Document:

Unassociated Document

     

    Exhibit
      10.1

    
 

    ACQUISITION
      AGREEMENT

     

    dated
      as
      of September 3, 2006

     

    by
      and
      among

     

    PINNACLE
      ENTERTAINMENT, INC.,

     

    ATLANTIC
      COAST ENTERTAINMENT HOLDINGS, INC.,

     

    ACE
      GAMING, LLC,

     

    AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP,

     

    AREP
      BOARDWALK PROPERTIES LLC,

     

    PSW
      PROPERTIES LLC,

     

    AREH
      MLK
      LLC

     

    and

     

    MITRE
      ASSOCIATES LLC

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACQUISITION
      AGREEMENT

     

    THIS
      ACQUISITION AGREEMENT (this “Agreement”)
      is
      made and entered into as of September 3, 2006, by and among Pinnacle
      Entertainment, Inc., a Delaware corporation (“Buyer”),
      Atlantic Coast Entertainment Holdings, Inc., a Delaware corporation
      (“ACE
      Hi”),
      ACE
      Gaming, LLC, a New Jersey limited liability company and wholly-owned subsidiary
      of ACE Hi (“ACE
      Lo”
and,
      together with ACE Hi, the “ACE
      Selling Parties”),
      American Real Estate Holdings Limited Partnership, a Delaware limited
      partnership (“AREH”
and,
      together with ACE Hi, each a “Seller”
and
      collectively, the “Sellers”),
      AREP
      Boardwalk Properties LLC, a Delaware limited liability company (“Boardwalk”),
      PSW
      Properties LLC, a Delaware limited liability company (“MLK
      I”),
      AREH
      MLK LLC, a Delaware limited liability company (“MLK
      II”),
      Mitre
      Associates LLC, a Delaware limited liability company (“MLK
      III”
and,
      together with MLK I and MLK II, the “MLK
      Entities”
and,
      together with Boardwalk, the “AREH
      Subs”
and,
      together with ACE Lo, each a “Company”
and
      collectively, the “Companies”;
      AREH
      and the AREH Subs are collectively referred to as the “AREH
      Selling Parties”
and,
      together with the ACE Selling Parties, each a “Selling
      Party”
and
      collectively, the “Selling
      Parties”).
      Capitalized terms used herein and not otherwise defined shall have the meanings
      set forth or referenced in Section
      13.1
      hereof.

     

    WHEREAS,
      ACE Hi owns 100% of the issued and outstanding membership interests (the
“ACE
      Lo
      Equity Interests”)
      in ACE
      Lo. 

     

    WHEREAS,
      ACE Lo is the owner of certain real estate situated in the City of Atlantic
      City, State of New Jersey, more particularly described on Exhibit
      A
      attached
      hereto and incorporated herein by reference (the “Casino
      Land”
which,
      together with the Improvements now or hereafter located thereon, shall be deemed
      part of the Casino Property), and owns and operates a casino and hotel commonly
      known as The Sands Hotel & Casino in Atlantic City at the Casino Property
      (the “Casino
      Business”);
      

     

    WHEREAS,
      AREH directly or indirectly owns or controls 100% of the issued and outstanding
      membership interests (the “AREH
      Subs Equity Interests”
and,
      together with the ACE Lo Equity Interests, the “Interests”)
      in the
      AREH Subs. 

     

    WHEREAS,
      Boardwalk is the owner of certain real estate situated in the City of Atlantic
      City, State of New Jersey (commonly known as the Traymore site), more
      particularly described on Exhibit
      B
      attached
      hereto and incorporated herein by reference (the “Traymore
      Land”
and,
      together with the Improvements now or hereafter located thereon, the
“Traymore
      Site”);
      

     

    WHEREAS,
      the MLK Entities are the owners of certain real estate situated in the City
      of
      Atlantic City, State of New Jersey adjacent to or in the vicinity of the Casino
      Land, more particularly described on Exhibit
      C
      attached
      hereto and incorporated herein by reference (the “MLK
      Land”
and,
      together with the Traymore Land, the “Adjacent
      Land”;
      the
      MLK Land, together with the Improvements now or hereafter located thereon,
      is
      referred to as the “MLK
      Properties”
and,
      together with the Traymore Site, shall be deemed part of the Adjacent
      Properties);

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      MLK III is party to an agreement (the “Restaurant
      Purchase Agreement”)
      to
      purchase (the “Restaurant
      Purchase”)
      certain real estate in the City of Atlantic City, State of New Jersey adjacent
      to the Casino Property (commonly known as the Poseidon Restaurant), more
      particularly described on Exhibit D
      attached
      hereto and incorporated herein by reference (the “Restaurant
      Land”
and,
      together with the Improvements now or hereafter located thereon, the
“Restaurant
      Site”);

     

    WHEREAS,
      following consummation of the Restaurant Purchase, for all purposes of this
      Agreement: (i) the Restaurant Land will be deemed to be a part of the Adjacent
      Land, (ii) the Restaurant Site will be deemed to be a part of the Adjacent
      Properties, and (iii) the Adjacent Properties, together with the Casino
      Property, shall each be referred to herein as a “Property”
and
      collectively, as the “Properties”;
      

     

    WHEREAS,
      Buyer and Sellers acknowledge and agree that it is the intention of the parties
      that, on the terms and subject to the conditions set forth in this Agreement,
      Buyer will acquire (a) the ACE Lo Equity Interests (the “ACE
      Lo
      Purchase”)
      from
      ACE Hi and (b) the AREH Subs Equity Interests (the “AREH
      Subs Purchase”
and,
      together with the ACE Lo Purchase, the “Purchase”)
      from
      AREH; and

     

    WHEREAS,
      in order to facilitate Buyer’s construction of a new casino facility at the
      Properties, Buyer has required that the ACE Selling Parties give the required
      notice under the WARN Act and proceed towards a shutdown of the Casino
      Business.

     

    NOW,
      THEREFORE, the parties hereto, in consideration of the premises and of the
      mutual representations, warranties and covenants contained herein and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, agree as follows: 

     

    ARTICLE
      I

    PURCHASE
      AND SALE OF INTERESTS;
      CLOSING

     

    Section
      1.1 Purchase
      and Sale of Interests.
      Upon the
      terms and subject to the conditions set forth in this Agreement, at the Closing,
      each Seller agrees that it will sell, convey, assign and transfer to Buyer,
      and
      Buyer shall purchase and accept from such Seller, the Interests set forth
      opposite such Seller’s name on Schedule
      I
      attached
      hereto.

     

    Section
      1.2 Closing. Unless
      this Agreement is earlier terminated pursuant to ARTICLE
      XI
      hereof,
      the closing of the transactions contemplated by this Agreement, including the
      purchase and sale of the Interests (the “Closing”),
      shall
      take place at 9:00 a.m., New York time, at the offices of Katten Muchin Rosenman
      LLP, on the fifth (5th)
      business day immediately following satisfaction of the required notice period
      under the WARN Act; provided that,
      if the
      other conditions to Closing set forth in ARTICLE
      X
      shall
      have not been satisfied or waived at such time (other than those conditions
      to
      be satisfied or waived at the Closing, but subject to the satisfaction or waiver
      of such conditions at such time), then the parties shall use commercially
      reasonable efforts to cause the remaining conditions to be satisfied or waived
      and the Closing to occur as soon as reasonably practicable thereafter. The
      date
      upon which the Closing shall occur is sometimes referred to in this Agreement
      as
      the “Closing
      Date.”

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    PURCHASE
      PRICE

     

    Section
      2.1 Purchase
      and Sale of ACE Lo Equity Interests. 

     

    (a) (i) At
      the
      Closing, subject to the terms and conditions set forth herein, Buyer shall
      pay
      to ACE Hi, in consideration of its purchase of the ACE Lo Equity Interests,
      $250,000,000
      minus
      the
      Traymore Price (the “Initial
      ACE Purchase Price”),
      it
      being expressly agreed and understood that although ACE Lo has an option to
      purchase the Boardwalk Equity Interests pursuant to the Traymore Call Agreement,
      Buyer shall purchase the Boardwalk Equity Interests directly from AREH pursuant
      to Section
      2.2.
      The
      Initial ACE Purchase Price shall be adjusted pursuant to Section
      2.7
      of this
      Agreement (the “Closing
      ACE Purchase Price”).

     

    (ii) If
      applicable, at the Closing, Buyer shall make the payments to ACE Hi as set
      forth
      in Section
      9.16
      and
Section
      9.24.
      If the
      events referred to in Section
      9.16 and
      Section
      9.24
      have not
      occurred by the Closing, those payments will be made following the Closing
      along
      with any other post-Closing payments required under this Agreement.

     

    (b) For
      purposes of this Agreement, the term:

     

    (i) “ACE
      Closing Price Adjustment”
means
      the result of 

     

    
      	 	
              (A)

            	
              the
                sum of the following assets of ACE Lo, calculated in accordance with
                GAAP
                consistently applied (except to the extent that a different methodology
                is
                specified in this Agreement), as of the Measurement Date:
                

            

    

     

    
      	 	
              (I)

            	
              cash
                and cash equivalents; 

            

    

     

    
      	 	
              (II)

            	
              Accounts
                Receivable;

            

    

     

    
      	 	
              (III)

            	
              Inventory;
                

            

    

     

    
      	 	
              (IV)

            	
              prepaid
                expenses (other than prepaid real and personal property Taxes) of
                the
                Casino Business, to the extent they (x) relate to periods no more
                than ninety (90) calendar days following the Measurement Date or
                (y) are
                set forth on Schedule 2.1(b)(i)(A)(IV),
                to the extent of any remaining balances thereof as of the Measurement
                Date; 

            

    

     

    
      	 	
              (V)

            	
              prepaid
                real and personal property Taxes and special assessments, if any,
                of ACE
                Lo related to the Casino Property that are attributable to periods
                on or
                after the Measurement Date; and 

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (VI)

            	
              refundable
                deposits under ACE Material Contracts (including insurance and utility
                deposits), minus 

            

    

     

    
      	 	
              (B)

            	
              the
                sum of the following liabilities of ACE Lo, calculated in accordance
                with
                GAAP consistently applied (except to the extent that a different
                methodology is specified in this Agreement), as of the Measurement
                Date:
                

            

    

     

    
      	 	
              (I)

            	
              accounts
                payable; 

            

    

     

    
      	 	
              (II)

            	
              accrued
                expenses (including, without limitation, accruals for medical claims
                and
                general liability claims in accordance with past
                practice);

            

    

     

    
      	 	
              (III)

            	
              unpaid
                real and personal property Taxes and special assessments, if any,
                of ACE
                Lo related to the Casino Property that are attributable to periods
                up to,
                but not including, the Measurement Date;

            

    

     

    
      	 	
              (IV)

            	
              accrued
                salary, bonus, commissions and other payroll and related expenses
                that are
                attributable to periods up to, but not including, the Measurement
                Date;

            

    

     

    
      	 	
              (V)

            	
              Notes
                Payable; 

            

    

     

    
      	 	
              (VI)

            	
              Gaming
                Liabilities;

            

    

     

    
      	 	
              (VII)

            	
              Agreed
                Interim Amount; and

            

    

     

    
      	 	
              (VIII)

            	
              Advance
                Room Deposits. 

            

    

     

    For
      clarity, (x) if the ACE Closing Price Adjustment is greater than zero
      (i.e.,
      a
      positive number), the Initial ACE Purchase Price will be increased by such
      amount and (y) if the ACE Closing Price Adjustment is less than zero
      (i.e.,
      a
      negative number), the Initial ACE Purchase Price will be reduced by such
      amount.

     

    (ii) “ACE
      Hi
      NJSEA Payment”
means
      the result of (A) ACE Lo’s proportionate share of the cash payment due on
      October 15, 2006 to the NJSEA in respect of the twelve (12) months ended
      June 30, 2006, calculated in accordance with Section 1 of the Grant and
      Donations Agreement (the “2006
      NJSEA Payment”),
      multiplied
      by
      (B) the
      ratio (the “ACE
      Hi
      NJSEA Ratio”)
      equal
      to (I) the gross gaming revenues of ACE Lo for the period from July 1, 2006
      through the Measurement Date, divided
      by
      (II) the
      gross gaming revenues of ACE Lo for the period from July 1, 2006 through the
      Closing Date. 

     

    (iii) “Agreed
      Interim Amount”
means
      Forty Thousand Dollars ($40,000).

     

    (iv) “Initial
      Amount”
means
      Ten Million Dollars ($10,000,000).

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (v) “Agreed
      Severance Amount”
      means
      the
      sum of (A) the amount of ACE Lo’s contractual severance obligations to the
      individuals listed on Schedule 2.1(b)(v)
      attached
      hereto in the amounts provided for in the agreements or order listed on such
      Schedule 2.1(b)(v),
      plus
      (B) two
      (2) weeks salary (as proportionately adjusted for part-time status) for each
      non-union Casino Employee employed at the Casino Property immediately prior
      to
      the Closing, plus
      (C) the Agreed Stay-Put Bonuses described in Section
      9.28(c)
      hereof,
      and plus
      (D) any
      payments due under the Casino Shutdown Plan.

     

    (vi) “Casino
      Mansion Taxes”
means
      the amount of “Mansion” Taxes payable pursuant to New Jersey Assembly Bill No.
      4701 (ACS), as amended, with respect to the indirect transfer of the Casino
      Property from ACE Hi to Buyer pursuant to the ACE Lo Purchase.

     

    (vii) “Certain
      Employee Liabilities”
means,
      with respect to ACE Lo, (A) severance payments to the Casino Employees
      arising out of terminations by ACE Lo of employment of Casino Employees before
      the Measurement Date, (B) severance payments to Casino Employees arising
      out of terminations of employment of Casino Employees on or after the
      Measurement Date and through the Closing Date, to the extent that such severance
      amounts paid or committed to be paid to such Casino Employees exceed the Agreed
      Severance Amount, (C) payments to Casino Employees in respect of vacation
      accrued through the Measurement Date and (D) the EBITDA Bonuses. Certain
      Employee Liabilities do not include any payments required to be made under
      the
      WARN Act or the Casino Shutdown Plan; it being agreed that any such WARN Act
      payments and payments to be made pursuant to the Casino Shutdown Plan, if any,
      shall be the sole responsibility of Buyer.

     

    (viii) “Comp
      Points Liability”
means
      the estimated liability of the food and beverage and gift certificates which
      ACE
      Lo is obligated to provide to customers in respect of “comp” points awarded to
      such customers in the ordinary course of the Casino Business.  The
      estimated liability is calculated using a discount factor and expiration factor
      applied to total points earned. The expiration factor is based on historical
      redemption rates.

     

    (ix) “CRDA
      Price”
means
      Ten Million Six Hundred Forty-One Thousand Seven Hundred Thirty-Four Dollars
      ($10,641,734).

     

    (x) “Deposit
      Delay Increment”
means
      the result of (I) One Million Dollars ($1,000,000) multiplied
      by
      the
      number of days between (A) the first
      (1st)
      business day after the date of this Agreement and (B) the date the Deposit
      is
      deposited with the Escrow Agent pursuant Section
      2.3(a)
      hereof.

     

    (xi) “Discharged
      ACE Indemnified Liabilities”
means
      any ACE Indemnified Liabilities paid or discharged by ACE Lo in cash or
      otherwise through a reduction of ACE Lo’s assets during the Measurement
      Period. 

     

    (xii) “EBITDA
      Bonuses”
means
      bonuses payable to Casino Employees pursuant to the American Casino &
Entertainment Properties LLC & Atlantic Coast Entertainment Holdings, Inc.
      Management Plan effective January 1, 2005, as revised January 10, 2006, which
      are set forth on Schedule
      2.1(b)(xii),
      to
      the extent required to be paid under such plan.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

       

    

    (xiii) “Estimated
      ACE Closing Price Adjustment”
means
      the estimate of the ACE Closing Price Adjustment determined pursuant to
Section
      2.5(a)
      hereof.

     

    (xiv) “Estimated
      ACE Hi NJSEA Payment”
means
      the estimate of the ACE Hi NJSEA Payment determined pursuant to Section
      2.5(a)
      hereof.

     

    (xv) “Estimated
      Casino Mansion Taxes”
means
      the estimate of the Casino Mansion Tax determined pursuant to Section
      2.5(a)
      hereof.
      

     

    (xvi) “Estimated
      Certain Employee Liabilities”
means
      the estimate of the Certain Employee Liabilities determined pursuant to
Section
      2.5(a)
      hereof.

     

    (xvii) “Estimated
      Multiemployer Plan Liabilities”
means
      Four Million Four Hundred Thousand Dollars ($4,400,000).

     

    (xviii) “Gaming
      Liabilities”
means
      the following gaming-related liabilities incurred in connection with the Casino
      Business: (A) the amount accrued on the meters of ACE Lo’s progressive slot
      machines and progressive Caribbean stud poker games (“Progressive
      Gaming Liabilities”),
      (B) liabilities for redemption of outstanding chips, keno tickets, wagers,
      ticket-in/ticket-out and other similar gaming liabilities at face value less
      discounts in accordance with past practice taken prior to June 30, 2006
      (“Outstanding
      Chip & Ticket-In/Ticket-Out Liabilities”);
      and
      (C) unclaimed jackpot liabilities;
      provided that,
      the
      amounts in each of subclauses (A) - (C) above shall be adjusted downward to
      equal the amounts for which ACE Lo remains liable, which shall consist of (I)
      any amounts required to be paid into escrow (any such amounts, “Escrow
      Gaming Amounts”),
      and
      (II)  any other amounts existing as of the Measurement Date for which ACE
      Lo remains liable after the Casino Shutdown, such adjustment to be determined
      following discussions among Buyer, ACE Hi and the New Jersey Casino Control
      Commission (such amounts, the “Required
      Gaming Liabilities”);
      provided,
      however,
      that to
      the extent that Required Gaming Liabilities include amounts accrued on meters
      on
      ACE Lo’s progressive slot machines required to be carried over to another meter
      when Buyer reopens a casino on the Properties, only one-half (1⁄2) of such amounts
      accrued on meters shall be included in Gaming Liabilities.

     

    (xix) “Measurement
      Date”
means
      12:00:01 a.m. New York City time, on September 1, 2006. 

     

    (xx) “Measurement
      Period”
means
      the period from and after the Measurement Date through the Closing. 

     

    (xxi) “Multiemployer
      Plan Liabilities”
means,
      with respect to ACE Lo, obligations to Multiemployer Plans for delinquent
      contributions thereto as of the Measurement Date or on account of any withdrawal
      liability, determined as of the Measurement Date as if ACE Lo had incurred
      a
      complete or partial withdrawal event under Title IV of ERISA on such
      date.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

    

    (c) Schedule
      II
      attached
      hereto is an illustrative calculation of the ACE Closing Price Adjustment in
      Section
      2.1(b)(i)
      in
      accordance with this Agreement, on the assumption that the Measurement Date
      occurred at 12:00:01 a.m. (New York time) on July 1, 2006.

     

    Section
      2.2 Purchase
      and Sale of AREH Subs Equity Interests. 

     

    (a) Subject
      to the terms and conditions set forth herein, the aggregate purchase price
      for
      the AREH Subs Equity Interests shall be equal to the result of clauses (i)
      through (iv)
      below
      (such amount, the “AREH
      Purchase Price”
and,
      together with the Closing
      ACE
      Purchase Price, the “Purchase
      Price”):

     

    (i) the
      Traymore Price plus
      the MLK
      Price (the “Base
      AREH Purchase Price”);
      plus 

     

    (ii) the
      Restaurant Purchase Price; minus

     

    (iii) one-half
      (1⁄2) of the Adjacent Property Mansion Taxes; plus or
      minus

     

    (iv) the
      AREH
      Subs Prorations.

     

    (b) For
      purposes of this Agreement, the term:

     

    (i) “Adjacent
      Property Mansion Taxes”
means
      the amount of “Mansion” Taxes payable pursuant to New Jersey Assembly Bill No.
      4701 (ACS), as amended, with respect to the indirect transfer of the Adjacent
      Properties from AREH to Buyer pursuant to the AREH Subs Purchase.

     

    (ii) “AREH
      Subs Prorations”
means
      the result of: (A) prepaid real and personal property Taxes and special
      assessments, if any, of the AREH Subs related to the Adjacent Properties that
      are attributable to periods on and after the Closing Date, plus
      (B) unamortized prepaid expenses of the AREH Subs under the Assumed AREH
      Sub Contracts as of the Closing Date, minus
      (C) unpaid utility charges for telephone, gas, electricity, sewer, water
      and other services of the AREH Subs for the current billing period prorated
      for
      the period up to, but not including, the Closing Date, minus
      (D) unpaid real and personal property Taxes and special assessments, if
      any, of the AREH Subs related to the Adjacent Properties that are attributable
      to periods up to, but not including, the Closing Date and that are to be paid
      by
      the AREH Subs or Buyer on or after the Closing Date; minus
      (E) accrued expenses under the Assumed AREH Sub Contracts attributable
      to periods prior to the Closing Date that are to be paid by the AREH Subs on
      or
      after the Closing Date; and minus
      (F)
      payments of rent and deposits received under the Assumed Leases attributable
      to
      periods on or after the Closing Date.

     

    For
      clarity, (x) if the AREH Subs Proration is greater than zero (i.e.,
      a
      positive number), the AREH Purchase Price will be increased by such amount
      and
      (y) if the AREH Subs Proration is less than zero (i.e.,
      a
      negative number), the AREH Purchase Price will be reduced by such
      amount.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

       

    

    (iii) “Estimated
      AREH Subs Prorations”
means
      the good faith estimate of the AREH Subs Prorations pursuant to Section
      2.6(b)
      hereof.

     

    (iv) “Estimated
      Adjacent Property Mansion Taxes”
means
      the good faith estimate of the Adjacent Property Mansion Taxes pursuant to
      Section
      2.6(b)
      hereof. 

     

    (v) “MLK
      Price”
means
      (A) Five Million Seven Hundred Eighty-Five Thousand Dollars ($5,785,000), plus
      the out-of-pocket costs and expenses (including transfer or similar Taxes,
      if
      any) actually paid by AREH or its Affiliates for the MLK Properties minus
      the (B)
      MLK Indebtedness.

     

    (vi) “Restaurant
      Purchase Price”
means
      either (A) Five Million One Hundred Thousand Dollars
      ($5,100,000), plus the out-of-pocket costs and expenses (including transfer
      or similar Taxes, if any) actually paid by AREH or its Affiliates in connection
      with the Restaurant Purchase (such costs and expenses, the “Restaurant
      Costs”),
      in
      the event that the closing of the Restaurant Purchase occurs prior to the
      Closing or (B) Two Hundred Thousand Dollars ($200,000), representing the
      deposit actually paid by AREH or its Affiliates under the purchase agreement
      for
      the Restaurant Site, plus the Restaurant Costs, in the event the closing of
      the
      Restaurant Purchase does not occur prior to the Closing. 

     

    Section
      2.3 Deposit.

     

    (a) On
      the
      first (1st)
      business day following the execution of this Agreement, Buyer shall deposit
      Fifty Million Dollars ($50,000,000) (as such amount may be adjusted pursuant
      to
Section
      9.1(d)
      or
Section
      9.4(b)
      hereof,
      the “Deposit”)
      with
      the Escrow Agent pursuant to an escrow agreement substantially in the form
      attached hereto as Exhibit
      E
      (the
“Deposit
      Escrow Agreement”)
      executed and delivered by each of ACE Hi, Buyer and the Escrow Agent. Buyer
      and
      ACE Hi hereby acknowledge and agree that upon the Closing or any termination
      of
      this Agreement, any interest earned on the Deposit shall accrue for the benefit
      of and be paid to Buyer. In
      the
      event that the required amount of the Deposit is reduced or eliminated in
      accordance with Section
      9.4(b)
      hereof,
      Buyer shall deliver written notice of such reduction to the Escrow Agent and
      such reduced amount, together with any interest accrued thereon shall be
      promptly released from the escrow under the Deposit Escrow Agreement (the
“Deposit
      Escrow”)
      by the
      Escrow Agent and paid to Buyer pursuant to this Section
      2.3(a)
      and the
      Deposit Escrow Agreement.

     

    (b) Prior
      to
      the Closing Date, Buyer and ACE Hi acknowledge and agree that Buyer shall be
      entitled to quarterly distributions of one-half (1⁄2) of all accrued interest on
      the Deposit Escrow Amount, which shall be distributed by the Escrow Agent to
      Buyer within ten (10) business days after the end of each calendar quarter
      pursuant to the Deposit Escrow Agreement and this Section
      2.4(c).
      Interest earned on the Deposit shall be included in income by Buyer for Income
      Tax purposes.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

       

    

    (c) At
      the
      Closing, the Deposit (without giving effect to the interest earned thereon)
      shall be released to ACE Hi and the amount so released shall be credited against
      the Closing ACE Purchase Price and deducted from the ACE Closing Payment
      pursuant to Section
      2.5(c)(xii)
      hereof,
      and Buyer and ACE Hi shall deliver written instructions to the Escrow Agent
      to
      (i) release from the Deposit Escrow and pay to ACE Hi the
      Deposit and (ii) release from the Deposit Escrow and pay to Buyer any interest
      earned on the Deposit, all pursuant to this Section
      2.3(c)
      and the
Deposit
      Escrow Agreement. 

     

    (d) Upon
      any
      termination of this Agreement, (i) the Deposit (without giving effect to the
      interest earned thereon) shall be released from the Deposit Escrow and paid
      by
      the Escrow Agent to Buyer or ACE Hi, as applicable, pursuant to Section
      11.2(b)
      hereof
      and the terms of the Deposit Escrow Agreement and (ii) any interest earned
      on
      the Deposit shall be released from the Deposit Escrow and paid by the Escrow
      Agent to Buyer pursuant to Section
      11.2(b)
      hereof
      and the terms of the Deposit Escrow Agreement.

     

    (e) Buyer
      and
      ACE Hi agree to execute and be bound by such other reasonable and customary
      escrow instructions as may be necessary or reasonably required by the Escrow
      Agent or the parties hereto in order to distribute and pay the funds held in
      the
      Deposit Escrow as provided in this Section
      2.3
      and the
      Deposit Escrow Agreement. In the event of any inconsistency between the terms
      and provisions of such supplemental escrow instructions and the terms and
      provisions of this Agreement, or any inconsistency between the terms and
      provisions of the Deposit Escrow Agreement and the terms and provisions of
      this
      Agreement, the terms and provisions of this Agreement shall control, absent
      an
      express written agreement between Buyer and ACE Hi to the contrary which
      acknowledges this Section
      2.3(e). 

     

    Section
      2.4 GB
      Indemnification Escrow Amount.
      At
      Closing, ACE Hi shall deposit with the Escrow Agent a portion of the ACE Closing
      Payment equal to Fifty Million Dollars ($50,000,000) (as such amount may be
      adjusted pursuant to Section
      2.4(c)
      hereof,
      the “GB
      Indemnification Escrow Amount”)
      pursuant to an escrow agreement substantially in the form attached hereto as
      Exhibit
      F
      (the
“GB
      Indemnification Escrow Agreement”)
      executed and delivered by each of ACE Hi, Buyer and the Escrow Agent, which
      shall be held in a segregated escrow account (the “GB
      Indemnification Escrow”)
      invested in accordance with Schedule
      2.4
      attached
      hereto pending the date of the satisfaction of the Holdback Condition (such
      date, the “GB
      Date”).
      ACE
      Hi shall be solely responsible for payment of all Taxes with respect to any
      interest or income earned on or dividends paid with respect to the GB
      Indemnification Escrow Amount. Pursuant to the GB Indemnification Escrow
      Agreement and this Section 2.4, the GB Indemnification Escrow Amount shall
      be
      released by the Escrow Agent as follows:

     

    (a) Upon
      satisfaction of Holdback Condition: (x) ACE Hi shall be entitled to receive
      all
      of the GB Indemnification Escrow Amount (reduced by any amounts payable pursuant
      to Section
      2.4(b)
      below),
      together with any interest or income earned thereon or dividends paid with
      respect thereto; and (y) Buyer shall deliver written instructions to the Escrow
      Agent to release from the GB Indemnification Escrow and pay to ACE Hi all of
      the
      GB Indemnification Escrow Amount (reduced by any amounts payable pursuant to
      Section 2.4(b) below), together with any interest or income earned thereon
      or
      dividends paid with respect thereto, pursuant to this Section
      2.4(a)
      and the
      GB Indemnification Escrow Agreement,
      and the
      GB Indemnification Escrow Agreement shall provide that the Escrow Agent shall
      release such amount to ACE Hi upon the earlier of: (i) receipt of such notice
      from Buyer; or (ii) receipt of a final non-appealable order of a court of
      competent jurisdiction declaring that the Holdback Condition has been
      satisfied.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    (b) In
      the
      event that Buyer or any other Indemnified Party is entitled to indemnification
      pursuant to Section 12.2(a)(iv) or (v) or 12.2(b)(iv) or (v) hereof for Losses
      arising with respect to any GB Claims and/or GB Resale Payment and ACE Hi has
      not timely and properly indemnified Buyer or such other Indemnified Party for
      such Losses pursuant to Section
      12.6
      hereof:
      (x) Buyer or such other Indemnified Party shall be entitled to receive the
      sum
      equal to such Losses from the GB Indemnification Escrow; (y) ACE Hi shall
deliver
      written instructions to the Escrow Agent to release from the GB Indemnification
      Escrow and pay to Buyer the full amounts of such Losses
      (or, if
      less, the full amount held in the GB Indemnification Escrow), and (z) the GB
      Indemnification Escrow Agreement shall provide that the Escrow Agent shall
      release such amount to Buyer or such other Indemnified Party upon the earlier
      of: (i) receipt of such notice from ACE Hi; or (ii) receipt of a final
      non-appealable order of a court of competent jurisdiction declaring that Buyer
      or such other Indemnified Party is entitled to such indemnification in such
      amount pursuant to Section 12.2(a)(iv) or (v) or 12.2(b)(iv) or (v) hereof
      for Losses arising with respect to any GB Claims.

     

    (c) Prior
      to
      the GB Date, Buyer and ACE Hi acknowledge and agree that (i) ACE Hi shall be
      entitled to quarterly distributions of one-half (1⁄2) of all accrued interest on
      the GB Indemnification Escrow Amount, which shall be distributed by the Escrow
      Agent to ACE Hi within ten (10) business days after the end of each calendar
      quarter pursuant to the GB Indemnification Escrow Agreement and this
Section
      2.4(c),
      (ii) in
      the event that the net asset value of the GB Indemnification Escrow Amount
      (determined in accordance with the procedures set forth on Schedule
      2.4)
      shall
      increase to an amount in excess of Sixty Million Dollars ($60,000,000), the
      Escrow Agent shall, within five (5) business days after receipt of written
      instructions from ACE Hi following such increase, release from the GB
      Indemnification Escrow and pay to ACE Hi any amounts held in the GB
      Indemnification Escrow in excess of Fifty Million Dollars ($50,000,000), and
      (iii) in the event that the net asset value of the GB Indemnification Escrow
      Amount shall decrease to an amount less than Forty Million Dollars
      ($40,000,000), ACE Hi shall, within five (5) business days after such shortfall,
      promptly deposit into the GB Indemnification Escrow an amount equal to the
      amount of such shortfall in order to cause the GB Indemnification Escrow Amount
      to be equal to Fifty Million Dollars ($50,000,000).

     

    (d) If,
      at
      any time 

     

    (i) the
      Holdback Condition shall not have been satisfied,

     

    (ii) either
      Seller, any of their Affiliates, the Companies, Buyer or any other Indemnified
      Party shall have suffered an adverse judgment (the “GB
      Judgment”)
      in any
      trial court proceeding or an adverse determination in any appellate court review
      (other than any appellate court determination that remands the case to a trial
      court for further proceedings) respecting the GB Claims, 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (iii) Buyer
      shall be attempting in good faith to obtain development financing for the
      redevelopment of the Casino Land and/or the Traymore Land and the chief
      executive officer of Buyer shall have certified in a sworn affidavit, under
      penalty of perjury, that, in his good faith judgment and after consultation
      with
      Buyer’s potential financing sources or arrangers, Buyer would be unable to
      obtain such development financing or such development financing would be more
      expensive due to the existence of the GB Claims, and

     

    (iv) two
      (2)
      years shall have passed from the Closing Date,

     

    then
      Buyer can make a written demand on ACE Hi to settle the GB Judgment within
      thirty (30) days of such demand. In the event that the GB Judgment has not
      been
      satisfied at the end of such thirty (30)-day period, Buyer shall have the right
      (A) to settle the GB Judgment so long as Buyer shall obtain full and complete
      releases in favor of Buyer and all other Indemnified Parties, Seller, AREP
      and
      its Affiliates, GB, and all of the officers, directors, employees, attorneys
      and
      agents of the foregoing with respect to all matter asserted or that could have
      been asserted in the legal actions resulting in the GB Judgment, (B) to deliver
      written instructions to the Escrow Agent to release all or a portion of the
      GB
      Indemnification Escrow Amount from escrow and pay to the GB Parties amounts
      sufficient to satisfy the settlement described in preceding subclause (A),
      and
      (C) to tender an indemnity claim pursuant to ARTICLE
      XII
      hereof
      for any amounts in excess of the GB Indemnification Escrow Amount that are
      required to be paid to the GB Parties in settlement of the GB Judgment;
provided however,
      that no
      amounts shall be released from the GB Indemnification Escrow to the GB Parties
      pursuant to this Section
      2.4(d)
      if Buyer
      shall have actually obtained development financing for the redevelopment of
      the
      Casino Land and the Traymore Land without conditions or restrictions that relate
      to the satisfaction of the GB Claims. If the foregoing results in the
      satisfaction of the Holdback Condition, Buyer shall deliver written instructions
      to the Escrow Agent to release from the GB Indemnification Escrow and pay to
      ACE
      Hi any remaining amounts in the GB Indemnification Escrow, if any, pursuant
      to
      this Section
      2.4(d)
      and the
      GB Indemnification Escrow Agreement.

     

    Section
      2.5 ACE
      Closing Payment. 

     

    (a) At
      least
      five (5) business days prior to the Closing Date, ACE Hi shall deliver to Buyer
      a closing statement (the “Preliminary
      ACE Closing Schedule”)
      setting forth ACE Hi’s determination of (i) the Estimated ACE Closing Price
      Adjustment, (ii) the Estimated Certain Employee Liabilities, (iii) the
      Discharged ACE Indemnified Liabilities, (iv) the Estimated Casino Mansion Taxes,
      (v) the Estimated ACE Hi NJSEA Payment and (vi) a calculation of the ACE
      Closing Payment, set forth in reasonable detail. The Preliminary ACE Closing
      Schedule (and each component thereof) shall be prepared in accordance with
      the
      provisions of this Agreement and on a basis consistent with the methodology
      set
      forth on Schedule
      II,
      and
      shall be accompanied by reasonably sufficient back-up or supporting data used
      in
      the preparation of the Preliminary ACE Closing Schedule as is sufficient to
      reflect how ACE Hi made such determinations and calculations.
      ACE Hi
      shall give Buyer reasonable prior written notice of any cash counts and physical
      inventories that will be taken by ACE Hi as of 5:59:59 a.m. on September 1,
      2006, in connection with its preparation of the Preliminary ACE Closing
      Schedule. Notwithstanding any provision of this Agreement to the contrary,
      Buyer
      shall, subject to applicable Gaming Laws, if any, be permitted to have a
      representative of Buyer present to observe such cash counts and physical
      inventories. Buyer and ACE Hi each shall bear its own expenses in the
      preparation and review of the Preliminary ACE Closing Schedule.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    (b) If
      Buyer
      shall disagree with any calculations set forth in the Preliminary ACE Closing
      Schedule or ACE Hi’s determination of the ACE Closing Payment, it shall notify
      ACE Hi of such disagreement in writing within two (2) business days after its
      receipt of the Preliminary ACE Closing Schedule, which notice shall set forth
      in
      reasonable detail the particulars of such disagreement and Buyer’s estimate of
      the ACE Closing Payment. In the event that Buyer provides no such notice of
      disagreement within such two (2) business day period, ACE Hi’s estimate of the
      ACE Closing Payment shall be deemed the “ACE Closing Payment.” If, however,
      Buyer provides a timely notice of disagreement to ACE Hi, Buyer and ACE Hi
      shall
      use their commercially reasonable efforts for a period of two (2) business
      days
      to resolve any disagreements with respect to the Preliminary ACE Closing
      Schedule and the calculation of the ACE Closing Payment for purposes of the
      Closing. If, at the end of such period, Buyer and ACE Hi are unable to resolve
      such disagreements, (i) ACE Hi’s estimate of the ACE Closing Payment shall be
      deemed the “ACE
      Closing Payment”
for
      purposes of the Closing, and (ii) ACE Hi shall promptly deposit the difference
      between Buyer’s estimate of the ACE Closing Payment and the ACE Closing Payment
      into an interest-bearing escrow account with the Escrow Agent (the “ACE
      Closing Payment Escrow”),
      to be
      disbursed to Buyer or ACE Hi following the Closing in accordance with
Section
      2.7
      and an
      escrow agreement substantially in the form attached hereto as Exhibit
      G-1
      (the
“ACE
      Closing Payment Escrow Agreement”)
      executed and delivered by each of ACE Hi, Buyer and the Escrow Agent. ACE Hi
      and
      Buyer shall each bear their own expenses in the preparation and review of the
      Preliminary ACE Closing Schedule. 

     

    (c) The
      “ACE
      Closing Payment”
shall
      be a cash amount equal to the sum of: 

     

    (i) the
      Initial ACE Purchase Price; plus
      or
minus

     

    (ii) the
      Estimated ACE Closing Price Adjustment; minus

     

    (iii) the
      Estimated Certain Employee Liabilities; minus

     

    (iv) the
      Estimated Multiemployer Plan Liabilities; minus

     

    (v) the
      Discharged ACE Indemnified Liabilities; minus

     

    (vi) one-half
      (1⁄2) of the Estimated Casino Mansion Taxes; plus

     

    (vii) the
      CRDA
      Price; minus

     

    (viii) the
      Comp
      Points Liability; minus

     

    (ix) the
      Estimated ACE Hi NJSEA Payment; plus

     

    (x) the
      Initial Amount; plus

     

    (xi) the
      Deposit Delay Increment; and minus

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

       

    

    (xii) the
      amount of the Deposit delivered to ACE Hi at Closing pursuant to the terms
      hereof.  

     

    Section
      2.6 AREH
      Closing Payment. 

     

    (a) At
      least
      five (5) business days prior to the Closing Date, AREH shall deliver to Buyer
      a
      closing statement (the “Preliminary
      AREH Closing Schedule”)
      consisting of AREH’s determination of (i) the Estimated AREH Subs Prorations,
      (ii) the Estimated Adjacent Property Mansion Taxes and (iii) a calculation
      of
      the AREH Closing Payment, set forth in reasonable detail. The Preliminary AREH
      Closing Schedule (and each component thereof) shall be prepared in accordance
      with the provisions of this Agreement and shall be accompanied by reasonably
      sufficient back-up or supporting data used in the preparation of the Preliminary
      AREH Closing Schedule as is sufficient to reflect how AREH made such
      determinations and calculations. 

     

    (b) If
      Buyer
      shall disagree with any calculations set forth in the Preliminary AREH Closing
      Schedule or AREH’s determination of the AREH Closing Payment, it shall notify
      AREH of such disagreement in writing within two (2) business days after its
      receipt of the Preliminary AREH Closing Schedule, which notice shall set forth
      in reasonable detail the particulars of such disagreement and Buyer’s estimate
      of the AREH Closing Payment. In the event that Buyer provides no such notice
      of
      disagreement within such two (2) business day period, AREH’s estimate of the
      AREH Closing Payment shall be deemed the “AREH Closing Payment” for purposes of
      the Closing. If, however, Buyer provides a timely notice of disagreement to
      AREH, Buyer and AREH shall use their commercially reasonable efforts for a
      period of two (2) business days to resolve any disagreements with respect to
      the
      Preliminary AREH Closing Schedule and the calculation of the AREH Closing
      Payment. If, at the end of such period, Buyer and AREH are unable to resolve
      such disagreements, (i) AREH’s estimate of the AREH Closing Payment shall be
      deemed the “AREH Closing Payment” for purposes of the Closing, and (ii) AREH
      shall promptly deposit the difference between Buyer’s estimate of the AREH
      Closing Payment and the AREH Closing Payment into an interest-bearing escrow
      account with the Escrow Agent (the “AREH
      Closing Payment Escrow”),
      to be
      disbursed to Buyer or AREH following the Closing in accordance with Section
      2.8
      and an
      escrow agreement substantially in the form attached hereto as Exhibit
      G-2
      (the
“AREH
      Closing Payment Escrow Agreement”)
      executed and delivered by each of AREH, Buyer and the Escrow Agent. AREH and
      Buyer shall each bear their own expenses in the preparation and review of the
      Preliminary AREH Closing Schedule. 

     

    (c) The
      “AREH
      Closing Payment”
shall
      be a cash amount equal to the sum of 

     

    (i) the
      Base
      AREH Purchase Price; plus

     

    (ii) the
      Restaurant Purchase Price; minus

     

    (iii) one-half
      (1⁄2) of the Estimated Adjacent Property Mansion Taxes; and plus
      or
minus

     

    (iv) the
      Estimated AREH Subs Prorations.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

       

    

    Section
      2.7 Final
      ACE Purchase Price Adjustment.

     

    (a) The
      “Closing
      ACE Purchase Price”
shall
      be equal to the result of clauses (i) through (xi)
      below:

     

    (i) the
      Initial ACE Purchase Price; plus
      or
minus

     

    (ii) the
      ACE
      Closing Price Adjustment; minus

     

    (iii) the
      Certain Employee Liabilities; minus

     

    (iv) the
      Estimated Multiemployer Plan Liabilities; minus

     

    (v) the
      Discharged ACE Indemnified Liabilities; minus

     

    (vi) one-half
      (1⁄2) of the Casino Mansion Taxes minus

     

    (vii) the
      Comp
      Point Liability; minus

     

    (viii) the
      ACE
      Hi NJSEA Payment; plus

     

    (ix) the
      Initial Amount; plus

     

    (x) the
      Deposit Delay Increment; and plus

     

    (xi) the
      CRDA
      Price. 

     

    (b) As
      soon
      as reasonably practicable following the Closing Date, but in no event more
      than
      sixty (60) days after the Closing Date, Buyer shall cause to be prepared and
      delivered to ACE Hi a statement (the “Final
      ACE Closing Schedule”)
      setting forth Buyer’s determination of (i) the items described in subclauses (i)
      - (xi)
      of
Section
      2.7(a)
      hereof
      in accordance with the provisions of this Agreement and on a basis consistent
      with the methodology set forth on Schedule
      II,
      and
      (ii) the ACE Purchase Price Adjustment (as defined below), if any, based on
      the
      Final ACE Closing Schedule and the provisions of this Section
      2.7
      and set
      forth in reasonable detail. The Final ACE Closing Schedule (and each component
      thereof) shall be prepared in accordance with the provisions of this Agreement
      and on a basis consistent with the methodology set forth on Schedule
      II
      and
      shall be accompanied by reasonably sufficient back-up or supporting data used
      in
      the preparation of the Final ACE Closing Schedule as is sufficient to reflect
      how Buyer made such determinations and calculations. Buyer shall give ACE Hi
      reasonable prior written notice of any cash counts and physical inventories
      that
      will be taken by Buyer in connection with its preparation of the Final ACE
      Closing Schedule. Notwithstanding any provision of this Agreement to the
      contrary, ACE Hi shall, subject to applicable Gaming Laws, if any, be permitted
      to have a representative of ACE Hi present to observe such cash counts and
      physical inventories. Buyer and ACE Hi each shall bear its own expenses in
      the
      preparation and review of the Final ACE Closing Schedule. 

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

       

    

    (c) If
      ACE Hi
      shall disagree with the calculation of the Closing ACE Purchase Price or any
      element of the Final ACE Closing Schedule, it shall, within thirty (30) business
      days after its receipt of the Final ACE Closing Schedule, notify Buyer of such
      disagreement in writing, setting forth the particulars of such disagreement.
      In
      connection therewith and subject to applicable Law, Buyer will provide ACE
      Hi
      and its Representatives reasonable access to ACE Lo’s books and records to the
      extent reasonably related to ACE Hi’s review of the Final ACE Closing Schedule
      and the calculation of Closing ACE Purchase Price. In the event that ACE Hi
      does
      not provide such notice of disagreement within such thirty (30) business day
      period, ACE Hi shall be deemed to have accepted the Final ACE Closing Schedule
      and the calculation of Closing ACE Purchase Price delivered by Buyer, which
      shall be final, binding and conclusive for purposes of this Section
      2.7(c)
      with
      respect to the determination of the Closing ACE Purchase Price.  In
      the event any such notice of disagreement is timely provided, Buyer and ACE
      Hi,
      in conjunction with their respective independent accounting firms, shall use
      commercially reasonable efforts for a period of ten (10) business days (or
      such
      longer period as they may mutually agree) to resolve any disagreements with
      respect to the calculation of the Closing ACE Purchase Price. If, at the end
      of
      such period, they are unable to resolve such disagreements, then an independent
      accounting firm of recognized national standing with no existing relationship
      with any of the parties and which Buyer and ACE Hi shall not have otherwise
      retained on other matters prior to the resolution of the Final ACE Closing
      Schedule or, to the extent Buyer and ACE Hi cannot agree on such independent
      accounting firm, an arbitrator from the National Panel of Professional
      Accounting and Related Services Disputes of the American Arbitration Association
      selected by the mutual agreement of Buyer and ACE Hi (the “Auditor”)
      shall
      resolve any remaining disagreements provided, that if Buyer and ACE Hi cannot
      mutually agree on an Auditor, any remaining disagreements shall be resolved
      by a
      court of competent jurisdiction in accordance with Section 13.2 hereof. For
      the
      avoidance of doubt, the following procedures by the Auditor shall only be
      applicable if Buyer and ACE Hi mutually agree on the selection of an Auditor.
      The Auditor shall determine as promptly as practicable whether the Final ACE
      Closing Schedule was prepared in accordance with the standards set forth in
      this
      Agreement and, only with respect to the disputed line items submitted to the
      Auditor, whether and to what extent (if any) the Closing ACE Purchase Price
      requires adjustment. The Auditor may retain an actuarial firm or other
      professionals as it may reasonably determine to be necessary or appropriate
      in
      discharging its duties under this Section
      2.7(c).
      The
      parties and the Auditor shall agree on reasonable procedures for determining
      the
      disputed line items; provided,
      that,
      such
      procedures shall include the following (collectively, the “Audit
      Procedures”):
      (i) each of Buyer and ACE Hi shall have the right to make one (1) written
      submission to the Auditor regarding the disputed line items submitted to the
      Auditor, (ii) each party shall have the right to make one (1) written submission
      to the Auditor in response to the other party’s written submission in subclause
      (i), (iii) the Auditor may submit follow-up questions to either party, and
      such
      parties shall have the right to respond to such questioning by the Auditor,
      (iv)
      each party shall have the right to submit one written response to the other
      party’s response to the Auditor pursuant to subclause (iii), and (v) copies of
      all written materials submitted to the Auditor (and summaries of all discussions
      with the Auditor) shall be promptly provided to the other party. The Auditor
      shall promptly deliver to Buyer and ACE Hi its determination in writing, which
      determination shall be made subject to the definitions and principles set forth
      in this Agreement and shall select either the position of ACE Hi or Buyer,
      and
      no compromise position, with respect to each of the disputed line items
      submitted to the Auditor. The fees and expenses of the Auditor shall be paid
      one-half by Buyer and one-half by ACE Hi. The determination of the Auditor
      shall
      be final, binding and conclusive for purposes of this Section
      2.7(c)
      and
      enforceable as an arbitration award, and shall represent the exclusive remedy
      with respect to the determination of the Closing ACE Purchase Price. The date
      on
      which Closing ACE Purchase Price is finally determined in accordance with this
      Section
      2.7
      is
      hereinafter referred to as the “ACE
      Determination Date.” 

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

       

    

    (d) Within
      ten (10) business days of the ACE Determination Date, the amount (which may
      be a
      positive or negative number) equal to 

     

    (i) the
      Closing ACE Purchase Price, minus

     

    (ii) the
      ACE
      Closing Payment, minus

     

    (iii) the
      amount of the Deposit delivered to ACE Hi pursuant to the terms
      hereof.

     

    (the
      “ACE
      Purchase Price Adjustment”)
      shall
      be
      paid (A) from ACE Hi to Buyer (if the ACE Purchase Price Adjustment is a
      negative amount), by ACE Hi’s delivery of written instructions to the Escrow
      Agent to release from the ACE Closing Payment Escrow and pay to Buyer such
      portion of the amounts in the ACE Closing Payment Escrow, if any, up to the
      ACE
      Purchase Price Adjustment (together with any interest earned on such portion),
      and any remainder in cash by wire transfer of immediately available funds to
      an
      account designated by Buyer by written notice to ACE Hi given within two (2)
      days of the ACE Determination Date or (B) from Buyer to ACE Hi
      (if
      the ACE Purchase Price Adjustment is a positive amount), in cash by wire
      transfer of immediately available funds to an account designated by ACE Hi
      by
      written notice to Buyer given within two (2) days of the ACE Determination
      Date.
      Any funds remaining in the ACE Closing Payment Escrow following the payment
      of
      the ACE Purchase Price Adjustment pursuant to the preceding sentence shall
      be
      promptly released from escrow and paid by the Escrow Agent to ACE Hi as
      authorized by written instructions delivered to the Escrow Agent by ACE Hi.
      

     

    Section
      2.8 Final
      AREH Purchase Price Adjustment.

     

    (a) As
      soon
      as reasonably practicable following the Closing Date, but in no event more
      than
      sixty (60) days after the Closing Date, Buyer shall cause to be prepared and
      delivered to AREH a statement (the “Final
      AREH Closing Schedule”)
      setting forth Buyer’s determination of (i) the AREH Subs Prorations, (ii) a
      calculation of the AREH Purchase Price and (iii) the AREH Purchase Price
      Adjustment (as defined below), if any, based on the Final AREH Closing Schedule
      and the provisions of this Section
      2.8
      and set
      forth in reasonable detail. The Final AREH Closing Schedule (and each component
      thereof) shall be accompanied by reasonably sufficient back-up or supporting
      data used in the preparation of the Final AREH Closing Schedule as is sufficient
      to reflect how Buyer made such determinations and calculations. Buyer and AREH
      each shall bear its own expenses in the preparation and review of the Final
      AREH
      Closing Schedule. 

     

    (b) If
      AREH
      shall disagree with the calculation of the AREH Purchase Price or any element
      of
      the Final AREH Closing Schedule relevant thereto, it shall, within thirty (30)
      business days after its receipt of the Final AREH Closing Schedule, notify
      Buyer
      of such disagreement in writing, setting forth in detail the particulars of
      such
      disagreement. In connection therewith and subject to applicable Law, Buyer
      will
      provide AREH reasonable access to any of the respective AREH Subs’ books and
      records to the extent reasonably related to AREH’s review of the Final AREH
      Closing Schedule and the calculation of AREH Purchase Price. In the event that
      AREH does not provide such notice of disagreement within such thirty (30)
      business day period, AREH shall be deemed to have accepted the Final AREH
      Closing Schedule and the calculation of AREH Purchase Price delivered by Buyer,
      which shall be final, binding and conclusive for purposes of this Section
      2.8(b)
      with
      respect to the determination of the AREH Purchase Price. In the event any such
      notice of disagreement is timely provided, Buyer and AREH, in conjunction with
      their respective independent accounting firms, shall use commercially reasonable
      efforts for a period of ten (10) business days (or such longer period as they
      may mutually agree) to resolve any disagreements with respect to the calculation
      of the AREH Purchase Price. If, at the end of such period, they are unable
      to
      resolve such disagreements, then the Auditor shall resolve any remaining
      disagreements provided, that if Buyer and AREH cannot mutually agree on an
      Auditor, any remaining disagreements shall be resolved by a court of competent
      jurisdiction in accordance with Section 13.2 hereof. For the avoidance of doubt,
      the following procedures by the Auditor shall only be applicable if Buyer and
      AREH mutually agree on the selection of an Auditor. The parties and the Auditor
      shall agree on reasonable procedures for determining the disputed line items;
      provided,
      that,
      that
      such procedures shall include the Audit Procedures. The Auditor shall determine
      as promptly as practicable whether the Final AREH Closing Schedule was prepared
      in accordance with the standards set forth in this Agreement and, only with
      respect to the disputed line items submitted to the Auditor, whether and to
      what
      extent (if any) the AREH Purchase Price requires adjustment. The Auditor shall
      promptly deliver to Buyer and AREH its determination in writing, which
      determination shall be made subject to the definitions and principles set forth
      in this Agreement and shall select either the position of AREH or Buyer, and
      no
      compromise position, with respect to each of the disputed line items submitted
      to the Auditor. The fees and expenses of the Auditor shall be paid one-half
      by
      Buyer and one-half by AREH. The determination of the Auditor shall be final,
      binding and conclusive for purposes of this Section
      2.8(b)
      and
      enforceable as an arbitration award, and shall represent the exclusive remedy
      with respect to the determination of the AREH Purchase Price. The date on which
      AREH Purchase Price is finally determined in accordance with this Section
      2.8
      is
      hereinafter referred to as the “AREH
      Determination Date.” 

