Document:

EXHIBIT 4.11

 

INTERCOMPANY NOTE

 

New York, New York

June 16, 2006

 

FOR VALUE RECEIVED, each of the undersigned, to the
extent a borrower from time to time from any other entity listed on the
signature page hereto (each, in such capacity, a “Payor”),
hereby promises to pay on demand to the order of such other entity listed below
(each, in such capacity, a “Payee”), in
lawful money of the United States of America in immediately available funds, at
such location in the United States of America as a Payee shall from time to
time designate, the unpaid principal amount of all loans and advances
(including trade payables) made by such Payee to such Payor.  Each Payor promises also to pay interest on
the unpaid principal amount of all such loans and advances in like money at
said location from the date of such loans and advances until paid at such rate
per annum as shall be agreed upon from time to time by such Payor and such
Payee.

 

This note (“Note”) is an
Intercompany Note referred to in the Credit Agreement dated as of June 16, 2006
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”) among JACOBS
ENTERTAINMENT, INC., a Delaware corporation (“Borrower”),
the Lenders (such term and each other capitalized term used but not defined
herein having the meaning given it in Article I of the Credit Agreement)
and CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as administrative agent (in such
capacity, “Administrative Agent”) for the
Lenders, as collateral agent (in such capacity, “Collateral
Agent”) for the Secured Parties, as swingline lender (in such
capacity, “Swingline Lender”) and as issuing
bank (“Issuing Bank”) and is subject to the
terms thereof, and shall be pledged by each Payee pursuant to the Security
Agreement, to the extent required pursuant to the terms thereof.  Each Payee hereby acknowledges and agrees
that the Administrative Agent may exercise all rights provided in the Credit
Agreement and the Security Agreement with respect to this Note.

 

Anything in this Note to the contrary
notwithstanding, the indebtedness evidenced by this Note owed by any Payor that
is Borrower or a Guarantor to any Payee other than Borrower shall be
subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to all Obligations of such Payor under the Credit
Agreement, including, without limitation, where applicable, under such Payor’s
guarantee of the Obligations under the Credit Agreement (such Obligations and
other indebtedness and obligations in connection with any renewal, refunding,
restructuring or refinancing thereof, including interest thereon accruing after
the commencement of any proceedings referred to in clause (i) below,
whether or not such interest is an allowed claim in such proceeding, being
hereinafter collectively referred to as “Senior Indebtedness”):

 

(i)                                     In the event of any insolvency or bankruptcy
proceedings, and any receivership, liquidation, reorganization or other similar
proceedings in connection therewith, relative to any Payor or to its creditors,
as such, or to its property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of such Payor, whether or not
involving insolvency or bankruptcy, then (x) the holders of Senior Indebtedness
shall be paid in full in cash in respect of all amounts

 

1

 

constituting Senior Indebtedness before any Payee is
entitled to receive (whether directly or indirectly), or make any demands for,
any payment on account of this Note and (y) until the holders of Senior
Indebtedness are paid in full in cash in respect of all amounts constituting
Senior Indebtedness, any payment or distribution to which such Payee would
otherwise be entitled (other than debt securities of such Payor that are
subordinated, to at least the same extent as this Note, to the payment of all
Senior Indebtedness then outstanding (such securities being hereinafter
referred to as “Restructured Debt Securities”))
shall be made to the holders of Senior Indebtedness;

 

(ii)                                  if any default occurs and is continuing with
respect to any Senior Indebtedness (including any Default under the Credit
Agreement), then no payment or distribution of any kind or character shall be
made by or on behalf of the Payor or any other Person on its behalf with
respect to this Note; and

 

(iii)                               if any payment or distribution of any
character, whether in cash, securities or other property (other than
Restructured Debt Securities), in respect of this Note shall (despite these
subordination provisions) be received by any Payee in violation of clause (i) or
(ii) before all Senior Indebtedness shall have been paid in full in cash,
such payment or distribution shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness (or
their representatives), ratably according to the respective aggregate amounts
remaining unpaid thereon, to the extent necessary to pay all Senior
Indebtedness in full in cash.

 

To the fullest extent permitted by law, no present
or future holder of Senior Indebtedness shall be prejudiced in its right to
enforce the subordination of this Note by any act or failure to act on the part
of any Payor or by any act or failure to act on the part of such holder or any
trustee or agent for such holder.  Each
Payee and each Payor hereby agree that the subordination of this Note is for
the benefit of the Administrative Agent, the Issuing Bank and the Lenders and
the Administrative Agent, the Issuing Bank and the Lenders are obligees under
this Note to the same extent as if their names were written herein as such and
the Administrative Agent may, on behalf of the itself, the Issuing Bank and the
Lenders, proceed to enforce the subordination provisions herein.

 

The indebtedness evidenced by this Note owed by any
Payor that is not Borrower or a Guarantor shall not be subordinated to, and
shall rank pari passu in right of payment with, any
other obligation of such Payor.

 

Nothing contained in the subordination provisions
set forth above is intended to or will impair, as between each Payor and each
Payee, the obligations of such Payor, which are absolute and unconditional, to
pay to such Payee the principal of and interest on this Note as and when due
and payable in accordance with its terms, or is intended to or will affect the
relative rights of such Payee and other creditors of such Payor other than the
holders of Senior Indebtedness.

 

Each Payee is hereby authorized to record all loans
and advances made by it to any Payor (all of which shall be evidenced by this
Note), and all repayments or prepayments thereof, in its books and records,
such books and records constituting prima facie evidence of the accuracy of the
information contained therein.

 

Each Payor hereby waives presentment, demand,
protest or notice of any kind in connection with this Note.  All payments under this Note shall be made
without offset, counterclaim or deduction of any kind.

 

2

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

 

 

	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
   

  	
  By:    Jeffrey P. Jacobs

  
	
   

  	
  Its:    Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  JACOBS PIÑON PLAZA ENTERTAINMENT,

  INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey
  P. Jacobs

  	
   

  
	
   

  	
  By:   Jeffrey P. Jacobs

  
	
   

  	
  Its:   President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JACOBS ELKO ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey
  P. Jacobs

  	
   

  
	
   

  	
  By:   Jeffrey P. Jacobs

  
	
   

  	
  Its:   President

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
  Stephen R. Roark, signing on behalf of the

  
	
   

  	
  entities listed below in the capacity
  listed

  
	
   

  	
  next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  BLACK HAWK GAMING & DEVELOPMENT

  
	
   

  	
  COMPANY, INC., as its President

  
	
   

  	
  GOLD DUST WEST CASINO, INC., as its Vice

  
	
   

  	
  President

  
	
   

  	
  GILPIN VENTURES, INC., as its President

  
	
   

  	
  JALOU L.L.C., as its President and Manager

  
	
   

  	
  JALOU II INC., as its President

  

 

3

 

	
   

  	
  GILPIN HOTEL VENTURE

  
	
   

  	
  By: Gilpin Ventures, Inc., its partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
   

  	
  Name:  Stephen R. Roark

  
	
   

  	
   

  	
  Its:   President

  
	
   

  	
   

  
	
   

  	
  By: Black Hawk Gaming &
  Development

  Company, Inc., its partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
   

  	
  Name:   Stephen R. Roark

  
	
   

  	
   

  	
  Its:   President

  
	
   

  	
   

  
	
   

  	
  BLACK HAWK/JACOBS ENTERTAINMENT,

  LLC

  
	
   

  	
  By: Black Hawk Gaming &
  Development

  Company, Inc.

  
	
   

  	
  Its: Authorized Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
   

  	
  Name:   Stephen R. Roark

  
	
   

  	
   

  	
  Its:   President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DIVERSIFIED OPPORTUNITIES GROUP LTD.

  
	
   

  	
  By Jacobs Entertainment, Inc., its
  Managing

  Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
   

  	
  Name:   Stephen R. Roark

  
	
   

  	
   

  	
  Its:   Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JACOBS DAKOTA WORKS, LLC

  
	
   

  	
  By: Jacobs Entertainment, Inc., its
  Sole Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen
  R. Roark

  	
   

  
	
   

  	
   

  	
  Name:   Stephen R. Roark

  
	
   

  	
   

  	
  Its:   Chief Financial
  Officer

  

 

4

 

	
   

  	
  /s/ Stan
  Guidroz

  	
   

  
	
   

  	
  Stan Guidroz, signing on behalf of the
  entities

  
	
   

  	
  listed below in the capacity listed next to
  each

  respective entity:

  
	
   

  	
   

  
	
   

  	
  WINNER’S CHOICE CASINO, INC., as its

  President

  
	
   

  	
  JACE, INC., as its President

  
	
   

  	
  FUEL STOP 36, INC., as its President

  
	
   

  	
  HOUMA TRUCK PLAZA & CASINO,
  L.L.C., as

  its President and Manager

  
	
   

  	
  JALOU – CASH’S L.L.C., its President and

  Manager

  
	
   

  	
  LUCKY MAGNOLIA TRUCK STOP AND

  CASINO, L.L.C., as its President and Manager

  
	
   

  	
  BAYOU VISTA TRUCK PLAZA AND CASINO,

  L.L.C., as its President and Manager

  
	
