<PAGE>

                               ASSET PURCHASE AGREEMENT

                                       BETWEEN

             COLORADO GAMING & ENTERTAINMENT CO., A DELAWARE CORPORATION
                                           
                                     "PURCHASER"

                                         AND

            PIONEER ASSOCIATES LIMITED LIABILITY COMPANY, A NEVADA 
            LIMITED LIABILITY COMPANY

                                       "SELLER"

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                                  TABLE OF CONTENTS

1.   PURCHASE AND CONSIDERATION. . . . . . . . . . . . . . . . . . . . . . .  1
     1.1    SALE AND PURCHASE. . . . . . . . . . . . . . . . . . . . . . . .  1
            (a)     Equipment and Warranties . . . . . . . . . . . . . . . .  1
            (b)     Contracts. . . . . . . . . . . . . . . . . . . . . . . .  2
            (c)     Books and Records. . . . . . . . . . . . . . . . . . . .  2
     1.2    ASSIGNMENT OF LEASES . . . . . . . . . . . . . . . . . . . . . .  2
     1.3    EXCLUDED ASSETS; NO ASSUMPTION OF LIABILITIES. . . . . . . . . .  3
            (a)     EXCLUDED ASSETS. . . . . . . . . . . . . . . . . . . . .  3
            (b)     NO ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . .  4
            (c)     PURCHASER'S ASSUMPTION OF CERTAIN LIABILITIES. . . . . .  5
     1.4    PURCHASE PRICE AND TERMS . . . . . . . . . . . . . . . . . . . .  6
            (a)     PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . .  6
            (b)     Additional Assets. . . . . . . . . . . . . . . . . . . .  8
            (c)     CHIPS AND TOKEN REDEMPTION . . . . . . . . . . . . . . .  8
     1.5    PURCHASE PRICE ALLOCATION. . . . . . . . . . . . . . . . . . . .  9

2.   CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     2.1    THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     2.2    ACTIONS AT THE CLOSING . . . . . . . . . . . . . . . . . . . . . 10

3.   REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . . . . . . . 11
     3.1    ORGANIZATION AND AUTHORITY . . . . . . . . . . . . . . . . . . . 12
     3.2    EFFECT OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 12
     3.3    FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 12
     3.4    TITLE TO AND CONDITION OF ASSETS . . . . . . . . . . . . . . . . 13
     3.5    LEASES AND CONTRACTS . . . . . . . . . . . . . . . . . . . . . . 14
     3.6    LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
     3.7    DISCLOSURE OF LIABILITIES; NO MATERIAL ADVERSE CHANGE. . . . . . 14
     3.8    LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . 15
     3.9    ENVIRONMENTAL AND SAFETY . . . . . . . . . . . . . . . . . . . . 15
     3.10   COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . . . 17
     3.11   TAXES AND PARKING IMPACT FEES. . . . . . . . . . . . . . . . . . 18
     3.12   BROKER OR FINDER . . . . . . . . . . . . . . . . . . . . . . . . 19

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     3.13   SCHEDULES AND EXHIBITS . . . . . . . . . . . . . . . . . . . . . 19
     3.14   DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4.   REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . 19
     4.1    ORGANIZATION AND AUTHORITY . . . . . . . . . . . . . . . . . . . 19
     4.2    EFFECT OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 20
     4.3    BROKER OR FINDER . . . . . . . . . . . . . . . . . . . . . . . . 20

5.   COVENANTS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . 20
     5.1    TAXES AND TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . 20
     5.2    EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
     5.3    CONDUCT OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . 21
     5.4    SATISFACTION OF CONDITIONS . . . . . . . . . . . . . . . . . . . 22

6.   CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 22
            (a)     DUE DILIGENCE. . . . . . . . . . . . . . . . . . . . . . 22
            (b)     CONDITIONS PRECEDENT TO CLOSING. . . . . . . . . . . . . 23
            (c)     TAX CLEARANCES . . . . . . . . . . . . . . . . . . . . . 24
            (d)     ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . 24
            (e)     NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . 25
            (f)     TRUTH OF WARRANTIES. . . . . . . . . . . . . . . . . . . 25

7.   INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
     7.1    INDEMNITY OF PURCHASER . . . . . . . . . . . . . . . . . . . . . 25
     7.2    INDEMNITY OF SELLER. . . . . . . . . . . . . . . . . . . . . . . 26
     7.3    NOTICE OF CLAIMS -- PARTICIPATION IN THIRD PARTY SUITS . . . . . 26

8.   DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
     8.1    PURCHASER'S DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 27
     8.2    SELLER'S DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 27

9.   MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 27
     9.1    CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . 28
     9.2    ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
     9.3    EXPENSES; TAXES. . . . . . . . . . . . . . . . . . . . . . . . . 28
     9.4    SCHEDULES AND EXHIBITS . . . . . . . . . . . . . . . . . . . . . 29
     9.5    SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . 29

<PAGE>

     9.6    NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
     9.7    PUBLICITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
     9.8    AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . 30
     9.9    GOVERNING LAW; MEDIATION; ARBITRATION. . . . . . . . . . . . . . 30
     9.10   SECTION HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . 31
     9.11   COOPERATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
     9.12   ATTORNEYS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . 32
     9.13   PARTIAL INVALIDITY . . . . . . . . . . . . . . . . . . . . . . . 32
     9.14   ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 32
     9.15   COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . 33


<PAGE>

                                  LIST OF SCHEDULES


SCHEDULE 1.1(a)                    EQUIPMENT AND WARRANTIES

SCHEDULE 1.1(b)                    CONTRACTS

SCHEDULE 1.2                       LEASES

SCHEDULE 1.3(a)                    EXCLUDED ASSETS

SCHEDULE 1.3(b)                    PURCHASER'S GAMING DEVICE DEBT

SCHEDULE 1.5                       PURCHASE PRICE ALLOCATION

SCHEDULE 3.6                       LITIGATION

<PAGE>

                               ASSET PURCHASE AGREEMENT


     This is an Asset Purchase Agreement ("Agreement"), dated as of  December
10, 1997 (the "Effective Date"), between COLORADO GAMING & ENTERTAINMENT CO., a
Delaware corporation ("Purchaser") and/or its successors and assigns, and
PIONEER ASSOCIATES LIMITED LIABILITY COMPANY, a Nevada Limited Liability Company
("Seller").
                                       RECITAL

     Purchaser desires to purchase from Seller and Seller desires to sell to
Purchaser, on the terms and conditions of this Agreement, substantially all of
the operating assets used in the casino business of Seller (the "Business"),
located at 125-135 Gregory Street, Black Hawk, Colorado (the "Property").

