[Execution Copy]

 

**EXHIBIT 10.12**

** **

MEMBERSHIP INTERESTS PURCHASE AGREEMENT

 

By and Between

 

GAMECO HOLDINGS, INC., asSeller,

 

AND

 

JACOBS ENTERTAINMENT, INC.,as Buyer,

 

 

February 22, 2005

 

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**MEMBERSHIP INTERESTS PURCHASE AGREEMENT**

 

**THISMEMBERSHIP INTERESTS PURCHASE AGREEMENT** (this “Agreement”),dated February 22, 2005 (“Agreement Date”), is entered into by and between **GAMECO HOLDINGS, INC.**, a Delawarecorporation (“Seller”), and **JACOBSENTERTAINMENT, INC.**, aDelaware corporation (“Buyer”). Capitalized terms not defined in context are defined in Section 13.15.

 

RECITALS

 

A.                                   Selleris the sole member of each the following Louisiana limited liability companies:(i) **JALOU BREAUX BRIDGE, LLC** (“BreauxBridge”); (ii) **JALOU EUNICE, LLC** (“Eunice”);and (iii) **JALOU OF JEFFERSON, LLC**(“Jefferson”)(Breaux Bridge, Eunice and Jefferson are collectively, the “TruckStops” and sometimes individually, each a “Truck Stop”).

 

B.                                     BreauxBridge operates a truck stop, convenience store, restaurant, fueling operationand video draw poker gaming parlor located at 1869 Mills Highway, BreauxBridge, St. Martin Parish, Louisiana.

 

C.                                     Euniceoperates a truck stop, convenience store, restaurant, fueling operation andvideo draw poker gaming parlor located at 3747 Highway 190, Eunice, St. LandryParish, Louisiana.

 

D.                                    Jeffersonoperates a truck stop, convenience store, restaurant, fueling operation andvideo draw poker gaming parlor located at 7340 Westbank Expressway, Marrero,Jefferson Parish, Louisiana.

 

E.                                      Sellerdesires to sell to Buyer, and Buyer desires to purchase from Seller, upon theterms and subject to the conditions of this Agreement, all of the membershipinterests of each of the Truck Stops (collectively, the “Membership Interests”).

 

AGREEMENT

 

NOW,THEREFORE, in consideration of the foregoing recitals and the mutualagreements, terms, conditions, covenants, representations and warrantieshereinafter set forth, the receipt and sufficiency of which are herebyacknowledged, the parties agree as follows:

 

# **Article 1.PURCHASE AND SALE OF MEMBERSHIP INTERESTS**

#  

## 1.1.                              **Purchase and Sale of Membership Interests**.  At the Closing and effective as of theClosing Date, (a) Seller will sell, transfer and assign, free and clear of allLiens or Claims whatsoever, all of the Membership Interests to Buyer or itsdesignee or nominee, and (b) Buyer will purchase the Membership Interests fromSeller and deliver to Seller the Purchase Price (as defined in Section 1.2).

 

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## 1.2.                              **Purchase Price**.

##  

### 1.2.1.                     The purchase price for theMembership Interests (the “Purchase Price”) shall be Twenty-Two Million FiveHundred Thousand and no/100 Dollars ($ 22,500,000.00).

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### 1.2.2.                     The Purchase Price shall be paidto the Seller by wire transfer of immediately available funds on the ClosingDate.

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## 1.3.                              **Transfer Taxes**.  Buyer and Seller shall share equally any andall transfer or similar Taxes (but excluding all withholding taxes computed onthe basis of net income) – (“Transfer Taxes”) imposed upon either party heretoas a result of the transactions contemplated hereby.  To the extent any exemptions from suchTransfer Taxes are available, Buyer and Seller shall cooperate to prepare anycertificates or other documents necessary to claim such exemptions.

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# **Article 2.GAMING RIGHTS OPTION**

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## 2.1.                              **Grant of Option**.                                                        As additional consideration forthe Buyer’s purchase of the Membership Interests hereunder, to be effective atthe Closing hereunder and contingent upon the same, Seller, Jeffrey P. Jacobsand Richard E. Jacobs (collectively, the “Optionors”) do hereby grant to Buyerthe right, but not the obligation, to acquire any and all interests any of theOptionors may own, whether now owned or hereafter acquired and whether heldjointly or severally, in any Gaming Assets or in any Entity that owns anyGaming Assets (the “Option”) during the Option Term.  The parties acknowledge that this Agreementis intended to and does grant multiple options, one for each Gaming Assetcovered by the Option during the Option Term and that the exercise of theOption with respect to any one Gaming Asset shall not preclude the exercise ofthe Option at a later time with respect to any other Gaming Assets that are ormay become subject to the Option. Notwithstanding the foregoing, no Passive Gaming Investment held by anyOptionor at any time shall be subject to the Option or the covenants describedin Section 2.4 below.

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## 2.2.                              **Option Term**.                       The Option may not be exercisedprior to the eighteenth (18th) monthly anniversary of the Notes Closing Date,and the Option shall expire immediately upon the payment in full of the Notes (“OptionTerm”).  The Option shall be exercised bydelivering written notice (“Option Notice”) of the Buyer’s intent to exercisethe Option pursuant to the Notice provisions of Section 13.4 below, andidentifying the specific Gaming Asset(s) to be purchased.  The Option may not be rescinded or canceledwithout the prior written consent of the majority of the holders of theprincipal balance then outstanding of the Notes.

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## 2.3.                              **Purchase Price and Closing**.                                    The purchase price for anyGaming Assets purchased pursuant to the exercise of the Option (“OptionPurchase Price”) shall be equal to the applicable Optionor’s actual cost ofsuch Gaming Assets.  Absent manifesterror, the determination of the Option Purchase Price shall be the actual costbasis of such Gaming Assets as reflected in the books and records of theapplicable Optionor.  The Closing of anypurchase

 

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## under the Option shall take place at theBuyer’s principal place of business and shall occur not later then ninety (90)days following the applicable Optionor’s receipt of the Option Notice.  The Option Purchase Price shall be paid incash, or immediately available funds, at such closing.  The parties shall execute a separate purchaseagreement in form and substance substantially similar to this Agreement for thepurchase of any Gaming Assets following the exercise of the Option, with suchadditions or modifications as shall be necessary to convey the particularGaming Assets that are the subject of the Option.

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## 2.4.                              **Additional Covenants**.

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### 2.4.1.                     In addition to the foregoing andnot in lieu thereof, as additional consideration for the Buyer’s purchase ofthe Membership Interests hereunder, each of the Optionors covenants and agreesthat commencing on and after the Note Closing Date and continuing throughoutthe Option Term, each Optionor will hold any ownership interests in any GamingAssets either through the Buyer or a wholly-owned subsidiary of the Buyer; *excluding, only,* any Gaming Assets ownedby an Optionor on the Note Closing Date,

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### 2.4.2.                     Notwithstanding the foregoingSection 2.4.1 and as an exception thereto, any Optionor may purchase ownershipinterests in or the assets of truck stops located within the State ofLouisiana, whether or not such ownership interests or assets are held in theBuyer or a wholly-owned subsidiary thereof, *provided,however,*each Optionor, as applicable, agrees that such ownershipinterests or assets after acquisition of the same shall be Gaming Assets forall purposes hereunder and shall be subject to the rights of the Buyer underthe Option.  Each Optionor, asapplicable, agrees to execute such additional documents as may be necessary tocomply with the terms and conditions of this Section 2.4.2.