     

    
      
        
        

      

      
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    (c) Within
      ten (10) business days of the AREH Determination Date, the amount (which may
      be
      a positive or negative number) equal to 

     

    (i) the
      AREH
      Purchase Price, minus

     

    (ii) the
      AREH
      Closing Payment

     

    (the
      “AREH
      Purchase Price Adjustment”)
      shall
      be paid (A) from AREH to Buyer (if the AREH Purchase Price Adjustment is a
      negative amount) by Buyer’s delivery of written instructions to the Escrow Agent
      to release from the AREH Closing Payment Escrow and pay to Buyer all or a
      portion of the funds in the AREH Closing Payment Escrow, if any, up to the
      amount of the AREH Purchase Price Adjustment (together with any interest earned
      on such payment), and any remainder in cash by wire transfer of immediately
      available funds to an account designated by Buyer by written notice to AREH
      given within two (2) days of the AREH Determination Date or (B) from Buyer
      to
      AREH (if the AREH Purchase Price Adjustment is a positive amount), in
      cash
      by wire transfer of immediately available funds to an account designated by
      AREH
      by written notice to Buyer given within two (2) days of the AREH Determination
      Date. Any funds remaining in the AREH Closing Payment Escrow following the
      payment of the AREH Purchase Price Adjustment pursuant to the preceding sentence
      shall be promptly released from escrow and paid by the Escrow Agent to AREH
      as
      authorized by written instructions delivered to the Escrow Agent by
      AREH.

     

    
      
        
        

      

      
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    Section
      2.9 Closing
      Deliveries. 

     

    (a) At
      the
      Closing, the ACE Selling Parties shall deliver to Buyer: 

     

    (i) the
      certificates, if any, representing the ACE Lo Equity Interests, either duly
      endorsed for transfer to Buyer or accompanied by appropriate duly executed
      limited liability interest powers or, if the ACE Lo Equity Interests are not
      certificated, one or more instruments of assignment in a form approved by Buyer
      conveying such ACE Lo Equity Interests to Buyer; 

     

    (ii) the
      resignations or evidence of their removal from office of the persons named
      on
Schedule
      III(a)
      as
      directors, officers and managers, as applicable, of ACE Lo and Brighton Park
      Maintenance Corp., effective as of the Closing Date, together with any required
      amendments to the organizational documents of ACE Lo and Brighton Park
      Maintenance Corp. and filings with Governmental Entities;

     

    (iii) the
      certificates required by Section
      10.2(a)
      and
Section
      10.2(b)
      hereof;

     

    (iv) affidavits
      executed by ACE Hi and any of its required Affiliates that satisfy the
      requirements of Section 1445 of the Code; and

     

    (v) owners’
      affidavits and indemnities in the forms attached to the preliminary
      certification and report on title for each parcel of the ACE Real Properties
      set
      forth on Exhibit
      H-1
      attached
      hereto (the “ACE
      Real Property Preliminary Certifications and Reports”).
      

     

    (b) At
      the
      Closing, AREH shall deliver to Buyer: 

     

    (i) the
      certificates, if any, representing the AREH Subs Equity Interests, either duly
      endorsed for transfer to Buyer or accompanied by appropriate duly executed
      limited liability interest powers or, if the AREH Subs Equity Interests are
      not
      certificated, one or more instruments of assignment in a form approved by Buyer
      conveying such AREH Subs Equity Interests to Buyer; 

     

    (ii) the
      resignations of the persons named on Schedule
      III(b)
      as
      directors, officers and managers, as applicable, of the Companies effective
      as
      of the Closing Date, together with any required amendments to the organizational
      documents of the Companies and filings with Governmental Entities;

     

    (iii) the
      certificates required by Section
      10.2(a)
      and
Section
      10.2(b)
      hereof;

     

    (iv) affidavits
      executed by AREH and any of its required Affiliates that satisfy the
      requirements of Section 1445 of the Code; and

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

       

    

    (v) owner’s
      affidavits and indemnities in the forms attached to the preliminary
      certifications and reports on title for each parcel of the Adjacent Real
      Properties set forth on Exhibit
      H-2
      attached
      hereto (the “Adjacent
      Real Property Preliminary Certifications and Reports”
and,
      together with the ACE Real Property Preliminary Certifications and Reports,
      the
“Preliminary
      Certifications and Reports”).
      

     

    (c) At
      the
      Closing, Buyer shall deliver: 

     

    (i) to
      ACE
      Hi, immediately available funds by wire transfer to an account designated
      by ACE Hi (which account shall be designated in writing to Buyer at least two
      (2) business days prior to the Closing Date) in an amount
      equal to the ACE Closing Payment; 

     

    (ii) to
      AREH,
      immediately available funds by wire transfer to an account designated
      by AREH (which account shall be designated in writing to Buyer at least two
      (2)
      business days prior to the Closing Date) in an amount
      equal to the AREH Closing Payment; and

     

    (iii) to
      each
      Seller, the certificates required by Section
      10.3(a)
      and
Section
      10.3(b)
      hereof.

     

    Section
      2.10 No
      Duplication.
      To the
      extent that any item is included in any adjustment in this ARTICLE
      II,
      such
      item shall not be included in any other adjustment if such inclusion would
      result in any duplication or double-counting. Similarly, anything to the
      contrary in this Agreement notwithstanding, amounts which have been deducted
      in
      calculating the Closing ACE Purchase Price or the AREH Purchase Price shall
      not
      be subject to indemnification by the Selling Parties hereunder.

     

    ARTICLE
      III

    [RESERVED]

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF ACE
      SELLING PARTIES

    THAT
      ARE
      BROUGHT DOWN FOR PURPOSES OF THE CLOSING CONDITIONS

     

    Each
      ACE
      Selling Party hereby represents and warrants, jointly and severally, to Buyer
      that the statements contained in this ARTICLE
      IV
      are true
      and correct as of the date hereof and as of the Closing Date as if made at
      and
      as of such times (except to the extent expressly made as of an earlier date,
      in
      which case as of such earlier date), except as set forth herein and in the
      disclosure letter delivered by the ACE Selling Parties to Buyer on the date
      of
      this Agreement (the “ACE
      Disclosure Letter”).
      The
      ACE Disclosure Letter is arranged in paragraphs corresponding to the numbered
      and lettered paragraphs contained in this Agreement and the disclosure in any
      paragraph shall, to the extent applicable, only qualify other paragraphs in
      this
      Agreement to the extent the matters to be excepted from such other paragraphs
      is
      readily apparent from the text of the disclosure in the ACE Disclosure Letter.
      

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    Section
      4.1 Organization
      of the Selling Parties. 

     

    (a) ACE
      Hi is
      organized and validly existing under the laws of the State of Delaware and
      has
      all requisite corporate power and authority to carry on its business as now
      being conducted.

     

    (b) ACE
      Lo is
      organized and validly existing under the laws of the State of New Jersey and
      has
      all requisite limited liability company power and authority to carry on its
      business as now being conducted.

     

    Section
      4.2 Authority;
      No Conflict; Required Filings and Consents. 

     

    (a) (i)
      ACE
      Hi has all requisite corporate power and authority and (ii) ACE Lo has all
      requisite limited liability company power and authority, to enter into this
      Agreement and to consummate the transactions that are contemplated by this
      Agreement. The execution and delivery of this Agreement by each ACE Selling
      Party and the consummation by each ACE Selling Party of the transactions to
      which it is a party that are contemplated by this Agreement have been duly
      and
      validly authorized by (A) in the case of ACE Lo, ACE Hi, as ACE Lo’s sole member
      and (B) in the case of ACE Hi, the approval by ACE Hi’s Board of Directors, and
      subject to obtaining the approval and adoption of this Agreement and approval
      of
      the Purchase by the Requisite Stockholder Approval, no other action of any
      such
      ACE Selling Party or any board or committee thereof or any other limited
      liability or corporate proceeding on the part of such ACE Selling Parties or
      their respective members or stockholders are necessary to authorize this
      Agreement and to consummate the transactions contemplated by this Agreement.
      The
      Board of Directors of ACE Hi has received all information relating to this
      Agreement and the ACE Lo Purchase necessary to make an informed judgment, and
      has deemed the ACE Lo Purchase expedient and for the best interests of ACE
      Hi.
      This Agreement has been duly executed and delivered by each ACE Selling Party,
      and assuming this Agreement constitutes the valid and binding obligation of
      Buyer and the AREH Selling Parties, constitutes the valid and binding obligation
      of the ACE Selling Parties, enforceable against each of the ACE Selling Parties
      in accordance with its terms, subject, as to enforcement, to (x) applicable
      bankruptcy, insolvency, reorganization, moratorium or similar Laws now or
      hereinafter in effect affecting creditors’ rights generally and (y) general
      principles of equity. 

     

    (b) Except
      for ACE Lo’s surrender of its gaming license to own and operate the Casino
      Business in the State of New Jersey as contemplated by this Agreement, the
      execution and delivery of this Agreement by the ACE Selling Parties and the
      consummation by the ACE Selling Parties of the transactions contemplated by
      this
      Agreement will not, (i) conflict with, or result in any violation or breach
      of, any provision of the respective organization documents of the ACE Selling
      Parties, or (ii) subject to the governmental filings and other matters
      referred to in Section
      4.2(c)
      hereof,
      contravene, conflict with, or result in a violation of any of the terms or
      requirements of, or give any Governmental Entity the right to revoke, withdraw,
      suspend, cancel, terminate, or modify, in each case in any respect, any permit,
      concession, franchise, license, judgment, or Law applicable to the ACE Selling
      Parties, or any of them, except in the case of clause (ii) for any such
      contraventions, conflicts, violations, revocations, withdrawals, suspensions,
      cancellations, terminations or modifications which (x) are not, individually
      or
      in the aggregate, reasonably likely to have a Material Adverse Effect on ACE
      Lo
      or (y) would not materially impair or delay the Closing. 

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (c) No
      consent, approval, license, order or authorization of, or registration,
      declaration or filing with, or Permit from (“Consent”),
      any
      court, administrative agency, commission, Gaming Authority or other governmental
      authority or instrumentality (“Governmental
      Entity”)
      is
      required by or with respect to the ACE Selling Parties in connection with the
      execution and delivery of this Agreement by the ACE Selling Parties or the
      consummation by the ACE Selling Parties, or either of them, of the transactions
      to which they are a party that are contemplated by this Agreement, except for
      (i) the filing of the pre-merger notification report under the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR
      Act”),
      (ii)
      any approvals or filing of notices required under the Gaming Laws, and
      (iii) such other Consents which, if not obtained or made, would not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on ACE Lo. 

     

    Section
      4.3 Capitalization. 

     

    (a) The
      ACE
      Lo Equity Interests represent all of the issued and outstanding Equity Interests
      of ACE Lo, all of which are duly authorized, validly issued, fully paid and
      nonassessable, were not issued in violation of any preemptive rights created
      by
      applicable Laws, ACE Lo’s organizational documents or any Contract. Except for
      the EBITDA bonus plan, there are no outstanding or authorized profit
      participation or any other contractual rights of which ACE Lo is obligated
      the
      value of which is derived from the financial performance of ACE Lo or the value
      of the ACE Lo Equity Interests. Except for the EBITDA bonus plan, there is
      no
      liability for, or obligation with respect to, any dividends, distributions
      or
      similar participation interests declared or accumulated but unpaid with respect
      to any ACE Lo Equity Interests. Except as contemplated by this Agreement, there
      are no obligations, contingent or otherwise, of ACE Lo to repurchase, redeem
      or
      otherwise acquire any of the ACE Lo Equity Interests or to provide funds to
      or
      make any material investment (in the form of a loan, capital contribution or
      otherwise) in any entity. 

     

    (b) There
      are
      no (i) options, warrants or other rights, agreements, arrangements or
      commitments to which any ACE Selling Parties is a party, or by which any ACE
      Selling Parties is bound, relating to issued or unissued ACE Lo Equity
      Interests, (ii) securities convertible into or exchangeable for ACE Lo Equity
      Interests, (iii) obligations of any ACE Selling Party to issue, sell,
      transfer, pledge or otherwise dispose of any ACE Lo Equity Interests or
      securities convertible into or exchangeable for ACE Lo Equity Interests or
      (iv)
      bonds, debentures, notes or other indebtedness of ACE Lo having voting rights
      (or convertible into securities having such rights) issued and outstanding.
      There are no voting trusts, proxies or other voting agreements or understandings
      to which any ACE Selling Party is a party or by which any ACE Selling Party
      is
      bound with respect to the issued or unissued ACE Lo Equity Interests.

     

    (c) ACE
      Hi
      owns all of the issued and outstanding ACE Lo Equity Interests free and clear
      of
      all Liens, has good title to such ACE Lo Equity Interests, and, at the Closing,
      will transfer and convey to Buyer good title to such ACE Lo Equity Interests,
      free and clear of all Liens. None of the ACE Lo Equity Interests were
      certificated and no evidences of ownership were ever issued by ACE Lo for the
      ACE Lo Equity Interests.

     

    
      
        
        

      

      
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    Section
      4.4 Certain
      Real Estate Contracts. Except
      as
      set forth in Section
      4.4
      of the
      ACE Disclosure Letter, there are no Contracts with respect to the sale,
      exchange, encumbrance, lease, occupancy or transfer of all or any portion of
      the
      Casino Land, or any interest therein, and no Person has any option, right of
      first refusal or right of first offer to purchase all or any portion of the
      Casino Land, or any interest therein. Except as set forth in Section
      4.4
      of the
      ACE Disclosure Letter, there are no agreements relating to the use and occupancy
      of the Casino Land that are not terminable upon thirty (30) days’
notice.

     

    Section
      4.5 Vote
      Required.
      The
      affirmative vote of the holders of record of at least a majority of the
      outstanding common stock, par value $0.01 per share, of ACE Hi (the
“ACE
      Hi
      Common Stock”)
      with
      respect to the sale of substantially all of the assets of ACE Hi (the
“Requisite
      Stockholder Approval”),
      is
      the only vote of the holders of any capital stock in ACE Hi required to approve
      this Agreement, the ACE Lo Purchase and the other transactions contemplated
      hereby directly relating to the ACE Selling Parties.
      No
      information statement under Regulation 14C promulgated under the Exchange Act
      is
      required in connection with this Agreement, the ACE Lo Purchase and the other
      transactions contemplated hereby directly relating to the ACE Selling
      Parties. 

     

    Section
      4.6 Labor
      and Employment Matters.
      ACE Lo
      is not a party to any collective bargaining agreement, neutrality agreement,
      “card check” or other current labor agreement with or respecting any labor union
      or organization
      that
      purports to cause any current or future facilities of Buyer or any Affiliate
      of
      Buyer (including without limitation a redeveloped casino on the Casino Land,
      but
      excluding the Sands’ casino operations in their present form), (a) to be bound
      by the existing collective bargaining agreements to which ACE Lo is currently
      bound, (b) to recognize any union as a bargaining agent or (c) to
      alter the procedures pursuant to which a union is recognized as a bargaining
      agent. 

     

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF ACE SELLING PARTIES

    THAT
      ARE
      BROUGHT DOWN SOLELY FOR PURPOSES OF INDEMNITY

     

    Each
      ACE
      Selling Party hereby represents and warrants, jointly and severally, to Buyer
      that the statements contained in this ARTICLE
      V
      are true
      and correct as of the date hereof and as of the Closing Date as if made at
      and
      as of such times (except to the extent expressly made as of an earlier date,
      in
      which case as of such earlier date), except as set forth herein and in the
      ACE
      Disclosure Letter. The ACE Disclosure Letter is arranged in paragraphs
      corresponding to the numbered and lettered paragraphs contained in this
      Agreement and the disclosure in any paragraph shall, to the extent applicable,
      only qualify other paragraphs in this Agreement to the extent the matters to
      be
      excepted from such other paragraphs is readily apparent from the text of the
      disclosure in the ACE Disclosure Letter. 

     

    Section
      5.1 Other
      Organizational Matters.
      As of
      the Measurement Date, (a) each of the ACE Selling Parties is duly qualified
      or
      licensed to do business and is in good standing in each jurisdiction in which
      the property owned, leased or operated by it or the nature of the business
      conducted by it makes such qualification or licensing necessary, except where
      the failure to be so qualified, licensed or in good standing would not have
      a
      Material Adverse Effect on the ACE Selling Parties, (b) ACE Lo has no
      Subsidiaries or does not hold or own any interests or investments in any Person,
      other than Brighton Park Maintenance Corp. or interests or investments which
      constitute cash or cash equivalents and (c) copies of the organizational
      documents of each of the ACE Selling Parties and Brighton Park Maintenance
      Corp.
      have been made available to Buyer, and such copies are accurate and complete
      copies of such organizational documents as in effect on the date
      hereof. 

     

    
      
        
        

      

      
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    Section
      5.2 Absence
      of Undisclosed Liabilities.
      Section
      5.2
      of the
      ACE Disclosure Letter sets forth the liabilities and obligations of ACE Lo
      as of
      June 30, 2006, required to be reflected on a balance sheet in accordance with
      GAAP. As of the Measurement Date, except as set forth on Section
      5.2
      of the
      ACE Disclosure Letter and except for liabilities incurred since June 30, 2006
      in
      the ordinary course of business consistent with past practice, to the ACE
      Selling Parties’ knowledge, there are no liabilities or obligations of ACE Lo,
      whether or not accrued, contingent or otherwise, except as have been reflected
      in the ACE Closing Price Adjustment pursuant to Section
      2.1(b)(i).

     

    Section
      5.3 Material
      Contracts. 

     

    (a) As
      of the
      Measurement Date, Section
      5.3(a)
      of the
      ACE Disclosure Letter sets forth a true, correct and complete list of all
      material Contracts to which ACE Lo is a party or by which it is bound, or by
      which any of its assets or properties is subject to or bound by, which are
      necessary for the operation of the Casino Business or which involve payments
      or
      liabilities in excess of One Hundred Thousand Dollars ($100,000) (collectively,
      the “ACE
      Lo
      Material Contracts”).

     

    (b) As
      of the
      Measurement Date, ACE Lo has delivered or made available to Buyer full copies
      of
      all written ACE Lo Material Contracts, together with all amendments thereto,
      and
      accurate descriptions of all material terms of all oral ACE Lo Material
      Contracts.

     

    (c) As
      of the
      Measurement Date, (i) each Assumed ACE Lo Contract is valid and binding upon
      ACE
      Lo (and, to the ACE Selling Parties’ knowledge, on all other parties thereto),
      in accordance with its terms and is in full force and effect, (ii) ACE Lo has
      in
      all material respects performed the obligations required to be performed by
      it
      as of the date hereof under each Assumed ACE Lo Contract and, to the ACE Selling
      Parties’ knowledge, each other party to each Assumed ACE Lo Contract has in all
      material respects performed the obligations required to be performed by it
      under
      such Assumed ACE Lo Contract, (iii) there is no material breach or material
      violation of or default by ACE Lo under any of the Assumed ACE Lo Contracts,
      whether or not such breach, violation or default has been waived, and (iv)
      no
      event has occurred with respect to ACE Lo which, with notice or lapse of time
      or
      both, would constitute a material breach, material violation or material default
      of, or give rise to a right of termination, material modification, cancellation,
      foreclosure, imposition of a Lien, prepayment or acceleration under, any of
      the
      Assumed ACE Lo Contracts.

     

    
      
        
        

      

      
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    Section
      5.4 Litigation. 

     

    (a) As
      of the
      Measurement Date, there is no Legal Proceeding pending or, to the ACE Selling
      Parties’ knowledge, threatened against (i) either of the ACE Selling
      Parties or any of their respective assets, properties or businesses or
      (ii) any of their respective executive officers or directors, in their
      capacities as such, before any Governmental Entity, where the amount involved
      (excluding attorneys’ fees and costs) would reasonably be expected to exceed
      Five Hundred Thousand Dollars ($500,000).

     

    (b) As
      of the
      Measurement Date, there are no Legal Proceedings pending or, to the ACE Selling
      Parties’ knowledge, threatened with respect to this Agreement or seeking to
      prevent, hinder, materially modify or challenge the Purchase or the other
      transactions contemplated hereby. 

     

    (c) Since
      June 30, 2006 and prior to the Measurement Date, except as set forth in
Section
      5.4(c)
      of the
      ACE Disclosure Letter, ACE Lo has not entered into any agreement to settle
      or
      compromise any Legal Proceeding pending or threatened against it which involves
      (i) any material obligation other than money that would, individually or in
      the aggregate, reasonably be expected to have Material Adverse Effect on ACE
      Lo,
      and/or (ii) the payment of money by ACE Lo, where such payment or payments
      would
      exceed Five Hundred Thousand Dollars ($500,000). 

     

    (d) As
      of the
      Measurement Date, except as set forth on Section
      5.4(d)
      of the
      ACE Disclosure Letter, ACE Lo is not subject to any outstanding judgment against
      it awarding monetary damages in excess of Five Hundred Thousand Dollars
      ($500,000). 

     

    (e) The
      provisions of this Section
      5.4
      shall
      not apply (and are not intended to apply) to Taxes. 

     

    Section
      5.5 ERISA. 

     

    (a) Certain
      Terms.
      For
      purposes of this Agreement, (i) the term “Plans”
shall
      mean (A) all “Employee
      Benefit Plans”
(as
      such term is defined in section 3(3) of the Employee Retirement Income Security
      Act of 1974, as amended (“ERISA”))
      existing as of the Measurement Date, of which ACE Lo is a sponsor or
      participating employer or as to which ACE Lo makes contributions or is required
      to make contributions, or which covers any Casino Employee, (B) any employment
      agreement to which ACE Lo is a party, or which covers any Casino Employee,
      or
      (C) any other material arrangement or policy of ACE Lo, or which covers any
      Casino Employee (whether written or oral) providing for health, life, vision
      or
      dental insurance coverage (including self-insured arrangements), workers’
compensation, disability benefits, supplemental unemployment benefits, vacation
      benefits or retirement benefits, fringe benefits, or for profit sharing,
      deferred compensation, bonuses, stock options, stock appreciation or other
      forms
      of incentive compensation or post-retirement insurance, compensation or
      benefits; provided,
      however,
      that
      the term “Plan”
shall
      not include any Multiemployer Plan; (ii) the term “ERISA
      Affiliate”
shall
      mean any member of the same controlled group of businesses as ACE Lo within
      the
      meaning of Section 4001(a)(14) of ERISA; and (iii) the term “Multiemployer
      Plan”
shall
      mean any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA
      to which ACE Lo contributes or is required to contribute, or had been required
      to contribute since December 31, 1998.

     

    
      
        
        

      

      
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    (b) Section
      5.5(a)
      of the
      ACE Disclosure Letter sets forth a true and complete list of all Plans and
      each
      Multiemployer Plan to which ACE Lo is required to contribute. With respect
      to
      each Plan, ACE Lo has made available to Buyer complete and correct copies of
      the
      Plan document, any summary plan description, the latest Internal Revenue Service
      determination letter, the last two annual financial statements, and the last
      two
      annual reports on IRS Form 5500 (including all required schedules and
      accountant’s opinions). Except as contemplated by this Agreement, none of ACE Lo
      or any of its ERISA Affiliates has announced or otherwise made any commitment
      to
      amend any Plan in any material respect or to create any arrangement that would
      be a Plan if in effect currently.

     

    (c) Each
      Plan
      is and has been operated and administered in all material respects in accordance
      with its terms and all applicable laws, including, without limitation, ERISA
      and
      the Code. Each Plan intended to be tax-qualified under Section 401(a) of the
      Code has received a favorable determination letter (or is a prototype plan
      which
      is the subject of a favorable opinion letter) from the Internal Revenue Service
      as to its tax-qualified status under the Code and, to the ACE Selling Parties’
knowledge, nothing has occurred since the date of such favorable determination
      letter or opinion letter which would adversely affect the qualified status
      of
      such Plan.

     

    (d) All
      contributions and premium payments required to have been paid under or with
      respect to any Plan as of the Measurement Date have been timely paid. With
      respect to any insurance policy which provides, or has provided, funding for
      benefits under any Plan, (A) there is and will be no liability of either ACE
      Lo,
      Buyer or Buyer’s Subsidiaries in the nature of a retroactive or retrospective
      rate adjustment, loss sharing arrangement, or actual or contingent liability
      as
      of the Measurement Date, nor would there be any such liability if such insurance
      policy were terminated as of the Measurement Date, and (B) to the knowledge
      of
      the ACE Selling Parties, no insurance company issuing any such policy is in
      receivership, conservatorship, bankruptcy, liquidation, or similar proceeding,
      and no such proceedings with respect to any insurer are imminent.

     

    (e) No
      Plan
      provides health, life insurance or other welfare benefits to retirees or other
      terminated employees of ACE Lo, other than continuation coverage required by
      Section 4980B of the Code or Sections 601-608 of ERISA (“COBRA”)
      or any
      similar state law. There has been no failure by any ERISA Affiliate of ACE
      Lo to
      comply with COBRA for which ACE Lo could be liable.

     

    (f) None
      of
      the Plans is a “defined benefit plan,” within the meaning of Section 3(35) of
      ERISA or is a plan subject to Section 412 of the Code, nor has ACE Lo been
      obligated to contribute to any such “defined benefit plan” or plan subject to
      Section 412 of the Code since December 31, 1998.

     

    (g) With
      respect to any “defined benefit plan,” within the meaning of Section 3(35) of
      ERISA or any plan subject to Section 412 of the Code, maintained or contributed
      to by any ERISA Affiliate of ACE Lo: (i) no liability to the Pension Benefit
      Guaranty Corporation (“PBGC”)
      has
      been incurred (other than for premiums not yet due); (ii) no notice of intent
      to
      terminate any such plan in a distress termination (within the meaning of Section
      4041(c) of ERISA) has been filed with the PBGC or distributed to participants;
      (iii) no proceedings to terminate any such plan have been instituted by the
      PBGC; (iv) no “accumulated funding deficiency,” within the meaning of Section
      302 of ERISA or Section 412 of the Code, whether or not waived, has been
      incurred, and (v) all required contributions have been timely made. There are
      no
      Liens against the property of ACE Lo under section 412(n) of the Code or
      sections 302(f) or 4068 of ERISA. 

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    (h) With
      respect to each “multiemployer plan,” within the meaning of Section 4001(a)(3)
      of ERISA, contributed to by ACE Lo or any of its ERISA Affiliates: (i) neither
      ACE Lo nor any of its ERISA Affiliates any outstanding liability for a complete
      or partial withdrawal or delinquent contributions, (ii) to the ACE Selling
      Parties’ knowledge, no such plan is in reorganization (within the meaning of
      Section 4241 of ERISA) or insolvent (within the meaning of Section 4245 of
      ERISA), and (iii) to the knowledge of the ACE Selling Parties, none of such
      multiemployer plans nor any trust created thereunder has incurred any
“accumulated funding deficiency,” as such term is defined in section 412 of the
      Code, whether or not waived, and no condition has occurred or exists which
      by
      the passage of time could be expected to result in an accumulated funding
      deficiency as of the last day of the current plan year of any such multiemployer
      plan. As of the Measurement Date, there has been no (A) withdrawal by either
      ACE
      Lo or any of its ERISA Affiliates that is a substantial employer from a
      single-employer plan (as defined in Section 4001(a)(15) of ERISA) which is
      a
      Plan and which has two or more contributing sponsors at least two of whom are
      not under common control, as referred to in section 4063(b) of ERISA, or (B)
      cessation by either ACE Lo or any of its ERISA Affiliates of operations at
      a
      facility causing more than 20% of participants in a Plan which is a
      single-employer plan (as defined in Section 4001(a)(15) of ERISA) to be
      separated from employment, as referred to in section 4062(f) of ERISA. None
      of
      ACE Lo or any of its ERISA Affiliates, or any other organization of which any
      of
      them are a successor or parent corporation as defined in section 4069(b) of
      ERISA, have engaged in any transaction described in section 4069(a) of
      ERISA.

     

    (i) No
      event
      has occurred and no condition exists with respect to any Plan which could
      subject any Plan, ACE Lo, or Buyer to any material liability for a breach of
      fiduciary duty, a “prohibited transaction,” within the meaning of Section 406 of
      ERISA or Section 4975 of the Code, or a tax, penalty or fine under Section
      502
      or 4071 of ERISA or Subtitle D, Chapter 43 of the Code.

     

    (j) There
      is
      not pending or, to the ACE Selling Parties’ knowledge, threatened, any action,
      suit, or claim (other than routine claims for benefits in the ordinary course)
      involving a Plan which could give rise to a material liability. No Plan is
      currently under governmental investigation or audit.

     

    (k) Except
      as
      otherwise contemplated by this Agreement, neither the execution of this
      Agreement nor the consummation of the transactions contemplated by this
      Agreement, will (i) materially increase the amount of benefits otherwise payable
      under any Plan, (ii) result in any material respect the acceleration of the
      time
      of payment, exercisability, funding or vesting of any such benefits, or (iii)
      result in any material payment (whether severance pay or otherwise) becoming
      due
      to, or with respect to, any current or former employee or director of ACE Lo.
      No
      payment or series of payments that would constitute a “parachute payment”
(within the meaning of Section 280G of the Code) has been made or is required
      to
      be made under any Plan, directly or indirectly, to any employee in connection
      with the execution of this Agreement or as a result of the consummation of
      the
      transactions contemplated hereby. 

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    Section
      5.6 Other
      Labor and Employment Matters.

     

    (a) As
      of the
      Measurement Date, ACE Lo is in compliance with all applicable Laws relating
      to
      employment, employment practices, safety and health, employment discrimination,
      wages, hours and terms and conditions of employment, including employee
      compensation matters (collectively, “Employment
      Laws”),
      except where the failure to so comply would not, individually or in the
      aggregate, reasonably be expected to have a Material Adverse Effect on the
      ACE
      Selling Parties. As of the Measurement Date, since January 1, 2003, ACE Lo
      has
      not received any written notice from any Governmental Entity that ACE Lo has
      violated any Employment Law in any material respect.  

     

    (b) As
      of the
      Measurement Date, there are no unfair labor practice charges, complaints or
      petitions for elections or other Legal Proceedings pending against the ACE
      Selling Parties, or either of them, before the National Labor Relations Board,
      or any similar labor relations governmental bodies, or, of which the ACE Selling
      Parties, or either of them, has received notice, and there is no strike,
      slowdown, work stoppage or lockout or, to the knowledge of the ACE Selling
      Parties, any threat thereof, by or with respect to any employees of ACE
      Lo.  

     

    (c) As
      of the
      Measurement Date, ACE Lo is not a party to any collective bargaining agreement,
      neutrality agreement, “card check” or other current labor agreement with or
      respecting any labor union or organization.

     

    (d) As
      of the
      Measurement Date, neither of the ACE Selling Parties have knowledge of any
      activity or proceeding of any labor organization (or representative thereof)
      or
      employee group (or representative thereof) to organize any non-unionized
      employees of ACE Lo. 

     

    Section
      5.7 Intellectual
      Property. 

     

    (a) Section
      5.7(a) of
      the
      ACE Disclosure Letter contains a complete and correct list of all material
      Owned
      Intellectual Property that has been registered or is the subject of a pending
      application for registration by or on behalf of ACE Lo (the “Registrations”),
      as of
      the Measurement Date. Section
      5.7(a)
      of the
      ACE Disclosure Letter contains a complete and correct list of all material
      Licensed Intellectual Property used in or necessary to the conduct of the
      business of ACE Lo, and identification of the Contract, license, sublicense
      or
      other agreement pursuant to which each such item of material Licensed
      Intellectual Property is licensed to and used by ACE Lo as of the Measurement
      Date. Section
      5.7(a)
      of the
      ACE Disclosure Letter contains a list of all ACE Lo Material Contracts which
      govern the rights or obligations of ACE Lo with respect to any ACE Lo
      Intellectual Property used in or necessary to the conduct of the Casino Business
      (the “Intellectual
      Property Agreements”)
      as of
      the Measurement Date. Correct and complete copies of all written items
      identified in Section
      5.7(a)
      of the
      ACE Disclosure Letter have been delivered or made available by ACE Lo to
      Buyer. 

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    (b) As
      of the
      Measurement Date, ACE Lo owns the right, title and interest in the Customer
      Data
      free and clear of any Liens and has the right to use the Specified Intellectual
      Property (other than the Customer Data) free and clear of any Liens, in each
      case as currently used in the conduct of the Casino Business. As of the
      Measurement Date, the Intellectual Property Agreements are free and clear of
      all
      Liens. The Specified Intellectual Property comprise all of the material
      Intellectual Property reasonably necessary for or used in the conduct of the
      Casino Business as presently conducted, as of the Measurement Date.

     

    (c) As
      of the
      Measurement Date, the ACE Selling Parties have no knowledge that ACE Lo has
      infringed or otherwise violated any rights of any Person by its use of any
      Specified Intellectual Property. As of the Measurement Date, except as set
      forth
      in Section
      5.7(c)
      of the
      ACE Disclosure Letter, to the ACE Selling Parties’ knowledge, none of the
      Specified Intellectual Property:

     

    (i) is
      being
      infringed by any other Person; or

     

    (ii) is
      otherwise used or is available for use by any other Person, except for (A)
      any
      rights retained by a licensor pursuant to the terms of an Intellectual Property
      Agreement, and (B) any Intellectual Property that is used pursuant to an
      Intellectual Property Agreement in the conduct of the Casino Business but was
      not developed or licensed for the exclusive use of ACE Lo.

     

    (d) As
      of the
      Measurement Date, the Intellectual Property Agreements are valid, legal,
      binding, enforceable and in full force and effect in accordance with their
      terms, and to the ACE Selling Parties’ knowledge no default, violation or breach
      exists thereunder by ACE Lo or any other party thereto, and no event has
      occurred and is continuing that, with notice or the passage of time or both,
      would constitute a default, violation or breach thereunder by ACE Lo or any
      other party, except where such default, violation, breach or event would not,
      individually or in the aggregate, reasonably be expected to have a Material
      Adverse Effect on ACE Lo. 

     

    (e) As
      of the
      Measurement Date, no claim or demand of any Person has been made on ACE Lo
      nor
      is there any Legal Proceeding that is pending or, to the ACE Selling Parties’
knowledge, threatened, which (i) challenges the rights of ACE Lo in respect
      of
      any Specified Intellectual Property, (ii) asserts that ACE Lo is infringing
      or otherwise violating, or is required to pay any royalty, license fee, charge
      or other amount with regard to, any ACE Lo Intellectual Property, or (iii)
      claims that any default exists under any Intellectual Property Agreement. Since
      January 1, 2003, to the ACE Selling Parties’ knowledge, none of the Specified
      Intellectual Property has been subject to any outstanding ruling, decree,
      judgment, stipulation or other order by or with any court, arbitrator or
      administrative agency, or has been the subject of any litigation.

     

    Section
      5.8 Tax
      Matters. 

     

    (a) ACE
      Lo
      has been properly classified as an entity disregarded as an entity separate
      from
      its owner within the meaning of Treasury Regulations Section
      301.7701-3(b)(1)(ii), and applicable state Income Tax Law, at all times since
      its inception and is not a successor to any other person or entity. ACE Lo’s
      owner for such Federal and applicable state Income Tax purposes has been ACE
      Hi
      at all times since ACE Lo’s inception.

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    (b) All
      material Tax Returns required to be filed with respect to (including without
      limitation with respect to the income, business, or activities of) ACE Lo,
      either separately by any Person or as part of a consolidated, combined or
      unitary group, have been timely filed (taking into account extensions timely
      filed) with the appropriate Governmental Entity. All such Tax Returns are true,
      correct and complete in all material respects. Neither ACE Lo nor ACE Hi is
      currently the beneficiary of any extension of time to file any such Tax Return,
      except as set forth on Section
      5.8(b)
      of the
      ACE Disclosure Letter. ACE Hi has delivered to Buyer true, correct and complete
      copies of all material Tax Returns of, or with respect to the income, business,
      or activities of, ACE Lo relating to any open Tax Periods that have been filed
      by ACE Hi or ACE Lo. 

     

    (c) As
      of the
      Measurement Date, all material Taxes that have become due with respect to
      (including without limitation with respect to the income, business, or
      activities of) ACE Lo have been timely paid (whether or not shown on a Tax
      Return). ACE Lo is in compliance in all material respects with, and its records
      contain all information and documents necessary to comply in all material
      respects with, all applicable information reporting and Tax withholding
      requirements under federal, state and local Laws. All material Taxes that ACE
      Lo
      is or was required by Law to withhold or collect have been duly withheld or
      collected and, to the extent required, have been timely paid to the proper
      Governmental Entity. ACE Lo has properly requested, received and retained all
      necessary exemption certificates and other documentation supporting any claimed
      exemption or waiver of Taxes on sales or other transactions as to which ACE
      Lo
      would have been obligated to collect or withhold Taxes, except where its failure
      to do so would not have a Material Adverse Effect on ACE Lo. 

     

    (d) As
      of the
      Measurement Date, (i) there are currently no deficiencies for Taxes that have
      been claimed, proposed or assessed with respect to the income, business, or
      activities of ACE Lo, nor are there any ongoing, pending or threatened claims,
      audits, investigations, examinations, or subpoenas or requests for information
      relating to any liability in respect of Taxes with respect to the income,
      business, or activities of ACE Lo, nor are there any matters under discussion
      with any Governmental Entity in respect of Taxes with respect to the income,
      business, or activities of ACE Lo, (ii)  no power of attorney has been
      executed by or on behalf of ACE Lo with respect to any matters relating to
      Taxes
      that is currently in force, and no extension or waiver of a statute of
      limitations relating to Taxes of ACE Hi or ACE Lo is in effect and (iii) no
      claim has ever been made by any Governmental Entity in a jurisdiction where
      ACE
      Lo does not file Tax Returns that ACE Lo is or may be subject to taxation in
      that jurisdiction.

     

    (e) As
      of the
      Measurement Date, ACE Lo has not requested or received any ruling from any
      Governmental Entity, or signed any binding agreement with any Governmental
      Entity, which would increase the Tax liability of ACE Lo for any
      Post-Measurement Date Tax Period. Neither Buyer nor ACE Lo will be required
      to
      recognize for Tax purposes in a Post-Closing Tax Period any income or gain
      that
      would otherwise have been required to be recognized under the accrual method
      of
      accounting in a Pre-Closing Tax Period, as a result of ACE Hi or ACE Lo making
      a
      change in method of accounting.

     

    (f) As
      of the
      Measurement Date, there are no Liens for Taxes (other than for current Taxes
      not
      yet due and payable) upon any of the assets of ACE Lo. 

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    (g) ACE
      Lo
      has not been a member of any affiliated group of corporations which has filed
      a
      combined, consolidated or unitary Income Tax Return for federal, state, local
      or
      foreign Tax purposes. ACE Lo is not liable for the Taxes of any Person under
      Treasury Regulation Section 1.1502-6 or any similar provision of state, local
      or
      foreign Law, as a transferee or successor, by contract, or otherwise.
      Notwithstanding the foregoing, ACE Hi has been a member of an affiliated group
      of corporations which has filed a combined, consolidated or unitary Income
      Tax
      Return for federal, state, local or foreign Tax purposes. 

     

    (h) As
      of the
      Measurement Date, (A) there are no Tax sharing, indemnity, allocation or similar
      agreements in effect as between ACE Lo (or any predecessors thereof), on the
      one
      hand, and any other Person, on the other hand and (B) ACE Lo has no contractual
      obligations to indemnify any other Person with respect to Taxes.

     

    (i) ACE
      Hi is
      not a “foreign person” within the meaning of Section 1445 of the
      Code.

     

    Section
      5.9 Insurance. 

     

    (a) ACE
      Lo
      has made available to Buyer prior to the date of this Agreement full copies
      of
      all policies of property, fire and casualty, product liability, workers’
compensation, and other forms of insurance (including self-insurance
      arrangements) held or used by ACE Lo. As of the Measurement Date, all such
      policies are in full force and effect, all premiums due with respect thereto
      have been paid or accrued. 

     

    (b) As
      of the
      Measurement Date, with respect to each such insurance policy, neither ACE Lo
      nor, to the ACE Selling Parties’ knowledge, any other party to the policy is in
      material breach or material default thereunder.

     

    (c) As
      of the
      Measurement Date, there is no claim by ACE Lo under any such insurance policies
      referenced in Section
      5.9(a)
      currently pending against any insurer under such insurance policies in excess
      of
      Five Hundred Thousand Dollars ($500,000) in the aggregate as to which coverage
      has been denied or disputed, in whole or in part, by any such
      insurer.

     

    Section
      5.10 Affiliate
      Transactions.
      None of
      the directors, officers, Affiliates or present or former equityholders of any
      ACE Selling Party or any Affiliate of any of the foregoing Persons is a party
      to
      any material agreement, understanding, indebtedness or proposed transaction
      with
      ACE Lo or is directly or, to the ACE Selling Parties’ knowledge, indirectly
      interested in any material Contract with ACE Lo, including without limitation
      any agreement under which it: (i) leases any material real or personal property
      (either to or from such Person), (ii) licenses material Intellectual Property
      (either to or from such Person), (iii) is obligated to purchase any material
      asset from or sell such asset to such Person, (iv) purchases any material
      products or services from such Person, (v) pays or receives material
      commissions, rebates or other payments, (vi) lends or borrows more than Ten
      Thousand Dollars ($10,000) at any given time, (vii) provides management
      services, (viii) leases any real property, including office or facility
      leases or (ix) provides or receives any other material benefit or payment.
      ACE
      Lo has not guaranteed or assumed any obligations of its or its Affiliates’
respective managers, directors, officers, stockholders, members or other
      Affiliates or any Affiliate of any of the foregoing Persons. No manager,
      director, officer, equityholder or other Affiliate of the ACE Selling Parties
      or
      any Affiliate of any of the foregoing Persons owns or has any material rights
      in
      or to any of the Properties or the assets of ACE Lo. 

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    Section
      5.11 Personal
      Property.
      As of
      the Measurement Date, (a) Section
      5.11
      of the
      ACE Disclosure Letter sets forth a true, correct and complete list of each
      material tangible asset (other than real estate) owned by ACE Lo, including
      without limitation, all slot machines and other types of gaming equipment and
      vehicles, (b) except for the assets and properties leased or licensed under
      the
      ACE Lo Material Contracts set forth in Section
      5.3
      of the
      ACE Disclosure Letter, except for assets and properties which constitute
      Intellectual Property, ACE Lo has good and marketable title to, or the right
      to
      use, all of the material tangible and intangible assets and material properties
      used in connection with the Casino Business, free and clear of any Lien other
      than Permitted Encumbrances and (c)  ACE Lo owns or leases all material
      assets and properties which are required for the operation of the Casino
      Business as presently conducted. 

     

    Section
      5.12 Brokers.
      Neither
      of the ACE Selling Parties nor any of their respective Affiliates or
      Representatives have employed any broker, financial advisor or finder or
      incurred any liability for any brokerage fees, commissions or finder’s fees in
      connection with the transactions contemplated by this Agreement.

     

    Section
      5.13 No
      Other Conflicts.
      Except
      for such breaches, conflicts, violations, defaults, terminations, cancellations,
      accelerations, losses or failures to obtain consents or waivers that directly
      result from the Casino Shutdown or as contemplated by this Agreement, the
      execution and delivery of this Agreement by the ACE Selling Parties and the
      consummation by the ACE Selling Parties of the transactions contemplated by
      this
      Agreement will not, result in any violation or breach of, or constitute (with
      or
      without notice or lapse of time, or both) a default (or give rise to a right
      of
      termination, cancellation or acceleration of any obligation or loss of any
      benefit) under, or require a consent or waiver under, any of the terms,
      conditions or provisions of any bond, mortgage, indenture or Assumed ACE Lo
      Contract to which the ACE Selling Parties, or either of them, is a party or
      by
      which the ACE Selling Parties, or either of them, may be bound, except for
      any
      such breaches, conflicts, violations, defaults, terminations, cancellations,
      accelerations, losses or failures to obtain any such consent or waiver which
      (x)
      are not, individually or in the aggregate, reasonably likely to have a Material
      Adverse Effect on ACE Lo or (y) would not materially impair or delay the
      Closing. 

     

    Section
      5.14 Real
      Estate. 

     

    (a) Section
      5.14(a) of
      the
      ACE Disclosure Letter contains (i) a complete and accurate list, legal
      descriptions, and street addresses where available, of all real property and/or
      Improvements that are owned (or at the Closing will be owned) by ACE Lo,
      including without limitation the Casino Land (each such property, “ACE
      Owned Property”)
      and
      (ii) a complete and accurate list, legal descriptions, and street addresses
      where available, of all real property leased or occupied by ACE Lo, as tenant,
      lessee, sub-lessee, licensee, manager, or otherwise, including, without
      limitation, all real property on which any Casino Business operations, parking
      lot operations, billboard advertising, casino operations, casino support
      operations, office or administrative operations are conducted or which are
      otherwise used in the Casino Business since July 1, 2005, including without
      limitation the property held under the Madison House Lease (each such leased
      property, a “ACE
      Leased Property”).
      ACE
      Owned Property and ACE Leased Property are referred to herein collectively
      as
      the “ACE
      Real Property”
or
      the
“Casino
      Property.” 

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    (b) ACE
      Lo
      holds title to each parcel of the ACE Real Property as set forth in the Pro
      Forma Title Policies set forth on Exhibit
      I-1
      attached
      hereto (the “ACE
      Real Property Pro Forma Title Policies”).

     

    (c) As
      of the
      Measurement Date, ACE Lo has provided to Buyer a true, correct and complete
      copy
      of the Madison House Lease and all other Contracts related to the ACE Leased
      Property. The Madison House Lease is in full force and effect on the date
      hereof, and there exists no default or event of default under the Madison House
      Lease on the date hereof on the part of (i) the ACE Selling Parties or (ii)
      to
      the ACE Selling Parties’ knowledge, the landlord thereunder. 

     

    (d) As
      of the
      Measurement Date, the ACE Real Property (including without limitation the
      Warehouse Property) constitutes all the fee and leasehold interests in real
      property used in the Casino Business since July 1, 2006. There are no
      non-contiguous, offsite or other real properties or Improvements owned, leased
      or otherwise used by ACE Lo, whether located in Atlantic City, New Jersey or
      otherwise, in connection with the operation of the Casino Business since July
      1,
      2006.

     

    (e) ACE
      Lo
      has the option to acquire the Boardwalk Equity Interests pursuant to the
      Traymore Call Agreement. ACE Lo’s option rights under the Traymore Call
      Agreement have not been exercised. The Traymore Call Agreement is in full force
      and effect on the date hereof, and there exists no default or event of default
      under the Traymore Call Agreement on the date hereof by ACE Lo, AREH or any
      other party thereto. 

     

    (f) As
      of the
      Measurement Date, each of the ACE Selling Parties has, to the extent in its
      possession or control, delivered or made available for review to Buyer true,
      correct and complete copies of (i) the current title insurance policies and/or
      any updated preliminary title reports, commitments or lender’s policies of title
      insurance relating to the ACE Real Property, (ii) the most recent surveys
      related to the ACE Real Property, and (iii) all material development
      agreements, reciprocal easement agreements, land use agreements, redevelopment
      agreements, agreements relating to the zoning of the ACE Real Property and
      all
      other material agreements relating to the use or operation of the ACE Real
      Property and any business conducted thereon, and all building condition or
      engineering property reports with respect to the ACE Real Property.

     

    (g) As
      of the
      Measurement Date, to the ACE Selling Parties’ knowledge, the ACE Real Property
      and its use or occupancy is now in compliance in all material respects with
      all
      applicable building, zoning, subdivision and other land use and similar Laws
      affecting the ACE Real Property.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    (h) As
      of the
      Measurement Date, there is no action, proceeding or litigation, in each case,
      to
      which the ACE Selling Parties are a party defendant, pending, or, to the best
      of
      the ACE Selling Parties’ knowledge threatened to be brought against the ACE
      Selling Parties as a party defendant (i) to condemn all or any portion of the
      ACE Real Property, (ii) to take all or any portion of the ACE Real Property,
      or
      any interest therein, by eminent domain, (iii) to modify the zoning of, or
      other
      governmental rules or restrictions applicable to, the ACE Real Property or
      the
      use or development thereof, (iv) for any street widening or changes in
      highway or traffic lanes or patterns in the immediate vicinity of the ACE Real
      Property, (v) which otherwise would interfere with the use, ownership,
      improvement, development and/or operation of the ACE Real Property, or (vi)
      otherwise relating to the ACE Real Property or the interests of ACE Lo therein,
      in each case, which would, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect on (A) ACE Lo, (B) the ability of
      the
      ACE Selling Parties to operate the ACE Real Property in the manner presently
      conducted or
      (C)
      the ability of Buyer or ACE Lo to use, own, improve, develop and/or operate
      any
      individual parcel of ACE Real Property.

     

    (i) As
      of the
      Measurement Date, (i) the ACE Selling Parties are not party to any
      commitments to or agreements with any Governmental Entity or agency (federal,
      state or local) or any other Person affecting the use, improvement or ownership
      of the ACE Real Property which are not described in the ACE Disclosure Letter or
      herein and (ii) except as set forth in Section
      5.14(i)
      of the
      ACE Disclosure Letter, there are no outstanding judgments relating to the
      ownership, lease, use or occupancy by any Person of any ACE Real
      Property.

     

    (j) As
      of the
      Measurement Date, (i) ACE Lo has obtained all appropriate certificates of
      occupancy, easements and rights of way, including proofs of dedication, required
      to use and operate the ACE Real Property in the manner in which the ACE Real
      Property is currently used and in a manner consistent with past practice, except
      for such certificates, easements or rights of way that are ministerial in nature
      and normally issued in due course upon the application therefor without further
      action of the applicant, (ii) correct and complete copies of all such
      certificates, permits and licenses have been provided to Buyer, and
      (iii) ACE Lo has all approvals, permits and licenses (including without
      limitation all environmental Permits) necessary to own and operate the ACE
      Real
      Property as currently owned and operated and in a manner consistent with past
      practice.

     

    (k) As
      of the
      Measurement Date, except as set forth in the Pro Forma Title Policies, no
      special assessments have been levied or, to the ACE Selling Parties’ knowledge,
      are threatened or pending against all or any part of the ACE Real Property.
      

     

    Section
      5.15 Compliance
      with Laws. 

     

    (a) As
      of the
      Measurement Date, to the ACE Selling Parties’ knowledge, ACE Lo is, and its
      operations are being conducted, in compliance with all Laws and judgments
      applicable to ACE Lo (including without limitation any Gaming Laws), except
      where the failure to so comply would not, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on the ACE Selling
      Parties. 

     

    
      
        
        

      

      
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    (b) As
      of the
      Measurement Date, ACE Lo and, to the ACE Selling Parties’ knowledge, each of its
      members, managers, directors, officers and Persons performing management
      functions similar to officers, hold all material permits, registrations,
      findings of suitability, licenses, variances, exemptions, certificates of
      occupancy, orders and approvals of all Governmental Entities (including all
      authorizations under Gaming Laws), necessary to operate the Casino Property
      and
      conduct the Casino Business (“Permits”),
      each
      of which is in full force and effect in all material respects, and, to the
      ACE
      Selling Parties’ knowledge, no event has occurred which permits, or upon the
      giving of notice or passage of time or both, would permit, revocation,
      non-renewal, modification, suspension, limitation or termination of any Permit
      that currently is in effect, except where such revocation, non-renewal,
      modification, suspension, limitation or termination would not, individually
      or
      in the aggregate, reasonably be expected to have a Material Adverse Effect
      on
      the ACE Selling Parties. To the ACE Selling Parties’ knowledge, each of its
      members, managers, directors, officers, key employees and Persons performing
      management functions similar to officers, in each case whose position is related
      to the Casino Business, are in compliance in all material respects with the
      terms of the Permits. There are no Legal Proceedings by any Governmental Entity
      with respect to ACE Lo, the Casino Business or the Casino Property that are
      pending, or to the knowledge of the ACE Selling Parties, threatened, which
      may
      result in the revocation, cancellation, termination or suspension, or any
      adverse modification of any Permits. Notwithstanding anything contained in
      this
Section
      5.15,
      the
      representations contained herein do not concern Environmental Laws, which are
      the subject of the representations in Section 5.17. 

     

    (c) As
      of the
      Measurement Date, neither ACE Lo nor, to the ACE Selling Parties’ knowledge, any
      of its members, managers, directors, officers, key employees or Persons
      performing management functions similar to officers, in each case whose position
      is related to the Casino Business, has received any written claim, demand,
      notice, complaint, court order or administrative order from any Governmental
      Entity in the past three (3) years under, or relating to any violation or
      possible violation of any Gaming Laws related to actions or inactions at the
      Casino Property which did or would be reasonably likely to result in fines
      or
      penalties of One Million Dollars ($1,000,000) or more, in the aggregate. To
      the
      ACE Selling Parties’ knowledge, there are no facts, which if known to the Gaming
      Authorities will or would be reasonably likely to result in the revocation,
      limitation or suspension of any Gaming Approval.

     

    (d) The
      provisions of this Section
      5.15
      shall
      not apply (and are not intended to apply) to Taxes.

     

    Section
      5.16  Investment
      Company Act of 1940.
      Neither
      of the ACE Selling Parties is, or on the Closing Date will be, required to
      be
      registered as an investment company under the Investment Company Act of 1940,
      as
      amended. 

     

    Section
      5.17 Other
      Environmental Matters. 

     

    (a) As
      of the
      Measurement Date, to the knowledge of the ACE Selling Parties, (i) there
      does not exist on, at, in or under the Casino Property or any other real
      property presently or formerly owned, leased, operated or used by ACE Lo any
      Hazardous Substance that would reasonably be expected to give rise to a material
      liability and (ii)
      ACE Lo
      is in compliance in all material respects with all applicable Environmental
      Laws. 