                                      AGREEMENT

     For good and valuable consideration, the parties agree as follows:

1.   PURCHASE AND CONSIDERATION.

     1.1    SALE AND PURCHASE.  Seller agrees to sell, transfer, assign and
deliver to Purchaser on the Closing Date (as hereinafter defined), and Purchaser
agrees to buy from Seller, the operating assets of any kind or nature
whatsoever, tangible and intangible, owned by Seller and used in connection with
the operation of the Business (collectively, the "Assets"), which include the
following:

            (a)     EQUIPMENT AND WARRANTIES.  Those certain 266 gambling
devices and gaming equipment (collectively, "Purchaser's 

<PAGE>

Gaming Devices"), and the machinery, computers, furniture, fixtures and 
equipment, whether leased or owned by Seller, including Seller's rights under 
all related warranties (collectively, the "Equipment"), all as more 
particularly described on Schedule 1.1(a).  Notwithstanding the foregoing, 
the Equipment shall not include the Excluded Assets (as hereinafter defined) 
described in Section 1.3; 

            (b)     CONTRACTS.  Those contracts listed on SCHEDULE 1.1(b) (the
"Contracts").  Seller will take such actions as are necessary to assign the
Contracts to Purchaser at the Closing (as hereinafter defined). Purchaser shall
not assume, and Seller shall retain all liabilities to, all other contracts
which relate to the Business other than the Contracts listed on Schedule 1.1(b);
and

            (c)     BOOKS AND RECORDS.  Any of Seller's books and records,
including all customer, supplier, fixed asset lists and all other relevant
records and files relating to the Business as requested by Purchaser.

     1.2    ASSIGNMENT OF LEASES. Seller shall assign and Purchaser shall
assume those certain leases for the Property, more particularly described in
SCHEDULE 1.2 (the "Leases").  With respect to the Leases which do not involve
real property, Seller shall receive credit for any security deposits relating to
such Leases, the amount of which shall be reflected on said Schedule.  Purchaser
shall not assume, and Seller shall retain all 


                                       2

<PAGE>

liabilities to, all other leases which relate to the Business other than the 
Leases listed on Schedule 1.2.

     1.3    EXCLUDED ASSETS; NO ASSUMPTION OF LIABILITIES.

            (a)     EXCLUDED ASSETS.  The Assets to be purchased and sold
hereunder shall not include the following assets of Seller existing on the
Closing Date (the "Excluded Assets"), which Excluded Assets are described in
SCHEDULE 1.3(a):

                    (i)    Those certain 19 gaming devices ("19 Devices") as
described in SCHEDULE 1.3(a).  Purchaser shall receive a credit against the
Purchase Price for the 19 Devices in an amount equal to $76,000;

                    (ii)   Those certain 25 gaming devices ("25 Devices") 
acquired by Seller subsequent to negotiations commencing on this Agreement. 
Those 25 Devices are described in SCHEDULE 1.3(a).  The 19 Devices and the 
25 Devices are collectively referred to as "Seller's Gaming Devices";

                    (iii)  The equipment, including all hardware and software
constituting the slot tracking system ("Slot Tracking System"), including copies
of the Slot Tracking System lists and the database associated therewith. 
Purchaser shall receive a credit against the purchase price for Seller's
retention of the Slot Tracking System in an amount equal to $100,000.
Notwithstanding anything in this Agreement to the contrary, Seller shall deliver
a true and correct copy of the Slot Tracking System database printout to
Purchaser at the Closing;


                                       3

<PAGE>

                    (iv)    Those certain items of office furniture, computers,
office equipment and vehicles (collectively, the "Excluded Office Equipment") as
described in Schedule 1.3(a).  Purchaser shall receive a credit against the
Purchase Price for Seller's retention of the Excluded Office Equipment in an
amount equal to $15,000;

                    (v)     Seller's cash, gaming chips and tokens in gaming
devices, cages and change banks and any other location in the Property.  Such
amounts are to be determined as of two o'clock a.m. on the Closing Date;  

                    (vi)    Seller's cash in any bank, brokerage or other
institution;

                    (vii)   All of Seller's rights, title and interest in the
"Bronco Billy's" name and logos and associated proprietary rights thereto, and
all personal property containing the "Bronco Billy's" name and associated logos;

                    (viii)  All of Seller's inventories of whatever kind,
including food, beverages, merchandise, cigarettes, office and maintenance
supplies; and

                    (ix)    All of Seller's accounts receivable.

            (b)     NO ASSUMPTION OF LIABILITIES.  Except as expressly provided
below, Purchaser shall not assume any liabilities, including trade or accounts
payable of Seller or of the Business, or any portion of the loan and/or purchase
money amounts payable to International Gaming & Technologies ("IGT") or any
other lenders or sellers of Seller's Gaming Devices which is 


                                       4

<PAGE>

attributable to and is secured by (i) Seller's Gaming Devices ("Seller's 
Gaming Device Debt") and/or (ii) Purchaser's Gaming Devices ("Purchaser's 
Gaming Device Debt").  A description of the principal balance of Purchaser's 
Gaming Device Debt as of January 1, 1998 is set forth on SCHEDULE 1.3(b). The 
parties agree that assuming all payments on Purchaser's Gaming Device Debt 
are timely made between the Effective Date and December 31, 1997, the 
aggregate principal balance thereon as of January 1, 1998, will be 
$510,785.00.  To the extent that the aggregate principal balance of 
Purchaser's Gaming Device Debt on January 1, 1998 exceeds $510,785.00, 
Purchaser shall receive a credit against the Purchase Price for such amount 
at Closing. 

            (c) PURCHASER'S ASSUMPTION OF CERTAIN LIABILITIES.  Purchaser will
assume the following liabilities subject to appropriate credits at Closing for
all proratable items or as otherwise provided:    

                    (i)     The Leases described in Schedule 1.2 subject to the
amendments hereinafter provided; 

                    (ii)    The  progressive liability above the reset amount
as defined by Colorado Gaming Regulations for Purchaser's Gaming Devices and
Seller's Gaming Devices, for which Purchaser shall receive a credit at Closing;
and


                                       5

<PAGE>

                    (iii)   The liability of redeeming Seller's outstanding and
unredeemed slot script according to its current terms ("Slot Script"), to the
extent that the Colorado Limited Gaming Control Commission (the "Commission")
permits the assumption of such liability.

