Document:

Exhibit 10.13

SHARE PURCHASE AGREEMENT

by and between

ATLAS INDUSTRIES HOLDINGS
LLC

and

JOHN HANCOCK
VARIABLE LIFE INSURANCE COMPANY

 

 

 

 

 

Dated as
of May 1, 2007

SUBSCRIPTION INSTRUCTIONS - PLEASE
READ CAREFULLY

THE SECURITIES OFFERED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE NOT
BEEN  QUALIFIED UNDER THE SECURITIES LAWS
OF ANY STATE.   THE PURCHASER OF THESE SECURITIES, BY MAKING SUCH
PURCHASE, AGREES FOR THE BENEFIT OF THE ISSUER THAT THE SECURITIES OFFERED
HEREBY MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(A)(1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL
INVESTOR THAT THE PURCHASER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, WHOM THE SELLER HAS INFORMED, IN
EACH CASE, THAT THE SALE, OFFER FOR SALE OR TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION
IN ACCORDANCE WITH RULES 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT,
AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES, IN EACH CASE, THE SATISFACTION OF WHICH CONDITIONS IS SUPPORTED
BY AN OPINION OF COUNSEL DELIVERED TO THE ISSUER THAT IS IN FORM, SCOPE AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY.

ATLAS INDUSTRIES HOLDINGS LLC

SHARE PURCHASE AGREEMENT

SHARE PURCHASE AGREEMENT (this “Agreement”), dated
as of May 1, 2007 by and between Atlas Industries Holdings LLC, a Delaware
limited liability company (the “Company”), and John Hancock Variable Life Insurance
Company, a Massachusetts life insurance company (“Buyer”).

WHEREAS:

A.            The Company wishes to sell, and
Buyer wishes to purchase, common shares representing limited liability company
interests (the “Shares”) in the Company as
provided for in the Company’s Second Amended and Restated Operating Agreement,
dated as of April 25, 2007 (as amended from time to time, the “Company’s Operating Agreement”)
upon the terms and subject to the conditions set forth in this Agreement;

B.            The Shares sold by the Company and
purchased by the Buyer (such Shares, the “Restricted Shares”) will be sold pursuant to
an exemption from registration under the Securities Act of 1933, as amended
(the “1933 Act”),
and the rules and regulations promulgated thereunder by the United States
Securities and Exchange Commission (the “SEC”);

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C.            Simultaneous with the closing of the
purchase of Shares by the Buyer, the Company intends and expects to close an
initial public offering (the “IPO”) of Shares to the public pursuant to registration
under the 1933 Act (such Shares, the “Registered Shares”);

D.            The Restricted Shares and the
Registered Shares will be identical in all respects and constitute the same
class of equity interest in the Company, except as to the status of the
Restricted Shares under the 1933 Act and applicable state securities laws; and

E.             The Company will, in connection
with the issuance of the Restricted Shares and pursuant to the terms of the
Registration Rights Agreement substantially in the form of Exhibit A
attached hereto (the “Registration
Rights Agreement”), grant to Buyer certain rights to register
the Restricted Shares for resale by Buyer under the 1933 Act and the rules and
regulations promulgated thereunder by the SEC and applicable state securities
laws.

NOW THEREFORE, in consideration of the
mutual covenants, representations, warranties and agreements contained herein,
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:

1.             PURCHASE
AND SALE OF SHARES

a.             Purchase
of Restricted Shares.  Subject to Section
1(b) below, at the Closing (defined below), the Company shall issue and sell
that number of Restricted Shares to the Buyer, at the Per Share Price (as
defined below), equal to the Number of Shares (as defined on Schedule A
hereto) as calculated and determined by reference to the definitions set forth
on Schedule A hereto and the information set forth next to the Buyer’s
name on Exhibit A to Schedule A hereto, which Number of Shares
with respect to the Buyer shall be set forth on Exhibit A to Schedule
A hereto next to the Buyer’s name at the IPO Closing, and the Buyer shall
purchase the Number of Shares from the Company at the Per Share Price (the Per
Share Price multiplied by the Number of Shares to be
purchased by Buyer, the “Aggregate Purchase Price”).  The per share purchase price (the “Per Share Price”)
for the Restricted Shares shall be the same as the per share purchase price of the
Registered Shares to be offered in the IPO of the Company, as set forth in the
Company’s final prospectus relating thereto, as filed pursuant to Rule 424(b)
under the 1933 Act (the “Final  Prospectus”).

b.             Closing.  The closing (the “Closing”) of the issuance
and sale of the Restricted Shares shall occur contemporaneously with, and shall
be conditioned upon, the closing of the IPO with respect to the sale and
delivery of any firm securities thereat. 
The date of the occurrence of the Closing shall be referred to herein as
the “Closing Date.”   For the avoidance of doubt, if for whatever
reason the IPO is not completed, the Company will 

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not be obligated to issue and sell the Restricted
Shares and the Buyer shall not be required to purchase the Restricted Shares
and this Agreement may be terminated in accordance with Section 5(k) below.

c.             Form of Payment. 
At the Closing, the Buyer shall pay the Aggregate Purchase Price
pursuant to the settlement process set forth in an escrow agreement to be
entered into by and among the Buyer, the Company and other parties named
therein, to be dated as of the Closing Date; provided,
however, that this shall not be the exclusive form of payment if
otherwise agreed by the Buyer and the Company at the Closing.

d.             Form of Delivery.  At the Closing, the Company shall deliver to
the Buyer a certificate evidencing the Restricted Shares, duly executed by the
Company and authenticated by the Company’s transfer agent representing that
number of Restricted Shares purchased by the Buyer in accordance with Section
1(a) above and including appropriate legends for the Restricted Shares
identifying the status thereof.

e.             Registration
Rights Agreement. 
At the Closing, the parties hereto shall execute and deliver the
Registration Rights Agreement.

2.             REPRESENTATIONS
AND WARRANTIES OF THE BUYER

Buyer hereby represents and warrants to the Company as
of the date hereof and as of the Closing Date that:

a.             Organization
and Qualification.  Buyer is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation, has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.

b.             Authorization;
Enforceability.  (i) Buyer has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and the Registration Rights Agreement; (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby and thereby
have been duly authorized and no further consent or corporate authorization is
required therefor; (iii) this Agreement has been, and at Closing the
Registration Rights Agreement will be, duly executed and delivered by Buyer;
and (iv) assuming due execution and delivery by the Company, this Agreement
constitutes, and the Registration Rights Agreement will constitute, the valid
and binding obligations of Buyer enforceable against it in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies or by other equitable principles of general application or
by the public policy provisions of federal securities  laws.

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c.             Knowledge
and Experience. 
Buyer: (i) has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of an investment
in the Company; (ii) is prepared to bear the economic risk of such an
investment; and (iii) has consulted with its own legal, financial, tax and
other advisors to the extent it has deemed appropriate in connection with any
investment in the Company, as well as the purchase of the Restricted Shares and
the status thereof.

d.             Company Information.  Buyer has requested, received, read and
reviewed such information concerning the Company, its business and operations,
the transactions in which it intends to engage and the proposed IPO, including
drafts of the prospectus relating to the foregoing as it deems necessary or
advisable in the circumstances.

e.             Accredited
Investor. 
Buyer is: (i) familiar with or has otherwise been advised by counsel regarding
the rules and regulations of the 1933 Act, that are and would be applicable to
it in connection with the acquisition of the Restricted Shares; (ii) familiar
with the term “accredited investor,” as defined in Rule 501(a) under the 1933
Act; and (iii) an institutional accredited investor within the meaning of Rule
501(a)(1), (2), (3), (7) or (8) under the 1933 Act.

f.              No
Registration. 
Buyer acknowledges that: (i) the Restricted Shares are not a part of the
IPO; (ii) the Restricted Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of
the 1933 Act; (iii) the Company has not filed nor will it file a registration
statement in connection with, or otherwise register, the offer and sale of the
Restricted Shares under the 1933 Act or the securities laws of any state except
in accordance with the Registration Rights Agreement; and (iv) the solicitation
of bids and any offer or sale of the Restricted Shares are being made in
reliance on an exemption from the registration requirements of the 1933 Act.

g.             Investment Purpose:  No Distribution. 
Buyer is seeking to acquire the Restricted Shares for its own account or
an account or accounts with respect to which it exercises sole investment
discretion and each such account, if any, is an institutional accredited
investor and each such account, if any, is aware that the solicitation of bids
and any offer or sale of the Restricted Shares are being made in reliance on an
exemption from the registration requirements of the 1933 Act.  Buyer is seeking to acquire the Restricted
Shares for investment purposes only, and not with a view to the distribution
thereof, in whole or in part.

h.             Transfer
Restrictions. 
Buyer acknowledges that any subsequent transfer of the Restricted Shares
may be restricted under the 1933 Act or applicable state securities laws, and
that any securities so acquired will bear legends to such effect.

i.              Condition
to Closing. 
Buyer acknowledges and agrees that the Closing is contingent upon the
closing of the IPO, and that if, for whatever reason, the IPO is not 

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completed, the Company shall not be obligated to issue
and sell the Restricted Shares and Buyer shall not be required to purchase the
Restricted Shares and this Agreement may be terminated in accordance with
Section 5(k) below.

j.              Manner
of Issuance. 
Buyer acknowledges and agrees that the issuance of the Restricted Shares
shall be effected in accordance with Section 1 above.

3.             REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Buyer as
of the date hereof and as of the Closing Date that:

a.             Organization
and Qualification.  The Company is duly organized, validly
existing and, where applicable, in good standing under the laws of the jurisdiction
of its formation, has the requisite power and authority to own its properties
and to carry on its business as now being conducted and presently proposed to
be conducted, as applicable.

b.             Authorization;
Enforceability.  (i) The Company has the requisite
power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, and to issue and/or sell the Restricted Shares
in accordance with the terms hereof; (ii) the execution and delivery of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby, including the issuance of the Restricted Shares, have been duly
authorized and no further consent or authorization is required therefor; (iii)
this Agreement has been, and at Closing the Registration Rights Agreement will
be, duly executed and delivered by the Company; and (iv) assuming due execution
and delivery by Buyer, this Agreement constitutes, and the Registration Rights
Agreement will constitute, the valid and binding obligations of the Company
enforceable against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies or by
other equitable principles of general application or by the public policy
provisions of federal securities  laws.

c.             Issuance
of Securities. 
The Restricted Shares have been duly authorized and, upon issuance in
accordance with the terms hereof and thereof, shall be validly issued and fully
paid, and free from all taxes, liens and charges with respect to the issue
thereof.

4.             TRANSFER
AGENT INSTRUCTIONS

The
Company shall instruct its transfer agent to issue certificates, registered in
the name of the Buyer or its nominee, for the Restricted Shares in such amounts
as specified from time to time by the Buyer to the Company.  All such certificates shall bear a
restrictive legend of the type referred to in Section 2(h) of this
Agreement.  The Company warrants and
covenants that no instruction other 

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than such
instructions referred to in this Section 4, and stop transfer instructions to
give effect to Section 2(h) hereof or any applicable provision of the
Registration Rights Agreement, will be given by the Company to its transfer
agent and that the Restricted Shares shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement.  Nothing in this Section 4
shall affect in any way Buyer’s obligations and agreement to comply with all
applicable securities laws upon the sale, assignment or other transfer of the
Shares.  If Buyer provides the Company
with an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, that registration of the sale, assignment or other
transfer by Buyer of any of the Restricted Shares is not required under the
1933 Act, the Company shall permit the transfer, and promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by Buyer.

5.             GOVERNING LAW; MISCELLANEOUS

a.             Governing
Law.  This Agreement shall be governed by and
interpreted in accordance with, the laws of the State of New York without
regard to the principles of conflict of laws to the extent that such principles
would require or permit the application of laws of another jurisdiction.

b.             Counterparts. 
This Agreement may be executed in two or more identical counterparts,
including, without limitation, by facsimile transmission (with copies sent by
U.S. mail to the other parties), all of which counterparts shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party.  In the event any signature page is delivered
by facsimile transmission, the party using such means of delivery shall cause four
(4) additional original executed signature pages to be physically delivered to
the other party within five (5) days of the execution and delivery hereof.

c.             Headings. 
The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretations of, this Agreement.

d.             Severability. 
If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement.

e.             Entire
Agreement; Amendments.  This Agreement and
the Registration Rights Agreement contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, none of the parties hereto makes any
representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the
party to be charged with enforcement.

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f.              Notices. 
Any notices required or permitted to be given under the terms of this
Agreement shall be sent by mail or delivered personally, by courier or by
facsimile (with a copy by U.S. mail) and shall be effective five (5) days after
being placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier or by
facsimile (with a copy by U.S. mail), in each case properly addressed to the
party to receive the same.  The addresses
for such communications shall be:

If to the Company:

	
  

  	
   

  	
  Atlas Industries Holdings LLC

  
	
   

  	
   

  	
  One Sound Shore Drive

  
	
   

  	
   

  	
  Suite 302

  	
   

  	
   

  
	
   

  	
   

  	
  Greenwich, CT 06830

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
  (203) 983-7933

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (203) 622-0151

  
	
   

  	
   

  	
  Attention:

  	
   

  	
  Andrew M. Bursky

  

 

With a copy to:

	
  

  	
   

  	
  McDermott Will & Emery LLP

  
	
   

  	
   

  	
  600 Thirteenth Street, N.W.

  
	
   | 

  	
   

  	
  Washington, DC 
  20005

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
  (202) 756-8126

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (202) 756-8087

  
	
   

  	
   

  	
  Attention:

  	
   

  	
  Christopher M. Zochowski

  

 

If to the Buyer:

	
  

  	
   

  	
  John Hancock Variable Life Insurance Company
  [UPDATE]

  
	
   

  	
   

  	
  197 Clarendon Street C-2

  
	
   

  	
   

  	
  Boston, MA 02116

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
  (617) 572-5343

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
  (617) 572-1165

  
	
   

  	
   

  	
  Attention:

  	
   

  	
  Bond & Corporate Finance Group

  

 

With
a copy to such parties as the Buyer may designate from time to time.

Each party hereto shall
provide notice to the other party of any change in address.

g.             Successors
and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties.  The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Buyer. 
Buyer may not assign its rights hereunder without the consent of the
Company.

 8
 

h.             No
Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

i.              Publicity.  Except with respect to or made in relation to
the IPO, the parties shall have the right to approve before issuance any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the Buyer, to
make any press release or other public disclosure with respect to such
transactions as is required by applicable law and regulations (although the
Buyer shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release and shall be provided
with a copy thereof).

j.              Further
Assurances. 
Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purpose
of this Agreement and the consummation of the transactions contemplated hereby.

k.            Termination.  In the event that the IPO is terminated, this
Agreement shall automatically be terminated and be of no further force and
effect.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the Parties hereto have
caused this Agreement to be executed as of the day and year first above
written.

	
  

  	
   

  	
  ATLAS INDUSTRIES HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Timothy Fazio

  
	
   

  	
   

  	
  Name: 

  	
   

  	
  Timothy Fazio

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ E. Kendall Hines, Jr.

  
	
   

  	
   

  	
  Name:

  	
   

  	
  E. Kendall Hines, Jr.

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Senior Managing Director

  

 

 10

 

EXHIBIT
A

REGISTRATION
RIGHTS AGREEMENT

 

 

 

[to
be attached]

 

John
Hancock Variable Life Insurance Company

SCHEDULE
A

Capitalized
terms used, but not otherwise defined herein shall have the meaning set forth
in

the Agreement to which this Schedule A is attached.

Definitions:

“Actual Purchase Price —
Forest” shall mean the sum of (i) the
actual purchase price of Forest, as set forth in the Company’s Final
Prospectus, plus (ii) the actual purchase price of
CanAmPac, as set forth in the Company’s Final Prospectus.

“Actual Purchase Price —
Pangborn” shall mean the actual purchase price of Pangborn, as
set forth in the Company’s Final Prospectus.

“Actual Share Price”
shall mean the actual price per Common Share issued and sold in connection with
the Company’s IPO, as set forth in the Company’s Final Prospectus.

“Assumed Investment —
Forest” shall mean, with respect to any Person, the product of (i) the Assumed Share Price, multiplied
by (ii) the Unit Allocation — Forest with respect to such Person.

“Assumed Investment —
Pangborn” shall mean, with respect to any Person, the product of (i) the Assumed Share Price, multiplied
by (ii) the Unit Allocation — Pangborn with respect to such Person.

“Assumed Purchase Price —
Forest” shall mean $138,500,000.

“Assumed Purchase Price —
Pangborn” shall mean $22,500,000.

“Assumed Share Price”
shall mean $15.00.

 “CanAmPac” shall mean CanAmPac ULC, a
Nova Scotia unlimited liability company.

“Capital Contribution”
shall mean, with respect to any Person, the sum of (i) the
Net Investment — Forest with respect to such Person, plus (ii)
the Net Investment — Pangborn with respect to such Person.

“Effective Tax Rate”
shall mean, with respect to any Person, the percentage set forth in the column
entitled “Effective Tax Rate” on Exhibit A to this Schedule A in
the row relating to such Person.

“Forest”
shall mean Forest Resources LLC, a Delaware limited liability company.

“Gross Investment — Forest”
shall mean, with respect to any Person, the product of (i)
the Actual Share Price, multiplied by
(ii) the Gross Units — Forest with respect to such Person.

“Gross Investment —
Pangborn” shall mean, with respect to any Person, the product of (i) the Actual Share Price, multiplied
by (ii) the Gross Units — Pangborn with respect to such Person.

“Gross Units — Forest”
shall mean, with respect to any Person, the product of (i)
the product of (x) the Unit Allocation —
Forest with respect to such Person, multiplied by (y)
the Share Price Multiplier, multiplied by (ii)
Purchase Price Multiplier — Forest; provided,
that the product thereof shall be rounded up to the nearest whole number.

“Gross Units — Pangborn”
shall mean, with respect to any Person, the product of (i)
the product of (x) the Unit Allocation —
Pangborn with respect to such Person, multiplied by (y)
the Share Price Multiplier, multiplied by (ii)
Purchase Price Multiplier — Pangborn; provided,
that the product thereof shall be rounded up to the nearest whole number.

“Incremental Tax Liability —
Forest” shall mean, with respect to any Person, the product of (i) the sum of (x) the
Gross Investment — Forest with respect to such Person, minus (y)
the Assumed Investment — Forest with respect to such Person, multiplied by (ii) the Effective Tax Rate with respect to
such Person.

