Unassociated Document


    PARTNERSHIP INTEREST
PURCHASE AGREEMENT

    


    THIS
PARTNERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made
and entered into as of the 14th  day
of October, 2010, by and between Florida Gaming Centers, Inc., a Florida
corporation d/b/a Miami Jai Alai (“Seller”) and West
Flagler Associates, Ltd., a Florida limited partnership (“Purchaser”).

     

    RECITALS:

     

    A.           Seller
is engaged in the business of the operation of jai alai and related gaming
businesses, including cardroom and inter-track wagering operations, at the Miami
Jai Alai fronton and facility (the “Facility”) in Miami,
Florida, and Summer Jai Alai, a Florida general partnership (the “Company”) owns the
summer pari-mutuel permit (the “Summer Permit”) and
is authorized to conduct pari-mutuel wagering at the Facility during the summer
season from May 1st to
November 30th of each
year pursuant to Section 550.0745, Florida Statutes (2010).  Seller
owns the Facility and the winter pari-mutuel permit to conduct live gaming at
the Facility during the winter season (the “MJA
Permit”).  The Summer Permit operates at the Facility pursuant
to an Amended and Restated Permit Use Agreement dated as of September 30, 2010
(the “Use
Agreement”) between Seller and the Company, and the Lease Agreement dated
as of September 30, 2010 between Seller and the Company and the Memorandum of
Lease dated as of September 30, 2010 between Seller and the Company
(collectively, the “Lease
Agreement”).

     

    B.           Seller,
Purchaser and BKCLP 2, Ltd., a Florida limited partnership (“BKCLP 2”), entered
into that certain Amended and Restated General Partnership Agreement of Summer
Jai Alai dated as of December 12, 2007 (the “Partnership
Agreement”) setting forth the parties agreements, rights and obligations
with respect to the Company.

     

    C.           Seller
is the owner of twenty one percent (21%) of the total issued and outstanding
partnership interests in the Company, free and clear of any liens or
encumbrances, subject only to the rights and restrictions of the partners of the
Company that are set forth in the Partnership Agreement.

     

    D.           Seller
desires to sell and Purchaser desires to purchase, or designate one of its
Affiliates (the “Purchaser Affiliate”)
to purchase, all of Seller’s rights, title and interests in and to the Company,
including all of the Seller’s partnership interests in the Company and any and
all other rights, title and interests that Seller may have in and to the
Company, the Company’s assets, the Company’s business and the Summer Permit
(collectively, the “Interests”), for the
consideration and on the terms set forth in this Agreement.

     

    E.           Seller
and Purchaser desire to make certain representations, warranties and agreements
in accordance with the transactions contemplated in this Agreement.

     

    F.           Certain
terms used in this Agreement are defined in Section 6.1 hereof.

     

    NOW, THEREFORE, for and in
consideration of the foregoing premises and the representations, warranties and
agreements contained in this Agreement and other good and valuable
consideration, the receipt and adequacy of which are hereby conclusively
acknowledged, Seller and Purchaser, intending to be legally bound, agree as
follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.           PURCHASE AND SALE OF THE
INTERESTS; CLOSING.

     

    1.1           Purchase, Sale and Transfer
of Interests.  Subject to the terms of this Agreement, at the
Closing, Seller will sell, transfer, assign, convey and deliver to Purchaser or,
at Purchaser’s option, to Purchaser Affiliate, all of the Interests, including
all of Seller’s partnership interests in the Company (the “Seller’s Partnership
Interests”), which partnership interests consist of twenty one percent
(21%)  of the total issued and outstanding partnership interests in
the Company (the “Partnership
Interests”), free and clear of any and all Liens (subject only to the
rights and restrictions of the partners of the Company that are set forth in the
Partnership Agreement), and Purchaser or Purchaser Affiliate will purchase the
Interests from Seller.

     

    1.2           Consideration for Purchase
and Sale.  Subject to the terms of this Agreement, as
consideration to Seller for the sale, transfer, assignment, conveyance and
delivery of the Interests to Purchaser or Purchaser Affiliate at Closing,
Purchaser agrees to pay and/or assume, as applicable (or, at Purchaser’s option,
Purchaser Affiliate shall pay and/or assume, as applicable) the following at the
Closing:

     

    (a)           Cash
Consideration. Cash consideration in the amount of Two Million
Dollars ($2,000,000) (the “Cash Purchase
Price”), to be paid as follows:

     

    (i)           Seller
and Purchaser agree that Nine Hundred Sixty Three Thousand Dollars ($963,000) of
the Cash Purchase Price (the “Retention Amount”)
shall not be delivered to Seller but shall instead be delivered by Purchaser to
the Escrow Agent, to be held in an escrow account (the “Escrow Account”) by
the Escrow Agent in accordance with the Escrow Agreement among Seller, Purchaser
and the Escrow Agent substantially in the form attached as Exhibit A, as
security for Seller’s obligations hereunder to complete the Roof Repair (as such
term is defined below) and to be disbursed by the Escrow Agent to pay and/or
reimburse Seller for Seller’s Roof Repair Costs and/or Purchaser for Purchaser’s
Roof Repair Costs (as such terms are defined below), as applicable, in
accordance with the provisions of Section 1.10 and the terms of the Escrow
Agreement.

     

    (ii)           Subject
to the terms of this Agreement, the balance of the Cash Purchase Price, in the
amount of  One Million Thirty Seven Thousand Dollars ($1,037,000) (the
“Closing Date Cash
Payment”), less any Creditor Payments (as such term is defined below)
shall be delivered to Seller in accordance with Section 1.4(b) of this
Agreement.  Seller acknowledges and agrees that upon delivery of the
Retention Amount to the Escrow Agent as provided in Section 1.2(a)(i) and
delivery of the Closing Date Cash Payment (less any Creditor Payments) in
accordance with Section 1.4(b), Purchaser’s obligation to pay the Cash Purchase
Price shall be deemed completed and fully satisfied.

     

    (b)           Forgiveness and
Assumption.

     

    (i)           The
forgiveness by Purchaser of (i) the principal amount that Seller owes Purchaser
under that certain Promissory Note dated as of January 31, 2005 (the “Promissory Note”) by
Seller in favor of Purchaser and Calder Race Course, Inc., a Florida corporation
(“Calder”), and
(ii) interest accruing thereon to the date of the Closing (the “Purchaser Note
Liabilities”); and

     

    
      
        
        

      

      
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    (ii)           The
assumption by Purchaser of (i) Seller’s obligation to pay the principal amount
that Seller owes Calder under the Promissory Note, and (ii) interest accruing
thereon to the date of the Closing (the “Assumed Note
Liabilities”).  Except with respect to the Assumed Note
Liabilities, Purchaser will not assume or acquire, by virtue of the transactions
contemplated hereby, any Liabilities or obligations of Seller.

     

    1.3           Closing.  The
purchase and sale of the Interests provided for in this Agreement (the “Closing”) shall take
place at the offices of Purchaser's counsel, Gunster, Yoakley & Stewart,
P.A., at 2 South Biscayne Boulevard, Suite 3400, Miami, Florida
33131, simultaneously with the execution and delivery by the parties hereto
of this Agreement, or at such other time and place as the parties may agree in
writing.  The date and time as of which the Closing actually takes
place is herein referred to as the “Closing
Date”.

     

    1.4           Closing
Obligations.

     

    (a)           At
the Closing, Seller shall deliver to Purchaser or, at Purchaser’s option, to
Purchaser Affiliate:

     

     

    (i)           if
the Partnership Interests are represented by certificates, partnership
certificates representing the Seller’s Partnership Interests, accompanied by
executed stock power(s) in form and substance acceptable to Purchaser, endorsed
in blank by the

     

     

    Seller
and dated as of the Closing Date;

     

    (ii)           an
executed assignment of the Interests by Seller in favor of Purchaser or, at
Purchaser’s option, to Purchaser Affiliate, in the form attached to this
Agreement as Exhibit
B, dated as of the Closing Date (the “Assignment”) signed
by Seller;

     

     

    (iii)           an
executed Escrow Agreement, signed by Seller and the Escrow Agent dated as of the
Closing Date;

     

    (iv)           an
officer’s certificate of Seller, signed by the President or Vice President of
Seller and dated as of the Closing Date, (a) representing and warranting to
Purchaser and/or Purchaser Affiliate, as applicable, that each of Seller’s
representations and warranties in this Agreement is accurate in all respects as
of the Closing Date as if made on the Closing Date (but only if the Closing Date
does not occur on the date of the execution and delivery of this Agreement); and
(b) certifying to Purchaser and/or Purchaser Affiliate, as applicable, that all
of the covenants, agreements and obligations that Seller is required to perform
or to comply with pursuant to this Agreement or any of the Ancillary Agreements
at or prior to the Closing (considered collectively), and each of these
covenants, agreements and obligations (considered individually), shall have been
duly performed and complied with in all material respects;

     

    (v)           a
secretary’s certificate of Seller, signed by the Secretary or Assistant
Secretary of Seller and dated as of the Closing Date:

     

    (a)           certifying
and attaching all requisite, standing and effective resolutions or actions of
Seller's board of directors and shareholders approving the execution, delivery
and performance by Seller of this Agreement, the Ancillary Agreements and any
and all other agreements, certificates and documents that may be necessary or
required in connection with the transaction contemplated under this Agreement or
the Ancillary Agreements;

     

    
      
        
        

      

      
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    (b)           certifying
and attaching all requisite, standing and effective resolutions or actions of
the Company’s partners approving the execution, delivery and performance by the
Company of the Ancillary Agreements and any and all other agreements,
certificates and documents that may be necessary or required in connection with
the transaction contemplated under the Ancillary Agreements;

     

    (c)           certifying
as complete and accurate as of the Closing, attached copies of (i) Seller’s
articles of incorporation, as amended and as certified by the Secretary of State
of Florida, (ii) Seller’s bylaws and the Company’s partnership agreement, each
as amended, (iii) the Summer Permit, (iv) the MJA Permit, (v) the Company’s
Annual License to conduct pari-mutuel wagering during the 2010 - 2011 state
fiscal year (the “Summer License”), and
(vi) the Closing Balance Sheet and representing and warranting to Purchaser
and/or Purchaser Affiliate, as applicable, that the Closing Balance Sheet is
true and correct as of the Closing Date; and

     

    (d)           certifying
to the signatures and incumbency of the officers of Seller authorized to execute
and deliver this Agreement, the Ancillary Agreements and any and all other
agreements, certificates and documents that may be necessary or required in
connection with the transaction contemplated under this Agreement or the
Ancillary Agreements;

     

    (vi)           a
certificate of status of each of Seller and the Company issued by the Secretary
of State of Florida, each as of a date no earlier than five (5) Business Days
prior to the Closing Date;

     

    (vii)           to
the extent available, a certificate indicating payment of all corporation or
other franchise taxes by the Company, certified as of a date no earlier than
five (5) Business Days prior to the Closing Date by the appropriate taxing
Governmental Authorities;

     

    (viii)                      (a)
an opinion of Seller’s counsel, the law firm of Frost Brown Todd LLC, in the
form attached to this Agreement as Exhibit C-1 dated as
of the Closing Date (the “Seller’s Counsel’s
Opinion”); and (b) an opinion of Seller’s Florida counsel, the law firm
of Infante, Zumpano, Hudson & Miloch, LLC, in the form attached to this
Agreement as Exhibit
C-2 dated as of the Closing Date (the “Seller’s Florida Counsel’s
Opinion”);

     

    (ix)           executed
resignation letters in form and substance acceptable to Purchaser from each
manager, officer, and director of Seller with respect to any and all positions
that such Person may hold in the Company, each effective as of the Closing Date
(collectively, the “Resignation
Letters”);

     

    (x)           an
executed release in the form attached hereto as Exhibit D, with
appropriate insertions, signed by Seller in favor of the Company, Purchaser and
BKCLP 2, and dated as of the Closing Date (the “Seller Release”),
releasing the Company, Purchaser and BKCLP 2 from any and all Liabilities that
any of them may have to Seller as of the Closing Date (other than Liabilities to
Seller under the Use Agreement and the Lease Agreement), as more particularly
described therein;

     

    
      
        
        

      

      
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    (xi)           executed
releases, each in the form attached hereto as Exhibit E, with
appropriate insertions, signed by each manager, officer, and director of Seller
who may hold any positions in the Company, and dated as of the Closing Date (the
“Management
Releases” and collectively with the Assignment, the Assumption (as such
term is defined below), the Escrow Agreement and the Seller Release, the “Ancillary
Agreements”);

     

    (xii)           an
affidavit (the “FIRPTA
Affidavit”), signed by Seller, in the form required by the Treasury
Regulations issued pursuant to Section 1445 of the Code; and

     

    (xiii)                      such
other agreements, documents, instruments or certificates as shall be reasonably
requested by Purchaser and/or Purchaser Affiliate or their respective counsel
for the purpose of (i) evidencing the accuracy of Seller's representations and
warranties, (ii) evidencing the performance of or the compliance by Seller
with any agreement, covenant or obligation required to be performed or complied
with, (iii) evidencing the satisfaction of any condition referred to in
Section 1.5(a) of this Agreement, or (iv) otherwise facilitating the
consummation or performance of any of the transactions contemplated under this
Agreement or the Ancillary Agreements.