     There is no other debt associated with the Business other than that debt
which is described in this Section 1.3(b) and to the extent that debt other than
that which is listed in Section 1.3(b) is discovered, Seller shall assume all
liabilities therefor and Purchaser shall not be responsible for the payment of
or assume any such liabilities.

     1.4    PURCHASE PRICE AND TERMS.  

            (a)  PURCHASE PRICE.  The consideration for the sale, assignment 
and transfer of the Assets shall be Five Million and No/100ths Dollars 
($5,000,000.00) (the "Purchase Price").  The parties acknowledge and agree 
that Purchaser will purchase Purchaser's Gaming Devices hereunder subject to 
the Purchaser's Gaming Device Debt, but may renegotiate such debt with the 
lender/lessor thereunder at Closing.  The Purchase Price will be paid as 
follows:  One Hundred Thousand Dollars ($100,000) cash paid as earnest money 
hereunder by Purchaser within five (5) business days of the Effective Date to 
Clear Creek-Gilpin County Abstract & Title Corp. ("Title Company") to be held 
by the Title Company in an interest-bearing account, with interest to be 
credited to Purchaser upon the closing of the transactions contemplated 
hereunder ("Earnest Money Deposit"), with the 


                                       6

<PAGE>

balance, subject to customary closing adjustments and the credits and 
adjustments described herein ("Cash Payment"), to be paid in cash or readily 
available funds at Closing.  At the Closing, as hereinafter defined, in 
addition to customary closing adjustments, for purposes of computing the 
Purchase Price, and the Cash Payment, Purchaser shall receive the following 
credits against the Purchase Price: (i) $76,000 attributable to the 19 
Devices; (ii) $100,000 attributable to the Slot Tracking System (iii) $15,000 
attributable to the Excluded Office Equipment; (iv) that amount equal to 
75.0% of the then outstanding unredeemed value of the first $40,000 of Slot 
Script which is redeemable for cash and 90% of all amounts of such Slot 
Script in excess of $40,000; (v) the amount of the progressive liability 
reflected as of the Closing Date in all of Purchaser's Gaming Devices and 
Seller's Gaming Devices as described in Section 1.3(b)(ii); and (vi) any 
amount over $510,785.00 (the aggregate principal balance of Purchaser's 
Gaming Device Debt pursuant to Section 1.3(b)).  The Cash Payment will be 
increased by the amount of: (x) any prepaid expenses and device fees which 
Seller paid prior to Closing and which are attributable to time periods after 
Closing; (y) the security deposits on the Leases which do not involve real 
property; and (z) if the Closing Date occurs after January 1, 1998, the 
difference between the principal balance of Purchaser's Gaming Device Debt as 
of January 1, 1998 and the principal balance of Purchaser's Gaming Device 
Debt as of the Closing Date to the extent that such difference represents 
monies paid by 


                                       7

<PAGE>

Seller to IGT to pay down the principal balance of Purchaser's Gaming Device 
Debt after January 1, 1998. In no event shall Seller receive any credit for 
any discount which Purchaser negotiates with IGT on the payoff of Purchaser's 
Gaming Device Debt.

            (b)  ADDITIONAL ASSETS.  The Purchase Price and the Cash Payment 
set forth above will be increased by Seller's acquisition price of any gaming 
devices or other equipment purchased by Seller subsequent to June 30, 1997 
and prior to the Closing Date ("New Acquisitions") if Purchaser desires, in 
its sole discretion, to purchase the New Acquisitions (or any portion 
thereof) from Seller.  If Purchaser does not desire to Purchase the New 
Acquisitions, they shall become Excluded Assets. 

            (c)  CHIPS AND TOKEN REDEMPTION.  Purchaser agrees that it will, 
for a period of 120 days from the Closing Date, or such period of time 
prescribed by the Director of the Colorado Division of Gaming, pursuant to 
the Colorado Gaming Regulations ("Redemption Period"), and to the extent of 
funds then in the escrow account described below, redeem any of Seller's 
gaming chips and tokens presented to it using proceeds from an escrow to be 
established by Seller for such purpose.  Purchaser will have no obligation to 
redeem such chips or tokens from its own funds.  Seller agrees within five 
(5) days following Closing to calculate its outstanding chip and token float 
(excluding gold and silver tokens and commemorative tokens), and to deposit 
into an escrow account an amount equal to 75% of Seller's outstanding chip 
and 

                                       8
<PAGE>

token float so computed.  No more frequently than weekly, Purchaser may 
submit the redeemed gaming chips and tokens for reimbursement from the escrow 
account.  It is agreed that two signatures will be required on the escrow 
account, one party to be designated by Seller and one by Purchaser.  After 
the end of the Redemption Period, the balance in the escrow account, if any, 
will be paid to Seller in full.  Any further redemption of Seller's 
outstanding chips and tokens after the Redemption Period will be at the 
option and expense of Purchaser.  Seller agrees to pay the cost of 
publication of the redemption as required by the Colorado Gaming Regulations 
and Purchaser agrees to cooperate with Seller in obtaining approval from the 
Director of the Colorado Division of Gaming for the form of the publication 
and the newspapers selected for publication.  The cost of the destruction of 
the chips and tokens will be the expense of Seller.  During the Redemption 
Period, to the extent customers seek to redeem chips and tokens in excess of 
the amount deposited into the escrow account, Seller agrees to immediately 
deposit additional funds into the escrow account sufficient to cover the 
excess.  In the event Seller fails to so deposit funds in the escrow as 
required during the Redemption Period, Purchaser shall have the right to 
immediately cease redeeming the chips and tokens.

     1.5    PURCHASE PRICE ALLOCATION.  The parties agree to allocate the 
Purchase Price as provided in SCHEDULE 1.5 (the "Allocation").  Each of the 
parties agrees to report this 

                                       9
<PAGE>

transaction for state and federal tax purposes in accordance with the 
Allocation and agrees not to file any tax return or otherwise take a position 
with federal or state tax authorities which is inconsistent with the 
Allocation.  The Allocation is intended to comply with Section 1060 of the 
Internal Revenue Code and the regulations promulgated thereunder.

2.   CLOSING.

     2.1    THE CLOSING.  Assuming that all conditions to closing have been 
satisfied or waived by Purchaser in its sole discretion, the transactions 
contemplated by this Agreement shall be consummated (the "Closing") at the 
offices of Isaacson, Rosenbaum, Woods & Levy, P.C., at such time as the 
parties mutually agree upon, no later than five (5) business days after 
Purchaser delivers written notice to Seller that it has obtained all 
Approvals (or Purchaser has waived any of such Approvals) as set forth in 
Section 6(b), but in no event later than five (5) business days from the 
expiration of the Inspection Period, unless the parties mutually agree to 
extend such date (the "Closing Date").  The time of Closing on the Closing 
Date shall be by mutual agreement of the parties.