     

    
      
        
        

      

      
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    (b) As
      of the
      Measurement Date, there are no pending or, to the knowledge of the ACE Selling
      Parties, threatened claims or other proposed actions or proceedings by any
      Person (including any Governmental Entity or third party) affecting the Casino
      Property or any other real property presently or formerly owned, leased,
      operated or used by ACE Lo under or pursuant to any Environmental Laws that
      would reasonably be expected to give rise to a material liability.

     

    (c) As
      of the
      Measurement Date, to the knowledge of the ACE Selling Parties, there are no,
      and
      there have not been any, aboveground or underground storage tanks on, at, in
      or
      under the Casino Property or any other real property presently or formerly
      owned, leased, operated or used by ACE Lo.

     

    (d) As
      of the
      Measurement Date, ACE Lo has not used, treated, stored, disposed of, arranged
      for or permitted the disposal of, transported, handled or released any Hazardous
      Substances, or owned or operated any property or facility (including without
      limitation the Casino Property) in a manner that has given or would reasonably
      be expected to give rise to any material liability, including any liability
      for
      response costs, corrective action costs, personal injury, property damage,
      natural resources damage or attorneys fees, pursuant to any Environmental
      Laws. 

     

    (e) As
      of the
      Measurement Date, accurate and complete copies of all environmental reports,
      tests, studies, investigations and surveys performed on or with respect to
      the
      Casino Property by, on behalf of or in the possession of ACE Lo have been
      provided to Buyer.

     

    (f) As
      of the
      Measurement Date, none of the ACE Selling Parties has received any order,
      citation, directive, inquiry, notice, summons, warning or other communication
      of
      any alleged potential or actual violation of Environmental Law or any actual
      or
      potential material Environmental Liability respecting the Casino Property or
      any
      other real property presently or formerly owned, leased, operated or used by
      ACE
      Lo.

     

    ARTICLE
      VI

    REPRESENTATIONS
      AND WARRANTIES OF AREH SELLING PARTIES

    THAT
      ARE
      BROUGHT DOWN FOR PURPOSES OF THE CLOSING CONDITIONS

     

    Each
      AREH
      Selling Party hereby represents and warrants, jointly and severally, to Buyer
      that the statements contained in this ARTICLE
      VI
      are true
      and correct as of the date hereof and as of the Closing Date as if made at
      and
      as of such times, except as set forth herein and in the disclosure letter
      delivered by the AREH Selling Parties to Buyer on the date of this Agreement
      (the “AREH
      Disclosure Letter”).
      The
      AREH Disclosure Letter is arranged in paragraphs corresponding to the numbered
      and lettered paragraphs contained in this Agreement and the disclosure in any
      paragraph shall, to the extent applicable, only qualify other paragraphs in
      this
      Agreement to the extent the matters to be excepted from such other paragraphs
      is
      reasonably apparent from the text of the disclosure in the AREH Disclosure
      Letter.

     

    Section
      6.1 Organization
      of the Selling Parties.
      Each
      of
      the AREH Selling Parties is duly organized and validly existing under the laws
      of its jurisdiction of organization and has all requisite limited liability
      company or partnership power and authority to carry on its respective business
      as now being conducted. 

     

    
      
        
        

      

      
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    Section
      6.2 Authority;
      No Conflict; Required Filings and Consents. 

     

    (a) Each
      of
      the AREH Selling Parties has all requisite power and authority to enter into
      this Agreement and to consummate the transactions that are contemplated hereby.
      The execution and delivery of this Agreement by the AREH Selling Parties and
      the
      consummation by each AREH Selling Party of the transactions to which it is
      a
      party that are contemplated by this Agreement have been duly and validly
      authorized by all requisite limited liability company or partnership action,
      and
      no other action of any such AREH Selling Party or any board or committee thereof
      or any other limited liability or partnership proceeding on the part of such
      AREH Selling Parties or their respective members or partners are necessary
      to
      authorize this Agreement, and no other action of any AREH Selling Party or
      any
      board or committee thereof or any other limited liability or partnership
      proceeding on the part of such AREH Selling Parties or their respective members
      or partners is necessary to consummate the transactions contemplated by this
      Agreement. This Agreement has been duly executed and delivered by each AREH
      Selling Party and, assuming this Agreement constitutes the valid and binding
      obligation of Buyer and the ACE Selling Parties, constitutes the valid and
      binding obligation of the AREH Selling Parties, enforceable against each of
      the
      AREH Selling Parties in accordance with its terms, subject, as to enforcement,
      to (x) applicable bankruptcy, insolvency, reorganization, moratorium or
      similar Laws now or hereinafter in effect affecting creditors’ rights generally
      and (y) general principles of equity.

     

    (b) The
      execution and delivery of this Agreement by the AREH Selling Parties and the
      consummation by the AREH Selling Parties of the transactions contemplated by
      this Agreement will not, (i) conflict with, or result in any violation or
      breach of, any provision of the respective organizational documents of the
      AREH
      Selling Parties or (ii) subject to the governmental filings and other
      matters referred to in Section
      6.2(c)
      hereof,
      contravene, conflict with, or result in a violation of any of the terms or
      requirements of, or give any Governmental Entity or any other Person the right
      to revoke, withdraw, suspend, cancel, terminate, or modify, in each case in
      any
      respect, any permit, concession, franchise, license, judgment, or Law applicable
      to the AREH Selling Parties, or any of them, except in the case of clause (ii)
      for any such contraventions, conflicts, violations, revocations, withdrawals,
      suspensions, cancellations, terminations or modifications which (x) are not,
      individually or in the aggregate, reasonably likely to have a Material Adverse
      Effect on the AREH Selling Parties or (y) would not materially impair or
      delay the Closing. 

     

    (c) No
      Consent of, with or from any Governmental Entity is required by or with respect
      to any AREH Selling Party in connection with the execution and delivery of
      this
      Agreement by the AREH Selling Parties or the consummation by the AREH Selling
      Parties, or any of them, of the transactions to which they are a party that
      are
      contemplated by this Agreement, except for (i) the filing of the pre-merger
      notification report under the HSR Act and (ii) such other Consents which, if
      not
      obtained or made, would not, individually or in the aggregate, reasonably be
      expected to have a Material Adverse Effect on the AREH Selling
      Parties. 

     

    
      
        
        

      

      
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    Section
      6.3 Capitalization. 

     

    (a) The
      AREH
      Subs Equity Interests represent all of the issued and outstanding Equity
      Interests of the AREH Subs, all of which are duly authorized, validly issued,
      fully paid and nonassessable, were not issued in violation of any preemptive
      rights created by applicable Laws, the applicable AREH Sub’s organizational
      documents or any Contract. There are no outstanding or authorized profit
      participation or any other contractual rights the value of which is derived
      from
      the financial performance of the AREH Subs or the value of any AREH Subs Equity
      Interests. There is no liability for, or obligation with respect to, any
      dividends, distributions or similar participation interests declared or
      accumulated but unpaid with respect to any AREH Subs Equity Interests. There
      are
      no obligations, contingent or otherwise, of any AREH Sub to repurchase, redeem
      or otherwise acquire any of the AREH Subs Equity Interests or to provide funds
      to or make any material investment (in the form of a loan, capital contribution
      or otherwise) in any entity other than guarantees of bank obligations or
      indebtedness for borrowed money entered into in the ordinary course of business.
      

     

    (b) There
      are
      no (i) options, warrants or other rights, agreements, arrangements or
      commitments to which any AREH Sub is a party, or by which any AREH Sub is bound,
      relating to issued or unissued AREH Subs Equity Interests, other than the
      Traymore Call Agreement, (ii) securities convertible into or exchangeable
      for AREH Subs Equity Interests, (iii) obligations of any AREH Selling Party
      to issue, sell, transfer, pledge or otherwise dispose of any Equity Interests
      in, or securities convertible into or exchangeable for Equity Interests in,
      any
      AREH Sub or (iv) bonds, debentures, notes or other indebtedness of any AREH
      Sub
      having voting rights (or convertible into securities having such rights) issued
      and outstanding. There are no voting trusts, proxies or other voting agreements
      or understandings to which any AREH Sub is a party or by which any AREH Sub
      is
      bound with respect to the issued or unissued Equity Interests of such AREH
      Sub.
      ACE Lo’s option rights under the Traymore Call Agreement have not been
      exercised. The Traymore Call Agreement is in full force and effect on the date
      hereof, and there exists no default or event of default under the Traymore
      Call
      Agreement on the date hereof by ACE Lo, AREH or any other party
      thereto.

     

    (c) AREH,
      either directly or through its wholly-owned Subsidiaries, (i) owns all of
      the issued and outstanding AREH Subs Equity Interests free and clear of all
      Liens, (ii) has good title to such AREH Subs Equity Interests and,
      (iii) at the Closing, (A) will transfer and convey to Buyer good title to
      such AREH Subs Equity Interests, and/or (B) will cause BEC to transfer and
      convey to Buyer good and marketable title to the Boardwalk Equity Interests,
      and/or (C) will cause Draper Associates LLC to transfer and convey to Buyer
      good and marketable title to the Equity Interests in MLK I and MLK III, in
      each
      case free and clear of all Liens. None of the AREH Subs Equity Interests were
      certificated and no evidences of ownership were ever issued by any of the AREH
      Sub for the AREH Subs Equity Interests. 

     

    Section
      6.4 Certain
      Real Estate Contracts.
      There
      are no Contracts with respect to the sale, exchange, encumbrance, lease or
      transfer of any or any portion of the Traymore Land, or any interest therein,
      and no Person has any option, right of first refusal or right of first offer
      to
      purchase all or any portion of the Traymore Land, or any interest therein.
      There
      are no agreements relating to the use and occupancy of the Traymore Land that
      are not terminable upon thirty (30) days’ notice.

     

    
      
        
        

      

      
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    Section
      6.5 Labor
      Matters.
      No AREH
      Sub is a party to any collective bargaining agreement, neutrality agreement,
      “card check” or other current labor agreement with or respecting any labor union
      or organization that purports to bind the current or future casino properties
      of
      any purchaser of the AREH Subs Equity Interests (including Buyer, pursuant
      to
      this Agreement) or require a redeveloped casino on the Traymore Site to be
      unionized. 

     

    ARTICLE
      VII

    REPRESENTATIONS
      AND WARRANTIES OF AREH SELLING PARTIES

    THAT
      ARE
      BROUGHT DOWN SOLELY FOR PURPOSES OF INDEMNITY

     

    Each
      AREH
      Selling Party hereby represents and warrants, jointly and severally, to Buyer
      that the statements contained in this ARTICLE
      VII
      are true
      and correct as of the date hereof and as of the Closing Date as if made at
      and
      as of such times (except to the extent expressly made as of an earlier date,
      in
      which case as of such earlier date), except as set forth herein and in the
      AREH
      Disclosure Letter. The AREH Disclosure Letter is arranged in paragraphs
      corresponding to the numbered and lettered paragraphs contained in this
      Agreement and the disclosure in any paragraph shall, to the extent applicable,
      only qualify other paragraphs in this Agreement to the extent the matters to
      be
      excepted from such other paragraphs is reasonably apparent from the text of
      the
      disclosure in the AREH Disclosure Letter. 

     

    Section
      7.1 Other
      Organizational Matters.
      Each of
      the AREH Selling Parties is duly qualified or licensed to do business and is
      in
      good standing in each jurisdiction in which the property owned, leased or
      operated by it or the nature of the business conducted by it makes such
      qualification or licensing necessary, except where the failure to be so
      qualified, licensed or in good standing would not have a Material Adverse Effect
      on the AREH Selling Parties. None of the AREH Subs has any Subsidiaries or
      holds
      or owns any interests or investments in any Person, other than interests or
      investments which constitute cash or cash equivalents. Copies of the
      organizational documents of each of the AREH Selling Parties have been made
      available to Buyer, and such copies are accurate and complete copies of such
      organizational documents as in effect on the date hereof. 

     

    Section
      7.2 Agreements,
      Contracts and Commitments.
      Section
      7.2
      of the
      AREH Disclosure Letter sets forth a true, correct and complete list and, if
      such
      Contract is not in writing, a description of any material terms thereof, of
      each
      material Contract to which any of the AREH Subs is a party or to which any
      is
      bound (collectively, the “AREH
      Subs Contracts”),
      in
      each case in effect on the date hereof. The AREH Selling Parties have delivered
      or made available to Buyer full copies of all written AREH Subs Contracts as
      in
      effect on the date hereof. Each Assumed AREH Subs Contract is valid and binding
      upon the AREH Subs (and, to the AREH Selling Parties’ knowledge, on all other
      parties thereto), in accordance with its terms and is in full force and effect.
      As of the Measurement Date, (i) there is no breach or violation of or default
      by
      any of the AREH Subs under any Assumed AREH Subs Contract, whether or not such
      breach, violation or default has been waived, (ii) to the AREH Selling Parties’
knowledge there is no breach or violation of or default by any other Person
      under any Assumed AREH Subs Contract, (iii) the AREH Subs have performed all
      obligations required to be performed by the AREH Subs under any Assumed AREH
      Subs Contract, and (iv) no event has occurred with respect to any AREH Subs
      which, with notice or lapse of time or both, would constitute a breach,
      violation or default of, or give rise to a right of termination, modification,
      cancellation, foreclosure, imposition of a Lien, prepayment or acceleration
      under, any Assumed AREH Subs Contract, except in the case of each of clauses
      (i)
      - (iv) above, as would not, individually or in the aggregate, be reasonably
      likely to have a Material Adverse Effect on the AREH Selling
      Parties.

     

    
      
        
        

      

      
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    Section
      7.3 Absence
      of Undisclosed Liabilities.
      Section
      7.3
      of the
      AREH Disclosure Letter sets forth the liabilities and obligations of the AREH
      Subs as of June 30, 2006, required to be reflected on a balance sheet in
      accordance with GAAP. As of the Measurement Date, except as set forth on
Section
      7.3
      of the
      AREH Disclosure Letter and except for liabilities incurred since June 30, 2006
      in the ordinary course of business consistent with past practice, to the AREH
      Selling Parties’ knowledge, there are no liabilities or obligations of any AREH
      Subs, whether or not accrued, contingent or otherwise.

     

    Section
      7.4 Tax
      Matters. 

     

    (a) Each
      of
      the AREH Subs has been properly classified as an entity disregarded as an entity
      separate from its owner within the meaning of Treasury Regulations Section
      301.7701-3(b)(1)(ii), and applicable state Income Tax Law, at all times since
      its inception and is not a successor to any other person or entity. Each AREH
      Subs’ owner for such Federal and applicable state Income Tax purposes has been
      AREH at all times since such AREH Subs’ respective inception.

     

    (b) All
      material Tax Returns required to be filed with respect to (including without
      limitation with respect to the income, business, or activities of) the AREH
      Subs, either separately by any Person or as part of a consolidated, combined
      or
      unitary group, have been timely filed (taking into account extensions timely
      filed) with the appropriate Governmental Entity. All such Tax Returns are true,
      correct and complete in all material respects. Neither the AREH Subs nor AREH
      is
      currently the beneficiary of any extension of time to file any such Tax Return,
      except as set forth in Section
      7.4(b)
      of the
      AREH Disclosure Letter. AREH has delivered to Buyer true, correct and complete
      copies of all material Tax Returns of, or with respect to the income, business,
      or activities of, the AREH Subs relating to any open Tax Periods that have
      been
      filed by the AREH Subs. 

     

    (c) As
      of the
      Measurement Date, all material Taxes that have become due with respect to
      (including without limitation with respect to the income, business, or
      activities of) each of the AREH Subs have been timely paid (whether or not
      shown
      on a Tax Return). Each of the AREH Subs is in compliance in all material
      respects with, and its records contain all information and documents necessary
      to comply in all material respects with, all applicable information reporting
      and Tax withholding requirements under federal, state and local Laws. All
      material Taxes that any of the AREH Subs is or was required by Law to withhold
      or collect have been duly withheld or collected and, to the extent required,
      have been timely paid to the proper Governmental Entity. Each of the AREH Subs
      has properly requested, received and retained all necessary exemption
      certificates and other documentation supporting any claimed exemption or waiver
      of Taxes on sales or other transactions as to which such AREH Subs would have
      been obligated to collect or withhold Taxes, except where its failure to do
      so
      would not have a Material Adverse Effect on such AREH Sub. 

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

     

    (d) As
      of the
      Measurement Date, there are currently no deficiencies for Taxes that have been
      claimed, proposed or assessed with respect to the income, business, or
      activities of any of the AREH Subs, nor are there any ongoing, pending or
      threatened claims, audits, investigations, examinations, or subpoenas or
      requests for information relating to any liability in respect of Taxes with
      respect to the income, business, or activities of the AREH Subs, nor are there
      any matters under discussion with any Governmental Entity in respect of Taxes
      with respect to the income, business, or activities of any AREH Subs. Except
      as
      set forth in Section
      7.4(d)
      of the
      AREH Disclosure Letter, no power of attorney has been executed by or on behalf
      of any of the AREH Subs with respect to any matters relating to Taxes that
      is
      currently in force, and no extension or waiver of a statute of limitations
      relating to Taxes of the AREH Subs is in effect. No claim has ever been made
      by
      any Governmental Entity in a jurisdiction where any AREH Sub does not file
      Tax
      Returns that such AREH Sub is or may be subject to taxation in that
      jurisdiction.

     

    (e) As
      of the
      Measurement Date, none of the AREH Subs has requested or received any ruling
      from any Governmental Entity, or signed any binding agreement with any
      Governmental Entity, that would increase the Tax liability of any AREH Sub
      for
      any Post-Measurement Date Tax Period. Neither Buyer nor the AREH Subs will
      be
      required to recognize for Tax purposes in a Post-Closing Tax Period any income
      or gain that would otherwise have been required to be recognized under the
      accrual method of accounting in a Pre-Closing Tax Period, as a result of any
      of
      the AREH Selling Parties making a change in method of accounting.

     

    (f) As
      of the
      Measurement Date, there are no Liens for Taxes (other than for current Taxes
      not
      yet due and payable) upon any of the assets of any of the AREH Subs.

     

    (g) None
      of
      the AREH Subs has been a member of any affiliated group of corporations which
      has filed a combined, consolidated or unitary Income Tax Return for federal,
      state, local or foreign Tax purposes. None of the AREH Subs is liable for the
      Taxes of any Person under Treasury Regulation Section 1.1502-6 or any similar
      provision of state, local or foreign Law, as a transferee or successor, by
      contract, or otherwise.

     

    (h) As
      of the
      Measurement Date, there are no Tax sharing, indemnity, allocation or similar
      agreements in effect as between any of the AREH Subs (or any predecessors
      thereof), on the one hand, and any other Person, on the other hand. None of
      the
      AREH Subs has any contractual obligations to indemnify any other Person with
      respect to Taxes.

     

    (i) AREH
      is
      not a “foreign person” within the meaning of Section 1445 of the
      Code.

     

    Section
      7.5 Insurance.
      As of
      the Measurement Date, the insurance policies maintained by the AREH Selling
      Parties or their respective Affiliates in respect of the Adjacent Properties
      are
      in full force and effect, and all premiums due with respect thereto have been
      paid or accrued. As
      of the
      Measurement Date, with respect to each such insurance policy, neither the AREH
      Subs nor any other party to the policy is in breach or default
      thereunder. As
      of the
      Measurement Date, there is no claim by any of the AREH Selling Parties or their
      respective Affiliates under any such insurance policies currently pending
      against any insurer under such insurance policies as to which coverage has
      been
      denied or disputed, in whole or in part, by any such insurer.
      As of
      the Measurement Date, to the knowledge of the AREH Selling Parties, the AREH
      Selling Parties have not received any written notice from any insurance carrier
      which has issued a policy of insurance with respect to the Adjacent Properties
      of any material defects or deficiencies or requesting the performance of any
      material repairs, alterations or other work with respect to the Adjacent
      Properties. 

     

    
      
        
        

      

      
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    Section
      7.6 Litigation. 

     

    (a) As
      of the
      Measurement Date, there is no Legal Proceeding pending, or as to which either
      of
      the AREH Selling Parties has received any written notice of assertion or, to
      the
      knowledge of the AREH Selling Parties, threatened against (i) either of the
      AREH
      Selling Parties or any of their respective assets, properties or businesses
      or
      (ii) any of their respective executive officers or directors, in their
      capacities as such, before any Governmental Entity, where the amount involved
      (excluding attorneys’ fees and costs) would reasonably be expected to exceed
      Five Hundred Thousand Dollars ($500,000).

     

    (b) As
      of the
      Measurement Date, there are no Legal Proceedings pending or, to the AREH Selling
      Parties’ knowledge, threatened with respect to this Agreement or seeking to
      prevent, hinder, materially modify or challenge the Purchase or the other
      transactions contemplated hereby. 

     

    (c) As
      of the
      Measurement Date, no AREH Sub has entered into any agreement to settle or
      compromise any Legal Proceeding pending or threatened against it which involves
      (i) any material obligation other than money that would, individually or in
      the aggregate, reasonably be expected to have a Material Adverse Effect on
      such
      AREH Sub, and/or (ii) the payment of money, which such payment or payments
      would
      exceed Five Hundred Thousand Dollars ($500,000). 

     

    (d) As
      of the
      Measurement Date, no AREH Sub is subject to any outstanding judgment against
      it
      awarding monetary damages in excess of Five Hundred Thousand Dollars
      ($500,000).

     

    (e) The
      provisions of this Section
      7.6
      shall
      not apply (and are not intended to apply) to Taxes. 

     

    Section
      7.7 Brokers.
      None of
      the AREH Selling Parties nor any of their respective Affiliates or
      Representatives have employed any broker, financial advisor or finder or
      incurred any liability for any brokerage fees, commissions or finder’s fees in
      connection with the transactions contemplated by this Agreement. 

     

    Section
      7.8 Operations
      of AREH Subs.
      Each of
      the AREH Subs was formed solely to purchase the applicable Adjacent Properties,
      and none of the AREH Subs has engaged in any business or other activities or
      incurred any liabilities, other than in connection with the purchase and
      ownership of the Adjacent Properties and the transactions contemplated
      hereby.

     

    
      
        
        

      

      
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    Section
      7.9 No
      Other Conflicts.
      The
      execution and delivery of this Agreement by the AREH Selling Parties and the
      consummation by the AREH Selling Parties of the transactions contemplated by
      this Agreement will not, result in any violation or breach of, or constitute
      (with or without notice or lapse of time, or both) a default (or give rise
      to a
      right of termination, cancellation or acceleration of any obligation or loss
      of
      any benefit) under, or require a consent or waiver under, any of the terms,
      conditions or provisions of any bond, mortgage, indenture or Assumed AREH Subs
      Contract to which the AREH Selling Parties, or any of them, is a party or by
      which the AREH Selling Parties, or any of them, may be bound, except for any
      such breaches, conflicts, violations, defaults, terminations, cancellations,
      accelerations, losses or failures to obtain any such consent or waiver which
      (a)
      are not, individually or in the aggregate, reasonably likely to have a Material
      Adverse Effect on the AREH Selling Parties or (b) would not materially
      impair or delay the Closing. 

     

    Section
      7.10  Adjacent
      Real Property. 

     

    (a) Section
      7.10(a) of
      the
      AREH Disclosure Letter contains (i) a complete and accurate list, legal
      descriptions and street addresses where available, of all real property and/or
      Improvements owned (or, with respect to the Restaurant Land, that may be owned
      at the Closing) by the AREH Subs, including without limitation the Adjacent
      Land
      (the “Adjacent
      Owned Property”)
      and
      (ii) a complete and accurate list, legal descriptions, and street addresses
      where available, of all real property leased or occupied pursuant to written
      occupancy agreements by the AREH Subs, as tenant, lessee, sub-lessee, licensee,
      manager, or otherwise, including, without limitation, all real property on
      which
      any parking lot operations, office or administrative operations are conducted
      or
      which are otherwise material to the operation of the AREH Subs’ businesses (each
      such leased property, an “Adjacent
      Leased Property”).
      The
      Adjacent Owned Property and the Adjacent Leased Property are referred to herein
      collectively as the “Adjacent
      Real Property”
or
      the
“Adjacent
      Properties.” 

     

    (b) The
      AREH
      Subs (or, with respect to the Restaurant Site, if the Restaurant Purchase is
      consummated prior to the Closing, will) hold title to each parcel of the
      Adjacent Real Property as set forth in the pro forma title policies set forth
      on
Exhibit
      I-2
      attached
      hereto (the “Adjacent
      Real Property Pro Forma Title Policies”
and,
      together with the ACE Real Property Pro Forma Title Policies, the “Pro
      Forma Title Policies”). 

     

    (c) As
      of the
      Measurement Date, the AREH Selling Parties have provided to Buyer true, correct
      and complete copies of all agreements by any AREH Sub as lessor or sublessor
      and
      any third party in connection with the Adjacent Real Property, or any portion
      thereof (the “Assumed
      Leases”),
      each
      of which is in full force and effect on the date hereof, and there exists no
      default or event of default under such Assumed Lease on the date hereof on
      the
      part of either landlord or tenant thereunder. Except for the Assumed Leases,
      there are no other agreements, written or oral, between the AREH Subs and any
      other Person giving any Person or entity any rights to use, occupy or operate
      on
      or any interest in the Adjacent Real Property or any portion thereof or
      otherwise affecting or relating to the Adjacent Real Property. None of the
      AREH
      Subs is in material default under the documents governing the Assumed Leases
      and, to the AREH Selling Parties’ knowledge, no defaults (whether or not
      subsequently cured) by any AREH Subs or any other party have been alleged in
      writing thereunder, and to the AREH Selling Parties’ knowledge, no event has
      occurred with the giving of notice, or the passage of time, or both, which
      would
      constitute a material default or violation or breach in any respect under the
      documents governing the Assumed Leases. 

     

    
      
        
        

      

      
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    (d) As
      of the
      Measurement Date, the AREH Selling Parties have delivered or made available
      for
      review to Buyer true, correct and complete copies of (i) the current title
      insurance policies and/or any updated preliminary title reports, commitments
      or
      lender’s policies of title insurance relating to the Adjacent Real Property,
      (ii) the most recent surveys related to the Adjacent Real Property, and
      (iii) all material development agreements, reciprocal easement agreements,
      land
      use agreements, redevelopment agreements, agreements relating to the zoning
      of
      the Adjacent Real Property and all other material agreements relating to the
      use
      or operation of the Adjacent Real Property and any business conducted thereon,
      and all building condition or engineering property reports with respect to
      the
      Adjacent Land. 

     

    (e) As
      of the
      Measurement Date, there are no documents pursuant to which the Adjacent Leased
      Property is occupied by an AREH Sub, as tenant, subtenant, licensee or
      otherwise. 

     

    (f) As
      of the
      Measurement Date, to the AREH Selling Parties’ knowledge, the Adjacent Real
      Property and its use or occupancy is now in compliance in all material respects
      with all applicable building, zoning, subdivision and other land use and similar
      Laws affecting the Adjacent Real Property.

     

    (g) As
      of the
      Measurement Date, there is no action, proceeding or litigation, in each case,
      to
      which the AREH Selling Parties are a party defendant, pending, or, to the AREH
      Selling Parties’ knowledge, threatened to be brought against the AREH Selling
      Parties as a party defendant (i) to condemn all or any portion of the Adjacent
      Real Property, (ii) to take all or any portion of the Adjacent Real Property,
      or
      any interest therein, by eminent domain, (iii) to modify the zoning of, or
      other
      governmental rules or restrictions applicable to, the Adjacent Real Property
      or
      the use or development thereof, (iv) for any street widening or changes in
      highway or traffic lanes or patterns in the immediate vicinity of the Adjacent
      Real Property, (v) which otherwise would interfere with the use, ownership,
      improvement, development and/or operation of the Adjacent Real Property, or
      (vi)
      otherwise relating to the Adjacent Real Property or the interests of the AREH
      Selling Parties therein, which would, individually or in the aggregate,
      reasonably be expected to have a Material Adverse Effect on the AREH Selling
      Parties or the ability of the AREH Subs or Buyer to use, own, improve, develop
      and/or operate any individual parcel of Adjacent Real Property.

     

    (h) As
      of the
      Measurement Date, the AREH Selling Parties are not party to any commitments
      to
      or agreements with any Governmental Entity or agency (federal, state or local)
      affecting the use, improvement or ownership of the Adjacent Real Property which
      are not described in the AREH Disclosure Letter or herein.

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        

      

    

     

    (i) As
      of the
      Measurement Date, there are no outstanding judgments relating to the ownership,
      lease, use or occupancy by any Person of any Adjacent Real
      Property.

     

    (j) As
      of the
      Measurement Date, the AREH Subs have obtained all appropriate certificates
      of
      occupancy, easements and rights of way, including proofs of dedication, required
      to use and operate the Adjacent Real Property in the manner in which the
      Adjacent Real Property is currently used and in a manner consistent with past
      practice, except for such certificates, easements or rights of way that are
      ministerial in nature and normally issued in due course upon the application
      therefor without further action of the applicant. Correct and complete copies
      of
      all such certificates, permits and licenses have been provided to Buyer. As
      of
      the Measurement Date, the AREH Subs have all approvals, permits and licenses
      (including without limitation all environmental Permits) necessary to own and
      operate the Adjacent Real Property as currently owned and operated and in a
      manner consistent with past practice.

     

    (k) Except
      as
      set forth in the Pro Forma Title Policies, as of the Measurement Date, no
      special assessments have been levied or, to the knowledge of the AREH Selling
      Parties, are threatened or pending against all or any part of the Adjacent
      Real
      Property. 

     

    (l) There
      are
      no Contracts with respect to the sale, exchange, encumbrance, lease or transfer
      of any or any portion of the Adjacent Real Property, or any interest therein,
      and no Person has any option, right of first refusal or right of first offer
      to
      purchase all or any portion of the Adjacent Real Property, or any interest
      therein. There are no agreements relating to the use and occupancy of the
      Adjacent Real Property that are not terminable upon thirty (30) days’ notice.

     

    Section
      7.11 Compliance
      With Laws.
      As of
      the Measurement Date, to the AREH Selling Parties’ knowledge, the use and
      occupancy by the AREH Subs of the Adjacent Real Property is in compliance with
      all applicable Laws of any Governmental Entity. As of the Measurement Date,
      none
      of the AREH Selling Parties have received any notice from any Governmental
      Entity having jurisdiction over the Adjacent Real Property advising that the
      Adjacent Real Property or any use or occupancy thereof is in material violation
      of any applicable Law, ordinance or regulation, including without limitation
      any
      zoning or other municipal ordinance. Notwithstanding anything to the contrary
      in
      this Section
      7.11,
      the
      representations herein do not concern Environmental Laws, which are the subject
      of the representations in Section
      7.12.

     

    Section
      7.12 Other
      Environmental Matters. 

     

    (a) As
      of the
      Measurement Date, to the knowledge of the AREH Selling Parties, there does
      not
      exist
      on, at, in or under the Adjacent Real Property or any other real property
      presently or formerly owned, leased, operated or used by any of the AREH Subs
      any Hazardous Substance that would reasonably be expected to give rise to a
      material liability. As of the Measurement Date, to the knowledge of the AREH
      Selling Parties, each of the AREH Subs is in compliance in all material respects
      with all applicable Environmental Laws.

     

    (b) As
      of the
      Measurement Date, there are no pending or, to the knowledge of the AREH Selling
      Parties, threatened claims or other proposed actions or proceedings by any
      Person (including any Governmental Entity or third party) affecting the Adjacent
      Real Property or any other real property presently or formerly owned, leased,
      operated or used by the AREH Subs under or pursuant to any Environmental Laws
      that would reasonably be expected to give rise to a material
      liability.

     

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

     

    (c) As
      of the
      Measurement Date, and to the knowledge of the AREH Selling Parties, there are
      no, and there have not been any, aboveground or underground storage tanks on,
      at, in or under the Adjacent Real Property or any other real property presently
      or formerly owned, leased, operated or used by the AREH Subs.

     

    (d) As
      of the
      Measurement Date, none of the AREH Subs has used, treated, stored or disposed
      of, arranged for or permitted the disposal of, transported, handled or released
      any Hazardous Substances, or owned or operated any facility (including without
      limitation the Traymore Property) in a manner that has given or would reasonably
      be expected to give rise to any material liability, including any liability
      for
      response costs, corrective action costs, personal injury, property damage,
      natural resources damage or attorneys fees, pursuant to any Environmental
      Laws. 

     

    (e) As
      of the
      Measurement Date, accurate and complete copies of all environmental reports,
      tests, studies, investigations and surveys performed on or with respect to
      the
      Adjacent Real Property by, on behalf of or in the possession of any of the
      AREH
      Subs have been provided to Buyer.

     

    (f) As
      of the
      Measurement Date, none of the AREH Selling Parties has received any written
      order, citation, directive, inquiry, notice, summons, warning or other
      communication of any alleged potential or actual violation of Environmental
      Law
      or any actual or potential material Environmental Liability respecting the
      Adjacent Real Property or any other real property presently or formerly owned,
      leased, operated or used by any of the AREH Subs.

     

    Section
      7.13 Labor
      Matters.
      No AREH
      Sub is a party to any collective bargaining agreement, neutrality agreement,
      “card check” or other current labor agreement with or respecting any labor union
      or organization. 

     

    ARTICLE
      VIII

    REPRESENTATIONS
      AND WARRANTIES OF BUYER 

     

    Buyer
      hereby represents and warrants to the Selling Parties that the statements
      contained in this ARTICLE
      VIII
      are true
      and correct as of the date hereof except as set forth herein and in the
      disclosure letter delivered by Buyer to the AREH Selling Parties on the date
      of
      this Agreement (the “Buyer
      Disclosure Letter”).
      The
      Buyer Disclosure Letter is arranged in paragraphs corresponding to the numbered
      and lettered paragraphs contained in this Agreement and the disclosure in any
      paragraph shall, to the extent applicable, only qualify other paragraphs in
      this
      Agreement to the extent the matters to be excepted from such other paragraphs
      is
      reasonably apparent from the text of the disclosure in the Buyer Disclosure
      Letter.

     

    Section
      8.1 Organization.
      Buyer
      is duly organized and validly existing under the laws of its jurisdiction of
      organization and has full power and authority to conduct its business as and
      to
      the extent now conducted and to own, use and lease its assets and
      properties. 

     

    
      
        
        

      

      
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    Section
      8.2 Authority;
      No Conflict; Required Filings and Consents.

     

    (a) Buyer
      has
      full power and authority to enter into this Agreement and to consummate the
      transactions contemplated hereby. The execution and delivery of this Agreement
      and the consummation by Buyer of the transactions to which it is a party that
      are contemplated hereby have been duly authorized by all necessary action on
      the
      part of Buyer and no other proceedings or actions on the part of Buyer or its
      stockholders are necessary to authorize such execution, delivery and
      performance. This Agreement has been duly executed and delivered by Buyer and,
      assuming this Agreement constitutes the valid and binding obligation of the
      respective Selling Parties thereto, constitutes the valid and binding obligation
      of Buyer, enforceable against Buyer in accordance with its terms, subject,
      as to
      enforcement, to (i) applicable bankruptcy, insolvency, reorganization,
      moratorium or similar laws now or hereinafter in effect affecting creditors’
rights generally and (ii) general principles of equity.

     

    (b) The
      execution and delivery of this Agreement by Buyer does not, and the consummation
      by Buyer of the transactions to which it is a party that are contemplated by
      this Agreement will not, (i) conflict with, or result in any violation or breach
      of, any provision of the organizational documents of Buyer, (ii) result in
      any
      violation or breach of, or constitute (with or without notice or lapse of time,
      or both) a default (or give rise to a right of termination, cancellation or
      acceleration of any obligation or loss of any benefit) under, or require a
      consent or waiver under, any of the terms, conditions or provisions of any
      note,
      bond, mortgage, indenture, lease, or other Contract or obligation to which
      Buyer
      is a party or by which it or its properties or assets may be bound, or
      (iii) subject to the governmental filings and other matters referred to in
Section
      8.2(c)
      hereof,
      contravene, conflict with or result in a violation of any of the terms or
      requirements of, or give any Governmental Entity or any other Person the right
      to revoke, withdraw, suspend, cancel, terminate, or modify any permit,
      concession, franchise, license, judgment, or Law applicable to Buyer or any
      of
      its properties or assets, except in the case of clause (ii) and (iii) for any
      such breaches, conflicts, violations, defaults, terminations, cancellations,
      accelerations, losses or failures to obtain any such consent or waiver which
      are
      not, individually or in the aggregate, reasonably likely to have a Buyer
      Material Adverse Effect.

     

    (c) No
      consent, approval, order or authorization of, or registration, declaration
      or
      filing with, any Governmental Entity is required by or with respect to Buyer
      in
      connection with the execution and delivery of this Agreement by Buyer or the
      consummation by Buyer of the Purchase and the other transactions contemplated
      hereby, except for (i) the filing of the pre-merger notification report under
      the HSR Act, (ii) any approvals or filing of notices required under the Gaming
      Laws, if any, and (iii) such other material filings, consents, approvals,
      orders, authorizations, permits, registrations and declarations as may be
      required under the Laws of any jurisdiction in which the Companies conduct
      any
      business or own any assets. 

     

    Section
      8.3 Financing.
      Subject
      to (a) the accuracy of Sellers’ representations and warranties in this
      Agreement, (b) the accuracy and completeness of the materials provided by the
      Selling Parties to Buyer prior to the date of this Agreement and (c) the
      Selling Parties’ compliance with their respective covenants and agreements in
      this Agreement, Buyer has available to it as of the date of this Agreement
      and
      will have available to it on the Closing Date funds or access to funds
      sufficient to enable Buyer to pay the Purchase Price and all fees and expenses
      necessary or related to the consummation of the transactions contemplated by
      this Agreement. 

     

    
      
        
        

      

      
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    Section
      8.4 Legal
      Proceedings.
      As of
      the date hereof, except as set forth in Section
      8.4
      of the
      Buyer Disclosure Letter, there are no Legal Proceedings pending or, to Buyer’s
      knowledge, threatened with respect to this Agreement or seeking to prevent,
      hinder, materially modify or challenge the Purchase or the other transactions
      contemplated hereby.

     

    Section
      8.5 Brokers.
      Neither
      Buyer nor any of its Representatives have employed any broker, financial advisor
      or finder or incurred any liability for any brokerage fees, commissions or
      finder’s fees in connection with the transactions contemplated by this
      Agreement.

     

    Section
      8.6 Ownership
      of New Jersey Casino.
      Buyer
      does not own a casino facility or other gaming facility located in the state
      of
      New Jersey. 

     

    ARTICLE
      IX

    COVENANTS

     

    Section
      9.1 Casino
      Shutdown; WARN Act Notice.

     

    (a) Within
      three (3) business days following the execution of this Agreement, ACE Hi shall
      cause ACE Lo to give the notice required under the WARN Act (the “WARN
      Act Notice”)
      to
      employees of ACE Lo (the “Casino
      Employees”)
      (such
      date, the “WARN
      Act Notice Date”).
      To
      the extent that it may do so in compliance with applicable law and subject
      to
      any contrary order or directive from the Gaming Authorities, ACE Hi shall cause
      ACE Lo to continue to operate the Casino Business through the required notice
      period under the WARN Act in accordance with Section
      9.1(b)
      and
Section
      9.2(a)
      hereof.
      Whether
      or not ACE Lo is permitted to continue to operate a gaming business, it shall
      continue to employ and compensate its employees that have not resigned or been
      terminated in accordance with past practice during the required notice period
      under the WARN Act.

     

    (b) Prior
      to
      the Closing, ACE Hi shall cause ACE Lo to surrender to the New Jersey Casino
      Control Commission its certificate of operation for the Casino Business in
      the
      State of New Jersey (the “Casino
      Shutdown”).
      In
      addition, ACE Hi shall use commercially reasonable efforts to cause ACE Lo
      to
      comply with a Casino Shutdown plan set forth in Section
      9.1(b)
      of the
      ACE Disclosure Letter (the “Casino
      Shutdown Plan”).  

     

    (c) The
      parties hereby acknowledge and agree that prior the Casino Shutdown, the
      operations of ACE Lo may deteriorate and such deterioration, by itself, will
      not
      constitute a breach of any representation, warranty or covenant or condition
      to
      Buyer’s obligation to close or constitute grounds for a termination of this
      Agreement or the Purchase. Subject to Section
      9.2(a)(i)(B)
      through (N) and (x)(ii) hereof, Buyer hereby acknowledges and agrees that:
      (i)
      ACE Lo and the Casino Business may not be able to operate in a manner that
      is in
      the ordinary course of business or that is consistent with past practice, and
      its failure to operate in the ordinary course of business or consistent with
      past practice shall not, by itself, constitute a breach of any representation,
      warranty or covenant or condition to Buyer’s obligation to close or constitute
      grounds for a termination of this Agreement or the Purchase, and (ii) if
      employees in certain key positions resign, ACE Lo may be required to cease
      all
      gaming operations.

     

    
      
        
        

      

      
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    (d) Buyer
      shall be responsible for funding any cash shortfalls, including for any Taxes
      imposed on ACE Lo, of ACE Lo due to losses of the Casino Business after the
      Measurement Date and prior to Closing; provided that,
      at the
      time of any such funding by Buyer, ACE Lo shall be in material compliance with
      all of the covenants contained in Section
      9.2(a)
      hereof.
      Not less than five (5) business days prior to the date on which ACE Hi
      reasonably projects that ACE Lo will suffer a cash shortfall, ACE Hi shall
      deliver written notice to Buyer of such projected cash shortfall and the amount
      of such cash shortfall, accompanied by reasonably sufficient back-up or
      supporting data used in the calculation of such projected cash shortfall as
      is
      sufficient to reflect how ACE Hi made such determination. Within two (2)
      business days following Buyer’s receipt of such written notice, Buyer and ACE Hi
      shall deliver joint written instructions to the Escrow Agent to deduct from
      the
      Deposit, release from escrow and pay to ACE Lo cash in an amount sufficient
      to
      cover such projected shortfall pursuant to the Deposit Escrow Agreement and
      this
Section
      9.1(d)
      and (ii)
      ACE Lo shall issue a promissory note in favor of Buyer substantially in the
      form
      attached hereto as Exhibit
      J
      (an
“ACE
      Lo
      Promissory Note”)
      in an
      amount equal to the withdrawal from the Deposit described in preceding subclause
      (i). Each ACE Lo Promissory Note shall provide, among other things, that the
      cash payments by Buyer contemplated by this Section
      9.1(d)
      shall be
      repaid by ACE Lo to Buyer only in the event this Agreement is terminated (A)
      by
      either Buyer or Sellers, pursuant to Section
      11.1(b)
      (unless
      Buyer’s failure to fulfill any obligation under this Agreement has been the
      primary cause of, or materially contributed to, the failure of the Closing
      to
      occur on or before the Outside Date) or Section
      11.1(c)
      (unless
      Buyer shall not have used its commercially reasonable efforts to prevent the
      entry of and to remove the applicable Restraint or if Buyer’s failure to fulfill
      any obligation under this Agreement has been the primary cause of, or materially
      contributed to, the action resulting in such Restraint), (B) by Buyer, pursuant
      to Section
      11.1(d)
      or
Section
      11.1(h),
      or
      (C) by ACE Hi, with respect to the ACE Lo Purchase, pursuant to
Section
      11.1(g).
      The ACE
      Lo Promissory Note shall not be payable under any other circumstances. In the
      event that the Deposit shall decrease to an amount less than Forty Million
      Dollars ($40,000,000) as a result of the payments described in the preceding
      sentence, Buyer shall, within five (5) business days after such shortfall,
      promptly deposit into the Deposit Escrow cash in an amount equal to such
      shortfall in order to cause the Deposit to be equal to Fifty Million Dollars
      ($50,000,000). For purposes of clarity, Buyer and ACE Hi hereby acknowledge
      and
      agree that any adjustment in size of the Deposit pursuant to this Section
      9.1(d)
      will
      result in a larger or smaller ACE Closing Payment.
      In no
      event will any ACE Lo Promissory Note be treated as a liability to reduce any
      payment to the Selling Parties under Article II hereof.

     

    (e) Prior
      to the
      Closing, Buyer and ACE Hi shall use commercially reasonable efforts to resolve
      with the New Jersey Casino Control Commission the appropriate amounts, if any,
      of Progressive Gaming Liabilities, Outstanding Chip & Ticket-In/Ticket-Out
      Liabilities and unclaimed jackpot liabilities for which ACE Lo shall remain
      liable after the Casino Shutdown, including without limitation amounts to be
      paid into escrow, withheld and/or carried over to another meter when the casino
      reopens. 
      Buyer
      shall and shall cause ACE Lo following the Closing to promptly pay to ACE Hi
      (i)
      any Escrow Gaming Amounts permitted to be released from any such escrow by
      the
      New Jersey Casino Control Commission and (ii) one-half (1⁄2) of any amounts (less
      a present value discount) permitted to be carried over to another meter when
      the
      casino reopens by the New Jersey Casino Control Commission or any other
      Governmental Entity, in each case in cash by wire transfer of immediately
      available funds to an account designated by ACE Hi to Buyer.

     

    
      
        
        

      

      
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    Section
      9.2 Conduct
      of Business.

     

    (a) Notwithstanding
      the acknowledgements and agreements contained in Section
      9.1(c)
      hereof,
      the ACE Selling Parties shall be obligated to observe the covenants contained
      in
      this Section
      9.2(a)(i)(B)
      through (N) and (a)(ii). Except as provided in this Agreement (but specifically
      excluding Section
      9.1(c))
      or as
      set forth in Section
      9.2
      of the
      ACE Disclosure Letter, during the period commencing on the date of this
      Agreement until the earliest of (x) the termination of this Agreement with
      respect to the ACE Lo Purchase or (y) the Closing, subject to the
      limitations set forth below:

     

    (i) the
      ACE
      Selling Parties shall (except to the extent that Buyer shall otherwise consent
      in writing, which consent may not be unreasonably withheld): 

     

    
      	 	
              (A)

            	
              subject
                to the limitations set forth in Section 9.1(c) above and including
                the
                effects of the Casino Shutdown and the other requirements of this
                Agreement, conduct ACE Lo’s business in the ordinary course in accordance
                with past practice;

            

    

     

    
      	 	
              (B)

            	
              (I)
                take all appropriate actions in accordance with past practice to
                maintain
                the confidentiality of ACE Lo’s business information and trade secrets
                (including the Customer Data), including without limitation (x) in
                accordance with past practice, limiting access to such confidential
                business information and trade secrets (including the Customer Data),
                and
                (y) other reasonable procedures and (II) obtain signed
                confidentiality agreements in the form of Exhibit
                9.2
                attached hereto provided by Buyer from each Casino Employee listed
                on
                Schedule 9.2(a)(i)(B)
                attached hereto as a condition to their receipt of severance payments
                upon
                the termination of their employment at the Casino Property, unless
                such
                severance payments are required to be paid by ACE Lo pursuant to
                the
                agreements or order listed on Schedule
                2.1(b)(v)
                attached hereto;

            

    

     

    
      	 	
              (C)

            	
              use
                commercially reasonable efforts to protect from theft ACE Lo’s existing
                tangible assets (other than real property) provided that no claim
                shall be
                asserted by Buyer for any loss of such assets since the date hereof
                that,
                in the aggregate, do not exceed One Hundred Thousand Dollars
                ($100,000);

            

    

     

    
      	 	
              (D)

            	
              use
                commercially reasonable efforts to terminate the services of ACE
                Lo’s
                officers and employees, suppliers and vendors (other than (I) ACE
                Lo’s capital leases for gaming equipment, including shufflemasters and
                slot machines, (II) the License Agreement, (III) the Madison
                House Lease and (IV) the Brighton Park Agreements) in a manner consistent
                with maintaining required operations through the Closing Date during
                a
                Casino Shutdown; 

            

    

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (E)

            	
              comply
                with ACE Lo’s obligations under the Madison House Lease, except to the
                extent such obligations are inconsistent with the Casino Shutdown;
                

            

    

     

    
      	 	
              (F)

            	
              maintain
                ACE Lo’s qualifications and licenses to do business and maintain ACE Lo
                in
                good standing in each jurisdiction in which the property owned, leased
                or
                operated by it or the nature of the business conducted by it makes
                such
                qualification or licensing necessary, except as contemplated in this
                Agreement or where the failure to be so qualified, licensed or in
                good
                standing would not have a Material Adverse Effect on the ACE Selling
                Parties; 

            

    

     

    
      	 	
              (G)

            	
              (I) with
                respect to ACE Hi, continue to pay Income Taxes if and when due with
                respect to the income, business, or activities of ACE Lo, and
                (II) with respect to ACE Lo, shall continue to pay Non-Income Taxes
                when due with respect to the income, business, or activities of ACE
                Lo;
                

            

    

     

    
      	 	
              (H)

            	
              (I)
                to the extent permitted by applicable Law, keep Buyer fully informed
                and
                consult with Buyer regarding any “effects” negotiations with any labor
                union or union representatives in connection with the Casino Shutdown,
                and
                (II) refrain from entering into any agreement or commitment in
                connection with any such negotiations without Buyer’s prior written
                consent;

            

    

     

    
      	 	
              (I)

            	
              (I)
                maintain the existing insurance coverage relating to the assets of
                ACE Lo
                (however, in the event any such coverage shall be terminated or lapse,
                ACE
                Lo shall provide written notice to Buyer a reasonable amount of time
                prior
                to such termination or lapse and procure such replacement insurance
                as
                shall be requested by Buyer, (II) at Buyer’s cost, acquire such other
                commercially available insurance coverage that Buyer directs in order
                to
                cover the assets of ACE Lo following the Measurement Date and
                (III) file claims for any available insurance coverage and diligently
                pursue such claims; 

            

    

     

    
      	 	
              (J)

            	
              terminate
                all Contracts and other arrangements, whether written or oral, to
                which
                ACE Lo is a party or pursuant to which any of ACE Lo’s assets are bound
                under which any Affiliates of the Selling Parties (other than ACE
                Lo)
                provide or receive any direct benefit or payment, as of the Measurement
                Date, except for the Contracts listed on Schedule
                9.2(a)(i)(J);
                

            

    

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (K)

            	
              following
                the Measurement Date, at Buyer’s cost, take any specific actions and
                implement any specific changes or upgrades to ACE Lo’s procedures with
                respect to compliance with applicable building and safety codes,
                Environmental Laws and other applicable Laws and with respect to
                avoiding
                environmental mishaps, in each case as reasonably requested by Buyer;
                

            

    

     

    
      	 	
              (L)

            	
              clear
                all Liens on any of the assets of ACE Lo (other than Liens arising
                from or
                in connection with the GB Claims), provided that
                this covenant shall be deemed satisfied with respect to any Lien
                that has
                been bonded, discharged or which constitutes a Permitted
                Encumbrance;

            

    

     

    
      	 	
              (M)

            	
              promptly
                notify Buyer upon receipt of any written correspondence received
                by any
                ACE Selling Party regarding potential condemnation proceedings or
                restrictions on the use of the Casino Property and take all steps
                reasonably requested by Buyer to resist any such condemnation proceedings
                or avoid the imposition of such restrictions;
                and

            

    

     

    
      	 	
              (N)

            	
              (I) operate
                each Plan in substantial compliance with its terms and with ERISA,
                the
                Code, and all other applicable Laws, (II) timely make all required
                contributions to all Plans and Multiemployer Plans, (III) not incur
                any liability on account of any “defined benefit plan” within the meaning
                of Section 3(35) of ERISA or any plan subject to Section 412 of the
                Code
                maintained or contributed to by any ERISA Affiliate of ACE Lo, (IV)
                not
                permit the creation of any Lien against the property of ACE Lo under
                Section 412(n) of the Code or Sections 302(f) or 4068 of ERISA, or
                the
                commission of any “prohibited transaction” within the meaning of Section
                406 of ERISA or Section 4975 of the Code for which ACE Lo or Buyer
                could
                be liable. 

