hereby, including application of
     proceeds from the sale of the Securities, there would be no Default or
     Event of Default thereunder or breach thereof.

     5.7. Financial Statements
          --------------------

          5.7.1.  Fair Presentation
                  -----------------

               The historical financial statements of the Company and the
          Guarantor, together with the notes thereto, set forth in the Exchange
          Act Reports comply as to form with the requirements applicable to
          financial statements required to be included in registration
          statements on Form S-1 under the Securities Act and present fairly the
          financial position, results of operations and cash flows of the
          Company and the Guarantor at the respective dates and for the
          respective periods

                                      -25-
<PAGE>

          indicated. Such financial statements have been prepared in accordance
          with generally accepted accounting principles applied on a consistent
          basis throughout the periods presented except as stated therein. The
          financial and statistical information and data included in the section
          entitled "Selected Financial Data and Discussion" in the Placement
          Memorandum are accurately presented and prepared on a basis consistent
          with the relevant financial statements and the books and records of
          the Company and the Guarantor, as applicable.

          5.7.2.  Projections
                  -----------

               The projections (the "Projections") contained in the section of
          the Placement Memorandum entitled "Projected Financial Information"
          and in the Appendix to the Placement Memorandum entitled "Projections"
          have been prepared on the basis of assumptions that were and are
          reasonably believed by the Company to be reasonable as of the date
          such projections were prepared, in light of the historical financial
          performance of the Company and of current and reasonably foreseeable
          business conditions, it being recognized, however, that estimates,
          assumptions, forecasts and projections as to future events may not
          prove to be correct, that actual future financial performance will
          vary from that projected, and may vary materially, and that nothing
          contained in this subparagraph shall be construed as a warranty or
          guarantee of future financial performance.

          5.7.3.  No Material Adverse Change
                  --------------------------

               Since June 30, 1997, there has been no material adverse change in
          the properties, business, operations, earnings, assets, liabilities,
          or financial condition of the Company or the Guarantor from that set
          forth in the Placement Memorandum.

          5.7.4.  Liabilities
                  -----------

               On a consolidated basis, the Company and the Guarantor have no
          material liability or obligation (absolute, accrued, contingent or
          otherwise), except (i) liabilities reflected in the Placement
          Memorandum or in the Exchange Act Reports, (ii) other liabilities
          incurred in the ordinary course of business, consistent with past
          practices (and in any case not in excess of $250,000), since the date
          of said Placement Memorandum, (iii) as set forth in Schedule 5.7.4
          hereto as previously delivered and (iv) liabilities reflected on the
          balance sheet attached hereto.  On a consolidated basis, the Company
          and the Guarantor have no material forward or material, long-term
          commitments or material unrealized losses or anticipated losses from
          any unfavorable commitments, except as reflected in the Placement
          Memorandum, the balance sheet included in the Exchange Act Reports

                                      -26-
<PAGE>

          and as set forth in Schedule 5.7.4 hereto as previously delivered.

     5.8. Accounting Controls, etc.
          -------------------------

          The Company maintains a system of internal accounting controls
     sufficient to provide reasonable assurance that (i) transactions are
     executed in accordance with management's general or specific
     authorizations, (ii) transactions are recorded as necessary to permit
     preparation of financial statements in conformity with generally accepted
     accounting principles and to maintain accountability for assets, (iii)
     access to assets is permitted only in accordance with management's general
     or specific authorization, and (iv) the recorded accountability for assets
     is compared with the existing assets at reasonable intervals and
     appropriate action is taken with respect to any differences.

     5.9. Full Disclosure
          ---------------

          5.9.1.  No Untrue Statement
                  -------------------

             Except for the 1996 Analysts' Report contained in the Appendix to
          the Placement Memorandum, or as reflected in the Placement Memorandum,
          none of the Placement Memorandum or any of the other Documents
          contained as of its respective date, or would now contain were the
          information contained therein made available to you as of the date of
          this Agreement (other than with respect to additional or updated
          information referred to in this Section 5 and certain changes to the
          terms of the Indenture from the terms set forth in the Placement
          Memorandum), any untrue statement of a material fact or as of such
          date omitted, or now omits, to state a material fact necessary to make
          the statements contained herein or therein, in light of the
          circumstances under which they were made, not misleading.