     

    (b)           At
the Closing, Purchaser shall deliver to Seller:

     

    (i)           the
Closing Date Cash Payment, less any and all amounts of Creditor Payments that
Purchaser may pay to the Closing Date Creditors (as such term is defined below)
pursuant to Section 1.7.  Seller hereby authorizes and approves the
payment and delivery by Purchaser of any and all Creditor Payments to the
Closing Date Creditors, and acknowledges and agrees that such Creditor Payments
shall be deducted from the amount of Closing Date Cash Payment that is payable
to Seller hereunder and payment of such Creditor Payments to the Closing Date
Creditors shall be deemed to constitute the payment, delivery and satisfaction
of that portion of the Closing Date Cash Payment that is otherwise payable to
Seller hereunder;

     

    (ii)           an
executed Escrow Agreement, signed by Purchaser and dated as of the Closing
Date;

     

    (iii)           such
other agreements, documents, instruments or certificates as shall be reasonably
requested by Seller or its counsel for the purpose of (i) evidencing the
accuracy of Purchaser's representations and warranties, (ii) evidencing the
performance of or the compliance by Purchaser with any agreement, covenant or
obligation required to be performed or complied with, (iii) evidencing the
satisfaction of any condition referred to in Section 1.5(b) of this Agreement,
(iv) evidencing Purchaser’s release of Seller from the Purchaser Note
Liabilities and the assumption of the Assumed Note Liabilities (the “Assumption”), or
(v) otherwise facilitating the consummation or performance of any of the
transactions contemplated under this Agreement or the Ancillary
Agreements.


    
      
        
        

      

      
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    1.5           Closing
Conditions.

     

    (a)           Purchaser's
obligation to purchase (or, at Purchaser’s option, to cause the Purchaser
Affiliate to purchase) the Interests and to take the other actions required to
be taken by Purchaser at the Closing, is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any of which may be
waived by Purchaser in whole or in part):

     

    (i)           All
of Seller's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually) including, without limitation, those in Section 3 hereof, shall
have been accurate in all respects as of the date of this Agreement, and shall
be accurate in all respects as of the Closing Date as if made on the Closing
Date.

     

    (ii)           All
of the agreements, covenants and obligations that Seller is required to perform
or to comply with pursuant to this Agreement or any of the Ancillary Agreements
at or prior to the Closing (considered collectively), and each of these
agreements, covenants and obligations (considered individually), shall have been
duly performed and complied with in all material respects.

     

    (iii)           There
shall have occurred no Material Adverse Change since June 30, 2010, nor any
event or development, which individually or together with other such events,
could be reasonably expected to result in such a Material Adverse Change, nor
any material change in the right or ability of the Company to operate (including
the right and ability to own and operate the Summer Permit and operate at the
Facility) after Closing in substantially the same nature as conducted during the
2009 - 2010 state fiscal year.

     

    (iv)           The
Company shall hold and own (of record and beneficially) the Summer Permit on the
Closing Date, free and clear of any Liens, other than the rights and
restrictions of the partners of the Company that are set forth in the
Partnership Agreement, the Lease Agreement, and the Use Agreement, and there
shall exist no events or circumstances as of the Closing Date that may result in
the termination, revocation or expiration of the Summer Permit.

     

    (v)           Each
agreement, instrument, certificate and document required to be delivered
pursuant to Section 1.4(a) shall have been delivered, and each of the other
agreements, covenants and obligations in Sections 1.6(a), 1.7, 1.8 and 1.9 shall
have been performed and complied with in all respects.  Each of
Seller’s Filings shall have been made.  Each of Seller’s Required
Consents shall have been obtained by Seller and shall be in full force and
effect.

     

    (vi)           There
shall not have been commenced or, to the knowledge of any party hereto,
threatened against Purchaser, Purchaser Affiliate or against any Person
affiliated with Purchaser, any Proceeding (a) involving any challenge to,
or seeking damages or other relief in connection with, any of the transactions
contemplated under this Agreement or any of the Ancillary Agreements, or
(b) that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated under this
Agreement or any of the Ancillary Agreements.

     

    
      
        
        

      

      
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    (vii)           There
shall not have been commenced or, to the knowledge of any party hereto,
threatened against the Company, Seller, Purchaser, Purchaser Affiliate or BKCLP
2, any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, that certain Petition for Declaratory Statement
which was filed by Purchaser with the Division on September 10, 2010 (the “Petition”), or
(b) that seeks to revoke, withdraw, suspend, cancel, terminate, or modify
the Summer Permit, the MJA Permit or the Summer License.

     

    (viii)          There
shall not have been made or, to the knowledge of any party hereto, threatened by
any Person any claim asserting that such Person (a) is the holder or the
beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, any Interests, any Partnership Interests, or any other voting,
equity, or ownership interest in, the Company (other than BKCLP 2 with respect
to the twenty seven percent (27%) Partnership Interest that it currently owns),
or (b) is entitled to all or any portion of the consideration
hereunder.

     

    (ix)           Neither
the consummation nor the performance of any of the transactions contemplated
under this Agreement or any of the Ancillary Agreements will, directly or
indirectly (with or without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause Purchaser,
Purchaser Affiliate, the Company or any Person affiliated with Purchaser or the
Company to suffer any material adverse consequence under, (a) any
applicable Law or Order, or (b) any Law or Order that has been published,
introduced, or otherwise proposed by or before any Governmental
Authority.

     

    (x)           As
of the Closing, there shall not be in effect any Law or any injunction or other
Order that prohibits the sale of the Interests by Seller to Purchaser (or
Purchaser Affiliate) or the purchase of the Interests by Purchaser (or Purchaser
Affiliate) from Seller that has been adopted or issued, or has otherwise become
effective, since the date of this Agreement.

     

    (xi)           As
of the Closing, the Company shall have no Liabilities.

     

    (xii)           Purchaser
shall have received from Seller a consolidated balance sheet of the Company
dated as of the Closing Date which shall be prepared in accordance with
generally accepted accounting procedures consistently applied (the "Closing Balance
Sheet"), which Closing Balance Sheet shall be satisfactory to Purchaser
in all respects, and which Closing Balance Sheet shall not show any Liabilities,
other than any Stated Liabilities, all of which shall be paid and satisfied by
Seller prior to the Closing.

     

    (b)           Seller's
obligation to sell and transfer the Interests and to take the other actions
required to be taken by Seller at the Closing, is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Seller in whole or in part):

     

    (i)           All
of Purchaser's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), shall have been accurate in all respects as of the date of this
Agreement and shall be accurate in all respects as of the Closing Date as if
made on the Closing Date.

     

    
      
        
        

      

      
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    (ii)           Each
agreement, instrument, certificate and document required to be delivered
pursuant to Section 1.4(b) shall have been delivered, and each of the other
agreements, covenants and obligations in Section 1.6(b) shall have been
performed and complied with in all respects.

     

    (iii)           As
of the Closing, there shall not be in effect any Law or any injunction or other
Order that prohibits the sale of the Interests by Seller to Purchaser or the
purchase of the Interests by Purchaser from Seller that has been adopted or
issued, or has otherwise become effective, since the date of this
Agreement.

     

    (iv)           There
shall not have been commenced or, to the knowledge of any party hereto,
threatened against Seller, or against any Person affiliated with Seller, any
Proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the transactions contemplated under this
Agreement or any of the Ancillary Agreements, or (b) that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with
any of the transactions contemplated under this Agreement or any of the
Ancillary Agreements.

     

    1.6           Consents and
Approvals.

     

    (a)           Seller
will promptly make any and all filings and registrations (collectively, the
“Seller’s
Filings”) required by applicable Law or Order to be made by it in order
to consummate the transactions contemplated under this Agreement and the
Ancillary Agreements and Seller will use its commercially reasonable efforts to
obtain all consents, waivers and approvals (collectively “Seller’s Required
Consents”) required under applicable Law, Order or Contract in order to
consummate the transactions contemplated under this Agreement and the Ancillary
Agreements, including any waiver by BKCLP 2 that may be required with respect to
any notification rights that it may have under the Partnership Agreement in
order to consummate the purchase and sale of the Interests and the other
transactions under this Agreement in less than Forty Five (45) days, and any
consents or approvals that BKCLP 2 may need to provide with respect to the
execution, delivery and performance by the Company of any of the Ancillary
Agreements to which it is listed as a party. Seller will cooperate with
Purchaser with respect to all of Purchaser’s Filings.

     

    (b)           Purchaser
will promptly make all filings and registrations (collectively, the “Purchaser’s Filings”)
required by applicable Law or Order to be made by it in order to consummate the
transactions contemplated under this Agreement and the Ancillary Agreements.
Purchaser will (i) cooperate with Seller with respect to all of Seller’s
Filings; and (ii) cooperate with Seller in obtaining all of Seller’s Required
Consents; provided that this Agreement will not require Purchaser to dispose of
or make any change in any portion of its business or to incur any other burden
to obtain any of Seller’s Required Consents.

     

    
      
        
        

      

      
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    1.7           Liabilities at Closing;
Discharge.  The Closing Balance Sheet shall not show any
Liabilities other than the Stated Liabilities.   Prior to the
Closing, Seller shall (or shall cause the Company to) request and deliver to the
Company, payoff and estoppel letters from the holders of any Indebtedness of the
Company (the “Closing
Date Creditors”), which letters will be delivered by the Company to
Purchaser, and shall contain payoff amounts, per diem interest, wire transfer
instructions and an agreement to deliver to the Company, upon full payment or
release of any such Indebtedness, UCC-3 termination statements, satisfactions of
mortgage or other appropriate releases and any original promissory notes or
other evidences of Indebtedness marked canceled.  On or prior to the
Closing, Seller shall pay to any and all Closing Date Creditors, including any
and all holders of Liens on any Assets, the amount (the “Creditor Payments”)
of any and all Indebtedness and Liabilities of the Company as of the Closing
Date, including all Stated Liabilities, so that (i) such Indebtedness is fully
paid, satisfied and discharged prior to the Closing, and (ii) any and all Liens
of such Closing Date Creditors on such Assets, as set forth in the Estoppels,
are fully released and satisfied.  Any and all Indebtedness of the
Company that is due or owing to Seller as of the Closing Date shall be fully
released and satisfied upon execution of the Seller Release at the
Closing.  At Purchaser’s option, Purchaser shall have the right to
deduct from the Closing Date Cash Payment, any amount of the Creditor Payments
and pay such Creditor Payments to the applicable Closing Date Creditors on
behalf of Seller.

     

    1.8           Bank Accounts and Other
Accounts.  At or prior to the Closing, Seller shall (and shall
cause the Company to take all such action that may be necessary or desirable in
order to close, as of the Closing Date, any and all checking, savings and other
accounts of the Company at any all of the Company’s banks, brokerage firms and
other depository institutions, except for those accounts that are expressly
agreed to by Purchaser to remain active (the “Active
Accounts”).  Purchaser shall cooperate with Seller by taking
all such partnership action that may be necessary or desirable in Purchaser’s
capacity as a partner of the Company in order for Seller to close such accounts
(other than any Active Accounts).  Seller shall (and shall cause
Company) to procure and complete from the applicable banks, brokerage firms and
other depository institutions such documents (including signature cards and
corporate resolutions) that are necessary to add or remove signatories to and
from the Active Accounts, and deliver such completed documents to Purchaser at
the Closing.  Seller shall cooperate with Purchaser to enable
Purchaser to add its representatives as signatories on the Active Accounts
effective as of the Closing Date.

     

    1.9           Company
Records.  On or prior to the Closing, Seller shall deliver to
Purchaser all copies of all Tax Returns, bank account statements, accounting
records and notes, corporate records and any other books and records and related
materials of the Company.