            

    

     

    (ii) without
      limiting the generality of the foregoing, the ACE Selling Parties agree that
      they shall not (except to the extent that Buyer shall otherwise consent in
      writing, which consent shall not be unreasonably withheld); provided,
      however,
      that
      the conversion of the 3% Notes or the exercise or conversion of outstanding
      warrants to purchase ACE Hi Common Stock, in each case in accordance with their
      respective terms, shall not constitute a violation of this section: 

     

    
      	 	
              (A)

            	
              amend
                or otherwise change ACE Lo’s organizational documents or form any
                Subsidiaries of ACE Lo or amend any term of the ACE Lo Equity
                Interests;

            

    

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)

            	
              declare,
                set aside, make or pay any dividend, distribution (whether payable
                in
                cash, securities or property or any combination thereof), contribution,
                loan or any other payment in respect of any ACE Lo Equity Interests
                other
                than a distribution in kind of the Warehouse Property and the Warehouse
                Agreement or the cash proceeds of the Warehouse Property and/or the
                Warehouse Agreement to ACE Hi pursuant to Section
                9.23;

            

    

     

    
      	 	
              (C)

            	
              issue,
                sell, pledge, dispose of, grant, transfer, encumber or authorize
                the
                issuance, sale, pledge, disposition, grant, transfer or encumbrance
                of any
                Equity Interests in ACE Lo, or any securities convertible into or
                exchangeable for, or any options, warrants or rights to acquire,
                Equity
                Interests in ACE Lo, or any appreciation rights, performance units
                or
                other rights of any kind to acquire Equity Interests or such convertible
                or exchangeable securities of ACE
                Lo;

            

    

     

    
      	 	
              (D)

            	
              split,
                combine or reclassify any of the ACE Lo Equity Interests;
                

            

    

     

    
      	 	
              (E)

            	
              adopt
                a plan of or any complete or partial liquidation or adopt resolutions
                providing for or authorizing such liquidation of or adoption of a
                plan of
                or any dissolution, merger or consolidation of ACE Hi or ACE
                Lo;

            

    

     

    
      	 	
              (F)

            	
              except
                as set forth on Schedule
                9.2(a)(ii)(F)
                attached hereto, pursuant to the Casino Shutdown Plan, or as required
                by
                applicable Law or any collective bargaining agreements that are listed
                on
                Section
                4.6
                of
                the ACE Disclosure Letter, grant to employees, officers or directors
                of
                ACE Lo any increase in salary or wages payable by ACE
                Lo;

            

    

     

    
      	 	
              (G)

            	
              enter
                into or amend any employment, consulting, indemnification, severance
                or
                termination agreement payable by ACE Lo with any present or former
                employee, manager, officer or director of any ACE Selling Party;
                

            

    

     

    
      	 	
              (H)

            	
              except
                for agreements to provide severance to the Casino Employees pursuant
                to
                the Stay-Put Bonuses or otherwise in accordance with this Agreement,
                and
                except as otherwise provided in Section
                9.21,
                establish, adopt, enter into or amend in any material respect any
                Employee
                Benefit Plan applicable to ACE Lo (or arrangement that, had it been
                in
                existence on the date hereof, would be a Employee Benefit Plan applicable
                to ACE Lo); 

            

    

     

    
      	 	
              (I)

            	
              except
                as otherwise provided by applicable Law, enter into or amend any
                collective bargaining agreement or any successor collective bargaining
                agreement, neutrality agreement, “card check” or any other labor agreement
                with or respecting any labor union or union representative;
                

            

    

     

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (J)

            	
              make
                or authorize any capital expenditure payable by ACE Lo, except for
                (I)
                necessary maintenance and safety expenditures and (II) other capital
                expenditures that do not exceed, in the aggregate, Two Hundred Thousand
                Dollars ($200,000);

            

    

     

    
      	 	
              (K)

            	
              knowingly
                operate in a manner not in compliance with applicable Laws and judgments,
                where in each case such knowing operation or failure would result
                in a
                Material Adverse Effect on ACE Lo;

            

    

     

    
      	 	
              (L)

            	
              enter
                into any commitments or agreements with any Governmental Entity or
                agency
                (Federal, state or local) or any other Person affecting the use,
                improvement or ownership of the ACE Real Property;
                

            

    

     

    
      	 	
              (M)

            	
              enter
                into or amend any commitment or Contract (i) having a term beyond
                the
                Closing; or (ii) that obligates ACE Lo or binds any of ACE Lo’s assets, in
                each case other than those entered into with third parties that are
                not
                Affiliates of any of the Selling Parties and as reasonably necessary
                to
                implement the Casino Shutdown Plan, and provided that at least two
                (2)
                days’ prior written notice has been provided to Buyer before entering into
                such commitments or Contracts;

            

    

     

    
      	 	
              (N)

            	
              (I)
                sell, pledge, transfer, lease, dispose of, grant, encumber or otherwise
                authorize the sale, pledge, lease, transfer, disposition, grant or
                encumbrance of any of the properties or assets of ACE Lo, except
                for
                (x) sales of inventory in the ordinary course of business or (y)
                Permitted Encumbrances, or (II) acquire (x) any corporation, limited
                liability company, partnership, joint venture, association or other
                business organization or division thereof, or a substantial portion
                of the
                assets thereof (including without limitation by merger, consolidation,
                lease or acquisition of Equity Interests or assets), (y) any interests
                or
                investments in any Person, other than interests or investments which
                constitute cash or cash equivalents or (z) any other assets outside
                of the
                ordinary course of business; 

            

    

     

    
      	 	
              (O)

            	
              fail
                to perform in all material respects all of ACE Lo’s obligations under the
                ACE Material Contracts, or waive, release, assign, settle or compromise
                any material rights or claims, except to the extent such obligations
                are
                inconsistent with the Casino
                Shutdown;

            

    

     

    
      	 	
              (P)

            	
              except
                as permitted in Section 9.16 or Section 12.3 hereof, with respect
                to ACE
                Lo (including without limitation with respect to its income, business,
                or
                activities), (I) make or rescind any material election relating to
                Taxes,
                (II) settle or compromise any material claim, action, suit, litigation,
                proceeding, arbitration, investigation, audit or controversy relating
                to
                Taxes, (III) make any material change to any method of reporting
                income,
                deductions, or other items for Tax purposes, (IV) make any material
                change
                in method of accounting for Tax purposes, in each case except as
                required
                by Law, (V) execute any power of attorney by or on behalf of ACE
                Lo with
                respect to any matters relating to Taxes, (VI) extend or waive any
                statute of limitations relating to Taxes of ACE Lo, or (VII) enter
                into any Tax sharing, indemnity, allocation or similar agreements
                as
                between ACE Lo, on the one hand, and any other Person, or enter into
                any
                contractual obligations to indemnify any other Person with respect
                to
                Taxes; 

            

    

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (Q)

            	
              except
                as contemplated in Section 9.1(d), with respect to ACE Lo, (I) incur
                or
                assume any Indebtedness, except (x) up to One Hundred Thousand
                Dollars ($100,000) and (y) as will be repaid in full prior to or at
                the Closing by ACE Lo, (II) assume, guarantee, endorse or otherwise
                cause
                ACE Lo to become liable or responsible (whether directly, contingently
                or
                otherwise, but excluding the deposit, negotiation or endorsement
                of
                negotiable instruments for collection in the ordinary course of business)
                for the obligations of any other Person, (III) vary ACE Lo’s inventory
                practices in any material respect from ACE Lo’s past practices in the
                ordinary course of business, except any such variation as is consistent
                with the Casino Shutdown, (IV) accept deposits or advance payments
                in
                respect of any room reservations for any periods after the Closing
                or (V)
                make or authorize any loans, advances or capital contributions to,
                or
                investments in, any other Person (including advances to present or
                former
                employees, officers, managers, directors or other Affiliates of ACE
                Lo)
                except in the ordinary course of
                business;

            

    

     

    
      	 	
              (R)

            	
              other
                than in the ordinary course of business, waive any material defenses
                with
                respect to, or make any payment of any material liability (other
                than
                Indebtedness permitted by paragraph (Q)
                above) of ACE Lo, including without limitation any payments of principal
                as guarantor under the 3% Notes, before the same comes due in accordance
                with its terms;

            

    

     

    
      	 	
              (S)

            	
              enter
                into or amend any Leases with respect to the Casino
                Property;

            

    

     

    
      	 	
              (T)

            	
              adopt
                or propose any amendment, change or modification in the certificate
                of
                incorporation or bylaws or other applicable governing instruments
                of ACE
                Hi that would delay, prevent, frustrate or materially interfere with
                this
                Agreement, the ACE Lo Purchase and the other transactions contemplated
                hereby;

            

    

     

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (U)

            	
              waive
                any benefits, or agree to modify in any manner, any confidentiality,
                standstill or similar agreement to which ACE Lo is a
                party;

            

    

     

    
      	 	
              (V)

            	
              make
                any material change in accounting principles, practices or methods
                by ACE
                Lo, except insofar as may be required by a change in GAAP;
                

            

    

     

    
      	 	
              (W)

            	
              settle
                or compromise any Legal Proceeding for which Buyer is not indemnified
                pursuant to this Agreement, other than in respect of the GB Claims
                or as
                permitted in paragraph (P)
                above; 

            

    

     

    
      	 	
              (X)

            	
              create
                any Liens on title to the Casino Property, other than Permitted
                Encumbrances;

            

    

     

    
      	 	
              (Y)

            	
              enter
                into any new lines of business or expand the Casino Business;
                

            

    

     

    
      	 	
              (Z)

            	
              dispose
                of, transfer, or alter in any material way the mix and type of slot
                machines at the Casino Property;

            

    

     

    
      	 	
              (AA)

            	
              exercise
                ACE Lo’s option rights under the Traymore Call
                Agreement;

            

    

     

    
      	 	
              (BB)

            	
              (I)
                slow ACE Lo’s collection practices for gaming receivables,
                (II) increase wagering limits or (III) increase the level of credit
                to customers; 

            

    

     

    
      	 	
              (CC)

            	
              take
                any action that could reasonably be expected to result in a failure
                of any
                of the conditions set forth in ARTICLE
                X
                hereof; or

            

    

     

    
      	 	
              (DD)

            	
              agree
                or commit to do any of the
                foregoing.

            

    

     

    (b) Except
      as
      expressly contemplated by this Agreement or as disclosed on Section
      9.2(b)
      of the
      AREH Disclosure Letter, during the period from the date of this Agreement and
      continuing until the earlier of (x) the termination of this Agreement with
      respect to the AREH Subs Purchase or (y) the Closing: 

     

    (i) the
      AREH
      Selling Parties shall (except to the extent that Buyer shall otherwise consent
      in writing, which consent may not be unreasonably withheld): 

     

    
      	 	
              (A)

            	
              operate
                and manage the Adjacent Properties in the same manner done by the
                AREH
                Subs prior to the date of this Agreement,

            

    

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)

            	
              (I) with
                respect to AREH, continue to pay Income Taxes if and when due with
                respect
                to the income, business, or activities of AREH and each of the AREH
                Subs,
                and (II) with respect to the AREH Subs, shall continue to pay
                Non-Income Taxes when due with respect to the income, business, or
                activities of AREH and each of the AREH Subs,

            

    

     

    
      	 	
              (C)

            	
              (I)
                maintain the existing insurance coverage relating to the assets of
                the
                AREH Subs (however, in the event any such coverage shall be terminated
                or
                lapse, the AREH Subs shall provide written notice to Buyer a reasonable
                amount of time prior to such termination or lapse and procure such
                replacement insurance as shall be requested by Buyer, (II) at Buyer’s
                cost, the AREH Subs shall acquire such other commercially available
                insurance coverage that Buyer directs in order to cover the assets
                of the
                AREH Subs following the Measurement Date and (III) file claims for
                any available insurance coverage and diligently pursue such claims,
                and
                

            

    

     

    
      	 	
              (D)

            	
              terminate
                all Contracts and other arrangements, whether written or oral, to
                which
                any AREH Sub is a party or pursuant to which any of the AREH Subs’ assets
                are bound under which any Affiliates of the Selling Parties (other
                than
                such AREH Subs) provide or receive any direct benefit or
                payment,

            

    

     

    
      	 	
              (E)

            	
              following
                the Measurement Date, at Buyer’s cost, take any specific actions and
                implement any specific changes or upgrades to the AREH Subs’ procedures
                with respect to compliance with applicable building and safety codes,
                Environmental Laws and other applicable Laws and with respect to
                avoiding
                environmental mishaps, in each case as reasonably requested by Buyer,
                

            

    

     

    
      	 	
              (F)

            	
              clear
                all Liens on any of the assets of AREH Subs, provided that
                this covenant shall be deemed satisfied with respect to any Lien
                that has
                been bonded, discharged or which constitutes a Permitted
                Encumbrance;

            

    

     

    
      	 	
              (G)

            	
              promptly
                notify Buyer upon receipt of any written correspondence received
                by any
                AREH Selling Party regarding potential condemnation proceedings or
                restrictions on the use of the Traymore Property and take all steps
                reasonably requested by Buyer to resist any such condemnation proceedings
                or avoid the imposition of such restrictions;

            

    

     

    
      	 	
              (H)

            	
              (I)
                not adversely modify or amend the Restaurant Purchase Agreement and
                (II) perform MLK III’s obligations under the Restaurant Purchase
                Agreement; and 

            

    

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

     

    (ii) without
      limiting the generality of the foregoing, the AREH Selling Parties agree that
      they shall not, and AREH agrees to cause its Subsidiaries and BEC not to (except
      to the extent that Buyer shall otherwise consent in writing, which consent
      may
      not be unreasonably withheld): 

     

    
      	 	
              (A)

            	
              amend
                or otherwise change the AREH Subs’ organizational documents or amend any
                term of the AREH Subs Equity
                Interests;

            

    

     

    
      	 	
              (B)

            	
              declare,
                set aside, make or pay any dividend, distribution (whether payable
                in
                cash, securities or property or any combination thereof), contribution,
                loan or any other payment in respect of any AREH Subs Equity Interests;
                

            

    

     

    
      	 	
              (C)

            	
              issue,
                sell, pledge, dispose of, grant, transfer, encumber or authorize
                the
                issuance, sale, pledge, disposition, grant, transfer or encumbrance
                of any
                Equity Interests in the AREH Subs, or any securities convertible
                into or
                exchangeable for, or any options, warrants or rights to acquire,
                Equity
                Interests in the AREH Subs, or any appreciation rights, performance
                units
                or other rights of any kind to acquire Equity Interests or such
                convertible or exchangeable securities of the AREH
                Subs;

            

    

     

    
      	 	
              (D)

            	
              split,
                combine or reclassify of any of the AREH Subs Equity
                Interests;

            

    

     

    
      	 	
              (E)

            	
              adopt
                a plan of or any complete or partial liquidation or adopt resolutions
                providing for or authorizing such liquidation of or adoption of a
                plan of
                or any dissolution, merger or consolidation of any AREH
                Sub;

            

    

     

    
      	 	
              (F)

            	
              except
                as otherwise provided by applicable Law, enter into or amend any
                collective bargaining agreement or any successor collective bargaining
                agreement, neutrality agreement, “card check” or any other labor agreement
                with or respecting any labor union or union representative;
                

            

    

     

    
      	 	
              (G)

            	
              make
                or authorize any capital expenditure payable by any AREH Sub except
                for
                (I) necessary maintenance and safety expenditures and (II) other
                capital expenditures that do not exceed, in the aggregate, Fifty
                Thousand
                Dollars ($50,000);

            

    

     

    
      	 	
              (H)

            	
              knowingly
                operate in a manner not in compliance with applicable Laws and judgments,
                where in each case such knowing operation or failure would result
                in a
                Material Adverse Effect on the AREH
                Subs;

            

    

     

    
      	 	
              (I)

            	
              enter
                into any commitments or agreements with any Governmental Entity or
                agency
                (Federal, state or local) or any other Person affecting the use,
                improvement or ownership of the Adjacent Real Property;
                

            

    

     

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (J)

            	
              enter
                into or amend any commitment or Contract that obligates any of the
                AREH
                Subs or binds any of the AREH Subs’ assets beyond the Closing Date, or
                extend any existing Contract of any of the AREH Subs beyond the Closing
                Date;

            

    

     

    
      	 	
              (K)

            	
              (A)
                sell, pledge, transfer, lease, dispose of, grant, encumber or otherwise
                authorize the sale, pledge, lease, transfer, disposition, grant or
                encumbrance of any of the properties or assets of the AREH Subs,
                except
                for (I) sales of inventory and excess or obsolete assets in the
                ordinary course of business and (II) Permitted Encumbrances, or (B)
                acquire (I) any corporation, limited liability company, partnership,
                joint venture, association or other business organization or division
                thereof, or a substantial portion of the assets thereof (including
                without
                limitation by merger, consolidation, lease or acquisition of Equity
                Interests or assets) (other than Boardwalk) or (II) any other assets
                outside of the ordinary course of business, other than the Restaurant
                Site; 

            

    

     

    
      	 	
              (L)

            	
              enter
                into, terminate or adversely modify or amend any of the Assumed AREH
                Subs
                Contracts or waive, release, assign, settle or compromise any material
                rights or claims;

            

    

     

    
      	 	
              (M)

            	
              except
                as permitted in Section 9.16 or Section 12.3 hereof, with respect
                to the
                AREH Subs (including without limitation with respect to their respective
                income, business, or activities), (I) make or rescind any material
                election relating to Taxes, (II) settle or compromise any material
                claim,
                action, suit, litigation, proceeding, arbitration, investigation,
                audit or
                controversy relating to Taxes, (III) make any material change to
                any
                method of reporting income, deductions, or other items for Tax purposes,
                in each case except as required by Law, (IV) make any material change
                in
                method of accounting for Tax purposes, in each case except as required
                by
                Law, (V) execute any power of attorney by or on behalf of any AREH
                Sub
                with respect to any matters relating to Taxes, (VI) extend or waive
                any statute of limitations relating to Taxes of any AREH Sub, or
                (VII) enter into any Tax sharing, indemnity, allocation or similar
                agreements as between AREH Sub, on the one hand, and any other Person,
                or
                enter into any contractual obligations to indemnify any other Person
                with
                respect to Taxes; 

            

    

     

    
      	 	
              (N)

            	
              (I)
                incur or assume any Indebtedness of the AREH Subs, except as will
                be
                repaid in full prior to or at the Closing by the AREH Subs, (II)
                assume,
                guarantee, endorse or otherwise cause any AREH Sub to become liable
                or
                responsible (whether directly, contingently or otherwise, but excluding
                deposit, negotiation or endorsement of negotiable instruments for
                collection in the ordinary course of business) for the obligations
                of any
                other Person, or (III) make or authorize any loans, advances or capital
                contributions to, or investments in, any other
                Person;

            

    

     

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (O)

            	
              other
                than in the ordinary course of business, waive any material defenses
                with
                respect to, or make any payment of any material liability (other
                than
                Indebtedness permitted by paragraph (N)
                above) of the AREH Subs; 

            

    

     

    
      	 	
              (P)

            	
              enter
                into or amend any Leases with respect to the Adjacent
                Properties;

            

    

     

    
      	 	
              (Q)

            	
              allow
                the Adjacent Properties to deteriorate, ordinary wear and tear
                excepted;

            

    

     

    
      	 	
              (R)

            	
              settle
                or compromise any Legal Proceeding for which Buyer is not indemnified
                pursuant to this Agreement, other than in respect of the GB Claims
                or as
                permitted in paragraph (M)
                above; 

            

    

     

    
      	 	
              (S)

            	
              create
                any Liens on title to the Adjacent Properties, other than Permitted
                Encumbrances;

            

    

     

    
      	 	
              (T)

            	
              take
                any action that could reasonably be expected to result in a failure
                of any
                of the conditions set forth in ARTICLE
                X
                hereof; or

            

    

     

    
      	 	
              (U)

            	
              agree
                or commit to do any of the
                foregoing.

            

    

     

    Section
      9.3 Cooperation;
      Notice; Cure.
      Subject
      to compliance with applicable Law (including, without limitation, antitrust
      Laws, Gaming Laws and privacy Laws), from the date hereof until the earlier
      of
      the termination of this Agreement or the Closing, Buyer and the Selling Parties
      shall confer on a regular basis with one or more Representatives of each other
      party to report on the general status of ongoing operations of the Properties.
      Buyer and the Selling Parties shall promptly notify each other in writing of,
      and will use commercially reasonable efforts to cure before the Closing Date,
      any event, transaction or circumstance, as soon as practical after it becomes
      known to such party, that (a) causes or will cause any covenant or agreement
      of
      Buyer and the Selling Parties under this Agreement to be breached in any
      material respect, (b) renders or will render untrue in any material respect
      any
      representation or warranty of the respective parties contained in this Agreement
      or (c) of any fact, circumstance, event or action which will result in, or
      would
      reasonably be expected to result in, the failure of such party to timely satisfy
      any of the closing conditions specified in ARTICLE
      X
      hereof
      of this Agreement, as applicable. Nothing contained in Section
      9.2
      hereof
      shall prevent the Selling Parties from giving such notice, using such efforts
      or
      taking any action to cure or curing any such event, transaction or
      circumstance. 

     

    Section
      9.4 No
      Solicitation. 

     

    (a) None
      of
      the ACE Selling Parties shall, nor shall they authorize, knowingly permit or
      cause any of their respective Affiliates or their or their respective
      Affiliates’ directors, officers, managers, employees or members, or any
      investment banker, financial advisor, attorney, accountant or other
      representative retained by any of them to, directly or indirectly, after the
      date hereof, (i) solicit, initiate or knowingly encourage (including by way
      of
      furnishing non-public information), or knowingly take any other action designed
      to facilitate, any inquiries or the making of any proposal that constitutes
      a
      Takeover Proposal (as defined below) or (ii) participate in any
      negotiations or discussions (other than to state that they are not permitted
      to
      have discussions) regarding any Takeover Proposal; provided,
      however,
      that
      if, at any time prior to October 18, 2006 (the “Alternative
      Proposal Period”),
      the
      Board of Directors of ACE Hi determines in good faith, after consultation with
      its Affiliates and advisors, that a Takeover Proposal that was not solicited
      by
      it after the date hereof and did not otherwise result from a breach of this
      Section
      9.4(a)
      is, or
      is reasonably likely to result in, a Superior Proposal (as defined in
Section
      9.4(d)(ii)),
      and
      subject to providing prior written notice of its decision to take such action
      to
      Buyer and compliance with Section
      9.4(c),
      ACE Hi
      and its Affiliates, and their respective directors, executive officers,
      controlling persons, employees and advisors may (x) furnish information
      with respect to ACE Lo, ACE Hi and their respective Affiliates (including
      without limitation any Selling Party) to the Person making such proposal (and
      its Representatives) pursuant to a customary confidentiality agreement
      (provided, that such confidentiality agreement shall not in any way restrict
      ACE
      Hi from complying with its disclosure obligations under this Agreement,
      including with respect to such proposal; provided further,
      that
      any such confidentiality agreement need not contain a standstill or similar
      provision) and (y) participate in discussions or negotiations regarding such
      proposal. ACE Hi agrees to provide Buyer with any information provided in
      writing or a reasonable summary of oral information provided to the person
      making such Takeover Proposal and its Representatives substantially
      simultaneously with the provision thereof to such other person. Each of the
      ACE
      Selling Parties shall, and shall cause any of their respective Affiliates or
      any
      Persons acting on their behalf to, immediately cease and cause to be terminated
      any activities, discussions or negotiations with any parties existing on the
      date hereof with respect to any Takeover Proposal. Notwithstanding
      the foregoing, the Board of Directors of ACE Hi shall be permitted to disclose
      to the stockholders of ACE Hi a position with respect to a Takeover Proposal
      required by Rule 14e-2(a), Item 1012(a) of Regulation M-A or Rule 14d-9
      promulgated under the Exchange Act.

    
       

      
        
          
          

        

        
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    (b) Except
      as
      contemplated by this Section
      9.4,
      neither
      the Board of Directors of ACE Hi nor any committee thereof shall (i) withdraw
      or
      modify, or propose publicly to withdraw or modify, in a manner adverse to Buyer,
      the approval or recommendation by such Board of Directors or such committee
      of
      this Agreement or the ACE Lo Purchase, (ii) approve or recommend, or propose
      publicly to approve or recommend, any Takeover Proposal, or (iii) cause ACE
      Hi
      to enter into any letter of intent, agreement in principle, acquisition
      agreement or other similar agreement (other than a confidentiality agreement
      of
      the type and under the circumstances described in Section
      9.4(a))
      related
      to any Takeover Proposal (each, an “ACE
      Hi
      Acquisition Agreement”).
      Notwithstanding the foregoing, in response to a Takeover Proposal that was
      not
      solicited by it after the date of this Agreement and that did not otherwise
      result from a breach of Section
      9.4(a),
      prior
      to October 18, 2006, the Board of Directors of ACE Hi may, if it determines
      in
      good faith, after consulting with outside counsel, that taking such action
      is
      reasonably required by the Board of Directors’ fiduciary obligations under
      applicable Law, (A) withdraw or modify, or propose publicly to withdraw or
      modify, the approval or recommendation by such Board of Directors or any
      committee thereof of this Agreement or the Purchase, (B) approve or recommend,
      or propose to approve or recommend, any Superior Proposal, or (C) terminate
      this
      Agreement with respect to the ACE Lo Purchase pursuant to Section
      11.1(g)
      hereof
      simultaneously with the payment of the Termination Fee, but only after (I)
      such
      Board of Directors has determined in good faith that such Takeover Proposal
      constitutes a Superior Proposal, (II) ACE Hi has notified Buyer in writing
      of
      the determination that such Takeover Proposal constitutes a Superior Proposal,
      (III) Buyer has the opportunity to revise the terms of this Agreement to
      match or exceed the terms of such Superior Proposal within three (3) business
      days following receipt by Buyer of such notice, which shall include the right
      to
      match any non-price terms of such Superior Proposal (including without
      limitation, decreasing the size of or eliminating the Deposit, or replacing
      the
      Deposit with a letter of credit, if applicable, in the event that clause (II)
      in
Section
      9.4(d)(ii)
      is held
      unenforceable by a court of competent jurisdiction) and (IV) following the
      expiration of the three (3) business day period referenced in clause (III)
      above, the Board of Directors of ACE Hi has determined that the Superior
      Proposal remains a Superior Proposal. Notwithstanding the foregoing, other
      than
      in connection with a Takeover Proposal, the Board of Directors of ACE Hi may,
      if
      it determines in good faith, after consulting with outside counsel, that the
      failure to take such action would result in a breach of the Board of Directors’
fiduciary obligations under applicable Law, withdraw or modify the approval
      or
      recommendation by such Board of Directors or any committee thereof of this
      Agreement or the Purchase if ACE Hi has notified Buyer in writing of the
      decision to do so at least three (3) business days prior to the taking of such
      action, which notice shall specify in writing the reasons therefor.
      Notwithstanding anything to the contrary in this Agreement, Buyer and the
      Selling Parties hereby agree to issue a press release promptly following the
      execution of this Agreement which shall include the principal terms of this
      Agreement, including a summary of the primary terms of Section
      9.4,
      Section
      9.5
      and
Section
      9.11
      hereof.
      The parties have agreed to include in such press release the description of
      such
      provisions in Exhibit
      K
      attached
      hereto and that inclusion of such description in such press release shall be
      deemed to have satisfied the requirement of the previous
      sentence.

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

     

    (c) In
      addition to the obligations of ACE Hi set forth in paragraphs (a) and (b) of
      this Section
      9.4,
      ACE Hi
      shall as promptly as practicable advise Buyer, orally and in writing, of any
      request for information or of any Takeover Proposal (and in any case within
      24
      hours of such request or the receipt of such Takeover Proposal), the principal
      terms and conditions of such request or Takeover Proposal and the identity
      of
      the person making such request or Takeover Proposal. ACE Hi shall keep Buyer
      informed of the status and material details (including amendments or proposed
      amendments) of any such request or Takeover Proposal as promptly as
      practicable.

     

    (d) For
      purposes of this Agreement, the term:

     

    (i) “Takeover
      Proposal”
means
      any bona fide inquiry, proposal or offer from any Person relating to (A) any
      direct or indirect acquisition or purchase (or series of related acquisitions
      or
      purchases) of assets that constitute 20% or more of the Casino Property (other
      than any direct or indirect (i) sale of any interests of GB Holdings or GB
      Holding’s minority interest in ACE Hi, so long as AREH controls (through
      entities other than GB Holdings or its successors) more than 50% of the voting
      securities of ACE Hi, (ii) transfer of the interests in AREP Sands Holding
      LLC
      (“AREP
      Sands”)
      to any
      direct or indirect wholly-owned Subsidiary of AREH, or (iii) transfer of
      units of American Real Estate Partners, L.P. (“AREP”)),
      (B)
      any direct or indirect acquisition or purchase (or series of related
      acquisitions or purchases) of (I) 50% or more of any class of voting
      securities of ACE Hi or (II) any of the ACE Lo Equity Interests (other than
      any direct or indirect (i) transfer of the interests in AREP Sands to any direct
      or indirect wholly-owned Subsidiary of AREH or (ii) transfer of units of AREP),
      (C) any tender offer or exchange offer (or other offer to purchase or
      acquire) that, if consummated, would result in any Person beneficially owning
      (I) 50% or more of any class of voting securities of ACE Hi or
      (II) any of the ACE Lo Equity Interests (other than any direct or indirect
      (i) transfer of the interests in AREP Sands to any direct or indirect
      wholly-owned Subsidiary of AREH or (ii) transfer of units of AREP), (D) any
      merger, consolidation, business combination, recapitalization, liquidation,
      dissolution or similar transaction involving ACE Hi or ACE Lo or (E) any direct
      or indirect acquisition or purchase of, any joint venture or partnership or
      similar arrangement involving, or any recapitalization, restructuring or
      leveraged financing or similar transaction involving all or any portion of
      the
      Casino Property, in each case other than (I) any direct or indirect
      (i) transfer of the interests in AREP Sands to any direct or indirect
      wholly-owned Subsidiary of AREH or (ii) transfer of units of AREP and (II)
      the
      transactions contemplated by this Agreement.

     

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        

      

    

     

    (ii) “Superior
      Proposal”
means
      any written Takeover Proposal that the Board of Directors of ACE Hi determines
      in good faith (after consultation with its Affiliates and its advisors) to
      be
      more favorable (taking into account (A) all financial and strategic
      considerations, including relevant legal, financial, regulatory and other
      aspects of such Takeover Proposal and the Purchase and the other transactions
      contemplated by this Agreement deemed relevant by the Board of Directors of
      ACE
      Hi, (B) the identity of the third party making such Takeover Proposal, (C)
      the
      anticipated timing, conditions and prospects for completion of such Takeover
      Proposal, including the prospects for obtaining regulatory approvals and
      financing, and any third party shareholder approvals and (D) the other terms
      and
      conditions of such Takeover Proposal) to ACE Hi’s stockholders than the ACE Lo
      Purchase and the other transactions directly relating to the ACE Selling Parties
      contemplated by this Agreement (taking into account all of the terms of any
      proposal by Buyer to amend or modify the terms of the Purchase and the other
      transactions contemplated by this Agreement), except that (I) the reference
      to
“any of the ACE Lo Equity Interests” in clauses (B)(II) and (C)(II) of the
      definition of “Takeover
      Proposal”
in
      Section
      9.4(d)(i)
      shall be
      deemed to be a reference to “50% or more of the ACE Lo Equity Interests” and
      (II) the Takeover Proposal must include an escrow deposit in an amount at least
      equal to and upon terms and conditions substantially similar to the
      Deposit. 

     

    Nothing
      in this Section
      9.4
      is
      intended to prevent or preclude ACE Hi from communicating with its Affiliates,
      its or their controlling persons, or its counsel or advisors.

     

    (e) (i) Prior
      to
      the termination of this Agreement with respect to the AREH Subs Purchase, AREH
      shall not and shall not permit its Subsidiaries or BEC to transfer or agree
      to
      transfer the Traymore Site, directly or indirectly, to any Person (other than
      to
      a direct or indirect wholly-owned Subsidiary of AREH that assumes all the
      obligations of the transferor under this Agreement), except either (x) in
      accordance with this Agreement or (y) pursuant to an exercise of the
      Traymore Call Right.

     

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

     

    (ii) If
      the
      Board of Directors of ACE Hi has determined that a Takeover Proposal constitutes
      a Superior Proposal, AREH and Buyer shall remain obligated to consummate the
      AREH Subs Purchase pursuant to this Agreement, and all the relevant provisions
      of this Agreement relating to the AREH Subs Purchase shall survive any
      termination by ACE Hi with respect to the ACE Lo Purchase pursuant to
Section
      11.1(g)
      hereof
      based on the Superior Proposal; provided,
      however,
      that
      (A) the closing of the AREH Subs Purchase shall occur simultaneously with the
      closing of such Superior Proposal and (B) the closing of such Superior Proposal
      shall be a condition to the closing of the AREH Subs Purchase. For the avoidance
      of doubt, any purchase of the Boardwalk Equity Interests by Buyer pursuant
      to
      this subsection (ii)
      would be
      purchased subject to the continuing rights of ACE Lo, if any, under the Traymore
      Call Right.

     

    (iii) In
      the
      event that such Superior Proposal is terminated without being consummated,
      then
      the ACE Selling Parties shall promptly notify Buyer of such termination in
      writing and Buyer may elect, by delivering written notice to the Selling Parties
      within thirty (30) days of the receipt of such notice from the ACE Selling
      Parties, to reinstate the rights and obligations of Buyer and the ACE Selling
      Parties under this Agreement, including without limitation Buyer’s right to
      purchase the ACE Lo Equity Interests and the AREH Subs Equity Interests from
      ACE
      Hi and AREH, respectively, for the same purchase price and, to the extent
      possible, on the same terms and conditions as in this Agreement, modified as
      appropriate to reflect changes in the timing and circumstances surrounding
      the
      transaction (a “Revival”),
      and
      the parties shall enter into appropriate documents and agreements for such
      transaction as promptly as practicable.
      In the
      event that Buyer does not so elect to effect a Revival during such thirty
      (30)-day period pursuant to the preceding sentence, this Agreement shall
      immediately terminate pursuant to Section
      11.1(i)
      hereof. 

     

    (f) (i) None
      of
      the AREH Selling Parties shall, nor shall they authorize, knowingly permit
      or
      cause any of their respective Affiliates or their or their Affiliates’
directors, officers, managers, employees or members, or any investment banker,
      financial advisor, attorney, accountant or other representative retained by
      any
      of them, or BEC, to, directly or indirectly, (A) solicit, initiate or
      knowingly encourage (including by way of furnishing non-public information),
      or
      knowingly take any other action designed to facilitate, any inquiries or the
      making of any proposal that constitutes an AREH Subs Takeover Proposal (as
      defined below) or (B) participate in any negotiations or discussions (other
      than
      to state that they are not permitted to have discussions) regarding any AREH
      Subs Takeover Proposal. Each of the AREH Selling Parties shall, and shall cause
      any of their respective Affiliates or any Persons acting on their behalf,
      including BEC, to immediately cease and cause to be terminated any activities,
      discussions or negotiations with any parties existing on the date hereof with
      respect to any AREH Subs Takeover Proposal.

     

    (ii) None
      of
      the AREH Selling Parties (or the relevant governing bodies of such entities)
      shall (A) withdraw or modify, or propose publicly to withdraw or modify, in
      a
      manner adverse to Buyer, the approval or recommendation by such AREH Selling
      Party (or relevant governing body thereof) of this Agreement or the AREH Subs
      Purchase, (ii) approve or recommend, or propose publicly to approve or
      recommend, any AREH Subs Takeover Proposal, or (iii) cause any of the AREH
      Selling Parties to enter into any letter of intent, agreement in principle,
      acquisition agreement or other similar agreement related to any AREH Subs
      Takeover Proposal.

     

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

     

    (iii) In
      addition to the obligations of the AREH Selling Parties set forth in
      subparagraphs (i) and (ii) of this Section
      9.4(f),
      AREH
      shall as promptly as practicable advise Buyer, orally and in writing, of any
      request for information or of any AREH Subs Takeover Proposal (and in any case
      within 24 hours of such request or the receipt of such AREH Subs Takeover
      Proposal), the principal terms and conditions of such request or AREH Subs
      Takeover Proposal and the identity of the person making such request or AREH
      Subs Takeover Proposal. AREH shall keep Buyer informed of the status and
      material details (including amendments or proposed amendments) of any such
      request or AREH Subs Takeover Proposal as promptly as practicable.

     

    (iv) For
      purposes of this Agreement, the term “AREH
      Subs Takeover Proposal”
means
      any bona fide inquiry, proposal or offer from any person relating to
      (A) any direct or indirect acquisition or purchase of all or any portion of
      the Traymore Site or the other Adjacent Properties, (B) any direct or indirect
      acquisition or purchase of any Equity Interests of the AREH Subs, (C) any tender
      offer or exchange offer (or other offer to purchase or acquire) that, if
      consummated, would result in any Person beneficially owning any Equity Interests
      of the AREH Subs, (D) any merger, consolidation, business combination,
      recapitalization, liquidation, dissolution or similar transaction involving
      any
      of the AREH Subs, or (E) any direct or indirect acquisition or purchase of,
      any
      joint venture or partnership or similar arrangement involving, or any
      recapitalization, restructuring or leveraged financing or similar transaction
      involving all or any portion of the Traymore Site or all or any portion of
      Adjacent Properties, in each case other than (I) any direct or indirect transfer
      of units or Equity Interests, as applicable, of AREP or AREH, (II) any direct
      or
      indirect transfer of all or any portion of the assets of AREH or AREP to a
      wholly-owned subsidiary of AREP or AREH, and (III) the transactions
      contemplated by this Agreement. 

     

    Notwithstanding
      any of the terms or restrictions of this Section
      9.4(f),
      AREH
      and its Subsidiaries may provide information to, and participate in discussions
      and negotiations with, any Person making a Superior Proposal in the same manner
      and to the same extent as the ACE Selling Parties are permitted pursuant to
      the
      preceding provisions of this Section 9.4.

     

    Section
      9.5 Requisite
      Stockholder Approval; Notice to Stockholders.
      Within
      one day following the execution of this Agreement, ACE Hi shall take all actions
      necessary in accordance with the DGCL and its organizational documents for
      the
      purpose of obtaining the Requisite Stockholder Approval, including obtaining
      from AREP Sands a stockholder written consent (the “Stockholder
      Consent”)
      approving this Agreement, the ACE Lo Purchase and the other transactions
      contemplated hereby directly relating to the ACE Selling Parties. Promptly
      following execution of the Stockholder Consent, and in no event more than five
      (5) business days following the date of this Agreement, ACE Hi shall send,
      pursuant to Section 228 of the DGCL, a written notice to all stockholders of
      ACE
      Hi that did not execute the Stockholder Consent informing them that this
      Agreement, the ACE Lo Purchase and the other transactions contemplated hereby
      directly relating to the ACE Selling Parties were approved by the stockholders
      of ACE Hi. Notwithstanding the foregoing, the Requisite Stockholder Approval
      shall be of no further force or effect in the event that ACE Hi terminates
      this
      Agreement with respect to the ACE Lo Purchase pursuant to Section
      11.1(g)
      hereof.

     

    
      
        
        

      

      
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    Section
      9.6 Access
      to Information. 

     

    (a) To
      the
      extent permitted by applicable Law and confidentiality obligations and upon
      reasonable advance notice, the ACE Selling Parties shall afford to Buyer and
      its
      officers, employees, accountants, counsel, financial advisors and other
      representatives (and to its potential financing sources and their respective
      representatives) (collectively, “Representatives”)
      reasonable access during normal business hours during the period prior to the
      Closing or termination of this Agreement to all of the Assumed ACE Lo Contracts
      and the properties, books, contracts, commitments, personnel and records of
      the
      ACE Selling Parties, to the extent permitted by applicable Law, and, during
      such
      period, to the extent permitted by applicable Law and confidentiality
      provisions, the ACE Selling Parties shall (i) confer on a regular and
      frequent basis with one or more Representatives of Buyer to discuss material
      operational and regulatory matters and the general status of its ongoing
      operations, (ii) advise Buyer of any change or event that has had or would
      reasonably be expected to have a material adverse effect on such party, and
      (iii) furnish to Buyer promptly all other information concerning its business,
      properties and personnel, in each case as Buyer may reasonably request. Buyer
      shall schedule and coordinate all inspections with the individual(s) set forth
      in Section
      9.6(a)
      of the
      ACE Disclosure Letter. ACE Hi shall be entitled to have its Representatives
      present at all times during any such inspection. Notwithstanding the foregoing,
      no ACE Selling Party shall be required to provide access to or to disclose
      any
      information (i) where such access or disclosure could jeopardize the
      attorney-client privilege or work product privilege of such ACE Selling Party
      or
      contravene any Law or binding agreement entered into prior to the date of this
      Agreement, or (ii) to the extent that outside counsel to ACE Hi advises that
      such access or disclosure should not be disclosed in order to ensure compliance
      with any applicable Law. Buyer agrees to hold confidential all information
      related to the ACE Selling Parties which it has received or to which it has
      gained access pursuant to this Agreement in accordance with the Confidentiality
      Agreement dated May 24, 2006 (the “Confidentiality
      Agreement”),
      by
      and between Buyer, Boardwalk and ACE Hi.

     

    (b) To
      the
      extent permitted by applicable Law and confidentiality obligations and upon
      reasonable advance notice, the AREH Selling Parties shall afford to Buyer and
      its Representatives reasonable access during normal business hours during the
      period prior to the Closing to all Assumed AREH Contracts and the properties,
      books, contracts, commitments, personnel and records of the AREH Subs, to the
      extent permitted by applicable Law, and, during such period, to the extent
      permitted by applicable Law and confidentiality provisions, the AREH Subs shall
      (i) advise Buyer of any change or event that has had or would reasonably be
      expected to have a material adverse effect on such party, and (ii) furnish
      to Buyer promptly all other information concerning its business, properties
      and
      personnel, in each case as Buyer may reasonably request. Buyer shall schedule
      and coordinate all inspections with the individual(s) set forth in Section
      9.6(b)
      of the
      AREH Disclosure Letter. AREH shall be entitled to have its Representatives
      present at all times during any such inspection. Notwithstanding the foregoing,
      no AREH Sub shall be required to provide access to or to disclose any
      information (i) where such access or disclosure could jeopardize the
      attorney-client privilege or work product privilege of such AREH Sub or
      contravene any Law or binding agreement entered into prior to the date of this
      Agreement, or (ii) to the extent that outside counsel to such AREH Sub
      advises that such access or disclosure should not be disclosed in order to
      ensure compliance with any applicable Law. Buyer agrees to hold confidential
      all
      information related to the AREH Subs which it has received or to which it has
      gained access pursuant to this Agreement in accordance with the Confidentiality
      Agreement. 

     

    
      
        
        

      

      
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    Section
      9.7 Regulatory
      Matters; Commercially Reasonable Efforts.

     

    (a) Regulatory
      Approvals.
      Each
      party hereto shall cooperate and promptly prepare and file all necessary
      documentation, effect all necessary applications, notices, petitions and
      filings, and shall use commercially reasonable efforts to take or cause to
      be
      taken all actions, and do or cause to be done all things in order to obtain
      all
      approvals and authorizations of all Governmental Entities, necessary or
      advisable to consummate and make effective, in the most expeditious manner
      reasonably practicable, the transactions contemplated by this Agreement. Buyer
      shall have the responsibility for the preparation and filing of any required
      applications, filings or other materials; provided however,
      that
      the ACE Selling Parties shall provide and cause their respective Affiliates
      to
      provide Buyer with any information required in connection with such filings
      as
      promptly as practicable; and the Selling Parties or their Affiliates shall
      have
      the right to review and approve in advance all characterizations of the
      information relating to the Selling Parties that appear in any application,
      notice, petition or filing made in connection with the transactions contemplated
      by this Agreement. Buyer and the Selling Parties agree that they will consult
      and cooperate with each other with respect to the obtaining of all such
      necessary approvals and authorizations of Governmental Entities.

     

    (b) Filings.
      Each of
      Buyer, ACE Hi and AREH undertakes and agrees to file as soon as practicable
      a
      Notification and Report Form under the HSR Act with the United States Federal
      Trade Commission (the “FTC”)
      and
      the Antitrust Division of the United States Department of Justice (the
“Antitrust
      Division”).
      Each
      of Buyer and the Selling Parties shall respond as promptly as practicable under
      the circumstances to any inquiries received from the FTC or the Antitrust
      Division for additional information or documentation and to all inquiries and
      requests received from any Governmental Entity in connection with any Law.
      Buyer
      shall have the exclusive right to direct and control the process of obtaining
      the Governmental Consents (as defined below) required in connection with the
      transactions contemplated by this Agreement and the Selling Parties agree to
      reasonably cooperate with Buyer with respect thereto.

     

    (c) Cooperation.
      In
      addition, each party shall, subject to applicable Law and to the terms and
      conditions hereof, except as prohibited by any applicable representative of
      any
      applicable Governmental Entity, (i) promptly notify each other party hereto
      of
      any material communication to that party relating to the transactions
      contemplated by this Agreement from the FTC, the Antitrust Division or any
      other
      Governmental Entity, and consult with the other party in advance regarding
      any
      material proposed written communication relating to the transactions
      contemplated by this Agreement to any of the foregoing in response thereto,
      and
      (ii) furnish the other party or its outside counsel with copies of all
      material correspondence, filings, and written communications (and memoranda
      setting forth the substance thereof) between them and their Affiliates and
      their
      respective Representatives on the one hand, and any Government Entity or members
      of its staff, on the other hand, with respect to this Agreement and the
      transactions contemplated hereby. 

     

    
      
        
        

      

      
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    (d) Objections.
      In
      furtherance and not in limitation of the covenants of the parties contained
      in
Section
      9.7(a),
      Section
      9.7(b)
      and
Section
      9.7(c),
      but
      subject to Section
      9.7(f),
      each of
      Buyer and the Selling Parties shall use its commercially reasonable efforts
      to
      resolve such objections, if any, as may be asserted by a Governmental Entity
      or
      other person with respect to the transactions contemplated hereby under any
      antitrust Law or other applicable Law but no party shall be required under
      this
      Agreement to divest itself of assets or limit its freedom of action with respect
      to, or its ability to retain, any business, services, employees or assets.
      In
      connection with the foregoing, if any administrative or judicial action or
      proceeding, including any proceeding by a private party, is instituted (or
      threatened to be instituted) challenging any transaction contemplated by this
      Agreement as violative of any antitrust Law or other applicable Law, subject
      to
Section
      9.7(f),
      each of
      Buyer and the Selling Parties shall cooperate in all material respects with
      each
      other and use its respective commercially reasonable efforts to, as promptly
      as
      practicable, contest and resist any such action or proceeding, to limit the
      scope or effect of any proposed action of, or remedy sought to be obtained
      or
      imposed by, any Governmental Entity, and to have vacated, lifted, reversed
      or
      overturned any decree, judgment, injunction or other order, whether temporary,
      preliminary or permanent, that is in effect and that prohibits, prevents or
      restricts the consummation of the transactions contemplated by this
      Agreement.

     

    (e) Further
      Actions.
      Upon
      the terms and subject to the conditions set forth in this Agreement, each of
      the
      parties agrees to use its commercially reasonable efforts to take, or cause
      to
      be taken, all actions, and to do, or cause to be done, and to assist and
      cooperate with the other parties in doing, all things reasonably necessary
      or
      advisable under applicable Laws (including the HSR Act and the Gaming Laws)
      to
      consummate and make effective, in the most expeditious manner reasonably
      practicable, the transactions contemplated by this Agreement, including
      (i) obtaining any required third party consents and Governmental Consents,
      (ii) taking any steps reasonably requested by either party in order to comply
      with applicable Laws related to (A) Front Money, (B) guests’ baggage
      checked in or left in the care of ACE Lo at the Casino Property,
      (C) guests’ personal property in safe deposit boxes located at the Casino
      Property and (D) motor vehicles checked and placed in the care of ACE Lo at
      the Casino Property, (iii) taking any steps required by the applicable
      Gaming Authorities to store gaming equipment and (iv) and delivering any
      additional instruments necessary to consummate the transactions contemplated
      by
      this Agreement. 

     

    (f) Commercially
      Reasonable Efforts.
      Notwithstanding the foregoing, as used in this Section
      9.7
      or in
      any other provision of this Agreement, “commercially
      reasonable efforts”
shall
      not include nor require (A) any party to sell, or agree to sell, hold or agree
      to hold separate, or otherwise dispose or agree to dispose of any properties
      or
      other asset, (B) any party to conduct or agree to conduct its business in any
      particular manner after the Closing, (C) the Selling Parties or Buyer to
      terminate the employment of or remove any of its executive officers or
      directors, or (D) any Person to pay any fee or payment to obtain any
      consent other than standard filing fees and the like established by any
      applicable Governmental Entity. None of the Selling Parties may take or agree
      to
      take any action, or consent to or agree to consent to any such restriction
      without the prior written consent of Buyer.

     

    
      
        
        

      

      
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    (g) SEC
      Filings.
      Each of
      Buyer and, following the Closing, ACE Lo, on the one hand, and ACE Hi, on the
      other hand, shall, and shall use commercially reasonable efforts to cause their
      Representatives to, reasonably cooperate with each other (including without
      limitation providing reasonable access to the books and records of ACE Lo or
      ACE
      Hi), at the requesting party’s expense, in the preparation of any filings to be
      made by such requesting party or its Affiliates with the SEC or other
      Governmental Entities related to this Agreement and the transactions
      contemplated hereby or otherwise, including without limitation, ACE Hi’s and/or
      Buyer’s or their respective Affiliates’ filings of quarterly or annual reports
      on Form 10-Q or Form 10-K or the filings of current reports on Form 8-K
      announcing the Purchase and/or the Closing.

     

    Section
      9.8 State
      Anti-Takeover Statutes.
      The ACE
      Selling Parties shall (i) use commercially reasonable efforts requested by
      Buyer
      such that no state anti-takeover statute or similar statute or regulation or
      provision in any organizational document becomes applicable to this Agreement,
      the ACE Lo Purchase or any of the other transactions contemplated hereby and
      (ii) if any state anti-takeover statute or similar statute or regulation or
      provision in any organizational document becomes applicable to this Agreement,
      the ACE Lo Purchase or any of the other transactions contemplated hereby, use
      commercially reasonable efforts reasonably requested by Buyer such that this
      Agreement, the ACE Lo Purchase and the other transactions contemplated hereby
      may be consummated as promptly as reasonably practicable on the terms
      contemplated by this Agreement to minimize the effect of such statute or
      regulation or provision in any organizational document on the ACE Lo Purchase
      and the other transactions contemplated by this Agreement; provided that
      the term
“commercially
      reasonable efforts”
as
      used
      in this Section
      9.8
      shall
      not include the payment of costs or incurrence of expenses by the ACE Selling
      Parties or a requirement to identify or conduct a survey of state anti-takeover
      statutes. 

     

    Section
      9.9 Publicity.
      Subject
      to the provisions of Section 9.4(b) hereof, Buyer and the Selling Parties will
      consult with each other before issuing, and provide each other the reasonable
      opportunity to review, comment upon and concur with, any press release or other
      public statements announcing the transactions contemplated by this Agreement
      to
      the public, including the Purchase, and shall not issue any such press release
      or make any such public statement prior to such consultation, except as any
      party, after consultation with counsel, determines is required by applicable
      Law
      or applicable rule or regulation of the NYSE; provided that
      the
      provisions of this Section
      9.9
      shall
      not apply to require prior consultation with respect to any disclosures
      containing the same information in substantially the same form as disclosures
      that have previously been included in any press release or other public
      statement and have previously been approved by the other parties
      hereto. 

     

    
      
        
        

      

      
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    Section
      9.10 Further
      Assurances and Actions.

     

    (a) Subject
      to the terms and conditions herein, each party hereto agrees to use its
      commercially reasonable efforts to take, or cause to be taken, all appropriate
      action, and to do, or cause to be done, all things reasonably necessary, proper
      or advisable under applicable Laws to consummate and make effective the
      transactions contemplated by this Agreement, including, without limitation,
      to
      fulfill all conditions precedent applicable to such party pursuant to this
      Agreement and to execute, acknowledge and deliver in proper form any further
      documents, certificates, agreements and other writings, and take such other
      action as such other party may reasonably require, in order to effectively
      carry
      out the intent of this Agreement.

     

    (b) In
      case
      at any time after the Closing any further action is necessary to carry out
      the
      purposes of this Agreement or to vest Buyer with full title to all properties,
      assets, rights, approvals, immunities, franchises of any of the parties to
      the
      Closing, the proper officers and/or directors of Buyer and the particular Seller
      shall take all reasonable actions and such Seller shall bear the cost of any
      such necessary action; provided that,
      if such
      action is necessary due to events or circumstances particular to Buyer, Buyer
      shall bear the cost of such action.

     

    Section
      9.11 Fees
      and Expenses.

     

    (a) Except
      as
      provided in this Section
      9.11
      and
Section
      2.7(c)
      and
Section
      2.8(b)
      hereof,
      all fees and expenses incurred in connection with the Purchase, this Agreement
      and the transactions contemplated by this Agreement shall be paid by the party
      incurring such fees or expenses, whether or not the Purchase is consummated;
      provided that
      (i) the
      filing fees pursuant to the pre-merger notifications under the HSR Act shall
      be
      paid by Buyer; (ii) all recording or filing fees (excluding any Taxes or
      fees described in the succeeding clauses (iii) and (iv)) with respect to the
      removal of any Liens on the Properties shall be paid by Sellers; (iii) any
      transfer, documentary, sales, use, stamp, registration and other such Taxes
      (including all applicable real estate transfer or similar Taxes) and related
      fees (including any penalties, interest and additions to Tax) incurred in
      connection with the Purchase and the transfers and other transactions
      contemplated by this Agreement (but excluding any Taxes or fees incurred with
      respect to the distribution-in-kind of the Warehouse Property by ACE Lo to
      ACE
      Hi, which shall be paid solely by ACE Hi, notwithstanding Section
      12.3(c)(i)),
      shall
      be borne solely by Buyer, (iv) the Casino Mansion Taxes and the Adjacent
      Property Mansion Taxes shall be borne solely by Buyer (but in accordance with
      Section
      2.6(c)(iii)
      and
Section
      2.7(a)(vi)
      hereof
      one-half (1⁄2) of such Taxes shall be deducted from the AREH Closing Payment and
      the ACE Closing Payment, respectively), (v) Buyer will
      pay
      for all costs of obtaining any title insurance hereunder, including without
      limitation, the ALTA owner’s extended coverage policies of title insurance for
      the Properties and (vi) the fees and expenses of the Escrow Agent under each
      of
      the escrow agreements contemplated by this Agreement shall be paid one-half
      (1⁄2)
      by Buyer and one-half (1⁄2) by the applicable Seller or Sellers that are parties
      to such escrow agreements.

