Document:

Exhibit 4.2

 

PETRO-CANADA

EMPLOYEE

STOCK OPTION PLAN

(Amended and Re-stated to April 26, 2005)

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  PURPOSE

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  ELIGIBILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  OPTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  OTHER EVENTS
  AFFECTING ENTITLEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  CASH PAYMENT ALTERNATIVE

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  PARTICIPANT’S
  RIGHT NOT TRANSFERABLE

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  REGULATIONS AND AMENDMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  APPLICABLE
  LAW

  	
   

  

 

 

1.                                      PURPOSE

 

The intention
of the Employee Stock Option Plan is:

 

(a)                                  to promote employee commitment to Petro-Canada;

 

(b)                                 to encourage employees to further the development of Petro-Canada;
and

 

(c)                                  to retain the key employees necessary for Petro-Canada’s long term
success.

 

2.                                      INTERPRETATION

 

2.1                               Definitions.

 

As hereinafter
used in the Plan:

 

“Cash Payment Alternative” means the right of an Option
holder to elect to receive cash equal to the amount by which the Market Price
of the Share covered by a surrendered Option exceeds the Option Price of the
Share to be acquired subject to such Option.

 

“Committee” means the Management Resources and Compensation
Committee of the board of directors of the Company, or such other committee of
the board of directors as may be given the responsibility to act on behalf of
the board of directors with respect to the Plan, or, in the absence of any such
committee, the board of directors itself.

 

“Company” means Petro-Canada, a company incorporated under
the laws of Canada.

 

“Eligible Party” means an Employee or an estate entitled to
participate in the Plan pursuant to Paragraph 6.1.

 

“Employee” means any person who is an employee of the Company
or a Subsidiary of the Company.

 

“Market Price” means with respect to all Options approved by
the Committee, the closing price of the Shares on the Relevant Stock Exchange
on the Trading Day immediately preceding the day on which the Options are
granted or the Cash Payment Alternative is exercised, as applicable, or, if the
Shares did not trade on the Relevant Stock Exchange on such date, the Market
Price shall be the average of the bid and ask prices in respect of the Shares
at the close of trading on such date;

 

and for the
purposes of the foregoing:

 

(i)                                     “Trading Day”, with respect to a
stock exchange, means a day on which such stock exchange is open for business;

 

 

(ii)                                  “Relevant Stock Exchange” means the
Toronto Stock Exchange or, if the shares are not then listed on the Toronto
Stock Exchange, such stock exchange on which the Shares are listed as may be
selected by the Committee for such purpose.

 

“Option” means an option to purchase Shares granted in
accordance with the terms of the Plan, as described more fully in Paragraph 5.

 

“Option Price” means the price per Share at which Shares may
be purchased under an Option, as the same may be adjusted from time to time in
accordance with Paragraph 5.12.

 

“Plan” means this employee stock option plan as amended from
time to time.

 

“Shares” means the common shares without nominal or par value
in the capital of the Company.

 

2.2                               Subsidiary

 

In the Plan a
body corporate is a “Subsidiary” of
another body corporate if:

 

(a)                                  it is controlled by

 

(i)                                     that other body corporate,

 

(ii)                                  that other body corporate and one or more bodies corporate each of
which is controlled by that other body corporate, or

 

(iii)                               two or more bodies corporate each of which is controlled by that
other body corporate; or

 

(b)                                 it is a Subsidiary of a body corporate that is a Subsidiary of that
other body corporate.

 

For this
purpose a body corporate is controlled by a person or by two or more bodies
corporate if:

 

(a)                                  securities of the body corporate to which are attached more than
fifty per cent of the votes that may be cast to elect directors of the body
corporate are held, other than by way of security only, by or for the benefit
of that person or by or for the benefit of those bodies corporate; and

 

(c)                                  the votes attached to those securities are sufficient, if exercised,
to elect a majority of the directors of the body corporate.

 

 

2.3                               Words, etc.

 

In this Plan;
unless the context otherwise dictates, references to the masculine include the
feminine and references to the singular include the plural and vice versa; the
inclusion of headings is for convenience of reference only and shall not affect
the construction hereof; and all money references are to Canadian currency.

 

3.                                      ELIGIBILITY

 

All Eligible
Parties may participate in the Plan on the basis described herein, subject to
applicable legal, timing and other constraints which may preclude or limit
participation. However no Eligible Party has the right to participate in the
Plan and the Committee may decide on those Eligible Parties who may participate
in the Plan and the extent of participation.

 

4.                                      PARTICIPATION

 

Participation
in the Plan is voluntary and any decision not to participate shall not affect
an Employee’s or other Option holder’s employment with the Company or a
Subsidiary of the Company.  Nothing
contained in this Plan shall give any Employee or other Option holder the right
to be retained in the services of the Company or a Subsidiary of the Company,
nor shall it interfere with the right of the Company or any Subsidiary of the
Company, to discharge an Employee or other Option holder.  An Option holder shall have no entitlement by
way of compensation or damages resulting from the termination of the office or
employment by virtue which he is or may be eligible to participate in, or to
exercise Options or a Cash Payment Alternative under the Plan for the loss of
any right or benefit or prospective right or benefit under the Plan which he
might otherwise have enjoyed whether the compensation is claimed for wrongful
dismissal or otherwise.  Participation in
the Plan will not give any Employee or other Option holder any right or claim
to any benefit except to the extent provided in the Plan.

 

5.                                      OPTIONS

 

5.1                               Shares Subject to, and Maximum Number of Shares Issuable Under, the
Plan

 

Options may be
granted in respect of authorized and unissued Shares.  The maximum number of Shares (the “Specified Maximum”) which may be issued upon exercise of
Options granted under the Plan is twenty-eight million five hundred thousand
(28,500,000).  For the purpose of this
Paragraph 5.1 and the applicable rules of the stock exchanges on which the
Shares are listed:

 

(a)                                  Shares which have been purchased or issued under the Plan prior to March 2,
1995 pursuant to share purchases made or Options which have been exercised
prior to such date shall not be counted as Shares which have been purchased or
issued under the Specified Maximum; and

 

 

(b)                                 Options which expire unexercised and the Shares which were issuable
under such Options shall be available for issuance under the Specified Maximum.

 

No fractional
Shares may be purchased or issued under the Plan.

 

5.2                               Grant of Options

 

Options may be
granted to any Employee.  Options may be
granted by the Company pursuant to the decisions of the Committee provided and
to the extent that such decisions are approved by the board of directors of the
Company.  Options shall not be granted to
non-executive directors of the Company.

