ALPHA HOSPITALITY CORP, 8-K, 1998-02-09

ALPHA HOSPITALITY CORP
8-K, 1998-02-09
MISCELLANEOUS AMUSEMENT & RECREATION

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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: December 17, 1997

ALPHA HOSPITALITY CORPORATION
_______________________________________

(Exact name of Registrant as specified in its charter)

Delaware 1-12522 13-3714474
_____________ ____________________ _____________________
(State or other (Commission File No.) (IRS Employer ID No.)
jurisdiction of
incorporation)

12 East 49th Street, New York, New York 10017
_______________________________________
(Address of principal executive offices)

Registrant's telephone number, including area code: (212) 750-3500
____________________________________________________
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Item 2. Acquisition or Disposition of Assets.

On December 17, 1997, Alpha Hospitality Corporation (the "Company"),
through its subsidiaries Alpha Gulf Coast, Inc. ("Gulf Coast") and Alpha
Greenville Hotel, Inc., entered into an Asset Sale Agreement (the "Sale
Agreement") with Greenville Casino Partners, L.P. ("Buyer") a Mississippi
limited partnership unrelated to the Company, pursuant to which the Company (by
its subsidiaries) agreed, subject to the terms and conditions set forth therein,
to sell to Buyer substantially all of the Company's operating assets in
Greenville, Mississippi, including a hotel currently under construction on land
adjacent to its Bayou Caddy's Jubilee Casino (the "Casino"). Greenville Casino
Partners, L.P. operates the Las Vegas Casino, which is one of three riverboat
casinos currently operating at the Marina on Lake Ferguson in downtown
Greenville, Mississippi. The Las Vegas Casino is a 1-story casino barge with a
mezzanine level containing approximately 18,000 square feet of gaming space and
has 649 slot machines and 19 table games. The Buyer employs approximately 550
full-time personnel.

Upon consummation of the sale provided for under the Sale Agreement and
related financing (the "Pre-Closing Financing") obtained in conjunction with,
and as part of, the transactions contemplated under the Sale Agreement, the
Company (through its subsidiaries) is anticipated to receive (a) approximately
$26.5 million in cash, and (b) a 25% limited partnership interest in Buyer and
Buyer will assume (i) approximately $2 million of liabilities relating to the
business and assets being assumed and (ii) the Pre-Closing Financing.

Consummation of the proposed sale under the Sale Agreement is subject to
certain conditions, including approval of the transaction by the Company's
stockholders. The Company is in the process of preparing a proxy statement
relating to the proposed sale for filing with the Securities and Exchange
Commission (the "SEC") and, following review by the SEC, intends to distribute
the proxy statement to its stockholders and solicit their votes in favor of
proposed sale. The Company has been advised by Buyer that through its
solicitation of holders of the Company's capital stock, it has sufficient votes
to approve the proposed sale.

In conjunction with and in anticipation of the proposed sale contemplated
by the Sale Agreement, on December 30, 1997, Gulf Coast and Alpha Hotel obtained
the Pre-Closing Financing, pursuant to which they borrowed $19.0 million ($23.9
million less loan costs and loan discounts of approximately $5 million) from
Credit Suisse First Boston Mortgage Capital, L.L.C. ("Credit Suisse") and
concurrently therewith Gulf Coast applied the net proceeds therefrom to the
payment and discharge of approximately $17 million of the Company's
indebtedness, including $16 million of secured debt. Additionally, in
conjunction with and as part of the Pre- Closing Financing, Gulf Coast executed
and delivered to Credit Suisse an unsecured, zero-coupon promissory note (the
"Subordinated Debt") in the stated principal amount of $4.8 million. Although no
proceeds were received by Gulf Coast in conjunction with the Subordinated Debt,
under the terms of the Sale Agreement, Buyer is to assume such promissory note
upon consummation of the sale of the Casino Assets. The Pre-Closing financing is
secured by a sescurity interest in substantially all of the Company's assets,
including the Casino and other assets contemplated to be sold to Buyer.
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Closing of the purchase and sale of the Casino and related assets is
provided under the Sale Agreement to occur on the earlier to occur of (a) the
fifth business day after all conditions precedent have been met or (b) January
31, 1998 (provided, that if the SEC has not, on or before January 6, 1998,
approved the form of proxy statement to solicit the vote of the Company's
stockholders with respect to the proposed sale , the January 31, 1998 date shall
be extended to the earlier of (i) the 25th day after such approval is given or
(ii) February 25, 1998) or on such other date as Gulf Coast and Buyer may agree.

THE FORGOING DESCRIPTION OF THE SALE AGREEMENT IS NOT INTENDED TO BE
COMPLETE OR DETAILED. ATTENTION IS DIRECTED TO THE SALE AGREEMENT, WHICH IS
ATTACHED HERETO AS EXHIBIT A AND INCORPORATED HEREIN BY REFERENCE, FOR A
COMPLETE AND DETAILED UNDERSTANDING OF THE SALE AGREEMENT. THE ABOVE DESCRIPTION
OF SELECTIVE PORTIONS OF THE SALE AGREEMENT IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE ACTUAL SALE AGREEMENT, A COPY OF WHICH IS INCLUDED HEREWITH AS
EXHIBIT A.

Item 7. Financial Statements and Exhibits

a. Exhibit (a) - Copy of the Sale Agreement.

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Signature

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: February 9, 1997

Alpha Hospitality Corporation
(Registrant)

By:/s/ James A. Cutler
______________________________
Chief Financial Officer

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ASSET PURCHASE AGREEMENT

between

ALPHA GULF COAST, INC., A DELAWARE CORPORATION

and

ALPHA GREENVILLE HOTEL, INC., A DELAWARE CORPORATION

and

GREENVILLE CASINO PARTNERS, L.P.,

A MISSISSIPPI LIMITED PARTNERSHIP
DATED DECEMBER 17, 1997

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TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
1. Casino Assets . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Casino Barge and Related Equipment . . . . . . . . . 3
1.2 Fixtures, Gaming Equipment and Other Assets. . . . . 3
1.3 Moorage, Lease and Related Agreements. . . . . . . . 4
1.4 Excluded Assets. . . . . . . . . . . . . . . . . . . 5
1.5 List of Casino Assets . . . . . . . . . . . . . . . 6
2. Hotel Assets. . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Casino Hotel . . . . . . . . . . . . . . . . . . . . 6
2.2 Lease, Permits and Commitments . . . . . . . . . . . 7
3. Employees . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Consideration and Closing . . . . . . . . . . . . . . . . 9
4.1 Cash Portion . . . . . . . . . . . . . . . . . . . . 9
4.2 Designated Liabilities . . . . . . . . . . . . . . . 11
4.3 Limited Partnership Interest . . . . . . . . . . . . 13
4.4 Consideration for Hotel Assets . . . . . . . . . . . 13
4.5 Closing of the Purchase of the Casino Assets . . . . 15
4.6 Closing of Purchase of Hotel Assets . . . . . . . . 16
5. Deliveries at Closing . . . . . . . . . . . . . . . . . . 20
5.1 Unencumbered Assets. . . . . . . . . . . . . . . . . 20
5.2 Current Obligations. . . . . . . . . . . . . . . . . 22
5.3 Assumption of Liabilities. . . . . . . . . . . . . . 23
5.4 Excluded Liabilities . . . . . . . . . . . . . . . . 23
6. Conduct Prior to the Closing Date . . . . . . . . . . . . 24
7. Additional Conduct Prior to the Hotel Closing Date. . . . 29

</TABLE>

i
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<TABLE>

<S> <C> <C>
8. Conditions to Closing . . . . . . . . . . . . . . . . . . 31

8.1 Conditions to Seller's Obligations to Close
Purchase of Casino Assets . . . . . . . . . . . . . 31

8.2 Conditions to Purchaser's Obligation to Close
Purchase of the Casino Assets . . . . . . . . . . . 34

8.3 Conditions to Purchaser's Obligations to Close
the Purchase of the Hotel Assets . . . . . . . . . . 43

9. Post-Closing Agreements . . . . . . . . . . . . . . . . . 46

9.1 Disclosure and Use of Confidential Information . . . 46

9.2 Use of Trademarks. . . . . . . . . . . . . . . . . . 47

9.3 Hiring Away Employees. . . . . . . . . . . . . . . . 47

9.4 Back-Up . . . . . . . . . . . . . . . . . . . . . . 48

9.5 Further Assurances . . . . . . . . . . . . . . . . . 48

9.6 Injunctive Relief. . . . . . . . . . . . . . . . . . 49

9.7 Indemnification and Settlement of Claims . . . . . . 50

(a) Indemnification of Purchaser . . . . . . . . . 50

(b) Survival Periods as to Seller . . . . . . . . . 52

(d) Survival Periods as to Purchaser . . . . . . . 54

(e) Procedure for Claimed Relief . . . . . . . . . 55

(i) Notice of Claims . . . . . . . . . . . . . 55

(ii) Dispute with Respect to Notice of
Claim . . . . . . . . . . . . . . . . . . 57

(iii) Third Party Claims . . . . . . . . . . . . 58

(f) Right to Offset . . . . . . . . . . . . . . . . 60

10. Seller's Representations and Warranties . . . . . . . . . 61

10.1 Permits, Registrations, Licenses, Leasehold,
Moorage and Dockage Interest . . . . . . . . . . . . 62

</TABLE>

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<TABLE>

<S> <C> <C>
10.2 Listing of Assets and Title . . . . . . . . . . . . 64
10.3 Payment of Debts . . . . . . . . . . . . . . . . . . 65
10.4 Designated Liabilities . . . . . . . . . . . . . . . 66
10.5 No Other Contracts . . . . . . . . . . . . . . . . . 66
10.6 Hart-Scott-Rodino Act . . . . . . . . . . . . . . . 67
10.7 Coast Guard Standards. . . . . . . . . . . . . . . . 67
10.8 No Conflict. . . . . . . . . . . . . . . . . . . . . 67
10.9 Condition and Non-Removal of Equipment . . . . . . . 68
10.10 Compliance with Laws . . . . . . . . . . . . . . . 68
10.11 Hotel Marketing. . . . . . . . . . . . . . . . . . . 69
10.12 Litigation . . . . . . . . . . . . . . . . . . . . . 69
10.13 Hazardous Substances . . . . . . . . . . . . . . . . 70
10.14 Brokers and Real Estate Commissions. . . . . . . . . 71
10.15 Contracts and Agreements . . . . . . . . . . . . . . 72
10.16 Compliance with Mississippi Gaming Regulations . . . 73
10.17 Good Standing. . . . . . . . . . . . . . . . . . . . 73
10.18 Corporate Authorization. . . . . . . . . . . . . . . 74
10.19 Valid Obligation . . . . . . . . . . . . . . . . . . 74
10.20 Profit and Loss Statements . . . . . . . . . . . . . 74
10.21 Knowledge . . . . . . . . . . . . . . . . . . . . . 75
10.22 Application of Sale Proceeds . . . . . . . . . . . . 76
10.23 Pledge of Partnership Interest . . . . . . . . . . . 78
11. Purchaser's Representations and Warranties. . . . . . . . 79
11.1 Good Standing. . . . . . . . . . . . . . . . . . . . 79
11.2 Corporate Authorization. . . . . . . . . . . . . . . 79
11.3 No Violation of Other Documents. . . . . . . . . . . 80

</TABLE>

iii

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<TABLE>

<S> <C> <C>
11.4 Brokers and Real Estate Commissions. . . . . . . . . 80
11.5 Hart-Scott-Rodino Act . . . . . . . . . . . . . . 80
11.6 Delivery of Partnership Agreement . . . . . . . . . 81
11.7 Delivery of Proforma Balance Sheet . . . . . . . . . 81
12. Right to Terminate and Remedies . . . . . . . . . . . . . 82
12.1 Right To Terminate . . . . . . . . . . . . . . . . . 82
12.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 83
(a) Purchaser's Remedies . . . . . . . . . . . . . 83
(b) Seller's Remedies . . . . . . . . . . . . . . . 85
(c) Subordination of Termination Payments . . . . . 85
13. Legal Compliance. . . . . . . . . . . . . . . . . . . . . 88
14. Risk of Loss. . . . . . . . . . . . . . . . . . . . . . . 88
15. Time of Essence . . . . . . . . . . . . . . . . . . . . . 90
16. Governing Law . . . . . . . . . . . . . . . . . . . . . . 90
17. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . 90
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 91
19. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 92
19.1 Entire Agreement; Enforceability . . . . . . . . . . 92
19.2 Amendments . . . . . . . . . . . . . . . . . . . . . 93
19.3 Binding Effect; Assignment; No
Third Party Beneficiaries . . . . . . . . . . . . . 93
19.4 Waivers; Consents . . . . . . . . . . . . . . . . . 94
19.5 Severability . . . . . . . . . . . . . . . . . . . . 95
19.6 Captions . . . . . . . . . . . . . . . . . . . . . . 95
19.7 Interpretation of "including" and "day". . . . . . . 95
19.8 Counterparts . . . . . . . . . . . . . . . . . . . . 96

</TABLE>

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<TABLE>

<S> <C> <C>
20. No Offer. . . . . . . . . . . . . . . . . . . . . . . . . 96

</TABLE>

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SCHEDULES

<TABLE>
<S> <C>
Schedule 1.3(a) Casino Agreements

Schedule 1.3(b) Option to Acquire Option and
Contract Rights

Schedule 1.4 Excluded Assets

Schedule 1.5 Casino Assets

Schedule 4.6 Pledge of Limited Partnership Interest

Schedule 5.1 Form of Conveyances

Schedule 5.1(e)(v) Additional Permitted Exceptions to Title to Real Estate

Schedule 6(d)(i) Key Employee Positions Requiring Notification

Schedule 6(e) Casino Insurance

Schedule 7(c) Builder's Risk Insurance Policy

Schedule 8.1(c) Form of Opinion Letter of Purchaser's Counsel

Schedule 8.2(c)(2)(a) Form of Written Consent of the City of Greenville

Schedule 8.2(c)(2)(b) Form of Consent of City of Greenville to Collateral Assignment

Schedule 8.2(c)(3)(a) Form of Written Consent of the Greenville Yacht
Club

Schedule 8.2(c)(3)(b) Form of Consent of the Greenville Yacht Club to
Collateral Assignment

Schedule 8.2(c)(4)(a) Form of Written Consent of Board of Mississippi
Levee Commissioners

Schedule 8.2(c)(4)(b) Form of Consent of the Board of Mississippi Levee
Commissioners to Collateral Assignment

</TABLE>

<PAGE>

<TABLE>
<S> <C>
Schedule 8.2(c)(5)(a) Form of Written Consent for Assignment to Purchaser of Permit to
Construct and Maintain Facilities

Schedule 8.2(c)(5)(b) Form of Consent of Board of Mississippi Levee Commissioners
to Collateral Assignment

Schedule 8.2(c)(9)(a) Form of Acknowledgment of the Greenville Port Commission

Schedule 8.2(c)(9)(b) Consent to Collateral Assignment by Greenville Port Commission

Schedule 8.2(c)(10)(a) Form of Acknowledgment of the Board of Mississippi Levee Commissioners

Schedule 8.2(c)(10)(b) Consent to Collateral Assignment by Board of Mississippi Levee
Commissioners

Schedule 8.2(e) Form of Opinion Letter of Seller's Counsel for Casino Closing

Schedule 8.2(f) Environmental Matters

Schedule 8.2(i) Engineering Matters

Schedule 8.2(j) Site Inspection Matters

Schedule 8.2(m) Regulatory Matters

Schedule 8.2(n) Utility Matters

Schedule 8.3(e) Form of Opinion of Seller's Counsel for Hotel Closing

Schedule 8.3(k) Supervisory Management Agreement

Schedule 8.3(l) Consent of The Mississippi Department of Archives and History to Assignment and
Collateral Assignment

Schedule 10.9 Slot Machines to Be Removed from Casino

Schedule 10.12 Pending Litigation

Schedule 10.20 Non-Recurring Items

</TABLE>

<PAGE>

<TABLE>
<S> <C>
Schedule 11.6 Partnership Agreement

Schedule 11.7 Purchaser's Proforma Balance Sheet

Schedule 17 Guaranty from Alpha Hospitality Corporation

</TABLE>

iii

<PAGE>

ASSET PURCHASE AGREEMENT

This Agreement is entered into by ALPHA GULF COAST, INC., a Delaware
corporation (hereinafter referred to as "SELLER"), ALPHA GREENVILLE HOTEL, INC.,
a Delaware corporation (hereinafter referred to as "ALPHA HOTEL"), and
GREENVILLE CASINO PARTNERS, L.P., a Mississippi limited partnership (hereinafter
referred to as "PURCHASER") as of the 17th day of December, 1997 (hereinafter
referred to as the "EXECUTION DATE").

