Exhibit 10.34

 

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Published CUSIP Number:                     

 

CREDIT AGREEMENT

 

Dated as of May 20, 2004

 

among

 

BOYD GAMING CORPORATION

as the Borrower,

 

BANK OF AMERICA, N.A.,

as Administrative Agent and L/C Issuer,

 

WELLS FARGO BANK, N.A.,

as Swing Line Lender,

 

CIBC WORLD MARKETS CORP.

and

WELLS FARGO BANK, N.A.,

as Co-Syndication Agents,

 

CALYON NEW YORK BRANCH

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Co-Documentation Agents

 

and

 

The Other Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC,

CIBC WORLD MARKETS CORP.

and

WELLS FARGO BANK, N.A.

as

Joint Lead Arrangers and Joint Book Managers

 

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TABLE OF CONTENTS

 

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ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

   1

1.01

 

Defined Terms

   1

1.02

 

Other Interpretive Provisions

   25

1.03

 

Accounting Terms

   26

1.04

 

Rounding

   26

1.05

 

References to Agreements and Laws

   26

1.06

 

Times of Day

   26

1.07

 

Letter of Credit Amounts

   26

ARTICLE II

 

THE COMMITMENTS AND CREDIT EXTENSIONS

   27

2.01

 

Committed Loans

   27

2.02

 

Borrowings, Conversions and Continuations of Committed Loans

   27

2.03

 

Letters of Credit

   29

2.04

 

Swing Line Loans

   37

2.05

 

Prepayments

   39

2.06

 

Termination or Reduction of Commitments

   40

2.07

 

Repayment of Loans

   41

2.08

 

Interest

   41

2.09

 

Fees

   42

2.10

 

Computation of Interest and Fees

   42

2.11

 

Evidence of Debt

   43

2.12

 

Payments Generally

   43

2.13

 

Sharing of Payments

   45

2.14

 

Increase in Commitments

   45

ARTICLE III

 

TAXES, YIELD PROTECTION AND ILLEGALITY

   47

3.01

 

Taxes

   47

3.02

 

Illegality

   48

3.03

 

Inability to Determine Rates

   48

3.04

 

Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate
Loans.

   48

3.05

 

Compensation for Losses

   49

 

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3.06

 

Matters Applicable to all Requests for Compensation

   50

3.07

 

Survival

   50

ARTICLE IV

 

CONDITIONS PRECEDENT TO EFFECTIVENESS AND CREDIT EXTENSIONS

   50

4.01

 

Conditions of Effectiveness

   50

4.02

 

Conditions to all Credit Extensions

   54

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

   55

5.01

 

Existence, Qualification and Power; Compliance with Laws

   55

5.02

 

Authorization; No Contravention

   55

5.03

 

Governmental Authorization; Other Consents

   55

5.04

 

Binding Effect

   56

5.05

 

Financial Statements; No Material Adverse Effect

   56

5.06

 

Litigation

   56

5.07

 

No Default

   57

5.08

 

Ownership of Property; Liens

   57

5.09

 

Environmental Compliance

   57

5.10

 

Insurance

   57

5.11

 

Taxes

   57

5.12

 

ERISA Compliance

   57

5.13

 

Subsidiaries

   58

5.14

 

Margin Regulations; Investment Company Act; Public Utility Holding Company Act

   58

5.15

 

Disclosure

   58

5.16

 

Intellectual Property; Licenses, Etc

   59

5.17

 

Collateral Documents

   59

ARTICLE VI

 

AFFIRMATIVE COVENANTS

   59

6.01

 

Financial Statements

   59

6.02

 

Certificates; Other Information

   60

6.03

 

Notices

   62

6.04

 

Payment of Obligations

   62

6.05

 

Preservation of Existence, Etc

   63

 

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6.06

 

Maintenance of Properties

   63

6.07

 

Maintenance of Insurance

   63

6.08

 

Compliance with Laws

   63

6.09

 

Books and Records

   63

6.10

 

Inspection Rights

   64

6.11

 

Use of Proceeds

   64

6.12

 

Environmental Covenant

   64

6.13

 

Accuracy of Information

   64

6.14

 

Significant Subsidiaries

   64

ARTICLE VII

 

NEGATIVE COVENANTS

   65

7.01

 

Liens

   65

7.02

 

Investments

   66

7.03

 

Indebtedness

   67

7.04

 

Fundamental Changes

   67

7.05

 

Dispositions

   68

7.06

 

Restricted Payments

   69

7.07

 

Change in Nature of Business

   69

7.08

 

Transactions with Affiliates

   69

7.09

 

Burdensome Agreements

   69

7.10

 

Maintenance of Debt

   70

7.11

 

Financial Covenants

   70

7.12

 

Capital Expenditures

   71

7.13

 

Use of Proceeds

   71

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

   71

8.01

 

Events of Default

   71

8.02

 

Remedies Upon Event of Default

   74

8.03

 

Application of Funds

   74

ARTICLE IX

 

ADMINISTRATIVE AGENT

   75

9.01

 

Appointment and Authorization of Administrative Agent

   75

9.02

 

Delegation of Duties

   76

 

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9.03

 

Liability of Administrative Agent

   76

9.04

 

Reliance by Administrative Agent

   76

9.05

 

Notice of Default

   77

9.06

 

Credit Decision; Disclosure of Information by Administrative Agent

   77

9.07

 

Indemnification of Administrative Agent

   78

9.08

 

Administrative Agent in its Individual Capacity

   78

9.09

 

Successor Administrative Agent

   78

9.10

 

Administrative Agent May File Proofs of Claim

   79

9.11

 

Collateral and Guaranty Matters

   80

9.12

 

Other Agents; Arrangers and Managers

   80

ARTICLE X

 

MISCELLANEOUS

   80

10.01

 

Amendments, Etc

   80

10.02

 

Notices and Other Communications; Facsimile Copies

   82

10.03

 

No Waiver; Cumulative Remedies

   83

10.04

 

Attorney Costs, Expenses and Taxes

   83

10.05

 

Indemnification by the Borrower

   84

10.06

 

Payments Set Aside

   84

10.07

 

Successors and Assigns

   85

10.08

 

Confidentiality

   89

10.09

 

Set-off

   90

10.10

 

Interest Rate Limitation

   90

10.11

 

Counterparts

   90

10.12

 

Integration

   90

10.13

 

Survival of Representations and Warranties

   91

10.14

 

Severability

   91

10.15

 

Tax Forms

   91

10.16

 

Replacement of Lenders

   93

10.17

 

Governing Law

   93

10.18

 

Waiver of Right to Trial by Jury

   93

10.19

 

USA PATRIOT Act Notice

   94

 

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10.20

 

Designation as Senior Debt

   94

10.21

 

Gaming Boards

   94

10.22

 

Gaming Regulations

   94

 

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(continued)

 

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SCHEDULES

    

2.01

 

Commitments and Pro Rata Shares

    

2.03

 

Existing Letters of Credit

    

5.06

 

Litigation

    

5.09

 

Environmental Matters

    

5.13

 

Subsidiaries and Other Equity Investments

    

5.16

 

Intellectual Property Matters

    

7.01

 

Existing Liens

    

7.03

 

Existing Indebtedness

    

7.12

 

Specified Capital Expenditures

    

10.02

 

Administrative Agent’s Office, Certain Addresses for Notices

     EXHIBITS     

Form of

    

A

 

Committed Loan Notice

    

B

 

Swing Line Loan Notice

    

C-1

 

Term Note

    

C-2

 

Revolving Note

    

C-3

 

Swing Line Note

    

D

 

Compliance Certificate

    

E

 

Assignment and Assumption

    

F

 

Guaranty

    

G

 

Opinion Matters

    

H

 

Security Agreement

    

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of May 20, 2004, among
BOYD GAMING CORPORATION, a Nevada corporation (the “Borrower”), each lender from
time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer, and
WELLS FARGO BANK, N.A., as Swing Line Lender.

 

The Borrower has requested that the Lenders provide a revolving credit facility
and a term loan facility, and the Lenders are willing to do so on the terms and
conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

 

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.

 

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

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“Aggregate Revolving Commitments” means the Revolving Commitments of all
Revolving Lenders. As of the Effective Date, the Aggregate Revolving Commitments
are $1,100,000,000.

 

“Agreement” means this Credit Agreement.

 

“Applicable Rate” means in the case of Credit Extensions under the Revolving
Commitment, from time to time, the following rates per annum (expressed in basis
points), based upon the Total Leverage Ratio as set forth below:

 

Applicable Rate

 

Pricing

Level

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Total Leverage

Ratio

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   Unused
Fee

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   Eurodollar Rate +
Letters of Credit

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   Base Rate +

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1

   > 5.00    50.0    225.0    100.0

2

   4.50 < x £ 5.00    37.5    200.0    75.0

3

   4.00 < x £ 4.50    30.0    175.0    50.0

4

   3.50 < x £ 4.00    25.0    150.0    25.0

5

   £ 3.50    25.0    125.0    0.00

 

The Applicable Rate for Term Loans made on the Effective Date shall be 175 basis
points per annum in the case of Eurodollar Rate Loans and 50 basis points in the
case of Base Rate Loans.

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Total Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b) in the case of the first three fiscal quarters of any fiscal
year and immediately following the date a certification of the Total Leverage
Ratio is delivered pursuant to Section 6.02(c) in the case of the final quarter
of any fiscal year; provided, however, that if a Compliance Certificate is not
delivered when due in accordance with Section 6.02(b) or a certification of
Total Leverage Ratio is not delivered when due in accordance with Section
6.02(c), then Pricing Level 1 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
and shall continue to apply until the first Business Day after the date such
certificate is delivered.

 

“Arrangers” means Banc of America Securities LLC, CIBC World Markets Corp. and
Wells Fargo Bank, N.A., in their capacities as joint lead arrangers and joint
book managers.

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit E.