 

5.3                               Terms of Options

 

Subject as
herein and otherwise specifically provided in this Paragraph 5, the number of
Shares subject to each Option, the Option Price, the expiration date of each
Option, the extent to which each Option is exercisable from time to time during
the term of the Option and other terms and conditions relating to each such
Option shall be determined by the Committee; provided, however, that if no
specific determination is made by the Committee with respect to any of the
following matters, each Option shall, subject to any other specific provisions
of the Plan, contain the following terms and conditions:

 

(a)                                  the period during which the Option shall be exercisable shall be
seven years from the date the Option is granted to the Optionee; and

 

(b)                                 not more than one-fourth of the Shares covered by the Option may be
taken up during any one of the first four years of the term of the Option;
provided, however, that if the number of Shares taken up under the Option in
any of such years is less than one-fourth of the Shares covered by the Option,
the Option holder shall have the right, at any time or from time to time during
the remainder of the term of the Option, to purchase such number of shares
subject to the Option which were purchasable, but not purchased by him, during
such year; and provided further that in the event that, at any time, an offer is
made to all holders of Shares to purchase some or all of their Shares, the
Company will give notice of such offer to Option holders and all Options will
become immediately exercisable.

 

5.4                               Option Price

 

The Option
Price on Shares which are the subject of Options shall not be lower than the
Market Price.

 

 

5.5                               Maximum Option Period

 

In no event
may the term of an Option exceed ten years from the time of the grant of the
Option.

 

5.6                               Limit on Options to any Person

 

The total
number of Shares to be optioned to any optionee under the Plan together with
any Shares reserved for issuance under options for services and employee stock
purchase plans to such optionee shall not exceed 5% of the issued and
outstanding Shares at the date of the grant of the Option.

 

5.7                               Limits with Respect to Insiders

 

The
maximum number of Shares which may be issuable to insiders, as insiders is
defined by the Securities Act (Alberta) and their associates, under the Plan when
combined with any other share compensation arrangement shall be 10% of the
Shares issued and outstanding (on a non-diluted basis).

 

5.8                               Options Non-Assignable

 

Each Option is
personal to the Option holder and is non-assignable.

 

5.9                               Change of Employment

 

Notwithstanding
any other provisions of the Plan, Options shall not be affected by any change
of employment of the Option holder where the Option holder continues to be
employed by the Company or a Subsidiary of the Company.

 

5.10                        Exercise of Options

 

Subject to the
provisions of the Plan, an Option may be exercised from time to time, in the
manner specified by the Company from time to time.  Certificates for such Shares shall be issued
within a reasonable time following the receipt of such notice and payment.  The Shares which are issued on the exercise
of an Option will be the same in all respects as shares of the same class
already issued and outstanding.

 

5.11                        Conditions Precedent to Issuance of Shares

 

Notwithstanding
any of the provisions contained in the Plan or in any Option, the Company’s
obligation to issue Shares to an Option holder pursuant to the exercise of an
Option shall be subject to:

 

(a)                                  completion of such registration or other qualification of such
Shares or obtaining approval of such governmental authority as the Company
shall determine to be

 

 

necessary
or advisable in connection with the authorization, issuance or sale thereof;

 

(b)                                 the admission of such Shares to listing on any stock exchange on
which the Shares may then be listed; and

 

(c)                                  the receipt from the Option holder of such representations,
agreements and undertakings as to future dealings in such Shares as the Company
determines to be necessary or advisable in order to safeguard against the
violation of the securities laws of any applicable jurisdiction.  In this connection the Company shall, to the
extent necessary, take all reasonable steps to obtain such approvals,
registrations and qualifications as may be necessary for issuance of such
Shares in compliance with applicable securities laws and for the listing of
such Shares on any stock exchange on which the Shares are then listed.

 

5.12                        Adjustments

 

Appropriate
adjustments in the number of Shares subject to the Plan, and as regard Options
or a Cash Payment Alternative granted or to be granted, in the number of Shares
subject to an Option and the Option Price of such Options, and the calculation
of the amount payable upon exercise of the Cash Payment Alternative,
respectively, shall be made by the board of directors of the Company to give
effect to adjustments in the number of Shares resulting from subdivisions,
consolidations or reclassifications of the Shares, the payment of stock
dividends by the Company (other than dividends in the ordinary course) or other
relevant changes in the capital stock of the Company, subsequent to the approval
of the Plan by the board of directors of the Company, the purpose of such
adjustments being to put the Option holder upon exercising an Option in the
same position as he would have been in if he had exercised the Option prior to
the relevant change, except with respect to the receipt of income on the
Shares.

 

6.                                      OTHER
EVENTS AFFECTING ENTITLEMENT

 

6.1                               Death of Participant

 

Unless
otherwise provided at the time the Option is granted, in the event the Option
holder dies before all of the Shares purchased under the Plan by the holder of
Options have been delivered to him or the cash payment has been made to him
and/or all of the Options granted to the Option holder under the Plan have been
exercised, the Option holder’s executors or heirs shall be entitled to
participate in the Plan to the extent the Option holder would have been
entitled to, provided that all Options granted to the Option Holder vest
immediately on the death of the Option Holder and shall expire on the earlier
of:

 

(a)                                  the first anniversary of the date of death; and

 

 

(b)                                 the normal expiry date.

 

6.2                               Termination

 

Unless
otherwise provided at the time the Option is granted, and subject to the other
provisions hereof, in the event that after the grant of Options to an Option
holder an Option holder’s employment with the Company or a Subsidiary of the
Company , is terminated (such term to include involuntarily retirement), other
than termination because of death or voluntary retirement:

 

(a)                                  in the case of the termination of the Option holder’s employment at
the option of the Company or a Subsidiary of the Company, and without cause,
any Options granted to the Option holder under the Plan and vested on the
effective date of the termination (such date to be defined in the notice of
termination or notice of involuntary retirement) may be exercised by the Option
holder at any time until the earlier of 90 days after the effective date of
termination, or until the normal expiry date. 
Unless the Committee decides otherwise prior to the grant of any Option,
termination without cause shall include termination of an Option holder’s
employment with (i) the Company or a Subsidiary of the Company by reason
of the transfer of the business or part of the business of the Company or a
Subsidiary of the Company to a person other than the Company or a Subsidiary of
the Company and (ii) a Subsidiary of the Company by which an Option holder
is employed ceasing to be a Subsidiary of the Company; and

 

(b)                                 in any other case not covered by Clause 6.2(a), any Options granted
to the Option holder under the Plan shall immediately expire and be of no
further effect, whether or not such Options had become exercisable by the time
of termination.