   

  	
  RACELAND TRUCK PLAZA AND CASINO,

  L.L.C., as its President and Manager

  
	
   

  	
  JRJ PROPERTIES, LLC, as its President and

  Manager

  
	
   

  	
  JALOU OF LAROSE, LLC, as its President and

  Manager

  
	
   

  	
  JALOU BREAUX BRIDGE, LLC, as its President

  and Manager

  
	
   

  	
  JALOU EUNICE, LLC, as its President and

  Manager

  
	
   

  	
  JALOU OF ST. MARTIN, L.L.C., as its
  President

  and Manager

  
	
   

  	
  JALOU DIAMOND, L.L.C., as its President and

  Manager

  
	
   

  	
  JALOU MAGIC, L.L.C., as its President and

  Manager

  
	
   

  	
  JALOU OF VINTON, LLC, as its President and

  Manager

  
	
   

  	
  JALOU OF VINTON-BINGO, LLC, as its

  President and Manager

  
	
   

  	
  JALOU OF ST. HELENA, LLC, as its President

  and Manager

  
	
   

  	
  JALOU OF JEFFERSON, LLC, as its President
  and

  Manager

  

 

5

 

	
   

  	
  /s/ Ian M.
  Stewart

  	
   

  
	
   

  	
  Ian M. Stewart, signing on behalf of the
  entities

  listed below in the capacity listed next to each

  respective entity:

  
	
   

  	
   

  
	
   

  	
  COLONIAL HOLDINGS, INC., as its President

  
	
   

  	
  STANSLEY RACING CORP., as its President

  
	
   

  	
  COLONIAL DOWNS, LLC, as its President

  
	
   

  	
  VIRGINIA CONCESSIONS, LLC, as its Vice 

  President

  
	
   

  	
  MARYLAND-VIRGINIA RACING CIRCUIT,

  INC., as its President

  
	
   

  	
   

  
	
   

  	
  COLONIAL DOWNS, L.P.

  
	
   

  	
  By: Stansley Racing Corp., its General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian M.
  Stewart

  	
   

  
	
   

  	
   

  	
  Name:   Ian M. Stewart

  
	
   

  	
   

  	
  Its:   President

  
						

 

6EXHIBIT 4.12

 

$210,000,000

 

JACOBS ENTERTAINMENT, INC.

 

9.75% Senior Notes due 2014

 

PURCHASE AGREEMENT

 

June 9, 2006

 

CREDIT
SUISSE SECURITIES (USA) LLC (“Credit Suisse”),

  As Representative of the Several Purchasers,

Eleven
Madison Avenue,

New
York, N.Y. 10010-3629

 

Dear Sirs:

 

1.                                      Introductory.  Jacobs Entertainment, Inc., a Delaware
corporation (the “Company”),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several initial purchasers named in Schedule A hereto (the “Purchasers”) U.S. $210,000,000 principal amount of its 9.75%
Senior Notes due 2014 (the “Notes”).  The obligations of the Company under the
Indenture (as defined below) and the Notes will be unconditionally guaranteed
(the “Guarantees” and, together with the
Notes, the “Offered Securities”), on a joint
and several basis, by each of the Company’s subsidiaries listed in Schedule B
hereto (each, a “Guarantor” and, collectively, the “Guarantors” and, together with the Company, the “Issuers”).  The Offered
Securities will be issued under an indenture, dated as of June 16, 2006
(the “Indenture”), among the Issuers
and Wells Fargo Bank, National Association, as Trustee (the “Trustee”). The United States Securities Act of 1933, as
amended, is herein referred to as the “Securities Act.”

 

The holders of the Offered Securities will be entitled
to the benefits of a Registration Rights Agreement of even date herewith among
the Issuers and the Purchasers (the “Registration
Rights Agreement”), pursuant to which the Issuers agree to file a
registration statement with the Securities Exchange Commission (the “Commission”) as described in the
Preliminary Offering Circular and the Final Offering Circular (each as defined
below).

 

The Issuers propose to issue the Offered Securities in
connection with (i) the acquisition by the Company of three truck plaza
video gaming facilities and the raw land to develop a fourth video gaming plaza
from Gameco Holdings, Inc., an affiliate of the Company (the “Truck Plaza Acquisitions”), in each case pursuant to an
asset purchase agreement (the

 

1

 

“Truck Plaza Acquisition
Agreements”); (ii) the acquisition by the Company of the Best
Western Piñon Plaza Resort, a land-based casino located in Carson City, Nevada
(“Piñon Plaza” and, together with the
Truck Plaza Acquisitions, the “Acquisitions”)
pursuant to an asset purchase agreement (the “Piñon Acquisition
Agreement” and, together with the Truck Plaza Acquisition
Agreements, the “Acquisition Documents”); (iii) the
conversion of a 21,000 square-foot facility in Elko, Nevada, into a casino (the
“Elko Development”); (iv) the
entrance by the Company and the Guarantors into a senior secured credit
facility, which will provide for (a) a $40 million term loan, (b) a
$40 million revolving credit facility and (c) a $20 million delayed draw
term loan, as more fully described in the General Disclosure Package and the Final
Offering Circular (each as defined below) under the heading “Description of
Other Indebtedness—Senior Secured Credit Facilities” (the “Credit Facility”);
(v) the consummation by the Company of a tender offer (the “Tender Offer”) to purchase any or all of its outstanding 11
7/8% Senior Secured Notes due 2009 (the “2009 Notes”),
in connection with which the Company and its subsidiaries that have issued
guarantees of the 2009 Notes will enter into a supplemental indenture (the “Supplemental Indenture”) with the Trustee pursuant to which
substantially all of the restrictive covenants applicable to the 2009 Notes
will cease to apply to the 2009 Notes and the collateral securing the 2009
Notes will be released; and (vi) the payment by the Company of related
fees and expenses.

 

The Offered Securities, the Exchange Notes (as defined
in the Registration Rights Agreement), the Private Exchange Securities (as
defined in the Registration Rights Agreement), the Indenture, the Registration
Rights Agreement, the Credit Facility, the Supplemental Indenture, the other
documents relating to the Tender Offer and this Agreement are herein
collectively referred to as the “Basic Documents.”
The Truck Plaza Acquisition Agreements and the Piñon Acquisition Agreement, together with all related agreements,
instruments and other documents required in connection therewith are herein
collectively referred to as the “Acquisition Documents”
and, together with the Basic Documents, the “Transaction
Documents.”  The Acquisitions,
the issuance of the Offered Securities and each of the other transactions
contemplated by the Transaction Documents are herein collectively referred to
as the “Transactions.”

 

The Issuers hereby agree with the several Purchasers
as follows:

 

2.                                      Representations
and Warranties of the Company.  Each Issuer represents and warrants to, and
agrees with, the several Purchasers that:

 

(a)                                 A preliminary offering circular (as
supplemented by the Supplement dated June 9, 2006, the “Preliminary Offering Circular”) relating to the Offered
Securities to be offered by the Purchasers and a final offering circular (the “Final Offering Circular”)  disclosing the offering
price and other final terms of the Offered Securities and is dated as of the
date of this Agreement (even if finalized and issued subsequent to the date of
this Agreement) have been or will be prepared by the Company.  “General Disclosure Package”
means the Preliminary Offering Circular, together with any Issuer Free Writing
Communication (as hereinafter defined) existing at the Applicable Time (as
hereinafter defined) and the information in which is intended for general
distribution to prospective investors, as evidenced by its being specified in Schedule C to this Agreement (including the term sheet listing the
final terms of the Offered Securities and their offering, included in Schedule C
to this Agreement, which is referred to as the “Terms
Communication”).

 

2

 

“Applicable
Time” means 10 :00 am ( New York City time) on the date of
this Agreement.  As of the date of this
Agreement, the Final Offering Circular does not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein, or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.  At the Applicable Time neither (i) the
General Disclosure Package, nor (ii) any individual Supplemental Marketing
Material (as hereinafter defined), when considered together with the General
Disclosure Package, included any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.  The
preceding two sentences do not apply to statements in or omissions from the
Preliminary or Final Offering Circular, the General Disclosure Package or any
Supplemental Marketing Material based upon written information furnished to the
Company by any Purchaser through Credit Suisse specifically for use therein, it
being understood and agreed that the only such information is that described as
such in Section 8(b) hereof. Except as disclosed in the General
Disclosure Package, on the date of this Agreement, the Company’s Annual Report
on Form 10-K most recently filed with the Commission and all subsequent
reports (collectively, the “Exchange Act Reports”)
which have been filed by the Company with the Commission or sent to
shareholders pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such documents, when they were filed with the Commission,
conformed in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder.

 

“Free Writing Communication”
means a written communication (as such term is defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or a solicitation of an
offer to buy the Offered Securities and is made by means other than the
Preliminary Offering Circular or the Final Offering Circular.  “Issuer Free Writing
Communication” means a Free Writing Communication prepared by or on
behalf of any Issuer, used or referred to by any Issuer or containing a
description of the final terms of the Offered Securities or of their offering,
in the form retained in such Issuer’s records. 
“Supplemental Marketing Material” means
any Issuer Free Writing Communication (other than any Issuer Free Writing
Communication specified in Schedule C to this Agreement) set forth on Schedule D
to this Agreement.

