**EXHIBIT 10.20**

 

[Execution Copy]

 

 

**ASSETPURCHASE AGREEMENT**

** **

**BETWEEN**

** **

**LAROSETRUCK PLAZA & CASINO, L.L.C.,**

** **

**MIDWAY RECREATION, L.L.C.**

 

**JOE F. PENN, JR.**

 

**MELISSA PENN**

 

**AND**

** **

**GAMECOHOLDINGS, INC.**

** **

**DATED:  November 2, 2005**

 

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# **STATE OF LOUISIANA**

# ** **

**PARISH OFLAFOURCHE**

 

**ASSET PURCHASE AGREEMENT**

 

BE IT KNOWN, that beforethe undersigned Notaries Public, and in the presence of the undersignedcompetent witnesses, personally came and appeared:

 

**LAROSE TRUCK PLAZA &CASINO, LLC,**aLouisiana limited liability company (“Larose” and sometimes referred toherein as “Device Owner”), domiciled and having its principal place of businessin the Parish of Lafourche and whose mailing address is declared to be P.O. Box99, Larose, Louisiana 70373, herein represented by its duly authorized agentJoe F. Penn, Jr.;

 

**MIDWAY RECREATION, L.L.C.,**a Louisiana limited liability company (“Midway”),domiciled and having its principal place of business in the Parish of Lafourcheand whose mailing address is declared to be P.O. Box 99, Larose, Louisiana70373, herein represented by its duly authorized agent Joe F. Penn, Jr.;

 

**JOE F. PENN, JR.,**a Louisiana resident, whose mailing address is declared to be 4411 CherokeeRose Drive, Zachary, Louisiana 70791;

 

**MELISSA PENN,** aLouisiana resident, whose mailing address is declared to be 4411 Cherokee RoseDrive, Zachary, Louisiana 70791 (Joe F. Penn, Jr. and Melissa Penn arecollectively, “Penn”);

 

(Larose, Midway and Pennshall collectively be referred to herein as “Sellers” and each individually as “Seller”);

 

and

 

**GAMECO HOLDINGS, INC**,a Delaware corporation (the “Purchaser”), domiciled and having a place ofbusiness in the County of New Kent, State of Virginia and whose mailing addressis declared to be 1869 Mills Highway, Breaux Bridge, Louisiana 70517, hereinrepresented by its duly authorized agent Jeffrey P. Jacobs,

 

each of whom did executethis Asset Purchase Agreement (“Agreement”), to be effective as of this 2nd dayof November, 2005 (the “Agreement Date”).

 

**INTRODUCTION**

 

A.                                   Sellersown the assets of a truck stop located at 1825 Hwy 308, Lockport, Louisiana70374 (the “Truck Stop”).

 

B.                                     TheTruck Stop, *inter alia*, provides retail motor anddiesel fuels, convenience store and restaurant operations for sale to or use bythe general public as well as video draw poker devices for play by the generalpublic.

 

C.                                     Buyer,for itself and its designees, desires to purchase and Sellers desire to sellthe Truck Stop.

 

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NOW, THEREFORE, inconsideration of the promises, obligations, representations and warrantiescontained herein, the receipt and sufficiency of which are hereby acknowledged,and upon the terms and subject to the conditions hereinafter set forth, theparties agree as follows:

 

Section 1.                                            Definitionsand Related Matters.

 

1.1                                 Definitions.For the purposes of this Agreement, the following terms have the meanings setforth below (such meanings to be applicable to both the singular and pluralforms of the terms defined):

 

“Acquired Assets”shall mean all assets, accounts receivable arising or accruing after theClosing Date, privileges, rights, real property, Devices, Intellectual PropertyRights, licenses, interests and claims (whether personal, tangible orintangible) of every type and description owned by Sellers (subject only to theleases identified on Schedule 6.9(a) and the PermittedEncumbrances) and used in the operation of the Business, other than theExcluded Assets. Acquired Assets, include, but are not limited to, each of thefollowing:

 

(a)                              feesimple title (subject to Permitted Encumbrances hereinafter defined) in and tocertain improved real property located at 11825 Hwy 308, Lockport, Louisiana70374 (the “Real Property”), consisting of approximately                                   (                  )acres, more or less, together with all improvements, buildings, structures,issues, profits and rents, fixtures and all rights pursuant to any leases,recorded or unrecorded, respecting all or any part of the Real Property;together with, to the extent legally transferable, all approvals,authorizations, consents, licenses, permits, privileges, rights, variances andwaivers relating to the Real Property from any Governmental Body having jurisdictionover the Real Property, if any, including, but not by way of limitation, thosewith respect to building, effluent control, environmental protection, fire,foundation, pollution control, use, utilities and zoning heretofore held by orgranted to Sellers; together with any and all easements, rights and privilegesappurtenant thereto, including all right, title and interest of the Sellers inand to any land lying in the bed of any street, road or avenue currentlyadjoining, lying across or adjacent to or to be opened or proposed in front ofor adjoining the Real Property, and all riparian rights; all of the foregoingbeing collectively referred to as the Premises (the “Premises”) and beingfurther described in Exhibit A;

 

(b)                                 allmachinery, equipment, display cases, refrigerators, coolers, sinks, ovens,stoves, telephones, cash registers, furniture and other equipment, chattels andfixtures used in or supporting the Business, including, but not limited to,those items identified on Schedule 1.1(b);

 

(c)                                  allinventories of any kind related to or purchased for the operation of theBusiness, including, but not limited to, those items identified on Schedule 1.1(c);

 

(d)                                 allIntellectual Property Rights, subject to the qualifications in Section 6.10,used in or for the benefit of the Business;

 

(e)                                  accurate,certified copies of all books and records relating to the Business, including,without limitation: (i) lists of all known potential or past customers andsuppliers; (ii) records with respect to all equipment, includingwarranties and service agreements, inventory and machinery; (iii) any andall business plans and/or models; (iv) all financial records and reports; (v) allemployee records; and (vi) all other books and records used by Sellers inthe operation of the Business;

 

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(f)                                    allapprovals, authorizations, consents, licenses, permits, registrations,certificates, privileges, rights, variances and waivers relating to ornecessary for the operation of the Business from any Governmental Body havingjurisdiction over the Business, to the extent the same are transferable;

 

(g)                                 allfixtures and improvements located on the Premises;

 

(h)                                 allgoodwill of the Business;

 

(i)                                     thoseContracts identified on Schedule 6.9(b), under terms and conditionscontained in Schedule 6.9(b); and

 

(j)                                     theListed Devices, together with any and all parts, spare parts, paper readers orother equipment used therein or in support thereof.

 

“Affiliate” of anyparticular Person means any other Person directly or indirectly controlling,controlled by or under common control with such particular Person. The term “control”means the possession, directly or indirectly, of the power to direct themanagement and policies of a Person whether through the ownership ofsecurities, by contract or otherwise.

 

“Annualized EBITDA”shall mean the sum of all monthly EBITDA (as defined below) arising from theoperation of the Facility, calculated for the twelve (12) full calendar monthsprior to the month in which the Closing shall occur, after making appropriateadjustments for any non-recurring transactions.

 

 “Assumed Contracts” shall mean thecontracts specifically identified in Schedule 6.9(b).

 

“Business” shallmean all of the operations and business of the Truck Stop located at 1825 Hwy308, Lockport, Louisiana 70374, including, but not limited to, its gamingoperations, convenience store, restaurant facility and its motor and dieselfuel sales.

 

“Business Day”means any day other than a Saturday, Sunday or public holiday under the laws ofthe State of Louisiana or any other day on which banking institutions areobligated to close in Baton Rouge, Louisiana.

 

“Capital Expenditures”means all expenditures for any capital or fixed assets or improvements, or forreplacements, substitutions or additions thereto, which have a useful life ofmore than one (1) year (including expenditures with respect to CapitalizedLease Obligations but excluding expenditures which are fully expensed in theperiod incurred in accordance with GAAP consistently applied).

 

“Capitalized Lease”means a lease under which the obligations of the lessee should, in accordancewith GAAP consistently applied, be included in determining total liabilities asshown on the liability side of a balance sheet of the lessee.

 

“Capitalized LeaseObligations” means the amount of the liability reflecting the aggregatediscounted amount of future payments under all Capitalized Leases calculated inaccordance with GAAP consistently applied and Statement of Financial AccountingStandards No. 13.

 

 “Closing” has the meaning set forth in Section 2.2.

 

“Closing Certificate”has the meaning set forth in Section 7.1(c).

 

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“Closing Date” hasthe meaning set forth in Section 2.2.

 

“Closing Reports”shall mean (i) the “coin-in”,prize and pay-out sheets generated by the Business; (ii) the fuel salesreports of the Business; and (iii) the financial reports of the Businesssetting forth the income, expenses, assets, liabilities and cashflow of theBusiness monthly, from January 1, 2004 through the Closing Date.

 

“Code” means theInternal Revenue Code of 1986, as amended, and any reference to any particularCode section shall be interpreted to include any revision of or successorto that section regardless of how numbered or classified.

 

“Contract” has themeaning set forth in Section 6.9(a).

 

“Deposit” shallmean the sum of Fifty Thousand and no/100 Dollars ($50,000.00).

 

 “Devices” shall mean “Video Draw PokerDevices” as defined in the Video Draw Poker Devices Control Law, LouisianaRevised Statutes, Title 27:301 *et seq*.,as amended from time to time.

 

“EBITDA”shall mean for any one (1) calendar month period the sum of: (i) netincome, plus (ii) interest expenses, plus (iii) the aggregate amountof federal, state and local taxes on or measured by income (whether or notpayable during that period), and plus (iv) depreciation and amortization,all as shall be computed by the Purchaser’s accountants which computation shallbe made strictly in accordance with GAAP, consistently applied, and verified byan accountant chosen by the Sellers. Notwithstanding the past practices of theSellers, when calculating EBITDA hereunder, the parties agree to use theaccrual method of accounting, including, but not limited to, accruing for alllicenses, permits, any gaming licenses and occupational fees, insurance costs,vacation benefits and real property taxes. In addition, the Purchaser and theSellers will mutually agree on the treatment in the calculation of AnnualizedEBITDA of those expenses currently being deducted by any of the Sellers butwhich the parties agree will not continue after the Closing.

 

 “Environmental and Safety Requirements”means all federal, state, parish and local statutes, regulations, rules,ordinances and similar provisions having the force or effect of law, alllicenses, permits, authorizations, approvals, covenants or criteria having theforce or effect of law, all guidelines having the force or effect of law, alljudicial and administrative orders and determinations, all contractualobligations and all common law and equitable doctrines (including, withoutlimitation, injunctive relief and tort doctrines such as negligence, nuisance,trespass and strict liability), in each case concerning public health andsafety, worker health and safety and pollution or protection of the environment(including, without limitation, all those relating to the presence, use,production, generation, handling, transportation, treatment, storage, disposal,distribution, labeling, testing, processing, discharge, release, threatenedrelease, control or cleanup of any hazardous or otherwise regulated materials,substances or wastes, chemical substances or mixtures, pesticides, pollutants,contaminants, toxic chemicals, petroleum products or byproducts, asbestos,polychlorinated biphenyls, noise or radiation), each as amended and as now orhereafter in effect, including, by way of illustration and not limitation, theOccupational Safety and Health Act of 1970, 29 U.S.C. §§ 651, *et seq.*, the Comprehensive Environmental Response,Compensation and Liability Act of 1980, 42 U.S.C. §§9601, *et seq.*,the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901, *et seq.*, the Clean Air Act, 42 U.S.C. §§ 7401, *et seq.*, the Solid Waste Disposal Act, 42 U.S.C. §§ 6901,*et seq.*, the Clean Water Act, 33 U.S.C.§§1251, *et seq.*, and the 

 

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Toxic SubstancesControl Act, 15 U.S.C. §§ 2601, *et seq.*, andany similar or corresponding state, local, municipal and/or parish ordinance,rule, regulation, law or act, (or any successor legislation thereto).

 

“ERISA” shall meanthe Employee Retirement Income Security Act of 1974 (or any successorlegislation thereto), as amended from time to time and any regulationspromulgated thereunder.

 

“Escrow Agent”shall mean Lawyer’s Title of Baton Rouge, having an address at 8352 BluebonnetBoulevard, Baton Rouge, Louisiana 70810-2825.

 

“Escrow Hold Back”shall equal Fifty Thousand and no/100 Dollars ($50,000.00).

 

“Establishment License”shall mean a Type V license to operate Devices at a qualified truck stopfacility as defined in the Video Draw Poker Devices Control Law, LouisianaRevised Statutes, Title 27:301 *et seq*.,and in Chapter 42 of the Louisiana Administrative Code, both as amended fromtime to time, for the Premises.

 

“Excluded Assets”shall mean the following:

 

(a)                                  Theoriginal copies of all books and records of the Sellers and related to theTruck Stop;

 

(b)                                 Rightsof the Sellers pursuant to or under this Agreement;

 

(c)                                  Anyfederal, state or local tax refunds or tax credits of the Sellers;

 

(d)                                 Anyleases, not necessary to or used in the operation of the Business, by Sellersof any personal property other than the Assumed Contracts;

 

(e)                                  Allnotes, bonds, guarantees or other evidence of indebtedness of any Person heldby the Sellers;

 

(f)                                    Allcash, cash equivalents, investments and all deposits of the Sellers, exceptingthere from, all cash, cash equivalents, investments and all deposits arisingfrom or related to the Business on or after the Closing Date which shall be theproperty of the Purchaser;

 

(g)                                 Anyand all insurance policies of the Sellers or any of their Affiliates and allrights to any refunds in connection therewith; *provided,however,* the Purchaser shall have no responsibility for any loss ofprepaid premiums or other costs, expenses or charges arising from or associatedwith the foregoing;

 

(h)                                 Thelicense held by the Sellers, or any Affiliates, and necessary for the ownershipof the Devices (commonly referred to as a “Device Owners License”);

 

(i)                                     Allaccounts receivable, and all rights, claims or security interests arising outof or in connection therewith, relating to the Business and arising or existingat any time prior to the Closing Date (collectively, the “Sellers’ AccountsReceivable”);

 

(j)                                     Allrights, claims and causes of action relating to any of the property included inthe preceding description of Excluded Assets.

 

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“GAAP” meansUnited States generally accepted accounting principles as promulgated by theFinancial Accounting Standards Board, as in effect from time to time.

 

“Governmental Body”means any federal, state, parish, municipal or other governmental orquasi-governmental agency, department, board, commission, bureau or other likeentity or instrumentality.

 

“Indebtedness”means at a particular time, any indebtedness in any form, nature or typewhatsoever, including but not limited to: (i) any indebtedness forborrowed money or issued in substitution for or exchange of indebtedness forborrowed money; (ii) any indebtedness evidenced by any note, bond,debenture or other debt instrument; (iii) any indebtedness for thedeferred purchase price of property or services with respect to which a Personis liable, contingently or otherwise, as obligor or otherwise; (iv) anycommitment by which a Person assures a creditor against loss (including,without limitation, contingent reimbursement obligations with respect toletters of credit); (v) any obligations for which a Person is obligatedpursuant to a guarantee; (vi) any obligations under Capitalized Leaseswith respect to which a Person is liable, contingently or otherwise, asobligor, guarantor or otherwise, or with respect to which obligations a Personassures a creditor against loss; (vii) any indebtedness secured by a Lienon a Person’s assets; and (viii) net obligations under hedgingarrangements (including, without limitation, derivatives) designed to protect aPerson against fluctuations in interest rates, currency exchange rates,commodity prices or other financial transactions.

 

“Intellectual PropertyRights” means all (i) patents, patent applications, patent disclosuresand inventions, (ii) trademarks, service marks, trade dress, trade names,logos and business names and registrations and applications for registrationthereof, together with all of the goodwill associated therewith, (iii) copyrights(registered or unregistered) and copyrightable works and registrations andapplications for registration thereof, (iv) mask works and registrationsand applications for registration thereof, (v) computer software, data,databases and documentation thereof, (vi) trade secrets and other confidentialinformation (including, without limitation, ideas, formulas, compositions,inventions (whether patentable or unpatentable and whether or not reduced topractice), know-how, manufacturing and production processes and techniques,research and development information, drawings, specifications, designs, plans,proposals, technical data, copyrightable works, financial and marketing plansand customer and supplier lists and other information), (vii) otherintellectual property rights and (viii) copies and tangible embodimentsthereof (in whatever form or medium).

 

“Investment” asapplied to any Person means (i) any direct or indirect ownership, purchaseor other acquisition by such Person of any notes, obligations, instruments,stock, securities or ownership interests (including partnership interests,membership interests and joint venture interests) of any other Person and (ii) anycapital contribution by such Person to any other Person.

 

“Knowledge” or anyderivation thereof whether or not capitalized, shall mean, actual knowledge ofa condition or set of facts as has been obtained from any source, including,regardless of any common law or statutory definition of the foregoing,information which would cause a reasonable person to inquire further.

 

“Lien” means anymortgage, deed of trust, pledge, security interest, encumbrance, lien, claims,charge or other restriction of any kind whatsoever (including any conditionalsale or other title retention agreement or lease in the nature thereof), anysale of receivables with recourse against the Business, any filing of oragreement to file a financing statement as debtor under the Uniform CommercialCode or any 

 

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similar statuteother than to reflect ownership by a third party of property leased to theSellers for use in the Business under a lease which is not in the nature of aconditional sale or title retention agreement.

 

“Liquor and GamingLaws of the State of Louisiana” shall mean the laws promulgated in theLouisiana Revised Statutes Title 27:1 *et seq*.,and Title 26:1 *et seq*., asamended from time to time and the Louisiana Administrative Code provisionsinterpreting the same.

 

“Listed Devices”shall mean those Devices listed on Schedule 1.1(Listed Devices).

 

“Material AdverseEffect” or “Material Adverse Change” means any matter or matterswhich would, alone or in the aggregate, have an adverse effect on (i) thefinancial condition, operating results, assets, liabilities, operations,condition (financial or otherwise), business or prospects of the Sellers, theBusiness or any Affiliate of the Sellers, (ii) the ability of the Sellersor the Business to perform any of their obligations related to theoperations of the Business (each, a “Material Adverse Effect”), or (iii) theability of the Premises to qualify as a truck stop facility under the Liquorand Gaming Laws of the State of Louisiana. Material Adverse Effect or MaterialAdverse Change specifically includes, but is not limited to: (a) anyviolation by the Sellers or the Business, in any form and for any reason,of the Liquor and Gaming Laws of the State of Louisiana; or (ii) therevocation or suspension, for any period of time, of any liquor or gaminglicense issued by the State of Louisiana to the Sellers or the Business andused in the operations of the Business, or (iii) the ability of thePremises to qualify as a truck stop facility under the Liquor and Gaming Lawsof the State of Louisiana.

 

“PermittedEncumbrances” means:

 

(a)                                  realestate and *ad valorem*taxes not yet due andpayable;

 

(b)                                 interestsor title of a lessor or lessee under any lease identified in Schedule 6.9(b);and

 

(c)                                  tothe extent existing on the Closing Date hereof, matters which are described on Schedule 1.1(PermittedEncumbrances), and approved of in writing by the Purchaser prior to theClosing.

 

“Person”means an individual, a partnership, a corporation, a limited liability company,an association, a joint stock company, a trust, a joint venture, anunincorporated organization, a governmental entity or any department, agency orpolitical subdivision thereof and any other entity.

 

“Purchase Price”shall mean Six Million and no/100 Dollars ($6,000,000.00).

 

“Purchaser” meansGameco Holdings, Inc., a Delaware corporation, its successors, assignsand/or designees, in its sole discretion.

 

 “Settlement Statement” shall mean astatement, signed by the Sellers and the Purchaser and to be received by theEscrow Agent at least twenty-four (24) hours prior to the Closing, identifyingall funds to be received by the Escrow Agent as of the Closing and furtheridentifying how and to whom all such funds are to be paid by the Escrow Agent,such that all Acquired Assets are transferred to the Purchaser free and clearof any and all Liens whatsoever, except Permitted Encumbrances.

 

“Survey” shallhave the meaning given it in Section 3.4.

 

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“Tax” or “Taxes”means any federal, state, county, parish, local, foreign or other income, grossreceipts, ad valorem, franchise, profits, sales or use, transfer, registration,excise, utility, gaming, environmental, communications, real or personalproperty, capital stock, membership interest, license, payroll, wage or otherwithholding, employment, social security, severance, stamp, occupation,alternative or add-on minimum, estimated and other taxes or fees of any kindwhatsoever (including deficiencies, penalties, additions to tax or fees, andinterest attributable thereto) whether disputed or not.

