8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 5, 2006

Atlantic Coast Entertainment Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	333-110484	54-2131349
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

c/o Sands Hotel & Casino Indiana Avenue and Brighton Park, 9th Floor Atlantic City, New Jersey	08401
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (609) 441-4633

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On June 5, 2006, ACE Gaming, LLC (“ACE”), a New Jersey limited liability company and a wholly-owned subsidiary of Atlantic Coast Entertainment Holdings, Inc. (the “Company”), entered into a call agreement (the “Option Agreement”), with American Real Estate Holdings Limited Partnership (“AREH”), pursuant to which AREH granted ACE the option to acquire all of its membership interests in AREP Boardwalk Properties, LLC (“AREP Boardwalk”). The Company is an indirect majority-owned subsidiary of AREH. The Option Agreement allows ACE to exercise its option at any time until 5:00 PM on June 5, 2007.

The Option Agreement provides that the purchase price of the membership interests underlying the option set forth therein is (a) the sum of (i) $61 million, (ii) the Traymore Closing Costs (as defined in the Option Agreement), (iii) the Traymore Financing Costs (as defined in the Option Agreement); and (iv) the Operating Costs (as defined in the Option Agreement), plus, in each case, interest thereon at a rate of 8% per annum less (b) any revenue received by AREP Boardwalk or AREH.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1* Call Agreement, dated as of June 5, 2006, by and between ACE and AREH.
99.1* Definitions of certain terms in the Call Agreement.

*Filed herewith

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
Dated: June 7, 2006	By:	/s/ Denise Barton
		Name:	Denise Barton
		Title:	Vice President, Chief Financial Officer, and Principal Accounting Officer

EX-10.1

Exhibit 10.1

EXECUTION COPY

CALL AGREEMENT

DATED AS OF JUNE 5, 2006

BETWEEN

AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP

AND

ACE GAMING, LLC

EXECUTION COPY

CALL AGREEMENT

     CALL AGREEMENT (this “Agreement”) dated as of June 5, 2006, by and between American Real Estate Holdings Limited Partnership, a Delaware limited partnership (“AREH”) and ACE Gaming, LLC, a New Jersey limited liability company (“ACE”). Capitalized terms used in this Agreement but not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement (as defined below).

     Whereas, AREH directly and indirectly owns or controls all of the membership interests (the “Equity Interests”) of AREP Boardwalk Properties LLC, a Delaware limited liability company (the “Company”) (as assignee of AREP Boardwalk LLC) which, on November 28, 2005 executed an agreement (the “Purchase Agreement”) with, among others, Martial Development Corp., a New Jersey corporation and Boardwalk Regency Corporation, a New Jersey corporation, to acquire, among other things, the Traymore Site (as defined in the Purchase Agreement) in Atlantic City, New Jersey for a price allocated to the Traymore Site of $61 million (subject to adjustment for pro rated rents, utilities and assessments);

     Whereas, ACE is a wholly-owned subsidiary of Atlantic Coast Entertainment Holdings, Inc. (“Atlantic Coast”), which is a majority-owned subsidiary of AREH; and

     Whereas, the Traymore Site is adjacent to properties owned by ACE but ACE, neither at the date of the Purchase Agreement nor at this time, has capital or financing available to acquire the Traymore Site.

     In consideration of the foregoing, and the representations, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Call Right.

        (a) ACE’s Right to Acquire Equity Interests. Upon the terms and subject to the conditions of this Agreement, ACE shall have the right to require AREH to sell to ACE the Equity Interests (the “Call Right”), and upon exercise by ACE of the Call Right in accordance with the terms hereof, AREH agrees to sell to ACE the Equity Interests at a purchase price equal to the Call Price, as hereinafter defined.

        (b) Exercise of Call Right; Call Closing. On or prior to the Call Termination Date (as defined below), if ACE is entitled to exercise its Call Right and desires to do so, ACE shall deliver a written notice (the “Call Notice”) to AREH specifying a place and date not earlier than thirty (30) nor later than sixty (60) days after the Inspection Documents (as defined below) are received by ACE for the closing of the purchase of the Equity Interests (the “Call Closing”), provided that such date shall be deferred to ten (10) days after the date of obtaining any consents or approvals of any Governmental Entity which are required by any Requirement of Law (as defined below) to effect the transfer to ACE of the Equity Interest in accordance with this Section. The date on which the Call Closing occurs is referred to herein as the “Call Closing Date.” The Call Closing shall be held at such location within New York, New York as shall be

designated in the Call Notice. At the Call Closing, ACE shall deliver to AREH, subject to the continuing accuracy of AREH’s representations, warranties and covenants in Section 6 hereof, the Call Price and AREH shall deliver to ACE a certificate or certificates representing the Equity Interests, free and clear of all Liens, duly endorsed or accompanied by appropriate powers or such other instruments as may be necessary or appropriate to effect the transfer to ACE of the Equity Interests.

        (c) Risk of Loss. Risk of loss prior to the Call Closing shall be on AREH.

       (i) If, prior to the Call Closing, the Traymore Site shall be damaged by fire or other casualty, and if any destruction or damage is not repaired by AREH prior to the Call Closing or arrangements for repairs reasonably satisfactory to ACE are not made prior to the Call Closing so that the Traymore Site shall be in substantially as good condition at the Call Closing as existed prior to such damage or destruction, then this Agreement shall, at the option of ACE, be terminated, and with the exception of those obligations which expressly survive the termination of this Agreement, neither party shall have any further obligations or liability to the other hereunder. If, after the occurrence of any such casualty, this Agreement is not so terminated, ACE may elect to purchase the Traymore Site in the damaged condition without credit or adjustments to the Call Price, provided, subject to the rights of the tenants under Traymore Leases, AREH shall assign its rights to any sums collected under any policies of insurance because of such damage due to casualty to ACE.

       (ii) In the event a condemnation proceeding or payment in lieu of condemnation occurs in respect of any part of the Traymore Site prior to the Call Closing, and such proceeding does not result in a Condemnation Termination Event, all payments in respect of such condemnation shall be paid by the Company or AREH, or the rights to receive such payments shall be assigned, to ACE at the Call Closing, or, at AREH’s election, the Call Price shall be reduced by such payments. If prior to the Call Closing, a Condemnation Termination Event occurs, then this Agreement shall, at the option of ACE, be terminated, and with the exception of those obligations which expressly survive the termination of this Agreement, neither party shall have any further obligations or liability to the other hereunder.

