Document:

Exhibit 10.1

Exhibit 10.1

PINNACLE ENTERTAINMENT, INC.

$350,000,000

8.75% Senior Subordinated Notes due 2020

PURCHASE AGREEMENT

April 29, 2010

J.P. Morgan Securities Inc.

Banc of America Securities LLC

Barclays Capital Inc.

Credit Agricole Securities (USA) Inc.

Deutsche Bank Securities Inc.

UBS Securities LLC

As Representatives of the several

Initial Purchasers named in Schedule 1 attached hereto,

c/o J.P. Morgan Securities Inc.

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), proposes upon the terms
and conditions set forth in this agreement (this “Agreement), to issue and sell to the initial
purchasers named in Schedule 1 attached to this Agreement (the “Initial Purchasers”) for
whom J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., Credit
Agricole Securities (USA) Inc., Deutsche Bank Securities Inc. and UBS Securities LLC are acting as
the representatives (“you” or the “Representatives”) the aggregate of $350,000,000 principal amount
of the Company’s 8.75% Senior Subordinated Notes due 2020 (the “Notes”). The Notes will be
irrevocably and unconditionally guaranteed (the “Guarantees”) by the subsidiaries of the Company
listed in Schedule 2 hereto that have signed this Agreement (each, a “Guarantor” and,
collectively the “Guarantors”). The Notes will be issued pursuant to an Indenture to be dated as
of the Closing Date (as defined in Section 5(a)), among the Company, the Guarantors and The Bank of
New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Notes are more fully
described in the Pricing Disclosure Package (as defined below) and the Offering Memorandum (as
defined below).

This Agreement is to confirm the agreement concerning the purchase of the Notes from the
Company by the Initial Purchasers.

 

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1. Purchase and Resale of the Notes. The Notes will be offered and sold to the
Initial Purchasers without registration under the Securities Act of 1933, as amended (the “Act”),
in reliance on an exemption pursuant to Section 4(2) under the Act. The Company and the Guarantors
have prepared a preliminary offering memorandum, dated as of April 29, 2010 (the “Preliminary
Offering Memorandum”), a pricing term sheet substantially in the form attached hereto as
Schedule 3 (the “Pricing Term Sheet”) and an offering memorandum, dated as of the date
hereof (the “Offering Memorandum”), setting forth information regarding the Company, the
Guarantors, the Notes and the Exchange Notes (as defined herein), the Guarantees and the Exchange
Guarantees (as defined herein). The Preliminary Offering Memorandum, as supplemented and amended
as of the Applicable Time (as defined below), together with the Pricing Term Sheet and any of the
documents listed on Schedule 4 hereto, other than a road show that is a Free Writing Offering
Document (as defined below), are collectively referred to as the “Pricing Disclosure Package.” The
Company and the Guarantors hereby confirm that they have authorized the use of the Pricing
Disclosure Package and the Offering Memorandum in connection with the offering and resale of the
Notes by the Initial Purchasers. “Applicable Time” means 6:00 p.m. (New York City time) on the
date of this Agreement.

Any reference to the Preliminary Offering Memorandum, the Pricing Disclosure Package or the
Offering Memorandum shall be deemed to refer to and include the Company’s most recent Annual Report
on Form 10-K and all documents filed from and after the beginning of the current fiscal year with
the United States Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a),
13(c), 14 or 15(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or prior to the date of the Preliminary Offering Memorandum, the Pricing Disclosure
Package or the Offering Memorandum, as the case may be. Any reference to the Preliminary Offering
Memorandum, the Pricing Disclosure Package or the Offering Memorandum, as the case may be, as
amended or supplemented, as of any specified date, shall be deemed to include any documents filed
with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of
the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, and prior to
such specified date. All documents filed under the Exchange Act and so deemed to be included in
the Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum, as
the case may be, or any amendment or supplement thereto are hereinafter called the “Exchange Act
Reports.” The Exchange Act Reports, when they were or are filed with the Commission, conformed or
will conform in all material respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder.

 

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It is understood and acknowledged that upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the Act, the Notes (and all
securities issued in exchange therefor, in substitution thereof) shall bear the following legend
(along with such other legends as the Initial Purchasers and their counsel deem necessary):

“THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS
NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN “OFFSHORE TRANSACTION” PURSUANT TO
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR
TO (X) THE DATE WHICH IS ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY
RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE
LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL
OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER
INFORMATION, ALL IN FORM AND SUBSTANCE SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION”,
“UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.”

 

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You have advised the Company that the Initial Purchasers will make offers (the “Exempt
Resales") of the Notes purchased by the Initial Purchasers hereunder on the terms set forth in each
of the Pricing Disclosure Package and the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be “qualified institutional
buyers” as defined in Rule 144A under the Act (“QIBs”) and (ii) outside the United States to
certain persons who are not U.S. persons (as defined in Regulation S under the Act (“Regulation
S”)) (such persons, “Non-U.S. Persons”) in offshore transactions in reliance on Regulation S.
Those persons specified in clauses (i) and (ii) are referred to herein as the (“Eligible
Purchasers"). The Initial Purchasers will offer the Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed at any time without
notice.

Holders (including subsequent transferees) of the Notes will have the registration rights set
forth in the registration rights agreement (the “Registration Rights Agreement") among the Company,
the Guarantors and the Initial Purchasers to be dated as of the Closing Date (as defined in Section
5 herein), for so long as such Notes constitute “Transfer Restricted Securities” (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Commission under the circumstances set forth therein, a
registration statement under the Act (the “Exchange Offer Registration Statement”) relating to the
Company’s 8.75% Senior Subordinated Notes due 2020 (the “Exchange Notes”) and the Guarantors’
Exchange Guarantees (the “Exchange Guarantees”) to be offered in exchange for the Notes and the
Guarantees. Such portion of the offering is referred to as the “Exchange Offer.”

2. Representations, Warranties and Agreements of the Company and the Guarantors. The
Company and each of the Guarantors, jointly and severally, represent, warrant and agree that:

(a) When the Notes and Guarantees are issued and delivered pursuant to this Agreement,
such Notes and Guarantees will not be of the same class (within the meaning of Rule 144A
under the Act) as securities of the Company or any of the Guarantors that are listed on a
national securities exchange registered under Section 6 of the Exchange Act, or that are
quoted in a United States automated inter-dealer quotation system.

(b) Assuming that (i) the representations and warranties of the Initial Purchasers in
Section 4 are true and (ii) each of the Eligible Purchasers is a QIB or a Non-U.S. Person
who acquires the Notes in an “offshore transaction” in reliance on Regulation S, the
purchase and resale of the Notes pursuant hereto (including pursuant to the Exempt Resales)
is exempt from the registration requirements of the Act. No form of general solicitation or
general advertising within the meaning of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general solicitation or
general advertising) was used or will be used by the Company, the Guarantors, any of their
affiliates or any of their respective representatives (other than the Initial Purchasers, as
to whom the Company and the Guarantors make no representation) in connection with the offer
and sale of the Notes.

 

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(c) No form of general solicitation or general advertising was used by the Company, the
Guarantors or any of their respective representatives (other than the Initial Purchasers, as
to whom the Company and the Guarantors make no representation) with respect to Notes sold
outside the United States to Non-U.S. Persons, by means of any directed selling efforts
within the meaning of Rule 902 under the Act, and the Company, any affiliate of the Company
and any person acting on its or their behalf (other than the Initial Purchasers, as to whom
the Company and the Guarantors make no representation) has complied with and will implement
the “offering restrictions” required by Rule 902.

(d) The Company is not required to deliver the information specified in Rule 144A(d)(4)
under the Act in connection with the Exempt Resales and the Notes and the Guarantees satisfy
the requirements of Rule 144A(d)(3).

(e) The Pricing Disclosure Package and Offering Memorandum have been prepared by the
Company and the Guarantors for use by the Initial Purchasers in connection with the Exempt
Resales. No order or decree preventing the use of the Preliminary Offering Memorandum, the
Pricing Disclosure Package or the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration requirements of
the Act has been issued and no proceeding for that purpose has commenced or is pending or,
to the knowledge of the Company or any of the Guarantors is contemplated.

(f) The Pricing Disclosure Package did not, as of the Applicable Time, and will not, as
of the Closing Date, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Pricing Disclosure
Package in reliance upon and in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Initial Purchaser specifically for
inclusion therein, which information is specified in Section 9(e).

(g) The Offering Memorandum will not, as of its date and as of the Closing Date,
contain an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which they were
made, not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Offering Memorandum made in reliance upon and in
conformity with written information furnished to the Company through the Representatives by
or on behalf of the Initial Purchasers specifically for inclusion therein, which information
is specified in Section 9(e).

 

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(h) The Exchange Act Reports did not, and any further documents filed and incorporated
by reference in the Preliminary Offering Memorandum or the Offering Memorandum will not,
when filed with the Commission, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(i) The Company (including its agents and representatives, other than the Initial
Purchasers in their capacity as such) has not made any offer to sell or solicitation of an
offer to buy the Notes that would constitute a “free writing prospectus” (if the offering of
the Notes was made pursuant to a registered offering under the Act), as defined in Rule 405
under the Act (a “Free Writing Offering Document”) without the prior consent of the
Representatives; any such Free Writing Offering Document the use of which has been
previously consented to by the Initial Purchasers is listed on Schedule 4.

(j) Each Free Writing Offering Document (including, without limitation, any electronic
road show or other document listed on Schedule 4 hereto), when considered together
with the Pricing Disclosure Package as of the Applicable Time, did not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading.

(k) Each of the Company and its subsidiaries (as defined in Section 17) listed on
Schedule 2 to this Agreement and marked with an asterisk, including each of the
Guarantors (collectively, the “Subsidiaries”), has been duly organized, is validly existing
and in good standing as a corporation or other business entity under the laws of its
jurisdiction of organization and is duly qualified to do business and in good standing as a
foreign corporation or other business entity in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such qualification, except where
the failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on (i) the business,
condition (financial or otherwise), results of operations, stockholders’ equity, properties
or prospects of the Company and its subsidiaries, taken as a whole; (ii) the long-term debt
or capital stock of the Company and its subsidiaries, taken as a whole; (iii) the offering
and sale of the Notes and Guarantees (the “Offering”) and consummation of the Offering or
the redemption by the Company of its existing 8.25% Senior Subordinated Notes due 2012 (the
“8.25% Notes”) in connection with a satisfaction and discharge of the indenture governing
the 8.25% Notes (the “8.25% Indenture”) pursuant to Section 12.01 of the 8.25% Indenture
(the “Discharge”) and related escrow of a portion of the proceeds of this Offering therefor
pursuant to an escrow agreement, dated as of April 29, 2010, between the Company and the
Trustee (the “Escrow Arrangements” and, together with the Discharge and related redemption
of the 8.25% Notes, the “Redemption”); or (iv) any other transaction contemplated by this
Agreement or any other material transaction contemplated by the Pricing Disclosure Package
or the Offering Memorandum (a “Material Adverse Effect”). Except as disclosed in the
Pricing Disclosure Package and the Offering Memorandum, each of the Company and the
Subsidiaries has all power and authority necessary to own or hold its properties and to
conduct the businesses in which it
is engaged. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed on Schedule
2 to this Agreement. None of the subsidiaries of the Company (other than the
Subsidiaries and PNK Development 11, LLC) is a “significant subsidiary” (as defined in Rule
405).

 

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(l) The Company has an authorized capitalization as set forth in each of the Pricing
Disclosure Package and the Offering Memorandum, and all of the issued shares of capital
stock of the Company have been duly authorized and validly issued, are fully paid and
non-assessable, conform to the description thereof contained in each of the Pricing
Disclosure Package and the Offering Memorandum and were issued in compliance with federal
and state securities laws and not in violation of any preemptive right, resale right, right
of first refusal or similar right. All of the issued shares of capital stock or membership
interests of each Subsidiary of the Company have been duly authorized and validly issued,
(and with respect to capital stock are fully paid and non-assessable) and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims (i) created or arising in connection
with the Company’s Third Amended and Restated Credit Agreement dated as of February 5, 2010,
as it may be amended from time to time (the “Bank Credit Facility”) or (ii) as could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.

(m) The Company and each of the Guarantors have full right, power and authority to
execute and deliver this Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated by this Agreement, including the Redemption, the
Pricing Disclosure Package and the Offering Memorandum. This Agreement and the transactions
contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum
have been duly and validly authorized by the Company and the Guarantors. This Agreement has
been duly and validly executed and delivered by the Company and the Guarantors and
constitutes the legal, valid and binding obligation of the Company and the Guarantors,
enforceable in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting creditors’ rights generally, except as enforceability may be subject
to general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as enforceability may be limited by state or
federal laws or policies relating to the non-enforceability of the indemnification
provisions contained herein.

(n) The Company and each of the Guarantors have the full right, power and authority to
execute and deliver the Notes and the Guarantees and to perform their respective obligations
thereunder. The Notes and the Guarantees have been duly and validly authorized by the
Company and each of the respective Guarantors for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in accordance with the
terms hereof and thereof, will be the legal, valid and binding obligations of the Company
and each of the Guarantors, enforceable against them in accordance with their terms and
entitled to the benefits of the Indenture, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting creditors’ rights generally and
except as enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). The Pricing
Disclosure Package and the Offering Memorandum contain a summary of the terms of the Notes
and the Guarantees, which summary is accurate in all material respects.

 

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(o) The Company and each of the Guarantors have the full right, power and authority to
execute and deliver the Exchange Notes and the Exchange Guarantees and to perform their
respective obligations thereunder. The Notes and the Guarantees have been duly and validly
authorized by the Company and each of the respective Guarantors for issuance and sale to the
Initial Purchasers pursuant to this Agreement and, if and when issued and authenticated in
accordance with the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid and binding
obligations of the Company and each of the Guarantors, enforceable against them in
accordance with their terms and entitled to the benefits of the Indenture, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting creditors’ rights generally and
except as enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

(p) The Company and each of the Guarantors have full right, power and authority to
execute and deliver the Indenture and to perform their respective obligations thereunder.
The Indenture has been duly and validly authorized by the Company and each Guarantor, and
upon its execution and delivery and, assuming due authorization, execution and delivery by
the Trustee, will be a legal, valid and binding agreement of the Company and each Guarantor,
enforceable in accordance with its terms, except (i) as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws affecting creditors’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (ii) that rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of general
applicability. No qualification of the Indenture under the Trust Indenture Act of 1939 (the
“1939 Act”) is required in connection with the offer and sale of the Notes contemplated
hereby or in connection with the Exempt Resales.

(q) The Company and each of the Guarantors have full right, power and authority to
execute and deliver the Registration Rights Agreement and to perform their respective
obligations thereunder. The Registration Rights Agreement has been duly and validly
authorized by the Company and each Guarantor and, when executed and delivered by the Company
and each Guarantor in accordance with the terms of this Agreement and the Registration
Rights Agreement, will be (assuming the due authorization, execution and delivery thereof by
you) the legal, valid and binding obligations of the Company and each of the Guarantors,
enforceable against them in accordance with its terms, except as such enforceability may be
limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar
laws affecting creditor’s rights generally except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as enforceability may be limited by state and
federal laws or policies relating to the non-enforceability of indemnification provisions
contained therein as to rights of indemnification and contribution, by principles of public
policy.

 

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(r) The execution, delivery and performance of this Agreement, the Indenture, the
Registration Rights Agreement, the Notes, the Guarantees, the Exchange Notes and the
Exchange Guarantees by the Company and the Guarantors, the consummation of the transactions
contemplated hereby and thereby, including the Redemption, and the application of the
proceeds from the sale of the Notes as described under “Use of proceeds” in the Pricing
Disclosure Package and the Offering Memorandum will not (i) result in a breach or violation
of any of the terms or provisions of, impose any lien, charge or encumbrance upon any
property or assets of the Company and its subsidiaries, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, license or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject; (ii) result in any violation of the provisions of the charter
or by-laws (or similar organizational documents) of the Company or any of the Subsidiaries;
or (iii) result in any violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets, except (in the case of clauses (i) and
(iii) above) as could not reasonably be expected to have a Material Adverse Effect.

(s) No consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties or assets is required for the execution, delivery
and performance of this Agreement, the Indenture, the Registration Rights Agreement, the
Notes, the Guarantees, the Exchange Notes and the Exchange Guarantees by the Company and the
Guarantors, the consummation of the transactions contemplated hereby and thereby, including
the Redemption, and the application of the proceeds from the sale of the Notes as described
under “Use of proceeds” in each of the Pricing Disclosure Package and the Offering
Memorandum, except for (i) filings with or approvals (including “shelf” approvals) by or
from the applicable gaming authorities in the States of Indiana, Louisiana, Nevada, New
Jersey and Missouri, which have been made or obtained, including notice filings with such
applicable gaming authorities which will be made upon consummation of the transactions
contemplated by this Agreement or the Offering Memorandum, (ii) the written consent from
Barclays Bank PLC, as the administrative agent (the “Administrative Agent”) under the Bank
Credit Facility, that the terms of the Notes (other than pricing) are not, in the aggregate,
more favorable to the holders of such Notes than those contained in the “Existing
Subordinated Obligations” (as such term is defined in the Bank Credit Facility) as in effect
on the date of the Bank Credit Facility in any manner which is detrimental to the Agents (as
defined therein) or the Lenders (as defined therein), or if the Administrative Agent is
unable to deliver such
written acknowledgement, the consent of the Required Lenders (as such term is defined
in the Bank Credit Facility) (in either case, the “Bank Consent”), (iii) the filing of a
registration statement by the Company and with the Commission pursuant to the Act as
required by the Registration Rights Agreement, (iv) such consents as may be required under
the State securities or Blue Sky laws or the by-laws and rules of FINRA in connection with
the purchase and distribution of the Notes, the Guarantees, the Exchange Notes and the
Exchange Guarantees by the Initial Purchasers, each of which has been obtained and is in
full force and effect, and (v) the deposit of a portion of the proceeds of the Offering
pursuant to the Escrow Arrangements and the Discharge, both of which shall occur
concurrently with the Closing.

 

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(t) Neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person (other than this Agreement) that would give rise
to a valid claim against any of them or any Initial Purchaser for a brokerage commission,
finder’s fee or like payment in connection with the offering and sale of the Notes.

(u) Except as identified in the Pricing Disclosure Package and the Offering Memorandum,
there are no contracts, agreements or understandings between the Company or any Guarantor
and any person granting such person the right to require the Company or any Guarantor to
file a registration statement under the Act with respect to any securities of the Company or
any Guarantor (other than the Registration Rights Agreement, and the Registration Rights
Agreement dated as of August 10, 2009, among the Company, the guarantors identified therein
and J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc. and
Deutsche Bank Securities Inc. as representatives of the several initial purchasers) owned or
to be owned by such person or to require the Company or any Guarantor to include such
securities in the securities registered pursuant to any registration statement filed by the
Company or any Guarantor under the Act.

(v) The Company and the Guarantors have not sold or issued any securities that would be
integrated with the offering of the Notes or Guarantees contemplated by this Agreement
pursuant to Rule 144A under the Act, the Act, the Rules and Regulations or the
interpretations thereof by the Commission. The Company and the Guarantors will take
reasonable precautions designed to insure that any offer or sale by them, direct or
indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act),
of any Notes or any substantially similar security issued by the Company or any Guarantor,
within six months subsequent to the date on which the distribution of the Notes has been
completed (as notified to the Company by the Initial Purchasers), is made under restrictions
and other circumstances reasonably designed not to affect the status of the offer and sale
of the Notes in the United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Act, including any sales
pursuant to Rule 144A under, or Regulation D or S of, the Act.

 

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(w) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
neither the Company nor any of its subsidiaries has sustained, since the date of the latest
audited financial statements included or incorporated by reference in the
Pricing Disclosure Package, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree which could reasonably be expected
to result in a Material Adverse Effect, and since such date, there has not been any change
in the capital stock or long-term debt of the Company or any of its subsidiaries, taken as a
whole, or any adverse change or development, in or affecting the condition (financial or
otherwise), results of operations, stockholders’ equity, properties, management, business or
prospects of the Company and its subsidiaries taken as a whole, in each case except as could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

(x) Since the date as of which information is given in the Pricing Disclosure Package
and the Offering Memorandum and except as may otherwise be described in the Pricing
Disclosure Package and the Offering Memorandum, the Company and the Guarantors have not
(i) incurred any material liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary course of business (ii)
entered into any material transaction or agreement not in the ordinary course of business or
(iii) declared or paid any dividend on its capital stock.

(y) The historical financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the Pricing Disclosure Package and the
Offering Memorandum comply as to form in all material respects with the requirements of
Regulation S-X under the Act (other than Rule 3-10(g) thereof) and present fairly in all
material respects the financial condition, results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the periods indicated and,
except as disclosed therein, have been prepared in conformity with accounting principles
generally accepted in the United States applied on a consistent basis throughout the periods
involved; the other financial information included or incorporated by reference in the
Pricing Disclosure Package and the Offering Memorandum has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information shown
thereby; and pro forma financial information (including the related notes and supporting
schedules, if any) included or incorporated by reference in the Pricing Disclosure Package
and the Offering Memorandum has been prepared in accordance with the Commission’s rules and
guidance with respect to pro forma financial information except that the periods ended
December 31, 2007 and 2008 have been omitted therefrom, and the assumptions underlying such
pro forma financial information are reasonable and are set forth in each of the Pricing
Disclosure Package and the Offering Memorandum.

(z) Deloitte & Touche LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries and whose report appears in the Offering
Memorandum or is incorporated by reference therein, and Ernst & Young LLP have each
delivered the initial letter referred to in Section 8(m) hereof and are each independent
public accountants as required by the Act and the Rules and Regulations.

(aa) The statistical and market-related data included in the Pricing Disclosure Package
and the consolidated financial statements of the Company and its subsidiaries
included or incorporated by reference in the Pricing Disclosure Package are based on or
derived from sources that the Company reasonably believes to be reliable and accurate in all
material respects.

 

11

 

(bb) Neither the Company nor any of the Subsidiaries is, as of the Closing Date, and
after giving effect to the offer and sale of the Notes and the application of the proceeds
therefrom as described under “Use of proceeds” in the Pricing Disclosure Package or the
Offering Memorandum, none of them will be, an “investment company” or an entity “controlled”
by an “investment company” within the meaning of such term under the Investment Company Act
of 1940, as amended (the “Investment Company Act”), and the rules and regulations of the
Commission thereunder.

(cc) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
there are no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject that could, in the aggregate, reasonably be expected to have a
Material Adverse Effect or could, in the aggregate, reasonably be expected to have a
material adverse effect on the performance of this Agreement, the Indenture, the Notes and
the Registration Rights Agreement or the consummation of the transactions contemplated
hereby and thereby, including the Redemption; and to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or others.

(dd) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
no relationship, direct or indirect, exists between or among the Company or any Guarantor,
on the one hand, and the directors, officers, stockholders, customers or suppliers of the
Company or any Guarantor, on the other hand, that is required by Item 402 or Item 404 of
Regulation S-K to be described in the documents incorporated by reference into the Pricing
Disclosure Package or the Offering Memorandum which is not so described.