 

“Tax Return” meansany return, information report or filing with respect to Taxes, including anyschedules attached thereto and including any amendment thereof.

 

“Title Company”shall mean Lawyer’s Title of Baton Rouge having an address at 8352 BluebonnetBoulevard, Baton Rouge, Louisiana 70810-2825.

 

“Title Evidence”shall mean the Title Policy and the Survey, as defined in Sections 3.3 and3.4, respectively.

 

1.2                                 AccountingPrinciples. The classification, character and amount of all assets,liabilities, capital accounts and reserves and of all items of income andexpense to be determined, and any consolidation or other accounting computationto be made, and the interpretation of any definition containing any financialterm, pursuant to this Agreement shall be determined and made in accordancewith GAAP consistently applied.

 

1.3                                 OtherInterpretive Matters. In this Agreement, unless a clear contrary intentionappears:  (a) the singular numberincludes the plural number and vice versa; (b) reference to any Personincludes such Person’s successors and assigns but, if applicable, only if suchsuccessors and assigns are permitted by this Agreement and reference to aPerson in a particular capacity excludes such Person in any other capacity; (c) referenceto any gender includes each other gender; (d) reference to any agreement(including this Agreement and the Schedules and Exhibits hereto), document orinstrument means such agreement, document or instrument as amended or modifiedand in effect from time to time in accordance with the terms thereof and, ifapplicable, the terms hereof (and without giving effect to any amendment ormodification that would not be permitted in accordance with the terms hereof); (e) referenceto any applicable law means such applicable law as amended, modified, codifiedor reenacted, in whole or in part, and in effect from time to time, including rules andregulations promulgated thereunder and reference to any particular provision ofany applicable law shall be interpreted to include any revision of or successorto that provision regardless of how numbered or classified; (f) referenceto any Article, Section or Exhibit means such Article or Section hereofor such Exhibit hereto; (g) “hereunder,” “hereof,” “hereto” and wordsof similar import shall be deemed references to this Agreement as a whole andnot to any particular Section or other provision hereof; and (h) ”including”(and with correlative meaning “include”) means including without limiting thegenerality of any description preceding such term.

 

Section 2.                                            Purchaseof Assets and Closing.

 

2.1                                 Purchaseand Sale of the Acquired Assets .

 

(a)                                  Atthe Closing, subject to the terms and conditions contained in this Agreement,the Sellers, as applicable, shall sell, assign, set-over, convey, deliver andtransfer to the Purchaser, or its designee, free and clear of any and all Liensand Indebtedness whatsoever, excepting only Permitted 

 

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Encumbrances, andthe Purchaser shall purchase from the Sellers, as applicable, all of theirrights, title and interests in and to the Acquired Assets for the PurchasePrice.

 

(b)                                 Withinten (10) days following the execution of this Agreement by all partieshereto, the Purchaser shall deliver the Deposit to the Escrow Agent. TheDeposit shall be applied as a credit toward the Purchase Price by the EscrowAgent at the Closing. In the event Purchaser shall terminate this Agreement forany reason in the Purchaser’s sole discretion prior to the Closing Date, otherthan a default by the Purchaser, upon notice to the Escrow Agent and theSellers of the Purchaser’s election to terminate this Agreement, the EscrowAgent shall release the Deposit to the Purchaser. Should the Purchaser breachany provisions of this Agreement and not otherwise cure such breach pursuant tothe terms and conditions hereof, the Deposit shall be forfeited by thePurchaser to the Sellers as the full and final measure of their liquidateddamages hereunder, and not as a penalty, and, with the exception of thePurchaser’s indemnity set forth in Section 3.1(b) below,thereafter this Agreement shall be null and void and of no further force andeffect.

 

(c)                                  TheClosing of the purchase and sale of the Acquired Assets shall take place at theoffices of the Title Company or at such other place as may be mutuallyagreeable to the Sellers and the Purchaser. At the Closing, upon payment of thePurchase Price, the Sellers, as applicable, shall deliver to the Purchaser theAcquired Assets, together with such bills of sale, powers of assignment,certificates, deed(s) and other documents and instruments of conveyance asshall be reasonably satisfactory to the Purchaser and its counsel to transferrecord ownership of the Acquired Assets, including, but not limited to, those itemsidentified in Section 10 below.

 

(d)                                 Sellerseach acknowledge and agree that Purchaser may pay the entire PurchasePrice to any one of the Sellers as directed by all of the Sellers at theClosing and that payment of the Purchase Price pursuant to the directions ofthe Sellers shall satisfy any and all of the Purchaser’s obligations forpayment of the Purchase Price hereunder to each of the Sellers. Notwithstandingthe foregoing, the parties agree that ten percent (10%) of the Purchase Price,allocated equally between the Sellers is the monetary consideration paid forthe “covenant not to do” as contained in Section 11.21. The partiesacknowledge and agree that this allocation is a reasonable allocation given theentities’ and their relative abilities and experience in the gaming industry. Theparties each further acknowledge and agree that payment of the Purchase Priceto the Sellers as outlined on the Settlement Statement is appropriateconsideration and reasonably related to the value of the interests each partyis transferring under this Agreement.

 

2.2                                 Closing.

 

(a)                                  Thesale and transfer of the Acquired Assets from the Sellers, as applicable, tothe Purchaser (“Closing”), pursuant to the terms and subject to the conditionshereof shall take place on a date determined by the Purchaser which date shallnot be later than December 19, 2005 (“Closing Date”).

 

(b)                                 It shall be a condition of the Closing thatthe Annualized EBITDA as of the Closing Date shall be not less than OneMillion Three Hundred Thousand and no/100 Dollars ($1,300,000.00).

 

2.3                                 Releaseof Sellers’ Interest and Claims against the Business and the Acquired Assets.Sellers agree, concurrently with the Closing, to release all of their interestsin and to and any claims against any of the Business or the Acquired Assets. Sellersshall deliver to the Escrow Agent a fully executed assignment, terminationand/or modification agreement, to be effective as of and only upon the 

 

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Closing, in form andsubstance reasonably acceptable to the Purchaser, terminating all interests andclaims of the Sellers in the Business to the Acquired Assets as of the ClosingDate. Nothing contained in the foregoing is intended to nor shall it operate torelease any claims or causes of action the Sellers’ or any one of them may havearising out of or under this Agreement.

 

2.4                                 Non-Assumptionof Liabilities by Purchaser. Except for the Assumed Obligations (ashereinafter defined), the Purchaser does not assume and shall not be liable forany of the Indebtedness, debts, obligations, expenses, claims, liabilities orcommitments, of any nature whatsoever (collectively “Obligations”) of theSellers, whether arising prior to, on or after the Closing, including, but notlimited to, Obligations arising from or related to the Acquired Assets and/orthe Business. The Sellers agree, individually, that all Obligations, other thanObligations under the Assumed Contracts that accrue after the transfer of theAcquired Assets (collectively, the “Assumed Obligations”), shall remain theobligations of the Sellers, as applicable. The Sellers, jointly and severally,do hereby indemnify, defend and hold Purchaser harmless from and against anyand all claims, losses, expenses, damages or liabilities asserted against orsuffered by Purchaser arising out of or resulting from the Obligations (otherthan the Assumed Obligations).

 

2.5                                 Releaseof Funds.

 

(a)                                  Uponcompletion of the transfers and deliveries described in Sections 2.1, 2.2,2.3 and 2.4 above and the discharge of all Liens and Indebtedness, theEscrow Agent shall release, pursuant to the Settlement Statement, any and allfunds then on deposit hereunder. Any fees charged by the Escrow Agent for itsservices hereunder shall be borne solely by the Purchaser.

 

(b)                                 Notwithstandingthe foregoing, the parties agree that this Agreement and the Closing Date shallbe subject to the issuance to or receipt by the Purchaser of the Consents (asdefined on Schedule 6.13 below). If the Consents have not beenreceived or issued as of the Closing Date, the Closing Date shall be extendedfrom day to day for no more than thirty (30) Business Days until the third (3rd)day following the date each such Consent is received, satisfied or waived. Insuch an event, the Sellers shall continue to operate the Business and thegaming and other operations thereof in accordance with the requirements of thisAgreement. Notwithstanding the foregoing, nothing contained in this paragraphshall delay the Closing for more than thirty (30) Business Days. After theexpiration of such thirty (30) days period, any party may upon writtennotice terminate this Agreement, and with the exception of the Purchaser’sindemnity under Section 3.1(b) below, thereafter thisAgreement shall be null and void and of no further force and effect.

 

Section 3.                                            DueDiligence. Beginning on the Agreement Date and continuing to and including December 10,2005 (the “Due Diligence Period”), Purchaser shall have the right to perform thefollowing due diligence pursuant to the terms and conditions hereof.

 

3.1                                 GeneralTesting and Inspections.

 

(a)                                  Duringthe Due Diligence Period, Purchaser shall have the right to conduct suchengineering, environmental, general business and feasibility studies,inspections, testing, audits and/or reviews of the Acquired Assets, thePremises and the Business and its assets, liabilities, operations (includinggaming operations and records), financial performance and affairs as Purchaserdeems necessary, including soil tests, borings, drainage tests and similartests on any land or improvement owned by the Sellers and used in the Business,and audits and reviews of all of the Business’s or Sellers’

 

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financial and businessrecords, operations, documents and instruments, including a financial and taxaudit of the Business. Such studies shall be conducted by Purchaser and itsagents at the Purchaser’s sole cost and expense.

 

(b)                                 Subjectto reasonable advance notice, the Sellers agree to allow Purchaser and/or itsagents access to all assets, records, documents and instruments of the Businessor the Acquired Assets to conduct such studies, tests, inspections, reviews andaudits, provided such access shall not unreasonably interfere with theactivities of the Sellers. Purchaser shall save, defend, indemnify and hold theSellers harmless from and against all claims, lawsuits, judgments, losses,liabilities or expenses of any kind or nature which may be assertedagainst or incurred by the Sellers as the result of the examination, tests,inspections, reviews, audits or studies of the Acquired Assets, the Premises orthe Business by the Purchaser or any of its manager’s, members, employees,agents, contractors or designees (excluding the discovery of any preexistingcondition on the Premises and any consequential damages arising from theforegoing). Notwithstanding anything contained herein to the contrary,Purchaser’s indemnity obligations set forth in this Section 3.1(b) shallsurvive any termination of this Agreement.

 

3.2                                 Zoning.Prior to Closing, Purchaser shall have confirmed that the Premises and thecurrent and intended uses thereof will be in compliance, as of the ClosingDate, with all applicable building and zoning codes and any restrictions uniquethereto.

 

3.3                                 TitleCommitment; Defects.

 

(a)                                  Withintwenty (20) days following the Agreement Date, the Purchaser shall cause theTitle Company to issue and deliver its commitment (the “Commitment”) forissuance of an ALTA Owners Policy (Form B - revised 10-17-70) of titleinsurance covering the Premises in the full amount of the Purchase Price, whichCommitment shall show marketable, fee simple title to the Premises to be vestedin the Sellers, subject only to the Permitted Encumbrances. Copies of theCommitment together with copies of each document affecting title to thePremises referenced therein, except for monetary encumbrances which are to bereleased at Closing, shall be delivered to Purchaser and the Sellers.

 

(b)                                 Purchasershall notify Sellers of Purchaser’s disapproval of any matter contained in theTitle Evidence within five (5) days after Purchaser’s receipt of all ofthe Title Evidence and copies of the documents referred to in the TitleEvidence as exceptions or exclusions from coverage. If the Title Evidence isnot satisfactory to Purchaser (collectively, “Defects”), those Defects shall,as a condition to Purchaser’s obligations under this Agreement, be cured orremoved from the Title Evidence at or prior to the Closing. If Sellers electnot to or are otherwise unable to cure and remove all Defects at or prior tothe Closing Date (or any extension thereof), this Agreement may beterminated, at Purchaser’s sole election, by written notice given to Sellerswithin five (5) days after expiration of the period allowed for cure andthe Deposit shall be promptly released by the Escrow Agent to the Purchaser, orPurchaser may, at Purchaser’s sole election, waive such uncured Defects andproceed to close this transaction with no diminution of the Purchase Price.

 

(c)                                  Notwithstandingany provision of this Section 3.3 to the contrary, Sellers shallhave the obligation, on or prior to the Closing Date, to secure releases,discharges or satisfactions, or otherwise cure at no cost to Purchaser, any Defectwhich is a Lien for the payment of money only (except real estate and *ad valorem* taxes and assessments which shall be prorated inaccordance with Section 10), including, without limitation, allmortgages, any Lien or encumbrance which may be released or discharged bythe 

 

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payment of adefinite sum of money or any exception to title which arose as the result ofthe act or violation of Sellers or anyone claiming by, from, through or underSellers.

 

(d)                                 Itshall be a condition precedent to Purchaser’s obligation to consummate thetransaction contemplated hereby that the Title Company will, upon filing theinstruments for conveyance of record, issue its ALTA Owner’s Fee Policy (Form Brevised 10-17-70) of title insurance (the “Title Policy”) in the full amount ofthe Purchase Price, at standard rates, insuring Purchaser in fee simple titleto the Premises subject only to the Permitted Encumbrances, and without theexception for certain of the standard printed exceptions (encroachments,overlaps, boundary line dispute, or any other matters which would be disclosedby an accurate survey or inspection of the Premises, easements or claims ofeasements not shown by the public records, or any lien or right to a lien forservices, labor or materials furnished to the Premises, imposed by law, and notshown by the public records), unless and except to the extent that any suchmatters included in the so-called standard printed exceptions have beenapproved or waived by Purchaser. The Title Policy shall also affirmativelyinsure:  (i) Purchaser’s right touse any appurtenant easements in accordance with their terms and conditions; (ii) contiguityof the parcels described in Exhibit A (if more than one parcel); (iii) thatthe Premises have the benefit of full and free ingress and egress, bothpedestrian and vehicular, directly to and from a public highway; and (iv) suchother and additional endorsements or conditions as the Purchaser may require.Sellers agree to execute and deliver to the Title Company such affidavits andinstruments as may be reasonably required to permit the Title Company toissue Purchaser’s Title Evidence in the form required by this subsection andto provide a copy of such affidavits and instruments to Purchaser. The cost andexpense of such Owner’s Policy shall be borne solely by the Purchaser.

 

3.4  Survey. Within ten (10) days ofthe Agreement Date, Sellers shall deliver to the Purchaser any surveys of thePremises in Sellers’ possession, together with a copy of any reports,documents, notices, citations or records of any type or form in thepossession of the Sellers relating to or identifying: (i) a physicaldeficiency in the Premises; (ii) an adverse effect on the Premises,including, but not limited to, any records, notices or citations relating to orconcerning any aspect of the environmental condition of the Premises; or (iii) achange in the current, zoning, accessibility, physical characteristics,insurability, damage, condemnation, takings of or to any portion of thePremises. Following the Agreement Date, Purchaser shall have the right, at itssole election, to cause a registered surveyor or professional engineer toprepare a survey (the “Survey”) in form sufficient to enable the TitleCompany to delete from the Title Policy the so-called standard exception formatters disclosed by an accurate Survey. A perimeter legal description of thePremises as prepared by such surveyor or engineer shall be used to describe thePremises in the Deed and in Exhibit A. The cost and expense of suchSurvey shall be borne by the Purchaser. A copy of the Survey shall be furnishedto the Sellers. In the event the Survey discloses any encroachments, overlaps,boundary line disputes or any other matter affecting the Premises or whichviolates any law, rule or regulation or is otherwise unacceptable to thePurchaser, such matter(s) shall be considered to be a Defect(s) and therelative rights and obligations of the parties with respect thereto shall begoverned by the provisions of Section 3.3 hereof.

 

3.5                                 EnvironmentalMatters.

 

Purchaser, at its soleelection, may cause an environmental evaluation and/or consulting firm(the “Consultant”) selected by Purchaser to conduct an environmental inspectionand audit of the Premises (the “Audit”), including, without limitation, a PhaseI, II or III site assessment study. The cost and expense of such Auditshall be borne by the Purchaser. To the extent environmental audits for thePremises have been previously obtained by Sellers; Sellers, as applicable,shall deliver copies of same to 

 

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Purchaser withinfifteen (15) days of the Agreement Date. Purchaser and Sellers shall cooperatein an attempt to achieve the result that the Audit is performed as soon aspracticable and is completed no later than the expiration of the Due DiligencePeriod. In addition to providing any information reasonably requested by theConsultant, Sellers shall cooperate with Purchaser and the Consultant throughoutthe course of the Audit and shall cooperate in any other way reasonablyrequested by Purchaser or the Consultant.

 

3.6                                 OtherRecords and Documents.

 

(a)                                  Inaddition to the foregoing and to the extent the below-listed documents are inthe possession of the Sellers, the Sellers agree to deliver to the Purchaser,within fifteen (15) days of the Agreement Date, a full and accurate list andreasonably complete details concerning each item described below and a copy ofeach document to the extent such copies are in the possession or control of theSellers:

 

(i)                                     copiesof any and all certificates of title, liens, encumbrances, deeds of trust,mortgages, judgments, rights-of-way, easements, covenants, conditions orrestrictions, other exceptions or matters of record relating to or affectingany real or personal property used in the Business;

 

(ii)                                  copiesof all certificates of occupancy, zoning variances, licenses, permits,authorizations and approvals relating to the Premises or the Business from anyGovernmental Body having jurisdiction over the Premises or the Business,together with any other notices and agreements related thereto, including, butnot limited to, any and all gaming and liquor licenses and permits and renewalsof the same or applications therefore;

 

(iii)                               tothe extent not already required above, copies of any and all environmentalpermits, notices, demands, action letters, reports, assessments, audits,directives from any Governmental Body, documentation of any environmentalmatter related to the Premises; identification of which portion of the Premiseshas ever been or is now being used for the storage, generation, treatment,manufacture, disposal or release of any “hazardous substance” as defined by theComprehensive Environmental Response Compensation and Liability Act,identification of all waste disposal sites and the location of all undergroundstorage tanks or lines, whether in use or abandoned; a summary of allenvironmental testing done by the Sellers; and identification of any event ofnon-compliance with an Environmental and Safety Requirement;

 

(iv)                              copiesof all real estate, personal property, fuel and *ad valorem*taxes, assessments, general and special, bills and returns, gaming and liquorlicense fees and renewals and any and all notices of violations, delinquenciesand/or assessments of the same received by the Sellers within twenty-four (24)months preceding the Agreement Date;

 

(v)                                 copiesof any and all leases affecting the Premises or the Business in any manner;

 

(vi)                              copiesof all fuel sales reports whether maintained for the Business’s sole use orsubmitted to any federal, state or local governmental agency (and will continueto provide Purchaser this information within fifteen (15) days of the end ofeach calendar month during the term of this Agreement);

 

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(vii)                           copiesof monthly financial statements, including an income and balance sheetstatement for each of the twenty-four (24) months preceding the Agreement Date,showing the financial condition of every aspect of the Business (and willcontinue to provide Purchaser this information within fifteen (15) days of theend of each calendar month during the term of this Agreement);

 

(viii)                        copies ofany and all Contracts (as defined hereinafter) affecting the Premises or theBusiness in any manner; and

 

(ix)                                anyother documents and information reasonably requested by the Purchaser.

 

# **Section 4.**                                            Termination. Notwithstanding anythingcontained in this Agreement to the contrary and in addition to any other rightsof termination of the Purchaser under this Agreement, if at any time prior tothe Closing Date, any of the studies, Title Evidence, Survey, audits,inspections, testing, reviews or other activities performed pursuant to Sections3.1, 3.2, 3.3, 3.4, 3.5 or 3.6, or any other information (includinginformation related to the Purchaser’s financing), however gathered orobtained, shall reveal information or conditions unacceptable to the Purchaser,in its sole discretion, then Purchaser shall have the option to terminate thisAgreement. Upon receipt of such notice, this Agreement shall terminate andthereafter be null and void and of no further force and effect, and the EscrowAgent shall promptly return to the Purchaser then deposit.