R E C I T A L S:

A. Seller is the owner and operator of the Bayou Caddy's Jubilee Casino
(hereinafter referred to as the "CASINO") consisting of the Casino Barge
(Official Number 519419) (hereinafter referred to as the "CASINO
BARGE"), certain permits, mooring, dockage, lease rights and other
assets, including real property and tangible and intangible personal
property more particularly described herein.

B. Seller wishes to sell to Purchaser the Casino including Casino Barge,
and all related fixtures, equipment, contractual rights, and all other
real and personal property associated therewith, and the Casino Hotel,
together with its furniture

<PAGE>

and fixtures, and to assign each of the agreements described below to
Purchaser, and Purchaser wishes to buy and assume the same, all under
the terms and conditions set forth in this Agreement.

C. Seller's affiliate, Alpha Hotel, is currently constructing an all-suite
hotel on the site of the former headquarters of the Mississippi Board of
Levee Commissioners as described in Section 2 below (hereinafter
referred to as the "CASINO HOTEL"). Alpha Hotel is a wholly owned
subsidiary of Alpha Hospitality Corporation. Seller hereby undertakes to
cause Alpha Hotel to transfer the Hotel Assets in accordance with the
terms of this Agreement and Alpha Hotel by execution hereof agrees to
transfer the Hotel Assets to Purchaser and to be bound by the terms of
this Agreement as they relate to the sale of the Hotel Assets and makes
any and all representations and undertaking with respect to the Hotel
Assets as set forth herein. When used herein with respect to any and all
obligations, undertakings, agreements, representations or warranties
with respect to the Hotel Assets and the sale of the Hotel Assets, the
term Seller shall be deemed to include Alpha Gulf Coast, Inc. and Alpha
Greenville Hotel, Inc.

AGREEMENT
---------

<PAGE>

Seller and Purchaser agree as follows:

1. CASINO ASSETS: (excluding the Casino Hotel)

Seller agrees to sell Seller's interest in, and Purchaser agrees to buy
Seller's interest in the following, all under the terms and conditions
set forth in this Agreement:

1.1 CASINO BARGE AND RELATED EQUIPMENT

The Casino Barge presently docked at the Greenville, Mississippi
Waterfront, together with the Boarding Barge (Official Number
514272) (hereinafter referred to as the "BOARDING BARGE"),
together with any and all engines, boilers, machinery,
components, masts, boats, anchors, cables, chains, rigging,
tackle, apparel, furniture, capstans, outfit tools, pumps, gear,
furnishings, appliances, fittings, spare and replacement parts,
and any and all other appurtenances appertaining or belonging
thereto, and whether on board or not on board, and, additionally,
all log books, manuals, trip records, maintenance reports,
inspection records, seaworthiness certificates, and other
historical records or information relating to the Casino Barge
and the Boarding Barge in the possession of Seller, and ramps,
generators and related equipment (including, but not limited to,
existing walkway coverings) located at the site described

<PAGE>

in the Mooring Agreement and the Dockage Agreement described in
Schedule 1.3(a).

1.2 FIXTURES, GAMING EQUIPMENT AND OTHER ASSETS

Except as otherwise provided in Section 1.4, all fixtures,
improvements, equipment, equipment supplies, furniture,
advertising and promotional materials, trade names, logos,
customer lists and other tangible and intangible assets,
including, without limitation, all books and records with respect
to assets described in Sections 1.1, 1.2, and 1.3(a) (except for
those certain books and records expressly excluded in Section
1.4(c)), in, on, or about the Casino Barge, or at any other
location at Greenville, Mississippi, and owned, leased and/or
used by Seller in connection with the Casino, and all interests
in real property owned, leased, or under option to Seller in
Washington County, Mississippi, and all improvements thereto.

1.3 MOORAGE, LEASE AND RELATED AGREEMENTS

(a) All of Seller's rights and obligations under the permits,
moorage, dockage, license, lease agreements and contracts
as listed on Schedule 1.3(a) (hereinafter referred to as
the "CASINO AGREEMENTS").

<PAGE>

(The assets described in Sections 1.1, 1.2, and 1.3(a)
except those expressly excluded in Section 1.4 are
hereinafter referred to as the "CASINO ASSETS".)

(b) Provided that with respect to the real property described
in the Real Estate Option Agreement dated October 26,
1995, recorded in Book 1893, at page 62, of the land
records of Washington County, Mississippi, and the Lease
and Option Agreement dated October 26, 1995, the
Memorandum of which is recorded in Deed Book 1893, at page
70, of said land records, each between Deer Creek and
Black Bayou Steam Navigation and Transportation Company
and Cotton Club, Inc., and assigned to Seller, Seller
shall not convey such assets to Purchaser upon Closing
but, in lieu of conveyance, shall execute and deliver to
Purchaser at closing the Option to Exercise Option Rights
in the form attached as Schedule 1.3(b).

1.4 EXCLUDED ASSETS

The provisions of Sections 1.1, 1.2 and 1.3(a) notwithstanding,
Casino Assets shall not include:

a. cash, accounts receivable, notes receivable and any

<PAGE>

other amounts due from any third party arising from the
operation of the Casino prior to the closing on the
closing date;

b. the gaming equipment and other equipment and assets listed
on Schedule 1.4;

c. Seller's stock records, books, tax returns, minute books
and financial, tax, and accounting records;

d. All of Seller's rights under this Agreement;

e. All tax refunds;

f. The Lease Agreement with Mosow Real Estate, Inc. dated
November 14, 1995;

g. The Lease Agreement with Mosow Real Estate, Inc. dated
February 1, 1997; and

h. The Real Estate Option Agreement dated October 26, 1995,
and the Lease and Option Agreement dated October 26, 1995,
each between Deer Creek Navigation and Transportation
Company and Cotton Club, Inc., and assigned to Seller.

1.5 LIST OF CASINO ASSETS

The Casino Assets to be purchased, except the Casino Agreements
which are listed on Schedule 1.3(a), are listed on Schedule 1.5;
provided, however, as soon as practical, and in no event later
than five (5) days after the execution of this Agreement, Seller
shall provide Purchaser with any amendments to Schedule 1.5 and,

<PAGE>

subject to Purchaser's agreement, the amendments shall be made to
Schedule 1.5.

2. HOTEL ASSETS:

2.1 CASINO HOTEL

Alpha Hotel agrees to sell and Purchaser agrees to buy the Casino
Hotel upon the substantial completion of its construction by
Alpha Hotel in accordance with the Standard Form Agreement
between Alpha Greenville Hotel, Inc., as Owner, and W. G. Yates
and Sons Construction Company, Inc., dated July 7, 1997 and the
plans and specifications for construction as referenced therein,
and the specifications for furnishing of the hotel prepared by
Seller and delivered to Purchaser on December 6, 1997
(hereinafter referred to collectively the "HOTEL PLANS") together
with all furniture, fixtures, and equipment, including telephone
equipment, located therein or owned or acquired for use in
connection therewith.

2.2 LEASE, PERMITS AND COMMITMENTS

In connection with the purchase of the Casino Hotel, Seller
agrees to assign and Purchaser agrees to assume the following
agreements with third parties:

a. A Lease Agreement with The Board of Mississippi

<PAGE>

Levee Commissioners for construction and maintenance of a
hotel in Greenville, Mississippi dated February 19, 1997,
and amended April 18, 1997;

b. A permit for construction and maintenance of facilities on
The Board of Mississippi Levee Commissioners' right-of-way
dated September 11, 1997;

c. A Mississippi Landmark permit issued by the Mississippi
Department of Archives and History dated March 28, 1997;

d. A Consent by The Board of Mississippi Levee Commissioners
to the aforementioned Mississippi Landmark permit dated
July 9, 1997.

(Hereinafter the agreements identified in Section 2.2 are
hereinafter collectively referred to as the "HOTEL AGREEMENTS").

(The Casino Hotel and the Hotel Agreements are hereinafter
referred to as the "HOTEL ASSETS". The Casino Assets and Hotel
Assets are hereinafter referred to collectively as the "ASSETS").

3. EMPLOYEES:

Purchaser will assume no employment agreements or other obligations to
Seller's employees (except for accrued vacation and health insurance due
upon the Closing Date and assumed by

<PAGE>

Purchaser as described in Section 4.2). Notwithstanding the foregoing,
Purchaser intends to rehire some employees of the Seller and certifies
that it shall rehire so many of Seller's employees as is necessary to
prevent the application of the Worker Adjustment and Retraining
Notification Act, 29 USC 'SS'.2101, et seq. (the "WARN ACT"). Purchaser
shall indemnify and hold harmless the Seller from any violations of the
WARN Act caused by any act or omission of Purchaser including a breach
of the certification in the prior sentence. If requested by Purchaser,
Seller shall deliver to Purchaser before the Closing Date, or Hotel
Closing Date respectively, the following information as to each of its
employees: name; salary or wage rate; date of hire; vacation
entitlement; and the amount and monetary value of accrued vacation as of
the Closing Date and Hotel Closing Date. Purchaser shall be entitled
prior to the Closing Date, and Hotel Closing Date respectively, to
review Seller's employee records and to interview Seller's employees, on
a schedule mutually agreed to by the parties and under conditions
mutually agreed to by the parties, and, at Purchaser's sole discretion,
subject to the certifications made in this Section 3, to make offers, if
any, for post Closing Date and post Hotel Closing Date employment to
Seller's employees. Provided, nothing herein shall constitute a right to
employment in any employee.

4. CONSIDERATION AND CLOSING:

<PAGE>

The total consideration for the Casino Assets shall be the sum of the
considerations set forth in Sections 4.1, 4.2 and 4.3:

4.1 CASH PORTION

The cash portion of the purchase price shall be $26,500,000,
which shall be payable as follows:

(a) Credit to the Purchaser for the assumption by Purchaser of
the principal balance owing as of the Closing Date of the
senior secured Promissory Note from Seller to Credit
Suisse First Boston Mortgage Capital, L.L.C. or any
affiliate, successor, assignee or designee thereof
(hereinafter referred to as the "LENDER") in the original
principal amount of $19,000,000 executed in the financing
transaction described in Section 8.1(e) and Section 8.2(t)
(hereinafter referred to as the "PRINCIPAL LOAN"). The
amount of such credit shall be equal to the original
principal amount of the Principal Loan less the sum of the
following:

(i) an amount equal to the sum of any principal payments
made by the Seller on account of the Principal Loan,
and

(ii) an amount equal to the sum of loan points, and
brokerage commissions, totaling in the aggregate 4.5%
of the Principal Loan amount (totalling no more than

<PAGE>

$855,000.00), and filing fees and title insurance
expenses incurred by Seller in connection with the
closing of the Principal Loan and the Subordinated
Debt (as hereinafter defined). It is expressly
understood and agreed that all of the Lender's legal
fees owing to Lender's counsel shall be charged to
Purchaser.

(b) Payment in cash or other immediately available funds upon
the Closing Date of the balance of the aforesaid cash
portion of the purchase price.

4.2 DESIGNATED LIABILITIES AND ASSUMED DEBT

The assumption by Purchaser of the following specified
liabilities of Seller which shall not exceed $2,000,000.00
as of closing:

a. Accrued vacation pay and health insurance claims due to
employees of Seller upon the Closing Date;

b. Chip liability as of the Closing Date;

c. Seller's Greenville Casino operations accounts incurred
in the ordinary course of business which are not older
than forty-five (45) days past their respective due dates
on the Closing Date. Provided, however, any wages earned
by Seller's Casino employees but not paid as of the
Closing Date shall not be included in the Designated
Liabilities and

<PAGE>

shall be paid by Purchaser when due, provided that such
amount shall not exceed $1,000,000.00 as of the Closing
Date, and shall be accounted for by Seller on closing as a
reduction to the cash payment in Section 4.1;

d. Non-delinquent city, county, levee, drainage, and school
district ad valorem property taxes and special assessments
for calendar year 1998, prorated to Closing Date on the
basis of calendar year 1997's property taxes and special
assessments;

e. The gross amount of slot machine and table games
progressive meter liability;

f. The gross amount of poker "bad beat" liability; and

g. The slot club points and unredeemed promotional coupons
liability.

The liabilities to be assumed by Purchaser under Section 4.2, subparts
(a) through (g) inclusive are hereinafter referred to collectively as
the "DESIGNATED LIABILITIES". The precise amount of the Designated
Liabilities set forth in Section 4.2(a)-(g) shall be calculated by
Seller as of the Closing Date and verified as accurate by Purchaser.
Provided that the value of slot club points and unredeemed promotional
coupons shall be calculated upon Closing Date at sixty percent (60%) of
the face amount thereof; provided, further, that the actual dollar value
of the slot club points and promotional coupon

<PAGE>

liability as of Closing Date shall be verified by a subsequent
accounting performed by Seller and Purchaser on the six (6) month
anniversary of the Closing Date and any variation in the actual dollar
value of these items which when added to the Designated Liabilities
causes the Designated Liabilities to exceed $2,000,000.00 shall result
in a payment by Seller to Purchaser in the amount of the excess of such
Designated Liabilities above $2,000,000.00 upon twenty (20) days advance
written notice of the excess.