 

6.3                               Voluntary Retirement

 

Unless
otherwise provided at the time the Option is granted, and subject to the other
provisions hereof, in the event that after the grant of Options to an Option
holder an Option holder’s employment with the Company or a Subsidiary of the
Company, ceases due to voluntary retirement:

 

(a)                                  all options held by the Option holder vest immediately upon the
effective date of the voluntary retirement; and

 

(b)                                 any Options which are exercisable by the Option holder may be
exercised at any time within three years after the date of the voluntary
retirement.

 

6.4                               Other Disruption of Employment

 

Unless
otherwise provided at the time the Option is granted, in the event that after
the grant of Options to an Option holder an Option holder:

 

 

(a)                                  takes a Company approved leave of absence without pay; or

 

(b)                                 becomes disabled and entitled to benefits under a long-term
disability program,

 

the
Option holder shall be entitled to continue his participation in the Plan.

 

7.                                      CASH
PAYMENT ALTERNATIVE

 

7.1                               Grant of Cash Payment Alternative

 

Unless
otherwise determined by the Committee at the time an Option is granted, a Cash
Payment Alternative shall be granted in connection and in conjunction with the
grant of each Option under the Plan after January 1, 2004.

 

Subject to
Paragraph 7.4, a Cash Payment Alternative shall be subject to the same terms,
conditions and limitations as the related Option.

 

7.2                               Exercise of Cash Payment Alternative

 

A Cash Payment
Alternative shall be exercisable only at the same time by the same person, to
the same extent and in the same manner that the Option related thereto is
exercisable.  Upon exercise of a Cash
Payment Alternative, the related Option shall be transferred and surrendered to
the Company and the Share and related Option shall be available for issuance
under the Specified Maximum.  Payment of
the amount to which an Option holder is entitled upon the exercise of a Cash
Payment Alternative, less any amount necessary to ensure compliance with laws
relating to withholding of tax or other deductions, shall be made to such
person, in the form of a cheque or money order or by wire transfer of
immediately available funds to an account designated by the Option holder, in
Canadian currency, or any other currency at the option of the Company,  made payable to such person or his estate, as
applicable, within a reasonable time following the election of the holder.

 

7.3                               Non-Transferable

 

A Cash Payment
Alternative shall be transferable only in the manner and to the extent that the
related Option is transferable.

 

7.4                               Discretion of Committee

 

A Cash Payment
Alternative shall be subject to such other terms, conditions and limitations as
the Committee shall determine.

 

7.5                               Reference

 

Every
reference in the Plan to an Option shall, unless the context required
otherwise, be deemed to include reference to a Cash Payment Alternative.

 

 

8.                                      PARTICIPANT’S
RIGHT NOT TRANSFERABLE

 

Except as
provided herein, the rights of an Option holder under the Plan are
non-transferable, in whole or in part, either directly or by operation of law
or otherwise in any manner.

 

9.                                      NOTICES

 

Any notice or
other document to be delivered to an Option holder shall be validly sent, given
or delivered if it is delivered by hand to the Option holder or is mailed by
first class prepaid mail to the latest address shown on the records of the
Company for the Option holder for purposes of the Plan or, in the absence of
such address for purposes of the Plan, for general purposes.  Any notice or document so mailed shall be
deemed to have been received by the Option holder in the ordinary course of
mail.

 

Any notice or
other document to be delivered to the Company shall be validly sent, given or
delivered if it is delivered by hand or mailed by first class mail to the
Secretary of the Company at the Company’s head office or if it is
electronically sent to the Company or its authorized agent for this purpose,
the receipt of which has been confirmed.

 

10.                               REGULATIONS
AND AMENDMENT

 

10.1                        Regulations

 

The Committee
may make, amend and repeal at any time and from time to time such resolutions
not inconsistent herewith as it may deem necessary or advisable for the
administration and operation of the Plan. 
In particular, the Committee may delegate to any person, group of
persons or corporation, any administrative duties and powers under the
Plan.  All decisions and interpretations
of the Committee respecting the Plan and all rules and regulations made
from time to time pursuant thereto, shall be binding and conclusive on the
Company, on all Eligible Parties, on all Option holders and on their respective
legal representatives.

 

10.2                        Amendment to Plan

 

The Committee
may amend the Plan:

 

(a)                                  to make formal, minor or technical modifications to any of the
provisions of the Plan;

 

(b)                                 to change any of the provisions of the Plan provided the change is
not materially prejudicial to the interests of the Option holders; or

 

(c)                                  to correct any ambiguity, defective provisions, error or omissions
in the provisions of the Plan provided that the rights of the Option holders
are not prejudiced by the correction.

 

 

Subject to the
obtaining of any required regulatory or other approvals any other amendment to
the Plan shall be effective only after it has been approved by a resolution of
the Option holders signed by the Option holders having rights to acquire a
majority of the Shares to be issued under the Plan or passed at a meeting of
Option holders (held after at least 14 days notice to all Option holders and
attended in person or by proxy by at least two Option holders) by the
affirmative vote of Option holders having rights to acquire a majority of the
Shares subject to rights to acquire by the Option holders who are present or
represented at the meeting.

 

10.3                        Amendment to Outstanding Options

 

The Committee
may from time to time amend the terms of Options granted under the Plan, subject
to the obtaining of any required regulatory or other approvals and, if any such
amendment will materially adversely affect the rights of Option holders with
respect to outstanding Options, the obtaining of the consent of Option holders
holding a majority of the outstanding Options to such amendment. Such consent
may be obtained by written resolution signed by Option holders holding a
majority of the outstanding Options or passed at a meeting of Option holders
(held after at least 14 days notice to all Option holders and attended in
person or by proxy by at least two Option holders) by the affirmative vote of
Option holders holding a majority of the Options who are present or represented
at the meeting.  Notwithstanding the
foregoing, the obtaining of the consent of Option holders to an amendment which
materially adversely affects the rights of such Option holders with respect to
outstanding Options shall not be required if such amendment is required to
comply with applicable laws, regulations, rules, orders of governmental or
regulatory authorities or the requirements of any stock exchange on which
Shares of the Company are listed.

 

11.                               COSTS

 

The Company
shall not charge any Option holder for any part of the cost of administering
and operating the Plan.  Option holders
may be required to pay fees charged by third party service providers retained
by the Company to assist in the administration of the Plan.