(ee) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
no labor disturbance by or dispute with the employees of the Company or its subsidiaries
exists or, to the knowledge of the Company, is imminent or threatened that could reasonably
be expected to have a Material Adverse Effect.

(ff) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
(i) Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Security Act of 1974, as amended (“ERISA”)) that is subject to Title IV of ERISA
or Section 412 of the Code (as defined below) (but not including a “multiemployer plan”,
within the meaning of Section 4001(c)(3) of ERISA) for which the Company or any member of
its “Controlled Group” (defined as any organization which is a member of a controlled group
of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as
amended (the “Code”)) may have any liability (each a “Plan”), has been maintained in
compliance in all material respects with its terms and with the requirements of all
applicable statutes, rules and regulations including ERISA and the Code; (ii) with respect
to each such Plan (a) no “reportable event” (within

 

12

 

the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur,
(b) no “accumulated funding deficiency” (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred or is reasonably expected to
occur, (c) the fair market value of the assets under each Plan exceeds the present value of
all benefits accrued under such Plan (determined based on those assumptions used to fund
such Plan) and (d) neither the Company nor any member of its Controlled Group has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and without
default) in respect of such Plan; and (iii) each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would reasonably be expected to cause the loss of such qualification,
except where failure to be so qualified would not be reasonably likely to result in a
Material Adverse Effect. Except as described in the Pricing Disclosure Package, neither the
Company nor any member of its Controlled Group has any withdrawal or other liability to any
“multiemployer plan,” within the meaning of Section 4001(c)(3) of ERISA, except for a
liability which either is not reasonably likely to result in a Material Adverse Effect or
which is indemnified against by a third party.

(gg) The Company and each of the Subsidiaries have filed all federal, state, local and
foreign income and franchise tax returns required to be filed through the date hereof,
subject to permitted extensions, and have paid or made provision for the payment of all
taxes due thereon, except (i) those taxes that are not reasonably likely to result in a
Material Adverse Effect, (ii) those taxes, assessments or other charges that are being
contested in good faith, if such taxes, assessments, or other charges are adequately
reserved for or (iii) as described in the Pricing Disclosure Package and the Offering
Memorandum; and no tax deficiency has been determined adversely to the Company or any of its
subsidiaries, nor does the Company have any knowledge of any tax deficiencies, in either
case, that could, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

(hh) Neither the Company nor any of the Subsidiaries is in violation of its charter or
by-laws (or similar organizational documents); neither the Company nor any of its
subsidiaries (i) is in default, and no event has occurred that, with notice or lapse of time
or both, would constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement,
license or other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (ii) is in violation of any statute
or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over it or its property or assets or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business, except in the case of clauses
(i) and (ii), to the extent any such violation or default could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and except (in the case
of clause (i) alone) for any lien, charge or encumbrance disclosed in the Pricing Disclosure
Package and the Offering Memorandum.

 

13

 

(ii) There is and has been no failure on the part of the Company, the Guarantors or any
of their respective directors or officers, in their capacities as such, to comply with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, except where failure to be in compliance would not reasonably be
expected to result in a Material Adverse Effect.

(jj) No forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in any of the Pricing Disclosure Package
or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.

(kk) The Company and its subsidiaries maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed
to ensure that they provide a reasonable level of assurance that information required to be
disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and procedures designed to ensure that they
provide a reasonable level of assurance that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely decisions regarding
required disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the
Exchange Act.

(ll) The Company and its subsidiaries maintain systems of “internal control over
financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or under the supervision of,
their respective principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. The Company and its subsidiaries maintain
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except, in each case, as disclosed in each of the
Pricing Disclosure Package and the Offering Memorandum, the Company has not been advised of
any material weaknesses in the Company’s internal controls as of the date hereof.

 

14

 

(mm) Except, in each case, as disclosed in each of the Pricing Disclosure Package and
the Offering Memorandum, (i) the Company and each of its subsidiaries have such permits,
licenses, patents, franchises, certificates of need and other approvals or authorizations of
governmental or regulatory authorities (“Permits”) as are necessary under applicable law to
own their properties and conduct their businesses in the manner
described in the Pricing Disclosure Package, except for any of the foregoing that could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (ii) each
of the Company and its subsidiaries has fulfilled and performed all of its obligations with
respect to such Permits, and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other impairment of
the rights of the holder or any such Permits, except for any of the foregoing that could not
be reasonably expected to have a Material Adverse Effect, and (iii) neither the Company nor
any of its subsidiaries has received notice of any revocation or modification of any such
Permit or has any reason to believe that any such Permit will not be renewed in the ordinary
course, except where the revocation, modification or failure to renew any such Permit could
not be reasonably expected to have a Material Adverse Effect.

(nn) The Company and each of its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses, know-how, software, systems
and technology (including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures) necessary for the conduct of their
respective businesses, except for any of the foregoing that could not reasonably be expected
to result in a Material Adverse Effect.

(oo) Except as described in the Pricing Disclosure Package and the Offering Memorandum,
(A) there are no proceedings that are pending, or known to be contemplated, against the
Company or any of its subsidiaries under any laws, regulations, ordinances, rules, orders,
judgments, decrees, permits or other legal requirements of any governmental authority,
including without limitation any international, national, state, provincial, regional, or
local authority, relating to the protection of human health or safety, the environment, or
natural resources, or to hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”) in which a governmental authority is also a party, other than such
proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or
more will be imposed, (B) the Company and its subsidiaries are not aware of any issues
regarding compliance with Environmental Laws, or liabilities or other obligations under
Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or
contaminants, that could reasonably be expected to have a Material Adverse Effect, and (C)
none of the Company and its subsidiaries anticipates material (with respect to the Company
and its subsidiaries, taken as a whole) capital expenditures relating to Environmental Laws
(except, with respect to development projects, such capital expenditures which do not
materially exceed amounts contemplated for such capital expenditures in budgets or cost
estimates for such projects or potential expenditures in connection with proposed projects
for which budgets have not been developed).

(pp) Neither the Company nor any of its subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has, at any time during the last five
years, (i) used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.

 

15

 

(qq) The operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened, except in each
case, as would not reasonably be expected to have a Material Adverse Effect.

(rr) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of knowingly financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

(ss) The Company has not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Notes, will not distribute any offering
material in connection with the offering and sale of the Notes other than any Preliminary
Offering Memorandum, the Pricing Term Sheet, the Offering Memorandum or any Free Writing
Offering Document to which the Representatives have consented in accordance with Section
2(i).

(tt) The Company and the Guarantors have not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that could reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company or the Guarantors to facilitate the sale or resale of the Notes or
Guarantees.

(uu) The Company and its subsidiaries have good and marketable title to all real
property and to all personal property described in the Pricing Disclosure Package and the
Offering Memorandum as being owned by them, in each case free and clear of all liens,
encumbrances and defects except (i) such as are described in the Pricing Disclosure Package
and the Offering Memorandum, (ii) such as arise in connection with the Bank Credit Facility,
(iii) such as do not (individually or in the aggregate) interfere with the use made or
proposed to be made of such property by the Company and its subsidiaries, (iv) with respect
to land held for development, restrictions ordinarily expected to be resolved in the
development process, or

 

16

 

(v) such as are not (individually or in the aggregate) reasonably likely to result in a Material Adverse Effect; and any real property and
buildings held under lease or sublease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as (i) do not interfere
with, the use made and proposed to be made of such property and buildings by the Company and
its subsidiaries or (ii) are not (individually or in the aggregate) reasonably likely to
result in a Material Adverse Effect. Neither the Company nor any subsidiary has received
any written notice of any claim adverse to its ownership of any real or personal property or
of any claim against the continued possession of any real property, whether owned or held
under lease or sublease by the Company or any subsidiary, except as would not reasonably be
likely to result in a Material Adverse Effect.

(vv) The Company and its subsidiaries carry, or are covered by, insurance in such
amounts and covering such risks as the Company reasonably considers adequate for the conduct
of their business and the value of their properties and as is reasonably customary for
companies engaged in similar businesses in similar industries.

(ww) Neither the Company nor any of its Subsidiaries intends, or intends to permit any
of their respective Subsidiaries, to incur debts beyond its ability to pay such debts as
they mature, taking into account the timing and the amounts of cash to be received by the
Company or any of its Subsidiaries and the timing and the amounts of cash to be payable on
or in respect of the Company’s indebtedness or the indebtedness of each Subsidiary.

(xx) No Restricted Subsidiary (as defined in the Indenture) of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Restricted Subsidiary’s capital stock, from repaying to the
Company any loan or advances to such Restricted Subsidiary from the Company or from
transferring any of such Restricted Subsidiary’s property or assets to the Company or any
other Restricted Subsidiary of the Company, except as described in or contemplated by the
Pricing Disclosure Package.

(yy) Immediately after each of the Guarantors has entered into the Guarantee to which
it is a party, (i) the fair value of the assets of such Guarantor will exceed the debts and
liabilities, subordinated, contingent or otherwise, of such Guarantor, (ii) the present fair
saleable value of the property of such Guarantor will be greater than the amount that will
be required to pay the probable liabilities of such Guarantor on its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other liabilities,
subordinated, contingent or otherwise, become absolute and matured, (iii) such Guarantor
will be able to pay its debts and other liabilities, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured, and (iv) such Guarantor
will not have an unreasonably small capital with which to conduct the business in which it
is engaged as such business is conducted and is proposed to be conducted following the
Closing Date.

 

17

 

(zz) None of the transactions contemplated by this Agreement (including without
limitation, the use of the proceeds from the sale of the Notes), will violate or
result in a violation of Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors
of the Federal Reserve System.

(aaa) On and immediately after the Closing Date, the Company (after giving effect to
the issuance of the Notes and the other transactions related thereto as described in each of
the Pricing Disclosure Memorandum and the Offering Memorandum) will be Solvent. As used in
this paragraph, the term “Solvent” means, with respect to a particular date, that on such
date (i) the present fair market value (or present fair saleable value) of the assets of the
Company is not less than the total amount required to pay the liabilities of the Company on
its total existing debts and liabilities (including contingent liabilities) as they become
absolute and matured; (ii) the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as they mature and become due
in the normal course of business; (iii) assuming consummation of the issuance of the Notes
as contemplated by this Agreement, the Pricing Disclosure Memorandum and the Offering
Memorandum, the Company is not incurring debts or liabilities beyond its ability to pay as
such debts and liabilities mature; (iv) the Company is not engaged in any business or
transaction, and does not propose to engage in any business or transaction, for which its
property would constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged; and (v) the Company is
not a defendant in any civil action that would reasonably be expected to result in a
judgment that the Company is or would become unable to satisfy.

(bbb) [intentionally omitted.]

(ccc) The financial information presented under “Summary — Recent Developments” set
forth in each of the Preliminary Offering Memorandum and the Final Offering Memorandum (i)
was derived from the internal accounting records of the Company (as those records were
maintained at the date of each of the Preliminary Offering Memorandum and the Final Offering
Memorandum) and (ii) was prepared on a basis consistent with the corresponding financial
information included in the Company’s Management’s Discussion and Analysis of Financial
Condition and Results of Operations included in the Form 10-K for the year ended December
31, 2009, other than as described in the Pricing Disclosure Package and the Offering
Memorandum with respect to the change in the Company’s segments and the discontinued
operations treatment of the Company’s Argentina operations and Atlantic City holdings.

Any certificate signed by any officer of the Company or the Guarantors, as the case may be,
and delivered to the Representatives or counsel for the Initial Purchasers in connection with the
offering of the Notes shall be deemed a representation and warranty by the Company and the
Guarantors, jointly and severally, as to matters covered thereby (and is subject to the limitations
therein, if any), to each Initial Purchaser. The Company and the Guarantors acknowledge that, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 8 hereof,
counsel to the Company and counsel to the Initial Purchasers will rely upon the accuracy and truth
of the foregoing representations, warranties and agreements and the Company and the Guarantors
hereby consent to such reliance.

 

18

 

3. Purchase of the Notes by the Initial Purchasers. On the basis of the
representations and warranties contained in, and subject to the terms and conditions of, this
Agreement, the Company agrees to sell the Notes to the several Initial Purchasers, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the Company, the aggregate
principal amount of the Notes set forth opposite the respective names of the Initial Purchasers on
Schedule 1 hereto, at a purchase price equal to 98% of the principal amount thereof, plus
accrued interest, if any, from May 6, 2010 to the Closing Date.

4. Offering of Notes by the Initial Purchasers. Each of the Initial Purchasers,
severally and not jointly, hereby represents and warrants to the Company that it will offer the
Notes for sale upon the terms and conditions set forth in this Agreement and in the Pricing
Disclosure Package. Each of the Initial Purchasers hereby represents and warrants to, and agrees
with, the Company, on the basis of the representations, warranties and agreements of the Company
and the Guarantors that such Initial Purchaser: (i) is a QIB with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits and risks of an
investment in the Notes; (ii) is purchasing the Notes pursuant to a private sale exempt from
registration under the Act; (iii) is not acquiring the Notes with a view to any distribution
thereof or with any present intention of offering or selling any of the Notes in a transaction that
would violate the Act or the securities laws of any state of the United States or any other
applicable jurisdiction; (iv) in connection with the Exempt Resales, will solicit offers to buy the
Notes only from, and will offer to sell the Notes only to, the Eligible Purchasers in accordance
with this Agreement and on the terms contemplated by the Pricing Disclosure Package; (v) will not
offer or sell the Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any form
of general solicitation or general advertising (within the meaning of Regulation D, including, but
not limited to, advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general advertising); (vi)
will not engage in any directed selling efforts within the meaning of Rule 902 under the Act, in
connection with the offering of the Notes; (vii) will not offer or sell the Notes as part of a plan
or scheme to evade the registration provisions of the Act, in connection with the offering of the
Notes in reliance on Regulation S; and (viii) has not, and its affiliates have not, offered or
sold, and neither it nor its affiliates will offer or sell the Notes in the United States or to, or
for the benefit or account of, a U.S. person (other than a distributor) (x) as part of its
distribution at any time and (y) otherwise until 40 days after the later of the commencement of the
offering of the Notes pursuant hereto and the Closing Date (the “distribution compliance period”),
other than in accordance with Regulation S or another exemption from the registration requirements
of the Act. The Initial Purchasers further agree that, during such 40-day distribution compliance
period, it will not cause any advertisement with respect to the Notes (including any “tombstone”
advertisement) to be published in any newspaper or periodical or posted in any public place and
will not issue any circular relating to the Notes, except such advertisements as permitted, and
include the statements required, by Regulation S. The Initial Purchasers also agree that, at or
prior to confirmation of a sale of Notes offered and sold pursuant to Regulation S, it will have
sent to each distributor, dealer or person receiving a selling concession, fee or other
renumeration in respect of the Notes from it during the restricted period a confirmation or notice
substantially to the following effect:

 

19

 

“The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may
not be offered, sold, assigned, transferred, pledged, encumbered or
otherwise transferred within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of your distribution
at any time or (ii) otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date, except in either
case (A) in accordance with Regulation S under the Securities Act,
(B) to a “Qualified Institutional Buyer” (as defined in Rule 144A
(“Rule 144A”) under the Securities Act) in a transaction meeting the
requirements of Rule 144A or (C) to an institutional “accredited
investor” (as defined in Rule 501(a)(1), (2), (3), (5), (6) or (7)
of Regulation D under the Securities Act) in a transaction that is
exempt from the registration requirements of the Securities Act, and
in connection with any subsequent sale by you of the Series A Notes
covered hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have
the meanings assigned to them in Regulation S.”

The Initial Purchasers have advised the Company that they will offer the Notes to Eligible
Purchasers at a price initially equal to 100% of the principal amount thereof, plus accrued
interest, if any, from the date of issuance of the Notes. Such price may be changed by the Initial
Purchasers at any time without notice.

The Company shall not be obligated to deliver any Notes to be delivered on the Closing Date,
except upon payment of the aggregate principal amount (less the applicable discount and payment of
interest set forth in Section 3 above) for all of the Notes to be purchased under this Agreement.

Each of the Initial Purchasers understands that the Company and, for purposes of the opinions
to be delivered to the Initial Purchasers pursuant to Section 8 hereof, counsel to the Company and
counsel to the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby consent to such
reliance.

5. Delivery of and Payment for the Notes.

(a) Delivery of and payment for the Notes shall be made at the offices of Irell &
Manella, 1800 Avenue of the Stars, Los Angeles, CA 90067, at 10:00 A.M., New York City time,
on the fifth full business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representatives and the Company (the
“Closing Date”).

 

20

 

(b) Delivery of the Notes will be made to the Representatives by or on behalf of the
Company against payment of the purchase price therefor by wire transfer of immediately
available funds. Delivery of the Notes will be made through the facilities of The
Depository Trust Company (“DTC”) unless the Representatives will otherwise instruct.
Delivery of the Notes at the time and place specified in this Agreement is a further
condition to the obligations of each Initial Purchaser.

6. Further Agreements of the Company, the Guarantors and the Initial
Purchasers. Each of the Company and the Guarantors agrees as follows:

(a) The Company and the Guarantors will furnish to the Initial Purchasers, without
charge, within one business day of the date of the Offering Memorandum, such number of
copies of the Offering Memorandum as may then be amended or supplemented as they may
reasonably request.

(b) The Company and the Guarantors will not make any amendment or supplement to the
Pricing Disclosure Package or to the Offering Memorandum of which the Initial Purchasers
shall not previously have been advised or to which they shall reasonably object after being
so advised.

(c) The Company and each of the Guarantors consents to the use of the Pricing
Disclosure Package and the Offering Memorandum, in accordance with the securities or Blue
Sky laws of the jurisdictions in which the Notes are offered by the Initial Purchasers and
by all dealers to whom Notes may be sold, in connection with the offering and sale of the
Notes.

(d) If, at any time prior to completion of the distribution of the Notes by the Initial
Purchasers to Eligible Purchasers, any event occurs or information becomes known that, in
the judgment of the Company, any of the Guarantors or in the opinion of counsel for the
Initial Purchasers, should be set forth in the Pricing Disclosure Package or the Offering
Memorandum so that the Pricing Disclosure Package or the Offering Memorandum, as then
amended or supplemented, does not include any untrue statement of material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is necessary to
supplement or amend the Pricing Disclosure Package or the Offering Memorandum in order to
comply with any law, the Company and the Guarantors will forthwith prepare an appropriate
supplement or amendment thereto, and will expeditiously furnish to the Initial Purchasers
and dealers a reasonable number of copies thereof.

 

21

 

(e) None of the Company nor any Guarantor will make any offer to sell or solicitation
of an offer to buy the Notes that would constitute a Free Writing Offering Document without
the prior consent of the Representatives, which consent shall not be unreasonably withheld
or delayed; if at any time following issuance of a Free Writing Offering Document any event
occurred or occurs as a result of which such Free Writing Offering Document conflicts with
the information in the Pricing Disclosure Package or the Offering Memorandum or, when taken
together with the information in the Pricing
Disclosure Package or the Offering Memorandum, includes an untrue statement of a
material fact or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances then prevailing, not misleading, as promptly as
practicable after becoming aware thereof, the Company will give notice thereof to the
Initial Purchasers through the Representatives and, if requested by the Representatives,
will prepare and furnish without charge to each Initial Purchaser a Free Writing Offering
Document or other document which will correct such conflict, statement or omission.

(f) The Company and the Guarantors promptly from time to time will take such action as
the Representatives may reasonably request to qualify the Notes and Guarantees for offering
and sale under the securities laws or Blue Sky laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Notes; provided that in connection therewith the Company and the
Guarantors shall not be required to (i) qualify as a foreign corporation in any jurisdiction
in which it would not otherwise be required to so qualify, (ii) file a general consent to
service of process in any such jurisdiction or (iii) subject itself to taxation in any
jurisdiction in which it would not otherwise be subject.

(g) During the period of 90 days from the date hereof, without the prior written
consent of J.P. Morgan Securities Inc. on behalf of the Initial Purchasers, which consent
shall not be unreasonably withheld, to not, directly or indirectly, issue, offer, sell,
agree to issue, offer or sell, solicit offers to purchase, pledge or otherwise dispose of
(or enter into any transaction or duties which is designed to, or could be expected to,
result in the disposition by any person at any time in the future) any debt securities of
the Company or any Subsidiary with terms substantially similar (including having equal rank)
to the Notes (other than the Notes); provided, however, nothing contained in this Section
6(g) shall obligate the Company to retain J.P. Morgan Securities Inc. as its initial
purchaser or underwriter.

(h) The Company will furnish to the holders of the Notes as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet and statements of
income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the date of the Offering Memorandum), will make available to its
securityholders consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail.

(i) So long as any of the Notes are outstanding, the Company and the Guarantors will
furnish to the Initial Purchasers (i) as soon as available, a copy of each report of the
Company or any Guarantor mailed to stockholders generally or filed with any stock exchange
or regulatory body and (ii) from time to time such other information concerning the Company
or the Guarantors as the Initial Purchasers may reasonably request.

 

22

 

(j) The Company and the Guarantors will apply the net proceeds from the sale of the
Notes being sold by the Company as set forth in the Offering Memorandum under the caption
“Use of proceeds.”

(k) The Company and the Guarantors will not (and cause its affiliates not to) take,
directly or indirectly, any action which is designed to or which constitutes or which might
reasonably be expected to cause or result in the stabilization or manipulation of the price
of any security of the Company or the Guarantors to facilitate the sale or resale of the
Notes or Guarantees and neither the Company, the Guarantors nor any of its affiliated
purchasers (as defined in Rule 100 of Regulation M under the Exchange Act) will take any
action prohibited by Regulation M under the Exchange Act.

(l) The Company and the Guarantors will not oppose the Notes being made eligible for
clearance and settlement through the DTC.

(m) During the period from the Closing Date to one year after the Closing Date, the
Company and the Guarantors will not, and will not permit any of their respective affiliates
(as defined in Rule 144 under the Act) to, resell any of the Notes that have been acquired
by any of them, except for Notes purchased by the Company, the Guarantors or any of their
respective affiliates and resold in a transaction registered under the Act or pursuant to
Rule 144 of the Act.

(n) The Company and the Guarantors agree not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act) that would
be integrated with the sale of the Notes in a manner that would require the registration
under the Act of the sale to the Initial Purchasers or the Eligible Purchasers of the Notes.

(o) The Company and the Guarantors agree to comply with all the terms and conditions of
the Registration Rights Agreement and all agreements set forth in the representation letters
of the Company and the Guarantors to DTC relating to the approval of the Notes by DTC for
“book entry” transfer.

(p) The Company and the Guarantors will take such steps as shall be necessary to ensure
that neither the Company nor any of the Company’s subsidiaries becomes an “investment
company” within the meaning of such term under the Investment Company Act of 1940, as
amended.

(q) The Company and the Guarantors agree use their best efforts to do and perform all
things required to be done or performed under this Agreement by the Company and the
Guarantors prior to the Closing Date to satisfy all conditions precedent to the delivery of
the Notes.

(r) The Company and the Guarantors agree to take all reasonable action necessary to
enable Standard & Poor’s Corporation and Moody’s Investors Service, Inc. to reaffirm their
respective credit ratings on the Company’s outstanding senior subordinated debt, including
for this purpose, the issuance of the Notes.