    
      
        
        

      

      
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    1.10           Roof
Repair. Commencing promptly after the Closing Date, Seller shall, at
Seller’s sole cost and expense (“Seller’s Roof Repair
Costs”), diligently repair and/or replace, as appropriate, in a good and
workmanlike manner and in accordance with all applicable Laws, rules and
regulations, the roof at the Facility (the “Roof”) so that Seller
can properly conduct jai alai operations at the Facility, including pursuant to
the Use Agreement (the “Roof
Repair”).  Seller’s Roof Repair Costs may be paid from the
Retention Amount in escrow in accordance with the terms hereof and the Escrow
Agreement.  In the event that no funds remain in escrow to pay any
part of Seller’s Roof Repair Costs, then Seller shall remain responsible to
diligently complete the Roof Repair and shall remain solely responsible for
Seller’s Roof Repair Costs.  Seller shall conduct the Roof Repair
pursuant to that certain agreement dated as of September 24, 2010 (the “Roof Repair
Contract”) between Seller and Florida Lemark Corporation (such repair
company, or such other roof repair company that is approved in writing by
Purchaser, is referred to herein as the “Roof Repair
Company”).  Seller shall be responsible for the costs to obtain
all permits, licenses and approvals necessary to perform and complete the Roof
Repair.  Purchaser shall have the right to reasonably monitor the Roof
Repair, including without limitation, the right to observe the repair
work.  Upon completion of the Roof Repair, or at such time that the
Roof Repair Company presents invoices for payment with respect to the Roof
Repair starting from the commencement of the Roof Repair, (i) Seller shall
submit invoices of the Roof Repair Company to Purchaser, and (ii) Seller shall
have the right to request the Escrow Agent for payment or reimbursement of
Seller’s Roof Repair Costs represented by such invoice(s) by providing a notice
to Escrow Agent and Purchaser, which notice shall set forth (a) the amount
sought to be released to pay or reimburse against such invoice(s)(which shall
not exceed the amount of the invoice(s)), and (b) the basis of such request,
making specific reference to this Section 1.10 and including such invoices
together with  description or reports of the repairs and/or
replacement conducted to the dates thereof.  Escrow Agent shall,
subject to the terms, conditions, procedures and limitations of the Escrow
Agreement, release funds to Seller in the amount of such invoice(s) in payment
of Seller’s Roof Repair Costs.  Seller shall promptly pay over to the
Roof Repair Company any and all payments that Seller receives from the Escrow
Agent with respect to such invoice(s).  In any event, Seller shall
complete the Roof Repair by December 31, 2010 (the “Roof Repair
Deadline”).  The Roof Repair shall be considered complete at
such time as the applicable Governmental Authority that has the authority to
issue a building permit for the Roof Repair completes all required inspections
and approves the Roof Repair.  In the event that the Roof or any part
thereof is not fully repaired and/or replaced, as appropriate, by the Roof
Repair Deadline in accordance with all applicable Laws, rules and regulations,
then Purchaser shall have the right (but not the obligation), without limiting
any other rights or remedies that Purchaser may have under this Agreement, the
Lease Agreement, the Use Agreement or under applicable law, to (i) cause any
Roof Repair Company to repair and/or replace, as appropriate, the Roof or any
part thereof, and (ii) from time to time, setoff against any amounts payable by
Purchaser to Seller and/or against the Retention Amount held under the Escrow
Agreement, any and all charges, fees, costs and expenses (including any
permitting fees and costs) incurred or required by Purchaser to cause any Roof
Repair Company to repair and/or replace, as appropriate, the Roof or any part
thereof (“Purchaser’s
Roof Repair Costs”).  Purchaser shall give written notice to
Seller and Escrow Agent of any claim for Purchaser’s Roof Repair Costs
hereunder, which notice shall set forth the amount of Purchaser’s Roof Repair
Costs.  Escrow Agent shall, subject to the terms, conditions,
procedures and limitations of the Escrow Agreement, release funds to Purchaser
in payment of Purchaser’s Roof Repair Costs.  Notwithstanding anything
contained in the Agreement, the Lease Agreement, the Use Agreement or the Escrow
Agreement to the contrary, any request for payment or set-off with respect to
any Purchaser Roof Repair Costs shall not be subject to contest or other
conditions under the Agreement, the Lease Agreement, the Use Agreement or the
Escrow Agreement, and shall be effected (and the Retention Amount thereof shall
be released to Purchaser) within five (5) days from the date such written notice
is delivered to Seller and/or the Escrow Agent.  Without limiting any
other rights or remedies available to Purchaser, Purchaser shall have the right
to set-off against any amounts that may be due or payable under the Lease
Agreement or the Use Agreement and any other amount due or payable by Purchaser,
any claim Purchaser may have against Seller in the event that Seller fails to
timely complete the roof Repair or otherwise breaches or fails to perform or
satisfy any of its obligations or liabilities under this Section 1.10, including
without limitation breaches of the standard of care and repair set forth
herein.

     

    
      
        
        

      

      
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    1.11           Post Closing Due
Diligence. In addition to the due diligence described in Paragraph 5
of the Letter of Intent, Purchaser and its Representative shall have the
non-exclusive right, at its sole cost and expense, to continue to conduct due
diligence of Miami Jai Alai, including the Facility and the MJA Permit, and
Seller after the Closing, including commissioning and/or conducting
architectural and engineering studies, in order to determine the cost and
feasibility of converting the Facility into a licensed slot machine facility
(the “Post-Closing
Diligence”).  The goal of the parties is to conclude the
Post-Closing Diligence by January 1, 2011.  Subject to the sale by
Seller of the Fort Pierce Jai Alai facility and subject to the results of the
Post-Closing Diligence, Seller and Purchaser will, as soon as practicable after
the Closing, commence and pursue non-exclusive discussions to structure a
transaction for the financing, management and/or operation of the slot machine
facility at Miami Jai Alai, including the MJA Permit and the Facility, by
Purchaser or its Affiliate(s) or the purchase of Miami Jai Alai, including,
without limitation, the MJA Permit and the Facility, by Purchaser or its
Affiliate(s).  The parties hereto acknowledge and agree that this
provision shall not be deemed to constitute an obligation on the part of either
of the parties hereto to enter into or consummate (or cause either party to
enter into or consummate, as applicable) any transaction on any particular terms
or within any particular time period, and, until and unless the parties agree to
the terms of and enter into a mutually acceptable definitive agreement regarding
such transaction, neither parties shall have any right to cause the other party
to enter into or consummate any such transaction.

     

    1.12           Further Assurances;
Post-Closing Cooperation.

     

    (a)           Subject
to the terms and conditions of this Agreement, at any time or from time to time
after the Closing, at Purchaser’s and/or the Company’s request and without
further consideration, Seller shall execute and deliver to Purchaser such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide
such materials and information and take such other actions as Purchaser and/or
the Company may reasonably deem necessary or desirable in order to effectively
transfer, convey and assign to Purchaser, or, at Purchaser’s option, Purchaser
Affiliate, and to confirm Purchaser’s, or, at Purchaser’s option, Purchaser
Affiliate’s title to, all of the Interests, and, to the full extent permitted by
applicable Law, to put Purchaser or, at Purchaser’s option, Purchaser Affiliate,
in actual possession and operating control of the Company and to assist
Purchaser and Purchaser Affiliate in exercising all rights with respect thereto,
and otherwise to fulfill Seller’s obligations under this Agreement and the
Ancillary Agreements.

     

    (b)           In
the event that any party hereto collects or receives, after the Closing, funds
belonging to any other party, the party receiving same shall promptly deliver
the amounts to the party entitled thereto, and the parties will cooperate to
minimize any such misdirected funds.

     

    2.           REPRESENTATIONS AND
WARRANTIES OF THE SELLER.

     

    2.1           Representations and
Warranties of Seller.  Seller represents and warrants to
Purchaser and Purchaser Affiliate as follows:

     

    (a)           The
Company has been conducted as a single purpose entity, has entered into no
Contracts other than the Use Agreement and the Lease Agreement, does not own any
real property, has no employees and has no Liabilities, Indebtedness or
obligations of any nature (whether known or unknown, accrued, absolute,
contingent or otherwise and whether or not required to be reflected in the
Company’s financial statements in accordance with generally accepted accounting
principles) other than the Stated Liabilities.


    
      
        
        

      

      
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    (b)           The
Company has good and marketable title to and is the record and beneficial owner
of the Summer Permit and the other Assets described on Schedule 2.1(b) subject
to no Liens other than, with respect to the Summer Permit, the rights and
restrictions of the partners of the Company that are set forth in the
Partnership Agreement, the Lease Agreement, and the Use Agreement.

     

    (c)           Except
as set forth on Schedule 2.1(c), Seller has good and marketable title to and is
the record and beneficial owner of the MJA Permit and the Facility, subject to
no Liens, other than, with respect to the Facility, Liens which individually or
in the aggregate with other such Liens do not materially impair the conduct of
the business at Miami Jai Alai or the ability of Seller to perform a “full
schedule of live racing or games” under the Summer Permit and the MJA Permit at
the Facility.

     

    (d)           Seller
is a corporation duly organized, validly existing, and in good standing under
the Laws of the State of Florida, with full power and authority to conduct its
business as it is now being conducted and to own or use the MJA Permit, the
Facility and the other properties and assets that it purports to own or
use.  Seller is duly qualified or licensed to conduct business and is
in good standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary.

     

    (e)           The
Company is a general partnership duly organized, validly existing, and in good
standing under the Laws of the State of Florida, with full power and authority
to conduct its business as it is now being conducted and to own or use the
Summer Permit, and the other properties and assets that it purports to own or
use.  The Company is duly qualified or licensed to conduct business
and is in good standing in each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary.

     

    (f)           Seller
has the power and authority to execute and deliver this Agreement and each
Ancillary Agreement to which it is a party, to perform its obligations hereunder
and thereunder, and to consummate the transactions contemplated hereby and
thereby.

     

    (g)           Upon
the execution and delivery by Seller of this Agreement and the Ancillary
Agreements, this Agreement and Ancillary Agreements will constitute the legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with their terms.

     

    (h)           The
Company does not own, directly or indirectly, any outstanding voting securities
of or other interests in, or control, any other corporation, partnership, joint
venture or other business entity.


    
      
        
        

      

      
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    (i)           Seller
is the legal and record beneficial owner of the Interests, including the
Seller’s Partnership Interests, with good and marketable title to such Interests
and free and clear of all Liens whatsoever (subject only to the rights and
restrictions of the partners of the Company that are set forth in the
Partnership Agreement).  Seller is the legal and record beneficial
owner of the Seller’s Partnership Interests, which constitute twenty one percent
(21%) of the total issued and outstanding Partnership Interests.  The
Seller’s Partnership Interests (i) have been duly authorized and validly issued
and are fully paid and nonassessable, (ii) were issued in compliance with all
applicable state and federal securities laws, (iii) were not issued in violation
of any preemptive rights or rights of first refusal, rights of first offer or
other similar rights, restrictions or Liens created by statute, or any Contract
rights or restrictions, and (iv) are not subject to preemptive rights, rights of
first refusal, rights of first offer or other similar rights, restrictions or
Liens created by statute, or any Contract to which the Company or Seller may be
bound, other than the rights and restrictions of the partners of the Company
that are set forth in the Partnership Agreement.  Seller has not
transferred or granted to any Person, and no other Person has (other than
Purchaser pursuant to this Agreement), any option, warrant, right, agreement or
commitment of any kind to acquire the Interests, including the Seller’s
Partnership Interests, or any part thereof. There are no proxies, voting rights
or other agreements or understandings with respect to the voting of the Seller’s
Partnership Interests, other than those that are set forth in the Partnership
Agreement.  Upon the occurrence of the Closing, Purchaser (or, at
Purchaser’s option, Purchaser Affiliate) will own the Interests, including the
Seller’s Partnership Interests, free and clear of any and all Liens whatsoever
(subject only to the rights and restrictions of the partners of the Company that
are set forth in the Partnership Agreement). No preemptive rights or rights of
first refusal arise by virtue of or in connection with the transactions
contemplated hereby.

     

    (j)           
Seller has not granted or issued to any Person, nor has Seller taken any action
to grant or issue to any Person, (i) any partnership interests, equity
securities or other voting securities of the Company, (ii) any securities of the
Company convertible into or exchangeable for partnership interests, equity
securities or voting securities of or interest in the Company, or (iii) any
options, warrants, subscription rights or other rights, agreements or
commitments of any kind to acquire from the Company, or that could require or
obligate the Company to issue or sell, any partnership interests, equity
securities, voting securities or securities convertible into or exchangeable for
any security of or interest in the Company.

     

    (k)           The
execution and delivery by Seller of this Agreement and the Ancillary Agreements
do not, and the consummation of the transactions contemplated thereby will not,
conflict with or result in a violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under (i) any provision of the
Company’s partnership agreement, as amended to date, or other organizational
documents, as applicable, (ii) any provision of Seller’s articles of
incorporation, bylaws or organizational documents, (iii) any loan or credit
Contract, note, mortgage, indenture, lease or other material Contract to which
Seller or the Company is a party, or (iv) any instrument, permit, license,
judgment, Order, decree, statute, Law, ordinance, rule or regulation applicable
to Seller or the Company or their respective properties or Assets.