 

12.                               APPLICABLE LAW

 

The Plan shall
be governed by and construed in accordance with the laws of the Province of
Alberta and the courts of such province shall have non-exclusive jurisdiction
over any dispute under the Plan.Exhibit 10.1

 

EXECUTED

 

CONFIDENTIAL

 

AGREEMENT
TO EXECUTE SECURITIES PURCHASE AGREEMENT

(this “Agreement”)

 

Dated:  June 20, 2005

 

1.                                      Agreement
to Execute

 

(a)                                  Execution of
Securities Purchase Agreement.  Each of CP Baton Rouge Casino, L.L.C., a
Louisiana limited liability company (“Buyer”), and
Columbia Sussex Corporation, a Kentucky corporation and the indirect parent
company of Buyer (“Parent Guarantor”),
hereby agrees to execute and deliver, and Penn National Gaming, Inc., a
Pennsylvania corporation (“Penn”),
hereby agrees to cause Argosy Gaming Company, a Delaware corporation and,
immediately following the Effective Time (as defined below), a wholly owned
subsidiary of Penn (“Seller”), to
execute and deliver, in each case, immediately following the Effective Time, (a) a
definitive Securities Purchase Agreement substantially in the form attached
hereto as Annex A (the “Securities
Purchase Agreement”), and (b) a
definitive Transition Services Agreement substantially in the form attached as Exhibit D
to the Securities Purchase Agreement, in each case, subject to (i) Buyer’s
receipt of an updated Seller Disclosure Letter at least five days prior to the
Effective Date, (ii) Buyer’s right to disapprove, prior to the Effective
Date, any change or changes made in such updated Seller Disclosure Letter from
the Seller Disclosure Letter attached as Annex B hereto, which change or
changes would have, or which would reasonably be expected to have, individually
or in the aggregate, an ACBR Material Adverse Effect, (iii) since the date
hereof, there shall have been no ACBR Material Adverse Effect, and (iv) Paragraph 1(b) below.

 

As used herein, “Effective
Time” means the effective time of the merger of Thoroughbred
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary
of Penn (“Merger Sub”), with and
into Seller (such time, the “Effective Time”
and, the date on which the Effective Time occurs, the “Effective Date”), pursuant to an Agreement
and Plan of Merger, dated as of November 3, 2004 (as it may be amended
from time to time, the “Merger Agreement”),
by and among Penn, Merger Sub and Seller.

 

Capitalized terms used but not defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.

 

(b)                                 Survey. Seller shall
cause to be delivered to Buyer, promptly after it is received by Seller, the
ALTA/ACSM survey of the Property that is currently being undertaken by SJB
Group, Inc. (the “Survey”).  For a period of five (5) business days
after Buyer’s receipt of the Survey, Buyer shall have the right to deliver
notice to Seller objecting to any matters disclosed in the Survey which would
materially and adversely affect the use of the Property as it is currently
being used and which are not Permitted Encumbrances (disregarding solely for
this purpose the reference to the “Survey” in clause (i) of the definition
of Permitted Encumbrances) (“Objectionable
Survey Matters”).

 

If Buyer does not deliver such notice to Seller
within such five (5) business day period, Buyer shall be deemed to have
accepted all matters shown on the Survey and the parties agree that the Survey
shall be attached to the Securities Purchase Agreement as Exhibit G
and shall constitute the “Survey” as such term is defined in the Securities
Purchase Agreement.  If Buyer delivers
such notice to Seller within such five (5) business day period, Seller
shall as promptly as reasonably practicable commence using commercially
reasonable efforts to eliminate such Objectionable Survey Matters or to have
the title company insure against such Objectionable Survey Matters.

 

 

If, using commercially reasonable efforts, Seller is
unable to eliminate such Objectionable Survey Matters, or to have the title
company insure against such Objectionable Survey Matters, in each case, prior
to the Effective Date, then:  (i) Seller
may at its option elect to continue using commercially reasonable efforts to
eliminate such Objectionable Survey Matters, or to have the title company
insure against such Objectionable Survey Matters, for so long as Seller deems
that such efforts may reasonably be expected to result in the elimination of
the Objectionable Survey Matters or the title company insuring over such
Objectionable Survey Matters prior to Closing, in which case the parties agree
to modify the Securities Purchase Agreement accordingly and to execute such
modified Securities Purchase Agreement on the Effective Date or as promptly as
practicable thereafter; and (ii) Buyer and Seller shall in good faith use
their respective reasonable best efforts to reach a mutually agreeable
resolution of any remaining Objectionable Survey Matters not addressed by the
preceding clause (i) prior to execution of the Securities Purchase
Agreement, shall modify the Securities Purchase Agreement accordingly to reflect
any such resolution and shall execute such modified Securities Purchase
Agreement on the Effective Date or as promptly as practicable after such
resolution is reached.  If Buyer and
Seller, after discussing such matters in good faith and using their reasonable
best efforts to reach resolution, are unable to reach a mutually agreeable
resolution of any remaining Objectionable Survey Matters not addressed by the
preceding clause (i), the parties shall have the right to mutually terminate
this Agreement.

 

2.                                      Deposit

 

(a)                                  Concurrently
with the execution of this Agreement, Buyer has deposited an amount equal to
fifteen million dollars ($15,000,000) (such amount, including the interest accrued thereon, the “Deposit”) with First American Title Company, Philadelphia Branch (the “Escrow Agent”), pursuant to an escrow
agreement dated as of the date hereof and attached as Exhibit A to
the Securities Purchase Agreement (the “Deposit
Escrow Agreement”) executed and delivered by Penn, Buyer and the
Escrow Agent.  At the Closing, the
Deposit shall be credited against the Purchase Price and the Deposit shall be
promptly released and paid by the Escrow Agent to Seller pursuant to the
Securities Purchase Agreement and the terms of the Deposit Escrow Agreement.  Upon the termination of this Agreement
pursuant to Paragraph 8 (except in
the case of a termination of this Agreement upon execution of the Securities
Purchase Agreement) the Deposit shall be payable pursuant to Paragraph 8(b), and thereafter shall be
promptly released by the Escrow Agent to Buyer or Penn, as applicable, pursuant
to Paragraph 8(b) and the
terms of the Deposit Escrow Agreement.

 

(b)                                 Penn and Buyer
agree to execute and be bound by such other reasonable and customary escrow
instructions as may be necessary or reasonably required by the Escrow Agent or
the parties hereto in order to consummate the purchase and sale contemplated in
the Securities Purchase Agreement, or otherwise to distribute and pay the funds
held in escrow as provided in this Agreement and the Deposit Escrow Agreement; provided
that such escrow instructions are consistent with the terms of this Agreement,
the Securities Purchase Agreement and the Deposit Escrow Agreement.  In the event of any inconsistency between the
terms and provisions of such supplemental escrow instructions and the terms and
provisions of this Agreement or the Securities Purchase Agreement, or any
inconsistency between the terms and provisions of the Deposit Escrow Agreement
and the terms and provisions of this Agreement or the Securities Purchase
Agreement, the terms and provisions of this Agreement or the Securities
Purchase Agreement, respectively, shall control, absent an express written
agreement between the parties hereto to the contrary which acknowledges this Paragraph 2(b).