 

23

 

7. Expenses. The Company and the Guarantors jointly and severally, agree, whether or
not the transactions contemplated by this Agreement are consummated or this Agreement is
terminated, to pay all costs, expenses, fees and taxes incident to and in connection with (a) the
preparation and printing of certificates for the Notes; (b) the preparation and printing of the
Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering Memorandum
(including any exhibits thereto), Registration Rights Agreement and any amendment or supplement
thereto; (c) the distribution of the Preliminary Offering Memorandum, the Pricing Disclosure
Package and the Offering Memorandum (including any exhibits thereto), Registration Rights Agreement
and any amendment or supplement thereto, or any document incorporated by reference therein, all as
provided in this Agreement; (d) any required review by FINRA of the terms of sale of the Notes or
Guarantees (including related reasonable and documented fees and expenses of counsel to the Initial
Purchasers); (e) the qualification of the Notes, the Guarantees, the Exchange Notes and the
Exchange Guarantees under the securities laws of the several jurisdictions as provided in Section
6(f) and the preparation, printing and distribution of a Blue Sky Memorandum (including related
reasonable and documented fees and expenses of counsel to the Initial Purchasers); (f) the Trustee,
any agent of the Trustee, the counsel for the Trustee in connection with the Indenture, the Notes,
the Guarantees, the Exchange Notes and the Exchange Guarantees; (g) all expenses in connection with
the approval of the Notes by DTC for “book-entry” transfer; (h) the furnishing of such copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with the Exempt Resales; and (i) all
expenses in connection with the rating of the Notes and the Exchange Notes. The Company and the
Guarantors shall not be required to pay for any of the Initial Purchasers’ costs and expenses
(other than those as described in clauses (d) and (e) above), including, without limitation, (i)
the fees and expenses of counsel to the Initial Purchasers (other than as set forth above) and (ii)
the “roadshow” expenses of the Initial Purchasers; provided, however, if the sale of Notes pursuant
to Section 3 of this Agreement shall not be consummated because the conditions in Section 8 (other
than Section 8(k)) hereof are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof, or by reason of any failure, refusal or inability on
the part of the Company or any of the Guarantors to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on its part to be performed,
unless such failure, refusal or inability is due primarily to the default or omission of any
Initial Purchaser, the Company and each Guarantor, jointly and severally shall reimburse the
several Initial Purchasers for reasonable out-of-pocket expenses, including reasonable and
documented fees and disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Notes or in contemplation of performing their obligations
hereunder; but the Company and the Guarantors shall not in any event be liable to any of the
several Initial Purchasers for damages on account of loss of anticipated profits from the sale by
them of the Notes.

8. Conditions of Initial Purchasers’ Obligations. The respective obligations of the
Initial Purchasers hereunder are subject to the accuracy, when made and on the Closing Date, of the
representations and warranties of the Company and the Guarantors contained herein, to the
performance by the Company and the Guarantors of their respective obligations hereunder, and to
each of the following additional terms and conditions:

(a) The Initial Purchasers shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Pricing Disclosure Package or the
Offering Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact that, in the opinion of counsel to the Initial Purchasers, is material or omits to
state a fact that, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

 

24

 

(b) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Indenture, the Notes, the Guarantees, the Exchange
Notes, the Exchange Guarantees, the Registration Rights Agreement and the Offering
Memorandum, and all other legal matters relating to this Agreement and the transactions
contemplated hereby and thereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to pass upon such
matters.

(c) Irell & Manella LLP shall have furnished to the Representatives its written
opinion, as counsel to the Company, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Representatives,
substantially in the form attached hereto as Exhibit B-1.

(d) Brownstein Hyatt Farber Schreck, LLP, Nevada counsel for the Company, shall have
furnished to the Representatives its written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, substantially in the form attached hereto as
Exhibit B-2.

(e) Baker & Daniels LLP, Indiana counsel for the Company, shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to the
Representatives, substantially in the form attached hereto as Exhibit B-3.

(f) Stone Pigman Walther Wittmann L.L.C., Louisiana counsel for the Company, shall have
furnished to the Representatives its written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, substantially in the form attached hereto as
Exhibit B-4.

(g) Briol & Associates, PLLC, Minnesota counsel for the Company, shall have furnished
to the Representatives its written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory
to the Representatives, substantially in the form attached hereto as Exhibit B-5.

(h) Lathrop & Gage LLP, Missouri counsel for the Company, shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, substantially in the form attached
hereto as Exhibit B-6.

 

25

 

(i) Sills Cummis & Gross P.C., New Jersey counsel for the Company, shall have furnished
to the Representatives its written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory
to the Representatives, substantially in the form attached hereto as Exhibit B-7.

(j) Watkins Ludlam Winter & Stennis, P.A., Mississippi counsel for the Company, shall
have furnished to the Representatives its written opinion, as counsel to the Company,
addressed to the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, substantially in the form attached hereto as
Exhibit B-8.

(k) The Representatives shall have received from Latham & Watkins LLP, counsel for the
Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Notes, the Pricing Disclosure Package and the Offering Memorandum
and other related matters as the Representatives may reasonably require, and the Company and
the Guarantors shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.

(l) At the time of execution of this Agreement, the Representatives shall have received
from each of Deloitte & Touche LLP and Ernst & Young LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Initial Purchasers and dated the date
hereof (i) confirming that they are independent public accountants within the meaning of the
Act and are in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the
date hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Pricing
Disclosure Package, as of a date not more than three days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection
with registered public offerings, or, in the case of Ernst & Young LLP, such matters as set
forth on Exhibit C.

(m) With respect to the letters of Deloitte & Touche LLP and Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the “initial letters”), the Company shall have furnished to the
Representatives letters (the “bring-down letters”), of each of such accountants, addressed
to the Initial Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) in the case of Deloitte & Touche LLP stating, as of
the date of its bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as

 

26

 

of which specified financial information is given in each of the Pricing Disclosure Package or
the Offering Memorandum, as of a date not more than three days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by their initial letter, (iii) in the case of Ernst &
Young LLP, stating, as of the date of its bring-down letter (or, with respect to matters
involving changes or developments since the respective dates of which specified financial
information is given in the Pricing Disclosure Package or the Offering Memorandum, as of a
date not more than three days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to its SAS 100 review of the Company’s consolidated
financial statements included in its Form 10-K for the year ended December 31, 2009 and
filed with the Commission and other matters ordinarily covered by accountants’ “comfort
letters” to underwriters in connection with registered public offerings and (iii) confirming
in all material respects the conclusions and findings set forth in the initial letters.

(n) The Company shall have furnished to the Representatives a certificate, dated the
Closing Date, of the Company’s Chief Executive Officer and its Chief Financial Officer
stating, in their respective capacities as officers of the Company and not in their
respective individual capacities, that each of them severally represents that:

(i) The representations, warranties and agreements of the Company and the
Guarantors in Section 2 are true and correct on and as of the Closing Date, and the
Company and the Guarantors have complied with all of their respective agreements
contained herein in all material respects and satisfied all the conditions on their
part to be performed or satisfied hereunder at or prior to the Closing Date;

(ii) He or she has carefully examined the Pricing Disclosure Package and the
Offering Memorandum, and, in his or her opinion, (A) the Pricing Disclosure Package,
as of the Applicable Time, and the Offering Memorandum, as of its date and the
Closing Date, did not and do not contain any untrue statement of a material fact and
did not and do not omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading, and (B) since the date of the Pricing Disclosure Package and the
Offering Memorandum no event has occurred that should have been set forth in a
supplement or amendment to the Pricing Disclosure Package or the Offering Memorandum
that has not been so set forth; and

(iii) Since the respective dates as of which information is given in the
Pricing Disclosure Package and the Offering Memorandum, there has not been any
development that resulted in a Material Adverse Effect or any development that could
reasonably be expected to result in a Material Adverse Effect, whether or not
arising in the ordinary course of business.

 

27

 

(o) Except as described in the Pricing Disclosure Package, (i) neither the Company nor
any of its subsidiaries shall have sustained, since the date of the latest
audited financial statements included or incorporated by reference in the Pricing
Disclosure Package, any change resulting in a Material Adverse Effect or (ii) since such
date there shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management, business or prospects of the Company and its
subsidiaries taken as a whole, the effect of which is, in the reasonable judgment of J.P.
Morgan Securities Inc., so material and adverse as to make it impracticable or inadvisable
to proceed with the offering or the delivery of the Notes being delivered on the Closing
Date on the terms and in the manner contemplated in the Pricing Disclosure Package.

(p) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall
have occurred in the rating accorded the Company’s or any of its Subsidiaries’ debt
securities or preferred stock by Standard & Poor’s Corporation and Moody’s Investors Service
and (ii) neither Standard & Poor’s Corporation nor Moody’s Investors Service shall have
publicly announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company’s or any of its Subsidiaries’ debt securities
or preferred stock.

(q) [Intentionally omitted.]

(r) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national emergency or war by the United
States if the effect of such engagement in hostilities, escalation or declaration of war
would, in your reasonable judgment, make it impracticable or inadvisable to market the Notes
or to enforce contracts for the sale of the Notes or (iv) there shall have occurred a change
in financial markets or any calamity or crisis inside or outside the United States or such a
material adverse change in general economic, political or financial conditions, including,
without limitation, as a result of terrorist activities after the date hereof (or the effect
of international conditions on the financial markets in the United States shall be such), as
to make it in each such case, in the reasonable judgment of J.P. Morgan Securities Inc.,
impracticable or inadvisable to market the Notes or to enforce contracts for the sale of the
Notes.

(s) The DTC shall have accepted the Notes for clearance.

 

28

 

(t) The Company and the Representatives shall have received the Bank Consent from the
Administrative Agent under the Bank Credit Facility.

(u) The Company and the Guarantors shall have executed and delivered the Registration
Rights Agreement, and the Initial Purchasers shall have received an original copy thereof,
duly executed by the Company and the Guarantors.

(v) The Company, the Guarantors and the Trustee shall have executed and delivered the
Indenture, and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company, the Guarantors and the Trustee.

(w) The Company and the Trustee shall have entered into the Escrow Arrangements, the
Company and the Trustee shall have performed their respective obligations under the
Discharge, and on the Closing Date, no injunction or other action shall prohibit the Trustee
from fulfilling its obligations under Section 12.02 of the 8.25% Indenture.

(x) The Company and the Guarantors shall have furnished the Representatives and counsel
to the Initial Purchasers with such other certificates, opinions or other documents as they
may have reasonably requested.

All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to counsel for the Initial Purchasers.

9. Indemnification and Contribution.

(a) Each of the Company and the Guarantors, jointly and severally, shall indemnify and
hold harmless each Initial Purchaser, its affiliates, directors, officers and employees and
each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act, from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim, damage, liability
or action relating to purchases and sales of Notes and Guarantees), to which that Initial
Purchaser, affiliate, director, officer, employee or controlling person may become subject,
under the Act or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Free Writing Offering Document, the Preliminary Offering
Memorandum, the Pricing Disclosure Package or the Offering Memorandum or in any amendment or
supplement thereto, (B) in any Blue Sky application or other document prepared or executed
by the Company or any Guarantor (or based upon any written information furnished by the
Company or any Guarantor) specifically for the purpose of qualifying any or all of the Notes
under the securities laws of any state or other jurisdiction (any such application, document
or information being hereinafter called a “Blue Sky Application”) or (C) in any materials or
information provided to investors by, or with the approval of, the Company in connection
with the marketing of the offering of the Notes (“Marketing Materials”), including any
roadshow or investor presentations made to investors by the

 

29

 

Company (whether in person or electronically), (ii) the omission or alleged omission to state in any Free Writing
Offering Document, the Preliminary Offering Memorandum, the Pricing Disclosure Package or
the Offering Memorandum or in any amendment or supplement thereto or in any Blue Sky
Application or in any Marketing Materials, any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading or (iii) any act or failure to act or any alleged act or failure to act by any
Initial Purchaser in connection with, or relating in any manner to, the Notes, the
Guarantees or the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the Guarantors shall not
be liable under this clause (iii) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to be taken by
such Initial Purchaser through its gross negligence or willful misconduct), and shall
reimburse each Initial Purchaser and each such director, officer, employee or controlling
person promptly upon demand for any legal or other out-of-pocket expenses reasonably
incurred by that Initial Purchaser, director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided, however, that
the Company and the Guarantors shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in any
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum
or in any such amendment or supplement thereto or in any Blue Sky Application or any
Marketing Materials, in reliance upon and in conformity with written information furnished
to the Company through the Representatives by or on behalf of any Initial Purchaser
specifically for inclusion therein, which information consists solely of the information
specified in Section 9(e). The foregoing indemnity agreement is in addition to any
liability which the Company or the Guarantors may otherwise have to any Initial Purchaser or
to any affiliate, director, officer, employee or controlling person of that Initial
Purchaser.

(b) Each Initial Purchaser, severally and not jointly, shall indemnify and hold
harmless the Company, each of the Guarantors and their respective directors, officers and
employees, and each person, if any, who controls the Company or the Guarantors, as the case
may be, within the meaning of Section 15 of the Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to which the
Company, the Guarantors or any such director, officer, employee or controlling person may
become subject, under the Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Free Writing Offering Document, Preliminary
Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum or in any
amendment or supplement thereto or in any Blue Sky Application or any Marketing Materials,
or (ii) the omission or alleged omission to state in any Free Writing Offering Document,
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum
or in any amendment or supplement thereto or in any Blue Sky Application or any Marketing
Materials, any material fact
necessary to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of that Initial Purchaser specifically
for inclusion therein, which information is limited to the information set forth in Section
9(e). The foregoing indemnity agreement is in addition to any liability that any Initial
Purchaser may otherwise have to the Company, any Guarantor and any such director, officer,
employee or controlling person.

 

30

 

(c) Promptly after receipt by an indemnified party under this Section 9 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 9, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent the party to whom
notice was not given was unaware of the proceeding to which such notice would have related
and has been materially prejudiced by such failure (through the forfeiture of substantive
rights or defenses or a material diminution thereof) and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the indemnified party and
shall pay as incurred the reasonable fees and disbursements of such counsel related to such
proceeding. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that an indemnified party shall
have the right to employ counsel to represent jointly the indemnified parties and their
respective directors, officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought by the
indemnified parties against the indemnifying party under this Section 9 if (i) the
indemnified party and the indemnifying party shall have so mutually agreed; (ii) the
indemnifying party has failed within a reasonable time to retain counsel reasonably
satisfactory to the indemnified party; (iii) the indemnified parties and their respective
directors, officers, employees and controlling persons shall have reasonably concluded that
there may be legal defenses available to them that are different from or in addition to
those available to the indemnifying party; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the indemnifying parties or their respective
directors, officers, employees or controlling persons, on the one hand, and the indemnified
party on the other hand, and representation of both sets of parties by the same counsel
would be inappropriate due to actual or potential differing interests between them, and in
any such event the fees and expenses of such separate counsel shall be paid by the Company
and the Guarantors. Any such separate firm for any Initial Purchaser, its affiliates,
directors, officers, employees

 

31

 

and any control persons of such Initial Purchaser shall be designated in writing by J.P. Morgan Securities Inc.
and any such separate firm for the Company, the Guarantors, their respective directors and
officers, employees and any control persons of the Company and the Guarantors shall be
designated in writing by the Company. No indemnifying party shall (A) without the prior
written consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding and does not include any findings of fact or
admissions of fault or culpability as to the indemnified party, or (B) be liable for any
settlement of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying party or if
there be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment. In the event that it is finally
judicially determined that any indemnified party was not entitled to receive payments for
legal and other expenses pursuant to this Section 9, the indemnified party will promptly
return all sums that that had been advanced pursuant hereto.

(d) If the indemnification provided for in this Section 9 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 9(a) or
9(b) in respect of any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors, on the one hand, and the Initial Purchasers, on the other, from the
offering of the Notes and Guarantees or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other, with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received by the Company and the
Guarantors, as set forth on the cover page of the Offering Memorandum, on the one hand, and
the total discounts and commissions received by the Initial Purchasers with respect to the
Notes purchased under this Agreement, as set forth on the cover page of the Offering
Memorandum, on the other hand. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company, the
Guarantors or the Initial Purchasers, the intent of the parties and their

 

32

 

relative
knowledge, access to information and opportunity to correct or prevent such statement or omission. For purposes of the preceding two sentences, the
net proceeds deemed to be received by the Company shall be deemed to be also for the benefit
of the Guarantors, and information supplied by the Company shall also be deemed to have been
supplied by the Guarantors. The Company, the Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this Section 9(d) were
to be determined by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 9(d) shall be deemed to include, for purposes of
this Section 9(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), no Initial Purchaser shall be required to contribute any
amount in excess of the amount by which the total discounts and commissions received by such
Initial Purchaser with respect to the offering of the Notes exceeds the amount of any
damages that such Initial Purchaser has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute as provided in this
Section 9(d) are several in proportion to their respective purchase obligations and not
joint.

(e) The Initial Purchasers severally confirm and the Company and the Guarantors
acknowledge and agree that the statements regarding delivery of Notes by the Initial
Purchasers set forth on the cover page of, and the paragraph relating to stabilization by
the Initial Purchasers appearing under the caption “Plan of Distribution” in, the Offering
Memorandum are correct and constitute the only information concerning such Initial
Purchasers furnished in writing to the Company or any Guarantor by or on behalf of the
Initial Purchasers specifically for inclusion in the Preliminary Offering Memorandum, the
Pricing Disclosure Package and the Offering Memorandum or in any amendment or supplement
thereto.

10. Defaulting Initial Purchaser. If, on the Closing Date, any Initial Purchaser
defaults in the performance of its obligations under this Agreement, the remaining non-defaulting
Initial Purchasers shall be obligated to purchase the Notes that the defaulting Initial Purchaser
agreed but failed to purchase on the Closing Date in the respective proportions which the principal
amount of the Notes set forth opposite the name of each remaining non-defaulting Initial Purchaser
in Schedule 1 hereto bears to the total principal amount of the Notes set forth opposite
the names of all the remaining non-defaulting Initial Purchasers in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Initial Purchasers shall not be obligated to
purchase any of the Notes on the Closing Date if the total principal amount of the Notes that the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase on such date
exceeds 10.0% of the total principal amount of the Notes to be purchased on the Closing Date, and
any remaining non-defaulting Initial Purchaser shall not be obligated to purchase more than 110% of
the principal amount of the Notes that it agreed to purchase on the Closing Date pursuant to the
terms of Section 3. If

 

33

 

the foregoing maximums are exceeded, the remaining non-defaulting Initial Purchasers, or those other initial purchasers satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Notes to be purchased on the Closing
Date. If the remaining Initial Purchasers or other initial purchasers satisfactory to the
Representatives do not elect to purchase the Notes that the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase on the Closing Date, this Agreement shall terminate
without liability on the part of any non-defaulting Initial Purchaser, the Company or the
Guarantors, except that the Company and Guarantors will continue to be liable for the payment of
expenses to the extent set forth in Section 7. As used in this Agreement, the term “Initial
Purchaser” includes, for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases Notes
that a defaulting Initial Purchaser agreed but failed to purchase.

Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may
have to the Company or Guarantors for damages caused by its default. If other Initial Purchasers
are obligated or agree to purchase the Notes of a defaulting or withdrawing Initial Purchaser,
either the Representatives or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Pricing Disclosure Package, the Offering
Memorandum or in any other document or arrangement.

11. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by the Representatives, by notice given to and received by the Company, prior to
delivery of and payment for the Notes if, prior to that time, any of the events described in
Sections 8(o), 8(p) or 8(r) shall have occurred or if the Initial Purchasers shall decline to
purchase the Notes for any reason permitted under this Agreement.

12. Research Analyst Independence. The Company and the Guarantors acknowledge that
the Initial Purchasers’ research analysts and research departments are required to be independent
from their respective investment banking divisions and are subject to certain regulations and
internal policies, and that such Initial Purchasers’ research analysts may hold views and make
statements or investment recommendations and/or publish research reports with respect to the
Company, the Guarantors and/or the offering that differ from the views of their respective
investment banking divisions. The Company and the Guarantors hereby waive and release, to the
fullest extent permitted by law, any claims that the Company or any of the Guarantors may have
against the Initial Purchasers with respect to any conflict of interest that may arise from the
fact that the views expressed by their independent research analysts and research departments may
be different from or inconsistent with the views or advice communicated to the Company or the
Guarantors by such Initial Purchasers’ investment banking divisions. The Company and the
Guarantors acknowledge that each of the Initial Purchasers is a full service securities firm and as
such from time to time, subject to applicable securities laws, may effect transactions for its own
account or the account of its customers and hold long or short positions in debt or equity
securities of the companies that may be the subject of the transactions contemplated by this
Agreement.

 

34

 

13. No Fiduciary Duty. The Company and the Guarantors acknowledge and agree that in
connection with this offering, sale of the Notes or any other services the Initial
Purchasers may be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral representations or assurances
previously or subsequently made by the Initial Purchasers: (i) no fiduciary or agency relationship
between the Company, the Guarantors and any other person, on the one hand, and the Initial
Purchasers, on the other, exists; (ii) the Initial Purchasers are not acting as advisors, expert or
otherwise, to the Company or the Guarantors, including, without limitation, with respect to the
determination of the public offering price of the Notes, and such relationship between the Company
and the Guarantors, on the one hand, and the Initial Purchasers, on the other, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and obligations that the
Initial Purchasers may have to the Company or the Guarantors shall be limited to those duties and
obligations specifically stated herein; and (iv) the Initial Purchasers and their respective
affiliates may have interests that differ from those of the Company and the Guarantors. The
Company and the Guarantors hereby waive any claims that the Company or the Guarantors may have
against the Initial Purchasers with respect to any breach of fiduciary duty in connection with this
offering.

14. Notices, Etc. All statements, requests, notices and agreements hereunder shall be
in writing, and:

(a) if to the Initial Purchasers, shall be delivered or sent by mail or facsimile
transmission to: J.P. Morgan Securities Inc., 383 Madison Avenue, New York, New York 10179,
Attention: Ken Lang, Fax: (212) 270-1063, or if in connection with Section 9 of this
Agreement, Director of Litigation, Office of General Counsel, J.P. Morgan Securities Inc.,
in each case with a copy to Initial Purchasers’ counsel at Latham & Watkins LLP, 355 South
Grand Ave., Los Angeles, California 90071-1560, Attention: Julian T. H. Kleindorfer, Esq.,
and Cynthia A. Rotell, Esq. Fax: (213) 891-8763; and

(b) if to the Company, shall be delivered or sent by mail or facsimile transmission to
Pinnacle Entertainment, Inc., 8918 Spanish Ridge Avenue, Las Vegas, NV 89148, Attention:
John A. Godfrey, Esq., Fax: (702) 784-7748, with a copy to the Company’s counsel at Irell &
Manella LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, CA 90067-4276, Attention:
Kevin McGeehan, Esq. and Ashok W. Mukhey, Esq., Fax: (310) 203-7199.

Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Initial Purchasers by J.P. Morgan Securities Inc. on
behalf of the Representatives.

15. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchasers, the Company, the Guarantors and their
respective successors. This Agreement and the terms and provisions hereof are for the sole benefit
of only those persons, except that (A) the representations, warranties, indemnities and agreements
of the Company and the Guarantors contained in this Agreement shall also be deemed to be for the
benefit of the directors, officers and employees of the Initial Purchasers and each person or
persons, if any, who control any Initial Purchaser within the meaning of Section 15 of the Act and
(B) the indemnity agreement of the Initial Purchasers contained in
Section 9(b) of this Agreement shall be deemed to be for the benefit of the affiliates,
directors of the Company, the Guarantors and any person controlling the Company or the Guarantors
within the meaning of Section 15 of the Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section 15, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any provision contained
herein.

 

35

 

16. Survival. The respective indemnities, representations, warranties and agreements
of the Company, the Guarantors and the Initial Purchasers contained in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement or any certificate delivered pursuant
hereto, shall survive the delivery of and payment for the Notes and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation made by or on behalf
of any of them or any person controlling any of them.

17. Definition of the Terms “Business Day” and “Subsidiary". For purposes of this
Agreement, (a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not
a day on which banking institutions in New York are generally authorized or obligated by law or
executive order to close and (b) “subsidiary” has the meaning set forth in Rule 405.

18. Partial Enforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is, for any reason, determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable and to effect the original intent of the parties hereto.

19. Governing Law. This Agreement and any claim, controversy or dispute arising under
or related to this Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

20. Counterparts. This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same instrument.

21. Headings. The headings herein are inserted for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

[Signature Pages Follow]

 

36

 

If the foregoing correctly sets forth the agreement among the Company, the Guarantors and the
Initial Purchasers, please indicate your acceptance in the space provided for that purpose below.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PINNACLE ENTERTAINMENT, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	Title:	 	Executive Vice President and 

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ACE GAMING, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	PNK Development 13, LLC, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Biloxi Casino Corp., its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Chief Financial Officer and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AREH MLK LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Biloxi Casino Corp., its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	 	 	Title:	 	Chief Financial Officer and Treasurer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-1 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	AREP BOARDWALK PROPERTIES LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Biloxi Casino Corp., its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Financial Officer and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BELTERRA RESORT INDIANA, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc., 
its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President 
and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BILOXI CASINO CORP.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	Title:	 	Chief Financial Officer and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BOOMTOWN, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc., 
its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and
 Chief Financial Officer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-2 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	CASINO MAGIC CORP.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	Title:	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	CASINO ONE CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	Title:	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LOUISIANA-I GAMING, A LOUISIANA 
PARTNERSHIP IN COMMENDAM	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Boomtown, LLC, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Pinnacle Entertainment, Inc., 
its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Executive Vice President and 

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	MITRE ASSOCIATES LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	PNK Development 13, LLC, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Biloxi Casino Corp., its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Chief Financial Officer and Treasurer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-3 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	OGLE HAUS, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Belterra Resort Indiana, LLC,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (BATON ROUGE) PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	PNK Development 8, LLC,

its Managing Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (BOSSIER CITY), INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	Title:	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (CHILE 1), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	 	 	Title:	 	Executive Vice President and

Chief Financial Officer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-4 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (CHILE 2), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK DEVELOPMENT 7, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK DEVELOPMENT 8, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK DEVELOPMENT 9, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-5 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK DEVELOPMENT 13, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Biloxi Casino Corp., 
its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Financial Officer and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (ES), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (LAKE CHARLES), L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member and Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (RENO), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-6 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (RIVER CITY), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	 	 	Title:	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (SCB), L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	PNK Development 7, LLC,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Stephen H. Capp	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	PNK (ST. LOUIS RE), LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Stephen H. Capp	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name:	 	Stephen H. Capp	 	 
	 	 	 	 	 	 	Title:	 	Executive Vice President and

Chief Financial Officer	 	 

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-7 

 

	 	 	 	 	 	 	 
	 	 	PNK (STLH), LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Pinnacle Entertainment, Inc.,

its Sole Member
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Stephen H. Capp
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Stephen H. Capp 

Title:   Executive Vice President and 

            Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen H. Capp
	 	 	 	 	 
	 	 	 	 	Name: Stephen H. Capp
	 	 	 	 	Title:   Chief Financial Officer and Treasurer
	 
	 	 	 	 	 	 
	 	 	PSW PROPERTIES LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Biloxi Casino Corp., its Sole Member
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Stephen H. Capp
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Stephen H. Capp
	 

	 	 	 	 	 	Title:   Chief Financial Officer and Treasurer
	 
	 	 	 	 	 	 
	 	 	ST. LOUIS CASINO CORP.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Stephen H. Capp
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Stephen H. Capp
	 

	 	 	 	 	 	Title:   Chief Financial Officer
	 
	 	 	 	 	 	 
	 	 	YANKTON INVESTMENTS, LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ John A. Godfrey
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: John A. Godfrey
	 

	 	 	 	 	 	Title:   Manager

Signature Page to Senior Subordinated Notes Purchase Agreement

 

S-8

 

Accepted:

J.P. Morgan Securities Inc.

Banc of America Securities LLC

Barclays Capital Inc.

Credit Agricole Securities (USA) Inc.

Deutsche Bank Securities Inc.

UBS Securities LLC

For themselves and on behalf of the several

     Initial Purchasers named in Schedule 1 attached hereto

By J.P. Morgan Inc.

	 	 	 	 	 
	By:  	                       /s/ Ken Lang
 	 	 
	 	Authorized Representative 	 	 

 

 

SCHEDULE 1

	 	 	 	 	 
	 	 	Principal Amount	 
	Initial Purchasers	 	of Notes	 
	 
	 
	J.P. Morgan Securities Inc.
	 	$	63,000,000	 
	 
	 
	Banc of America Securities LLC
	 	$	63,000,000	 
	 
	 
	Barclays Capital Inc.
	 	$	49,000,000	 
	 
	 
	Credit Agricole Securities (USA) Inc.
	 	$	49,000,000	 
	 
	 
	Deutsche Bank Securities Inc.
	 	$	49,000,000	 
	 
	 
	UBS Securities LLC
	 	$	49,000,000	 
	 
	 
	Capital One Southcoast, Inc.
	 	$	21,000,000	 
	 
	 
	Citadel Securities, LLC
	 	$	7,000,000	 
	 
	 
	 	 	 	 
	Total
	 	$	350,000,000	 
	 	 	 	 

 

Schedule 1-1

 

SCHEDULE 2

Subsidiaries

* denotes a subsidiary as described in Section 2(k) of this Agreement.

± denotes an unrestricted subsidiary under the Indenture.

*ACE Gaming, LLC

*AREH MLK LLC

*AREP Boardwalk Properties LLC

*Belterra Resort Indiana, LLC

*Biloxi Casino Corp.

*Boomtown, LLC

Brighton Park Maintenance Corp.

*Casino Magic Corp.

±Casino Magic (Europe), BV

±Casino Magic Hellas Management Services, SA

Casino Magic Management Services Corp.

*Casino Magic Neuquen, SA

*Casino One Corporation

Double Bogey, LLC

±Landing Condominium, LLC

*Louisiana-I Gaming, a Louisiana Partnership in Commendam

*Mitre Associates LLC

*OGLE HAUS, LLC

Pinnacle Design & Construction, LLC

*PNK (Baton Rouge) Partnership

 

Schedule 2-1

 

*PNK (BOSSIER CITY), Inc.

*PNK (CHILE 1), LLC

*PNK (CHILE 2), LLC

PNK Development 1, Inc.

PNK Development 2, Inc.

PNK Development 3, Inc.

PNK Development 4, Inc.

PNK Development 5, Inc.

PNK Development 6, Inc.

*PNK Development 7, LLC

*PNK Development 8, LLC

*PNK Development 9, LLC

±PNK Development 10, LLC

±PNK Development 11, LLC

PNK Development 12, LLC

*PNK Development 13, LLC

PNK Development 15, LLC

PNK Development 16, LLC

±PNK Development 17, LLC

±PNK Development 18, LLC

PNK Development 19, LLC

PNK Development 20, LLC

PNK Development 21, LLC

PNK Development 22, LLC

PNK Development 23, LLC

 

Schedule 2-2

 

PNK Development 24, LLC

PNK Development 25, LLC

PNK Development 26, LLC

PNK Development 27, LLC

±PNK Development 28, LLC

*PNK (ES), LLC

PNK (EXUMA), LIMITED

±PNK (Kansas), LLC

*PNK (LAKE CHARLES), L.L.C.

*PNK (Reno), LLC

*PNK (River City), LLC

*PNK (SCB), L.L.C.

*PNK (STLH), LLC

*PNK (ST. LOUIS RE), LLC

±Port St. Louis Condominium, LLC

*President Riverboat Casino-Missouri, Inc.

*PSW Properties LLC

Realty Investment Group, Inc.

*St. Louis Casino Corp.

*Yankton Investments, LLC

 

Schedule 2-3

 

SCHEDULE 3

FORM OF TERM SHEET

Pricing Supplement dated April 29, 2010 to Preliminary Offering Memorandum dated April 29, 2010 of
Pinnacle Entertainment, Inc.

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering
Memorandum.

The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and
supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with
the information in the Preliminary Offering Memorandum.

The notes have not been registered under the Securities Act of 1933, as amended, or the securities
laws of any other jurisdiction and are being offered only to (1) “qualified institutional buyers”
as defined in Rule 144A under the Securities Act and (2) outside the United States to non-U.S.
persons in compliance with Regulation S under the Securities Act.

	 	 	 
	Issuer:

	 	Pinnacle Entertainment, Inc.
	 
	 	 
	Security Description:

	 	Senior Subordinated Notes
	 
	 	 
	Distribution:

	 	144A/RegS w/ Registration Rights
	 
	 	 
	Face:

	 	 $350,000,000
	 
	 	 
	Gross Proceeds:

	 	 $350,000,000
	 
	 	 
	Coupon:

	 	 8.75%
	 
	 	 
	Maturity:

	 	May 15, 2020
	 
	 	 
	Offering Price:

	 	 100.0%
	 
	 	 
	Yield to Maturity:

	 	 8.75%
	 
	 	 
	Spread to Treasury:

	 	 +502 basis points
	 
	 	 
	Benchmark:

	 	UST 3.625% due February 15, 2020
	 
	 	 
	Ratings:

	 	Caa1/B
	 
	 	 
	Interest Pay Dates:

	 	May 15 and November 15
	 
	 	 
	Beginning:

	 	November 15, 2010

 

Schedule 3-1

 

	 	 	 
	Equity Clawback:

	 	Up to 35% at 108.75%
	 
	 	 
	Until:

	 	May 15, 2013
	 
	 	 
	Optional Redemption:

	 	Makewhole call @ T+50bps prior to May 15, 2015 then:

	 	 	 	 	 
	On or after:	 	Price:	 
	 
	 	 	 	 
	May 15, 2015
	 	 	104.375	%
	 
	 	 	 	 
	May 15, 2016
	 	 	102.917	%
	 
	 	 	 	 
	May 15, 2017
	 	 	101.458	%
	 
	 	 	 	 
	May 15, 2018 and thereafter
	 	 	100.000	%

	 	 	 
	Change of control:

	 	 
	 
	 	 
	 
	 	Put @ 101% of principal plus
accrued interest
	 
	 	 
	Trade Date:

	 	April 29, 2010
	 
	 	 
	Settlement Date:

	(T+5)	May 6, 2010
	 
	 	 
	CUSIP:

	 	144A: 723456AL3
	 
	 	 
	 

	 	Reg S: U72281AD7
	 
	 	 
	ISIN:

	 	144A: US723456AL35
	 
	 	 
	 

	 	Reg S: USU72281AD72
	 
	 	 
	Denominations:

	 	2,000x1,000
	 
	 	 
	Joint Book-Running 

Managers:

	 	J.P. Morgan
	 
	 	 
	 

	 	BofA Merrill Lynch
	 
	 	 
	 

	 	Barclays Capital
	 
	 	 
	 

	 	Credit Agricole CIB
	 
	 	 
	 

	 	Deutsche Bank Securities
	 
	 	 
	 

	 	UBS Investment Bank
	 
	 	 
	Co-Managers:

	 	Capital One Southcoast
	 
	 	 
	 

	 	Citadel Securities

 

Schedule 3-2

 

	 	 	 
	Use of Proceeds:

	 	The Company intends to use the
majority of the net proceeds of
this offering to refinance all
of its outstanding 8.25% senior
subordinated notes due 2012,
which the Company intends to
redeem pursuant to a redemption
notice. The Company expects to
use a portion of the net
proceeds from this offering to
repay all $80 million
outstanding in revolving credit
borrowings under its amended
and restated credit facility.
The Company expects to use the
remaining net proceeds from the
offering for general corporate
purposes, including funding its
Baton Rouge development
project.
	 
	 	 
	Pro forma ratio of
earnings to fixed
charges*:

	 	Year ended December 31, 2009 —
	 
	 	 
	 

	 	* Gives effect to the issuance
and sale of the notes offered
herein, the redemption of $200
million aggregate principal
amount of the Company’s 8.25%
senior subordinated notes due
2012 and the $80 million pay
down of the Company’s existing
revolving credit facility, as
if it had occurred on January
1, 2009. Earnings were
insufficient to cover pro forma
fixed charges by approximately
$297 million for the year ended
December 31, 2009.
	 
	 	 
	Recent Developments
— Sale of Argentina
Operations:

	 	On April 29, 2010, the Company
entered into a Sale and
Purchase Agreement to sell its
Argentina operations for
approximately $40 million,
subject to adjustment,
customary closing conditions
and approval from the
government of the Province of
Neuquén. If the approval is
not obtained within 120 days of
the execution of the Sale and
Purchase Agreement, either
party may terminate such
agreement.

 

Schedule 3-3

 

Capitalization as of December 31, 2009 (after giving effect to the offering and the anticipated use
of the proceeds)*

	 	 	 	 	 	 	 	 	 
	 	 	As of December 31, 2009	 
	(dollars in thousands, except per share data)	 	Actual	 	 	As adjusted	 
	 
	 	 	 	 	 	 	 	 
	Cash, cash equivalents and restricted cash
	 	$	138,896	 	 	$	195,583	 
	 
	 	 	 	 	 	 	 	 
	Long-term debt, including current portion:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Amended and restated credit facility
	 	$	36,919	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 
	8.625% senior notes due 2017
	 	 	443,919	 	 	 	443,919	 
	 
	 	 	 	 	 	 	 	 
	Senior subordinated notes offered hereby
	 	 	—	 	 	 	350,000	 
	 
	 	 	 	 	 	 	 	 
	7.5% senior subordinated notes due 2015
	 	 	380,796	 	 	 	380,796	 
	 
	 	 	 	 	 	 	 	 
	8.25% senior subordinated notes due 2012
	 	 	200,899	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 
	Other debt
	 	 	838	 	 	 	838	 
	 
	 	 	 	 	 	 	 	 
	Total long-term debt
	 	$	1,063,371	 	 	$	1,175,553	 
	 
	 	 	 	 	 	 	 	 
	Stockholders’ equity:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Preferred Stock ($1.00 par value, 250,000
shares authorized; no shares issued and
outstanding)
	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 
	Common Stock ($0.10 par value, 100,000,000
shares authorized; 60,079,686 shares
outstanding (net of treasury shares))
	 	 	6,209	 	 	 	6,209	 
	 
	 	 	 	 	 	 	 	 
	Capital in excess of par value
	 	 	1,014,233	 	 	 	1,014,233	 
	 
	 	 	 	 	 	 	 	 
	Accumulated Deficit
	 	 	(488,379	)	 	 	(488,697	)
	 
	 	 	 	 	 	 	 	 
	Treasury stock
	 	 	(20,090	)	 	 	(20,090	)
	 
	 	 	 	 	 	 	 	 
	Accumulated other comprehensive loss
	 	 	(17,564	)	 	 	(17,564	)
	 
	 	 	 	 	 	 	 	 
	Total stockholders’ equity
	 	 	494,409	 	 	 	494,091	 
	 
	 	 	 	 	 	 	 	 
	Total capitalization
	 	$	1,557,780	 	 	$	1,669,644	 

 

Schedule 3-4

 

The table above gives effect to:

	 	•	 	the redemption at par of $200.0 million in aggregate principal amount of outstanding
8.25% senior subordinated notes due 2012;

	 
	 	•	 	the approximately $43 million in net borrowings under our revolving credit
facilities between December 31, 2009 and April 22, 2010; and

	 
	 	•	 	the $80 million anticipated pay down of our amended and restated revolving credit
facility with a portion of the net proceeds of this offering.

 

Schedule 3-5

 

SCHEDULE 4

FREE WRITING OFFERING DOCUMENTS

	 	•	 	Final Term Sheet, dated April 29, 2010, relating to the Notes and substantially in
the form of Schedule 3 hereto;

	 
	 	•	 	Any “electronic road shows” and each document provided as an amendment or supplement to the
Preliminary Offering Memorandum

 

Schedule 4-1

 

EXHIBIT B-1

Form of Opinion of Irell & Manella LLP, Counsel for the Company

1. The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware with full corporate power and authority to own its properties and
to conduct its business as described in the Pricing Disclosure Package and the Offering Memorandum.
The Company is duly qualified and in good standing as a foreign corporation in each jurisdiction
listed opposite the Company’s name on Schedule A to this opinion.

2. Each Delaware Guarantor is an entity duly formed, validly existing and in good standing
under the laws of the State of Delaware with full limited liability company power and authority to
own its properties and conduct its business as described in the Pricing Disclosure Package and the
Offering Memorandum. Each Guarantor is duly qualified and in good standing as a foreign
corporation or limited liability company, as applicable, in each jurisdiction listed opposite such
Guarantor’s name on Schedule A to this opinion.

3. The Company has the full corporate power and authority to execute and deliver the Purchase
Agreement, the Registration Rights Agreement, the Indenture, the Notes and the Exchange Notes and
to perform its obligations thereunder, including, without limitation, the full corporate power and
authority to issue, sell and deliver the Notes and the Exchange Notes, as contemplated by the
Purchase Agreement.

4. Each Delaware Guarantor has the full limited liability company power and authority to
execute and deliver the Purchase Agreement, the Registration Rights Agreement, the Indenture, their
respective Guarantees and their respective Exchange Guarantees and to perform their obligations
thereunder.

5. The Purchase Agreement has been duly authorized, executed and delivered by the Company and
each Delaware Guarantor.

6. The Registration Rights Agreement has been duly authorized, executed and delivered by the
Company and each Delaware Guarantor and constitutes the legally valid and binding obligation of the
Company and each of the Guarantors, enforceable against each of them in accordance with its terms.

7. The Indenture has been duly authorized, executed and delivered by the Company and each
Delaware Guarantor and constitutes the legally valid and binding obligation of the Company and each
of the Guarantors, enforceable against each of them in accordance with its terms.

8. The Notes have been duly authorized for issuance and sale to the Initial Purchasers by the
Company and duly executed by the Company and, when issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of the Purchase Agreement, the Notes will be
the valid and legally binding obligations of the Company, enforceable against the Company in
accordance with their terms, and will be entitled to the benefits of the Indenture.

 

Exhibit B-1-1

 

9. The Exchange Notes have been duly authorized for issuance in the Exchange Offer, and when
duly executed and delivered by the Company and, when issued and authenticated in accordance with
the terms of the Indenture and the Registration Rights Agreement, the Exchange Notes will be the
valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their terms, and will be entitled to the benefits of the Indenture.

10. The Guarantees of each Delaware Guarantor have been duly authorized and executed by each
Delaware Guarantor. The Guarantees, when delivered in accordance with the terms of the Indenture,
will, upon the due execution, issuance and authentication of the Notes in accordance with the terms
of the Indenture and the delivery to and payment therefor by the Initial Purchasers in accordance
with the terms of the Purchase Agreement, and receipt of the agreed consideration by each of the
Guarantors, be the valid and legally binding obligations of each of the Guarantors, enforceable
against each of them in accordance with their terms. The Exchange Guarantees of each Delaware
Guarantor have been duly authorized for issuance in the Exchange Offer by each Delaware Guarantor.
The Exchange Guarantees, when duly executed and delivered by each Guarantor in accordance with the
terms of the Indenture and the Registration Rights Agreement, will, upon the due execution,
issuance and authentication of the Exchange Notes in accordance with the terms of the Indenture and
the delivery to and payment therefor by the holders thereof in accordance with the terms of the
Indenture and the Registration Rights Agreement, and receipt of the agreed consideration by each of
the Guarantors, be the legally valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with their terms.

11. The execution and delivery of the Transaction Documents by the Company and the Guarantors,
the performance by the Company and the Guarantors of their respective obligations thereunder, the
consummation by the Company and the Guarantors of the transactions contemplated by the Transaction
Documents (including the issuance of the Notes and the consummation of the Redemption) and the use
of the proceeds therefrom in the manner set forth under the caption “Use of proceeds” in the
Pricing Disclosure Package and the Offering Memorandum, do not and will not (A) result in a breach
of any of the terms and provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or the Guarantors
pursuant to any agreement or instrument listed on Schedule B hereto (we, with your
permission, have relied upon certificates of officers of the Company as to financial calculations
relevant to this opinion), (B) violate any provision of the certificate or articles of
incorporation or operating agreement or bylaws or other organizational documents of the Company or
any Delaware Guarantor, or (C) violate any federal, Delaware or New York law, statute, rule or
regulation customarily applicable to offerings of this type or, to our knowledge, any judgment,
order, writ or decree of any
government instrumentality or court applicable to or having jurisdiction over the Company, any
Guarantor or any of their respective assets or properties (assuming for purposes of this paragraph,
compliance with all applicable state securities or blue sky laws, as to which we express no
opinion, and, in the case of the Registration Rights Agreement, the Act, the Exchange Act and the
1939 Act) except for, with respect to the foregoing clauses (A) and (C), such violations, breaches,
defaults, liens, charges and encumbrances that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

Exhibit B-1-2

 

12. No consent, approval, authorization, order, registration, filing, qualification, license
or permit of or with any court or any judicial, regulatory or other legal or governmental authority
or agency of the United States, New York or Delaware (that is customarily applicable to offerings
of this type), is required for the Company’s or each Guarantor’s execution, delivery and
performance of the Transaction Documents on or before the Closing Date or the issuance of the Notes
and the Guarantees, except for (1) such as may be required under state securities or blue sky laws
in connection with the purchase and distribution of the Notes by the Initial Purchasers (as to
which we express no opinion), (2) such as will be required under the Act in connection with the
issuance of the Exchange Notes and the Exchange Guarantees and (3) qualification of the Indenture
under the 1939 Act, in connection with the issuance of the Exchange Notes and the Exchange
Guarantees.

13. The reports filed under the Exchange Act and incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum or any amendment thereof or supplement thereto
(other than the financial statements and notes thereto, related schedules and other financial data
included or incorporated by reference therein, as to which no opinion is rendered), and in the case
of any such incorporated report that was subsequently amended, such report as amended by the
subsequently filed amendment, when they were filed with the Commission, complied on their face as
to form in all material respects with the Exchange Act and the applicable rules and regulations
thereunder.