 

“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

 

2

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“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2003,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

 

“Availability Period” means the period from and including the Effective Date to
the earliest of (a) the Revolving Loan Maturity Date, (b) the date of
termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and
(c) the date of termination of the commitment of each Revolving Lender to make
Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et
seq., as amended.

 

“Barbary Coast Hotel and Casino” means the hotel, casino and entertainment
complex owned by Coast Hotels and Casinos and located at the intersection of
Flamingo Road and Las Vegas Boulevard and the approximately 2.5 adjacent acres
of real property owned by the Borrower as of the Closing Date.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.” The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Blue Chip Casino” means the Blue Chip riverboat casino gaming complex in
Michigan City, Indiana.

 

“Borgata” means the Borgata Hotel, Casino and Spa in Atlantic City, New Jersey
which is owned by MDDC.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.

 

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“Boyd Family” means William S. Boyd, any direct descendant or spouse of such
person, or any direct descendant of such spouse, and any trust or other estate
in which each person who has a beneficial interest directly or indirectly
through one or more intermediaries in any Capital Stock of the Borrower is one
of the foregoing persons.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the State of Nevada or the State of New York and, if such day relates
to any Eurodollar Rate Loan, means any such day on which dealings in Dollar
deposits are conducted by and between banks in the London interbank eurodollar
market.

 

“California Hotel and Casino” means the California Hotel and Casino which is
owned by CH&C and is located in Las Vegas, Nevada.

 

“Capital Stock” means, with respect to any Person, any and all shares or other
equivalents (however designated) of corporate stock, partnership interests,
limited liability company membership interests, or any other participation,
right, warrants, options or other interest in the nature of an equity interest
in such Person, but excluding any debt security convertible or exchangeable into
such equity interest.

 

“Cash Collateralize” has the meaning specified in Section 2.03(g).

 

“Change of Control” means the occurrence of any of the following: (i) the
consummation of any transaction, the result of which any “person” or “group”
(within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning
of Rule 13d-5(b)(1) under the Exchange Act), other than the Boyd Family and
other than a Subsidiary, becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act, except that a Person shall be deemed to have
“beneficial ownership” of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time) of 50% or more of the total voting power of all classes of the Voting
Stock of the Borrower and/or warrants or options to acquire such Voting Stock,
calculated on a fully diluted basis; provided that for purposes of this clause
(i), the members of the Boyd Family shall be deemed to beneficially own any
Voting Stock of a corporation held by any other corporation (the “parent
corporation”) so long as the members of the Boyd Family beneficially own (as so
defined), directly or indirectly through one or more intermediaries, in the
aggregate 50% or more of the total voting power of the Voting Stock of the
parent corporation; (ii) the sale, lease, conveyance or other transfer of all or
substantially all of the property of the Borrower (other than to any
Subsidiary); (iii) the approval of any plan of liquidation or dissolution of the
Borrower by the stockholders of the Borrower; (iv) the Borrower consolidates
with or merges into another Person or any Person consolidates with or merges
into the Borrower in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Borrower is reclassified into or exchanged for
cash, securities or other property, other than any such transaction where (a)
the outstanding Voting Stock of the Borrower is reclassified into or exchanged
for Voting Stock of the surviving corporation that is Capital Stock and (b) the
holders of the Voting Stock of the Borrower immediately prior to such
transaction own, directly or indirectly, not less than a majority of the Voting
Stock of the

 

4

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surviving corporation immediately after such transaction in substantially the
same proportion as before the transaction; (v) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (together with any new directors whose election or
appointment by such board or whose nomination for election by the stockholders
of the Borrower was approved by a vote of either (a) 66 2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved, or (b)
members of the Boyd Family who beneficially own (as defined for purposes of
clause (i) above), directly or indirectly through one or more intermediaries, in
the aggregate 50% or more of the total voting power of the Voting Stock of the
Borrower), cease for any reason to constitute a majority of the Board of
Directors then in office; or (vi) any change in control (or similar event,
however denominated) with respect to the Borrower shall occur under and as
defined in any indenture or agreement in respect of Indebtedness to which the
Borrower is a party.

 

“CH&C” means California Hotel and Casino, a Nevada corporation and wholly-owned
Subsidiary of the Borrower.

 

“Closing Date” means the date that this Agreement has been executed by all
parties hereto.

 

“Coast” means Coast Casinos, Inc., a Nevada corporation, from and after the date
such entity is successor by merger to BGC, Inc. as contemplated by the Merger
Agreement.

 

“Coast Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of September 26, 2003 among Coast Hotels and Casinos, Bank of
America, as administrative agent, and a syndicate of lenders, as amended from
time to time.

 

“Coast Hotels and Casinos” means Coast Hotels and Casinos, Inc., a Nevada
corporation and wholly-owned Subsidiary of Coast.

 

“Coast Merger” means the merger contemplated by the Merger Agreement.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means, collectively, the Pledged Casinos, the vessels subject to
the First Preferred Ship Mortgages, the property described in the Security
Agreement, all property pledged pursuant to Section 6.14 and all other property
and interests pledged as collateral security for the Secured Obligations.
Collateral shall not include any right, title or interest of the Borrower or any
of its Subsidiaries in any Gaming License or the Capital Stock of any entity.

 

“Commitment” means for each Lender, such Lender’s Revolving Commitment and/or
Term Loan Commitment.

 

“Commitments” means the Revolving Commitments and the Term Loan Commitments.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Term Lenders pursuant to Section 2.01
or by each of the Revolving Lenders pursuant to Section 2.01(b).

 

5

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“Committed Loan” means a Loan made or to be made by a Lender pursuant to Section
2.01.

 

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

 

“Consolidated EBITDA” means, for any period, the Borrower and its Subsidiaries’
EBITDA, plus (or minus), without duplication, the EBITDA during such twelve
month period for any Subsidiary acquired (or disposed of) by the Borrower during
such period, in either case, plus (or minus) any loss (or gain) arising from a
change in GAAP, plus (after the same shall have been open for at least one
fiscal quarter) the annualized pro forma EBITDA of the South Coast casino, plus
any charges for the early retirement of debt, plus (or minus) any non-recurring
non-cash losses (or gains), minus any earnings or plus any losses from any
unconsolidated affiliates, plus the Borrower’s share of any net income before
any pre-opening expenses of MDDC, plus all one-time acquisition and merger
related charges and expenses in connection with the Merger (to the extent
otherwise deducted from Consolidated EBITDA).

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for
the Borrower and its Subsidiaries on a consolidated basis (exclusive of any
Indebtedness of the Borrower’s Subsidiaries to the Borrower or another
Subsidiary or any Indebtedness of the Borrower to any Subsidiary), the sum of
(a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments
(exclusive of surety bonds or similar instruments utilized in the ordinary
course of the Borrower and its Subsidiaries’ business), (d) all obligations in
respect of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) Attributable
Indebtedness in respect of capital leases and Synthetic Lease Obligations, (f)
without duplication, all Guarantees with respect to outstanding Indebtedness of
the types specified in clauses (a) through (e) above of Persons other than the
Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to in
clauses (a) through (f) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in
which the Borrower or a Subsidiary is a general partner or joint venturer,
unless such Indebtedness is expressly made non-recourse to the Borrower or such
Subsidiary. Notwithstanding the foregoing, Consolidated Funded Indebtedness
shall not include any public Indebtedness (x) that has been defeased in
accordance with the terms of the indenture or other agreement under which it was
issued or (y) that has been called for redemption and for which funds sufficient
to redeem such Indebtedness have been set aside by the Borrower.

 

6

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“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Control” has the meaning specified in the definition of “Affiliate.”

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Deed of Trust” means each Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Financing Statement, executed and delivered pursuant to
Section 4.01(a)(v) as amended, supplemented, restated or otherwise modified from
time to time.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum, in all cases to the fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Committed Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“Delta Downs Racetrack and Casino” means the horse racing, pari-mutuel and
gaming business including the hotel, food and beverage, simulcast and related
operations in Calcasieu Parish, Louisiana known as Delta Downs Racetrack and
Casino and owned by Boyd Racing, L.L.C.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any Collateral by
the Borrower or any Guarantor, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.

 

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“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

 

“EBITDA” means, for any period, a Person’s consolidated earnings before
depreciation, amortization, interest expense, pre-opening expenses, non-cash
rent expense, extraordinary items and taxes, all as determined in accordance
with GAAP.

 

“Effective Date” means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.

 

“Eldorado Casino” means the Eldorado Casino which is owned by Eldorado, Inc. and
is located in Henderson, Nevada.

 

“Eligible Assignee” has the meaning specified in Section 10.07(g).

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings

 

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by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar Rate” means for any Interest Period with respect to a Eurodollar
Rate Loan:

 

(a) the rate per annum equal to the rate determined by the Administrative Agent
to be the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

 

(b) if the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall not be available, the rate per
annum equal to the rate determined by the Administrative Agent to be the offered
rate on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

 

(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the first
day of such Interest Period.

 

“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate
based on the Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Existing Credit Agreement” means that certain Second Amended and Restated
Credit Agreement dated as of June 24, 2002 among the Borrower, Canadian Imperial
Bank of Commerce, as administrative agent, and a syndicate of lenders.

 

“Existing Letters of Credit” means letters of credit issued and outstanding
under the Existing Credit Agreement and the Coast Credit Agreement as set forth
in Schedule 2.03 (as such Schedule may be updated prior to the Effective Date),
which shall be deemed outstanding as Letters of Credit hereunder as of the
Closing Date pursuant to Section 2.03(a).

 

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“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

 

“Fee Letters” means those letter agreements, each dated March 24, 2004, among
the Borrower, the Administrative Agent and Banc of America Securities LLC, the
Borrower, CIBC Inc. and CIBC World Markets Corp., and the Borrower and Wells
Fargo Bank, N.A.

 

“First Preferred Ship Mortgages” means those certain First Preferred Ship
Mortgages on the Whole of the Patco 400, Official Number 545101 [Sam’s Town
Tunica], on the Whole of Treasure Chest Casino, Official Number 1025416, on the
Whole of Par-A-Dice, Official Number 1020343, on the Whole of Blue Chip Casino,
Official Number 1056331 and on the Whole of the Shreve Star, Official Number
1028290.