     2.2    ACTIONS AT THE CLOSING.  At the Closing:

            (a)  Purchaser shall (i) pay to Seller by bank or cashier's check 
or wire transfer the Cash Payment; (ii) cause IGT to execute releases in a 
form satisfactory to Seller releasing Seller from any and all obligations 
under Purchaser's Gaming Device Debt at no cost to Seller; and (iii) execute 
and deliver a settlement statement showing the Purchase Price and setting 
forth the credits set forth above and contemplated herein, and other 
customary closing adjustments,

                                      10
<PAGE>

including those adjustments for rent, taxes, utilities and other customarily 
prorated items.

            (b)  Seller shall (i) execute and deliver to Purchaser in forms 
satisfactory to Purchaser, all bills of sale, endorsements, assignments and 
other instruments as Purchaser shall reasonably request to sell, assign, 
transfer and deliver to Purchaser good title to all of the Assets and the 
Leases, free and clear of all Encumbrances (as such term is defined in 
Section 3.4) or Seller shall cause KDL, Inc., a Colorado corporation ("KDL"), 
owner of certain of Purchaser's Gaming Devices, to execute and deliver all 
documents necessary for Seller to transfer the Assets to Purchaser, free and 
clear of all Encumbrances, including without limitation, releases of all 
UCC-1 Financing Statement releases executed by IGT; (ii) deliver to Purchaser 
the title policy contemplated by the Title Commitment and the original 
Survey, if not previously delivered; (iii) deliver the Slot Tracking System 
database printout in accordance with Section 1.3(a)(iii); (iv) execute and 
deliver a certificate by Seller that the representations and warranties by 
Seller herein are true and correct as of the Closing Date; and (v) execute 
and deliver a settlement statement setting forth the credits set forth above 
and contemplated herein, and all customary closing adjustments, including 
those for rent, taxes, utilities and other customarily prorated items.  

3.   REPRESENTATIONS AND WARRANTIES OF SELLER.

                                      11
<PAGE>

     Seller makes the following representations, warranties, and as 
applicable, covenants, to Purchaser, which representations and warranties 
shall survive the Closing and shall be deemed to be remade as of the Closing 
Date: 

     3.1    ORGANIZATION AND AUTHORITY.  Seller is a limited liability 
company duly organized, validly existing and in good standing under the laws 
of the State of Nevada.  Seller has full legal right, power and authority to 
execute and deliver this Agreement and to consummate the transactions 
contemplated hereby.  The execution, delivery, and performance of this 
Agreement and the transactions contemplated hereby have been duly authorized 
by all necessary action on the part of Seller, including the approval of 
Seller's members.

     3.2    EFFECT OF AGREEMENT.  The execution and delivery of this 
Agreement by Seller does not, and the consummation of the transactions 
contemplated hereby will not, conflict with or constitute a default under 
Seller's Articles of Organization or its Operating Agreement, or its other 
organizational documents, any law or regulation applicable to Seller, or any 
agreement or instrument to which Seller is a party or by which Seller is 
bound.  No consent of any person not a party to this Agreement and no consent 
of any governmental authority is required to be obtained on the part of 
Seller to permit the consummation of the transactions contemplated by this 
Agreement.  

     3.3    FINANCIAL STATEMENTS.  Seller has delivered to Purchaser its 
audited balance sheet and income statement as of 

                                      12
<PAGE>

December 31, 1996 (the "Balance Sheet Date") and its unaudited balance sheet 
and statement of income for the period ending June 30, 1997 (collectively, 
the "Financial Statements").  At or before Closing, Seller shall deliver all 
unaudited Financial Statements for the monthly periods ending prior to the 
Closing Date.  All such Financial Statements fairly present the financial 
condition and results of operations of Seller as of the respective dates 
thereof and for the periods therein referred to, all in accordance with 
generally accepted accounting principles ("GAAP") consistently applied 
throughout the periods involved.  

     3.4    TITLE TO AND CONDITION OF ASSETS.  Seller has good title to all 
of the Assets, except as set forth in SCHEDULE 1.3(b) as to those Purchaser's 
Gaming Devices owned by KDL (which Seller shall cause KDL to transfer to 
Seller as set forth in Section 2.2(b)) and except for the security interests 
of the sellers and lenders in Purchaser's Gaming Devices to secure 
Purchaser's Gaming Device Debt, all of the Assets are free and clear of all 
encumbrances, liens, pledges and security interests whatsoever 
("Encumbrances").  Seller has made and will continue to make through the 
Closing Date, all principal and interest payments due under the Purchaser's 
Gaming Device Debt and with respect to any of the other Encumbrances.   All 
Schedules and Exhibits attached hereto or to be attached hereto or to any 
closing document are, or will be when created, correct and complete.

                                      13
<PAGE>

     The Assets include all assets and properties of every kind and 
description, other than those Excluded Assets set forth in Schedule 1.3(a), 
tangible or intangible, the use of which is necessary to enable Purchaser to 
conduct the Business on the Premises as conducted prior to the date hereof 
and all such property that is tangible is in good operating condition, 
ordinary wear and tear excepted.

     At the Closing, Seller will sell, assign, transfer and deliver to 
Purchaser good title to all of the Assets, free and clear of any and all 
Encumbrances. Seller agrees that it will remain responsible at its sole cost 
and expense for timely and prompt payment of all of its accounts payable. 
Seller will also take such actions as are necessary to extinguish and obtain 
releases of the Encumbrances on the Assets.

     3.5    LEASES AND CONTRACTS.  Seller is not in default under any of the 
Contracts or Leases.

     3.6    LITIGATION.  There is no action, suit, proceeding or 
investigation by or before any court or governmental authority including 
before the Commission, pending or threatened against or involving Seller or 
any of the Assets, nor to the best of Seller's knowledge is there any 
reasonable basis therefor, other than those currently pending before the 
Commission, or other criminal and other regulatory agency proceedings and 
investigations described in SCHEDULE 3.6.

     3.7    DISCLOSURE OF LIABILITIES; NO MATERIAL ADVERSE CHANGE.

     As of the Balance Sheet Date, the Financial Statements 

                                      14
<PAGE>

accurately disclosed or otherwise reflected all existing liabilities of 
Seller and of the Business of any nature, whether accrued, absolute, 
contingent or otherwise.  Since the Balance Sheet Date, there has not been 
any material adverse change in the amount of Seller's liabilities or the 
financial condition of the Business.