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## 2.5.                              **Right of Sale**.  Nothing contained in this Article 2,including but not limited to the grant of the Option, is intended to, nor shallit be construed as, restricting any Optionor’s right to sell any Gaming Assetsto a third party prior to the Buyer’s exercise of the Option with respect tothose particular Gaming Assets.

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## 2.6.                              **Acknowledgment of Consideration**.  Jeffrey P. Jacobs and Richard E. Jacobs, individually,acknowledge and agree that the payment of the Purchase Price under thisAgreement by Buyer to Seller has separate direct and indirect economic benefitto each of them and is sufficient consideration for their covenants andagreements under this Article 2.

##  

## 2.7.                              **Noteholders**.  The rights of the Buyer and the obligationsof the Optionors set forth in this Article 2 are for the benefit of the holdersof the Notes and no such right or obligation may be amended, waived, terminatedor otherwise modified without the prior written consent of the holders of amajority of the outstanding principal amount of the Notes.

 

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# **Article 3.********CLOSING AND DELIVERIES**

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## 3.1.                              **General**.  The closing of the transactions contemplatedherein (other than the transactions contemplated by Article 2)(the “Closing”)shall take place at 10:00 a.m. on or before March 15, 2005, at the offices ofHahn Loeser & Parks, LLP, 3300 BP Tower, 200 Public Square, Cleveland, Ohio44114-2301, or such other time, date and place as the parties may agree.  The effective time of closing shall be 12:01a.m. (the “Effective Time”) on the date of the Closing (the “Closing Date”).

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## 3.2.                              **Seller’s Closing Deliveries**. On the Closing Date, Seller shall deliver, or caused to be delivered, toBuyer the following items:

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### 3.2.1.                     Membership Interests.  An instrument of assignment, in form andsubstance reasonably acceptable to the Buyer and Buyer’s legal counsel,conveying the Membership Interests to Buyer, together with the certificates ofmembership interests issued by each of the Truck Stops to the Seller;

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### 3.2.2.                     Receipt.  A receipt evidencing receipt by Seller of thePurchase Price (the “Receipt”);

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### 3.2.3.                     Limited Liability CompanyRecords.  All of the original limited liability companyrecords, including company record books, etc., for each of the Truck Stops;

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### 3.2.4.                     Officer’s Certificate.  A certificate of an officer of Seller to theeffect that the conditions set forth in Sections 9.1 and 9.2 havebeen satisfied;

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### 3.2.5.                     Good Standing Certificates.  A good standing/full force and effectcertificate, as applicable, dated not more than thirty (30) days prior to theClosing Date, for the Seller and each of the Truck Stops;

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### 3.2.6.                     Secretary’s IncumbencyCertificate.  A certificate of the Secretary for the Sellercertifying (a) the current officers of the Seller and each of the Truck Stops,(b) a current copy of the Seller’s Articles of Incorporation and the Articlesof Organization for each of the Truck Stops, (c) a current copy of the Seller’sBy-laws and the Operating Agreement of each of the Truck Stops, and (d) a copyof the Seller’s resolution authorizing the sale contemplated by this Agreement;and

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### 3.2.7.                     Updates to Schedules.  An update to each of the Schedules attachedto this Agreement identifying any changes between the Agreement Date and theClosing Date.

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## 3.3.                              **Buyer’s Closing Deliveries**. On the Closing Date, Buyer shall deliver, or cause to be delivered, toSeller the following items:

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### 3.3.1.                     Wire Transfer.  The Purchase Price, paid by wire transfer inimmediately available funds to an account specified in writing by Seller priorto the Closing;

 

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### 3.3.2.                     Officer’s Certificate.  A certificate of an officer of Buyer to theeffect that the conditions set forth in Sections 10.1 and 10.2have been satisfied;

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### 3.3.3.                     Good Standing Certificate.  A good standing certificate, dated not morethan thirty (30) days prior to the Closing Date, for the Buyer;

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### 3.3.4.                     Secretary’s IncumbencyCertificate.  A certificate of the Secretary for the Buyercertifying (a) the current officers of the Buyer, (b) a copy of the Buyer’sCertificate of Incorporation and By-laws and (c) a copy of the Buyer’sresolution authorizing the sale contemplated by this Agreement.

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# **Article 4.DUE DILIGENCE**

 

## 4.1.                              **Due Diligence Period**.  Beginning on the Agreement Date and continuingthereafter until the Closing Date (“Due Diligence Period”), Buyer shall havethe right to perform the following due diligence pursuant to the terms andconditions hereof:

 

## 4.2.                              **General Testing and Inspections**.  Buyer shall have the right, during the DueDiligence Period, to conduct such engineering, environmental, general businessand feasibility studies, audits, test, reviews and/or surveys of any or all ofthe Truck Stops and their respective assets, liabilities, operations (includinggaming operations and records), financial performance and affairs, as the Buyerdeems necessary, including soil tests, borings, drainage tests and similartests on any land or improvements owned or leased by any of the Truck Stops,and audits and reviews of any of the financial and business records,operations, documents and instruments of the Seller pertaining to any of theTruck Stops or their operations.  Suchstudies shall be conducted by the Buyer and its agents at the Buyer’s sole costand expense.  Subject to reasonableadvance notice, the Seller and each of the Truck Stops agrees to allow Buyerand its agents access to all assets, records, documents and instruments of theTruck Stops to conduct such studies and audits, provided such access shall notunreasonably interfere with the activities of the Seller or any of the TruckStops.  Buyer shall, and does hereby,save, defend, indemnify and hold the Seller and each Truck Stop harmless fromand against all claims, lawsuits, judgments, losses, liabilities or expenses ofany kind or nature which may be asserted against or incurred by the Seller orany of the Truck Stops as the result of the Buyer’s or its agents’ actions andactivities conducted pursuant to this Section 4.2. The Buyer shall keepthe results of all due diligence activities confidential unless specificallydirected or required to disclose the same under any federal, state or locallaw, rule or regulation or upon the order of any court or governmentalagency.  Notwithstanding any otherprovisions of this Agreement or any documents contemplated hereby to thecontrary, the obligation of the Buyer to defend, indemnify and hold harmlessthe Seller and each of the Truck Stops under this Section 4.2 shallsurvive the execution and delivery of this Agreement and the consummation ofthe transactions contemplated hereby or the termination of this Agreement.