# ** **

### Section 5.                                            Sellers’ Accounts Receivable. Following the Closing, Buyershall use its reasonable commercial efforts to collect the Sellers’ AccountsReceivables. Seller agrees to maintain accurate records of each such AccountReceivable and the balance remaining on the same and to provide such reasonabledocumentation as may be requested from time to time by the Purchaser orany obligor under the same. Seller agrees to forebear taking any legal action,including the filing of any claim, to collect any Accounts Receivable followingthe Closing Date. Purchaser shall, within the first ten (10) days of eachcalendar month, remit to Seller all amounts collected on any Seller’s AccountsReceivable during the immediately preceding calendar month. During any calendarmonth, should an obligor under any of the Seller’s Accounts Receivable alsohave an account with the Purchaser, the Purchaser shall apply any sumscollected from such obligor *first* againstsuch obligor’s Seller’s Accounts Receivable until paid in full and then againstthe amounts owed the Purchaser. Notwithstanding anything contained herein tothe contrary, in no event, whatsoever, shall the Purchaser have any liabilityfor any of the Sellers’ Account Receivable that are uncollected or determinedto be uncollectible, nor shall the Purchaser be obligated to expend any fundsin furtherance of such collection efforts. On and after the first (1st)anniversary of the Closing Date, Purchaser shall have no further obligations tocollect any sums under any of the Sellers’ Accounts Receivable.

###  

Section 6.                                            Representationsand Warranties of the Sellers. As a material inducement to the Purchaser toenter into this Agreement and purchase the Acquired Assets hereunder, theSellers each hereby, jointly and severally, represent and warrant to thePurchaser as follows:

 

6.1                                 Organization,Power and Licenses.

 

(a)                                  Laroseis duly formed, validly existing and in full force and effect under the laws ofthe State of Louisiana and is qualified to do business in Louisiana and everyother jurisdiction in which its ownership of property or the conduct ofbusiness requires it to qualify. Larose possesses all requisite 

 

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power andauthority, and all licenses, permits and authorizations necessary, to own andoperate its properties, to carry on its businesses as now conducted and tocarry out the transactions contemplated by this Agreement. Larose is not inviolation of any of the provisions of its Articles of Organization or OperatingAgreements.

 

(b)                                 EachPenn is a Louisiana resident, of the age of majority and of sound mind. Together,Penn is the owner of one hundred percent (100%) of all outstanding and issuedmembership interests of Larose and no other person has any Investment in Larose,nor any right, by option, warrant, right of first refusal or by law or inequity to acquire the same.

 

(c)                                  Sellers,as applicable, own one hundred percent (100%) of all rights, title andinterests in and to the Acquired Assets, free and clear of any Liens orIndebtedness, excepting only the Permitted Encumbrances, with full, valid,unencumbered power and authority to convey the same, excluding only thoseassets identified on Schedule 6.9(a). There are no preemptiverights, warrants, options, or rights of first refusal with respect to thetransfer of the Acquired Assets hereunder. The Acquired Assets are all of theassets used in or necessary to the operation of the Business.

 

(d)                                 Anyindividuals who have any spousal or dower rights in any of the Acquired Assets,the Premises or the Business, under any federal, state or local law have joinedin the execution of this Agreement and have consented to the transferscontemplated herein and upon such transfers shall have waived any and allinterests, rights or titles they may have in and to the Acquired Assets orthe Business.

 

6.2                                 Affiliates;Subsidiaries; Investments. There are no Affiliates or other Persons inwhich the Sellers own, of record or beneficially, any direct or indirectequity, Investment or other interest or any right (contingent or otherwise) toacquire the same, or in which the Sellers otherwise participate, which wouldhave or has any interest in the Business or the Acquired Assets.

 

6.3                                 Authorization;No Breach. The execution, delivery and performance of this Agreement andall other agreements, instruments and transactions contemplated hereby andthereby to which any Seller is a party have been duly authorized by allrequisite organizational approvals. This Agreement and all other agreements andinstruments contemplated hereby to which any Seller is a party each constitutesa valid and binding obligation of the Sellers, as applicable, enforceable inaccordance with its terms. Assuming the payment of all Liens by the Sellers atthe Closing, the execution and delivery by the Sellers of this Agreement andall other agreements and instruments contemplated hereby to which the Sellersare a party, the offering and sale of the Acquired Assets hereunder and thefulfillment of and compliance with the respective terms hereof by the Sellers,does not and shall not: (i) conflict with or result in a breach of theterms, conditions or provisions of, (ii) constitute a default under, (iii) resultin the creation of any Lien upon the Acquired Assets pursuant to, (iv) giveany third party the right to modify, terminate or accelerate any obligationunder, (v) result in a violation of, or (vi) require anyauthorization, consent, approval, exemption or other action by or notice ordeclaration to, or filing with, any court or Governmental Body pursuant to, theArticles of Organization or Operating Agreements of the applicable Sellers orany law, statute, rule or regulation to which the Sellers are subject orany agreement, instrument, order, judgment or decree to which the Sellers ortheir assets are subject, other than: (a) appropriate notifications to theLouisiana State Police and Louisiana gaming authorities of the consummations ofthe transfers contemplated by this Agreement; and (b) appropriatelicensure and/or findings of suitability of the transferee of the ListedDevices by the Louisiana Gaming Control Board.

 

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6.4                                 ClosingReports and Absence of Liabilities.

 

(a)                                  TheClosing Reports, certified by Penn and attached hereto as Schedule 6.4(a),are: (i) true, accurate and complete; (ii) contain the sameinformation as has been actually filed with the Louisiana State Police and anyother Governmental Body; (iii) are reflected in the books and records ofthe Sellers; and (iv) fairly and accurately present the financialcondition of the Business as of the dates thereof. After giving effect to thetransactions to occur at the Closing, neither the Business nor the Sellers willhave any liabilities or Indebtedness, including, but not limited to, income taxliabilities, contingent or otherwise, other than as described on Schedule 6.4(a).The Closing Reports shall be updated on the Closing Date and shall be true,accurate and complete and consistent with any and all filings with any federal,state or local authorities or agencies as of the most recent reporting dateprior to the Closing Date.

 

(b)                                 Exceptas described on Schedule 6.4(b), none of the Sellers has:

 

(i)                                     anyliabilities or Indebtedness (whether accrued, absolute, contingent,unliquidated or otherwise, whether due or to become due, whether known orunknown, and regardless of when asserted) which will remain a Lien upon theBusiness or the Acquired Assets following the Closing hereof, nor which willbecome a liability, Indebtedness or obligation of the Purchaser on or after theClosing, other than the Assumed Contracts;

 

(ii)                                  madeany Capital Expenditures for which liability, in any form, will remain afterthe Closing Date; or

 

(iii)                               issued:(a) any notes, bonds or other debt securities which will remain or becomean obligation of the Acquired Assets, the Business or the Purchaser on or afterthe Closing Date, or (b) any shareholder/owner interests or other equitysecurities, membership interests or any securities convertible, exchangeable orexercisable into any ownership interests in the Business or Acquired Assets; or

 

(iv)                              sold,assigned or transferred any of the Business’s Intellectual Property Rights orother intangible assets, or disclosed any of the Business’s proprietaryconfidential information to any Person; or

 

(v)                                 madeany loans or advances to, guarantees for the benefit of, or any Investments inthe Business or the Acquired Assets, that will not have been completely repaidand/or terminated as of the Closing Date; or

 

(vi)                              knowledgeof, or have caused the Business or any Acquired Asset to suffer any, damage,destruction or casualty loss which has had or may in the future have aMaterial Adverse Effect on the Business, whether or not covered by insurance;or

 

(vii)                           asrelates to the Business, borrowed any amount of, incurred or become subject to,any liabilities, except current liabilities consisting solely of accountspayable and trade payables incurred in the ordinary course of business andliabilities under leases identified elsewhere in this Agreement; or

 

(viii)                        dischargedor satisfied any Lien or paid any obligation or liability, other than currentliabilities paid in the ordinary course of business; or

 

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(ix)                                mortgagedor pledged any of its properties or assets or subjected them to any Lien,except Permitted Encumbrances; or

 

(x)                                   sold,assigned or transferred any of its tangible assets, except in the ordinarycourse of business, or cancelled any debts or claims; or

 

(xi)                                sufferedany extraordinary losses or waived any rights of value, whether or not in theordinary course of business or consistent with past practice; or

 

(xii)                             madeany commitments for Capital Expenditures that have not expired as of the AgreementDate; or

 

(xiii)                          agreedto do any of the foregoing.

 

6.5                                 NoAdverse Change. From the Agreement Date to and through the Closing Date,there has not been nor shall there be any adverse change in the operatingresults, operations, condition (financial or otherwise), prospects, employeerelations or customer or supplier relations of the Business or the AcquiredAssets, as applicable. From the Agreement Date to and through the Closing Date,Sellers shall promptly give Purchaser notice of any adverse change in theoperating results, operations, condition (financial or otherwise), prospects,employee relations or customer or supplier relations of the Business or theAcquired Assets, as applicable.

 

6.6                                 Absenceof Undisclosed Liabilities. No Seller nor any Affiliate has any obligationor liability (whether accrued, absolute, contingent, unliquidated or otherwise,whether due or to become due and regardless of when asserted) related orattaching to or affecting in any manner the Business or the Acquired Assets andarising out of transactions entered into at or prior to the Closing, or anyaction or inaction at or prior to the Closing, or any state of facts existingat or prior to the Closing, other than (a) liabilities set forth on theClosing Reports, and (b) other liabilities and obligations expresslydisclosed on Schedule 6.6.

 

6.7                                 BusinessProperty. The Sellers, as applicable, have good, valid and one hundredpercent (100%) complete title to all of the Acquired Assets, free and clear ofany Lien other than Permitted Encumbrances, and have full power and authorityto convey and transfer the same free and clear of any and all claims by anyPerson whatsoever. The Acquired Assets constitute all of the assets and realproperty and improvements used by any of the Sellers in or necessary for theoperation of the Business as of the Closing Date.

 

6.8                                 TaxMatters. The Purchaser shall have no liability for or exposure to any Taxesarising from the operation(s) of the Business prior to the Closing Date. Allnecessary and required Tax Returns have been timely filed and are correct inall material respects as to the amount of tax owed and have been prepared incompliance with all applicable laws and regulations in all respects; theSellers have paid all Taxes due and owing by any of them (whether or not suchTaxes are required to be shown on a Tax Return) and have withheld and paid overto the appropriate taxing authority all Taxes which it or they are required towithhold from amounts paid or owing to any employee, member, creditor or otherthird party; no Seller has waived any statute of limitations with respect toany Taxes or agreed to any extension of time with respect to any material Taxassessment or deficiency; as of the Agreement Date, no foreign, federal, state,parish or local tax audits or administrative or judicial proceedings arepending or being conducted with respect to the Business or any of the AcquiredAssets; no information related to Tax 

 

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matters has beenrequested by any foreign, federal, state or local taxing authority and nowritten notice indicating an intent to open an audit or other review has beenreceived by Sellers from any foreign, federal, state, parish or local taxingauthority.

 

6.9                                 Contractsand Commitments.

 

(a)                                  Exceptas listed on Schedule 6.9(a), there are no agreements, contracts,leases, licenses, commitments or instruments (including any and all amendmentsthereto) (collectively, the “Contracts”) to which the Business is a party or bywhich the Business or any of the Acquired Assets are bound or subject. Thereare no commitments or agreements with any third-party or Governmental Bodyaffecting the Business or the Acquired Assets which are not listed on Schedule 6.9(a).Except as otherwise expressly noted on Schedule 6.9(a), eachagreement listed on Schedule 6.9(a) is in full force andeffect and constitutes a legal, valid and binding obligation of Business,assignable to the Purchaser hereunder, upon Purchaser’s written consent toassume the same. Except as otherwise expressly noted on Schedule 6.9(a),no such Contract is in default or breach (with or without the giving of noticeor the passage of time or both) and no other party is in default or breach ofany such Contracts and the Sellers under each such Contract are or will be asof the Closing Date timely in their payments of any and all sums or anyperformance obligations under each such Contract.

 

(b)                                 Sellersagree to execute and deliver on the Closing Date such documents and instrumentsas are necessary and reasonably acceptable to the Purchaser and Purchaser’scounsel to completely transfer, set-over and assign to the Purchaser thosecontracts and only those contracts listed on Schedule 6.9(b).

 

6.10                           IntellectualProperty Rights.

 

(a)                                  Schedule 6.10contains a complete and accurate list of all Intellectual Property Rights, ifany, owned or used by Sellers in the Business, other than rights under licensesof any original equipment manufacturers (“OEM”), i.e Windows, etc., oroff-the-shelf software, such as word processing programs, etc.; *provided, however,* all of the Sellers’ownership rights, if any, in and to any of the foregoing, shall constituteAcquired Assets and shall be transferred to the Purchaser hereunder.

 

(b)                                 TheSellers own all right, title and interest in and to all of the IntellectualProperty Rights listed on Schedule 6.10, free and clear of allLiens and there have been no claims made against Sellers asserting theinvalidity, misuse or unenforceability of any of such Intellectual PropertyRights.

 

(c)                                  AllIntellectual Property Rights used in or for the Business, whether listed or notlisted on Schedule 6.10, shall be considered Acquired Assetshereunder and shall be transferred to the Purchaser for the Purchaser Price onthe Closing Date. Sellers agree to execute and deliver on the Closing Date suchdocuments and instruments as are necessary and acceptable to the Purchaser andPurchaser’s counsel to completely transfer, set-over and assign each and everyIntellectual Property Right to the Purchaser.

 

6.11                           Litigation,etc.

 

(a)                                  Exceptas set forth on Schedule 6.11, there are no actions, suits,proceedings, orders, investigations or claims pending or, to the Sellers’knowledge, threatened against or affecting the Sellers, the Business, theAcquired Assets or pending or threatened by the Sellers against any thirdparty, at law or in equity, and affecting in any manner the Business or theAcquired Assets or the prospects thereof, 

 

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before or by anyfederal, foreign, state, parish or local court, or Governmental Body (includingany actions, suits, proceedings or investigations with respect to orthreatening the transactions contemplated by this Agreement); nor has therebeen any such actions, suits, proceedings, orders, investigations or claimspending against or affecting the Business or the Acquired Assets during the two(2) years preceding the Agreement Date. None of the Sellers, or any oftheir Affiliates involved in the operation of the Business, are subject to anyarbitration proceedings or any governmental investigations or inquiries(including inquiries as to the qualification to hold or receive any license orpermit, including, but not limited to, the right to have Devices or sell liquorand sell or store petroleum products or byproducts); and, to the Sellers’knowledge, there is no basis for any of the foregoing. None of the Sellers norany of their Affiliates is subject to any judgment, order or decree of anycourt or other governmental agency, and has not received any written opinion ormemorandum from legal counsel to the effect that it or they are exposed, from alegal standpoint, to any liability which may involve or be related, in anymanner, to the Business or the Acquired Assets.

 

(b)                                 TheSellers do, jointly and severally, hereby indemnify, defend and hold harmlessthe Purchaser, and its owners, shareholders, members, directors, managers,officers, employees, agents, successors and assigns, from and against any andall expenses, claims, fees, fines, damages or losses, including reasonableattorney’s fees, which the Purchaser may suffer as a result of anylitigation matter, claim, investigation or choses in action existing oraccruing as of the Closing Date (whether or not set forth on Schedule 6.11)or arising or filed at anytime and related, in any manner, to the operation ofthe Business or ownership of the Acquired Assets by the Sellers (each, a “LitigationMatter”). Purchaser shall have the right, at its sole election, to participatein the defense of any Litigation Matter, including, but not limited to,requiring the defense to be conducted by legal counsel of its choice.

 

6.12                           Brokerage.There are no claims for brokerage commissions, finders’ fees or similar compensationin connection with the transactions contemplated by this Agreement based on anyarrangement or agreement binding upon Sellers.

 

6.13                           RequiredConsents. Except as listed on Schedule 6.13 (the “Consents”),no consents, approvals or other like permission are required or necessary fromany Governmental Body or from any third party for the consummation of thetransactions contemplated by this Agreement.

 

6.14                           Insurance.

 

(a)                                  Allassets, properties and risks of the Business or the Acquired Assets are, and forthe period of their operation and/ownership by the Sellers have been, coveredby valid and currently effective insurance policies or binders of insurance(including general liability and property insurance) issued in favor of theSellers, in each case with responsible insurance companies, in such types andamounts and covering such risks as are consistent with customary practices andstandards of companies engaged in businesses and operations similar to those ofthe Business and such coverage shall continue through midnight of the ClosingDate. All refunds or costs associated with the cancellation of such policiesshall be the sole asset of and responsibility of the Sellers.

 

(b)                                 Inthe event that any of the Acquired Assets or any portion of the Business isdamaged or otherwise the subject of a casualty or condemnation on or prior tothe Closing Date, and the reduction in the fair market value of the AcquiredAssets or the Business as a result of the casualty or condemnation reasonablyexceeds Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00), theneither the Purchaser or Sellers shall have, in their sole, independentdiscretion, the right to terminate this 

 

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Agreement. If thereduction in the fair market value as a result of any casualty or condemnationis less than Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00), onlythe Purchaser shall have the right to elect to terminate this Agreement. Iffollowing a condemnation or casualty that occurs on or prior to the ClosingDate, neither party elects to terminate this Agreement, then Purchaser shallproceed to close without any reduction in the Purchase Price and any and allinsurance proceeds and the right to contest or make a claim for the same shallbecome the property of the Purchaser after the Closing Date and no Seller shallhave any right, title or interest in or to the same and each does herebyrelinquish any and all interest therein; *provided,however,*each of the foregoing shall fully cooperate in assigningand securing any and all insurance proceeds on behalf of the Purchaser. In theevent Purchaser or Sellers shall elect to terminate this Agreement pursuant tothis Section 6.14(b) with the exception of the Purchaser’sindemnity set forth at Section 3.1(b), this Agreement shall thereafter benull and void and of no further force and effect and no party hereto shall haveany further obligation or liability hereunder, and the Escrow Agent shallpromptly thereafter return the Deposit to the Purchaser.

 

6.15                           Transactionswith Affiliates. Except as disclosed on Schedule 6.15 or asotherwise provided for herein, the Business has no outstanding contracts,agreements, loans, obligations, debts or other legally binding arrangement withthe Sellers or any of their Affiliates that will survive the Closing.

 

6.16                           Employees,Officer and Directors.

 

(a)                                  NoSeller, on behalf of the Business, has ever maintained or contributed to, anyemployee benefit plan (as defined in Section 3(3) of ERISA) or anybonus, incentive, retirement, deferred compensation, retiree medical or lifeinsurance, supplemental retirement, severance or other benefit plans, programsor arrangements, or any employment, termination, severance or other contractsor agreements, and, except as set forth on Schedule 6.16(a), thereexists no employee benefit plan for which the Sellers could incur liability onbehalf of the Business under Section 4069 of ERISA in the event such planhas been or were to be terminated. Any employee of the Business may beterminated without cause at any time for any lawful reason without obligationon the part of the Sellers to make any payment therefore.

 

(b)                                 TheSellers, as appropriate, agree to terminate and dismiss, for any lawful reason,without creating any financial or other obligation to the Business or thePurchaser any employee or agent of the Business, as may be requested bythe Purchaser, which termination shall be effective not later than midnight onthe Closing Date.

 

(c)                                  Notwithstandingthe foregoing, nothing contained in this Agreement shall prohibit thePurchaser, or its designee, from entering into an employment relationship undersuch terms and conditions as are acceptable to the Purchaser, with anyemployee, manager or agent of the Business.

 

6.17                           LaborMatters. Except as set forth in Schedule 6.17, the Sellersemploy all personnel working at the Premises or in the Business and none of theforegoing is a party to any collective bargaining or other labor union contractapplicable to persons employed for the benefit of the Business, no collectivebargaining agreement is being negotiated by the Sellers and none of the Sellershas knowledge of any activities or proceedings (a) involving anyunorganized employees of the Business seeking to certify a collectivebargaining unit or (b) of any labor union to organize any of the employeesof the Business. There is no labor dispute, strike or work stoppage againstthe Sellers affecting or threatening to affect the Business pending orthreatened which may interfere with the operation of the Premises or theBusiness.

 

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6.18                           Compliancewith Laws.