     3.8    LABOR MATTERS.  Seller is not a party to any collective 
bargaining agreement covering its employees.  Seller is in compliance with 
all federal, state and local laws applicable to Seller respecting employment 
practices, gaming licenses, terms and conditions of employment and wages and 
hours, and has not and is not engaged in any unfair labor practice.  No 
employment claim or grievance as to Seller or the Business exists (including 
without limitation any claim or discrimination on the basis of race, age or 
sex) except as disclosed in Schedule 3.6.  Seller has given all appropriate 
notices to the employees of the Business under the WARN Act, 29 U.S.C. 
Section 2101 ET SEQ., as amended.

     3.9    ENVIRONMENTAL AND SAFETY.  To Seller's best knowledge, there are 
no past or existing conditions or activities relating to the receiving, 
processing, use, treatment, storage, accumulation, generation, spillage, 
migration, disposal, transportation or handling, or the release, emission, or 
discharge of any Hazardous Materials (as hereinafter defined) which may form 
the basis of any claim, action, suit, proceeding or investigation against or 
relating to Seller, the Business or 

                                      15
<PAGE>

any property occupied by Seller and the Business for violation of any 
Environmental Law (as hereinafter defined).  To Seller's best knowledge, 
there has been no disposal, release or threatened release of Hazardous 
Materials on, from or under the Property, or any other real property which 
could affect the Property.  For purposes of this Agreement, the terms 
"disposal" and "release," shall have the definitions assigned thereto under 
Environmental Laws. Seller, the Business and the Property have at all times 
during Seller's period of ownership and operation of the Business, been in 
compliance with all federal, state and local laws, statutes, ordinances, 
codes, regulations and orders relating to the receiving, handling, use, 
storage, accumulation, transportation, generation, spillage, migration, 
discharge, release and disposal of any flammable, combustible, explosive, 
infectious, corrosive, caustic, irritant, strong sensitizing, carcinogenic or 
radioactive materials, hazardous wastes, toxic substances, contaminants, 
pollutants or related materials, including without limitation, substances 
defined as "hazardous substances," "hazardous materials," or "toxic 
substances" in the Comprehensive Environmental Response, Compensation and 
Liability Act of 1980, as amended by the Superfund Amendments and 
Reauthorization Act of 1986, as amended, 42 U.S.C. Section 9601 ET SEQ.; the 
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 1801, 
ET SEQ.; the Resource Conservation and Recovery Act of 1976, as amended, 42 
U.S.C. Section 6901 ET SEQ.; the Clean Water Act, as amended, 33 U.S.C. 
Section 466, ET SEQ., including the 

                                      16
<PAGE>

Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 ET 
SEQ.; the Safe Drinking Water Act, as amended, 14 U.S.C. Section 1401, ET 
SEQ.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601, 
ET SEQ., as amended; the Federal Insecticide, Fungicide and Rodenticide Act, 
as amended, 7 U.S.C. Section 136 ET SEQ.; the Atomic Energy Act of 1954, as 
amended, 42 U.S.C. Section 2011 ET SEQ.; the Clean Air Act, as amended, 42 
U.S.C. Section 7401 ET SEQ.; the Solid Waste Disposal Act, as amended, 42 
U.S.C. Section 49 U.S.C. Section 3251 ET SEQ.; the Emergency Planning and 
Community-Right-to-Know Act, as amended, 42 U.S.C. Section 11001 ET SEQ.; the 
Occupational Safety and Health Act, 29 U.S.C. Section 651 ET SEQ.; and in the 
regulations adopted and publications promulgated pursuant to said laws 
(collectively, "Environmental Laws").  Such materials and substances are 
collectively referred to herein as "Hazardous Materials."

     3.10   COMPLIANCE WITH LAW.  Seller and the Business are in compliance 
with all applicable laws and regulations applicable to the Business except 
with regard to the pending regulatory and criminal matters set forth in 
Schedule 3.6. Seller has all material licenses, permits, orders or approvals 
from governmental authorities required for the conduct of the Business, 
including all gaming and liquor licenses, and is not in violation of any such 
licenses, permits, orders and approvals, which are in full force and effect, 
and no suspension or cancellation thereof has been threatened except as set 
forth in Schedule 3.6.

                                      17
<PAGE>

     3.11   TAXES AND PARKING IMPACT FEES.  Seller has timely filed within 
the required time periods for filing or extensions all returns, estimates and 
reports ("Returns") which it is required to file relating to any and all 
taxes or other governmental charges, obligations or fees, including but not 
limited to any income, business, payroll, occupation, franchise, gaming, 
sales, or use tax and any related interest or penalties ("Taxes") 
attributable to the properties and assets of Seller and the operations of the 
Business, and such Returns are true and correct in all respects.  Seller has 
paid all Taxes, if any, shown to be due and payable on said Returns and has 
withheld with respect to employees all federal, state and local income taxes, 
FICA, FUTA and any other Taxes required to be withheld.  The reserves and/or 
accruals for Taxes on the books and records of Seller are sufficient to 
discharge the Taxes for all periods (or the portion of any period) ending on 
or prior to the Closing Date.  There have been no previous, nor, to the 
knowledge of the Seller, are there any pending or threatened assessments, 
asserted deficiencies or claims for additional Taxes, nor to the best of 
Seller's knowledge is there any basis therefor.  There are currently no 
Encumbrances and immediately following the Closing there will be no 
Encumbrances relating or attributable to Taxes on the Assets.  Seller has 
paid all parking impact fees in connection with the Business and the 
Property. All amounts required to be withheld by Seller as of the Closing 
Date for Taxes and all parking impact fees have been or will be withheld 

                                      18
<PAGE>

and paid when due to the appropriate agency or governmental authority.

     3.12   BROKER OR FINDER.  Seller has not retained any broker or finder 
in connection with the transactions contemplated by this Agreement.

     3.13   SCHEDULES AND EXHIBITS.  All of the schedules and exhibits 
attached hereto are true, complete and accurate in all respects.

     3.14   DISCLOSURE.  There is no fact known by Seller not disclosed in 
writing to Purchaser by Seller that materially and adversely affects, or so 
far as may reasonably be foreseen by Seller will materially and adversely 
affect, the Assets or the condition of the Business.