     

    (l)           Except
for the notice to the Division that is required under Florida Statutes Section
550.054(12) regarding the consummation of the purchase and sale of the Interests
by Seller and Purchaser hereunder, the execution, delivery and performance by
Seller of this Agreement and/or the Ancillary Agreements and the consummation of
the purchase and sale of the Interests by Seller and/or the consummation of the
other transactions contemplated under this Agreement and/or the Ancillary
Agreements require no consent, approval, Order or authorization of, action by or
in respect of, or registration or filing with, any Governmental
Authority.

     

    
      
        
        

      

      
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    (m)           Except
for the notice to the Division that is required under Florida Statutes Section
550.054(12) regarding the consummation of the purchase and sale of the Interests
by Seller and Purchaser hereunder, the execution, delivery and performance by
the Company of any of the Ancillary Agreements and the consummation of the
transactions contemplated under the Ancillary Agreements require no consent,
approval, Order or authorization of, action by or in respect of, or registration
or filing with, any Governmental Authority.

     

    (n)           The
execution, delivery and performance of this Agreement and/or any of the
Ancillary Agreements and the consummation of the purchase and sale of the
Interests and/or the other transactions contemplated under this Agreement and/or
the Ancillary Agreements will not result in the creation of any claims, Liens,
charges, encumbrances, Indebtedness, security interests or other restrictions
whatsoever upon the Interests, the Summer Permit, the MJA Permit or any other
Asset of the Company or Seller.

     

    (o)           Except
as set forth in Schedule 2.1(o), there are no investigations, actions, suits or
other Proceedings pending or, to Seller’s knowledge, threatened against the
Company or Seller or against any officer, director, manager or partner thereof
(in such capacity) and, to Seller’s knowledge, no event has occurred or
circumstance exists that would reasonably be expected to give rise to or serve
as a basis for the commencement of any action, suit or proceeding against the
Company, Seller or any Assets or property thereof (including the Summer Permit
and the MJA Permit), or against any officer, director, manager or partner
thereof (in such capacity).  None of the Company, Seller nor, to
Seller’s knowledge, any of their respective officers, directors, managers or
partners (in such capacity) has received written or oral notice from any
Governmental Authority that it is the target of any investigation or Proceeding
by any Governmental Authority, nor is any such investigation or Proceeding
pending.

     

    (p)           Except
as set forth in Schedule 2.1(p), neither Seller nor, to Seller’s knowledge, the
Company has (i) made a general assignment for the benefit of its creditors, (ii)
admitted in writing its inability to pay its debts as they mature, (iii) had an
attachment, execution or other judicial seizure of any property interest which
remains in effect or (iv) taken, failed to take or submitted to any action
indicating a general inability to meet its financial obligations as they
accrue.  There is not pending any Proceeding seeking reorganization,
arrangement, adjustment, liquidation, dissolution or recomposition of Seller,
the Seller’s parent company or the Company or any of their Indebtedness under
any Law relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking appointment of a receiver, trustee, custodian or other similar official
for any of them or any of their respective shareholders or principals for all or
any substantial part of their respective property or assets.

     

    (q)           Seller
has delivered to Purchaser (i) a balance sheet of the Company as at December 31,
2009 (including the notes thereto, the “2009 Balance Sheet”),
and the related statements of income, changes in partners’ equity, and cash flow
for the fiscal year then ended, together with the report thereon of King &
Company, PSC, independent certified public accountants, including the notes
thereto, and (ii) an unaudited balance sheet of the Company as at September 30,
2010 (the “Interim
Balance Sheet”) and the related unaudited statements of income, changes
in partners’ equity, and cash flow for the nine (9) months then ended, including
the notes thereto.  Such financial statements and notes fairly present
the financial condition and the results of operations, changes in partners’
equity and cash flow of the Company as at the respective dates of and for the
periods referred to in such financial statements, all in accordance with
generally accepted accounting principles consistently applied.  The
financial statements referred to in this Section 2.1(q) reflect the consistent
application of such accounting principles throughout the periods
involved.  No financial statements of any Person are required by
generally accepted accounting principles to be included in the financial
statements of the Company.

     

    
      
        
        

      

      
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    (r)           Seller
has delivered to Purchaser Seller’s Annual Report Pursuant to the Uniform
Reporting System Prescribed for Pari-Mutuel Permit Holders, including a balance
sheet of Seller as at December 31, 2009 and the related statements of income,
changes in partners’ equity, and cash flow for the fiscal year then ended,
together with the report thereon of King & Company, PSC, independent
certified public accountants, including the notes thereto.  Such
financial statements and notes fairly present the financial condition and the
results of operations, changes in partners’ equity and cash flow of Seller as at
the date of and for the periods referred to in such financial statements, all in
accordance with generally accepted accounting principles consistently
applied.  The financial statements referred to in this Section 2.1(q)
reflect the consistent application of such accounting principles throughout the
periods involved.  No financial statements of any Person are required
by generally accepted accounting principles to be included in the financial
statements of Seller.

     

    (s)           The
books of account, minute books, and other records of the Company are complete
and correct in all material respects and have been maintained in accordance with
sound business practices, including the maintenance of an adequate system of
internal controls.  To Seller’s knowledge, the minute books of the
Company contain accurate and complete records of all meetings held of, and
partnership action taken by, the Company's partners and, to Seller’s knowledge,
no meeting of any such partners has been held for which minutes have not been
prepared and are not contained in such minute books.  At the Closing,
all of those books and records will be delivered to Purchaser.

     

    (t)           The
Assets are sufficient to enable the Company to conduct jai alai performances and
perform a “full schedule of live racing or games” under the Summer Permit at the
Facility after the Closing.

     

    (u)           Except
as set forth in Schedule 2.1(u), the Seller’s assets that Seller currently owns
are sufficient enable Seller to conduct jai alai performances and perform a
“full schedule of live racing or games” under each of the MJA Permit and the
Summer Permit at the Facility after the Closing.

     

    (v)           The
Company does not have any Liabilities of any nature except for the Liabilities
reflected or reserved against in the 2009 Balance Sheet and current Liabilities
incurred in the ordinary course of business consistent with the past practices
since the date of the 2009 Balance Sheet thereof.

     

    
      
        
        

      

      
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    (w)           Except
as set forth in Schedule 2.1(w), since the date of the 2009 Balance Sheet, there
has not been any change, event or effect that is materially adverse to (i) the
business, operations, properties, assets, prospects, or condition of the Company
or the Seller, as applicable, or any Asset, the Summer Permit, the MJA Permit,
the Liabilities or the Stated Liabilities, or (ii) the ability of Seller to
perform its obligations under this Agreement or to consummate the transactions
contemplated by this Agreement (“Material Adverse
Change”), and no event has occurred or circumstance exists that may
result in such a Material Adverse Change.

     

    (x)

     

    (i)           Each
of the Company and Seller is, and at all times since December 31, 2009, has
been, in material compliance with each Law that is or was applicable to it or to
the conduct or operation of its business or the ownership or use of any of its
assets.

     

    (ii)           No
event has occurred or, to Seller’s knowledge, circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in a violation by
the Company or Seller of, or a failure on the part of the Company or Seller to
comply with, any Law, or (B) may give rise to any obligation on the part of the
Company or Seller to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature.

     

    (iii)           Neither
Seller nor the Company has received, at any time since December 31, 2009, any
notice or other communication (whether oral or written) from any Governmental
Authority or any other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Law which has had or
may result in, individually or in the aggregate, a Material Adverse Change, or
(B) any actual, alleged, possible, or potential obligation on the part of the
Company or the Owner to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature, which has had or may result in,
individually or in the aggregate, a Material Adverse Change.

     

    (y)           Schedule
2.1(y) contains a complete and accurate list of each license, authorization and
permit that is held by the Company or that relates to the business of, or to any
of the assets owned or used by, the Company, including the Summer
Permit.  The Summer Permit and each other  license,
authorization and permit listed or required to be listed in Schedule 2.1(y) is
active, valid and in full force and effect.  Except as set forth in
Schedule 2.1(y):

     

    (i)           the
Company is, and at all times since July 1, 2007, has been, in full compliance
with all of the terms and requirements of the Summer Permit and each
other  license, authorization and permit identified or required to be
identified in Schedule 2.1(y), and each such license, authorization and permit
(including the Summer Permit) is not subject to the satisfaction of any
condition that has not been satisfied or waived;

     

    (ii)           no
event has occurred or, to Seller’s knowledge, circumstance exists that may (with
or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of the Summer Permit or any other license, authorization and permit listed or
required to be listed in Schedule 2.1(y), or (B) result directly or indirectly
in the revocation, withdrawal, suspension, cancellation, or termination of, or
any modification to, the Summer Permit or any other license, authorization and
permit listed or required to be listed in Schedule 2.1(y);

     

    
      
        
        

      

      
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    (iii)           neither
Seller nor the Company has received, at any time since July 1, 2007, any notice
or other communication (whether oral or written) from any Governmental Authority
or any other Person regarding (A) any actual, alleged, possible, or potential
violation of or failure to comply with any term or requirement of the Summer
Permit or any other license, authorization or permit listed or required to
be listed in Schedule 2.1(y) which has had or may result in, individually
or in the aggregate, a Material Adverse Change, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to the Summer Permit or any license,
authorization or permit;

     

    (iv)           no
Proceeding is pending or, to Seller’s knowledge, threatened against the Company
or Seller that seeks to revoke, withdraw, suspend, cancel, terminate, or modify
the Summer Permit or the Summer License;

     

    (v)           all
reports, registrations, applications, filings and fees required to have been
delivered, registered, filed or paid under applicable Law with respect the
Summer Permit and the other licenses, authorizations and permits listed or
required to be listed in Schedule 2.1(y), including all reports, registrations,
applications, filings and fees required to have been delivered, registered,
filed or paid for the maintenance, continuation and renewal of the Summer Permit
and the other licenses, authorizations and permits listed or required to be
listed in Schedule 2.1(y) have been duly delivered, registered, filed and paid
on a timely basis with the Division and all other appropriate Governmental
Authorities, and all other reports, registrations, applications, filings and
payments required to have been made with respect to the Summer Permit and such
licenses, authorizations and permits have been duly delivered, registered, filed
and paid on a timely basis with the Division and all other appropriate
Governmental Authorities;

     

    (vi)           Seller
and the Company have conducted a “full schedule of live racing or games” (as
such term is defined in Section 550.002(11), Florida Statutes) under the Summer
Permit during each of the 2007-2008, 2008-2009, and 2009-2010 state fiscal
years; and

     

    (vii)           the
Summer Permit and the other licenses, authorizations and permits listed in
Schedule 2.1(y) collectively constitute all of the licenses, authorizations and
permits necessary to permit the Company to lawfully conduct and operate its
business in the manner it currently conducts and operates such business and to
permit the Company to own and use its assets in the manner in which it currently
owns and uses such assets.

     

    (z)           Schedule
2.1(z) contains a complete and accurate list of each license, authorization and
permit that is held by Seller or that otherwise relates to the business of, or
to any of the assets owned or used by, Seller, including the MJA
Permit.  The MJA Permit and each other  license,
authorization and permit listed or required to be listed in Schedule 2.1(z) is
valid and in full force and effect.  Except as set forth in Schedule
2.1(z):

     

    (i)           Seller
is, and at all times since July 1, 2007, has been, in full compliance with all
of the terms and requirements of the MJA Permit and each
other  license, authorization and permit identified or required to be
identified in Schedule 2.1(z), and each such license, authorization and permit
(including the MJA Permit) is not subject to the satisfaction of any condition
that has not been satisfied or waived;

     

    
      
        
        

      

      
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    (ii)           no
event has occurred or, to Seller’s knowledge, circumstance exists that may (with
or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of the MJA Permit or any other license, authorization and permit listed or
required to be listed in Schedule 2.1(z) which has had or may result in,
individually or in the aggregate, a Material Adverse Change, or (B) result
directly or indirectly in the revocation, withdrawal, suspension, cancellation,
or termination of, or any modification to, the MJA Permit or any other license,
authorization and permit listed or required to be listed in Schedule
2.1(z);

     

    (iii)           Seller
has not received, at any time since July 1, 2007, any notice or other
communication (whether oral or written) from any Governmental Authority or any
other Person regarding (A) any actual, alleged, possible, or potential violation
of or failure to comply with any term or requirement of the MJA Permit or any
other license, authorization or permit, or (B) any actual, proposed, possible,
or potential revocation, withdrawal, suspension, cancellation, termination of,
or modification to the MJA Permit or any license, authorization or
permit;

     

    (iv)           no
Proceeding is pending or, to Seller’s knowledge, threatened against Seller that
seeks to revoke, withdraw, suspend, cancel, terminate, or modify the MJA
Permit;

     

    (v)           all
reports, registrations, applications, filings and fees required to have been
delivered, registered, filed or paid under applicable Law with respect the MJA
Permit and the other licenses, authorizations and permits listed or required to
be listed in Schedule 2.1(z), including all reports, registrations,
applications, filings and fees required to have been delivered, registered,
filed or paid for the maintenance, continuation and renewal of the MJA Permit
and the other licenses, authorizations and permits listed or required to be
listed in Schedule 2.1(z) have been duly delivered, registered, filed and paid
on a timely basis with the Division and all other appropriate Governmental
Authorities, and all other reports, registrations, applications, filings and
payments required to have been made with respect to the MJA Permit and such
licenses, authorizations and permits have been duly delivered, registered, filed
and paid on a timely basis with the Division and all other appropriate
Governmental Authorities;

     

    (vi)           Seller
has conducted a “full schedule of live racing or games” (as such term is defined
in Section 550.002(11), Florida Statutes) under the MJA Permit during each of
the 2007-2008, 2008-2009, and 2009-2010 state fiscal years;

     

    (vii)           the
MJA Permit and the other licenses, authorizations and permits listed in Schedule
2.1(z) collectively constitute all of the licenses, authorizations and permits
necessary to permit Seller to lawfully conduct and operate its business in the
manner it currently conducts and operates such business and to permit Seller to
own and use its assets in the manner in which it currently owns and uses such
assets.