 

(b)                                 The Company has been duly incorporated
and is an existing corporation in good standing under the laws of the State of
Delaware , with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure
Package; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification
except where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the management, business,
condition (financial or other), properties or

 

3

 

results of operations of
the Company and the Subsidiaries, taken as a whole (any such event, a “Material Adverse Effect”).

 

(c)                                  Each subsidiary of the Company has been
duly organized and is in good standing under the laws of the jurisdiction of
its organization, with power and authority (corporate and other) to own its
properties and conduct its business as described in the General Disclosure
Package; and each subsidiary of the Company is duly qualified to do business as
a foreign entity in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, result in a Material Adverse Effect; all of
the issued and outstanding equity interests of each subsidiary of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; and the equity interests of each subsidiary owned by the
Company, directly or through subsidiaries, are owned free from liens,
encumbrances and defects except as described in the General Disclosure Package.

 

(d)                                 Each of the Issuers has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Offered Securities, the Exchange Notes and the Private Exchange
Securities.  The Notes, the Exchange
Notes and the Private Exchange Securities have each been duly and validly
authorized by the Company for issuance and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and, in the case the Notes, delivered to and paid for by the
Purchasers in accordance with the terms hereof, and, in the case of the
Exchange Notes and the Private Exchange Securities delivered in exchange for
the Notes, will have been duly executed, issued and delivered and will constitute
valid and legally binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors’ rights
generally or (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding at law or in equity)
(collectively, the “Enforceability Exceptions”);
the Guarantees endorsed on the Notes and the guarantees to be endorsed on the
Exchange Notes and the Private Exchange Securities have each been duly and
validly authorized by each of the Guarantors to the extent applicable and, when
the Notes are executed by the Company and authenticated by the Trustee in
accordance with the provisions of the Indenture, and delivered to and paid for
by the Purchasers in accordance with the terms hereof, will have been duly executed,
issued and delivered and will constitute valid and legally binding obligations
of the Guarantors, entitled to the benefits of the Indenture and enforceable
against the Guarantors in accordance with their terms except that the
enforcement thereof may be limited by the Enforceability Exceptions; the
Offered Securities are in the form contemplated by the Indenture.

 

(e)                                  Each of the Issuers has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Indenture.  The Indenture has
been duly and validly authorized by the Issuers and meets the requirements for
qualification

 

4

 

under the Trust Indenture
Act of 1939, as amended (the “Trust Indenture Act”),
and, when executed and delivered by the Issuers (assuming the due
authorization, execution and delivery thereof by the Trustee), will constitute
a valid and legally binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms except that the enforcement thereof may be
limited by the Enforceability Exceptions.

 

(f)                                   Each of the Issuers has the requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.  This Agreement has
been duly and validly authorized by the Issuers and, when executed and
delivered by the Issuers, will constitute a valid and legally binding agreement
of the Issuers (assuming due authorization, execution and delivery by the other
parties thereto), enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by the Enforceability Exceptions
and except as any rights to indemnity or contribution hereunder may be limited
by federal and state securities laws and public policy considerations.

 

(g)                                  Each of the Issuers has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Registration Rights Agreement. 
The Registration Rights Agreement has been duly and validly authorized
by the Issuers and, when executed and delivered by the Issuers, will constitute
a valid and legally binding agreement of the Issuers (assuming due authorization,
execution and delivery by the other parties thereto), enforceable against the
Issuers in accordance with its terms except that the enforcement thereof may be
limited by the Enforceability Exceptions and except as any rights to indemnity
or contribution hereunder may be limited by federal and state securities laws
and public policy considerations.

 

(h)                                 Each of the Issuers has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Transaction Documents, in each case to the extent a party
thereto.  The Transaction Documents have
been duly and validly authorized by the Issuers, in each case to the extent a
party thereto, and, when executed and delivered by the applicable Issuers, will
constitute valid and legally binding agreements of such Issuers, enforceable
against such Issuers in accordance with their terms except that the enforcement
thereof may be limited by the Enforceability Exceptions and except as any
rights to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.  Each of the Transaction Documents conforms in
all material respects to the description thereof in the General Disclosure
Package.

 

(i)                                     (A) The Issuers have delivered to
the Purchasers a true and correct copy of each of the Transaction Documents
that have been executed (or finalized to the extent execution is not required)
and delivered prior to the date of this Agreement and each other Transaction
Document in the form substantially as it will be executed and delivered on or
prior to the Closing Date, together, in each case, with all related agreements
and all schedules and exhibits thereto, and as of the date hereof there have
been no material amendments, alterations, modifications or waivers of any of
the provisions of any of the Transaction Documents or from the form in which
any such Transaction Document has been delivered to the Purchasers; and (B) there
exists as of the date hereof (after giving

 

5

 

effect to the
transactions contemplated by each of the Transaction Documents) no event or
condition that would constitute a default or an event of default (in each case,
as defined in each of the Transaction Documents) under any of the Transaction
Documents that would result in a Material Adverse Effect or materially
adversely affect the ability of the Company to consummate the Transactions.

 

(j)                                    Except as set forth in the General
Disclosure Package, no consent, approval, authorization, license,
qualification, exemption or order of any court or governmental agency or body
or third party is required for the performance of any Transaction Document or
otherwise in connection with the Tender Offer by the Issuers or for the
consummation by the Issuers of any of the transactions contemplated hereby and
thereby, or the application of the proceeds of the issuance of the Offered
Securities as described in General Disclosure Package (including, without
limitation, the Nevada Gaming Commission, the Nevada State Gaming Control Board
(collectively, the “Nevada Gaming Authorities”),
the Colorado Limited Gaming Control Commission, the Colorado Division of Gaming
(collectively, the “Colorado Gaming
Authorities”), the Louisiana Gaming Control Board and the Video
Gaming Division of the Louisiana State Police (the “Louisiana
Gaming Authorities”) and the Virginia Racing Commission (the “Virginia Gaming Authorities”) (collectively, the “Gaming Authorities”)), except as has already been acquired
or as may be required under state securities or “Blue Sky” laws in connection
with the Tender Offer or the purchase and distribution of the Offered
Securities by the Purchasers and except as would not, individually or in the
aggregate, have a Material Adverse Effect; all such consents, approvals,
authorizations, licenses, qualifications, exemptions and orders (including,
without limitation, pursuant to any statutes, laws, rules or regulations
relating to gaming or wagering which are applicable to the businesses of the
Issuers (collectively, “Gaming Laws”)
which are required to be obtained by law or by any Transaction Document by the
Closing Date have been obtained or made, as the case may be, and are in full
force and effect and not the subject of any pending or, to the best knowledge
of the Issuers, threatened attack by appeal or direct proceeding or otherwise.

 

(k)                                 None of the Issuers is (i) in
violation of its certificate of incorporation or bylaws (or similar organizational
document), (ii) in breach or violation of any statute, judgment, decree,
order, rule or regulation, including, without limitation, any rule or
regulation of any Gaming Authority, applicable to it or any of its properties
or assets, which breach or violation would, individually or in the aggregate,
have a Material Adverse Effect, or (iii) in default (nor has any event occurred
which with notice or passage of time, or both, would constitute a default) in
the performance or observance of any obligation, agreement, covenant or condition
contained in any Transaction Document or any other contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which it is a
party or to which it is subject, which default would, individually or in the
aggregate, have a Material Adverse Effect.

 

(l)                                     The execution, delivery and performance
by the Issuers of each of the Transaction Documents to which they are parties
and the consummation by the Issuers of the transactions contemplated hereby and
thereby and by the General Disclosure Package

 

6

 

and the fulfillment of
the terms hereof and thereof will not (a) violate, conflict with or
constitute or result in a breach of or a default under (or an event that, with
notice or lapse of time, or both, would constitute a breach of or a default
under) any of (i) the terms or provisions of any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which any Issuer
is a party or to which any of its properties or assets are subject, (ii) the
certificate of incorporation or bylaws (or similar organizational document) of
any Issuer or (iii) (assuming compliance with all applicable state securities
or “Blue Sky” laws) any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or other body (including,
without limitation, any Gaming Law and any rule or regulation of any
Gaming Authority) applicable to the Issuers or any of their respective
properties or assets or (b) result in the imposition of any lien upon or
with respect to any of the properties or assets now owned or hereafter acquired
by any Issuer (other than any lien arising under the Transaction Documents),
which violation, conflict, breach, default or lien would, individually or in
the aggregate, have a Material Adverse Effect.

 

(m)                             The audited consolidated financial
statements included in the General Disclosure Package present fairly the
consolidated financial position, results of operations and cash flows of the
entities for which they are included at the dates and for the periods to which
they relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis; the interim unaudited
consolidated financial statements included in the General Disclosure Package
present fairly the consolidated financial position, results of operations and
cash flows of such entities at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis with the audited consolidated
financial statements included therein; the summary and selected financial and
statistical data included in the General Disclosure Package present fairly the
information shown therein and have been prepared and compiled on a basis
consistent with the audited financial statements included therein, except as
otherwise stated therein; and Deloitte & Touche LLP, which has
examined certain of such financial statements as set forth in its reports
included in the General Disclosure Package, is an independent public accounting
firm as required by the Securities Act.