     

    (b) In
      the
      event that (i) following execution of the Stockholder Consent, a Takeover
      Proposal (or the intention of any person to make one), whether or not
      conditional, shall have been made known to ACE Hi or shall have been publicly
      disclosed and thereafter (x) this Agreement is terminated by Buyer pursuant
      to
Section
      11.1(d)
      or
Section
      11.1(h)
      hereof
      and (y) within twelve (12) months of such termination ACE Hi or AREH
      executes any ACE Hi Acquisition Agreement or any person consummates any Takeover
      Proposal, (ii) this Agreement is terminated by ACE Hi with respect to the ACE
      Lo
      Purchase pursuant to Section
      11.1(g)
      hereof,
      or (iii) this Agreement is terminated by Buyer pursuant to Section
      11.1(f),
      then in
      each case ACE Hi shall pay Buyer a fee equal to Ten Million Dollars
      ($10,000,000) (the “Termination
      Fee”),
      payable by wire transfer of same day funds. Payment of the Termination Fee
      to
      Buyer pursuant to (A) clause (i) above shall be made concurrently with the
      earlier of the consummation of the Takeover Proposal or the execution of the
      ACE
      Hi Acquisition Agreement, (B) clause (ii) above shall be made concurrently
      with
      termination of this Agreement and (C) clause (iii) above shall be made within
      two (2) business days of termination of this Agreement.
      In no
      event will Buyer be entitled to receive the Termination Fee more than
      once.

     

    
      
        
        

      

      
        -69-

        
          

        

      

      
        
        

      

    

     

    (c) ACE
      Hi
      acknowledges that the agreement contained in Section
      9.11(b)
      is an
      integral part of the transactions contemplated by this Agreement, and that,
      without this agreement, Buyer would not enter into this Agreement. Accordingly,
      if ACE Hi fails promptly to pay any amount due pursuant to this Section
      9.11,
      and, in
      order to obtain such payment, Buyer commences a suit that results in a judgment
      against ACE Hi for the payments set forth in this Section
      9.11,
      ACE Hi
      shall pay to Buyer its costs and expenses (including attorneys’ fees and
      expenses) in connection with such suit, together with interest on the amount
      of
      the fee at the prime rate of Citibank N.A. in effect on the date such payment
      was required to be made plus 2% per annum; provided that,
      if ACE
      Hi prevails in such suit and is determined not to owe any amounts to Buyer
      pursuant to this Section
      9.11,
      Buyer
      shall pay to ACE Hi its costs and expenses (including attorneys’ fees and
      expenses) in connection with defending such suit.

     

    Section
      9.12 Casualty
      and Condemnation. 

     

    (a) If,
      before the Closing, one or more of the Properties suffer damage, then the
      Closing shall proceed as scheduled and the applicable Seller shall, as of the
      Closing Date, (i) promptly pay to Buyer all insurance proceeds received by
      the applicable Seller or its Affiliates, if any, with respect to such damage,
      destruction or other loss, less expenses incurred in collection of any proceeds
      applied to any physical restoration of the Properties and (ii) assign to Buyer
      all rights of such Seller and its Affiliates, if any, against third parties
      with
      respect to any causes of action, whether or not litigation has commenced as
      of
      the Closing Date, in connection with such damage, destruction or other loss.
      Between the date of the casualty and the Closing, Buyer will have the right
      to
      direct negotiations with the applicable insurance carriers of any of the Selling
      Parties with respect to any repairs (including the cost thereof) to be made,
      but
      shall not have the right to settle any such claim without Seller’s prior written
      consent. After the Closing, Buyer shall have the right to negotiate and settle
      with any insurance carriers of any of the Selling Parties with respect to which
      there is potential coverage for such damage, destruction or loss, provided
      that the
      applicable Seller shall have the right to consult with Buyer with respect to
      such negotiations or settlements.

     

    (b) In
      the
      event a condemnation proceeding or payment in lieu of condemnation occurs
      relative to any part of the Properties prior to the Closing Date, all payments
      relative to such condemnation (the “Condemnation
      Amount”)
      shall
      be paid by the applicable Seller to Buyer at the Closing, or the rights to
      the
      Condemnation Amount shall be assigned to Buyer at the Closing, or, at the
      applicable Seller’s election, the applicable Seller’s portion of the Purchase
      Price shall be reduced by the Condemnation Amount.

     

    
      
        
        

      

      
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    Section
      9.13 Conversion
      and Repayment of 3% Notes Prior to Closing.
      Prior
      to Closing, AREH shall, or shall cause its Affiliates who are holders of the
      3%
      Notes (including without limitation, AREP Sands and its Affiliates) to, demand
      payment of all of the 3% Notes in shares of ACE Hi Common Stock in accordance
      with the terms of the Indenture by delivering a notice to ACE Hi pursuant to
      Section 301(f) of the Indenture (the “Demand
      Notice”).
      Following its receipt of the Demand Notice, ACE Hi shall take all actions and
      execute all proper certificates and instruments to acknowledge satisfaction
      and
      discharge of the Indenture prior to the Closing and cause, prior to the Closing,
      the release of all liens and security interests in any of the assets of ACE
      Lo,
      and the extinguishment of the guarantee given by ACE Lo in respect of the 3%
      Notes, including delivering or causing to be delivered to the Trustee (a)
      sufficient shares of ACE Hi Common Stock to satisfy the rights of holders of
      the
      3% Notes to obtain the appropriate number of shares of ACE Hi Common Stock
      in
      respect of any payment pursuant to the Demand Notice and (b) an officers’
certificate and an opinion of counsel, each stating that all conditions
      precedent provided for in the Indenture relating to the satisfaction and
      discharge of the Indenture have been complied with.

     

    Section
      9.14 MLK
      Street Widening Project. 

     

    (a) ACE
      Lo
      has delivered to the CRDA a letter dated as of July 17, 2006, a copy of which
      has been provided to Buyer, pursuant to which ACE Lo formalized its application
      to the CRDA for the reservation of a certain portion of the CRDA Funds for
      direct investment in the MLK Street Widening Project. Such reservation, and
      various components of the MLK Street Widening Project, were approved by the
      CRDA
      by Resolution No. 06-54, dated July 18, 2006. 

     

    (b) The
      ACE
      Selling Parties hereby agree not to take any further actions with regard to
      the
      MLK Street Widening Project (including without limitation entering into an
      “investment agreement” with the CRDA with respect thereto) or the acquisition of
      certain real estate in the City of Atlantic City, State of New Jersey adjacent
      to the Casino Property (including, without limitation, that property commonly
      known as the Old Post Office (the “Old
      Post Office Land”
and,
      together with the Improvements now or hereafter located thereon, the
“Old
      Post Office Site”),
      without first obtaining Buyer’s written approval thereof. 

     

    (c) ACE
      Hi
      shall permit Buyer to participate in any further discussions with the CRDA
      regarding the investment agreement with the CRDA, the MLK Street Widening
      Project and ACE Lo’s acquisition of the Old Post Office Site, including an
      opportunity to negotiate with the CRDA regarding the scope of the MLK Street
      Widening Project.

     

    Section
      9.15 [Intentionally
      Omitted.]

     

    Section
      9.16 Real
      Property Tax Contests. 

     

    (a) ACE
      Hi
      shall have irrevocable control over any Real Property Tax Contest, including
      selecting counsel (“Counsel”)
      and
      expert witnesses (“Experts”)
      to
      represent ACE Lo in any proceedings and determining in its sole discretion
      whether such Real Property Tax Contest shall be undertaken, continued or
      discontinued by way of judicial or administrative proceedings, appeal,
      compromise, settlement or otherwise. ACE Hi’s right to control any Real Property
      Tax Contest shall include, without limitation, the right to direct ACE Lo to
      (i) settle any Real Property Tax Contest, (ii) appeal (or otherwise
      seek further review by an appellate court of) any decision or determination
      of
      any judicial or administrative body related to any Real Property Contest, and
      (iii) decline to take any further action following any judgment, order or
      decision of a judicial or administrative body. Notwithstanding the foregoing,
      ACE Hi agrees that it shall not settle any Real Property Tax Contest, without
      Buyer’s prior written consent, unless the aggregate amount of the Real Property
      Tax Refund to be received pursuant to the Real Property Tax Events equals or
      exceeds Twenty Million Dollars ($20,000,000) (without regard to the amount
      of
      fees of, and the costs and expenses incurred by, Counsel and
      Experts).

     

    
      
        
        

      

      
        -71-

        
          

        

      

      
        
        

      

    

     

    (b) ACE
      Hi,
      on the one hand, and ACE Lo and Buyer, on the other hand, shall be responsible
      for one-half (1⁄2) of the hourly fees (but excluding any contingent fees) of, and
      the costs and expenses actually incurred by, Counsel and Experts from and after
      the Measurement Date in connection with any Real Property Tax Contest.

     

    (c) Following
      the Closing, (i) Buyer shall (or Buyer shall cause ACE Lo to) promptly notify
      ACE Hi after the receipt of and provide copies of any correspondence or other
      documents related to any Real Property Tax Contest, (ii) Buyer shall cause
      ACE Lo and/or Counsel to execute any documents reasonably necessary with respect
      to any Real Property Tax Contest (including without limitation filings of
      pleadings in any court of competent jurisdiction, powers of attorney, settlement
      agreements, stipulations and consents to the entry of any judgments or orders)
      and (iii) Buyer shall (or shall cause ACE Lo to) provide written notice to
      ACE Hi as promptly as reasonably practicable prior to changing the record owner
      of the Casino Property and cooperate with ACE Hi in connection with any
      substitution of parties in order to protect any claim with respect to the Real
      Property Tax Contests. 

     

    (d) The
      amount of any Real Property Tax Refund shall be (i) first, reduced by the amount
      of any contingent fees payable to Counsel, (ii) second, retained by Buyer
      until Buyer has received an aggregate amount of Real Property Tax Refunds equal
      to Ten Million Dollars ($10,000,000), (iii) third, paid to ACE Hi as provided
      in
      the immediately following sentence until ACE Hi has received an aggregate amount
      of Real Property Tax Refunds equal to Ten Million Dollars ($10,000,000), and
      (iv) fourth, split between Buyer and ACE Hi equally, and ACE Hi’s one-half
      (1⁄2) share paid to ACE Hi as provided in the immediately following sentence. On
      the later of (x) the Closing or (y) ten (10) business days following ACE
      Hi’s delivery of written notice to Buyer of the occurrence of any Real Property
      Tax Event (together with a copy of the evidence thereof), Buyer shall (or Buyer
      shall cause ACE Lo to) pay any amounts required to be paid pursuant to this
      Section
      9.16(d)
      by wire
      transfer of immediately available funds. 

     

    (e) If
      Buyer
      or ACE Lo receives any cash payments, including interest, pursuant to a judgment
      of a judicial or administrative body relating to a Real Property Tax Contest
      prior to a Real Property Tax Event, such cash payments shall be allocated and
      paid in accordance with Section
      9.16(d)
      hereof.
      At the time of a Real Property Tax Event with respect to such Real Property
      Tax
      Contest, there shall be an accounting by the parties to determine whether the
      allocation of such payments pursuant to the preceding sentence was correct,
      and
      whether any monies are due to ACE Hi or alternatively, if ACE Hi must return
      to
      ACE Lo, with interest thereon at the actual rate charged to ACE Lo, any excess
      monies received by it in the event the amount received pursuant to the Real
      Property Tax Event is modified downward.

     

    
      
        
        

      

      
        -72-

        
          

        

      

      
        
        

      

    

     

    (f) The
      parties hereto acknowledge and agree that, for purposes of determining whether
      credits shall be included in the calculation of any Real Property Tax Refund,
      such credits shall be taken into account whether or not they are used and
      whether or not they could be used, including in particular by reason of the
      fact
      that such credits may no longer be usable by ACE Lo, Buyer or any Affiliate
      of
      Buyer, or any transferee therefrom or successor thereto, if (i) ACE Lo does
      not continue to be the record owner of the Casino Property or (ii) ACE Lo
      does not continue to be the named party in the Real Property Tax Contests.
      

     

    Section
      9.17 Title
      to Properties; “As-Is” Physical Condition of Improvements.  

     

    (a) Title
      to Properties.
      In
      connection with the execution of this Agreement, Buyer has received from the
      title company (i) the Pro Forma Title Policies and (ii) the Preliminary
      Certifications and Reports. The Pro Forma Title Policies are subject only to
      the
      permitted exceptions to title for the Properties set forth on Schedule B-2
      to
      each of the Pro Forma Title Policies attached as Exhibit
      I-1
      or
Exhibit
      I-2
      hereto
      (collectively, the “Permitted
      Exceptions”).
      At
      least ten (10) days prior to the Closing, Sellers agree to deliver to the title
      company the customary indemnities (e.g., mechanics’ lien) and affidavits in the
      forms attached as exhibits to the Preliminary Certifications and Reports, and
      to
      deliver such other documents and take such actions as necessary to cause the
      satisfaction of the requirements contained in Schedule B-1 to each of the
      Preliminary Certifications and Reports. 

     

    (b) “As-Is”
      Physical Condition of Improvements.
      Buyer
      or its Representatives have had the opportunity to fully examine and inspect
      the
      physical condition of the Improvements prior to the execution of this Agreement,
      and subject to the representations and warranties in ARTICLE
      IV,
      ARTICLE
      V,
      ARTICLE
      VI
      and
ARTICLE
      VII
      hereof
      and this Section
      9.17(b),
      Buyer
      agrees to accept the physical condition of the Improvements in an “AS-IS”
condition. Buyer agrees that, except for the specific and express
      representations and warranties in ARTICLE
      IV,
      ARTICLE
      V,
      ARTICLE
      VI
      and
ARTICLE
      VII
      hereof,
      Buyer is not relying upon any representations, statements or warranties of
      any
      Representative of any Seller as to the physical condition of the Improvements.
      To the extent not covered by the representations and warranties made in
ARTICLE
      IV,
      ARTICLE
      V,
      ARTICLE
      VI
      and
ARTICLE
      VII
      hereof,
      Buyer waives any right to assert any claim against Sellers, at Law or in equity,
      relating to the physical condition of the Improvements.

     

    Section
      9.18 Estoppel
      Certificates.
      Sellers
      shall (a) deliver to the lessor under each of the leases which are Assumed
      ACE
      Lo Contracts or AREH Occupancy Agreements, estoppel certificates and lessor
      consents certified to Buyer and Buyer’s lenders under its credit facility, which
      provide for, among other things, a mortgage of lessee’s leasehold interest in
      such ACE Leased Property or Adjacent Leased Property, as applicable, in a form
      reasonably acceptable to Buyer and Buyer’s lenders under its credit facility,
      (b) deliver to Buyer any such estoppel certificates or lessor consents obtained
      from such lessors and (c) at Buyer’s request, deliver to such lessors any
      follow-up requests reasonably requested by Buyer in a form provided by Buyer
      to
      Sellers. Buyer shall provide Sellers with the forms it wishes to use within
      thirty (30) days after this Agreement is executed. The failure to obtain any
      such consents or estoppel certificates shall not be a breach of Sellers’
covenants, obligations or representations or warranties or a failure of any
      of
      Buyer’s conditions to close under this Agreement. 

     

    
      
        
        

      

      
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    Section
      9.19 Cooperation
      on Tax Matters. 

     

    (a) The
      parties agree that the Traymore Price shall be allocated to the Traymore Site,
      and that, subject to such allocation, the Purchase Price (together with the
      applicable liabilities of the Companies and any other relevant items) shall
      be
      allocated among (i) the Interests and (ii) the assets of the Companies as
      set forth on Schedule
      9.19
      attached
      hereto (the “Purchase
      Price Allocation”),
      and
      if such schedule is not attached to this Agreement upon its execution, the
      parties will cooperate with mutual good faith effort to agree upon and attach
      such schedule hereto after execution of this Agreement and prior to the Closing.
      The parties hereto shall use the Purchase Price Allocation for all reporting
      purposes having to do with federal, state and local Taxes. The parties shall
      cooperate in connection with the preparation of, and shall timely file, any
      forms required to be filed under Section 1060 of the Code and any corresponding
      provision of state or local Tax law. Each of the parties agrees to file all
      Tax
      Returns and determine all Taxes (including, without limitation, for purposes
      of
      Section 1060 of the Code) in accordance with and based upon the Purchase Price
      Allocation. Buyer
      and
      Sellers shall promptly inform one another of any challenge by any Governmental
      Entity to any allocation made pursuant to this Section
      9.19(a)
      and
      shall consult and keep one another informed with respect to the status of,
      and
      any discussion, proposal or submission with respect to, such
      challenge. 

     

    (b) Sellers
      shall prepare (or cause to be prepared), consistent with the past practices
      and
      customs of, or with respect to, the applicable Companies (unless a contrary
      position is required by applicable Law), and timely file (or cause to be timely
      filed) with the appropriate Governmental Entity, all Income Tax Returns of,
      or
      with respect to, the applicable Companies relating to Pre-Closing Tax Periods
      and all Non-Income Tax Returns of, or with respect to, the applicable Companies
      that are required to be filed on or before the Closing Date. Refunds of Taxes
      paid by ACE Lo before the Measurement Date with respect to any Pre-Measurement
      Date Tax Period of ACE Lo, if received by ACE Lo or by Buyer on or after the
      Closing Date, shall be paid to ACE Hi; provided,
      however,
      that
      the foregoing shall not apply to (i) any such refund to which Section
      9.16
      applies,
      or (ii) any such refund to the extent that such refund is in respect of an
      item already included in any positive adjustment to the Purchase Price, or
      other
      credit hereunder, for the benefit of ACE Hi. If any such refund described in
      clause (ii) of the preceding sentence is received by ACE Hi on or after the
      Closing Date, such refund, up to the amount of the positive adjustment, shall
      be
      paid by ACE Hi to ACE Lo. Refunds of Taxes paid by ACE Lo on or after the
      Measurement Date with respect to any Post-Measurement Date Tax Period of ACE
      Lo,
      if received by ACE Hi, shall be paid by ACE Hi to ACE Lo. Refunds of Taxes
      paid
      by any of the MLK Entities before the Closing Date with respect to any
      Pre-Closing Tax Period of such MLK Entity, if received by such MLK Entity or
      by
      Buyer on or after the Closing Date, shall be paid to AREH; provided, however,
      that the foregoing shall not apply to any such refund to the extent that such
      refund is in respect of an item already included in any positive adjustment
      to
      the Purchase Price, or other credit hereunder, for the benefit of AREH. If
      any
      such refund described in the proviso of the preceding sentence is received
      by
      AREH on or after the Closing Date, such refund, up to the amount of the positive
      adjustment, shall be paid by AREH to the applicable MLK Entity. Refunds of
      Taxes
      paid by any of the MLK Entities on or after the Closing Date with respect to
      any
      Post-Closing Tax Period of such MLK Entity, if received by AREH, shall be paid
      by AREH to such MLK Entity. To the extent required by the Traymore Purchase
      Agreement, any refunds of real property Taxes paid with respect to the Traymore
      Site for periods prior to May 18, 2006, if received by Boardwalk, Buyer or
      AREH
      shall be paid to Boardwalk Regency Corp. Refunds of Taxes paid by Boardwalk
      with
      respect to any Tax Period of Boardwalk, if received by AREH, shall be paid
      by
      AREH to Boardwalk, except to the extent provided for in the preceding sentence.
      Except to the extent required by Law, (i) ACE Lo shall not file any amended
      Tax
      Return for any Pre-Measurement Date Tax Period and (ii) none of the MLK Entities
      shall file any amended Tax Return for any Pre-Closing Tax Period, in each case
      without the applicable Seller’s consent, which consent shall not be unreasonably
      withheld or delayed.

     

    
      
        
        

      

      
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    (c) Buyer
      shall prepare (or cause to be prepared) and timely file (or cause to be timely
      filed) with the appropriate Governmental Entity all Income Tax Returns of,
      or
      with respect to, the Companies relating to Post-Closing Tax Periods and all
      Non-Income Tax Returns of, or with respect to, the Companies that are required
      (with all extensions) to be filed after the Closing Date. Except to the extent
      required by Law, once filed, Measurement Date Straddle Period Tax returns of
      ACE
      Lo and Closing Date Straddle Period Tax Returns of any MLK Entity shall not
      be
      amended, in each case, without the applicable Seller’s consent, which consent
      shall not be unreasonably withheld or delayed.

     

    (d) Sellers
      and Buyer shall, and shall cause their respective Affiliates to, reasonably
      cooperate in preparing and filing all Tax Returns, including maintaining and
      making available to each other all records or information and personnel that
      may
      be relevant for the preparation of any Tax Returns, the determination of amounts
      due or payable hereunder in respect of Taxes, any audit or other examination
      by
      any Governmental Entity, the filing of any claim for a refund of Tax or for
      the
      allowance of any Tax credit, or any judicial or administrative proceedings
      relating to liability for Taxes with respect to all Tax Periods. Sellers and
      Buyer agree to (i) retain (or cause to be retained) all books and records with
      respect to Tax matters pertinent to any of the Companies relating to any
      Pre-Closing Tax Period until the applicable statute of limitations with respect
      to Taxes for, or with respect to, such Company has expired and to abide by
      (or
      cause to be abided by) all record retention agreements entered into with any
      Governmental Entity; and (ii) allow (or cause to be allowed) any party, at
      times and dates mutually acceptable to the parties, to inspect, review and
      make
      copies of such records as such party may deem necessary or appropriate from
      time
      to time, such activities to be conducted during normal business hours at such
      party’s expense. 

     

    (e) Following
      the Closing, Buyer shall prepare (or cause to be prepared) and timely file
      (or
      cause to be timely filed) with the appropriate Governmental Entity any Tax
      Returns required to be filed by Buyer in respect of the Casino Mansion Taxes
      and
      the Adjacent Property Mansion Taxes and shall timely pay to the appropriate
      Governmental Entity the Casino Mansion Taxes and the Adjacent Property Mansion
      Taxes. 

     

    Section
      9.20 Like-Kind
      Exchange.

     

    (a) Buyer
      or
      Sellers, or any of them, may elect to effect the transfer and conveyance of
      any
      of the assets of the Companies as part of a tax-deferred exchange under Section
      1031 of the Code (a “Section
      1031 Exchange”).
      If
      Buyer or Sellers, or any of them, so elects (an “Electing
      Party”),
      such
      Electing Party shall provide notice to Sellers (if the Electing Party is Buyer)
      or Buyer (if the Electing Party is a Seller) (“Non-Electing
      Party”)
      of its
      election, and thereafter such Electing Party:

     

    
      
        
        

      

      
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    (i) may
      at
      any time at or prior to Closing assign its rights and obligations under this
      Agreement to a “qualified intermediary” as defined in Treasury Regulation
      Section 1.1031(k)−1(g)(4), subject to all of the Non-Electing Parties’ rights
      and obligations hereunder; and

     

    (ii) shall
      promptly provide written notice of such assignment to the Non-Electing
      Parties.

     

    (b) The
      Non-Electing Parties shall cooperate with an Electing Party’s reasonable
      requests intended to allow such Electing Party to effect the Section 1031
      Exchange; provided, however, that the Non-Electing Parties’ obligations to
      cooperate with such Electing Party shall be limited and conditioned as
      follows:

     

    (i) the
      Non-Electing Party shall receive written notice from the Electing Party at
      least
      three (3) business days prior to the Closing Date, which shall identify the
      parties involved in such Section 1031 Exchange, enclose all documents for which
      the Non-Electing Parties’ signatures shall be required, and instruct the
      Non-Electing Parties as to any changed manner of payment of the Purchase Price,
      if any (including having such payment be made to a “qualified intermediary”) or
      other requested changes;

     

    (ii) the
      Electing Party shall pay for any and all reasonable additional costs and
      expenses incurred by the Non-Electing Parties in connection with accommodating
      the Section 1031 Exchange;

     

    (iii) the
      Electing Party shall not be relieved of any of its obligations under this
      Agreement by reason of the Section 1031 Exchange; and

     

    (iv) the
      Electing Party’s failure to effectuate any intended Section 1031 Exchange shall
      not relieve such Electing Party from its obligations to consummate the
      transactions contemplated by this Agreement and the consummation of such Section
      1031 Exchange shall not be a condition precedent to such Electing Party’s
      obligations under this Agreement.

     

    (c) The
      Electing Party hereby indemnifies and agrees to defend, and hold the
      Non-Electing Parties harmless from and against any claims, costs, damages,
      expenses, liabilities and losses incurred by, claimed against or suffered by
      it
      arising out of such Electing Party’s Section 1031 Exchange.

     

    (d) Any
      election permitted under this Section
      9.20
      is
      expressly conditioned upon the following: that such election (i) shall have
      no
      negative effect on securing any necessary consent or approval hereunder; (ii)
      will not delay the Closing Date; and (iii) will not result in any additional
      material cost or liability to the Non-Electing Parties.

     

    
      
        
        

      

      
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    Section
      9.21 Employee
      Matters. ACE
      Hi,
      as the sole manager of ACE Lo, shall adopt resolutions terminating each Plan
      sponsored or maintained by ACE Lo that is intended to satisfy the requirements
      of Sections 401(a) and 401(k) of the Code, with the effective date of such
      termination being the day before the Closing. Such resolutions shall be in
      form
      and content reasonably satisfactory to Buyer. Before the effective date of
      such
      resolutions, ACE Lo will amend any such Plan intended to satisfy the
      requirements of Sections 401(a) and 401(k) of the Code (other than a Plan which
      is a prototype plan) to the extent necessary to enable such Plan to satisfy
      the
      requirements of Sections 401(a) and 401(k) of the Code through the effective
      date of its termination. 

     

    Section
      9.22 Final
      MEPA Adjustment.
      Within
      fifteen (15) business days following ACE Lo’s receipt of the final determination
      from a Multiemployer Plan, an arbitrator, or a court of competent jurisdiction
      of ACE Lo’s multiemployer plan withdrawal liability incurred in connection with
      the cessation of the Casino Business (the “Final
      MEPA Determination”),
      Buyer
      shall deliver to ACE Hi a notice setting forth (a) the amount of the Final
      MEPA
      Determination (together with any backup or supporting data used in such
      determination) and (b) Buyer’s calculation of the Multiemployer Plan
      Liabilities, as prepared by an actuarial firm retained by Buyer. If ACE Hi
      shall
      disagree with Buyer’s calculation of the Multiemployer Plan Liabilities, it
      shall, within thirty (30) business days after its receipt of Buyer’s estimate,
      notify Buyer of such disagreement in writing, setting forth the particulars
      of
      such disagreement. Buyer and ACE Hi shall resolve such disagreements in
      accordance with the procedures set forth in Section
      2.7(c)
      hereof,
      except that references to the Auditor shall be replaced with an actuarial firm
      jointly selected by Buyer’s actuarial firm and ACE Hi’s actuarial firm. Within
      ten (10) business days of the final determination of the Multiemployer Plan
      Liabilities pursuant to this Section
      9.22,
      the
      result of (i) the Multiemployer Plan Liabilities minus
      (ii) the
      Estimated Multiemployer Plan Liabilities (which may be a positive or negative
      number) shall be paid (A) by ACE Hi to Buyer (if such difference is a
      positive amount) in cash by wire transfer of immediately available funds to
      an
      account designated by Buyer by written notice to ACE Hi or (ii) by Buyer to
      ACE
      Hi (if such difference is a negative amount) in cash by wire transfer of
      immediately available funds to an account designated by ACE Hi by written notice
      to Buyer.
      ACE Hi
      and Buyer shall cooperate with each other with respect to notice to, or the
      determination by any Multiemployer Plan of any withdrawal liability, and any
      notice or other communication to such Multiemployer Plan by ACE Hi, ACE Lo
      or
      Buyer shall be subject to the review and approval (not to be unreasonably
      withheld or delayed) of Buyer or ACE Hi, as the case may be. 

     

    Section
      9.23 Sale
      of Warehouse Property.
      At ACE
      Hi’s sole discretion, prior to the Closing ACE Lo shall either (a) distribute
      the Warehouse Property and/or the Warehouse Agreement to ACE Hi as a
      distribution-in-kind at any time, or (b) sell the Warehouse Property and/or
      the
      Warehouse Agreement to a third party pursuant to the Warehouse Sale Agreement
      or
      otherwise, and distribute the net cash proceeds of such sale, less any and
      all
      transfer Taxes to the extent such Taxes are properly payable by ACE Lo, fees
      and
      costs of ACE Lo, to ACE Hi within 10 business days of the completion of such
      sale;
      provided,
      however,
      that if
      ACE Lo shall not have sold the Warehouse Property and/or the Warehouse Agreement
      as of immediately prior to the Closing, ACE Hi shall cause ACE Lo to distribute
      the Warehouse Property and/or the Warehouse Agreement as a distribution-in-kind
      to ACE Hi concurrently with the Closing.

     

    
      
        
        

      

      
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    Section
      9.24 City-Wide
      Progressives Refund. In
      the
      event that ACE Lo shall be entitled to funds as a result of participation in
      City-Wide Progressive Jackpots based upon: (i) over funding of jackpots;
      (ii) distribution of reserved administration costs; or (iii) other similar
      items, in each case in respect of or deriving from amounts paid in by ACE Lo
      prior to the Measurement Date (“City-Wide
      Progressives Refund”),
      ACE
      Lo shall (and, following the Closing, Buyer shall cause ACE Lo to) use
      commercially reasonable efforts to collect such City-Wide Progressive Refunds
      and shall pay to ACE Hi, in cash by wire transfer of immediately available
      funds, all City-Wide Progressive Refunds. ACE Lo shall (and, following the
      Closing, Buyer shall cause ACE Lo to) make such payment to ACE Hi: (i) at
      the Closing if ACE Lo receives any City-Wide Progressive Refund at any time
      prior to Closing; or (ii) in all other instances, within ten (10) business
      days
      following ACE Lo’s or Buyer’s receipt of any City-Wide Progressive
      Refund.

     

    Section
      9.25 Termination
      of Related Party Contracts.
      Buyer
      and the Selling Parties hereby acknowledge and agree that, as of the Closing,
      all Contracts and other arrangements, whether written or oral, to which any
      Company is a party or pursuant to which any of the Companies’ assets are bound
      under which any Affiliates of the Selling Parties (other than such Companies)
      provide or receive any direct benefits or payments shall be terminated and
      of no
      further force or effect. The Selling Parties shall take any and all actions
      reasonably necessary or appropriate to effectuate the terminations of the
      Contracts and other arrangements described in the preceding sentence, including
      without limitation the Contracts listed on Schedule
      9.2(a)(i)(I)
      attached
      hereto.

     

    Section
      9.26 Refund
      of 2006 NJSEA Payment.
      Following the Closing, in the event that ACE Lo receives a refund of all or
      any
      portion of the 2006 NJSEA Payment in cash from the NJSEA (the “2006
      NJSEA Refund”),
      then
      ACE Lo shall (or Buyer shall cause ACE Lo to), within ten (10) business days
      following ACE Lo’s receipt of the 2006 NJSEA Refund, pay to ACE Hi, in cash by
      wire transfer of immediately available funds to an account designated by ACE
      Hi
      by written notice to Buyer, an amount equal to (a)  the 2006 NJSEA Refund
multiplied
      by
      (b) the
      ACE Hi NJSEA Ratio.

     

    Section
      9.27 Post-Closing
      Assumed Lease Payment.
      Buyer
      shall promptly pay to ACE Hi any payments of rent and/or deposits received
      by
      Buyer or any of its Affiliates (including following the Measurement Date, ACE
      Lo) under the Assumed Leases attributable to periods on or prior to the
      Measurement Date by wire transfer of immediately available funds to an account
      designated in writing by ACE Hi to Buyer.

     

    
      
        
        

      

      
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    Section
      9.28 Severance
      Payments; Outplacement Services. 

     

    (a) Buyer
      shall pay the Agreed Severance Amount as follows: (a) each individual listed
      on
Schedule 2.1(b)(v)
      attached
      hereto shall be paid the amounts as provided for in the agreements or order
      listed on Schedule 2.1(b)(v),
      and (b)
      the Covered Casino Employees shall be paid two (2) weeks salary, as
      proportionately adjusted for part-time status. 

     

    (b) At
      the
      Closing, ACE Hi shall pay to ACE Lo for payment (and ACE Lo shall pay) to each
      Covered Casino Employee that has been employed at the Casino Property for at
      least two (2) full years, one (1) week salary for each full year (beyond such
      two (2) full years) that such Covered Casino Employee has been employed at
      the
      Casino Property through the Closing Date. By way of example, any full-time
      Covered Casino Employee that has been employed at the Casino Property for
      three (3) full years as of date of termination shall be paid two (2) weeks
      salary pursuant to Section
      9.28(a)
      and one
      (1) week salary pursuant to this Section
      9.28(b).

     

    (c) Buyer
      shall pay such additional amounts (the “Agreed
      Stay-Put Bonuses”)
      to the
      Covered Casino Employees in the job categories described on Schedule
      9.28(c)
      (the
“Stay-Put
      Casino Employees”)
      as are
      necessary in order to provide each Stay-Put Casino Employee with a minimum
      of
      four (4) weeks salary pursuant to this Section
      9.28.
      By way
      of example, a full-time Stay-Put Casino Employee that has been employed at
      the
      Casino Property for three (3) full years as of the date of termination shall
      be
      paid (i) two (2) weeks salary pursuant to Section
      9.28(a)
      hereof,
plus
      (ii) one (1) week salary pursuant to Section
      9.28(b)
      hereof
      and plus
      (iii) an
      additional one (1) week salary pursuant to this Section
      9.28(c).
      In
      contrast, a full-time Stay-Put Casino Employee that has been employed at the
      Casino Property for five (5) full years as of the date of termination shall
      be
      paid (A) two (2) weeks salary pursuant to Section
      9.28(a)
      hereof,
plus
      (B) three (3) weeks salary pursuant to Section
      9.28(b)
      hereof
      and plus
      (C) no
      amounts pursuant to this Section
      9.28(c).

     

    (d) Following
      the Casino Shutdown, ACE Lo shall (and following the Closing, Buyer shall cause
      ACE Lo to) use commercially reasonable efforts to arrange job fairs, resume
      writing workshops and other outplacement services for Covered Casino
      Employees.

     

    (e) For
      purposes of this Section
      9.28,
      a
“Covered
      Casino Employee”
means
      any non-union Casino Employee (other than the individuals listed on Schedule 2.1(b)(v)
      attached
      hereto) who (i) has been employed at the Casino Property for at least six (6)
      months and (ii) has continued to be employed at the Casino Property through
      the
      Closing (or, in the case of particular employees that Buyer identifies are
      necessary to remain employed following the Closing, such later date as Buyer
      shall specify at Closing (which shall not be later than thirty (30) days
      following the Closing)). 

     

    ARTICLE
      X

    CONDITIONS
      TO CLOSING 

     

    Section
      10.1 Conditions
      to Each Party’s Obligation to Effect the Closing.
      The
      respective obligations of each party to this Agreement to effect the Closing
      is
      subject to the satisfaction of each of the following conditions on or prior
      to
      the Closing Date, any of which may be waived in whole or in part to the extent
      permitted by applicable Law in a writing executed by all of the parties
      hereto: 

     

    
      
        
        

      

      
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    (a) No
      Injunctions.
      No
      Governmental Entity shall have enacted, issued, promulgated, enforced or entered
      any order, executive order, stay, decree, judgment or injunction or statute,
      rule or regulation, whether temporary, preliminary or permanent, which is in
      effect and prevents or prohibits the Closing or makes it illegal for any party
      hereto to perform its obligations hereunder
      (a
“Restraint”);
      provided,
      however,
      that if
      this condition would not be satisfied as of the Scheduled Closing Date then
      in
      effect, then the Scheduled Closing Date shall automatically be extended until
      the tenth (10th) business day following the satisfaction or waiver of this
      condition, but not later than September 3, 2007 (the “Outside
      Date”);
      and
provided further,
      in the
      event that, as of such Outside Date, this condition would not be satisfied,
      then
      the Outside Date shall be automatically extended by three (3)
      months.

     

    (b) HSR
      Act.
      Any
      applicable waiting periods, together with any extensions thereof, under the
      HSR
      Act and the antitrust or competition Laws of any other applicable jurisdiction
      shall have expired or been terminated.

     

    (c) Surrender
      of Gaming License.
      ACE Lo
      shall have surrendered to the New Jersey Casino Control Commission its gaming
      licenses to own and operate the Casino Business in the State of New Jersey.
      

     

    (d) Cessation
      of Operations.
      The ACE
      Selling Parties shall have ceased all gaming activities at the Casino Property
      and the Madison House. 

     

    Section
      10.2 Additional
      Conditions to Obligations of Buyer.
      The
      obligation of Buyer to effect the Closing is subject to the satisfaction of
      each
      of the following conditions on or prior to the Closing Date, any of which may
      be
      waived in whole or in part in writing exclusively by Buyer; provided,
      however,
      that
      notwithstanding anything to the contrary in this Agreement (but subject to
      the
      following proviso), any conditions to the Buyer’s obligations hereunder which
      have not been satisfied by reason of any breach of a representation, warranty
      or
      covenant which may be satisfied by the payment of money by the Selling Parties,
      shall be deemed satisfied upon payment to the Escrow Agent of such amount
      pursuant to an escrow agreement substantially in the form attached hereto as
      Exhibit
      L
      (the
“Closing
      Condition Escrow Agreement”)
      executed and delivered by each of ACE Hi, AREH, Buyer and the Escrow Agent
      pending the agreement of the Buyer and the Selling Parties as to the amount
      of
      any such payment due to the Buyer or upon receipt of a final and non-appealable
      order issued by a court of competent jurisdiction as to the disposition of
      such
      amount; provided further,
      that
      the waiver of any condition based on the accuracy of any representation or
      warranty, or on the performance of or compliance with any covenant or
      obligation, will not affect the right to indemnification, reimbursement, or
      other remedy pursuant to Section
      12.2
      or
      otherwise based on such representations, warranties, covenants and
      obligations: 

     

    
      
        
        

      

      
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    (a) Representations
      and Warranties. 

     

    (i) Each
      of
      the representations and warranties of the ACE Selling Parties in ARTICLE
      IV
      hereof
      and the AREH Selling Parties in ARTICLE
      VI
      hereof
      shall be true and correct in all respects at and as of the Closing as if made
      at
      and as of such time (except to the extent expressly made as of an earlier date,
      in which case as of such earlier date). 

     

    (ii) Buyer
      shall have received certificates signed on behalf of each Selling Party by
      an
      executive officer of such party to the effect of subclause (i) of this
Section
      10.2(a).

     

    (b) Performance
      of Obligations.
      Each of
      the Selling Parties shall have performed 

     

    (i) in
      all
      material respects all covenants, agreements and obligations (other than
      representations and warranties made by the Selling Parties in this Agreement)
      set forth in Section 9.1(a), 9.2(a)(i)(H(II)), 9.2(a)(ii)(A-J, L-N, P, Q(I),
      S,
      U, W, Y and AA), 9.2(b)(i)(H)(I), 9.2(b)(ii)(A-G, I-K, M, N(I), P and R), 9.5,
      9.13, 9.14(b), 9.25 and 9.28(b) hereof; and

     

    (ii) in
      all
      respects all other covenants, agreements and obligations (other than
      representations and warranties made by the Selling Parties in this Agreement)
      set forth in this Agreement other than those set forth in Section
      9.4
      hereof
      and other than those set forth in subclause (i) above, except where the failure
      to perform such other covenants, agreements or obligations would not,
      individually or in the aggregate, result in a Material Adverse
      Effect. 

     

    Buyer
      shall have received certificates signed on behalf of each Selling Party by
      an
      executive officer of such party to such effect. 

     

    (c) Closing
      Deliveries.
      Sellers
      shall have delivered to Buyer the documents and agreements set forth in
Section
      2.9(a)(i)
      through (iv) hereof and, solely with respect to the Casino Land, Section
      2.9(a)(v) hereof and Section
      2.9(b)
      (i)
      through (iv) hereof and, solely with respect to the Traymore Land, Section
      2.9(b)(v) hereof.

     

    (d) Title.
      Buyer
      shall have received title policies conforming to the Pro Forma Title Policies
      issued by a nationally recognized title insurance company for the Casino
Land
      and
      Traymore Land.

     

    (e) Bankruptcy.
      No
      action or proceeding shall have been commenced by or against either of the
      ACE
      Selling Parties under the U.S. Federal bankruptcy code or any state Law for
      the
      relief of debtors or for the enforcement of the rights of creditors (and in
      the
      case of an involuntary case or proceeding, remains undismissed and unstayed
      for
      a period of 90 days). 

     

    (f) Liens.
      No Lien
      other than those relating to GB Claims shall have attached to ACE Lo’s interest
      in the Casino Property, ACE Hi’s interest in the ACE Lo Equity Interests,
      Boardwalk’s interest in the Traymore Site or AREH’s interest in the Boardwalk
      Equity Interests; provided
      that
      this condition shall be deemed to be satisfied with respect to any Lien that
      has
      been bonded or discharged or that constitutes a Permitted
      Encumbrance.

     

    
      
        
        

      

      
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    (g) Requisite
      Stockholder Approval.
      The
      Requisite Stockholder Approval shall have been obtained and shall be valid
      and
      in full force and effect.

     

    (h) Conversion
      of 3% Notes; Repayment of Indebtedness; Release of Liens and
      Guarantees.
      Buyer
      shall have received satisfactory evidence that, prior to Closing: (i) all
      of the 3% Notes shall have been converted into ACE Hi Common Stock, (ii) the
      Flatiron Financing Agreement shall have been terminated and be of no further
      force and effect; (iii) the Drawbridge Loan Documents shall have been
      terminated and be of no further force and effect; (iv) all other Indebtedness
      (other than the MLK Indebtedness) shall have been paid off in full; (v) all
      Liens other than those relating to GB Claims on the assets of ACE Lo or the
      AREH
      Subs under or in respect of the 3% Notes, the Drawbridge Loan Documents or
      any
      other Indebtedness of any Person (other than the MLK Indebtedness) shall have
      been released, and (vi) all guarantees entered into by ACE Lo in connection
      with
      the 3% Notes, the Drawbridge Loan Documents or any other Indebtedness of any
      Person shall have been extinguished and released.

     

    (i) Termination
      of ACE Lo 401(k) Plan.
      ACE Hi
      shall have adopted resolutions terminating the ACE Lo 401(k) Plan in accordance
      with Section
      9.21
      hereof.

     

    The
      parties acknowledge the indemnification of Buyer regarding GB Claims set forth
      in this Agreement and the ability of Buyer to utilize the GB Indemnification
      Escrow as provided herein. The existence of the GB Claims or Liens relating
      thereto and any lawsuit, action or assertion by or on behalf of the GB Parties,
      other than a Restraint, whether or not they would constitute a breach of a
      representation, warranty, covenant or failure of a condition to Buyer’s
      obligation to close hereunder, shall not constitute the failure of a condition
      to Buyer’s obligation to close hereunder unless there is a failure to satisfy
      the condition set forth: (a) in Section
      10.2(a)(i)
      hereof
      by reason of a material breach of the representation and warranty in the first
      sentence in Section
      4.3(c)
      hereof
      or (b) in Section
      10.2(d)
      hereof.

     

    Section
      10.3 Additional
      Conditions to Obligations of Sellers.
      The
      obligations of Sellers to effect the Closing are subject to the satisfaction
      of
      each of the following conditions on or prior to the Closing Date, any of which
      may be waived in whole or in part in writing exclusively by Sellers: 

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of Buyer contained in this Agreement shall be
      true and correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth therein) at and as of the Closing as if made
      at and as of such time (except to the extent expressly made as of an earlier
      date, in which case as of such earlier date), except where the failure of such
      representations and warranties to be true and correct would not, individually
      or
      in the aggregate, result in a Buyer Material Adverse Effect. Sellers
      shall have received a certificate signed on behalf of Buyer by an executive
      officer of such party to such effect.

     

    
      
        
        

      

      
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    (b) Performance
      of Obligations of Buyer.
      Buyer
      shall have performed  

     

    (i) in
      all
      material respects all covenants, agreements and obligations (other than
      representations and warranties made by Buyer in this Agreement) set forth in
      Section 9.1(d) and 9.28(a) hereof, and 

     

    (ii) in
      all
      respects all other covenants, agreements and obligations (other than
      representations and warranties made by Buyer in this Agreement) set forth in
      this Agreement other than those set forth in subclause (i) above, except where
      the failure to perform such other covenants, agreements or obligations would
      not, individually or in the aggregate, result in a Material Adverse
      Effect.

     

    Sellers
      shall have received a certificate signed on behalf of Buyer by an executive
      officer of such party to such effect. 

     

    (c) Closing
      Deliveries.
      Buyer
      shall have delivered to Sellers the payments, documents and agreements set
      forth
      in Section
      2.9(c)
      hereof. 

     

    ARTICLE
      XI

    TERMINATION 

     

    Section
      11.1 Termination.
      This
      Agreement may be terminated (and such termination shall have the effects set
      forth in Section
      11.2
      hereof)
      at any time prior to the Closing by written notice by the terminating party
      to
      the other party (except in the case of termination pursuant to Section
      11.1(a)
      hereof,
      which requires mutual agreement of all parties or pursuant to Section
      11.1(i)
      hereof,
      which termination shall be automatic): 

     

    (a) by
      mutual
      written consent of Buyer and Sellers whether or not the Agreement has been
      approved by the respective directors and stockholders of such
      parties; 

     

    (b) by
      either
      Buyer or Sellers, if the transactions contemplated hereby shall not have been
      consummated on or prior to the Outside Date; provided,
      however,
      that
      the right to terminate this Agreement under this Section
      11.1(b)
      shall
      not be available to any party whose failure to fulfill any obligation under
      this
      Agreement has been the primary cause of or resulted in the failure of the
      Closing to occur on or before the Outside Date; 

     

    (c) by
      either
      Buyer or Sellers, if any Restraint prohibiting or otherwise preventing the
      purchase of the ACE Lo Equity Interests, the Boardwalk Equity Interests, the
      Casino Property or the Traymore Site shall be in effect and shall have become
      final and nonappealable; provided,
      that,
      the
      party seeking to terminate this Agreement pursuant to this Section
      11.1(c)
      shall
      have used its commercially reasonable efforts to prevent the entry of and to
      remove such Restraint and that the right to terminate this Agreement under
      this
Section
      11.1(c)
      shall
      not be available to any party whose failure to fulfill any obligation under
      this
      Agreement has been the primary cause of, or materially contributed to,
the
      action resulting in such Restraint;

     

    (d) by
      Buyer,
      if any Selling Party has breached any representation, warranty, covenant or
      agreement on the part of such Selling Party set forth in this Agreement which
      (i) would result in a failure of a condition set forth in Section
      10.2(a)
      or (b)
      hereof and (ii) is not cured in all material respects within sixty (60) calendar
      days after written notice thereof; provided,
      however,
      that if
      such breach cannot reasonably be cured within such sixty (60) day period but
      can
      be reasonably cured prior to the Outside Date, and such Selling Party is
      diligently proceeding to cure such breach, this Agreement may not be terminated
      pursuant to this Section
      11.1(d);
      provided,
      further,
      that
      Buyer’s right to terminate this Agreement under this Section
      11.1(d)
      shall
      not be available if, at the time of such intended termination, Sellers have
      the
      right to terminate this Agreement under Section
      11.1(e)
      hereof; 

     

    
      
        
        

      

      
        -83-

        
          

        

      

      
        
        

      

    

     

    (e) by
      Sellers, if Buyer has breached any representation, warranty, covenant or
      agreement on the part of Buyer set forth in this Agreement which (i) would
      result in a failure of a condition set forth in Section
      10.3(a)
      or (b)
      hereof and (ii) is not cured in all material respects within sixty (60)
      calendar days after written notice thereof; provided,
      however,
      that if
      such breach cannot reasonably be cured within such sixty (60) day period but
      can
      be reasonably cured prior to the Outside Date, and Buyer is diligently
      proceeding to cure such breach, this Agreement may not be terminated pursuant
      to
      this Section
      11.1(e);
      provided,
      further,
      that
      Sellers’ right to terminate this Agreement under this Section
      11.1(e)
      shall
      not be available if, at the time of such intended termination, Buyer has the
      right to terminate this Agreement under Section
      11.1(d),
      Section
      11.1(f)
      or
Section
      11.1(h)
      hereof; 

     

    (f) by
      Buyer,
      in the event that AREP Sands does not execute and adopt the Stockholder Consent
      within one (1) business day following the execution of this
      Agreement;

     

    (g) by
      ACE Hi
      with respect to the ACE Lo Purchase only, in accordance with Section
      9.4(b);
      provided that,
      in
      order for the termination of this Agreement pursuant to this Section
      11.1(g)
      to be
      deemed effective, ACE Hi shall have complied with Section
      9.4
      and with
      applicable requirements, including the payment of the Termination Fee, of
Section
      9.11;

     

    (h) by
      Buyer,
      in the event of a material breach of Section
      9.4;
      or

     

    (i) automatically,
      if Buyer does not deliver a written notice to elect to effect a Revival pursuant
      to Section
      9.4(e)(iii)
      hereof
      within the time period specified therein.

     

    Section
      11.2 Effect
      of Termination.

     

    (a) Liability.
      In the
      event of any termination of this Agreement 

     

    (i) by
      ACE
      Hi, pursuant to Section
      11.1(g)
      hereof,
      this Agreement shall immediately become void as between Buyer and the ACE
      Selling Parties and there shall be no further liability or obligation as between
      Buyer and the ACE Selling Parties, or its or their respective Affiliates or
      Representatives, provided that,
      notwithstanding such termination, this Agreement shall remain in full force
      and
      effect as between Buyer and the AREH Selling Parties as and to the extent
      contemplated in Section
      9.4(e)(ii)
      hereof
      with respect to the AREH Subs Purchase, 

     

    (ii) pursuant
      to Section
      11.1(i)
      hereof,
      this Agreement shall immediately become void as between Buyer and the Selling
      Parties and there shall be no further liability or obligation as between Buyer
      and the Selling Parties, or its or their respective Affiliates or
      Representatives,

     

    
      
        
        

      

      
        -84-

        
          

        

      

      
        
        

      

    

     

    (iii) by
      either
      Buyer or any Seller, pursuant to any other provision of Section
      11.1
      hereof
      (i.e.,
      other
      than pursuant to Section
      11.1(g)
      hereof
      or automatically pursuant to Section
      11.1(i)
      hereof),
      this Agreement shall immediately become void and there shall be no further
      liability or obligation on the part of Buyer, any Selling Party, or its or
      their
      respective Affiliates or Representatives.

     

    Notwithstanding
      anything to the contrary in this Section
      11.2(a),
      (A) to
      the extent that any such termination results from the breach by a party hereto
      of any of its representations, warranties, covenants or agreements set forth
      in
      this Agreement, no termination of this Agreement pursuant to Section
      11.1
      hereof
      shall relieve any party of liability for a breach of any provision of this
      Agreement occurring before such termination and (B) Section
      9.4
      and
Section
      9.11
      hereof,
      this Section
      11.2
      and
ARTICLE
      XIII
      hereof
      shall remain in full force and effect notwithstanding any termination hereunder.
      In the event that this Agreement is terminated, Buyer will redeliver all
      documents, work papers and other materials of the ACE Selling Parties or the
      Selling Parties, as applicable, relating to the transactions contemplated
      herein, whether obtained before or after the execution hereof, in accordance
      with the terms of the Confidentiality Agreement.

     

    (b) Deposit.
      Within
      three (3) business days following any termination of this Agreement, but subject
      to the following sentence, Buyer shall deliver written instructions to the
      Escrow Agent to release from the Deposit Escrow and pay to Buyer the Deposit
      (including any interest earned thereon); provided that,
      in the
      event of a termination with respect to the ACE Lo Purchase only and not the
      AREH
      Subs Purchase pursuant to Section
      11.1(g)
      hereof,
      Buyer shall deliver written instructions to the Escrow Agent to release from
      the
      Deposit Escrow and pay to Buyer a portion of the Deposit corresponding to the
      proportion of the entire Purchase Price represented by the Closing ACE Purchase
      Price (including any interest earned thereon). Notwithstanding the foregoing
      sentence, if (i) all of the conditions to Buyer’s obligation to close under
Section
      10.1
      and
Section
      10.2
      hereof
      shall have been satisfied (other than those conditions to be satisfied at the
      Closing), and Buyer fails to close within the time required by this Agreement,
      (ii) the condition to the parties’ obligations to close under Section
      10.1(b)
      shall
      not have been satisfied due to Buyer’s failure to use best efforts to cause the
      expiration or termination of any appliacable waiting periods, together with
      any
      extensions thereof, under the HSR Act in accordance with Section
      9.7(b)
      hereof,
      (iii) the condition to Buyer’s obligation to close under Section
      10.2(d)
      shall
      not have been satisfied due to Buyer’s failure to pay the fees of the title
      insurance company, or (iv) the Sellers’ obligations to close under Section
      10.3(c)
      hereof
      shall not have been satisfied due to Buyer’s failure to pay the Purchase Price
      at the Closing, then ACE Hi shall be entitled to receive the Deposit (without
      any interest earned thereon) and Buyer and ACE Hi shall deliver joint written
      instructions to the Escrow Agent to (A) release from the Deposit Escrow and
      pay to ACE Hi, the Deposit (without giving effect to the interest earned
      thereon) and
      (B) release from the Deposit Escrow and pay to Buyer, any interest earned
      on the Deposit, all pursuant to this Section
      11.2(b)
      and the
      Deposit Escrow Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      XII

    SURVIVAL;
      INDEMNIFICATION 

     

    Section
      12.1 Survival
      of Representations, Warranties, Covenants and Agreements.
      The
      representations and warranties made by Sellers and, prior to the Closing, the
      Companies in this Agreement or any certificate delivered by Sellers (or, prior
      to the Closing, the Companies) pursuant hereto shall survive the Closing until
      (and claims based upon or arising out of such representations and warranties
      may
      be asserted at any time before but in no event after) the date that is
      twelve (12) months following the Closing Date; provided,
      however,
      (i) the
      representations and warranties made by the applicable Selling Parties in
Section
      4.3
      and
Section
      6.3
      hereof
      shall survive the Closing until the later of (x) eighteen (18) months following
      the Closing or (y) the satisfaction of the Holdback Condition, and (ii)
      there shall be no limitation on the time within which notice of a claim based
      on
      fraud on the part of any party hereto may be made. The
      termination of the representations and warranties to the extent provided herein
      shall not affect a party in respect of any claim made by such party in
      reasonable detail in a writing received by the Indemnifying Party prior to
      the
      expiration of the applicable survival period provided herein.
      The
      covenants and agreements of the parties contained in this Agreement shall
      survive the Closing in perpetuity; provided that
      claims
      based upon or arising out of the Selling Parties’ covenants in Section 9.1 and
Section
      9.2
      hereof
      must be made by the Indemnified Parties in reasonable detail in a writing
      received by the applicable Indemnifying Party prior to the date that is twelve
      (12) months following the Closing. The
      Indemnifying Parties’ indemnification obligations pursuant to Section
      12.2(a)(iii),
      Section
      12.2(b)(iii),
      Section
      12.3(a)
      and
Section
      12.3(b)
      hereof
      (other than with respect to obligations arising under Section
      9.22,
      which
      shall survive the Closing until ten (10) days following the final determination
      of the Multiemployer Plan Liabilities under Section
      9.22)
      and
      Buyer’s indemnification obligations pursuant to Section
      12.3(c)
      hereof
      shall expire on the date that is eighteen (18) months from the Closing Date;
      provided,
      however,
      that
      the expiration of such indemnification obligations shall not affect an
      Indemnified Party or Seller Indemnified Party (with respect to their
      indemnification rights under Section
      12.3(c))
      in
      respect of any claim made by such party in reasonable detail in a writing
      received by the Indemnifying Party or Buyer, as applicable, prior to the
      expiration of such eighteen (18) month period
      (or the
      applicable period described above with respect to obligations arising under
      Section
      9.22
      hereof). 