     

    
      
        
        

      

      
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    (aa)           Schedule
2.1(aa) contains a complete and accurate list, and Seller has delivered to
Purchaser true and complete copies, of each Contract (a) under which the Company
has or may acquire any rights, (b) under which the Company has or may become
subject to any obligation or Liability, (c) by which the Company or any of the
assets owned or used by it is or may become bound, or (d) under which Seller
operates or conducts (or which is required for Seller to operate or conduct) jai
alai performances under the Summer Permit at the Facility.  Except as
set forth in Schedule 2.1(aa):

     

    (i)           neither
Seller nor any Affiliate of Seller has nor may acquire any rights under, and
neither Seller nor any Affiliate of Seller has nor may become subject to any
Liability under, any Contract that relates to the business of, or any of the
assets owned or used by, the Company, other than the Use Agreement and the Lease
Agreement, in each case, in Seller’s capacity as a contract party to each such
Contract;

     

    (ii)           each
Contract identified or required to be identified in Schedule 2.1(z) is in full
force and effect and is valid and enforceable in accordance with its
terms;

     

    (iii)           the
Company and Seller, as applicable, are, and at all times since December 31,
2009, have been, in material compliance with all applicable terms and
requirements of each Contract identified or required to be identified in
Schedule 2.1(aa);

     

    (iv)           each
other Person that has or had any Liability under any Contract identified or
required to be identified in Schedule 2.1(aa) is, and at all times since
December 31, 2009, has been, in material compliance with all applicable terms
and requirements of such Contract;

     

    (v)           to
Seller’s knowledge, no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give Seller, the Company or other Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Contract identified or
required to be identified in Schedule 2.1(aa); and

     

    (vi)           neither
Seller nor the Company has given to nor received from any other Person, at any
time since December 31, 2009, any notice or other communication (whether oral or
written) regarding any actual, alleged, possible, or potential violation or
breach of, or default under, any Contract identified or required to be
identified in Schedule 2.1(aa);

     

    (vii)           there
are no renegotiations of, attempts to renegotiate, or outstanding rights to
renegotiate any material amounts paid or payable to the Company under current or
completed Contracts with any Person and no such Person has made written demand
for such renegotiation;

     

    (viii)                      The
Contracts relating to the sale or provision of products or services by the
Company and such other Contracts under which Seller operates or conducts (or
which is required for Seller to operate or conduct) jai alai performances under
the Summer Permit at the Facility have been entered into in the ordinary course
of business consistent with past practices and have been entered into without
the commission of any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Law.

     

    
      
        
        

      

      
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    (bb)           None
of the events or circumstances that are described in Sections 1.5(a)(iii),
1.5(a)(iv), 1.5(a)(vi), 1.5(a)(vii), 1.5(a)(viii), 1.5(a)(ix) or 1.5(a)(x) has
occurred or is pending or continuing as of the date hereof.

     

    (cc)           With
respect to any and all Taxes:

     

    (i)           the
Company has been treated as a partnership for federal, state and local income
tax purposes since its formation and has never elected nor, to Seller’s
knowledge, have its partners elected, to have the Company treated as a
corporation for federal, state or local income tax purposes.

     

    (ii)           the
Company has filed all Tax Returns that it was required to file under applicable
laws and regulations.  All such Tax Returns were correct and complete
in all respects and have been prepared in substantial compliance with all
applicable laws and regulations. All Taxes due and owing by the Company (whether
or not shown on any Tax Return) have been paid. The Company currently is not the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by an authority in a jurisdiction where the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and
payable) upon any of the Assets of the Company.

     

    (iii)           Seller
has filed all Tax Returns that Seller was required to file in a manner
consistent with the Tax Returns of the Company.  All of the Tax
Returns of Seller were correct and complete in all respects with respect to all
items of income, gain, loss, deduction, or credit of the Company.

     

    (iv)           the
Company has withheld and paid all Taxes required to have been withheld and paid
in connection with any amounts paid or owing to any employee, independent
contractor, creditor, partner, or other third party.

     

    (v)           Neither
Seller nor, to Seller’s knowledge, any partner, manager or officer (or employee
responsible for Tax matters) of the Company expects any authority to assess any
additional Taxes for any period for which Tax Returns have been filed. No
foreign, federal, state, or local tax audits or administrative or judicial Tax
proceedings are pending or being conducted with respect to the
Company.  The Company has not received from any foreign, federal,
state, or local taxing authority (including jurisdictions where the Company has
not filed Tax Returns) any (i) notice indicating an intent to open an audit or
other review, (ii) request for information related to Tax matters, or (iii)
notice of deficiency or proposed adjustment for any amount of Tax proposed,
asserted, or assessed by any taxing authority against the Company. Schedule 2.1(cc)
attached hereto lists all federal, state, local, and foreign income Tax Returns
filed with respect to the Company for taxable period ended during the year
2009.  Seller has delivered to Purchaser correct and complete copies
of all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Company (or Seller by virtue
of an allocation of any items or items of income, gain, loss, deduction, or
credit of the Company) filed or received for the year 2009.

     

    
      
        
        

      

      
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    (vi)           The
Company has not waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or
deficiency.

     

    (vii)           The
Company has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code §6662.

     

    (viii)                      The
Company will not be required to include any item of income, or exclude any item
of deduction from ordinary income or loss (or portion thereof) for any taxable
period (or portion thereof) ending after the Closing Date as a result of any:
(i) change in method of accounting for a taxable period ending on or prior to
the Initial Closing Date; (ii) “closing agreement” as described in Code §7121
(or any corresponding or similar provision of state, local or foreign income Tax
law) executed on or prior to the Closing Date; (iii) installment sale or open
transaction disposition made on or prior to the Closing Date; or (iv) prepaid
amount received on or prior to the Closing Date.

     

    (ix)           Without
the prior written consent of Purchaser, neither the Company nor Seller shall
make or change any election, change an annual accounting period, adopt or change
any accounting method, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment relating to the Company, surrender
any right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to the
Company, or take any other similar action relating to the filing of any Tax
Return or the payment of any Tax, if such election, adoption, change, amendment,
agreement, settlement, surrender, consent or other action would have the effect
of increasing the Tax Liability of the Company or Purchaser or Purchaser
Affiliate for any period ending after the Closing Date or decreasing any Tax
attribute of the Company existing on the Closing Date.

     

    (x)           Seller
is not a "foreign person" within the meaning of Code Section 1445 and it will
furnish Purchaser with an executed FIRPTA Affidavit.

     

    (dd)           With
respect to the Facility and the business conducted at the Facility:

     

    (i)           All
of the real property used in connection with the business at Miami Jai Alai is
owned by Seller.  Seller has good and marketable fee simple title to
the Facility, free and clear of all Liens other than Liens which individually or
in the aggregate with other such Liens do not materially impair the conduct of
the business at Miami Jai Alai or the ability of Seller to perform a “full
schedule of live racing or games” under the Summer Permit and the MJA Permit at
the Facility.  Seller does not share the Facility or the use or
operation thereof with any other Person other than the Company, and there no
Contracts in force or proposed for any such sharing
arrangement.  Seller shall not take any action that would interfere
with the conduct of a “full schedule of live racing or games” under the Summer
Permit at the Facility.  The Facility does not rely on any other real
property for vehicular or pedestrian ingress or egress to and from the Facility
(other than public roads and thoroughfares) and the Facility does not rely on
any other real property for parking or other easements or rights of
way.  To the best knowledge of Seller, neither the Facility or the
improvements or the use thereof, contravenes or violates any building,
administrative, environmental, zoning, other land use, occupational safety and
health or other applicable Law in any material respect in any manner as would be
reasonably likely to cause a Material Adverse Change.

     

    
      
        
        

      

      
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    (ii)           Except
with respect to the Roof, the improvements on the Facility are in operating
condition and in a state of operable maintenance and repair, ordinary wear and
tear excepted, and are adequate and suitable for the purposes for which they are
presently being used; and, to the best knowledge of Seller, there are no
condemnation or appropriation, environmental, zoning or other land use
regulation proceedings or investigations pending or threatened against any of
the Facility, such improvements, Seller or the Company which would affect the
use and operation of the Facility and the improvements as a jai alai facility,
nor are there any assessments affecting the Facility, such improvements, Seller
or the Company.

     

    (iii)          Except
with respect to the Roof, neither of the Facility nor the improvements thereon,
or the use and operation thereof, contravenes or violates any building, zoning,
subdivision, land use, administrative, occupational safety and health,
environmental or other applicable Law in any material
respect.  Neither Seller nor the Company has received any notice from
any Governmental Authority advising Seller or the Company of a violation of any
such Laws (whether now existing or which will exist under applicable Laws with
the passage of time) or (ii) any action which must be taken to avoid a
violation thereof.

     

    (iv)          Except
as set forth in Schedule 2.1(dd), there are no material outstanding Contracts
made by Seller for the construction or repair of any improvements to the
Facility which have not been fully paid for.

     

    (v)           To
the best knowledge of Seller, except with respect to the Roof, there are no
material physical defects in the Facility.

     

    (vi)          All
water, sewer, gas, electric, telephone, and drainage facilities and all other
utilities required by law for Seller’s continued use and operation of the
Facility as a jai alai facility are installed, or may be installed without
additional consent of any third party, across public property or valid easements
to the boundary lines of the Facility.

     

    (vii)         Other
than with respect to the Roof, neither Seller nor the Company has received any
notice from any insurance carrier of any defects or inadequacies in the
Facility, or in any portion thereof, which would materially adversely affect the
insurability thereof or the cost of such insurance.  To Seller’s
knowledge, there are no pending insurance claims relating to the
Facility.

     

    (viii)        Seller
is in possession of and has good title to, or has valid leasehold interests in
or valid rights under Contract to use, all the tangible personal property of
Seller relating to the business at Miami Jai Alai as currently conducted, and as
of the Closing Date, Seller shall be in possession of and have good and valid
title to all such tangible personal property.  All such tangible
personal property is free and clear of all Liens, other than Liens which
individually or in the aggregate with other such Liens do not materially impair
the conduct of the business at Miami Jai Alai or the ability of Seller to
perform a “full schedule of live racing or games” under the Summer Permit and
the MJA Permit at the Facility, and is in good working order and condition,
ordinary wear and tear, maintenance and replacement excepted, and its use
complies in all material respects with all applicable Laws.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (ee)           Except
as set forth in Schedule 2.1(ee), neither Seller nor the Company is not a party
to or bound by any collective bargaining agreement or any other agreement with a
labor union, and there has been no effort by any labor union during the twenty
four (24) months prior to the date hereof to organize any employees of Seller or
the Company into one or more collective bargaining units.  There is no
pending or, to Seller’s knowledge, threatened labor dispute, strike or work
stoppage which affects or which may affect the business of Seller or the Company
or which may interfere with its continued operations of the Miami Jai Alai and
the Facility.  Neither Seller, the Company nor any or their respective
Representatives has within the last twenty four (24) months committed any unfair
labor practice as defined in the National Labor Relations Act, as amended, and
there is no pending or, to Seller’s knowledge, threatened charge or complaint
against the Company by or with the National Labor Relations Board or any
representative thereof.  There has been no strike, walkout or work
stoppage involving any of the employees of Seller or the Company during the
twenty four (24) months prior to the date hereof.  Seller and the
Company have materially complied with applicable laws, rules and regulations
relating to employment, civil rights and equal employment opportunities,
including but not limited to, the Civil Rights Act of 1964, the Fair Labor
Standards Act, and the Americans with Disabilities Act, as amended.