 

(n)                                 The pro forma financial statements and
other pro forma financial information (including the notes thereto) included in
the General Disclosure Package (A) have been prepared in accordance with
applicable requirements of Regulation S-X promulgated under the Exchange Act
and (B) have been properly computed on the bases described therein; and
the assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included in the General Disclosure
Package are reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.

 

(o)                                 Except as described in the General
Disclosure Package, there is not pending or, to the best knowledge of the
Company, threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, to which any of the Issuers is a party, or to which
its respective properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, that, if determined

 

7

 

adversely to any Issuer
would, individually or in the aggregate, have a Material Adverse Effect or that
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the Transactions or the issuance or sale of the Offered Securities to be sold
hereunder or the application of the proceeds therefrom or the other
transactions described in the General Disclosure Package.

 

(p)                                 None of the Issuers has, and, after
giving effect to the Transactions and the issuance and sale of the Offered
Securities, no Issuer will have any liability for any prohibited transaction
(as defined in Section 406 of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), or Section 4975
of the Internal Revenue Code of 1986, as amended (“Code”)),
accumulated funding deficiency (as defined in Section 302 of ERISA) or any
complete or partial withdrawal from a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA), with respect to any plan (as defined in Section 3(3) of
ERISA) as to which the Issuers have or could have any direct or indirect,
actual or contingent liability.  With
respect to such plans, the Issuers are, and, after giving effect to the Transactions
and the issuance and sale of the Offered Securities, will be, in compliance in
all material respects with all provisions of the Code and ERISA.

 

(q)                                 The Issuers own or possess adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how that are necessary to conduct their business
(including, without limitation, those issued by Gaming Authorities) as
described in the General Disclosure Package. 
No Issuer has received any notice of infringement of or conflict with
(or knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how that, if such assertion of infringement or conflict were
sustained, would, individually or in the aggregate, have a Material Adverse Effect.

 

(r)                                    Except as set forth in the General
Disclosure Package, each Issuer and each of their respective securityholders,
directors and members of management possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other tribunals
(including, without limitation, the Gaming Authorities) presently required or
necessary to own or lease, as the case may be, and to operate its respective
properties and to carry on its respective businesses as now or proposed to be
conducted as set forth in the General Disclosure Package (“Permits”),
except where the failure to obtain such Permits would not, individually or in
the aggregate, have a Material Adverse Effect; each Issuer and each of their
respective securityholders, directors and members of management has fulfilled
and performed in all material respects all of its obligations with respect to
such Permits and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit; and none of
the Issuers has received any notice of any proceeding relating to revocation or
modification of any such Permit, except as described in the General Disclosure
Package and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.

 

8

 

(s)                                   Subsequent to the respective dates as of
which information is given in the General Disclosure Package and except as
described therein, (i) the Issuers have not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions, in either case whether or not in the ordinary course of business,
(ii) the Issuers have not purchased any of their respective outstanding
capital stock, or declared, paid or otherwise made any dividend or distribution
of any kind on any of their respective capital stock or otherwise (other than,
with respect to any of the Guarantors, the purchase of, or dividend or
distribution on, capital stock owned by the Company), (iii) there has not
been any other change in the capital stock or any change in the long-term
indebtedness of the Issuers, (iv) there has not occurred any material
change, or any development involving a prospective material change, in or
affecting the general affairs, management, business, condition (financial or
other), properties, prospects or results of operations of the Issuers, taken as
a whole, not contemplated by the General Disclosure Package and (v) the
Issuers have not sustained any material loss or interference with respect to
their respective businesses or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding.

 

(t)                                    There are no legal or governmental
proceedings, nor are there any contracts or other documents required by the
Securities Act to be described in a prospectus for a Registration Statement on Form S-1
that are not described in the General Disclosure Package.  Except as described in the General Disclosure
Package, none of the Issuers is in default under any of the contracts described
in the General Disclosure Package, has received a notice or claim of any such
default or has knowledge of any breach of such contracts by the other party or
parties thereto, except such defaults or breaches as would not, individually or
in the aggregate, have a Material Adverse Effect.

 

(u)                                 None of the Issuers has taken or will
take any action that would cause this Agreement or the issuance or sale of the
Offered Securities to violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.

 

(v)                                 Each of the Issuers has good and
marketable title to all real property described in the General Disclosure
Package as being owned by it and good and marketable title to the leasehold
estate in the real property described therein as being leased by it, free and
clear of all liens, charges, encumbrances or restrictions, except, in each
case, as described in the General Disclosure Package or such as would not,
individually or in the aggregate, have a Material Adverse Effect.  All leases, contracts and agreements,
including those referred to in the General Disclosure Package to which any
Issuer is a party or by which any of them is bound are valid and enforceable
against such Issuer (subject to the Enforceability Exceptions), are, to the
knowledge of the Issuers, valid and enforceable against the other party or
parties thereto (subject to the Enforceability Exceptions) and are in full
force and effect.

 

(w)                               Each of the Issuers has filed all
necessary federal, state and foreign income and franchise tax returns, except
where the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and have paid all taxes

 

9

 

shown as due thereon; and
other than tax deficiencies which any Issuer is contesting in good faith and
for which adequate reserves have been provided in accordance with generally
accepted accounting principles or as otherwise disclosed in the General
Disclosure Package, there is no tax deficiency that has been asserted against
any Issuer that would, individually or in the aggregate, have a Material Adverse
Effect.

 

(x)                                 (i) Immediately after the
consummation of the Transactions and the other transactions contemplated by
this Agreement and the other Transaction Documents, the (i) fair value and
present fair saleable value of the assets of each of the Issuers will exceed
the sum of its stated liabilities and identified contingent liabilities; and (ii) each
of the Issuers is not, nor will it be, after giving effect to the execution,
delivery and performance of this Agreement and the other Transaction Documents,
and the consummation of the Transactions and the other transactions contemplated
hereby and thereby, in each case to which it is a party (a) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted or (b) unable to pay its debts (contingent or
otherwise) as they mature.

 

(y)                                 Except as disclosed in the General
Disclosure Package and except as would not, individually or in the aggregate,
have a Material Adverse Effect, (A) each of the Issuers is in compliance
with all, and is not subject to liability (including, without limitation, fines
or penalties) under any, applicable Environmental Laws, (B) each of the
Issuers has made all filings and provided all notices required under any
applicable Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance with
their requirements, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or, to
the best knowledge of the Issuers, threatened against any Issuer under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets, facility
or property owned, operated, leased or controlled by any Issuer, (E) no
Issuer is subject to any order, decree or agreement requiring, or otherwise
obligated or required to perform any response or corrective action relating to
any hazardous material, (F) no Issuer has received notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”) or any comparable state law, (G) no property
or facility of any Issuer is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority and (H) there are no past or present
actions, events, operations or activities which could reasonably be expected to
prevent or interfere with compliance by any Issuer with any applicable
Environmental Law or to result in liability (including, without limitation,
fines or penalties) under any applicable Environmental Law.

 

For purposes of this Agreement, the following terms shall
have the following meanings:  “Environmental Law” means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or

 

10

 

administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment binding on any Issuer, relating to pollution or protection
of the environment, natural resources or health or safety including, without
limitation, any relating to the release or threatened release of any pollutant,
contaminated substance, material, waste, chemical or contaminant subject to
regulation thereunder.

 

(z)                                  No Issuer is, or immediately after the
Closing Date will be, required to register as an “investment company” or a
company “controlled by” an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “Investment
Company Act”).

 

(aa)                          No Issuer or any of such entities’
directors, officers, employees, agents or controlling persons has taken,
directly or indirectly, any action designed, or that might reasonably be
expected, to cause or result, under the Securities Act or otherwise, in, or
that has constituted, stabilization or manipulation of the price of the Offered
Securities.

 

(bb)                          No Issuer or any of its Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act)
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any “security” (as defined
in the Securities Act) which is or could be integrated with the sale of the
Offered Securities in a manner that would require the registration under the
Securities Act of the Offered Securities or (ii) assuming the accuracy of
the representations and warranties of the Purchasers and compliance by the
Purchasers with the covenants in Section 4 hereof, engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering of
the Offered Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.  Assuming the accuracy of the representations
and warranties of the Purchasers and compliance by the Purchasers with the
covenants in Section 4 hereof, it is not necessary in connection with the
offer, sale and delivery of the Offered Securities to the Purchasers in the
manner contemplated by this Agreement to register any of the Offered Securities
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act.

 

(cc)                            No securities of any Issuer are of the
same class (within the meaning of Rule 144A under the Securities Act) as
the Offered Securities and listed on a national securities exchange registered
under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.

 

(dd)                          Except as set forth in the General
Disclosure Package, there is no strike, labor dispute, slowdown or work stoppage with
the employees of any Issuer which is pending or, to the best knowledge of any
Issuer, threatened.