          5.9.2.  Projections
                  -----------

             The projections contained in the Placement Memorandum have been
          prepared by the management of the Company and are based on the good
          faith estimates and assumptions of the management of the Company, and
          the Company has no reason to believe that such estimates and
          assumptions are not reasonable, it being understood that the
          projections set forth in the Placement Memorandum are not guarantees
          of results and that actual results will vary from the projections and
          such variations may be material.

     5.10.  Litigation
            ----------

          5.10.1.  No Material Proceedings
                   -----------------------

                                      -27-
<PAGE>

             Except as disclosed in the Company's Exchange Act Reports or the
          Placement Memorandum, there is no Proceeding against or affecting the
          Company or the Guarantor or any of their properties or assets except
          for such Proceedings that, if finally determined adversely to the
          Company or the Guarantor, would not reasonably be expected to have,
          singly or in the aggregate, a Material Adverse Effect.

          5.10.2.  No Material Judgments
                   ---------------------

             Neither the Company nor the Guarantor is subject to any judgment,
          order, decree, rule or regulation of any court, governmental authority
          or arbitration board or tribunal that would, singly or in the
          aggregate, have a Material Adverse Effect.

     5.11.  Taxes
            -----

          All tax returns required to be filed by the Company or the Guarantor
     in any jurisdiction (including foreign jurisdictions) have been timely so
     filed, and all material taxes, assessments, fees and other charges
     (including, without limitation, withholding taxes, penalties, and interest)
     due or claimed to be due from the Company or the Guarantor that are due and
     payable have been paid, other than those (i) being contested in good faith
     and for which an adequate reserve or accrual has been established or (ii)
     those currently payable without penalty or interest and for which an
     adequate reserve or accrual has been established or extensions duly filed.
     The Company and the Guarantor know of no actual or proposed additional tax
     assessments for any fiscal period against the Company or the Guarantor that
     would, singly or in the aggregate, have a Material Adverse Effect.  Neither
     the Company's nor the Guarantor's income or franchise tax returns are under
     audit and no waivers of the statute of limitations or extensions of time
     with respect to any tax returns have been granted by the Company or the
     Guarantor.

     5.12.  Labor
            -----

          There is (i) no unfair labor practice complaint pending against the
     Company or any Guarantor nor, to the knowledge of each of the Company and
     the Guarantor, threatened against any of them, before the National Labor
     Relations Board, any state or local labor relations board or any foreign
     labor relations board, and no grievance or arbitration proceeding arising
     out of or under any collective bargaining agreement is so pending against
     the Company or any Guarantor, or, to the knowledge of each of the Company
     and the Guarantor, threatened against any of them, (ii) no strike, labor
     dispute, slowdown or stoppage pending against the Company or any Guarantor
     nor, to the knowledge of each of the Company and the Guarantor, threatened
     against the Company or the Guarantor and (iii) no union organizing activity
     occurring to the knowledge of each of the Company and the Guarantor, and no
     outstanding demand for recognition existing

                                      -28-
<PAGE>

     with respect to the employees of the Company or the Guarantor, nor any
     petition for an election which has been filed with the National Labor
     Relations Board to the knowledge of each of the Company and the Guarantor.

     5.13.  ERISA
            -----

          The execution and delivery of this Agreement, the other Documents and
     the sale of the Securities to be purchased by you will not, to the
     Company's and the Guarantor's knowledge, involve any "prohibited
     transaction."  To the Company's and the Guarantor's knowledge, none of the
     Company, the Guarantor or any of their ERISA Affiliates is a "party in
     interest" or a "disqualified person" except as to those employee benefit
     plans set forth on Schedule 2.3.3.  To the Company's and the Guarantor's
     knowledge no condition exists or event or transaction has occurred in
     connection with any "employee benefit plan" maintained or contributed to by
     the Company or the Guarantor or any ERISA Affiliate of the Company or the
     Guarantor (any plan being herein referred to as the "Pension Plan") that
     could result in the Company or the Guarantor or any such ERISA Affiliate
     incurring any liability, fine or penalty which would, singly or in the
     aggregate, have a Material Adverse Effect.  The Company and the Guarantor
     maintain no pension plans subject to Title IV of ERISA.