     

    (ff)           Seller
and the Company is and has at all times been in material compliance with all
Environmental Laws governing its business, operations, properties and assets,
including, without limitation: (i) all requirements relating to the discharge
and handling of Hazardous Substances; (ii) all requirements relating to notice,
record keeping and reporting; (iii) all requirements relating to obtaining and
maintaining licenses and permits for the ownership of its properties and assets
and the operation of its business as presently conducted, including licenses and
permits relating to the handling and discharge of Hazardous Substances; and (iv)
all applicable writs, orders, judgments, injunctions, governmental
communications, decrees, informational requests or demands issued pursuant to,
or arising under, any Environmental Laws.  With respect to the
Facility, (i) Seller has not received any written notice since December 31, 2009
alleging the present violation of any Environmental Laws, and (ii) to Seller’s
knowledge, since December 31, 2009, no material unauthorized storage, treatment,
discharge or disposal of hazardous waste or substance on the Facility has been
made by Seller, except in substantial compliance with applicable Environmental
Laws.

     

    (gg)           To
Seller’s knowledge, there are no breaches of any of the terms of, nor claims by
any party made pursuant to, the Partnership Agreement nor, to Seller’s
knowledge, are there any pending breaches of any of the terms of, or of pending
claims or threatened claims by any party made pursuant to the Partnership
Agreement.

     

    (hh)           Since
December 31, 2009, neither the Company nor, to Seller’s knowledge, any partner,
manager, director, officer, agent, or employee of the Company, or any other
Person associated with or acting for or on behalf of the Company, has directly
or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured, (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of the Company or any Affiliate of the Company, or
(iv) in violation of any Law, (b) established or maintained any fund or asset
that has not been recorded in the books and records of the Company.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (ii)           No
representation or warranty of Seller in this Agreement or the Schedules hereto
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not
misleading.  There is no fact known to Seller that has specific
application to Seller or the Company and that materially adversely affects the
Interests or the assets, business, prospects, financial condition, or results of
operations of the Company or Seller that has not been set forth in this
Agreement or the Schedules hereto.

     

    3.           REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER.

     

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

     

    (a)           Purchaser
is a duly organized, validly existing limited partnership, in good standing
under the Laws of the State of Florida, with full power and authority to conduct
its business as it is now being conducted.

     

    (b)           Upon
the execution and delivery by Purchaser of this Agreement and each of the
Ancillary Agreements to which Purchaser is a party, this Agreement and such
Ancillary Agreements will constitute the legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its
terms.

     

    (c)           The
execution and delivery by Purchaser of this Agreement and the Ancillary
Agreements to which Purchaser is a party do not, and the consummation of the
transactions contemplated thereby by Purchaser will not, conflict with or result
in a violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation under (i) any provision of Purchaser’s certificate of limited
partnership or partnership agreement, (ii) any Contract to which Purchaser is a
party, or (iii) any instrument, permit, license, judgment, Order, decree,
statute, Law, ordinance, rule or regulation applicable to
Purchaser.

     

    (d)           The
execution, delivery and performance by Purchaser of this Agreement and the
Ancillary Agreements to which Purchaser is a party and the consummation by
Purchaser of the purchase and sale of the Interests and the other transactions
contemplated under this Agreement and the Ancillary Agreements to which
Purchaser is a party require no consent, approval, Order or authorization of,
action by or in respect of, or registration or filing with, any Governmental
Authority, except for the notice to the Division that is required under Florida
Statutes Section 550.054(12) regarding the consummation of the purchase and sale
of the Interests by Seller and Purchaser hereunder.


    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    4.           SURVIVAL OF REPRESENTATIONS
AND WARRANTIES.

     

    4.1           Survival of Representations
and Warranties. The representations and warranties contained in this
Agreement, or in any schedule, document, certificate or instrument delivered in
connection herewith, shall survive the Closing for a period of twenty four (24)
months, provided however, that notwithstanding the foregoing, (i) the
representations and warranties contained in Section 2.1(d), Section 2.1(f),
Section 2.1(g), Section 2.1(i), Section 2.1(j), Section 2.1(cc) and Section
2.1(ff) shall survive the Closing indefinitely; and (ii) any representation or
warranty that would otherwise expire in accordance with the foregoing provision
shall continue to survive if any claim for indemnification with respect to such
representation or warranty shall have been given under Section 5.3 on or
prior to such expiration date, until the related claim for indemnification has
been satisfied or otherwise resolved under Section 5.  The covenants
and agreements contained in this Agreement, or in any schedule, document,
certificate or instrument delivered in connection herewith, shall survive the
Closing until the later of (i) twelve (12) months following the last date on
which any such covenant or agreement is to be performed, or (ii) one hundred and
eighty (180) days after the expiration of all applicable statutes of limitation
(including all periods of extension, whether automatic or permissive) with
respect to the performance of any such covenant or agreement; provided however
that any covenant or agreement that would otherwise expire in accordance with
the foregoing provision shall continue to survive if any claim for
indemnification with respect to such covenant or agreement shall have been given
under Section
5.3 on or prior to such expiration date, until the related claim for
indemnification has been satisfied or otherwise resolved under Section
5.

     

    5.           INDEMNIFICATION.

     

    5.1           Indemnification of
Purchaser.  Seller hereby indemnifies Purchaser and its
Affiliates and the Company (collectively, the “Purchaser Group”)
against and agrees to hold each of the Purchaser Group harmless from and shall
reimburse each of the Purchaser Group for any and all damage, loss, Liability
and expense (including without limitation reasonable expenses of investigation
and reasonable attorneys’ fees and expenses in connection with any action, suit
or proceeding) (“Damages”) incurred or
suffered by any of the Purchaser Group arising out of or with respect
to:

     

    (a)           (i)
any misrepresentation or breach of warranty made by Seller pursuant to this
Agreement or any of the Ancillary Agreements to which Seller is a party or any
other certificate, agreement or writing delivered by Seller pursuant hereto or
thereto and (ii) any claim, action, suit or other Proceeding by any Person
alleging facts that if proven true would constitute a misrepresentation or
breach of warranty by Seller;

     

    (b)           any
breach or nonfulfillment of, or failure to perform, any covenant or agreement
made by Seller pursuant to this Agreement or any of the Ancillary Agreements to
which Seller is a party;

     

    (c)           any
Excluded Liability, including any failure on the part of Seller to pay, perform
and/or discharge any of the Excluded Liabilities;

     

    (d)           the
ownership of the Interests prior to Closing;

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (e)           any
act by Seller prior to Closing with respect to the Company or the Summer Permit
outside the scope of the Seller’s authority under the Partnership Agreement or
authority otherwise properly granted to Seller by the partners of the
Partnership;

     

    (f)           any
act or omission of Seller prior to Closing which constitutes, or which with the
passage of time and the giving of notice shall constitute, a breach or default
under the Partnership Agreement;

     

    (g)           the
failure of Seller to transfer and/or deliver good and marketable title to the
Interests, free and clear of any Liens (subject only to the rights and
restrictions of the partners of the Company that are set forth in the
Partnership Agreement); or

     

    (h)           any
claim that is asserted by any Person, to the effect that such Person (i) is
the holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, the Interests or any part thereof, or (2) is
entitled to all or any portion of the Cash Purchase Price.

     

    Notwithstanding
anything contained in this Agreement to the contrary, the parties hereto
acknowledge and agree that BKCLP 2 shall not be entitled to indemnity pursuant
to Section 5 or any other provision of this Agreement; provided however, that nothing
contained in this Agreement or the Ancillary Agreements shall be deemed to
release or otherwise affect any indemnification Liabilities or other Liabilities
that Seller may have to BKCLP 2 or Purchaser under the Partnership Agreement or
any other agreement or applicable Law.

     

    5.2           Indemnification of
Seller.  Purchaser and, if and
only if the Interests are purchased by the Purchaser Affiliate and not by
Purchaser, Purchaser Affiliate, hereby indemnify Seller and its
Affiliates (collectively, the “Seller Group”)
against and agrees to hold each of the Seller Group harmless from and shall
reimburse each of the Seller Group for any and all Damages incurred or suffered
by any of the Seller Group arising out of or with respect to:

     

    (a)           (i)
any misrepresentation or breach of warranty made by Purchaser pursuant to this
Agreement or any of the Ancillary Agreements to which Purchaser is a party or
any other certificate, agreement or other writing delivered by Purchaser
pursuant hereto or thereto and (ii) any claim, action, suit or proceeding by any
Person alleging facts that if proven true would constitute a misrepresentation
or breach of warranty by Purchaser pursuant hereto;

     

    (b)           any
breach of any covenant or agreement made by Purchaser pursuant to this Agreement
or any of the Ancillary Agreements to which Purchaser is a party;
or

     

    (c)           any
breach of any covenant or agreement made by Purchaser pursuant to this Agreement
or any of the Ancillary Agreements with respect to the Purchaser Note
Liabilities or the Assumed Note Liabilities.

     

    5.3           Procedures.

     

    (a)           Any
Person seeking indemnification under this Section 5 (the “Indemnified Person”)
shall give prompt notice to the party against whom indemnity is sought (the
“Indemnifying
Person”) of the assertion of any Third Party Claim; provided that no
delay on the part of the Indemnified Person in notifying the Indemnifying Person
shall relieve the Indemnifying Person of any Liability or obligation hereunder,
except to the extent that the Indemnifying Person has been irreparably
prejudiced thereby.

     

    
      
        
        

      

      
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    (b)           If
an Indemnified Person gives notice to the Indemnifying Person pursuant to
Section 5.3(a) of the assertion of a Third Party Claim, the Indemnifying Person
shall be entitled to participate in the defense of such Third Party Claim and,
to the extent that it wishes (unless (i) the Indemnifying Person is also a
Person against whom the Third Party Claim is made and the Indemnified Person
determines in good faith that joint representation would be inappropriate or
(ii) the Indemnifying Person fails to provide reasonable assurance to the
Indemnified Person of its financial capacity to defend such Third Party Claim
and provide indemnification with respect to such Third Party Claim), to assume
the defense of such Third Party Claim with counsel satisfactory to the
Indemnified Person. If the Indemnifying Person assumes the defense of a Third
Party Claim, (i) such assumption will conclusively establish for purposes of
this Agreement that the claims made in that Third Party Claim are within the
scope of and subject to indemnification, and (ii) no compromise or settlement of
such Third Party Claims may be effected by the Indemnifying Person without the
Indemnified Person’s written consent unless (A) there is no finding or admission
of any violation of Law or any violation of the rights of any Person; (B) the
sole relief provided is monetary damages that are paid in full by the
Indemnifying Person; and (C) the Indemnified Person shall have no liability with
respect to any compromise or settlement of such Third Party Claims effected
without its written consent. If notice is given to an Indemnifying Person of the
assertion of any Third Party Claim and the Indemnifying Person does not, within
ten (10) days after the Indemnified Person’s notice is given, give notice to the
Indemnified Person of its election to assume the defense of such Third Party
Claim, the Indemnifying Person will be bound by any determination made in such
Third Party Claim or any compromise or settlement effected by the Indemnified
Person.

     

    (c)           Notwithstanding
the foregoing, if an Indemnified Person determines in good faith that there is a
reasonable probability that a Third Party Claim may adversely affect it or its
Affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the Indemnified Person may, by
notice to the Indemnifying Person, assume the exclusive right to defend,
compromise or settle such Third Party Claim.

     

    (d)           Notwithstanding
the provisions of Section 6.2, Seller hereby consents to the nonexclusive
jurisdiction of any court in which a Proceeding in respect of a Third Party
Claim is brought against any member of the Purchaser Group for purposes of any
claim that a member of the Purchaser Group may have under this Agreement with
respect to such Proceeding or the matters alleged therein and agree that process
may be served on Seller with respect to such a claim anywhere in the
world.

     

    (e)           With
respect to any Third Party Claim subject to indemnification under this Section
5: (i) both the Indemnified Person and the Indemnifying Person, as the case may
be, shall keep the other Person fully informed of the status of such Third Party
Claim and any related Proceedings at all stages thereof where such Person is not
represented by its own counsel, and (ii) the parties agree (each at its own
expense) to render to each other such assistance as they may reasonably require
of each other and to cooperate in good faith with each other in order to ensure
the proper and adequate defense of any Third Party Claim.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (f)           With
respect to any Third Party Claim subject to indemnification under this Section
5, the parties agree to cooperate in such a manner as to preserve in full (to
the extent possible) the confidentiality of all confidential information and the
attorney-client and work-product privileges. In connection therewith, each party
agrees that: (i) it will use its best efforts, in respect of any Third Party
Claim in which it has assumed or participated in the defense, to avoid
production of confidential information (consistent with applicable Law and rules
of procedure), and (ii) all communications between any party hereto and counsel
responsible for or participating in the defense of any Third Party Claim shall,
to the extent possible, be made so as to preserve any applicable attorney-client
or work-product privilege.