Also, Purchaser shall assume the outstanding balance as of the Closing
Date on the subordinated secured note from the Seller to the Lender in
the original principal amount of $4,879,000.00 executed in the financing
transaction described in Section 8.1(e) and Section 8.2(t) (hereinafter
the "SUBORDINATED DEBT").

4.3 LIMITED PARTNERSHIP INTEREST

A limited partnership interest equal to twenty-five percent (25%)
of all the outstanding partnership interests in Purchaser as of
the Closing Date. Seller's limited partnership interest shall be
subject to all terms and conditions of the Revised Third Amended
and Restated Partnership Agreement of Purchaser dated as of
December 1, 1997. The parties agree solely for purposes

<PAGE>

of this Agreement that the value of the 25% limited partnership
interest is $8,500,000.00.

4.4 CONSIDERATION FOR HOTEL ASSETS

The total purchase price for the Hotel Assets shall be equal to
Seller's cost of construction and furnishing in compliance with
the Hotel Plans, subject to a maximum purchase price of
$3,200,000.00 plus the additional sum of $112,500.00 as
consideration for Seller's advance lease payments in a like
amount made to the Board of Mississippi Levee Commissioners
pursuant to the Lease described in Section 2.2(a) for the
27-month period beginning December 1, 1997, through February 29,
2000, subject to a $4,166.67 per month reduction in the amount of
$112,500.00 for each month or part thereof after December 1,
1997, during which the purchase of the Hotel Assets does not
close (the "HOTEL PURCHASE PRICE"), plus interest at an annual
rate of 11% for construction financing on an amount equal to the
Hotel Purchase Price from the date of Purchaser's receipt of
written notice from Seller of substantial completion of the
construction and furnishing of the Casino Hotel (which notice
shall include a copy of the architect's certificate of
substantial completion and which will also certify that such
construction conformed to the plans submitted to and

<PAGE>

approved by the Mississippi Department of Archives and History
addressed to Seller and Purchaser and a certificate of the
building inspector of the City of Greenville or his designated
agent evidencing inspection and approval for occupancy)
(hereinafter referred to as "DATE OF SUBSTANTIAL COMPLETION")
until closing of the purchase of the Hotel Assets, less the
amount of any items of work necessary to complete construction
and furnishing of the Casino Hotel after issuance of the
certificate of the building inspector of the City of Greenville
or his designated agent evidencing inspection and approval for
occupancy and architect's certificate of substantial completion.
The purchase price for the Hotel Assets shall be payable upon the
Hotel Closing Date (hereinafter defined).

4.5 CLOSING OF THE PURCHASE OF THE CASINO ASSETS

The closing of the purchase of the Casino Assets shall be
consummated at 590 Madison Avenue, New York, New York, (or at
such other place, as may hereinafter be agreed upon by Seller and
Purchaser) on the earlier of (a) the fifth (5th) business day
after all conditions precedent stated in Article 8 are fulfilled
or (b) January 31, 1998, provided, however, the foregoing
notwithstanding, if the Securities and Exchange Commission
(hereinafter

<PAGE>

referred to as the "SEC") has not approved the form of the proxy
statement for the meeting of Seller's parent's shareholders to
consider approval of this transaction on or before January 6,
1998, the date of January 31, 1998, shall be extended to the
earlier of (x) the twenty-fifth (25th) day after SEC approval of
such proxy statement or (y) February 25, 1998, or on such other
date, as may hereafter be agreed upon by Seller and Purchaser
(hereinafter referred to as the "CLOSING DATE"). The physical
transfer of Casino Assets and transfer of the operation of the
Casino shall occur on Closing Date. The schedule and procedure
for transfer of Casino Assets and transfer of operation of the
Casino shall comply with rules, regulations, orders and
directives of the Mississippi Gaming Commission. At the time of
transfer of Casino Assets, and subject to approval of the
Mississippi Gaming Commission and the Mississippi State Tax
Commission, Purchaser and Seller will count down the floor bank,
hopper and cage cash and Purchaser will purchase from Seller the
cash therein (the total sum of which shall equal the minimum
amount required by the Mississippi Gaming Commission for the
current operation of the Casino not, however, to exceed
$1,500,000.00) upon payment therefor at par in cash or other
immediately available funds.

<PAGE>

4.6 CLOSING OF PURCHASE OF HOTEL ASSETS

The closing of the purchase of Hotel Assets shall be consummated
at 590 Madison Avenue, New York, New York, as soon as practically
possible after written notice by Seller of the Date of
Substantial Completion and the conditions precedent to the Hotel
Closing have been fulfilled (hereinafter referred to as the
"HOTEL CLOSING DATE"). The Date of Substantial Completion of the
Hotel shall occur no later than February 6, 1998, or on such
later date as provided in this Section 4.6, and Seller represents
that February 26, 1998, is the latest date on which Seller must
complete the Casino Hotel in order to satisfy infrastructure
investment requirement applicable to the Casino under current
orders issued by the Mississippi Gaming Commission. In the event
that the Date of Substantial Completion for the Hotel is after
February 6, 1998, then for each day after February 6, 1998, until
Hotel Closing Date:

a. Seller shall pay to Purchaser liquidated damages of One
Thousand Dollars ($1,000.00) per day, payable weekly until
the Date of Substantial Completion of the Casino Hotel,
the payment of which shall be secured by a security
interest in Seller's limited partnership interest in
Purchaser, as more particularly described in the pledge of
partnership in-

<PAGE>

strument attached as Schedule 4.6 (hereinafter referred to
as the "PLEDGE OF PARTNERSHIP INTEREST"); and

b. In the event any failure to complete the Casino Hotel
(including, but not limited to, a failure caused by a
casualty loss) results in any suspension of Purchaser's
gaming license at the Casino by the Mississippi Gaming
Commission, Seller shall pay to Purchaser an additional
amount of liquidated damages in the sum of One Hundred
Thousand Dollars ($100,000.00) per day, payable daily, for
each day during which such suspension is in effect, which
liability shall be secured by a security interest in
Seller's limited partnership interest in Purchaser, as
more particularly described in the Pledge of Partnership
Insterest attached as Schedule 4.6. In the event any
amount of liquidated damages is in excess of the value of
the limited partnership interest when applied against it,
the excess shall be due and payable from Seller. Provided,
however, Purchaser shall give Seller written notice of its
intent to collect such liability under Section 4.6(a) or
Section 4.6(b) by exercise of Purchaser's rights under the
Pledge of Partnership Interest and Seller shall have
thirty

18
<PAGE>

(30) days to pay the amount to be otherwise collected
under the Pledge of Partnership Interest in cash or other
immediately available funds. In the event of any such cash
payment by Seller, Purchaser's right to collect the amount
owing by exercise of Purchaser's rights under the Pledge
of Partnership Interest shall be reduced by the amount
thus paid. The Purchaser agrees to take such reasonable
action and work with the Mississippi Gaming Commission and
Seller to prevent the suspension of the Purchaser's gaming
license. Provided, further, it is expressly understood
that the notice and procedure provisions set forth in
Paragraph 9.7 shall have no application to the payments
required in this Paragraph 4.6(a) and (b).

c. Subject to fulfillment of the conditions precedent to the
Hotel Closing, should Purchaser, due to no fault of Seller
or its agents, representatives or contractors, fail to
close the purchase of the Hotel Assets within fifteen (15)
days after receipt of Seller's notice of the Date of
Substantial Completion of the Hotel, Purchaser shall pay
to Seller, in addition to the interest specified in
Section 4.4, an additional sum of One Thousand Dollars
($1,000.00) per day, payable weekly, for each day
thereafter during which Purchaser does not

<PAGE>

close the purchase of the Hotel Assets. If after the
expiration of the sixty (60) day period following the
receipt of the notice of the Date of Substantial
Completion, Purchaser has failed to close the purchase of
Hotel Assets under conditions stated above in this Section
4.6(c), in addition to the monetary penalties provided
above and any other remedy available to Seller, Seller
shall be entitled to seek specific performance of
Purchaser's obligation to close the purchase of the Hotel
Assets.

5. DELIVERIES AT CLOSING:

5.1 UNENCUMBERED ASSETS

At the Closing Date and Hotel Closing Date respectively, the
Seller shall deliver to Purchaser all documents (including all
Required Approvals (as such term is defined in Section 8.2(c)
hereof) from third parties) necessary to convey title to or
assign Seller's interests in the Casino Assets and the Hotel
Assets, respectively. All documents to be delivered shall be in
the forms specified in Schedule 5.1 (provided that fee simple
estates in real property shall be conveyed by deeds of the same
type by which such real property was conveyed to

<PAGE>

Seller's predecessor-in-title, Jubilation Lakeshore, Inc.,
formerly known as Cotton Club of Greenville, Inc., (hereinafter
referred to as the "JUBILATION LAKESHORE")) and shall convey the
Assets free and clear of all mortgages, liens, security
interests, reservations, judgments, pledges, charges, claims,
escrows or other encumbrances (hereinafter referred to
collectively as "ENCUMBRANCES") except the following expressly
enumerated Encumbrances and other exceptions (hereinafter
referred to as the "PERMITTED EXCEPTIONS"):

a. The liens in favor of the Lender securing the Principal
Loan and the Subordinated Debt;

b. Liens in respect to Seller's share of the ad valorem taxes
for the year 1998 not yet due and payable, including city,
county, levee, drainage and school district ad valorem
taxes and special assignments (all ad valorem and special
assessments for the year 1997 shall have been paid by
Seller on or before closing);

c. Except as otherwise provided in this Agreement, interests
in real estate including estates in fee simple,
leaseholds, licenses, and options, shall only be warranted
to be free and clear of Encumbrances created by Seller or
by Seller's predecessor-in-title, Jubilation Lakeshore, or
arising

<PAGE>

after the earlier of the acquisition of the subject real
estate asset by Jubilation Lakeshore or by Seller, as the
case may be; and

d. Except as otherwise provided in this Agreement, with
respect to any interest in real estate included in the
Assets, including estates in fee simple, leaseholds,
licenses, and options, the following exceptions shall also
apply:

(i) Any restrictions, terms or provisions of any zoning
ordinances of the City of Greenville or Washington
County, Mississippi;

(ii) Oil, gas and other minerals lying in, on or under
any property conveyed by Seller's
predecessors-in-title;

(iii) Rights of parties in possession not shown of public
record, deficiencies in quantity of land, boundary
line disputes, road ways, unrecorded servitudes or
easements, or uses of the subject property not
visible from the surface, and any other similar
matters not of record not created by or known to
Seller;

(iv) With respect to parties in the chain of title before
Seller and/or Jubilation Lakeshore, lack of legal
capacity or lack of authority of any grantor, fraud
of forgery of any instruments, false recitals of
marital status or

<PAGE>

marital rights, and undisclosed heirs not revealed
in the chain of title for any such properties; and

(v) The additional exceptions to title as described on
Schedule 5.1(e)(v) with respect to each of the real
estate parcels owned or leased.

5.2 CURRENT OBLIGATIONS

Seller shall be current, as of the Closing Date and Hotel Closing
Date, respectively, in its obligations on all permits, leases,
moorage, dockage, licenses, and other existing contracts which
are part of the Assets purchased. Seller shall use its
commercially reasonable efforts to obtain estoppel certificates
from the other party to each such agreement, but shall not be
responsible to Purchaser for failure to obtain such estoppel
certificates.

5.3 ASSUMPTION OF LIABILITIES

Subject to the terms and conditions set forth in this Agreement,
Purchaser shall assume and agree to pay, perform and discharge
the following, and only the following, liabilities and
obligations of Seller as the same exist on midnight of the day
preceding the Closing

<PAGE>

Date (the "ASSUMED LIABILITIES"):

(a) Seller's indebtedness to the Lender under the Principal
Loan and the Subordinated Debt;

(b) Designated Liabilities as described in Section 4.2;

(c) Seller's liability for lease payments and contractual
obligations which first become due and owing after the
Closing Date under the Casino Agreements and Hotel
Agreements listed on Schedule 1.3(a) and in Section 2.2,
respectively.

5.4 EXCLUDED LIABILITIES

Except for the Assumed Liabilities, no obligation or liability of
Seller or relating to the business of Seller or to the Assets, of
any nature whatsoever (whether express or implied, fixed or
contingent, liquidated or unliquidated, known or unknown,
accrued, due or to become due), is to be assumed by Purchaser,
nor shall Purchaser be liable to pay, perform or discharge any
such obligation or liability.

6. CONDUCT PRIOR TO THE CLOSING DATE:

Between the Execution Date and closing and physical transfer of Casino
Assets on the Closing Date:

a. Seller shall give to Purchaser and Purchaser's officers,
employees, agents, attorneys, consul-

<PAGE>

tants, accountants and lenders (designated by Purchaser as
"PURCHASER'S AUTHORIZED REPRESENTATIVES") all of whom
shall have agreed in writing to be bound by the
confidentiality agreement between Seller and Purchaser
dated September 30, 1997, reasonable access, during normal
business hours upon reasonable notice, to all of the
properties (both real and personal) included in the Assets
and to the books, contracts, documents and records of the
Casino and shall furnish to Purchaser and Purchaser's
Authorized Representatives such information as Purchaser
or such persons may at any time and from time to time
reasonably request.

b. Seller shall use its commercially reasonable efforts to
obtain the Required Approvals required under Section
8.2(c). At Purchaser's request, Seller shall provide all
reasonable assistance needed to transfer to Purchaser, or
to any person designated by Purchaser, any other
transferable licenses and permits not included in the
Required Approvals, provided that failure to obtain
approvals for transfer of licenses and permits not
included in the Required Approvals is not a condition
precedent for closing for which Seller shall be held
responsible.

<PAGE>

c. Seller shall cause the Casino to carry on its business in
the usual and ordinary course, consistent with past
practices, and shall use its commercially reasonable
efforts to preserve the Casino's business and the goodwill
of its customers, suppliers and others having business
relations with the Casino and to retain the business
organization of the Casino intact, including using
reasonable efforts to keep available the services of its
present employees (other than those dismissed for cause or
who voluntarily discontinue their employment), and to
maintain all of its properties in good operating condition
and repair, ordinary wear and tear excepted. Without
limiting the generality of the foregoing and subject to
the provisions of Section 4.2 hereof, Seller shall pay,
when due, all wages and benefits (including medical
benefit claims) of Seller's employees currently when due
in accordance with their terms, all indebtednesses to
trade creditors and other obligations incurred in the
ordinary course of the Casino's business. Seller shall
make no material change in marketing expenditures without
the prior written consent of Purchaser, provided, however,
Seller shall be entitled to allocate such expenditures as
Seller deems appropriate.