     2. ACE’s Inspection and Review Rights.

        (a) Promptly after receipt of the Call Notice, but in no event more than fifteen (15) days thereafter, AREH or the Company shall deliver to ACE to the extent in AREH’s or the Company’s possession or control with regard to the Traymore Site and the Company, and to the extent not previously delivered to ACE, the following: (i) title reports and policies, survey, tax bills or statements, utility bills, insurance certificates, warranties, vendor contracts, and all other documents relating of similar nature and import; (ii) the Traymore Leases, and tenant estoppel certificates and subordination or nondisturbance agreements for each of the Traymore Leases; (iii) the organizational documents of the Company, including all corporate books, documents and records relating thereto, if any; (iv) a list of all Liabilities of the Company including, without limitation, the Boardwalk Assumed Liabilities; (v) any environmental reports and engineering

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reports relating to the Traymore Site; (vi) all relevant contracts, books and records, and all financial data and information and other information, including tax returns and filings; and (vii) such other documents and records as ACE may reasonably request relating to the Company and the Traymore Site (all such documents are hereinafter collectively referred to as the “Inspection Documents”).

        (b) ACE shall have until thirty (30) days after receipt of the Inspection Documents (the “Due Diligence Period”) (i) to inspect the Inspection Documents, (ii) upon reasonable notice to AREH, have reasonable access to the Traymore Site Land and Traymore Site Improvements, and (iii) to inspect and conduct such other due diligence into any other matters pertaining to the Company or the Traymore Site. At any time prior to the expiration of the Due Diligence Period, ACE may, in its sole discretion and in writing, terminate its Call Notice and this Agreement, for any reason or no reason at all, and with the exception of those obligations which expressly survive the termination of this Agreement, neither party shall have any further obligations or liability to the other hereunder.

        (c) In the event that ACE does not terminate this Agreement by the end of the 30-day Due Diligence Period then ACE shall be deemed to have, subject to the terms hereof, reviewed and accepted the Inspection Documents and completed its investigation of the Traymore Site Land and Traymore Site Improvements, the Traymore Leases, the tenants and all other matters relating to the exercise of the Call Right. The furnishing of the Inspection Documents to ACE or its attorneys, accountants, agent or other representatives or any investigation by any of the foregoing, shall not affect ACE’s right to rely on any representations, warranties and covenants expressly made in this Agreement.

     3. Exercise. ACE may exercise the Call Right at any time after the Closing Date (as defined in the Purchase Agreement) until 5:00 PM on June 5, 2007 (such date, the “Call Termination Date”). Time shall be of the essence with regard to delivery of the Call Notice. If the Call Notice that complies with Section 1(b) is delivered by ACE to AREH prior to the Call Termination Date, the Call Closing may occur after the Call Termination Date, including to give effect to the deferral of the Call Closing, as provided in Section 1(b) to obtain any consents or approvals of any Governmental Entity which are required by any Requirement of Law. In no event shall the Call Closing occur prior to the expiration of the Due Diligence Period or later than 75 days after delivery of the Call Notice (such 75^th day, the “Call Closing Termination”).

     4. Call Price.

        (a) The Call Price shall equal (A) the sum of (i) the price allocated pursuant to the Purchase Agreement to the Traymore Site of $61 million (subject to adjustment for pro rated rents, utilities and assessments), (ii) the Traymore Closing Costs, (iii) the Traymore Financing Costs and (iv) the Traymore Operating Costs, plus, in each case, interest thereon at the rate of 8% per annum from the date such costs are incurred, calculated on the basis of a 360 day year, through and including the Call Closing Date, less (B) any revenues received by the Company or AREH with respect to the Traymore Site through and including the Call Closing Date; provided that the proceeds of any financing shall not be deemed revenues for purposes of this clause (B). The Call Price shall be further adjusted in accordance with the provisions of Section 4(b) hereof.

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        (b) AREH, in its sole discretion, and subject to the approval of the holder of the Traymore Debt (the “Lender”), if required under the terms of the Traymore Debt loan documents, may decide to sell to ACE the Equity Interests and/or the Traymore Site subject to the Traymore Debt. To the extent AREH chooses to sell the Equity Interests and/or the Traymore Site to ACE subject to the Traymore Debt, ACE executes a novation and assumption agreement related to such indebtedness reasonably satisfactory to AREH and the Lender releases AREH from all obligations under the Traymore Debt (except any guarantee obligation in effect on the date of the Call Closing and in favor of the Lender that is required to remain in effect following a transfer of the borrower’s obligations under the Traymore Debt documents to an affiliate), then the Call Price shall be reduced by an amount equal to the outstanding principal amount of the Traymore Debt and any accrued and unpaid interest thereon at the Call Closing Date. In addition to payment of the Call Price, ACE shall reimburse AREH for all escrow amounts posted in connection with the Traymore Debt. To the extent AREH sells the Equity Interests (and the Traymore Site) to ACE free and clear of the Traymore Debt (either because it chooses to or because the Lender does not approve of the sale to ACE for any reason in its absolute discretion, if such approval is required under the Traymore Debt documents), ACE shall, in addition to the Call Price, pay to the Lender any prepayment penalties and other fees in connection with the prepayment of the Traymore Debt.

        (c) The Traymore Closing Costs shall include all costs and expenses actually incurred by AREH and its affiliates in connection with the acquisition, ownership and financing of the Traymore Site and the transfer of the Equity Interests to ACE including, without limitation, legal fees, title insurance, recording, transfer or similar taxes, survey and inspection costs. The Traymore Financing Costs shall include all fees, costs and expenses incurred by AREH and its affiliates in connection with obtaining financing to acquire the Traymore Site pursuant to the Purchase Agreement, including, without limitation, legal fees and expenses, and any fees payable to any financing source in connection with obtaining such financing, all principal and interest payments made on the Traymore Debt and all costs associated with the assignment of the Traymore Debt, if applicable. The Traymore Operating Expenses shall include all costs and expenses actually incurred by AREH and its affiliates in owning or operating the Traymore Site. The Traymore Debt means the loan made to AREH by Bear Stearns Commercial Mortgage Inc. (or any affiliate thereof).

     5. Payment of Call Price. ACE shall pay the Call Price to AREH at the Call Closing in cash delivered by wire transfer of immediately available funds to the account or accounts designated at least two (2) Business Days prior to such Call Closing by AREH to ACE.

     6. Representations, Warranties and Covenants.

        (a) AREH. AREH hereby represents, warrants and covenants to ACE as follows as of the date hereof and as of the Call Closing (and ACE’s obligation to acquire the Equity Interests at the Call Closing shall be subject to such representations and warranties being true and accurate as of such date):

       (i) Organization. AREH is a limited partnership duly organized and validly existing under the laws of the State of Delaware.

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       (ii) Power and Authority. AREH has the requisite limited partnership power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by AREH and the consummation by AREH of the transactions contemplated hereby have been duly authorized by all requisite limited partnership action on the part of AREH, and no other proceedings on the part of its partners are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by, and constitutes the valid and binding obligation of, AREH, enforceable against it in accordance with its terms.