“Incremental Tax Liability —
Pangborn” shall mean, with respect to any Person, the product of (i) the sum of (x) the
Gross Investment — Pangborn with respect to such Person, minus (y)
the Assumed Investment — Pangborn with respect to such Person, multiplied by (ii) the Effective Tax Rate with respect to
such Person.

“Net Investment — Forest”
shall mean, with respect to any Person, the Gross Investment — Forest with
respect to such Person; provided, however, that if the Actual Purchase
Price — Forest exceeds the Assumed Purchase
Price — Forest, then “Net Investment — Forest”
shall mean, with respect to any Person, the product of (i)
the Net Units — Forest with respect to such Person, multiplied
by (ii) the Actual Share Price.

“Net Investment — Pangborn”
shall mean, with respect to any Person, the Gross Investment — Pangborn with
respect to such Person; provided, however, that if the Actual Purchase
Price — Pangborn exceeds the Assumed Purchase
Price — Pangborn, then “Net Investment — Pangborn”
shall mean, with respect to any Person, the product of (i)
the Net Units — Pangborn with respect to such Person, multiplied
by (ii) the Actual Share Price.

“Net Units — Forest”
shall mean, with respect to any Person, the Gross Units — Forest with respect
to such Person; provided,  however, that if the Actual Purchase Price — Forest exceeds the Assumed Purchase Price — Forest, then “Net Units — Forest” shall mean, with
respect to any Person, the result of (i)
the sum of (x) the Gross Investment — Forest
with respect to such Person, minus (y) the
Incremental Tax Liability — Forest with respect to such Person, divided  by (ii) the
Actual Share Price; provided,
that the result thereof shall be rounded up to the nearest whole number.

“Net Units — Pangborn”
shall mean, with respect to any Person, the Gross Units — Pangborn with respect
to such Person; provided,  however, that if the Actual Purchase Price —
Pangborn exceeds the Assumed Purchase Price —
Pangborn, then “Net Units — Pangborn” shall
mean, with respect to any Person, the result of (i)
the sum of (x) the Gross Investment —
Pangborn with respect to such Person, minus (y) the
Incremental Tax Liability — Pangborn with respect to such Person, divided  by (ii) the
Actual Share Price; provided,
that the result thereof shall be rounded up to the nearest whole number.

“Number of  Shares” shall mean, with respect to
any Person, the sum of (i) the Net Units — Forest
with respect to such Person, plus (ii) the
Net Units — Pangborn with respect to such Person.

“Pangborn”
shall mean Capital Equipment Resources LLC, a Delaware limited liability
company.

 2
 

“Person”
shall mean any natural person, partnership, trust, estate, association
(including any group, organization, co-tenancy, plan, board, council or
committee), limited liability company, corporation, custodian, nominee,
government (including a country, state, county or any other governmental
subdivision, agency or instrumentality), body politic or any other entity (or
series thereof) in its own or any representative capacity.

“Purchase Price Multiplier —
Forest” shall mean the result of (i)
the Actual Purchase Price — Forest, divided by (ii)
the Assumed Purchase Price — Forest.

“Purchase Price Multiplier —
Pangborn” shall mean the result of (i)
the Actual Purchase Price — Pangborn, divided by (ii)
the Assumed Purchase Price — Pangborn.

“Share Price Multiplier”
shall mean the result of (i) Assumed Share
Price, divided by (ii) the Actual Share Price.

“Unit Allocation — Forest”
shall mean, with respect to any Person, the number of units set forth in the
column entitled “Unit Allocation — Forest” on Exhibit A to this Schedule
A in the row relating to such Person.

“Unit Allocation — Pangborn”
shall mean, with respect to any Person, the number of units set forth in the
column entitled “Unit Allocation — Pangborn” on Exhibit A to this Schedule
A in the row relating to such Person.

 

 3

Exhibit A

	
  

  	
   

  	
   

  	
   

  	
  Unit Allocation -

  	
   

  	
  Unit Allocation -

  	
   

  	
  Effective

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  	
  Shares

  	
   

  	
  Forest

  	
   

  	
  Pangborn

  	
   

  	
  Tax Rate

  	
   

  
	
  John Hancock Variable
  Life Insurance Company

  	
   

  	
  *

  	
   

  	
  23,375.00

  	
   

  	
  —

  	
   

  	
  38.0

  	
  %

  
												

*                    The
Number of Shares to be acquired by the Buyer pursuant to Section 9 of the
Agreement shall be completed upon consummation of the IPO and shall be equal to the Number of Shares,
with respect to the Buyer, calculated and determined by reference to the
definitions set forth on Schedule A to which this Exhibit A is
attached and the information set forth next to the Buyer’s name on Schedule
A to which this Exhibit A is attached.Exhibit
10.1

 

ASSET PURCHASE AGREEMENT

by and between

HEDWIGS LAS VEGAS TOP TIER, LLC,

and

155 EAST TROPICANA , LLC,

April 30, 2007

 

TABLE
OF CONTENTS

	
  ARTICLE I

  	
  PURCHASE AND SALE

  	
  1

  
	
  1.1

  	
  Purchase and Sale of Assets

  	
  1

  
	
  1.2

  	
  Excluded Assets

  	
  2

  
	
  1.3

  	
  Assumed Liabilities

  	
  2

  
	
  1.4

  	
  Excluded Liabilities

  	
  3

  
	
  1.5

  	
  Purchase Price

  	
  3

  
	
  1.6

  	
  Purchase Price Payable at Closing

  	
  3

  
	
  1.7

  	
  Purchase Price Payable at the End of the Lease Term

  	
  3

  
	
  1.8

  	
  Purchase Price Adjustment

  	
  4

  
	
  1.9

  	
  Allocation of Purchase Price; Tax Filings

  	
  4

  
	
  1.10

  	
  Closing

  	
  5

  
	
  1.11

  	
  Closing Obligations

  	
  5

  
	
  1.12

  	
  Deferral of Transfer of Certain Assets

  	
  6

  
	
  1.13

  	
  Adjustment and Prorations

  	
  6

  
	
  ARTICLE II

  	
  REPRESENTATIONS AND WARRANTIES REGARDING SELLER

  	
  7

  
	
  2.1

  	
  Organization and Qualification

  	
  7

  
	
  2.2

  	
  Authorizations, Consents and Approvals; No
  Violations

  	
  7

  
	
  2.3

  	
  Compliance with Laws, Generally

  	
  8

  
	
  2.4

  	
  Compliance with Gaming Laws

  	
  8

  
	
  2.5

  	
  Financial Statements

  	
  9

  
	
  2.6

  	
  No Undisclosed Liabilities

  	
  9

  
	
  2.7

  	
  Absence of Certain Changes or Events

  	
  9

  
	
  2.8

  	
  Litigation

  	
  10

  
	
  2.9

  	
  Labor and Employment Matters

  	
  10

  
	
  2.10

  	
  Taxes

  	
  11

  
	
  2.11

  	
  Real Property

  	
  11

  
	
  2.12

  	
  Tangible Personal Property

  	
  13

  
	
  2.13

  	
  Environmental Matters

  	
  13

  
	
  2.14

  	
  Intellectual Property

  	
  14

  
	
  2.15

  	
  Material Contracts

  	
  15

  
	
  2.16

  	
  Affiliate Contracts

  	
  16

  

 

 i
 

 

	
  2.17

  	
  Suppliers

  	
  16

  
	
  2.18

  	
  Brokers and Finders

  	
  16

  
	
  2.19

  	
  Title to Personal Property

  	
  16

  
	
  2.20

  	
  Capital Equipment

  	
  16

  
	
  2.21

  	
  Disclosure

  	
  17

  
	
  2.22

  	
  Licenses

  	
  17

  
	
  2.23

  	
  Insurance

  	
  17

  
	
  2.24

  	
  Inventory

  	
  18

  
	
  2.25

  	
  Vehicles

  	
  18

  
	
  2.26

  	
  Entire Business

  	
  18

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
  18

  
	
  3.1

  	
  Corporate Organization, Qualification, Power,
  Authority and Nationality

  	
  18

  
	
  3.2

  	
  Consents and Approvals; No Violations

  	
  19

  
	
  3.3

  	
  Brokers and Finders

  	
  19

  
	
  ARTICLE IV

  	
  COVENANTS RELATING TO CONDUCT OF BUSINESS AND OTHER
  AGREEMENTS

  	
  19

  
	
  4.1

  	
  Conduct of the Business

  	
  19

  
	
  4.2

  	
  Access to Information

  	
  20

  
	
  4.3

  	
  HSR Filing

  	
  20

  
	
  4.4

  	
  Regulatory And Other Approvals

  	
  21

  
	
  4.5

  	
  Reasonable Efforts

  	
  21

  
	
  4.6

  	
  Publicity

  	
  21

  
	
  4.7

  	
  Tax Matters

  	
  21

  
	
  4.8

  	
  Further Assurances

  	
  22

  
	
  4.9

  	
  Books and Records

  	
  22

  
	
  4.10

  	
  Release of Liens; Consents; Permits

  	
  23

  
	
  4.11

  	
  Amendment of Hooters License

  	
  23

  
	
  4.12

  	
  Notice of Developments

  	
  23

  
	
  4.13

  	
  Exclusivity

  	
  23

  
	
  4.14

  	
  Consent of Noteholders

  	
  23

  
	
  4.15

  	
  Additional Deposits if Closing is Deferred

  	
  23

  
	
  4.16

  	
  Baggage

  	
  24

  

 

 ii
 

 

	
  4.17

  	
  Safe Deposits

  	
  24

  
	
  4.18

  	
  Valet Parking

  	
  24

  
	
  4.19

  	
  Estoppel Certificates

  	
  24

  
	
  4.20

  	
  Employees and Employee Benefits

  	
  24

  
	
  4.21

  	
  Restructuring of Agreement

  	
  24

  
	
  4.22

  	
  Failure of Condition Subsequent

  	
  25

  
	
  ARTICLE V

  	
  CONDITIONS TO CONSUMMATION OF THE TRANSACTION

  	
  25

  
	
  5.1

  	
  Conditions to Each Party’s Obligations to Complete
  the Transactions

  	
  25

  
	
  5.2

  	
  Additional Conditions to the Obligation of Purchaser

  	
  25

  
	
  5.3

  	
  Additional Conditions to the Obligation of Seller

  	
  27

  
	
  ARTICLE VI

  	
  OBLIGATIONS AFTER CLOSING

  	
  27

  
	
  6.1

  	
  Survival of Representations, Warranties and
  Covenants; Indemnification

  	
  27

  
	
  6.2

  	
  Offset of Certain Claims

  	
  30

  
	
  ARTICLE VII

  	
  TERMINATION

  	
  30

  
	
  7.1

  	
  Termination

  	
  30

  
	
  7.2

  	
  Effect of Termination

  	
  31

  
	
  ARTICLE VIII

  	
  DEFINITIONS; INTERPRETATION; EFFECTIVENESS OF
  AMENDMENT

  	
  31

  
	
  8.1

  	
  Definitions

  	
  31

  
	
  8.2

  	
  Interpretation

  	
  42

  
	
  ARTICLE IX

  	
  MISCELLANEOUS AND GENERAL

  	
  43

  
	
  9.1

  	
  Payment of Expenses and Other
  Payments

  	
  43

  
	
  9.2

  	
  Amendment

  	
  43

  
	
  9.3

  	
  Waiver and Extension

  	
  43

  
	
  9.4

  	
  Counterparts

  	
  43

  
	
  9.5

  	
  Governing Law

  	
  43

  
	
  9.6

  	
  Specific Performance

  	
  43

  
	
  9.7

  	
  Submission to Jurisdiction

  	
  43

  
	
  9.8

  	
  Notices

  	
  44

  
	
  9.9

  	
  Entire Agreement; Assignment

  	
  45

  
	
  9.10

  	
  Parties in Interest

  	
  45

  
	
  9.11

  	
  Validity

  	
  45

  

 

 iii
 

 

	
  9.12

  	
  Attorneys’ Fees

  	
  46

  
	
  9.13

  	
  Currency

  	
  46

  
	
  9.14

  	
  Captions

  	
  46

  
	
  9.15

  	
  Public Announcements

  	
  46

  

 

	
  SCHEDULE 1.2 -

  	
  Excluded Assets

  
	
  SCHEDULE 1.3 -

  	
  Assumed Leases

  
	
  SCHEDULE 1.5 -

  	
  Accrued Royalties

  
	
  SCHEDULE 2.2 -

  	
  Authorizations, Consents and Approvals

  
	
  SCHEDULE 2.3 -

  	
  Compliance with Laws, Generally

  
	
  SCHEDULE 2.4 -

  	
  Compliance with Gaming Laws

  
	
  SCHEDULE 2.6 -

  	
  Undisclosed Liabilities

  
	
  SCHEDULE 2.7 -

  	
  Certain Changes or Events

  
	
  SCHEDULE 2.8 -

  	
  Litigation

  
	
  SCHEDULE 2.9 -

  	
  Labor and Employment Matters

  
	
  SCHEDULE 2.11 -

  	
  Real Property

  
	
  SCHEDULE 2.12 -

  	
  Permitted Liens

  
	
  SCHEDULE 2.13 -

  	
  Environmental Matters

  
	
  SCHEDULE 2.14 -

  	
  Intellectual Property

  
	
  SCHEDULE 2.15 -

  	
  Material Contracts

  
	
  SCHEDULE 2.16 -

  	
  Affiliate Contracts

  
	
  SCHEDULE 2.17 -

  	
  Suppliers

  
	
  SCHEDULE 2.22 -

  	
  Licenses

  
	
  SCHEDULE 2.23 -

  	
  Insurance

  
	
  SCHEDULE 2.25 -

  	
  Vehicles

  
	
   

  	
   

  
	
  EXHIBIT 1 -

  	
  Escrow Agreement

  

 

 iv

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT, dated as of April 30, 2007 (this “Agreement”),
is by and between Hedwigs Las Vegas Top Tier, LLC, a Delaware limited liability
company, (“Purchaser”) and 155 East Tropicana, LLC, a Nevada limited
liability company, (“Seller”).

Seller owns and operates a hotel located at 155 East Tropicana Ave. in
Las Vegas Nevada (the “Hotel”), a casino located at the Hotel (the “Casino”)
and various related retail operations, including restaurants, stores and other
amenities (the “Other Operations”). 
The Hotel, the Casino and the Other Operations are collectively referred
to herein as the “Business.” 
Seller desires to sell to Purchaser and Purchaser desires to purchase
from Seller substantially all of Seller’s assets and to assume certain of
Seller’s liabilities.  Purchaser has
deposited or will deposit in escrow the sum of $3,000,000  under
the terms of the Escrow Agreement attached hereto as Exhibit 1 (the “Escrow
Agreement”).  In order to provide for
the lawful continuation of the operations of the Casino, Purchaser shall lease
back the Casino operation to Seller as provided in a Casino Operating Lease
Agreement to be negotiated and agreed upon by and between Seller and Purchaser
on or before 5:00 p.m., pst, May 7, 2007 (the “Lease Agreement”).

NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth in this Agreement and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement, intending to be legally
bound, agree as follows:

ARTICLE
I

PURCHASE
AND SALE

1.1           Purchase and Sale of Assets. 
Subject to the terms and
conditions of this Agreement, at the Closing Seller shall sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser shall purchase, acquire and
accept from Seller all of Seller’s assets of whatever kind nature or
description, other than the Excluded Assets. 
The assets to be purchased by Purchaser from Seller are hereinafter
referred to as the “Purchased Assets” and include, without limitation:

(a)           the Real Property;

(b)           the
Assignable Licenses;

(c)           the Inventory;

(d)           the Seller Intellectual Property;

(e)           the Contract Rights;

(f)            the Equipment;

(g)           the Lease Rights;

(h)           the Insurance Rights; and

 1
 

(i)            Seller’s
rights in telephone numbers, domain names and other, similar items used
directly in the conduct of the Business.

Seller shall convey to Purchaser all of the Purchased
Assets free and clear of all Liens applicable to or suffered to exist by
Seller, other than Permitted Liens; provided, however, that the Gaming Assets
shall not be conveyed at Closing, shall be retained by the Seller during the
term of the Lease Agreement and shall be conveyed to Purchaser or its assignee
concurrently with the termination of the Lease Term.

1.2           Excluded Assets. 
Notwithstanding
anything to the contrary in this Agreement, Seller shall not sell to Purchaser
and Purchaser shall not purchase from Seller any of the following (the “Excluded
Assets”), all defined in accordance with GAAP:

(a)           Seller’s rights under Contracts that are
not Assumed Contracts or Assumed Leases;

(b)           any rights under Licenses that Seller
may not lawfully transfer to Purchaser;

(c)           the Accounts;

(d)           the Cash;

(e)           the Receivables;

(f)            the Business
Records (provided that Purchaser shall be entitled to receive copies thereof as
reasonably necessary for its conduct of the Business);

(g)           the General Intangibles, other than those
specifically enumerated in Section 1.1;

(h)           Prepaids;

(i)            Deposits;

(j)            Notes Deferred
Financing Costs;

(k)           Credit Line Deferred Financing Costs;
and

(l)            the assets
listed in Schedule 1.2.

1.3           Assumed Liabilities. 
At the Closing, Purchaser shall assume (i) the principal amount, any
penalties attributable to the Transactions, and any premium (but not any
accrued interest or penalty not attributable to the Transactions) under the
Notes (the “Indebtedness”); (ii) the Advance Deposits; and (iii) Seller’s
obligations under the Assumed Contracts and the Assumed Leases; provided,
however, that Purchaser shall assume the foregoing liabilities to the extent,
but only to the extent that the nature and amount of such obligations are
apparent on the face of the instruments defining the Indebtedness, the Assumed
Contracts or the Assumed

 2
 

Leases, as the case may be, or
from information provided by Seller to Purchaser in writing and acknowledged in
writing by Purchaser prior to the date hereof, and provided further that all
warranty liabilities and all liabilities for breaches of or defaults relating
to, or any past due payment or performance obligation under, any Indebtedness,
Assumed Contract or Assumed Lease prior to the Closing are not assumed and
shall be the sole responsibility of Seller (the “Non-Gaming Liabilities”).

The Gaming Liabilities shall not be assumed at
Closing, but shall remain the obligation of the Seller during the term of the
Lease Agreement and shall be assumed by Purchaser or its assignee concurrently
with the termination of the Lease Term. 
The Non-Gaming Liabilities and the Gaming Liabilities are collectively
referred to herein as the “Assumed Liabilities.”