     

    (g)           A
claim for indemnification for any matter not involving a Third Party Claim may
be asserted by notice to the party from whom indemnification is sought and shall
be paid promptly after such notice.

     

    5.4           Indemnification Maximum and
Basket.

     

    (a)           
Subject to the provisions of Section 5.4(c), the maximum liability of Seller
with respect to Damages incurred by the Purchaser Group under Sections 5.1(a)
and (b) shall not exceed Two Million Five Hundred Thousand Dollars ($2,500,000)
in the aggregate (the “Seller’s Indemnification
Maximum”).

     

    (b)           Subject
to the provisions of Section 5.4(c), no Indemnified Person who is a member of
the Purchaser Group shall be entitled to indemnification with respect to any
claim under Section 5.1(a) or Section 5.1(b) until the aggregate amount of
Damages with respect to claims under Section 5.1 exceeds Fifty Thousand Dollars
($50,000) (the “Seller’s Indemnification
Basket”), at which time the Indemnified Person shall be entitled to
indemnification for all such Damages suffered, sustained or incurred by the
Indemnified Person (including all Damages suffered, sustained or incurred prior
to exceeding the $50,000 threshold), subject to the Seller’s Indemnification
Maximum to the extent the Seller’s Indemnification Maximum is applicable to such
Damages under Section 5.4(a).  For purposes of this Section 5.4(b),
all Damages suffered, sustained or incurred by each member of the Purchaser
Group shall be aggregated.

     

    (c)           Notwithstanding
the provisions of Section 5.4(a) or Section 5.4(b) or anything contained in this
Agreement to the contrary, the provisions of Section 5.4(a) and Section 5.4(b)
(including provisions relating to the Seller’s Indemnification Maximum and the
Seller’s Indemnification Basket) shall not apply to claims under, or Damages
suffered, sustained or incurred with respect to any of the matters described in,
Section 5.1(c), Section 5.1(d), Section 5.1(e), Section 5.1(f), Section 5.1(g)
or Section 5.1(h), or matters arising in respect of, or Damages suffered,
sustained or incurred with respect to any of the matters described in (including
any breach of any of the covenants, agreements, representations or warranties
set forth in), Section 1.1, Section 1.7, Section 1.10, Section 2.1(d), Section
2.1(f), Section 2.1(g), Section 2.1(i), Section 2.1(j), Section 2.1(cc), Section
2.1(ff) or Section 6.1(k), or to any breach of any of Seller’s representations
or warranties of which Seller had knowledge at any time prior to the date on
which such representation or warranty is made or any intentional breach by
Seller of any covenant or obligation, and Seller shall be liable and responsible
for all Damages with respect to such claims, matters and breaches.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (d)           The
maximum liability of Purchaser (and, if the
Interests are purchased by the Purchaser Affiliate, Purchaser
Affiliate) with respect to Damages incurred by the Seller Group under Sections
5.2(a), (b) and (c) (including with respect to claims under, and/or Damages
suffered, sustained and/or incurred with respect to any of the matters described
in Section 5.2(a), Section 5.2(b) and/or Section 5.2(c), and/or matters arising
in respect of, and/or Damages suffered, sustained and/or incurred with respect
to any breach of any of the covenants, agreements, representations and/or
warranties set forth in this Agreement and/or any of the Ancillary Agreements)
shall not exceed, in the aggregate, the amount equal to (x) the Assumed Note
Liabilities, less (y) any amount thereof that is paid or otherwise reduced from
time to time (the “Purchaser’s Indemnification
Maximum”).

     

    (e)           No
Indemnified Person who is a member of the Seller Group shall be entitled to
indemnification with respect to any claim under Section 5.2(a), Section 5.2(b)
or Section 5.2(c) until the aggregate amount of Damages with respect to claims
under Section 5.2 exceeds Fifty Thousand Dollars ($50,000) (the “Purchaser’s Indemnification
Basket”), at which time the Indemnified Person shall be entitled to
indemnification for all such Damages suffered, sustained or incurred by the
Indemnified Person (including all Damages suffered, sustained or incurred prior
to exceeding the $50,000 threshold), subject to the Purchaser’s Indemnification
Maximum.  For purposes of this Section 5.4(e), all Damages suffered,
sustained or incurred by each member of the Seller Group shall be
aggregated.

     

    5.5           No Waiver.  No waiver of a
Closing condition by Purchaser or Seller shall limit its rights under Section
5.

     

    6.           MISCELLANEOUS
PROVISIONS.

     

    6.1           Defined
Terms.  As used in this Agreement, the following capitalized
terms have the meanings indicated below:

     

    (a)           “Affiliate” means any
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person
specified.  For purposes of this definition, control of a Person means
the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning ten
percent (10%) or more of the voting securities of another Person shall be deemed
to control that Person.

     

    (b)           “Ancillary Agreements”
shall have the meaning ascribed to such term in Section 1.4(a)
hereof.

     

    (c)           “Assets” means,
collectively, all of the properties, assets, rights and interests of every
nature, kind and description, tangible and intangible (including goodwill),
whether real, personal or mixed, whether accrued, contingent or otherwise, and
whether now existing or hereafter acquired used or held for use in connection
with the business of the Company or otherwise owned by the Company, free and
clear of all Liens, including but not limited to the Summer Permit, and all of
the rights arising out of the ownership thereof or appurtenant thereto, and all
rights under the Use Agreements, the Lease Agreement and other Contracts
relating thereto, and all licenses, permits, approvals and qualifications
relating to the Summer Permit issued to the Company by any Governmental
Authority.

     

    
      
        
        

      

      
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    (d)           “Business Day” means a
day other than Saturday, Sunday or any day on which banks located in the State
of Florida are authorized or obligated to close.

     

    (e)           “Closing” shall have
the meaning ascribed to such term in Section 1.3 hereof.

     

    (f)           “Closing Balance
Sheet” shall have the meaning ascribed to such term in Section 1.5(a)
hereof.

     

    (g)           “Contract” means any
written, oral, implied or other agreement, contract, lease, license, evidence of
Indebtedness, obligation, mortgage, indenture, security agreement, pledge
agreement, understanding, arrangement, instrument, guaranty, indemnity,
warranty, deed, assignment, power of attorney, certification, purchase order,
work order, insurance policy, employee benefit plan, commitment, covenant,
assurance, or other contract of any nature to which such Person is a party or by
which it or its properties may be bound or affected or under which it or its
respective business, properties or assets receive benefits.

     

    (h)           “Division” means the
Division of Pari-Mutuel Wagering of the Department of Business and Professional
Regulation of the State of Florida.

     

    (i)           "Environmental Laws"
means all federal, state, regional or local statutes, laws, rules, regulations,
codes, orders, plans, injunctions, decrees, rulings, and changes or ordinances
or judicial or administrative interpretations thereof, or similar laws of
foreign jurisdictions where Seller or the Company conducts business, whether
currently in existence or hereafter enacted or promulgated, any of which govern
(or purport to govern) or relate to pollution, protection of the environment,
public health and safety, air emissions, water discharges, hazardous or toxic
substances, solid or hazardous waste or occupational health and safety, as any
of these terms are or may be defined in such statutes, laws, rules, regulations,
codes, orders, plans, injunctions, decrees, rulings and changes or ordinances,
or judicial or administrative interpretations thereof, including, without
limitation: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendment and Reauthorization Act of
1986, 42 U.S.C. 9601, et seq. (collectively
"CERCLA"); the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and subsequent Hazardous and Solid Waste Amendments of
1984, 42 U.S.C. 6901 et seq. (collectively
"RCRA"); the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
1801, et seq.; the Clean Water
Act, as amended, 33 U.S.C. 1311, et seq.; the Clean Air
Act, as amended (42 U.S.C. 7401-7642); the Toxic Substances Control Act, as
amended, 15 U.S.C. 2601 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act as amended, 7 U.S.C. 136-136y
("FIFRA"); the Emergency Planning and Community Right-to-Know Act of 1986 as
amended, 42 U.S.C. 11001, et seq. (Title III of
SARA) ("EPCRA"); and the Occupational Safety and Health Act of 1970, as amended,
29 U.S.C. 651, et seq.
("OSHA").


    
      
        
        

      

      
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    (j)           “Escrow Agent” means
the escrow agent that is a signatory to the Escrow Agreement.

     

    (k)           “Excluded Liabilities”
means (i) any and all Liabilities of the Company of any kind, character or
description whatsoever arising on or prior to the Closing, whether or not
asserted, existing, pending, or threatened prior to, on or after the Closing
Date, (ii) any and all Liabilities under Contracts, commitments and other
obligations, whether oral or written, to which the Company is a party or
otherwise affecting the business of the Company or the Assets or any part
thereof, arising, created or entered into on or prior to the Closing, to the
extent that such Liabilities arise out of or relate to any breach, default,
noncompliance, nonperformance, misrepresentation, act or omission that occurred
prior to the Closing, whether or not asserted, existing, pending, or threatened
prior to, on or after the Closing Date, (iii) any and all Liabilities under
Contracts, commitments and other obligations, whether oral or written, to which
the Company is a party or otherwise affecting the business of the Company or the
Assets or any part thereof, arising, created or entered into on or prior to the
Closing, to the extent that any such Contract, commitment or obligation is not
disclosed in a Schedule hereto, and (iv) any and all Liabilities of Seller or
its Affiliates of any kind, character or description whatsoever, whether arising
prior to, on or after the Closing, and whether or not asserted, existing,
pending, or threatened prior to, on or after the Closing Date (other than the
Purchaser Note Liabilities and the Assumed Note
Liabilities).  Purchaser and Purchaser Affiliate shall have no
Liability for any Excluded Liability, and the Company shall not have any
Liability for any Excluded Liability after the Closing, and Seller shall remain
solely responsible and liable for, and shall pay, perform and discharge at
Closing or shall make adequate provisions for, all of the Excluded
Liabilities.

     

    (l)           “Governmental
Authority” means any court, tribunal, arbitrator, authority,
administrative or other agency, commission, gaming authority, official or other
authority or instrumentality of the United States, any foreign country or any
domestic or foreign state, county, city or other political subdivision,
including the Division.

     

    (m)           "Hazardous Substances"
shall be construed broadly to include any toxic or hazardous substance,
material, or waste, and any other contaminant, pollutant or constituent thereof,
including without limitation, chemicals, compounds, by-products, petroleum or
petroleum products, and polychlorinated biphenyls, the presence of which
requires investigation or remediation under any Environmental Laws or which are
or become regulated, listed or controlled by, under or pursuant to any
Environmental Laws.

     

    (n)           “Indebtedness” of any
Person means all obligations of such Person (i) for borrowed money, (ii)
evidenced by notes, bonds, debentures or similar instruments, (iii) for the
deferred purchase price of goods or services (including trade payables and
accruals incurred), (iv) under capital leases and (v) in the nature of
guarantees of the obligations described in clauses (i) through (iv) above of any
other Person.

     

    (o)           “Laws” means all laws,
statutes, rules, regulations, ordinances and other pronouncements having the
effect of law of the United States, any foreign country or any state, county,
city or other political subdivision or of any Governmental
Authority.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (p)           “Letter of Intent”
means that certain letter dated September 20, 2010 between Seller and
Purchaser.

     

    (q)           “Liabilities” means
all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, whether now or hereafter existing or
arising, whether due or to become due, whether liquidated or unliquidated and whether
determined or undetermined).

     

    (r)           “Liens” means any
mortgage, pledge, assessment, security interest, lease, lien, adverse claim,
levy, charge, hypothecation, mortgage, equity, trust, equitable report, claim,
preference, right of possession, lease, tenancy, license, enrichment, covenant,
infringement, interference, Order, condition, equitable interest, proxy, option,
warrant, right of first refusal, preemptive right, community property interest,
defect, exception, limitation, impairment, imperfection of title, condition,
restriction or other encumbrance of any kind (including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership), or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.

     

    (s)           “Order” means any
writ, judgment, decree, injunction or similar order of, or any license, permit
or authorization of, any Governmental Authority (in each such case whether
preliminary or final).

     

    (t)           “Person” means any
natural person, corporation, limited liability company, partnership, general
partnership, limited partnership, limited liability limited partnership,
proprietorship, organization, company, entity, trust, union, association or
Governmental Authority.

     

    (u)           “Proceeding” means any
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.

     

    (v)           “Representatives” with
respect to a Person, means such Person’s shareholders, principals, partners,
directors, officers, managers, employees, financing sources, representatives,
agents, accountants and advisors.