       (iii) Equity Interests Free of Liens. The transfer of the Equity Interests pursuant to this Agreement (A) (1) does not and will not result in the creation or imposition of any mortgage, pledge, security interest, encumbrance, lien, option to purchase or sell, right of first refusal or charge of any kind (“Lien”) (other than any Lien created by action of any person other than AREH or the Company) upon the Equity Interests, (2) does not and will not violate any law, rule, regulation, order, judgment, decree or determination of any arbitrator, court or other Governmental Entity (“Requirement of Law”) applicable to AREH or the Company or to which the properties of either is subject and (3) does not and will not conflict with or result in any breach of any term, condition or provision of, or constitute (with due notice or lapse of time or both) a default under, or pursuant to the terms of, any mortgage, deed or trust or other agreement or instrument to which AREH or the Company is a party or by which either or any of its properties is bound except that ACE acknowledges that the Lender’s consent may be required to transfer the Equity Interests pursuant to this Agreement, and (B) does not and will not conflict with the charter documents of either AREH or the Company. As of the Call Closing, the Equity Interests will be (1) duly authorized, validly issued, fully paid and non-assessable membership interests, (2) the only membership interests issued and outstanding and (3) delivered free and clear of all Liens (other than any Lien solely created by action of ACE or relating to the Traymore Debt) and not be subject to any voting or trust agreement, proxy, buy-sell agreement, right of first refusal, preemptive-right or similar restriction. As of the Call Closing, no individual, Governmental Entity or entity of whatever nature (“Person”), including AREH, will have the right to acquire from the Company any membership interest or any other securities of the Company.

       (iv) No Conflict. The execution, delivery and performance by AREH of this Agreement, and the consummation by AREH of the transactions contemplated hereby (A) (1) does not and will not violate any Requirement of Law applicable to AREH or the Company and (2) does not and will not conflict with or result in any breach of any term, condition or provision of, or constitute (with due notice or lapse of time or both) a default under, or pursuant to the terms of, any mortgage, deed of trust or other agreement or instrument to which AREH or the Company is a party or by which AREH, the Company or the properties of either is bound except that ACE acknowledges that the Lender’s consent may be required to transfer the Equity Interests pursuant to this Agreement, and (B) does not and will not conflict with the organizational documents of AREH or the Company.

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       (v) Consents/Approvals. As of the Call Closing, (A) no consents of, filings with, authorizations or other actions of, any Governmental Entity will be required to be received, made or filed by, or taken on behalf of, AREH’s transfer of the Equity Interests pursuant to this Agreement, other than those that have or will have been received, made, filed or taken, and (B) no consent, approval, waiver or other action by any Person under any contract, agreement, indenture, lease or other similar document to which AREH or any of its properties is bound is required for the transfer of the Equity Interests pursuant to the Agreement, except for any such consents, approvals, waivers or other actions that have been or will have been previously obtained or completed.

       (vi) Inspection Documents. The Inspection Documents (other than any Inspection Documents produced or prepared by third parties) are complete and accurate in all material respects.

       (vii) Company Business. The Company has not engaged, and will not engage in any business other than the acquisition, ownership and operation of the Traymore Site.

        (b) ACE. ACE hereby represents, warrants and covenants to AREH as follows as of the date hereof and as of the Call Closing:

       (i) Organization. ACE is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.

       (ii) Power and Authority. ACE has the requisite limited liability company power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by it of this Agreement and the consummation by it of the transactions contemplated hereby have been duly authorized by all requisite limited liability company action and no other proceedings on its part or its members or managers is necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by ACE and constitutes its valid and binding obligation, enforceable against ACE in accordance with its terms.

       (iii) No Conflict. The execution, delivery and performance by ACE of this Agreement, and the consummation by ACE of the transactions contemplated hereby (A)(1) does not and will not violate any Requirement of Law applicable to it and (2) does not and will not conflict with or result in any breach of any term, condition or provision of, or constitute (with due notice or lapse of time or both) a default under, or pursuant to the terms of, any mortgage, deed of trust or other agreement or instrument to which it is a party or by which it or any of its properties is bound and (B) does not and will not conflict with its organizational documents.

       (iv) Consents/Approvals. As of the Call Closing (A) no consents of, filings with, authorizations or other actions of, any Governmental Entity will be required to be received, made or filed by, or taken on behalf of, ACE in connection with its

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  purchase of the Equity Interests pursuant to this Agreement, other than those that have or will have been received, made, filed or taken, and (B) no consent, approval, waiver or other action by any Person under any contract, agreement, indenture, lease or other similar document to which ACE or Atlantic Coast or any of their properties is bound is required for the transfer of the Equity Interests pursuant to the Agreement, except for any such consents, approvals, waivers or other actions that have been or will have been previously obtained or completed.

       (v) Liabilities of the Company. ACE acknowledges the existence of the obligations of the Company as lessor under the Traymore Leases (as defined in the Purchase Agreement), the Boardwalk Assumed Liabilities (as defined in the Purchase Agreement) and, to the extent AREH chooses to sell the Equity Interests and/or the Traymore Site subject to the Traymore Debt, the Traymore Debt, and provided that the exercise of the Call Right closes in accordance with Section 1(b), agrees to accept the Equity Interests and the Traymore Site subject to all the terms and conditions contained in the Traymore Leases, copies of which will be included in the Inspection Documents, the Boardwalk Assumed Liabilities, and the Traymore Debt, and the other liabilities listed and disclosed in the Inspection Documents.

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

        (a) Consents/Approvals. All consents of, filings with, authorizations or other actions of, any Governmental Entity required to be received, made or filed by, or taken on behalf of, AREH in connection with its transfer, and ACE in connection with its purchase, of the Equity Interests pursuant to this Agreement, have been received, made, filed or taken, and (B) all consents, approvals, waivers or other action by any Person under any contract, agreement, indenture, lease or other similar document to which AREH, ACE or any of their properties is bound is required for the transfer of the Equity Interests pursuant to this Agreement have been obtained or completed.

        (b) Performance of Obligations. Each of AREH and ACE shall have performed in all material respects all covenants, agreements and obligations required to be performed by it under this Agreement at or prior to the Call Closing.

        (c) Financing. To the extent, but only to the extent, AREH, in accordance with Section 4(b), decides to sell to ACE the Equity Interests free and clear of the Traymore Debt (either because AREH chooses to or because the Lender does not consent to the sale of the Equity Interests to ACE for any reason (if such consent is required under the Traymore Debt documents)), then ACE shall have obtained financing on commercially reasonable terms and conditions sufficient to enable it to consummate the transaction contemplated hereby.

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     To the extent the conditions set forth in this Section 7 are not satisfied or waived at or prior to the Call Closing Termination, then the Call Notice and this Agreement, with the exception of those obligations that expressly survive the termination of this Agreement, shall automatically terminate, and neither party shall have any further obligations or liability to the other hereunder.