     

    Section
      12.2 Indemnification. 

     

    (a) Indemnification
      by ACE Hi.
      Subject
      to the provisions of Section
      12.4
      and
      Section 12.7 hereof, from and after the Closing, ACE Hi shall indemnify, defend,
      save and hold harmless Buyer and its Affiliates (including, without limitation,
      Buyer and the Companies), each of their respective direct or indirect parent
      entities, officers, members, partners, directors and employees (and in the
      case
      of clause (iv) below, Buyer’s Representatives), and each of the heirs,
      executors, successors and assigns of any of the foregoing (each individually,
      an
“Indemnified
      Party”
and,
      collectively, the “Indemnified
      Parties”),
      against any losses, claims, damages, liabilities and expenses whenever arising
      or incurred (including, without limitation, amounts paid for reasonable
      attorneys’ fees and expenses and costs of suit), whether or not involving a
      third party claim (hereinafter “Losses”),
      asserted under any Federal or state statute or regulation, or at common law
      whether in tort, contract, legal or equitable, or on any other basis, arising
      out of or resulting from: 

     

    
      
        
        

      

      
        -86-

        
          

        

      

      
        
        

      

    

     

    (i) any
      breach of any representation or warranty made by the ACE Selling Parties, or
      either of them, in this Agreement (other than any breach of Section
      5.8
      hereof),
      to the extent not included or taken into account in the calculations of the
      Closing ACE Purchase Price pursuant to ARTICLE
      II
      hereof; 

     

    (ii) any
      breach of any covenant or agreement made, or to be performed, by the ACE Selling
      Parties, or either of them, in this Agreement (other than any breach of Sections
      9.16 or 9.19 or hereof); 

     

    (iii) the
      ACE
      Indemnified Liabilities, to the extent not included or taken into account in
      the
      calculations of the Closing ACE Purchase Price pursuant to ARTICLE
      II
      hereof; 

     

    (iv) any
      action, suit or proceeding against Buyer, any other Indemnified Party or ACE
      Lo
      in respect of the GB Claims;
      or

     

    (v) any
      GB
      Resale Payment.

     

    (b) Indemnification
      by AREH.
      Subject
      to the provisions of Section
      12.4
      and
      Section 12.7 hereof, from and after the Closing, AREH (together with ACE Hi,
      each individually, an “Indemnifying
      Party”
and,
      collectively, the “Indemnifying
      Parties”)
      shall
      indemnify, defend, save and hold harmless the Indemnified Parties from and
      against any and all Losses asserted under any Federal or State statute or
      regulation, or at common law whether in tort, contract, legal or equitable,
      or
      on any other basis, incurred in connection with, arising out of or resulting
      from: 

     

    (i) any
      breach of any representation or warranty made by the AREH Selling Parties,
      or
      any of them, in this Agreement (other than any breach of Section
      7.4
      hereof),
      to the extent not included or taken into account in the calculations of the
      AREH
      Closing Payment;

     

    (ii) any
      breach of any covenant or agreement made, or to be performed, by the AREH
      Selling Parties, or any of them, in this Agreement (other than any breach of
      Sections 9.16 or 9.19 hereof); 

     

    (iii) the
      AREH
      Indemnified Liabilities, to the extent not included or taken into account in
      the
      calculations of the AREH Closing Payment;

     

    (iv) any
      action, suit or proceeding against Buyer, any other Indemnified Party or ACE
      Lo
      in respect of the GB Claims;
      

     

    (v) any
      GB
      Resale Payment;
      or

     

    (vi) any
      breach of any representation or warranty made by the ACE Selling Parties in
      Section
      4.3
      hereof. 

     

    
      
        
        

      

      
        -87-

        
          

        

      

      
        
        

      

    

     

    (c) The
      parties hereto hereby acknowledge and agree that for purposes of this
ARTICLE
      XII,
      in the
      event any representation or warranty of the ACE Selling Parties in ARTICLE
      IV
      or
ARTICLE
      V
      hereof
      or the AREH Selling Parties in ARTICLE
      VI
      or
ARTICLE
      VII
      hereof
      shall have been breached (taking into account any and all “Material Adverse
      Effect,” “materiality” and similar exceptions and qualifiers set forth in any
      such representations and warranties), solely for purposes of determining the
      amount of Losses resulting therefrom, any and all “Material Adverse Effect”
qualifiers set forth in any such representations and warranties shall be
      disregarded.

     

    (d) Notwithstanding
      anything to the contrary contained in this Agreement, the indemnification
      obligations of the Indemnifying Parties in Section
      12.2(a)
      and
Section
      12.2(b)
      hereof
      shall not apply to any particular Loss until ninety (90) days after the
      applicable Indemnified Party has filed a claim with respect to such insured
      Loss
      for reimbursement under its title insurance policy(ies) and/or any other
      applicable insurance policies. Each Indemnified Party covenants to use
      commercially reasonable efforts to obtain reimbursement from such insurer(s)
      for
      any such insured Losses. Any indemnified Loss under Section
      12.2(a)
      or
Section
      12.2(b)
      shall be
      reduced by the amount, if any, of the Indemnified Party’s recovery under such
      insurance policies. 

     

    Section
      12.3 Tax
      Indemnity.

     

    (a) Indemnification
      by ACE Hi.
      Subject
      to the provisions of Section
      12.4
      and
      Section 12.7 hereof, from and after the Closing, ACE Hi shall indemnify, defend,
      save and hold harmless the Indemnified Parties (including, without limitation,
      ACE Lo) from and against any and all Losses incurred in connection with, arising
      out of, resulting from or incident to:

     

    (i) Non-Income
      Taxes of ACE Lo (or any of its predecessors) for all Pre-Measurement Date Tax
      Periods;

     

    (ii) Income
      Taxes of, or with respect to, ACE Hi or any of its Affiliates, in which it
      has a
      direct or indirect equity interest, including without limitation, (A) all such
      Taxes arising out of or in connection with the sale of the ACE Lo Equity
      Interests or other transactions contemplated by this Agreement occurring on
      or
      before the Closing, and (B) with respect to the income, business or activities
      of ACE Lo, for all Pre-Closing Tax Periods;

     

    (iii) any
      breach of any covenant or agreement made, or to be performed, by ACE Hi or
      any
      of its Affiliates, in which it has a direct or indirect equity interest, in
      Section
      9.19;
      or

     

    (iv) any
      breach of any representation or warranty or the inaccuracy of any representation
      or warranty, made in Section
      5.8.

     

    
      
        
        

      

      
        -88-

        
          

        

      

      
        
        

      

    

     

    (b) Indemnification
      by AREH.
      Subject
      to the provisions of Section
      12.4
      and
      Section 12.7 hereof, from and after the Closing, AREH shall indemnify, defend,
      save and hold harmless the Indemnified Parties (including, without limitation,
      the AREH Subs) from and against any and all Losses incurred in connection with,
      arising out of, resulting from or incident to:

     

    (i) Non-Income
      Taxes of the MLK Entities for all Pre-Closing Tax Periods;

     

    (ii) Income
      Taxes of, or with respect to, AREH or any of its Affiliates (other than ACE
      Hi
      and its Subsidiaries), including without limitation, (A) all such Taxes arising
      out of or in connection with the sale of the AREH Subs Equity Interests or
      other
      transactions contemplated by this Agreement occurring on or before the Closing
      and (B) with respect to the income, business or activities of the AREH
      Subs, for all Pre-Closing Tax Periods;

     

    (iii) any
      breach of any covenant or agreement made, or to be performed, by AREH or any
      of
      its Affiliates (other than ACE Hi and its Subsidiaries) in Section
      9.19;
      or

     

    (iv) any
      breach of any representation or warranty or the inaccuracy of any representation
      or warranty, made in Section
      7.4.

     

    (c) Indemnification
      by Buyer.
      Subject
      to the provisions of Section
      12.4
      hereof,
      from and after the Closing, Buyer shall indemnify, defend, save and hold
      harmless Sellers and their Affiliates (each individually, a “Seller
      Indemnified Party”
and
      collectively, the “Seller
      Indemnified Parties”)
      from
      and against any and all Losses incurred in connection with, arising out of,
      resulting from or incident to:

     

    (i) Non-Income
      Taxes of (A) ACE Lo for all Post-Measurement Date Tax Periods, (B) the MLK
      Entities for all Post-Closing Tax Periods, and (C) Boardwalk for all Tax
      Periods; and Income Taxes of, or with respect to (including without limitation
      with respect to the income, business, or activities of), ACE Lo and each of
      the
      AREH Subs for all Post-Closing Tax Periods; 

     

    (ii) any
      breach of any covenant or agreement made, or to be performed, by Buyer or any
      of
      its Affiliates in Section
      9.19;
      or

     

    (iii) Taxes
      for
      which Buyer is responsible under Section 9.11.

     

    (d) Amount
      of Taxes.
      For
      purposes of this Section
      12.3,
      Taxes
      shall include the amount of Taxes which would have been paid but for the
      application of any credit or net operating loss or capital loss deduction
      attributable to, as applicable, either Post-Measurement Date Tax Periods or
      Post-Closing Tax Periods.

     

    (e) Closing
      Date Straddle Period.
      In the
      case of any Closing Date Straddle Period:

     

    (i) real
      and
      personal property Taxes or other Taxes levied on a per diem basis (collectively,
      “Per
      Diem Taxes”)
      of any
      of the Companies for a Pre-Closing Tax Period shall be equal to the amount
      of
      such Per Diem Taxes for the entire Closing Date Straddle Period multiplied
      by a
      fraction, the numerator of which is the number of calendar days during the
      Closing Date Straddle Period that are in the Pre-Closing Tax Period and the
      denominator of which is the total number of calendar days in the Closing Date
      Straddle Period; and

     

    
      
        
        

      

      
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    (ii) Taxes
      of
      any of the Companies (other than Per Diem Taxes) for any Pre-Closing Tax Period
      shall be computed as if such Tax Period ended as of the end of the day on the
      Closing Date.

     

    In
      the
      case of any Measurement Date Straddle Period, analogous principles to the
      foregoing shall apply.

     

    (f) Certain
      Procedures.

     

    (i) All
      claims for indemnification under this Section
      12.3
      shall be
      asserted and resolved pursuant to the provisions of Section
      12.4,
      except
      to the extent that the following clause (ii),
      (iii)
      or
(iv)
      requires
      otherwise.

     

    (ii) The
      applicable Seller and Buyer shall jointly control all proceedings taken in
      connection with any claim made by any Governmental Entity, which if successful
      might result in an indemnity payment under this Section
      12.3
      (a
“Tax
      Claim”)
      relating to Taxes of the applicable Company or Companies for, as applicable,
      a
      Measurement Date Straddle Period or a Closing Date Straddle Period. A party
      shall promptly notify the other party if it decides not to control the defense
      or settlement of any Tax Claim that it is entitled to control pursuant to this
      Section
      12.3(f)(ii),
      and the
      other party shall thereupon be permitted to defend and settle such proceeding
      in
      its sole and absolute discretion.

     

    (iii) Sellers
      and Buyer shall reasonably cooperate with each other in contesting any Tax
      Claim. Such cooperation shall include the retention and, upon the request of
      the
      party or parties controlling proceedings relating to such Tax Claim, the
      provision to such party or parties of records and information that are
      reasonably relevant to such Tax Claim, and making employees available on a
      mutually convenient basis to provide additional information or explanation
      of
      any material provided hereunder or to testify at proceedings relating to such
      Tax Claim.

     

    (iv) Any
      indemnity payment required to be made by any party under this Section
      12.3
      shall be
      due and payable from such party to the party being indemnified or the applicable
      Governmental Entity, as applicable, in immediately available funds no later
      than
      one (1) business day before the date on which the related Taxes are required
      to
      be paid to the relevant Governmental Entity. 

     

    Section
      12.4 Procedures
      Relating to Indemnification.

     

    (a) Notice
      of Asserted Liability.
      With
      respect to third party claims, all claims for indemnification by any Indemnified
      Party or Seller Indemnified Party under this Section
      12.4
      shall be
      asserted and resolved as follows: promptly after discovery of or receipt by
      an
      Indemnified Party or a Seller Indemnified Party of notice of any demand, claim
      or circumstances, which, with the lapse of time, are reasonably expected to
      give
      rise to a claim or the commencement (or the threatened commencement) of any
      action, proceeding or investigation (an “Asserted
      Liability”),
      that
      may result in Losses which are subject to indemnification hereunder, the
      Indemnified Party or Seller Indemnified Party, as applicable, shall give written
      notice thereof (the “Claims
      Notice”)
      to the
      applicable Indemnifying Party or Buyer, as applicable. The Claims Notice shall
      describe the Asserted Liability in reasonable detail, to the extent possible,
      and shall indicate the amount (estimated, if necessary, and to the extent
      feasible) of the Losses that have been or may be suffered by the Indemnified
      Party or Seller Indemnified Party, as applicable. The failure of an Indemnified
      Party or Seller Indemnified Party, as applicable, to provide a Claims Notice
      with reasonable promptness shall not affect any indemnification obligations
      hereunder except to the extent that the applicable Indemnifying Party or Buyer,
      as applicable, is actually and materially prejudiced thereby.

     

    
      
        
        

      

      
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    (b) Opportunity
      to Defend.

     

    (i) An
      Indemnifying Party may elect to compromise or defend, at its own expense and
      by
      its own counsel, any Asserted Liability; provided,
      however,
      that
      counsel for such Indemnifying Party shall be approved by the Indemnified Party
      (whose approval shall not unreasonably be withheld or delayed). If such
      Indemnifying Party elects to compromise or defend such Asserted Liability,
      it
      shall, within thirty (30) days (or sooner, if the nature of the Asserted
      Liability so requires), notify the Indemnified Party of its intent to do so,
      in
      which case it shall have the sole right and authority to control any such
      compromise or defense, and the Indemnified Party shall cooperate, at the expense
      of such Indemnifying Party, in the compromise of, or defense against, such
      Asserted Liability. If such Indemnifying Party elects not to compromise or
      defend the Asserted Liability or fails to notify the Indemnified Party of its
      election within such thirty (30) day period, such Indemnified Party may pay,
      compromise or defend such Asserted Liability with counsel reasonably acceptable
      to such Indemnifying Party (at the Indemnifying Parties’ sole cost and expense
      in the event that the Indemnifying Parties are determined to be liable
      hereunder). Notwithstanding the foregoing, neither the Indemnifying Parties
      nor
      the Indemnified Party may settle or compromise any claim over the objection
      of
      the other; provided,
      however,
      that if
      the claim is for money damages only, the Indemnifying Parties can settle or
      compromise any such claim solely for money damages without the consent of the
      Indemnified Party provided it pays or otherwise satisfies the money damages
      in
      full, in which case the Indemnifying Parties can settle or compromise any such
      claim without the consent of the Indemnified Party. No settlement or compromise
      may be entered into by an Indemnifying Party without an unconditional and full
      release of the Indemnified Parties reasonably acceptable to their counsel.
      If an
      Indemnifying Party elects to defend any claim, the Indemnified Party shall
      make
      available to such Indemnifying Party such non-privileged books, records or
      other
      documents within its control that are necessary or appropriate for such defense
      (in the judgment of counsel engaged by such Indemnifying Party).

     

    (ii) The
      Indemnified Parties have the right to employ their own counsel in any compromise
      of, or defense against, any Asserted Liability, or in connection with an
      Indemnified Party’s provision of reasonable cooperation and assistance to such
      Indemnifying Party or such Indemnifying Party’s counsel as provided above, but
      the fees, expenses and other charges of such counsel employed by the Indemnified
      Party will be at the expense of the Indemnified Party (and shall not constitute
      Losses hereunder) unless (A) the employment of counsel by the Indemnified Party
      has been authorized in writing by an Indemnifying Party, (B) the Indemnifying
      Parties have not in fact employed counsel to compromise or defend against the
      Asserted Liability within the period provided in Section
      12.4(b)(i)
      hereof
      or (C) the provisions of Section 12.4(b)(iii) below are applicable. It is
      understood that the Indemnifying Parties shall not, in connection with any
      proceeding or related proceedings in the same jurisdiction, be liable for the
      reasonable fees, disbursements and other charges of more than one separate
      firm
      (plus, if required, one separate firm admitted to practice in a local
      jurisdiction) at any one time retained by the Indemnified Party unless the
      employment of more than one counsel has been authorized in writing by an
      Indemnifying Party.

     

    
      
        
        

      

      
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    (iii) Notwithstanding
      anything to the contrary in this Agreement, in the event there is a conflict
      of
      interest between any of the Indemnifying Parties and the Indemnified Parties
      with respect to the defense of any Asserted Liability arising under Section
      12.2(a)(iv)
      or
Section
      12.2(b)(iv)
      hereof,
      the Indemnified Parties shall have the right to participate in the defense
      (subject to the rights of the Indemnifying Parties pursuant to Section
      12.4(b)(i) above), with one counsel selected by the Indemnified Parties and
      at
      the Indemnifying Parties’ expense (with advancement of expenses pursuant to
Section
      12.4(d)
      hereof),
      any such Asserted Liability arising under Section
      12.2(a)(iv)
      or
Section
      12.2(b)(iv)
      hereof.
      

     

    (c) Notice
      of Direct Claim.
      In the
      event that in the reasonable judgment of Buyer, after consultation with Buyer’s
      outside legal counsel, an Indemnified Party has a claim for indemnification
      that
      does not involve a third party (a “Direct
      Claim”),
      the
      Indemnified Party shall provide a written notice to the Indemnifying Parties
      of
      such Direct Claim with reasonable promptness, specifying, to the extent known,
      the nature and circumstances of such Direct Claim and the amount (estimated,
      if
      necessary, and to the extent feasible) of the Losses incurred or reasonably
      expected to be incurred in respect of such Direct Claim (a “Payment
      Request”);
      provided,
      however,
      the
      failure of an Indemnified Party to provide such Payment Request with reasonable
      promptness shall not adversely affect any indemnification obligations hereunder
      except to the extent that the Indemnifying Parties are actually and materially
      prejudiced thereby.

     

    (d) Advancement
      of Expenses.
      The
      right to indemnification of Losses conferred by Section
      12.2
      hereof
      shall include, solely for Asserted Liabilities under Section
      12.2(a)(iv)
      or
Section
      12.2(b)(iv),
      the
      right to have the applicable Indemnifying Party pay the Indemnified Party’s
      expenses in any action, proceeding or investigation in which (i) such
      Indemnifying Party elects not to compromise or defend such Asserted Liability,
      (ii) such Indemnifying Party fails to notify the Indemnified Party of its
      election within the thirty (30) day period contemplated in Section
      12.4(b)(i)
      or
      (iii) the Indemnified Party is entitled to reimbursement pursuant to
Section
      12.4(b)(iii),
      in each
      case as such expenses are suffered or incurred and in advance of such action’s,
      proceeding’s or investigation’s final disposition. Any such advance shall be
      subject to an undertaking by or on behalf of an Indemnified Party, which need
      not be secured and shall be accepted without reference to such Indemnified
      Party’s financial ability to make repayment, to make repayment to repay all
      advanced expenses if it shall ultimately be determined by a final, nonappealable
      decision rendered by a court of competent jurisdiction over the parties that
      such Indemnified Party is not entitled to be indemnified by the Indemnifying
      Parties.

     

    
      
        
        

      

      
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    Section
      12.5 Contribution. 

     

    (a) If
      the
      indemnification provided for in Section
      12.2
      hereof
      is not enforceable under applicable Law, then the Indemnifying Parties, in
      lieu
      of indemnifying such Indemnified Parties, shall to the full extent permissible
      under applicable Law (but in all events subject to the terms and limitations
      of
      this ARTICLE
      XII,
      including without limitation, Section
      12.7
      hereof)
      contribute to the Losses incurred by such Indemnified Parties in connection
      with
      any claim relating to an indemnifiable event under this Agreement, in such
      proportion as is deemed fair and reasonable in light of all of the circumstances
      of such action, suit or proceeding in order to reflect the relative fault of
      the
      Indemnifying Parties (and their officers, directors, employees and agents),
      on
      one hand, and the Indemnified Parties, on the other hand, in connection with
      the
      events or transactions from which such action, suit or proceeding arose;
provided,
      however,
      that if
      the foregoing allocation is not permitted by applicable Law, then such
      allocation shall be adjusted as appropriate to reflect not only the relative
      fault of the Indemnifying Parties (and their officers, directors, employees
      and
      agents), on one hand, and the Indemnified Parties, on the other hand, but also
      the relative benefits received by such parties in connection therewith as well
      as any other relevant equitable considerations. For purposes of this
Section
      12.5,
      the
      relative fault of the Indemnifying Parties (and their directors, officers,
      employees and agents), on one hand, and the Indemnified Parties, on the other
      hand, in connection with the events or transactions giving cause to such action,
      suit or proceeding shall be determined by reference to, among other things,
      the
      degree to which their liability is primary or secondary and the degree to which
      their conduct is active or passive.
      In no
      event shall any Indemnified Party be entitled to collect or receive
      indemnification or contribution in an aggregate amount greater than would be
      applicable if the indemnification provided for in Section
      12.2
      hereof
      was enforceable under applicable Law.

     

    (b) The
      Indemnifying Parties hereby agree to fully indemnify and hold the Indemnified
      Parties harmless from any claims of contribution or indemnification which may
      be
      brought by officers, directors, employees or agents of the Indemnifying Parties
      or persons who were officers, directors, employees or agents of ACE Lo prior
      to
      the Measurement Date for actions, suits or proceedings arising from or relating
      to events occurring prior to the Measurement Date. 

     

    Section
      12.6 Payment
      of Damages.
      An
      Indemnified Party shall be paid in cash by an Indemnifying Party the amount
      to
      which such Indemnified Party may become entitled by reason of the provisions
      of
      this ARTICLE
      XII,
      within
      fifteen (15) days after such amount is determined either by mutual agreement
      of
      the parties or on the date on which both such amount and an Indemnified Party’s
      obligation to pay such amount have been determined by a final, nonappealable
      judgment of a court or administrative body having jurisdiction over such
      proceeding. 

     

    Section
      12.7 Limitations
      on Indemnity.

     

    (a) Other
      than in respect of a claim for indemnification based on fraud on the part of
      any
      Indemnifying Party hereto, for which there shall be no limitations on the amount
      of Losses recoverable through the indemnification provisions hereunder, no
      Indemnified Party shall seek, or be entitled to seek or obtain, indemnification
      from the Indemnifying Parties, for any amounts, in the aggregate, in excess
      of
      the sum of (x) the Closing ACE Purchase Price plus
      (y) cash amounts paid by Buyer to ACE Hi following the Closing pursuant to
Section
      9.16
      (Real
      Property Tax Refund), Section
      9.19(b)
      (Tax
      Refunds), and Section
      9.24
      (City-Wide Progressives Refund) hereof (collectively, (x) and (y) are referred
      to as the “ACE
      Hi
      Cap”)
      plus
      (z) the
      AREH Purchase Price; provided,
      however,
      that:

     

    
      
        
        

      

      
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    (i) no
      Indemnified Party shall seek, or be entitled to seek or obtain, indemnification
      from AREH pursuant to Section
      12.2(b)(vi)
      hereof
      for any amount, in the aggregate, in excess of One Hundred Thirty-Five Million
      Dollars ($135,000,000);

     

    (ii) no
      Indemnified Party shall seek, or be entitled to seek or obtain, indemnification
      from ACE Hi pursuant to Section
      12.2(a)
      or
Section
      12.3(a)
      hereof
      for any amount, in the aggregate, in excess of the ACE Hi Cap; 

     

    (iii) no
      Indemnified Party shall seek, or be entitled to seek or obtain, indemnification
      from the Indemnifying Parties pursuant to Section
      12.2(a)(i)
      or
Section
      12.2(b)(i)
      hereof
      until the aggregate amount of Losses arising under such Sections, taken
      together, exceed Five Hundred Thousand Dollars ($500,000) (the “Indemnification
      Floor”);
      provided,
      however,
      that if
      the aggregate amount of such Losses arising under Section
      12.2(a)(i)
      and
Section
      12.2(b)(i)
      hereof
      exceed the amount of the Indemnification Floor, the Indemnified Parties shall
      only be entitled to seek indemnification from the Indemnifying Parties for
      the
      amount of such Losses in excess of the Indemnification Floor;
      and

     

    (iv) to
      the
      extent that any matter is indemnified by both ACE Hi and AREH pursuant to this
      ARTICLE
      XII,
      the
      Indemnified Parties shall not be entitled to collect twice. 

     

    (b) In
      calculating the amount of any Losses payable to an Indemnified Party hereunder,
      the amount of the Losses (i) shall not be duplicative of any adjustments to
      the
      Purchase Price pursuant to ARTICLE
      II
      hereof,
      (ii) shall not be duplicative of any other Losses for which an indemnification
      claim has been made and (iii) shall be computed net of any amounts actually
      recovered by such Indemnified Party under any insurance policy with respect
      to
      such Losses (net of any costs and expenses incurred in obtaining such insurance
      proceeds). If an Indemnifying Party pays an Indemnified Party for a claim and
      subsequently insurance proceeds in respect of such claim is collected by the
      Indemnified Parties, then the Indemnified Party promptly shall remit the
      insurance proceeds (net of any costs and expenses incurred in obtaining such
      insurance proceeds) to the Indemnifying Party. The Indemnified Parties shall
      use
      commercially reasonable efforts to obtain from any applicable insurance company
      any insurance proceeds in respect of any claim for which the Indemnified Parties
      seek indemnification under this ARTICLE
      XII.
      

     

    (c) No
      Selling
      Party shall be liable to any Indemnified Party, and Buyer shall not be liable
      to
      any Selling Party, for indirect, special, incidental, consequential or punitive
      losses or damages (including, without limitation, consequential losses or
      damages measured by lost profits) claimed by such Indemnified Party or Selling
      Party, as applicable, under the terms of this Agreement; provided that
      nothing
      in this Section
      12.7(c)
      shall
      prevent any Indemnified Party or Selling Party, as applicable, from recovering
      amounts paid for indirect, special, incidental, consequential or punitive losses
      or damages to a “Covered
      Third Party.”
A
      “Covered
      Third Party”
means
      any third party (other than an Indemnified Party or a Selling Party) having
      claims (i) against any of the Selling Parties as of the Measurement Date
      (including, without limitation, the GB Parties with respect to the GB Claims),
      (ii) as a result of any breach of any of the Selling Parties of their respective
      covenants or agreements under this Agreement other than the covenants and
      agreements under this ARTICLE
      XII
      or
      (iii) as a GB Party against Buyer in respect of the GB Claims. For the
      avoidance of doubt, any counterparty to any Contract entered into (x) by Buyer
      and its Affiliates or any other Indemnified Party after the date hereof or
      (y)
      by ACE Lo after the Closing Date is not a “Covered
      Third Party”
with
      respect to claims arising out of such Contract. It is the intention of the
      parties hereto, by this limitation, to limit damage claims between the parties
      hereto to direct damages, so that, for example, if it was determined that as
      a
      result of the GB Claims, Buyer was not entitled to any of the property acquired
      under this Agreement, Losses of the Indemnified Parties would include the direct
      damages incurred in an amount equal to the payment Buyer made to the Selling
      Parties for property Buyer did not receive, but would not include any amounts
      that Buyer might owe to its lenders with respect to its future development
      activities on the Properties, whether as a result of any undertaking to such
      lenders or damages that Buyer may incur as a result of a breach or cross default
      under its financing arrangements, or any business interference losses or costs
      or losses due to any delays of or interference with Buyer’s planned development
      activities for indirect, special, incidental, consequential or punitive damages
      (including, without limitation, consequential damages measured by lost profits)
      suffered by such parties. 

     

    
      
        
        

      

      
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    (d) Buyer
      and
      the Selling Parties hereby acknowledge and agree that (i) Buyer’s Losses
      shall not include any direct Losses (i.e., damages other than indirect, special,
      incidental, consequential or punitive damages (including, without limitation,
      consequential damages measured by lost profits)) claimed against such
      Indemnified Party in connection with Contracts relating to Buyer’s future
      development activities on the Properties entered into by Buyer or any of its
      Affiliates (including ACE Lo) following the Closing Date and prior to the date
      that is two (2) years following the Closing Date, (ii) Buyer’s Losses may,
      if otherwise indemnified under and not excluded from the Indemnifying Parties’
indemnification obligations under this Agreement, include
      any such
      direct Losses claimed against the Indemnified Parties in connection with
      Contracts relating to Buyer’s future development activities on the Properties
      entered into by Buyer or any of its Affiliates (including ACE Lo) on or after
      the date that is two (2) years following the Closing Date and (iii) Buyer’s
      Losses shall not in any event include direct Losses claimed against any
      Indemnified Parties by lenders (or other financing sources) to Buyer or an
      Affiliate of Buyer. 

     

    Section
      12.8 Exclusive
      Remedy.
      Except
      in the cases of (a) fraud and (b) Section
      9.16
      hereof,
      in which cases the Indemnified Parties reserve any and all rights and remedies
      available to them, after the Closing, the indemnities provided in this
ARTICLE
      XII
      shall
      constitute the sole and exclusive remedy of any Indemnified Party (but not
      the
      Selling Parties) for Losses arising out of, resulting from or incurred in
      connection with any claims regarding matters arising under or otherwise relating
      to this Agreement; provided,
      however;
      that
      this exclusive remedy for Losses does not preclude any party from bringing
      an
      action for specific performance, including the right to seek a mandatory
      injunction or other equitable relief to require a party to close the purchase
      or
      sale, as applicable, as contemplated herein, or otherwise seek to require a
      party to perform its obligations under this Agreement. 

     

    
      
        
        

      

      
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    Section
      12.9 Treatment
      of Indemnification Payments.
      All
      indemnification payments made pursuant to this ARTICLE
      XII
      shall be
      treated by the parties for Income Tax purposes as adjustments to the Purchase
      Price, unless otherwise required by applicable Law. The liabilities in respect
      of which such indemnification payments are made shall, if applicable, be treated
      for Income Tax purposes as additional applicable liabilities for purposes of
      the
      Purchase Price Allocation.

     

    Section
      12.10 Certain
      Claims.
      For the
      avoidance of doubt, the ACE Closing Price Adjustments contain accruals for
      various liabilities. To the extent any claim for indemnification under this
      Article XII relates to a claim for which an accrual has been made pursuant
      to
      the ACE Closing Price Adjustments, the amount of such accrual shall be taken
      into account to reduce the Losses of the Indemnified Parties in respect thereof
      and the Indemnifying Party shall have all right to defend such claims in
      accordance with section 12.4(b) notwithstanding such accruals.

     

    ARTICLE
      XIII

    MISCELLANEOUS 

     

    Section
      13.1 Definitions.

     

    (a) For
      purposes of this Agreement, the term: 

     

    “3%
      Notes”
means
      the 3% Notes due September 29, 2008, issued by ACE Hi under the
      Indenture.

     

    “2004
      GB Restructuring”
means
      the restructuring transactions consummated by GB ACE Hi and the ACE Selling
      Parties in July 2004 which, among other things, resulted in the transfer of
      the
      Casino Property and Casino Business from GB Holdings to ACE Hi and from ACE
      Hi
      to ACE Lo.

     

    “Accounts
      Receivable”
means
      all accounts receivable, including gaming receivables, of the Casino Business,
      net of reserves determined in accordance with past practices; provided that,
      additional reserves shall be established as appropriate to ensure that no single
      customer represents more than 10% of the net gaming receivables of the Casino
      Business. 

     

    “ACE
      Indemnified Liabilities”
means
      any and all liabilities or obligations of ACE Lo, whether disclosed or
      undisclosed, existing before and remaining after the Measurement Date, other
      than the Assumed ACE Liabilities. Without limiting the foregoing, the following
      liabilities and obligations of ACE Lo shall be expressly included in the ACE
      Indemnified Liabilities: (i) obligations under Contracts other than the
      Assumed ACE Lo Contracts and other than Contracts entered into by ACE Lo
      following the Measurement Date not in violation of the provisions of this
      Agreement; (ii) all costs and expenses relating to or arising out of the
      employment or termination of employment of the Casino Employees for all periods
      before the Measurement Date (including, but not limited to, all payroll taxes
      and payments due under all collective bargaining agreements), but specifically
      excluding any Assumed ACE Liabilities, (iii) all costs, expenses,
      contributions, and liabilities arising out of or relating to all Plans for
      periods before the Measurement Date, but specifically excluding any Assumed
      ACE
      Liabilities, (iv) the Certain Employee Liabilities, to the extent not
      reflected in the determination of the Closing ACE Purchase Price pursuant to
      ARTICLE
      II
      hereof,
      but specifically excluding any Assumed ACE Liabilities, (v) any costs or
      liability involved in providing COBRA coverage or benefits relating to a
“covered employee” or “qualified beneficiary” arising from or out of a
“qualifying event” (as such terms are defined in Section 4980B of the Code) that
      occurs prior to the Measurement Date; (vi) any liability arising under Section
      4064 of ERISA on account of the termination under Sections 4041(c) or 4042
      of
      ERISA of any defined benefit plan subject to Title IV of ERISA that is
      sponsored, maintained, or contributed to by any of the ACE Selling Parties
      or
      their ERISA Affiliates, which such termination occurs within five (5) plan
      years
      of such plan following the Closing; and (vii) the Multiemployer Plan
      Liabilities. Nothing that has been taken into account in the calculation of
      the
      Closing ACE Purchase Price pursuant to ARTICLE
      II
      hereof
      shall be considered an ACE Indemnified Liability.

     

    
      
        
        

      

      
        -96-

        
          

        

      

      
        
        

      

    

     

    “Advance
      Room Deposits”
means
      all advance reservation cash deposits and pre-payments for rooms in advance
      of
      actual stays occurring after the Measurement Date.

     

    “Affiliate”
means,
      with respect to any Person, any other Person that directly or indirectly,
      through one or more intermediaries, controls, is controlled by, or is under
      common control with, such first-mentioned Person. As used herein, “control”
means
      the right to exercise, directly or indirectly, more than fifty percent (50%)
      of
      the voting power of the stockholders, members or owners and, with respect to
      any
      individual, partnership, trust or other entity or association, the possession,
      directly to cause the direction of the management or actions of the controlled
      entities.

     

    “Applicable
      Bankruptcy Case”
means
      the Bankruptcy Case or any other bankruptcy proceeding of any Person or entity
      which has a direct or indirect ownership interest in the Casino Land and/or
      the
      Traymore Land (including without limitation ACE Hi or ACE Lo). 

     

    “Applicable
      Court”
means
      the Bankruptcy Court or any other court in the Bankruptcy Case or any bankruptcy
      proceeding arising out of or relating to the GB Claims.

     

    “AREH
      Indemnified Liabilities”
means
      any and all liabilities or obligations of the AREH Subs, whether disclosed
      or
      undisclosed, existing before and remaining after the Closing, other than the
      Assumed AREH Subs Liabilities. Without limiting the foregoing, the following
      liabilities and obligations of the AREH Subs shall be expressly included in
      the
      AREH Indemnified Liabilities: (i) the obligations of the AREH Subs under
      Contracts other than the Assumed AREH Subs Contracts. 

     

    “A(a)s
      of the date hereof”
or
      words of similar import means the date that this Agreement is executed by the
      parties hereto as set forth on the cover of this Agreement.

     

    “Assumed
      ACE Lo Contracts”
means
      those Contracts listed on Schedule
      IV.
      

     

    “Assumed
      ACE Liabilities”
means
      (i) obligations, costs and liabilities arising on or after the Measurement Date
      under the Assumed ACE Lo Contracts; (ii) severance payments to Casino
      Employees arising out of terminations of employment of Casino Employees on
      or
      after the Measurement Date in an aggregate amount up to (but not exceeding)
      the
      Agreed Severance Amount; (iii) obligations, costs or liability involved in
      providing COBRA coverage or benefits relating to a “covered employee” or
“qualified beneficiary” arising from or out of a “qualifying event” (as such
      terms are defined in Section 4980B of the Code) that occurs on or after the
      Measurement Date; (iv) all costs, expenses, contributions, and liabilities
      arising out of or relating to all Plans for periods on or after the Measurement
      Date; and (v) all other obligations, costs or liabilities arising on or after
      the Measurement Date (provided that the foregoing clauses (iv) and (v) shall
      not
      relieve any of the ACE Selling Parties from any liability they may have to
      Buyer
      under this Agreement arising under any covenant or agreement made, or to be
      performed, by such ACE Selling Parties, or either of them, in this
      Agreement).

     

    
      
        
        

      

      
        -97-

        
          

        

      

      
        
        

      

    

     

    “Assumed
      AREH Subs Contracts”
means
      those Contracts listed on Schedule
      V.
      

     

    “Assumed
      AREH Subs Liabilities”
means
      obligations under the Assumed AREH Subs Contracts.

     

    “Bankruptcy
      Case”
means
      that certain voluntary petition for relief filed by GB Holdings on September
      29,
      2005, under Chapter 11 of Title 11 of the United States Code with the Bankruptcy
      Court, Case No. 05-42736JHW, in which GB Holdings is currently operating as
      a
      debtor in possession, and any and all appeals and related proceedings (including
      without limitation those relating to any Federal or state avoiding statute,
      in a
      non-bankruptcy court).

     

    “Bankruptcy
      Court”
means
      the United States Bankruptcy Court for the District of New Jersey hearing GB
      Holdings bankruptcy case (Case No. 05-42736, Chief Judge Wizmur).

     

    “BEC”
means
      Building Exchange Company, a Virginia corporation. 

     

    “Boardwalk
      Equity Interests”
means
      the membership interests of Boardwalk. 

     

    “Brighton
      Park Agreements”
means
      (i) the Brighton Park Improvements Agreement dated as of November 5, 1987,
      by
      and between Greate Bay and Claridge, (ii) the Brighton Park Development
      Agreement dated as of November 9, 1987, by and among Greate Bay, Claridge and
      the City of Atlantic City, (iii) the Brighton Park Maintenance Agreement
      dated as of November 9, 1987, by and among Claridge, Greate Bay and the City
      of
      Atlantic City, (iv) Landscaping Services Agreement dated May 8, 1996, by and
      between Brighton Park Maintenance Corporation and Atlantic City Special
      Improvement District, (v) Cleaning Services Agreement dated May 24, 1996, by
      and
      between Brighton Park Maintenance Corporation and Atlantic City Special
      Improvement District, and (vi) Security Services Agreement dated May 1, 1996,
      by
      and between Brighton Park Maintenance Corporation and Atlantic City Special
      Improvement District.

     

    “business
      day”
means
      any Monday through Friday, inclusive, other than any such days that financial
      institutions within the State of New York are authorized or required to close;
      provided,
      however,
      any
      reference in this Agreement to any day other than a business day shall be deemed
      a reference to a calendar day. 

     

    “Buyer
      Material Adverse Effect”
means
      any change, event, violation, inaccuracy, state of facts, circumstances or
      effect (any such item an “Effect”)
      that
      prevents or impairs in any material respect the ability of Buyer to perform
      its
      obligations under this Agreement or prevents or materially delays the
      consummation by Buyer of any of the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        -98-

        
          

        

      

      
        
        

      

    

     

    “Claridge”
means
      Claridge at Park Place, Inc.

     

    “Closing
      Date Straddle Period”
means
      any Tax Period beginning before the Closing Date and ending after the Closing
      Date.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended, or any successor provisions.
      

     

    “Contract”
means
      any agreement, contract, lease, service contract, equipment lease, sign lease,
      software license agreement, power of attorney, note, loan, evidence of
      indebtedness, purchase order, letter of credit, settlement agreement, franchise
      agreement, undertaking, covenant not to compete, employment agreement, license,
      instrument, obligation, commitment, understanding, policy, purchase and sales
      order, quotation and other executory commitment to which any Person is a party
      or to which any of the assets of such Person are subject, whether oral or
      written, express or implied, other than a Plan or Multiemployer
      Plan.

     

    “CRDA”
means
      the New Jersey Casino Reinvestment Development Authority.

     

    “CRDA
      Funds”
means
      (i) those alternative investment tax payments paid by ACE Lo or its
      predecessors-in-interest to the New Jersey State Treasurer and currently held
      in
      escrow pending the direction by ACE Lo of such payments to the CRDA for (A)
      purchase of CRDA bonds, (B) direct investment approved by the CRDA or (C)
      partial payment of the investment alternative tax imposed under N.J.S.A.
      5:12-144.1a.(1), all in accordance with the requirements of N.J.S.A.
      5:12-144.1a.(2), (ii) that portion allocable to ACE Lo of the “Casino Capital
      Construction Fund” created pursuant to N.J.S.A. 5:12-173.22, (iii) that portion
      allocable to ACE Lo of the “Atlantic City Expansion Fund” created pursuant to by
      N.J.S.A. 5:12-173.22a, and (iv) that portion allocable to ACE Lo of the
“Casino Boardwalk Revitalization Fund” funded in accordance with Section 3 of
      that certain Casino Parking Fee Agreement dated February 1, 2005 by and among
      CRDA, ACE Lo and various third-party casino licensees, to the extent of funds
      available for direction by ACE Lo for “eligible economic development
      projects.”

     

    “Customer
      Data”
means
      all customer databases, customer lists, historical records of customers and
      any
      other customer information collected and used by ACE Lo or its Affiliates in
      connection with marketing and promoting the Casino Business. 

     

    “DGCL”
means
      the General Corporation Law of the State of Delaware, as amended.

     

    “Drawbridge”
means
      Drawbridge Special Opportunities Fund LP, a national banking
      association.

     

    “Drawbridge
      Loan Documents”
means
      (i) the Note and Mortgage Modification Agreement dated as of November 30, 2005,
      by and among ACE Hi, as borrower, ACE Lo, as guarantor, and Drawbridge, as
      lender; (ii) the Loan and Security Agreement dated as of November 12, 2004,
      by
      and among ACE Hi, as borrower, ACE Lo, as guarantor, and Fortress, as lender;
      (iii) the First Mortgage and Security Agreement dated as of November 12,
      2004, by and between ACE Lo, as mortgagor, and Fortress, as mortgagee, with
      respect to the Casino Property; (iv) the Guaranty dated as of November 12,
      2004, by ACE Lo to and for the benefit of Fortress; and (v) the Assignment
      and
      Acceptance Agreement dated as of November 12, 2004 (and recorded on November
      18,
      2004, in the office of the Clerk of Atlantic County in Volume 11883, Instrument
      No. 2004113011), by and between Fortress and Drawbridge. 

     

    
      
        
        

      

      
        -99-

        
          

        

      

      
        
        

      

    

     

    “Environmental
      Laws”
means
      all applicable and legally enforceable foreign, federal, state and local
      statutes or laws, judgments, orders, regulations, licenses, permits, rules
      and
      ordinances relating to pollution or protection of health or the environment,
      including, but not limited to the Federal Water Pollution Control Act (33 U.S.C.
      §1251 et
      seq.),
      Resource Conservation and Recovery Act (42 U.S.C. §6901 et
      seq.),
      Safe
      Drinking Water Act (42 U.S.C. §3000(f) et
      seq.),
      Toxic
      Substances Control Act (15 U.S.C. §2601 et
      seq.),
      Clean
      Air Act (42 U.S.C. §7401 et
      seq.),
      Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
      §9601 et
      seq.)
      and
      other similar state and local statutes, in effect as of the date hereof.

     

    “Environmental
      Liabilities”
means
      any and all liabilities (including, without limitation, all reasonable fees,
      disbursements and expenses of counsel, expert and consulting fees and costs
      of
      investigations and feasibility studies and responding to government requests
      for
      information or documents, clean-up fees), fines, penalties, restitution and
      monetary sanctions and interest, whether accrued, direct or indirect, known
      or
      unknown, absolute or contingent, liquidated or unliquidated and past, present
      or
      future, resulting from any claim or demand, by any Person or entity, under
      or
      pursuant to any Environmental Law, or arising, directly or indirectly, from
      the
      presence, release, discharge, disposal, generation, treatment, storage,
      emission, migration or use of any Hazardous Substance.

     

    “Equity
      Interest”
means
      any share, capital stock, partnership, limited liability membership or similar
      ownership interest in any entity, and any option, warrant, right or security
      (including debt securities) convertible, exchangeable or exercisable
      therefor.

     

    “Escrow
      Agent”
means
      JPMorgan Chase Bank N.A., a national bank association incorporated under the
      laws of the United States of America, or any successor escrow agent, or such
      other escrow agent mutually agreed to by Buyer and Sellers.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Final
      Determination”
means
      a
      judgment of a judicial or administrative body relating to a Real Property Tax
      Contest that has become final and non-appealable, including without limitation
      the expiration of the time to seek certification to the Supreme Court of New
      Jersey or, if such application is filed, the denial of such application.

     

    “Flatiron
      Indebtedness”
means
      the obligations of ACE Lo pursuant to the Short-Term Insurance Premium Financing
      Agreement dated as of January 1, 2006, by and between ACE Lo and Flatiron
      Capital Corporation.

     

    “Fortress”
means
      Fortress Credit Corp., a Delaware corporation.

     

    “Front
      Money”
means
      all money stored on deposit at the Casino Property cage belonging to, and stored
      in an account for, any Person. 

     

    “GAAP”
means
      United States generally accepted accounting principles as in effect from time
      to
      time. 

     

    
      
        
        

      

      
        -100-

        
          

        

      

      
        
        

      

    

     

    “Gaming
      Authorities”
means
      those federal, state, local and other governmental, regulatory and
      administrative authority, agency, board and officials responsible for, or
      involved in, the regulation of gaming or gaming activities or the sale of liquor
      in any jurisdiction, including, without limitation, within the State of New
      Jersey, specifically, the New Jersey Casino Control Commission, the New Jersey
      Division of Gaming Enforcement, and all other state and local regulatory and
      licensing bodies with authority over gaming in the State of New Jersey and
      its
      political subdivisions. 

     

    “Gaming
      Laws”
mean
      all laws pursuant to which any Gaming Authority possesses regulatory, licensing
      or permit authority over gaming within the State of New Jersey, including,
      without limitation, the New Jersey Casino Control Act and the rules and
      regulations promulgated thereunder, as amended from time to time. 

     

    “GB
      Claims”
means
      (i) any and all claims related to GB Holdings, ACE Hi, ACE Lo or any of their
      respective Affiliates arising out of or related to events occurring prior to
      or
      through the Closing, whether brought before the Closing or thereafter, held
      by
      any of the GB Parties against any of the ACE Selling Parties, Buyer or any
      other
      Indemnified Party, (ii) any action, claim, suit, investigation or proceeding,
      actual or threatened, and all appeals arising therefrom, arising out of or
      relating to the 2004 GB Restructuring, including without limitation (A) any
      action, claim, suit, investigation, or proceeding seeking a payment of money
      (including without limitation an increase in the Purchase Price), or (B) a
      transfer of all or a portion of the assets of the ACE Selling Parties, or either
      of them, under any avoiding statute, whether arising under Federal or state
      Law,
      (iii) any proceedings in the Bankruptcy Case, including without limitation
      pre-
      or post- confirmation proceedings in the Chapter 11 case and all proceedings
      in
      the event the Bankruptcy Case is converted to Chapter 7, or (iv) the production
      of documents, giving of any deposition testimony, any Bankruptcy Rule 2004
      examinations, or any other proceeding or litigation involving or relating to
      the
      assets of the ACE Selling Parties, or either of them, arising from the actions
      of the GB Parties in their capacity as such, even though no claim is made
      against Buyer or any other Indemnified Party or ACE Lo and neither ACE Lo,
      Buyer
      nor any other Indemnified Party is a party to such proceeding or litigation.
      

     

    “GB
      Holdings”
means
      GB Holdings, Inc., a Delaware corporation. 

     

    “GB
      Parties”
means
      (i) Greate Bay or GB Holdings; (ii) so long as GB Holdings is a debtor in a
      bankruptcy case pending before the Bankruptcy Court, the GB Holdings bankruptcy
      estate and its official committee of general unsecured creditors in its
      bankruptcy case; (iii) the equityholders of GB Holdings; (iv) the creditors
      of GB Holdings; and (v) any other person or entity which is granted
      standing by the Bankruptcy Court to prosecute any of the GB Claims including,
      but not limited to, a liquidation or litigation trust created pursuant to a
      plan
      of reorganization in GB Holdings chapter 11 proceedings confirmed by the
      Bankruptcy Court which acquires the right to prosecute such GB
      Claims.

     

    “GB
      Property”
means
      GB Property Funding Corp., a Delaware corporation.

     

    “GB
      Resale Payment”
means
      any payment made by Buyer to acquire any property acquired by Buyer under this
      Agreement, directly or indirectly, if following the Closing such property is
      resold by order of an Applicable Court, but only to the extent that such payment
      exceeds any portion of the purchase price refunded or otherwise paid to Buyer
      in
      connection with or as a result of a resale of such property, including without
      limitation, pursuant to a post-Closing auction or other proceeding by, or
      approved or required by, an Applicable Court or conducted pursuant to or in
      furtherance of the terms of a plan of reorganization in an Applicable Bankruptcy
      Case, including by a Chapter 7 or 11 trustee or a liquidating or creditors
      trust
      established in an Applicable Bankruptcy Case, in each case as ordered or
      approved by an Applicable Court. For example, if the original purchase price
      for
      the Casino Property was equal to Two Hundred Million Dollars ($200,000,000),
      and
      an Applicable Court reacquired the Casino Property but refunded to Buyer the
      original purchase price of Two Hundred Million Dollars ($200,000,000) paid
      by
      Buyer, then in the event that Buyer later acquired the Casino Property at a
      post-Closing auction for a purchase price of Two Hundred Fifty Million Dollars
      ($250,000,000), the “GB Resale Payment” would equal Fifty Million Dollars
      ($50,000,000).

     

    
      
        
        

      

      
        -101-

        
          

        

      

      
        
        

      

    

     

    “Governmental
      Consents”
means
      all notices, reports, filings, consents, registrations, approvals, permits
      or
      authorizations required to be made prior to the Closing by Buyer and the Selling
      Parties or any of their respective Affiliates with, or obtained prior to the
      Closing by Buyer and the Selling Parties or any of their respective Affiliates
      from, any Governmental Entity in connection with the execution and delivery
      of
      this Agreement and the consummation of the transactions contemplated hereby
      (and
      shall include the expiration or termination of the waiting period under the
      HSR
      Act).

     

    “Grant
      and Donations Agreement”
means
      the Grant and Donations Agreement dated as of April 2004, by and between the
      CRDA, the NJSEA, ACE Lo and the other New Jersey casino licensees. 

     

    “Greate
      Bay”
means
      Greate Bay Hotel and Casino, Inc., a New Jersey corporation. 

     

    “Hazardous
      Substance”
means
      any pollutant, chemical, substance and any toxic, infectious, carcinogenic,
      reactive, corrosive, ignitable or flammable chemical, chemical compound, or
      hazardous substance, material or waste, whether solid, liquid or gas, that
      is
      subject to regulation, control or remediation under applicable Environmental
      Laws, including without limitation, any quantity of friable asbestos, urea
      formaldehyde foam insulation, PCBs, crude oil or any fraction thereof, all
      forms
      of natural gas, petroleum products or by-products or derivatives.