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## 4.3. **Title Insurance.** Prior to the Closing, Buyer may cause to have delivered to Buyer acommitment from a title insurance company reasonably acceptable to Buyer toissue as of the Closing Date for any real property owned or leased by any ofthe Truck Stops, in the customary form prescribed for use in the State ofLouisiana (collectively, the “Title Policy”). Seller shall

 

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## deliver any information as reasonably may berequired by Buyer’s title insurance company under the requirements section ofthe title insurance commitment or otherwise in connection with the issuance ofBuyer’s title insurance policy.  Sellershall provide an affidavit of title or such other information as Buyer’s titleinsurance company may reasonably require in order for the title insurancecompany to delete the standard exceptions and to insure over the “gap” (i.e.,the period of time between the effective date of the title insurance company’slast checkdown of title and the Closing Date) and to cause the title insurancecompany to delete all standard exceptions from the final title insurancepolicy.

 

## 4.4.                              **Financial Statements**.  As of the Agreement Date, Seller hasdelivered, or caused to be delivered, to the Buyer a Statement of Income andBalance Sheet for each Truck Stop for the full calendar year ending on December31, 2004 (collectively, the “Financial Statements”), in such detail as may bereasonably requested by the Buyer.

 

# **Article 5.********SELLER’S REPRESENTATIONS AND WARRANTIES**

 

Sellerrepresents and warrants to Buyer as follows:

 

## 5.1.                              **Organization and Authorization**.

 

### 5.1.1.                     Seller is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofDelaware.

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### 5.1.2.                     Each of the Truck Stops is alimited liability company duly organized, validly existing and in full forceand effect under the laws of the State of Louisiana.  None of the Truck Stops has any subsidiaries.

 

## 5.2.                              **Validity of Agreements**.  Seller has the power and authority to enterinto this Agreement and all other agreements and instruments executed anddelivered or to be executed and delivered under this Agreement (the “TransactionDocuments”) to which Seller is a party. The execution, delivery and performance by Seller of this Agreement, theTransaction Documents and the other documents and certificates contemplatedtherein have been duly authorized by all necessary corporate action on the partof Seller.  This Agreement is, and whenexecuted and delivered at the Closing, the Transaction Documents to whichSeller is a party and all other documents and certificates contemplated thereinwill be, the legal, valid and binding obligations of Seller, enforceableagainst Seller in accordance with their terms.

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## 5.3.                              **Non-Contravention**.  The execution and delivery by Seller of thisAgreement, the Transaction Documents to which Seller is a party and all otherdocuments and certificates contemplated therein and the consummation andperformance by Seller of the transactions contemplated by this Agreement andthe Transaction Documents will not (i) violate any provision of the Articles ofIncorporation or the By-laws of Seller or Articles of Organization or OperatingAgreement of any of the Truck Stops, (ii) violate or result in any defaultunder, or the acceleration of (whether by the giving of notice or the passageof time or both), any obligation under any contract, note, bond, mortgage,indenture, or lease to which Seller or any of the Truck

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## 6

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## Stops is a party or by which Seller or anyTruck Stop is bound that would, in any such event, be material, or (iii)violate any constitutional provision, statue, rule, law, regulation, award,order, ordinance, judgment, decree, citation, policy, standard, interpretation,writ or injunction of any Governmental Body (collectively, “Law”).

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## 5.4.                              **Capitalization**.  The Membership Interests represent the onlyauthorized, issued and outstanding equity interests of each Truck Stop.  The Membership Interests are duly and validlyissued and outstanding and are fully paid and nonassessable.  The Membership Interests have not been issuedin violation of, and are not subject to, and there are no, outstanding optionsor other conversion or exchange rights relating to the MembershipInterests.  There are no authorized oroutstanding options under which the Seller or any of the Truck Stops may be obligated to issueor sell any equity interests of any Truck Stop. Except as identified on Schedule 5.4, there are no agreements,commitments, contacts or rights of first refusal relating to the issuance, saleor transfer of any equity interest of or profit participation in any of theTruck Stops.  At the Closing, Buyer shallreceive the Membership Interests free and clear of all Liens and Claimswhatsoever.  As of the Closing, no TruckStop shall be subject to any obligation (contingent or otherwise) to repurchaseor otherwise acquire or retire any equity interests (including MembershipInterests).  Seller has full legal andbeneficial ownership of the Membership Interests.  The Membership Interests have not beenregistered under any Securities Laws with any federal, state or localGovernmental Body

 

## 5.5.                              **Title to Truck Stop Property**.  As of the Agreement Date, except as disclosedon Schedule 5.5, each Truck Stop has good and valid title to, or a validand enforceable leasehold interest in, all of its properties and assets,tangible or intangible, as reflected in each Truck Stop’s Financial Statements,and the schedules attached thereto, and the same are free and clear of allLiens and Claims except (a) Liens to be released at or prior to Closing, (b)such Liens that are disclosed by the Title Policy (including real propertytaxes that are a lien but not yet due and owing) for each Truck Stop and therecords of the Secretary of State of Louisiana and (c) those Liens and Claimsidentified on Schedule 5.5.

 

5.6.                               **Tax Matters****.** Except as set forth on Schedule 5.6,Seller and each Truck Stop, as applicable, has timely filed or will timelyfile, in the manner provided by Law, all Tax Returns for periods prior to andincluding the Closing Date which are required to be filed with respect of theincome or operations of Seller. All such Tax Returns are complete and correctin all material respects and have been prepared in material compliance with allapplicable laws and regulations. Seller has paid or will pay all Taxes owed forthe taxable periods covered by such Tax Returns (whether or not shown thereon)in the manner provided by Law. None of the assets of any Truck Stop is subjectto any Liens for any Taxes, and to the Seller’s actual knowledge there is nobasis upon which such a Lien could be asserted.

 

## 5.7.                              **Environmental Liability**.  To the Seller’s actual knowledge, there hasbeen no release, threatened release, spill, leak, discharge or emission of anyHazardous Materials to the air, surface water, groundwater or soil at any ofthe Truck Stops requiring corrective action under any applicable EnvironmentalLaws.  To the Seller’s actual knowledge,there has been no material release, threatened release, spill, leak, dischargeor emission of any Hazardous Materials to the air, surface water, groundwateror soil at any of the Truck Stops that is a violation of any applicableEnvironmental Laws.  “Hazardous Materials”means any hazardous or toxic substance

 

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## or waste or any contaminant or pollutantregulated or otherwise creating liability under any Environmental Laws,including, without limitation, “hazardous substances” as defined by theComprehensive Environmental Response Compensation and Liability Act, asamended, “toxic substance” as defined by the Toxic Substance Control Act, asamended, “hazardous wastes” as defined by the Resource Conservation andRecovery Act, as amended, “hazardous materials” as defined by the HazardousMaterials Transportation Act, as amended, thermal discharges, radioactivesubstances, PCBs, natural gas, petroleum products or byproducts and crudeoil.  “Environmental Laws” means all Lawsrelating to pollution, worker health and worker safety, or the environment, andall other Laws relating to emissions, discharges, releases or threatenedreleases of Hazardous Materials into the environment or otherwise relating tothe generation, distribution, use, treatment, storage, disposal, transport orhandling of Hazardous Materials.  Each ofthe Truck Stops is and has been in material compliance with all EnvironmentalLaws, provided any noncompliance has not had and is not likely to have aMaterial Adverse Effect on such respective Truck Stop or its operations.  Buyer acknowledges that each of the TruckStops contains a fueling operation for the sale and dispersal to the generalpublic of gas and diesel fuels.  Neitherthe Seller nor any Truck Stop has received any written notice, report or otherinformation regarding any actual or alleged violation of Environmental Lawsrelating to any Truck Stop.