 

3.                                      Governmental
Approvals

 

The parties shall comply with their respective
obligations under Sections 6.6 and
6.12 of the Securities Purchase
Agreement, which sections are incorporated herein by reference; provided,
that

 

2

 

solely for purposes of the
foregoing, all references in such Sections
6.6 and 6.12 to “Seller”
shall be deemed to refer to Penn, and all references in such Sections 6.6 and 6.12 to “date hereof” or “date of this Agreement” shall be
deemed to refer to the date of this Agreement; and provided further, that Buyer’s
compliance with such obligations is subject to (i) Buyer’s limited access
to information concerning the ACBR Entities, and (ii) limitations arising
due to the Securities Purchase Agreement not having been executed.

 

4.                                      Additional
Covenants

 

Prior to the termination of this Agreement in
accordance with Paragraph 8:

 

(a)                                  No Solicitation.  Subject to obligations imposed by applicable
Law, Penn shall not, directly or indirectly, through any of its officers,
directors, employees, financial advisors, agents or other representatives (i) solicit
or initiate any inquiries or proposals that constitute, or could reasonably be
expected to lead to, an Acquisition Proposal with respect to the ACBR Entities,
(ii) engage in negotiations with any person (or group of persons) other
than Buyer or its respective Affiliates concerning, or (iii) provide any
non-public information to any person or entity relating to, any Acquisition
Proposal.

 

(b)                                 Cooperation.  Subject to compliance with applicable Law
(including, without limitation, antitrust Laws and Gaming Laws), (i) Penn
and Buyer shall confer on a regular and frequent basis with one or more
representatives of the other party to report on the general status of ongoing
operations of the Property, (ii) Penn shall cooperate with Buyer to
facilitate access of Buyer’s Representatives to the Property and to all of the
ACBR Entities’ respective personnel, properties, books, Property Benefit Plans,
insurance records, Tax Returns, Contracts and records, in each case, other than
any information pertaining to Excluded Assets, as Buyer may reasonably request,
subject to the limitations set forth in Section 6.5
of the Securities Purchase Agreement, and (iii) Penn agrees to promptly
provide to Buyer copies of any financial statements with respect to the ACBR
Entities that Seller provides to Penn. 
No information or knowledge obtained in any investigation pursuant to
this Paragraph 4(b) shall
affect or be deemed to modify any representation or warranty contained in this
Agreement or in the Securities Purchase Agreement or the conditions to the
obligations of the parties to consummate the transactions contemplated herein
and in the Securities Purchase Agreement.

 

(c)                                  Employee
Solicitation.  Neither
Penn nor any of its Affiliates shall, directly or indirectly, solicit, entice,
or encourage any Property Employee or an Argosy Property Employee, or any other
employee of Buyer or the ACBR Entities, to leave such person’s employment with
Seller, Buyer or the ACBR Entities; provided, however, that the
foregoing shall not apply to (x) a general solicitation of the public for
employment so long as such general solicitation is not specifically targeted to
any employee, officer or director of Buyer or any of the ACBR Entities, as the
case may be, or (y) to individuals who initiate contact with Penn or any of
Penn’s Affiliates regarding such employment without any encouragement or
solicitation by Penn or any of Penn’s Affiliates.  Neither Parent Guarantor, Buyer nor any of
their Affiliates shall, directly or indirectly, solicit, entice, or encourage
any employee of Penn, Seller or any of their Affiliates (other than the ACBR
Entities), and with whom Parent Guarantor, Buyer or any of their Affiliates had
contact in connection with, or who was specifically identified to Parent
Guarantor, Buyer or any of their Affiliates for purposes of, the transactions
contemplated by this Agreement or the Securities Purchase Agreement, to leave
such person’s employment with Penn, Seller or any of their Affiliates (other
than the ACBR Entities); provided, however, that the foregoing
shall not apply to (x) a general solicitation of the public for employment so
long as such general solicitation is not specifically targeted to any employee,
officer or director of Penn, Seller or any of their Affiliates (other than the
ACBR Entities), as the case may be, or (y) to individuals who initiate contact
with Parent Guarantor, Buyer or any of their Affiliates regarding such
employment without any encouragement or solicitation by Parent Guarantor, Buyer
or any of their Affiliates.

 

3

 

5.                                      Publicity;
Further Assurances

 

(a)                                  Publicity.  Penn and Buyer shall agree on the form and
content of any initial press release regarding the transactions contemplated by
this Agreement or the Securities Purchase Agreement, thereafter shall consult
with each other before issuing, and shall provide each other the opportunity to
review and comment upon and use all reasonable efforts to agree upon, any press
release or other public statement with respect to any of the transactions
contemplated by this Agreement or the Securities Purchase Agreement.  Penn and Buyer shall not issue any such press
release or make any such public statement prior to such consultation and prior
to considering in good faith any such comments, except as may be required by
applicable Law (including without limitation the Securities Act, the Exchange
Act, any rules and regulations of the National Association of Securities
Dealers, Inc. and any Gaming Laws) or any listing agreement with the New
York Stock Exchange or the NASDAQ Stock Market. 
Notwithstanding anything to the contrary herein, Penn and Buyer or their
respective Affiliates may make any public statement in response to specific
questions by the press, analysts, investors or those attending industry
conferences or financial analyst conference calls, so long as any such
statements are not inconsistent with previous press releases, public
disclosures or public statements made jointly by Penn and Buyer and do not
reveal non-public information regarding the ACBR Entities, Seller, Penn or
Buyer. 

 

(b)                                 Further
Assurances and Actions. 
Subject to the terms and conditions herein, each party hereto agrees to
use its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things reasonably necessary, proper
or advisable under applicable Laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.

 

6.                                      Buyer’s
Financing; Licensability of Principals

 

(a)                                  Buyer has as of
the date hereof, and will have available on the Closing Date, sufficient funds
to enable Buyer to pay the Purchase Price, and all fees and expenses necessary
or related to the consummation of the transactions contemplated by the
Securities Purchase Agreement.