 

“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) twelve
month trailing Consolidated EBITDA minus the aggregate amount of cash taxes (net
of tax refunds received), Maintenance Capital Expenditures and Restricted
Payments of the Borrower and its Subsidiaries (excluding any Restricted Payments
made by a Subsidiary to the Borrower or to any Subsidiary) during such period to
(b) consolidated scheduled principal payments and interest expense (as defined
in GAAP) of the Borrower and its Subsidiaries for such period.

 

“Foreign Lender” has the meaning specified in Section 10.15(a)(i).

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Fremont Hotel and Casino” means the Fremont Hotel and Casino which is owned by
Sam-Will, Inc. and is located in Las Vegas, Nevada.

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Gaming Board” means any governmental agency that holds regulatory, licensing or
permit authority over gambling, gaming or casino activities conducted by the
Borrower or any of its Subsidiaries within its jurisdiction.

 

10

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“Gaming Laws” means all Laws pursuant to which any Gaming Board possesses
regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by the Borrower or any of its Subsidiaries within its
jurisdiction.

 

“Gaming License” means any license, permit, franchise or other authorization
from any governmental authority required to own, lease, operate or otherwise
conduct the gaming business of the Borrower or any of its Subsidiaries,
including all licenses granted under Gaming Laws.

 

“Gold Coast Hotel and Casino” means the hotel, casino and entertainment complex
owned by Coast Hotels and Casinos and located at 4000 West Flamingo Road, Las
Vegas, Nevada.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Granting Lender” has the meaning specified in Section 10.07(h).

 

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors” means, collectively:

 

(a) CH&C, which owns and operates Sam’s Town Las Vegas and California Hotel and
Casino;

 

(b) Mare-Bear, Inc., a Nevada corporation and wholly-owned Subsidiary of CH&C
that owns and operates the Stardust Resort and Casino;

 

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(c) Sam-Will, Inc., a Nevada corporation and wholly-owned Subsidiary of CH&C
that owns and operates the Fremont Hotel and Casino;

 

(d) Eldorado, Inc., a Nevada corporation and wholly-owned Subsidiary of CH&C
that owns and operates the Eldorado Casino and the Jokers Wild Casino;

 

(e) M.S.W., Inc., a Nevada corporation and wholly-owned Subsidiary of CH&C that
owns and operates Main Street Station;

 

(f) California Hotel Finance Corporation, a Nevada corporation and wholly-owned
Subsidiary of CH&C;

 

(g) Boyd Atlantic City, Inc., a New Jersey corporation and a wholly-owned
Subsidiary of the Borrower that indirectly owns an interest in the Borgata;

 

(h) Par-A-Dice Gaming Corporation, an Illinois corporation and wholly-owned
Subsidiary of the Borrower that owns Par-A-Dice Hotel Casino;

 

(i) Boyd Tunica, Inc., a Mississippi corporation and wholly-owned Subsidiary of
the Borrower that owns Sam’s Town Tunica;

 

(j) Boyd Indiana, Inc., an Indiana corporation and wholly-owned Subsidiary of
the Borrower;

 

(k) Blue Chip Casino, LLC, an Indiana limited liability company and Subsidiary
of Boyd Indiana, Inc. that owns the Blue Chip Casino;

 

(l) Boyd Kenner, Inc., a Louisiana corporation and wholly-owned Subsidiary of
the Borrower;

 

(m) Boyd Louisiana L.L.C., a Nevada limited liability company and Subsidiary of
the Borrower and Boyd Kenner, Inc.;

 

(n) Treasure Chest Casino, L.L.C., a Louisiana limited liability company and
Subsidiary of Boyd Louisiana, L.L.C. and Boyd Kenner, Inc. that owns Treasure
Chest Casino;

 

(o) Boyd Louisiana Racing, Inc., a Louisiana corporation and wholly-owned
Subsidiary of the Borrower;

 

(p) Boyd Racing, L.L.C., a Louisiana limited liability company and wholly-owned
Subsidiary of Boyd Louisiana Racing, Inc. that owns Delta Downs Racetrack and
Casino;

 

(q) Boyd Shreveport, L.L.C., a Louisiana limited liability company and
wholly-owned Subsidiary of Boyd Kenner, Inc.;

 

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(r) Boyd Red River, L.L.C., a Louisiana limited liability company and
wholly-owned Subsidiary of the Borrower;

 

(s) Red River Entertainment of Shreveport Partnership in Commendam, a Louisiana
partnership in commendam, a Subsidiary owned by Boyd Shreveport, L.L.C. and Boyd
Red River, L.L.C., and which owns Sam’s Town Shreveport;

 

(t) Coast, from and after the Merger a wholly-owned Subsidiary of the Borrower;

 

(u) Coast Hotels and Casinos, a wholly-owned Subsidiary of Coast that owns
Barbary Coast Hotel and Casino, Gold Coast Hotel and Casino, Orleans Hotel and
Casino, Suncoast Hotel and Casino and the South Coast Project Property;

 

(v) any other Significant Subsidiary of the Borrower; and

 

(w) any other Subsidiary that executes a Guaranty pursuant to the provisions of
Section 6.14;

 

provided that any Guarantor which is sold or otherwise transferred in a
Disposition permitted by Section 7.05 may be released from the Guaranty in
accordance with Section 9.11 and thereafter such Person shall no longer be a
“Guarantor” or a “Loan Party” for purposes of any Loan Document.

 

“Guaranty” means the guaranty executed and delivered by the Guarantors pursuant
to Section 4.01(a)(iii), and any amendment to guaranty executed and delivered by
a Subsidiary pursuant to Section 6.14 hereof, which shall be substantially in
the form of Exhibit F hereto, as amended, supplemented or otherwise modified
from time to time.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hazardous Materials Indemnity” means that certain Hazardous Materials Indemnity
executed and delivered by the Borrower and each of the Guarantors pursuant to
Section 4.01(a)(x), as amended, supplemented, restated or otherwise modified
from time to time.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

 

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(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

(c) net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);

 

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

(f) capital leases and Synthetic Lease Obligations; and

 

(g) all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date. Notwithstanding the foregoing,
Indebtedness shall not include any public Indebtedness (x) that has been
defeased in accordance with the terms of the indenture or other agreement under
which it was issued or (y) that has been called for redemption and for which
funds sufficient to redeem such Indebtedness have been set aside by the
Borrower.

 

“Indemnified Liabilities” has the meaning specified in Section 10.05.

 

“Indemnitees” has the meaning specified in Section 10.05.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the applicable
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
applicable Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Committed Loan Notice or such
other period that is requested by the Borrower and determined by the
Administrative Agent to be available in the eurodollar market; provided that:

 

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

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(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

 

(iii) no Interest Period shall extend beyond the applicable Maturity Date.

 

“Investment” means any direct or indirect acquisition or investment by the
Borrower or any Guarantor in any other Person that is not a Guarantor prior to
or substantially concurrently with such acquisition or investment, whether by
means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to,
Guarantee or assumption of debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person, or (c) the purchase
or other acquisition (in one transaction or a series of transactions) of assets
of another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“IP Rights” has the meaning specified in Section 5.16.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter Credit
Application, and any other document, agreement and instrument entered into by
the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C Issuer
and relating to any such Letter of Credit.

 

“Jokers Wild Casino” means the Jokers Wild Casino which is owned by Eldorado,
Inc. and is located in Henderson, Nevada.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

15

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“L/C Advance” means, with respect to each Revolving Lender, such Revolving
Lender’s funding of its participation in any L/C Borrowing in accordance with
its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder and Canadian Imperial Bank of Commerce in its capacity as
issuer of certain of the Existing Letters of Credit, any other Lender approved
by the Borrower and the Administrative Agent or any successor issuer of Letters
of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer and the Swing Line Lender.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any standby or commercial letter of credit issued
hereunder and shall include the Existing Letters of Credit.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the fifth Business Day prior to the
Revolving Loan Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).

 

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

 

“Letter of Credit Sublimit” means an amount equal to $30,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Revolving
Commitments.

 

“License Revocation” means the revocation, failure to renew or suspension of, or
the appointment of a receiver, supervisor or similar official with respect to
any casino, gambling or gaming license issued by any Gaming Board covering any
casino or gaming facility.

 

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“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in the form of a Committed Loan or a Swing Line Loan.

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letters, the Security Agreement, the Deeds of Trust, the First Preferred Ship
Mortgages, the Hazardous Materials Indemnity and the Guaranty.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Main Street Station” means the Main Street Station Hotel, Casino and Brewery,
which facility is owned by M.S.W., Inc., a Nevada corporation, and is located in
Las Vegas, Nevada.

 

“Maintenance Capital Expenditures” means capital expenditures for the
maintenance, repair, restoration or refurbishment of tangible property, but
excluding any capital expenditures which adds to or significantly improves any
such property.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of any
Loan Party to perform its obligations under any Loan Document to which it is a
party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it
is a party.

 

“Maturity Date” means, as the context may require, the Revolving Loan Maturity
Date or the Term Loan Maturity Date.

 

“MDDC” means Marina District Development Company, LLC, a New Jersey limited
liability company, which is wholly owned by Marina District Development Holding
Co., LLC, a New Jersey limited liability company, which as of the Closing Date
is owned fifty percent by a Subsidiary of MGM MIRAGE and fifty percent by Boyd
Atlantic City, Inc., or any successor entity to MDDC.