     

    “Holdback
      Condition”
means
      the first to occur of any of the following: 

     

    (i) a
      release, in favor of Buyer, the other Indemnified Parties and ACE Lo, of any
      and
      all GB Claims, which release shall either (A) be executed by each of the GB
      Parties which holds or has an interest in the GB Claims as of the date such
      release is executed, (B) be contained in a plan of reorganization confirmed
      by a
      final, non-appealable order of the Bankruptcy Court or another court of
      competent jurisdiction, or (C) be contained in another court order entered
      by,
      or a stipulation approved by, such a court that binds all of the GB Parties
      that
      hold or have an interest in the GB Claims as of the date such court order or
      stipulation; 

     

    
      
        
        

      

      
        -102-

        
          

        

      

      
        
        

      

    

     

    (ii) entry
      of
      a final non-appealable judgment or order of the Bankruptcy Court or another
      court of competent jurisdiction that binds all of the GB Parties that hold
      or
      have an interest in the GB Claims as of the date of such judgment or order
      determining (A) that neither Buyer, any other Indemnified Party nor ACE Lo
      shall be liable in respect of any GB Claims, or (B) the amount of Buyer’s,
      any other Indemnified Party’s and/or ACE Lo’s liability in respect of the GB
      Claims, and the payment by ACE Hi, AREH or AREH’s Affiliates of such amount in
      full; 

     

    (iii) entry
      of
      a final non-appealable order of the Bankruptcy Court or another court of
      competent jurisdiction (A) allowing the Purchase to proceed according to the
      terms and conditions specified in this Agreement and that the same be
      consummated free and clear of any of the GB Claims or (B) determining after
      the Closing that the Purchase is free and clear of any of the GB Claims;

     

    (iv) the
      consent of Buyer (which shall not be unreasonably withheld or delayed) upon
      presentation to Buyer of evidence that reflects the full satisfaction of the
      GB
      Claims by a means other than those specified herein; or

     

    (v) the
      expiration of all statutes of limitations applicable to the GB Claims.

     

    “Improvements”
means,
      as it relates to any Company, all buildings, structures and other similar
      improvements and fixtures owned by the relevant entity and placed on, attached
      to, or located on the Casino Land or Adjacent Land, as applicable.

     

    “Income
      Tax”
means
      (i) any federal, state, local or foreign income Tax, alternative minimum
      Tax or other similar Tax (but only if determined with respect to net income),
      and (ii) the New Jersey Corporation Business Tax (including any alternative
      minimum assessment).

     

    “Income
      Tax Return”
means
      any Tax Return relating to Income Taxes.

     

    “Indebtedness”
means,
      as of any date, without duplication, (i) all indebtedness of such Person for
      borrowed money (other than chip and token liability incurred in the ordinary
      course of such Person’s business), (ii) all obligations of such Person for the
      deferred purchase price of property or services (other than trade payables
      and
      accrued expenses that are current liabilities), (iii) all obligations of
      such Person evidenced by notes, bonds, debentures or other similar instruments,
      (iv) all indebtedness created or arising under any conditional sale or other
      title retention agreement with respect to property acquired by such Person
      (even
      though the rights and remedies of the seller or lender under such agreement
      in
      the event of default are limited to repossession or sale of such property),
      (v)
      all capital lease obligations of such Person, (vi) all obligations of such
      Person, contingent or otherwise, as an account party or applicant under
      acceptance, letter of credit or similar facilities, (vii) all obligations of
      such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
      acquire for value any Equity Interests of such Person, (viii) all guarantee
      obligations of such Person in respect of obligations of the kind referred to
      in
      clauses (i) through (vii) above, (ix) all obligations of the kind referred
      to in
      clauses (i) through (viii) above secured by (or for which the holder of such
      obligation has an existing right, contingent or otherwise, to be secured by)
      any
      Lien on property (including, without limitation, accounts and contract rights)
      owned by such Person, whether or not such Person has assumed or become liable
      for the payment of such obligation, in the case of clause (ix) above, other
      than
      Permitted Encumbrances.

     

    
      
        
        

      

      
        -103-

        
          

        

      

      
        
        

      

    

     

    “Indenture”
means
      that certain Indenture dated as of July 22, 2004, by and among ACE Hi, as
      issuer, ACE Lo, as guarantor, and Wells Fargo Bank, National Association, as
      trustee (“Trustee”),
      relating to the 3% Notes.

     

    “Intellectual
      Property”
means
      all intellectual property or other proprietary rights, including all patents,
      patent applications, inventions (whether or not patentable), processes,
      products, technologies, discoveries, copyrightable and copyrighted works, trade
      secrets, trademarks, trademark registrations and applications, domain names,
      service marks, service mark registrations and applications, trade names, trade
      secrets, know-how, trade dress, copyright registrations, customer lists,
      confidential marketing and customer information, licenses, confidential
      technical information, and all documentation thereof, and the goodwill
      symbolized thereby. 

     

    “Inventory”
means
      inventory held for sale to customers or delivery to customers as gifts
      (specifically excluding slot machine parts, tables, linens, china, silver,
      glass, paper, uniforms and similar items), net of reserves for outdated or
      damaged goods and inventory shrinkage. 

     

    “IRS”
means
      the Internal Revenue Service, a division of the United States Treasury
      Department, or any successor thereto. 

     

    “knowledge”
      of a particular fact or matter means that a Person is actually aware of such
      fact or other matter after reasonable inquiry. When used in the phrase
“knowledge of the ACE Selling Parties” or “the ACE Selling Parties’ knowledge”
and words of similar import, “knowledge” means the knowledge of Richard P.
      Brown, Denise Barton, Nancy Axilrod and Douglas Niethold. When used in the
      phrase “knowledge of the AREH Selling Parties” or “the AREH Selling Parties’
knowledge” and words of similar import, “knowledge” means the knowledge of
      Felicia Buebel and Hillel Moerman.

     

    “Law”
means
      any foreign or domestic law, statute, code, ordinance, rule, regulation, order,
      judgment, writ, stipulation, award, injunction, decree or arbitration award,
      policies, guidance, court decision, rule of common law or finding, including,
      without limitation, the Gaming Laws. 

     

    “Leases”
means
      any leases, subleases, occupancy and concession agreements affecting the
      Properties. 

     

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

     

    “License
      Agreement”
means
      the License Agreement dated as of July 14, 2004, by and between Las Vegas Sands,
      Inc., a Nevada corporation, as licensor, and Greate Bay, as licensee, as amended
      by the Assignment and Assumption Agreement dated as of July 14, 2004, by and
      between Greate Bay, as assignor, and ACE Lo, as assignee. 

     

    
      
        
        

      

      
        -104-

        
          

        

      

      
        
        

      

    

     

    “Licensed
      Intellectual Property”
means
      all Intellectual Property that is used by ACE Lo in the conduct of the Casino
      Business pursuant to a license, consent or authorization from a third
      party.

     

    “Liens”
means
      any mortgage, pledge, lien, security interest, conditional or installment sale
      agreement or other similar encumbrances that is a lien under applicable Law.
      

     

    “Madison
      House Hotel”
means
      the hotel known as the “Madison House” operated by ACE Lo pursuant to the
      Madison House Lease.

     

    “Madison
      House Lease”
means
      the Lease dated as of December 18, 2000, by and among Madison House Group,
      L.P.,
      a New Jersey limited partnership, as landlord, and Greate Bay, as tenant, as
      assigned by Greate Bay to ACE Lo by the Assignment of Lease dated July 22,
      2004,
      and recorded July 22, 2004 in the office of the Clerk/Register of Atlantic
      County in deed book 7791, page 1. 

     

    “Material
      Adverse Effect”
means,
      when used in connection with any Selling Party, any Effect that (i) is
      materially adverse to the assets, properties, capitalization or condition
      (including any changes in liabilities or other balance sheet entries, but
      excluding any deterioration or adverse developments in operating results) of
      such Person and its Subsidiaries, taken as a whole, but excluding any of the
      foregoing resulting from (A) changes or conditions generally affecting the
      U.S.
      economy or financial markets or generally affecting the industry in which the
      applicable Person or any of its Subsidiaries operates (in each case, to the
      extent not disproportionately affecting the applicable Person as compared to
      other gaming companies), (B) any change in state Law, as long as such
      change in Law does not reduce or alter the scope, manner of operation, type,
      nature or timing of any permitted gaming activities which the applicable Person
      or its Subsidiaries are permitted to conduct and as long as such change in
      Law
      does not disproportionately affect the applicable Person as compared to other
      gaming companies in the state and (C) any change or effect resulting from
      compliance with the terms of this Agreement or (ii) prevents or impairs in
      any material respect the ability of such Person to perform its obligations
      under
      this Agreement or prevents or materially delays the consummation by such Person
      of any of the transactions contemplated hereby.

     

    “Measurement
      Date Straddle Period”
means
      any Tax Period beginning before the Measurement Date and ending after the
      Measurement Date.

     

    “MLK
      Indebtedness”
means
      any unpaid amounts as of the Closing Date under the purchase money mortgage
      in
      the original principal amount of One Million Seven Hundred Fifty Thousand
      Dollars ($1,750,000) by Boardwalk in favor of John Schultz (“Schultz”)
      in
      respect a portion of the MLK Land pursuant to the Agreement of Purchase and
      Sale
      dated as of March 2006, by and between Boardwalk and Schultz.

     

    “MLK
      Street Widening Project”
means
      a
      project to be undertaken by the CRDA and funded through the application of
      CRDA
      Funds that may provide, among other things, for the widening of that street
      located in Atlantic City, New Jersey identified as Dr. Martin Luther King,
      Jr.
      Boulevard, between Atlantic Avenue and Pacific Avenue, in a manner consistent
      with the prior widening of Dr. Martin Luther King, Jr. Boulevard between Absecon
      Boulevard/Route 30 and Atlantic Avenue, including the purchase of property,
      demolition of structures, design and construction of road improvements and
      such
      other activities as may required to complete such project.

     

    
      
        
        

      

      
        -105-

        
          

        

      

      
        
        

      

    

     

    “NJSEA”
means
      the New Jersey Sports & Exposition Authority. 

     

    “Non-Income
      Tax”
means
      any Tax other than an Income Tax. 

     

    “Non-Income
      Tax Return”
means
      any Tax Return relating to a Non-Income Tax.

     

    “Notes
      Payable”
means
      (i) all indebtedness of ACE Lo for borrowed money (other than chip and token
      liability incurred in the ordinary course of the Casino Business), (ii) all
      obligations of ACE Lo for the deferred purchase price of property or services
      (other than trade payables and accrued expenses that are current liabilities),
      (iii) all obligations of ACE Lo evidenced by notes, bonds, debentures or other
      similar instruments (other than promissory notes required pursuant to this
      Agreement), (iv) all capital lease obligations of ACE Lo and (v) all guarantee
      obligations of ACE Lo in respect of obligations of the kind referred to in
      clauses (i) through (iv) above.

     

    “Owned
      Intellectual Property”
means
      all Intellectual Property owned by ACE Lo.

     

    “Permitted
      Encumbrances”
means
      (i) the Permitted Exceptions, (ii) matters disclosed by (A) the ALTA/ACSM
      Land Title Survey by Pennoni Associates Inc., dated September 14, 2000, GRBA
      #
      1300.001.01, (B) the Property Survey Plan by Arthur W. Ponzio Co. &
Associates, Inc., dated July 12, 2005, last revised May 9, 2006, Project #27869
      (Block 48 Lots 11, 12, 13, 19 and Block 49 Lot 12), (C) the Property Survey
      Plan
      by Arthur W. Ponzio Co. & Associates, Inc., dated July 12, 2005, last
      revised May 9, 2006, Project #27869 (Block 48 Lots 14, 25 and Block 1 Lot 111),
      (D) ATLA/ACSM Property Survey by Arthur W. Ponzio Co. & Associates, Inc.,
      dated April 19, 2006, last revised April 30, 2006, Project #28397, (E) the
      Property Survey Plan by Arthur W. Ponzio Co. & Associates, Inc., dated April
      28, 2006, last revised May 9, 2006, Project #27869 (Block 47 Lots 13-18), (F)
      ATLA/ACSM Property Survey by Arthur W. Ponzio Co. & Associates, Inc., dated
      May 4, 2006, last revised May 17, 2006, Project #28416, and (G) ALTA Survey
      by
      Arthur W. Ponzio Co. & Associates, Inc., dated July 10, 2006 (unsigned by
      Ponzio), Project #28522, (iii) the mortgage securing the MLK Indebtedness,
      and
      (iv) matters created or caused by Buyer. 

     

    “Person”
means
      an individual, corporation, limited liability company, partnership, association,
      trust, unincorporated organization, other entity or “group”
(as
      defined in Rule 13d−5(b)(1) under the Exchange Act). 

     

    “Personal
      Property”
means
      all office, hotel, casino, showroom, restaurant, bar, convention, meeting and
      other furniture, furnishings, appliances, equipment, equipment manuals, slot
      machines, gaming tables and gaming paraphernalia (including parts or inventories
      thereof), gaming chips and tokens (including, without limitation, (i) slot
      machine tokens not currently in circulation, and (ii) reserve chips, if any,
      not
      currently in circulation), passenger/delivery vehicles, computer hardware,
      point
      of sale equipment, telephone numbers, two-way security radios and base station,
      maintenance equipment, tools, signs and signage, office supplies, cleaning
      supplies in unopened cases or bulk containers or packages, linens (sheets,
      towels, blankets, napkins), uniforms, silverware, glassware, chinaware, pots,
      pans and utensils, and food, beverage and alcoholic beverage inventories owned
      by ACE Lo and located at the Casino Property or used in the Casino Business.
      

     

    
      
        
        

      

      
        -106-

        
          

        

      

      
        
        

      

    

     

    “Post-Closing
      Tax Period”
means
      any Tax Period ending after the Closing Date, other than that portion of any
      Closing Date Straddle Period ending on the Closing Date.

     

    “Post-Measurement
      Date Tax Period”
means
      any Tax Period ending after the Measurement Date, other than that portion of
      any
      Measurement Date Straddle Period ending on the Measurement Date.

     

    “Pre-Closing
      Tax Period”
means
      any Tax Period ending on or before the Closing Date and that portion of any
      Closing Date Straddle Period ending on the Closing Date.

     

    “Pre-Measurement
      Date Tax Period”
means
      any Tax Period ending on or before the Measurement Date and that portion of
      any
      Measurement Date Straddle Period ending on the Measurement Date.

     

    “Qualified
      Exchange Accommodation Agreements”
means
      (A) the Qualified Exchange Accommodation Agreement dated as of May 17,
      2006, by and among BEC, Boardwalk and AREH; (B) the Promissory Note dated as
      of
      May 17, 2006, from BEC payable to AREH in the aggregate principal amount of
      $61,850,000; (C) the Nominee Agreement dated as of May 17, 2006, by and
      between Boardwalk, BEC and AREH; and (D) the Lease dated as of May 17,
      2006, by and between AREH and Boardwalk.

     

    “Real
      Property Tax Contest”
or
      “Real
      Property Tax Contests”
means
      a
      claim or claims (including an appeal or appeals of any judgment, order, decision
      or determination of a judicial or administrative body) by ACE Lo relating to
      real property tax assessment(s) imposed by the City of Atlantic City with
      respect to the Casino Property for any Tax years (or portion thereof) beginning
      after 1995 and ending on the Measurement Date.

     

    “Real
      Property Tax Event”
means
      a
      Final Determination or the execution of a Real Property Tax Settlement Agreement
      with respect to any Real Property Tax Contest followed by the entry of a
      judgment issued pursuant to the Real Property Tax Settlement Agreement that
      has
      become final and non-appealable, including without limitation the expiration
      of
      the time to seek certification to the Supreme Court of New Jersey or, if such
      application is filed, the denial of such application. 

     

    “Real
      Property Tax Refund”
means
      the sum, including interest, of (i) the aggregate amount (without discount)
      of
      (A) any cash payments and (B) the face value of any credits against real
      property Taxes due with respect to the Casino Property (and any other Properties
      to which the credits are applicable) for periods following the Measurement
      Date
      allowed in lieu of cash payment refunds of Taxes paid in periods prior to the
      Measurement Date to be received by ACE Lo, Buyer or any Affiliate of Buyer
      or
      any transferee therefrom or successor thereto pursuant to any Real Property
      Tax
      Event, to the extent such cash payments or credits are to be either received
      or
      available during the period beginning on the Measurement Date and ending on
      the
      fifth (5th)
      anniversary of the Closing, and (ii) the present value of any cash payments
      and
      credits against real property Taxes due with respect to the Casino Property
      (and
      any other Properties to which the credits are applicable) for periods following
      the Measurement Date allowed in lieu of cash payment refunds of Taxes paid
      in
      periods prior to the Measurement Date to be received by ACE Lo, Buyer or any
      Affiliate of Buyer or any transferee therefrom or successor thereto pursuant
      to
      any Real Property Tax Event, to the extent such cash payments or credits are
      to
      be either received or available in periods following the fifth (5th)
      anniversary of the Closing, discounted to present value based on the projected
      utilization of such credits at the then current real property Tax rate at a
      discount rate of eight percent (8%) per annum.

     

    
      
        
        

      

      
        -107-

        
          

        

      

      
        
        

      

    

     

    “Real
      Property Tax Settlement Agreement”
means
      any written agreement with a municipal, state or administrative authority
      settling a Real Property Tax Contest.

     

    “Release”
means
      any spilling, leaking, emitting, discharging, depositing, escaping, leaching,
      dumping, or other releasing of a Hazardous Substance into the environment,
      whether intentional or unintentional.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended. 

     

    “Specified
      Intellectual Property”
means
      Customer Data, the right to use the “Sands” name and the right to use the
“Madison House” name.

     

    “Subsidiary”
means,
      with respect to any Person, any corporation or other organization, whether
      incorporated or unincorporated, of which (i) such Person or any other Subsidiary
      of such Person is a general partner or managing member or (ii) at least 50%
      of
      the securities or other Equity Interests having by their terms voting power
      to
      elect a majority of the board of directors or others performing similar
      functions with respect to such Person, corporation or other organization that
      is, directly or indirectly, owned or controlled by such party or by any one
      or
      more of its Subsidiaries, or by such party and one or more of its Subsidiaries.
      

     

    “Tax
      Period”
means
      any period prescribed by any Governmental Entity for which a Tax Return is
      required to be filed or a Tax is required to be paid. 

     

    “Tax
      Return”
means
      any report, return (including any information return), claim for refund,
      election, estimated Tax filing or payment, request for extension, document,
      declaration or other information or filing required to be supplied to any
      Governmental Entity with respect to Taxes, including attachments thereto and
      amendments thereof. 

     

    “Taxes”
means
      any and all taxes, charges, fees, levies, tariffs, duties, liabilities,
      impositions or other assessments of any kind (together with any and all
      interest, penalties, additions to tax and additional amounts imposed with
      respect thereto) imposed by any Tax authority or other Governmental Entity,
      including, without limitation, income, gross receipts, profits, gaming, excise,
      real or personal property, environmental, sales, use, value-added, ad valorem,
      withholding, social security, retirement, employment, unemployment, workers’
compensation, occupation, service, license, net worth, capital stock, payroll,
      franchise, gains, stamp, transfer and recording taxes, and shall include any
      liability for the Taxes of any other Person under Treasury Regulation Section
      1.1502−6 (or any similar provision of state, local, or foreign Law), or as a
      transferee or successor, by contract, or otherwise. 

     

    
      
        
        

      

      
        -108-

        
          

        

      

      
        
        

      

    

     

    “Traymore
      Call Agreement”
means
      the Call Agreement dated as of June 5, 2006, by and between AREH and ACE Lo.
      

     

    “Traymore
      Call Right”
means
      ACE Lo’s right to require AREH to sell to ACE Lo the Boardwalk Equity Interests
      pursuant to the Traymore Call Agreement. 

     

    “Traymore
      Call Termination Date”
means
      5:00 p.m. New York Time on June 5, 2007, which represents the date and time
      at
      which the “Call Right” under the Traymore Call Agreement shall expire if it
      remains unexercised at such time.

     

    “Traymore
      Closing Costs”
means
      all costs and expenses actually incurred by AREH and its Affiliates in
      connection with the acquisition, ownership and financing of the Traymore Site
      including, without limitation, legal fees, title insurance costs, recording
      fees, transfer or similar taxes, and survey and inspection costs.

     

    “Traymore
      Operating Expenses”
means
      all costs and expenses actually incurred by AREH and its affiliates in owning
      or
      operating the Traymore. 

     

    “Traymore
      Price”
means
      an amount equal to the result of (i) the sum of (A) the price allocated pursuant
      to the Traymore Purchase Agreement to the Traymore Site of $61 million (subject
      to adjustment for pro rated rents, utilities and assessments), plus
      (B) the
      Traymore Closing Costs and plus
      (C) the
      Traymore Operating Costs, plus,
      in each
      case, interest thereon at the rate of 8% per annum from the date such costs
      are
      incurred, calculated on the basis of a 360 day year, through and including
      the
      Closing Date, minus
      (ii) any
      revenues received by Boardwalk or AREH with respect to the Traymore Site through
      and including the Closing Date (but excluding any amounts received pursuant
      to
      the Qualified Exchange Agent Agreements).

     

    “Traymore
      Purchase Agreement”
means
      the agreement dated November 28, 2005, by and among Martial Development Corp.,
      a
      New Jersey Corporation, Boardwalk Regency Corporation, a New Jersey corporation
      and Boardwalk. 

     

    “Warehouse
      Property”
means
      the real estate situated in the Township of Little Egg Harbor, New Jersey,
      more
      particularly described in the Warehouse Sale Agreement, together with the
      Improvements nor or hereafter located thereon.

     

    “Warehouse
      Sale Agreement”
means
      the Contract for the Sale/Purchase of Sale dated as of May 27, 2003, as amended,
      by and between ACE Lo and Brookside Point, L.L.C. 

     

    “WARN
      Act”
means
      the Worker Adjustment and Restraining Notification Act of 1988, or any similar
      state or local statute or ordinance.

     

    (b) The
      following are defined elsewhere in this Agreement, as indicated
      below:

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            
	
              2006
                NJSEA Payment

            	 	
              Section
                2.1(b)(ii)

            
	
              2006
                NJSEA Refund

            	 	
              Section
                9.26

            
	
              ACE
                Closing Payment

            	 	
              Section
                2.5(c)

            

    

     

    
      
        
        

      

      
        -109-

        
          

        

      

      
        
        

      

    

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            

    

    
      	
              ACE
                Closing Payment Escrow

            	 	
              Section
                2.5(b)

            
	
              ACE
                Closing Payment Escrow Agreement

            	 	
              Section
                2.5(b)

            
	
              ACE
                Closing Price Adjustment

            	 	
              Section
                2.1(b)(i)

            
	
              ACE
                Determination Date

            	 	
              Section
                2.7(c)

            
	
              ACE
                Disclosure Letter 

            	 	
              ARTICLE
                IV

            
	
              ACE
                Hi

            	 	
              Preamble
                

            
	
              ACE
                Hi NJSEA Payment

            	 	
              Section
                2.1(b)(ii)

            
	
              ACE
                Hi Acquisition Agreement

            	 	
              Section
                9.4(b)

            
	
              ACE
                Hi Common Stock

            	 	
              Section
                4.5

            
	
              ACE
                Hi NJSEA Ratio

            	 	
              Section
                2.1(b)(ii)

            
	
              ACE
                Leased Property

            	 	
              Section
                5.14(a)

            
	
              ACE
                Lo

            	 	
              Preamble
                

            
	
              ACE
                Lo Equity Interests

            	 	
              Recitals

            
	
              ACE
                Lo Material Contracts

            	 	
              Section
                5.3(a)

            
	
              ACE
                Lo Purchase

            	 	
              Recitals

            
	
              ACE
                Lo Pro Forma Title Policies

            	 	
              Section
                5.14(b)

            
	
              ACE
                Lo Promissory Note

            	 	
              Section
                9.1(d)

            
	
              ACE
                Owned Property

            	 	
              Section
                5.14(a)

            
	
              ACE
                Permits

            	 	
              Section
                5.15(b)

            
	
              ACE
                Purchase Price Adjustment

            	 	
              Section
                2.7(d)

            
	
              ACE
                Real Property

            	 	
              Section
                7.10(a)

            
	
              ACE
                Selling Parties

            	 	
              Preamble
                

            
	
              Additional
                Land

            	 	
              Recitals

            
	
              Additional
                Land Purchases

            	 	
              Recitals

            
	
              Additional
                Properties

            	 	
              Recitals

            
	
              Adjacent
                Land 

            	 	
              Recitals
                

            
	
              Adjacent
                Leased Property

            	 	
              Section
                7.10(a)

            
	
              Adjacent
                Owned Property

            	 	
              Section
                7.10(a)

            
	
              Adjacent
                Property Mansion Taxes

            	 	
              Section
                2.2(b)(i)

            
	
              Adjacent
                Properties

            	 	
              Section
                7.10(a)

            
	
              Adjacent
                Real Property

            	 	
              Section
                7.10(a)

            
	
              Agreed
                Severance Amount

            	 	
              Section
                2.1(b)(v)

            
	
              Agreed
                Stay-Put Bonuses

            	 	
              Section
                9.28(c)

            
	
              Agreement
                

            	 	
              Preamble
                

            
	
              Alternative
                Proposal Period

            	 	
              Section
                9.4(a)

            
	
              Antitrust
                Division

            	 	
              Section
                9.7(b)

            
	
              AREH

            	 	
              Preamble

            
	
              AREH
                Closing Payment

            	 	
              Section
                2.6(c)

            
	
              AREH
                Closing Payment Escrow

            	 	
              Section
                2.6(b)

            
	
              AREH
                Closing Payment Escrow Agreement

            	 	
              Section
                2.6(b)

            
	
              AREH
                Determination Date

            	 	
              Section
                2.8(b)

            
	
              AREH
                Disclosure Letter

            	 	
              ARTICLE
                VI

            
	
              AREH
                Purchase Price

            	 	
              Section
                2.2(a)

            
	
              AREH
                Purchase Price Adjustment

            	 	
              Section
                2.8(c)

            

    

     

    
      
        
        

      

      
        -110-

        
          

        

      

      
        
        

      

    

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            

    

    
      	
              AREH
                Selling Parties

            	 	
              Preamble

            
	
              AREH
                Subs

            	 	
              Preamble

            
	
              AREH
                Subs Contracts

            	 	
              Section
                7.2

            
	
              AREH
                Subs Equity Interests

            	 	
              Recitals

            
	
              AREH
                Subs Purchase

            	 	
              Recitals

            
	
              AREH
                Subs Prorations

            	 	
              Section
                2.2(b)(ii)

            
	
              AREH
                Subs Takeover Proposal

            	 	
              Section
                9.4(f)(iv)

            
	
              AREH
                Subs Pro Forma Title Policies

            	 	
              Section
                7.10(b)

            
	
              AREP
                Sands

            	 	
              Section
                9.4(d)(i)

            
	
              Asserted
                Liability

            	 	
              Section
                12.4(a)

            
	
              Audit
                Procedures

            	 	
              Section
                2.7(c)

            
	
              Auditor
                

            	 	
              Section
                2.7(c)

            
	
              Base
                AREH Purchase Price

            	 	
              Section
                2.2(a)(i)

            
	
              Boardwalk

            	 	
              Preamble
                

            
	
              Buyer

            	 	
              Preamble
                

            
	
              Buyer
                Disclosure Letter 

            	 	
              ARTICLE
                VIII

            
	
              Casino
                Business

            	 	
              Recitals
                

            
	
              Casino
                Employees

            	 	
              Section
                9.1(a)

            
	
              Casino
                Land 

            	 	
              Recitals
                

            
	
              Casino
                Mansion Taxes

            	 	
              Section
                2.1(b)(vi)

            
	
              Casino
                Property

            	 	
              Section
                5.14(a)

            
	
              Casino
                Shutdown

            	 	
              Section
                9.1(b)

            
	
              Casino
                Shutdown Plan

            	 	
              Section
                9.1(b)

            
	
              Certain
                Employee Liabilities

            	 	
              Section
                2.1(b)(vii)

            
	
              City-Wide
                Progressives Refund

            	 	
              Section
                9.24

            
	
              Claims
                Notice

            	 	
              Section
                12.4(a)

            
	
              Closing
                

            	 	
              Section
                1.2

            
	
              Closing
                ACE Purchase Price

            	 	
              Section
                2.1(a)(i)

            
	
              Closing
                Date 

            	 	
              Section
                1.2

            
	
              COBRA

            	 	
              Section
                5.5(e)

            
	
              commercially
                reasonable efforts

            	 	
              Section
                9.7(f)

            
	
              Companies

            	 	
              Preamble

            
	
              Competing
                AREH Offer

            	 	
              Section
                9.4(e)(ii)

            
	
              Condemnation
                Amount

            	 	
              Section
                9.12(b)

            
	
              Confidentiality
                Agreement 

            	 	
              Section
                9.6(a) 

            
	
              Consent

            	 	
              Section
                4.2(c)

            
	
              Counsel

            	 	
              Section
                9.16(a)

            
	
              Covered
                Casino Employee

            	 	
              Section
                9.28(e)

            
	
              CRDA
                Price

            	 	
              Section
                2.1(b)(ix)

            
	
              Demand
                Notice

            	 	
              Section
                9.13

            
	
              Deposit

            	 	
              Section
                2.3(a)

            
	
              Deposit
                Escrow Agreement

            	 	
              Section
                2.3(a)

            
	
              Direct
                Claim

            	 	
              Section
                12.4(c)

            
	
              Discharged
                ACE Indemnified Liabilities

            	 	
              Section
                2.1(b)(xi)

            

    

     

    
      
        
        

      

      
        -111-

        
          

        

      

      
        
        

      

    

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            

    

    
      	
              EBITDA
                Bonuses

            	 	
              Section
                2.1(b)(xii)

            
	
              Electing
                Party

            	 	
              Section
                9.20(a)

            
	
              Employee
                Benefit Plans

            	 	
              Section
                5.5(a) 

            
	
              Employment
                Laws

            	 	
              Section
                5.6(a)

            
	
              ERISA
                

            	 	
              Section
                5.5(a) 

            
	
              ERISA
                Affiliate

            	 	
              Section
                5.5(a)

            
	
              Escrow
                Gaming Amounts

            	 	
              Section
                2.1(b)(xviii)

            
	
              Estimated
                ACE Closing Price Adjustment

            	 	
              Section
                2.1(b)(xiii)

            
	
              Estimated
                Adjacent Property Mansion Taxes

            	 	
              Section
                2.2(b)(iv)

            
	
              Estimated
                AREH Subs Prorations

            	 	
              Section
                2.2(b)(iii)

            
	
              Estimated
                Casino Mansion Taxes

            	 	
              Section
                2.1(b)(xv)

            
	
              Estimated
                Certain Employee Liabilities

            	 	
              Section
                2.1(b)(xvi)

            
	
              Estimated
                Multiemployer Plan Liabilities

            	 	
              Section
                2.1(b)(xvii)

            
	
              Experts

            	 	
              Section
                9.16(a)

            
	
              Final
                ACE Closing Schedule

            	 	
              Section
                2.7(b)

            
	
              Final
                AREH Closing Schedule

            	 	
              Section
                2.8(a)

            
	
              Final
                MEPA Determination

            	 	
              Section
                9.22

            
	
              FTC

            	 	
              Section
                9.7(b)

            
	
              Gaming
                Liabilities

            	 	
              Section
                2.1(b)(xviii)

            
	
              GB
                Indemnification Escrow Agreement

            	 	
              Section
                2.4

            
	
              GB
                Indemnification Escrow Amount

            	 	
              Section
                2.4

            
	
              GB
                Date

            	 	
              Section
                2.4

            
	
              GB
                Judgment

            	 	
              Section
                2.4(d)(ii)

            
	
              Governmental
                Entity 

            	 	
              Section
                4.2(c)

            
	
              HSR
                Act

            	 	
              Section
                4.2(c)

            
	
              Indemnification
                Floor

            	 	
              Section
                12.7(a)

            
	
              Indemnified
                Party

            	 	
              Section
                12.2(a)

            
	
              Indemnifying
                Party

            	 	
              Section
                12.2(b)

            
	
              Initial
                ACE Purchase Price

            	 	
              Section
                2.1(a)(i)

            
	
              Inspection
                

            	 	
              Section
                9.6 

            
	
              Intellectual
                Property Agreements

            	 	
              Section
                5.7(a)

            
	
              Interests

            	 	
              Recitals
                

            
	
              Losses

            	 	
              Section
                12.2(a)

            
	
              Measurement
                Date

            	 	
              Section
                2.1(b)(xix)

            
	
              Measurement
                Period

            	 	
              Section
                2.1(b)(xx)

            
	
              MEPA
                Adjustment Amount

            	 	
              Section
                9.22

            
	
              MLK
                I

            	 	
              Preamble

            
	
              MLK
                II

            	 	
              Preamble

            
	
              MLK
                III

            	 	
              Preamble

            
	
              MLK
                Entities

            	 	
              Preamble

            
	
              MLK
                Land

            	 	
              Recitals

            
	
              MLK
                Letter

            	 	
              Recitals

            
	
              MLK
                Price

            	 	
              Section
                2.2(b)(v)

            
	
              MLK
                Properties

            	 	
              Recitals

            

    

     

    
      
        
        

      

      
        -112-

        
          

        

      

      
        
        

      

    

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            

    

    
      	
              Multiemployer
                Plan

            	 	
              Section
                5.5(a)

            
	
              Multiemployer
                Plan Liabilities

            	 	
              Section
                2.1(b)(xxi)

            
	
              NJSEA

            	 	
              Section
                9.26

            
	
              Non-Electing
                Party

            	 	
              Section
                9.20(a)

            
	
              Non-Refundable
                Date

            	 	
              Section
                11.2(b)

            
	
              Notice
                

            	 	
              Section
                12.4

            
	
              Old
                Post Office Land

            	 	
              Section
                9.14

            
	
              Old
                Post Office Site

            	 	
              Section
                9.14

            
	
              Outside
                Date 

            	 	
              Section
                10.1(a)

            
	
              Outstanding
                Chip & Ticket-In/Ticket-Out Liabilities

            	 	
              Section
                2.1(b)(xviii)

            
	
              Payment
                Request

            	 	
              Section
                12.4(c)

            
	
              PBGC

            	 	
              Section
                5.5(g)

            
	
              Per
                Diem Taxes

            	 	
              Section
                12.3(e)(i)

            
	
              Permitted
                Exceptions

            	 	
              Section
                9.17(a)

            
	
              Plans

            	 	
              Section
                5.5(a)

            
	
              Preliminary
                ACE Closing Schedule

            	 	
              Section
                2.5(a)

            
	
              Preliminary
                AREH Closing Schedule

            	 	
              Section
                2.6(a)

            
	
              Pro
                Forma Title Policies

            	 	
              Section
                7.10(b)

            
	
              Progressive
                Gaming Liabilities 

            	 	
              Section
                2.1(b)(xviii)

            
	
              Properties

            	 	
              Recitals

            
	
              Purchase

            	 	
              Recitals
                

            
	
              Purchase
                Price 

            	 	
              Section
                2.2(a)

            
	
              Purchase
                Price Allocation 

            	 	
              Section
                9.19(a)

            
	
              Registrations

            	 	
              Section
                5.7(a)

            
	
              Required
                Gaming Liabilities

            	 	
              Section
                2.1(b)(xviii)

            
	
              Requisite
                Stockholder Approval

            	 	
              Section
                4.5

            
	
              Representatives
                

            	 	
              Section
                9.6(a) 

            
	
              Restaurant
                Costs

            	 	
              Section
                2.2(b)(vi)

            
	
              Restaurant
                Land

            	 	
              Recitals
                

            
	
              Restaurant
                Purchase

            	 	
              Recitals

            
	
              Restaurant
                Purchase Price

            	 	
              Section
                2.2(b)(vi)

            
	
              Restaurant
                Site

            	 	
              Recitals

            
	
              Restraint

            	 	
              Section
                10.1(a)

            
	
              Section
                1031 Exchange

            	 	
              Section
                9.20(a)

            
	
              Sellers

            	 	
              Preamble
                

            
	
              Selling
                Parties

            	 	
              Preamble
                

            
	
              Stay-Put
                Casino Employees

            	 	
              Section
                9.28(c)

            
	
              Stockholder
                Consent

            	 	
              Section
                9.5

            
	
              Subsidy
                Notice

            	 	
              Section
                9.26

            
	
              Subsidy
                Payment

            	 	
              Section
                9.26

            
	
              Superior
                Proposal

            	 	
              Section
                9.4(d)(ii)

            
	
              Takeover
                Proposal

            	 	
              Section
                9.4(d)(i)

            
	
              Tax
                Claim

            	 	
              Section
                12.3(f)(i)

            
	
              Termination
                Fee

            	 	
              Section
                9.11(b)

            

    

     

    
      
        
        

      

      
        -113-

        
          

        

      

      
        
        

      

    

     

    
      	
              Terms

            	 	
              Cross
                Reference in 

              Agreement

            

    

    
      	
              Traymore
                Land 

            	 	
              Recitals

            
	
              Traymore
                Site 

            	 	
              Recitals

            
	
              WARN
                Act Notice

            	 	
              Section
                9.1(a)

            
	
              WARN
                Act Notice Date

            	 	
              Section
                9.1(a)

            

    

    

    Section
      13.2 Governing
      Law; Consent to Jurisdiction.

     

    (a) This
      Agreement and the transactions contemplated hereby, and all disputes between
      the
      parties under or related to the Agreement or the facts and circumstances leading
      to its execution, whether in contract, tort or otherwise, shall be governed
      by,
      and construed in accordance with, the Laws of the State of Delaware (without
      giving effect to choice of Law principles thereof).

     

    (b) Each
      of
      the parties irrevocably agrees that any legal action or proceeding with respect
      to this Agreement or for recognition and enforcement of any judgment in respect
      hereof brought by the other party hereto or its successors or assigns shall
      be
      brought and determined exclusively in the Delaware Court of Chancery (and if
      the
      Delaware Court of Chancery shall be unavailable, any court of the State of
      Delaware or the federal court of the United States of America sitting in the
      State of Delaware), and each of the parties hereby irrevocably submits with
      regard to any such action or proceeding for itself and in respect to its
      property, generally and unconditionally, to the exclusive jurisdiction of the
      aforesaid courts. Each of the parties hereby irrevocably waives, and agrees
      not
      to assert, by way of motion, as a defense, counterclaim or otherwise, in any
      action or proceeding with respect to this Agreement, (i) any claim that it
      is
      not personally subject to the jurisdiction of the above-named courts for any
      reason other than the failure to lawfully serve process, (ii) that it or its
      property is exempt or immune from jurisdiction of any such court or from any
      legal process commenced in any such court (whether through service of notice,
      attachment prior to judgment, attachment in aid of execution of judgment,
      execution of judgment or otherwise), and (iii) to the fullest extent permitted
      by applicable Law, that (A) the suit, action or proceeding in any such court
      is
      brought in an inconvenient forum, (B) the venue of such suit, action or
      proceeding is improper and (C) this Agreement, or the subject matter hereof,
      may
      not be enforced in or by any such court. Process in any such suit, action or
      proceeding may be served on any party anywhere in the world, whether within
      or
      without the jurisdiction of the above-named courts. Without limiting the
      foregoing, each party agrees that service of process on such party as provided
      in Section
      13.3
      hereof
      shall be deemed effective service of process on such party.

     

    
      
        
        

      

      
        -114-

        
          

        

      

      
        
        

      

    

     

    Section
      13.3 Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally, telecopied (which is confirmed) or mailed
      by registered or certified mail (return receipt requested) to the parties at
      the
      following addresses (or at such other address for a party as shall be specified
      by like notice): 

     

    
      	
            	(a)	
              if
                to Buyer, to 

            

    

     

    Pinnacle
      Entertainment, Inc.

    3800
      Howard Hughes Parkway

    Suite
      1800

    Las
      Vegas, Nevada 89109

    Telecopy
      No.: (702) 784-7778

    Attention: John
      A.
      Godfrey, Esq.

     

    with
      a
      copy to:

     

    Irell
      & Manella LLP

    1800
      Avenue of the Stars, Suite 900

    Los
      Angeles, California 90067

    Telecopy
      No: (310) 203-7199

    Attention: C.
      Kevin
      McGeehan

    Ashok
      Mukhey

     

    
      	
            	(b)	
              if
                to the ACE Selling Parties before the Closing, to
                

            

    

     

    Atlantic
      Coast Entertainment Holdings, Inc.

    Indiana
      Avenue and Brighton Park

    Atlantic
      City, NJ 08401

    Telecopy
      No: (609) 441-4937

    Attention: Richard
      P. Brown

    Nancy
      Axilrod, Esq. 

     

    with
      a
      copy to: 

     

    Katten
      Muchin Rosenman LLP

    575
      Madison Avenue

    New
      York,
      NY 10022-2585

    Telecopy
      No: (212) 940-8776

    Attention: Joel
      A.
      Yunis, Esq. 

    Evan
      L.
      Greebel, Esq. 

     

    
      
        
        

      

      
        -115-

        
          

        

      

      
        
        

      

    

     

    if
      to the
      ACE Selling Parties after the Closing, to 

     

    Atlantic
      Coast Entertainment Holdings, Inc.

    c/o
      American Real Estate Holdings Limited Partnership

    White
      Plains Plaza 

    445
      Hamilton Avenue

    Suite
      1210

    White
      Plains, NY 10601

    Telecopy
      No: (914) 614-7001 

    Attention: Felicia
      Buebel, Esq.

     

    with
      a
      copy to: 

     

    Katten
      Muchin Rosenman LLP

    575
      Madison Avenue

    New
      York,
      NY 10022-2585

    Telecopy
      No: (212) 940-8776

    Attention: Joel
      A.
      Yunis, Esq. 

    Evan
      L.
      Greebel, Esq. 

     

    
      	
            	(c)	
              if
                to the AREH Selling Parties, to 

            

    

     

    American
      Real Estate Holdings Limited Partnership

    White
      Plains Plaza 

    445
      Hamilton Avenue

    Suite
      1210

    White
      Plains, NY 10601

    Telecopy
      No: (914) 614-7001 

    Attention: Felicia
      Buebel, Esq.

     

    Section
      13.4 Interpretation.
      When a
      reference is made in this Agreement to Sections, Exhibits or Schedules, such
      reference shall be to a Section or Exhibit or Schedule of this Agreement unless
      otherwise indicated. All Exhibits and Schedules of this Agreement, including
      without limitation, the ACE Disclosure Letter, the AREH Disclosure Letter and
      the Buyer Disclosure Letter are incorporated herein by reference. The table
      of
      contents and headings contained in this Agreement are for reference purposes
      only and shall not affect in any way the meaning or interpretation of this
      Agreement. Whenever the words “include,”
      “includes”
or
      “including”
are
      used in this Agreement they shall be deemed to be followed by the words
“without
      limitation.”
The
      phrase “made available” in this Agreement shall mean that the information
      referred to has been made
      available
      if
      requested by the party to whom such information is to be made available. Each
      of
      Buyer and the Selling Parties will be referred to herein individually as a
      “party”
and
      collectively as “parties”
(except
      where the context otherwise requires). 

     

    
      
        
        

      

      
        -116-

        
          

        

      

      
        
        

      

    

     

    Section
      13.5 Headings.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this
      Agreement. 

     

    Section
      13.6 Entire
      Agreement.
      This
      Agreement and all documents and instruments referred to herein constitute the
      entire agreement and supersede all prior agreements and understandings, both
      written and oral, among the parties with respect to the subject matter hereof
      (provided that the Confidentiality Agreement shall remain in full force and
      effect after the Closing or upon termination of this Agreement). Each party
      hereto agrees that, except for the representations and warranties contained
      in
      this Agreement and the respective Disclosure Letters, none of Buyer nor any
      of
      the Selling Parties makes any other representations or warranties, and each
      hereby disclaims any other representations and warranties made by itself or
      any
      of its respective Representatives or other representatives, with respect to
      the
      execution and delivery of this Agreement or the transactions contemplated
      hereby, notwithstanding the delivery or disclosure to any of them or their
      respective Representatives of any documentation or other information with
      respect to any one or more of the foregoing. 

     

    Section
      13.7 Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of Law or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner materially adverse to any party. Upon
      such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner to the end that transactions contemplated
      hereby are fulfilled to the extent possible. 

     

    Section
      13.8 Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by operation of law (including without limitation, by merger or
      consolidation) or otherwise by any of the parties without the prior written
      consent of the other parties, except that (a) Buyer may, without the prior
      written consent of any other party hereto, transfer or assign its right to
      purchase any of the Interests to one or more of its direct or indirect
      Subsidiaries, written notice of which shall be given to the Selling Parties
      at
      the time of such transfer or assignment, provided that no such transfer or
      assignment shall relieve Buyer of any of its agreements or obligations hereunder
      and (b) either Buyer or Sellers may assign their rights under this Agreement
      pursuant to Section
      9.20
      hereof.
      Any assignment in violation of this Section
      13.8
      shall be
      void.
      Subject
      to the preceding sentences, this Agreement will be binding upon, inure to the
      benefit of and be enforceable by, the parties and their respective successors
      and permitted assigns.

     

    Section
      13.9 Parties
      in Interest; No Third Party Beneficiaries.
      This
      Agreement shall be binding upon and inure solely to the benefit of each party
      hereto and their respective successors and assigns, and nothing in this
      Agreement, express or implied is intended to or shall confer upon any other
      Person any right, benefit or remedy of any nature whatsoever under or by reason
      of this Agreement; provided,
      however,
      AREH
      and its Affiliates (other than GB Holdings and the GB Parties) shall be entitled
      to the benefits of, and the right to enforce, this Agreement with respect to
      the
      post-Closing obligations of the parties hereunder. 

     

    
      
        
        

      

      
        -117-

        
          

        

      

      
        
        

      

    

     

    Section
      13.10 Counterparts.
      This
      Agreement may be executed by facsimile and/or in one or more counterparts,
      and
      by the different parties hereto in separate counterparts, each of which when
      executed shall be deemed to be an original but all of which taken together
      shall
      constitute one and the same agreement. 

     

    Section
      13.11 Mutual
      Drafting.
      Each
      party hereto has participated in the drafting of this Agreement, which each
      party acknowledges is the result of extensive negotiations between the parties.
      In the event of any ambiguity or question of intent arises, this Agreement
      shall
      be construed as if drafted jointly by the parties and no presumption or burden
      of proof shall arise favoring or disfavoring any party by virtue of the
      authorship of any of the provisions of this Agreement. 

     

    Section
      13.12 Amendment.
      This
      Agreement may not be amended except by an instrument in writing signed on behalf
      of Buyer and Sellers. 

     

    Section
      13.13 Extension;
      Waiver.
      At any
      time prior to the Closing, Buyer and any of the Selling Parties by action taken
      or authorized by their respective boards of directors or other duly authorized
      action may, to the extent legally allowed (i) extend the time for or waive
      the
      performance of any of the obligations or other acts of the other parties hereto,
      (ii) waive any inaccuracies in the representations and warranties made by any
      of
      the other parties hereto contained herein or in any document delivered pursuant
      hereto and (iii) waive compliance with any of the agreements or conditions
      required to be performed by any of the other parties hereto contained herein.
      Any agreement on the part of a party hereto to any such extension or waiver
      shall be valid only if set forth in a written instrument signed on behalf of
      such party. 

     

    Section
      13.14 Termination
      of Traymore Call Agreement.
      The
      parties hereto hereby acknowledge and agree that the Traymore Call Agreement
      shall automatically terminate on and as of the closing of the sale of both
      of
      (but not only one of) the following: (x) the ACE Lo Equity Interests to Buyer
      pursuant to the ACE Lo Purchase and (y)  the AREH Subs Equity Interests to
      Buyer pursuant to the AREH Subs Purchase.

     

    [SIGNATURE
      PAGE FOLLOWS] 

    

    
      
        
        

      

      
        -118-

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned have caused this Agreement to be signed by
      their respective duly authorized officers as of the date first written above.
      

    

      
        	 	
                “BUYER”

                 

                PINNACLE
                  ENTERTAINMENT, INC.

              
	 	 	 
	 	
                By: 

              	/s/
	 	
                Name: 

              	  

	 	
                Its: 

              	   
                

      

    

     

     

      	
            	
              
                “ACE
                  HI”

                 

                ATLANTIC
                  COAST ENTERTAINMENT 

                HOLDINGS,
                  INC.

              

            
	 	 	 
	 	
              By: 

            	/s/
	 	
              Name: 

            	 
	 	
              Its: 

            	 

    

     

     

    
      	
            	
              
                “ACE
                  LO”

              

               

              ACE
                GAMING, LLC

            
	 	By:	
              Atlantic Coast Entertainment Holdings,
                

              Inc.,
                sole member

            
	 	 	 
	 	
              By: 

            	/s/
	 	
              Name: 

            	 
	 	
              Its: 

            	 

    

    

    
      
        
        

      

      
        -119-

        
          

        

      

      
        
        

      

    

    

    
      	
            	
              “AREH”

               

              AMERICAN
                REAL ESTATE HOLDINGS 

              LIMITED
                PARTNERSHIP

            
	 	By:	
              American Property Investors, Inc.,
                

              general partner

            
	 	 	 
	 	
              By: 

            	/s/
	 	
              Name: 

            	 
	 	
              Its: 

            	 

    

     

    
      	
            	
              
                “BOARDWALK”

                 

              

              AREP
                BOARDWALK PROPERTIES LLC

            
	 	 	 
	 	
              By: 

            	/s/
	 	
              Name: 

            	  

	 	
              Its: 

            	  

    

    

     

    
      	
            	
              “MLK
                ENTITIES”

               

              AREH
                MLK LLC

            
	 	By:	
              American Real Estate
                Holdings

              Limited Partnership, sole
                member

            
	 	 	 	 
	 	
            	By:	
              American Property Investors, Inc.,
                

              general partner

            
	 	
              By: 

            	/s/
	 	
              Name: 

            	
                        

            
	 	
              Its: 

            	
                        

            

   

    
      
        
        

      

      
        -120-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              
                PSW
                  PROPERTIES LLC 

                MITRE
                  ASSOCIATES LLC

              

            
	 	By:	
              Draper Associates LLC, sole
                member

            
	 	
            	By:   
              	
              American Real Estate
                Holdings

              Limited Partnership, sole
                member

            

    

    
      	 	 	        	By:  
               	
              American Property Investors, Inc.,
                

              general
                partner

            

    

     

    
      	 	
              By: 

            	/s/
	 	
              Name: 

            	
                        

            
	 	
              Its: 

            	
                        

            

    

     

    
      
        
        

      

      
        -121-STOCKHOLDERS
      AGREEMENT

     

    THIS
      STOCKHOLDERS AGREEMENT is made and entered into as of September 3, 2006 (this
      "Agreement")
      among
      Pinnacle Entertainment, Inc., a Delaware corporation ("Parent"),
      American Real Estate Holdings Limited Partnership, a Delaware limited
      partnership ("AREH"),
      and
      AREP Sands Holding, LLC, a Delaware limited liability company ("AREP Sands")
      (AREH and AREP Sands are each referred to herein as an "Icahn Affiliated Party"
      and, collectively, as the "Icahn Affiliated Parties").

     

    WHEREAS,
      Parent, Atlantic Coast Entertainment Holdings, Inc., a Delaware corporation
      (the
      "Company"
      or
      "ACE
      Hi"),
      ACE
      Gaming, LLC, a New Jersey limited liability company ("ACE
      Lo"),
      AREH,
      AREP Boardwalk Properties LLC, a Delaware limited liability company
      ("Boardwalk"),
      PSW
      Properties LLC, a Delaware limited liability company ("MLK
      I"),
      AREH
      MLK LLC, a Delaware limited liability company ("MLK
      II"),
      Mitre
      Associates LLC, a Delaware limited liability company ("MLK
      III"
      and,
      together with Boardwalk, MLK I and MLK II, the "AREH
      Subs"),
      are
      entering into an Acquisition Agreement dated as of the date hereof (as the
      same
      may be amended or supplemented to reflect any Increased Parent Transaction
      (as
      defined in Section 5(a) below), the "Acquisition
      Agreement");
      capitalized terms used but not defined herein shall have the meanings set forth
      in the Acquisition Agreement;

     

    WHEREAS,
      the Icahn Affiliated Parties collectively Beneficially Own (as defined below)
      an
      aggregate of 6,344,074 shares of common stock, $0.01 par value per share, of
      the
      Company ("Company
      Common Stock"),
      consisting of 4,029,084 shares of Company Common Stock and 2,314,990 shares
      of
      Company Common Stock issuable upon conversion of $35,124,000 in aggregate
      principal amount of 3% Notes of the Company due July 22, 2008 ("3%
      Notes"),
      representing in the aggregate approximately 63.44% of the outstanding shares
      of
      Company Common Stock on a Fully Diluted Basis (as defined in Section 5). The
      Icahn Affiliated Parties do not Beneficially Own any of the warrants to purchase
      Company Common Stock at $0.01 per share ("Warrants");

     

    WHEREAS,
      each Icahn Affiliated Party which is a record owner of shares of Company Common
      Stock (individually, a "Stockholder",
      and,
      collectively, the "Stockholders")
      is the
      record owner of shares of Company Common Stock set forth opposite its name
      on
      Schedule 1 hereto (such shares of Company Common Stock, together with any other
      shares of capital stock of the Company acquired by the Stockholder after the
      date hereof and during the term of this Agreement, being collectively referred
      to herein as the "Subject
      Shares"
      of the
      Stockholder); 

     

    WHEREAS,
      each Icahn Affiliated Party which is a record holder of Warrants, other rights
      to acquire shares of Company Common Stock or 3% Notes is the record holder
      of
      such securities set forth opposite its name on Schedule 1 hereto (such Warrants,
      other rights and 3% Notes, together with any other securities or other interests
      in securities of the Company (other than the Subject Shares) acquired by such
      Icahn Affiliated Party after the date hereof and during the term of this
      Agreement, being collectively referred to herein as the "Other
      Subject Securities"
      of such
      Icahn Affiliated Party);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      the Icahn Affiliated Parties Beneficially Own 7,748,744 shares of common stock,
      $.01 par value per share (the "GB
      Common Stock"),
      of GB
      Holdings, Inc. ("GB
      Holdings"),
      representing approximately 77.5% of the outstanding shares of GB Holdings'
      common stock. On September 29, 2005, GB Holdings filed a voluntary petition
      for
      relief under Chapter 11 of Title 11 of the United States Code with the United
      States Bankruptcy Court for the District of New Jersey (the "Bankruptcy
      Court"),
      Case
      No. 05-42736JHW, and is currently operating as a debtor in possession in such
      Chapter 11 case. Such Chapter 11 case of GB Holdings, and any all appeals and
      related proceedings (including without limitation those relating to any Federal
      or state avoiding statute, in a non-bankruptcy court), is referred to herein
      as
      the "Bankruptcy
      Case";

     

    WHEREAS,
      each Icahn Affiliated Party which is a record holder of GB Holdings common
      stock
      is the record holder of such securities set forth opposite its name on Schedule
      1 hereto; and

     

    WHEREAS,
      as a condition to its willingness to enter into the Acquisition Agreement,
      Parent has requested that each Icahn Affiliated Party enter into this
      Agreement.