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## 5.8.                              **Jefferson Construction Costs**.  Seller agrees that any costs or expensesnecessary to complete the construction of the Truck Stop at Jefferson in accordwith those certain plans and specifications of Perrin & Carter, Inc., datedOctober 29, 2003 (“Plans and Specifications”), shall be and remain the costsand expenses of the Seller even if such costs and expenses are incurred afterthe Closing Date.  Seller represents thatfollowing the transactions contemplated in this Agreement it shall retain thefinancial ability to pay all of the costs and expenses of completing theJefferson Truck Stop pursuant to the Plans and Specifications.

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## 5.9.                              **Seller Inter-company Loans**.  Notwithstanding the contents of the FinancialStatements or any other language to contrary contained in this Agreement, anyloans, notes payable or other debt obligations between the Seller and any ofthe Truck Stops or between the Truck Stops and any other subsidiaries of the Seller(collectively, the “Seller Inter-company Loans”) shall be retired by the Sellerfrom the proceeds of the Purchase Price and shall not be a part of the transferof the Membership Interests at Closing. In no event shall the Buyer, nor any of its subsidiaries, including, butnot limited to, the Truck Stops following the Closing, have any liability forany of the Seller Inter-company Loans.

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## 5.10.                        **Consents, etc****.** Except as identified on Schedule 5.10 or the matters described inSection 6, any registration, declaration or filing with, or consent, approval,license, permit or other authorization or order by, any governmental orregulatory authority, domestic or foreign, that is required in connection withthe valid execution, delivery, acceptance and performance by the Seller andeach of the Truck Stops under this Agreement or the consummation by the Sellerand each of the Truck Stops of any of the transactions contemplated hereby hasbeen or will be completed, made or obtained on or before the Closing Date.

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## 5.11.                        **Litigation, etc**.  Except as set forth on Schedule 5.11,to the Seller’s actual knowledge there are no Claims against the Seller or anyof the Truck Stops or any of their assets, or pending or threatened by theSeller or any of the Truck Stops against any third party, at law or

 

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## in equity, or before or by any GovernmentalBody.  To the Seller’s actual knowledge,no Truck Stop is subject to any judgment, order or decree of any court or otherGovernmental Body (excepting various licensing necessary for its customary andon-going operations).

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## 5.12.                        **Brokers’ Fees**.  No investment banker, broker, finder or otherintermediary has been retained by or is authorized to act on behalf of Sellerwho might be entitled to any fee or commission from Buyer or the Company uponconsummation of the transactions contemplated by this Agreement.

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## 5.13.                        **No Adverse Change**.  From the Agreement Date to the Closing Date,there shall be no adverse change in the operating results, assets, liabilities,operations, prospects, employee relations or customer or supplier relations ofany of the Truck Stops which has had or could reasonably be expected to have aMaterial Adverse Effect.

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## 5.14.                        **Conduct Pending Closing**.  From the Agreement Date until the ClosingDate, Seller shall use commercially reasonable efforts to cause each of theTruck Stops to be operated and to carry on its respective businesses in theordinary course consistent with past practice.

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# **Article 6.********BUYER’S REPRESENTATIONS AND WARRANTIES**

#  

Buyer herebyrepresents and warrants to Seller as follows:

 

## 6.1.                              **Organization and Power**. Buyer is a corporation dulyorganized, validly existing and in good standing under the laws of the State ofDelaware.

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## 6.2.                              **Authorization and Validity of Agreements**. Theexecution, delivery and performance by Buyer of this Agreement, the TransactionDocuments and the other documents and certificates contemplated therein hasbeen duly authorized by all necessary corporate action on the part of Buyer.  Buyer has the power and authority to enterinto this Agreement, the Transaction Documents and the other documents andcertificates contemplated to be executed herein and to consummate thetransactions contemplated thereby.  ThisAgreement and the Transaction Documents and the other documents andcertificates contemplated herein constitute the legal, valid and bindingobligations of Buyer, enforceable against it in accordance with theirrespective terms.

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## 6.3.                              **Non-Contravention**.  The execution and delivery by Buyer of thisAgreement, the Transaction Documents and the other documents and certificatescontemplated therein and the consummation and performance by Buyer of thetransactions contemplated herein will not (i) violate any provision of theArticles of Incorporation or By-laws of Buyer, (ii) violate, or be in conflictwith any provision of, or constitute a default under, or result in thetermination of, or accelerate the performance required by, or cause theacceleration of the maturity of any liability or other obligation to whichBuyer is a party, or (iii) violate any Law.

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## 6.4.                              **Brokers’ Fees**.  No investment banker, broker, finder or otherintermediary has been retained by or is authorized to act on behalf of Buyerwho might be entitled to any fee or commission from Seller upon consummation ofthe transactions contemplated by this Agreement.

 

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## 6.5.                              **Non-Registration****.**  The Buyer understands and agrees that theMembership Interests are not registered under the Securities Act of 1933, asamended (the “Securities Act”), nor the securities laws of any state, and,accordingly, the Membership Interests may not be offered, sold, pledged,hypothecated or otherwise transferred or disposed of in the absence of registrationor the availability of an exemption from registration under the Securities Actand any applicable state securities laws.

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## 6.6.                              **Devices.****                                                  **The Buyer acknowledges that allDevices operated at any of the Truck Stops are owned and operated therein by athird-party, licensed device owner, to-wit; Southern Trading Corporation, aLouisiana corporation.  All such Devicesare operated pursuant to Device Placement Agreements between each of the TruckStops and Southern Trading Corporation, copies of which have been provided tothe Buyer.

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## 6.7.                              **Licensure**.                                     The Buyer acknowledges that theactivities of the video draw poker gaming parlors and the alcohol, tobacco andlottery sales, as applicable, conducted at each of the Truck Stops are subjectto licensing and regulation by various federal, state and local GovernmentalBodies.  The Buyer further acknowledgesthat appropriate notifications to the Louisiana State gaming authorities of theconsummation of the transactions contemplated by this Agreement will berequired promptly following the Closing hereunder.

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# **Article 7.********SURVIVAL**

#  

Therepresentations and warranties contained in Sections 5.1 through 5.9 andSections 6.1 through 6.7, inclusive, shall survive the execution anddelivery of this Agreement and consummation of the transactions provided for inthis Agreement without limitation as to time. The representations and warranties contained in Sections 5.10 through5.14 shall survive the Closing hereunder and shall continue in effect for aperiod of one (1) year from and after the Closing Date.

 

# **Article 8.********MUTUAL COVENANTS AND AGREEMENTS**

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## 8.1.                              **Expenses**.  Except as otherwise specifically provided inthis Agreement and the Transaction Documents, each party shall bear its ownexpenses in connection with and in performance of this Agreement and theTransaction Documents.  Buyer shall besolely responsible for all of its costs incurred in its due diligenceactivities, including, but not limited to, the costs of any surveys,environmental site assessment studies, title policies and title commitments andany and all costs, expenses or fees relating to its financing of thetransactions contemplated in this Agreement.