1.4           Excluded Liabilities. 
Except for the Assumed Liabilities, Purchaser shall not assume, by
virtue of this Agreement or the transactions contemplated hereby, and shall
have no liability for, any debts, liabilities or obligations of Seller of any
kind, character or description whatsoever except as otherwise agreed to in this
Agreement.  Without limiting the
generality of the foregoing, Seller shall not, other than as a result of
assuming the Assumed Contracts and the Notes, assume any obligation for
Intercompany Liabilities.

1.5           Purchase Price.  The consideration of the sale
and transfer of the Purchased Assets to Purchaser, shall consist of the Cash
Purchase Price and the assumption by Purchaser of the Assumed Liabilities.  The Cash Purchase Price shall be (i) Ninety
Five Million dollars ($95,000,000) plus (ii) the cash amount of the Accrued Royalty,
plus (iii) any obligations under any notes executed by Seller under the Lease
Agreement (including accrued interest and penalties) and shall be subject to
adjustment as provided in Section 1.8.

1.6           Purchase Price Payable at Closing.  At the Closing, and subject to
the terms and conditions of this Agreement, Purchaser shall, pay to Seller at
the Closing in cash by wire transfer of immediately available funds to one or
more accounts designated by each Seller in writing at least two (2) Business
Days before the Closing Date, an amount equal to the sum of (i) eighty five
million dollars ($85,000,000), plus (ii) the cash amount of the Accrued
Royalty, minus (ii) the amount of the distribution to Seller pursuant to the
Escrow Agreement.

1.7           Purchase Price Payable at the End of the
Lease Term.  At the end of the Lease Term, Purchaser shall
pay to Seller, in a manner consistent with the instructions and methodology
provided in Section 1.6, the additional sum of (i) Ten Million dollars
($10,000,000), plus (ii) the amount of any outstanding loans to Seller under
the Lease Agreement (including accrued interest and penalties), reduced by
(iii) the amount of any Settled Claims in favor of Purchaser; provided no
reduction will be made for Claims related to Seller’s obligations under the
Lease Agreement including any obligations under any notes issued by Seller
pursuant to the Lease Agreement.  Upon
the payment of the remaining amounts owing under this Section 1.7, Seller shall
convey good and marketable title to all Gaming Assets to Purchaser.

The amount paid by Purchaser to Seller pursuant to this Section 1.7 may be
reduced by an amount of a Third Party Claim or such lesser amount as Purchaser
and Seller reasonably agree (the “Third Party Holdback”) if and only if (a) the
Third Party Claim is against both Purchaser and Seller; (b) the Third Party
Claim arises from intentional misdeeds, including but not limited

 3
 

to intentional torts, intentional crimes or fraud; (c)
the Third Party Claim is not fully covered by an insurance policy of either
Seller or Purchaser; (d) the Third Party Holdback is deposited, together with
an amount paid by Purchaser equal to the Third Party Holdback, in an
independent escrow account pending the resolution of the Third Party Claim; (e)
Seller has the right to defend itself against the Third Party Claim; and (f)
the escrow terms provide that any Third Party Holdback not otherwise
distributed in satisfaction of a Third Party Claim shall following the final
resolution of the Third Party Claim shall be promptly distributed to
Seller.  In addition, the amount paid by
Purchaser to Seller pursuant to this Section 1.7 may be further reduced by the
amount Purchaser reasonably anticipates expending on its defense of such Third
Party Claim, provided that such amount is deposited, together with an amount
equal thereto in an independent escrow account pending the resolution of the
Third Party Claim (collectively the “Defense Holdback”) and further provided
that the Defense Holdback shall upon the final resolution of the Third Party
Claim be utilized to fund the indemnity obligations of the parties under
Section 6.1(j).

The amount paid by Purchaser to Seller pursuant to
this Section 1.7 may be reduced by an amount of a Direct Claim (the “Direct
Holdback”) if and only if (a) the Direct Claim shall be settled by arbitration
to be administered by JAMS in accordance with its Comprehensive Arbitration
Rules and Procedures then in effect; (b) judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof; (c) at
the conclusion of arbitration, the arbitrator shall issue an award in writing
setting forth the basis for the award; (d) the decision of the arbitrator shall
be final and conclusive, and the Purchaser and Seller waive the right to trial
de novo or appeal; (e) the prevailing party shall be entitled to recover its
reasonable costs and attorney’s fees; (f) the Direct Holdback is deposited in
an independent escrow account pending the resolution of the Direct Claim; (g)
the escrow terms provide that any Direct Holdback amount remaining in escrow
following the payment to Purchaser of any arbitration award under this Section
1.7 shall be promptly distributed to Seller.

1.8           Purchase Price Adjustment. 
On the day prior to the Closing Date, representatives of Purchaser and
Seller shall take a physical inventory of the Inventory as of the Cutoff Time
and shall determine the amount of Advance Deposits.  If the Inventory, as so determined, exceeds
the amount of the Advance Deposits, Purchaser shall promptly pay the difference
to Seller.   If the Inventory, as so
determined, is less than the amount of the Advance Deposits, Seller shall
promptly pay the difference to Purchaser. 
In the event of any disagreement as to the amount of any payment
required under this Section 1.8, each party shall state its position as to the
amount of the required payment and the identity of the payor and payee and the
matter shall be referred to an independent arbitrator selected by the parties
(or if the parties cannot agree on an independent arbitrator, by a Las Vegas
Court to which either party may apply for that purpose) and the decision of
such arbitrator shall be final and binding on the parties.  The cost of any such arbitrator shall be
borne by the party whose stated position was most different from the arbitrator’s
ruling.

1.9           Allocation of Purchase Price; Tax Filings. 
Within sixty (60) days of the date of this Agreement,
Seller shall provide to Purchaser its proposed schedule of allocation of the Purchase
Price among the Purchased Assets (the “Purchase Price Allocation”). In the
event that Purchaser does not agree with Seller’s proposed Purchase Price
Allocation, or any portion thereof, Purchaser and Seller shall endeavor in good
faith to resolve such disagreement within

 4
 

thirty (30) days following
the date of this Agreement. If Purchaser and Seller are unable to resolve such
disagreement within such time period, then any disputed matter(s) will be
finally and conclusively resolved by an independent accounting firm of
recognized national standing with no existing relationship with either party
that is mutually selected by Purchaser and Seller (the “Auditor”) as promptly
as practicable, and such resolution(s) will be reflected on the schedule of the
Purchase Price Allocation. The fees and expenses of the Auditor shall be borne
equally by Purchaser and Seller. Purchaser and Seller agree to act in
accordance with the Purchase Price Allocation in any relevant Tax Returns or
filings, including Form 8594 and any forms or reports required to be filed
pursuant to Section 1060 of the Code and applicable Treasury Regulations or any
similar provisions of local, state and foreign law, and shall not take any
position on any Tax Return inconsistent with such allocation unless required to
do so by a final determination of a Tax Authority.

1.10         Closing.  Promptly upon execution of
this Agreement, the Lease Agreement, the Assignment Agreement and the
Membership Interest Purchase Agreement, Purchaser shall deposit with the escrow
agent such amount as shall be required to cause its aggregate cash deposit in
escrow to be $3,000,000.  Seller shall as
promptly as possible notify Purchaser, and Purchaser shall as promptly as
possible notify Seller, when the conditions set forth in ARTICLE V to such
party’s obligations to complete the Transactions have been satisfied or
waived.  Subject to Section 7.1(a)(iv),
the closing of the Transactions (the “Closing”) shall take place at the
offices of Kummer Kaempfer Bonner Renshaw & Ferrario on the second Business
Day following the satisfaction or waiver of the conditions set forth in Article
VI, or at such other time, date and place as Seller and Purchaser may agree in
writing.  If the Closing occurs, it shall
be deemed to have occurred at the Cutoff Time. 
The date on which the Closing occurs is referred to herein as the “Closing
Date.”

1.11         Closing Obligations.

(a)           At the Closing, Seller shall deliver, or
cause to be delivered from escrow or otherwise, to Purchaser:

(i)            The Transfer
Documents relating to the Purchased Assets to be transferred at Closing;

(ii)           the officer’s
certificates described in Section 5.2(c); and

(iii)          certifications
establishing exemption from withholding required pursuant to federal, state or
local real estate withholding upon the transfer of the Purchased Assets
pursuant to this Agreement or otherwise out of or in connection with the
Transactions.

(b)           At the Closing, Purchaser shall deliver,
or cause to be delivered from escrow or otherwise,  to Seller:

(i)            the payment
called for in Section 1.6, reduced by any applicable Tax or other withholding,
which shall be treated as paid to Seller for the purpose of this Agreement; and

(ii)           the Officer’s
Certificate described in Section 5.3(c).

 5
 

(c)           At the Closing, the parties shall each
execute and deliver to the other the Lease Agreement.

1.12         Deferral of Transfer of Certain Assets. 
The Gaming Assets shall not be transferred at the Closing and, instead,
shall be transferred to Purchaser or its assignee at the end of the Lease Term,
subject to the payment of the amounts provided in Section 1.7.

1.13         Adjustment and Prorations. 
The matters and items set forth below shall be apportioned between
Seller and Purchaser or, where applicable, credited in total to a particular
party:

(a)           Taxes. All real and
personal property taxes, special assessments and tax rebates, if any, whether
payable in installments or not, and whether due and payable or not, shall be
prorated as of the Cutoff Time.  If such
taxes for the tax year in which the Closing occurs have not been finally
determined on the Closing Date, then such taxes shall be prorated on an
estimated basis using the most current information available.  When such taxes have been finally determined,
the parties shall recalculate such prorations and any amount payable by Seller
or Purchaser shall be paid to the other party within fifteen (15) days after
such taxes are finally determined.

(b)           Room Rentals. One-half
(50%) of the room rentals attributable to the night prior to the Closing Date shall
be the property of Seller and the remaining one-half (50%) shall be the
property of Purchaser.  Room rentals
attributable to any night prior to the night prior to the Closing Date shall be
the property of Seller.

(c)           Other Receipts.  All receipts of the Business (other than
receipts from gaming activities managed under the Lease Agreement) shall be the
property of Seller if received prior to the Cutoff Time and the property of
Purchaser if received after the Cutoff Time. 
Receipts from gaming activities managed under the Lease Agreement shall
be the property of Seller as provided in the Lease Agreement.

(d)           Utilities.  Prior to the Closing, Seller shall notify all
utility companies servicing the Property of the anticipated change in ownership
of the Purchased Assets and request that all billings after the Closing be made
to Purchaser.  Utility meters will be
read, to the extent that the utility company will do so, during the daylight
hours on the Closing Date, with charges to that time paid by Seller and charges
thereafter paid by Purchaser.  Prepaid
utility charges shall be adjusted on the closing statement and paid for at
Closing.  Charges for utilities which are
unmetered, or the meters for which have not been read on the Closing Date, will
be prorated between Purchaser and Seller as of the Closing Date based upon
utility billings received after Closing. 
Seller or Purchaser, as appropriate, shall, upon receipt, submit a copy
of the utility billings for any such charges to the other party and such party
shall pay its pro-rata share of such charges to the party requesting payment
within seven (7) days from the date of any such request.  This obligation shall survive Closing.

Purchaser shall be responsible for paying, before the
Closing, all deposits required by utility companies in order to continue
service at the Property for periods after the Closing Date and shall take any
other action and make any other payments required to assure uninterrupted

 6
 

availability of utilities at the Property for all
periods after Closing.  Following
Closing, all utility deposits made by Seller may be refunded directly to Seller
by the utility company holding same.

(e)           Insurance. 
Subject to the terms of this Agreement and the Lease Agreement, all of
Seller’s insurance policies, including, without limitation, fire and any
additional hazard insurance, may be cancelled by Seller as of the Closing Date,
and any refunded premiums shall be retained by Seller.  Purchaser will be responsible for acquiring
and placing its own insurance in force from and after the Closing Date.  Up to and including the date and time of
Closing, Seller and its insurer(s) shall be liable for any claims for personal
injury.  After Closing, Purchaser and its
insurer(s) shall be responsible for any such claims arising on and after the
Closing Date.  Notwithstanding anything
to the contrary in this Section 1.13(e), Seller shall take and/or refrain from
taking such action as may be required to maintain the Insurance Rights for the
benefit of Purchaser.

ARTICLE II

REPRESENTATIONS AND
WARRANTIES

REGARDING SELLER

Seller represents and warrants to Purchaser, subject to the exceptions
set forth in the Disclosure Schedule attached hereto as Schedule 2 (which
exceptions shall specifically identify the Section or Sections to which such
exception relates) that:

2.1           Organization and Qualification. 
Seller is a limited liability company duly formed, validly existing and
in good standing under the Laws of Nevada. 
Seller is not required to be qualified as a foreign limited liability
company in any other jurisdiction. 
Seller has all requisite limited liability company power and authority
and all necessary Permits to own, lease and operate its properties and to carry
on its business as it is now being conducted, except where any failure to have
such power and authority or Permits would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.  Seller has made available to Purchaser prior
to the Closing complete and correct copies of the articles of organization and
operating agreement of Seller as in effect as of the date hereof.  Seller does not own (wholly or partially) any
subsidiary entities other than 155 East Tropicana Finance Corp.

2.2           Authorizations,
Consents and Approvals; No Violations.

(a)           The execution of this Agreement and all
related agreements to be executed by Seller and the consummation of the
Transactions has been duly and validly approved by all required action of
Seller and its members and no such approval has been revoked or rescinded.

(b)           Except (i) for the filing of
notification and report forms with the United States Federal Trade Commission (“FTC”)
and the United States Department of Justice under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the “HSR Act”) and the expiration or
termination of any applicable waiting period thereunder, and (ii) any required
approval of the Transactions by the Nevada Gaming Commission and the Clark
County Gaming and Liquor Licensing Board, and no material applications, notices
to, consultations with, Consents of or filings with, any Government Authority,
self-regulatory authority or third party are necessary in

 7
 

connection with the execution and delivery of
this Agreement and the consummation of the Transactions.

(c)           Neither the execution, delivery or
performance of this Agreement nor the consummation of the Transactions, does or
will (i) conflict with in any material respect, or result in any breach of, any
provisions of the articles of organization or operating agreement of Seller;
(ii) conflict with, result in or constitute a default under, any of the terms,
conditions or provisions of any Material Contract to which Seller is a party or
by which it is bound, except where such conflicts, results or defaults would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect; (iii) conflict with, result in or constitute a default under,
any of the terms, conditions or provisions of any Permit of Seller; or (iv)
subject to giving the notices and obtaining the approvals referred to in
Section (a) above, conflict with or violate any Order or Law applicable to
Seller, or applicable to any of its properties or assets.

2.3           Compliance with Laws, Generally. 
Seller is in compliance with all applicable Laws, Orders and Permits
except for failures so to comply that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.  As of the date hereof Seller has not, in the
last two (2) years, received any written communication from any Governmental
Authority alleging that Seller is not in compliance with any applicable Law,
Order or Permit that has not been resolved.

2.4           Compliance with
Gaming Laws.

(a)           Section 2.4 of the Disclosure Schedule
contains a correct and complete list of all Gaming Approvals and other material
licenses, certifications and permits for the gaming operations conducted at the
Casino (and the holder or operator thereof).

(b)           Seller and, to its Knowledge, each of
its officers, members, managers, key employees and Persons performing
management functions similar to the foregoing (collectively, “Seller’s Key
Persons”) hold all licenses, permits, franchises, authorizations,
certificates, approvals and consents, including, without limitation, all
certificates of occupancy, all environmental, liquor, Gaming Approvals, health
and safety licenses of all Governmental Authorities which are material to the
conduct of the Business and the ownership, use, occupation and/or operation of
the Gaming Assets and Casino (collectively, “Operating Permits”), each
such Operating Permit is and will be in full force and effect on the Closing
Date, Seller and each of Seller’s Key Persons are in compliance in all material
respects with all such Operating Permits, and no event (including, without
limitation, any material violation of any law, rule or regulation) has occurred
which would be reasonably likely to lead to the revocation or termination of
any such Operating Permit or the imposition of any restriction thereon.

(c)           Seller and, to its Knowledge, each of
Seller’s Key persons, have no reason to believe that Seller will not be able to
maintain in effect all Gaming Approvals and other Operating Permits necessary
for the lawful conduct of its business or operations as now conducted or as
planned to be conducted at the Casino, including, but not limited to, the Lease
Agreement for the continued operation of the Casino by Seller.

 8
 

2.5           Financial Statements.  The financial statements (the “Financial
Statements”) included in Seller’s Annual Report on Form 10-K for the year
ended December 31, 2006  (the “Report”)
fairly present the financial condition and results of operations of Seller at
the dates and for the periods indicated.

2.6           No Undisclosed Liabilities. 
As of the date hereof, except as reflected, reserved or disclosed in the
Financial Statements, and except for liabilities and obligations incurred in
the ordinary course of business since the date of the most recent balance sheet
included in the Financial Statements (the “Balance Sheet Date”), Seller
does not have any material liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required by GAAP to
be recognized on a balance sheet of Seller dated as of the date hereof.