 

(b)                                 Neither Buyer
nor any of its Representatives or Affiliates has ever been denied, or had revoked,
a gaming license by a Governmental Entity or Gaming Authority.  Buyer and each of its Representatives and
Affiliates is in good standing in each of the jurisdictions in which Buyer or
any of its Affiliates owns or operates gaming facilities.  There are no facts, which if known to the
regulators under the Gaming Laws, that would (i) be reasonably likely to
result in the denial, revocation, limitation or suspension of a gaming license
or (ii) result in a negative outcome to any finding of suitability proceedings
currently pending, or under the suitability proceedings necessary for the
consummation of the Securities Purchase Agreement.

 

7.                                      Confidentiality
Agreements

 

Buyer acknowledges that the information being
provided to or made available to Buyer and its Affiliates and Representatives
by or on behalf of, or with respect to, Seller and the ACBR Entities is subject
to (1) the confidentiality agreement dated April 26, 2005 between
Penn and Buyer (the “Penn  Confidentiality Agreement”), and (2) the
confidentiality agreement dated April 26, 2005 between Seller and Buyer
(the “Seller  Confidentiality Agreement” and, together
with the Penn Confidentiality Agreement, the “Confidentiality
Agreements”).

 

8.                                      Term
and Termination

 

(a)                                  Termination.  This Agreement shall remain in full force and
effect, unless earlier terminated pursuant to this Paragraph 8(a) until
such time as the Securities Purchase Agreement is

 

4

 

executed
and delivered by the parties thereto. 
This Agreement shall automatically terminate at such time as the
Securities Purchase Agreement is executed.

 

This Agreement may be terminated at any time prior
to the execution of the Securities Purchase Agreement (with respect to clauses (ii) through (vi) below,
by written notice by the terminating party to the other party) as follows:

 

(i)                                     (x) such time
as mutually agreed to by Buyer and Penn, or (y) pursuant to Paragraph 10(n)(ii)(A);

 

(ii)                                  by either Buyer
or Penn, if the Securities Purchase Agreement shall not have been executed on
or prior to December 31, 2005 (the “Outside
Date”); provided, however,
that the right to terminate this Agreement under this clause (ii) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the primary cause of or resulted in the failure of the Securities Purchase
Agreement to be executed on or before the Outside Date;

 

(iii)                               by either Buyer
or Penn, if any Governmental Entity has issued a nonappealable final order,
decree or ruling or taken any other nonappealable final action, in each case,
denying Buyer any necessary Governmental Approvals or determining that such
Governmental Entity will not issue to Buyer all necessary Governmental
Approvals; provided, however, that Buyer shall not have the right
to terminate this Agreement pursuant to this clause
(iii) unless Buyer has complied with all of its obligations
under Paragraph 3 (provided, that
in determining whether Buyer has complied with all of its obligations under Paragraph 3, any breaches thereof which,
individually and in the aggregate, are not material, have been cured and do not
result in, or contribute to, such denial or the failure of Buyer to receive all
necessary Governmental Approvals shall not be taken into account);

 

(iv)                              by either Buyer
or Penn, if a court of competent jurisdiction or other Governmental Entity
shall have issued a nonappealable final order, decree or ruling or taken any
other nonappealable final action, in each case, having the effect of
permanently restraining, enjoining or otherwise prohibiting the Closing and the
transactions contemplated by the Securities Purchase Agreement or the
transactions contemplated by this Agreement; provided, however, that the right to
terminate this Agreement under this clause (iv) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or materially contributed to, such
action; and provided  further, that if such order, decree or
ruling shall have been issued, or such action shall have been taken, by a
Gaming Authority or in respect of any Gaming Approval, Buyer shall not have the
right to terminate this Agreement pursuant to this clause (iv) unless Buyer has complied with all of its
obligations under Paragraph 3 (provided,
that in determining whether Buyer has complied with all of its obligations
under Paragraph 3, any breaches
thereof which, individually and in the aggregate, are not material, have been
cured and do not result in, or contribute to, the issuance of such order,
decree or ruling, or the taking of such action, by a Gaming Authority shall not
be taken into account);

 

(v)                                 by Buyer, if
Penn has breached any representation, warranty, covenant or agreement on the
part of Penn set forth in this Agreement; which (x) would result in a failure
of (1) the representations and warranties of Penn contained in this
Agreement to be true and correct (without giving effect to any limitation as to
“materiality” set forth therein) at and as of the Effective Date as if made at
and as of such time (except to the extent expressly made as of an earlier date,
in which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct would not, individually
or in the aggregate,

 

5

 

result in an ACBR Material
Adverse Effect, or (2) Penn to have performed in all material respects all
covenants, agreements and obligations required to be performed by it under this
Agreement at or prior to the Effective Date, and (y) is not cured in all
material respects within thirty (30) calendar days after written notice
thereof; provided, however,
that if such breach cannot reasonably be cured within such thirty (30) day
period but can be reasonably cured prior to the Effective Date, and Penn is
diligently proceeding to cure such breach, this Agreement may not be terminated
pursuant to this clause (v); provided, however, that Buyer’s right to
terminate this Agreement under this clause (v) shall
not be available if, at the time of such intended termination, Penn has the
right to terminate this Agreement under clause
(ii), (iii), (iv) or (vi) of
this Paragraph 8(a);

 

(vi)                              by Penn, if
Buyer or Parent Guarantor has breached any representation, warranty, covenant
or agreement on the part of Buyer or Parent Guarantor, respectively, set forth
in this Agreement; which (x) would result in a failure of (1) the
representations and warranties of Buyer and Parent Guarantor contained in this
Agreement to be true and correct (without giving effect to any limitation as to
“materiality” set forth therein) at and as of the Effective Date as if made at
and as of such time (except to the extent expressly made as of an earlier date,
in which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct would not, individually
or in the aggregate, result in a Buyer Material Adverse Effect, or (2) Buyer
and Parent Guarantor to have performed in all material respects all covenants,
agreements and obligations required to be performed by it under this Agreement
at or prior to the Effective Date, and (y) is not cured in all material
respects within thirty (30) calendar days after written notice thereof; provided, however, that if such breach
cannot reasonably be cured within such thirty (30) day period but can be
reasonably cured prior to the Effective Date, and Buyer or Parent Guarantor is
diligently proceeding to cure such breach, this Agreement may not be terminated
pursuant to this clause (vi); provided, however, that Penn’s right to
terminate this Agreement under this clause (vi) shall
not be available if, at the time of such intended termination, Buyer has the
right to terminate this Agreement under clause
(ii), (iii), (iv) or (v) of
this Paragraph 8(a); and

 

(vii)                           this Agreement
shall automatically terminate at such time as the Merger Agreement is
terminated.