 

(ee)                            Each Issuer carries insurance (including
self-insurance) in such amounts and covering such risks as in its reasonable
determination is adequate for the conduct of its business and the value of its
properties.

 

11

 

(ff)                              Each Issuer (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in accordance
with management’s authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management’s authorization and (D) the reported accountability
for its assets is compared with existing assets at reasonable intervals.  Each Issuer maintains systems of “internal
control over financial reporting” (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, management to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.

 

(gg)                            No holder of securities of any Issuer
will be entitled to have such securities registered under the registration
statements required to be filed by the Issuers pursuant to the Registration
Rights Agreement other than as expressly permitted thereby.

 

(hh)                          The statistical and market and
industry-related data included in the General Disclosure Package are based on
or derived from sources which the Issuers believe to be reliable and accurate
or represent the Issuers’ good faith estimates that are made on the basis of
data derived from such sources.

 

(ii)                                  Except as disclosed in the General
Disclosure Package, the Issuers do not know of any claims for services, either
in the nature of a finder’s fee or financial advisory fee, with respect to the
offering of the Offered Securities and the transactions contemplated by the
General Disclosure Package.

 

(jj)                                None of the Issuers, any of their
respective Affiliates or any person acting on its or their behalf (other than
the Purchasers, as to which the Issuers make no representation) has engaged in
any directed selling efforts (as that term is defined in Regulation S
under the Securities Act (“Regulation S”))
with respect to the Offered Securities and the Issuers and their respective
Affiliates and any person acting on its or their behalf (other than the
Purchasers, as to which the Issuers make no representation) have acted in
accordance with the offering restrictions requirement of Regulation S.

 

Any certificate signed by any officer of any Issuer
and delivered to any Purchaser or to counsel for the Purchasers shall be deemed
a joint and several representation and warranty by the Issuers to each Purchaser
as to the matters covered thereby.

 

3.                                      Purchase,
Sale and Delivery of Offered Securities.  On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth
herein, the Company agrees to sell to the several Purchasers, and each of the
Purchasers agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 9.75% of the principal amount thereof plus accrued interest
from June 16, 2006 to the Closing Date (as hereinafter defined), the
aggregate principal amount of Notes set forth opposite the name of such
Purchasers in Schedule A hereto.

 

12

 

The Issuers will deliver against payment of the
purchase price the Offered Securities in the form of one or more permanent
global securities in definitive form (the “Global Securities”)
deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described
in the Final Offering Circular.  Payment
for the Offered Securities shall be made by the Purchasers in Federal (same
day) funds by wire transfer to an account at a bank acceptable to Credit Suisse
at the office of Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New
York 10005, at 10:00 A.M. (New York time), on June 16, 2006, or
at such other time not later than seven full business days thereafter as Credit
Suisse and the Company determine, such time being herein referred to as the “Closing Date”, against delivery to the Trustee as custodian
for DTC of the Global Securities representing all of the Securities. The Global
Securities will be made available for checking at the above office of Cahill
Gordon & Reindel LLP,
at least 24 hours prior to the Closing Date.

 

4.                                      Representations
by Purchasers; Resale by Purchasers.

 

(a)                                 Each Purchaser
severally represents and warrants to the Issuers that it is an “accredited
investor” within the meaning of Regulation D under the Securities Act.

 

(b)                                 Each Purchaser
severally acknowledges that the Offered Securities have not been registered
under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser severally represents and
agrees that it has offered and sold the Offered Securities, and will offer and
sell the Offered Securities only in accordance with Rule 903 or Rule 144A
under the Securities Act (“Rule 144A”).
Accordingly, neither such Purchaser nor its affiliates, nor any persons acting
on its or their behalf, have engaged or will engage in any directed selling
efforts with respect to the Offered Securities, and such Purchaser, its
affiliates and all persons acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S and Rule 144A.

 

(c)                                  Each Purchaser
severally agrees that it and each of its affiliates has not entered and will
not enter into any contractual arrangement with respect to the distribution of
the Offered Securities except for any such arrangements with the other
Purchasers or affiliates of the other Purchasers or with the prior written
consent of the Company.

 

(d)                                 Each Purchaser
severally agrees that it and each of its affiliates will not offer or sell the
Offered Securities in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or (ii) any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising. Each Purchaser severally agrees, with respect to resales
made in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to settlement of
such resale a notice to the effect that the resale of such Offered 

 

13

 

Securities has been made
in reliance upon the exemption from the registration requirements of the
Securities Act provided by Rule 144A.

 

(e)                                  Each of the
Purchasers severally represents and agrees that (i) it has not offered or
sold and prior to the expiry of a period of six months from the closing date,
will not offer or sell any Offered Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes
of their businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii) it has
only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and
Markets Act 2000 (the “FSMA”))
received by it in connection with the issue or sale of any Offered Securities in
circumstances in which section 21(1) of the FSMA does not apply to
the Company or any Guarantor; and (iii) it has complied and will comply
with all applicable provisions of the FSMA with respect to anything done by it
in relation to the Offered Securities in, from or otherwise involving the
United Kingdom.

 

5.                                      Certain
Agreements of the Issuers.  The Issuers jointly and severally agree with
the several Purchasers that:

 

(a)                                 The Issuers will advise Credit Suisse
promptly of any proposal to amend or supplement the Preliminary or Final
Offering Circular and will not effect such amendment or supplementation without
Credit Suisse’s consent, which Credit Suisse shall not unreasonably withhold.  If, at any time prior to the completion of the
resale of the Offered Securities by the Purchasers, there occurs an event or
development as a result of which any document included in the Preliminary or
Final Offering Circular, the General Disclosure Package or any Supplemental
Marketing Material included or would include an untrue statement of a material
fact or omitted or would omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at
such time, not misleading, or if it is necessary at any such time to amend or
supplement the Preliminary or Final Offering Circular, the General Disclosure
Package or any Supplemental Marketing Material to comply with any applicable
law, the Company promptly will notify Credit Suisse of such event and promptly
will prepare, at its own expense, an amendment or supplement which will correct
such statement or omission. Neither Credit Suisse’s consent to, nor the
Purchasers’ delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in Section 6.  The first sentence of this subsection does
not apply to statements in or omissions from any document in the Preliminary or
Final Offering Circular, the General Disclosure Package or any Supplemental
Marketing Material made in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through Credit Suisse
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 8(b) hereof.

 

(b)                                 The Issuers will furnish to Credit Suisse
copies of the Preliminary Offering Circular, each other document comprising a
part of the General Disclosure Package, the

 

14

 

Final Offering Circular,
all amendments and supplements to such documents and each item of Supplemental
Marketing Material, in each case as soon as available and in such quantities as
Credit Suisse requests, and the Company will furnish to Credit Suisse on the
date hereof three copies of each of the foregoing documents signed by a duly
authorized officer of the Company, one of which in the case of the Preliminary
Offering Circular and Final Offering Circular will include the independent
accountants’ reports manually signed by such independent accountants. At any
time when the Company is not subject to Section 13 or 15(d) of or
otherwise filing reports in accordance with the Exchange Act, the Company will
promptly furnish or cause to be furnished to Credit Suisse and, upon request,
to each of the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers, copies of
the information required to be delivered to holders and prospective purchasers
of the Offered Securities pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of
the Offered Securities.  The Company will
pay the expenses of printing and distributing to the Purchasers all such
documents.

 

(c)                                  The Company will arrange for the
qualification of the Offered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions in the United
States and Canada as Credit Suisse designates and will continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Purchasers, provided that the Company will not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any such jurisdiction.

 

(d)                                 During the period of two years after the
Closing Date, the Company will, upon request, furnish to Credit Suisse, each of
the other Purchasers and any holder of Offered Securities a copy of the
restrictions on transfer applicable to the Offered Securities.

 

(e)                                  During the period of two years after the
Closing Date, the Company will not, and will not permit any of its affiliates
(as defined in Rule 144 under the Securities Act) to, resell any of the
Offered Securities that have been reacquired by any of them.

 

(f)                                   During the period of two years after the
Closing Date, no Issuer will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required to
be registered under Section 8 of the Investment Company Act.