14. The statements under the captions “Description of Other Indebtedness”, “Description of
Notes” and “Summary of Material United States Federal Income Tax Considerations” in the Pricing
Disclosure Package and the Offering Memorandum, insofar as they purport to describe or summarize
certain provisions of the agreements, statutes, regulations, legal matters or securities referred
to therein, are accurate descriptions or summaries in all material respects.

15. The Company and each of the Guarantors are not and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described in the Pricing
Disclosure Package and the Offering Memorandum, will not be, an “investment company” as such term
is defined in the Investment Company Act.

16. Assuming the proceeds of the sale of the Notes are used for the purposes set forth in the
Pricing Disclosure Package and the Offering Memorandum, such use of proceeds will not violate the
provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

17. The Indenture complies as to form in all material respects with the requirements of the
1939 Act, and the rules and regulations of the Commission applicable to an indenture which is
qualified thereunder. It is not necessary in connection with the offer, sale and delivery of the
Notes to the Initial Purchasers in the manner contemplated by the Purchase Agreement or in
connection with the Exempt Resales to qualify the Indenture under the 1939 Act.

18. No registration under the Act of either the Notes or the Guarantees is required for the
sale of the Notes and the Guarantees to the Initial Purchasers as contemplated by the Purchase
Agreement or for the Exempt Resales.

 

Exhibit B-1-3

 

19. To our knowledge, there are no pending actions, suits or proceedings before any
governmental agency or body or any court against or affecting the Company or any of the Guarantors
or any of their respective properties that would be required to be disclosed in the Pricing
Disclosure Package or the Offering Memorandum pursuant to Item 103 of Regulation S-K of the rules
and regulations issued under the Act had the Offering Memorandum been a registration statement
under the Act, that are not so disclosed. To our knowledge, other than as set forth in the Pricing
Disclosure Package and the Offering Memorandum, there are no legal or governmental proceedings
pending to which the Company or the Guarantors is a party or of which any property of the Company
or any Guarantor is the subject which are likely to have, individually or in the aggregate, a
Material Adverse Effect; and, other than as set forth in the Pricing Disclosure Package and the
Offering Memorandum, to our knowledge, no such proceedings have been overtly threatened in writing
by governmental authorities or by others.

20. The Notes, the Guarantees, the Indenture and the Registration Rights Agreement conform in
all material respects to the description thereof contained in the Pricing Disclosure Package and
the Offering Memorandum.

21. To our knowledge, other than the Registration Rights Agreement, there are no contracts,
agreements or understandings between the Company or any of its Subsidiaries and any person granting
such person the right to require the Company or any of its Subsidiaries to file a registration
statement under the Act with respect to any securities of the Company as a result of the sale of
the Notes pursuant to the Purchase Agreement or to require the Company or any of its Subsidiaries
to include such securities with the Notes to be registered pursuant to any registration statement
in accordance with the Registration Rights Agreement.

22. When the Notes are issued and delivered pursuant to the Purchase Agreement, such Notes
will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the
Company or any Guarantor that are listed on a national securities exchange registered under Section
6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation
system.

23. The Company is not required to comply with the requirements of Rule 144A(d)(4) of the Act
in connection with the offering contemplated by the Offering Memorandum.

In addition, we have participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company and representatives
for the Initial Purchasers and their counsel at which the contents of the Pricing Disclosure
Package and the Offering Memorandum and related matters were discussed and, although we do not pass
upon, or assume any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Pricing Disclosure Package or the Offering Memorandum, or in any supplements or
amendments thereto, and have not made any independent check or verification thereof (except to the
extent stated in paragraphs 14 and 20 above), during the course of such participation, no facts
came to our attention which caused us to believe that the Pricing Disclosure Package (including the
documents incorporated by reference therein), as of the Applicable Time, or the Offering Memorandum
(including the documents incorporated by reference therein), as of its date (or any amendment
thereof or supplement thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, it being understood that we
express no belief with respect to the financial statements, schedules or other financial data
included in, or omitted from, the Pricing Disclosure Package or the Offering Memorandum or any
amendments or supplements thereto.

 

Exhibit B-1-4

 

EXHIBIT B-2

Form of Opinion of Brownstein Hyatt Farber Schreck, Nevada Counsel for the Company

1. Each of the Nevada Subsidiary Guarantors has been duly organized and is validly existing as
a limited liability company in good standing under the laws of the State of Nevada, with limited
liability company power and authority to own or lease its properties and conduct its business as
described in the Pricing Disclosure Package and the Offering Memorandum, and to execute, deliver
and perform its obligations under the Transaction Documents to which it is a party, including the
power and authority to issue the Guarantees and the Exchange Guarantees.

2. The Company is qualified to do business as a foreign corporation and is in good standing in
the State of Nevada.

3. Each of the Transaction Documents to which each Nevada Subsidiary Guarantor is a party has
been duly authorized, and each of the Transaction Documents to which each Nevada Subsidiary
Guarantor is a party, other than the Exchange Guarantees, has been executed and delivered by such
Nevada Subsidiary Guarantor.

4. The issuance and sale of the Notes and the Exchange Notes by the Company and the Guarantees
and the Exchange Guarantees by the Subsidiary Guarantors, the execution and delivery by each of the
Company and the Subsidiary Guarantors of each of the Transaction Documents to which it is a party,
and the consummation of the Transactions do not contravene, violate or breach (a) the Governing
Documents, (b) any Applicable Nevada Order, or (c) any Applicable Nevada Law.

5. The statements contained in the Pricing Disclosure Package and the Offering Memorandum
under the captions “Risk Factors — Risks related to our business — Our industry is highly
regulated, which makes us dependent on obtaining and maintaining gaming licenses and subjects us to
potentially significant fines and penalties” and “Government regulations and gaming issues -
Nevada”, and the statements contained in Exhibit 99.1 to the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2009, under the caption “Government Regulation and Gaming
Issues — Nevada”, which is incorporated by reference in the Offering Memorandum, except for
financial data included therein or omitted therefrom (as to which we express no opinion), have been
reviewed by us and, to the extent such statements constitute summaries of the Nevada Gaming Laws or
other Nevada legal matters, they are accurate summaries in all material respects.

6. No Nevada Governmental Approval is required for the execution and delivery by the Company
or any Nevada Subsidiary Guarantor of, and the performance by the Company or any Nevada Subsidiary
Guarantor of its obligations under, the Transaction Documents to which it is a party, the
consummation of the Transactions, or the offering, issuance or sale of the Notes, the Exchange
Notes, the Guarantees and the Exchange Guarantees to the Initial Purchasers, except (a) such as
have been obtained and are in full force and effect at the Closing Date and (b) as set forth in the
Pricing Disclosure Package and the Offering Memorandum.

7. With the Company’s consent, based solely on an inquiry of those attorneys currently with
the firm who have rendered legal services to the Company and the Nevada Subsidiary Guarantors since
January 1, 2009, we confirm that we are not currently representing the Company or the Nevada
Subsidiary Guarantors in any pending litigation.

8. To our knowledge, other than as set forth in the Pricing Disclosure Package and the
Offering Memorandum, there are no regulatory proceedings pending before the Nevada Gaming
Authorities to which the Company or any of the Nevada Subsidiary Guarantors is a party, which are
likely to result, individually or in the aggregate, in a Material Adverse Effect.

 

Exhibit B-2-1

 

EXHIBIT B-3

Form of Opinion of Baker & Daniels LLP, Indiana Counsel for the Company

1. Based solely on the Certificates of Existence and Authorization identified on Schedule I,
(a) each of the Company and the Indiana Gaming Subsidiary is duly qualified and authorized to do
business as a foreign corporation and foreign limited liability company, respectively, under the
laws of the State of Indiana; and (b) Ogle Haus is validly existing as a limited liability company
under the laws of the State of Indiana, and has filed its most recent biennial report required by
Indiana law with the Indiana Secretary of State, and no notice of withdrawal, dissolution, or
expiration with respect to Ogle Haus has been filed with the Indiana Secretary of State or has
taken place. Ogle Haus has all requisite limited liability company power and authority to own,
lease, and operate its properties and conduct its business in the State of Indiana as described in
the Pricing Disclosure Package and the Offering Memorandum.

2. Based solely upon the Officer’s Certificate identified on Schedule I, (a) all of the issued
and outstanding ownership interests of Ogle Haus have been duly authorized and validly issued and
are fully paid and nonassessable; (b) all outstanding ownership interests of Ogle Haus are owned
directly by the Indiana Gaming Subsidiary; and (c) none of the outstanding ownership interests of
Ogle Haus were issued in violation of any preemptive rights provided by Indiana law or the
Operating Agreement for Ogle Haus.

3. No authorization, approval, consent, or order of, the Indiana Gaming Commission or any
other governmental body, agency, or official of the State of Indiana, is required in connection
with the offering, issuance, or sale of the Notes or the Exchange Notes to the Initial Purchasers
or the execution by the Indiana Gaming Subsidiary and Ogle Haus of the Guarantee or the Exchange
Guarantee or to make valid and legally binding the execution, delivery and performance by the
Company, the Indiana Gaming Subsidiary or Ogle Haus of the Operative Documents to which it is a
party or the Exchange Guaranty, except (a) such as have been obtained and are in full force and
effect, (b) such periodic reports and informational filings to which the Company, the Indiana
Gaming Subsidiary, or Ogle Haus are subject generally, (c) such as are required under the Indiana
Gaming Laws which have been obtained or waived, (d) such as are required as a condition of the
Approval identified on Schedule I, and (e) such as may be required under applicable federal or
state securities laws or regulations.

4. The statements in the Pricing Disclosure Package and the Offering Memorandum under the
captions “Risk Factors — Risks related to our business — Our industry is highly regulated, which
makes us dependent on obtaining and maintaining gaming licenses and subjects us to potentially
significant fines and penalties” and “Government regulations and gaming issues” (relating to
Indiana Gaming Laws) and the statements in Exhibit 99.1 of the Company’s Annual Report on Form 10-K
for fiscal year ended December 31, 2009 under the caption “Government Regulation and Gaming Issues
- Indiana” which are incorporated by reference in, the Pricing Disclosure Package and the Offering
Memorandum (except for financial and operating data included therein, as to which we express no
opinion), as modified by statements in the Offering Memorandum under the caption “Government
regulations and gaming issues -
Updates,” insofar as such statements constitute summaries of the Indiana Gaming Laws or other
Indiana legal matters, are correct in all material respects.

 

Exhibit B-3-1

 

5. (i) Each of the Indiana Gaming Subsidiary and Ogle Haus has obtained all approvals,
consents, orders, and authorizations from the Indiana Gaming Commission necessary or required in
connection with the issuance of the Notes and the execution of the Guarantee by the Indiana Gaming
Subsidiary and Ogle Haus, subject to the limitations imposed by the Indiana Gaming Commission as
set forth in the Approvals identified on Schedule I, and (ii) based solely on the Officer’s
Certificate identified on Schedule I, the Indiana Gaming Subsidiary has received and presently
holds a riverboat owner’s license from the Indiana Gaming Commission and such license is valid and
in full force and effect. To our knowledge, no event has occurred which currently, or after notice
or lapse of time, or both, would reasonably be expected to result in a revocation, modification,
suspension, or termination of such license.

6. Each of the Operative Documents to which Ogle Haus is a party has been duly authorized,
executed and delivered by Ogle Haus.

7. The execution and delivery by Ogle Haus of the Operative Documents to which it is a party,
and the performance by Ogle Haus of its agreements under such documents, do not violate Ogle Haus’
Operating Agreement or Indiana Gaming Laws.

 

Exhibit B-3-2

 

EXHIBIT B-4

Form of Opinion of Stone Pigman Walther Wittmann L.L.C., Louisiana Counsel for the
Company

1. Based solely upon certificates of existence and good standing issued by the Louisiana
Secretary of State, (a) Louisiana-I Gaming, a Louisiana Partnership in Commendam, is a Louisiana
partnership in commendam that is validly existing under the laws of Louisiana (the concept of good
standing is not applicable to a partnership in Louisiana), (b) PNK (Baton Rouge) Partnership is a
Louisiana partnership that is validly existing under the laws of Louisiana (the concept of good
standing is not applicable to a partnership in Louisiana), (c) PNK (Bossier City), Inc. is a
corporation that is validly existing under the laws of Louisiana and is in good standing with the
Louisiana Secretary of State, (d) PNK (Lake Charles), L.L.C. is a limited liability company that is
validly existing under the laws of Louisiana and is in good standing with the Louisiana Secretary
of State, and (e) PNK (SCB), L.L.C. is a limited liability company that is validly existing under
the laws of Louisiana and is in good standing with the Louisiana Secretary of State. Each of the
Louisiana Guarantors has all requisite corporate, partnership or limited liability company (as
applicable) power and authority to conduct its business and to own or lease its properties as
described in the Pricing Disclosure Package and the Offering Memorandum, and to enter into and
perform its obligations under the Operative Documents to which it is a party.

2. Each of the Operative Documents to which each Louisiana Guarantor is a party has been duly
authorized by such Louisiana Guarantor, and each of the Operative Documents to which each Louisiana
Guarantor is a party, other than the Exchange Guarantees, has been executed and delivered by such
Louisiana Guarantor.

3. The issuance and sale of the Notes and the Exchange Notes by the Company and the Guarantees
and the Exchange Guarantees by the Louisiana Guarantors, the execution and delivery by the Company
and the Louisiana Guarantors of the Operative Documents to which they are parties, and the
consummation of the transactions contemplated by the Operative Documents do not violate any
provision of such Louisiana Guarantor’s certificate or articles of incorporation or bylaws,
partnership agreement, articles of organization or operating agreement, or other formation and
organization documents (as applicable) in effect on the date of this legal opinion, and no such
action by the Company or the Louisiana Guarantors will result in any violation of any applicable
Louisiana law in effect as of the date of this opinion letter which in our experience is
customarily applicable to transactions of the type contemplated by the Operative Documents (other
than state securities or blue sky laws as to which we express no opinion and have assumed for
purposes of this paragraph compliance therewith).

 

EXHIBIT B-4-1

 

4. The statements in (a) the Pricing Disclosure Package and the Offering Memorandum under the
captions (i) “Risk Factors — Risks Related to our Business — Our industry is highly regulated,
which makes us dependent on obtaining and maintaining gaming licenses and subjects us to
potentially significant fines and penalties” and (ii) “Government Regulations and Gaming Issues,”
and in (b) Exhibit 99.1 (relating to Government Regulation and Gaming
Issues) of the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2009
which is incorporated by reference in the Pricing Disclosure Package and the Offering Memorandum,
(except for financial and operating data included therein, as to which we express no opinion),
insofar as such statements constitute summaries of the laws and regulations of the State of
Louisiana, including gaming laws and regulations, are correct in all material respects.

5. No consent or filing based on law or legal requirements in the State of Louisiana as in
effect on the date of this legal opinion (and as in our experience is customarily applicable to
transactions of this kind) is required for the execution, delivery and performance by the Company
or any Louisiana Guarantor of the Operative Documents to which it is a party and the consummation
of the transactions contemplated by the Operative Documents, or the offering, issuance and sale of
the Notes, the Exchange Notes, the Guarantees and the Exchange Guarantees to the Initial
Purchasers, except (a) such as have been obtained and are in full force and effect as of the date
of this legal opinion, (b) as set forth in the Pricing Disclosure Package and the Offering
Memorandum, (c) as otherwise described in this legal opinion with respect to post Closing Date
notices and filings, and (d) as may be required under state securities or “Blue Sky” laws and
regulations (as to which we express no opinion).

6. To our knowledge, without investigation or inquiry, other than as set forth in the Pricing
Disclosure Package and the Offering Memorandum, there are no legal or governmental proceedings
pending or threatened in Louisiana against the Company or any of the Louisiana Guarantors, which
are likely to result, individually or in the aggregate, in a Material Adverse Effect.

 

EXHIBIT B-4-2

 

EXHIBIT B-5

Form of Opinion of Briol & Associates, PLLC, Minnesota Counsel for the Company

1. Casino Magic Corp. (the “Minnesota Guarantor”) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Minnesota, with full corporate power
and authority under Minnesota law to conduct its business as described in the Officer’s
Certificate, a copy of which is attached hereto as Exhibit 1.

2. Based solely on the Officer’s Certificate, all issued and outstanding shares of capital
stock of the Minnesota Guarantor have been duly authorized and are validly issued, fully paid and
non-assessable. Based solely on said Officer’s Certificate, none of the outstanding shares of
capital stock of the Minnesota Guarantor was issued in violation of statutory preemptive or, to our
knowledge, non-statutory preemptive or other similar rights of any security holder.

3. The Minnesota Guarantor has the full right, power and authority to execute, deliver and
perform its obligations under the Purchase Agreement, the Indenture, the Registration Rights
Agreement, its Guarantee and its Exchange Guarantee (the Guarantee and the Exchange Guarantee are
collectively referred to as the “Minnesota Guarantees”) (collectively for purposes of this opinion,
the “Operative Documents”) and to consummate the transactions contemplated thereby including,
without limitation, the full right, power and authority to issue and deliver the Minnesota
Guarantees pursuant to the Indenture.

4. Each of the Operative Documents (including the Minnesota Guarantees) has been duly and
validly authorized, executed and delivered by the Minnesota Guarantor.

5. The issuance and sale of the Notes and the Exchange Notes of the Company and the issuance
of the Minnesota Guarantees by the Minnesota Guarantor, the execution and delivery by the Minnesota
Guarantor of the Operative Documents, and the consummation of the transactions contemplated by
Operative Documents, the Pricing Disclosure Package and the Offering Memorandum (collectively, for
the purposes of such opinion, the “Transaction Documents”) by the Minnesota Guarantor do not, (a)
contravene or result in a breach or violation of the Articles of Incorporation or Bylaws of the
Minnesota Guarantor, (b) to our knowledge, contravene or violate any judgment, decree or order of
any Minnesota governmental authority having jurisdiction over the Minnesota Guarantor, (c)
contravene or violate any applicable Minnesota law (except that we express no opinion as to the
requirements of the securities laws or the Blue Sky Laws of the State of Minnesota) or (d) conflict
with or result in a breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Minnesota Guarantor pursuant to, any indenture, mortgage, deed of trust, loan agreement or any
other agreement, instrument, franchise, license or permit known to such counsel to which the
Minnesota Guarantor is a party or by which the Minnesota Guarantor or its properties or assets may
be bound (except that we express no opinion as to the requirements of the securities laws or the Blue Sky Laws of the
State of Minnesota).

 

EXHIBIT B-5-1

 

6. No authorization, approval, consent or order of any Minnesota court or governmental
authority or agency is required for the execution, delivery and performance by the Company and the
Minnesota Guarantor of the Transaction Documents, the consummation of the transactions contemplated
by the Transaction Documents or otherwise in connection with the offering, issuance or sale of the
Notes, the Exchange Notes and the Minnesota Guarantees to the Initial Purchasers, except such as
have been obtained and, to our knowledge, are in full force and effect at the Closing Date;
notwithstanding the foregoing, no opinion is rendered as to the requirements of the securities laws
or the Blue Sky Laws of the State of Minnesota.

7. The Minnesota Guarantor is not in violation of its charter or by-laws and, based solely on
the Officer’s Certificate attached hereto as Exhibit 1, the Minnesota Guarantor is not in default
in the performance of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is material to the Minnesota
Guarantor to which the Minnesota Guarantor is a party or by which any of its property is bound
(except that such counsel expresses no opinion as to the requirements of the securities laws or the
Blue Sky Laws of the State of Minnesota).

8. We know of no material legal or governmental actions, suits or proceedings pending or
threatened against the Minnesota Guarantor which are required to be disclosed in the Pricing
Disclosure Package and the Offering Memorandum. To our knowledge, other than as set forth in the
Pricing Disclosure Package and the Offering Memorandum, there are no legal or governmental
proceedings pending to which the Minnesota Guarantor is a party or of which any property of the
Minnesota Guarantor is the subject which are likely to result, individually or in the aggregate, in
a Material Adverse Effect; and, other than as set forth in the Pricing Disclosure Package and the
Offering Memorandum, no such proceedings have been overtly threatened in writing by governmental
authorities or by others.

 

EXHIBIT B-5-2

 

EXHIBIT B-6

Form of Opinion of Lathrop & Gage LLP Missouri Counsel for the Company

1. St. Louis Casino Corp. has been duly incorporated and is validly existing as a corporation
in good standing under the laws of Missouri, with full corporate power and authority under Missouri
law to own its properties and conduct its business as described in the Offering Memorandum and,
based upon the Officer’s Certificate, is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which requires such qualification wherein
it owns or leases material properties or conducts material business.

2. President Riverboat Casino-Missouri, Inc. has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Missouri, with full corporate power
and authority under Missouri law to own its properties and conduct its business as described in the
Offering Memorandum and, based upon the Officer’s Certificate, is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material properties or conducts material business.

3. PNK (River City), LLC has been duly organized and is validly existing as a limited
liability company in good standing under the laws of Missouri, with full company power and
authority under Missouri law to own its properties and conduct its business as described in the
Offering Memorandum and, based upon the Officer’s Certificate, is duly qualified to do business as
a foreign entity and is in good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts material business.

4. Casino One Corporation is duly qualified and in good standing as a foreign corporation
under the laws of Missouri.

5. Based solely upon the Officer’s Certificate, (a) all of the issued and outstanding
ownership interests of St. Louis Casino Corp. have been duly authorized and validly issued and are
fully paid and nonassessable; (b) all outstanding ownership interests of St. Louis Casino Corp. are
owned directly by the Company’s wholly-owned direct subsidiary, Casino Magic Corp., a Minnesota
corporation; and (c) none of the outstanding ownership interests of St. Louis Casino Corp. were
issued in violation of any preemptive rights provided by Missouri law or the articles of
incorporation of St. Louis Casino Corp.

6. Based solely upon the Officer’s Certificate, (a) all of the issued and outstanding
ownership interests of President Riverboat Casino-Missouri, Inc. have been duly authorized and
validly issued and are fully paid and nonassessable; (b) all outstanding ownership interests of
President Riverboat Casino-Missouri, Inc. are owned directly by Pinnacle Entertainment, Inc., a
Delaware corporation; and (c) none of the outstanding ownership interests of President Riverboat
Casino-Missouri, Inc. were issued in violation of any preemptive rights provided by Missouri law or
the articles of incorporation of President Riverboat Casino-Missouri, Inc.

 

EXHIBIT B-6-1

 

7. Based solely upon the Officer’s Certificate, (a) all of the issued and outstanding
ownership interests of PNK (River City), LLC have been duly authorized and validly issued and are
fully paid and nonassessable; (b) all outstanding ownership interests of PNK (River City), LLC are
owned directly by Pinnacle Entertainment, Inc., a Delaware corporation; and (c) none of the
outstanding ownership interests of PNK (River City), LLC were issued in violation of any preemptive
rights provided by Missouri law or the articles of organization of PNK (River City), LLC.

8. Each of the Missouri Guarantors has the full right, power and authority to execute, deliver
and perform its obligations, if any, under the Purchase Agreement, the Indenture, the Registration
Rights Agreement, the Notation of Guaranty (the Guarantee executed and delivered by the Missouri
Guarantors is referred to as the “Missouri Guarantee”) (collectively for the purposes of this
opinion letter, the “Operative Documents”) and the Exchange Guarantee and to consummate the
transactions contemplated thereby including, without limitation, the full right, power and
authority to execute and deliver the Missouri Guarantee pursuant to the Indenture.