     8. Miscellaneous.

        (a) Further Assurances. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to perform its obligations hereunder and to consummate and make effective the transactions contemplated to be consummated by such party under this Agreement. Without limitation of the generality of the foregoing, each party hereto agrees to cooperate with the other parties in obtaining as promptly as practicable after the exercise of the Call Right, any and all consents or approvals of any Governmental Entity referred to in Section 1(b), with respect to such exercise and the related Call Closing.

        (b) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto, provided that neither this Agreement nor any rights or obligations hereunder may be assigned or delegated by AREH or ACE without the prior written consent of the other party except that (i) ACE may assign, in whole or in part, its rights and obligations to Atlantic Coast or any subsidiary of ACE or Atlantic Coast provided that ACE continues to be bound by its obligations hereunder, (ii) ACE may assign its rights and obligations to any subsidiary of Atlantic Coast or ACE into which ACE is merged, consolidated or otherwise combined and (iii) AREH may assign in whole its rights and obligations hereunder to any Person in connection with a transfer of the Equity Interests to such Person, provided such Person agrees with ACE in writing to be bound by all of the terms of this Agreement applicable to AREH.

        (c) Costs and Expenses. Except as otherwise set forth herein, each party agrees to bear its own expenses, fees and costs incurred in connection with the transactions contemplated by this Agreement.

        (d) Brokerage. There are no valid claims for brokerage commissions, finder’s fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of any party hereto and each party will indemnify and hold the other party harmless against any liability or expense to it arising out of such a claim.

        (e) Amendment. Any amendment hereto shall be effective only if in writing and signed by each of AREH and ACE.

        (f) Waiver; Cumulative Rights. No provision of this Agreement shall be deemed to have been waived by any act or knowledge of any party or of such party’s agents, officers or employees, but only by an instrument in writing specifying such waiver signed by

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AREH and delivered to ACE, if AREH is the waiving party, or in writing signed by ACE and delivered to AREH, if ACE is the waiving party. The failure or delay of any party to require performance by another party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in whole or in party from time to time.

        (g) Notices. All notices, demands, requests, certificates or other communications under this Agreement shall be in writing and shall be mailed by certified or registered mail (return receipt requested) with charges prepaid, hand delivered or sent by facsimile transmission or by commercial courier to the address set forth below for each of the parties (or at such other address as shall be specified by a party by like notice to the other parties):

       (i) If to AREH:

American Real Estate Holdings Limited Partnership
100 South Bedford Road
Mt. Kisco, NY 10549
Attn.: Felicia Buebel
Fax.: (914) 242-9282

        with copies to:

DLA Piper Rudnick Gray Cary US LLP
1251 Avenue of the Americas
New York, NY 10020
Attn.: Steven Wasserman
Fax.: (212) 835-6001

       (ii) If to ACE:

Sands Casino Hotel
Indiana Avenue & Brighton Park
Atlantic City, NJ 08401
Attn: General Counsel
Fax: (609) 441-4937

        with copies to:

Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022
Attn.: Joel Yunis
Fax.: (212) 894-5666

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Notices shall be deemed delivered when received; provided that any notice delivered after business hours or on a Saturday, Sunday or legal holiday at the place of such delivery shall be deemed for purposes of computing any time period hereunder to have been delivered on the next business day in such place of business.

        (h) Governing Law. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of New York, without reference to its conflicts of law principles.

        (i) 1031 Exchange. ACE acknowledges that AREH intends to structure its acquisition of the Traymore Site as a 1031 Exchange in accordance with applicable Internal Revenue regulations. ACE acknowledges and hereby consents to such transaction and the transfer by AREH of the Equity Interests to the nominee exchange agent. Notwithstanding such transfer, AREH agrees to cause such exchange agent to comply with the terms of this Agreement applicable to AREH to the extent the same have been assigned to the nominee exchange agent.

        (j) Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

        (k) Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

        (l) Remedies. Each party shall be entitled to obtain specific performance of the obligations of another party hereunder and immediate injunctive relief, and in the event any action or proceeding is brought in equity to enforce this Agreement, no party will present as a defense that there is an adequate remedy at law. Such remedies shall be in addition to any other remedies which any party may have under this Agreement or otherwise.

        (m) “As-Is” Condition; Waiver and Release. Except for the express representations and warranties contained in Section 6(a) of this Agreement, the Equity Interests to be transferred hereunder will be transferred “as is, where is,” in their present condition and state of repair, with all faults, limitations and defects (hidden and apparent). Without limitation, ACE acknowledges that, except as specifically set forth to the contrary in Section 6(a) of this Agreement, no warranties or representations, expressed or implied, of any kind whatsoever have been made by AREH, any of its affiliates or any other person, or will be relied upon by ACE.

        (n) Survival of Representations, Warranties and Covenants. The representations, warranties and covenants contained in Section 6 of this Agreement shall survive the Call Closing for a period of six months. Except as set forth in the immediately preceding sentence no other representation, warranty or covenant of AREH shall survive the Call Closing or termination of this Agreement, and upon the earlier of the Call Closing, the Call Termination Date or other termination of this Agreement, all obligations and duties of AREH shall be deemed fully satisfied, and AREH shall have no further obligation, duty or liability hereunder, contingent or otherwise.

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        (o) Limitation of Claims. Notwithstanding anything to the contrary contained herein, the aggregate liability of AREH with respect to any claims, losses, liabilities, damages, judgments, proceedings, causes of actions, costs and expenses shall not exceed the Call Price actually paid by ACE at the Call Closing.

     [Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto on the date first above written.

AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
By:	American Property Investors, Inc., its general partner
By:	/s/ Jon F. Weber
	Name:	Jon F. Weber
	Title:	President
ACE GAMING, LLC
By:	/s/ Richard P. Brown
	Name:	Richard Brown
	Title:	President and Chief Executive Officer

     The undersigned, AREP Sands Holding, LLC, the holder of approximately $27 million aggregate principal amount of the 3% Notes due July 22, 2008 (the “Notes”) issued by Atlantic Coast Entertainment Holdings, Inc. (“Atlantic”) and guaranteed by ACE Gaming, LLC (“ACE”) under an indenture dated July 22, 2004 (the “Indenture”), by and among Atlantic, as issuer, ACE, as guarantor, and Wells Fargo National Bank Association, as trustee, in its capacity as the holder of a majority of the outstanding principal amount of the Notes, hereby consents to all of the matters set forth in the above agreement and waives any and all defaults, conflicts, failures of compliance and future compliance with, under or in respect of the Indenture, resulting from or arising out of, the execution, delivery or performance of the above agreement.