     5.14.  Compliance with Laws
            --------------------

          Neither the Company nor the Guarantor is in violation of any
     Applicable Law, except such violations are not reasonably expected to have,
     singly or in the aggregate, a Material Adverse Effect.  Neither the Company
     nor the Guarantor has failed to obtain any licenses, permits, franchises or
     other governmental authorizations necessary to the ownership or operation
     of its respective properties or the conduct of its respective business as
     currently conducted, except such failures as would not be reasonably
     expected to have, singly or in the aggregate, a Material Adverse Effect.

     5.15.  Governmental Consents
            ---------------------

          No consent, approval or authorization of, or filing, registration or
     qualification with, any governmental or regulatory authority or body is
     required in connection with or as a condition to the execution and delivery
     of this Agreement or any of the other Documents or the consummation of
     transactions contemplated hereby or thereby (including, without limitation,
     the offer, issuance, sale or delivery of the Securities at the Closing),
     except for (i) approval of the Nevada State Gaming Control Board required
     to be obtained under the Stock Pledge and Security Agreement dated as of
     the date hereof executed by the Guarantor in favor of the Trustee, (ii)
     such consents, approvals, authorizations, filings, registrations or
     qualifications as have been made or obtained on or before the Closing Date
     (and copies of which will be delivered to you upon your request) or are not
     required to be made or obtained prior to the Closing Date, and (iii) except
     to

                                      -29-
<PAGE>

     the extent that the failure to obtain any such consents, approvals,
     authorizations or qualifications or to make any such filings or
     registrations is not reasonably expected to have singly or in the
     aggregate, a Material Adverse Effect.

     5.16.  Permits, etc.
            -------------

          Each of the Company and the Guarantor has such permits, licenses,
     franchises, certificates, consents, orders and authorizations
     (collectively, the "Permits") of and from, and has made all declarations
     and filings with, all federal, state, local and other governmental
     authorities, all self-regulatory organizations and all courts and other
     tribunals as are necessary to own, lease and operate its respective
     properties and to conduct its business in the manner described in the
     Placement Memorandum except where the failure to have such Permits would
     not reasonably be expected, singly or in the aggregate, to have a Material
     Adverse Effect ("Material Permits").  All Material Permits are in full
     force and effect, and each of the Company and the Guarantor has fulfilled
     and performed all of its material obligations with respect to Material
     Permits.  No event has occurred which allows, or after notice or lapse of
     time would allow, revocation or termination by the issuer thereof or which
     results in any other material impairment of the rights of the holder of any
     Material Permits.  The Company and the Guarantor have no reason to believe
     that any governmental body or agency is considering limiting, suspending or
     revoking any such Material Permit.

     5.17.  No Violation of Regulations of Board of Governors of Federal Reserve
            --------------------------------------------------------------------
System
------

          None of the transactions contemplated by this Agreement (including,
     without limitation, the use of the proceeds from the sale of the
     Securities) shall violate or result in a violation by the Company or the
     Guarantor of Regulations G, T, U and X of the Board of Governors of the
     Federal Reserve System.  No part of the proceeds of the sale of the
     Securities will be used directly or indirectly for the purpose of
     purchasing or carrying any margin securities within the meaning of
     Regulation G.

     5.18.  Environmental Matters
            ---------------------

          Each of the Company and the Guarantor is aware of the potential effect
     of Environmental Laws (as defined below) and the disposal of hazardous or
     toxic substances, wastes, pollutants and contaminants on the business,
     assets, operations and properties of the Company and the Guarantor and
     identified and evaluated associated estimated costs and estimated
     liabilities (including, without limitation, all estimated material capital
     and operating expenditures required for clean-up, closure of properties and
     compliance with Environmental Laws, all permits, licenses and approvals,
     all related material constraints on operating activities, and potential
     liabilities to third parties.)  On the basis of such reviews, each of the
     Company and the Guarantor believes that such associated estimated costs and
     liabilities are not reasonably expected to have a Material

                                      -30-
<PAGE>

     Adverse Effect, either individually or in the aggregate. None of the
     Company or the Guarantor (i) has violated any environmental, safety or
     similar law or regulation applicable to it or its business or property
     relating to the protection of human health and safety, the environmental or
     hazardous or toxic substances or wastes, pollutants or contaminants
     ("Environmental Laws"), (ii) lacks any permit, license or other approval
     required of it under applicable Environmental Laws or (iii) is or will be
     violating any term or condition of such permit, license or approval, which
     in the case of clauses (i), (ii) or (iii), is reasonably expected to either
     individually or in the aggregate, have a Material Adverse Effect.