9. Each of the Operative Documents to which any Missouri Guarantor is a party (including the
Missouri Guarantee) has been duly and validly authorized, executed and delivered by such Missouri
Guarantor.

10. The execution and delivery by each of the Missouri Guarantors of the Operative Documents,
including the Missouri Guarantee, to which it is a party, and the consummation of the transactions
contemplated by such Operative Documents do not violate any provision of such Missouri Guarantor’s
certificate or articles of incorporation or bylaws, partnership agreement, articles of
organization or operating agreement, or other formation and organization documents (as applicable)
in effect on the Closing Date, and no such action by any Missouri Guarantor will result in any
violation of any applicable Missouri law in effect as of the date of our opinion which in our
experience is customarily applicable to transactions of the type contemplated by the Operative
Documents (other than state securities or “Blue Sky” laws as to which we express no opinion and
compliance with which we have assumed for purposes of this paragraph).

11. We know of no material legal or governmental actions, suits or proceedings pending or
overtly threatened in writing against any Missouri Guarantor which are required to be disclosed in
the Offering Memorandum, except as set forth in the Offering Memorandum. To our knowledge, other
than as set forth in the Offering Memorandum, there are no legal or governmental proceedings
pending to which any Missouri Guarantor is a party or of which any property of any Missouri
Guarantor is the subject which are likely to result, individually or in the aggregate, in a
Material Adverse Effect; and, other than as set forth in the Offering Memorandum, no such
proceedings have been overtly threatened in writing by governmental authorities or by others.

12. The statements contained or incorporated by reference in the Offering Memorandum under the
caption “Risk Factors—Risks related to our business” and in Exhibit 99.1 under the caption
"Government Regulation and Gaming Issues—Missouri”, which is
incorporated by reference in the Pricing Disclosure Package and the Offering Memorandum (except for
any financial and operating data included therein, as to which we express no opinion), have been
reviewed by us and to the extent such statements constitute summaries of the statutes, laws and
applicable regulations of the State of Missouri regarding gaming, they are accurate and correct in
all material respects and fairly summarize the information and matters therein described.

 

EXHIBIT B-6-2

 

EXHIBIT B-7

FORM OF OPINION OF SILLS CUMMIS & GROSS P.C., NEW JERSEY COUNSEL
FOR THE COMPANY

1. Based solely upon a certificate dated May
 _____, 2010 of the Treasurer of the State of New
Jersey, the Company is registered and in good standing as a foreign corporation under the laws of
the State of New Jersey. Based solely upon certificates dated May
 _____, 2010 of the Treasurer of
the State of New Jersey, each of Mitre Associates LLC and PSW Properties, LLC is registered and in
good standing as a foreign limited liability company under the laws of the State of New Jersey.

2. Based solely upon certificates dated May
 _____, 2010 of the Treasurer of the State of New
Jersey, each of ACE Gaming, LLC and PNK Development 13, LLC (collectively, the “New Jersey
Subsidiaries") is a limited liability company existing and in good standing under the laws of the
State of New Jersey.

3. The statements contained in the Preliminary Offering Memorandum and the Offering Memorandum
under the caption “Government Regulations and Gaming Issues” and in Exhibit 99.1 to the Company’s
Form 10-K for the year ended December 31, 2009 under the caption “Government Regulations and Gaming
Issues — New Jersey,” to the extent that such statements deal with New Jersey regulatory matters,
are accurate in all material respects.

4. Based solely upon our review of the operating agreement and the certificate of formation of
each New Jersey Subsidiary and the New Jersey Limited Liability Company Act, and without
independent investigation, each New Jersey Subsidiary has the limited liability company power and
authority to execute and deliver the Transaction Documents to which it is a party and to perform
its obligations thereunder, including the limited liability power and authority to issue, sell and
deliver the New Jersey Guarantee under the Indenture.

5. Based solely upon the Officers’ Certificates and our review of the Written Consent and the
operating agreement and certificate of formation of each New Jersey Subsidiary and the New Jersey
Limited Liability Company Act, and without independent investigation, each of the Transaction
Documents to which each of the New Jersey Subsidiaries is a party has been duly authorized and each
of the Transaction Documents to which each of the New Jersey Subsidiaries is a party, other than
the Exchange Guarantees, has been executed and delivered by such entity.

6. Solely with respect to N.J.S.A. 5:12-1 et seq. and the regulations promulgated pursuant
thereto (collectively, the “New Jersey Gaming Laws”), no authorization, approval, consent or
license issued by the “Casino Control Commission” or the “Division of Gaming Enforcement” (as such
governmental authorities are referenced in the New Jersey Gaming Laws, hereinafter referred to as
the “New Jersey Regulators”) is necessary in connection with the issuance of the Notes or the
Exchange Notes or for the due authorization, execution and delivery by the Company or any Guarantor
of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated thereby, except such as have been obtained and
are in full force and effect.

 

EXHIBIT B-7-1

 

7. The execution and delivery of the Transaction Documents by the Company and the New Jersey
Subsidiaries and the consummation of the transactions contemplated thereby will not conflict with
or violate (a) any New Jersey Gaming Laws, (b) any order or decree of the New Jersey Regulators of
which we have knowledge as to which the Company or any New Jersey Subsidiary is bound or (c) the
operating agreement or certificate of formation of either New Jersey Subsidiary.

8. Except for ordinary course and ongoing investigations that are part of the application and
licensing process for the Company, and except as may be described in the Offering Memorandum and
the Form 10-K, we have no knowledge of any material legal or governmental proceedings in the State
of New Jersey to which the Company or either New Jersey Subsidiary is a named party wherein a claim
of a violation of the New Jersey Gaming Laws is asserted.

9. Based solely upon the Officers’ Certificates and our review of the operating agreement of
each New Jersey Subsidiary, and without independent investigation, (a) all of the outstanding
membership interests of ACE Gaming, LLC are owned of record by PNK Development 13, LLC, and (b) all
of the outstanding membership interests of PNK Development 13, LLC are owned of record by Biloxi
Casino Corp.

 

EXHIBIT B-7-2

 

EXHIBIT B-8

Form of Opinion of Watkins Ludlam Winter & Stennis, P.A., Mississippi Counsel for the
Company

1. Based solely on the Good Standing Certificates, each of the Mississippi Guarantors is
validly existing as a corporation in good standing under the laws of the State of Mississippi. BCC
has the requisite corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Officer Certificates. Casino One has the requisite
corporate power and authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum.

2. Each of the Mississippi Guarantors has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Offering Documents and to consummate the
Transactions, including, without limitation, the requisite corporate power and authority to
execute, issue and deliver the Mississippi Guarantees pursuant to the Indenture.

3. Each of the Offering Documents (including the Mississippi Guarantees) to which the
Mississippi Guarantors is a party has been duly and validly authorized, executed and delivered by
each of the Mississippi Guarantors.

4. The offer, sale or delivery of the Notes and the Exchange Notes of the Company and the
Mississippi Guarantees by the Mississippi Guarantors, and the execution, delivery or performance by
the Mississippi Guarantors of the Offering Documents, and the consummation of the Transactions by
the Mississippi Guarantors do not, (a) contravene or result in a breach or violation of the
Organizational Documents of the Mississippi Guarantors, (b) to our knowledge, contravene or violate
any judgment, decree or order of any Mississippi governmental authority having jurisdiction over
the Mississippi Guarantors, or (c) contravene or violate any applicable Mississippi law in effect
as of the date of our opinion and which in our experience customarily is applicable to transactions
of the type contemplated by the Transaction Documents (except that we express no opinion as to the
requirements of the securities laws or the Blue Sky Laws of the State of Mississippi).

5. No authorization, approval, consent or order of any Mississippi court or governmental or
regulatory authority of the State of Mississippi is required for the execution, delivery and
performance by the Company and the Mississippi Guarantors of the Offering Documents, the
consummation of the Transactions or otherwise in connection with the offering, issuance or sale of
the Notes and the Mississippi Guarantees to the Initial Purchasers; notwithstanding the foregoing,
we express no opinion as to the requirements of the securities laws or the Blue Sky Laws of the
State of Mississippi.

6. With the Company’s consent, based solely upon an inquiry of those attorneys currently with
the firm who have rendered legal services to the Company and the Mississippi Guarantors since
January 1, 2008, we confirm that we are not currently representing the
Company or the Mississippi Guarantors in any pending litigation, except for C&B Services, Inc.
v. RG Restoration, Inc. and Pinnacle Entertainment, Inc., Civ. Action No. A2402-06-184, and RG
America, Inc. and RG Restorations, Inc. v. Pinnacle Entertainment, Inc., Casino-Magic Biloxi and
Biloxi Casino Corp. and John Does 1-50, Civ. Action No. A2402-06-185, which have been consolidated
and are pending in the Circuit Court of Harrison County, Mississippi, in the Second Judicial
District.

 

EXHIBIT B-8-1exv10w25

Exhibit 10.25

	 	 	 	 	 
	 
	 	
	 	CONFIDENTIAL

DO NOT COPY

SEPARATION PAY AGREEMENT

 

By and Between

WRIGHT MEDICAL TECHNOLOGY, INC.

and

WILLIAM L. GRIFFIN

 

April 1, 2009

 

 

	 	 	 

	Wright Medical Technology, Inc.
	 	 
	Separation Pay Agreement

	 	CONFIDENTIAL
	 

	 	DO NOT COPY

SEPARATION PAY AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 

	1. Definitions
	 	 	1	 
	2. Sarbanes-Oxley Act of 2002
	 	 	5	 
	3. Notice and Date of Termination
	 	 	6	 
	4. Termination from the Board and any Offices Held
	 	 	6	 
	5. Severance Benefits upon Involuntary Termination Prior to Change in Control
	 	 	6	 
	6. Severance Benefits upon Involuntary Termination in Connection with and after a Change in
Control
	 	 	8	 
	7. Severance Benefits upon Termination by the Company for Cause or by the Executive Other than
for Good Reason
	 	 	9	 
	8. Severance Benefits upon Termination due to Death
	 	 	10	 
	9. Adjustments to Maximize After-Tax Benefits
	 	 	10	 
	10. Nonexclusivity of Rights
	 	 	10	 
	11. Full Settlement; Mitigation
	 	 	11	 
	12. Representations
	 	 	11	 
	13. Executive’s Covenants
	 	 	11	 
	14. Specific Remedies for Executive Breach of the Covenants as outlined in Section 13
	 	 	13	 
	15. Potential Impact of Accounting Restatements on Certain Bonuses and Profits
	 	 	14	 
	16. Successors
	 	 	14	 
	17. Administration Prior to Change in Control
	 	 	15	 
	18. Delayed Commencement of Certain Payments
	 	 	15	 
	19. Miscellaneous
	 	 	15	 
	EXHIBIT A
	 	 	18	 
	EXHIBIT B
	 	 	21	 

 

 

	 	 	 

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SEPARATION PAY AGREEMENT

     THIS SEPARATION PAY AGREEMENT (“Agreement”), dated as of April 1, 2009 (the
“Effective Date”) is made by and between WRIGHT MEDICAL TECHNOLOGY, INC., a corporation
organized and existing under the laws of the State of Delaware with its principal place of business
at 5677 Airline Road, Arlington, Tennessee 38002 (the “Company”), and WILLIAM L. GRIFFIN
(the “Executive”).

     WHEREAS, the Company or its Affiliate (collectively referred to as the “Company”)
employs the Executive as Senior Vice President, Global Operations and recognizes the Executive as
performing key functions for the success of the Company; and

     WHEREAS, the Company has determined that it is in the best interests of the Company to
institute formalized separation arrangements for certain executives of the Company, including
Executive, in the event of a separation of employment; and

     WHEREAS, the Executive desires to enter into this Agreement with Company;

     NOW, THEREFORE, based on the foregoing, and for and in consideration of the mutual covenants
contained in this Agreement, the Company and the Executive hereby agree as follows:

     1. Definitions. For the purposes of this Agreement, the following capitalized terms
have the meanings set forth below:

          1.1. “ Accounting Firm” has the meaning assigned thereto in Section 9.4 hereof.

          1.2. “Act” has the meaning assigned in Section 2 hereof.

          1.3. “Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.

          1.4. “Buyer” has the meaning assigned thereto in Section 19.11 hereof.

          1.5. “Cause” means:

               1.5.1. Prior to a Change in Control, (i) the willful failure by the Executive to substantially
perform the Executive’s duties with the Company (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness) as determined by the Board, which failure
amounts to an intentional and extended neglect of the Executive’s duties, (ii) continued,
documented poor performance on the part of the Executive following a reasonably sufficient time for
the Executive to improve, (iii) the determination by the Board, in its sole discretion, that the
Executive has engaged or is about to engage in conduct materially injurious to the Company, (iv)
the Executive’s conviction of or entering of a guilty or no contest plea to a felony charge (or
equivalent thereof) in any jurisdiction; and/or (v) the Executive’s participation in activities
proscribed in Sections 13.1, 13.3, and 13.4 or the material breach of any other covenants contained
herein. For the purposes of clause (i) of this definition, no act, or failure to act, on the
Executive’s part shall be deemed to be “willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive’s act, or failure to
act, was in the best interests of the Company.

               1.5.2. From and after a Change in Control, (i) the willful failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any such failure
resulting from the Executive’s incapacity due to physical or mental illness) as determined by the
Board, which failure amounts to an intentional and extended neglect of the Executive’s duties, (ii) the
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Board, in its sole discretion, that the Executive has engaged or is about to
engage in conduct materially injurious to the Company, (iii) the Executive’s conviction of or
entering of a guilty or no contest plea to a felony charge (or equivalent thereof) in any
jurisdiction; and/or (iv) the Executive’s participation in activities proscribed in Sections 13.1,
13.3, and 13.4 or the material breach of any other covenants contained herein. For the purposes of
clause (i) of this definition, no act, or failure to act, on the Executive’s part shall be deemed
to “willful” unless done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive’s act, or failure to act, was in the best interests of the
Company. Notwithstanding the foregoing, the Executive shall not be deemed terminated for Cause
pursuant to clause (i) of this definition unless and until the Executive shall have been provided
with reasonable notice of and, if possible, a reasonable opportunity to cure the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment for Cause.

          1.6. “Change in Control” shall be deemed to have occurred on or after the Effective
Date of any of the following:

               1.6.1. the acquisition by any Person or Persons acting as a group of capital stock of Wright
Medical Group, Inc. (“WMG”), a Delaware corporation and the sole stockholder of the
Company, which when added to any capital stock of WMG already owned by the Person, constitutes more
than fifty percent (50%) of either (i) the total fair market value of the outstanding capital stock
of WMG, or (ii) the total voting power of the outstanding capital stock of WMG; provided, however,
that a Change in Control will not be deemed to have occurred when any Person who owns more than
fifty percent (50%) of the total fair market value or the total voting power of the outstanding
capital stock of WMG as of the date of this Agreement acquires any additional capital stock of WMG;
and provided further, that an increase in the percentage of the outstanding capital stock of WMG
owned by a Person as a result of a transaction in which WMG acquires its capital stock in exchange
for property will be treated as an acquisition of such capital stock by such Person; or

               1.6.2. the acquisition by a Person, in a single transaction or a series of transactions within
a twelve (12) month period, of capital stock of WMG representing not less than thirty-five percent
(35%) of the total voting power of the outstanding capital stock of WMG; or

               1.6.3. the acquisition by a Person, in a single transaction or a series of transactions within
a twelve (12) month period, of consolidated assets of WMG which have a total gross fair market
value of not less than forty percent (40%) of the total gross fair market value of all the
consolidated assets of WMG immediately prior to such acquisition(s), in each case without regard to
any liabilities associated with such assets; provided, however, that a Change in Control will not
be deemed to have occurred when such assets are acquired by:

                    1.6.3.1. an entity of which WMG owns, directly or indirectly, fifty percent (50%) or more of
the total fair market value or the total voting power of the outstanding capital stock;

                    1.6.3.2. a Person which owns, directly or indirectly, fifty percent (50%) or more of the total
fair market value or the total voting power of the outstanding capital stock of WMG;

                    1.6.3.3. an entity of which a Person described in clause ii above owns, directly or
indirectly, fifty percent (50%) or more of the total fair market value or the total voting power of
the outstanding capital stock;

                    1.6.3.4. an entity which is controlled by the stockholders of WMG immediately after the
transfer; or

                    1.6.3.5. a stockholder of WMG in exchange for or with respect to capital stock of WMG.

 

 

	 	 	 

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          1.6.4 a majority of the members of the WMG Board of Directors (the “Board”) is
replaced in any twelve (12) month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of the appointment or election; or

          1.6.5 there is consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation or partnership which results in a forty
percent (40%) or more of the Company’s assets to be transferred under the control of a different
legal entity.

          1.7. “Change in Control Date” means the date on which a Change in Control occurs.

          1.8. “Code” means the Internal Revenue Code of 1986, as amended and the Treasury
Regulations promulgated thereunder, as in effect from time to time.

          1.9. “Compensation Committee” means the compensation committee of the Board.

          1.10. “Competitive Business” means the manufacturing, supplying, producing, selling,
distributing, marketing or providing for sale of any product, device or instrument manufactured or
sold by the Company or any of its Affiliates or subsidiaries, in each case as of the Executive’s
Date of Termination.

          1.11. “Confidential Information” means non-public privileged or confidential
information and trade secrets concerning the operations, future plans and methods of doing
business.

          1.12. “Date of Termination” has the meaning assigned thereto in Section 3.2 hereof.

          1.13. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
applicable rulings and regulations thereunder.

          1.14. “Excise Tax” has the meaning assigned thereto under Section 9 hereof.

          1.15. “Good Reason” means:

               1.15.1. Prior to a Change in Control, the occurrence of any of the following without the prior
written consent of the Executive, unless such act or failure to act is corrected prior to the Date
of Termination specified in the Notice of Termination (as discussed in Section 3 hereof):

                    1.15.1.1. the assignment to the Executive of any duties materially inconsistent with the range
of duties and responsibilities appropriate to a senior executive within the Company, such range
determined by reference to past, current and reasonable practices within the Company;

                    1.15.1.2. a material reduction in the Executive’s overall standing and responsibilities within
the Company, but not including a mere title change or a transfer within the Company which does not
singly or together adversely affect the Executive’s overall status within the Company, provided
however, that no change in reporting relationship resulting from organizational realignment due to
the addition of a Chief Operating Officer or Chief Commercial Officer shall be included in this
definition of Good Reason;

                    1.15.1.3. a material reduction by the Company in the Executive’s aggregate annualized
compensation and benefits opportunities, except for across-the-board reductions or modifications of
benefit plans similarly affecting all similarly situated executives of comparable rank with the
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                    1.15.1.4. the failure by the Company to pay to the Executive any portion of the Executive’s
current compensation and benefits under any program with the Company within thirty (30) days of the
date such compensation and/or benefits are due;

                    1.15.1.5. any purported termination of the Executive’s employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of Section 3 hereof; for the
purposes of this Agreement, no such purported termination shall be effective;

                    1.15.1.6. the failure by the Company to obtain a satisfactory agreement from any successor of
the Company requiring such successor to assume and agree to perform the Company’s obligations under
this Agreement, as contemplated in Section 16.3 hereof;

                    1.15.1.7. the failure of the Company to provide indemnification and D&O insurance protection
as required in Section 10 of this Agreement; or

                    1.15.1.8. the failure by the Company to comply with any material provision of this Agreement.

               1.15.2. From and after a Change in Control, the occurrence of any of the following without the
prior written consent from the Executive, unless such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination (as discussed in Section 3 hereof):

                    1.15.2.1. a material and adverse change in the Executive’s title, authority as an executive
officer, duties, responsibilities or reporting lines as in effect immediately prior to the Change
in Control;

                    1.15.2.2. a material reduction in the Executive’s aggregate annualized compensation
opportunities or the failure to continue in effect any material benefit plan in which the Executive
participates immediately prior to the Change in Control, unless an equitable arrangement, agreeable
to the Executive, has been made with respect to such plan as replacement or the reduction in
participation levels of such replacement plans of the Executive;

                    1.15.2.3. the relocation of the Executive’s principal place of employment immediately prior to
the Change in Control Date (the “Principal Location”) to a location which is more than
forty (40) miles from the Principal Location.

               1.15.3. Notwithstanding any of the foregoing, placing the Executive on a paid leave for up to
ninety (90) days pending a determination of whether there is a basis to terminate the Executive for
Cause shall not constitute a Good Reason.

               1.15.4. Following a Change in Control, the Executive’s determination that an act or failure to
act constitutes Good Reason shall be presumed to be valid unless the Company can provide
incontrovertible evidence to the contrary. The Executive’s right to terminate the Executive’s
employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or
mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting Good Reason hereunder.

          1.16. “Incentive Compensation Awards” means awards granted under Incentive
Compensation Plans providing the Executive with the opportunity to earn, on a year-by-year or a
multi-year basis, annual and long-term incentive compensation.

          1.17. “Incentive Compensation Plans” means annual incentive compensation plans and
long-term incentive compensation plans of the Company, which long-term incentive compensation plans
may include plans offering stock options, restricted stock and other forms of long-tern incentive
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          1.18. “Involuntary Termination” means (a) a termination of employment by the Company
for other than for Cause or death, or (b) the Executive’s resignation of employment for Good
Reason; provided, however, that except as provided in the last paragraph of Section 6 hereof, a
termination of the Executive’s employment by reason of the Executive’s retirement on or after age
[65] prior to a Change in Control shall not constitute an Involuntary Termination hereunder. In
addition, an Involuntary Termination that would cause an amount to be paid to an Executive which is
non-qualified deferred compensation subject to Code Section 409A, shall also mean an Executive’s
“separation from service” within the meaning of Section 409A of the Code.

          1.19. “Notice of Termination” has the meaning assigned thereto under Section 3.1
hereof.

          1.20. “Payment” has the meaning assigned thereto in Section 9 hereof.

          1.21. “Person” has the meaning set forth in Section 3(a)(9) of the Exchange Act, as
modified and used in sections 13(d) and 14(d) thereof, except that the term shall not include (i)
the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially the same proportions as their
ownership of the stock in the Company, or (v) a person or group as used in Rule 13d-1(b)
promulgated under the Exchange Act.

          1.22. “Post-Change In Control Accrued Obligations” has the meaning assigned thereto in
Section 6.3.1 hereof.

          1.23. “Post-Change In Control Severance Payment” has the meaning assigned thereto in
Section 6 hereof.

          1.24. “Pre-Change In Control Accrued Obligations” has the meaning assigned thereto in
Section 5.3.1 hereof.

          1.25. “Pre-Change In Control Severance Payment” has the meaning assigned thereto in
Section 5 hereof.

          1.26. “Principal Location” has the meaning assigned thereto in Section 1.15.2.3 above.

          1.27. “Release” has the meaning assigned thereto in Section 13.5 hereof.

          1.28. “Total Number of Months” has the meaning assigned thereto in Sections 5 and 6
hereof.

          1.29. “Underpayment” has the meaning assigned thereto in Section 9.2 hereof.