 

(b)                                 Application of
the Deposit.  Upon the
termination of this Agreement pursuant to Paragraph
8(a), the Deposit shall be distributed as follows:

 

(i)                                     upon the
termination of this Agreement pursuant to
clause (i), (ii), (iii), (iv), (v) or (vii) of Paragraph
8(a), the Deposit shall
be paid to Buyer;

 

(ii)                                  upon the
termination of this Agreement pursuant to clause
(vi) of Paragraph 8(a),
the Deposit (excluding the interest accrued thereon) shall be paid to Penn and
the interest accrued on the Deposit shall be paid one-half to Penn and one-half
to Buyer; and

 

(iii)                               upon the
termination of this Agreement upon execution of the Securities Purchase
Agreement, the Deposit shall remain deposited with the Escrow Agent in
accordance with Section 2.3 of the Securities Purchase Agreement.

 

(c)                                  Liability.  In the
event of termination of this Agreement as provided in Paragraph 8(a), this Agreement shall
immediately become void and there shall be no Liability on the part of Penn,
Buyer or Parent Guarantor, or their respective Affiliates or Representatives,
other than pursuant to Paragraph 8(b),
this Paragraph 8(c), Paragraph  10, and the Confidentiality Agreements;

 

6

 

provided, however,
that nothing contained in this Paragraph 8 shall relieve or limit the Liability of either party to this Agreement
for (x) any fraudulent or willful breach of its representations or warranties
set forth in this Agreement or (y) any material breach of its covenants
or agreements set forth in this Agreement.

 

(d)                                 Fees and Expenses. 
Except as otherwise expressly provided in this Agreement, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses.

 

9.                                      Representations
and Warranties

 

Penn represents and warrants (with respect to
itself) to Buyer and Parent Guarantor, and each of Buyer and Parent Guarantor
represents and warrants (with respect to itself) to Penn, as follows:

 

(a)                                  Organization.  Such party is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of its state of
incorporation or formation.

 

(b)                                 Authority.  Such party has the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions to which it is a party that are contemplated by this Agreement.  The execution and delivery of this Agreement
by such party and the consummation by such party of the transactions to which
it is a party that are contemplated by this Agreement have been duly authorized
by all necessary action on the part of such party.  This Agreement has been duly executed and
delivered by such party, and assuming this Agreement constitutes the valid and
binding obligation of the other parties hereto, this Agreement constitutes the
valid and binding obligation of such party, enforceable against such party in
accordance with its terms, subject, as to enforcement, to (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereinafter in effect affecting creditors’ rights generally and (ii) general
principles of equity.

 

(c)                                  No Conflict.  The execution and delivery of this Agreement
by such party does not, and the consummation by such party of the transactions
to which it is a party that are contemplated by this Agreement will not, (i) conflict
with, or result in any violation or breach of, any provision of the
organization documents of such party, (ii) result in any violation or
breach of, or constitute (with or without notice or lapse of time, or both) a
default (or give rise to a right of termination, cancellation or acceleration
of any obligation or loss of any material benefit) under, or require a consent
or waiver under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture or other agreement to which such party is a party or
otherwise bound, or (iii) subject to the governmental filings and other
matters referred to in Paragraph 9(d),
contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Entity or any other Person the right
to revoke, withdraw, suspend, cancel, terminate, or modify any permit,
concession, franchise, license, judgment, or Law applicable to such party or
any of its properties or assets.

 

(d)                                 Required
Filings and Consents.  No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to such party in
connection with the execution and delivery of this Agreement by such party or
the consummation by such party of the transactions to which it is a party that
are contemplated hereby, except for (i) any approvals or filing of notices
required under the Gaming Laws, (ii) such other filings, consents,
approvals, orders, authorizations, permits, registrations and declarations as
may be required under the Laws of any jurisdiction in which such party conducts
any business or owns any assets, and (iii) any consents, approvals,
orders, authorizations, registrations, permits, declaration or filings required
to be obtained or made by any of the other parties hereto or any of their
Affiliates or key employees (including, without limitation, under the Gaming
Laws).

 

7

 

(e)                                  Litigation.  There are no Proceedings pending or, to such
party’s knowledge, threatened against such party before any Governmental
Entity, which, if determined adversely, could prevent or materially delay such
party from completing any of the transactions contemplated by the Securities
Purchase Agreement.

 

10.                               Miscellaneous

 

(a)                                  Governing Law;
Consent to Jurisdiction; Waiver of Trial by Jury.  This Agreement and the transactions
contemplated hereby, and all disputes between the parties under or related to
the Agreement or the facts and circumstances leading to its execution, whether
in contract, tort or otherwise, shall be governed by and construed in
accordance with the Laws of the State of New York applicable to contracts made
and to be performed in the State of New York, including, without limitation,
Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York
Civil Practice Laws and Rules 327(b).

 

Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court, or Federal court of the United States
of America, sitting in New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby or for recognition or enforcement of any judgment relating
thereto, and each of the parties hereby irrevocably and unconditionally (A) agrees
not to commence any such action or proceeding except in such courts, (B) agrees
that any claim in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by Law, in
such Federal court, (C) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such New York State or
Federal court, (D) waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such New York State or Federal court, and (E) to the
extent such party is not otherwise subject to service of process in the State
of New York, as to Penn, appoints CT Corporation System as such party’s agent
in the State of New York, and as to Parent Guarantor and Buyer, appoints CT
Corporation System as such party’s agent in the State of New York, for
acceptance of legal process and agrees that service made on any such agent
shall have the same legal force and effect as if served upon such party
personally within such state.  Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law.  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Paragraph 10(b).  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by Law.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS
OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT
HAS BEEN

 

8

 

INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
PARAGRAPH 10(a).

 

(b)                                 Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, delivered by facsimile (which is confirmed) or mailed by registered
or certified mail (return receipt requested) to the parties at the respective
addresses set forth in Section 11.2 of the Securities Purchase
Agreement (or at such other address for a party as shall be specified by like
notice).

 

(c)                                  Headings; Table
of Contents.  The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.

 

(d)                                 Entire
Agreement; No Third Party Beneficiaries.  This Agreement, the Confidentiality
Agreements and all documents and instruments referred to herein constitute the
entire agreement and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.

 

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

 

(f)                                    Assignment.  Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by operation of Law
(including, without limitation, by merger or consolidation) or otherwise
without the prior written consent of the other party.  Any assignment in violation of this Paragraph 10(f) shall be void.