     

    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    SECTION 1.  Representations
      and Warranties of Icahn Affiliated Parties.
      The
      Icahn Affiliated Parties jointly and severally represent and warrant to Parent
      as of the date hereof as follows:

     

    (a)  Organization;
      Authority; Execution and Delivery; No Conflicts; Enforceability.
      Each
      Icahn Affiliated Party (if not a natural person) is duly organized, validly
      existing and in good standing under the laws of the jurisdiction in which it
      is
      organized. Each Icahn Affiliated Party has all requisite power and authority
      to
      execute and deliver this Agreement and (if it is a Stockholder) the Written
      Consent of the Holders of Common Stock of the Company attached hereto as Exhibit
      A (the "Stockholder Consent") and to perform its obligations hereunder and
      comply with the terms hereof. The execution and delivery by each Icahn
      Affiliated Party of this Agreement and the Stockholder Consent (if it is a
      Stockholder) and the performance of its obligations hereunder and compliance
      with the terms hereof have been duly authorized by all necessary action on
      the
      part of such Icahn Affiliated Party. Each Icahn Affiliated Party has duly
      executed and delivered this Agreement, and this Agreement constitutes the legal,
      valid and binding obligation of such Icahn Affiliated Party, enforceable against
      such Icahn Affiliated Party in accordance with its terms. The execution and
      delivery by each Icahn Affiliated Party of this Agreement and the Stockholder
      Consent (if it is a Stockholder) do not, and the performance of its obligations
      hereunder and compliance with the terms hereof will not, conflict with, or
      result in any violation of, or default (with or without notice or lapse of
      time,
      or both) under, or give rise to a right of termination, cancellation or
      acceleration of any obligation or loss of a material benefit under, or result
      in
      the creation of any Lien (other than Liens created pursuant to this Agreement)
      upon any of the assets of such Icahn Affiliated Party under, any provision
      of
      (i) any organizational documents of such Icahn Affiliated Party,
      (ii) any Contract to which such Icahn Affiliated Party is a party or by
      which assets of such Icahn Affiliated Party are bound or (iii) subject to
      the filings and other matters referred to in the next sentence, any provision
      of
      any Judgment or Law applicable to such Icahn Affiliated Party or the assets
      of
      such Icahn Affiliated Party, other than, in the case of clauses (ii) and (iii)
      above, any such items that, individually or in the aggregate, have not
      materially impaired or delayed, and are not reasonably likely to materially
      impair or delay, such Icahn Affiliated Party’s ability to perform its
      obligations hereunder or comply with the terms hereof. No Consent of, or
      registration, declaration or filing with, any Governmental Entity is required
      to
      be obtained or made by or with respect to each Icahn Affiliated Party in
      connection with the execution, delivery and performance of this Agreement or
      the
      execution and delivery of the Stockholder Consent (if it is a Stockholder)
      or
      the performance of its obligations hereunder or the compliance with the terms
      hereof other than (x) the filing with the SEC of such reports under the Exchange
      Act as may be required in connection with this Agreement and (y) such other
      Consents, registrations, declarations or filings that are contemplated by the
      Acquisition Agreement or the failure of which to obtain or make are not,
      individually or in the aggregate, reasonably likely to materially impair or
      delay such Icahn Affiliated Party’s ability to perform its obligations hereunder
      or comply with the terms hereof.

     

    
      
        
        

      

      
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    (b)  The
      Subject Shares, Other Subject Securities and GB Holdings
      Securities.
      Each
      Stockholder is the record and Beneficial Owner of, or is the trustee of a trust
      that is the record holder of, and whose beneficiaries are the Beneficial Owners
      of, and has good and marketable title to, the Subject Shares set forth opposite
      its name on Schedule 1 attached hereto, free and clear of any Liens (other
      than Liens created pursuant to the terms of this Agreement or arising under
      federal or state securities Laws). Each Stockholder does not own, of record
      or
      Beneficially, any shares of capital stock of the Company other than the Subject
      Shares set forth opposite its name on Schedule 1 attached hereto. Each
      Stockholder does not own, of record or beneficially, any other securities of
      or
      interests in the Company, or any options, warrants, convertible securities,
      exchangeable securities or other similar rights entitling the holder thereof
      to
      acquire shares of capital stock of the Company, other than the Subject Shares
      and the Other Subject Securities set forth opposite its name on Schedule 1
      attached hereto. The Other Subject Securities are not entitled to vote on the
      approval of the Acquisition Agreement or the Purchase. Each Stockholder has
      the
      sole right to vote such Subject Shares, and none of such Subject Shares is
      subject to any voting trust or other agreement, arrangement or restriction
      with
      respect to the voting of such Subject Shares, except as contemplated by this
      Agreement. The Icahn Affiliated Parties and any Affiliates of Icahn do not
      own,
      of record or Beneficially, any shares of capital stock or other securities
      of or
      interests in the Company or GB Holdings other than the capital stock, other
      securities and interests set forth on Schedule 1 attached hereto and a loan
      made
      by AREH to GB Holdings in the original principal amount of
      $1,200,000.

     

    (c)  The
      authorized capital stock of the Company consists of 10,000,000 shares of Company
      Common Stock, and 5,000,000 shares of preferred stock, par value $.01 per share
      (“Company
      Preferred Stock”
and,
      together with the Company Common Stock, the “Company
      Capital Stock”).
      As of
      the date hereof, (i) 6,912,016 shares of
      Company Common Stock were issued and outstanding, (ii) no shares of Company
      Common Stock were held by the Company in its treasury, and (iii) no shares
      of
      Company Preferred Stock were issued or outstanding or reserved for issuance
      or
      were held by the Company in its treasury. As of the date of this Agreement,
      other than Warrants to acquire 619,096 shares of Company Common Stock and
      $37,458,970 in aggregate principal amount of 3% Notes which are convertible
      into
      2,468,886 shares of Company Common Stock, there are no (i) options,
      warrants or other rights, agreements, arrangements or commitments of any kind
      relating to issued or unissued Company Capital Stock, (ii) securities
      convertible into or exchangeable for Company Capital Stock,
      (iii) obligations of the Company or any of its Affiliates to issue or sell
      any Company Capital Stock, or (iv) bonds, debentures, notes or other
      indebtedness of Company Capital Stock having voting rights (or convertible
      into
      securities having such rights) issued and outstanding.
      The
      Icahn Affiliated Parties own of record a majority of the outstanding shares
      of
      Company Common Stock.

     

     

    
      
        
        

      

      
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    SECTION 2.  Representations
      and Warranties of Parent.
      Parent
      hereby represents and warrants to the Icahn Affiliated Parties as follows:
      Parent is duly organized, validly existing and in good standing under the laws
      of the State of Delaware. Parent has all requisite corporate power and authority
      to execute and deliver this Agreement and to consummate the transactions
      contemplated by the Acquisition Agreement. The execution and delivery by Parent
      of this Agreement and consummation of the transactions contemplated by the
      Acquisition Agreement have been duly authorized by all necessary action on
      the
      part of Parent. Parent has duly executed and delivered this Agreement, and
      this
      Agreement constitutes the legal, valid and binding obligation of Parent,
      enforceable against Parent in accordance with its terms. The execution and
      delivery by Parent of this Agreement do not, and the consummation of the
      transactions contemplated by the Acquisition Agreement and compliance with
      the
      terms hereof will not, conflict with, or result in any violation of, or default
      (with or without notice or lapse of time, or both) under, or result in the
      creation of any Lien upon any of the properties or assets of Parent under,
      any
      provision of (i) any organizational documents of Parent, (ii) any
      Contract to which Parent is a party or by which any assets of Parent are bound
      or (iii) subject to the filings and other matters referred to in the next
      sentence, any provision of any Judgment or Law applicable to Parent or the
      assets of Parent, other than, in the case of clauses (ii) and (iii) above,
      any
      such items that, individually or in the aggregate, have not, and are not
      reasonably likely to, materially impair or delay Parent’s ability to consummate
      the transactions contemplated by the Acquisition Agreement. No Consent of,
      or
      registration, declaration or filing with, any Governmental Entity is required
      to
      be obtained or made by or with respect to Parent in connection with the
      execution, delivery and performance of this Agreement or the consummation of
      the
      transactions contemplated by the Acquisition Agreement, other than such
      Consents, registrations and filings contemplated by the Acquisition
      Agreement.

     

    SECTION 3.  Consent,
      Irrevocable Proxy and Related Covenants Relating to Stockholders.
      Each
      Stockholder covenants and agrees as follows, and the Icahn Affiliated Parties
      jointly and severally covenant and agree that they will cause each Stockholder
      to perform the following:

     

    (a)  Immediately
      following the execution and delivery of this Agreement, each Stockholder shall,
      in accordance with Section 228 of the Delaware General Corporation Law, consent
      to the approval and adoption of the Acquisition Agreement and the transactions
      contemplated thereby by delivering to the Company the Stockholder Consent in
      respect to all of the Subject Shares set forth next to the name of the
      Stockholder on Schedule 1. Subject to any right of termination pursuant to
      an
      ACE Lo Termination (as defined below), such consent shall be
      irrevocable.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (b)  Each
      Stockholder hereby grants to Parent an irrevocable proxy to exercise, at any
      time and from time to time, solely in order to approve the Acquisition Agreement
      and the transactions contemplated thereby and the form, terms and provisions
      thereof and the consummation by the Company and ACE Lo of the transactions
      contemplated thereby, including the Purchase,: (i) all rights and powers of
      such
      Stockholder with respect to its Subject Shares to vote, give approvals,
      consents, call meetings, give, receive and waive notices of meetings, and grant
      proxies to others; and (ii) without limitation of the rights and powers referred
      to in the preceding clause (i), all voting, approval, consent and waiver rights
      and powers that such Stockholder possesses or may in the future possess as
      record owner or Beneficial Owner of its Subject Shares, provided,
      however,
      that
      until such time as the Stockholders have delivered to Parent the Stockholder
      Consent with respect to a majority of the outstanding shares of Company Common
      Stock, each Stockholder's irrevocable proxy grant to Parent shall include the
      power to exercise voting power with respect to such Stockholder's Subject Shares
      to prevent any other action, including any other merger and any consolidation,
      sale of assets or securities, reorganization or recapitalization, liquidation
      or
      winding up of the Company or ACE Lo or any other extraordinary transaction
      involving the Company or ACE Lo or any other corporate action the consummation
      of which could reasonably be expected to, directly or indirectly, frustrate
      the
      purposes of, or prevent or delay the consummation of, the transactions
      contemplated by this Agreement or the Acquisition Agreement. By giving this
      proxy such Stockholder hereby revokes all other proxies granted by such
      Stockholder to vote any of its Subject Shares solely with respect to the
      foregoing matters. The power and authority hereby conferred shall not be
      terminated by any act of such Stockholder or by operation of law, by lack of
      appropriate power or authority or by the occurrence of any other event or events
      except the Closing or an ACE Lo Termination and shall be binding upon all such
      Stockholder's beneficiaries, distributees, successors, assigns and legal
      representatives. If, after execution of this Agreement, such Stockholder shall
      cease to have appropriate power or authority, Parent is nevertheless authorized
      and directed to vote the Stockholder's Subject Shares in accordance with the
      terms of this Agreement as if such lack of appropriate power or authority had
      not occurred and regardless of notice thereof. This proxy is irrevocable, is
      coupled with an interest and is granted in consideration of Parent's entering
      into the Acquisition Agreement. This proxy and all rights and powers conferred
      by this paragraph shall terminate upon the earlier to occur of (x) the
      Closing and (y) an ACE Lo Termination.

     

    (c)  If
      the
      proxy granted in this Section 3 is invalid or is ineffective for any reason,
      each Stockholder hereby irrevocably agrees to vote, give approvals, consents,
      call meetings, give, receive and waive notices of meetings, and grant proxies
      to
      others in such manner as Parent may, in its sole discretion, deem necessary
      or,
      in Parent's reasonable discretion, desirable in order to secure the consent,
      adoption and approval by the stockholders of the Company of the Acquisition
      Agreement and the form, terms and provisions thereof and the consummation by
      the
      Company of the transactions contemplated thereby, including the Purchase. The
      obligations of each Stockholder and all rights and powers conferred under this
      Section 3(c) shall terminate upon the earlier to occur of (x) the Closing
      and (y) an ACE Lo Termination.

     

    (d)  Each
      Stockholder agrees that Parent may deliver a copy of this Agreement to the
      Secretary of the Company and to any inspector or judges of elections, transfer
      agents, registrars or others to whom Parent wishes to give notice of the rights
      hereby granted.

     

    
      
        
        

      

      
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    SECTION 4.  Covenants
      of Icahn Affiliated Parties.
      The
      Icahn Affiliated Parties jointly and severally covenant and agree as
      follows:

     

    (a)  At
      any
      meeting of stockholders of the Company or at any adjournment thereof or in
      any
      other circumstances upon which an Icahn Affiliated Party’s vote, consent or
      other approval is sought, such Icahn Affiliated Party agrees not to grant a
      proxy to any person to vote in favor of, and such Icahn Affiliated Party shall
      vote or consent (or cause to be voted or a consent given) the Subject Shares
      and
      Other Subject Securities of such Icahn Affiliated Parties against, (i) any
      Takeover Proposal, and (ii) any amendment of the Company's certificate of
      incorporation or bylaws or ACE Lo's operating agreement or other proposal or
      transaction involving the Company, ACE Lo, any AREH Sub or any subsidiary
      thereof, which amendment or other proposal or transaction in any manner is
      reasonably likely to impede, frustrate, prevent, delay or nullify any provision
      of the Acquisition Agreement, the Purchase or the consummation of any of the
      transactions contemplated hereby or thereby or change in any manner the voting
      rights of any class of Company capital stock. Each Icahn Affiliated Party shall
      not commit or agree to take any action inconsistent with the foregoing. The
      obligations of each Icahn Affiliated Party and all rights and powers conferred
      under this Section 4(a) shall terminate upon the earlier to occur of (x) the
      Closing and (y) an ACE Lo Termination.

     

    (b)  Except
      as
      contemplated by this Agreement, no Icahn Affiliated Party shall be restricted
      from voting in favor of, against or abstaining with respect to any matter
      presented to the stockholders or other securityholders of the
      Company.

     

    (c)  In
      any
      circumstance in which an Icahn Affiliated Party’s or its Affiliate's vote,
      consent or other approval is sought with respect to the AREH Subs, such Icahn
      Affiliated Party agrees not to, and shall cause its Affiliate not to, grant
      a
      proxy to any person to vote in favor of, and such Icahn Affiliated Party shall
      vote or consent (or cause to be voted or a consent given) any interests held
      by
      such Icahn Affiliated Parties or Affiliates against, (i) any AREH Subs
      Takeover Proposal, and (ii) any amendment of the AREH Subs' respective
      operating agreement or other organizational documents or other proposal or
      transaction involving the Company, ACE Lo, any AREH Sub or any subsidiary
      thereof, which amendment or other proposal or transaction in any manner is
      reasonably likely to impede, frustrate, prevent, delay or nullify any provision
      of the Acquisition Agreement, the Purchase or the consummation of any of the
      transactions contemplated hereby or thereby or change in any manner the voting
      rights of any class of Company capital stock. Each Icahn Affiliated Party shall
      (and shall cause any of its Affiliates) not commit or agree to take any action
      inconsistent with the foregoing. The obligations of each Icahn Affiliated Party
      and all rights and powers conferred under this Section 4(c) shall terminate
      upon
      the earlier to occur of (x) the Closing and (y) a Complete Termination (as
      defined below).

     

    (d)  Prior
      to
      the Closing, the Icahn Affiliated Parties shall cause each of AREH's
      wholly-owned subsidiaries that hold 3% Notes (the "Applicable
      Subsidiaries")
      to
      convert the 3% Notes it holds into equity securities of the Company and to
      deliver a Demand Payment Notice (as defined in that certain indenture governing
      the 3% Notes, dated as of July 22, 2004, by and among the Company, ACE Lo and
      Wells Fargo Bank, National Association, as Trustee (the “Indenture”))
      in
      order to cause the conversion of all 3% Notes held by others, in each case,
      in
      accordance with the terms of the Indenture (the "Conversion").

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (e)  Other
      than pursuant to the Conversion, until after the earlier of the Closing or
      an
      ACE Lo Termination, each Icahn Affiliated Party shall not (and shall cause
      its
      Affiliates not to) directly or indirectly (i) sell, transfer, pledge,
      assign or otherwise dispose of (including by gift) (collectively, "Transfer"),
      or
      enter into any Contract, option or other arrangement with respect to the
      Transfer of, or any profit sharing arrangement relating to, any Subject Shares,
      any Other Subject Securities or any securities or interests such Icahn
      Affiliated Party and its Affiliates owns or holds in GB Holdings, Boardwalk
      or
      the AREH Subs to or with any person other than pursuant to the Acquisition
      Agreement or (ii) enter into any voting arrangement, whether by proxy,
      voting agreement or otherwise, with respect to any Subject Shares or any Other
      Subject Securities or any securities or interests it owns or holds in GB
      Holdings, Boardwalk or the AREH Subs and shall not commit or agree to take
      any
      of the foregoing action, other than, in each case, any of the foregoing actions
      that, individually or in the aggregate, are not reasonably likely to impair
      or
      delay, such Icahn Affiliated Party’s or its Affiliates' ability to perform its
      obligations hereunder or comply with the terms hereof. The parties hereto hereby
      acknowledge and agree that financing activities by the Icahn Affiliated Parties,
      whether or not secured, that do not involve the direct Transfer of Subject
      Shares or Other Subject Securities are not restricted by this Sections
      (provided, however, that a foreclosure or other exercise of a secured party's
      right to take title to or dispose of collateral involving Subject Shares or
      Other Subject Shares shall be considered a direct Transfer).
      The
      obligations of each Icahn Affiliated Party and all rights and powers conferred
      under this Section 4(e) shall terminate upon the earlier to occur of (x) the
      Closing and (y) an ACE Lo Termination.

     

    (f)  Each
      Icahn Affiliated Party acknowledges the terms and conditions of Section 9.4
      (No
      Solicitation) of the Acquisition Agreement and agrees to comply with such terms
      and conditions to the extent applicable to such Icahn Affiliated
      Party.

     

    (g)  Subject
      to the actions permitted to be taken in accordance with Section 9.4 of the
      Acquisition Agreement:

     

    Each
      Icahn Affiliated Party shall use commercially reasonable efforts (it being
      understood that in no event shall such commercially reasonable efforts obligate
      any Icahn Affiliated Party to pay money) to take, or cause to be taken, all
      actions, and to do, or cause to be done, and to assist and cooperate with the
      other parties in doing, all things reasonably requested by Parent from the
      Icahn
      Affiliated Party in its capacity as a stockholder or other interestholder of
      the
      Company to consummate and make effective, in the most expeditious manner
      reasonably practicable, the Purchase and the other transactions contemplated
      hereby and by the Acquisition Agreement as in effect on the date hereof. In
      its
      capacity as a stockholder or other interestholder in GB Holdings, each Icahn
      Affiliated Party shall (and shall cause its Affiliates to) refrain from taking
      any action in the Bankruptcy Case for the purpose or with the intent of
      impeding, frustrating, preventing, delaying or nullifying any provision of
      the
      Acquisition Agreement or the Purchase or the consummation of any of the
      transactions contemplated hereby or thereby. In addition, each Icahn
      Affiliated Party agrees not to (and shall cause its Affiliates not to) authorize
      the filing of a bankruptcy petition by the Company or ACE Lo and not to directly
      or indirectly cause an involuntary bankruptcy petition to be filed against
      the
      Company or ACE Lo. The
      obligations of each Icahn Affiliated Party and all rights and powers conferred
      under this Section 4(g) shall terminate upon the earlier to occur of (x) the
      Closing and (y) an ACE Lo Termination.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (h)  The
      Icahn
      Affiliated Parties, on the one hand, and Parent and/or any of its Affiliates,
      on
      the other hand, shall not issue any press release or make any other public
      statement with respect to the Purchase or any transaction contemplated hereby
      or
      by the Acquisition Agreement, except after having provided the other the
      reasonable opportunity for review and comment on such press release or other
      public statement by, the other party to the extent practicable, except as any
      party, after consultation with counsel, determines is required by applicable
      law
      or applicable rule or regulation of any national securities exchange on such
      party's securities are listed; provided that the provisions of this paragraph
      shall not require prior consultation with respect to any disclosure containing
      the same or substantially similar information which the other party previously
      had the opportunity to review.

     

    (i)  Each
      Icahn Affiliated Party hereby consents to and approves the actions taken by
      the
      Board of Directors of the Company in approving the Acquisition Agreement, the
      sale of substantially all the assets contemplated therein and the other
      transactions contemplated thereby.

     

    SECTION 5.  Payments
      to Parent in the Event of an Alternative Disposition.

     

    (a)  If:

     

    (A)  the
      Acquisition Agreement is terminated pursuant to an ACE Lo Termination or a
      Complete Termination (i) by the Company pursuant to Section 11.1(g) of the
      Acquisition Agreement, (ii) by Parent pursuant to Section 11.(d) or Section
      11.1(h) of the Acquisition Agreement, or (iii) by either Parent or the Sellers
      pursuant to Section 11.1(b) or 11.1(c), and,
      in the
      case of a termination described in clauses (i), (ii) or (iii), within twelve
      (12) months following such termination, the Company, ACE Lo, the AREH Subs,
      and/or any Icahn Affiliated Party or any of their Affiliates enters into a
      definitive agreement with respect to a Superior Proposal, Takeover Proposal
      and/or an AREH Subs Takeover Proposal (provided however that such requirement
      shall also be deemed satisfied in the event of a termination of the Acquisition
      Agreement described in clause (i) (I) in the event that the definitive agreement
      with respect to the Superior Proposal giving rise to such termination is entered
      into at any time following such termination but is not consummated and within
      twelve (12) months following the termination of the definitive agreement
      relating to such Superior Proposal the Company enters into any definitive
      agreement with respect to a Superior Proposal, Takeover Proposal and/or AREH
      Subs Takeover Proposal, or (II) in the event that the Company does not enter
      into the definitive agreement with respect to the Superior Proposal giving
      rise
      to such termination, but within twelve (12) months following the termination
      of
      discussions with the other party regarding such Superior Proposal (but in the
      case of this clause (II), in no event later than twenty-four (24) months
      following the termination of the Acquisition Agreement described in clause
      (i)
      above) the Company enters into any definitive agreement with respect to a
      Superior Proposal, Takeover Proposal and/or AREH Subs Takeover Proposal)
and
      the
      transactions contemplated by such Superior Proposal, Takeover Proposal and/or
      AREH Subs Takeover Proposal (any such transaction, a “Third
      Party Transaction”)
      are
      consummated, or

     

    (B)  prior
      to
      the earlier of (x) the Closing or (y) an ACE Lo Termination or a Complete
      Termination, an Applicable Court determines that GB Holdings is deemed to own
      (either directly or through one or more wholly-owned and/or majority-controlled
      subsidiaries or through nominees) the Casino Land and/or the Traymore Land
      and a
      Takeover Proposal and/or an AREH Subs Takeover Proposal (substituting GB
      Holdings for ACE Hi and ACE Lo in such definitions if applicable) in lieu of
      the
      Acquisition Agreement is (i) approved or required by an order of, or pursuant
      to
      an approved process (including without limitation an auction) ordered by, an
      Applicable Court and consummated or (ii) consummated pursuant to or in
      furtherance of the terms of a plan of reorganization in an Applicable Bankruptcy
      Case, including pursuant to any process (including without limitation an
      auction) conducted by a Chapter 7 or 11 trustee or a liquidating or creditors
      trust established in an Applicable Bankruptcy Case, whether by reorganization,
      recapitalization, dissolution, liquidation or otherwise (any such transaction,
      a
“Bankruptcy
      Court Transaction”),
      or

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (C)  (i)
      Parent matches or exceeds the terms of a Superior Proposal pursuant to Section
      9.4(b) of the Acquisition Agreement or (ii) for any other reason (including
      without limitation pursuant to an auction or other proceeding by, or approved
      or
      required by, an Applicable Court or conducted pursuant to or in furtherance
      of
      the terms of a plan of reorganization in an Applicable Bankruptcy Case,
      including by a Chapter 7 or 11 trustee or a liquidating or creditors trust
      established in an Applicable Bankruptcy Case, whether by reorganization,
      recapitalization, dissolution, liquidation or otherwise), Parent increases
      the
      purchase consideration paid for the Purchase or other acquisition of the
      Properties (or entities owning the Properties) (any such transaction in clause
      (i) or (ii), an “Increased
      Parent Transaction”
and
      together with any Third Party Transaction and any Bankruptcy Court Transaction,
      an “Alternative
      Disposition”)
      and
      the
      transactions contemplated by such Increased Parent Transaction are
      consummated,

     

    then
      the
      Icahn Affiliated Parties shall, jointly and severally, pay to Parent (in
      accordance with Section 5(c)) an aggregate amount in cash equal to the Excess
      Profit (as defined below), if any, realized by the Icahn Affiliated Parties
      and
      their Affiliates from the consummation of the applicable Alternative
      Disposition. The Excess Profit shall be paid to Parent irrespective of any
      amounts Parent receives as a consequence of breakup or termination fees, if
      any,
      they receive pursuant to the Acquisition Agreement, except that such fees are
      permitted to be included in the costs and expenses to be deducted from the
      calculation of the Excess Profit below to the extent that such fees are paid
      by
      ACE Hi out of the proceeds of such Alternative Disposition.

     

    (b)  For
      purposes of this Section 5, the following terms shall have the meanings set
      forth below:

     

    "Alternative
      Disposition Consideration"
      means,
      without duplication, the portion of the purchase price (as finally determined
      under the applicable definitive documents relating to such Alternative
      Disposition) that would be received directly or indirectly, by the Icahn
      Affiliated Parties and their Affiliates in respect of their debt claims and
      equity interests in the Company, ACE Lo and GB Holdings or any
      successor-in-interest or assignee of the foregoing pursuant to such Alternative
      Disposition (w) determined on a Fully-Diluted Basis (as defined below), (x)
      assuming the Company, ACE Lo, GB Holdings and any other entity holding such
      consideration were liquidated (disregarding any equitable subordination of
      interests or claims) immediately following the consummation of such Alternative
      Disposition, (y) after deduction of reasonable costs and expenses (but excluding
      income taxes of the security holders), and (z) valuing any non-cash
      consideration at its Fair Market Value (as defined below) on the date of such
      consummation; provided,
      however,
      that in
      no event shall GB Holdings be deemed to be an Affiliate of any Icahn Affiliated
      Parties. In the event that any Icahn Affiliated Parties or any of their
      Affiliates is the acquirer in an Alternative Disposition, the Fair Market Value
      of any continuing ownership interest in the entity or entities that result
      from
      such Alternative Disposition held by any Icahn Affiliated Parties or any of
      their Affiliates, together with any consideration conveyed by the acquirer,
      shall be considered Alternative Disposition Consideration realized by the Icahn
      Affiliated Parties and their Affiliates from such Alternative
      Disposition.

     

    An
      "Applicable
      Court"
      shall
      mean the Bankruptcy Court or any other court in the Bankruptcy Case or any
      bankruptcy proceeding arising out of or relating to the GB Claims.

     

    An
      "Applicable
      Bankruptcy Case"
      shall
      mean any of the Bankruptcy Case or any bankruptcy proceeding of any person
      or
      entity which has a direct or indirect ownership interest in the Casino Land
      and/or the Traymore Land (including without limitation the Company or ACE
      Lo).

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    "Baseline
      Amount"
      shall
      mean, without duplication, the portion of the Purchase Price (as defined in
      the
      form of Acquisition Agreement entered into on the date hereof, the “Initial
      Acquisition Agreement”))
      (subject to all adjustments provided in the Initial Acquisition Agreement)
      that
      would have been received, directly or indirectly, by the Icahn Affiliated
      Parties and their Affiliates in respect of their debt claims and equity
      interests in the Company, ACE Lo and GB Holdings or any successor-in-interest
      or
      assignee of the foregoing pursuant to the consummation of the transactions
      contemplated by the Initial Acquisition Agreement (had such transactions been
      consummated on November 15, 2006 (w) determined on a Fully-Diluted Basis, (x)
      assuming the Company, ACE Lo, GB Holdings and any other entity holding such
      consideration were liquidated (disregarding any equitable subordination of
      interests or claims) immediately following the consummation of such Alternative
      Disposition, (y) after deduction of reasonable costs and expenses and payments
      to creditors (but excluding income taxes of the security holders), and (z)
      valuing any non-cash consideration at its Fair Market Value on the date of
      such
      consummation; provided,
      however,
      that in
      no event shall GB Holdings be deemed to be an Affiliate of any Icahn Affiliated
      Parties.  To
      the
      extent that such Alternative Disposition involves only the Casino Property
      (or
      ACE Lo) or portion thereof or only the Traymore Property (or Boardwalk) or
      portion thereof, then the Baseline Amount shall be adjusted to correspond to
      that portion of the Purchase Price in the Initial Acquisition Agreement
      corresponding to the Closing Ace Purchase Price or portion thereof or the AREH
      Purchase Price or portion thereof, as applicable.

     

    "Excess
      Profit"
      means
      the amount by which the Alternative Disposition Consideration exceeds the
      Baseline Amount (but not less than zero) calculated consistent with the
      methodology set forth in Schedule 2 hereto.

     

    "Fair
      Market Value"
      means,
      with respect to any non-cash consideration consisting of:

     

    (i)  securities
      listed on a national securities exchange or traded on the Nasdaq National
      Market, an amount equal to the average closing price per share of such security
      as reported on such exchange or Nasdaq National Market for the ten trading
      days
      prior to the date of determination; and

     

    (ii)  consideration
      which is other than securities of the form specified in clause (i) above, an
      amount determined by a nationally recognized independent investment banking
      firm
      mutually agreed upon by the parties within 10 business days of the event
      requiring selection of such banking firm; provided,
      however,
      that if
      the parties are unable to agree within two business days after the date of
      such
      event as to the investment banking firm, then the parties shall each select
      one
      firm, and those firms shall select a third investment banking firm, which third
      firm shall make such determination, provided
      further,
      that
      the reasonable and customary fees and expenses of all such investment banking
      firms shall be borne equally by Parent, on the one hand, and the Stockholders,
      on the other hand. The determination of the Fair Market Value of any non-cash
      consideration by the investment banking firm shall be binding upon the
      parties.

     

    "Fully-Diluted
      Basis"
      shall
      mean the equity interests of the Company, ACE Lo and GB Holdings held by the
      Icahn Affiliated Parties and their Affiliates assuming that all outstanding
      Warrants of all holders thereof were exercised and that all options, other
      rights (other than the Warrants), convertible securities and exchangeable
      securities (including, without limitation, the 3% Notes) in the Company, ACE
      Lo
      and GB Holdings or any successor-in-interest or assignee of the foregoing
      outstanding on the date of consummation of the Alternative Disposition were
      exercised or converted into or exchanged for equity interests in the Company,
      ACE Lo and GB Holdings, in each case in accordance with the terms of such
      securities.

     

    (c)   Calculation
      and Payment of Excess Profit.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (i)  Within
      three business days after the consummation of a Third Party Transaction or
      a
      Bankruptcy Court Transaction or concurrently with the consummation of an
      Increased Parent Transaction, as the case may be, the Icahn Affiliated Parties
      shall (i) pay to Parent the Icahn Affiliated Parties’ good faith estimate of the
      Excess Profit (the “Estimated
      Excess Profit”),
      if
      any, payable under this Section 5, by wire transfer of same day funds to an
      account designated by Parent to the Icahn Affiliated Parties in writing prior
      to
      the date of such payment and (ii) provide to Parent a written statement
      substantially in the form of Schedule 2 hereto illustrating the Icahn Affiliated
      Parties’ calculation of the Estimated Excess Profit, which calculation shall be
      performed on a basis consistent with Schedule 2 hereto. Within three business
      days following the date on which the purchase price payable pursuant to the
      applicable Alternative Disposition is finally determined under the applicable
      definitive documents relating to such Alternative Disposition (the “Final
      Purchase Price”),
      the
      Icahn Affiliated Parties shall provide to Parent a written statement (the
“IAP
      Final Statement”)
      substantially in the form of Schedule 2 hereto illustrating the Icahn Affiliated
      Parties’ calculation of the final Excess Profit (the “IAP
      Final Excess Profit”)
      based
      on the Final Purchase Price, which calculation shall be performed on a basis
      consistent with Schedule 2 hereto.

     

    (ii)  If
      Parent
      shall disagree with the calculation of the IAP Final Excess Profit, it shall,
      within thirty (30) business days after its receipt of the IAP Final Statement,
      notify the Icahn Affiliated Parties of such disagreement in writing, setting
      forth in detail the particulars of such disagreement. In the event that Parent
      does not provide such notice of disagreement within such thirty (30) business
      day period, Parent shall be deemed to have accepted the IAP Final Statement
      and
      the calculation of the IAP Final Excess Profit set forth therein, which shall
      be
      final, binding and conclusive for purposes of this Section 5 with respect to
      the
      payment of any Excess Profit.  In the event any such notice of
      disagreement is timely provided, Parent and the Icahn Affiliated Parties, in
      conjunction with their respective independent accounting firms, shall use
      commercially reasonable efforts for a period of ten (10) business days (or
      such
      longer period as they may mutually agree) to resolve any disagreements with
      respect to the calculation of the Excess Profit. If, at the end of such period,
      they are unable to resolve such disagreements, then an independent accounting
      firm of recognized national standing with no existing relationship with any
      of
      the parties and which Parent and the Icahn Affiliated Parties shall not have
      otherwise retained on other matters prior to the resolution of the IAP Final
      Excess Profit or, to the extent Parent and the Icahn Affiliated Parties cannot
      agree on such independent accounting firm, an arbitrator from the National
      Panel
      of Professional Accounting and Related Services Disputes of the American
      Arbitration Association selected by the mutual agreement of Parent and the
      Icahn
      Affiliated Parties (the “Auditor”;
      provided, however, if Parent and ACE Hi have selected an Auditor pursuant to
      the
      Acquisition Agreement, then such Auditor shall be the Auditor under this
      Agreement) shall resolve any remaining disagreements provided, that if Parent
      and the Icahn Affiliated Parties cannot mutually agree on an Auditor, any
      remaining disagreements shall be resolved by a court of competent jurisdiction
      in accordance with Section 8(l) hereof. For the avoidance of doubt, the
      following procedures by the Auditor shall only be applicable if Parent and
      the
      Icahn Affiliated Parties mutually agree on the selection of an Auditor. The
      parties and the Auditor shall agree on reasonable procedures for determining
      the
      disputed line items; provided,
      that,
      that
      such procedures shall include the following: (i) each of Parent, on the one
      hand, and the Icahn Affiliated Parties, on the other hand, shall have the right
      to make one (1) written submission to the Auditor regarding the disputed line
      items submitted to the Auditor, (ii) each party shall have the right to make
      one
      (1) written submission to the Auditor in response to the other party’s written
      submission in subclause (i), (iii) the Auditor may submit follow-up questions
      to
      either party, and such parties shall have the right to respond to such
      questioning by the Auditor, (iv) each party shall have the right to submit
      one
      written response to the other party’s response to the Auditor pursuant to
      subclause (iii), and (v) copies of all written materials submitted to the
      Auditor (and summaries of all discussions with the Auditor) shall be promptly
      provided to the other party. The Auditor shall promptly deliver to Parent,
      on
      the one hand, and the Icahn Affiliated Parties, on the other hand, its
      determination in writing, which determination shall be made subject to the
      definitions and principles set forth in this Agreement and shall select either
      the position of Parent, on the one hand, or the Icahn Affiliated Parties, on
      the
      other hand, and no compromise position, with respect to each of the disputed
      line items submitted to the Auditor. The Auditor shall determine as promptly
      as
      practicable whether the IAP Final Statement and the calculation of the IAP
      Final
      Excess Profit set forth therein was prepared in accordance with the standards
      set forth in this Agreement and, only with respect to the disagreements
      submitted to the Auditor, whether and to what extent (if any) the Estimated
      Excess Profit requires adjustment. The Auditor shall promptly deliver to Parent
      and the Icahn Affiliated Parties its determination in writing, which
      determination shall be made subject to the definitions and principles set forth
      in this Agreement, and shall be (x) consistent with either the position of
      Parent or the Icahn Affiliated Parties or (y) between the positions of
      Parent and the Icahn Affiliated Parties (the amount of Excess Profit, if any,
      as
      finally determined pursuant to this Section 5(c)(ii), the “Final
      Excess Profit”).
      The
      fees and expenses of the Auditor shall be paid one-half by Parent and one-half
      by the Icahn Affiliated Parties. The determination of the Auditor shall be
      final, binding and conclusive for purposes of this Section 5 and enforceable
      as
      an arbitration award, and shall represent the exclusive remedy with respect
      to
      the determination of any Excess Profit. The date on which the Excess Profit
      is
      finally determined in accordance with this Section 5(c) is hereinafter referred
      to as the “Excess
      Profit Determination Date.”

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    (iii)  Within
      three business days of the Excess Profit Determination Date, the amount (which
      may be a positive or negative number) equal to
      (x) the
      Final Excess Profit, minus
      (y) the
      Estimated Excess Profit (such amount, the “Excess
      Profit Adjustment”)
      shall
      be
      paid (A) from Parent to the Icahn Affiliated Parties (if the Excess Profit
      Adjustment is a negative amount), in cash by wire transfer of immediately
      available funds to an account designated in writing by the Icahn Affiliated
      Parties to Parent prior to the date of such payment or (B) from
      the
      Icahn Affiliated Parties to Parent (if the Excess Profit Adjustment is a
      positive amount), in cash by wire transfer of immediately available funds to
      an
      account designated in writing by Parent to the Icahn Affiliated Parties prior
      to
      the date of such payment.

     

    SECTION 6.  Termination.
      This
      Agreement, other than Section 4(c) and Section 5 hereof, shall terminate
      upon the earliest of (i) the Closing and (ii) an ACE Lo Termination,
      other than with respect to the liability of any party for breach hereof prior
      to
      such termination. Section 4(c) shall terminate upon the earliest of (i) the
      Closing and (ii) a Complete Termination. Section 5 hereof shall terminate
      upon the expiration of all rights thereunder.

     

    SECTION 7.  Additional
      Matters.
      

     

    (a)  The
      Icahn
      Affiliated Parties shall, from time to time, execute and deliver, or cause
      to be
      executed and delivered, such additional or further consents, documents and
      other
      instruments as Parent may reasonably request for the purpose of effectively
      carrying out the transactions contemplated by this Agreement and the Acquisition
      Agreement.

     

    (b)  No
      person
      executing this Agreement who is or becomes during the term hereof a director
      or
      officer of the Company makes any agreement or understanding herein in his or
      her
      capacity as such director or officer of the Company. Each Stockholder signs
      solely in its capacity as the record holder and Beneficial Owner of, or the
      trustee of a trust whose beneficiaries are the Beneficial Owners of, the
      Stockholder’s Subject Shares and/or Other Subject Securities and nothing herein
      shall limit or affect any actions taken by any Stockholder in his capacity
      as an
      officer or director of the Company to the extent specifically permitted by
      the
      Acquisition Agreement.

     

    SECTION 8.  General
      Provisions.

     

    (a)  Definition
      of Beneficially Own or Beneficial Ownership.
      For
      purposes of this Agreement, the terms "Beneficially Own" or "Beneficial
      Ownership" or variants thereof with respect to any securities shall mean having
      "beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
      under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
      including pursuant to any agreement, arrangement or understanding, whether
      or
      not in writing. Without duplicative counting of the same securities by the
      same
      holder, securities Beneficially Owned by a Person shall include securities
      Beneficially Owned by all other Persons (who are Affiliates of such Person
      excluding officers and directors of the Company) who together with such Person
      would constitute a "group" within the meaning of Section 13(d)(3) of the
      Exchange Act.

     

    (b)  Amendments.
      This
      Agreement may not be amended except by an instrument in writing signed by each
      of the parties hereto.

     

    (c)  Notice.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally or sent by overnight courier (providing
      proof of delivery) to Parent in accordance with Section 13.3 of the
      Acquisition Agreement and to the Stockholders at their respective addresses
      set
      forth on Schedule 1 hereto (or at such other address for a party as shall be
      specified by like notice).

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (d)  Interpretation.
      When a
      reference is made in this Agreement to a Section or Schedule, such reference
      shall be to a Section of, or Schedule to, this Agreement unless otherwise
      indicated. The headings contained in this Agreement are for reference purposes
      only and shall not affect in any way the meaning or interpretation of this
      Agreement. Whenever the words "include", "includes" or "including" are used
      in
      this Agreement, they shall be deemed to be followed by the words "without
      limitation". The words "hereby", "hereof", "herein" and "hereunder" and words
      of
      similar import when used in this Agreement shall refer to this Agreement as
      a
      whole and not to any particular provision of this Agreement. The words "date
      hereof" shall refer to the date of this Agreement. The term "or" is not
      exclusive. The word "extent" in the phrase "to the extent" shall mean the degree
      to which a subject or other thing extends, and such phrase shall not mean simply
      "if". The definitions contained in this Agreement are applicable to the singular
      as well as the plural forms of such terms. Any agreement or instrument defined
      or referred to herein or in any agreement or instrument that is referred to
      herein means such agreement or instrument as from time to time amended, modified
      or supplemented unless otherwise specified. References to a person are also
      to
      its permitted successors and assigns.

     

    (e)  Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule or Law, or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner materially adverse to any party. Upon
      such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner to the end that transactions contemplated
      hereby are fulfilled to the extent possible.

     

    (f)  Counterparts.
      This
      Agreement may be executed in one or more counterparts, all of which shall be
      considered one and the same agreement. This Agreement shall become effective
      against any Stockholder when one or more counterparts have been executed by the
      Stockholder and delivered to Parent. In respect of each Stockholder, this
      Agreement shall become effective against Parent when one or more counterparts
      have been signed by Parent and delivered to each Stockholder. Each party need
      not sign the same counterpart.

     

    (g)  Trust
      Funds.
      In the
      event that any party hereto should receive any funds that are to be paid to
      another party pursuant to the terms of this Agreement, then the receiving party
      shall hold such funds in trust for the benefit of the party entitled to receive
      such funds and shall promptly pay such funds to the party entitled to receive
      such funds in accordance with this Agreement.

     

    (h)  Recapitalization.
      In the
      event of a stock dividend or distribution, or any change in the Subject Shares
      or Other Subject Securities by reason of any split-up, recapitalization,
      combination, merger, consolidation, exchange of securities or the like, or
      change or exchange ordered by any Applicable Court, the terms "Subject Shares"
      and "Other Subject Securities" shall include, without limitation, all such
      stock
      dividends and distributions and any securities, interests or claims into which
      for which any or all of the Subject Shares or Other Subject Securities (or
      any
      class thereof) may be changed or exchanged as may be appropriate to reflect
      such
      event (the "New Interests") and all obligations in this Agreement, including
      the
      obligation to grant a security interest, shall relate to the New Interests,
      to
      the extent applicable.

     

    (i)  Entire
      Agreement; No Third-Party Beneficiaries.
      This
      Agreement (i) constitutes the entire agreement and supersedes all prior
      agreements and understandings, both written and oral, among the parties with
      respect to the subject matter hereof and (ii) is not intended to confer
      upon any person other than the parties hereto any rights or remedies
      hereunder.

     

    (j)  Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of Delaware regardless of the laws that might otherwise govern under
      applicable principles of conflicts of law thereof.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (k)  Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by any of the parties without the prior written consent of the
      other
      parties, except that (a) Parent may, without such prior written consent of
      any
      other party hereto, transfer or assign its rights hereunder (including without
      limitation its right to receive Excess Profits) to one or more of its direct
      or
      indirect subsidiaries, written notice of which shall be given to the Icahn
      Affiliated Parties, provided
      that no
      transfer or assignment shall relieve Parent from any of its agreements or
      obligations hereunder. Any assignment in violation of this Section 8(k) shall
      be
      void. Subject to the preceding sentences, this Agreement will be binding upon,
      inure to the benefit of, and be enforceable by, the parties and their respective
      successors and assigns.

     

    (l)  Enforcement.
      The
      parties agree that irreparable damage would occur in the event that any of
      the
      provisions of this Agreement were not performed in accordance with their
      specific terms or were otherwise breached. It is accordingly agreed that the
      parties shall be entitled to an injunction or injunctions to prevent breaches
      of
      this Agreement and to enforce specifically the terms and provisions of this
      Agreement in any Delaware state court or any Federal court located in the State
      of Delaware, this being in addition to any other remedy to which they are
      entitled at Law or in equity. In addition, each of the parties hereto
      (i) consents to submit itself to the personal jurisdiction of any Delaware
      state court or any Federal court located in the State of Delaware in the event
      any dispute arises out of this Agreement or any transaction contemplated hereby,
      (ii) agrees that it will not attempt to deny or defeat such personal
      jurisdiction by motion or other request for leave from any such court,
      (iii) agrees that it will not bring any action relating to this Agreement
      or any transaction in any court other than a Delaware state court or any Federal
      court sitting in the State of Delaware and (iv) waives any right to trial
      by jury with respect to any claim or proceeding related to or arising out of
      this Agreement or any transaction contemplated hereby.

     

    (m) Definition
      of "ACE Lo Termination" and "Complete Termination".
      For
      purposes of this Agreement, the term "ACE Lo Termination" shall mean either
      (i)
      a termination of the Acquisition Agreement in accordance with its terms as
      between Buyer and the ACE Selling Parties pursuant to Section 11.1(g) of the
      Acquisition Agreement or (ii) a Complete Termination. For purposes of this
      Agreement, the term "Complete Termination" shall mean a termination of the
      Acquisition Agreement in accordance with its terms as between Buyer and the
      Selling Parties pursuant to any provision of Section 11.1 of the Acquisition
      Agreement other than Section 11.1(g) thereof. In the event that Buyer elects
      to
      effect a Revival pursuant to Section 9.4(e)(iii) of the Acquisition Agreement,
      then the rights and obligations of Parent and the Icahn Affiliated Entities
      under this Agreement shall also be reinstated in full, to the extent possible,
      on the same terms and conditions as in this Agreement, modified as appropriate
      to reflect changes in the timing and circumstances surrounding the transaction,
      and the parties shall enter into appropriate documents and agreements for such
      reinstatement as promptly as practicable.

     

    

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, each party has duly executed this Agreement, all as of the
      date
      first written above.

     

     

    
      	 	PINNACLE ENTERTAINMENT, INC.
	 	 
	 	 
	 	By:
              /s/ Daniel R. Lee  
	 	Name:
              Daniel R. Lee 
	 	Title:
              Chief Executive Officer 

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    [SIGNATURE
      PAGE TO STOCKHOLDERS
      AGREEMENT]

     

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

    

     

     

    
      	 	ICAHN AFFILIATED PARTIES
	 	 
	 	 
	 	AMERICAN REAL ESTATE HOLDINGS 
	 	LIMITED PARTNERSHIP
	 	By: American
              Property Investors, Inc., 
	 	
                
general
                partner

            
	 	 
	 	 
	 	By:
              /s/ Hillel
              Moerman                                     
	 	
              Name: Hillel
                Moerman                                     
                

            
	 	
              Its:
                CFO                                                              

            
	 	 
	 	 
	 	AREP SANDS HOLDING, LLC
	 	
              By:
                American
                Real Estate Holdings

            
	 	       Limited Partnership, sole
              member
	 	
                     By: American
                Property Investors, Inc., 

                          
                 general partner

            
	 	 
	 	 
	 	By:
              /s/ Hillel
              Moerman                                    
              
	 	Name: Hillel
              Moerman                                    
              
	 	Its:
              CFO                                                          
                 

    

     

     

     

     

     

     

     

    
      [SIGNATURE
        PAGE TO STOCKHOLDERS AGREEMENT]

       

       

      
 

      
        
          
          

        

        
          S-2

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      A

    

    WRITTEN
      CONSENT

    

    OF
      THE

    

    HOLDERS
      OF COMMON STOCK

    

    OF

    

    ATLANTIC
      COAST ENTERTAINMENT HOLDINGS, INC.

    

    Dated
      as
      of [          ], 2006

    

    
      
        

      

    

    

    Pursuant
      to Section 228 of the General

    

    Corporation
      Law of the State of Delaware

    
       

      
        

      

    

    

    The
      undersigned, the holder of record of 4,029,084
      shares
      of
      Common Stock, $0.01 par value per share (the "Company Common Stock"), of
      Atlantic Coast Entertainment Holdings, Inc., a Delaware corporation (the
      "Company"), representing at least a majority of the issued and outstanding
      shares of Company Common Stock, hereby consents to the adoption of the following
      resolutions without a meeting pursuant to Section 228(a) of the Delaware General
      Corporation Law with the intent that said resolutions shall be as valid and
      effectual as if they had been adopted and ratified at a formal meeting of
      stockholders duly convened, which consent will be effective when the minimum
      number of shares required to approve the action are obtained:

     

    WHEREAS,
      the Board of Directors of the Company (the "Board") has approved and the parties
      have entered into that certain Acquisition Agreement dated as of September
      3,
      2006 by and among Pinnacle Entertainment, Inc., a Delaware corporation
      ("Parent"), the Company, ACE Gaming, LLC, a New Jersey limited liability company
      ("ACE Lo") and American Real Estate Holdings Limited Partnership, a Delaware
      limited partnership ("AREH"), AREP Boardwalk Properties LLC, a Delaware limited
      liability company ("Boardwalk"), PSW Properties LLC, Delaware limited liability
      company ("MLK I"), AREH MLK LLC, a Delaware limited liability company ("MLK
      II"), Mitre Associates LLC, a Delaware limited liability company ("MLK III"),
      pursuant to which the Company will sell substantially all of its assets to
      Parent or its assignee (the "Proposed Purchase"); 

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    WHEREAS,
      reference is made to the Stockholders Agreement by and among Parent and the
      Stockholders of the Company party thereto (the "Stockholders
      Agreement");

    

    NOW,
      THEREFORE, BE IT RESOLVED that the form, terms and provisions of the executed
      Acquisition Agreement, in the form attached hereto as Exhibit A, are hereby
      approved and adopted in all respects, and that the Proposed Purchase described
      therein is hereby approved;

    

    RESOLVED
      FURTHER, that the number of shares of Common Stock of the Company set forth
      in
      the preamble above are owned of record by the undersigned on the date of this
      consent and that this consent is being given with respect to all of the shares
      of Common Stock of the Company set forth in the preamble above;

    

    RESOLVED
      FURTHER, that the directors and officers of the Company be, and they are or
      any
      one of them is, hereby authorized, empowered and directed, from time to time,
      in
      the name and on behalf of the Company under its seal, if desired, to execute,
      make oath to, acknowledge and deliver, any and all agreements, orders,
      directives, certificates, notices, assignments and other documents, instruments
      and papers and to take or cause to be taken such steps as they may determine
      to
      be necessary, appropriate or advisable to carry out the intent and purposes
      of
      the foregoing resolutions, such determination to be evidenced conclusively
      by
      the execution and delivery of such documents and the taking of such
      steps.

    

    This
      action by written consent may be signed in counterparts, each of which shall
      be
      deemed an original, and all of which together shall constitute one instrument.
      This action shall be delivered, by hand or by certified or registered mail,
      return receipt requested, to the Company by delivery to its registered office
      in
      the State of Delaware, to the Company's principal place of business or to an
      officer or agent of the Company having custody of the book in which proceedings
      of meetings of stockholders of the Company are recorded, pursuant to Section
      228(a) of the General Corporation Law of the State of Delaware and shall be
      effective as of the date of such delivery.

    

    *
      * * *
      *

    

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    
 

    IN
      WITNESS WHEREOF, the undersigned has executed this Written Consent as of the
      date first set forth above.

    

    
      	 	AREP SANDS HOLDING, LLC
	 	 
	 	 
	 	By:                                                                     
              
	 	Name:                                                               
              
	 	Its:                                                                      
	 	 

    

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    
 

    Exhibit
      A

    
 

     

     

     

     

     

    
      
        
        

      

      
        A-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]