2.7           Absence of Certain Changes or Events. 
As of the date hereof, since the Balance Sheet Date, except as disclosed
in the Reports or as a consequence of, or as contemplated by, this Agreement,
Seller’s business has been conducted in the ordinary course of business and
Seller has not experienced any events, developments or changes which,
individually or in the aggregate, would be reasonably likely to have a Material
Adverse Effect.  As of the date hereof,
without limiting the generality of the foregoing, except as contemplated by
this Agreement or disclosed in the Reports, since the Balance Sheet Date,
Seller has not:

(a)           amended in any material respect,
terminated, cancelled, compromised in any material respect or settled any
material claim relating to Seller, other than in the ordinary course of
business consistent with past practice;

(b)           sold, transferred, leased, subleased,
licensed or otherwise disposed of any material properties or assets, real,
personal or mixed (including leasehold interests and intangible property),
owned, leased or otherwise held primarily for Seller, other than in the
ordinary course of business consistent with past practice;

(c)           made, revoked or changed any material
Tax election or material method of Tax accounting or settled or compromised any
material liability relating to Taxes of Seller;

(d)           either (i) granted any increase, or
announced any increase, in the wages, salaries, compensation, bonuses,
incentives, pension or other benefits payable to any employee of Seller,
including any increase or change pursuant to any Seller Plan, or (ii)
established or increased or promised to increase any benefits under any Seller
Plan; in any such case (x) except as increased, announced, changed, promised,
granted or established, as the case may be, in the ordinary course of business
consistent with past practice, (y) except as required by Law or (z) except
ordinary course increases of Seller’s business pursuant to any collective
bargaining agreement or other similar employee agreement;

(e)           other than in the ordinary course of
business consistent with past practice, (i) advanced the collection of, or
offered any incentives that led to the advanced collection of, any accounts
receivable of Seller, (ii) materially modified the pricing practices of Seller
or (iii) offered any material discounts, rebates or offsets;

(f)            made any
change to its financial accounting methods, principles or practices;

 9

(g)           become aware of any pending or
threatened union organizational activity, labor dispute, strike or work
stoppage affecting Seller’s business, or any charge or complaint against Seller
filed with the National Labor Relations Board or any administrator of any
applicable state or federal equal employment opportunity laws;

(h)           experienced any damage, destruction or
loss (whether or not covered by insurance) materially affecting Seller’s assets
or leased properties;

(i)            engaged in any
sale, assignment, lease or other transfer of any of Seller’s properties, except
in the Ordinary Course of Business;

(j)            created or
assumed any mortgage, pledge or other Lien or encumbrance upon any of Seller’s
assets or properties, except for Permitted Liens;

(k)           sold, assigned, transferred, abandoned
or permitted to lapse any material Licenses or Permits or any portion thereof,
or any patents, trademarks, trade names, copyrights, trade secrets or other
intangible assets;

(l)            borrowed,
assumed or otherwise incurred any material liabilities except current
liabilities incurred in the Ordinary Course of Business and liabilities under
Contracts entered into in the Ordinary Course of Business;

(m)          made any capital expenditures or
commitments therefor that exceed, in the aggregate, $1,000,000;

(n)           made any loans or advances to or
guarantees for the benefit of any Persons, except for advances made to
employees for expenses in the Ordinary Course of Business;

(o)           declared or made any dividends or
distributions to its members or otherwise in respect of the Interests; or

(p)           agreed, whether in writing or otherwise,
to take any of the actions specified in this Section 2.7 (a)

through (f).

2.8           Litigation.  Seller is not a party to any
Litigation currently pending by or before any domestic or foreign federal,
national, state or local court, tribunal or agency, or by or before any
arbitrator, the outcome of which Litigation, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect.  Seller has not received written notice and is
not otherwise aware of any threatened material Litigation.  Neither Seller nor any of its material assets
or properties is subject to any material Order that could affect the legality,
validity or enforceability of this Agreement or the consummation of the
Transactions.

2.9           Labor and Employment
Matters.

(a)           There is no material charge or complaint
pending against Seller or, to Seller’s Knowledge, threatened before the
National Labor Relations Board.  There is
no material

 10
 

labor strike or lock-out pending or, to Seller’s
Knowledge, threatened with respect to any employees.

(b)           There is no material charge, claim, or
complaint pending against Seller, or to Seller’s Knowledge, threatened before
the EEOC, Department of Labor, OSHA or other federal or state government agency
with jurisdiction over industrial industries, wage and hour, discrimination or
other employment matters.

(c)           To Seller’s Knowledge, Seller is and has
been in compliance in all material respects with all applicable laws regarding
employment and employment practices, terms and conditions of employment, wages
and hours and employee benefits and is not and has not been engaged in any
unfair labor practice.  Since November 1,
2005 through and including the date hereof Seller has not effectuated (i) a “mass
layoff” (as defined in the Worker Adjustment and Retraining Notification Act of
1988 (the “WARN Act”) in the United States affecting any site of employment or
facility or operating unit within any site of employment or facility of Seller
or (ii) a “plant closing” (as defined in the WARN Act) in the United States
affecting any site of employment or facility of Seller.  Since November 1, 2005 through and including
the date hereof, Seller has not been affected by any transaction or engaged in
lay-offs or employment terminations sufficient in number to trigger the
application of any plant closing Law similar to the WARN Act.

(d)           Seller is not currently liable for any
material overdue payment to any trust or any governmental or administrative
authority with respect to unemployment compensation benefits or social security
for employees (other than routine payments to be made in the Ordinary Course of
Business).

(e)           Seller is not a party or subject to any
labor, union, collective bargaining or similar agreement.

2.10         Taxes.  Seller has not failed to file
any Tax Return, to pay any Tax, to withhold any amount or otherwise to comply
with any tax law in any manner that could cause Purchaser to have any liability
for any Tax payment or penalty, could result in a Lien on any of the Purchased
Assets or could result in an increase in the amount of any Assumed Liability.

2.11         Real Property.

(a)           Section 2.11 of the Disclosure Schedule
contains (i) a true and correct list of each parcel of real property owned by
Seller and used or held for use in connection with its business (collectively
the “Real Property”), and (ii) a true and correct list of each parcel of Real
Property leased by Seller (as lessor or lessee) and used or held for use in
connection with its business (collectively “Real Property Leases”).

(b)           Seller has good and marketable fee
simple title to the Real Property, free and clear of all Liens other than
Permitted Liens.  Seller is in possession
of the Real Property.  Seller has
adequate rights of ingress and egress with respect to each parcel of the Real
Property.  To Seller’s Knowledge, none of
the Real Property, or the improvements thereto, or the use thereof, contravenes
or violates any building, administrative, occupational safety and health or

 11
 

other applicable Law in any material respect
(whether or not permitted on the basis of prior nonconforming use, waiver or
variance).

(c)           Seller has a valid and subsisting
leasehold estate in and the right to quiet enjoyment of the real properties subject
to the Real Property Leases described in Section 2.11 of the Disclosure
Schedule actually leased by Seller as lessee for the full term thereof.  Each Real Property Lease is a legal, valid
and binding agreement, enforceable in accordance with its terms, of Seller and
of each other Person that is a party thereto, and to Seller’s Knowledge there
is no, nor has Seller received any notice of any, default (or any condition or
event which, after notice or lapse of time or both, would constitute a default)
thereunder.  Seller does not owe any
brokerage commissions with respect to any such leased space.

(d)           To Seller’s Knowledge, Seller has
delivered to Purchaser prior to the execution of this Agreement true and
complete copies of (i) all deeds, leases, mortgages, deeds of trust,
certificates of occupancy, title insurance policies, title reports, surveys and
similar documents, and all amendments thereof, with respect to the Real
Property, and (ii) all Real Property Leases (including any amendments and
renewal letters) and, to the extent reasonably available, all other documents
referred to in clause (i) of this paragraph (d) with respect to the Real
Property subject to the Real Property Leases described in Schedule 2.11.

(e)           No tenant or other party has any right
to purchase, or holds any right of first refusal to purchase, the Real
Property.

(f)            To Seller’s
Knowledge, none of the Real Property, or the Improvements, or the use and
operation thereof, contravenes or violates any building, zoning, subdivision,
land use, administrative, occupational safety and health, environmental or
other applicable Law in any material respect (whether or not permitted on the
basis of prior nonconforming use, waiver or variance).  Seller has not received any notice from any
Governmental Authority advising Seller of (i) a violation of any such Laws
(whether now existing or which will exist with the passage of time) or (ii) any
action which must be taken to avoid a violation thereof.

(g)           There are no outstanding contracts made
by Seller for the construction or repair of any improvements to the Real
Property which have not been fully paid for.

(h)           To Seller’s Knowledge, there are no
material physical defects in the Real Property.

(i)            The Real
Property is zoned “H-1” and “C-2.”  The
portion of the Real Property zoned “H-1” is designated by Clark County as being
part of a gaming enterprise district. 
Seller has obtained and maintains in full force and effect all licenses,
permits, easements, and rights-of-way, including a use permit, required from
all Governmental Authorities or from private parties for the use and operation
of the Real Property as a restaurant, hotel and casino with all of the
amenities necessary for the operation thereof and to assure vehicular and
pedestrian ingress to and egress from the Real Property.

(j)            Seller has not
received any notice from any insurance carrier of any defects or inadequacies
in the Real Property, or in any portion thereof, which would adversely affect
the insurability thereof or the cost of such insurance.

 12
 

(k)           There are no pending insurance claims
that are reasonably likely to have a Material Adverse Effect.

(l)            Seller is not
considered to be a “foreign person” within the meaning of Section 1445(f)(3) of
the Code, and Seller will furnish to Purchaser prior to the Closing, an
affidavit in a form reasonably acceptable to Purchaser.

2.12         Tangible Personal Property. 
As of the date hereof, Seller is in possession of and has good title to,
or has valid leasehold interests in or valid rights under contract to use, all
the tangible personal property, including all tangible personal property
reflected on the balance sheet included in the Financial Statements and
tangible personal property acquired since the date of such Financial Statements
other than tangible personal property disposed of since such date in the
Ordinary Course of Business consistent with past practice (collectively the “Tangible
Personal Property”).  As of Closing,
Seller shall be in possession of and has good and valid fee title to all such
Tangible Personal Property.  All the
Tangible Personal Property is free and clear of all Liens, other than Permitted
Liens, and is in good working order and condition, ordinary wear and tear
excepted, and its use complies in all material respects with all applicable
Laws.

2.13         Environmental Matters. 
To Seller’s Knowledge, Seller has obtained all Licenses which are
required under applicable Environmental Laws in connection with the conduct of
its business or the construction, ownership or operation of its assets.  Each of such Licenses is in full force and
effect and is held in the name of Seller. 
Seller has conducted its business in compliance in all material respects
with the terms and conditions of all such Licenses and with any applicable
Environmental Law.  In addition, except
as set forth in the Phase I Environmental Site Assessment Report dated June 22,
2004 and the Phase I Environmental Site Assessment Report dated November 8, 2006, true copies of which
have been provided to Purchaser:

(a)           No Order has been issued, no
Environmental Claim has been filed, no penalty has been assessed and no
investigation or review is pending or, to the Knowledge of Seller, threatened
by any Governmental Authority with respect to any alleged failure by Seller to
possess or comply with any License required under applicable Environmental Laws
in connection with the conduct of its business or with respect to any
generation, treatment, storage, recycling, transportation, discharge, disposal or
Release of any Hazardous Material in connection with its business, and to the
Knowledge of Seller there are no facts or circumstances in existence which
could reasonably be expected to form the basis for any such Order,
Environmental Claim, penalty or investigation.

(b)           To Seller’s Knowledge (i) no
polychlorinated biphenyl is or has been present, (ii) no asbestos or
asbestos-containing material is or has been present, (iii) there are no
underground storage tanks or surface impoundments for Hazardous Materials,
active or abandoned, and (iv) no Hazardous Material has been Released in a
quantity reportable under, or in violation of, any Environmental Law or
otherwise Released, in the cases of clauses (i) through (iv), at, on or under
any such site or facility during any period that Seller owned, operated or
leased such property.

(c)           To Seller’s Knowledge, Seller has not
transported or arranged for the transportation of any Hazardous Material in
connection with the operation of its business to any

 13
 

location that is (i) listed on the NPL under
CERCLA, (ii) listed for possible inclusion on the NPL by the Environmental
Protection Agency in CERCLIS or on any similar state or local list or (iii) the
subject of enforcement actions by federal, state or local Governmental
Authorities that may lead to Environmental Claims against Seller or its
business.

(d)           To Seller’s Knowledge, no Hazardous
Material generated in connection with the operation of Seller’s business has
been recycled, treated, stored, disposed of or Released by Seller at any
location.

(e)           No Liens have arisen under or pursuant
to any Environmental Law on any site or facility owned, operated or leased by
Seller on any of the Real Property, and no federal, state or local Governmental
Authority action has been taken or, to the Knowledge of Seller, is in process
that could subject any such site or facility to such Liens, and Seller would
not be required to place any notice or restriction relating to the presence of
Hazardous Materials at any such site or facility in any deed to the Real
Property on which such site or facility is located.

(f)            There have
been no environmental investigations, studies, audits, tests, reviews or other
analyses conducted by, or that are in the possession of, Seller in relation to
any site or facility now or previously owned, operated or leased by Seller on
any of the Real Property which have not been delivered to Purchaser prior to
the execution of this Agreement.

2.14         Intellectual Property.

(a)           Section 2.14 of the Disclosure Schedule
sets forth a list of (i) all copyright registrations and copyright registration
applications, domain names, trademarks (including unregistered trademarks),
trademark registrations and pending applications, patents and patent
applications, owned by or licensed to Seller or used by Seller within the past
two years (the “Listed Seller Intellectual Property” and, together with
all other Intellectual Property owned by Seller, the “Seller Intellectual
Property”), and (ii) all Intellectual Property Contracts other than “click-to-accept”
and similar generic licenses applicable to software generally available in the
open market.

(b)           As of the date of this Agreement:

(i)            Seller owns
all right, title and interest in and to Seller Intellectual Property free and
clear of all claims and Liens (except Permitted Liens), and except as noted in
Section 2.14 of the Disclosure Schedule, Seller has the exclusive right to use
the Listed Seller Intellectual Property free and clear of any claims.

(ii)           (A) Seller is
not, or will not as a result of the execution and delivery of this Agreement
be, in breach of any license, sublicense or other agreement relating to the
Seller Intellectual Property, (B) the execution and delivery of this Agreement
will not impair the right of Seller to use, possess, sell, or license any
Seller Intellectual Property, and (C) the use and transfer of the Seller
Intellectual Property does not require the Consent of any other person.

(iii)          (A) The Listed
Seller Intellectual Property is valid and enforceable under applicable Law and
has been properly maintained in the jurisdictions noted in Section 2.14 of the
Disclosure Schedule; (B) Seller is not aware of any unexpired patent or patent
application

 14
 

which includes claims that would materially
adversely affect the products or Business and; (C) Seller is not, as of the
date hereof, a party to any currently pending or threatened Litigation which
involves a claim of infringement of any patent, trademark, service mark,
copyright or violation of any trade secret or other proprietary right of any
third Person, nor has Seller received written notice of any such threatened
claim, nor is Seller the subject of any Consent agreement nor a party to any
settlement agreement resolving any such claim that would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect; (D) to
Seller’s Knowledge, the marketing, licensing, sale or use of any products of
Seller or operation of the Business, in the manner currently marketed, sold or
licensed or used, does not infringe or misappropriate any patent, trademark,
service mark, copyright, trade secret or other proprietary right of any third
party; and (E) to Seller’s Knowledge, there is no unauthorized, use,
disclosure, infringement or misappropriation of any Seller Intellectual
Property by any third party.

(iv)          Seller has the
right to use, free and clear of any claims or rights of others, all trade
secrets, inventions, detailed customer contact information, and manufacturing
and confidential processes (“Trade Secrets”) required for or incident to
operation of the Business or the manufacture and marketing of all products
formerly or presently sold, licensed, under development or produced by it,
including products licensed to others.  
There are no payments required to be made by Seller for the use of such
Trade Secrets, and Seller is not in any way making use of any confidential
information or trade secrets of any third party.  Seller has taken commercially reasonable
steps to preserve and maintain (A) the confidentiality of, and (B) Seller’s
interests in, proprietary information concerning Seller.

(v)           After the
Closing, no Affiliate, or current or former director, stockholder, officer or
employee of Seller will own or retain any material rights to use any of the Seller
Intellectual Property.

(c)           the Seller Intellectual Property
constitutes all of the intellectual property that is necessary to conduct the
Business immediately after Closing substantially as conducted by Seller during
the six (6) month period prior to the date hereof.

2.15         Material Contracts.

(a)           As of the date hereof, Section 2.15 of
the Disclosure Schedule sets forth each Material Contract of Seller of the type
described below:

(i)            each Material
Contract with any supplier identified in Section 2.17 of the Disclosure
Schedule to which Seller is a party;

(ii)           each Material
Contract to which Seller is a party with senior executives of Seller;

(iii)          all agreements
evidencing indebtedness for money borrowed and all guarantees of indebtedness
for borrowed money, bonds, sureties or letters of credit issued or caused to be
issued by Seller;

(iv)          all Material
Contracts to which Seller is a party that are reasonably expected to result in
payment on the part of Seller in excess of five hundred thousand dollars

 15
 

($500,000) or the provision of goods or
services by Seller valued in excess of one million dollars ($1,000,000), in
either case during any twelve (12) month period; and

(v)           any
Intellectual Property Contract.

(b)           Each Material Contract is, in all
material respects, (i) in full force and effect and is a valid and binding
obligation of Seller and (ii) enforceable against Seller and the other parties
thereto, in accordance with its terms (except that the enforcement thereof may
be limited by (A) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar Laws now or hereafter in effect relating to
creditors’ rights generally and (B) general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law).  As of the date hereof, Seller is not and, to
Seller’s Knowledge, no other party is, in material breach of, or material
default under, any Material Contract.

(c)           Seller is not a party to or bound by any
non-competition agreement or obligation which limits in any material respect
the manner in which, or the localities in which, all or any material portion of
Seller’s business is conducted.

2.16         Affiliate Contracts. 
As of the date hereof, Section 2.16 of the Disclosure Schedule sets
forth all contracts between, on the one hand, either owner of Seller or any of
its Affiliates, and, on the other hand, Seller, which will be in effect from
and after the Closing Date.  The
contracts listed in Section 2.16 of the Disclosure Schedule are hereafter called
the “Affiliate Contracts”.

2.17         Suppliers.

(a)           Listed in Section 2.17 of the Disclosure
Schedule are the names of each of the ten (10) most significant suppliers (by
purchase volume) to Seller in 2006.

(b)           As of the date hereof, Seller has not
received any written notice from a supplier listed in Section 2.17 of the
Disclosure Schedule that such supplier has refused or plans to refuse to sell
to Seller on terms and conditions substantially similar to those used in its
sales to Seller in 2006, subject to general and customary price increases.

2.18         Brokers and Finders. 
Seller has not, directly or indirectly, employed, and is not aware that
any of its Affiliates has employed, any investment banker, broker, finder or
intermediary in connection with the Transactions which would be entitled to any
investment banking, brokerage, finder’s, financial advisory or similar fee or
commission in connection with this Agreement or the Transactions.

2.19         Title to Personal Property. 
As of the Closing, Seller will have good title to, or a valid interest
in, all material tangible personal property used in the conduct of the
Business, free and clear of all Liens (other than Permitted Liens.)