 

(a)                                  Toeach of the Sellers’ or their Affiliates knowledge, each Seller and theBusiness is now and at all times has been in material compliance (provided thelack of any compliance will not have or have had a Material Adverse Effect onthe Business or the Acquired Assets) with all applicable federal, state andlocal statutes, ordinances, rules, regulations, permits, consents, licenses,orders or other authorizations governing or related to the Acquired Assets orthe Business and the Business’s liquor and gaming related activities,including, but not limited to, the Liquor and Gaming Laws of the State ofLouisiana, as amended, and the rules and regulations promulgatedthereunder, and no Seller nor any Affiliates thereof, have received any notice,demand, complaint or order from any Governmental Body asserting that a licenseof or related to the Business should be revoked, suspended, not issued orissued with qualifications, or that they or the Business are not in fullcompliance with the same. Larose, both as of the Agreement Date and the ClosingDate, has a validly issued Device Owner’s License permitting the ownership andoperation of Devices at the Premises and such Device Owner’s License is notcurrently subject to any investigation or notice of investigation, suspensionor revocation from any state, federal, local or parish agency or authority. Purchaseracknowledges that the Louisiana State Police have not yet issued anEstablishment License to Larose and/or Midway, as applicable, and that atpresent there is still pending an investigation by the Louisiana State Policeas part of the issuance of an Establishment License for the operation ofDevices at the Truck Stop.

 

(b)                                 Exceptas set forth in Section 6.18(a), to each of the Sellers’ or theirAffiliates’ knowledge, there is no investigation or review of the AcquiredAssets or the Business now underway or threatened by any Governmental Body,including, without limitation, any investigation or review by any gamingauthority, nor has any of the foregoing indicated an intention to conduct thesame.

 

6.19                           Environmentaland Safety Matters. Except as set forth on Schedule 6.19, withrespect to the Business, the Premises and the Acquired Assets:

 

(a)                                  theSellers and their Affiliates, as applicable, have complied and are in materialcompliance, in all respects (provided the lack of any compliance will not haveor have had a Material Adverse Effect on the Business or the Acquired Assets),with all Environmental and Safety Requirements;

 

(b)                                 withoutlimiting the generality of the foregoing, each of the Sellers and any of theirAffiliates have obtained and complied with, and are in material compliance, inall respects (provided the lack of any compliance will not have or have had aMaterial Adverse Effect on the Business or the Acquired Assets), with allpermits, licenses and other authorizations that may be required pursuantto Environmental and Safety Requirements for the occupation of the Premises andthe operation of the Business, including, but not limited to, the sale andstorage of fuel and fuel oil and the disposal of the Business’s waste water, alist of all such permits, licenses and other authorizations is set forth on Schedule 6.19(b);

 

(c)                                  noneof the Sellers nor any of their Affiliates have received any written or oralnotice, report or other information or has any knowledge regarding any actualor alleged violation of Environmental and Safety Requirements, including anyinvestigatory, remedial or corrective obligations, relating to the Business,the Premises or any Acquired Asset arising under Environmental and SafetyRequirements;

 

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(d)                                 toeach of the Seller’s knowledge, none of the following exists at thePremises:  (i) asbestos-containingmaterial in any form or condition; (ii) materials or equipmentcontaining polychlorinated biphenyls; or (iii) landfills, surface impoundments(i.e. ground disposals areas, covered or uncovered, in which trash or any othermaterials are stored or disposed of) or similar disposal areas;

 

(e)                                  noneof the Sellers nor any of their Affiliates have caused, will not knowinglycause, and there has not occurred during the time the Sellers have owned oroperated the Premises, any of the Acquired Assets or the Business, the releaseof any “hazardous substance” on the Premises in violation of any Environmentaland Safety Requirements;

 

(f)                                    noneof the Sellers or any of their Affiliates has, either expressly or by operationof law, assumed or undertaken any liability, including any obligation forcorrective or remedial action, of any other Person relating to Environmentaland Safety Requirements; and

 

(g)                                 toeach of the Seller’s knowledge, Schedule 6.19(g) is a full,complete and accurate list of all Underground Storage and Aboveground StorageTanks (UST’s and AST’s, respectively) on the Premises, each of which is now andhas at all times prior hereto been operated and maintained in full compliancewith all applicable Environmental and Safety Requirements.

 

6.20                           GovernmentalAuthorizations. Any registration, declaration or filing with, or consent,approval, license, permit or other authorization or order by, any GovernmentalBody, domestic or foreign, that is required in connection with the validexecution, delivery, acceptance and performance by the Sellers under thisAgreement or the consummation by the Sellers of any transaction contemplatedhereby or as otherwise necessary for the operation of the Business has been orwill be completed, made or obtained on or before the Closing Date, except anysuch filings or approvals that may be required of the transfercontemplated hereunder by the Louisiana State Police and the Louisiana GamingControl Board.

 

6.21                           Premises.To the best of the Sellers’ knowledge, information and belief, there is not nowpending nor threatened: (a) any litigation or proceeding to take all orany portion of the Premises by eminent domain or other condemnation proceeding;(b) any street widening or changes in any highway or traffic lanes orpatterns in the immediate vicinity of the Premises; or (c) other change ormodification by a Governmental Body which would adversely affect the Premises,the Business or any of the Acquired Assets. Further, to the best of the Sellers’knowledge, information and belief, (i) the Premises are connected to andserviced by adequate water, gas, sewage disposal and electric facilities; (ii) allmaterial systems of the Premises, including, but not limited to, heating,ventilation, air conditioning, electrical, plumbing, roof, fuel pumps andlines, etc., are in good operating condition, subject to reasonable andordinary wear and tear; and (iii) the Premises and all improvementslocated thereon are in full compliance with current building and zoning laws. Sellershave no information or knowledge that any portion of the Premises are beingcondemned or otherwise taken for use as part of any street widening process.

 

6.22                           Disclosure.To the best of the Sellers’ knowledge, information and belief, neither thisAgreement, nor any of the exhibits, schedules, attachments, written statements,documents, certificates, reports or other items prepared or supplied to the Purchaserby or on behalf of the Sellers or any of their Affiliates with respect to thetransactions contemplated hereby contain any untrue statement of a materialfact or omit a material fact necessary to make each statement contained hereinor therein not misleading.

 

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6.23                           Operations.

 

(a)                                  TheBusiness and the Acquired Assets, including, but not limited to, the fuel andgaming activities conducted therein, have been and shall be, at all times fromand after the Agreement Date through the Closing, operated pursuant to soundbusiness practices as are necessary to preserve, protect,  and provide maintenance for the Business andthe Acquired Assets and in no event following the Agreement Date, shall theamount of the Business’s inventory for any item of inventory, including, butnot limited to fuel, food or convenience items, be less than the average amountof inventory for that item at any time during the twelve (12) month periodpreceding the Closing Date. All of the Acquired Assets, both as of theAgreement Date and as of the Closing Date, shall be in good operating conditionand repair, reasonable wear and tear excepted.

 

(b)                                 AllDevices currently placed in the Premises are owned by Larose. There is noseparate agreement with any third party to operate the Listed Devices or manageany portion of the Business. Larose, for itself and any Affiliates, agrees, asa part of the Closing, to timely request a coordinated transfer of theDevices from the Louisiana gaming regulatory authorities and to cooperate inthe transfer of said Devices and to timely provide all documentation andinformation as shall be necessary to ensure the orderly and proper transfer ofDevices at the Premises, including ensuring that there is no period of timeduring such a transfer when at least forty (40) Devices are not legallyoperating on the Premises and available for play by the general public. Concurrentlyherewith, Larose, for itself and for its Affiliates, agrees to execute apurchase agreement with Southern Trading Corporation, a Louisiana corporation,or any other designee of the Purchaser who is also a holder of a validLouisiana device owner’s license, under which all of Larose’s interest in theListed Devices shall be transferred to Southern Trading Corporation, or suchdesignee, for a total consideration equal to One Dollar ($1.00) per ListedDevice; *provided, however,*in noevent shall the total consideration paid for the Listed Devices and theacquired Assets exceed the Purchase Price. It is the purpose of this Agreementand the intent of the Purchaser and Sellers that the total monetaryconsideration to be paid by the Purchaser and the acquirer of the ListedDevices for all of the Acquired Assets, including the Listed Devices, shallequal, but not exceed, the Purchase Price.

 

(c)                                  Theamount and type of fuel sales at the Premises, at all times for the last twelve(12) months, have been sufficient to qualify the Premises, pursuant to theLiquor and Gaming Laws of the State of Louisiana, as a truck stop facilityapproved to operate not less than fifty (50) Devices. None of the Sellers hasany knowledge of any information that would lead any party to reasonablyanticipate any change in the foreseeable future in the level and type of fuelsales at the Premises. Not more than one (1) percent of all fuel sales atthe Premises during any twelve (12) month period were made to the Sellers orany Affiliate of the foregoing.

 

6.24                           CertainPayments. No officer, director, employee or agent of the Business, theSellers or any of their Affiliates, nor any other person acting with or onbehalf of the Business has directly or indirectly (a) offered, agreed tomake or 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 treatmentin securing business, permits or licenses, (ii) to pay for favorabletreatment for business, permits or licenses secured, (iii) to obtain anyspecial concessions or for special concessions already obtained or (iv) inviolation of any legal requirement or (b) established or maintained anyfund or asset related to the Business, the Acquired Assets or their operations.

 

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6.25                           Interestin Competitors, Suppliers and Customers. Except as set forth on Schedule 6.25,none of the Sellers nor any Affiliates of the foregoing, have any ownershipinterest in any competitor, supplier or customer of the Business.

 

6.26                           No-Shop.Sellers, for themselves and for anyAffiliates, agree that until the termination or expiration of this Agreement,neither they nor any of their Affiliates shall enter into any agreements norhave discussions with any third parties for the sale of the Acquired Assets norgrant any rights of first refusal or options to acquire the same in any form whatsoever.Sellers acknowledge for themselves and for their Affiliates during the term ofthis Agreement, Purchaser shall have the sole and exclusive right to purchasethe Acquired Assets.

 

6.27                           Representationsand Warranties of the Purchaser. As a material inducement to the Sellers toenter into this Agreement and sell the Acquired Assets hereunder, the Purchaserrepresents and warrants to each of the Sellers as follows:

 

(a)                                  Purchaseris duly formed, validly existing and in good standing under the laws of theState of Delaware. Purchaser possesses all requisite power and authority, andall licenses, permits and authorizations necessary, to own and operate itsproperties, to carry on its businesses as now conducted and presently proposedto be conducted and to carry out the transactions contemplated by thisAgreement. Purchaser is not in violation of any of the provisions of itsArticles of Incorporation or By-Laws.

 

(b)                                 Theexecution, delivery and performance of this Agreement and all other agreements,instruments and transactions contemplated hereby and thereby to which thePurchaser is a party have been duly authorized by all requisite companyapprovals. This Agreement and all other agreements and instruments contemplatedhereby to which the Purchaser is a party each constitutes a valid and bindingobligation of the Purchaser enforceable in accordance with its terms. The executionand delivery by the Purchaser of this Agreement and all other agreements andinstruments contemplated hereby to which the Purchaser is a party, the purchaseof the Acquired Assets hereunder and the fulfillment of and compliance with therespective terms hereof by the Purchaser, does not and shall not: (i) conflictwith or result in a breach of the terms, conditions or provisions of, (ii) constitutea default under, (iii) result in a violation of, the Articles ofIncorporation or By-Laws of the Purchaser, or any law, statute, rule orregulation to which the Purchaser is subject.

 

Section 7.                                            ConditionsPrecedent.

 

7.1                                 Conditionsto the Purchaser’s Obligations. The obligation of the Purchaser to purchasethe Acquired Assets shall be expressly subject to the satisfaction andfulfillment, at or before the Closing, of each of the following conditionsprecedent and any other such conditions stated elsewhere in this Agreement.

 

(a)                                  Prohibition.There shall have been no lawsuit, judgment, order, suit, complaint orpreliminary or permanent injunction entered, pending or threatened in anyaction or proceeding before any United States federal, state, parish or localcourt, or any foreign court, of competent jurisdiction or Governmental Bodythreatening or enjoining, in whole or in part, the Business’s currentoperations, making illegal or prohibiting the consummation of the transactionshereunder, including the transfer of the Acquired Assets and the operation ofDevices on the Premises.

 

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(b)                                 RelatedAgreements. To be effective as of the Closing Date: (i) Larose shallhave executed a purchase agreement between Larose and Southern TradingCorporation, or any other properly licensed designee of the Purchaser,transferring to Southern Trading Corporation, or such other designee, all ofthe Listed Devices; (ii) Purchaser and Penn shall have entered into theIndependent Contractor Agreement set forth in Exhibit E; and (iii) Purchaser,Penn and the third parties referred to therein shall have entered into theRight of First Refusal Agreement set forth in Exhibit F.

 

(c)                                  RepresentationsTrue. The representations and warranties of the Sellers set forth in thisAgreement and the exhibits, schedules, attachments, written statements,documents, certificates, Closing Reports, financial statements or other itemsprepared or supplied to the Purchaser by or on behalf of the Sellers, shall betrue and correct in all respects on the Closing Date with the same effect asthough all such items had been made on and as of such date, and the Sellersshall each deliver to the Purchaser a certificate certified by an officer ofthe Sellers, and Penn, individually, certifying such or identifying any changesas of the Closing Date (the “Closing Certificate”).

 

(d)                                 GoodStanding Certificate. The Purchaser shall have received a good standingcertificate for each of the applicable Sellers dated within fifteen (15) daysprior to the Closing Date.

 

(e)                                  Conditionof Assets. The Acquired Assets shall be in good physical and operatingcondition, excepting normal wear and tear only, as existed on the AgreementDate. No damage or casualty shall have occurred to the Acquired Assets, Devicesor operations of the Business prior to the Closing Date.

 

(f)                                    LegalOpinion. Purchaser shall have received a legal opinion, substantially inthe form of Exhibit G attached hereto, from legal counsel forthe Sellers.

 

(g)                                 NoAdverse Change. As of the Closing Date, there shall be no adverse change inthe operating results, operations, condition (financial or otherwise), employeerelations or customer or supplier relations of the Business or the AcquiredAssets, as applicable.

 

(h)                                 AdditionalDocuments. The Purchaser shall have received from the Sellers, asappropriate, each of the instruments and other documents referred to elsewherein this Agreement.

 

(i)                                     AssumedContract Consents. The Purchaser shall have received the consent(s) of thelessors under the leases and/or contracts identified on Schedule 6.9(b).

 

(j)                                     TitlePolicy. The Title Company shall be unconditionally prepared to issue theTitle Policy in the name of the Purchaser or its designee, in the amount of thePurchase Price.

 

(k)                                  Financing.The Purchaser shall have received the funds from any financing for thecontemplated purchase of the Acquired Assets.

 

(l)                                     Laroseor Midway, as applicable, shall have been issued an Establishment License bythe Louisiana State Police and/or Gaming Control Board.

 

7.2                                 Conditionsto the Sellers’ Obligations. The obligation of the Sellers to sell theAcquired Assets to the Purchaser shall be subject to the satisfaction andfulfillment, at or before the Closing, of the following conditions precedent:

 

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(a)                                  Thereshall have been no lawsuit, judgment, order, suit, complaint or preliminary orpermanent injunction entered, pending or threatened in any action or proceedingbefore any United States federal, state, Parish or local court, or any foreigncourt, of competent jurisdiction or Governmental Body (which has jurisdictionover the enforcement of any applicable laws) making illegal or prohibiting theconsummation of the transactions hereunder, including the transfer of theAcquired Assets or the operation of Devices on the Premises;

 

(b)                                 Purchaserhas timely delivered or caused to be delivered the Purchase Price, plus orminus any applicable prorations hereunder, to the Escrow Agent;

 

(c)                                  Purchasershall have performed all obligations and complied with all agreements andcovenants required hereunder to be performed by Purchaser on or before theClosing Date;

 

(d)                                 Purchaser’srepresentations and warranties contained herein and in any documents furnishedto the Sellers on or prior to the Closing Date shall be true and correct in allrespects as of the Closing Date;

 

(e)                                  TheTitle Company has confirmed to Sellers that the Title Company isunconditionally prepared to disburse the Purchase Price (plus or minus allapplicable prorations and less the Escrow Hold Back) to the Sellers or itsdesignees subject only to the performance by the Sellers of their respectiveobligations under this Agreement;

 

(f)                                    Sellersshall have received the Agreements referred to in Section 7.1(b).

 

(g)                                 TheSellers shall have received the consent(s) of the lessors under the leasesand/or contracts identified on Schedule 6.9(b).

 

(h)                                 Exceptfor the consents under item (g) above, if any of the foregoing conditionsare not satisfied on or prior to the Closing Date for a reason other than adefault under this Agreement by the Sellers, Sellers shall give the Purchaserwritten notice of the foregoing conditions not satisfied and Purchaser shallhave thirty (30) Business Days during which to cure the same. In the event thePurchaser is unable to cure the conditions within such period, the Sellers may terminatethis Agreement and the Escrow Agent shall promptly release the Deposit to theSeller. Acceptance by any of the Sellers of any portion of the Purchase Priceshall be evidence of the waiver by each of the Sellers of the foregoingconditions precedent.

 

Section 8.                                            Omitted.

 

Section 9.                                            Non-Solicitation.

 

9.1                                 Notwithstandinganything contained in this Agreement to the contrary, each of the Sellers, forthemselves and their Affiliates, agrees for a period of three (3) yearsfollowing the Closing and as partial consideration for the Purchase Price, thatneither they, nor their Affiliates, shall employ, solicit for employment orinduce to leave their employment or other relationship, any employee, customer,vendor or supplier of the Purchaser, its Affiliates or the Business, nor anyemployee who may be permanently hired by the Purchaser or Southern TradingCorporation.

 

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9.2                                 Nothingcontained in this Section is intended or shall it be construed asprohibiting any party from running “help wanted” ads or other generalsolicitations for employees or from hiring respondents to such generalsolicitations, regardless of whether such respondents are or have been employedby one of the parties to this Agreement.

 

Section 10.                                      Deed,Adjustments and Prorations, Closing.

 

10.1                           Deed.                 Subject toPurchaser’s review and acceptance of Title Evidence, Sellers shall convey thePremises to Purchaser by an Act of Cash Sale (the “Deed”), attached hereto as Exhibit H,conveying good, marketable and indefeasible fee simple title to the Premisessubject only to the following:

 

(a)                                  Zoninglaws;

 

(b)                                 Currentreal estate and *ad valorem*taxes and assessments,if any, not yet due and payable; and

 

(c)                                  PermittedEncumbrances.

 

Such Deed shall contain alegal description of the Premises which is based upon and consistent with theSurvey and approved of by the Purchaser.

 

10.2                           Taxesand Assessments: Closing Costs.

 

(a)                                  Realestate and *ad valorem* taxes, general and specialand assessments (collectively “Real Estate Taxes”),  utilities, costs, charges and expensesgenerated by the operations of the Acquired Assets and other similar charges,as well as revenues generated by the Acquired Assets, shall be prorated betweenthe Sellers and the Purchaser as of the Closing Date, such that credits,charges, costs, expenses and revenues up to noon local time on the Closing Dateand all days preceding the Closing Date shall be allocated to Sellers, asapplicable, and credits, charges, costs, expenses and revenues after noon localtime on the Closing Date shall be allocated to Purchaser. The Purchase Priceshall be adjusted at the Closing to reflect the prorations, in accordance withthe Settlement Statement.

 

(b)                                 Theparties agree that, in accordance with Louisiana law, all revenue from theListed Devices shall be collected during the last normally scheduled “drop” orcollection prior to or on the Closing Date and that the proration of allrevenue generated from each Listed Device shall be calculated from the time ofthe foregoing “drop” and adjusted for the balance of the Closing Date untilnoon local time by using the print out of all coin-in and prizes paid asgenerated by each Listed Device from the time of the drop to noon local time onthe Closing Date.

 

(c)                                  Ifthe actual amount of Real Estate Taxes is not known on the Closing Date, RealEstate Taxes shall be prorated on the basis of the rate shown for the Premiseson the last available tax duplicate; provided, that there shall be deductedtherefrom all applicable credits. Sellers represent and warrant that there areno special assessments with regard to the Premises. Upon receipt of the finaltax duplicate for the period encompassing the Closing Date, the parties shalladjust, outside of the escrow, the proration of Real Estate Taxes based uponthe actual tax duplicate.

 

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(d)                                 Ifany errors or omissions are made regarding adjustments and prorations asaforesaid, the parties shall make the appropriate corrections promptly upon thediscovery thereof. Any corrected adjustment or proration shall be paid in cashto the party entitled thereto.