AGREED AND ACCEPTED:
AREP SANDS HOLDING, LLC
By:	/s/ Keith Meister
	Name:	Keith Meister
	Title:	President

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EX-99.1

Exhibit 99.1

DEFINITIONS

The following terms, which are used in this Agreement, were defined in the Purchase Agreement and have the meaning set forth below.

     Acquired Personal Property shall mean the Personal Property, excluding the Excluded Personal Property.

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

     Affiliate Customer List shall mean the output (in either electronic or printed form as reasonably requested by Flamingo Buyer) of that portion of the Customer Database that includes (a) the information set forth in Section 4.2(g) of the Flamingo Disclosure Letter, to the extent available in the Customer Database as of a time no earlier than 48 hours prior to the Closing but in no event after the Closing, for customers of the Casino Property, who (i) have visited the Casino Property during the 24 month period prior to the Closing (but not including such data for the ten day period prior to the Closing) and (ii) have visited any other property owned or operated by Harrah’s or its Affiliates and (b) the names, addresses and dates of stay for customers at the hotel located at the Casino Property for twelve (12) months prior to the Closing Date; provided, however, that the Affiliate Customer List shall not include any “do not mail” customers.

     Assumed Contract shall mean the Contracts related to the Casino Property which exist as of the Closing Date, which are either (i) set forth on Section 1.1(a)(iii) of the Flamingo Disclosure Letter, or (ii) not listed on Section 1.1(a)(iii) of the Flamingo Disclosure Letter but (a) reflected in the income statements of Flamingo prepared through the Closing Date and which are not otherwise, individually or in the aggregate, material to the Casino Property or (b) entered into prior to Closing with the approval of Flamingo Buyer or which did not require the approval of Flamingo Buyer pursuant to Section 7.1(a) of the Purchase Agreement.

     Boardwalk shall mean Martial Development Corp., a New Jersey corporation and Boardwalk Regency Corporation, a New Jersey corporation, together.

     Boardwalk Assumed Liabilities shall mean all Liabilities of Boardwalk, of any kind of nature whatsoever, whether known or unknown, fixed or contingent, but including, without limitation, except for the Boardwalk Excluded Liabilities.

     Boardwalk Buyer shall mean AREP Boardwalk LLC, a Delaware limited liability company.

     Boardwalk Disclosure Letter shall mean the Disclosure Letter delivered by Boardwalk to Buyers on the date of the Purchase Agreement.

     Boardwalk Excluded Asset shall mean:

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          (i) all assets and properties of Boardwalk not located at the Traymore Site, including, without limitation, the Other Assets and Other Property; and all assets and properties owned by Affiliates of Boardwalk;

          (ii) the Other Assets and Other Property;

          (iii) the corporate charter or other organizational documents, minute and stock books and records, corporate seals, Tax Returns (including supporting schedules) of Boardwalk or any of its Affiliates;

          (iv) subject to Section 3.1 of the Purchase Agreement, any refund, credit, claim or entitlement with respect to Taxes of Boardwalk or its Affiliates, or with respect to the Boardwalk Purchased Assets, to the extent attributable to Tax periods (or portions thereof) ending on or before the Closing Date;

          (v) all assets to which Boardwalk is entitled under the proration and adjustment provisions of Article III of the Purchase Agreement; and

          (vi) any assets set forth on Section 1.2(b) of the Boardwalk Disclosure Letter.

     Boardwalk Excluded Liabilities shall mean

          (i) any Liability in respect of any Boardwalk Excluded Asset, including the Other Assets and the Other Property;

          (ii) all Liabilities set forth on Section 1.4(b) of the Boardwalk Disclosure Letter;

          (iii) all indebtedness or accounts payable owing from Boardwalk to any Affiliate of Seller;

          (iv) all Pre-Closing Tax Liabilities;

          (v) all Liabilities under Environmental Laws for matters set forth on Section 5.26 of the Boardwalk Disclosure Letter (the “Boardwalk Excluded Environmental Liabilities:);

          (vi) all Liabilities of Boardwalk pursuant to the proration and adjustment provisions of Article III of the Purchase Agreement; and

          (vii) all Liabilities of Boardwalk that (A) by their terms should have been performed on or prior to the Transfer Time and/or (B) relate to events or circumstances, including claims, pending or threatened litigation, acts, omissions, events or occurrences relating to the Boardwalk Purchased Assets, arising on or prior to the Transfer Time, in each case, other than the Boardwalk Assumed Liabilities specifically enumerated in Section 1.3(b)(i) through (v) of the Purchase Agreement.

     Boardwalk Purchased Assets shall mean Boardwalk’s right, title and interest in and to Boardwalk’s assets, properties and rights, tangible and intangible, of every type and description, wherever located, in each case which are used or employed primarily in connection with the Traymore Site, including without limitation, Boardwalk’s assets, properties and rights set forth below, but excluding the Boardwalk Excluded Assets

          (i) the Traymore Site Land;

          (ii) the Traymore Site Improvements;

          (iii) the Traymore Contracts;

          (iv) any and all (A) drawings, specifications, surveys, architectural, engineering, soils, seismic, geological and environmental reports, studies and certificates, and other technical descriptions in Boardwalk’s possession relating to the Boardwalk Purchased Assets (collectively, the “Traymore Plans”), (B) third-party warranties, guaranties and indemnities relation to the Boardwalk Purchased Assets (collectively, the “Traymore Warranties”), (C) all licenses, permits, governmental

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approvals, utility commitments, utility rights, development rights or approvals or other similar rights relating to the Boardwalk Purchased Assets, all of which are set forth on Section 1.1(b)(iv) of the Boardwalk Disclosure Letter (collectively, the “Traymore Licenses”) and (D) any and all books and records relating exclusively to the Boardwalk Purchased Assets, including without limitation, any rent rolls;

          (v) all right, title and interest, if any, of Boardwalk in and to any land lying in the bed of any street, road, highway or avenue, open or proposed, in front of or adjoining all or any part of the Traymore Site Land and in all strips, gores or rights-of-way, riparian rights and easements; and

          (vi) all other property, real, personal or mixed, owned or held by Boardwalk (or Boardwalk’s representatives) which relates, in any way, to the design, construction, ownership, use leasing, advertising, maintenance or operation of the Boardwalk Purchased Assets.

     Books and Records shall mean all books and records of Flamingo relating to the Casino Property, including, without limitation, the rent roll, all architectural, structural, service manuals, engineering and mechanical plans and surveys, electrical, soil, wetlands, environmental and similar reports, studies, certificates and audits and all plans and specifications for the Casino Property except to the extent related primarily to the Excluded Liabilities, the Excluded Assets or otherwise proprietary to Harrah’s or its Affiliates (other than Flamingo) and shall not be deemed to include the Customer Database.

     Business Day shall mean shall mean any Monday through Friday, inclusive, other than any such days that financial institutions within the State New York are authorized or required to close; provided, however, any reference in the Purchase Agreement to any day other than a business day shall be deed a reference to calendar day.