 

“Merger Agreement” means that certain Agreement and Plan of Merger dated as of
February 6, 2004 among the Borrower, Coast and BGC, Inc., as amended as of March
5, 2004 and as modified by that certain waiver dated May 6, 2004, and as it may
be further amended with the consent of the Administrative Agent.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

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“Net Equity Proceeds” means with respect to the sale of any capital stock or
other equity interest by the Borrower, an amount equal to (i) the sum of the
cash and cash equivalents received in connection with such sale, minus (ii) the
underwriting discounts and commissions, and other out-of-pocket expenses,
incurred by the Borrower in connection with such sale.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C-1,
C-2 or C-3.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

 

“Omaha Partners” means Omaha Partners, LLC which was formed to pursue gaming and
hospitality development opportunities in or near Omaha, Nebraska.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Orleans Hotel and Casino” means the hotel, casino and entertainment complex
owned by Coast Hotels and Casinos and located at the intersection of Tropicana
Avenue and Arville Street in Las Vegas, Nevada.

 

“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

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“Par-A-Dice Hotel Casino” means the Par-A-Dice riverboat casino and nearby
hotel, which facility is owned by Par-A-Dice Gaming Corporation and is located
in East Peoria, Illinois.

 

“Participant” has the meaning specified in Section 10.07(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Permitted Liens” means the Liens permitted under Section 7.01.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by the Borrower or, with respect to any such plan
that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Pledged Casinos” shall mean all real property interests underlying (i)
Par-A-Dice Hotel Casino, (ii) Sam’s Town Tunica, (iii) Sam’s Town Las Vegas,
(iv) the California Hotel and Casino, (v) the Stardust Resort and Casino, (vi)
the Fremont Hotel and Casino, (vii) the Treasure Chest Casino, (viii) the
Eldorado Casino, (ix) the Jokers Wild Casino, (x) the Main Street Station, (xi)
the Blue Chip Casino, (xii) Delta Downs Racetrack and Casino, (xiii) the Sam’s
Town Shreveport, (xiv) the Barbary Coast Casino, (xv) the Gold Coast Hotel and
Casino, (xvi) the Orleans Hotel and Casino, (xvii) the Suncoast Hotel and
Casino, (xviii) the South Coast Project, and (xix) any Ventures pledged pursuant
to Section 6.14, (xx) all property subject to the Liens of the First Preferred
Ship Mortgages, together in each case with all fixtures, personal property and
other improvements now existing or to be constructed on any of such properties
(exclusive of any gaming equipment to the extent the pledge thereof is
prohibited by local law or contract).

 

“Pro Rata Share” means, with respect to any Commitment of Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the respective Commitment of such Lender
at such time and the denominator of which is the amount of the aggregate amount
of such Commitments at such time or, in the case of the Term Loan Lenders from
and after the Effective Date, a fraction (expressed as a percentage, carried out
to the ninth decimal place), the numerator of which is the amount of Term Loans
of such Term Lender and the denominator of which is the Outstanding Amount of
all Term Loans; provided that if the commitment of each Revolving Lender to make
Revolving Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, then the Pro Rata
Share of each Revolving Lender shall be determined based on the Pro Rata Share
of such Revolving Lender immediately prior to such termination and after giving
effect to any subsequent assignments made pursuant to the terms hereof.

 

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“Register” has the meaning specified in Section 10.07(c).

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the sum of (i) the Aggregate Revolving Commitments and (ii) prior to
the Effective Date, the Term Loan Commitments and thereafter the aggregate
Outstanding Amount of all Term Loans or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

“Required Revolving Lenders” means, as of any date of determination, Revolving
Lenders having more than 50% of the Aggregate Revolving Commitments or, if the
commitment of each Revolving Lender to make Revolving Loans and the obligation
of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Revolving Lenders holding in the aggregate more than 50% of the
Total Revolving Outstandings (with the aggregate amount of each Revolving
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Revolving Lender for purposes of
this definition); provided that the Commitment of, and the portion of the Total
Revolving Outstandings held or deemed held by, any Defaulting Lender shall be
excluded for purposes of making a determination of Required Revolving Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
operating officer, chief financial officer or treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity
interest of the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption,

 

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retirement, acquisition, cancellation or termination of any such capital stock
or other equity interest or of any option, warrant or other right to acquire any
such capital stock or other equity interest.

 

“Revolving Commitment” means, as to each Revolving Lender, its obligation to (a)
make Revolving Loans to the Borrower pursuant to Section 2.01(b), (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Revolving Lender’s name on Schedule
2.01 or in the Assignment and Assumption pursuant to which such Revolving Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.

 

“Revolving Lender” means each Lender that holds a Revolving Commitment.

 

“Revolving Loan” means each Loan made by a Revolving Lender under the Revolving
Commitment.

 

“Revolving Loan Maturity Date” means June 30, 2009.

 

“Revolving Note” means the promissory note made by the Borrower to a Revolving
Lender evidencing that Lender’s Pro Rata Share of the Revolving Commitment,
substantially in the form of Exhibit C-2, either as originally executed or as
the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.

 

“Sam’s Town Las Vegas” means Sam’s Town Hotel, Gambling Hall and Bowling Center,
which facility is owned by CH&C and is located in Las Vegas, Nevada.

 

“Sam’s Town Shreveport” means Sam’s Town Shreveport, which facility is owned by
Red River Entertainment of Shreveport Partnership in Commendam and is located in
Shreveport, Louisiana.

 

“Sam’s Town Tunica” means Sam’s Town Hotel and Gambling Hall, which facility is
owned by Boyd Tunica, Inc. and is located in Tunica County, Mississippi.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Secured Obligations” means, collectively, the Obligations and all obligations
of any Loan Party to any Lender or any Affiliate of a Lender under any Swap
Contracts.

 

“Secured Parties” means, collectively, the Lenders, any Affiliate or any Lender
that is a party to any Swap Contract with the Borrower and the Administrative
Agent.

 

“Security Agreement” means the security agreement executed and delivered
pursuant to Section 4.01(a)(iv), as such agreement may be amended, supplemented,
restated or otherwise modified from time to time, which will cover all of the
personal property and rights described therein that can be pledged without the
consent of any third party and which will be in substantially the form of
Exhibit H hereto.

 

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“Senior Leverage Ratio” means the ratio of (a) Consolidated Funded Indebtedness
minus Subordinated Debt to (b) twelve-month trailing Consolidated EBITDA. For
purposes of determining such ratio, the outstanding Consolidated Funded
Indebtedness and Subordinated Debt shall be calculated as of the last day of the
applicable Fiscal Quarter.

 

“Significant Subsidiary” means each Subsidiary (including such Subsidiary’s
interest in its direct and indirect Subsidiaries) of the Borrower that

 

(a) is designated with an asterisk in Schedule 5.13;

 

(b) accounted for at least 5% of consolidated revenues of the Borrower and its
Subsidiaries or 5% of Consolidated EBITDA of the Borrower and its Subsidiaries
before interest and taxes, in each case for the four fiscal quarters of the
Borrower ending on the last day of the last fiscal quarter of the Borrower
immediately preceding the date as of which any such determination is made; or

 

(c) has assets which represent at least 5% of the consolidated assets of the
Borrower and its Subsidiaries as of the last day of the last fiscal quarter of
the Borrower immediately preceding the date as of which any such determination
is made,

 

all of which, with respect to clauses (b) and (c), shall be as reflected on the
financial statements of the Borrower for the period, or as of the date, in
question, adjusted for the pro forma effect of any Subsidiary acquired (or
disposed of) by the Borrower during such period or concurrently with the date as
of which such determination is made.

 

“South Coast Project” means the proposed design, development and construction by
Coast Hotels and Casinos of a hotel, casino and entertainment complex on the
South Coast Project Property.

 

“South Coast Project Property” means the approximately 55 acres of real property
owned by Coast Hotels and Casinos located at the intersection of Las Vegas
Boulevard South and Silverado Ranch Road.

 

“SPC” has the meaning specified in Section 10.07(h).

 

“Stardust Resort and Casino” means the Stardust Resort and Casino which is owned
by Mare-Bear, Inc., a Nevada corporation and wholly-owned Subsidiary of CH&C,
and is located in Las Vegas, Nevada.

 

“Subordinated Debt” means the $250,000,000 of 8.75% Senior Subordinated Notes of
the Borrower due April 15, 2012, the $300,000,000 of 7.75% Senior Subordinated
Notes of the Borrower due December 15, 2012, the $350,000,000 of 6.75% Senior
Subordinated Notes of the Borrower due April 15, 2014 and all additional
unsecured Indebtedness of the Borrower for money borrowed which is subordinated,
upon terms reasonably satisfactory to the Administrative Agent, in right of
payment to the payment in full in cash of all Obligations.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests

 

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having ordinary voting power for the election of directors or other governing
body (other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.

 

“Suncoast Hotel and Casino” means the hotel, casino and entertainment complex
owned by Coast Hotels and Casinos and located at the intersection of Rampart and
Alta in Las Vegas, Nevada.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

 

“Swing Line Lender” means Wells, in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

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“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

 

“Swing Line Note” means the promissory note made by the Borrower to the Swing
Line Lender, substantially in the form of Exhibit C-3, either as originally
executed or as the same may from time to time be supplemented, modified,
amended, renewed, extended or supplemented.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $30,000,000 and
(b) the Aggregate Revolving Commitments. The Swing Line Sublimit is part of, and
not in addition to, the Aggregate Revolving Commitments.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“Term Loan” has the meaning set forth in Section 2.01(a).

 

“Term Loan Commitment” means, as to each Term Loan Lender, the commitment of
that Lender to make its Term Loan. As of the Effective Date, the aggregate Term
Loan Commitment is $500,000,000 and the respective Pro Rata Shares of the Term
Loan Lenders with respect to the Term Loan Commitment are set forth in the
records of the Administrative Agent.

 

“Term Loan Lender” means each Lender that holds Term Loan and/or a Term Loan
Commitment.

 

“Term Loan Maturity Date” means, in the case of the Term Loans made on the
Effective Date, June 30, 2011.

 

“Term Note” means the promissory note made by the Borrower to a Term Loan Lender
evidencing that Lender’s Pro Rata Share of the Term Loan Commitment,
substantially in the form of Exhibit C-1, either as originally executed or as
the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.

 

“Title Company” means Lawyers Title Insurance Corporation or such other title
insurance company as may be reasonably acceptable to the Administrative Agent.