 

(e)                                  Sellersshall not assign any policies of liability or property damage insurancecovering the Premises. No insurance premiums shall be prorated. Purchaser shallpay for recording fees. Purchaser shall pay any Louisiana transfer taxes andconveyance fees associated with the conveyance of the Real Property. Escrowfees shall be paid by the Purchaser. Each party shall pay its own attorneys’fees and all expenses incurred by it other than expenses specifically addressedelsewhere in this Agreement. All revenues and expenses arising from theoperation of the Acquired Assets and the Business (collectively, the “OperatingCharges”) accruing, earned or incurred on or prior to the Closing Date shall bethe sole responsibility of the Sellers (regardless of when an invoice is issuedor payment for such charges and expenses is due), including but not limited, toany salaries, utilities, Taxes or other costs. All Operating Charges arisingfrom the operation of the Acquired Assets and the Business and incurred afterthe Closing Date shall be the sole responsibility of the Purchaser. The partiesshall make a reasonable proration of the Operating Charges at Closing basedupon the most recent invoice for each Operating Charges and shall adjust suchproration upon receipt of the final invoice encompassing the Closing Date foreach such Operating Charges.

 

(f)                                    Closing.This transaction shall be closed through an escrow that is to be held by theTitle Company, in accordance with the general provisions of the usual form ofescrow agreement then in use by such Title Company for transactions similar tothis with such special provisions inserted as may be required to conform withthis Agreement. Each party shall execute and deliver on a timely basis allescrow instructions, deeds, funds, the Settlement Statement and other documentsreasonably necessary to accomplish Closing. In addition to, and not in limitationof, the foregoing:

 

(i)                                     Onor before the Closing Date, Sellers shall execute, deliver or cause to bedelivered to the Title Company all of the items listed below:

 

(a)                                  TheDeed;

 

(b)                                 Anyother instruments then required pursuant to any other sections of thisAgreement;

 

(c)                                  MechanicsLien Affidavit required by the Title Company; and

 

(d)                                 EachSeller’s affidavit of non-foreign status, as contemplated by Section 1445of the Code attached hereto as Exhibit D.

 

(ii)                                  Onor before the Closing Date, Purchaser shall deliver or cause to be delivered toTitle Company the Purchase Price, subject to the prorations and credits asherein provided, and execute and deliver to the Sellers an assumption agreementin form and substance reasonably satisfactory to Sellers and their counselunder which the Purchaser, or its designee, assumes and agrees to perform allobligations under the Assumed Contracts that accrue after the Closing Date.

 

(iii)                               Thetransactions provided for in this Agreement shall be completed by the TitleCompany on the Closing Date by doing each of the following:

 

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(a)                                  byfiling the Deed for record in the Deed Records of Lafourche Parish, Louisiana;

 

(b)                                 bycausing the issuance of the Title Policy, subject only to the PermittedEncumbrances, and forwarding the Title Policy to Purchaser with a copy toSellers;

 

(c)                                  byprorating taxes, assessments and other amounts, in accordance with thisAgreement and the Settlement Statement with respect to the Premises, and payingand charging Purchaser or Sellers for those costs and expenses to be paid bySellers or Purchaser pursuant hereto;

 

(d)                                 bydelivering to Purchaser: (i) the Seller’s/Owner’s Affidavit and Indemnity,fully executed by the applicable Sellers, and attached hereto as Exhibit I;and (ii) the FIRPTA Affidavit attached hereto as Exhibit D;  and

 

(e)                                  bypreparing and forwarding to Purchaser and Sellers four (4) signed copiesof the Settlement Statement setting forth all receipts and disbursements providedfor herein.

 

In addition to theobligations required to be performed hereunder by Sellers at the Closing,Sellers agree to perform such other acts, and/or to execute and deliver toPurchaser such further instruments, documents and other materials, as arereasonably requested by Purchaser at or subsequent to Closing in order toeffect the consummation of the transaction contemplated herein and to vesttitle to the Premises and the Acquired Assets in Purchaser, including, withoutlimitation, the assignment of all rights of Sellers in and to any easements forthe benefit of the Premises; *provided,however,* that the foregoing instruments and other materials, if any,shall not enlarge the scope of Sellers’ obligations hereunder.

 

(g)                                 Inthe event the Title Company is unable to simultaneously perform allinstructions set forth in Section 10(f)(iii)(a) through (e) onthe Closing Date, the Title Company shall so notify Sellers and Purchaser, andshall retain, unless otherwise instructed by the party depositing the same, alldocuments and funds deposited with the Title Company until receipt by the TitleCompany of written instructions executed by Sellers and Purchaser or by a Courtof competent jurisdiction.

 

(h)                                 Ifthe Purchaser (i) disapproves any condition referred to in this Agreementwithin the applicable time period and in the manner set forth in the Agreement,or (ii) is otherwise allowed to terminate this Agreement and cancel theEscrow, without thereby committing an act of default under this Agreement or theEscrow and does so, all obligations of the parties under this Agreement shall,except as otherwise set forth, terminate and none of the parties hereto shallhave any further obligation to the other under this Agreement. In such event,Escrow Agent shall return all funds (after deducting its charges, if itscharges are to be borne by the party depositing such funds) and documents thenin Escrow to the party depositing same and each party shall promptly return alldocuments in the possession of such party to the other party.

 

(i)                                     Possession.                                Atnoon local time on the Closing Date, subject in all events to the payment bythe Purchaser of the Purchase Price, Sellers shall cease operation of theAcquired Assets and 

 

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shall deliver possessionthereof to the Purchaser, and all risk of loss with respect thereto shall passto the Purchaser or its designee.

 

(j)                                     InventoryCount. The Sellers and Purchaser agree that at 7:00 a.m. local time onthe Closing Date, a representative from each of them (the “Representatives”)shall meet at the Truck Stop and shall jointly perform the followingfunctions:

 

(i)                                     countany food stuffs and convenience items held by the Sellers for sale to thegeneral public;

 

(ii)                                  shalljointly verify the amount of motor and diesel fuels remaining in anyunderground storage tanks;

 

(iii)                               shalljointly verify the amount of all currency contained in the Listed Devices as of7:00 a.m. local time on the Closing Date;

 

(iv)                              shalljointly verify the amount of all currency kept in the safe located in thecasino; and

 

(v)                                 shallfurther cooperate to turn over, at noon local time, subject in all events tothe payment of the Purchase Price by the Purchaser, all keys, passwords,accounts, and copies of all records, documents, instruments and any other itemsnecessary for the immediate and complete operation of the Acquired Assets.

 

(k)                                  InventoryAdjustment.

 

(i)                                     Purchaseragrees to pay to the Sellers, on the Closing Date: (i) a good faith,reasonable estimate (the “Estimate”) of the actual cost of those itemsremaining on the Premises and described in Section 10(j)(i) and (ii) above;*provided, however*, each such itemmust be in good, usable, saleable condition; (ii) the dollar value of theof currency remaining in the safe located in the casino; and (iii) thedollar value of the currency contained in the Listed Devices as verified under Section 10(j)(iii) above,less any and all unclaimed payouts, Taxes or fees, which currency shall remainin the safe and the Listed Devices following the Closing and shall become theproperty of the Purchaser.

 

(ii)                                  Withinsixty (60) Business Days of the Closing Date, the parties shall adjust theEstimate made in Section 10(k)(i) above, if necessary, to equal theactual verifiable cost incurred by any Seller of those items remaining on thePremises as of 7:00 a.m. local time on the Closing Date and described in Section 10(j)(i) and(ii) above. Seller must be able to provide Purchaser with verification, ina form reasonably acceptable to Purchaser, of a Seller’s actual, incurredcost for the items in Section 10(j)(i) and (ii) which remainedon the Premises on the Closing Date. Any Seller shall only be entitled to bereimbursed for their actual cost of such items without premium or interest. Anyitems, determined by the Purchaser as not being in good, usable, saleablecondition or for which the actual verifiable cost cannot be demonstrated to thePurchaser’s satisfaction, shall be removed by Sellers, within five (5) BusinessDays of such determination, at their sole cost and expense.

 

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(l)                                     EscrowHold Back. From and after the Closing Date, Escrow Agent shall withhold theEscrow Hold Back from the Sellers’ proceeds hereunder and shall hold such fundsin escrow. In the event: (i) the Purchaser shall receive any invoice, billor letter demanding payment for any Operating Charges that accrued or relate toany period of time on or prior to the Closing Date; or (ii) any accountreceivable transferred hereunder is not collected in full by the thirtieth day(30) prior to the Hold Back Expiration Date (as hereinafter defined), Purchasershall send evidence of such Operating Charges to the Escrow Agent and to theSellers (“Hold Back Notice”).

 

(i)                                     Sellersshall have ten (10) Business Days following their receipt of the Hold BackNotice to serve, in writing to both the Escrow Agent and the Purchaser, anyobjections they may have to the same. If no objection is timely served bythe Sellers, Escrow Agent is herewith authorized, without further action by anyparty, to promptly pay such Operating Charges out of the Escrow Hold Back.

 

(a)                                  IfSellers shall timely object to any payment out of the Escrow Hold Back and thebasis for an objection is that the Operating Charges that are the subject ofthe Hold Back Notice arose after the Closing Date, then the Escrow Agent shallhold such amount as is identified in the Hold Back Notice until such time as itreceives written instructions from all parties to disburse the same; or

 

(b)                                 IfSellers shall timely object to any payment out of the Escrow Hold Back and thebasis for an objection is anything other than an objection based upon Section 10(i)(i)(a) above,the Escrow Agent shall hold the funds identified in the Hold Back Notice for anadditional thirty (30) calendar days, after which it shall disburse such fundsas directed by the Purchaser.

 

(ii)                                  Promptlyafter that date which is one hundred twenty (120) days after the Closing Date (“HoldBack Expiration Date”), Escrow Agent shall release any funds then remaining inthe Escrow Hold Back to the Sellers, unless such funds have been the subject ofa Hold Back Notice and subsequent objection in which event such funds shallremain in escrow until the Escrow Agent has received written instructions fromboth the Purchaser and the Sellers.

 

Section 11.                                      Miscellaneous.

 

11.1                           Expenses.Unless specifically allocated by this Agreement, each of the parties shall beobligated to pay its own expenses (including all fees and expenses of legalcounsel, environmental consultants and accountants).

 

11.2                           Sellers’Resignation. Sellers shall and shall cause their owners, shareholders,members, managers, officers, employees and agents to, resign, effective as ofthe Closing Date, any positions they may hold within the Business,including, but not limited to, the positions of agent or employee.

 

11.3                           Updateto Schedules and Exhibits. The Sellers, as appropriate, shall promptlynotify the Purchaser, prior to the Closing Date, of any changes ormodifications to the information contained on the schedules or exhibitsattached to this Agreement or in any document, record or instrument supplied tothe Purchaser or any of its agents as a part of the transactionscontemplated herein and provide in written form an amended schedule,exhibit, document, record or instrument, as the case may be. Notwithstandinganything contained herein to the contrary, Sellers shall update the attachedSchedules within thirty (30) days of the Agreement Date. Notwithstanding theforegoing, upon receipt of any change or modification 

 

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to any schedule or exhibit orin any record, document or instrument described above which shall have oridentify a Material Adverse Effect, Purchaser shall have the right, in its solediscretion, to terminate this Agreement and upon such termination the EscrowAgent shall promptly release the Deposit to the Purchaser.

 

11.4                           Remedies.

 

(a)                                  Inthe event of any actual or alleged default by any party hereto (the “DefaultingParty”), the non-defaulting party (the “Non-Defaulting Party”) shall providewritten notice to the Defaulting Party (“Default Notice”) specifying thedefault; setting forth the Non-Defaulting Party’s claim that the matter constitutesa default; and identifying the steps or actions that the Non-Defaulting Partybelieves should be taken in order to cure the alleged default. The DefaultingParty shall have a period of seven (7) days, or such additional time as may bereasonably required, to cure the alleged default (the “Cure Period”). TheDefaulting Party shall have no liability for any actual or alleged default thatis cured within the Cure Period.

 

(b)                                 Eachof the parties hereto shall have all rights and remedies set forth in this Agreementand any other documents or instruments relating to the consummation of thetransactions contemplated under this Agreement, and all rights and remedieswhich such parties have been granted at any time under any other agreement orcontract and all of the rights which such parties have under any law. No remedyhereunder or thereunder conferred is intended to be exclusive of any otherremedy, and each and every such remedy shall be cumulative and shall be inaddition to every other remedy given hereunder or thereunder or now orhereafter existing at law or in equity or by statute or otherwise. The Sellersand Purchaser having any rights under any provision of this Agreement shall beentitled to enforce such rights specifically (without posting a bond or othersecurity), to recover damages by reason of any breach of any provision of thisAgreement and to exercise all other rights granted by law.

 

11.5                           Amendmentsand Waivers. No oral modification hereof shall be binding upon the parties;all modifications and amendments shall be in writing and signed by the parties.Failure by any party to insist upon or enforce any of its respective rights,benefits or remedies shall not constitute a waiver thereof. Any party hereto may waivethe benefit of any provision or condition for such party’s benefit contained inthis Agreement; *provided, however,*such a waiver must be specifically expressed in writing.

 

11.6                           Survivalof Agreement. All covenants, representations and warranties contained inthis Agreement or made in writing by any party in connection herewith shallsurvive the execution and delivery of this Agreement and the consummation ofthe transactions contemplated hereby.

 

11.7                           Successorsand Assigns. All covenants and agreements contained in this Agreement by oron behalf of any of the parties hereto shall bind and inure to the benefit ofthe respective heirs, personal representatives, executors, administrators,successors and assigns of the parties hereto whether or not so expressed;provided that none of the Sellers shall be permitted to assign their rights orobligations under this Agreement. Except as otherwise expressly providedherein, nothing expressed in or implied from this Agreement is intended togive, or shall be construed to give, any Person, other than the parties heretoand their permitted successors and assigns, any benefit or legal or equitableright, remedy or claim under or by virtue of this Agreement or any such otherdocument.

 

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11.8                           Severability.Whenever possible, each provision of this Agreement shall be interpreted insuch manner as to be effective and valid under applicable law, but if anyprovision of this Agreement is held to be prohibited by or invalid underapplicable law, such provision shall be ineffective only to the extent of suchprohibition or invalidity, without invalidating the remainder of thisAgreement.

 

11.9                           Counterparts.This Agreement may be executed in two or more counterparts, any one ofwhich need not contain the signatures of more than one party, but all suchcounterparts taken together shall constitute one and the same Agreement.

 

11.10                     DescriptiveHeadings; Interpretation. The descriptive headings of this Agreement areinserted for convenience only and do not constitute a substantive part ofthis Agreement.

 

11.11                     GoverningLaw. This Agreement shall be governed by and construed in accordance withthe laws of the State of Louisiana, without regard to principles of conflict oflaws.

 

11.12                     Notices.All notices, demands or other communications to be given or delivered under orby reason of the provisions of this Agreement shall be in writing and shall bedeemed to have been given (a) when delivered personally to the recipient, (b) one(1) Business Day after being sent to the recipient by reputable overnightcourier service (charges prepaid), (c) three (3) Business Days afterposting in the United States mail having been mailed to the recipient bycertified or registered mail, return receipt requested and postage prepaid, or (d) whensent via facsimile if a copy is delivered personally, couriered or mailed tothe recipient as set forth above. Such notices, demands and othercommunications shall be sent to the parties at the addresses indicated below:

 

If toany of the Sellers, to:

 

LaroseTruck Plaza and Casino, L.L.C.

c/oJoe F. Penn, Jr.

4411Cherokee Rose Drive

Zachary,Louisiana 70791

Facsimile:

 

with arequired copy to:

 

DavidM. Culpepper, Esq.

DavidM. Culpepper, L.L.C.

400Poydras Street, Suite 1710

New Orleans, Louisiana 70130

Facsimile:504-680-6080

 

If to the Purchaser, to:

 

GamecoHoldings, Inc.

c/oColonial Downs

1869Mills Highway

BreauxBridge, Louisiana 70517

Attn:Stan Guidroz

Facsimile:337-507-2282

 

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with arequired copy to:

 

HahnLoeser & Parks LLP

3300BP Tower

200Public Square

Cleveland,Ohio 44114

Attn:Stanley R. Gorom III, Esq.

Facsimile:216-274-2460

 

or to such other addressor to the attention of such other person as the recipient party has specifiedby prior written notice to the sending party.

 

11.13                     Construction. The parties hereto haveparticipated jointly in the negotiation and drafting of this Agreement. In theevent an ambiguity or question of intent or interpretation arises, thisAgreement shall be construed as if drafted jointly by the parties hereto, andno presumption or burden of proof shall arise favoring or disfavoring any partyby virtue of the authorship of any of the provisions of this Agreement. Theparties intend that each representation, warranty and covenant contained hereinshall have independent significance. If any party has breached anyrepresentation, warranty or covenant contained herein in any respect, the factthat there exists another representation, warranty or covenant relating to thesame subject matter (regardless of the relative levels of specificity) whichsuch party has not breached shall not detract from or mitigate the fact thatsuch party is in breach of the first representation, warranty or covenant.

 

11.14                     CompleteAgreement. This Agreement, those documents expressly referred to herein,and the other documents of even date herewith, or dated as of the Closing Date,delivered or executed in connection with the transactions contemplated herebyembody the complete agreement and understanding among the parties and supersedeany prior agreements or representations by or among the parties, written ororal, including the Letter of Intent dated October 3, 2005, and executedby the parties prior to the Agreement Date, which may have related to thesubject matter hereof in any way.

 

11.15                     Indemnification.

 

(a)                                  Inconsideration of the Purchaser’s execution and delivery of this Agreement andpurchase of the Acquired Assets hereunder, and in addition to all of each ofSellers’ other obligations under this Agreement and in addition to all otherrights and remedies available at law or in equity, each of the Sellers agree,jointly and severally, to defend, protect and indemnify the Purchaser and allof its officers, directors, shareholders, members, managers, partners,Affiliates, employees, agents, representatives, successors and assigns(including those retained in connection with the transactions contemplated bythis Agreement) (collectively, the “Purchaser Indemnitees”), and save and hold each of them harmless from andagainst, and pay on behalf of or reimburse such party on demand as and whenincurred, any and all actions, causes of action, suits, claims, losses, costs,penalties, fees, liabilities, damages and expenses in connection therewith(irrespective of whether any such Indemnitee is a party to the action for whichindemnification hereunder is sought), including reasonable attorneys’ fees anddisbursements, interest and penalties and all amounts paid in investigation,defense or settlement of any of the foregoing and claims relating to any of theforegoing (the “Purchaser Liabilities”),incurred by the Purchaser Indemnitees or any one of them as a result of,arising out of, or relating to: (a) the breach by any Seller of anyrepresentation, warranty, covenant, obligation or term contained herein; (b) anyclaim, debt, cause of action, expense, obligation or liability arising orrelated to the period of time prior to the 

 

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Closing Date andrelated in any manner to the operation of the Business and/or the AcquiredAssets by the Sellers; or (c) any breach or default by any Seller arisingout of the execution, delivery, performance or enforcement of this Agreementand any other instrument, document or agreement executed pursuant hereto,except to the extent any such Purchaser Liabilities are caused by theparticular Purchaser Indemnitee’s own acts or omissions.

 

(b)                                 Inconsideration of each Sellers’ execution and delivery of this Agreement andsale of the Acquired Assets hereunder, and in addition to all of the Purchaser’sother obligations under this Agreement and in addition to all other rights andremedies available at law or in equity, the Purchaser agrees to defend, protect and indemnify each Seller andall of their officers, directors, shareholders, members, partners, Affiliates,employees, managers, agents, representatives, successors and assigns (includingthose retained in connection with the transactions contemplated by thisAgreement) (collectively, the “Seller Indemnitees”), and save and holdeach of them harmless from and against, and pay on behalf of or reimburse suchparty on demand as and when incurred, any and all actions, causes of action,suits, claims, losses, costs, penalties, fees, liabilities, damages andexpenses in connection therewith (irrespective of whether any such SellerIndemnitee is a party to the action for which indemnification hereunder issought), including reasonable attorneys’ fees and disbursements, interest andpenalties and all amounts paid in investigation, defense or settlement of anyof the foregoing and claims relating to any of the foregoing (the “SellerLiabilities”), incurred by the Seller Indemnitees or any of them as aresult of, arising out of, or relating to: (a) the breach by the Purchaserof any representation, warranty, covenant, obligation or term contained herein;or (b) any claim, debt, cause of action, expense or liability arisingafter the Closing Date and related in any manner to the operation of theBusiness and/or the Acquired Assets by the Purchaser; or (c) any breach ordefault by the Purchaser arising out of the execution, delivery, performance orenforcement of this Agreement and any other instrument, document or agreementexecuted pursuant hereto, except to the extent any such Seller Liabilities arecaused by the particular Seller Indemnitee’s own acts or omissions.