     2. Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the contrary, if
the Company determines, in its good faith judgment, that any provision of this Agreement is likely
to be interpreted as a personal loan prohibited by the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder (the “Act”), then such provision shall be modified as
necessary or appropriate so as to not violate the Act; and if this cannot be accomplished, then the
Company shall use its best efforts to provide the Executive with similar, but lawful, substitute
benefit(s) at a cost to the Company not to significantly exceed the amount the Company would have
otherwise paid to provide such benefit(s) to the Executive. In addition, if the Executive is
required to forfeit or to make any repayment of any compensation or benefit(s) to the Company under
the Act or any other law, such forfeiture or repayment shall not constitute Good Reason.

 

 

	 	 	 

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     3. Notice and Date of Termination

          3.1. Any termination of the Executive’s employment by the Company or by the Executive shall be
communicated by a written notice of termination to the other party (the “Notice of
Termination”). Where applicable, the Notice of Termination shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. Unless the Board determines otherwise, a Notice of Termination
by the Executive alleging a termination for Good Reason must be made within 90 days of the initial
instance, or the initial instance which should reasonably have been known to the Executive, of an
act or failure to act that the Executive alleges to constitute Good Reason.

          3.2. The date of the Executive’s termination of employment with the Company (the “Date of
Termination”) shall be determined as follows:

               3.2.1. If due to Company terminating the Executive’s employment, either with or without Cause,
the Date of Termination shall be the date specified in the Notice of Termination; if for other than
Cause, the Date of Termination shall not be less than two (2) weeks from the date such Notice of
Termination is given, unless the Company elects to pay the Executive for that period in lieu of
notice.

               3.2.2. If due to death, the Date of Termination is the date of death.

               3.2.3. If the basis of the Executive’s Involuntary Termination is the Executive’s resignation
for Good Reason, the Date of Termination shall be determined by the Company, but shall not be less
than two (2) weeks nor more than eight (8) weeks form the date such Notice of Termination is given.

     4. Termination from the Board and any Offices Held. Upon termination of the
Executive’s employment for any reason, the Executive agrees the Executive’s membership on the Board
of the Company, the board of directors of any of the Company’s Affiliates, any committees of the
Board, any committees of the board of directors of any of the Company’s Affiliates and any and all
offices held, if applicable, shall be automatically terminated. Executive hereby agrees to
cooperate with the Company and execute any documents reasonably required by the Company or
competent authorities to effect this provision.

     5. Severance Benefits upon Involuntary Termination Prior to Change in Control. Except
as provided in Sections 6 and 17 hereof, in the event of the Involuntary Termination of the
Executive prior to a Change in Control, the Company shall pay to the Executive the following
Pre-Change in Control Severance Payment in the following amounts and manner:

          5.1. The total payment will be equal to the product of twelve (12) months (the “Total
Number of Months”) multiplied by 1.45 times monthly base pay. Provided, however, if the
termination occurs within the first two (2) years of the Executive’s initial employment, the
Total Number of Months shall not be less than eighteen (18) months.

          5.2. The payment will be made as follows: (i) half in a lump sum payable at or within a
reasonable period of time after the Date of Termination and (ii) subject to receipt of an executed
Release that has not been revoked, the remaining half in installments starting six (6) months after
the Date of Termination with a final installment of all remaining amounts to be paid on or before
March 15 of the calendar year following the year in which the Date of Termination occurred. The
amount of each installment payment described in clause (ii) of the preceding sentence will be
determined by dividing half of the total payment by 50% of the Total Number of Months. The final installment will be
equal to the total payment reduced by all the amounts previously paid (i.e., the lump sum payment
and the sum of all the installment payments previously paid). Notwithstanding the provisions of
clause (ii) to the contrary, if the

 

 

	 	 	 

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six month period would cause the installments to begin to be
paid after the March 15 date described in the first sentence of this section 5.2, then no
installments will be paid, and the second payment will be a lump sum equal to half the total
payment and that payment will be paid on or before March 15 of the calendar year following the year
in which the Date of Termination occurred. The installment payments (or the second lump sum
payment, if applicable) are specifically designated as consideration for execution of the Release
required in Section 13 and compliance with Executive’s covenants outlined in Section 13. All
payments will have applicable taxes withheld and any installment payments will be paid at the same
time as the normal Company payroll.

          5.3. In addition to the Pre-Change in Control Severance Payment, the Executive shall be
entitled to receive the following additional benefits:

               5.3.1. Accrued Obligations. The Company shall pay to the Executive a lump sum amount
in cash equal to the sum of (i) the Executive’s annual base salary through the Date of Termination
to the extent not theretofore paid, (ii) an amount equal to any annual cash Incentive Compensation
Awards earned (based on the performance for the most recently completed incentive period, whether
that period is the prior quarter or the prior calendar year), but not yet paid, (iii) an amount
equal to the value of any accrued and/or untaken vacation, if any, and (iv) reimbursement for
unreimbursed business expenses, if any, properly incurred by the Executive in the performance of
the Executive’s duties in accordance with the policies established from time to time by the Board.
(The amounts specified in clauses (i), (ii), (iii) and (iv) shall be hereinafter referred to as the
“Pre-Change in Control Accrued Obligations”.)

               5.3.2. Equity Based Compensation. All equity-based Incentive Compensation Awards
(including, without limitation, stock options, stock appreciation rights, restricted stock awards,
restricted stock units, performance share awards or other related awards) held by the Executive
shall be governed by the terms of the applicable Incentive Compensation Plan and Incentive
Compensation Award agreement, and this Agreement shall have no effect upon them.

               5.3.3. Welfare Benefits. Subject to Section 11 herein, the Executive shall be
eligible for health and dental coverage as provided for under COBRA, using the normal COBRA
administration process of the Company. The Company will pay all costs of these benefits for a
period up to, but not exceeding 18 months. If the Executive accepts employment with another
employer or otherwise is no longer eligible for COBRA coverage, these welfare benefits will cease
to be provided.

               5.3.4. Outplacement Benefits. The Executive shall receive outplacement assistance and
services following the Date of Termination for a period of months equal to the Total Number of
Months. These services will be provided by a national firm whose primary business is outplacement
assistance, selected by the Company. Notwithstanding the above, if the Executive accepts
employment with another employer, these outplacement benefits shall cease on the date of such
acceptance.

               5.3.5. Financial Planning Services. The Executive shall receive financial planning
services for a period of months equal to the Total Number of Months following the Date of
Termination, at a level consistent with the benefits provided under the Company’s financial
planning program for the Executive as in effect immediately prior to the Date of Termination.

               5.3.6. Annual Physical. The Executive may, within the 12 months following the Date of
Termination, receive an annual physical consistent with the physical provided under the Company’s
annual physical program as in effect immediately prior to the Date of Termination.

               5.3.7. General Insurance Benefit. No later than March 15 of the calendar year
following the year in which the Date of Termination occurred, provided Executive has made a request
for the payment described in this section 5.3.7 on such form as the Company may require. Executive
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receive a payment for use in continuation of insurance coverage, such payment to be equal to
the annual supplemental executive insurance benefit provided to the Executive prior to the
Executive’s Date of Termination. The Company will use its best efforts to make this payment at the
time requested.

               5.3.8. Attorney’s Fees in Defense of This Agreement. Notwithstanding any provision in
this Agreement, the Company shall pay all reasonable attorneys’ fees and expenses for the Executive
if the Executive must engage an attorney in order to enforce this Agreement following the
Executive’s Date of Termination. The Company will make payments on at least a quarterly basis
based on billings presented by the Executive from his or her legal counsel.

     6. Severance Benefits upon Involuntary Termination in Connection with and after a Change
in Control. Notwithstanding the provisions of Section 5 above, in the event of the Involuntary
Termination of the Executive within twelve (12) months following a Change in Control, the Company
shall pay to the Executive the following Post-Change in Control Severance Payment in the
following amounts and manner:

          6.1. The total payment will be equal to twelve (12) months multiplied by 1.45 times monthly
base pay. This is the Total Number of Months (the “Total Number of Months”). Provided,
however, if the termination occurs within the first two (2) years of the Executive’s initial
employment, the Total Number of Months shall not be less than eighteen (18) months.

          6.2. The payment will be made as follows: (i) half in a lump sum payable at or within a
reasonable period of time after the Date of Termination and (ii) subject to receipt of an executed
Release that has not been revoked, the remaining half in installments starting six (6) months after
the Date of Termination with a final installment of all remaining amounts to be paid on March 15 of
the calendar year following the year in which the Date of Termination occurred. The amount of each
installment payment described in clause (ii) of the preceding sentence will be determined by
dividing half of the total payment by 50% of the total Number of Months. The final installment
will be equal to the total payment reduced by all the amounts previously paid (i.e., the lump sum
payment and the sum of all the installment payments previously paid). Notwithstanding the
provisions of clause (ii) to the contrary, if the six month period would cause the installments to
begin to be paid after the March 15 date described in the first sentence of this section 6.2, then
no installments will be paid, and the second payment will be a lump sum equal to half the total
payment and that payment will be paid on March 15 of the calendar year following the year in which
the Date of Termination occurred. The installment payments (or the second lump sum payment, if
applicable) are specifically designated as consideration for execution of the Release required in
Section 13 and compliance with Executive’s covenants outlined in Section 13. All payments will
have applicable taxes withheld and any installment payments will be paid at the same time as the
normal Company payroll.

          6.3. In addition to the Post-Change in Control Severance Payment, the Executive shall be
entitled to receive the following additional benefits:

               6.3.1. Accrued Obligations. The Company shall pay to the Executive a lump sum amount
in cash equal to the sum of (i) the Executive’s annual base salary through the Date of Termination
to the extent not theretofore paid, (ii) an amount equal to any annual cash Incentive Compensation
Awards earned (based on most recently completed performance period, whether that period is the
prior quarter or the prior year), but not yet paid, (iii) an amount equal to the value of any
accrued and/or untaken vacation, if any, (iv) reimbursement for unreimbursed business expenses, if
any, properly incurred by the Executive in the performance of the Executive’s duties in accordance
with the policies established from time to time by the Board and (v) an annual incentive payment at
target for the year that includes the Date of Termination, prorated. (The amounts specified in clauses (i),
(ii), (iii), (iv) and (v) shall be hereinafter referred to as the “Post-Change in Control
Accrued Obligations”.)

               6.3.2. Equity Based Compensation. All equity-based Incentive Compensation Awards
(including, without limitation, stock options, stock appreciation rights, restricted stock awards,

 

 

	 	 	 

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restricted stock units, performance share awards or other related awards) held by the Executive
shall be governed by the terms of the applicable Incentive Compensation Plan and Incentive
Compensation Award agreement, and this Agreement shall have no effect upon them.

               6.3.3. Welfare Benefits. Subject to Section 11 herein, the Executive shall be
eligible for health and dental coverage as provided for under COBRA, using the normal COBRA
administration process of the Company. The Company will pay all costs of these benefits for a
period up to, but not exceeding 18 months. If the Executive accepts employment with another
employer or otherwise is no longer eligible for COBRA coverage, these welfare benefits will cease
to be provided.

               6.3.4. Outplacement Benefits. The Executive shall receive outplacement assistance and
services following the Date of Termination for a period of months equal to the Total Number of
Months. These services will be provided by a national firm whose primary business is outplacement
assistance, selected by the Company. Notwithstanding the above, if the Executive accepts
employment with another employer, these outplacement benefits shall cease on the date of such
acceptance.

               6.3.5. Financial Planning Services. The Executive shall receive financial planning
services for a period of months equal to the Total Number of Months following the Date of
Termination, at a level consistent with the benefits provided under the Company’s financial
planning program for the Executive as in effect immediately prior to the Date of Termination.

               6.3.6. Annual Physical. The Executive shall, within the 12 months following the Date
of Termination, receive an annual physical consistent with the physical provided under the
Company’s annual physical program as in effect immediately prior to the Date of Termination.

               6.3.7. General Insurance Benefit. No later than March 15 of the calendar year
following the year in which the Date of Termination occurred, provided Executive has made a request
for the payment described in this section 6.3.7 on such form as the Company may require. Executive
shall receive a payment for use in continuation of insurance coverage, such payment to be equal to
the annual supplemental executive insurance benefit provided to the Executive prior to the
Executive’s Date of Termination. The Company will use its best efforts to make this payment at the
time requested.

               6.3.8. Attorney’s Fees in Defense of This Agreement. Notwithstanding any provision in
this Agreement, the Company shall pay all reasonable attorneys’ fees and expenses for the Executive
if the Executive must engage an attorney in order to enforce this Agreement following the
Executive’s Date of Termination. The Company will make payments on at least a quarterly basis
based on billings presented by the Executive from his or her legal counsel.

          6.4. Notwithstanding anything contained herein, if a Change in Control occurs and the
Executive’s employment with the Company is terminated by reason of Involuntary Termination prior to
the Change in Control Date, and if such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the Change in Control or (ii) otherwise
arose in connection with or in anticipation of the Change in Control, then the Executive shall, in
lieu of the payments described in Section 5 hereof, be entitled to the Post-Change in Control
Severance Payment and the additional benefits described in this Section 6 as if such Involuntary
Termination had occurred within twelve (12) months following the Change in Control.

     7. Severance Benefits upon Termination by the Company for Cause or by the Executive Other
than for Good Reason. If the Executive’s employment shall be terminated for Cause, or if the
Executive terminates employment other than for Good Reason, the Company will have no further
obligations to the Executive under this Agreement other than the Pre-Change in Control Accrued
Obligations and any amounts described in Section 10 hereof.

 

 

	 	 	 

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     8. Severance Benefits upon Termination due to Death. If the Executive’s employment
shall terminate by reason of death, the Company shall pay the Executive’s estate the Post-Change in
Control Accrued Obligations and any amounts or benefits described in Section 10 herein. Such
payments shall be in addition to those rights and benefits to which the Executive’s estate may be
entitled under the relevant Company plans or programs.

     9. Adjustments to Maximize After-Tax Benefits. In the event it shall be determined
that any payment or distribution by the Company or its Affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments required under
this Section 9 ( a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”) , then the Executive’s Unreduced and Reduced Net Benefit
shall be determined and the Payments shall be adjusted in accordance with Section 9.3.

          9.1. For purposes of Section 9.3 the Unreduced Net Benefit shall equal the Payments, less the
amount of federal, state and local income and other taxes (including the excise tax under Code
Section 4999) payable with respect to such benefits. For these purposes, the federal, state, local
and any other taxes shall be calculated at the maximum marginal income tax rates applicable to such
Executive for each year in which the foregoing amounts shall be paid.

          9.2. For purposes of Section 9.3 the Reduced Net Benefit shall equal the amount determined
under Section 9.1 but with the Payments first reduced by an amount such that the present value of
all payments and benefits that the Executive receives or is entitled to receive from the Company
that would constitute “parachute payments” within the meaning of Code Section 280G does not exceed
2.99 times the Executive’s “base amount,” as defined under Code Section 280G. For purposes of
calculating the aggregate present value of such parachute payments, the requirements of Code
Section 280G shall be followed.

          9.3. If the Executive’s Reduced Net Benefit is greater than the Unreduced Net Benefit, then
the amount of the Payments set forth in Section 9.2 of the Agreement shall be reduced to an
aggregate present value amount that does not subject any of the payments to taxation under Code
Section 4999.

          9.4. A nationally recognized accounting firm as may be agreed upon by the Company and the
Executive (the “Accounting Firm”) shall perform any and all calculations required under Code
Section 280G, and shall determine the Executive’s Reduced and Unreduced Net Benefit. Such
determination shall be made within ten (10) business days of the date of a change in control or
ownership as determined under Code Section 280G and such determinations shall be binding on the
Company and the Executive. In the event a reduction of the Payments is to be made pursuant to
Section 9.3, the Executive shall have discretion to determine which and how much of the Payments
shall be eliminated or reduced consistent with the requirements of Section 9.3 and in accordance
with the requirements of Code Section 409A. The Executive shall make such decision no later than
five (5) business days following the determination by the independent accounting firm of the Executive’s Reduced and Unreduced Net
Benefit.

     10. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit plan, program, policy or practice
provided by the Company and for which the Executive may qualify (except with respect to any benefit
to which the Executive has waived the Executive’s rights in writing), including, without
limitation, any and all indemnification arrangements in favor of the Executive (whether under
agreements or under the Company’s charter documents or otherwise), and insurance policies covering
the Executive, nor shall anything herein limit or otherwise affect such rights as the Executive may
have under any other contract or agreement entered into after the Effective Date with the Company.
Amounts which are vested benefits or which the

 

 

	 	 	 

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Executive is otherwise entitled to receive under any benefit, plan, policy, practice or program of, or any contract or agreement entered into with, the
Company shall be payable in accordance with such benefit, plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement. At all times during the
Executive’s employment with the Company and thereafter, the Company shall provide the Executive
with indemnification and director and officer insurance insuring the Executive against insurable
events which occur or have occurred while the Executive was a director or executive officer of the
Company, on terms and conditions that are at least as generous as that then provided to any other
current or former director or executive officer of the Company or any Affiliate.

     11. Full Settlement; Mitigation. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform the obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others, provided that nothing herein shall preclude
the Company from separately pursuing recovery from the Executive based on any such claim. In no
event shall the Executive be obligated to seek other employment or take any other action by way of
mitigation of the amounts (including amounts for damages for breach) payable to the Executive under
any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the
Executive obtains other employment.

     12. Representations. The Executive hereby represents to the Company that the
Executive is legally entitled to enter into this Agreement and to perform the Executive’s
obligations hereunder, and that the Executive has the full right, power and authority, subject to
no rights of any third parties, to grant to the Company the rights contemplated in Section 13.2.

     13. Executive’s Covenants. The Executive hereby agrees to the following:

          13.1. Confidentiality. The Executive recognizes and acknowledges that the Company’s
and its predecessor’s Confidential Information is a valuable, special and unique asset of the
Company’s businesses, access to and knowledge of which are essential to the performance of the
Executive’s duties. Confidential Information shall include trade secrets and includes information
acquired by the Executive in the course and scope of the Executive’s job with the Company,
including information acquired from third parties, that is (i) not generally known or disseminated
outside the Company (such as nonpublic information), (ii) is designated or marked by the Company as
“confidential” or reasonably should be considered confidential or proprietary, or (iii) the Company
indicates through its policies, procedures or other instructions should not be disclosed to anyone
outside the Company. Without limiting the foregoing definitions, some examples of Confidential
Information under this Agreement include (a) matters of a technical nature, such as scientific,
trade or engineering secrets, “know-how”, formulae, secret processes, inventions, and research and
development plans or projects regarding existing and prospective customers, and products and
services, (b) information about costs, profits, markets, sales, customer lists, customer needs, customer preferences and customer purchasing histories, supplier lists,
internal financial data, personnel evaluations, nonpublic information about medical devices or
products of the Company (including future plans about them), information and material provided by
third parties in confidence and/or with nondisclosure restrictions, computer access passwords, and
internal market studies or surveys and (c) any other information or matters of a similar nature.
The Executive shall not, during or after the Executive’s employment by the Company, in whole or in
part, disclose such Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor shall the Executive make use of any such property
for the Executive’s own purposes or for the benefit of any person firm, corporation, association or
other entity (except the Company) under any circumstances during or after the Executive’s
employment by the Company; provided, however, that after the Executive’s employment by the Company
ceases these restrictions shall not apply to such Confidential Information, if any, which are then
in the public domain, and provided further that the Executive was not responsible, directly or
indirectly, for such Confidential Information entering the public domain without the Company’s
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          13.2. Inventions. The Executive hereby sells, transfers and assigns to the Company
or to any person or entity designated by the Company all of the right, title and interest of the
Executive in and to all inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly,
during the Executive’s employment by the Company or any of its predecessors which relate to
methods, apparatus, designs, products, processes or devices sold, leased, used or under
consideration or development by the Company or any of its predecessors, or which otherwise relate
to or pertain to the business, functions or operations of the Company or any of its predecessors,
or which arise from the efforts of the Executive during the Executive’s employment with the Company
or any of its predecessors. The Executive shall, during and after the Executive’s employment with
the Company, communicate promptly and disclose to the Company, in such form as the Company
requests, all information, details and data pertaining to the aforementioned inventions, ideas,
disclosures and improvements. The Executive shall, during and after the Executive’s employment by
the Company, execute and deliver to the Company such formal transfers and assignments and such
other papers and documents as may be necessary by the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within one (1) year after
the Executive’s employment with the Company ceases shall be deemed to fall within the provisions of
this Section 13.2 unless proved to have been first conceived and made following such termination or
expiration.

          13.3. Non-Solicitation of Employees. The Executive recognizes that the Executive
possesses and will possess confidential information about other employees of the Company and its
Affiliates relating to their education, experience, skills, abilities, compensation and benefits,
and inter-personal relationships with customer of the Company and its Affiliates. The Executive
recognizes that the information the Executive possesses and will possess about these other
employees is not generally known, is of substantial value to the Company and its Affiliates in
developing their business and in securing and retaining customers, and has been and will be
acquired by the Executive because of the Executive’s business position with the Company and its
Affiliates. The Executive agrees that at all times during the Executive’s employment with the
Company and for a period equal to the Executive’s Total Number of Months thereafter, the Executive
will not, directly or indirectly, solicit or recruit any employee of the Company or its Affiliates
for the purpose of being employed by the Executive or by any competitor of the Company or its
Affiliates on whose behalf the Executive is acting as an agent, representative or employee and that
the Executive will not convey such confidential information or trade secrets about other employees
of the Company and its Affiliates to any other Person; provided, however, that it shall not
constitute a solicitation or recruitment of employment in violation of paragraph to discuss
employment opportunities with any employee of the Company or its Affiliates who has either first
contacted the Executive or regarding whose employment the Executive has discussed with and received
the written approval of the Company’s Vice President, Human Resources (or, if such position is
vacant, the Company’s then Chief Executive Officer), prior to making such solicitation or
recruitment. In view of the nature of the Executive’s employment with the Company, the Executive likewise agrees that the
Company and its Affiliates would be irreparably harmed by any such solicitation or recruitment in
violation of the terms of this paragraph and that the Company and its Affiliates shall therefore be
entitled to preliminary and/or permanent injunctive relief prohibiting the Executive from engaging
in any activity or threatened activity in violation of the terms of this paragraph and to any other
relief available to them.

          13.4. Non-Interference and Non-Competition. During the Executive’s employment by
the Company and its Affiliates and for a period of months equal to the Executive’s Total Number of
Months after such employment ceases, the Executive shall not, directly or indirectly (whether as an
officer, director, owner, employee, partner, or other participant), engage in any Competitive
Business. During this period, the Executive shall not solicit or entice any agent, supplier,
consultant, distributor, contractor, lessors or lessees of the Company or its Affiliates to make
any changes whatsoever in their current relationships with the Company or its Affiliates, and will
not assist any other Person or entity to interfere with or dispute such relationship. In view of
the nature of the Executive’s employment with the Company, the Executive likewise agrees that the
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such interference or competitive actions in violation of the terms of this paragraph and that the Company and its Affiliates shall
therefore be entitled to preliminary and/or permanent injunctive relief prohibiting the Executive
from engaging in any activity or threatened activity in violation of the terms of this paragraph
and to any other relief available to them.