 

“Title Policies” is defined in Section 4.01(a)(v).

 

“Total Leverage Ratio” means the ratio of (a) Consolidated Funded Indebtedness
to (b) twelve-month trailing Consolidated EBITDA. For purposes of determining
such ratio, the outstanding Consolidated Funded Indebtedness shall be calculated
as of the last day of the applicable Fiscal Quarter.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

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“Total Revolving Outstandings” means the aggregate Outstanding Amount of all
Revolving Loans, Swing Line Loans and all L/C Obligations.

 

“Treasure Chest Casino” means Treasure Chest Casino, which facility is owned by
Treasure Chest Casino, L.L.C. and is located in Kenner, Louisiana.

 

“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Venture” means any casino, hotel, casino/hotel, resort, resort/hotel,
riverboat, riverboat/dockside casino, horse racing track, entertainment center
or similar facility (or any site or proposed site for any of the foregoing), and
any and all reasonably related businesses necessary for, in support, furtherance
or anticipation of and/or ancillary to or in preparation for, any such business,
including off-track betting facilities and golf courses.

 

“Voting Stock” means securities of any class or classes of any a Person, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for corporate directors (or Persons performing equivalent functions).

 

“Wells” means Wells Fargo Bank, N.A.

 

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

 

(b)     (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

 

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document
in which such reference appears.

 

(iii) The term “including” is by way of example and not limitation.

 

(iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

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(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

1.03 Accounting Terms. (a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

 

(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

 

1.06 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Pacific time (daylight or standard, as applicable).

 

1.07 Letter of Credit Amounts. Unless otherwise specified, all references herein
to the amount of a Letter of Credit at any time shall be deemed to mean the face
amount of such Letter of Credit as in effect at such time.

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 Committed Loans.

 

(a) Subject to the terms and conditions set forth herein, each Term Loan Lender
severally agrees to lend to the Borrower its Pro Rata Share of the Term Loan
Commitment (each individually, a “Term Loan” and, collectively, the “Term
Loans”). Subject to Section 2.14, the Term Loans shall be made by the Term Loan
Lenders in a single Borrowing on the Effective Date and shall be made by the
Term Loan Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Term Loan Lender shall be responsible
for any failure by any other Term Loan Lender to perform its obligation to make
any Term Loan hereunder nor shall the Term Loan Commitment of any Term Loan
Lender be increased or decreased as a result of any such failure. Once repaid,
Term Loans may not be reborrowed.

 

(b) Subject to the terms and conditions set forth herein, each Revolving Lender
severally agrees to make Revolving Loans to the Borrower from time to time, on
any Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Revolving Commitment;
provided, however, that after giving effect to any Borrowing of Revolving Loans,
(i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Revolving Lender, plus such Revolving Lender’s Pro Rata Share of the
Outstanding Amount of all L/C Obligations, plus such Revolving Lender’s Pro Rata
Share of the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender’s Revolving Commitment. Within the limits of each Revolving Lender’s
Revolving Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01(b), prepay under Section 2.05, and
reborrow under this Section 2.01(b). Revolving Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

2.02 Borrowings, Conversions and Continuations of Committed Loans.

 

(a) Each Committed Borrowing, each conversion of Committed Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrower’s irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and
(ii) on the requested date of any Borrowing of Base Rate Committed Loans;
provided, however, that if the Borrower wishes to request Eurodollar Rate Loans
having an Interest Period other than one, two, three or six months in duration
as provided in the definition of “Interest Period”, the applicable notice must
be received by the Administrative Agent not later than 11:00 a.m. four Business
Days prior to the requested date of such Borrowing, conversion or continuation.
Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess thereof or such other amount

 

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as corresponds to any Term Loan amortization payment. Except as provided in
Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate
Committed Loans shall be in a principal amount of $100,000 or a whole multiple
of $100,000 in excess thereof or such other amount as corresponds to any Term
Loan amortization payment. Each Committed Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Committed Loans to be borrowed, converted or
continued, (iv) the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted, (v) whether the Borrowing is to be of Term
Loans or Revolving Loans, and (vi) if applicable, the duration of the Interest
Period with respect thereto. If the Borrower fails to specify a Type of
Committed Loan in a Committed Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Committed Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.

 

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender that holds a Commitment for the type of Loan
requested of the amount of its Pro Rata Share of the applicable Committed Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each applicable Lender of the
details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Committed Borrowing, each Lender that
holds a Commitment for the type of Loan requested shall make the amount of its
Committed Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 1:00 p.m. on the
Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date the Committed Loan
Notice with respect to such Borrowing is given by the Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and second, shall be
made available to the Borrower as provided above.

 

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Term Loans may be requested as,
converted to or continued as Eurodollar Rate Loans without the consent of the
Term Lenders holding more than 50% of the outstanding Term Loans and no
Revolving Loans may be requested as, converted to or continued as Eurodollar
Rate Loans without the consent of the Required Revolving Lenders.

 

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(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
funding such Loans of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders holding such Loans of any change in the Base Rate promptly following
such change.

 

(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than twelve Interest Periods in
effect with respect to Committed Loans.

 

2.03 Letters of Credit.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Revolving Lenders set forth
in this Section 2.03, (1) from time to time on any Business Day during the
period from the Effective Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower or its Subsidiaries, and
to amend or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Revolving Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or its Subsidiaries and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension with
respect to any Letter of Credit, (x) the Total Revolving Outstandings shall not
exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount
of the Committed Loans of any Revolving Lender, plus such Revolving Lender’s Pro
Rata Share of the Outstanding Amount of all L/C Obligations, plus such Revolving
Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Revolving Lender’s Commitment, or (z) the Outstanding Amount of
the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request
by the Borrower for the issuance or amendment of a Letter of Credit shall be
deemed to be a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the preceding
sentence. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed
to have been issued pursuant hereto, and from and after the Effective Date shall
be subject to and governed by the terms and conditions hereof.

 

(ii) The L/C Issuer shall not issue any Letter of Credit, if the expiry date of
such requested Letter of Credit would occur after the Letter of Credit
Expiration Date, unless all of the Revolving Lenders have approved such expiry
date.

 

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(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

 

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

 

(B) the issuance of such Letter of Credit would violate any Laws or one or more
policies of the L/C Issuer;

 

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial face amount less than $25,000;

 

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

 

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder; or

 

(F) a default of any Revolving Lender’s obligations to fund under Section
2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder,
unless the L/C Issuer has entered into satisfactory arrangements with the
Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such
Lender.

 

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

 

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed

 

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issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.

 

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Unless the L/C Issuer has received written notice
from any Revolving Lender, the Administrative Agent or any Loan Party, at least
one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in
Article IV shall not then be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Borrower (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in an
amount equal to the product of such Revolving Lender’s Pro Rata Share times the
amount of such Letter of Credit.

 

(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not later than
the Letter of Credit Expiration Date; provided,

 

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however, that the L/C Issuer shall not permit any such extension if (A) the L/C
Issuer has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
(iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is five Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the
Required Revolving Lenders have elected not to permit such extension or (2) from
the Administrative Agent, any Revolving Lender or any Loan Party that one or
more of the applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.

 

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower
and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an
“Honor Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing. If the
Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Revolving Lender of the Honor Date, the amount
of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Revolving Lender’s Pro Rata Share thereof. In such event, the Borrower shall be
deemed to have requested a Committed Borrowing of Base Rate Loans under the
Revolving Commitment to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Aggregate Commitments and the conditions
set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii) Each Revolving Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Revolving Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

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(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Committed Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Revolving Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Revolving Lender in
satisfaction of its participation obligation under this Section 2.03.

 

(iv) Until each Revolving Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata
Share of such amount shall be solely for the account of the L/C Issuer.

 

(v) Each Revolving Lender’s obligation to make Committed Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Lender’s obligation to make Committed
Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

(vi) If any Revolving Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.03(c) by
the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to
recover from such Revolving Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted to any Revolving
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

 

(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Revolving Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related

 

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Unreimbursed Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Revolving Lender its Pro Rata Share thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Revolving
Lender shall pay to the Administrative Agent for the account of the L/C Issuer
its Pro Rata Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned by such
Revolving Lender, at a rate per annum equal to the Federal Funds Rate from time
to time in effect.

 

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

 

(ii) the existence of any claim, counterclaim, set-off, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

 

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

 

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(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.

 

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

 

(f) Role of L/C Issuer. Each Revolving Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Revolving Lender for (i)
any action taken or omitted in connection herewith at the request or with the
approval of the Revolving Lenders or the Required Revolving Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower’s pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any Letter of Credit for any reason remains
outstanding and partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C

 

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Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). Sections 2.05 and 8.02(c) set forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.03, Section
2.05 and Section 8.02(c), “Cash Collateralize” means to pledge and deposit with
or deliver to the Administrative Agent, for the benefit of the L/C Issuer and
the Revolving Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to
the Administrative Agent and the L/C Issuer (which documents are hereby
consented to by the Revolving Lenders). Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Administrative Agent,
for the benefit of the L/C Issuer and the Revolving Lenders, a security interest
in all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing. Cash Collateral shall be maintained in blocked deposit accounts
at Bank of America.

 

(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP
shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance shall apply to each
commercial Letter of Credit.

 

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Lender in accordance with its Pro Rata Share a
Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit
equal to the Applicable Rate times the daily maximum amount available to be
drawn under such Letter of Credit. Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the last Business
Day of each March, June, September and December, commencing with the first such
date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Borrower shall pay directly to the L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit in the amount specified in the
applicable Fee Letter with the Administrative Agent, payable on the actual daily
maximum amount available to be drawn under such Letter of Credit. Such fronting
fee shall be computed on a quarterly basis in arrears. Such fronting fee shall
be due and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand.

 

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

 

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a

 

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Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer
hereunder for any and all drawings under such Letter of Credit. The Borrower
hereby acknowledges that the issuance of Letters of Credit for the account of
Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s
business derives substantial benefits from the businesses of such Subsidiaries.