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## 8.2.                              **Cooperation**.  Each party shall cause every Person that is ashareholder, director, officer or employee of any party hereto or any of theTruck Stops to use all commercially reasonable efforts to assist in thesatisfaction of such party’s obligations hereunder and in the consummation ofthe transactions contemplated herein.

 

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# **Article 9.********CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE**

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The obligationof Buyer to consummate the transactions contemplated by this Agreement issubject to the fulfillment, prior to or on the Closing Date, of each of thefollowing conditions precedent, any one or more of which may be waived by Buyerin writing:

 

## 9.1.                              **Compliance with Covenants**.  Seller shall have performed and complied inall material respects with all covenants, obligations and agreements requiredby this Agreement to be performed or complied with by it at or prior to theClosing Date.

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## 9.2.                              **Representation and Warranties**.  The representations and warranties of Sellercontained in this Agreement shall be true and correct in all material respectson the Closing Date as if made on such date, except for any changes permittedby the terms of this Agreement.

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## 9.3.                              **Actions of Seller at Closing**.  At the Closing and unless otherwise waived byBuyer, Seller shall have delivered to Buyer those deliveries set forth in Section3.2.

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## **9.4.****                             ****Financing**.  **Buyer shall have obtained the financing necessary toconsummate the transaction.**

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## **9.5.****                             ****No Material Adverse Effect****.  From and after the Agreement Date, thereshall not have been any event or change in the Seller or any of the Truck Stopswhich has had a Material Adverse Effect.**

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## **9.6.****                             ****Financial Statements****. ****Excepting only normal recurringchanges related to the usual operations of the Truck Stops, none of the TruckStops shall have suffered or incurred a material change in its Financial Statementsbetween December 31, 2004 and the Closing Date.**

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# **Article 10.********CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE**

#  

The obligationof Seller to consummate the transactions contemplated by this Agreement issubject to the fulfillment, prior to or on the Closing Date, of each of thefollowing conditions precedent, any one or more of which may be waived bySeller in writing:

 

## 10.1.                        **Compliance with Covenants**.  Buyer shall have performed and complied inall material respects with all covenants, obligations and agreements requiredby this Agreement to be performed or complied with by it at or prior to theClosing Date.

##  

## 10.2.                        **Representation and Warranties**.  The representations and warranties of Buyercontained in this Agreement shall be true and correct in all material respectson the Closing Date as if made on such date, except for any changes expresslypermitted by the terms of this Agreement.

##  

## 10.3.                        **Actions of Buyer at Closing**.  At the Closing and unless otherwise waived bySeller, Buyer shall have delivered to Seller those deliveries set forth in Section3.3.

 

11

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# **Article 11.********TERMINATION OF AGREEMENT**

#  

## 11.1.                        **Termination of Agreement**.  This Agreement may be terminated at any timeprior to the Closing Date only as follows:

##  

### 11.1.1.               By Mutual Agreement.  If Seller and Buyer both agree to terminatethe Agreement.

###  

### 11.1.2.               By Buyer.  Buyer may terminate this Agreement at anytimeprior to the Closing for any reason or no reason in the sole discretion of theBuyer.

###  

### 11.1.3.               By Seller.  Seller may terminate this Agreement by givingwritten notice to Buyer if Buyer has materially breached any of its covenants contained in thisAgreement or if there is any inaccuracy in any of the representations orwarranties made by Buyer, if Seller has previously notified Buyer in writing ofsuch breach or inaccuracy and the breach or inaccuracy has continued withoutcure for a period of fifteen (15) days after such notice.

###  

## 11.2.                        **Effect of Termination**.  In the event of a termination or breach(prior to the consummation of the Closing) by either party, this Agreementshall thereafter be null and void and of no further force or effect and eachparty shall be solely responsible for any and all costs or expenses it hasincurred hereunder.

##  

# **Article 12.********INDEMNIFICATION**

#  

## 12.1.                        **Seller’s Agreement to Indemnify**.

##  

### 12.1.1.               Buyer Claims.  Subject to the terms and conditions of this Article12, Seller shall indemnify, defend and hold harmless Buyer or any of itsofficers, directors, shareholders, employees or agents (“Buyer Indemnitees”)from and against any and all Claims, causes of actions, losses, damages(compensatory, punitive or other), deficiencies, Taxes, liabilities,obligations, reimbursements, costs and expenses of any kind or nature,penalties, fines, expenses (including reasonable attorneys’ and experts’ feesand expenses) and all amounts paid in investigation, defense or settlement ofany of the foregoing (collectively, “Losses”) suffered or incurred by any ofthem arising from, relating to or otherwise in respect of (a) any inaccuracy inany representations or warranties contained in Article 5 of thisAgreement, (b) any breach or non-fulfillment by Seller of any of its covenantscontained in this Agreement, the Transaction Documents or any agreementdelivered pursuant to this Agreement, or (c) any Losses arising from or relatedto the Seller’s operation of the Truck Stops prior to the Closing Date(collectively, “Buyer Claims”).

 

12

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### 12.1.2.               Cap.  No Buyer Claims shall be asserted pursuant toSection 12.1.1 until the aggregate Losses suffered or incurred by Buyerare equal to or greater than $100,000 (the “Threshold Amount”), in which eventthe Buyer Claims may be asserted only to the extent of the Losses in excess ofsuch amount, excluding individual Losses that are less than the ThresholdAmount.  With respect to Buyer Claimsasserted pursuant to Section 12.1.1, no indemnification shall be made inexcess of the Purchase Price (the “Cap”).

###  

## 12.2.                        **Buyer’s Agreement to Indemnify**.

##  

### 12.2.1.               Seller’s Claims.  Subject to the terms and conditions of this Article12, Buyer agrees to indemnify, defend and hold harmless Seller and any ofits officers, directors, shareholders, employees or agents (“Seller Indemnitees”)from and against all Losses suffered or incurred by any of them arising from,relating to or otherwise in respect of (i) any inaccuracy in anyrepresentations or warranties contained in Article 6 of this Agreement,(ii) any breach or non-fulfillment by Buyer of any of its covenants containedin this Agreement, the Transaction Documents or any agreement deliveredpursuant to this Agreement or (iii) any Losses arising from or related to theBuyer’s operation of the Truck Stops on or after the Closing Date(collectively, “Seller Claims”).

###  

### 12.2.2.               Cap.  No Seller Claims shall be asserted pursuantto Section 12.2.1 until the aggregate Losses suffered or incurred bySeller are equal to or greater than the Threshold Amount, in which event theSeller Claims may be asserted to the full extent of the Losses suffered orincurred by Seller, excluding individual Losses that are less than theThreshold Amount.  Additionally, withrespect to Seller Claims asserted pursuant to Section 11.2.1, no indemnificationshall be made in excess of the Cap.