     5.19.  Private Offering
            ----------------

          5.19.1.  Sale Exempt
                   -----------

             Based in part on representations made by the Purchasers and upon
          the letter dated this date by BTM Capital Corporation to the
          Purchasers, and assuming the correctness of such representations and
          that there has been no general solicitation by the Purchasers, the
          sale of the Securities hereunder is exempt from the registration and
          prospectus delivery requirements of the Securities Act and it is not
          necessary in connection with the sale of the Securities to the
          Purchasers in accordance herewith to qualify the Indenture under the
          Trust Indenture Act of 1939, as amended.

          5.19.2.  No General Solicitation
                   -----------------------

             In the case of each offer or sale of the Securities, no form of
          general solicitation or general advertising was used by the Company,
          the Guarantor or any of their respective officers, directors or
          employees including, but not limited to, advertisements, articles,
          notices or other communications published in any newspaper, magazine
          or similar medium or broadcast over television or radio, or any
          seminar or meeting whose attendees had been invited by any general
          solicitation or general advertising.  No offers were made by the
          Company or the Guarantor or any of their respective officers,
          directors or employees other than to persons whom the offeror
          reasonably believed to be accredited investors or sophisticated
          purchasers as those terms have been construed under Section 4(2) of
          the Securities Act or to Qualified Institutional Buyers within the
          meaning of Rule 144A under the Securities Act.  The Purchasers are the
          sole purchasers of the Securities.  No securities of the same class as
          any of the Securities have been issued and sold by the Company within
          the six-month period immediately prior to the date hereof.  The
          Company and the Guarantor agree that none of them nor anyone acting on
          any of their behalf, will, with the Company's or the Guarantor's
          knowledge, offer any Securities so as to bring the issuance and sale
          of any of the Securities within the registration requirements of
          Section 5 of the Securities Act

                                      -31-
<PAGE>

          nor offer any similar securities for issuance or sale to, or solicit
          any offer to acquire any of the same from, or otherwise approach or
          negotiate with respect thereto with anyone if the sale of any of the
          Securities and any such securities could be integrated as a single
          offering for purposes of the Securities Act.

     5.20.  Governmental Regulations
            ------------------------

          Neither the Company nor the Guarantor is subject to regulation, or
     will become subject to regulation upon the consummation of the transactions
     contemplated by this Agreement or any of the other Documents, under the
     Investment Company Act of 1940, as amended, or any Federal or state statute
     or regulation limiting its ability to incur or assume indebtedness for
     borrowed money or consummate the transactions contemplated hereby.

     5.21.  Patents, Trademarks, etc.
            -------------------------

          Each of the Company and the Guarantor owns, or is licensed under, and
     has the right to use, all material patents, trademarks, trade names,
     copyrights, technology, know-how and processes (collectively, "Intellectual
     Property") necessary for the conduct of its business as set forth in the
     Placement Memorandum.  The consummation of the transactions contemplated by
     this Agreement and the other Documents will not alter or impair any such
     rights, except to the extent that any such alterations or impairments would
     not, singly or in the aggregate, have a Material Adverse Effect.  No claims
     have been asserted by any person to the use of any Intellectual Property or
     challenging or questioning the validity or effectiveness of any license or
     agreement related thereto and to the knowledge of the Company and the
     Guarantor the use of such Intellectual Property by the Company and the
     Guarantor does not infringe on the rights of any person, except to the
     extent that any such claims or infringements would not, singly or in the
     aggregate, have a Material Adverse Effect.

     5.22.  Title to and Condition of Properties
            ------------------------------------

          Each of the Company and the Guarantor has good and marketable title to
     all the real or personal properties and other assets (tangible, intangible
     or mixed) it purports to own, free and clear of all Liens, except for Liens
     permitted under the Indenture.  To the Company's knowledge, all leases and
     other agreements to which the Company or the Guarantor is a party are valid
     and binding and in full force and effect, and each of the Company and the
     Guarantor, as the case may be, enjoys peaceful and undisturbed possession
     under all leases to which it is a party as lessee.  No default has occurred
     or is continuing under such leases and other agreements, and no consent
     need be obtained (other than consents that will be obtained prior to the
     Closing Date), from any Person in respect of any such lease or agreement in
     connection with the transactions contemplated by this Agreement and the
     other Documents, except to the extent that any such defaults,

                                      -32-
<PAGE>

     or the failure to obtain any such consents, could not, singly or in the
     aggregate, have a Material Adverse Effect. The properties used or useful to
     the conduct of the business of the Company and the Guarantor are in good
     repair and working order, except to such extent as could not, singly or in
     the aggregate, have a Material Adverse Effect. The Company and the
     Guarantor maintain with reputable insurers such insurance as may be
     required by law and such other insurance, to such extent and against such
     hazards and liabilities, as is customarily maintained by companies
     similarly situated (which may include self-insurance in the same form as is
     customarily maintained by companies similarly situated).