2.20         Capital Equipment. 
Except where the contrary would not be reasonably likely to have a
Material Adverse Effect, Seller’s capital equipment is in all material respects
(i) in good operating condition and repair (ordinary wear and tear excepted),
(ii) performing satisfactorily, (iii) available for immediate use in the
conduct of Seller’s business and (iv) adequate and

 16
 

necessary for Seller to conduct
its business.  Seller has good and
marketable title to all such capital equipment, free and clear of all security
interests, mortgages, Liens, pledges, charges, valid claims or encumbrances of
any kind or character, except Permitted Liens.

2.21         Disclosure.  Each Report included all
information required by Law to be included therein.  As of their respective dates, the Reports did
not contain any information that was materially false, nor did any such Report
omit any information necessary to make statements in the Reports, in the
context in which such statements were made, not misleading.  Neither this Agreement nor any of the
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to Purchaser by or on behalf of Seller pursuant to
this Agreement contain any untrue statement of a material fact or omit a
material fact necessary to make each statement contained herein or therein, in
light of the circumstances in which they were made, not misleading.

2.22         Licenses.  Section 2.22 of the Disclosure
Schedule contains a true and complete list of all material Licenses used or
held for use in the Business (and all pending applications for any such
Licenses), setting forth the grantor, the grantee, the function and the
expiration and renewal date of each. 
Prior to the execution of this Agreement, Seller has delivered to
Purchaser true and complete copies of all such Licenses.

(i)            Seller owns or
validly holds in its name all Licenses that are material, individually or in
the aggregate, to its business;

(ii)           each License
is valid, binding and in full force and effect;

(iii)          Seller has not
received any notice of default (or with the giving of notice or lapse of time
or both, would be in default) under any License; and

(iv)          the execution,
delivery and performance by Seller of this Agreement, and the consummation of
the transactions contemplated hereby and thereby, will not (A) result in or
give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (B) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under, or (C) result in the creation or imposition of any
Lien upon Seller or any of its assets and properties under any License.

2.23         Insurance.  Section 2.23 of the Disclosure
Schedule contains a true and complete list (including the names and addresses
of the insurers, the names of the Persons to whom such policies have been
issued, the expiration dates thereof, the annual premiums and payment terms
thereof, whether it is a “claims made” or an “occurrence” policy and a brief
description of the interests insured thereby) of all liability, property,
workers’ compensation and other insurance policies currently in effect that
insure the Business, the employees of Seller or the assets of Seller.  Each such insurance policy is valid and
binding and in full force and effect, no premiums due thereunder have not been
paid and Seller has not received any notice of cancellation or termination in
respect of any such policy or is in default thereunder.  Such insurance policies are placed with
financially sound and reputable insurers and, in light of the nature of the
business and the assets of Seller, are in amounts and have coverages that are
reasonable and customary for

 17
 

Persons engaged in such
business and having such assets and properties. 
Neither Seller nor the Person to whom such policy has been issued has
received notice that any insurer under any policy referred to in this Section
is denying liability with respect to a claim thereunder or defending under a
reservation of rights clause.

2.24         Inventory.  All the Inventory consists of
a quality and quantity usable in the Ordinary Course of Business consistent
with past practice, subject to normal and customary allowances in the industry
for spoilage, damage and outdated items. 
All items included in the Inventory are the property of Seller, free and
clear of any Lien other than Permitted Liens, have not been pledged as
collateral, are not held by Seller on consignment from others and conform in
all material respects to all standards applicable to such inventory or its use
or sale imposed by Governmental Authorities.

2.25         Vehicles.  Section 2.25 of the Disclosure
Schedule contains a true and complete list of all motor vehicles owned or
leased by Seller and used or held for use in the conduct of its business.  Seller has good and valid title to, or has valid
leasehold interests in or valid rights under contract to use, each vehicle,
free and clear of all Liens other than Permitted Liens.

2.26         Entire Business.  The sale of the Purchased
Assets by Seller to Purchaser pursuant to this Agreement will effectively
convey to Purchaser the entire Business and all of the tangible and intangible
property used by Seller (whether owned, leased or held under license by Seller,
by any of Seller’s Affiliates or by others) in connection with the conduct of
Seller’s business as heretofore conducted by Seller including, without
limitation, all tangible assets and properties of Seller reflected in the
balance sheet included in the Financial Statements and assets and properties
acquired since the Financial Statements were effective in the conduct of Seller’s
business.

ARTICLE III

REPRESENTATIONS AND
WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller that:

3.1           Corporate
Organization, Qualification, Power, Authority and Nationality.

(a)           Purchaser is a limited liability company
duly organized, validly existing and in good standing under the Laws of the
State of Delaware.

(b)           Purchaser has the requisite limited
liability company power and authority to execute and deliver this Agreement and
to consummate the Transactions.  This
Agreement, and the consummation by Purchaser of the Transactions, have been
duly and validly authorized by the Managing Member of Purchaser, and no other
corporate proceeding on the part of Purchaser is necessary to authorize this
Agreement or to consummate the Transactions. 
This Agreement has been duly and validly executed and delivered by
Purchaser and, assuming this Agreement constitutes the valid and binding
agreement of the Seller, constitutes the valid and binding agreement of
Purchaser, enforceable against Purchaser in accordance with its terms, except
as such enforcement may be limited by (i) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar Laws now or
hereafter in effect relating to 

 18
 

or affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).

(c)           Purchaser is not, and is not controlled
by, a foreign Person.

3.2           Consents and Approvals;
No Violations.

(a)           Except as set forth in Section 3.2(a) of
the Disclosure Schedule, and subject to the giving of notices, the occurrence
of the required consultations and obtaining the approvals referred to in
Section 2.2(b), no material applications, notices to, consultations with,
Consents of, or filings with, any Government Authority, self-regulatory
authority or third party are necessary in connection with the execution and
delivery by Purchaser of this Agreement and the consummation by Purchaser of
the Transactions.

(b)           Neither the execution, delivery or
performance of this Agreement by Purchaser, nor the consummation by Purchaser
of the Transactions, does or will (i) conflict with in any material respect, or
result in any material breach of any material provision of the certificate of
formation or the operating agreement of Purchaser; or (ii) except as set forth
in Section 3.2(a) of the Disclosure Schedule, and subject to giving the
notices, the occurrence of the required consultations and obtaining the
approvals referred to in Section 2.2(b), conflict with or violate any Order or
Law applicable to Purchaser or any of its respective material properties or
assets.

3.3           Brokers and Finders. 
No investment banker, broker, finder or intermediary or other Person is
or will be entitled to any investment banking, brokerage, finder’s, financial
advisory or similar fee or commission from Seller in connection with this
Agreement or the Transactions as a result of any arrangement made by Purchaser.

ARTICLE IV

COVENANTS RELATING TO
CONDUCT OF

BUSINESS AND OTHER
AGREEMENTS

4.1           Conduct of the Business. 
During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Closing Date and except in the ordinary course of Seller’s
business, consistent with past practice, unless Purchaser shall otherwise
Consent in writing (which shall include electronic mail), which Consent shall
not be unreasonably withheld, conditioned or delayed, and except as otherwise
contemplated by this Agreement, Seller shall use commercially reasonable
efforts to (i) carry on the Business, (ii) preserve intact Seller’s material
business relationships with its customers, suppliers, distributors and others
having business dealings with it, (iii) not terminate Seller’s officers or key
employees, (iv) not purchase any material assets, and (v) not sell, transfer,
license, lease or otherwise dispose of, or suffer or cause the encumbrance by
any new Lien (other than Permitted Liens) upon any of, its material properties
or assets, tangible or intangible, or any interest therein, (vi)  not advance the collection of, or offer any
incentives that lead to the advance collection of, any accounts receivable of
Seller,  (vii)  not materially modify the pricing practices
of Seller, (viii)  not offer any material
discounts, rebates or offsets, (ix) not sell or issue any equity interest in

 19
 

Seller, (x) not amend or modify
Seller’s organizational documents, (xi) not waive any material claim of Seller,
(xii) not materially increase the compensation of any of Seller’s employees or
materially alter the benefits of Seller’s employees except as required by Law,
(xiii) not permit any material insurance policy to lapse (unless replaced by an
equivalent policy), (xiv) not enter into any customer contract or amend any
existing customer contract to provide for fixed prices over a period of more
than one year, (xv) operate in compliance with all material Laws and the terms
of the Indenture; (xvi) make no distributions to its members (other than
regular distributions consistent with past practice for the purpose of funding
Tax obligations of its members resulting from their ownership of Seller.)  Seller shall promptly notify Purchaser if it
has taken or proposes to take or not take, as the case may be, any of the
above-described actions, whether or not in the Ordinary Course of Business
consistent with past practice, on the basis that it is not commercially
reasonable to do otherwise.

4.2           Access to
Information.

(a)           In connection with the Transactions,
upon reasonable advance notice to Seller and subject to the requirements of any
Laws governing access to information, Seller shall provide Purchaser and its
authorized agents and representatives (“Representatives”) with reasonable
access, during normal business hours and without disruption to their day-to-day
business, from the date of this Agreement to the earlier of the Closing Date or
termination of this Agreement, to the offices, properties, customers,
suppliers, plants, other facilities and books and records pertaining to Seller
and, during such period, Seller shall furnish to such Representatives all
financial, operating and other data and other information concerning Seller and
personnel employed by Seller as may reasonably be requested.  Any access provided pursuant to this Section
4.2(a) may, at Seller’s option, be subject to or with the participation of
Seller or a designated representative of Seller.

(b)           Purchaser agrees that it will, and will
cause its Representatives to, use any information obtained pursuant to this
Section 4.2 only in connection with the Transactions.

(c)           The Confidentiality Agreement shall
apply with respect to Information, as defined therein, furnished to Purchaser
or its Representatives pursuant to this Section 4.2.

4.3           HSR Filing.  Seller and Purchaser shall, as
promptly as practicable, file or cause to be filed all required notification
and report forms under the HSR Act with the FTC and the Antitrust Division of
the United States Department of Justice (the “Antitrust Division”) in
connection with the Transactions (with a request for early termination), and
will use their respective commercially reasonable efforts to respond as
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division for additional information or documentation and to cause the waiting
periods under the HSR Act to terminate or expire at the earliest possible date;
provided, however, that neither Purchaser nor Seller shall be required by any
provision of this Agreement to agree to any divestiture or “hold-separate”
arrangement or other condition that is not commercially reasonable in order to
obtain such termination or expiration. 
Seller and Purchaser will each furnish to the other such information and
assistance as the other may reasonably request in connection with its
preparation of any filings necessary under the provisions of the HSR Act.  The parties shall promptly furnish to each
other copies of all filings

 20
 

and correspondence relating to
the Transactions with any Governmental Authority specified in this Section 4.3.

4.4           Regulatory And Other Approvals. 
Purchaser will, as promptly as practicable, (a) take all commercially
reasonable steps necessary or desirable to obtain all consents, approvals or actions
of, make all filings with and give all notices to Governmental Authorities or
any other Person required of Purchaser to consummate the transactions
contemplated hereby, (b) provide such other information and communications to
such Governmental Authorities or other Persons as Seller or such Governmental
Authorities or other Persons may reasonably request in connection therewith and
(c) cooperate with Seller in taking such actions as are reasonably necessary in
connection with filings made with the Nevada Gaming Commission to permit the
transfer of the Business to Purchaser. 
Purchaser will provide prompt notification to Seller when any such
consent, approval, action, filing or notice referred to in clause (a) above is
obtained, taken, made or given, as applicable.

4.5           Reasonable Efforts. 
Seller and Purchaser shall, as promptly as practical, use commercially
reasonable efforts (unless otherwise stated herein) to satisfy the conditions
to Closing set forth in ARTICLE V and consummate the Transactions.  Seller and Purchaser shall furnish to each
other such information and assistance as the other may reasonably request in
connection with required filings, applications and Consents, and they shall
keep each other advised of the progress of making all such filings,
applications and Consents.  Without
limiting the generality of the foregoing, Seller and Purchaser shall cooperate
and use their respective commercially reasonable efforts to cause any and all
consents required under the Indenture to be received.

4.6           Publicity.  Seller and Purchaser will
consult with each other and will mutually agree upon any press release or
public announcement pertaining to this Agreement or the Transactions and shall
not issue any such press release or public announcement prior to such
consultation and agreement, except as may be required by applicable Law,
contract or by obligations pursuant to any listing agreement with any national
securities exchange, in which case the party proposing to issue such press
release or public announcement shall use its reasonable efforts to consult in
good faith with the other party and give such other party a reasonable
opportunity, to the extent reasonably practicable, to review and comment upon
such press release or public announcement before issuing any such press release
or public announcement.  Following the
initial release, either party may issue, without Consent, future releases or
publications that are consistent with the initial release.

4.7           Tax Matters.

(a)           Transfer Taxes.   Seller and Purchaser
shall each pay when due one half of all Transfer Taxes imposed with respect to
the transactions contemplated hereby and shall prepare and file all Tax Returns
related to Transfer Taxes.  The parties
shall execute and deliver, each to the other, any certificates or other
documents reasonably necessary in order to perfect any exemption from or
reduction in any Transfer taxes or to otherwise comply with any applicable
reporting requirements with respect to any Transfer Taxes.

 21

(b)           Tax Returns.  Seller shall, at its sole expense, prepare
and file or cause to be prepared and filed all Tax Returns required to be filed
by it with respect to the Business prior to the Closing, in each case in
accordance with past custom and practice.  Not later than 10 Business days before any
such Tax Return is due, Seller shall deliver a copy of the draft Tax Return to
Purchaser (with copies of any relevant schedules and work papers) for Purchaser’s
review and comment.

(c)           Indemnification
by Seller.  Seller shall indemnify
Purchaser from and against any liability for Taxes imposed on or with respect
to Seller or the Assets for any taxable year or period that ends on or before
the Closing Date, and with respect to any Straddle Period, for the portion of
the Straddle Period ending on the Closing Date (“Pre-Closing Taxes”).  For purposes of determining what portion of
Taxes arising in any Straddle Period are attributable to a Pre-Closing Tax
Period, (i) in the case of Taxes that are imposed on a periodic basis (such as
real property taxes), the amount of such Taxes for the entire period shall be
allocated between the pre-Closing and post-Closing period based upon the number
of days in each such period divided by the number of days in the Straddle
Period and (ii) in the case of Taxes not described in (i) (such as Taxes that
are either (A) based upon or related to income or receipts or (B) payroll and
similar taxes), the amount that would be payable if the taxable year or period
ended on the Closing Date; provided that, in determining such amount,
exemptions, allowances, or deductions that are calculated on a periodic basis,
such as the deduction for depreciation, shall be taken into account on a
pro-rated basis in the manner described in clause(i).

(d)           Tax Cooperation.  From and after the Closing Date, Seller and
Purchaser shall (i) cooperate with each other in the preparation of all Tax
Returns, (ii) provide (or cause to be provided) any records and other
information the other so requests, (iii) provide access to, and the cooperation
of its auditors, and (iv) cooperate with each other in connection with any Tax
investigation, audit or other proceeding.

4.8           Further Assurances. 
On and after the Closing Date, Seller and Purchaser shall use all
commercially reasonable efforts to take or cause to be taken all necessary or
appropriate actions and do, or cause to be done, all things necessary or
appropriate to consummate and make effective the Transactions, including the
execution of any additional documents or instruments of any kind (not
containing additional representations and warranties) which may be reasonably
necessary or appropriate to carry out any of the provisions hereof.

4.9           Books and Records. 
Seller shall take such actions as may be necessary to preserve and to
permit Purchaser to have access to and, at its sole expense, to copy, at
reasonable times and on reasonable notice, until at least the seventh
anniversary of the Closing Date, all pre-Closing Date records of Seller that
would normally be maintained by a similar company employing reasonable
record-preservation practices. 
Notwithstanding the foregoing, any and all such records may be destroyed
by Seller at any time if Seller provides Purchaser with notice if its intent to
destroy such records, including a reasonably detailed description of the
records to be destroyed, in which case, such records may be destroyed after the
thirtieth day following such notice unless Purchaser has notified Seller that
it desires to take possession of all or a portion of such records, in which
event, Seller shall transfer to Purchaser the records of which Purchaser wishes
to take possession.

 22
 

4.10         Release of Liens; Consents; Permits. 
Prior to the Closing, Seller shall:

(a)           obtain any and all Consents  to the Transactions required to be obtained under
agreements or Laws to which Seller is subject;

(b)           take such action as may be required to
cause Purchaser to continue to have rights under all Licenses (other than
Permits and Licenses relating to gaming regulations) following the Closing that
Seller had immediately prior to the Closing;

(c)           obtain the release of all Liens against
any of the Purchased Assets other than Permitted Liens; and

(d)           provide evidence of compliance with the
provisions of this Section 4.10 to Purchaser at Closing.

4.11         Amendment of Hooters License. 
Concurrently with or prior to the Closing, Seller shall cause its
license agreements with Hooters licensors to have been amended to consist, in
their entirety, of an assignment agreement to be negotiated and agreed
upon by and between Seller and Purchaser on or before 5:00 p.m., pst, May 7,
2007 (the “Assignment Agreement”).

4.12         Notice of Developments. 
Prior to the Closing, each party shall notify, as promptly as is
reasonably practicable, the other party, in writing, of all material events,
circumstances, facts and occurrences arising subsequent to the date of this
Agreement which could reasonably be expected to result in any material breach
of a representation or warranty or covenant of such party in this Agreement or
which could reasonably be expected to have the effect of making any
representation or warranty of such party in this Agreement untrue or incorrect
in any material respect.

4.13         Exclusivity.  Unless and until this
Agreement is terminated in accordance with the provisions of ARTICLE VII,
Seller will not, directly or indirectly through any representative, employee or
agent, solicit, initiate, or encourage the submission of any proposal or offer
from any Person relating to the acquisition of all or substantially all of the
Interests or the assets of Seller (including any acquisition structured as a
merger, consolidation, or share exchange) or authorize any person to do any of
the foregoing.

4.14         Consent of Noteholders. 
Seller and Purchaser shall each use all commercially reasonable efforts
to cause the holders of the Notes to consent to the Transactions.  Purchaser agrees to reimburse Seller by way
of a credit at closing for its reasonable out-of-pocket costs incurred at the
request of Purchaser in obtaining the consent of the holders of the Notes to
the Transactions or in aiding Purchaser or its agent in reacquiring the Notes.