###  

## 12.3.                        **Procedures for Resolution and Payment ofThird-Party Claims for Indemnification**.

##  

### 12.3.1.               Notice and Control.  Except as otherwise provided herein, in theevent any third party asserts a Claim with respect to any matter as to whichthe indemnities in this Agreement relate, the party or parties against whom theClaim is asserted (whether singular or plural, the “Indemnitee”) shall giveprompt written notice to the other party or parties (whether singular orplural, the “Indemnitor”) in reasonable detail so that the Indemnitor is orwill be able to reasonably understand the basis of the Claim; provided that thefailure of the Indemnitee to provide such notice shall not relieve theIndemnitor of its obligations hereunder except to the extent the Indemnitor ismaterially prejudiced thereby. Thereafter, the Indemnitor shall have the rightat its election to take over the defense or settlement of the third party Claimat its own expense by giving prompt notice to the Indemnitee.  If the Indemnitor does not give such noticeand does not proceed diligently

 

13

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### so to defend the third party Claim within 30days after receipt of the notice of the third party Claim, the Indemnitor shallbe bound by any defense or settlement that the Indemnitee may make as to thoseClaims and shall reimburse the Indemnitee for its Losses related to the defenseor settlement of the third party Claim. Subject to Indemnitor retaining controlof the Claim or settlement thereof, the Indemnitee shall, at its option andexpense, have the right to participate in the defense of any such Claimsdefended by the Indemnitor (except that Indemnitor shall not be responsible forthe fees and expenses of counsel to Indemnitee unless agreed to in writing).The parties shall cooperate in defending against any asserted third partyClaims.

###  

### 12.3.2.               Claim Resolution.  Anything in this Section 12.3 to thecontrary notwithstanding, (a) if there is a reasonable probability that a thirdparty Claim may materially and adversely affect the Indemnitee other than as aresult of money damages or other money payments, the Indemnitee shall have theright, at its own cost and expense, to defend, compromise or settle such Claim;*provided, however,*that if suchClaim is settled without the Indemnitor’s consent (which consent shall not beunreasonably withheld or delayed), the Indemnitee shall be deemed to havewaived all rights hereunder against the Indemnitor for money damages arisingout of such Claim, and (b) the Indemnitor shall not, without the writtenconsent of the Indemnitee, settle or compromise any Claim or consent to theentry of any judgment (i) which does not include as an unconditional termthereof the giving by the claimant or the plaintiff to the Indemnitee a releasefrom all liability in respect to such Claim or (ii) if such settlement,compromise or consent involves the imposition of equitable remedies or theimposition of any obligations on such Indemnitee other than financialobligations for which such Indemnitee will be fully indemnified hereunder.

###  

## 12.4.                        **Remedies Exclusive; No Other Remedies**.  The remedies contained in this Article 12shall be the parties’ sole and exclusive remedies for any post-Closing Claimsmade in connection with this Agreement. Each party hereto hereby waives and releases, and covenants not to seekor assert, any other Claims or remedies in the event that the Closing occurs.

##  

## 12.5.                        **Limitation of Damages**.  In no event shall any party to this Agreementbe liable to any other party for consequential, punitive or other similardamages.

##  

# **Article 13.********MISCELLANEOUS**

#  

## 13.1.                        **Reformation and Severability**.  If any provision of this Agreement is held tobe illegal, invalid or unenforceable under present or future Laws effectiveduring the term hereof, in lieu of such illegal, invalid or unenforceableprovision, there shall be added automatically as part of this Agreement aprovision as similar in terms to such illegal, invalid or unenforceable provisionas may be possible and be legal, valid and enforceable consistent with theintentions of

 

14

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## the parties hereto, and the legality,validity and enforceability of the remaining provisions hereof shall not in anyway be affected or impaired thereby. Likewise, each representation, warranty and covenant contained hereinshall have independent significance and, if any party hereto 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 thatthe party is in breach of the first representation, warranty or covenant.

##  

## 13.2.                        **Further Assurances**.  All parties agree and obligate themselves,and their respective officers, directors, shareholders, members, managers,employees and agents, to promptly execute any additional documents andinstruments and take any other actions necessary and proper for the completeand expeditious implementation and satisfaction of the provisions and intent ofthis Agreement.  In addition, the Selleragrees that during and subsequent to the sale transaction, it shall have acontinuing duty to supply such reasonable information and documentation and toperform such acts as may be required by any federal, state or local authorityor the Liquor and Gaming Laws of the State of Louisiana, including, but notlimited to, making its books and records available to the Buyer or its designeeon an as-needed, reasonable basis after the Closing; *provided, however,* in no event whatsoever shallthe Seller be required to pay or be responsible for the payment of any moniesin connection therewith.

##  

## 13.3.                        **Liquor and Gaming Laws of theState of Louisiana**.  Each of the parties agree that this Agreementis and shall be subject to the Liquor and Gaming Laws of the State of Louisianaand to the oversight of the Louisiana State Police and the Gaming Control Boardof the State of Louisiana.

##  

## 13.4.                        **Notices**.  Any notice or other communication required orpermitted hereunder shall be in writing and shall be deemed to be properlygiven when personally delivered (by hand or by courier), when sent by certifiedor registered mail, postage prepaid and return receipt requested, when sent byfacsimile transmission, or when delivered by overnight or similar deliveryservices, fees prepaid, to the party entitled to receive such notice at theaddress (or facsimile number) set forth below or at such other address (orfacsimile number) as such party shall provide in a written notice to the othersin accordance with the terms of this Section 13.4.  Except as otherwise specifically provided inthis Agreement, notice shall be deemed to be received by the party to whom suchnotice was sent, in the case of notice given by personal delivery, on the dateof delivery, in the case of notice given by certified mail (or by suchcomparable method), three (3) business days after mailing, in the case ofnotice by overnight delivery service, on the date of delivery to such overnightdelivery service, and, in the case of notice by facsimile transmission, on thedate of actual transmission.

##  

| If to Seller, to |   | Gameco Holdings, Inc.         |
|------------------|--------|-------------------------------|
|             |   | 10515 Colonial Downs  Parkway |
|             |   | New Kent, Virginia  23124     |
|             |   | Facsimile: (804)  966-1567    |
|             |   | Attention: Ian M.  Stewart    |

 

15

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| With a copy to:   |   | Stanley R. Gorom III,  Esq.   |
|-------------------|--------|-------------------------------|
|              |   | Hahn Loeser &  Parks, LLP |
|              |   | 3300 BP Tower                 |
|              |   | 200 Public Square             |
|              |   | Cleveland, OH 44114           |
|              |   | Facsimile: (216)  274-2460    |
|              |   |                          |
| If  to Buyer, to: |   | Jacobs Entertainment,  Inc.   |
|              |   | 240 Main Street               |
|              |   | Black Hawk, Colorado  80422   |
|              |   | Facsimile: (303)  582-0239    |
|              |   | Attention: Stephen R.  Roark  |
|              |   |                          |
| With  a copy to:  |   | Samuel E. Wing, Esq.          |
|              |   | Jones & Keller            |
|              |   | 1625 Broadway, Suite  1600    |
|              |   | Denver, Colorado 80202        |
|              |   | Facsimile: (303)  573-0769    |
|              |   |                          |
| And  to:          |   | Robert A. Weible, Esq.        |
|              |   | Baker & Hostetler,  LLP   |
|              |   | 3200 National City  Center    |
|              |   | 1900 East Ninth Street        |
|              |   | Cleveland, Ohio 44114         |
|              |   | Facsimile: (216)  696-0740    |

 

## 13.5.                        **Headings and Interpretations**.  The headings of Articles and Sectionscontained in this Agreement are for convenience only and shall not be deemed tocontrol or affect the meaning or construction of any provision of thisAgreement.