 

(g)                                 Parties of
Interest.  This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their respective successors and permitted assigns, and nothing in
this Agreement, express or implied is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

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

 

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

 

(j)                                     Amendment.  This Agreement may be amended by Buyer,
Parent Guarantor and Penn.  This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of Buyer, Parent Guarantor and Penn.

 

9

 

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

 

(l)                                     Time of Essence.  Time is of the essence with respect to this
Agreement and all terms, provisions, covenants and conditions herein.

 

(m)                               Parent Guaranty.  Parent Guarantor hereby guarantees the
punctual payment and performance by Buyer of all of Buyer’s obligations under
this Agreement.  Parent Guarantor hereby
waives notice of the acceptance hereof, presentment, demand for payment,
protest, notice of protest, or any and all notice of non-payment,
non-performance or non-observance, or other proof, or notice or demand with
respect to the obligations guaranteed under this Paragraph 10(m) (the “Guaranteed
Obligations”).  The guarantee
provided for in this Paragraph 10(m)
(this “Guarantee”) shall remain
and continue in full force and effect as to any modification, extension or
renewal of this Agreement.  None of Penn
or its Affiliates shall be under a duty to protect, secure or insure any
security or lien provided by this Agreement or any other collateral, and Parent
Guarantor acknowledges that other indulgences or forbearance may be granted
under such document, all of which may be made, done or suffered without notice
to, or further consent of, Parent Guarantor. 
Parent Guarantor hereby waives the pleading of any statute of
limitations applicable to any of the Guaranteed Obligations, as a defense to
the obligation hereunder.

 

PARENT GUARANTOR WAIVES ANY RIGHT OR CLAIM OF RIGHT
TO CAUSE PENN TO PROCEED AGAINST BUYER BEFORE PROCEEDING UNDER THIS
GUARANTEE.  PARENT GUARANTOR EXPRESSLY
WAIVES AND RELINQUISHES ALL SURETYSHIP RIGHTS AND REMEDIES (INCLUDING ANY
RIGHTS OF SUBROGATION) APPLICABLE AGAINST SELLER ACCORDED TO PARENT GUARANTOR
BY APPLICABLE LAW.

 

Parent Guarantor
agrees that the validity of this Guarantee and Parent Guarantor’s obligations
under this Agreement shall in no way be terminated, affected or impaired by
reason of (i) the assertion by Penn of any rights or remedies which Penn
may have under or with respect to any of the other provisions of this Agreement
(ii) the failure by Penn to exercise, or delay in exercising, any right or
remedy which Penn may have hereunder or in respect to this Agreement; (iii) the
commencement of a case under the Bankruptcy Code by or against Buyer; or (iv) any
payment made on the obligations guaranteed by this Guarantee or any other
indebtedness arising under this Agreement which is required to be refunded
pursuant to the order of any court having jurisdiction over the bankruptcy or
insolvency of Buyer; it being understood that no payment so refunded shall be
considered as a payment of any portion of the obligations guaranteed hereby,
nor shall it have the effect of reducing the liability of Parent Guarantor
under this Agreement.

 

(n)                                 FTC Approval.  All terms and conditions of this Agreement
and the Securities Purchase Agreement shall be subject to FTC approval and the
substitution or addition of such modified or other terms and conditions as the
FTC may require.

 

(i)                                     Each party
hereto agrees to accept such changes to this Agreement and the Securities
Purchase Agreement as shall be required by the FTC and to execute promptly an
appropriate amendment to this Agreement and to modify the Securities Purchase
Agreement to reflect such required changes (such amendment and such
modification, together, an

 

10

 

“Amendment”), unless (A) such changes would have, in the
aggregate, an ACBR Material Adverse Effect, in which case the parties hereto
shall not be required to execute an Amendment, or (B) if the FTC requests
or requires any change to this Agreement or the Securities Purchase Agreement
that would adversely affect the economics of the transactions contemplated by
this Agreement and the Securities Purchase Agreement, in which case the party
whose economics would be adversely affected (the “Affected Party”) may elect not to execute an Amendment, and,
in the case of each of clauses (A) and (B), the parties hereto shall take
the actions set forth in clause (ii) below.

 

(ii)                                  If (x) the FTC
requires any changes that would have, in the aggregate, an ACBR Material
Adverse Effect or (y) if the Affected Party elects not to execute an Amendment
pursuant to the preceding clause (i),
then the parties hereto shall, in good faith, use their respective best efforts
to reach prompt (but in any event within seven days after receiving the FTC’s
request to make the required changes) mutual agreement with respect to such
changes, including, without limitation, to adjust the Purchase Price to offset
the adverse economics to the extent the Affected Party recognizes an equivalent
benefit through such change.  If the
parties hereto, after complying with the preceding sentence, are unable to
reach mutual agreement with respect to such changes within such seven day
period, then (A) in the case of the preceding clause (x), either party may
elect to terminate this Agreement pursuant to Paragraph
8(a)(i)(y), and (B) in the case of the preceding clause (y),
the parties shall submit the matters that the parties have been unable to
resolve with respect to such changes to an independent nationally recognized
investment banking firm, independent nationally recognized accounting firm or
other independent arbitrator (“Arbitrator”)
mutually agreed upon by Penn and Buyer for final and binding resolution of such
dispute in accordance with procedures mutually agreed upon by Penn and
Buyer.  If Buyer and Penn are unable to
agree on an Arbitrator, then Buyer and Penn shall each select such an
Arbitrator and the two Arbitrators so selected shall select a third
Arbitrator.  The findings of the
Arbitrator so selected by Buyer and Penn (or, if Buyer and Penn are unable to
agree on an Arbitrator, so selected by the Arbitrators pursuant to the
foregoing sentence) shall be final and binding on all of the parties hereto,
and the fees and expenses of the Arbitrator(s) shall be paid by one-half by
Penn and one-half by Buyer.

 

[signature page follows]

 

11

 

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

 

 

	
   

  	
  Penn National
  Gaming, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter M. Carlino

  	
   

  
	
   

  	
   

  	
  Name: 
  Peter M. Carlino

  	
   

  
	
   

  	
   

  	
  Title:   
  Chairman and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP Baton Rouge
  Casino, L.L.C. 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wimar Tahoe Corporation,

  	
   

  
	
   

  	
   

  	
  Sole member

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
   

  	
  Name: 
  William J. Yung

  	
   

  
	
   

  	
   

  	
  Title:    President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Columbia Sussex
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
   

  	
  Name: 
  William J. Yung

  	
   

  
	
   

  	
   

  	
  Title: 
    President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]