4.15         Additional Deposits if Closing is Deferred. 
If the Closing has not occurred on or before October 31, 2007 because
the required Licenses and Permits have not been obtained and this Agreement has
not been terminated as provided in ARTICLE VII, Purchaser may, but shall not be
required to, deposit in escrow under the terms of the Escrow Agreement an
additional $500,000 on the first day of each subsequent month until the Closing
has occurred or this Agreement has been terminated.

 23
 

4.16         Baggage.  Concurrently with the Closing,
Seller shall perform the following functions for all baggage, trunks and other
property that was checked and placed in the care of Seller at the
Property:  (i) seal all pieces of baggage
with tape:  (ii) prepare an inventory (“Inventoried
Baggage”) of such items indicating the check number applicable thereto; and
(iii) deliver the Inventoried Baggage to an authorized representative of
Purchaser and secure a receipt for the Inventoried Baggage. Thereafter,
Purchaser shall be responsible for such Inventoried Baggage.

4.17         Safe Deposits.  On or before Closing, Seller
shall remove, all items stored by Seller or any of its Affiliates in safe
deposit boxes located at the Property (other than Acquired Assets), and all
such safe deposit boxes shall be made available for Purchaser’s use
thereafter.  Safe deposit boxes in use by
customers at the Property at Closing will be sealed in a reasonable manner
mutually agreeable to Purchaser and Seller. 
At the Closing, Purchaser and Seller shall designate in writing their
initial safe deposit representatives. Representatives of both Seller and
Purchaser are to be present when a seal is broken.  Seller will make a representative available
within one (1) hour after Purchaser notifies Seller that the representative is
required.  Purchaser shall have no responsibility
for loss or theft from a safe deposit box whose seal was broken in the presence
of Seller’s representative.  All safe
deposit keys, combinations and records shall be delivered at Closing to
Purchaser.

4.18         Valet Parking.  At Closing, Seller shall
perform, the following functions for all motor vehicles that were checked and
placed in the care of Seller at the Property: 
(i) mark all motor vehicles with a sticker or tape; (ii) prepare an
inventory of such vehicles (“Inventoried Vehicles”) indicating the check
number applicable thereto; and (iii) transfer control of the Inventoried
Vehicles to an authorized representative of Purchaser and secure a receipt for
the Inventoried Vehicles. Thereafter, Purchaser shall be responsible for the
Inventoried Vehicles.

4.19         Estoppel Certificates. 
Seller shall use commercially reasonable efforts to deliver to Purchaser
customary tenant estoppel certificates signed by all tenants under Real
Property Leases.

4.20         Employees and Employee Benefits. 
Purchaser shall offer employment to substantially all of Seller’s
non-executive employees, effective as of the Closing on terms and conditions
that, taken as a whole, offer substantially equivalent compensation and
benefits to such employees as such employees enjoyed in connection with their
employment by Seller as of the date of this Agreement, provided, however, that
Purchaser may offer such employment on a probationary basis for a period of not
less than 90 days from the date of such employment.

4.21         Restructuring of Agreement. 
Within seven days of the date of this Agreement, Seller and Purchaser shall
together prepare an agreement that shall provide for the sale of Seller’s
membership interest to Purchaser (the “Memberhip Interest Purchase
Agreement”), which agreement shall provide according to its terms that although
executed by the parties shall not become affective unless and until October 31,
2007.   If as of October 31, 2007, (i)
the Closing has not occurred due to the fact that consummating the Closing
would cause an event of default under the Indenture, and (ii) such default
would not exist if this Agreement were restructured as provided in the
Memberhip Interest Purchase Agreement,
this Agreement shall

 24
 

become null and void and of no
further force or effect and the parties shall thereafter abide by all of the
terms and conditions contained in the Memberhip Interest Purchase
Agreement.

4.22         Failure of Condition Subsequent. 
Notwithstanding Article VII, in the event that parties hereto fail to
reach agreement and execute the Lease Agreement, the Assignment Agreement and
the Memberhip Interest Purchase Agreement on or before 5:00 p.m., pst,
May 7, 2007, this Agreement shall terminate and any deposit posted by Purchaser
shall be refunded to Purchaser together with any interest accrued thereon and
neither party shall have any further obligation to the other hereunder.

ARTICLE V

CONDITIONS TO
CONSUMMATION OF THE TRANSACTION

5.1           Conditions to Each Party’s Obligations to
Complete the Transactions.  The respective obligations of each party to
complete the Transactions are subject to the satisfaction at or prior to the
Closing Date of the following conditions:

(a)           Injunction.  There shall not be in effect any Law or Order
of competent jurisdiction directing that the Transactions not be consummated as
provided herein; provided, however, that a party to this
Agreement may not invoke this Section 5.1(a) if such party has directly or
indirectly solicited or encouraged such Law or Order.

(b)           HSR Act.  The waiting period, together with any
extensions thereof, under the HSR Act shall have expired or early termination
thereof shall have been granted.

5.2           Additional Conditions to the Obligation
of Purchaser.  The obligation of Purchaser to complete the
Transactions is subject to the satisfaction at or prior to the Closing Date of
the following conditions, any and all of which may be waived in whole or in
part by Purchaser to the extent permitted by applicable Law:

(a)           Representations
and Warranties.  The representations and
warranties of Seller contained in Article II of this Agreement shall be true
and correct at and as of the Closing Date with the same effect as though made
on and as of the Closing Date (except that representations and warranties which
speak as of a specified date or period of time shall be true and correct only
as of such date or period of time); provided, however, that for
purposes of this Section 6.2(a), all representations and warranties Seller
shall be deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, without regard to any
“material,” “materiality” or “Material Adverse Effect” qualifiers set forth
therein, individually or in the aggregate, would be reasonably likely to have a
Material Adverse Effect.

(b)           Performance.  Seller shall have performed all of its
covenants and agreements under this Agreement to be performed or complied with
on or prior to the Closing Date, except where the failure to so perform has not
had and is not reasonably likely to have a Material Adverse Effect on Seller
that is continuing and has not materially impaired the parties’ ability to
consummate the Transactions as provided in this Agreement.

 25
 

(c)           Certificates.  Purchaser shall have received on the Closing
Date a certificate dated the Closing Date and executed by the Managing Member
of each Seller certifying to the fulfillment of the conditions specified in
Sections 5.2(a) and (b); provided that, in the case of conditions to have been
performed by an individual Seller, such certificate shall address only the
performance of the certifying Seller.

(d)           Material
Adverse Effect.  Since the date of this
Agreement, no change in circumstance or condition that has had a Material
Adverse Effect shall have occurred and be continuing.

(e)           Approval of
Noteholders.  All required consents and
approvals under the Indenture shall have been obtained.

(f)            Opinion Of
Counsel.  Purchaser shall have received
the opinion of Kummer Kaempfer Bonner Renshaw & Ferrario, counsel to Seller
dated as of the Closing Date in form and substance reasonably satisfactory to
Purchaser.

(g)           Title Policies
and Exceptions.

(i)            Prior to the
Closing, Purchaser shall obtain an ALTA extended owner’s policy of title
insurance, issued by Stewart Title Insurance Company or if such title company
is unable to do so, by a title insurance company reasonably acceptable to
Purchaser in its reasonable discretion (“Title Company”), insuring that
Seller has fee title to the Real Property and the improvements constructed
thereon, subject only to (i) the exceptions to title as shall be reasonably
satisfactory to Purchaser in its discretion, (ii) liens for taxes not yet due
and payable, and (iii) all standard exceptions, exclusions, conditions and
stipulations from coverage for Title Company’s Extended Coverage Form ALTA
owner’s Policy of Title Insurance, including any and all endorsements and
affirmative coverage customary in real estate sale transactions involving the
magnitude and type of the assets (including, without limitation, an ALTA 3.1
Zoning Endorsement) as Purchaser shall reasonably request (collectively the “Title
Policy”).  The coverage amount of the
Title Policy for the Real Property and Improvements shall be in an amount at
least equal to Two Hundred and Twenty Five Million dollars.  Notwithstanding the foregoing, Purchaser
shall have the right to acquire title insurance in an amount equal to the
anticipated replacement cost of the Real Property and Improvements provided
such increase shall in no event cause Seller’s obligation under subparagraph
(ii) below to increase above $300,000. 
Purchaser shall have the right to require the Title Company to obtain
facultative reinsurance, with direct access provisions against the reinsurer
with respect to the Title Policy in such amounts and with such title companies
as Purchaser shall determine in its reasonable discretion.

(ii)           Seller shall
pay up to $300,000 of the premium for the Title Policy and for all endorsements
thereto, and Purchaser shall pay the balance. 
Seller and Purchaser shall cooperate diligently to provide customary
documents required by Title Company as condition to the issuance of the Title
Policy.

(h)           Nevada Gaming
Commission Approval.  Seller
shall continue to have all Gaming Approvals necessary to (i) own or operate the
Gaming Assets; (ii) conduct nonrestricted gaming activities at the Casino; and
(iii) effect the Transactions and the Lease Agreement.

 26
 

5.3           Additional Conditions to the Obligation
of Seller.  The obligation of Seller to complete the
Transactions is subject to the satisfaction at or prior to the Closing Date of
the following conditions, any and all of which may be waived in whole or in
part by Seller to the extent permitted by applicable Law:

(a)           Representations
and Warranties.  The representations and
warranties of the Purchaser contained in Article III of this Agreement shall be
true and correct at and as of the Closing Date with the same effect as though
made on and as of the Closing Date (except that representations and warranties
which speak as of a specified date or period of time shall be true and correct
only as of such date or period of time); provided, however, that
for purposes of this Section 6.3(a), all representations and warranties of
Purchaser shall be deemed to be true and correct unless the failure or failures
of such representations and warranties to be so true and correct, without
regard to any “material” or “materiality” qualifiers set forth therein,
individually or in the aggregate, would be reasonably likely to have a material
adverse effect on Purchaser’s ability to consummate the Transactions.

(b)           Performance.  Purchaser shall have performed in all
material respects its covenants and agreements under this Agreement to be
performed or complied with on or prior to the Closing Date.

(c)           Certificate.  Seller shall have received on the Closing
Date a certificate dated the Closing Date and executed by the Chief Executive
Officer of Purchaser certifying to the fulfillment of the conditions specified
in Sections 5.3(a) and (b) hereof.

ARTICLE VI

OBLIGATIONS AFTER CLOSING

6.1           Survival of Representations, Warranties
and Covenants; Indemnification.

(a)           Survival.  All representations and warranties contained
in this Agreement shall survive until the third anniversary of the Closing
Date, except that the representations and warranties contained in Sections 2.9,
2.10 and 2.11, which shall survive the Closing until 60 days after the
expiration of the applicable statute of limitations.  All covenants and agreements which by their
terms contemplate or involve actions to be taken or obligations in effect after
the Closing shall survive the Closing and remain in full force and effect in
accordance with their terms and the terms of this Agreement.

(b)           Indemnification
by Seller.  Subject to the other
provisions of this Section 6.1, from and after the Closing Date, Seller shall
indemnify Purchaser from and against and in respect of any and all Losses
incurred by Purchaser which may be imposed on, sustained, incurred or suffered
by or assessed against Purchaser, directly or indirectly, to the extent
relating to or arising out of:

(i)            any breach of
any of the representations or warranties contained in Article II or in the
Officer’s Certificate delivered by Seller at Closing pursuant to Section
5.2(c); or

 27
 

(ii)           any failure by
Seller to perform or comply with its covenants and agreements contained in this
Agreement.

(c)           Indemnification
by Purchaser.  Subject to the other
provisions of this Section 6.1, from and after the Closing Date, Purchaser
shall indemnify Seller from and against and in respect of any and all Losses
incurred by Seller, directly or indirectly, to the extent relating to or
arising out of:

(i)            any breach of
any of the representations or warranties of Purchaser contained in Article III
or in the Officer’s Certificate delivered at Closing pursuant to Section
5.3(c); or

(ii)           any failure by
Purchaser to perform or comply with its covenants and agreements contained in
this Agreement.

(d)           Timing of
Delivery of Notice of Claim.  No
party shall be liable for any Losses pursuant to Section 6.1(b) unless the
party seeking such indemnification (the “Indemnified Party”) has (x)
delivered the notice of Claim in respect of such Loss required by Section
6.1(h) below (y) such notice of Claim is received by from which indemnification
is sought (the “Indemnifying Party”) on or prior to expiration of the
applicable survival period.

(e)           Insurance
Offset.  Each Loss shall be reduced by
(A) the amount of any insurance proceeds received by the Indemnified Party, (B)
any indemnification, contribution or other similar payment paid to the
Indemnified Party by any third party with respect to such Loss and (C) any Tax
refunds or credits of the Indemnified Party or any of its Affiliates
attributable to such Loss.

(f)            No Duplication.  Any liability for indemnification hereunder
shall be determined without duplication of recovery by reason of the state of
facts giving rise to such liability constituting a breach of more than one
representation, warranty, covenant or agreement or more than one right to
indemnification.

(g)           Exclusive
Remedy.  From and after Closing, except
for a party’s right to equitable relief for the breach of any covenant
contained herein or a claim for fraud, indemnification under Sections 6.1(b)(i)
shall be the sole and exclusive remedy of the parties to this Agreement, as
applicable, for breach of any representation, warranty, covenant or agreement
contained in this Agreement, and Seller, on the one hand and Purchaser, on the
other, as applicable, shall have no other liability to the other party
resulting from any such breach.

(h)           Notice of
Claim.  If the Indemnified Party shall
become aware of any claim, proceeding or other matter (a “Claim”), which
may give rise to a Loss that will be taken into account for purposes of
calculating whether the Indemnifying Party’s indemnification obligation arises
pursuant to Section 6.1(b) or Section 6.1(c) above, the Indemnified Party shall
promptly give notice thereof to the Indemnifying Party.  Such notice shall specify whether the Claim
arises as a result of a Claim by an unaffiliated third party against the
Indemnified Party (a “Third Party Claim”) or whether the Claim does not
so arise (a “Direct Claim”), and shall also specify with reasonable
particularity (to the extent that the information is available) the factual
basis for the Claim and the amount of the Claim, if known.  If the Indemnified Party does not

 28
 

promptly give notice of any Claim as specified
above, such failure shall not affect the Indemnified Party’s right to
indemnification hereunder for Losses in connection with such Claim, except to
the extent the Indemnifying Party’s rights are prejudiced by such failure.

(i)            Direct Claims.  With respect to any Direct Claim, following
receipt of notice from the Indemnified Party of the Claim, the Indemnifying
Party shall have ninety (90) days to make such investigation of the Claim as it
considers necessary or desirable.  For
the purpose of such investigation, the Indemnified Party shall make available
to the Indemnifying Party the information relied upon by the Indemnified Party
to substantiate the Claim, together with all such other information as the
Indemnifying Party may reasonably request. 
If both parties agree at or prior to the expiration of such 90-day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such Claim, they shall agree to apply it to the applicable
deductible, or if the applicable deductible has been satisfied, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the dispute shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a Las Vegas Court.

(j)            Third Party
Claims.

(i)            With respect
to any Third Party Claims the Indemnifying Party shall have the right, at its
expense and at its election, to assume control of the negotiation, settlement
and defense of the Claim through counsel of its choice.  The election of the Indemnifying Party to
assume such control shall be made within thirty (30) days of receipt of notice
of the Third Party Claim, failing which the Indemnifying Party shall be deemed
to have elected not to assume such control. 
If the Indemnifying Party elects to assume such control, the Indemnified
Party shall have the right to be informed and consulted with respect to the
negotiation, settlement or defenses of such Third Party Claim and to retain
counsel to act on its behalf, but the fees and disbursements of such counsel
shall be paid by the Indemnified Party unless the Indemnifying Party Consents
to the retention of such counsel or unless the named parties to any action or
proceeding include both the Indemnifying Party and the Indemnified Party and a
representation of both the Indemnifying Party and the Indemnified Party by the
same counsel would be inappropriate due to the actual or potential differing
interests between them (such as the availability of different defenses).  If the Indemnifying Party, having elected to
assume such control, thereafter fails to defend the Third Party Claim within a
reasonable period of time, subject to Section 6.1(j)(ii), the Indemnified Party
shall be entitled to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to the
Third Party Claim.  If any Third Party Claim
is of a nature such that the Indemnified Party is required by applicable Law to
make a payment to any third party with respect to the Third Party Claim before
the completion of settlement negotiations or related legal proceedings, the
Indemnified Party may make such payment and the Indemnifying Party shall,
subject to the provisions of this Section 6.1, after demand by the Indemnified
Party, reimburse the Indemnified Party for such payment.  If the amount of any liability of the
Indemnified Party under the Third Party Claim in respect of which such payment
was made, as finally determined, is less than the amount which was paid by the
Indemnifying Party to the Indemnified Party, the Indemnified Party shall,
promptly after receipt of the difference from the third party, pay the amount
of such difference to the Indemnifying Party.

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(ii)           Whether or not
the Indemnifying Party assumes control of the negotiation, settlement or
defense of any Third Party Claim:

(1)           the
Indemnifying Party shall not settle any Third Party Claim without the written
Consent of the Indemnified Party, which Consent shall not be unreasonably
withheld, conditioned or delayed, unless such settlement provides solely for
monetary damages or other monetary payments;

(2)           the
Indemnified Party shall not, if it continues to seek indemnity from the
Indemnifying Party with respect to the matter, settle any Third Party Claim
without the written Consent of the Indemnifying Party, which Consent may be
withheld in the Indemnifying Party’s sole discretion.

(iii)          The
Indemnified Party and the Indemnifying Party shall cooperate fully with each
other with respect to Third Party Claims and, regardless of which party has
control thereof as provided for herein, shall keep each other reasonably
advised with respect thereto.

(iv)          The
Indemnified Party shall not take any action the purpose of which is to
prejudice the defense of any claim subject to indemnification hereunder or to
induce a third party to assert a claim subject to indemnification hereunder.

6.2           Offset of Certain Claims. 
If at the end of the Lease Term, any Claim shall be a Settled Claim, the
amount thereof shall be deducted from the payment otherwise due from Purchaser
to Seller as provided in Section 1.7. 
If, at the end of the Lease Term, any Claim shall be a Pending Claim,
the amount thereof, shall be withheld from the payment otherwise due from
Purchaser to Seller as provided in Section 1.7. 
Upon such Claim becoming a Settled Claim, the amount thereof shall be
deducted from the payment otherwise due from Purchaser to Seller as provided in
Section 1.7 and the balance, if any, of the amount so withheld shall be paid to
Seller.