 

2.04 Swing Line Loans.

 

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving
Loans and L/C Obligations of the Revolving Lender acting as Swing Line Lender,
may exceed the amount of such Lender’s Revolving Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Revolving
Outstandings shall not exceed the Aggregate Revolving Commitments, and (ii) the
aggregate Outstanding Amount of the Revolving Loans of any Revolving Lender,
plus such Revolving Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations, plus such Revolving Lender’s Pro Rata Share of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Revolving
Commitment, and provided, further, that the Borrower shall not use the proceeds
of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate
Loan. Immediately upon the making of a Swing Line Loan, each Revolving Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Revolving Lender’s Pro Rata Share
times the amount of such Swing Line Loan.

 

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of
the limitations set forth in the proviso to the first sentence of Section
2.04(a), or (B) that one or more of the applicable conditions specified in
Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not

 

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later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at its
office by crediting the account of the Borrower on the books of the Swing Line
Lender in immediately available funds.

 

(c) Refinancing of Swing Line Loans.

 

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Revolving Lender make
a Base Rate Committed Loan in an amount equal to such Lender’s Pro Rata Share of
the amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Revolving Commitments and the conditions set forth in Section 4.02.
The Swing Line Lender shall furnish the Borrower with a copy of the applicable
Committed Loan Notice promptly after delivering such notice to the
Administrative Agent. Each Revolving Lender shall make an amount equal to its
Pro Rata Share of the amount specified in such Committed Loan Notice available
to the Administrative Agent in immediately available funds for the account of
the Swing Line Lender at the Administrative Agent’s Office not later than 1:00
p.m. on the day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Revolving Lender that so makes funds available shall
be deemed to have made a Base Rate Revolving Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the Swing
Line Lender.

 

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Revolving Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Lenders fund its risk participation in the relevant Swing Line Loan
and each Revolving Lender’s payment to the Administrative Agent for the account
of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment
in respect of such participation.

 

(iii) If any Revolving Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Revolving Lender pursuant to the foregoing provisions of this Section
2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall
be entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Revolving Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (iii) shall be conclusive
absent manifest error.

 

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(iv) Each Revolving Lender’s obligation to make Committed Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this Section
2.04(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against the Swing Line Lender,
the Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Revolving Lender’s obligation to make Committed Loans pursuant to this Section
2.04(c) is subject to the conditions set forth in Section 4.02. No such funding
of risk participations shall relieve or otherwise impair the obligation of the
Borrower to repay Swing Line Loans, together with interest as provided herein.

 

(d) Repayment of Participations.

 

(i) At any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender through the Administrative Agent its Pro
Rata Share of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

 

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Revolving Lender shall pay to the Swing Line Lender its Pro
Rata Share thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender.

 

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Revolving Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender’s Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.

 

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

 

2.05 Prepayments.

 

(a) The Borrower may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Committed Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than

 

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11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) on the date of prepayment of Base Rate Committed Loans; (ii)
any prepayment of Eurodollar Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Base Rate Committed Loans shall be in a principal amount of
$100,000 or a whole multiple of $100,000 in excess thereof or, in each case,
such other amount equal to the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment, whether
the Loans to be prepaid are Term Loans or Revolving Loans and the Type(s) of
Committed Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Pro Rata Share of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest thereon, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be applied to the Committed Loans of
the Revolving Lenders or Term Loan Lenders, as applicable, in accordance with
their respective Pro Rata Shares. Once prepaid, Term Loans may not be
reborrowed.

 

(b) The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 4:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

 

(c) If for any reason the Total Revolving Outstandings at any time exceed the
Aggregate Revolving Commitments then in effect, the Borrower shall immediately
prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.05(c) unless after the prepayment in full of the Revolving Loans and
Swing Line Loans the Total Revolving Outstandings exceed the Aggregate Revolving
Commitments then in effect.

 

(d) All prepayments of Term Loans shall be applied to installments of Term Loans
in the inverse order of maturity.

 

2.06 Termination or Reduction of Commitments. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate

 

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Commitments, such Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Commitments. Any reduction
of the Aggregate Commitments shall be applied to the Commitment of each
Revolving Lender according to its Pro Rata Share. All fees accrued until the
effective date of any termination of the Aggregate Commitments shall be paid on
the effective date of such termination.

 

2.07 Repayment of Loans.

 

(a) The Borrower shall make repayments of the Term Loans on the last day of each
fiscal quarter of the Borrower, commencing September 30, 2004 in an amount equal
to 0.25% of the aggregate principal amount of Term Loans advanced on the
Effective Date plus, in the event that the Term Loan Commitment shall be
increased pursuant to Section 2.14, the aggregate principal amount of Increased
Term Loans advanced on any Increase Effective Date. The Borrower shall repay the
outstanding principal amount of all Term Loans on the Term Loan Maturity Date.

 

(b) The Borrower shall repay to the Revolving Lenders on the Revolving Loan
Maturity Date the aggregate principal amount of Revolving Loans outstanding on
such date.

 

(c) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i)
the request of the Swing Line Lender pursuant to Section 2.04(c) and (ii) the
Revolving Loan Maturity Date.

 

2.08 Interest.

 

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate for Base Rate
Loans minus 0.50%.

 

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

 

(ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

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(iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

 

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.09 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

 

(a) Unused Fee. The Borrower shall pay to the Administrative Agent for the
account of each Revolving Lender in accordance with its Pro Rata Share, an
unused fee equal to the Applicable Rate times the actual daily amount by which
the Aggregate Revolving Commitments exceed the sum of (i) the Outstanding Amount
of Revolving Loans and (ii) the Outstanding Amount of L/C Obligations. The
unused fee shall accrue at all times during the Availability Period, including
at any time during which one or more of the conditions in Section 4.02 is not
met, and shall be due and payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing with the first such date
to occur after the Effective Date, and on the Revolving Loan Maturity Date. The
unused fee shall be calculated quarterly in arrears, and if there is any change
in the Applicable Rate during any quarter, the actual daily amount shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.

 

(b) Other Fees. The Borrower shall pay to the Arrangers and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letters. The Borrower shall pay to the Lenders such fees as
shall have been separately agreed upon in writing in the amounts and at the
times so specified. Notwithstanding the foregoing, no such fees shall be payable
prior to the Effective Date.

 

2.10 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one day.

 

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2.11 Evidence of Debt.

 

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

 

(b) In addition to the accounts and records referred to in subsection (a), each
Revolving Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Revolving Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Revolving Lender
in respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

 

2.12 Payments Generally.

 

(a) All payments to be made by the Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.

 

(b) If any payment to be made by the Borrower shall come due on a day other than
a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.

 

(c) Unless the Borrower or any Lender has notified the Administrative Agent,
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such

 

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payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:

 

(i) if the Borrower failed to make such payment, each Lender shall forthwith on
demand repay to the Administrative Agent the portion of such assumed payment
that was made available to such Lender in immediately available funds, together
with interest thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender to the date
such amount is repaid to the Administrative Agent in immediately available funds
at the Federal Funds Rate from time to time in effect; and

 

(ii) if any Lender failed to make such payment, such Lender shall forthwith on
demand pay to the Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to the Borrower to
the date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Committed Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.

 

(d) If any Lender makes available to the Administrative Agent funds for any Loan
to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(e) The obligations of the Lenders hereunder to make Committed Loans and the
obligations of the Revolving Lenders to fund participations in Letters of Credit
and Swing Line Loans are several and not joint. The failure of any Lender to
make any Committed Loan or to fund any such participation on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Committed Loan or purchase its participation.

 

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(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.

 

2.13 Sharing of Payments. If, other than as expressly provided elsewhere herein,
any Lender shall obtain on account of the Committed Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it, any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders entitled to such
payment such participations in the Committed Loans made by them and/or such
subparticipations in the participations in L/C Obligations or Swing Line Loans
held by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment in respect of such Committed Loans or such
participations, as the case may be, pro rata with each other Lender entitled to
such payment; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 10.06 (including pursuant to any settlement
entered into by the purchasing Lender in its discretion), such purchase shall to
that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender’s ratable share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered, without
further interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

 

2.14 Increase in Commitments.

 

(a) Provided there exists no Default, upon notice to the Administrative Agent
the Borrower may from time to time, request an increase in the Revolving
Commitment or Term Loans in accordance with this Section (the amount of any such
increase, the “Increased Revolving Commitment” or “Increased Term Loan”, as
applicable). The aggregate amount of all increases shall not exceed
$250,000,000. Any such request for an increase shall be in a minimum amount of
$5,000,000.

 

(b) The Borrower may designate any Lender party to this Agreement (with the
consent of such Lender, which may be given or withheld in its sole discretion)
or another Person which qualifies as an Eligible Assignee (which may be, but
need not be, existing Lenders) which

 

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at the time agrees to (i) in the case of any such designated Lender that is an
existing Lender, increase its Pro Rata Share of the Revolving Commitment or its
Term Loans, as applicable, and (ii) in the case of any other such Person (an
“Additional Lender”), become a party to this Agreement. The sum of the increases
in the Pro Rata Shares of the Revolving Commitment and the Term Loans of the
existing Lenders pursuant to this subsection (b) plus the new commitments of the
Additional Lenders shall not in the aggregate exceed the unsubscribed amount of
the Increased Revolving Commitment and the Increased Term Loans.

 

(c) If the Revolving Commitment and/or the Term Loans are increased in
accordance with this Section, the Administrative Agent and the Borrower shall
determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders that have agreed to increase their Commitments of the
final allocation of such increase and the Increase Effective Date. As a
condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Increase
Effective Date signed by a Responsible Officer of such Loan Party (i) certifying
and attaching the resolutions adopted by such Loan Party approving or consenting
to such increase, and (ii) in the case of the Borrower, certifying that, before
and after giving effect to such increase, (A) the representations and warranties
contained in Article V and the other Loan Documents are true and correct on and
as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default exists. If the Borrower shall increase the
Revolving Commitment, the Borrower shall prepay any Revolving Loans outstanding
on the Increase Effective Date (and pay any additional amounts required pursuant
to Section 3.05) to the extent necessary to keep the outstanding Revolving Loans
ratable with any revised Pro Rata Shares arising from any nonratable increase in
the Revolving Commitments under this Section. The Borrower shall also pay any
costs and expenses (including, without limitation Attorney Costs, title
insurance premiums and filing fees) incurred in connection with the increase of
any Commitment pursuant to this Section 2.14.