<PAGE>

d. Without the prior written consent of Purchaser, which
shall not be unreasonably withheld, and without limiting
the generality of any other provision of this Agreement,
except in the ordinary course of business, Seller shall
not:

(i) hire any employee for a position listed on Schedule
6(d)(i) without prior notification to Purchaser's
representative, John R. O'Donnell, or such other
representative as may be designated by Purchaser;

(ii) sell, transfer or otherwise dispose of any asset or
property, except for monies applied in payment of
the Casino's liabilities in the usual and ordinary
course of business;

(iii) incur or commit to incur any capital expenditures
(including, without limitation, purchases,
commitments or offers to purchase real estate) in
excess of $50,000 or which materially changes the
character of the Casino's operations without the
written approval of John R. O'Donnell or such other
representative as may be designated by Purchaser;

(iv) incur, assume or guarantee any indebtedness secured
by the Assets (except for the Principal Loan and the
Subordinated Debt); or

(v) directly or indirectly, enter into or assume

<PAGE>

any contract, agreement, obligation, lease, license
or commitment other than in the usual and ordinary
course of business in accordance with past practices
and which would extend beyond the Closing Date.

e. Seller shall cause the Casino to maintain the insurance
policies listed on Schedule 6(e) in full force and effect.
If any of the said policies shall expire, the Casino shall
use reasonable efforts to renew or replace the same prior
to the expiration of the expiring policies with policies
from a reputable insurance carrier with a "Best's Rating"
equal to or better than that of the existing carrier,
containing insurance coverage in the same or greater
amount than the existing policies in substantially the
same form and substance as the existing policies.

f. The Seller shall cooperate to provide documents relating
to the Assets and relating to the revenues and expenses of
the Casino and other documents and information reasonably
requested by Purchaser in connection with the closing of
Purchaser's financing, provided that Purchaser shall
reimburse Seller for any reasonable expenses incurred by
Seller in connection with providing such documents or
information and Seller shall have no obligation with

<PAGE>

respect to any requirements or approvals required for such
financing except as expressly provided for herein.

g. Seller shall provide Purchaser notice within 24 hours
after receipt of any notice of resignation received by
Seller from any of its employees whose position is listed
on Schedule 6(d)(i).

h. Seller shall use commercially reasonable efforts to close
the Principal Loan and the Subordinated Debt prior to
midnight December 31, 1997. After closing of said
financing, Seller shall remain current in its obligations
to Lender on the Principal Loan and the Subordinated Debt
and shall not allow an Event of Default (as defined in the
Principal Loan or the Subordinate Debt as the case may be)
to occur under the loan agreement and other loan documents
executed in connection with the Principal Loan and the
Subordinated Debt.

i. Purchaser shall use commercially reasonable efforts to
close the financing with Lender that will be evidenced by
a Senior Secured Note in the amount of $17,200,000.00 and
by a Subordinated Note in the amount of $3,621,000.00
prior to midnight December 31, 1997. After closing of said
financing, Purchaser shall remain current in its
obligations to

<PAGE>

Lender on the Senior Secured Note and the Subordinated
Note and shall not allow an Event of Default (as defined
in the loan agreement made in connection with the Senior
Secured Note and the Subordinated Note, as the case may
be) to occur under the loan agreement and other loan
documents in connection with the Senior Secured Note and
the Subordinated Note.

7. ADDITIONAL CONDUCT PRIOR TO THE HOTEL CLOSING DATE:

Between the Execution Date and the Hotel Closing Date:

a. Seller shall give the Purchaser and Purchaser's Authorized
Representatives reasonable access during normal business
hours to all of the Hotel Assets (both real and personal),
books, contracts, documents, records and shall furnish to
Purchaser and Purchaser's Authorized Representatives such
information as Purchaser or Purchaser's Authorized
Representatives may at any time and from time to time
reasonably request.

b. Seller shall use commercially reasonable efforts to
complete the construction of the Hotel in accordance with
the Hotel Plans. Any change orders in the Hotel Plans
totalling in the aggregate more than $20,000.00 (whether
as an increase or reduction) shall be subject to
Purchaser's approval,

<PAGE>

which shall not be unreasonably withheld.

c. Seller shall maintain the builder's risk insurance policy
listed on Schedule 7(c) which covers the Casino Hotel in
full force and effect. If the Casino Hotel policy shall
expire, the Seller shall use reasonable efforts to renew
or replace the same prior to the expiration of the
expiring policy with the policy from a reputable insurance
carrier with the "Best Rating" equal to or better than
that of the existing carrier containing insurance coverage
in the same or greater amount than the existing policies
in substantially the same form and substance as the
existing policy.

8. CONDITIONS TO CLOSING:

8.1 CONDITIONS TO SELLER'S OBLIGATIONS TO CLOSE PURCHASE OF CASINO
ASSETS

The obligation of Seller to close the transactions contemplated
hereby is subject to the fulfillment of all of the following
conditions as of the Closing Date (except where a different date
is expressly provided for herein), upon the non-fulfillment of
any of which, this Agreement may, at Seller's option, be
terminated and/or remedies sought pursuant to and with the effect
set forth

<PAGE>

in Section 12:

a. Each and every representation and warranty made by
Purchaser as of Execution Date shall have been true and
correct when made and shall be true and correct as of the
Closing Date.

b. All obligations of Purchaser to be performed hereunder
through, and including on, the Closing Date (including,
without limitation, all obligations which Purchaser would
be required to perform at the closing if the transaction
contemplated hereby was consummated) shall have been
performed.

c. Purchaser shall have delivered to Seller the written
opinions of Lake Tindall, LLP, and/or Altheimer & Gray,
and/or gaming counsel for Purchaser, dated as of the
Closing Date concerning Purchaser's partnership
organization and the Purchaser's general partner's good
standing and authority to consummate the transactions
contemplated hereby, in substantially the form of Schedule
8.1(c) attached hereto.

d. Approval by final Order of the Mississippi Gaming
Commission of the transactions contemplated herein and
post-closing operation of the Casino by Purchaser.

e. All conditions precedent to the closing of the Principal
Loan and the Subordinated Debt shall have

<PAGE>

been satisfied and the closing thereof shall have occurred
and all conditions precedent to the closing of that
certain financing from Lender to Purchaser represented by
a senior secured note in the principal amount of
$17,200,000.00 and a subordinated secured note in the
amount of $3,621,000.00 shall have been satisfied and the
closing thereof shall have occurred and all such financing
shall have been fully funded by the Lender by midnight
December 31, 1997. If both of the aforementioned loan
financings have not been closed and fully funded by
midnight December 31, 1997, this Agreement shall be null
and void. Provided further, that all conditions precedent
to the closing of the assumption of the Principal Loan and
the Subordinated Debt as of Closing Date, pursuant to an
amended and restated loan agreement between Lender and
Purchaser renewing and rearranging indebtedness in the in
the principal amount of $36,200,000 of senior secured
indebtedness and $8,500,000.00 of subordinated secured
indebtedness on terms agreeable to Lender and to Purchaser
shall have been satisfied, the closing of such assumption
and refinancing shall have occurred, and all loans to be
made pursuant thereto shall have been fully funded to
Purchaser before Seller shall have any

<PAGE>

obligation to sell the Casino Assets hereunder.

f. There shall have been no voluntary or involuntary
bankruptcy filing of Purchaser or its General Partner.

g. No suit, proceeding or litigation (including but not
limited to any proceeding by any government agency under
Hart-Scott-Rodino Act, as hereinafter defined) shall have
been commenced and an order obtained (which has not been
stayed) restraining or enjoining the consummation of the
transaction contemplated hereby.

8.2 CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE PURCHASE OF THE
CASINO ASSETS

The obligation of Purchaser to close the transactions
contemplated hereby is subject to the fulfillment of all of the
following conditions as of the Closing Date (except where
different date is expressly provided for herein), upon the
non-fulfillment of any of which, this Agreement may, at
Purchaser's option, be terminated and/or remedies sought pursuant
to and with the effect and subject to the limitations set forth
in Section 12.

<PAGE>

a. Each and every representation and warranty made by Seller
as of Execution Date shall have been true and correct when
made and shall be true and correct as of the Closing Date.

b. All obligations of Seller to be performed hereunder
through, and including on, the Closing Date (including,
without limitation, all obligations which Seller would be
required to perform at the closing if the transaction
contemplated hereby was consummated) shall have been
performed.

c. All of the consents and approvals as listed below in this
Section 8.2(c) ("REQUIRED APPROVALS") shall have been
obtained:

(1) Approval by proper corporate and shareholder actions
of the transactions contemplated herein by the
Sellers' Boards of Directors and shareholders, and
by the Board of Directors and shareholders of Alpha
Hospitality Corporation.

(2) Written consent of the City of Greenville to the
assignment to the Purchaser of the City Moorage
Agreement and the City Lease Agreement, and to the
collateral assignment thereof to the Lender in the
forms attached as Schedule 8.2(c)(2)(a) and (b).

(3) Written consent of the Greenville Yacht Club

<PAGE>

(a) to the assignment to the Purchaser of the Yacht
Club Dockage Agreement and Yacht Club License
Agreement and (b) to the collateral assignment
thereof to the Lender in the forms attached as
Schedule 8.2(c)(3)(a) and (b).

(4) Written consent of The Board of Mississippi Levee
Commissioners (a) to assignment to the Purchaser of
the Hotel Lease (effective as of the Hotel Closing
Date) and (b) to the collateral assignment thereof
to the Lender in the forms attached as Schedule
8.2(c)(4)(a) and (b).

(5) Written consent for assignment to Purchaser of the
permit for construction and maintenance of
facilities on The Board of Mississippi Levee
Commissioners' right-of-way dated September 11,
1997, in the form attached as Schedule 8.2(c)(5)(a)
and (b).

(6) Assignment to the Purchaser of permits from the U.S.
Army Corps of Engineers or issuance of permits to
Purchaser permitting the moorage of the Casino Barge
and the Boarding Barge in their present location.

(7) Written verification from the Mississippi Gaming
Commission that Seller is not in violation of any
infrastructure requirements

<PAGE>

which have been imposed in connection with the
granting of Gaming Licenses to Seller effective as
of the Closing Date.

(8) The consents, approvals and estoppels, if any,
obtained by Seller in connection with the closing of
the Principal Loan shall not have been withdrawn or
revoked by the issuing party.

(9) Written acknowledgment of the Greenville Port
Commission that it has no objection to the
assignment to the Purchaser of the City Moorage
Agreement and City Lease Agreement and to the
collateral assignment thereof to the Lender in the
forms attached as Schedule 8.2(c)(9)(a) and (b).

(10) Written acknowledgment of The Board of Mississippi
Levee Commissioners that it has no objection to the
assignment to the Purchaser of the City Moorage
Agreement and the City Lease Agreement and to the
collateral assignment thereof to the Lender in the
forms attached as Schedules 8.2(c)(10)(a) and (b).

d. No suit, proceeding or litigation (including, but not
limited to, any proceeding by any government agency under
the Hart-Scott-Rodino Antitrust Im-

<PAGE>

provements Act of 1976, Pub. L. 94-435 (the
"HART-SCOTT-RODINO ACT"), shall have been commenced and an
order obtained (which has not been stayed) restraining or
enjoining the consummation of the transaction contemplated
hereby.

e. Seller shall have delivered to Purchaser the written
opinions of Watkins, Ludlam & Stennis, P.A., Parker,
Duryee, Rosoff & Haft, P.C. and such other law firm(s)
reasonably acceptable to Purchaser, dated as of the
Closing Date, addressed to Purchaser and which shall state
that the Lender will be entitled to rely thereon, which
contains opinions in substantially the form of Schedule
8.2(e) attached hereto.

f. All of the matters shown on the attached Schedule 8.2(f)
shall have been cured to the satisfaction of Purchaser and
the Lender, and there shall have been no material adverse
change in the types of matters shown in the environmental
reports dated November 20, 1997, provided to the Lender
since the date of such environmental reports that has not
been cured to the satisfaction of Purchaser and the
Lender.

g. Seller's parent, Alpha Hospitality Corporation, shall have
executed and delivered to Purchaser on

<PAGE>

Execution Date the guaranty, the form of which is attached
as Schedule 17.

h. Seller shall have delivered to Purchaser a copy of a
"Fairness Opinion" acceptable to the Securities and
Exchange Commission as part of Seller's disclosure to its
Shareholders and which shall state that the Lender may
rely thereon, relating to the transactions under this
Agreement.

i. All of the matters shown on the attached Schedule 8.2(i)
shall have been cured to the satisfaction of Purchaser and
the Lender, and there shall have been no material adverse
change in the types of matters shown in the Engineering
Reports provided to the Lender since the date of such
Engineering Reports which has not been cured to the
satisfaction of Purchaser and the Lender.

j. All of the matters shown on the attached Schedule 8.2(j)
shall have been cured to the satisfaction of Purchaser and
the Lender, and there shall have been no material adverse
change in the real property and facilities since the date
of the site inspections dated November 21, 1997, provided
to the Lender that has not been cured to the satisfaction
of Purchaser and the Lender.

k. There shall have been no material adverse change

<PAGE>

in the matters addressed in the Appraisals provided to the
Lender since the date of such Appraisals that has not been
cured to the satisfaction of Purchaser and the Lender.

l. All material necessary licenses, permits, approvals,
waivers, authorization, consents, waiting period
expirations and clearances for the acquisition of the
Casino Assets, use and operation (and proposed operation)
of Casino Assets and the conduct of Purchaser's business
as conducted or as proposed to be conducted (including the
operation of both the Las Vegas Casino and Bayou Caddy's
Jubilee Casino) have been issued and/or obtained from the
appropriate governmental authority (excluding the
Alcoholic Beverage Control Division of the State Tax
Commission ("ABC")) and are in full force and effect.
Provided that except for the Required Approvals which are
expressly addressed in Schedule 8.2(c), Seller shall be
obligated only to use its commercially reasonable efforts
to obtain the assignment of the aforementioned items and
Seller's failure to obtain one or more of such items after
using its reasonable efforts to obtain the same shall not
result in any liability from Seller to Purchaser. All the
Casino Agreements shown on Schedule 1.3(a) (Items 1-7)
shall have

<PAGE>

been assigned by Seller to Purchaser. All approvals to be
obtained from the Mississippi Gaming Authorities in
connection with the issuance of additional equity by
Purchaser to Seller shall have been obtained. All
licensing, registrations and all other approvals and
findings of suitability for Seller to become an equity
holder in Purchaser shall have been obtained.

m. All of the matters shown on the attached Schedule 8.2(m)
shall have been cured to the satisfaction of Purchaser and
the Lender and there shall have been no material adverse
change since September 30, 1997, in the compliance of the
improvements and facilities or the use thereof with all
applicable zoning, subdivision, environmental protection,
toxic waste, asbestos, and all other applicable federal,
state and local laws and ordinances, and all rules,
regulations and requirements of any and all governmental
or quasi-governmental authorities having jurisdiction over
any of the Casino Assets with respect to the foregoing.

n. All of the matters shown on the attached Schedule 8.2(n)
shall have been cured to the satisfaction of Purchaser and
the Lender, and there shall have been no material adverse
change in utility-related

<PAGE>

matters since November 21, 1997.

o. A certificate in a form satisfactory to Purchaser and the
Lender representing that no pending or threatened action,
suit, or proceeding, judicial, administrative or
otherwise, is pending against Seller or its parent, Alpha
Hospitality Corporation, which would have a material
adverse effect on their ability to perform their
respective obligations under this Asset Purchase
Agreement.

p. Seller shall have delivered evidence of acceptance by the
City of utility, water, and sewer lines to be installed in
partial payment of rent pursuant to Section 6 of the Alpha
Moorage Agreement.

q. Seller shall deliver to Purchaser the pledge (in the form
attached as Schedule 4.6) of its partnership interest in
Purchaser as described in Section 4.3 as collateral to
secure Purchaser's obligations under Sections 4.6 and
9.7(f).

r. Approval by Final Order of the Mississippi Gaming
Commission of the transactions contemplated herein and
post closing operation of the Casino by Purchaser.

s. There shall have been no voluntary or involuntary
bankruptcy filing of Seller, Seller's Parent, Alpha
Hospitality Corporation, or any other subsidiary of Alpha
Hospitality Corporation.