 

11.16                     PrevailingParty Fees. In the event of a default of any condition or obligation ofthis Agreement on the part of any party hereto which results in any legalproceeding, the non-prevailing party shall pay to the prevailing party of thelitigation all reasonable costs and expenses of the legal proceeding and anyappeal therefrom, including reasonable attorney’s fees.

 

11.17                     Incorporation. Any and all Schedules, Exhibitsor other documents referred to herein or attached hereto are incorporatedherein as if fully rewritten in this Agreement.

 

11.18                     TaxTreatment Election.

 

(a)                                  Theparties agree that this Agreement is for the purchase and sale of assets andthat Purchase Price shall be allocated among the Acquired Assets in accordancewith Section 1060 of the Code. Purchaser and Sellers agree that as acondition to the Closing they shall, by mutual agreement, allocate the value ofthe Acquired Assets pursuant to the Code. Not less than ten (10) daysprior to the Closing, the Purchaser and Sellers, as applicable, shall completeand sign three (3) copies of form 8594, and each agrees to act inaccordance with the allocation contained therein in the course of any Taxaudit, tax review, the filing and preparation of any Tax Returns or taxlitigation. Neither Purchaser nor Sellers shall assert that the allocation asagreed upon was not separately bargained for at arm’s length and in good faith.

 

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(b)                                 Ifthe parties fail to reach a mutually agreeable determination with respect tothe values to be utilized in the completion of Exhibit Cwithin five (5) days prior to theClosing, the disputed item(s) shall be submitted to a certified publicaccountant employed by PricewaterhouseCoopers in New Orleans, Louisiana (the “IndependentAccountant”) for resolution. The Independent Accountant’s determination shallbe made using GAAP and shall be final and binding on both parties. The costsand expenses of the Independent Accountant will be split equally between thePurchaser and the Sellers. The Closing Date shall be extended day to day untilthe third (3rd) day following the Independent Accountant’s determination of theforegoing.

 

11.19                     AdditionalInstruments and Information. Allparties agree and do hereby obligate themselves to promptly execute anyadditional documents and instruments and take any other actions necessary andproper for the complete and expeditious implementation and satisfaction of theprovisions and intent of this Agreement. In addition, Sellers agree that duringand subsequent to the sale transaction, Sellers shall have a continuing duty tosupply such information and documentation and to perform such acts as may berequired by any Governmental Body or under the Liquor and Gaming Laws of theState of Louisiana.

 

11.20                     MonthlyFinancial Statements. Sellers agree toprovide, from and after the Agreement Date through the Closing Date, withinfifteen (15) days following the close of each calendar month, financialstatements, including a statement of income and expenses and a balance sheetprepared in manner consistent with the internal accounting and reporting practicesused by the Sellers beginning on and after January 1, 2005, reflecting theoperations and results of the Business for the prior month.

 

11.21                     FutureDevelopment.

 

(a)                                  Infurther consideration of the purchase of the Acquired Assets and the Business,each of the Sellers (“Selling Parties”) obligate themselves and theirAffiliates not to directly or indirectly, within a fifteen (15) mile radius (“ExclusionZone”) of the Truck Stop commencing on the Closing Date and continuingthereafter uninterrupted for a period of five (5) years: (i) own,manage, operate, control, be employed by, participate in or be connected withany aspect of a video poker truck stop facility or other business which derivesany portion of its revenues from legal or illegal gaming, whether as a soleproprietor, owner, partner, stockholder, member, director, officer, employee,agent, consultant, joint venturer, contractor, investor or other participant;or (ii) be otherwise involved or connected in any manner with theownership, management, operation, promotion, advertisement, solicitation ofcustomers, marketing or sales efforts or control of any enterprise that carrieson or engages in a business directly or indirectly in competition with thegaming, fueling (diesel and motor fuel), restaurant or convenience-storeactivities of the Business.

 

(b)                                 Theforegoing restriction is an obligation not to do an act or take an action. TheSelling Parties, each for themselves and their Affiliates, acknowledge that theforegoing obligation not to do an act is a material inducement for thePurchaser to enter into this Agreement and is a necessary, reasonable andappropriate restriction.

 

(c)                                  Giventhe unique and competitive nature of the video poker industry and the operationof truck stop facilities, the parties hereto acknowledge and agree that therestrictions contained in this Section 11.21 are reasonable andnecessary to protect the Business from competition for which it otherwise haslittle or no ability to defend itself. The parties hereto further acknowledgeand agree that 

 

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the restrictionscontained herein do not impose a burden upon one party which is notcommensurate with the risk to any other party.

 

(d)                                 Ifa court of competent jurisdiction determines that the restrictions containedherein are too restrictive to be enforced, in whole or in part, this provisionshall not be invalid, and all parties agree that the court shall modify therestrictions contained herein to the extent necessary to permit theirenforcement.

 

(e)                                  Inthe event of a breach or threatened breach of the provisions of this section,the Purchaser shall be entitled to an injunction restraining each of theSelling Parties from competing against the Purchaser or from rendering anyservices to any person, firm, corporation, association, partnership or otherentity that is competing against the Purchaser. Nothing contained in this section shallbe construed as prohibiting the Purchaser from pursuing any other remediesavailable for a breach or threatened breach of the restrictions contained inthis section, including the recovery of damages from the any of the SellingParties.

 

(f)                                    TenPercent (10%) of the Purchase Price is specifically allocated as payment to theforegoing entities and individuals as consideration for their obligations andcovenants under this Section 11.21.

 

(g)                                 Notwithstandingthe foregoing, Seller’s are currently and shall remain the owners and operatorsof that certain truck stop facility commonly referred to as Hollywood TruckPlaza & Casino (“Hollywood Truck Stop”) located in Bayou Vista,Louisiana. Seller’s continued ownership and operation of the Hollywood TruckStop shall not be a violation of the foregoing “obligation not to do” and shallbe the sole exception thereto.

 

11.22                     Time ofthe Essence. TIME IS OF THE ESSENCE WITH RESPECT TO EACH PROVISION OF THISAGREEMENT. The parties acknowledge and agree that the preceding sentence is acentral, indispensable element of this Agreement.

 

11.23                     ForceMajure. Any time period or obligation to timely perform imposed uponany party hereunder shall be extended as necessary when performance of suchobligation(s) is rendered impossible or unreasonably difficult as a result ofany acts of God, war, labor strikes or unrest, weather, acts of terrorism,general disruptions to the economy or day-to-day operations of the governmentof the Parish of Lafourche, the State of Louisiana or the United States ofAmerica which make conducting business unreasonably difficult or impossible.

 

11.24                     **SUBMISSION TO JURISDICTION AND VENUE, CONSENT TOSERVICE OF PROCESS, ETC.**TO THE FULLEST EXTENT PERMITTED BY LAW,EACH OF THE PURCHASER AND EACH OF THE SELLING PARTIES HEREBY IRREVOCABLY ANDUNCONDITIONALLY:

 

(A)                              AGREESTHAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TOTHIS AGREEMENT, THE TRANSFER CONTEMPLATED HEREIN OR ANY STATEMENT, COURSE OFCONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING(COLLECTIVELY, “RELATED LITIGATION”) TO WHICH EITHER IS OR MAY BE A PARTY MAY BEBROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING INBATON ROUGE, LOUISIANA,

 

38

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AND SUBMITS TO THEJURISDICTION OF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED LITIGATION INANY OTHER FORUM;

 

(B)                                ACKNOWLEDGESTHAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY RELATED LITIGATION,WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHTIN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANYSUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TOOBJECT, WITH RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVEJURISDICTION OVER IT; AND

 

(C)                                CONSENTSAND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANYRELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO ITAT THE ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREESTHAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESSSERVED IN ANY OTHER MANNER PERMITTED BY LAW).

 

11.25                     **JURY WAIVER**  TO THE FULLEST EXTENT PERMITTED BY LAW, EACHOF THE PURCHASER AND EACH OF THE SELLING PARTIES HEREBY IRREVOCABLY ANDUNCONDITIONALLY WAIVES THEIR RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS,CAUSES OF ACTION OR SUITS ARISING FROM OR RELATED TO THE SUBJECT MATTER OF THISAGREEMENT.

 

11.26                     **Use of storage building located on the Premises.**For not more than six (6) calendarmonths following the Closing Date, Purchaser shall permit the Seller, withoutcharge, to store any of the sellers’ video draw poker devices in the separatestorage building located on the Premises; *provided, however,*in no event shall the Purchaser have any obligation to maintain the security ofsuch building or the contents thereof during such six (6) month period andall risk of damage, theft or loss to any of the Sellers’ property stored on thePremises shall remain solely with the Sellers.

 

[Theremainder of this page is left intentionally blank.]

 

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THUS DONE ANDPASSED on the 9th day of November, 2005, at the City of Lockport,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:                                                                                                                                                                                                                                                         | SELLERS:                                                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                               | LAROSE TRUCK  PLAZA & CASINO, L.L.C., a  Louisiana limited liability company |
|                                                                                                                                                                                                                                                               |                                                                                  |
|                                                                                                                                                                                                                                                               |                                                                                  |
| /s/ Stan Guidor                                                                                                                                                                                                                                                    |                                                                                  | By: | /s/ Joe F. Penn, Jr. |   |
| Printed Name:  Stan Guidor                                                                                                                                                                                                                                    | Joe F. Penn, Jr.,  Authorized Officer                                            |
| /s/ Charlene Hancock                                                                                                                                                                                                                                               |                                                                                  |   |
| Printed Name: Charlene  Hancock                                                                                                                                                                                                                                    |                                                                                  |
|                                                                                                                                                                                                                                                               |                                                                                  |
|                                                                                                                                                                                                                                                               | /s/ Sheila P. St.  Pierre                                                             |   |
|                                                                                                                                                                                                                                                               | NOTARY PUBLIC                                                                         |   |
|                                                                                                                                                                                                                                                               |                                                                                  |
|                                                                                                                                                                                                                                                               |                                                                                  |
| THUS  DONE AND PASSED on the 9th day of November, 2005, at the City of  Lockport, State of Louisiana, the undersigned party having affixed its  signature in the presence of me, Notary, and the undersigned competent  witnesses, after due reading of the whole. |
|                                                                                                                                                                                                                                                               |                                                                                  |
| WITNESSES:                                                                                                                                                                                                                                                         | SELLERS:                                                                              |
|                                                                                                                                                                                                                                                               | MIDWAY  RECREATION, L.L.C., a Louisiana limited  liability company                    |
|                                                                                                                                                                                                                                                               |                                                                                  |
|                                                                                                                                                                                                                                                               |                                                                                  |
| /s/ Stan Guidor                                                                                                                                                                                                                                                    |                                                                                  | By: | /s/ Joe F. Penn, Jr. |   |
| Printed Name:  Stan Guidor                                                                                                                                                                                                                                    | Joe F. Penn, Jr.,  Authorized Officer                                            |
| /s/ Charlene Hancock                                                                                                                                                                                                                                               |                                                                                  |   |
| Printed Name: Charlene  Hancock                                                                                                                                                                                                                                    |                                                                                  |
|                                                                                                                                                                                                                                                               |                                                                                  |
|                                                                                                                                                                                                                                                               | /s/ Sheila P. St.  Pierre                                                             |   |
|                                                                                                                                                                                                                                                               | NOTARY PUBLIC                                                                         |   |
|                                                                                                                                                                                                                                                                    |                                                                                       |  |  |  |  |  |  |

 

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THUS DONE ANDPASSED on the 9th day of November, 2005, at the City of Lockport,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 

 
| WITNESSES:                           | SELLERS:                  |
|--------------------------------------|---------------------------|
|                                 |                      |
|                                 |                      |
| /s/ Stan Guidor                      |                      | /s/ Joe F. Penn, Jr., |   |
| Printed Name:                        | /s/ Stan Guidor           |   | Joe F. Penn, Jr.,  Individually and as the spouse of |
|                                 | Melissa Penn              |
| /s/ Charlene Hancock                 |                      |   |
| Printed Name:  Charlene Hancock |                      |   |
|                                 |                      |
|                                 | /s/ Sheila P. St.  Pierre |   |
|                                 | NOTARY PUBLIC             |   |
|                                      |                           |  |  |  |  |  |

 

THUS DONE ANDPASSED on the 9th day of November, 2005, at the City of Lockport,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 

 
| WITNESSES:                           | SELLERS:                  |
|--------------------------------------|---------------------------|
|                                 |                      |
|                                 |                      |
| /s/ Stan Guidor                      |                      | /s/ Melissa Penn |   |
| Printed Name:                        | /s/ Stan Guidor           |   | Melissa Penn,  Individually and as the spouse of Joe F. |
|                                 | Penn                      |
| /s/ Charlene Hancock                 |                      |   |
| Printed Name:  Charlene Hancock |                      |   |
|                                 |                      |
|                                 | /s/ Sheila P. St.  Pierre |   |
|                                 | NOTARY PUBLIC             |   |
|                                      |                           |  |  |  |  |  |

 

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THUS DONE AND PASSED onthe ___ day of November, 2005, at the City of West Palm Beach, State ofFlorida, the undersigned party having affixed its signature in the presence ofme, Notary, and the undersigned competent witnesses, after due reading of thewhole.

 
| WITNESSES:                           | PURCHASER:                                          |
|--------------------------------------|-----------------------------------------------------|
|                                 | Gameco Holdings, Inc.,  a Delaware corporation |
|                                 |                                                |
|                                 |                                                |
| /s/ Thomas Che                       |                                                | By: | /s/ Jeffrey P. Jacobs |   |
| Printed Name:                        | Thomas Che                                          |   | Jeffrey P. Jacobs, CEO |
| /s/ Jay Christianson                 |                                                |   |
| Printed Name:  Jay Christianson |                                                |   |
|                                 |                                                |
|                                 | /s/ Chrissy A. DeNitto                              |   |
|                                 | NOTARY PUBLIC                                       |   |
|                                      |                                                     |  |  |  |  |  |  |

 

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**LISTOF SCHEDULES AND EXHIBITS**

** **
| 1.  |   | Schedule 1.1(b)                       |   | -  Machinery/Equipment/Fixtures                       |
|-----|--------|--------------------------------------------|--------|-------------------------------------------------------|
| 2.  |   | Schedule 1.1(c)                       |   | - Inventories                                         |
| 3.  |   | Schedule 1.1(Listed  Devices)         |   | - Listed Devices                                      |
| 4.  |   | Schedule 1.1(Permitted  Encumbrances) |   | - Permitted  Encumbrances                             |
| 5.  |   | Schedule 6.4(a)                       |   | - Closing Report                                      |
| 6.  |   | Schedule 6.4(b)                       |   | - Exceptions                                          |
| 7.  |   | Schedule 6.6                          |   | - Undisclosed  Liabilities                            |
| 8.  |   | Schedule 6.9(a)                       |   | - Contracts                                           |
| 9.  |   | Schedule 6.9(b)                       |   | - Assumed  Contracts                                  |
| 10. |   | Schedule 6.10                         |   | - Intellectual  Property Rights                       |
| 11. |   | Schedule 6.11                         |   | - Litigation                                          |
| 12. |   | Schedule 6.13                         |   | - Required  Consents                                  |
| 13. |   | Schedule 6.15                         |   | - Transactions  with Affiliates                       |
| 14. |   | Schedule 6.16(a)                      |   | - Employee and  Officer - Employment Contracts        |
| 15. |   | Schedule 6.17                         |   | - Labor Matters                                       |
| 16. |   | Schedule 6.19                         |   | - Environmental  and Safety Matters                   |
| 17. |   | Schedule 6.19(b)                      |   | - List of  Permits                                    |
| 18. |   | Schedule 6.19(g)                      |   | - UST’s and AST’s                           |
| 19. |   | Schedule 6.25                         |   | - Interest in  Competitors, Suppliers and Customers   |
| 20. |   | EXHIBIT A                             |   | - Legal  Description - Premises                       |
| 21. |   | EXHIBIT B                             |   | - Omitted                                             |
| 22. |   | EXHIBIT C                             |   | - Form 8594                                      |
| 23. |   | EXHIBIT D                             |   | - Certification  of Non-foreign Status                |
| 24. |   | EXHIBIT E                             |   | - Independent  Contractor Agreement                   |
| 25. |   | EXHIBIT F                             |   | - Right of First  Refusal Agreement                   |
| 26. |   | EXHIBIT G                             |   | - Legal Opinion                                       |
| 27. |   | EXHIBIT H                             |   | - Deed                                                |
| 28. |   | EXHIBIT I                             |   | - Seller’s/Owner’s  Affidavit and Indemnity |

 

43

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SCHEDULE 1.1(b)

 

[Machinery/Equipment/Fixtures]

 

List being prepared, tobe attached within twenty (20) days of the Agreement Date. 

 

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SCHEDULE 1.1(c)

 

[Inventories]

 

List being prepared, tobe attached within twenty (20) days of the Agreement Date. 

 

45

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SCHEDULE 1.1 -Listed Devices

 

[Listed Devices]

 

List being prepared, tobe attached within twenty (20) days of the Agreement Date. 

 

46

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SCHEDULE 1.1 -Permitted Encumbrances

 

[Permitted Encumbrances]

 

To be determined andapproved of by Purchaser prior to the Closing.

 

47

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SCHEDULE 6.4

 

[Closing Report]

 

To be attached withintwenty (20) days following the Agreement Date. 

 

48

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SCHEDULE 6.6

 

[Undisclosed Liabilities]

 

None.

 

49

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SCHEDULE 6.9(a)

 

[Contracts]

 

None.

 

50

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SCHEDULE 6.9(b)

 

[Assumed Contracts]

 

None.

 

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SCHEDULE 6.10

 

[Intellectual PropertyRights]

 

1. “Larose Truck Plaza &Casino” name and trademark and any variation of same.

 

52

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SCHEDULE 6.11

 

[Litigation]

 

None.

 

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SCHEDULE 6.13

 

[Required Consents]

 

1.                                       Theissuance of appropriate permits from the LaFourche Parish Health Department.

 

2.                                       Theissuance of a state and parish liquor license/permit to sell alcoholicbeverages on the Premises by the Purchaser.

 

3.                                       Thereceipt of funds from the Purchaser’s financing source.

 

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SCHEDULE 6.15

 

[Transactions with Affiliates]

 

None.

 

55

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SCHEDULE 6.16(a)

 

[Employee and Officer -Employment Contracts]

 

None.

 

56

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SCHEDULE 6.17

 

[Labor Matters]

 

None.

 

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SCHEDULE 6.19

 

[Environmental and SafetyMatters]

 

None.

 

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SCHEDULE 6.19(b)

 

[List of Permits]

 
| 1.     |   | Gaming  Establishment License   |
|--------|--------|---------------------------------|
|   |   |                            |
| 2.     |   | Parish Retail  License          |
|   |   |                            |
| 3.     |   | Parish Device  License          |
|   |   |                            |
| 4.     |   | Sales Tax  Certificate          |
|   |   |                            |
| 5.     |   | Department of  Health           |
|   |   |                            |
| 6.     |   | UST Registration                |
|   |   |                            |
| 7.     |   | Outside Beer  License           |
|   |   |                            |
| 8.     |   | Beer &  Liquor License |
|   |   |                            |
| 9.     |   | Tobacco License                 |

 

List being prepared, tobe attached within twenty (20) days of the Agreement Date. 

 

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SCHEDULE 6.19(g)

 

[UST’s and AST’s]

 

1.               See the followingregistration documents for all Underground Storage Tanks. List being prepared,to be attached within twenty (20) days of the Agreement Date.

 

2.               There are noAbove-Ground Storage Tanks on the Premises.

 

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SCHEDULE 6.25

 

[Interest in Competitors,Suppliers and Customers]

 

None.

 

61

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EXHIBIT A

 

[Legal Description of thePremises]

 

62

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EXHIBIT B

 

[Management Agreements]

 

No Management Agreements.