ARTICLE VII

TERMINATION

7.1           Termination.

(a)           This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Closing:

(i)            by mutual
written Consent of the Purchaser and the Seller;

(ii)           by Purchaser
at any time;

(iii)          by Seller if
the Closing does not occur on or before October 31, 2007 and Seller is not then
in material breach of any of its representations, warranties or covenants in
this Agreement; provided, however, that the date on which Seller may terminate
under this Section 7.1(a)(iii) shall be extended for one month for each month
in respect of which Purchaser continues to make the payments described in
Section 4.15, and further provided,

 30
 

however, that, if, at any time prior to
termination of this Agreement, Seller shall be unable to perform its
obligations under the Lease Agreement, 
the date on which Seller may terminate under this Section 7.1(a)(iii)
shall be automatically extended without any such payment until the date on
which the Lease Term would otherwise have expired.

(iv)          by Seller or
Purchaser if the Closing does not occur on or before July 31, 2008; provided,
however, that the right to terminate this Agreement under this clause
(ii) shall not be available to any party whose breach of a representation,
warranty, covenant or agreement under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before such date; or

(v)           by Seller or
Purchaser if any court of competent jurisdiction or other Governmental
Authority shall have issued an Order permanently restraining, enjoining or
otherwise prohibiting the Transactions, and such Order shall have become final
and nonappealable.

(b)           The party desiring to terminate this
Agreement pursuant to Section 8.1(a)(ii) or (iii) shall give written notice of
such termination to the other party hereto.

7.2           Effect of Termination. 
In the event this Agreement is terminated pursuant to this ArticleVII,
the Transactions shall be abandoned, without further action by either of the
parties hereto, and this Agreement shall become void and have no further force
and effect, except that (a) the obligations of Purchaser set forth in the
Confidentiality Agreement shall remain in effect, (b) neither party shall be
relieved from any liabilities or damages arising out of a material breach of
any provision of this Agreement, (c) the respective obligations of the parties
set forth in Sections 4.6, 7.2, 8.1, 8.2, and ARTICLE IX shall remain in effect, and (d) as provided in the Escrow Agreement, Seller shall retain the
deposit of Three Million dollars ($3,000,000) and any
additional deposit made pursuant to Section 4.15 unless at the time of
termination there exists a breach by Seller of any representation, warranty,
covenant or other agreement in this Agreement and, as a result of such breach,
either (i) Purchaser would not upon Closing, obtain title to substantially all
of the Purchased Assets or (ii) the value of the Purchased Assets less the cost
of all Assumed Liabilities would be reduced by Five Million dollars ($5,000,000) or more.

ARTICLE VIII

DEFINITIONS;
INTERPRETATION; EFFECTIVENESS OF AMENDMENT

8.1           Definitions.  For purposes of this
Agreement, except as otherwise expressly provided or unless the context clearly
requires otherwise:

“Accounts”
means all property of Seller located in bank, brokerage, securities or other
similar accounts of any kind, nature or description.

“Accrued
Royalty” shall mean all sums accrued and unpaid as of the Closing Date
under the license agreements listed in Schedule 1.5.

“Advance
Deposits” shall mean the obligations of the Business at the Cutoff Time to
provide lodging for which payment has been received.

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“Affiliate”
of any Person shall mean any other Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such first Person.

“Affiliate
Contracts” shall have the meaning ascribed to it in Section 2.16.

“Agreement”
shall have the meaning ascribed to it in the preamble.

“Antitrust
Division” shall have the meaning ascribed to it in Section 4.3.

“Assignable
Licenses” shall mean all Licenses of Seller that can be assigned to
Purchaser as a part of the Transactions.

“Assignment
Agreement” shall have the meaning ascribed to it in Section 4.11.

“Assumed
Contracts” shall mean (other than Gaming Liabilities) (i) all Material
Contracts listed in Section 2.15 of the Disclosure Schedule and (ii) all other
Contracts (other than Contracts involving Intercompany Receivables or
Intercompany Liabilities) entered into by Seller in the Ordinary Course of
Business for a term not exceeding one year in duration that (a) are not
required to be listed in Section 2.15 of the Disclosure Schedule; (b) are
appropriately accounted for in the Financial Statements or were entered into
since the date of the most recent Financial Statements, but not including
Excluded Contracts.

“Assumed Leases”
shall mean all equipment, real property or other leases relating to the Hotel
and Other Operations and listed in Schedule 1.3.

“Assumed
Liabilities” shall have the meaning ascribed to it in Section 1.3.

“Auditor”
shall have the meaning ascribed to it in Section 1.9.

 “Balance Sheet Date” shall have the
meaning ascribed to it in Section 2.6.

“Business”
shall have the meaning ascribed to it in the preamble.

“Business
Records” shall mean the books and records of the Business, whether in
electronic or hard copy form.

“Business Day”
shall mean any day other than Saturday, Sunday or a day when banking
institutions are closed or are not required by law or regulation to be open in
the State of New York.

“Cash”
shall mean all cash, checks, money orders and other cash equivalents owned by
Seller other than Accounts.

“Cash Purchase
Price” shall have the meaning ascribed to it in Section 1.5.

“Casino”
shall have the meaning ascribed to it in the preamble.

 32
 

“CERCLIS”
shall mean the Comprehensive Environmental Response and Liability Information
System, as provided for by 40 C.F.R. Section 300.5.

“Claim”
shall have the meaning ascribed to it in Section 6.1(h).

“Closing”
shall have the meaning ascribed to it in Section 1.10.

“Closing Date”
shall have the meaning ascribed to it in Section 1.10.

“Code”
shall mean the Internal Revenue Code of 1986, as amended.

“Confidentiality
Agreement” shall mean the agreement dated on or about January 12, 2007 by
and between Seller or its Affiliate and Purchaser.

“Consent”
shall mean any consent, approval, authorization, clearance, exemption, waiver
or similar affirmation by, or filing with or notification to, a Person pursuant
to any Contract, Law, Order. License or Permit.

“Contracts”
shall mean all contracts or other agreements, whether written or oral, to which
Seller is a party or by which any of Seller’s property may be bound.

“Contract
Rights” shall mean all rights accruing to Seller under Assumed Contracts.

“Credit Line”
shall mean the credit line obtained by Seller from Wells Fargo Foothill, Inc.

“Credit Line Deferred
Financing Costs” shall mean the costs Seller capitalized in obtaining the
Credit Line.

“Cutoff Time”
shall mean the 12:00 midnight next preceding the Closing.

“Deposits”
shall mean any amount paid by Seller as security or in part payment to any service
provider, including but not limited to utility companies.

“Direct Claim”
shall have the meaning ascribed to it in Section 6.1(h).

“Direct
Holdback” shall have the meaning ascribed to it in Section 1.7.

“Disclosure
Schedule” shall mean the Disclosure Schedule prepared by Seller and
delivered to Purchaser concurrently with the execution of this Agreement.

“Environmental
Claim” shall mean, with respect to any Person, any written or oral notice,
claim, demand or other communication (collectively, a “claim”) by any other
Person alleging or asserting such Person’s liability for investigatory costs,
cleanup costs, Governmental Authority response costs, damages to natural
resources or other property, personal injuries, fines or penalties arising out
of, based on or resulting from (a) the presence, or release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.  The term “Environmental Claim” shall include,
without limitation, any

 33
 

claim
by any Governmental Authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law, and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from the presence of Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment.

 “Environmental Laws” shall mean all
domestic and foreign, federal, national, state and local Laws, rules, Orders,
regulations, ordinances, mandatory guidelines, decrees, Permits or directives
relating to pollution or protection of the environment, including Laws relating
to Releases of Hazardous Substances.

“Equipment”
means all machinery, equipment, tools implements, furniture and furnishings,
computer hardware and other electronic equipment, vehicles, storage facilities
or other similar items of property (other than items included within the
definition of Real Property) used in the conduct of the Business.

“Escrow
Agreement” shall have the meaning ascribed to it in the preamble.

“Excluded
Assets” shall mean the assets listed in Schedule 1.2.

“Excluded
Contracts” shall mean Contracts listed in Schedule 1.2.

“Financial
Statements” shall have the meaning ascribed to it in Section 2.5.

“FTC” shall
have the meaning ascribed to it in Section 2.2(b).

“GAAP”
shall mean United States generally accepted accounting principles, as applied
and interpreted by Seller consistent with past practice.

“Gaming
Approvals” shall mean any license, qualification, franchise, accreditation,
approval, registration, permit, finding of suitability or other authorization
relating to gaming, the gaming business or the operation of a casino under the
Gaming Laws or required by any Gaming Authority or otherwise necessary under
any Gaming Laws for the operation of gaming, the gaming business or a resort
casino at the Hotel or Casino.

“Gaming
Assets” shall mean all of Seller’s now owned and hereafter acquired gaming
equipment, wherever located, including any and all gaming devices (as defined
in NRS § 463.0155), gaming device parts, inventory and other related gaming
equipment and supplies used in connection with the operation of a casino,
including, without limitation, slot machines, gaming tables, cards, dice,
chips, tokens (including slot machine tokens not currently in circulation, and “reserve”
chips, if any, not currently in circulation), player tracking systems, cashless
wagering systems (as defined in NRS § 463.014) and associated equipment (as
defined in NRS § 463.0136),  together
with all improvements and/or additions thereto, mobile gaming systems (as
defined in Regulation 14.010(11) under NRS Chapter 463), all contracts
necessary to own or operate any of the Gaming Assets and/or to conduct gaming
operations, all assignable manufacturers and other warranties applicable to the
Gaming Assets, and all computer hardware and software used to operate the
Gaming Assets and/or to conduct gaming operations.

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“Gaming
Authority” shall mean any of the Nevada Gaming Commission, the Nevada State
Gaming Control Board, the Clark County Liquor and Gaming Licensing Board and
any other gaming regulatory body or any agency which has, or may at any time
after the Closing Date have, jurisdiction over the gaming activities or the
sale or distribution of liquor at the Hotel or Casino, or any successor to such
authority.

“Gaming
Laws” shall mean the provisions of the Nevada Gaming Control Act, codified
as NRS Chapter 463, as amended from time to time, all regulations of any Gaming
Authority promulgated thereunder, as amended from time to time, the provisions
of the Clark County Code, as amended from time to time, and all other laws,
statutes, rules, rulings, orders, ordinances, regulations and other legal
requirements of any Gaming Authority.

“Gaming
Liabilities” shall mean (i) all Material Contracts listed in Section 2.15
of the Disclosure Schedule relating to the gaming operations of the Casino;
(ii) all other Contracts relating to the gaming operations of the Casino (other
than Contracts involving Intercompany Receivables or Intercompany Liabilities)
entered into by Seller in the Ordinary Course of Business for a term not
exceeding one year in duration that (a) are not required to be listed in
Section 2.15 of the Disclosure Schedule and (b) are appropriately accounted for
in the Financial Statements or were entered into since the date of the most
recent Financial Statements, but not including Excluded Contracts; and (iii)
all equipment or other leases relating to the gaming operations of the Casino
and listed in Schedule 1.3.

“General
Intangibles” shall mean all of the rights of Seller in intangible property
not otherwise included as an Asset, including, without limitation, bank and
other similar accounts, telephone numbers, domain names and similar intangible
property.

“Governmental
Authority” shall mean any domestic or foreign agency, authority, board,
judicial body, commission, legislature, instrumentality or office of any
federal, national, state, county, district, municipal, city or other government
unit.

“Hazardous
Substances” or “Hazardous Materials” shall mean any chemical, material or
substance defined as or included in the definition of “hazardous substances,” “hazardous
wastes,” “hazardous materials,” “hazardous constituents,” “restricted hazardous
materials,” “extremely hazardous substances,” “toxic substances,” “contaminants,”
“pollutants,” “toxic pollutants” or words of similar meaning and regulatory
effect under any applicable Environmental Law, including petroleum and
polychlorinated biphenyls.

“HSR Act”
shall have the meaning ascribed to it in Section 2.2(b).

“Hotel”
shall have the meaning ascribed to it in the preamble.

“Income Tax”
or “Income Taxes” shall mean any and all United States or non-United
States federal, national, state or local Tax based on net income, including any
interest, penalties or other additions thereto.

“Indebtedness”
shall have the meaning ascribed to it in Section 1.3.

“Indemnified
Party” shall have the meaning ascribed to it in Section 6.1(d).

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“Indemnifying
Party” shall have the meaning ascribed to it in Section 6.1(d).

“Indenture”
shall mean that certain Indenture, dated as of March 29, 2005, by and between
Seller and The Bank of New York Trust Company, N.A. as Trustee, as amended from
time to time.

“Insurance
Rights” shall mean all rights of Seller in insurance policies to the extent
such policies provide for indemnity against any diminution in value of any
Purchased Asset based on an occurrence prior to the Cutoff Time.

“Intellectual
Property” shall mean (a) all inventions and discoveries (whether patentable
or unpatentable), all improvements thereto, and all patents, patent applications
and patent disclosures, together with all re-issuances, continuations,
continuations-in-part, divisionals, revisions, extensions and reexaminations
thereof, (b) all trademarks and service marks, other designations of origin and
trade dress, including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (c) all copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, (d) all know-how, trade secrets, technical information
and confidential business information (whether patentable or unpatentable and
whether or not reduced to practice), including, ideas, research and
development, formulas, compositions, manufacturing and production processes, techniques
and methods, technical data, designs, drawings, blue prints, patterns,
specifications, assembly procedures, test procedures, instruction manuals,
operation manuals, maintenance manuals, reliability data, quality control data,
customer and supplier lists, parts lists, domain names, pricing and cost
information and business and marketing plans and proposals, (e) all computer
software (including data and related documentation) and (f) all other
proprietary rights.

“Intellectual
Property Contracts” shall mean any contract pursuant to which Seller has
licensed (a) to any Person rights to any Seller Intellectual Property or (b)
from any third Person rights to Intellectual Property.

“Intercompany
Liabilities” shall mean liabilities of Seller to an Affiliate of Seller.

“Intercompany
Receivables” shall mean all accounts receivable held by Seller which are
payable to Seller by an Affiliate of Seller.

“Interests”
shall have the meaning ascribed to it in the preamble.

“Inventory”
shall mean all inventories of office, restaurant, bar, casino and other
supplies (including all foods and alcoholic and non-alcoholic beverages),
parts, packaging materials and other accessories related thereto which exist at
Closing (other than Casino inventory which shall be included as it exists upon
termination of the Lease Agreement) and are held at, or are in transit from or
to, the locations at which Seller’s business is conducted, in each case, which
are used or held for use by Seller in the conduct of its business, including
any of the foregoing purchased subject to any conditional sales or title
retention agreement in favor of any other Person, together with all rights of
Seller against suppliers of such inventories.

“Inventoried
Baggage” shall have the meaning ascribed to it in Section 4.16.

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“Inventoried
Vehicles” shall have the meaning ascribed to it in Section 4.18.

“Knowledge”
shall mean the actual knowledge of the officers, directors, members and general
managers of Seller.

“Las Vegas
Court” shall have the meaning ascribed to it in Section 9.7.

“Law” shall
mean any domestic or foreign common, federal, national, state or local law,
statute, ordinance, rule, regulation, and any other executive or legislative
proclamation.

“Lease
Agreement” shall have the meaning ascribed to it in the preamble.

“Lease Rights”
shall mean all rights of Seller in Assumed Leases.

“Lease Term”
shall mean the term of the lease provided for in the Lease Agreement

“License”
shall mean all licenses, Permits, certificates of authority, authorizations,
approvals, registrations, franchises and similar consents granted or issued by
any Governmental Authority.

“Lien”
shall mean any mortgage, deed of trust, pledge, security interest, attachment,
right of first refusal or first offer, encumbrance, Lien or charge of any kind
(including any agreement to give any of the foregoing) or right of others of
any similar nature.

“Listed Seller
Intellectual Property” shall have the meaning ascribed to it is Section
2.14.

“Litigation”
shall mean any suit, action, arbitration, cause of action, claim, complaint,
criminal prosecution, investigation, demand letter, governmental or other
administrative proceeding, whether at law or at equity, before or by any
domestic or foreign federal, national, state or local court, tribunal, or agency
or before any arbitrator.

“Losses” of
a Person shall mean any and all actual losses, liabilities, costs and expenses
(including reasonable attorneys’ fees and costs of investigation) of such
Person; provided, however, that Losses shall not include (i) any
cost or expense relating to any breach of representations or warranties
contained in either Section 2.11(f) or Section 2.11(h) in an amount less than
One Million dollars ($1,000,000) (ii) any special, indirect, punitive,
incidental or consequential damages (including without limitation lost profits
or loss of goodwill) of any party to this Agreement or any of its Affiliates,
or (iii)  any costs or expenses of any
party to this Agreement or any of its Affiliates that are related to the time
spent on any indemnified matter by employees or management of such party or
Affiliate; provided, further however, that with respect to Claims
related to Hazardous Substances, Losses shall not include, with respect to
Owned Properties, Purchaser’s claims for diminution of property value or loss
of sale or leasing opportunities.

“Material
Adverse Effect” shall mean any event or series of events (whether related
or not) that result in an adverse change in the assets, liabilities, financial
condition or results of operations of Seller, which is material to Seller,
taken as a whole, other than any such effect attributable to or resulting from
(i) the public announcement of the Transactions, (ii) actions

 37
 

taken
by Seller or any of its Subsidiaries at the specific written request of
Purchaser, (iii) any adverse change in general economic conditions or in
conditions affecting the gaming industry generally (other than any such adverse
change that has a materially, disproportionate adverse impact on Seller as
compared to the impact upon the gaming industry generally), or (iv) changes
resulting from earthquake, fire, flood, sabotage, accident, terrorist attack,
act of war or other calamity of such character which may interfere materially
with the conduct of the business and operations of Seller regardless of whether
or not such loss shall have been insured.

“Material
Contract” shall mean any contract or agreement to which Seller is a party
that is material to Seller.

“Membership
Interest Purchase Agreement” shall have the meaning ascribed to it in
Seciton 4.21.

“Non-Gaming
Liabilities” shall have the meaning ascribed to it in Section 1.3.

“Notes”
shall have the meaning ascribed to it in the Indenture.

“Notes Deferred
Financing Costs” shall the costs that Seller capitalized in issuing the
Notes.

“NPL” means
the National Priorities List under CERCLA.