     Buyer shall mean AREP Laughlin Corporation, a Delaware corporation (“Flamingo Buyer”) and AREP Boardwalk LLC, a Delaware limited liability company, (“Boardwalk Buyer”).

     Casino Land shall mean all real property owned by the Flamingo.

     Casino Property shall mean, collectively, the Casino Land, the building structures and improvements comprising hotel and casino located on the Casino Land, and the Fixtures on the Casino Land.

     Closing Date Working Capital shall mean the amount of Working Capital as of the Closing Date.

     Condemnation Termination Event shall mean, with respect to Flamingo, a taking of a material part of the Casino Property such that the remaining balance of the Casino Property may not be feasibly operated (after using commercially reasonable efforts to restore the Casino Property) as a casino hotel reasonably similar to other casino hotels in the area, and with respect to Boardwalk, any taking of any material portion of the Traymore site adjacent to the Atlantic City boardwalk.

     Contract shall mean any agreement, contract, lease, service contract, equipment lease, sign lease, software license agreement, power of attorney, note, loan, evidence of indebtedness, purchase order, letter of credit, settlement agreement, franchise agreement, undertaking, covenant not to compete, employment agreement, license, instrument, obligation, commitment, understanding,

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policy, purchase and sales order, quotation and other executory commitment to which any Person is a party or to which any of the assets of such Person are subject, whether oral or written, express or implied.

     CS3 Assets shall mean certain assets owned by Consolidated Supplies, Services and Systems, a Nevada corporation and an Affiliate of Flamingo, listed on Section 7.8(c) of the Flamingo Disclosure Letter and used exclusively in the operation of the Casino Property.

     Customer Database shall mean all customer databases, customer lists, historical records of customers and any other customers information collected and used by Flamingo or its Affiliates in connection with marketing and promoting the Casino Property.

     Detailed Balance Sheet shall mean the September 30, 2005 balance sheet and related data of Flamingo as set forth on Section 2.4 of the Flamingo Disclosure Letter.

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

     Excluded Assets shall mean, together, the Boardwalk Excluded Assets and the Flamingo Excluded Assets.

     Excluded Contracts shall mean all Contracts which are not primarily used in or relate to the Casino Property or are listed in Section 1.2(a)(ii) of the Flamingo Disclosure Letter, which list shall include, without limitation, those Contracts used primarily in the Business and entered into by any Affiliate of Flamingo.

     Excluded Intellectual Property shall mean all Intellectual Property which is not set forth on Section 5.5 of the Flamingo Disclosure Letter.

     Excluded Personal Property shall mean the following:

          (i) any and all signs, menus, stationery, gift shop inventory or other items containing any Excluded Intellectual Property or indicating that the Casino Property is owned and/or operated by or on behalf of “Flamingo” or identifying the Casino Property as the “Flamingo” or bearing the System Mark “Caesars”, “Harrah’s” or any other System Mark of Flamingo’s Affiliates, except for those items that Flamingo Buyer and Flamingo agree may be modified by Buyer to remove such System Mark or identification;

          (ii) all records, files and memorabilia pertaining to Flamingo or Harrah’s and any past or present corporate Affiliates or predecessors of Flamingo or Harrah’s (including Caesars Entertainment, Inc.); and

          (iii) any personal property of any third party (including, without limitation, any Affiliate of Flamingo) located at the Casino Property that is not the subject of an Assumed Contract.

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     Excluded Software shall mean all computer software owned by or licensed for use by Flamingo or its Affiliates and all source code, user codes and data, whether on tape, disc or other computerized format, and all related user manuals, computer records, service codes, programs, stored materials and databases (including, without limitation, all access codes and instructions needed to obtain access to and to utilize the information contained on such computer records), together with any and all updates and modifications of all of the foregoing and all copyrights related to the computer software, including, without limitation, the Customer Database and any customer tracking system.

     Final Working Capital Adjustment shall mean the amount (which may be a positive or negative number) equal to (i) the Closing Date Working Capital MINUS (ii) the Pre-Closing Working Capital.

     Fixtures shall mean as it relates to each Seller, all fixtures owned by Seller and placed on, attached to, or located at and used in connection with the operation of the Property.

     Flamingo shall mean, Flamingo Laughlin, Inc., a Nevada corporation.

     Flamingo Assumed Liability shall mean:

          (i) all Liabilities of the type designated on the Detailed Balance Sheet as being assumed by Buyer;

          (ii) all Liabilities to the extent solely relating to, or arising in respect of, (A) the Flamingo Purchased Assets accruing, arising out of, or relating to events, occurrences, acts or omissions happening from and after the Closing Date and (B) all Assumed Contracts which were not fully performed and were not required to have been so performed, prior to the Closing Date;

          (iii) all Liabilities with respect to entertainment, hotel, dining and other reservations made by patrons relating to the Casino Property from and after the Closing;

          (iv) except as provided for in Section 3.1 and 7.9 of the Purchase Agreement, all Liabilities for Taxes arising from and attributable to the ownership of any portion of the Flamingo Purchased Assets from and after the Closing Date and any Taxes that are included in the calculation of the Final Working Capital Adjustment;

          (v) (A) all Liabilities relating to Transferred Employees accruing from and after the Closing Date and (B) all obligations and Liabilities relating to severance provided for in Section 7.4(c) of the Purchase Agreement;

          (vi) all Liabilities of Buyer pursuant to the proration and adjustment provision of Article III of the Purchase Agreement;

          (vii) all Liabilities with respect to claims, acts, omissions, events or occurrences relating to the Flamingo Purchased Assets, which occur or arise on or after the Closing Date;

          (viii) all Liabilities under Environmental Laws, including without limitation Environmental Liabilities, relating to, resulting from, caused by or arising out of ownership, operation or control of the Casino Property, whether arising before or after the Closing Date, including, without limitation, any Liability relating to contamination or exposure to Hazardous Substances at or attributable to the Casino Property, but excluding the Flamingo Excluded Environmental Liabilities; and

          (ix) to the extent lawfully transferable, all obligations, commitments and Liabilities under any Governmental Approvals assigned to Buyer pursuant to Section 1.1(a)(vii) of the Purchase Agreement to the extent arising on or after the Closing Date.

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     Flamingo Buyer shall mean AREP Laughlin Corporation, a Delaware corporation.

     Flamingo Customer List shall mean the output (in either electronic or printed form as reasonably requested by Flamingo Buyer) of that portion of the Customer Database that includes the information set forth in Section 4.2(g) of the Flamingo Disclosure Letter, to the extent available in the Customer Database as of a time no earlier than 48 hours prior to the Closing but in no event after the Closing, for customers of the Casino Property, who (i) have visited the Casino Property during the 24 month period prior to the Closing (but not including such data for the ten day period prior to the Closing) and (ii) have not visited any other property owned or operated by Harrah’s or its Affiliates; provided, however, that the Flamingo Customer List shall not include any “do not mail” customers.