<PAGE>

t. All conditions precedent to the closing of the Principal
Loan and the Subordinated Debt shall have been satisfied
and the closing thereof shall have occurred and all
conditions precedent to the closing of that certain
financing from Lender to Purchaser represented by a senior
secured note in the principal amount of $17,200,000.00 and
a subordinated secured note in the amount of $3,621,000.00
shall have been satisfied and the closing thereof shall
have occurred and all such financing shall have been fully
funded by midnight December 31, 1997. If both of the
aforementioned loan financings have not been closed and
fully funded by midnight December 31, 1997, this Agreement
shall be null and void. Provided further, that all
conditions precedent to the closing of assumption of the
Principal Loan and the Subordinated Debt as of Closing
Date, pursuant to an amended and restated loan agreement
between Lender to Purchaser renewing and rearranging
indebtedness in the aggregate amount of $36,200,000.00 of
senior secured indebtedness and $8,500,000.00 of
subordinated secured indebtedness on terms agreeable to
Lender and to Purchaser shall have been satisfied, the
closing of such assumption and refinancing shall have

<PAGE>

occurred and all loans to be made pursuant thereto shall
have been fully funded to Purchaser before Purchaser shall
have any obligation to purchase the Casino Assets
hereunder.

8.3 CONDITIONS TO PURCHASER'S OBLIGATIONS TO CLOSE THE PURCHASE OF
THE HOTEL ASSETS

The conditions to Purchaser's obligations to close the purchase
of the Hotel Assets are as follows:

a. The closing of the Casino Assets shall have closed or be
closed simultaneously herewith.

b. Each and every representation and warranty made by Seller
with respect to the Hotel Assets as of Execution Date
shall have been true and correct in all material respects
when made and shall be true and correct in all material
respects as of the Hotel Closing Date.

c. All obligations of Seller with respect to the Hotel Assets
to be performed hereunder through, and including on, the
Hotel Closing Date (including, without limitation, all
obligations which Seller would be required to perform at
the closing if the transaction contemplated hereby was
consummated) shall have been performed.

d. No suit, proceeding or investigation (including,

<PAGE>

but not limited to, any proceeding or request for
information from any government agency under the
Hart-Scott-Rodino Act) shall have been commenced or
threatened by any governmental authority or private person
on any grounds to restrain, enjoin or hinder, or to seek
material damages on account of, the consummation of the
transaction contemplated hereby.

e. Seller's delivery to Purchaser of the written opinion of
Watkins, Ludlam & Stennis, P.A. and Parker, Duryee, Rosoff
& Haft, P.C. and such other law firm(s) reasonably
acceptable to Purchaser, dated as of the Hotel Closing
Date, which shall state that the Lender is entitled to
rely thereon and which contains opinions in substantially
the form of Schedule 8.3(e) attached.

f. All of the matters shown on the attached schedule 8.2(f)
which relate to the Casino Hotel shall have been cured to
the satisfaction of Purchaser and the Lender and there
shall have been no material adverse change in the types of
matters which relate to the Casino Hotel shown in the
Environmental Reports provided to the Lender since the
date of such Environmental Reports that has not been cured
to the satisfaction of Purchaser and the Lender.

<PAGE>

g. Seller shall have provided Purchaser with a certificate of
approval from the building inspector of the City of
Greenville or his designated agent evidencing inspection
and approval for occupancy, and an architect's certificate
evidencing the substantial completion of the Casino Hotel
in compliance with the Hotel Plans (which will also
certify that such construction conformed to the plans
submitted to and approved by the Mississippi Department of
Archives and History), subject to punch list items which
do not exceed in the aggregate $10,000.00.

h. Seller shall have provided Buyer with copies of all
documents, invoices and agreements related to the
construction and furnishing of the Casino Hotel and the
cost of same.

i. The Hotel shall be ready in all material respects to
receive guests in the ordinary course of the Hotel's
business.

j. All of the Hotel Agreements listed in Section 2.2 shall
have been assigned by Seller to Purchaser.

k. Greenville Hotel II, LLC, a wholly owned subsidiary of
Purchaser, and Alpha Hospitality Corporation shall have
entered into that certain Supervisory Management Agreement
in the form attached as Schedule 8.3(k) and Seller shall
have

<PAGE>

no obligation to close the sale of the Hotel until
such agreement is executed and delivered.

l. The Mississippi Department of Archives and History (the
"MDAH") shall have consented to the granting of a
leasehold deed of trust by Alpha Greenville Hotel, Inc.,
its successors and assigns, in the form attached as
Schedule 8.3(l) to Lender and the assignment of the MDAH
permit to Greenville Hotel II, and Purchaser and
Greenville Hotel II, LLC, shall have received an
architect's certificate confirming that there has been no
violation of the MDAH permit.

9. POST-CLOSING AGREEMENTS:
The parties agree that after the Closing:

9.1 DISCLOSURE AND USE OF CONFIDENTIAL INFORMATION

The Confidentiality Agreement dated September 30, 1997,
(hereinafter "CONFIDENTIALITY AGREEMENT") between the parties
shall remain in effect until December 31, 2002, provided that the
restrictions in the Confidentiality Agreement shall be waived to
the extent notices must be given or filings must be made by
either the Seller or Purchaser to any partners, shareholders,
regulatory officials, or other third parties, provided that any

<PAGE>

notices, filings or announcements concerning the transaction made
by Seller or Purchaser which contain Confidential Information
covered by the Confidentiality Agreement will be subject to
advance review and approval by the opposite party, which approval
shall not be unreasonably delayed or withheld.

9.2 USE OF TRADEMARKS

Seller shall not use and shall not license or permit any third
party to use, any names, slogan, logo or trademark which is
similar or deceptively similar to any of the names or trademarks
presently used or which may be used prior to Closing Date in
connection with the Casino's business.

9.3 HIRING AWAY EMPLOYEES

For a period commencing on the Execution Date and ending 180 days
after the Closing Date, Seller and its affiliates shall not
employ or take any actions which are calculated to persuade any
salaried, technical or special employees, representatives or
agents of Purchaser who are rehired by Purchaser at Closing to
terminate their association with Purchaser and thereafter shall
only take such actions upon 30 days prior written notice provided
to Purchaser. This

<PAGE>

section shall not apply to any employee who Purchaser chooses not
to employ as of the Closing Date.

9.4 BACK-UP

Seller shall, at Purchaser's request and expense, furnish to
Purchaser such documents and information with respect to Seller,
the Casino, or the Casino Hotel, which are in Seller's possession
and which are requested in connection with any investigation by
the Mississippi Gaming Commission or any tax authorities.

9.5 FURTHER ASSURANCES

The parties shall execute such further documents, and perform
such further acts, as may be reasonably necessary to transfer and
convey the Assets to Purchaser on the terms herein contained and
to otherwise comply with the terms of this Agreement.

9.6 INJUNCTIVE RELIEF

Seller specifically recognizes that any breach of Sections 9.1,
9.2 and 9.3 by Seller will cause irreparable injury to Purchaser,
and Purchaser specifically recognizes that any breach of Section
9.1 by Purchaser will cause irreparable injury to Seller and that
both parties recognize that in any such event

<PAGE>

actual damages may be difficult to ascertain, and in any event,
may be inadequate. Accordingly (and without limiting the
availability of legal or equitable, including injunctive,
remedies under any other provisions of this Agreement), Seller
and Purchaser agree that in the event of any such breach, in
addition to such other legal and equitable remedies, injunctive
relief may be available. Seller and Purchaser recognize that the
absence of time limitations in Sections 9.1 and 9.2 is reasonable
and properly required for the protection of Seller and Purchaser,
and in the event that the absence of such limitation is deemed to
be unreasonable by a court of competent jurisdiction, the parties
agree and submit to the imposition of such a limitation as said
court shall deem reasonable.

9.7 INDEMNIFICATION AND SETTLEMENT OF CLAIMS

a. INDEMNIFICATION OF PURCHASER Subject to the terms,
conditions and limitations contained in this Agreement,
the Seller agrees to indemnify, defend and hold Purchaser,
its partners and subsidiaries, and their respective
officers and directors (as hereinafter defined)
(collectively, for purposes of this Section 9.7(a),
referred to

<PAGE>

as "PURCHASER") harmless from and against any claims,
losses, liability, obligations, lawsuits, deficiencies,
damages or expense, including reasonable attorneys' fees
and all reasonable amounts paid in defense or settlement
of the foregoing (but net of any tax benefit derived by
any of the foregoing and net of any off-setting recoveries
or related proceeds received from insurance or similar
arrangements from third parties) (hereinafter referred to
as "LOSSES"), suffered or incurred as a result of (i) the
occurrence of any litigation identified in Schedule 10.12;
(ii) breach of any obligation, representation, warranty,
covenant or agreement made in this Agreement; (iii) any of
the Excluded Liabilities and/or (iv) the operation, use or
occupancy of the Assets by Seller or Seller's
predecessors-in-interest on or before the Closing Date
which obligation is not part of the Designated
Liabilities. All statements contained in this Agreement or
any schedule or exhibit hereto or certificate delivered by
or on behalf of Seller pursuant hereto shall be deemed
representations and warranties of Seller. Notwithstanding
the foregoing, Seller shall be liable to Purchaser

<PAGE>

hereunder only if and to the extent the amount of Losses
exceeds in aggregate $10,000 with respect to Casino Assets
or exceeds in the aggregate $10,000 with respect to Hotel
Assets; provided that Seller's aggregate liability under
this provision with respect to the Casino Assets shall not
exceed the amount of the total debt assumed by Purchaser
from Seller under Section 4.1 and Section 4.2 and the cash
paid pursuant to Section 4.1 or with respect to the Hotel
Assets shall not exceed $3,200,000; provided, further, in
the event of any breach of any of the representations and
warranties in Section 10.1(i) during the first five (5)
years after the Closing Date, Purchaser shall receive as
its sole remedy damages equal to the lesser of (a) the
aggregate of the sum of present value (using a discount
rate of 11%) of increased payments required to cure the
disturbance of the moorage and/or occupancy of the Casino
at its present location and to continue such moorage and
occupancy and all reasonable expenses incurred by
Purchaser in connection with such breach, or (b) the
following amounts: $600,000.00 if the breach occurs in the
first year following the Closing Date; $480,000.00 if the
breach occurs in the second year following the

<PAGE>

Closing Date; $360,000.00 if the breach occurs in the
third year following the Closing Date; $240,000.00 if the
breach occurs in the fourth year following the Closing
Date; and $120,000.00 if the breach occurs in the fifth
year following the Closing Date. Nothing herein shall be
construed to require indemnification by Seller for any
federal or state income taxes, or any interest or
penalties incurred thereon, payable by the Purchaser as a
result of any federal, state or local taxing authority
challenging the valuation of assets or the treatment for
tax purposes of any payment of fees or expenses.

b. SURVIVAL PERIODS AS TO SELLER Except as otherwise provided
in this Agreement, the representations, warranties,
covenants, and agreements made by the Seller in this
Agreement or any exhibit or schedule hereto or certificate
delivered pursuant hereto shall not merge into the
documents delivered at closing and shall survive the
Closing Dates and the transfer of Assets for a period to
expire on the later of (a) expiration of eighteen (18)
months after Closing Date or (b) July 31, 1999; provided,
however,that the representations and warranties set forth
in Section 10.1(i) and 10.13 shall be enforceable for a
period to expire

<PAGE>

on the later of (a) expiration of five (5) years after
Closing Date or (b) January 31, 2003.

c. INDEMNIFICATION OF SELLER AND ITS PARENT (i) Subject to
the provisions of this Agreement, Purchaser agrees to
indemnify, defend and hold Seller, its parent corporation,
Alpha Hospitality Corporation, and their respective
officers and directors (collectively, for purposes of this
Section 9.7(c), referred to as the "SELLER") harmless from
and against any losses, liability, obligations, lawsuits,
damages, or expenses including (without limitation)
reasonable legal cost and attorney's fees (but net of any
offsetting recoveries for related proceeds received from
insurance or similar arrangements with third parties)
(hereinafter referred to as "LOSSES") suffered or incurred
by Seller as a result of the occurrence of any breach of
any obligation, representation, warranty, covenant or
agreement of Purchaser contained in this Agreement or the
operation, use or occupancy of the Assets by Purchaser or
Purchaser's successors-in-interest to the Assets from and
after the Closing Date (and not arising from acts or
omissions by Seller or its predecessors prior to closing).
All

<PAGE>

statements contained in this Agreement or any schedule
or exhibit hereto or certificate delivered by or on behalf
of Purchaser pursuant hereto shall be deemed
representations and warranties of Purchaser.

d. SURVIVAL PERIODS AS TO PURCHASER Except as otherwise
provided in this Agreement, the representations,
warranties, covenants, and agreements made by the
Purchaser in this Agreement or any exhibit or schedule
hereto or certificate delivered pursuant hereto shall
survive the Closing Dates and the transfer of Assets and
shall not merge into the documents delivered at Closing.
The covenant to indemnify Seller for losses suffered or
incurred by Seller as a result of the operation, use, or
occupancy of assets by Purchaser or Purchaser's
successors-in-interest to the Assets (and not arising from
acts or omissions by Seller or its predecessors on or
prior to closing) from and after the Closing Date shall be
enforceable until expiration of five (5) years after
Closing Date, or such longer period for any agreements
which were assigned and assumed by Purchaser and for which
the Seller or any of its affiliates remain liable. All
other representations, warranties, covenants, and
agreements made by Purchaser shall

<PAGE>

be enforceable for a period to expire on the later of (a)
expiration of eighteen (18) months after Closing Date or
(b) July 31, 1999.