“Operating
Agreement” shall mean the Operating Agreement of Seller.

“Operating
Permits” shall have the meaning ascribed to it in Section 2.4(b).

“Order”
shall mean any decision or award, decree, injunction, judgment, order,
quasi-judicial decision or award, ruling, or writ of any domestic or foreign
federal, national, state or local or other court, arbitrator (with binding
effect), tribunal, administrative agency or authority.

“Ordinary Course
of Business” shall mean the ordinary course of the Business as historically
conducted by Seller.

“Other
Operations” shall have the meaning ascribed to it in the preamble.

“Owned
Properties” shall mean all parcels of and interests in real property owned in
fee by Seller together with, to the extent also owned by Seller, all buildings
and other structures, facilities or improvements (including construction in
process) located thereon, fixtures attached or appurtenant thereto and all
easements, license, rights and appurtenances relating to the foregoing.

“Pending Claim”
shall mean a Claim by Purchaser under Section 6.1(b) that has not been finally
resolved.

“Permit”
shall mean any domestic or foreign federal, national, state or local
governmental approval, authorization, certificate, declaration, easement,
filing, franchise, license, notice,

 38
 

permit,
variance, clearance, exemption or right to which Seller is a party or that is
or may be binding upon or inure to the benefit of Seller or the Business.

“Permitted
Liens” shall mean (i) liens of record securing the obligations of Seller
and its subsidiary under the Notes, (ii) statutory liens for Taxes not yet due
or payable or which are being contested in good faith by appropriate
proceedings and identified in Section 2.12 of the Disclosure Schedule, (iii)
imperfections of title, easements and zoning restrictions, if any, which,
individually or in the aggregate with other such matters, do not materially
detract from the value or marketability of the property subject thereto or
materially interfere with the uses and purposes to which such property is
currently employed or materially impair the operations of Seller and which have
arisen only in the ordinary course of business and consistent with past
practice, (iv) any state of facts that an accurate survey would disclose,
which, individually or in the aggregate with other such matters, do not
materially detract from the value or marketability of the property subject
thereto or materially interfere with the uses and purposes to which such
property is currently employed or materially impair the operations of Seller
and which have arisen only in the ordinary course of business and consistent
with past practice, (v) statutory or common law liens to secure landlords, lessors
or renters under leases or rental agreements confined to the premises rented,
(vi) deposits or pledges made in connection with, or to secure payment of,
worker’s compensation, unemployment insurance, old age pension or other social
security programs mandated under applicable Laws, (vii) statutory or common law
liens in favor of carriers, warehousemen, mechanics and materialmen to secure
claims for labor, materials or supplies and other like liens to the extent
amounts owed the lien claimant (or potential lien claimant) thereunder are
included in trade or accounts payable, (viii) liens in respect of consignment
arrangements securing the consigned inventory and any proceeds therefrom, (ix)
liens with respect to personal property leases that secure such personal
property and any proceeds therefrom, (x) purchase money liens, (xi)
restrictions on transfer of securities imposed by applicable state, national
and federal securities Laws and (xii) the Liens set forth in Section 2.12 of
the Disclosure Schedule.

“Person”
shall mean any individual, corporation, partnership, limited liability company,
joint venture, trust, association, organization or other entity.

“Prepaids”
shall mean those expenses which the Seller has paid in advance of receipt of
service or product and which will not be prorated at Closing under the terms of
this Agreement.

“Property”
shall mean the restaurant, hotel and casino located at 155 East Tropicana, Las
Vegas, Nevada commonly known as the Hooters Hotel and Casino.

“Purchase Price
Allocation” shall have the meaning ascribed to it in Section 1.9.

“Purchased
Assets” shall have the meaning ascribed to it in Section 1.1

“Purchaser”
shall have the meaning ascribed to it in the preamble.

“Real Property”
shall mean all of the real property legally described in Section 2.11 of the
Disclosure Schedule, together with all right, title and interest, if any, of
Seller in and to all land lying in any street, alley, road or avenue, open or
proposed, in front of or adjoining said land, to the center line thereof, all
of the right, title and interest of Seller, if any, in and to all

 39
 

easements
appurtenant to such real property and other easements, grants of rights,
licenses, privileges or other agreements for the benefit of, belonging to or
appurtenant to such real property whether or not situated on such real
property, together with all of Seller’s right, title and interest, if any, in
all gores, strips, tenements, hereditaments, rights, liberties, powers,
privileges, and appurtenances to or to the improvements, or in any way
pertaining to or to the improvements or their use, all of Seller’s right, title
and interest, if any, in choses in action and claims relating to or to the
improvements, and all of Seller’s right, title and interest in and to the bed
of any streets, roads, and avenues open or proposed in front of or adjoining
and all right, title and interest of Seller in and to any award made or to be
made in lieu thereof and in and to any unpaid award for the damage to said land
by reason of a change of grade of any street; together with all buildings,
fixtures and improvements located thereon,, structures (surface and
sub-surface), parking structures other improvements of any description located
on the premises, including, without limitation, the following, to the extent
owned by Seller; all apparatus, equipment and appliances attached to Real
Property, such as heating and air conditioning systems and facilities used to
provide any utility services, parking services, refrigeration, ventilation,
garbage disposal, recreation or other services thereto, and all landscaping and
all rights appurtenant thereto, including water rights, if any, and all of
Seller’s right, title and interest, if any, in and to minerals, oil, gas and
other hydrocarbon substances on or under Real Property.

“Real Property
Leases” shall have the meaning ascribed to it in Section 2.11.

“Receivables”
shall mean all accounts receivable of the Business.

“Release”
with respect to any Hazardous Substances, shall mean any release, deposit,
discharge, emission, leaking, leaching, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances into or from soil, groundwater, surface water
or sediment.

“Report”
shall have the meaning ascribed to it in Section 1.5.

“Representatives”
shall have the meaning ascribed to it in Section 4.2(a).

“Seller”
shall have the meaning ascribed to it in the preamble.

“Seller
Intellectual Property” shall have the meaning ascribed to it is Section 2.14.

“Seller’s Key
Persons” shall have the meaning ascribed to it in Section 2.4(b).

“Seller Plan”
shall mean the benefit and compensation plans, contracts, policies or
arrangements covering Seller’s employees that are (i) a “welfare” plan,
fund or program (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”));
(ii) a “pension” plan, fund or program (within the meaning of
Section 3(2) of ERISA); (iii) an incentive compensation plan;
(iv) an employment, consulting, termination, retention, indemnification or
severance agreement, plan or arrangement; or (v) a nonqualified deferred
compensation plan (within the meaning of Section 409A of the Code and
associated Treasury Department guidance, including IRS Notice 2005-1), or
an “excess benefit plan” (within the meaning of Section 3(36) of ERISA) or
a fringe benefit or perquisite plan, arrangement or policy; in each case, that
are entered into, established by, or sponsored or

 40
 

maintained
by or contributed to or required to be contributed to by Seller or by any trade
or business, whether or not incorporated (an “ERISA Affiliate”), that
together with Seller would be deemed a “single employer” within the meaning of
Section 4001(b) of ERISA or to which Seller or an ERISA Affiliate is
party.

“Settled Claim”
shall mean a Claim by Purchaser under Section 6.1(b) that has been finally
resolved.

“Straddle
Period” shall mean a taxable year or period beginning on or before, and
ending after, the Closing Date.

“Subsidiary”
shall mean any United States or foreign corporation, partnership, limited
liability company, joint venture or other legal entity of which a Person,
either alone or together with any other Subsidiary, owns, directly or
indirectly, more than 50% of the stock or other equity interests of such
corporation or other legal entity.

“Tangible
Personal Property” shall have the meaning ascribed to it in Section 2.12.

“Tax” or “Taxes”
shall mean any and all taxes, including any interest, penalties, or other
additions to tax that may become payable in respect thereof and the payment
pursuant to any indemnity or reimbursement obligation with respect thereto,
imposed by any Tax Authority, which taxes shall include, without limiting the
generality of the foregoing, all Income Taxes, profits taxes, taxes on gains,
alternative minimum taxes, estimated taxes, payroll and employee withholding
taxes, gambling withholding, unemployment insurance taxes, social security
taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes
on stock, sales and use taxes, ad valorem taxes, value added taxes, excise
taxes, franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real or personal property taxes, stamp taxes, environmental
taxes, transfer taxes, workers’ compensation taxes, and other taxes, fees,
duties, levies, customs, tariffs, imposts, assessments, obligations and charges
of the same or of a similar nature to any of the foregoing.

“Tax Authority”
shall mean any United States or non-United States federal, national, state,
provincial, county, municipal or other local government, any subdivision,
agency, commission or authority thereof, or any quasi-governmental body
exercising any taxing authority or any other authority exercising Tax regulatory
authority.

“Tax Return”
shall mean any and all returns, reports, information returns, declarations,
statements, certificates, bills, schedules, documents, claims for refund, or
other written information of or with respect to any Tax which is supplied to or
required to be supplied to any Tax Authority, including any attachments,
amendments and supplements thereto.

“Third Party
Claim” shall have the meaning ascribed to it in Section 6.1(h).

“Third Party
Holdback” shall have the meaning ascribed to it in Section 1.7.

“Title Company”
shall have the meaning ascribed to it in Section 5.2(g).

“Title Policy”
shall have the meaning ascribed to it in Section 5.2(g).

 41

“Trade Secrets”
shall have the meaning ascribed to it in Section 2.14(b)(iv).

 “Transactions” shall mean the
transactions contemplated by Section ARTICLE I of this Agreement.

“Transfer
Documents” shall have mean (i) one or more grant bargain and sale deeds
relating to the Real Property, (ii) such documents as may be required to convey
and transfer the Seller Intellectual Property, (iii) assignments of all
Contracts, Leases, Licenses and Permits to be assigned to Purchaser, (iv) title
transfer documents related to all vehicles that are Purchased Assets, (i) a
bill of sale relating to all Purchased Assets so transferable and (vi) such
other documents and instruments as may be requested by Purchaser for the
purpose of causing the transfer, assignment and conveyance of the Purchased
Assets to Purchaser.

“Transfer Taxes”
shall mean any and all transfer Taxes (excluding Taxes measured in whole or in
part by net income), including without limitation sales, use, excise, stock,
stamp, documentary, filing, recording, permit, license, authorization and
similar Taxes, fees, duties, levies, customs, tariffs, imposts, assessments,
obligations and charges of the same or of a similar nature to any of the
foregoing.

“WARN Act”
shall have the meaning ascribed to it in Section 2.9(c).

8.2           Interpretation.

(a)           Whenever the words “include,” “includes” or “including” are used in this
Agreement they shall be deemed to be followed by the words “without limitation.”

(b)           The words “hereof”, “hereby”, “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.

(c)           The plural of any defined term shall have a meaning correlative to such
defined term, the singular of any defined term shall have a meaning correlative
to such term defined in the plural and words denoting any gender shall include
all genders.  Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.

(d)           A reference to any party to this Agreement or any other agreement or document
shall include such party’s permitted successors and permitted assigns.

(e)           A reference to any legislation or to any provision of any legislation shall
include any amendment, modification or re-enactment thereof, any legislative
provision substituted therefore and all regulations and statutory instruments
issued thereunder or pursuant thereto.

(f)            The parties have participated jointly in the negotiation and drafting of
this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this

 42
 

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 provisions of this Agreement.

ARTICLE
IX

MISCELLANEOUS
AND GENERAL

9.1           Payment
of Expenses and Other Payments.  Whether or
not the Transactions shall be consummated and except as otherwise provided in
this Agreement, each party hereto shall pay its own expenses incident to
preparing, entering into and carrying out this Agreement and the consummation
of the Transactions.

9.2           Amendment.  This Agreement may be amended only by a
written agreement signed by each of the parties hereto or by a waiver in
accordance with Section 9.3.

9.3           Waiver
and Extension.  At any time prior to the Closing
Date, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (c) except to the extent prohibited by
Law, waive compliance with any of the agreements described 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 an instrument in writing signed by such party.  The failure of any party at any time or times
to demand performance of any provision hereof shall in no manner affect the
right of such party at a later time to enforce the same or any other provision
of this Agreement.  No waiver of any
condition or the breach of any term contained in this Agreement in one or more
instances shall be deemed to be a, or construed as a, further or continuing
waiver of such condition or breach or of any other condition or breach.

9.4           Counterparts.  For the convenience of the parties hereto,
this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute one agreement.

9.5           Governing
Law.  This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Nevada, without regard
to any conflict of laws principles thereof.

9.6           Specific
Performance.  Seller recognizes and agrees that
Purchaser’s remedies at law would be inadequate to compensate it for any
failure of Seller to consummate the Transactions.  Accordingly, Seller agrees that Purchaser may
seek specific performance of this Agreement and waives any right to oppose or
object to such specific performance.

9.7           Submission
to Jurisdiction.  Each party
unconditionally and irrevocably agrees to submit to the exclusive jurisdiction
of the appropriate court in Las Vegas, Nevada (a “Las Vegas Court”) for
the purpose of any dispute, controversy or claim arising under or relating to
this Agreement or the breach, termination or validity thereof, and for
proceedings arising out of or relating to the enforcement of any agreement to
arbitrate any dispute hereunder, and to the non-exclusive jurisdiction of the
Las Vegas Court and to the courts of its own domicile for the

 43
 

enforcement
of any decision of any arbitrators duly appointed under this Agreement.  Each party unconditionally and irrevocably
waives any objections which they may have now or in the future to such
jurisdiction, including any objections by reason of lack of personal
jurisdiction, improper venue or inconvenient forum.

9.8           Notices.  Any notice, request, instruction, claim,
demand or other document to be given hereunder by any party to another party
shall be in writing and shall be deemed given and received when delivered
personally, upon receipt of a transmission confirmation (with a confirming copy
sent by overnight courier) if sent by facsimile or like transmission and on the
next Business Day when sent by email (with a confirming copy sent by overnight
courier) or by Federal Express, United Parcel Service, Express Mail, or other
reputable overnight courier, as follows:

(a)           If to Purchaser, to:

Hedwig Las Vegas Top Tier, LLC

2587 S. Westgate Ave. 

Los Angeles, CA 90064
 Attention: 
Richard Bosworth

Richard@NTHAdvisory.com and HedwigsLV@yahoo.com(email)

(310) 420-6099 (telephone)

(310) 496-3132 (facsimile)

with a copy (which shall not constitute notice) to:

Stoel Rives LLP

111 Sutter Street, Suite 700

San Francisco, CA 94104

Attention:  Alexander Hamilton, Esq.

aehamilton@stoel.com (email)

(415) 617-8954 (telephone)

(415) 676-3000 (facsimile)

(b)           If to Seller to:

155 East Tropicana, LLC.

115 East Tropicana Avenue
 Las Vegas, Nevada 89109

Attn:  Michael Hessling

hessling@hooterslv.com (email)

(702) 739-9000 (telephone)

(702) 739-7783(facsimile)

and

 44
 

107 Hampton Road, 2nd Floor
 Clearwater, FL 33759
 Attn.: 
Niel Keifer
 Lucy.grinnell@originalhooters.com
 (727) 725-2551 (telephone)
 (727) 725-4717 (facsimile)

with a copy (which shall not constitute notice) to:

Kummer Kaempfer Bonner Renshaw &
Ferrario
 3800 Howard Hughes Parkway, 7th Floor
 Las Vegas, NV 89169
 Attn: 
Sherwood Cook
 scook@kkbrf.com (email)

(702) 792-7000 (telephone)

(702) 769-9181 (facsimile)

or to such other persons or
addresses as may be designated in writing by the party to receive such
notice.  Nothing in this Section 9.8
shall be deemed to constitute Consent to the manner and address for service of
process in connection with any legal proceeding (including Litigation arising
out of or in connection with this Agreement), which service shall be effected
as required by applicable Law.

9.9           Entire
Agreement; Assignment.  This Agreement
(including all exhibits and schedules hereto) and the Confidentiality Agreement
together constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and supersede all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof. This Agreement shall not be assigned or transferred
by Purchaser without the prior written Consent of Seller, which Consent shall
not be unreasonably withheld.  Subject to
the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and permitted assigns.

9.10         Parties in
Interest.  Except as expressly provided in
Article VII relating to indemnified parties, this Agreement is not intended to
confer any rights or remedies upon any Person except the parties hereto and
their respective successors and permitted assigns, and nothing herein, express
or implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever, including any
rights of employment for any specified period, under or by reason of this
Agreement.

9.11         Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full
force and effect.  If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any Law or public policy, all other terms and provisions of this Agreement
shall nevertheless remain in full force and effect for so long as the economic
or legal substance of the Transactions is not affected in any manner materially
adverse to either party hereto.  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

 45
 

this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the Transactions are consummated
as originally contemplated to the greatest extent possible.

9.12         Attorneys’
Fees.  If any dispute among the parties to this
Agreement results in litigation, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, all fees, costs and expenses of
appeals.

9.13         Currency.  All references to currency, monetary values
and dollars set forth herein shall mean United States (U.S.) dollars.

9.14         Captions.  The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof.

9.15         Public
Announcements.  At all times at or before the
Closing, neither Seller nor Purchaser will issue or make any reports,
statements or releases to the public with respect to this Agreement or the
transactions contemplated hereby without the consent of the other, which
consent shall not be unreasonably withheld. 
If either party is unable to obtain the approval of its public report,
statement or release from the other party and the party seeking such approval
reasonably considers such report, statement or release to be required by Law in
order to discharge such party’s disclosure obligations, then such party may
make or issue the legally required report, statement or release and promptly
furnish the other party with a copy thereof. 
Seller and Purchaser will also obtain the other party’s prior approval
of any press release to be

 46
 

issued immediately following the Closing announcing
the consummation of the transactions contemplated by this Agreement.

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

	
   

  	
  HEDWIGS LAS VEGAS TOP TIER, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Hedwigs Las Vegas GP, LLC,

  	
   

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
  Its Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  NTH Advisory Group, LLC

  
	
   

  	
   

  	
   

  	
  a California limited liability

  
	
   

  	
   

  	
   

  	
  company

  
	
   

  	
   

  	
   

  	
  Its managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard Bosworth

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Richard Bosworth

  
	
   

  	
   

  	
   

  	
  Title:  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  155 EAST TROPICANA, LLC

  
	
   

  	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Neil G. Kiefer

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Neil G. Kiefer

  
	
   

  	
   

  	
   

  	
  Title:  Chief Executive Officer

  
										

 

 47

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