 

(g)                                  The Company will pay all expenses
incidental to the performance of its obligations under this Agreement, the
Indenture and the Registration Rights Agreement, including (i) the fees
and expenses of the Trustee and its professional advisers; (ii) all
expenses in connection with the execution, issue, authentication, packaging and
initial delivery of the Offered Securities and, as applicable, the Exchange Securities
(as defined in the Registration Rights Agreement), the preparation and printing
of this Agreement, the Registration Rights Agreement, the Offered Securities, the
Indenture, the Preliminary Offering Circular, any other documents comprising
any part of the General Disclosure

 

15

 

Package, the Final
Offering Circular, all amendments and supplements thereto, each item of
Supplemental Marketing Material and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities and as applicable,
the Exchange Securities; (iii) the reasonable out-of-pocket expenses of
the Purchasers in connection with the offering of the Offered Securities
(including, without limitation, road show expenses) and the negotiation,
preparation, execution and delivery of the General Disclosure Package and the
Final Offering Circular and the Basic Documents (including, without limitation,
50% of the fees, expenses and disbursements of Cahill Gordon & Reindel
LLP, counsel to the Purchasers); (iv) the cost of qualifying the Offered
Securities for trading in The PortalSM Market (“PORTAL”)
and any expenses incidental thereto; (v) the cost of any advertising
approved by the Company in connection with the issue of the Offered Securities (vi) any
expenses (including fees and disbursements of the Purchasers’ counsel) incurred
in connection with qualification of the Offered Securities or the Exchange
Securities for sale under the laws of such jurisdictions in the United States
and Canada as Credit Suisse designates and the printing of memoranda relating
thereto, (vii) any fees charged by investment rating agencies for the
rating of the Securities or the Exchange Securities, and (viii) expenses
incurred in distributing the Preliminary Offering Circular, any other documents
comprising any part of the General Disclosure Package, the Final Offering
Circular (including any amendments and supplements thereto) and any
Supplemental Marketing Material to the Purchasers. The Company will also pay or
reimburse the Purchasers (to the extent incurred by them) for all travel
expenses of the Purchasers and the Issuers’ officers and employees and any
other expenses of the Purchasers and the Issuers in connection with attending
or hosting meetings with prospective purchasers of the Offered Securities from
the Purchasers.

 

(h)                                 In connection with the offering, until
Credit Suisse shall have notified the Company and the other Purchasers of the
completion of the resale of the Offered Securities, no Issuer nor any of its
affiliates has or will, either alone or with one or more other persons, bid for
or purchase for any account in which it or any of its affiliates has a
beneficial interest any Offered Securities or attempt to induce any person to
purchase any Offered Securities; and neither it nor any of its affiliates will
make bids or purchases for the purpose of creating actual, or apparent, active
trading in, or of raising the price of, the Offered Securities.

 

6.                                      Free
Writing Communications.

 

(a)                                 Each Issuer
represents and agrees that, unless it obtains the prior consent of Credit
Suisse, and each Purchaser represents and agrees that, unless it obtains the
prior consent of the Company and Credit Suisse, it has not made and will not
make any offer relating to the Offered Securities that would constitute an
Issuer Free Writing Communication.

 

(b)                                 The Issuers
consent to the use by any Purchaser of a Free Writing Communication that (i) contains
only (A) information describing the preliminary terms of the Offered
Securities or their offering or (B) information that describes the final
terms of the Offered Securities or their offering and that is included in the
Terms Communication or is included in or is subsequently included in the Final
Offering Circular or (ii) does not contain any material information about
the Issuers or their securities that was provided by or on behalf of the

 

16

 

Issuers, it being understood and agreed that
any such Free Writing Communication referred to in clause (i) or (ii) shall
not be an Issuer Free Writing Communication for purposes of this Agreement.

 

7.                                      Conditions
to the Obligations of the Purchasers and Issuers.  (a)  The obligations of the several
Purchasers to purchase and pay for the Offered Securities will be subject to
the accuracy of the representations and warranties on the part of the Issuers
herein, to the accuracy of the statements of officers of the Issuers made
pursuant to the provisions hereof, to the performance by the Issuers of their
obligations hereunder and to the following additional conditions precedent:

 

(i)  The Purchasers
shall have received “comfort” letters, dated the date of this Agreement and the
Closing Date, of Deloitte & Touche LLP in form and substance
reasonably satisfactory to Credit Suisse, containing statements and information
of the type customarily included in accountants’ “comfort” letters to
underwriters with respect to the financial statements and certain financial
information contained in the General Disclosure Package and the Final Offering Circular;
provided that the letter dated as of and delivered on the Closing Date
shall use a “cut-off” date no more than three business days prior to the
Closing Date.

 

(ii) 
Subsequent to the execution and delivery of this Agreement, there shall not
have occurred (A) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Issuers taken as one enterprise which, in the
judgment of a majority in interest of the Purchasers including Credit Suisse,
is material and adverse and makes it impractical or inadvisable to proceed with
completion of the offering or the sale of and payment for the Offered Securities;
(B) any downgrading in the rating of any debt securities of any Issuer by
any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities of any Issuer (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that any Issuer has been
placed on negative outlook; (C) any change in U.S. or international
financial, political or economic conditions or currency exchange rates or
exchange controls as would, in the judgment of a majority in interest of the
Purchasers including Credit Suisse, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered Securities,
whether in the primary market or in respect of dealings in the secondary
market, (D) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange; (E) or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(F) any banking moratorium declared by U.S. Federal or New York
authorities; (G) any major disruption of settlements of securities or
clearance services in the United States or (H) any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States, or
any declaration of war by Congress or any other national or international
calamity or emergency if, in the judgment of a majority in interest of the
Purchasers including Credit Suisse, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and payment
for the Offered Securities.

 

17

 

(iii)  The Purchasers
shall have received an opinion of Baker & Hostetler LLP, counsel to
the Issuers, in form and substance satisfactory to the Purchasers and Cahill
Gordon & Reindel LLP, counsel to the Purchasers, dated the Closing
Date, substantially in the form of Exhibit A-1 (with respect to the
Company and as to Delaware and Colorado law only) hereto.  In rendering such opinion, Baker &
Hostetler LLP shall have received and may rely upon such certificates and other
documents and information, including one or more opinions of local counsel reasonably
acceptable to the Purchasers and Cahill Gordon & Reindel LLP, counsel
to the Purchasers, as they may reasonably request to pass upon such matters.

 

(iv)  The Purchasers
shall have received an opinion of Brett A. Sulzer LLC, Louisiana gaming counsel
to Jalou L.L.C., a Louisiana limited liability company (“Jalou”)
and Jalou II Inc., a Louisiana corporation (“Jalou II”),
in form and substance satisfactory to the Purchasers and Cahill Gordon &
Reindel LLP, dated the Closing Date, substantially in the form of Exhibit A-2
hereto. In rendering such opinion, Brett A. Sulzer LLC shall have received and
may rely upon such certificates and other documents and information as they may
reasonably request to pass upon such matters.

 

(v)  The Purchasers
shall have received an opinion of Hahn Loeser & Parks LLP, special
counsel to Diversified, in form and substance satisfactory to the Purchasers
and Cahill Gordon & Reindel LLP, dated the Closing Date, substantially
in the form of Exhibit A-3 hereto. In rendering such opinion, Hahn
Loeser & Parks shall have received and may rely upon such certificates
and other documents and information as they may reasonably request to pass upon
such matters.

 

(iv)  The Purchasers
shall have received an opinion of Hirschler Fleischer, A Professional
Corporation, Virginia corporate and gaming counsel to Colonial Holdings, Inc.
(“Colonial Holdings”), in form and
substance satisfactory to the Purchasers and Cahill Gordon & Reindel LLP,
dated the Closing Date, substantially in the form of Exhibit A-4
(with respect to GA and as to Virginia law only) hereto. In rendering such
opinion, Hirschler Fleischer, A Professional Corporation, shall have received
and may rely upon such certificates and other documents and information as they
may reasonably request to pass upon such matters.

 

(vii)  The
Purchasers shall have received an opinion of Jones & Keller, P.C.,
Colorado corporate counsel to Black Hawk Gaming & Development Company, Inc.
(“Black Hawk”), in form and substance satisfactory
to the Purchasers and Cahill Gordon & Reindel LLP, dated the Closing
Date, substantially in the form of Exhibit A-5 hereto. In rendering
such opinion, Jones & Keller, P.C. shall have received and may rely
upon such certificates and other documents and information as they may
reasonably request to pass upon such matters.

 

(viii)  The
Purchasers shall have received an opinion of Isaacson Rosenbaum Woods &
Levy, P.C., Colorado gaming counsel to Black Hawk, in form and substance
satisfactory to the Purchasers and Cahill Gordon & Reindel LLP, dated
the Closing Date, substantially in the form of Exhibit A-6 hereto.
In rendering such opinion, Isaacson Rosenbaum Woods & Levy, P.C. shall
have received and may rely upon such certificates

 

18

 

and other documents and
information as they may reasonably request to pass upon such matters.

 

(ix)  The Purchasers
shall have received an opinion of Schreck Brignone, Nevada gaming counsel to Black
Hawk, Gold Dust West Casino, Inc. and Jacobs Pinon Plaza Entertainment, Inc.,
in form and substance satisfactory to the Purchasers and Cahill Gordon &
Reindel LLP, dated the Closing Date, substantially in the form of Exhibit A-7
hereto. In rendering such opinion, Schreck Brignone shall have received and may
rely upon such certificates and other documents and information as they may
reasonably request to pass upon such matters.

 

(x)  The Purchasers shall have received an opinion
of Henderson & Morgan, LLC, Nevada corporate counsel to Black Hawk, in
form and substance satisfactory to the Purchasers and Cahill Gordon &
Reindel LLP, dated the Closing Date, substantially in the form of Exhibit A-8
hereto. In rendering such opinion, Henderson & Morgan, LLC shall have
received and may rely upon such certificates and other documents and
information as they may reasonably request to pass upon such matters.