 

(d) Notwithstanding anything to the contrary herein, in no event shall the
interest rate payable on any Increased Revolving Commitment or Increased Term
Loan exceed the interest rate from time to time payable on Revolving Loans or
Term Loans, nor shall any Increased Term Loan mature prior to June 30, 2011 or
amortize faster than the Term Loans; provided, however, the interest rate on any
Increased Term Loan may exceed the interest rate from time to time payable on
Term Loans by up to 25 basis points if the maturity date for such Increased Term
Loan is at least twelve months after the Term Loan Maturity Date.

 

(e) This Section shall supersede any provisions in Sections 2.13 or 10.01 to the
contrary.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01 Taxes.

 

(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.

 

(b) In addition, the Borrower agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”).

 

(c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.

 

(d) The Borrower agrees to indemnify the Administrative Agent and each Lender
for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section) paid by the Administrative Agent and such Lender, (ii) amounts payable
under Section 3.01(c) and (iii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. Payment under this
subsection (d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefor.

 

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3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.

 

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Committed Borrowing of Base Rate Loans in the
amount specified therein.

 

3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar
Rate Loans.

 

(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender’s compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements

 

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contemplated by Section 3.04(c)), then from time to time upon demand of such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such increased cost or reduction.

 

(b) If any Lender determines that the introduction of any Law regarding capital
adequacy or any change therein or in the interpretation thereof, or compliance
by such Lender (or its Lending Office) therewith, has the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of such Lender’s obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such Lender’s
desired return on capital), then from time to time upon demand of such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender for such
reduction.

 

(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall have
received at least 15 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give
notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 15 days from receipt of such notice.

 

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

 

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

 

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or

 

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 10.16;

 

including any loss of anticipated profits solely attributable to a decline in
the Eurodollar Rate after the date such Loan was made and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or

 

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not such Eurodollar Rate Loan was in fact so funded. Any Lender making a claim
for compensation for losses pursuant to this Section 3.05 shall make such claim
within 30 days after such Lender first becomes aware of the loss, cost or
expense incurred by it.

 

3.06 Matters Applicable to all Requests for Compensation. A certificate of the
Administrative Agent or any Lender claiming compensation under this Article III
and setting forth the additional amount or amounts to be paid to it hereunder
(including calculations thereof in reasonable detail) shall be conclusive in the
absence of manifest error. In determining such amount, the Administrative Agent
or such Lender may use any reasonable averaging and attribution methods. Any and
all claims for compensation under this Article III shall be made by a Lender
within 30 days after such Lender becomes aware of the facts or circumstances
giving rise to such claim. Each Lender agrees to designate a different lending
office if such designation will avoid the need for or reduce the amount of any
request for compensation under this Article III and take any other action
available to reduce or mitigate such costs in each case if such action will not,
in the good faith judgment of such Lender, be materially disadvantageous to such
Lender.

 

3.07 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

 

ARTICLE IV

CONDITIONS PRECEDENT TO EFFECTIVENESS AND CREDIT EXTENSIONS

 

4.01 Conditions of Effectiveness. The effectiveness of this Agreement is subject
to satisfaction of the following conditions precedent:

 

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(i) executed counterparts of this Agreement;

 

(ii) a Note executed by the Borrower and dated the Effective Date in favor of
each Lender requesting a Note;

 

(iii) the Guaranty, dated as of the Effective Date, duly executed by each of the
Guarantors;

 

(iv) the Security Agreement, dated as of the Effective Date, duly executed by
each Loan Party, covering all of each such Person’s equipment, gaming devices
(but only to the extent permitted by applicable law and contract) and associated
equipment, fixtures, furnishings, inventory, accounts, intangibles and other
personal property of every kind and description, including, to the extent
permitted by the terms of the financing or leasing agreements applicable
thereto, all furniture, fixtures and equipment that are financed or leased, but
excluding any Gaming License and the Capital Stock of any entity, together with

 

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(A) acknowledgment copies of properly filed Uniform Commercial Code financing
statements (Form UCC-1), dated a date reasonably near to and prior to the
Effective Date, or such other evidence of filing as may be acceptable to the
Administrative Agent, naming each of the Loan Parties (as appropriate) as the
debtor, and the Administrative Agent on behalf of the Secured Parties, as the
secured party, or other similar instruments or documents, filed under the
Uniform Commercial Code of all jurisdictions as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the security interest
of the Administrative Agent pursuant to the Security Agreement;

 

(B) Uniform Commercial Code termination statements necessary to release all
Liens and other rights of any Person securing any existing Liens (other than
Permitted Liens), together with such other Uniform Commercial Code termination
statements as the Administrative Agent may reasonably request; and

 

(C) certified copies of Uniform Commercial Code Requests for Information or
Copies (Form UCC-3), or a similar search report certified by a party selected by
and acceptable to the Administrative Agent, dated a date reasonably near to the
Effective Date, listing all effective financing statements which name any of the
Loan Parties (under their present names and any previous names) as the debtor
and which are filed in the jurisdictions in which filings were made pursuant to
clause (A) above, together with copies of such financing statements (none of
which (other than those described in clause (A), if such Form UCC-3 or search
report, as the case may be, is current enough to list such financing statements
described in clause (A)) shall cover any Collateral described in the Security
Agreement except as permitted by Section 7.01);

 

(v) executed counterparts of a Deed of Trust dated on or before the Effective
Date with respect to each Pledged Casino, duly executed by each of the owners of
the Pledged Casinos, together with

 

(A) evidence of the completion (or satisfactory arrangements for the completion)
of all recordings and filings of each of the Deeds of Trust as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable effectively
to record the Deeds of Trust as valid, perfected Liens against the Pledged
Casinos, which Liens are subject to no outstanding monetary Liens recorded
against Guarantors’ interest in the Pledged Casinos;

 

(B) title policies (collectively, the “Title Policies”) in favor of the
Administrative Agent on behalf of the Secured Parties providing title insurance
in an aggregate amount of not less than the Aggregate Commitments and otherwise
in form and substance satisfactory to the Administrative Agent and issued by the
Title Company, with respect to the Deeds of Trust; and

 

(C) such other approvals, opinions, or documents in connection with the
foregoing as the Administrative Agent may reasonably request;

 

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(vi) to the extent necessary to obtain an ALTA Title Policy without a survey
exception, an updated surveyor’s plat of survey of each of the Pledged Casinos
prepared (and so certified) in compliance with the provisions of the applicable
state survey standards by a registered land surveyor of the state in which each
such Pledged Casino is located, and certified to the Administrative Agent and
the Title Company;

 

(vii) reliance letters with respect to the so-called “phase one” environmental
audits covering the Pledged Casinos previously obtained by the Borrower, in each
case from the environmental consulting firm that performed such audit to the
extent reasonably available as determined by the Administrative Agent and in
form and substance, reasonably satisfactory to the Administrative Agent;

 

(viii) executed counterparts of the First Preferred Ship Mortgages duly executed
by each of Boyd Tunica, Inc., Par-A-Dice Gaming Corporation, Treasure Chest
Casino, L.L.C., Blue Chip Casino, LLC and Red River Entertainment of Shreveport
Partnership in Commendam, together with

 

(A) evidence of the completion (or satisfactory arrangements for the completion)
of all recordings and filings of each of the First Preferred Ship Mortgages as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable effectively to record the First Preferred Ship Mortgages as valid,
perfected Liens against the vessels described therein, which Liens are subject
to no outstanding monetary Liens recorded against such vessels; and

 

(B) such other approvals, opinions or documents in connection with the foregoing
as the Administrative Agent may reasonably request;

 

(ix) evidence of the following insurance coverages with respect to the Pledged
Casinos:

 

(A) Comprehensive general public liability insurance in an amount reasonably
satisfactory to the Administrative Agent and the Borrower covering the Borrower
and the Guarantors;

 

(B) Worker’s compensation insurance (or self insurance therefor) and employer’s
liability insurance for the Borrower and the Guarantors, all in such amounts as
may be required by statute;

 

(C) If commercially available, flood insurance if any Pledged Casino is located
in an area designated by the Secretary of Housing and Urban Development as a
special flood hazard area; and

 

(D) Rental or business interruption insurance in amounts sufficient to pay
operating expenses, lost rental income and debt service for a period of up to
six months on each Pledged Casino other than the Treasure Chest Casino;

 

All policies of insurance required to be maintained by the Borrower and the
Guarantors shall be issued by companies reasonably satisfactory to the
Administrative Agent and

 

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shall have coverages and endorsements (including, without limitation, waivers of
subrogation and waivers of breach of warranty) and be written for such amount as
the Administrative Agent may reasonably require. All policies of insurance
required to be maintained by Borrower and the Guarantors must name the
Administrative Agent as mortgagee and additional insured or loss payee, must
insure the interest of the Administrative Agent in the property as mortgagee and
must provide that no cancellation or material modification of the policies will
be made without thirty days’ prior written notice to Administrative Agent.
Certificates for all such policies must be delivered to the Administrative Agent
and approved by the Administrative Agent (which approval shall not be
unreasonably withheld);

 

(x) the Hazardous Materials Indemnity, dated as of the Effective Date, duly
executed by each Guarantor that owns or leases real property Collateral;

 

(xi) unaudited financial statements of the Borrower and its Subsidiaries dated
as of March 31, 2004; unaudited financial statements of Coast and its
Subsidiaries as of March 31, 2004; and unaudited pro forma financial statements
of the Borrower and its Subsidiaries after giving effect to the Coast Merger as
of a date agreed to by the Administrative Agent and the Borrower as near to the
Effective Date as practicable;

 