(e) PROCEDURE FOR CLAIMED RELIEF

(i) NOTICE OF CLAIMS If at any time, or from time to time,
the party to be indemnified under Sections 9.7(a) or
9.7(c) (hereinafter referred to as the "INDEMNIFIED
PARTY") shall receive notice of or become aware of any
claim or liability which results or could result in a
Loss, such Indemnified Party shall give written notice
(hereinafter referred to as a "NOTICE OF CLAIM") to the
appropriate party to provide the indemnification under
this Section 9.7(a) or 9.7(c), as appropriate (hereinafter
referred to as the "INDEMNIFYING PARTY"), (a) within
thirty (30) days of the discovery of such potential or
actual Loss in the event the Indemnified Party has
received formal written notice of a third party claim, or
(b) otherwise within forty-five (45) days of the discovery
of such potential or actual Loss. Provided, the failure of
the Indemnified Party to give the 45-day notice of any
claim shall not release, waive, or otherwise affect the
Indemnifying Party's obligations with respect thereto

<PAGE>

except to the extent that the Indemnifying Party can
demonstrate actual loss and prejudice as a result of such
failure; provided, the Indemnifying Party shall be
relieved of any indemnification obligation whatsoever
under Section 9.7(a) and Section 9.7(c) respecting claims
for which the Indemnified Party has failed to provide
notice prior to the expiration of the applicable survival
period as set forth in Section 9.7(b) or Section 9.7(d),
as the case may be. A Notice of Claim shall set forth (a)
a brief description of the nature of the potential or
actual Loss, (b) a copy of all information and documents
relating thereto, (c) an estimate of the total amount of
Loss anticipated (including any costs or expenses which
have been or may be reasonably incurred in connection
therewith). With regard to third party claims as described
in Section 9.7(e)(iii), the Indemnified Party shall submit
a copy of the pleading asserting any such claim as its
Notice of Claim or, if no pleadings have been filed, the
form of notice shall contain the information as set forth
above. The providing of a Notice of Claim within the
applicable survival period as set forth in Section 9.7(b)
and Section 9.7(d), as the case may be, tolls the survival
period as to the

<PAGE>

claim described in the Notice of Claim, subject to the
requirements set forth in Section 9.7(e)(ii).

(ii) DISPUTE WITH RESPECT TO NOTICE OF CLAIM If the
Indemnifying Party rejects any Loss as to which a Notice
of Claim is received from an Indemnified Party, the
Indemnifying Party shall give written notice of such
rejection to such Indemnified Party within thirty (30)
days after the date of the Notice of Claim. Such written
notice shall set forth the grounds upon which the
Indemnifying Party bases its rejection of Loss. If no such
rejection of a Notice of Claim shall be sent within such
30 day period, the Indemnifying Party shall be deemed to
acknowledge the correctness of such claim for up to the
full amount thereof. In the event that the Indemnifying
Party shall have made timely rejection of any such claim
of an Indemnified Party, and the Indemnifying Party and
such Indemnified Party shall have failed to resolve or
compromise such claim within 60 days from the date the
Indemnified Party shall have received notice of such
rejection, then the Indemnified Party must, within 90 days
after such 60 day period, commence legal proceedings
against the Indemnifying Party, provided that, in any
event,

<PAGE>

suit must be brought within 6 months of the assertion of
the claim. Within sixty (60) days after the Indemnifying
Party's liability to an Indemnified Party for a Loss is
finally determined (a "final determination") in such legal
proceedings by a final nonappealable judgment or by
written agreement of the Indemnifying Party and
Indemnified Party, the Indemnifying Party shall satisfy
the Loss or its portion thereof as applicable by paying
cash or other immediately available funds to such
Indemnified Party.

(iii) THIRD PARTY CLAIMS With respect to any claims or
demands by third parties, whenever the Indemnified Party
shall have notice that a third party claim or demand has
been asserted or threatened which, if true, would
constitute a basis for indemnification hereunder, the
Indemnified Party shall notify the appropriate
Indemnifying Party of such claim or demand and of the
facts within the knowledge of the Indemnified Party which
relate thereto by a Notice of Claim in accordance with
Section 9.7(e)(i) above, and such Notice of Claim shall
specifically state that the claim is a third party claim.
The Indemnifying Party shall then have the right to
contest, negotiate or settle any such claim or demand
through counsel of the Indem-

<PAGE>

nifying Party's selection, reasonably satisfactory to the
Indemnified Party, and solely at the Indemnifying Party's
own cost, risk and expense; provided, however, that the
Indemnifying Party shall not, without the prior written
consent of the Indemnified Party (such consent not to be
unreasonably withheld or delayed) settle, compromise or
offer to settle or compromise any such claim or demand on
a basis which would result in the imposition of a consent
order, injunction or decree which would restrict the
future activity or conduct of Purchaser's business by the
Indemnified Party. In the event that the Indemnifying
Party should fail to give written notice to the
Indemnified Party of the Indemnifying Party's intention to
contest or settle any such claim or demand within twenty
(20) days after the Indemnified Party has notified the
Indemnifying Party that any such claim or demand has been
asserted or threatened, the Indemnified Party shall have
the right to satisfy and discharge the same by payment,
compromise or otherwise, and the Indemnifying Party shall
be entirely liable therefor to the Indemnified Party under
this indemnity. Notwithstanding the foregoing, however, in
the event the Indemnifying

<PAGE>

Party disputes the Notice of Claim sent pursuant to
Section 9.7(e)(i) or (iii), then the Indemnified Party
shall not, without such Indemnifying Party's written
consent settle or compromise such claim or consent to the
entry of a judgment in respect thereto. The Indemnified
Party may also, if it so elects and entirely within its
own discretion, defend any such claim or demand in the
event the Indemnifying Party fails to give notice of its
intention to contest or settle any such claim or demand or
to contest the Notice of Claim as provided in Section
9.7(e)(ii), in which event the Indemnifying Party shall be
required to indemnify the Indemnified Party for any and
all Losses which it may sustain, suffer, incur or become
subject to as a result of its decision to defend any such
claim or demand.

f. RIGHT TO OFFSET In the event that the Seller fails to pay
any Loss adjudicated to be due against the Seller pursuant
to the procedure set forth in Section 9.7(e) within thirty
(30) days after the final determination, subject to the
terms of this subsection (f), Purchaser shall have the
right, at its option, to enforce any such claim for
recovery by exercising its rights under the Pledge of
Partnership Interest pursuant to

<PAGE>

which Seller's Partnership Interest in Purchaser described
in Section 4.3 shall serve as collateral for any Loss
adjudicated to be due the Purchaser as aforesaid. Any
amount of Loss in excess of the value of the limited
partnership interest when applied against it shall be due
and payable in cash or immediately available funds from
Seller. Provided, however, Purchaser shall give Seller
written notice of its intent to enforce such liability
against the Pledge of Partnership Interest and Seller
shall have thirty (30) days to pay the amount to be
collected by the exercise of Purchaser's rights under the
Pledge of Partnership Interest, in which case Purchaser's
right to collect the amount by exercise of its rights
under the Pledge of Partnership Interest shall be reduced
by the amount thus paid.

10. SELLER'S REPRESENTATIONS AND WARRANTIES:

To induce Purchaser to enter into this Agreement, Seller makes the
following representations and warranties effective as of the closing and
transfer on Closing Date (except where any other effective date is
expressly indicated):

<PAGE>

10.1 PERMITS, REGISTRATIONS, LICENSES, LEASEHOLD, MOORAGE AND DOCKAGE
INTEREST

a. Seller is a party to each of the Casino Agreements
identified in Schedule 1.3(a) and the Hotel Agreements
identified in Section 2.2 (hereinafter collectively
"AGREEMENTS");

b. A true and complete copy of each of the Agreements
(including all amendments, modifications and supplements
to the Agreements) has been delivered to Purchaser as of
the Execution Date;

c. The Agreements are in full force and effect;

d. The Agreements have not been amended, modified or
supplemented, orally, by course of conduct or in writing,
except as identified in Schedule 1.3(a) and Section 2.2 or
except as may be agreed to by Purchaser after the
Execution Date and before Closing Date or Hotel Closing
Date as appropriate;

e. All rentals and fees due through the respective Closing
Dates under the Agreements shall have been paid in full as
of such closing dates and all such rentals and fees for
current periods not then due have been prorated in
accordance with a closing statement mutually agreed to
between Seller and Purchaser as of the respective closing
dates;

f. Seller is not in material default under the terms

<PAGE>

of any of the Agreements and Seller has received no notice
of any alleged default by Seller under the terms of any of
the Agreements. To the best of Seller's knowledge, no
other party to any of the Agreements is in material
default under the terms of any of the Agreements;

g. No event has occurred which, upon the passage of time or
the giving of notice or both, would constitute a material
default by any party to any of the Agreements;

h. All Required Approvals for assignment of the Agreements to
Purchaser will have been obtained as of the Closing Date
or the Hotel Closing Date, as applicable;

i. So long as Purchaser performs its obligations under the
Casino Agreements from and after Closing Date, Purchaser's
moorage and occupancy of the Casino moored at its present
location at the Greenville, Mississippi, Waterfront cannot
be disturbed or terminated by any third party and a breach
hereof may be asserted despite the fact that the facts
relating to such breach also may constitute a breach of
any other representation or warranty; and

j. So long as Purchaser performs its obligations under the
Hotel Agreements from and after Hotel

<PAGE>

Closing Date, Purchaser's occupancy of the Casino Hotel
cannot be disturbed or terminated by any third party.

10.2 LISTING OF ASSETS AND TITLE

a. The Casino Assets identified on Schedules 1.3(a) and 1.5
are complete lists of the assets owned, leased, or used by
the Seller in connection with the operation or ownership
of the Casino, excepting only those assets listed on
Schedule 1.4.

b. Seller has good and valid title, right, or leasehold
interests in the Assets free and clear of all Encumbrances
(except Permitted Exceptions) except that with respect to
title to interests in real estate (including estates in
fee simple, leaseholds, licenses, and options), Seller
warrants only that such Assets are free of Encumbrances
created by Seller or Seller's predecessor-in-title,
Jubilation Lakeshore, but are subject to the Permitted
Exceptions, and that as to title to the trade name "Bayou
Caddy's Jubilee Casino," Seller warrants only that Seller
has the right to use such name as it is presently used and
that such name is free of Encumbrances created by Seller;

<PAGE>

c. Seller has the right to sell or assign the Assets under
the terms of this Agreement subject to obtaining the
approvals specifically described in Section 8.2; and

d. Seller will defend the title to all Assets against all
claims and demands made by any party claiming rights
against Seller and its successors-in-interest as a result
of acts of Seller.

10.3 PAYMENT OF DEBTS

Excepting Permitted Exceptions, including, but not limited to,
Designated Liabilities, the Principal Loan and the Subordinated
Debt, Seller has paid, or will promptly pay and discharge as of
the Closing Date (or Hotel Closing Date as related to debts and
liabilities for construction and furnishing for the Casino Hotel)
all debts, liabilities and obligations, including, without
limitation, sales taxes, employee salaries and benefits, and
obligations to trade creditors, customers, public authorities, or
other third parties, which constitute a lien on any of the Assets
as of the Closing Date or which if not paid would result in the
imposition of a lien on the Assets or a judgment, consent order,
injunction or decree which would require payment by the Purchaser
or which would restrict the future activity or conduct of the
Casino or Casino

<PAGE>

Hotel by Purchaser. Provided further, Seller shall be current on
all obligations to the Lender in connection with the Principal
Loan and the Subordinated Debt and Seller shall not be in default
under any of the terms of the Principal Loan or the Subordinated
Debt.

10.4 DESIGNATED LIABILITIES

The Designated Liabilities including any increases thereto in
connection with Section 4.2 hereof shall not exceed $2,000,000.00
in the aggregate.

10.5 NO OTHER CONTRACTS

As of the Execution Date and as of the Closing Date (except for
the Principal Loan and the Subordinated Debt), the Seller has not
entered into any other contract to assign, sell, mortgage, or
encumber all or part of the Casino Assets. As of the Hotel
Closing Date, the Seller has not entered into any other contract
to assign, sell, mortgage, or encumber all or part of the Hotel
Assets. Except for the Hotel Agreements, Seller will not enter
into any executory contracts as to the Hotel Assets requiring
performance beyond the time of the Hotel Closing Date.

<PAGE>

10.6 HART-SCOTT-RODINO ACT

Seller's parent, Alpha Hospitality Corporation, is its own
"ultimate parent" for purposes of the Hart-Scott-Rodino Act, and
rules and regulations issued thereunder and Seller and its
"ultimate parent" do not have assets or annual revenues of
$100,000,000.00 per their most recent regularly prepared
financial statements.

10.7 COAST GUARD STANDARDS

To the best of Seller's knowledge, the Casino meets U. S. Coast
Guard standards applicable to floating casino vessels and is in a
seaworthy condition. Seller has received no written notices to
the contrary.

10.8 NO CONFLICT

By entering into this Agreement, as of the Execution Date, and
subject to obtaining the consents referred to in Section 8.2, by
assigning the Agreements and selling the Assets to Purchaser, as
of the Closing Date and Hotel Closing Date as applicable, Seller
will not breach any other material contract or agreement to which
Seller is a party, violate any judgment, order, or decree of any
court or arbiter that is binding on Seller, or create any lien,
charge, or encumbrance upon the Assets purchased and conveyed or
assigned

<PAGE>

hereunder.

10.9 CONDITION AND NON-REMOVAL OF EQUIPMENT

The Casino Assets will be at Closing Date, and the Hotel Assets
will be on the Hotel Closing Date, in good operating condition,
except for normal wear and tear. Except for the slot machines and
other assets listed in Schedule 1.4, none of the Casino Assets or
Hotel Assets present on the Execution Date will be removed, sold,
or disposed of before the respective closing dates, except in
ordinary course of business. Specifically, and without limitation
of the generality of the foregoing, there shall be no removal of
gaming equipment or reconfiguration of the gaming equipment in
the Casino from Execution Date through Closing Date, provided
that prior to Closing Date, Seller shall remove from the Casino
those certain sixteen (16) slot machines listed by name and
serial number in Schedule 10.9 and replace them with
substantially comparable sixteen (16) slot machines now in
Seller's inventory of slot machines stored off the Casino Barge.

10.10 COMPLIANCE WITH LAWS

Except as otherwise provided herein, as of the Execution Date and
as of the Closing Date with respect to

<PAGE>

the Casino Assets, and as of the Hotel Closing Date with respect
to the Hotel Assets, Seller is not in default or in violation of
any law or regulation, except for such defaults or violations
which will not have a material adverse effect on the Assets or
the operation of the Casino or Hotel operations. The business
operated by Seller at the Casino will be conducted up to the time
of Closing Date substantially in accordance with all applicable
federal, state, and local laws, rules, regulations, and orders,
including those pursuant to the Mississippi Gaming Control Act
and all rules, regulations, and orders of the Mississippi Gaming
Commission. Any non-compliance which results in a fine or
monetary claim (which Seller has not paid as of Closing Date), or
an action by a public official or regulatory agent to close or
restrict Casino operations is deemed to be a material
non-compliance for purposes of this Section.