4.   REPRESENTATIONS AND WARRANTIES OF PURCHASER.

     Purchaser makes the following representations and warranties to Seller:

     4.1    ORGANIZATION AND AUTHORITY.  Purchaser is a corporation duly 
organized, validly existing and in good standing under the laws of the State 
of Delaware.  Purchaser has full legal right, power and authority to execute 
and deliver this Agreement and to consummate the transactions contemplated 
hereby. Subject to Purchaser's receipt of approval from its Board of 
Directors, as hereafter provided, the execution, delivery and performance of 
this Agreement and the transactions contemplated hereby have been duly 
authorized by all necessary corporate action on the part of Purchaser.

                                      19
<PAGE>

     4.2    EFFECT OF AGREEMENT.  The execution and delivery of this 
Agreement by Purchaser does not, and the consummation of the transactions 
contemplated hereby will not, conflict with or violate or constitute a 
default under Purchaser's Articles of Incorporation or Bylaws, any law or 
regulation applicable to Purchaser, or any agreement or instrument to which 
Purchaser is a party or by which Purchaser is bound.

     4.3    BROKER OR FINDER.  Purchaser has not retained any broker or 
finder in connection with the transactions contemplated by this Agreement.

5.   COVENANTS OF SELLER.

     Seller covenants and agrees as follows:

     5.1    TAXES AND TAX RETURNS.  Seller shall be responsible for and pay 
when due all Taxes relating to or attributable to all periods ending on or 
before the Closing Date.  Seller shall be responsible for the timely filing 
of all Returns required by law to be filed relating or attributable to all 
periods ending on or before the Closing Date, and such Returns shall be true 
and correct in all respects.

     5.2    EMPLOYEES.  Concurrent with and conditioned upon the Closing, 
Seller shall terminate each of its employees as of the opening of business on 
the Closing Date, and shall be solely responsible for any and all costs 
associated with the employment and termination of such employees.  Such costs 
shall include without limitation, wages, bonuses, commissions, severance pay, 
vacation pay, sick leave benefits, health, disability, life and 

                                      20
<PAGE>

other insurance, severance and any awards, judgments or penalties which might 
be awarded to Seller's employees.  Seller has made no representations to its 
employees regarding continued employment or new employment with Purchaser.  
Purchaser, however, will accept and review applications from such employees 
for employment positions with Purchaser, and hire (or not) such applicants as 
Purchaser deems appropriate in its sole discretion.  Seller shall also be 
responsible for giving all notices to employees of the Business under the 
WARN Act.

     5.3    CONDUCT OF BUSINESS.  Until the Closing, Seller will  (i) use its 
best efforts to conduct the Business in a reasonable and prudent manner in 
accordance with sound business practices, (ii) use its best efforts to 
preserve its existing business organization and relations with employees, 
suppliers, customers and others with whom it has business relationships, 
(iii) use its best efforts to preserve, ensure and protect the properties of 
the Business, (iv) not refinance or encumber any of the Assets, (v) pay when 
due all amounts owing with respect to the Assets, including all amounts owing 
under the Purchaser's Gaming Device Debt, (vi) perform and pay all amounts 
owing under the Leases and the Contracts, and (vii) conduct the Business in 
the ordinary course and in compliance with all applicable laws and 
regulations.  Seller will not, without the prior written consent of 
Purchaser, make commitments to lease or purchase any equipment over 
$5,000.00.      

                                      21
<PAGE>

     5.4    SATISFACTION OF CONDITIONS.  Seller shall in good faith proceed 
to take or cause to be taken all actions within its power necessary to 
satisfy all conditions to its obligations to close and consummate the 
transactions contemplated by this Agreement.

6.   CONDITIONS TO CLOSING.  

     Purchaser's obligation to consummate the transactions contemplated by 
this Agreement is conditioned upon satisfaction of the following conditions, 
which Purchaser shall reasonably determine in good faith have or have not 
been satisfied, on or before the Closing Date.  If, for any reason any of the 
conditions are not so satisfied, then upon notice from Purchaser to Seller 
and the Title Company, the Title Company will return the Earnest Money 
Deposit, and both parties shall thereafter be relieved of any and all further 
rights, duties, liability or obligations hereunder:

            (a)     DUE DILIGENCE.  Purchaser shall have forty-five (45) days 
from the Effective Date to complete to its satisfaction its due diligence 
investigation of the Business, including conducting such tests, studies and 
other investigations, receive approval of its Board of Directors and review 
the Title Documents (as hereinafter defined), and such other matters as 
Purchaser deems necessary in its sole discretion (the "Inspection Period").  
In connection therewith, Seller shall furnish to Purchaser a current 
commitment for a leasehold title insurance policy issued by Title Company, 
together with copies of the exceptions to title within ten (10) days of the 
Effective Date and a current 

                                      22
<PAGE>

ALTA/ASCM survey of the Property, within fifteen (15) days of the Effective 
Date (collectively, "Title Documents").  Purchaser shall have the right to 
inspect the Title Documents and shall give Seller written notice of 
unmerchantability of title and any other unsatisfactory items revealed during 
Purchaser's due diligence (whether or not the same relate to any title 
matters), on or before the expiration of the Inspection Period ("Purchaser's 
Notice").  If Seller does not cure (or address to Purchaser's satisfaction) 
those items specified in Purchaser's Notice within five (5) calendar days of 
Seller's receipt of Purchaser's Notice and Purchaser does not give written 
notice to Seller of its intent to waive any matter so objected to within ten 
(10) calendar days of the expiration of the Inspection Period, this Agreement 
shall terminate and the Title Company shall return the Earnest Money Deposit 
and all interest earned thereon to Purchaser.  

            (b)     CONDITIONS PRECEDENT TO CLOSING. Prior to Closing, 
Purchaser shall have obtained all approvals, consents and permits, and 
entered into such third party agreements as Purchaser deems necessary in its 
sole and absolute discretion (collectively, the "Approvals"), including, but 
not limited to:  (i) those permits and approvals as required by the 
Commission, Historical Architectural Review Committee of the City of Black 
Hawk, Gilpin County, the Colorado Department of Revenue, and all other state 
and local regulatory authorities to expand Purchaser's existing casino to 
physically connect with and 

                                      23
<PAGE>

include the Business and the Property and its operation of the Business and 
to amend and/or expand its liquor license and gaming license and all other 
required permits and licenses in connection therewith; (ii) those approvals 
from, and third-party agreements with, the lessors under the Leases of real 
property in such form and as to such matters as Purchaser in its sole 
discretion determines is necessary, (iii) those approvals from, and 
third-party agreement with, the lessors of Purchaser's existing casino 
adjacent to the Property to authorize Purchaser to physically connect 
Purchaser's existing casino with the Property so that the two operations are 
conducted as one; (iv) those consents from and agreements with IGT and all 
other lenders' agreements to permit the transfer of Purchaser's Gaming 
Devices to it and to restructure or refinance the Purchaser's Gaming Device 
Debt; and (v) those approvals required to be obtained from Purchaser's 
bondholders and senior lenders to authorize the transaction contemplated by 
this Agreement and to provide such financing as Purchaser may require.