 

63

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EXHIBIT C

 

[IRS Form 8594]

 

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EXHIBIT D

 

TRANSFEROR’S CERTIFICATIONOF NONFOREIGN STATUS

 

To inform Gameco Holdings, Inc., aDelaware corporation (“Transferee”), that withholding of tax under Section 1445of the Internal Revenue Code of 1954, as amended (“Code”), will not be requiredupon the transfer of certain real property to the Transferee by Larose TruckPlaza & Casino, L.L.C., each a Louisiana limited liability company (“Transferor”),the undersigned hereby certifies the following:

 

1.                                       The Transferor is not a foreign person,foreign partnership, foreign trust, or foreign estate (as those terms aredefined in the Code and the Income Tax Regulations promulgated hereunder),

 

2.                                       The Transferor’s U.S. employer identificationnumber is                        and

 

3.                                       The Transferor’s office address is:

 

1825 Highway 308

Lockport, Louisiana 70374

 

The Transferor understands that this Certification may bedisclosed to the Internal Revenue Service by the Transferee and that any falsestatement contained herein could be punished by fine, imprisonment, or both.

 

The Transferor understands that the Transferee isrelying on this Certification in determining whether withholding is requiredupon said transfer.

 

Under penalty of perjury, I declare that I haveexamined this Certificate and, to the best of my knowledge and belief, it istrue, correct, and complete, and I further declare that I have authority tosign this document on behalf of the Transferor.

 

Date of this           day of                                              ,2005.

 

TRANSFEROR:

 

 
| By:    |                                      |   |
|--------|-------------------------------------------|--------|
|   | Joe F. Penn, Jr., Authorized Officer |   |

 

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EXHIBIT E

 

**STATEOF LOUISIANA**

 

**PARISHOF ST. MARY’S**

 

**INDEPENDENT CONTRACTOR AGREEMENT**

 

BE IT KNOWN, that beforethe undersigned Notaries Public, in the State of Louisiana, and in the presenceof the undersigned competent witnesses, personally came and appeared:

 

**JOE F. PENN, JR.,**a Louisiana resident (“Contractor”), whose mailing address is declared to be4411 Cherokee Rose Drive, Zachary, Louisiana 70791;

 

and

 

**GAMECO HOLDINGS, INC.**,a Delaware corporation (“Gameco”), domiciled and having a place of business inthe Parish of St. Martin, State of Louisiana and whose mailing address isdeclared to be 1869 Mills Hwy, Breaux Bridge, Louisiana 70517, hereinrepresented by its duly authorized agent Jeffrey P. Jacobs,

 

both of whom did executethis Independent Contractor Agreement (“Agreement”), to be effective as of this    day of                               ,2005 (the “Agreement Date”).

 

# **RECITALS**

# ** **

A.                                   Gameco,on the Agreement Date, has or anticipates purchasing the assets of a businessknown as the Larose Truck Plaza & Casino, L.L.C., and 1825 Hwy 308,Lockport, Louisiana 70375 (the “**Business**”);

 

B.                                     Contractorhas special skills, training, experience, knowledge and ability to perform advisoryand consulting services with respect to the Business and Gameco desiresContractor to provide such services; and

 

C.                                     Contractorseeks to be retained by Gameco and Gameco seeks to retain Contractor under theterms and subject to the conditions set forth below.

 

NOW,THEREFORE, in consideration of the mutual promises and agreements hereinafterset forth and other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                       *Incorporation*. The foregoing recitals areincorporated herein as if fully rewritten herein.

 

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2.                                       *Independent Contractor.*At all times during the Term (ashereinafter defined) of this Agreement, Contractor shall perform theduties and responsibilities identified in this Agreement as an independentcontractor and not as an agent, employee, member, joint venturer or partner ofGameco. Gameco shall not withhold any federal, state or local taxes, socialsecurity, unemployment compensation or other payments from the Payments (ashereinafter defined) paid to Contractor. Contractor shall pay all federal,state and local income taxes, social security contributions and all other taxesand charges levied or assessed with respect to the Payments received byContractor pursuant to this Agreement. Gameco and Contractor agree that Gamecoshall not provide Contractor with a paid vacation period, or with medical, lifeor any other benefits, except as expressly provided in this Agreement. Contractoragrees to abide by all applicable federal, state and local laws, ordinances, rules andregulations in performing the duties and responsibilities required of himhereunder. Contractor shall be obligated to pay any and all costs and expensesthat Contractor deems necessary or appropriate to fulfill his obligationshereunder.

 

3.                                       *Term and Termination.*This Agreement shall be deemed to havecommenced on the Agreement Date and shall continue thereafter until December 31,2007, unless terminated prior to such date as hereinafter provided (the “**Term**”). Notwithstanding the foregoing, thisAgreement may terminate immediately, at Gameco’s reasonable discretion,upon the occurrence of any of the following events (each a “**Termination**”):  (i) Contractor being convicted of afelony or act of moral turpitude; (ii) Contractor breaches or defaultsunder any of the terms and conditions of Section 6 of this Agreement; or (iii) Gamecois directed to disassociate itself from any relationship or contact withContractor by any state gaming authority. A Termination under Sections 3(i), (ii) or(iii) shall constitute a Termination for “**Cause**”. Gameco and Contractor acknowledge and agree that noprovision contained in this Agreement offers, guarantees or otherwise obligatesGameco to retain Contractor following the end of the Term or the Termination ofthis Agreement. Following the Termination of this Agreement for Cause, Gamecoshall pay Contractor the Payments accruing prior to the effective date of theTermination as outlined below. Contractor acknowledges and agrees that no othercompensation, of any nature or type, shall be payable hereunder following theTermination of this Agreement for Cause.

 

4.                                       *Duties and Responsibilities of Contractor.*Commencing on andafter the Agreement Date and continuing for the remainder of the Term,Contractor shall be available to the officers, agents and employees of Gamecoon an “as-needed and when-needed” basis with reasonable advance notice andshall be physically at the Business with reasonable advance notice and atreasonable times. Contractor agrees to conduct himself, at all times whilerendering services hereunder, in a professional manner and shall use his bestefforts to make recommendations hereunder for the purpose of benefiting thefinancial success of the Business. 

 

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Except as identified in Section 6(i) below,Contractor agrees not to accept any engagement during the Term that would placehim in a position of conflict of interest with respect to the financial successof the Business. Nothing contained in this Agreement is intended to, nor shallit be construed as granting Contractor any exclusive rights to provide theservices and duties described herein.

 

5.                                       *Compensation.*So long this Agreement has not been terminatedfor cause, Gameco will make the following payments to Contractor as and forfull and complete consideration and payment for any and all services renderedor obligations under this Agreement whether rendered on or after the AgreementDate (collectively, the “**Payments**”):Seventy-Five Thousand and 00/100 Dollars ($75,000.00) to be paid on the secondday of the calendar months of January and July in each of 2006 and2007. The death, illness or physical or mental incapacity of Contractor shallin no way relieve, excuse or diminish the obligations of Gameco to make thePayments to Contractor as set forth herein, and Contractor’s rights to receivethe Payments shall inure to his heirs, administrators, executors, successors orassigns. The Payments shall be the subject of a separate guarantee by Gameco. ShouldGameco sell or otherwise transfer all or substantially all of its ownershipinterests in the Business to Jacobs Entertainment, Inc. (“JEI”), suchguarantee of the Payments hereunder shall also transfer concurrently therewithto JEI.

 

6.                                       *Business’s Proprietary Interest in Trade Secrets ANDNon-Compete*.

 

a.               Contractoracknowledges that he may have access to and become familiar with theBusiness’s records, documents, files, policies, business plans, strategies,customers, suppliers, products, marketing processes and plans, financialinformation, employees, officers, agents, unique data and the like regarding theBusiness and its operations (collectively referred to herein as “**Trade Secrets**”). Contractor acknowledgesthat the Trade Secrets are special, valuable and unique assets of Gameco andthat Gameco would suffer great loss and damage if, during or after the Term,Contractor were to disclose, reveal, divulge or make available, either directlyor indirectly, to any person, firm, partnership, corporation, association orany other third-party, the Trade Secrets. Accordingly, Contractor agrees thatthe Trade Secrets, in their entirety or any portion thereof, shall not bedisclosed, revealed, divulged, or made available to any person, firm,partnership, corporation, association or any other third-party, either directlyor indirectly, during or after the Term, unless Contractor is authorized to doso in writing by Gameco, which authorization, if given, may be revoked byGameco at any time in its sole discretion. Contractor agrees that, upontermination of this Agreement for any reason, Contractor shall immediately returnto Gameco all Trade Secrets previously held by, retained or under the controlof Contractor (including, but not limited to, any analyses, compilations,studies or documents prepared 

 

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during the review ofTrade Secrets by Contractor or his agents), and Contractor agrees not to makeand/or retain any copies of any Trade Secrets.

 

b.              Inconsideration of the fees, payments, promises and benefits accruing hereunder,Contractor agrees for a period of five (5) years following the AgreementDate (the “**Non-Compete Period**”)not to, directly or indirectly, own (in any form in whole or in part),operate, manage, control, be employed by, participate in, provide advice,financial aid or other assistance, in any form, to any aspect of a business, orconduct, carry on or engage in any activity, any of which is directly orindirectly competitive with any aspect of the Business within a fifteen (15)mile radius of the Business. In addition to the foregoing, Contractor agrees,during the Non-Compete Period, not to induce any of Gameco’s employees to leavetheir employment, nor to employ either directly or indirectly any of Gameco’semployees. Further, Contractor agrees he shall not solicit any customers,suppliers, sponsors, advertisers or licensees/ors of Gameco for the purpose ofinducing, directly or indirectly, the termination such entity or individual’srelationship with Gameco.

 

c.               Theparties hereto further stipulate that, as between them, all of the itemsreferred to in Section 6 are important, material and confidential andgravely affect the effective and successful conduct of the Business, itsgoodwill and reputation. Any breach of the terms and provisions of Section 6hereof shall constitute a material and irreparable breach of this Agreement andwill subject the Business to immeasurable loss of revenue, businessopportunities and goodwill. The parties further acknowledge that the provisionsof Section 6 are each supported by new and valuable consideration.

 

d.              Inthe event that any provision of Section 6 shall be found by a court ofcompetent jurisdiction to be invalid or unenforceable as against public policy,such court shall exercise its discretion in reforming such provision to the endthat the Contractor shall be subject to non-disclosure, non-competition andnon-interference covenants to the fullest extent permissible under thecircumstances and enforceable by Gameco.

 

e.               The parties acknowledge that Gameco willsuffer material and irreparable damage if the Contractor violates any of thecovenants contained in Section 6. It is hereby agreed that in the event ofsuch breach or an apparent danger of such breach by the Contractor, Gamecoshall be entitled, in addition to such other remedies available to it, to an immediateinjunction to restrain the violation of any or all such provisions by theContractor. In the event that Gameco shall institute any action or proceedingto enforce the provisions of Section 6, the Contractor hereby agrees, inadvance, to waive the claim or defense that there is an adequate remedy at law;the Contractor shall not urge, or be heard to urge, in any such action orproceeding, the claim or defense that 

 

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suchremedy at law exists.

 

f.                 Thecovenants and promises made by the Contractor in favor of Gameco under Section 6are being executed and delivered by the Contractor in consideration of Gameco’sobligations hereunder, including, without limitation, the Payments.

 

g.              **Contractorhas carefully considered the obligations and restrictions contained in thisAgreement and has had adequate time and opportunity to consult with his ownlegal counsel and other advisors regarding the nature and extent of therestrictions upon him, and the rights, remedies and obligations contained inthe Agreement. Contractor hereby acknowledges and agrees that such obligationsand restrictions: (i) are reasonable in time, territory and scope; (ii) aredesigned to eliminate competition which otherwise would be unfair to Gameco; (iii) donot stifle the inherent skill and experience of the Contractor; (iv) wouldnot operate as a bar to the Contractor’s sole means of support; (v) arefully required to protect the legitimate interests of Gameco; and (vi) donot confer a benefit upon Gameco disproportionate to the detriment to theContractor.**

 

h.              In the event that Contractor breaches anyprovision of this Agreement, such violation (i) shall toll the running ofthe five (5) year period set forth in Section 6 from the date ofcommencement of such violation until such violation ceases, and (ii) shallrelieve Gameco of any obligations to the Contractor under this Agreement.

 

i.                  Notwithstandingthe foregoing, Contractor is currently and shall remain an owner and operatorof that certain truck stop facility commonly referred to as Hollywood TruckPlaza & Casino (“Hollywood Truck Stop”) located in Bayou Vista,Louisiana. Contractor’s continued ownership and operation of the HollywoodTruck Stop shall not be a violation of the terms of this Section 6 andshall be the sole exception thereto.

 

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7.                                       *Notice*. Notices and all other communications provided for inthis Agreement shall be in writing and shall be deemed to have been duly given whendelivered by recognized overnight courier, by facsimile with electronicconfirmation of receipt or three (3) days after being mailed by UnitedStates registered mail, return receipt requested, postage prepaid, addressed tothe last known address of the respective parties, provided that all notices toGameco shall be directed to the attention of Stan Guidroz, or to such otheraddress as either party may have furnished to the other in writing inaccordance herewith, except that notices of change of address shall beeffective only upon receipt.

 

8.                                       GoverningLaw. The validity, interpretation, construction and performance of thisAgreement shall be governed by the laws of the State of Louisiana withoutgiving effect to the conflicts of law principles thereof. The parties agreethat they shall be estopped from raising any defenses or claims regardingvenue, including any conflicts of laws provisions to which any party would beotherwise entitled.

 

9.                                       *Validity*. The invalidity or unenforceability of any one or moreprovisions of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, which shall remain in full force andeffect.

 

10.                                 *Counterparts*. This Agreement may be executed in one ormore counterparts, each of which shall be deemed to be an original but all ofwhich together will constitute one and the same instrument.

 

11.                                 *Entire Agreement.*This Agreement and the Asset PurchaseAgreement, also between the parties hereto among others, and dated as of evendate herewith, constitutes the entire agreement between Contractor and Gamecowith respect to the subject matter hereof and no agreements or representations,oral or otherwise, express or implied, with respect to the subject matterhereof have been made by any party that are not set forth expressly in thisAgreement or in the foregoing Asset Purchase Agreement . No provisions of thisAgreement may be modified, waived or discharged unless such modification,waiver or discharge is agreed to in writing signed by you and such officer as may bespecifically designated by Gameco. No waiver by any party at any time of anybreach by another party of, or compliance with, any condition or provision ofthis Agreement to be performed by the other parties shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.

 

12.                                 *Indemnification*. Contractor shallindemnify, defend and hold harmless Gameco and its officers, members, managers,employees, agents, contractors, successors and assigns from and against any andall damages, liabilities, costs, expenses, claims, and/or judgments, including,without limitation, legal costs and reasonable attorneys’ fees anddisbursements (collectively, “**Claims**”)which any of them may suffer from (i) any negligence or misconduct ofContractor arising from or 

 

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connected with Contractor’scarrying out of his duties under this Agreement, or (ii) the breach byContractor of any of his representations, duties, obligations, agreements orduties under this Agreement, including, but not limited to, Contractor’sobligations to withhold and remit any and all payroll taxes and otherwithholdings.

 

13.                                 *Indemnification*. Gameco shall indemnify,defend and hold harmless Contractor and his employees, agents, contractors,successors and assigns from and against any and all damages, liabilities,costs, expenses, claims, and/or judgments, including, without limitation, legalcosts and reasonable attorneys’ fees and disbursements (collectively, “**Claims**”) which any of them may sufferfrom (i) any negligence or misconduct of Gameco arising from or connectedwith Gameco’s carrying out of its duties under this Agreement, or (ii) thebreach by Gameco of any of its representations, duties, obligations, agreementsor duties under this Agreement.

 

14.                                 *Compliance with Law*. Both parties heretoagree that if the manner of payment to the Contractor, or payment by Gameco tothe Contractor or any other provision of this Agreement, becomes violative ofany law, including, but not limited to, federal or state taxation laws, rules orregulations, the parties shall negotiate a revision in the terms of theAgreement such that the purpose for the Agreement and the benefits contemplatedto be obtained by each shall be preserved to the greatest extent practicable.

 

15.                                 *Miscellaneous*.

 

*(a)**                               Negation of Agency*. Nothingherein contained shall be deemed to create an agency, joint venture orpartnership relation between the parties hereto and it is acknowledged that theparties hereto have only a relationship of independent contractor.

 

*(b)**                               Construction*. The language ofthis Agreement and of each and every article, paragraph, section, term and/orprovision of this Agreement, shall in all cases, for any and all purposes andin any and all circumstances, be construed as a whole according to its meaningand not strictly for or against Gameco or Contractor, without no regardwhatsoever to the identity or status of any person or persons who drafted allor any portion of this Agreement.

 

*(c)**                                Headings*. The section headingsused in this Agreement are intended solely for convenience of reference andshall be given no effect in the construction or interpretation of thisAgreement.

 

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16.                                 **SUBMISSION TO JURISDICTION AND VENUE, CONSENT TOSERVICE OF PROCESS, ETC.**TO THE FULLEST EXTENT PERMITTED BY LAW,EACH OF THE PURCHASER AND CONTRACTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(A)                              AGREESTHAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TOTHIS AGREEMENT, THE TRANSFER CONTEMPLATED HEREIN OR ANY STATEMENT, COURSE OFCONDUCT, ACT, OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING(COLLECTIVELY, “RELATED LITIGATION”) TO WHICH EITHER IS OR MAY BE A PARTY MAY BEBROUGHT IN ANY STATE OR FEDERAL COURT OF **COMPETENT**JURISDICTION SITTING IN BATON ROUGE, LOUISIANA, AND SUBMITS TO THE JURISDICTIONOF SUCH COURTS, AND AGREES NOT TO BRING ANY RELATED LITIGATION IN ANY OTHERFORUM;

 

(B)                                ACKNOWLEDGESTHAT SUCH COURTS WILL BE THE MOST CONVENIENT FORUM FOR ANY RELATED LITIGATION,WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHTIN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANYSUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TOOBJECT, WITH RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVEJURISDICTION OVER IT; AND

 

(C)                                CONSENTSAND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANYRELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO ITAT THE ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS AND AGREESTHAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESSSERVED IN ANY OTHER MANNER PERMITTED BY LAW).

 

17.                                 **JURY WAIVER**  TO THE FULLEST EXTENT PERMITTED BY LAW, EACHOF THE PURCHASER AND CONTRACTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVESTHEIR RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS, CAUSES OF ACTION OR SUITSARISING FROM OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

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THUS DONE ANDPASSED on the            dayof November, 2005, at the City of Lockport, State of Louisiana, the undersignedparty having affixed its signature in the presence of me, Notary, and theundersigned competent witnesses, after due reading of the whole.

 
| WITNESSES:    | CONTRACTOR: |
|---------------|-------------|
|          |        |
|          |        |
|          |        | By: |   |   |
| Printed Name: |        |   | Joe F. Penn, Jr.,  Individually |
|          |        |   |
| Printed Name: |        |   |   |
|          |        |
|          |        |
| NOTARY PUBLIC |
|               |             |  |  |  |  |  |  |

 

 

THUS DONE AND PASSED onthe      day of November, 2005, at the City of West PalmBeach, State of Florida, the undersigned party having affixed its signature inthe presence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | PURCHASER:                                          |
|---------------|-----------------------------------------------------|
|          | Gameco Holdings, Inc.,  a Delaware corporation |
|          |                                                |
|          |                                                |
|          |                                                | By: |   |   |
| Printed Name: |                                                |   | Jeffrey P. Jacobs, CEO |
|          |                                                |   |
| Printed Name: |                                                |   |   |
|          |                                                |
|          |                                                |   |
|          | NOTARY PUBLIC                                       |   |
|               |                                                     |  |  |  |  |  |  |  |  |

 

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EXHIBIT F

 

**STATEOF LOUISIANA**

 

**PARISHOF ST. MARY’S**

 

**RIGHT OF FIRST REFUSAL AGREEMENT**

 

BE IT KNOWN, that beforethe undersigned Notaries Public, in the States of Louisiana and                       ,and in the presence of the undersigned competent witnesses:

 

**Hollywood Truck Plaza &Casino, L.L.C**, a Louisiana limited liability company (“Hollywood”and sometimes referred to as the “Company”), domiciled and having its principalplace of business in the Parish of St. St. Mary’s and whose mailing address isdeclared to be P.O. Box 58, Berwick, Louisiana 70342, herein representedby its duly authorized agent: Joe F. Penn, Jr.;

 

**JOE F. PENN, JR.,**a Louisiana resident (“JFPenn”), whose mailing address is declared to be 4411Cherokee Rose Drive, Zachary, Louisiana 70791;

 

**MELISSA PENN,** aLouisiana resident (“MPenn”), whose mailing address is declared to be 4411Cherokee Rose Drive, Zachary, Louisiana 70791;

 

**WILLIAM J. HAMPTON,**a Louisiana resident (“WJHampton”), whose mailing address is declared to be                                                         ;

 

**CYNTHIA M. HAMPTON,**a Louisiana resident (“CMHampton”), whose mailing address is declared to be                                                         ;

 

(Hollywood, JFPenn,MPenn, WJHampton and CMHampton shall collectively be referred to herein as “Sellers”and each individually as “Seller”);

 

and

 

**GAMECO HOLDINGS, INC.**,a Delaware corporation (the “Purchaser”), domiciled and having a place ofbusiness in the Parish of St. Martin, State of Louisiana and whose mailingaddress is declared to be 1869 Mills Hwy, Breaux Bridge, Louisiana, hereinrepresented by its duly authorized agent Jeffrey P. Jacobs,

 

all of whom did executethis Right of First Refusal Agreement (“Agreement”), to be effective as of this    day of                               ,2005 (the “Agreement Date”).