10.11 HOTEL MARKETING

Seller will market the opening of the Casino Hotel prior to the
Hotel Closing Date pursuant to its Hotel marketing plan and
budget which has been provided to Purchaser prior to Execution
Date.

<PAGE>

10.12 LITIGATION

Except as identified on Schedule 10.12, as of the Execution Date,
and as of the Closing Date with respect to the Casino Assets, and
as of the Hotel Closing Date with respect to the Hotel Assets, no
action, litigation, government investigation, condemnation
proceeding, claim, eminent domain proceeding, or any other
proceeding is pending or, to the best of Seller's knowledge,
contemplated as to Seller or all or part of the Assets which is
not covered by insurance or which if adversely determined would
impose a lien on any of the Assets or would result in a consent
order, injunction or decree which would require that a payment be
made or would restrict the future conduct of the Casino business
by Purchaser at the Casino Barge in its present location in
Greenville, Mississippi.

10.13 HAZARDOUS SUBSTANCES

To the best of Seller's knowledge, neither Seller nor any of its
predecessors-in-interest has allowed any Hazardous Substances to
discharge or accumulate in violation of any applicable
environmental law, rule, or regulation on the Casino Barge or the
Boarding Barge, at the Greenville, Mississippi, waterfront or at
other real estate sites owned, licensed or leased by Seller

<PAGE>

in Greenville, Mississippi, or at the site of the Hotel (except
as previously disclosed in writing to Purchaser and remediated by
Seller at the site of the Hotel in accordance with applicable
environmental laws, rules, and regulations). To the best of
Seller's knowledge, no material violations of environmental laws
and regulations exist with respect to the Assets and no notices
of such alleged violations have been received by Seller.
"Hazardous Substances" shall mean any dangerous, toxic or
hazardous substance defined as hazardous or as a pollutant or
contaminant in, or the release or disposal of which is regulated
by, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980; the Super Fund Amendments and
Reauthorization Act of 1986; the Federal Resource Conservation
and Recovery Act of 1986; the Clean Water Act; the Clean Air Act;
or the Toxic Substances Control Act; or any other applicable
federal or state law. The representations and warranties in this
Section 10.13 do not cover the three properties to which Seller
holds options under that certain Real Estate Option dated October
26, 1995, from Deer Creek & Black Bayou Steam Navigation and
Transportation Company, Inc., and that certain Lease and Option
to Purchase Agreement dated October 26, 1995, from Deer Creek &
Black Bayou Steam Navigation and Transportation Company, Inc.

<PAGE>

10.14 BROKERS AND REAL ESTATE COMMISSIONS

Neither Seller nor any of its officers, directors,
representatives, or employees have had any dealings with any
broker or finder or incurred any liability for any brokerage
fees, brokerage commissions, or finder's fees as to this
Agreement or the sale of the Casino Assets or Hotel Assets.

10.15 CONTRACTS AND AGREEMENTS

Schedule 1.3(a) and Section 2.2 contain a true and complete list
of all material contracts and agreements to which Seller is a
party and which relate to the Casino or the Casino Hotel. Except
for non-written employment agreements with employees of the
Casino which are terminable at will by Seller, Seller is not a
party to any non-written contract or agreement pertaining to the
Casino or the Casino Hotel. True and correct copies of all
contracts and agreements listed on Schedule 1.3(a) and in Section
2.2, including any amendments, modifications, or supplements
thereto, have been provided to Purchaser prior to Execution Date.
All such contracts and agreements are in full force and effect.
Seller has materially performed its obligations thereunder, and,
to the best of Seller's knowledge, neither Seller nor any other
party thereto

<PAGE>

is in material default thereunder; and, to the best of Seller's
knowledge, no condition exists with which notice or lapse of time
or both would constitute a material default thereunder. Seller
will comply with all its material obligations under each of the
above described contracts and agreements up to the time of the
Closing Date and Hotel Closing Date as applicable. Specifically,
and without limitation of the generality of the foregoing, Seller
will comply with its obligations under its rental agreement with
Mosow Real Estate, Inc., related to the property at 240 S.
Theobald Street for such period of time as Seller is obligated to
The Board of Mississippi Levee Commissioners to provide it office
space under the Temporary Facilities Agreement between Seller and
The Board of Mississippi Levee Commissioners dated as of April
18, 1997.

10.16 COMPLIANCE WITH MISSISSIPPI GAMING REGULATIONS

The Casino is and will remain through the Closing Date in
compliance with the Mississippi Gaming Control Act and
regulations, rules, and orders of the Mississippi Gaming
Commission, provided, however, that non-material and
non-substantial breaches of said regulations, rules, and orders
which have had or will have no economic or operational
consequence are excluded from

<PAGE>

this representation and warranty.

10.17 GOOD STANDING

Seller is a corporation that is duly incorporated, validly
existing, and in good standing under the laws of the State of
Delaware, and Seller has all requisite corporate power and
authority to own its properties and to conduct its businesses as
they are now being conducted.

10.18 CORPORATE AUTHORIZATION

The execution, delivery, and performance of this Agreement by
Seller, Alpha Hospitality Corporation and Alpha Hotel have been
duly and validly authorized by all requisite corporate action
subject to obtaining their respective Shareholders' approval of
the execution, delivery and performance of this Agreement prior
to Closing.

10.19 VALID OBLIGATION

This Agreement is a valid and binding obligation of Seller and is
enforceable according to its terms, except as the same may be
restricted, limited or delayed by applicable bankruptcy or other
similar laws affecting creditors' rights generally and general

<PAGE>

equitable principles.

10.20 PROFIT AND LOSS STATEMENTS

Seller has provided to Purchaser prior to the Execution Date (a)
audited financial statements for the Casino for the fiscal year
ended December 31, 1996, and (b) unaudited profit and loss
statements for the Casino from January 1, 1997 through September
29, 1997, which, except for non-recurring items shown on Schedule
10.20, have been produced in the ordinary course of business
consistent with Seller's past practice in connection with the
operation of the Casino. The above-referenced audited financial
statements fairly present in all material respects the financial
condition of the Seller and the results of its operations for the
fiscal year ended December 31, 1996, and the above-referenced
unaudited profit and loss statements fairly present in all
material respects the results of Seller's operations (except for
non-recurring items as listed on Schedule 10.20 hereto) for the
periods ended at the respective dates thereof.

10.21 KNOWLEDGE

Any representation, warranty or covenant of Seller qualified by
the phrase "to best of Seller's knowledge"

<PAGE>

or "to Seller's knowledge", "known" or other similar phrase
implying a limitation on the basis of knowledge is intended to
indicate that none of the present directors of Seller or its
parent, Seller's or Seller's parent's President, Vice President,
Chief Financial Officer or Vice President-Casino Operations or
any of them has information which would give him or her actual
knowledge contrary to the existence or nonexistence of such facts
and appropriate inquiry has been made of the relevant operational
personnel of the Casino.

10.22 APPLICATION OF SALE PROCEEDS

At closing on the Closing Date, the closing agent, First American
Title Insurance Company, as agent for Seller, will apply the net
cash portion of the purchase price described in Section 4.1 as is
necessary to satisfy any and all then-outstanding Encumbrances
against the Assets and indebtednesses of Seller (not included in
the Designated Liabilities), except for the Permitted Exceptions,
including, but not limited to, liens, mortgages and encumbrances
in favor of the Lender and granted in connection with the
Principal Loan and the Subordinated Debt, provided the closing
agent shall distribute the funds in accordance with a closing
statement agreed to by the Purchaser and Seller. The Purchaser
and Seller agree that the

<PAGE>

closing statement shall provide that the claims of Seller's
non-affiliated third party creditors (including, but not limited
to, all trade creditors with invoices over 45 days old on the
Closing Date), except the Lender, shall be satisfied in full
prior to any payment from the sale proceeds to Seller's
affiliated creditors (including specifically and without
limitation Bryanston Group, Inc. and BP Group, Ltd.), each of
which shall, nonetheless, release any then-outstanding liens,
mortgages, and encumbrances against the Assets and shall consent
in writing to this distribution of sales proceeds and waive any
claims against Purchaser or the Lender arising therefrom.
Provided further, that Seller represents and warrants that all
litigation matters shown on Schedule 10.12, except the matters
numbered 1, 13, 18, 27, 28 and 29, shall, consistent with the
representations made on the Schedule, either be fully insured
without a reservation of rights or be paid in full or otherwise
fully satisfied on the Closing Date. As to the following
litigation matters: Hendrick Outdoor, Inc. v. Alpha Gulf Coast,
Inc., Cause No. 96-0426 (No. 13 on Schedule 10.12); Tidelands
Lease with the State of Mississippi (No. 27 on Schedule 10.12);
and Pitney Bowes Credit Corp. v. Alpha Gulf Coast, Inc., Cause
No. 097-0406 (No. 29 on Schedule 10.12), Seller shall, prior to
any payment to

<PAGE>

affiliated creditors, deposit with First American Title Insurance
Company at closing the sums of $63,000.00, $393,000.00 and
$43,000.00, respectively, to be held by said title insurance
company as agent for Seller to satisfy any of the contingent
liabilities arising out of or in connection with the aforelisted
itemized litigation matters, upon the satisfaction of each of
which Seller shall be entitled to disbursement of remaining
funds, if any, held by the Closing Agent on account of that
litigation matter. As to the matters numbered 1, 18, and 28 on
Schedule 10.12 (Akers v. Bayou Caddy's Jubilee Casino, Cause
#C196,0232; Lewis v. Alpha Gulf Coast Inc., Cause #C197-0128; and
Wilson v. Alpha Gulf Coast Inc., Cause #C197-0041), Seller
represents and warrants that such claims are fully insured
without reservation of rights except to the extent that the
allegations made of intentional conduct and/or give rise to
punitive damages and further represents and warrants that no
damages arising out of claims for intentional conduct and/or
punitive damages will be awarded in any such action.

10.23 PLEDGE OF PARTNERSHIP INTEREST

Upon its delivery to Purchaser on Closing Date, the pledge of
partnership interest, if any, described in Sections 4.6 and
9.7(f) will be duly and validly authorized by Seller's
shareholders and organizational

<PAGE>

documents and shall constitute valid and binding obligation of
Seller and shall be enforceable against Seller according to its
terms, except as the same may be restricted, limited or delayed
by applicable bankruptcy or similar laws affecting creditors'
rights and general equitable principles.

11. PURCHASER'S REPRESENTATIONS AND WARRANTIES:

To induce Seller to enter into this Agreement, Purchaser makes the
following representations and warranties effective as of the closing on
Closing Date (except where any other effective date is expressly
indicated):

11.1 GOOD STANDING

Purchaser is a limited partnership that is duly organized,
validly existing, and in good standing under the laws of the
State of Mississippi. Purchaser's general partner, Greenville CP,
Inc., is a corporation that is duly incorporated, validly
existing, in good standing under the laws of the State of
Delaware and qualified to do business in the State of
Mississippi. Purchaser has all requisite partnership power and
authority to own its properties and to carry on its businesses as
they are now being conducted.

<PAGE>

11.2 PARTNERSHIP AUTHORIZATION

The execution, delivery, and performance of this Agreement by
Purchaser has been duly and validly authorized in a manner
required by its organizational documents. This Agreement is a
valid and binding obligation of Purchaser and is enforceable
against Purchaser according to its terms, except as the same may
be restricted, limited or delayed by applicable bankruptcy or
other similar laws affecting creditors' rights generally and
general equitable principles.

11.3 NO VIOLATION OF OTHER DOCUMENTS

By closing the transactions contemplated under this Agreement on
the Closing Date and Hotel Closing Date, as applicable, Purchaser
will not breach any other contract to which Purchaser is a party
or violate any judgment, order, or decree of any court or arbiter
that is binding on Purchaser.

11.4 BROKERS AND REAL ESTATE COMMISSIONS

Neither Purchaser nor any of its officers, directors,
representatives, or employees have had any dealings with any
broker or finder or incurred any liability for any brokerage
fees, brokerage commissions, or finder's fees as to this
Agreement or the purchase of the

<PAGE>

Assets, except that Purchaser has employed the services of
Executive Business Services, Inc., in connection with financing
from Lender. Brokerage fees, if any, to Executive Business
Services, Inc., shall be paid by Purchaser.

11.5 HART-SCOTT-RODINO ACT

Purchaser is its own "ultimate parent" for purposes of the
Hart-Scott-Rodino Act, and rules and regulations issued
thereunder, and Purchaser does not have assets or annual revenues
of $100,000,000.00 per its most recent regularly prepared
financial statement.

11.6 DELIVERY OF PARTNERSHIP AGREEMENT

Purchaser has delivered to Seller prior to the Execution Date a
true and complete copy of its current Partnership Agreement and
all prior amendments thereto and the Securities Purchase
Agreement between Purchaser and certain Noteholders, dated as of
December 14, 1993, and all prior amendments thereto to Seller on
or before Closing Date. Attached hereto as Schedule 11.6 is a
true and complete copy of the Revised Third Amended and Restated
Partnership Agreement, which will be in full force and effect in
lieu of the Second Amended Partnership Agreement from and after
the Closing Date.

<PAGE>

Purchaser and its General Partner will use their best efforts as
described in the Letter attached to Schedule 11.6 to obtain
approval of the amendments to the Partnership Agreement contained
in said Letter.

11.7 DELIVERY OF BALANCE SHEET AND PROFORMA BALANCE SHEET

Purchaser has delivered to Seller on or before Execution Date
Purchaser's balance sheet as of the end of its fiscal quarter
most recently closed prior to the Execution Date, and attached as
Schedule 11.7 is Purchaser's proforma balance sheet as of Closing
Date, which will take into account the transactions contemplated
hereby. Purchaser represents that the balance sheet delivered on
or before Execution Date fairly presents the assets, liabilities,
and partnership investments as of the date thereof.