            (c)     TAX CLEARANCES.  Seller shall have received all 
appropriate tax clearances so that Purchaser can be assured it will not be 
involuntarily assuming any liabilities for Taxes of Seller.

            (d)     ABSENCE OF LITIGATION.  No litigation or administrative 
or similar proceeding shall have been brought or threatened to prevent, 
impede or contest the contemplated transaction.

                                      24
<PAGE>

            (e)     NO MATERIAL ADVERSE CHANGE.  There shall have been no 
material adverse change in the Business, condition, or prospects of the 
Business since the execution of this Agreement, including but not limited to 
any defaults by Seller under the Leases or under the Purchaser's Gaming 
Device Debt.

            (f)     TRUTH OF WARRANTIES.  The representations and warranties 
made by Seller in this Agreement shall be true when given and as of the 
Closing.

7.   INDEMNITY.

     7.1    INDEMNITY OF PURCHASER.  Seller shall indemnify, hold harmless 
and defend Purchaser from and against any and all losses, costs, expenses, 
liabilities, claims, demands and judgments of every nature (including 
reasonable attorneys' fees and costs) (collectively, "Claims") arising out of 
or in connection with:  (i) all claims, losses, costs, expenses, agreements, 
liabilities and obligations of Seller or of the Business arising from the 
operation of the Business prior to the Closing Date, whether or not disclosed 
in this Agreement or on the exhibits or schedules hereto; (ii) the breach by 
Seller of any warranty or representation made by Seller pursuant to this 
Agreement; (iii) any pending criminal or regulatory agency investigation, 
charges or proceedings involving the Seller, the Business or the Premises; 
(iv) any failure of Seller to comply with the WARN Act; (v) all claims by 
employees of Seller or the Business arising in connection with their 
employment in the Business or by Seller; (vi) failure to pay and satisfy in 
full 

                                      25
<PAGE>

all Seller's accounts payable as and when they become due; or (vii) the 
non-performance, partial or total, of any covenant made by Seller pursuant to 
this Agreement.

     7.2    INDEMNITY OF SELLER.  Purchaser shall indemnify and hold Seller 
harmless from and against any and all Claims arising out of or in connection 
with:  (i) the breach by Purchaser of any warranty or representation made by 
Purchaser pursuant to this Agreement; or (ii) the non-performance, partial or 
total, of any covenant made by Purchaser pursuant to this Agreement.

     7.3    NOTICE OF CLAIMS -- PARTICIPATION IN THIRD PARTY SUITS.  Any 
party making a claim for indemnity under this Section 7 ("Indemnitee") 
against the other party ("Indemnitor") shall give notice of such claim in 
writing, which notice shall state in general terms the facts upon which 
Indemnitee makes such claim for indemnification together with reasonable 
documentation of such claim. In the event of any claim or demand asserted 
against Indemnitee by a third party upon which Indemnitee may claim 
indemnification under this Section 7, Indemnitee shall give Indemnitor 
written notice within 15 days after receipt thereof indicating whether 
Indemnitee intends to conduct the defense of such claim or demand.  
Indemnitor shall have the right, at such Indemnitor's own expense, to 
participate in such defense, by written notice given to Indemnitee within 15 
days from the date of Indemnitee's notice of such claim.  If Indemnitee 
conducts the defense and Indemnitor does not participate in such defense, 
Indemnitee shall have the right to fully control and to settle 

                                      26
<PAGE>

the proceeding.  If Indemnitor elects to participate in such defense, 
Indemnitee shall nonetheless control the proceeding, but shall not settle the 
same without the consent of Indemnitor, which consent shall not be 
unreasonably withheld.  If Indemnitee elects not to conduct the defense, 
Indemnitor shall conduct such defense and Indemnitor shall not settle the 
same without the consent of Indemnitee, which consent shall not be 
unreasonably withheld.

8.   DEFAULT.

     8.1    PURCHASER'S DEFAULT.  In the event of Purchaser's default, the 
Earnest Money Deposit shall be forfeited by Purchaser and retained on behalf 
of Seller and both parties shall thereafter be released from all obligations 
hereunder.  It is agreed that the Earnest Money Deposit is liquidated damages 
since actual damages would be difficult if not impossible to ascertain and 
the Earnest Money Deposit is Seller's sole and exclusive remedy for 
Purchaser's default hereunder.

     8.2    SELLER'S DEFAULT.  If Seller is in default, Purchaser may elect 
to treat this contract as cancelled, in which case all payments and things of 
value received hereunder shall be returned and Purchaser may receive such 
damages as may be proper or Purchaser may elect to treat this Agreement as 
being in full force and effect and Purchaser shall have the right to specific 
performance or damages, or both.

9.   MISCELLANEOUS PROVISIONS.

                                      27
<PAGE>

     9.1    CONFIDENTIALITY.  The parties acknowledge and agree that as to 
the Business there exists proprietary and confidential information, including 
but not limited to information concerning employees; supplier lists; customer 
lists; information concerning the particular needs, requirements and desires 
of customers; product information; market and industry information; pricing 
and cost information; trade secrets; financial information including 
projections, forecasts and budgets; and other confidential knowledge and 
proprietary information, which derives economic value, actual or potential, 
from not being generally known to the public (the "Confidential 
Information").  Seller agrees to treat such Confidential Information as 
confidential and proprietary, whether before or after the Closing, and to not 
use or disclose the Confidential Information to any firm or entity 
whatsoever.  In the event that the transactions contemplated by this 
Agreement are not consummated, Purchaser agrees to similarly treat the 
Confidential Information and to not use or disclose the Confidential 
Information to any person or entity except Purchaser's duly authorized 
representatives for any purpose or reason whatsoever.

     9.2    ASSIGNMENT.  Purchaser shall have the right to assign this 
Agreement to an affiliate of Purchaser.

     9.3    EXPENSES; TAXES.  Each party shall bear its own expenses, 
including attorneys', accountants', brokers' and finders' fees incident to 
the preparation, negotiation, execution and delivery of this Agreement and 
the performance of the 

                                      28
<PAGE>

transactions contemplated hereby.  Purchaser shall pay the sales or use taxes 
which are due as a result of the transactions contemplated hereby.