          13.5. Release. The Executive and the Company agree that if the Executive’s employment
is terminated for any reason other than Cause or death, the Executive and the Company will execute
a release (the “Release”) of all claims substantially in the form attached hereto as
Exhibit A within forty-five (45) days after the applicable Date of Termination and does not revoke
such Release in accordance to the terms thereof. The Executive recognizes and agrees that
notwithstanding any other section to the contrary, this executed Release is required to be made
prior to any payments of any kind under this Agreement. Furthermore, in the event that the
Executive is covered under the Age Discrimination in Employment Act (“ADEA”), the Executive
agrees to execute the ADEA Release of all ADEA claims substantially in the form attached
hereto as Exhibit B as provided in the ADEA Release.

          13.6. Cooperation with Legal Matters. Executive agrees to cooperate with the Company
and its designated attorneys, representatives and agents in connection with any actual or
threatened judicial, administrative or other legal or equitable proceeding in which the Company is
or may become involved. Upon reasonable notice, Executive agrees to meet with and provide to the
Company or its designated attorneys, representatives or agents all information and knowledge
Executive may have relating to the subject matter of any such proceeding. The Company agrees to
reimburse Executive for any reasonable costs incurred by Executive in providing such cooperation.

     14. Specific Remedies for Executive Breach of the Covenants as outlined in Section 13.
Without limiting the rights and remedies available to the Company, and notwithstanding the rights
of the Executive set forth in Section 11, in the event of any breach by the Executive of the
covenants set forth in Section 13 above, the following actions may be taken by the Company:

          14.1. if the Company believes a breach has occurred, it will deliver to the Executive a
summary of the breach and a demand for explanation or agreement that such breach has occurred; the
Executive shall have twenty (20) business days to respond in writing to this demand, whereupon the
Company will make a decision as to whether the breach has, in fact, occurred; if it is determined
such a breach has occurred, then

          14.2. the Company’s obligation to make any payment or provide any benefits to the Executive
under Sections 5, 6, 7, 8 or 9 of this Agreement shall cease immediately and permanently, which
shall not have any impact whatsoever on the Executive’s continuing obligations under Sections 14.3 and 14.4 below, except, however, the benefits outlined in Sections 5.3.8 and 6.3.8 will
continue to be provided;

          14.3. the Executive shall repay to the Company, within ten (10) days after the Executive
receives written demand therefore, an amount equal to ninety percent (90%) of the payments and
benefits previously received by the Executive under this Agreement, plus interest on such amount at
an annual rate equal to the lesser of ten percent (10%) or the maximum non-usurious rate under
applicable law, from the dates on which such payments and benefits were received to the date of
repayment to the Company; and

          14.4. the Executive shall pay to the Company from time to time, within ten (10) days after the
Executive receives written demand therefore, an amount or amounts equal to the reasonable costs and
expenses (including reasonable attorney’s fees and expenses) incurred by or on behalf of the
Company in enforcing this Section 14 from and after the date on which the Company delivers notice
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          14.5. It is the desire and intent of the parties that the provisions of this Section 14 be
enforced to the fullest extent permissible under the applicable laws in each jurisdiction in which
enforcement is sought. Accordingly, if any portion of this Section 14 is adjudicated to be invalid
or unenforceable, this Section 14 shall be deemed curtailed, whether as to time or location, to the
minimum extent required for its validity under applicable law and shall be binding and enforceable
with respect to the Executive as so curtailed, such curtailment to apply only with respect to the
operation of this Section 14 in the jurisdiction in which the such adjudication is made. If a
court in any jurisdiction, in adjudicating the validity of this Section 14, imposes any additional
terms or restrictions with respect to this Section 14, this Section 14 shall be deemed amended to
incorporate such additional terms or restrictions.

          14.6. Executive agrees and acknowledges that Executive has received good and adequate
consideration for the covenants set forth in this Section 14 in the form of employment,
compensation and benefits separate and independent of any payments or potential payments in this
Agreement.

     15. Potential Impact of Accounting Restatements on Certain Bonuses and Profits.

          15.1. If the Company is required to prepare an accounting restatement of the Company’s
consolidated balance sheet or statement of operations affecting any reporting period that
transpires during the term of this Agreement due to the material noncompliance of the Company with
any financial requirements under the securities laws, the Company’s Board will be entitled to
determine whether the noncompliance was the result of knowing, intentional, fraudulent or illegal
conduct by the Executive, and if it so determines, to require the Executive to reimburse the
Company for (i) any bonus or other incentive-based or equity-based compensation received by the
Executive from the Company during the term of this Agreement and (ii) any profits realized from the
sale of securities of the issuer by the Executive during the term of this Agreement.

          15.2. In making the determination whether to seek reimbursement from Executive, the Board will
consider whether any bonus, incentive payment, equity award, or other compensation has been awarded
or received by the Executive during the term of this Agreement and whether such compensation was
based on any financial results or operating metrics that were satisfied as a result of the
Executive’s knowing, intentional, fraudulent or illegal conduct. The Board has sole discretion in
determining whether the Executive’s conduct has or has not met the standard of such forfeiture.

          15.3. If the Board determines that a forfeiture is appropriate, such amounts shall be withheld
from any future amounts owed to the Executive as compensation. The Company may commence legal
action to collect such sums as the Board determines is owed to the Company.

     16. Successors.

          16.1. Assignment by the Executive. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal representatives.

          16.2. Successors and Assigns of the Company. This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns. The Company may not assign
this Agreement to any person or entity (except for a successor described in Section 16.3 below)
without the Executive’s written consent.

          16.3. Assumption. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
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to its business and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law or otherwise.

     17. Administration Prior to Change in Control. Prior to a Change in Control, the
Compensation Committee shall have full and complete authority to construe and interpret the
provisions of this Agreement, to determine an individual’s entitlement to benefits under this
Agreement, to make in its sole and absolute discretion all determinations contemplated under this
Agreement, to investigate and make factual determinations necessary or advisable to administer or
implement this Agreement. All determinations made under this Agreement by the Compensation
Committee shall be final and binding on all interested persons. Prior to a Change in Control, the
Compensation Committee may delegate responsibilities for the operation and administration of this
Agreement to one or more officers or employees of the Company. The provisions of this Section 17
shall terminate and be of no further force and effect upon the occurrence of a Change in Control.

     18. Delayed Commencement of Certain Payments.

          18.1. Any payment due hereunder that is not considered non-qualified deferred compensation and
is not subject to Section 409A of the Code shall be paid no later than March 15 of the calendar
year following the year in which the Executive’s Date of Termination occurs provided that all other
payment conditions, including the execution of an unrevoked Release, are met.

          18.2. Not withstanding any provision of this Agreement to the contrary, the parties intend
that this Agreement be construed and applied in a manner that will conform its provisions with the
requirements for exemption from Section 409A of the Code or, if and to the extent payments are
subject to Section 409A of the Code, to conform to Section 409A of the Code in order to avoid the
imposition of additional federal income tax pursuant to Section 409A of the Code. Without limiting
the foregoing, in the event that the Executive is a “specified employee” within the contemplation
of Section 409A(a)(2)(B) of the Code at the time that any payment that is subject to Section 409A
of the Code is made on account of the Executive’s Involuntary Termination the Executive’s
separation from service with the Company and its Affiliates within the contemplation of Section
409A(a)(2)(A)(i) of the Code), then in no event shall such payment or the commencement thereof be
made before the six-month anniversary of the Date of Termination or, if earlier, the date of the
Executive’s post-separation death.

          18.3. Any reimbursement payment made under this Agreement that is considered non-qualified
deferred compensation within the meaning of Section 409A of the Code shall be made within the
timing requirements of Treasury Regulation Section 1.409A-3(i)(iv).

     19. Miscellaneous.

          19.1. Governing Law. This Agreement shall be governed by, construed under and
enforced in accordance with the laws of the State of Tennessee without regard to conflicts-of-laws
principles that would require the application of any other law. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.

          19.2. Amendment. This Agreement may not be amended, modified, repealed, waived,
extended or discharged except by an agreement in writing of both parties. No person, other than
pursuant to a resolution of the Board or the Compensation Committee, shall have authority on behalf
of the Company to agree to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto.

          19.3. Insurance. The Company may, at its election and for its benefit, insure the
Executive against accidental loss or death, and the Executive shall submit to such physical
examination and supply such information to the insurance company as may be required in connection
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however, that no detailed information concerning the Executive’s physical
examination will be provided to the Company or made available to the Company by the insurance
company.

          19.4. Waiver of Breach. A waiver by the Company or the Executive of a breach of any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
subsequent breach of the other party.

          19.5. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

          19.6. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient in writing and if sent by certified mail or express delivery to the Executive
at his home address or to the Company at Wright Medical Technology, Inc., Attention: General
Counsel, 5677 Airline Road, Arlington, Tennessee 38002, or to such other address as either party
shall notify the other. Notices and communications shall be effective when actually received by
the addressee.

          19.7. Taxes. The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant to any applicable
law or regulation.

          19.8. Entire Agreement. This Agreement contains the entire agreement of the parties
with respect to the subject matter referred to herein and supersedes any and all prior
negotiations, understandings, arrangements, letters of intent, and agreements, whether written or
oral, between the Executive and the Company and its Affiliates, or any of its or their directors,
officers, employees or representatives with respect thereto.

          19.9. No Right of Employment. Nothing in this Agreement shall be construed as giving
the Executive any right to be retained in the employ of the Company or shall interfere in any way
with the right of the Company to terminate the Executive’s employment at any time, with or without
Cause.

          19.10. Unfunded Obligation. The obligations under this Agreement shall be unfunded.
Benefits payable under this Agreement shall be paid from the general assets of the Company. The Company shall have no obligation to establish any fund or to set aside any assets to provide
benefits under this Agreement.

          19.11. Termination. Notwithstanding anything contained herein, this Agreement shall
automatically terminate and be of no further force and effect and no benefits shall be payable
hereunder in the event that the Company sells or otherwise disposes of any part of the business or
assets of the Company (other than such a sale or disposition which is part of a transaction or
series of transactions which would result in a Change in Control) and as a result of such
transaction, the Executive is offered employment by the buyer of such business or assets (the
“Buyer”) in an executive position with reasonably comparable status, compensation, benefits
and separation agreement and which is consistent with the Executive’s experience and education, but
the Executive declines to accept such offer.

          19.12. Term. The term of this Agreement shall commence from the Effective Date and
shall continue until the third (3rd) anniversary of the Effective Date; provided,
however, that commencing on the second (2nd) anniversary of the Effective Date (and each
anniversary of the Effective Date thereafter), the term of this Agreement shall automatically be
extended for one (1) additional year, unless at least ninety (90) days prior to such date, the
Company or the Executive shall give written notice to the other party that it or he, as the case
may be, does not wish to so extend this Agreement. Notwithstanding the foregoing, if the Company
gives such written notice to the Executive less than one (1) year after a Change in Control, the
term of this Agreement shall be automatically extended until the later of (a) the date that is one
(1) year after the anniversary of the Effective Date that follows such written notice or (b) the
second (2nd) anniversary of the Change in Control Date.

 

 

	 	 	 

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     IN WITNESS WHEREOF, the parties executed this Agreement as of the Effective Date.

AGREED AND ACCEPTED

	 	 	 	 	 	 	 

	WRIGHT MEDICAL TECHNOLOGY, INC.	 	 	 	WILLIAM L. GRIFFIN
	 
	 	 	 	 	 	 
	By:

	 	/s/ Jason P. Hood
	 	 	 	/s/ William L. Griffin
	 

	 	 
	 	 	 	 
	 

	 	Title: Jason P. Hood, Vice President, 

          General Counsel
and Secretary	 	 	 	 

 

 

	 	 	 

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EXHIBIT A

MUTUAL RELEASE AGREEMENT

     THIS MUTUAL RELEASE AGREEMENT (“Release”) dated as of (the “Effective
Date”) is made by and between WRIGHT MEDICAL TECHNOLOGY, INC., a corporation organized and
existing under the laws of the State of Delaware with its principal place of business at 5677
Airline Road, Arlington, Tennessee 38002 (the “Company”), and WILLIAM L. GRIFFIN (the
“Executive”) as provided in the Separation Pay Agreement between the parties.

     The Executive, on behalf of the Executive and the Executive’s heirs, executors,
administrators, successors and assigns, whether herein named or referred to or not, does hereby
release, discharge, and acquit and by these presents does hereby release, acquit, and forever
discharge Company, its successors and assigns, its agents, servants, and employees, its divisions,
subdivisions, and affiliates (collectively, the “Company”), of and from any and all past, present,
and future claims, counterclaims, demands, actions, causes of action, liabilities, damages, costs,
loss of services, expenses, compensation, third-party actions, suits at law or in equity, of every
nature and description, whether known or unknown, suspected or unsuspected, foreseen, or
unforeseen, real or imaginary, actual or potential, and whether arising at law or in equity, under
the common law, state or federal law, or any other law, or otherwise, including, but not limited
to, any claims that have been or might have been asserted as a result of the establishment or
termination of the employer-employee relationship, hereinafter collectively referred to as claims.
It is the intention of the parties hereto to effect a full and final general release of all such
claims. It is expressly understood and agreed that this release and agreement is intended to
cover, and does cover, not only all now known injuries, losses, and damages, but any future
injuries, losses, and damages not now known or anticipated, but which may later develop or be
discovered, including all the effects and consequences thereof.

     Executive does hereby declare that the Executive does understand, covenant, and agree that the
Executive will not make any claims or demands, or file any legal proceedings against Company or
join Company as a party to any claim, demand, or legal proceedings nor shall Executive proceed
against any other party, person, firm, or corporation on the claims described above except as is
necessary in order to enforce the terms and conditions of this Release and the Separation Pay
Agreement.

THE FILING OF ANY CLAIM, DEMAND, OR ANY AND ALL OTHER LEGAL PROCEEDINGS, BY THE EXECUTIVE, AGAINST
COMPANY, SHALL BE DEEMED TO BE A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT. SUCH BREACH SHALL,
IMMEDIATELY, TERMINATE COMPANY’S DUTY TO PAY ANY FURTHER SUMS TO EXECUTIVE AND SHALL ALSO BIND
EXECUTIVE TO REPAY ANY AND ALL SUMS PAID TO EXECUTIVE PURSUANT TO THE TERMS OF THIS AGREEMENT.
ADDITIONALLY, EXECUTIVE SHALL INDEMNIFY AND HOLD HARMLESS COMPANY FROM ANY AND ALL JUDGMENTS,
COSTS, EXPENSES, OR ATTORNEY FEES WHATSOEVER ARISING ON ACCOUNT OF THE FILING OF ANY SUCH CLAIM,
DEMAND, OR OTHER LEGAL PROCEEDINGS BY THE EXECUTIVE.

     It is further understood and agreed that the acceptance of the consideration more fully
described in the Separation Pay Agreement between the parties is in full accord and satisfaction of
any obligations, claims, and/or disputes that Executive may have with Company.

     And the parties hereby declare, understand, covenant, and agree that the terms of the
Separation Pay Agreement, and the amount stated therein, are the sole consideration for this
release and agreement and that the parties voluntarily accept said consideration for the purpose of
making a full and final compromise, adjustment and settlement of all claims for injuries, losses,
and damages resulting, or to

 

 

	 	 	 

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result, from said claims.

     Except for any claim under Sections 13, 14 or 15 of the Separation Pay Agreement, the Company,
on behalf of itself, its agents, servants, and employees, its divisions, subdivisions, and
affiliates (collectively, the “Company”), successors and assigns, whether herein named or referred
to or not, does hereby release, discharge, and acquit and by these presents does hereby release,
acquit, and forever discharge Executive, the Executive’s heirs, executors, administrators,
successors and assigns, of and from any and all past, present, and future claims, counterclaims,
demands, actions, causes of action, liabilities, damages, costs, loss of services, expenses,
compensation, third-party actions, suits at law or in equity, of every nature and description,
whether known or unknown, suspected or unsuspected, foreseen, or unforeseen, real or imaginary,
actual or potential, and whether arising at law or in equity, under the common law, state or
federal law, or any other law, or otherwise, including, but not limited to, any claims that have
been or might have been asserted as a result of the establishment or termination of the
employer-employee relationship, hereinafter collectively referred to as claims. It is the
intention of the parties hereto to effect a full and final general release of all such claims. It
is expressly understood and agreed that this release and agreement is intended to cover, and does
cover, not only all now known injuries, losses, and damages, but any future injuries, losses, and
damages not now known or anticipated, but which may later develop or be discovered, including all
the effects and consequences thereof.

     Company does hereby declare that the Company does understand, covenant, and agree that the
Company will not make any claims or demands, or file any legal proceedings against Executive or
join Executive as a party to any claim, demand, or legal proceedings nor shall Company proceed
against any other party, person, firm, or corporation on the claims described above except as is
necessary in order to enforce the terms and conditions of this Release and the Separation Pay
Agreement.

THE FILING OF ANY CLAIM, DEMAND, OR ANY AND ALL OTHER LEGAL PROCEEDINGS, BY THE COMPANY, AGAINST
EXECUTIVE, SHALL BE DEEMED TO BE A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT. SUCH BREACH
SHALL, IMMEDIATELY, TERMINATE EXECUTIVE’S DUTY TO COMPLY WITH THE NON-SOLICITATION,
NON-INTERFERENCE, AND NON-COMPETITION COVENANTS OF THE SEPARATION PAY AGREEMENT BETWEEN THE
PARTIES. ADDITIONALLY, COMPANY SHALL INDEMNIFY AND HOLD HARMLESS EXECUTIVE FROM ANY AND ALL
JUDGMENTS, COSTS, EXPENSES, OR ATTORNEY FEES WHATSOEVER ARISING ON ACCOUNT OF THE FILING OF ANY
SUCH CLAIM, DEMAND, OR OTHER LEGAL PROCEEDINGS BY THE COMPANY.

     It is further understood and agreed that the acceptance of the consideration more fully
described in the Separation Pay Agreement between the parties is in full accord and satisfaction of
any obligations, claims, and/or disputes that Company may have with Executive.

     It is further understood and agreed that this is the full and complete understanding of the
parties, that it is the integrated memorial of their agreement and that there are no other written
or oral understandings, agreements, covenants, promises, or arrangements, directly or indirectly
connected with this release, that are not incorporated herein. The terms of this release are
contractual and are not mere recitals.

 

 

	 	 	 

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     Notwithstanding the foregoing, nothing in this Release shall release either party from
obligations resulting from the Separation Pay Agreement nor prohibit either party from seeking the
enforcement of the Separation Pay Agreement.

     IN WITNESS WHEREOF, the parties executed this Release as of the Effective Date.

AGREED AND ACCEPTED

	 	 	 	 	 	 	 

	WRIGHT MEDICAL TECHNOLOGY, INC.	 	 	 	WILLIAM L. GRIFFIN
	 
	 	 	 	 	 	 
	By:  
	 	 	 	 	 	 
	 

	 

	 	 
	 	 
	 
	Title:  	 	 	 	 	 
	 

	 	 

	 	 	 	 

 

 

	 	 	 

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EXHIBIT B

ADEA RELEASE AND AGREEMENT

As a material inducement to Wright Medical Technology, Inc. (hereinafter referred to as
“Wright” or “Employer”) to enter into this ADEA Release and Agreement (the “Release or “Agreement”)
with WILLIAM L. GRIFFIN (hereinafter referred to as “Executive”) (for Executive, Executive’s heirs,
executors, administrators and assigns), Executive hereby unconditionally releases and forever
discharges Wright and each of the Wright’s stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions, subsidiaries, affiliates and
all persons acting by, through, under, or in concert with any of them from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including
attorney’s fees and costs actually incurred) of any nature whatsoever, known or unknown, suspected
or unsuspected, including, but not limited to, rights, under the Age Discrimination in Employment
Act of 1967, as amended from time to time, and other federal, state, or local laws prohibiting
discrimination, any claims the employee may have with regard to Executive’s hiring, employment, or
electing the re-employment program and termination of employment claims growing out of any legal
restrictions on Wright’s right to terminate its employees (“Claim” or Claims”), which the
Executive now has, owns or holds, or claims to have owned or held, or which the Executive at any
time hereinafter may have owned or held or claimed to have owned or held against Wright.

     To comply with the Older Workers Benefit Protection Act of 1990, as amended from time to time,
the Release and Agreement has advised Executive of the legal requirements of this Act and fully
incorporates the legal requirements by reference into this Agreement as follows:

	 	a.	 	This Agreement is written in layman’s terms, and the Executive understands and
comprehends its terms;
	 
	 	b.	 	Executive has been advised of Executive’s rights to consult an attorney to
review the Agreement;
	 
	 	c.	 	Executive does not waive any rights or claims that may arise after the date the
Release is executed;
	 
	 	d.	 	Executive is receiving consideration beyond anything of value to which
Executive already is entitled;
	 
	 	e.	 	Executive has been given a reasonable period of time to consider this Agreement
(45 days).

As consideration for this Release, Wright agrees to provide the items listed in the Separation Pay
Agreement dated April 1, 2009. The Executive enters into this Release with full knowledge of its
contents and enters into this Agreement voluntarily.

 

 

	 	 	 

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AGREED AND ACCEPTED

	 	 	 	 	 
	EXECUTIVE:
WRIGHT MEDICAL TECHNOLOGY, INC.
	 
	 	 	 	 
	I acknowledge that I fully understand and
agree that this Agreement may be pleaded
by Wright Medical Technology, Inc. as a
complete defense to any claim which
hereafter may be asserted by me or a claim
against Wright Medical Technology, Inc.
for or on account of any matter or thing
whatsoever arising out of the employment
relationship or my termination from active
employment.
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	
	 	 
	WILLIAM L. GRIFFIN
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	
	 	 
	 
	 	 	 	 
	SWORN TO AND SUBSCRIBED, before me, a
Notary Public, in my presence this
                     day of
                    , 2009	 	SWORN TO AND SUBSCRIBED, before me, a
Notary Public, in my presence this                    
day of
                    , 2009
	 
	 	 	 	 
	 
	 	 	 
	 	 
	Notary Public 
	 	 	 	Notary Public 
	 
	 	 	 	 
	County of                                         	 	Shelby County
	 
	 	 	 	 
	 	 	Tennessee
	State of                                         
	 	 	 	 
	 
	 	 	 	 
	My Commission Expires:                	 	My Commission Expires:                                         

NOTE: EXECUTIVE IS HEREBY ADVISED OF EXECUTIVE’S RIGHT TO RESCIND AND NULLIFY THIS AGREEMENT, WHICH
RIGHT MUST BE EXERCISED, IF AT ALL, WITHIN SEVEN (7) DAYS OF THE DATE OF EXECUTIVE’S SIGNATURE.
EXECUTIVE MUST REVOKE RELEASE BY LETTER TO WRIGHT MEDICAL TECHNOLOGY, INC., ATTENTION: GENERAL
COUNSEL, 5677 AIRLINE ROAD, ARLINGTON, TN 38002, WITHIN SEVEN (7) DAYS. NO CONSIDERATION SHALL BE
CONVEYED UNTIL SUCH TIME PERIOD HAS EXPIRED.

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