12. RIGHT TO TERMINATE AND REMEDIES:

12.1 RIGHT TO TERMINATE

Anything to the contrary herein notwithstanding, this Agreement
and the transactions contemplated hereby may be terminated at any
time prior to the Closing Date and Hotel Closing Date,
respectively, by prompt notice given in accordance with Section
18:

a. by the mutual written consent of Purchaser and

<PAGE>

Seller; or

b. by either of such parties by written notice given in
accordance with Section 18 if the closing of the purchase
of the Casino Assets shall not have occurred on the
earlier of (a) five (5) business days after all conditions
precedent stated in Sections 8.1 and 8.2 are fulfilled or
(b) January 31, 1998, provided, however, the foregoing
notwithstanding, if the "SEC" has not approved the form of
the proxy statement for the meeting of Seller's parent's
shareholders to consider approval of this transaction on
or before January 6, 1998, the date of January 31, 1998,
shall be extended to the earlier of (a) the twenty-fifth
(25th) day after SEC approval of such proxy statement or
(b) February 25, 1998 (or on such later date on which
Seller and Purchaser may hereafter mutually agree in
writing to be the Closing Date, neither party being
obligated to agree to such an extension); provided
however, that the right to terminate this Agreement under
this Section 12.1(b) shall not be available to any party
whose failure to fulfill any material obligation for which
such party has responsibility under this Agreement has
been the cause of or resulted in the failure of the
closing to occur on

<PAGE>

or prior to the aforesaid dates.

12.2 REMEDIES

a. PURCHASER'S REMEDIES The provisions of Section 12.1(b)
notwithstanding, in the event of a material breach of this
Agreement by Seller, and/or if all conditions precedent to
Seller's obligation to close the purchase of Casino Assets
as set forth in Section 8.1 are satisfied on the Closing
Date, or if all conditions precedent to Seller's
obligation to close the purchase of the Hotel Assets are
satisfied on the Hotel Closing Date, and Seller fails to
close in accordance with this Agreement, the Purchaser
shall not be limited to the remedy of termination of this
Agreement, but shall be entitled to pursue monetary
damages up to the amount of the Subordinated Debt and/or
specific performance of this Agreement. Provided, however,
the Purchaser shall not execute on any monetary judgment
obtained by it against the Seller (except one obtained in
connection with Seller's obligations under Section 4.6(a)
and/or (b)) pursuant to the foregoing until Seller has
paid the Principal Loan and Subordinated Note in full or
it has otherwise been satisfied or assigned.

<PAGE>

Notwithstanding the foregoing, in the event that the
closing does not occur due to (i) the failure of Seller
and/or Seller's parent, Alpha Hospitality Corporation, to
obtain on or before the Closing Date, the approval of the
transaction contemplated herein by their respective
shareholders provided in Section 8.2(e); (ii) Seller, its
parent or any other subsidiary of its parent are the
subject of bankruptcy proceedings; or (iii) the Seller
fails to deliver the Casino Assets as provided in Section
5.1 of the Agreement then, in such event, Purchaser shall
be immediately entitled to damages in the amount of One
Million Dollars ($1,000,000.00) in addition to all other
damages and remedies provided for in this Section. In
addition to the foregoing, the Purchaser shall be entitled
to recover all of its reasonable costs and expenses
incurred in pursuing either of these remedies (including,
without limitation, reasonable attorneys' fees).

b. SELLER'S REMEDIES The provisions of Section 12.1(b)
notwithstanding, in the event of a material breach of this
Agreement by Purchaser, and/or if all conditions precedent
to Purchaser's obligation to close the purchase of Casino
Assets as set forth in Section 8.2 are satisfied on the

<PAGE>

Closing Date, or if all conditions precedent to
Purchaser's obligation to close the purchase of the Hotel
Assets are satisfied on the Hotel Closing Date, and
Purchaser fails to close in accordance with this
Agreement, the Seller shall not be limited to the remedy
of termination of this Agreement, but shall be entitled to
pursue monetary damages up to the amount of the
Subordinated Debt and/or specific performance of this
Agreement and shall be entitled to recover all of its
reasonable costs and expenses incurred in pursuing either
of these remedies (including, without limitation,
reasonable attorneys' fees). Provided, however, the Seller
shall not execute on any monetary judgment obtained by it
pursuant to the foregoing until the Purchaser has paid the
indebtedness from the Lender evidenced by (i) the senior
secured note to the Lender in the amount of $17,200,000.00
and the subordinated secured note in the amount of
$3,621,000.00 executed in the financing transaction
described in Section 8.1(e) and Section 8.2(t), or (ii)
the senior secured note to the Lender in the amount of
$36,200,000.00 and the subordinated secured note to the
Lender in the amount of $8,500,000.00 in the event the
amended and restated loan agreement described in

<PAGE>

Section 8.2(t) is consummated. Notwithstanding the
foregoing, in the event that the closing of the sale and
purchase of the Casino Assets occurs, and all of the
conditions precedent to Purchaser's obligation to close
the purchase of the Hotel Assets are satisfied on the
Hotel Closing Date and Purchaser fails to close such
Purchase in accordance with this Agreement, the Seller
shall be entitled to pursue specific performance of this
Agreement and shall be entitled to recover all of its
reasonable costs and expenses incurred in pursuing this
remedy (including, without limitation, reasonable
attorneys' fees).

c. Subordination of Termination Payments. All amounts, if
any, payable by (i) Seller to Purchaser pursuant to
Section 12.2 (a) hereof, except those described in Section
4.6(a) and (b) and except for the one million dollar
payment described in Section 12.2(a), shall be evidenced
by a non-interest bearing promissory note issued by Seller
to Purchaser (the "SELLER TERMINATION NOTE") which shall
be fully subordinated to all obligations owing to Lender
from Seller, if any, or (ii) Purchaser to Seller pursuant
to Section 12.2(b) hereof shall be evidenced by a
non-interest bearing promissory note issued by

<PAGE>

Purchaser to Seller (the "PURCHASER TERMINATION NOTE")
which shall be fully subordinated to all obligations owing
to Lender from Purchaser. As long as Seller owes any
obligations to Lender, the holder of the Seller
Termination Note shall be prohibited from receiving
payments, declaring an event of default or otherwise
accelerating the amounts payable thereunder and as long as
Purchaser owes any obligations to Lender, the holder of
the Purchaser Termination Note shall be prohibited from
receiving payments, declaring an event of default or
otherwise accelerating the amounts payable thereunder.

13. LEGAL COMPLIANCE:

Seller and Purchaser agree that Article 6 of the Uniform Commercial
Code--Bulk Transfer has been repealed in Mississippi and, accordingly,
no action to comply with Bulk Sales laws will be taken.

14. RISK OF LOSS:

Seller shall fully assume the risk of any loss by fire or other casualty
that affects any of the Casino Assets or Hotel Assets up to the time of
Closing Date (as to Casino Assets) and the Hotel Closing Date (as to the
Hotel Assets). Seller shall, at its expense, keep the Casino Asset
insured until the time of the Closing Date and the Hotel Assets insured

<PAGE>

until Hotel Closing Date against any loss from fire or other casualty in
an amount equal to the replacement value of such Assets. If before the
transfer of Assets on the Closing Date and Hotel Closing Date, as
applicable, any loss by fire or other casualty affects some or all of
the Assets, Purchaser may choose either of the following alternatives:

a. If the casualty damages or destroys the Casino Assets to
the extent of Five Million Dollars ($5,000,000.00) or more
of their replacement cost and/or so damages the Casino
Barge as to render it not commercially usable for a period
of twenty (20) days or more, Purchaser may terminate this
Agreement. In that event, Purchaser shall have no further
obligations under this Agreement. If the casualty damages
or destroys the Hotel Assets to the extent of Seven
Hundred Thousand Dollars ($700,000.00) or more of their
replacement cost and/or so damages the Hotel as to delay
its substantial completion or opening for a period not to
exceed the shorter of thirty (30) days from February 6,
1998, or such period as the Mississippi Gaming Commission
allows Seller to complete the Casino Hotel in satisfaction
of "infrastructure" requirements under orders and
requirements issued by the Mississippi Gaming Commission
to proceed

<PAGE>

with closing, Purchaser may terminate this
Agreement with respect to the Hotel Assets.

b. If a casualty loss occurs in an amount or duration less
than the applicable amount or duration set forth in
Section 14.1(a) or, if notwithstanding the provisions of
Section 14.1(a), in the event of casualty loss covered by
Section 14.1(a), Purchaser chooses to go forward with the
purchase of the Casino Assets or the Hotel Assets, as
applicable, all insurance proceeds paid as a result of the
loss affecting the Assets (except for business
interruption insurance) shall be used to pay the expenses
of repairing, replacing, and restoring the Casino Assets
or Hotel Assets as applicable affected by the loss, and
any such expenses not covered by the insurance proceeds
shall be borne by Seller, with the Closing Date or Hotel
Closing Date extended until such repairs are completed. If
the repair, replacement, and restoration of the Casino
Assets or Hotel Assets has not been completed by the time
scheduled for the Closing Date or Hotel Closing Date, as
applicable, and nonetheless the parties mutually agree to
proceed with closing, further repair work shall be
completed by Purchaser at Seller's expense and any
insurance proceeds paid as a

<PAGE>

result of the loss shall be held in trust for that
purpose.

15. TIME OF ESSENCE:

The parties agree that as to performance under this Agreement, time
shall be of the essence.

16. GOVERNING LAW:

The Agreement shall be governed by the substantive laws of the State of
Mississippi, without regard to conflicts of law rules.

17. GUARANTY OF ALPHA HOSPITALITY CORPORATION:

By its signature below, Alpha Hospitality Corporation, parent of Seller,
guarantees Seller's performance of all of Seller's obligations and
liabilities to Purchaser arising out of or in relation to this Agreement
and any documents executed pursuant to this Agreement in accordance with
the terms and provisions set forth in the form of guaranty attached as
Schedule 17, the original of which shall be executed and delivered to
Purchaser by Alpha Hospitality Corporation on the Execution Date.

<PAGE>

18. NOTICES:

All notices given under this Agreement shall be in writing and shall be
sent postage prepaid by either (a) United States certified mail, return
receipt requested, or (b) for delivery on the next business day with a
nationally-recognized express courier. All such notices shall be sent to
the following addresses, until such addresses are changed by 30 days'
notice:

To Seller: Alpha Gulf Coast, Inc.
12 East 49th Street
New York, New York 10017

ATTN: President

With a copy to: Gina Jacobs, Esq.
Watkins, Ludlam & Stennis, P.A.

P. O. Box 427
Jackson, MS 39205

To Purchaser: Greenville Casino Partners, L.P.

c/o Greenville CP, Inc.,
its general partner
242 South Walnut Street
Greenville, MS 38701

ATTN: John R. O'Donnell,
President

With a copy to: Jerome C. Hafter, Esq.
Jenny M. Virden, Esq.
Lake Tindall, LLP
P. O. Box 918
Greenville, MS 38702-0918

Notices shall be deemed delivered on the fifth day after postmark, if
sent by certified mail, or on date of delivery

<PAGE>

to addressee as shown by express courier's receipt, if sent by express
courier. If the last day for giving any notice or taking any action
required or permitted under this Agreement would otherwise fall on a
Saturday, Sunday, or legal holiday, that last day shall be postponed
until the next legal business day.

19. MISCELLANEOUS:

19.1 ENTIRE AGREEMENT; ENFORCEABILITY

This Agreement, including any Recitals and any attached
Schedules, all of which are made a part of this Agreement,
contains the entire agreement of the parties concerning this
subject matter. No other terms or oral promises which are not in
this Agreement may be legally enforced, and no promises,
projections, inducements or representations made on or before the
Execution Date will change the terms of this Agreement or be
binding on any party. No promises or other terms shall be implied
in this Agreement.

19.2 AMENDMENTS

No amendment of this Agreement shall be binding unless it is in
writing, states that it constitutes an Amendment to this
Agreement, and is signed by the party

<PAGE>

against whom enforcement is sought.

19.3 BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFICIARIES

This Agreement shall both bind and benefit the parties to
this Agreement and their successors and permitted assigns.
Purchaser may assign its rights and privileges and
delegate its obligations under this Agreement, in whole or
in part, (a) to another entity which is wholly-owned by
Purchaser; (b) to another entity which is at the time of
assignment a current holder of a gaming license issued by
the Mississippi Gaming Commission; or (c) to any other
assignee only with the advance written approval of the
Seller, which approval will not be unreasonably denied or
delayed; provided, however, that no such assignment or
delegation shall relieve Purchaser of any obligations to
Seller expressly set forth in this Agreement. Purchase may
assign, as collateral, this Agreement and each of
Purchaser's rights and privileges hereunder to the Lender.
The parties do not intend that there be any third party or
other beneficiaries of this Agreement or guaranty except
that the Lender or any other party who becomes Purchaser's
successor-in-interest as to

<PAGE>

any or all of the Assets, after or as a result of an event
of default under the Casino Loan, shall become Purchaser's
successor as to all rights and privileges under this
Agreement and the guaranties delivered pursuant hereto,
including without limitation the right to rely upon and
enforce Seller's representations and warranties set forth
in Article 10, as if the Lender or such other party were a
party to this Agreement.

19.4 WAIVERS; CONSENTS

A party shall not be deemed to have made a waiver, consent or
approval under this Agreement unless it does so in writing. The
mere failure of a party to act to enforce any provision of this
Agreement shall not be considered a waiver, consent or approval
and shall not prevent that party from enforcing any provision of
this Agreement in the future.

19.5 SEVERABILITY

The invalidity or unenforceability of one provision of this
Agreement will not affect the validity or enforceability of the
other provisions.

<PAGE>

19.6 CAPTIONS

The section numbers and captions are inserted only as a matter of
convenience, and do not in any way define, limit, or describe the
scope or intent of this Agreement. Any references in this
Agreement to a Section or subsection shall refer to such Section
or subsection of this Agreement, unless expressly provided
otherwise.

19.7 INTERPRETATION OF "INCLUDING" AND "DAY"

Wherever the word "including" is used in this Agreement, or in
any recital or exhibit to this Agreement, it shall mean
"including without limitation." Wherever the word "day(s)" is
used in this Agreement, or in any recital or exhibit to this
Agreement, and the word "business" does not appear immediately
before such word, such word shall mean "calendar day(s)."

19.8 COUNTERPARTS

This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which together
shall constitute one and the same instrument.

<PAGE>

20. NO OFFER:

The submission of this Agreement for examination and negotiation does
not constitute an offer to enter into an agreement, and this Agreement
shall not be binding on any party until it is executed and delivered by
each party to this Agreement.

Seller, Purchaser, and Guarantor only for purposes of the guaranty executed
herein, have executed this Agreement as of the Execution Date.

SELLER:

ALPHA GULF COAST, INC., a
Delaware Corporation

By:_____________________________

Its:____________________________

ALPHA GREENVILLE HOTEL, INC.,
a Delaware Corporation

By:____________________________

Its:_________________________

GUARANTOR:

ALPHA HOSPITALITY CORPORATION,
a Delaware Corporation, only
for the purpose of agreeing to
the Guaranty

<PAGE>

By:_____________________________

Its:____________________________

<PAGE>

PURCHASER:

GREENVILLE CASINO PARTNERS,
L.P., a Mississippi Limited
Partnership

By: GREENVILLE CP, INC., a
Delaware Corporation, Its
General Partner

By:_____________________________

Its:____________________________

100

STATEMENT OF DIFFERENCES

The section symbol shall be expressed as .................................'SS'