     

    (w)           “Seller’s knowledge”
or “knowledge of
Seller” or similar term means, with respect to any representation,
warranty or statement in this Agreement that is qualified by such term, that
Seller will be deemed to have knowledge of a particular fact or other matter
that is set forth in such representation, warranty or statement if any
individual who is serving as a director, officer, executor or trustee of Seller
or Seller’s Affiliate (or in any similar capacity) has, or at any time had,
knowledge of that fact or other matter.  For purposes of this
Agreement, such individual will be deemed to have knowledge of such fact or
matter if that individual is actually aware of that fact or matter or if a
prudent individual could be expected to discover or otherwise become aware of
that fact or matter in the course of conducting a reasonable investigation
regarding the accuracy of any representation, warranty or statement contained in
this Agreement (and any such individual will be expected to have conducted a
reasonable investigation regarding the accuracy of the representations,
warranties or statements made herein by Seller).

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (x)           “Stated Liabilities”
means, collectively, the following Liabilities of the Company, in each case to
the extent arising out of or relating to the business of the Company or the
Assets as the same shall exist at the Closing Date, and no other
Liabilities:

     

    (i)           any
and all such Liabilities of the Company that exist on the Closing Date that were
disclosed on the 2009 Balance Sheet but were not required to be discharged or
satisfied in the ordinary course of business prior to the Closing;
and

     

    (ii)           any
and all such Liabilities of the Company that were incurred in the ordinary
course of business consistent with the past practices since the date of the 2009
Balance Sheet to the Closing Date that are disclosed on the Closing Balance
Sheet but were not required to be discharged or satisfied in the ordinary course
of business prior to the Closing.

     

    (y)           “Tax” means any
federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not and any expenses incurred in connection with
the determination, settlement or litigation of any Tax Liability.

     

    (z)           “Tax Return” means any
return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

     

    (aa)           “Third Party” means a
Person that is not a party to this Agreement.

     

    (bb)           “Third Party Claim”
means any claim against any Indemnified Person by a Third Party, whether or not
involving a Proceeding.

     

    6.2           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.  Confirmation of execution by electronic transmission
of a facsimile signature page shall be binding upon any party so
confirming.

     

    6.3           Further
Assurances.  The parties hereby agree from time to time to
execute and deliver such further and other transfers, assignments and documents
and do all matters and things which may be reasonably necessary to more
effectively and completely carry out the intentions of this
Agreement.

     

    6.4           Cooperation on Tax
Matters.  Purchaser and Seller shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section 6.4 and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Seller agrees (i) to retain all books and records in Seller’s
possession with respect to Tax matters pertinent to the Company relating to any
taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Purchaser, any extensions
thereof) of the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (ii) to give the Company
and Purchaser reasonable written notice prior to transferring, destroying or
discarding any such books and records. Seller shall allow the Company or the
Purchaser to take possession of such books and records.  Purchaser and
Seller further agree, upon request, to use their best efforts to obtain any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby).

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    6.5           Assignments; Binding
Effect.  Neither party may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
party, except that Purchaser may assign any or all of its rights and/or
obligations under this Agreement to Purchaser Affiliate or any one or more
subsidiaries or other Affiliates of Purchaser without the consent of
Seller.  Subject to the preceding sentence, all of the terms and
provisions of this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective legal representatives,
successors and permitted assigns, whether so expressed or not.

     

    6.6           No Third Party
Beneficiary.  The terms and provisions of this Agreement are
intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person other than any
Person entitled to indemnity pursuant to Section 5 hereof and Purchaser
Affiliate.

     

    6.7           Other Definitional and
Interpretive Provisions.  As used in this Agreement unless the
context otherwise requires, (i) words in the masculine or neuter gender include
the masculine, feminine and neuter genders, (ii) the terms defined in the
singular shall have a comparable meaning when used in the plural and vice versa,
(iii) the words “include”, “includes” and “including” shall be deemed to be
followed with the phrase “without limitation”, (iv) the word “will” shall be
construed to have the same meaning and effect as the word “shall”, (v) all
references to Schedules refer to schedules delivered herewith or attached hereto
(each of which is deemed to be a part of this Agreement), (vi) the table of
contents and the headings of the several sections of this Agreement are included
for convenience only and do not in any way affect the meaning or construction of
any provision therein, (vii) all references to Sections or Articles refer to
Sections or Articles of this Agreement, (viii) all references to “$” or
“dollars” refer to U.S. dollars, (ix) references to a number of days shall refer
to calendar days unless Business Days are otherwise specified, (x) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns to the extent permitted or authorized hereunder, and (xi) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof.  Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated
under the statute) and to any section of any statute, rule or regulation include
any successor to the section.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    6.8           Severability.  If
any provision of this Agreement or any other agreement entered into pursuant to
this Agreement is contrary to, prohibited by or deemed invalid under applicable
Law, such provision shall be inapplicable and deemed omitted to the extent so
contrary, prohibited or invalid, but the remainder of this Agreement shall not
be invalidated thereby and shall be given full force and effect so far as
possible.  If any provision of this Agreement may be construed in two
or more ways, one of which would render the provision invalid or otherwise
voidable or unenforceable and another of which would render the provision valid
and enforceable, such provision shall have the meaning which renders it valid
and enforceable.

     

    6.9           Waivers.  The
failure or delay of any party at any time to require performance by another
party of any provision of this Agreement, even if known, shall not affect the
right of such party to require performance of that provision or to exercise any
right, power or remedy under this Agreement.  Any waiver by any party
of any breach of any provision of this Agreement should not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right, power or remedy under this
Agreement.  No notice to or demand on any party in any circumstance
shall, of itself, entitle such party to any other or further notice or demand in
similar or other circumstances.

     

    6.10           Notices.  Any
notice, request, demand or other communication which any party hereto is
required or may desire to give or deliver to or make upon the other party under
this Agreement and any written consents or approvals required hereunder shall be
in writing (including telecopy communication) and shall be (as elected by the
Person giving such notice) hand-delivered by messenger or overnight courier
service, telecopied or mailed by registered or certified mail (postage
pre-paid), return receipt requested, and addressed to each party at their
respective addresses as set forth below:

     

    To
Seller:                                                                       Florida
Gaming Centers, Inc.

    c/o Miami
Jai Alai

    3500 NW
37th
Avenue

    Miami,
Florida 33142

    Attention:
Dan Licciardi, Vice President and General Manager

    
      	
               
      

            	
              Phone
      No.: (305) 633-6400

            


    

    
      	
               
      

            	
              Facsimile
      No.: _______________________

            


    

    


    With a
copy to Seller’s attorney:              Frost Brown Todd LLC

    400 West Market Street

    Suite 3200

    Louisville,
Kentucky  40202

    
      	
               
      

            	
              Attention:
      R. James Straus

            


    

    
      	
               
      

            	
              Phone
      No.: (502) 589-5400

            


    

    
      	
               
      

            	
              Facsimile
      No.: (502) 581-1087

            


    

    


    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

       

    

    To
Purchaser (and/or

    Purchaser
Affiliate, as
applicable):                                   West
Flagler Associated, Ltd.

    P.O. Box
350940

    Miami,
Florida 33135

    
      	
               
      

            	
              Attention:
      Scott Savin, Chief Operating
Officer

            


    

    
      	
               
      

            	
              Phone
      No.: _______________________

            


    

    
      	
               
      

            	
              Facsimile
      No.: _______________________

            


    

    


    
      	
              With
      a copy to Purchaser's attorney:

            	
              Gunster,
      Yoakley & Stewart, P.A.

            


    

    _______________________

    _______________________

    _______________________

    
      	
               
      

            	
              Attention:
      _______________________

            


    

    
      	
               
      

            	
              Phone
      No.: _______________________

            


    

    
      	
               
      

            	
              Facsimile
      No.: _______________________

            


    

    


    Seller
and Purchaser may from time to time notify the other in writing of changes with
respect to whom and where notices, requests, demands or other communication
should be sent by sending notification of such changes pursuant to this
Section.  Such notice, request, demand or other communication shall be
considered given and deemed delivered:  (a) upon hand delivery, or (b)
at the time such notice or communication is sent if sent by telefax
transmission, transmittal confirmed electronically by recorded transmission
report, or (c) one day after such notice or communication is sent if sent by
Federal Express or other reputable overnight courier service, fees or charges
prepaid, or (d) three (3) days after such notice or communication is sent if
sent by the United States Certified Mail, Return Receipt Requested, first class
postage and registration fees prepaid, and in each case correctly addressed to
the party for whom intended at their address written above, or such other
address as is most recently noticed for such party as aforesaid.  Any
notice, request, demand or other communication to be given by Seller or
Purchaser (and/or Purchaser Affiliate, as applicable) may be given by the
attorney for Seller or Purchaser (and/or Purchaser Affiliate, as applicable)
listed above, as applicable.

     

    6.11           Interpretation.  This
Agreement has been negotiated at arms length by the parties hereto, and the
parties mutually agree that for the purpose of construing the terms of this
Agreement, neither party shall be deemed responsible for the drafting hereof.
The parties acknowledge that each party has been advised that it should to
retain counsel to review the terms of this Agreement and to represent it in
connection with the transactions contemplated hereby, and that each party has
had an opportunity to retain counsel for such purpose.

     

    6.12           Governing Law, Venue and
Jurisdiction.  This Agreement shall be governed by and
construed and enforced in accordance with the internal Laws of the State of
Florida without regard to principles of conflicts of Laws.  The
parties acknowledge that a substantial portion of negotiations and anticipated
performance of this Agreement occurred or shall occur in Miami, Florida, and
therefore, without limiting the jurisdiction or venue of any other federal or
state court, each of the parties irrevocably and unconditionally (a) agrees that
any suit, action or other legal proceeding arising out of or relating to this
Agreement shall be brought in the courts of record of the State of Florida in
Miami-Dade County or the District Court of the United States, Southern District
of Florida, situated in Miami-Dade County; (b) consents to the jurisdiction of
such court in any such suit, action or proceeding; and (c) waives any objection
which it may have to the laying of venue of any such suit, action or proceeding
in any such court.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    6.13           Amendments.  The
provisions of this Agreement may not be amended, supplemented, waived or changed
orally, but only by a writing signed by the party against which it is sought to
be enforced.

     

    6.14           No Construction Against
Draftsmen.  The parties acknowledge that this is a negotiated
agreement, and that in no event shall the terms of this Agreement be construed
against either party on the basis that such party, or his counsel, drafted this
Agreement.

     

    6.15           Entire
Agreement.  This Agreement (including the exhibits and
schedules attached hereto) represents the entire understanding and agreement
between the parties with respect to the subject matter of this Agreement, and
supersedes all other negotiations, understandings and representations (if any)
made by and between such parties.

     

    6.16           Specific
Performance.  The provisions of this Agreement may be enforced
by suit for specific performance as well as an action for damages.

     

    6.17           Attorneys’
Fees.  In the event it shall be necessary for either party to
this Agreement to bring suit to enforce any provision hereof (before or after
Closing) or for damages on account of any breach of this Agreement, the
prevailing party shall be entitled to recover from the other in addition to any
damages or other relief granted as a result of such litigation, all costs and
expenses of such litigation and reasonable attorney’s fees (including attorney’s
fees and costs of appeals) as fixed by the court.

     

    [THIS
SPACE IS INTENTIONALLY LEFT BLANK.

    SIGNATURES
FOLLOW ON THE NEXT PAGE.]

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        	 	

                FLORIDA
      GAMING CENTERS, INC., 

                  a
      Florida corporation

                

              	 
	 	 	 	 
	
              	
                By:  
      

              	/s/
      William  B. Collett, Jr.	 
	 	 	Name:
      William  B. Collett, Jr.	 
	 	 	Title:    President
      and COO	 
	 	 	 	 
	 	 	 	 
	 	

                WEST
      FLAGLER ASSOCIATES, LTD.,


                  a
      Florida limited partnership

                

              	 
	 	 	 	 
	 	

                By:  
      

              	Southwest
      Florida Enterprises, Inc., its General Partner	 
	 	 	 	 
	 	By:  
      	Scott
      Savin	 
	 	 	Name: Scott
      Savin	 
	 	 	Title:  COO
      Ex. VP	 


      

    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    


    
       EXHIBIT
A

    

    


    FORM OF ESCROW
AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

    


    FORM OF ASSIGNMENT OF
INTERESTS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
C-1

    


    FORM OF SELLER’S COUNSEL’S
OPINION

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
C-2

    


    FORM OF SELLER’S FLORIDA
COUNSEL’S OPINION

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
D

    


    FORM OF SELLER
RELEASE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
E

    


    FORM OF MANAGEMENT
RELEASES

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(b)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(c)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(o)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(p)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(u)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(w)

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(y)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(z)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
2.1(aa)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(cc)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(dd)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Schedule
2.1(ee)