##  

## 13.6.                        **Waiver**.  The failure of any party to insist, in anyone or more instances, upon performance of any of the terms, covenants orconditions of this Agreement shall not be construed as a waiver or arelinquishment of any right or Claim granted or arising hereunder or of thefuture performance of any such term, covenant or condition, and such failureshall in no way effect the validity of this Agreement or the rights andobligations of the parties hereto. Additionally, no waiver of any breach ofthis Agreement shall be a waiver of any subsequent breach.  No waiver shall be effective unless made inwriting and signed by the party granting such waiver.

##  

## 13.7.                        **Counterparts**.  This Agreement may be executed in any numberof counterparts, each of which shall be deemed to be an original, and all ofwhich when taken together shall constitute one and the same instrument.

##  

## 13.8.                        **Governing Law**.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Colorado, without regardto principles of conflict of laws, and the parties expressly agree that venue,for all purposes hereunder, shall rest exclusively with the state and federalcourts of the State of Colorado.

 

16

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## 13.9.                        **Assignability and Binding Effect**.  This Agreement shall inure to the benefit of,and be binding upon, the parties hereto and their respective successors andpermitted assigns. This Agreement together with the Transaction Documents andthe rights and obligations hereunder may not be assigned by either partywithout the express written consent of the other.

##  

## 13.10.                  **Amendments**.  This Agreement may not be modified, amendedor supplemented except by an agreement in writing signed by each of the partieshereto.

##  

## 13.11.                  **Third Parties**.  Except for the holders of the Notes who shallbe third party beneficiaries of Article 2, nothing herein expressed or impliedis intended or shall be construed to confer upon or give to any Person otherthan the parties hereto and their successors or permitted assigns, any rightsor remedies under or by reason of this Agreement.

##  

## 13.12.                  **Entire Agreement**.  This Agreement and the Transaction Documentstogether with the schedules and exhibits hereto and thereto, shall constitutethe entire agreement between the parties hereto with respect to thetransactions contemplated hereby and shall supersede all prior negotiations,letters of intent, understandings and agreements. A disclosure of any informationin a schedule attached hereto, or delivery pursuant to the terms hereof, shallbe considered a disclosure of such information in any other schedules in whichthe same information may otherwise be required to be included in accordancewith the terms of this Agreement.

##  

## 13.13.                  **Other Interpretive Matters**.                                           In this Agreement, unless aclear contrary intention appears:  (a)the singular number includes the plural number and vice versa; (b) reference toany Person includes such Person’s successors and assigns but 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)reference to any gender includes each other gender; (d) reference to any agreement(including this Agreement and the schedules hereto), document or instrumentmeans such agreement, document or instrument as amended or modified and ineffect 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) reference to any applicable law means such applicable law as amended,modified, codified or reenacted, in whole or in part, and in effect from timeto time, including rules and regulations promulgated thereunder and referenceto any particular provision of any applicable law shall be interpreted toinclude any revision of or successor to that provision regardless of hownumbered or classified; (f) reference to any Article or Section means suchArticle or Section hereof; (g) “hereunder,” “hereof,” “hereto” and words ofsimilar import shall be deemed references to this Agreement as a whole and notto any particular Section or other provision hereof; and (h) “including” (andwith correlative meaning “include”) means including without limiting thegenerality of any description preceding such term.

 

## 13.14.                  **Certain Assistance in Income TaxPreparation and Audits and Other Matters**.

##  

### 13.14.1.                                                         TaxPreparation.

 

17

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#### 13.14.1.1.                                                Buyerand Seller shall furnish, at no cost to the other, such data as the other partymay reasonably require to prepare Tax Returns. If additional data is required by Seller or Buyer for preparation of TaxReturns or tax examinations, such additional information (includingreproduction of Tax Returns, tax assessments, and records) shall be furnished,at no cost and within a reasonable time after requested in writing.

####  

#### 13.14.1.2.                                                Buyerand Seller shall retain, until the applicable statutes of limitations(including any extensions) have expired, copies of all Tax Returns, supportingwork schedules, and other records or information which may be relevant to suchTax Returns for all tax periods or portions thereof ending prior to the ClosingDate.  Copies of all such Tax Returnsshall be promptly provided to any party upon request of the same.

 

### 13.14.2.                                                         Tax Audits.  Buyer and Seller shall provide reasonableassistance to each other with any tax audits or other administrative orjudicial proceedings involving any of the Truck Stops at no cost to the other.Neither party shall, without the prior written consent of the other, unlessrequired by law, initiate any contact or voluntarily enter into any agreementwith, or volunteer any information to, the taxing authorities with regard toTax Returns or declarations of the other party.

###  

## 13.15.                  **Additional Definitions**.  The following definitions shall apply:

##  

### 13.15.1.                                                         Claim means any actual, threatened orpotential claim (whether oral or written), demand, litigation, action, suit,investigation, proceeding, hearing, complaint, assessment or judgment,administrative or judicial, at law or in equity.

###  

### 13.15.2.                                                         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.

###  

### 13.15.3.                                                         Entity means a corporation,association, partnership, limited liability company, limited liabilitypartnership, trust or any other entity or organization.

###  

### 13.15.4.                                                         Gaming Assets shall mean any assets, in anyform, that relate to the operation or ownership of casinos, race-tracks, truckstops or other operations whose primary purpose is lawfully providing games ofchance (including pari-mutuel waging) for play by the

 

18

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###  

### general public; *provided, however,* Gaming Assets shall not include a PassiveGaming Investment.

###  

### 13.15.5.                                                         Governmental Body means any federal, state,county, parish, local or foreign governmental authority, quasi-governmentalauthority or any regulatory, administrative or other agency, department,commission, tribunal, board, bureau, instrumentality, any political or othersubdivision, or any body thereof, or any federal, state, county, local orforeign court or arbitrator.

###  

### 13.15.6.                                                         Lien means any mortgage, pledge,security interest, encumbrance, covenant, condition, restriction, easement,claim, lien or charge of any kind (including, without limitation, anyconditional sale or other title retention agreement or lease in the naturethereof), any sale of receivables with recourse, or any filing or agreement tofile a financing statement as debtor under the Uniform Commercial Code or any similarstatute.

###  

### 13.15.7.                                                         Liquor and Gaming Laws of theState of Louisianashall mean the laws promulgated in the Louisiana Revised Statutes Title 27:301et seq., and Title 26:1 et seq., as amended from time to time and the LouisianaAdministrative Code provisions interpreting the same.