     9.4    SCHEDULES AND EXHIBITS.  All references in this Agreement to 
schedules and exhibits refer to those schedules and exhibits which are 
attached hereto, all of which are made a part hereof and incorporated herein 
by reference.  

     9.5    SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and 
shall inure to the benefit of the parties hereto and their respective 
successors and assigns. 

     9.6    NOTICES.  All notices which are required or may be given pursuant 
to the terms of this Agreement shall be in writing and shall be delivered 
personally or by registered or certified mail, postage prepaid, or sent by 
overnight delivery service as follows:

     IF TO PURCHASER:              COLORADO GAMING & ENTERTAINMENT CO.
                                   12596 W. BAYAUD AVENUE, SUITE 450
                                   LAKEWOOD, COLORADO  80228
                                   ATTENTION:  ALAN L. MAYER, ESQ.

     WITH A COPY TO:               SANDY G. NYHOLM, ESQ.
                                   ISAACSON, ROSENBAUM, WOODS & LEVY, P.C.
                                   633 17TH STREET, SUITE 2200
                                   DENVER, COLORADO  80202

     IF TO SELLER:                 PIONEER ASSOCIATES LIMITED
                                     LIABILITY COMPANY
                                   125 GREGORY
                                   P.O. BOX 484
                                   BLACK HAWK, COLORADO 80422
                                   ATTENTION:MR. DAVID DOUGLASS
     
     WITH A COPY TO:               ROBERT FRENCH, ESQ.
                                   FRENCH, WEST, BROWN & HUNTLEY
                                   P.O. BOX 588
                                   BRECKENRIDGE, COLORADO  

                                      29
<PAGE>

     AND TO:                       TAD GOODENBOUR
                                   GRANT THORTON LLC
                                   90 S. CASCADE # 1200
                                   COLORADO SPRINGS, COLORADO 80903

Any of the addressees set forth above may be changed from time to time by 
written notice from the party requesting the change.  Such notices and other 
communications shall for all purposes of this Agreement be treated as being 
effective immediately if delivered personally, or three (3) days after 
mailing by certified or registered mail, return receipt requested, first 
class postage prepaid, or one (1) day after deposit for delivery by an 
overnight delivery service.

     9.7    PUBLICITY.  No public announcement of the transactions 
contemplated hereby prior to the Closing Date or the terms hereof shall be 
made by any party to this Agreement at any time without the prior written 
consent of the other parties, such consent not to be unreasonably withheld or 
delayed unless any announcement or notification shall be required by law in 
the opinion of counsel to the Purchaser or counsel to the Seller.

     9.8    AMENDMENTS AND WAIVERS.  Any amendment or waiver of any provision 
of this Agreement shall not be effective unless in writing and signed by the 
party against whom enforcement of such amendment or waiver is sought.  No 
failure or delay by either party in exercising any right, power or remedy 
with respect to any of the provisions of this Agreement shall operate as a 
waiver of such provisions with respect to such occurrences.

     9.9    GOVERNING LAW; MEDIATION; ARBITRATION.  This Agreement shall be 
governed by and construed in accordance with Colorado 

                                      30
<PAGE>

law as applied to contracts entirely entered into, executed and performed 
within said state.  In the event of any controversy or claim between the 
parties arising out of this Agreement and the parties being unable to resolve 
the dispute after good faith discussion and negotiation between themselves 
(with or without the assistance of counsel as they deem appropriate), the 
parties agree to submit such controversy or claim to an independent mediator 
to mediate such controversy or claim and structure a mutually satisfactory 
resolution of the same.  In the event that the parties are unable to 
structure such a mutually satisfactory resolution through mediation, the 
parties agree to submit the matter to final and binding arbitration by the 
American Arbitration Association under the Commercial Arbitration Rules.  The 
arbitrator shall be appointed in accordance with the Commercial Arbitration 
Rules.  Such arbitration shall be the sole remedy available to the parties in 
the event of such controversy or claim.  The arbitration shall be held in 
Denver, Colorado.  The results of the arbitration shall be final and binding 
on the parties.  The prevailing party in the arbitration shall be entitled to 
receive from the other party all fees, costs and expenses of counsel in such 
arbitration and judgment on the award rendered by the arbitrator(s) may be 
entered in any court having jurisdiction thereof.

     9.10   SECTION HEADINGS.  Section headings are for the convenience of 
the parties and shall not be used in the 

                                      31
<PAGE>

interpretation or construction of any provision of this Agreement.

     9.11   COOPERATION.  The parties agree that at any time and from time to 
time after the execution of this Agreement, whether before or after the 
Closing, they will, upon the request of any of the other, execute and deliver 
such further documents and do such further acts and things as are reasonably 
requested in order to effect fully the purposes of this Agreement.

     9.12   ATTORNEYS' FEES.  In the event of any dispute between the parties 
arising from or relating to this Agreement, the prevailing party in such 
dispute shall be entitled to recover its reasonable attorneys' fees and 
costs, in addition to all other recovery and relief.  

     9.13   PARTIAL INVALIDITY.  If any provision of this Agreement is held by
a court or other tribunal to be prohibited, invalid, void or unenforceable, such
provision shall be ineffective only to the extent of such prohibition and shall
not affect the validity of the remaining provisions hereof.

     9.14   ENTIRE AGREEMENT.  This Agreement supersedes any and all other 
agreements, either oral or written, between the parties hereto with respect 
to the subject matter hereof, including without limitation the Letter of 
Intent, and contains all of the covenants and agreements between the parties 
with respect to such subject matter.

                                      32
<PAGE>

     9.15   COUNTERPARTS.  This Agreement may be executed in counterparts, 
each of which shall be deemed an original and all of which together shall 
constitute a single instrument.  This Agreement may be executed with 
telecopied signatures, which will have the same legal effect as original 
signatures.















                                      33
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the 
dates set forth below to be effective as of the date first above written.

                                              SELLER:

Date:  12-10-97                               PIONEER ASSOCIATES LIMITED
     -----------------------------            LIABILITY COMPANY, a Nevada
                                              Limited Liability Company


                                              By: /s/ David Douglas
                                                 ---------------------------
                                              Title: President
                                                    ------------------------


                                              PURCHASER:

Date:                                         COLORADO GAMING &
     -----------------------------            ENTERTAINMENT CO., a Delaware
                                              corporation


                                              By: /s/ Stephen J. Szapor, Jr.
                                                 ---------------------------
                                              Title: President
                                                    ------------------------

                                      34