 

(xi)  The Purchasers shall have received an
opinion, dated the Closing Date, of Cahill Gordon & Reindel LLP,
counsel to the Purchasers, with respect to the sufficiency of certain legal
matters relating to this Agreement and such other related matters as the
Purchasers may require.  In rendering
such opinion, Cahill Gordon & Reindel LLP shall have received and may
rely upon such certificates and other documents and information as they may
reasonably request to pass upon such matters. 
In addition, in rendering their opinion, Cahill Gordon &
Reindel LLP may state that their opinion is limited to matters of New York,
Delaware corporate and federal law.

 

(xii)  On or prior to the Closing Date, the Company
shall have accepted for payment all 2009 Notes validly tendered pursuant to the
Tender Offer. The Company, each of its subsidiaries that have issued a
guarantee of the 2009 Notes and the Trustee shall have entered into the
Supplemental Indenture described in the documentation relating to the Tender
Offer and such Supplemental Indenture shall have become effective and operative.

 

(xiii)  The Purchasers shall have received a
certificate, dated the Closing Date, of the President or any Vice President and
a principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, and that, subsequent to the date of the most
recent financial statements in the General Disclosure Package there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Issuers taken as a whole except as
set forth in the General Disclosure Package or as described in such
certificate.

 

19

 

(b)                                  The obligation of the Company to issue
and sell the Notes to the Purchasers is subject to the conditions that the
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct on and as of the Closing Date and the Purchasers
shall have complied in all material respects with all agreements and satisfied
all conditions on their part to be performed or satisfied hereunder at or prior
to the Closing Date.

 

Documents described as being “in the agreed form” are
documents which are in the forms which have been initialed for the purpose of
identification by Cahill Gordon & Reindel LLP, copies of which are
held by the Company and Credit Suisse, with such changes as the Company and Credit
Suisse may approve.

 

The Company will furnish the Purchasers with such
conformed copies of such opinions, certificates, letters and documents as the
Purchasers reasonably request. Credit Suisse may in its sole discretion waive
on behalf of the Purchasers compliance with any conditions to the obligations
of the Purchasers hereunder.

 

8.                                      Indemnification
and Contribution.

 

(a)                                 The Issuers
jointly and severally will indemnify and hold harmless each Purchaser, its
officers, partners, members, directors and its affiliates and each person, if
any, who controls such Purchaser within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Purchaser may become subject, under the Securities Act
or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Preliminary Offering Circular or the Final Offering Circular, in each case
as amended or supplemented, or any Issuer Free Writing Communication or the
Exchange Act Reports, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Issuers will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Issuers by any Purchaser through Credit Suisse
specifically for use therein, it being understood and agreed that the only such
information consists of the information described as such in subsection (b) below.

 

(b)                                 Each Purchaser
will severally and not jointly indemnify and hold harmless the Issuers, their
directors and officers and each person, if any, who controls the such Issuer
within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities to which such Issuer may become subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Preliminary Offering Circular or the Final
Offering Circular, in each case as amended or supplemented, or any Issuer Free
Writing Communication or arise out

 

20

 

of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to such Issuer by such Purchaser
through Credit Suisse specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by such Issuer in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Purchaser consists of the information in the
Preliminary and Final Offering Circular furnished on behalf of each Purchaser: the
fifth paragraph, the ninth paragraph (the third and fourth sentences only) and
the eleventh paragraph under the caption “Plan of Distribution” in the
Preliminary Offering Circular and the Final Offering Circular; provided,
however, that the Purchasers shall not be liable for any losses, claims,
damages or liabilities arising out of or based upon the Issuers’ failure to
perform their respective obligations under Section 5(a) of this
Agreement.

 

(c)                                  Promptly after
receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a) or
(b) above, notify the indemnifying party of the commencement thereof; but
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under subsection (a) or (b) above
except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. 
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes (i) an unconditional
release of such indemnified party from all liability on any claims that are the
subject matter of such action and (ii) does not include a statement as to
or an admission of fault, culpability or failure to act by or on behalf of any
indemnified party.

 

(d)                                 If the
indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers on the one hand and the Purchasers on the other from the offering
of the Offered Securities or (ii) if the

 

21

 

allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Issuers on the one hand and the Purchasers
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Issuers on the
one hand and the Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Issuers bear to the total discounts and commissions
received by the Purchasers from the Issuers under this Agreement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Issuers or the Purchasers and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered Securities purchased by it were resold exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Purchasers’ obligations in this subsection (d) to contribute are
several in proportion to their respective purchase obligations and not joint.

 

(e)                                  The obligations
of the Issuers under this Section 8 shall be in addition to any liability
which the Issuers may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Securities Act or the Exchange Act; and the obligations of the
Purchasers under this Section shall be in addition to any liability which
the respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Issuer within
the meaning of the Securities Act or the Exchange Act.

 

9.                                      Default
of Purchasers.  If any
Purchaser or Purchasers default in their obligations to purchase Offered
Securities hereunder and the aggregate principal amount Offered Securities that
such defaulting Purchaser or Purchasers agreed but failed to purchase does not
exceed 10% of the total principal amount of Offered Securities, Credit Suisse
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Purchasers, but if no
such arrangements are made by the Closing Date, the non-defaulting Purchasers
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Purchasers
agreed but failed to purchase. If any Purchaser or Purchasers so default and
the aggregate principal amount of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount of Offered
Securities and arrangements satisfactory to Credit Suisse and the Company for
the purchase of such Offered Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Purchaser or the Issuers, except as
provided in Section 10. As used in this Agreement, the term “Purchaser”
includes any person substituted for a Purchaser under this Section. Nothing
herein will relieve a defaulting Purchaser from liability for its default.

 

22

 

10.                               Survival
of Certain Representations and Obligations.  The respective indemnities, agreements,
representations, warranties and other statements of the Issuers or their
officers and of the several Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Purchaser, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and
payment for the Offered Securities. If this Agreement is terminated pursuant to
Section 9 or if for any reason the purchase of the Offered Securities by
the Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Company and the Purchasers pursuant to Section 8
shall remain in effect. If the purchase of the Offered Securities by the
Purchasers is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 9 or the occurrence of
any event specified in clause (C), (D), (F), (G) or (H) of Section 7(a)(ii),
the Company will reimburse the Purchasers for all out-of-pocket expenses (including
fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities.

 

11.                               Notices.  All communications hereunder will be in
writing and, if sent to the Purchasers will be mailed, delivered or telegraphed
and confirmed to the Purchasers, c/o Credit Suisse Securities (USA) LLC, Eleven
Madison Avenue, New York, N.Y. 10010-3629, Attention:  LCD-IBD, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Jacobs Entertainment, Inc.,
17301 W. Colfax Avenue, Suite 250, Golden, Colorado 80401, Attention: Chief
Financial Officer; provided, however, that any notice to a Purchaser pursuant
to Section 8 will be mailed, delivered or telegraphed and confirmed to
such Purchaser.

 

12.                               Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 8, and no other person will
have any right or obligation hereunder, except that holders of Offered
Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof
against the Company as if such holders were parties thereto.

 

13.                               Representation
of Purchasers.  You will act
for the several Purchasers in connection with this purchase, and any action
under this Agreement taken by you will be binding upon all the Purchasers.

 

14.                               Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

 

15.                               Absence
of Fiduciary Relationship.  The Company
acknowledges and agrees that:

 

(a)                                 The Purchasers have been retained solely
to act as initial purchasers in connection with the initial purchase, offering
and resale of the Offered Securities and that no fiduciary, advisory or agency
relationship between the Company and any Purchaser has

 

23

 

been created in respect
of any of the transactions contemplated by this Agreement or the Preliminary or
Final Offering Circular, irrespective of whether any Purchaser has advised or
is advising the Company on other matters;

 

(b)                                 the purchase price of the Offered
Securities set forth in this Agreement was established by the Company following
discussions and arms-length negotiations with the Purchasers and the Company is
capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement;

 

(c)                                  the Company has been advised that the Purchasers
and their respective affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and that the Purchasers
have no obligation to disclose such interests and transactions to Company by
virtue of any fiduciary, advisory or agency relationship; and

 

(d)                                 the Company waives, to the fullest extent
permitted by law, any claims it may have against any Purchaser for breach of
fiduciary duty or alleged breach of fiduciary duty and agrees that the Purchasers
shall have no liability (whether direct or indirect) to the Company in respect
of such a fiduciary duty claim or to any person asserting a fiduciary duty
claim on behalf of or in right of the Company, including stockholders,
employees or creditors of the Company.

 

Nothing in this Section 15
is intended to contravene any covenant of good faith that may be applicable to
any Purchaser under this Agreement or applicable law.

 

16.                               Applicable
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York without regard to principles of conflicts of laws.