     5.23.  Real Estate
            -----------

          As of the date hereof, the Company or the Guarantor hold fee and
     leasehold interests, as the case may be, in all the real property set forth
     in the Exchange Act Reports.  No material real property leasehold interest
     held by the Company or the Guarantor on the date hereof is omitted from
     such reports and, except as set forth in such reports, no such fee or
     leasehold interest is encumbered by a mortgage or deed of trust, except as
     permitted by the Indenture.

     5.24.  Survival of Indemnification and Contribution and Representations and
            --------------------------------------------------------------------
     Warranties
     ----------

          All of the representations and warranties of the Company and the
     Guarantor in this Agreement and the other Documents and in any other
     document, financial statement or other instrument or certificate delivered
     to you by or on behalf of the Company or the Guarantor in connection with
     this Agreement and the Documents and the transactions contemplated hereby
     and thereby shall be deemed to constitute representations and warranties
     hereunder and shall be true in all material respects at and as of the
     Closing Date (unless specifically relating to a different date), after
     giving effect to the transactions contemplated hereby.

          All of the obligations to indemnify you and contribute to your losses
     contained in this Agreement and the other Documents and in any other
     document, financial statement or other instrument or certificate delivered
     to you by or on behalf of the Company or the Guarantor in connection with
     this Agreement and the Documents and the transactions contemplated hereby
     and thereby and all of the representations and warranties of the Company
     and the Guarantor shall survive the execution and delivery of this
     Agreement and the other Documents, any investigation by you and the
     issuance of the Securities.

SECTION 6.  MISCELLANEOUS
            -------------

     6.1. Notices
          -------

                                      -33-
<PAGE>

          Prior to the Closing, and thereafter with respect to matters
     pertaining to this Agreement only, all notices and other communications
     provided for or permitted hereunder shall be made in writing by hand-
     delivery, next-day air courier, certified first-class mail, return receipt
     requested, telex, or facsimile:

             (a)   if to you, at your address set forth below your signature on
          the signature page hereto with a copy to Ropes & Gray, One
          International Place, Boston, Massachusetts  02110, Attention:  Robert
          L. Nutt, Esq; and

             (b)   if to the Company or the Guarantor, at its address set forth
          on the first page of this Agreement with a copy to Gibson, Dunn &
          Crutcher LLP, 333 South Grand Avenue, Los Angeles, California  90071-
          3197, Attention: Karen Bertero, Esq. and Joerg Esdorn, Esq.

          All such notices and communications shall be deemed to have been duly
     given: when delivered by hand, if personally delivered; one business day
     after being timely delivered to a next-day air courier; five business days
     after being deposited in the mail, postage prepaid, if mailed; and when
     answered back if telexed.

          From and after the Closing, the foregoing notice provisions shall be
     superseded by the notice provisions of the Document under which notice is
     given.

     6.2. Successors and Assigns
          ----------------------

          This Agreement shall inure to the benefit of and be binding upon the
     successors and assigns of each of the parties, and to the extent set forth
     in Sections 2.5 and 2.6 hereof, the Indemnified Parties and their
     respective heirs, personal representatives, successors and assigns and no
     other persons shall acquire or have any right under or by virtue of this
     Agreement.

     6.3. Amendment and Waiver
          --------------------

          Prior to the Closing Date, this Agreement and the other Documents may
     be amended, modified or supplemented, and waivers or consents to departures
     from the provisions hereof may be given, provided that the same are in
     writing and signed by you, the Company and the Guarantor.  Thereafter, this
     Agreement may only be amended, and such waivers be given, with the consent
     of the holders of a majority of the then outstanding aggregate principal
     amount of the outstanding Notes (other than Notes owned or acquired by the
     Company or its Affiliates).