 

**INTRODUCTION**

 

A.                                   Sellersown the assets of a truck stop located at                                                               ,Louisiana                 ,and commonly referred to as the Hollywood Truck Plaza & Casino (the “TruckStop”).

 

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B.                                     TheTruck Stop, *inter alia*, provides retail motor anddiesel fuels, convenience store and restaurant operations for sale to or use bythe general public as well as video draw poker devices for play by the generalpublic.

 

**NOW, THEREFORE,**in consideration of thecovenants and agreements contained herein, for Ten Dollars and no/100 Dollars($10.00) in hand paid by the Purchaser to the Sellers, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, Sellers and Purchaser agree as follows:

 

1.                                     **Incorporation.   **Theforegoing recitals are incorporated by reference herein.

 

2.**                                     Rightof First Refusal.**Should any one of or all the Sellers, on or beforethat date which is ten (10) years after the Agreement Date, receive abona-fide, arm’s length, good faith offer to purchase any of the assets of theTruck Stop (excluding the sale of any asset determined by the Company to nolonger be necessary to the operation of the Truck Stop or otherwise sold in theordinary course of the operation of the Truck Stop (i.e. fuel and inventory) orany of the membership interests in the Company from an unrelated third-party(the “Offer”), Purchaser shall have the right, but not the obligation, to firstpurchase the Truck Stop or the Company under the same terms and conditionscontained in the Offer.

 

(a)          Sellers shall provide Purchaser,within fifteen days (15) of their receipt of any Offer, a copy of the Offer(the “Offer Notice”).

 

(b)         Purchaser shall havethirty (30) Business Days (the “Offer Period”) following its receipt of theOffer Notice to elect, in a writing delivered to the Sellers, to exercise itsright to purchase under this Right of First Refusal Agreement. If Purchasershall fail to make the election described herein within the Offer Period,Sellers may sell the Truck Stop or the Company to the third-party offeroridentified in the Offer Notice (“Offeror”), and Purchaser’s rights hereundershall cease and be of no further force and effect. During the Offer Period,Sellers shall grant Purchaser access to all of the books, records and premisesof the Truck Stop or the Company in order to evaluate the Offer and the currentperformance of the Truck Stop or the Company.

 

(c) Shouldthe sale to the Offeror fail to be consummated, this Right of First Refusalshall continue to be effective and any other offers to purchase the Truck Stopor the Company shall be subject to this right of first refusal.

 

(d) Notwithstandingany terms of the Offer, should Purchaser elect to exercise its right topurchase the Truck Stop or the Company under this Right of First RefusalAgreement, Purchaser shall have ninety days (90) to close the purchase of theTruck Stop or the Company under such terms and conditions as are contained inthe Offer.

 

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3. Notices. Allnotices, demands or other communications to be given or delivered under or byreason of the provisions of this Agreement shall be in writing and shall bedeemed to have been given: (a) when delivered personally to the recipient;(b) one (1) Business Day after being sent to the recipient byreputable overnight courier service (charges prepaid); (c) three (3) BusinessDays after posting in the United States mail having been mailed to therecipient by certified or registered mail, return receipt requested and postageprepaid; or (d) when sent via facsimile if a copy is delivered personally,couriered or mailed to the recipient as set forth above. Such notices, demandsand other communications shall be sent to the parties at the addressesindicated below:

 

If toany of the Sellers, to:

 

c/o JoeF. Penn, Jr.

4411Cherokee Rose Drive

Zachary,Louisiana 70791

Facsimile:

 

with arequired copy to:

 

DavidM. Culpepper, Esq.

DavidM. Culpepper, L.L.C.

400Poydras Street, Suite 1710

NewOrleans, Louisiana 70130

Facsimile:504-680-6080

 

If to the Purchaser, to:

 

GamecoHoldings, Inc.

c/oColonial Downs

1869Mill Hwy

BreauxBridge, Louisiana 70517

Attn:Stan Guidroz

Facsimile:337-507-2282

 

with arequired copy to:

 

HahnLoeser & Parks LLP

3300BP Tower

200Public Square

Cleveland,Ohio 44114

Attn:Stanley R. Gorom III, Esq.

Facsimile:216-274-2460

 

or to such other addressor to the attention of such other person as the recipient party has specifiedby prior written notice to the sending party.

 

4.                                     Eachof the Sellers, jointly and severally, represents and warrants to the Purchasereach of the following:

 

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(a)                             Theconsideration paid above has separate economic significance to each Seller, hasbeen received and is good and sufficient consideration for the promises,covenants and representations and warranties contained herein.

 

(b)                            Sellersjointly own one hundred percent (100%) of all rights, title and interests inand to the Company and the Company owns one hundred percent (100%) of allrights, title and interests in all the assets of the Truck Stop. There are nopreemptive rights, options, warrants or rights of first refusal with respect tothe transfer of the Truck Stop or the Company except the right of first refusalgranted hereunder.

 

5.                                  Eachparty warrants and represents to the others that it, he or she has full right,power and authority to enter into this Agreement and to perform its, hisor her obligations hereunder.

 

6.                                  ThisAgreement shall be construed in accordance with the laws of the State of Louisiana,without regard to principles of conflicts of laws.

 

7.                                  ThisAgreement may be executed in multiple original counterparts, all of which,when taken together, shall constitute one original.

 

THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | Hollywood Truck  Plaza & Casino, L.L.C., a |
|---------------|-----------------------------------------------------|
|          | Louisiana  limited liability company                |
|          |                                                |
|          |                                                |   |   |
| Printed Name: |                                                |   | By: |   |   |
|          |                                                | Its: | ** ** | ** ** |
| Printed Name: |                                                |   |   |
|          |                                                |
|          |                                                |   |
|          | NOTARY PUBLIC                                       |   |
|               |                                                     |  |  |  |  |  |  |  |  |  |

 

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THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | JFPenn:       |
|---------------|---------------|
|          |          |
|          |          |   |   |
| Printed Name: |          |   | Joe F. Penn, Jr. |   |
|          |          | ** ** | ** ** | ** ** |
|          |          | ** ** | ** ** | ** ** |
| Printed Name: |          |   |   |
|          |          |
|          |          |   |
|          | NOTARY PUBLIC |   |
|               |               |  |  |  |  |  |  |  |  |

 

THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | MPenn:        |
|---------------|---------------|
|          |          |
|          |          |   |   |
| Printed Name: |          |   | Melissa Penn. |   |
|          |          | ** ** | ** ** | ** ** |
|          |          | ** ** | ** ** | ** ** |
| Printed Name: |          |   |   |
|          |          |
|          |          |   |
|          | NOTARY PUBLIC |   |
|               |               |  |  |  |  |  |  |  |  |

 

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THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | WJHampton:    |
|---------------|---------------|
|          |          |
|          |          |   |   |
| Printed Name: |          |   | William J. Hampton |   |
|          |          | ** ** | ** ** | ** ** |
|          |          | ** ** | ** ** | ** ** |
| Printed Name: |          |   |   |
|          |          |
|          |          |   |
|          | NOTARY PUBLIC |   |
|               |               |  |  |  |  |  |  |  |  |

 

 

THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | CMHampton:    |
|---------------|---------------|
|          |          |
|          |          |   |   |
| Printed Name: |          |   | Cynthia M. Hampton |   |
|          |          | ** ** | ** ** | ** ** |
|          |          | ** ** | ** ** | ** ** |
| Printed Name: |          |   |   |
|          |          |
|          |          |   |
|          | NOTARY PUBLIC |   |
|               |               |  |  |  |  |  |  |  |  |

 

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THUS DONE AND PASSED on the       day of                         ,2005, at the City of                             ,State of Louisiana, the undersigned party having affixed its signature in thepresence of me, Notary, and the undersigned competent witnesses, after duereading of the whole.

 
| WITNESSES:    | Gameco Holdings, Inc.,  a Delaware corporation |
|---------------|-----------------------------------------------------|
|          |                                                |
|          |                                                | By: |   |   |
| Printed Name: |                                                |   | Jeffrey P. Jacobs, CEO |   |
|          |                                                | ** ** | ** ** | ** ** |
|          |                                                | ** ** | ** ** | ** ** |
| Printed Name: |                                                |   |   |
|          |                                                |
|          |                                                |   |
|          | NOTARY PUBLIC                                       |   |
|               |                                                     |  |  |  |  |  |  |  |  |  |

 

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EXHIBIT G

 

[Legal Opinion]

 

[Letterhead]

 

                                          ,2004

 

Gameco Holdings, Inc.

10515 Colonial DownsParkway

New Kent, Virginia 23124

 

Re:                               AssetPurchase Agreement, dated as of                                   ,2005

 

Ladies and Gentlemen:

 

We have acted as counselfor Larose Truck Plaza & Casino, L.L.C. a Louisiana limited liabilitycompany (“Company”), and Joe F. Penn, Jr.(“Penn”) in connection with the transactions contemplated by the Asset PurchaseAgreement, dated                                           ,2005 (the “Agreement”), by and among theCompany, Penn, and Gameco Holdings, Inc., a Delaware corporation (the “Purchaser”). Capitalized terms used but notdefined herein are used as defined in the Agreement.

 

In rendering the opinionsset forth herein, we have examined originals or copies, certified or otherwiseidentified to our satisfaction, of (i) the Agreement and certain of theother Transaction Documents as listed on Exhibit A (attached hereto andincorporated herein by reference) and referred to collectively as the “TransactionDocuments,” (ii) such Company records and other agreements, documents andinstruments necessary to give the opinions set forth below and (iii) suchcertificates or comparable documents of public officials and officers andrepresentatives of the Company, as the case may be, and we have made suchinquiries of such officers and representatives and considered such matters oflaw as we have deemed appropriate.

 

In all cases, we haveassumed the genuineness of signatures on all documents except those of the Companyand Penn, the legal competence of each person signing on behalf of each party,the authenticity and completeness of documents submitted to us as originals andthe conformity to authentic original documents of documents submitted to us ascopies. As to the opinions expressed in Section 4 below, only, we haveentirely relied upon certificates of Officers of the Company and Penn,originals of which are attached hereto (the “Certificates”). We have noindependent knowledge of any information, circumstances or set of facts thatwould cause us to question the veracity of the information contained in theCertificates.

 

Based upon the foregoing,we are of the opinion, as of the date hereof, that:

 

1.               The Company is dulyorganized, in full force and effect and in good standing under the laws of theState of Louisiana, with all requisite corporate power and authority to own itsproperties and to conduct business as described in the Agreement. The Companyis duly qualified to carry on its business as currently being conducted in eachjurisdiction where such qualification is required.

 

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2.               The Agreement hasbeen duly authorized, executed and delivered by the Company and Penn, and theAgreement constitutes the legal, valid and binding obligations of the Companyand Penn, enforceable against the Company and Penn in accordance with itsterms, subject as to enforceability to applicable bankruptcy, insolvency,reorganization, moratorium, liquidation or similar laws in effect from time totime relating to or affecting the enforcement of the rights of creditorsgenerally.

 

3.               The execution anddelivery by the Company and Penn of the Agreement and the performance of theirobligations there under will not, as applicable, (a) result in theviolation of any Louisiana corporate or federal or state securities statutes orregulations, or any order or decree known to us to have been issued by anycourt or governmental authority which is binding upon either the Company orPenn or any of their respective property, or (b) conflict with or resultin a breach or violation of any of the terms or provisions of the Company’sArticles of Organization or Operating Agreements or violate, conflict with orresult in a breach or termination of, or otherwise give any Person additionalrights or compensation under, or the right to terminate or accelerate, orconstitute (with notice or lapse of time, or both) a default under the terms ofany material agreement or instrument to which the Company or Penn is a party orby which any of the Company’s assets or properties are bound or result increation of a lien upon any of the properties or assets of the Company, underany agreement of the Company or Penn.

 

4.               No actions, suits,claims or proceedings against the Company or Penn are pending nor are anyactions, suits, proceedings or claims threatened, that if adversely determinedwould, either in any single case or in the aggregate, question the validity ofor prevent the consummation of the transactions contemplated by the Agreementor have a Material Adverse Effect on the financial conditions, properties oroperations of the Acquired Assets or the Company or Penn.

 

5.               Please note that notitle examination of the Company’s assets has been requested of or performed bythe undersigned.

 

6.               This opinion letteris given solely to the Purchaser and its designee and may be relied upononly by the Purchaser and its designees and may not be relied upon by anyother party or entity, except for the Purchaser’s lender, for any purposewhatsoever. This opinion letter may not be quoted, circulated or publishedwithout the prior written consent of the issuer, except among the Purchaser’sofficers, agents, lender and representatives and as necessary to enforce theterms of this opinion letter or the Agreement. The opinions stated herein aremade as of the date hereof, and we assume no obligation to advise you of anychanges to the foregoing.

 

Very truly yours,

 

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EXHIBIT H

 

[Deed]

 

# **STATE OF LOUISIANA**

# ** **

**PARISH OFLAFOURCHE**

 

**ACT OF CASH SALE OF IMMOVABLE PROPERTY**

 

BE IT KNOWN, that, before the undersigned Notary(ies)Public in the State of Louisiana, and in the presence of the undersignedcompetent witnesses, personally came and appeared:

 

LaroseTruck Plaza & Casino, L.L.C., a limited liability company of the Stateof Louisiana, domiciled and with its principal place of business in the Parishof Lafourche, with federal tax identification number                                                     ,and whose mailing address is declared to be 1825 Highway 308, Lockport,Louisiana 70374, hereinafter referred to as the “Seller”,

 

who declared that for and in consideration of the sumof               Dollars ($                  ),and other good and valuable consideration, in cash paid, the receipt andsufficiency of which are hereby acknowledged by the Seller, Seller does herebygrant, bargain, sell, convey, transfer, assign, deliver, and set over with fullguarantee and with full warranty of title, and with subrogation to all rightsand actions of warranty against all previous owners that Seller may otherwisehave, unto:

 

[            ],a              ofthe State of             ,domiciled and with its principal place of business in the             ,with federal tax identification number             ,and whose mailing address is declared to be 1869 Mills Hwy, Breaux Bridge,Louisiana 70517, hereinafter referred to as “Purchaser”,

 

purchasing and accepting for itself, its successors andassigns, and acknowledging the delivery and possession thereof, the followingdescribed property, with all of its component parts, including all rights,ways, privileges, servitudes and appurtenances thereto belonging, to-wit:

 

 

 

TO HAVE AND TO HOLD the above described property untothe said Purchaser, the Purchaser’s successors and assigns, forever. The Seller declares that all taxes on theproperty through the year 2004 have been timely paid by the Seller. Taxes forthe current year have been pro-rated between Seller and Purchaser as of thedate of closing. The Purchaser hereby agrees to pay all future andsubsequent taxes.

 

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The Seller hereby declares that the property hereinconveyed has not been heretofore alienated by the said Seller and that as ofthe Closing there shall be no mortgages, liens or encumbrances of recordagainst the said property.

 

The Seller declares that in the federal, state orlocal courts there are no judgments, general or particular, of record againstthe said property.

 

The Seller hereby agrees to deliver possession of theabove described property to the Purchaser on even date herewith.

 

Allparties signing the within instrument, whether as parties or as witnesses, havedeclared themselves to be of full legal capacity.

 

Allagreements and stipulations herein and all of the obligations assumed hereinshall inure to the benefit of and be binding upon the successors and assigns ofthe respective parties, and the Purchaser, its successors and assigns shallhave and hold the above described property in full ownership forever.

 

Notitle examination has been requested of or performed by me, Notary. The titledescription is provided by the parties, and the Notary appears solely and onlyfor the purpose of notarizing this document.

 

Bothparties agree and obligate themselves to promptly execute any additional acts,documents and/or instruments necessary and proper for the complete andexpeditious implementation and satisfaction of the provisions and intent ofthis Act of Cash Sale.

 

Theparties hereto have participated jointly in the negotiation and drafting ofthis Act of Cash Sale. In the event any ambiguity or questions of intent orinterpretation arise, this Act of Cash Sale shall be construed as if jointlydrafted by the parties and no presumption or burden of proof shall arisefavoring any of the parties by virtue of authorship of any of the provisions ofthis Act of Cash Sale.

 

In theevent of a default of any condition or obligation of this Act of Cash Sale onthe part of any of the parties hereto which results in the institution ofany legal proceeding, the non-prevailing party shall pay to the prevailingparty of the litigation all reasonable costs and expenses of the legalproceeding, and any appeal there from, including attorney’s fees.

 

Nochange or modification hereof shall be valid or binding unless the same is inwriting and signed by the party intended to be bound. No waiver of anyprovisions of this Act of Cash Sale shall be valid unless the same is inwriting and signed by the party against whom such waiver is sought to beenforced; moreover, no valid waiver of any provisions of this Act of Cash Saleat any time shall be deemed a waiver of any other provision of this Act of CashSale at such time, nor will it be deemed a valid waiver of such.

 

Nodetermination by any court, governmental body or otherwise that any provisionof this Act of Cash Sale or any amendment hereof is invalid or unenforceable inany instance shall affect the validity or enforceability of (a) any otherprovision thereof, or (b) that provision in any circumstance notcontrolled by the determination. Each such provision shall be valid andenforceable to the fullest extent allowed by, and shall be construed whereverpossible as being consistent with, applicable law.

 

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Allquestions concerning the construction, validity, and interpretation of this Actof Cash Sale and the performance of the obligations imposed hereby shall begoverned by the laws of the State of Louisiana.

 

Theparties do not intend, nor shall this Act of Cash Sale be construed as,creating any resolutory conditions, vender’s lien(s), or stipulation pour autriand if any of the foregoing are deemed created by this instrument the same areherewith waived by the parties hereto.

 

[The remainder of this page is left intentionally blank.]

 

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THUSDONE AND PASSED on the               day of                                     ,2005, at the City of                               ,Parish of                                           ,State of                                       ,the undersigned party having affixed her signature in the presence of me, Notary,and the undersigned competent witnesses, after due reading of the whole.

 
| WITNESSES: |   | SELLER:       |
|------------|--------|---------------|
|       |   |          |   |
|       |   |          |
|       |   |          | By: |   |   |
|       |   | Printed Name: |   |   |
|       |   | Title:        |   |   |
|       |   |          | Date: |   |   |
|            |        |               |  |  |  |  |  |  |

 

 
|   |          |   |
|--------|---------------|--------|
|   | NOTARY PUBLIC |   |

 

 

THUSDONE AND PASSED on the               day of                                     ,2005, at the City of                               ,Parish of                                           ,State of                                       ,the undersigned party having affixed her signature in the presence of me, Notary,and the undersigned competent witnesses, after due reading of the whole.

 
| WITNESSES: |   | PURCHASER:    |
|------------|--------|---------------|
|       |   |          |   |
|       |   |          |
|       |   |          | By: |   |   |
|       |   | Printed Name: |   |   |
|       |   | Title:        |   |   |
|       |   |          | Date: |   |   |
|            |        |               |  |  |  |  |  |  |

 

 
|   |          |   |
|--------|---------------|--------|
|   | NOTARY PUBLIC |   |

 

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EXHIBIT I

 

[Seller’s/Owner’s Affidavit and Indemnity]

 

To be prepared by Escrow Agent prior to the Closing Date and approvedby Sellers.

 

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