 

The Issuers hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

 

24

 

If the foregoing is in accordance with the Purchasers
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Purchasers in accordance with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey P.
  Jacobs

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Guarantors:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JACOBS
  ENTERTAINMENT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jeffrey P. Jacobs

  	
   

  	
   

  	
   

  
	
  By: Jeffrey P.
  Jacobs

  	
   

  	
   

  
	
  Its: Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JACOBS PIÑON
  PLAZA ENTERTAINMENT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jeffrey P. Jacobs

  	
   

  	
   

  	
   

  
	
  By: Jeffrey P.
  Jacobs

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JACOBS ELKO
  ENTERTAINMENT, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jeffrey P. Jacobs

  	
   

  	
   

  	
   

  
	
  By: Jeffrey P.
  Jacobs

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
							

 

25

 

	
  /s/ Stephen R. Roark

  	
   

  	
   

  	
   

  
	
  Stephen R.
  Roark, signing on behalf of the

  	
   

  	
   

  
	
  entities listed
  below in the capacity listed

  	
   

  	
   

  
	
  next to each
  respective entity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BLACK HAWK
  GAMING & DEVELOPMENT COMPANY, INC., as its President

  
	
  GOLD DUST WEST
  CASINO, INC., as its Vice President

  	
   

  	
   

  
	
  GILPIN VENTURES,
  INC., as its President

  	
   

  	
   

  
	
  JALOU L.L.C., as
  its President and Manager

  	
   

  	
   

  
	
  JALOU II INC.,
  as its President

  	
   

  	
   

  
	
  [JACOBS
  ENTERTAINMENT AIRPLANE, LLC, as its President and Manager]

  
	
   

  
	
  GILPIN HOTEL
  VENTURE

  	
   

  	
   

  
	
  By: Gilpin
  Ventures, Inc., its partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Stephen R. Roark

  	
   

  	
   

  	
   

  
	
  Name: Stephen R. Roark

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: Black Hawk
  Gaming & Development Company, Inc., its partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Stephen R. Roark

  	
   

  	
   

  	
   

  
	
  Name: Stephen R. Roark

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BLACK
  HAWK/JACOBS ENTERTAINMENT, LLC

  	
   

  	
   

  
	
  By: Black Hawk
  Gaming & Development Company, Inc.

  	
   

  	
   

  
	
  Its: Authorized
  Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Stephen R. Roark

  	
   

  	
   

  	
   

  
	
  Name: Stephen R. Roark

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DIVERSIFIED
  OPPORTUNITIES GROUP LTD.

  	
   

  	
   

  
	
  By Jacobs
  Entertainment, Inc., its Managing Member

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Stephen R. Roark

  	
   

  	
   

  	
   

  
	
  Name: Stephen R. Roark

  	
   

  	
   

  
	
  Its: Chief Financial Officer

  	
   

  	
   

  
						

 

26

 

	
  /s/ Stan Guidroz

  	
   

  	
   

  	
   

  
	
  Stan Guidroz,
  signing on behalf of the

  	
   

  	
   

  
	
  entities listed
  below in the capacity listed

  	
   

  	
   

  
	
  next to each
  respective entity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WINNER’S CHOICE
  CASINO, INC., as its President

  	
   

  	
   

  
	
  JACE, INC., as
  its President

  	
   

  	
   

  
	
  FUEL STOP 36,
  INC., as its President

  	
   

  	
   

  
	
  HOUMA TRUCK
  PLAZA & CASINO, L.L.C., as its President and Manager

  
	
  JALOU - CASH’S
  L.L.C., its President and Manager

  
	
  LUCKY MAGNOLIA
  TRUCK STOP AND CASINO, L.L.C., as its President and Manager

  
	
  BAYOU VISTA
  TRUCK PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
  RACELAND TRUCK
  PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
  JRJ PROPERTIES,
  LLC, as its President and Manager

  	
   

  	
   

  
	
  JALOU OF LAROSE,
  LLC, as its President and Manager

  	
   

  	
   

  
	
  JALOU BREAUX
  BRIDGE, LLC, as its President and Manager

  	
   

  	
   

  
	
  JALOU OF
  JEFFERSON, LLC, as its President and Manager

  	
   

  	
   

  
	
  JALOU EUNICE,
  LLC, as its President and Manager

  	
   

  	
   

  
	
  JALOU OF ST.
  MARTIN, L.L.C., as its President and Manager

  	
   

  	
   

  
	
  JALOU DIAMOND
  L.L.C., as its President and Manager

  	
   

  	
   

  
	
  JALOU MAGIC
  L.L.C., as its President and Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Ian M. Stewart

  	
   

  	
   

  	
   

  
	
  Ian M. Stewart,
  signing on behalf of the

  	
   

  	
   

  
	
  entities listed
  below in the capacity listed

  	
   

  	
   

  
	
  next to each
  respective entity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COLONIAL HOLDINGS,
  INC., as its President

  	
   

  	
   

  
	
  STANSLEY RACING
  CORP., as its President

  	
   

  	
   

  
	
  COLONIAL DOWNS,
  LLC, as its Manager

  	
   

  	
   

  
	
  MARYLAND-VIRGINIA
  RACING CIRCUIT, INC., as its President

  
	
  VIRGINIA
  CONCESSIONS, LLC, as its Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COLONIAL DOWNS,
  L.P.

  	
   

  	
   

  
	
  By: Stansley
  Racing Corp., its General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ian M. Stewart

  	
   

  	
   

  	
   

  
	
  Name: Ian M. Stewart

  	
   

  	
   

  
	
  Its: President

  	
   

  	
   

  
						

 

27

 

	
  The foregoing Purchase Agreement

  	
   

  	
   

  
	
  is hereby confirmed and accepted

  	
   

  	
   

  
	
  as of the date first above written.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Credit
  Suisse Securities (USA) LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sung Chun

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Sung Chun

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Director

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acting on behalf of itself and as the

  	
   

  	
   

  
	
  Representative of the several Purchasers

  	
   

  	
   

  

 

28

 

SCHEDULE A

 

	
  Manager

  	
   

  	
  Principal Amount of

  Offered Securities

  	
   

  
	
  Credit Suisse Securities (USA) LLC

  	
   

  	
  $

  	
  85,575,000

  	
   

  
	
  CIBC World
  Markets Corp.

  	
   

  	
  $

  	
  96,075,000

  	
   

  
	
  Libra
  Securities, LLC

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  Wells Fargo
  Securities, LLC

  	
   

  	
  $

  	
  15,750,000

  	
   

  
	
  KeyBanc Capital
  Markets, a Division of McDonald Investments, Inc.

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  210,000,000

  	
   

  

 

 

SCHEDULE B

 

Subsidiaries of
the Company

 

	
  Subsidiary

  	
   

  	
  Jurisdiction of Incorporation

  
	
  Jacobs
  Entertainment, Inc.

  	
   

  	
  Delaware

  
	
  Diversified Opportunities
  Group Ltd.

  	
   

  	
  Ohio

  
	
  Black Hawk
  Gaming & Development Company, Inc.

  	
   

  	
  Colorado

  
	
  Black
  Hawk/Jacobs Entertainment, LLC

  	
   

  	
  Colorado

  
	
  Gilpin Hotel
  Venture

  	
   

  	
  Colorado

  
	
  Gilpin Ventures, Inc.

  	
   

  	
  Colorado

  
	
  Gold Dust West
  Casino, Inc.

  	
   

  	
  Nevada

  
	
  Jacobs Pinon
  Plaza Entertainment

  	
   

  	
  Nevada

  
	
  Jalou II, Inc.

  	
   

  	
  Louisiana

  
	
  Winner’s Choice
  Casino, Inc.

  	
   

  	
  Louisiana

  
	
  Jalou L.L.C.

  	
   

  	
  Louisiana

  
	
  Houma Truck Plaza & Casino, L.L.C.

  	
   

  	
  Louisiana

  
	
  Jalou — Cash’s L.L.C.

  	
   

  	
  Louisiana

  
	
  JACE, Inc.

  	
   

  	
  Louisiana

  
	
  Lucky Magnolia
  Truck Stop and Casino, L.L.C.

  	
   

  	
  Louisiana

  
	
  Bayou Vista
  Truck Plaza and Casino, L.L.C.

  	
   

  	
  Louisiana

  
	
  Raceland Truck
  Plaza and Casino, L.L.C.

  	
   

  	
  Louisiana

  
	
  JRJ Properties,
  LLC

  	
   

  	
  Louisiana

  
	
  Fuel Stop 36, Inc.

  	
   

  	
  Louisiana

  
	
  Jalou of Larose,
  LLC

  	
   

  	
  Louisiana

  
	
  Jalou Breaux
  Bridge, LLC

  	
   

  	
  Louisiana

  
	
  Jalou of
  Jefferson, LLC

  	
   

  	
  Louisiana

  
	
  Jalou of Eunice,
  LLC

  	
   

  	
  Louisiana

  
	
  Colonial
  Holdings, Inc.

  	
   

  	
  Virginia

  
	
  Stansley Racing
  Corp.

  	
   

  	
  Virginia

  
	
  Colonial Downs,
  L.P.

  	
   

  	
  Virginia

  
	
  Colonial Downs,
  LLC

  	
   

  	
  Virginia

  
	
  Virginia Concessions, LLC

  	
   

  	
  Virginia

  
	
  Maryland-Virginia
  Racing Circuit, Inc.

  	
   

  	
  Virginia

  

 

 

SCHEDULE C

 

Pricing term sheet dated June 9, 2006, a
copy of which is attached hereto.

 

 

SCHEDULE D

 

Bloomberg electronic road show slides and accompanying audio recordings
(collectively, the “Electronic Road Show”).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]