     6.4. Counterparts
          ------------

          This Agreement may be executed in any number of counterparts and by
     the parties hereto in separate counterparts, each of which when so executed
     shall be deemed

                                      -34-
<PAGE>

     to be an original and all of which taken together shall constitute one and
     the same agreement.

     6.5. Headings
          --------

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

     6.6. Governing Law
          -------------

          THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
     THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
     PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
     CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER LAW.  THE
     COMPANY AND THE GUARANTOR HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF
     ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL
     COURT SITTING IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
     PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
     ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
     UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  NOTHING HEREIN
     SHALL AFFECT THE RIGHT OF ANY PURCHASER TO SERVE PROCESS IN ANY MANNER
     PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
     AGAINST THE COMPANY IN ANY OTHER JURISDICTION.

     6.7. Entire Agreement
          ----------------

          This Agreement, together with the other Documents and the Securities
     are intended by the parties as a final expression of their agreement and
     intended to, be a complete and exclusive statement of the agreement and
     understanding of the parties hereto in respect of the subject matter
     contained herein and therein.  There are no restrictions, promises,
     warranties or undertakings, other than those set forth or referred to
     herein and therein.  This Agreement, together with the other Documents and
     the Securities, supersedes all prior agreements and understandings between
     the parties with respect to such subject matter.

     6.8. Severability
          ------------

          If any term, provision, covenant or restriction of this Agreement is
     held by a court of competent jurisdiction to be invalid, illegal, void or
     unenforceable, the remainder of the terms, provisions, covenants and
     restrictions set forth herein shall remain in full force

                                      -35-
<PAGE>

     and effect and shall in no way be affected, impaired or invalidated, and
     the parties hereto shall use their best efforts to find and employ an
     alternative means to achieve the same or substantially the same result as
     that contemplated by such term, provision, covenant or restriction. It is
     hereby stipulated and declared to be the intention of the parties that they
     would have executed the remaining terms, provisions, covenants and
     restrictions without including any of such that may be hereafter declared
     invalid, illegal, void or unenforceable.

          If this Agreement is satisfactory to you, please so indicate by
     signing the acceptance at the foot of a counterpart of this Agreement and
     return such counterpart to the Company whereupon this Agreement will become
     binding between us in accordance with its terms.

                              Very truly yours,

                              COAST HOTELS AND CASINOS, INC.


                              By:  /s/  Harlan D. Braaten
                                 ------------------------
                                  Name:  Harlan D. Braaten
                                  Title:  President & COO

                              COAST RESORTS, INC.


                              By:  /s/  Harlan D. Braaten
                                 ------------------------
                                  Name:  Harlan D. Braaten
                                  Title:  President & COO



                                      -36-
<PAGE>

                          PURCHASE AGREEMENT SIGNATURE



Accepted and Agreed as of
the date first above written

Each of

     Putnam Income Fund
     Putnam High Yield Advantage Fund
     Putnam Diversified Income Trust
     Putnam High Income Convertible and Bond Fund


     By:  /s/  Paul M. O'Neal
        --------------------------
        Title:  Vice President

The Putnam Advisory Company Inc. on behalf of:

     Putnam CBO I Limited
     Putnam CBO II Limited
     Strategic Global Fund:  High Yield Fixed Income (Putnam) Fund


     By: /s/  Paul M. O'Neal
        -------------------------
        Title:  Vice President

                                      -37-
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                               Form of Indenture
                               -----------------

                                      -38-
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                 Form of Opinion of Gibson, Dunn & Crutcher LLP
                 ----------------------------------------------

                                      -39-
<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                    Form of Opinion of Barry Lieberman, Esq.
                    ----------------------------------------

                                      -40-
<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                   Form of Opinion of McDonald Carano Wilson
                   -----------------------------------------
                        McCune Bergin Frankovich & Hicks
                        --------------------------------
                                                                  Schedule 2.2.1
<TABLE>

<S>                                              <C>
Putnam Income Fund                                $  200,000
Putnam High Yield Advantage Fund                  $4,000,000
Putnam Diversified Income Trust                   $2,000,000
Putnam High Income Convertible and Bond Fund      $  200,000


Putnam CBO I Limited                              $4,000,000
Putnam CBO II Limited                             $6,000,000
Strategic Global Fund:  High Yield
</TABLE>

                                      -41-