     Flamingo Disclosure Letter shall mean the Disclosure Letter delivered by Flamingo to Buyers on the date of the Purchase Agreement.

     Flamingo Excluded Assets shall mean:

          (i) all items of the type designated to be retained by Flamingo on the Detailed Balance Sheet;

          (ii) the Excluded Contracts;

          (iii) any rights, claims, causes of action and credits (including all indemnities, warranties and similar rights) in favor of Flamingo or any of its Affiliates or Representatives to the extent relating to (A) any other Flamingo Excluded Asset or (B) any Flamingo Excluded Liability;

          (iv) the corporate charter or other organizational documents, minute and stock books and records, corporate seals, Tax Returns (including supporting schedules) of Flamingo or any of its Affiliates;

          (v) all of its human resources and other employee-related files and records, other than the Transferred Employee Records;

          (vi) all indebtedness or accounts payable owing from any Affiliate of Flamingo to Flamingo, all of which are set forth on Section 1.2(a)(vi) of the Flamingo Disclosure Letter;

          (vii) subject to Section 3.1 of the Purchase Agreement, any refund, credit, claim or entitlement with respect to Taxes of Flamingo or its Affiliates, or with respect to the Flamingo Purchased Assets, to the extent attributable to Tax periods, (or portions thereof) ending on or before the Closing Date;

          (viii) the Excluded Personal Property;

          (ix) the Excluded Intellectual Property;

          (x) the Customer Database;

          (xi) the Excluded Software;

          (xii) all assets and properties of Flamingo neither used primarily in connection with the business operated at the Casino Property nor located at the Casino Property and all assets and properties owned by Affiliates of Flamingo (other than the CS3 Assets) to the extent such assets and properties are not used primarily in connection with the business operated at the Casino Property;

          (xiii) all data, files and other materials located on any storage device (including such data, files and/or materials located on personal computers and servers) located at the Casino Property other than the Books and Records, the Flamingo Customer List, the Affiliate Customer List and the Transferred Data;

          (xiv) all assets to which Flamingo is entitled under the proration and adjustment provisions of Article III of the Purchase Agreement;

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          (xv) the Total Rewards and any player loyalty or rewards program of Harrah’s or its Affiliates; and

          (xvi) any assets set forth on Section 1.2(a)(xvi) of the Flamingo Disclosure Letter.

     Flamingo Excluded Environmental Liability shall mean all Liabilities under Environmental Laws for (i) matters set forth at Section 5.8(1), (2) and (3) of the Flamingo Disclosure Letter or (ii) any tort claim made prior to the expiration of the applicable statute of limitations which is directly related to contamination or exposure to Hazardous Substances at the Casino Property, but, if and only if, such contamination or exposure occurred solely prior to Closing.

     Flamingo Excluded Liability shall mean Liabilities of Flamingo, other than the Flamingo Assumed Liabilities, including:

          (i) any Liability in respect of any Flamingo Excluded Asset;

          (ii) all Liabilities of the type designated to be retained by Flamingo on the Detailed Balance Sheet;

          (iii) all Liabilities set forth on Section 1.4(a) of the Flamingo Disclosure Letter;

          (iv) all indebtedness or accounts payable owing from Flamingo to any Affiliate of Flamingo;

          (v) all Pre-Closing Tax Liabilities;

          (vi) all Pre-Closing Employee Liabilities;

          (vii) all Liabilities under Environmental Laws for (i) matters set forth at Sections 5.8(1), (2) and (3) of the Flamingo Disclosure Letter or (ii) any tort claim made prior to the expiration of the applicable statute of limitations which is directly related to contamination or exposure to Hazardous Substances at the Casino Property, but, if and only if, such contamination or exposure occurred solely prior to Closing (collectively, the Flamingo Excluded Environmental Liabilities);

          (viii) all Liabilities of Flamingo pursuant to the proration and adjustment provisions of Article III of the Purchase Agreement; and

          (ix) all Liabilities of Flamingo that (A) by their terms should have been performed on or prior to the Transfer Time, and/or (B) relate to the events or circumstances, including claims, pending or threatened litigation, acts, omissions, events or occurrences relating to the Flamingo Purchased Assets, arising on or prior to the Transfer Time, in each case, other than the Flamingo Assumed Liabilities.

     Flamingo Purchased Assets shall mean Flamingo’s right, title and interest in and to Flamingo’s assets, properties and rights, tangible and intangible, of every type and description, wherever located, in each case which are used or employed primarily in connection with the Casino Property, including without limitation, Flamingo’s assets, properties and rights set forth below, but excluding the Flamingo Excluded Assets and except as set forth in the Detailed Balance Sheet:

          (i) the Casino Property, including the Casino Land;

          (ii) all items of the type designated to be transferred to Flamingo Buyer on the Detailed Balance Sheet, including without limitation, all cash and cash equivalent balances of Flamingo and outstanding accounts receivable as of the Closing Date;

          (iii) the Assumed Contracts, including the Material Assumed Contracts;

          (iv) the Acquired Personal Property;

          (v) the Transferred Intellectual Property;

          (vi) the Books and Records;

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          (vii) the Transferred Data;

          (viii) the Governmental Approvals, and pending applications therefor, to the extent transferable by Law, all of which are set forth on Section 1.1(a)(viii) of the Flamingo Disclosure Letter;

          (ix) the Transferred Employee Records;

          (x) the Flamingo Customer List, the Affiliate Customer List and the Flamingo Databases; and

          (xi) all assets to which Buyer is entitled under the proration and adjustment provisions of Article III of the Purchase Agreement.

     Gaming Authority shall mean all licenses, permits, approvals, authorizations, registrations, findings of suitability, franchises, entitlements, waivers and exemptions issued by any Gaming Authority necessary for or relating to the conduct of activities by any party hereto or any of its Affiliates, including, without limitation, the ownership, operation, management and development of the Purchased Assets.

     Gaming Law shall mean all laws pursuant to which any Gaming Authority possesses regulatory, licensing or permit authority over gaming within (i) the State of Nevada, including, without limitation, the Nevada Gaming Control Act, as codified in Chapter 463 of the NRS, as amended from time to time, and the regulations of the Nevada Gaming Commission promulgated thereunder, as amended from time to time, and (ii) the State of New Jersey, including, without limitation, the New Jersey Casino Control Act, as amended from time to time.

     Governmental Approval shall mean submissions, with respect to the Purchase Agreement, required under (A) any applicable federal or state securities Laws, (B) the HSR Act and antitrust competition Laws of any other applicable jurisdiction, (C) the Gaming Laws and (D) any other applicable Law.