###  

### 13.15.8.                                                         Material Adverse Effect means any matter or matterswhich would, alone or in the aggregate, have a material adverse effect on  (i) the financial condition, operatingresults, assets, liabilities, operations, condition (financial or otherwise),business or prospects of any of the Truck Stops or the Seller, (ii) anymaterial violation by the Seller or any of the Truck Stops of the Liquor andGaming Laws of the State of Louisiana, (iii) the revocation or suspension, for anyperiod of time, of any liquor or gaming license issued by the State ofLouisiana to any of the Truck Stops.

###  

### 13.15.9.                                                         Notes shall mean collectively theBuyer’s 11 7/8% senior secured notes due 2009, in the original principalbalance of $125,000,000 and those additional 11 7/8% senior secured notes due2009, issued in 2005, in the original principal amount of $23,000,000 (“AdditionalNotes”)

###  

### 13.15.10.                                                   Notes Closing Date shall mean the date upon whichthe Additional Notes are fully issued and funded.

###  

### 13.15.11.                                                   Passive Gaming Investment shall mean any passiveinvestment in the voting equity of a publicly-traded Entity, even if suchEntity may own Gaming Assets. Notwithstanding the foregoing, an investment shall not be consideredpassive if either Richard E. Jacobs or Jeffrey P. Jacobs, whether jointly orindividually: (i) has

 

19

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### the power, whether by voting rights, contractor otherwise, to elect or appoint a majority of a given Entity’s Board ofDirectors; or (ii) otherwise participates (excluding the act of voting theirequity interests) in the management of an Entity.

###  

### 13.15.12.                                                   Person means an individual,corporation, Governmental Body, association, partnership, limited liabilitycompany, limited liability partnership, trust, or any other entity ororganization.

###  

### 13.15.13.                                                   Tax means the domestic federal,state, and local income, payroll, withholding, excise, social security, sales,use, ad valorum, real and personal property, occupancy, business, capitalstock, franchise, transfer, employment and unemployment, and any other tax,fee, duty, assessment or governmental charge of any kind whatsoever (including,without limitation, all interest, penalties and estimated taxes).

###  

### 13.15.14.                                                   Tax Return means returns, reports, claimsfor refund, information returns or other documents (including, withoutlimitation, any related or supporting schedules, statements or information)filed or required to be filed.

###  

## 13.16.                  **Incorporation**.   Any and all Schedules or other documentsreferred to herein or attached hereto are incorporated herein as if fullyrewritten in this Agreement.

##  

[The remainder of this page has been leftintentionally blank.]

 

20

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IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be executed as of theAgreement Date.

 

 
|       | BUYER:                                                    |
|------------|-----------------------------------------------------------|
| ** ** | **JACOBS ENTERTAINMENT, INC.**                            |
| ** ** | ** **                                                |
|       |                                                      |
|       | By: /s/ Stephen R. Roark                                  |   |
|       | Stephen R. Roark, Chief Financial Officer                 |
|       |                                                      |
|       |                                                      |
|       | SELLER:                                                   |
|       |                                                      |
| ** ** | **GAMECO HOLDINGS, INC.**                                 |
| ** ** | ** **                                                |
|       |                                                      |
|       | By: /s/ Ian M. Stewart                                    |   |
|       | Ian M. Stewart, Vice President                            |
|       |                                                      |
|       |                                                      |
|       | For the purpose of agreeing to the terms,  conditions and |
|       | covenants of Article 2 only:                              |
|       |                                                      |
|       |                                                      |
|       | /s/ Jeffrey P. Jacobs                                     |   |
|       | Jeffrey P. Jacobs                                         |
|       |                                                      |
|       |                                                      |
|       | /s/ Richard E. Jacobs                                     |   |
|       | Richard E. Jacobs                                         |

 

21

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**LIST OF SCHEDULES**

 

Schedule 5.4                             Capitalization

 

Schedule 5.5                             Liens,Claims and Title Exceptions

 

Schedule 5.6                             TaxMatters

 

Schedule 5.10                       Consents

 

Schedule 5.11                       Litigation

 

22

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**Schedule5.4**

 

**[Capitalization]**

 

1.                                       Jeffersonhas entered into that certain Development Agreement, dated September 26, 2003,by and between Jefferson and Jackpot Truck Stop, L.L.C., a Louisiana limitedliability company (“Jackpot”), which provides for, *inter alia*, the payment of a portion of the gaming revenuefrom this location to Jackpot.

 

23

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**Schedule5.5**

 

**[Liens,Claims and Title Exceptions]**

 

1.                                       EUNICE:

 

a.                                       Thoseexceptions to title disclosed in the Owner’s Title Policy, issued by LawyersTitle Insurance Corporation, Policy No. 136-00-780885, dated October 30, 2003,together with the endorsement, dated as of the Closing.

 

2.                                       BREAUXBRIDGE:

 

a.                                       Thoseexceptions to title disclosed in the Owner’s Title Policy, issued by LawyersTitle Insurance Corporation, Policy No. A75-0547929, dated July 1, 2003,together with the endorsement, dated as of the Closing.

 

3.                                       JEFFERSON:

 

a.                                       Thoseexceptions to title disclosed in the Owner’s Title Policy, issued by LawyersTitle Insurance Corporation, Policy No. B12-0006655, dated June 28, 2004,together with the endorsement, dated as of the Closing.

 

b.                                      SubleaseAgreement between Jefferson, as Landlord, and Subway Real Estate Corp., asTenant, dated December 9, 2004.

 

c.                                       SubleaseAgreement between, Jefferson, as Sub-lessor, and Point of Sale, L.L.C. asSub-lessee, dated July 1, 2004.

 

d.                                      DevelopmentAgreement by and between Jefferson and Jackpot Truck Stop, L.L.C., a Louisianalimited liability company, dated September 26, 2003.

 

e.                                       Thelitigation described on Schedule 5.11.

 

24

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**Schedule5.6**

 

**[TaxMatters]**

 

**None**

 

25

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**Schedule5.10**

 

**[Consents]**

 

1.**                                      **Anestablishment license has not been issued for the gaming operations located atEunice.  The application has been filedand the regulatory investigation and approval process associated therewith isunderway.

 

2.                                       Anestablishment license has not been issued for the gaming operations located atJefferson.  The application is beingfiled.

 

3.                                       Thetransfers contemplated by this Agreement will require notification by the Buyerto the Louisiana State Police within ten (10) days of their completion.

 

26

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**Schedule5.11**

 

**[Litigation]**

 

1.                                       *Avondale Truck Stop, L.L.C. vs. The Parish ofJefferson, Al-Huda, Inc., Al-Batool, Inc. and the Jefferson Parish Council*,No. 604-603, in the 24th Judicial District Court for the Parish of Jefferson,State of Louisiana, Division “L”, and consolidated with, *Phillip Hebert vs. The Parish of Jefferson, Al-Huda,Inc., Al-Batool, Inc. and the Jefferson Parish Council,*No. 604-604,in the 24th Judicial District Court for the Parish of Jefferson, State ofLouisiana, Division “K”

 

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