     Governmental Entity shall mean any court, administrative agency, commission, Gaming Authority or other governmental authority or instrumentality.

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

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

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

     Leases shall mean as it relates to each Seller, leases, subleases, occupancy and concession agreements affecting such Seller’s Property.

     Liabilities shall mean any direct or indirect liability, indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or endorsement of or by any Person of any type, whether accrued, absolute, contingent, matured, unmatured, liquidated, unliquidated, known or unknown.

     Material Assumed Contract shall mean as it relates to each Seller, all Assumed Contracts that either (i) have a remaining obligation for payment or services in excess of One Hundred Thousand Dollars ($100,000) or (ii) are not cancelable by such Seller upon thirty (30) days notice.

     Ordinary Course of Business shall describe any action taken by a Person if such action is consistent with such Person’s past practices and is taken in the ordinary course of such Person’s normal day to day operations.

     Other Assets shall mean other assets that are not located at the Traymore Site.

     Other Property shall mean Caesars Atlantic City.

     Passenger/Delivery Vehicles shall mean those certain passenger or delivery vehicles and recreational vehicles identified in Section 12.1(c) of the Flamingo Disclosure Letter.

     Personal Property shall mean all office, hotel, casino, showroom, restaurant, bar, convention, meeting and other furniture, furnishings, appliances, equipment, equipment manuals, slot machines, gaming tables and gaming paraphernalia (including parts or inventories thereof), subject to Section 7.11(b) of the Purchase Agreement, gaming chips and tokens, including, without limitation, (i) slot machine tokens not currently in circulation, and (ii) reserve chips, if any, not currently in circulation, Passenger/Delivery Vehicles, computer hardware, point of sale equipment, telephone numbers, two-way security radios and base station, maintenance equipment, tools, signs and signage, office supplies, cleaning supplies in unopened cases or bulk containers or packages, linens (sheets, towels, blankets, napkins), uniforms, silverware, glassware, chinaware, pots, pans and utensils, and food, beverage and alcoholic beverage inventories owed by Flamingo and located at the Casino Property or used in Ordinary Course of Business thereon the Closing Date.

     Pre-Closing Employee Liability shall mean (i) with respect to the Retained Employees, all Liabilities arising out of or relating primarily to any and all severance obligations or other Liabilities relating to the termination of Retained Employees, (ii) with respect to Property Employees, any and all accrued and unpaid salary, bonuses and commissions (but excluding vacation/sick pay) payable to any such Property Employee for any period prior to the Closing Date and (iii) with respect to the matters set forth on Section 7.1(1) and 7.1(2) of the Flamingo Disclosure Letter, all wages required to be paid as of the Closing and which are accrued and unpaid as of the Closing.

     Pre-Closing Tax Liability means as it relates to both Flamingo and Boardwalk, any Liability related primarily to (i) income Taxes of Flamingo or Boardwalk, respectively, and (ii) except as provided for in Sections 3.1 and 7.9 of the Purchase Agreement, all Liabilities for Taxes including,

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without limitation, any Taxes due pursuant to subsequent deficiency determinations made under NRS Chapter 463, arising from and attributable to the ownership of the Purchased Assets prior to the Closing Date; provided, however, that all Taxes that are included in the calculation of the Final Working Capital Adjustment shall not constitute Pre-Closing Tax Liabilities.

     Property shall mean one of the following, as applicable: the Casino Property and the Traymore Site.

     Property Employee shall mean employees of the Flamingo at the Casino Property.

     Purchase Assets shall mean employees of Flamingo at the Casino Property.

     Representatives shall mean any Flamingo and Boardwalk’s Affiliates, officers, directors, employees, financial advisors, agents or other representatives.

     Retained Employee shall mean all of the Property Employees, each of whom will be given offers of employment on terms and conditions of employment comparable to the terms and conditions of employment as those provided by Flamingo to each such Property Employee immediately prior to the Closing Date, other than the Property Employees that are set forth on Section 7.4(a) of the Flamingo Disclosure Letter.

     Seller shall mean Boardwalk and Flamingo, together.

     System Mark shall mean service marks, trademarks, trade names, fictitious firm names, color arrangements, designs, logos and other similar designations of source or origin and general intangibles of like nature, together with the goodwill symbolized thereby, now or hereafter held or applied for in connection therewith.

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

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

     Total Rewards shall mean the player loyalty program of Harrah’s including the Connection Card program.

     Transferred Data shall mean all data, files and other materials that the parties reasonably agree are required for Flamingo Buyer to operate the Casino Property; provided, however, that such

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data, files and materials shall not include that which, in Flamingo’s sole discretion, is deemed to be proprietary information, sensitive or confidential customer information, or competitively sensitive information.

     Transferred Employee shall mean the Property Employees who accept Flamingo Buyer’s offers of employment and commence employment with Flamingo effective as of the Closing Date.

     Transferred Employee Records shall mean records of Flamingo that relate to Transferred Employees, but only to the extent that such records may be transferred under applicable Law.

     Transferred Intellectual Property shall mean all Intellectual Property used exclusively in the operation of the Casino Property and set forth on Section 5.5 of the Flamingo Disclosure Letter, other than the Excluded Intellectual Property.

     Transfer Time shall mean 11:59:59 p.m., New York City time, on the day prior to the Closing Date.

     Traymore Contracts shall mean the Contracts (including all amendments, modifications and supplements thereto) related to the ownership, maintenance and operation of the Traymore Site, which are either (i) set forth on Section 1.1(b)(iii) of the Boardwalk Disclosure Letter, or (ii) not listed on Section 1.1(b)(iii) of the Boardwalk Disclosure Letter but entered into prior to Closing with the approval of Boardwalk Buyer or which did not require the approval of Boardwalk Buyer pursuant to Section 7.1(b) or (c) of the Purchase Agreement.

     Traymore Leases shall mean Leases giving any person or entity any rights to use, occupy or operate on the Traymore Site or any portion thereof or otherwise affecting or relating to the Traymore Site.

     Traymore Site shall mean, collectively, the Traymore Site Land, the Traymore Site Improvements, and the Fixtures at the Traymore Site Land.

     Traymore Site Improvements shall mean all buildings, structures and other improvements now or hereafter located on the Traymore Site Land.

     Traymore Site Land shall mean the land located in the City of Atlantic City, Atlantic County, New Jersey known and designated as Lots 13 through 18 in Block 47, Lots 11 through 14, 19 and 25 in Block 48, and Lot 12 in Block 49.

     Working Capital shall mean the calculation, in accordance with the methodology set forth on the Detailed Balance Sheet, of the current assets of Flamingo (other than Excluded Assets) minutes the current liabilities of Flaming (other than Excluded Liabilities), excluding all real and personal property Taxes subject to proration pursuant to Article III of the Purchase Agreement.

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