(xii) a certificate signed by a Responsible Officer of the Borrower, dated as of
the Effective Date, stating that: (i) the conditions precedent to the Coast
Merger have been satisfied without waiver or forbearance, except as disclosed to
and consented to by the Administrative Agent; (ii) the representations and
warranties of the Borrower set forth in the Merger Agreement are true and
correct in all material respects as of the date made; (iii) the Merger Agreement
has not been amended in any material respects, except as disclosed to and
consented by the Administrative Agent; (iv) attached thereto is a true and
complete copy of the definitive Merger Agreement; and (v) the Borrower has given
irrevocable instructions to its counsel to file all necessary merger
certificates in order to consummate the Coast Merger;

 

(xiii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party;

 

(xiv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each Loan Party is validly existing, in good standing and qualified to
engage in business in each jurisdiction where such Person is qualified to do
business;

 

(xv) a favorable opinion of Morrison & Foerster LLP, McDonald Carano Wilson LLC,
Watkins Ludlam Winter & Stennis, P.A., More Law Group, P.C., McGlinchey
Stafford, PLLC, Ice Miller, Cooper Levenson April Niedelman & Wagenheim, P.A.,
and Terriberry, Carroll & Yancey L.L.P., counsel to the Loan Parties, addressed
to the Administrative Agent and each Lender, as to the matters set forth in
Exhibit G and such other matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;

 

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(xvi) a certificate of a Responsible Officer of each Loan Party either (A)
attaching copies of all consents, licenses and approvals required in connection
with the execution, delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B)
stating that no such consents, licenses or approvals are so required;

 

(xvii) a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that the Total Leverage Ratio, calculated on a pro forma basis
giving effect to the Coast Merger based on the pro forma financial statements
delivered pursuant to clause (xi) above, is not more than 5.00 to 1.00, together
with a calculation thereof in form reasonably acceptable to the Administrative
Agent, (C) that the Senior Leverage Ratio, calculated on a pro forma basis
giving effect to the Coast Merger based on the pro forma financial statements
delivered pursuant to clause (xi) above, is not more than 3.00 to 1.00, together
with a calculation thereof in form reasonably acceptable to the Administrative
Agent and (D) that as of the Effective Date and after giving effect to the Coast
Merger and initial Credit Extensions on the Effective Date, the Borrower has
unused Revolving Commitments of at least $350,000,000;

 

(xviii) evidence that the Existing Credit Agreement and the Coast Credit
Agreement have been or concurrently with the Effective Date are being terminated
and all Liens securing obligations under the Existing Credit Agreement and the
Coast Credit Agreement have been or concurrently with the Effective Date are
being released; and

 

(xix) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required
Lenders reasonably may require.

 

(b) Any fees required to be paid on or before the Effective Date shall have been
paid.

 

(c) The Effective Date shall have occurred on or before August 1, 2004.

 

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

 

(a) The representations and warranties of the Borrower contained in Article V or
any other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.

 

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(b) No Default shall exist or would result from such proposed Credit Extension.

 

(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
(a) is duly organized or formed, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

 

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) except where such conflict, breach or contravention
or creation of a Lien may not reasonably be expected to have a Material Adverse
Effect, conflict with or result in any breach or contravention of, or the
creation of any Lien under, (i) any Contractual Obligation to which such Person
is a party, or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) except where such breach or contravention may not reasonably be expected
to have a Material Adverse Effect, violate any Law.

 

5.03 Governmental Authorization; Other Consents. Except for such authorizations,
approvals or notices obtained or delivered as of the Effective Date,
authorizations, approvals or notices to or from Gaming Boards which have been
applied for but not yet obtained as of the Effective Date or subsequently
required in connection with the addition of any Guarantor or the pledge of any
additional Collateral pursuant to Section 6.14, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any

 

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other Person is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, any Loan Party of this Agreement or
any other Loan Document, except that pursuant to regulation 8.130 of the Nevada
Gaming Control Board a notice of the Borrower’s execution of this Agreement must
be filed with the Nevada Gaming Control Board within the time periods prescribed
therein, pursuant to Mississippi Gaming Commission Regulation II.I. Section 11 a
notice and report of the material terms of this Agreement and certain related
information must be filed with the Mississippi Gaming Commission within the time
period prescribed therein and notice of the Borrower’s execution of this
Agreement and of information relating thereto, including but not limited to the
Lenders who are a party hereto must be filed with the New Jersey Casino Control
Commission and the New Jersey Division of Gaming Enforcement within the time
prescribed.

 

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights generally, and general principles of
equity.

 

5.05 Financial Statements; No Material Adverse Effect.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated March 31, 2004, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

 

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

5.06 Litigation. Except as specifically disclosed in Schedule 5.06, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental

 

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Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.

 

5.07 No Default. Neither the Borrower nor any Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.

 

5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

 

5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

 

5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP and except immaterial taxes
and tax returns so long as no material portion of the Collateral is in jeopardy
of being seized, levied upon or forfeited. There is no proposed tax assessment
against the Borrower or any Subsidiary that would, if made, have a Material
Adverse Effect.

 

5.12 ERISA Compliance.

 

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under

 

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Section 401(a) of the Code has received a favorable determination letter from
the IRS or an application for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Borrower and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

 

(b) There are no pending or, to the best knowledge of the Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

 

5.13 Subsidiaries. As of the Effective Date, the Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13 and has no
equity investments in excess of $100,000 in any other corporation or entity
other than those specifically disclosed in Part(b) of Schedule 5.13. All
Significant Subsidiaries of the Borrower as of the Effective Date are identified
in part (a) of Schedule 5.13 with an asterisk.

 

5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act.

 

(a) The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulations U and X issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.

 

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary
(i) is a “holding company,” or a “subsidiary company” of a “holding company,” or
an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
or (ii) is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

 

5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate,

 

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could reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other written information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection
with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

 

5.16 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person, except as would not be reasonably expected
to have a Material Adverse Effect. To the best knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Borrower
or any Subsidiary infringes upon any rights held by any other Person, except as
would not be reasonably expected to have a Material Adverse Effect. Except as
specifically disclosed in Schedule 5.16, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

5.17 Collateral Documents. The provisions of the Deeds of Trust, the First
Preferred Ship Mortgages and the Security Agreement are effective to create, in
favor of the Administrative Agent (for the benefit of the Lenders), valid and
perfected first priority Liens on the Pledged Casinos, the vessels subject to
the First Preferred Ship Mortgages and all personal property described in the
Security Agreement and the Deeds of Trust, to the extent that such Liens can be
perfected by filing, subject only to the Permitted Liens. All governmental
approvals necessary or desirable to perfect and protect, and establish and
maintain the priority of, such Liens have been duly effected or taken, including
any such approvals reasonably requested by the Administrative Agent.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

From the Effective Date and thereafter so long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding:

 

6.01 Financial Statements. The Borrower shall deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:

 

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations,

 

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shareholders’ equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Required Lenders,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit; and

 

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower
(commencing with the fiscal quarter ended June 30, 2004), a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal quarter and for the portion of the
Borrower’s fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.

 

As to any information contained in materials furnished pursuant to Section
6.02(e), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.

 

6.02 Certificates; Other Information. The Borrower shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:

 

(a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default or, if any such
Default shall exist, stating the nature and status of such event;

 

(b) within five (5) Business Days after the delivery of the financial statements
referred to in Sections 6.01(a) and (b) and in any event within the time period
specified therein (commencing with the delivery of the financial statements for
the fiscal quarter ended September 30, 2004), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower;

 

(c) as soon as possible and in any event within 45 days after the end of each
fiscal quarter ending as of December 31, a certification from a Responsible
Officer as to of the Total Leverage Ratio as of the end of such fiscal quarter;

 

(d) promptly after any request by the Administrative Agent or any request by a
Lender made through the Administrative Agent, copies of any detailed audit
reports,

 

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management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or any
Subsidiary, or any audit of any of them;

 

(e) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Borrower, and copies of all annual, regular, periodic and special reports
and registration statements which the Borrower may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Administrative Agent pursuant
hereto; and

 

(f) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender acting
through the Administrative Agent may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(e) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower’s website on the
Internet at the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent upon request of the
Administrative Agent or any Lender until a written request to cease delivering
paper copies is given by the Administrative Agent or such Lender and (ii) the
Borrower shall provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents and the Administrative Agent
shall post such documents and notify (which may be by facsimile or electronic
mail) each Lender of the posting of any such documents. Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificates required by Section 6.02(b) to the
Administrative Agent. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first

 

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page thereof; (x) by marking Borrower Materials “PUBLIC”, the Borrower shall be
deemed to have authorized the Administrative Agent, the Arrangers, the L/C
Issuer and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent and the
Arrangers shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion or the Platform not
designated “Public Investor.”

 

6.03 Notices. The Borrower shall promptly notify the Administrative Agent and
each Lender:

 

(a) of the occurrence of any Default;

 

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

 

(c) of the occurrence of any ERISA Event; and

 

(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

6.04 Payment of Obligations. The Borrower shall, and shall cause each Subsidiary
to pay and discharge as the same shall become due and payable, all its
obligations and liabilities, including (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property, unless the same are being contested in
good faith by appropriate proceedings diligently conducted and adequate reserves
in accordance with GAAP are being maintained by the Borrower or such Subsidiary;
and (c) all Indebtedness, as and when due and payable (including any applicable
grace periods), but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, except in each case as
could not be reasonably be expected to have a Material Adverse Effect.

 

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6.05 Preservation of Existence, Etc. The Borrower shall, and shall cause each
Significant Subsidiary to: (a) preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.04 or 7.05;
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses (including, without limitation, liquor licenses) and franchises
necessary or desirable in the normal conduct of its business, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

 

6.06 Maintenance of Properties. The Borrower shall, and shall cause its
Subsidiaries to: (a) maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good
working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

 

6.07 Maintenance of Insurance. The Borrower shall, and shall cause each
Subsidiary, to maintain liability, casualty and other insurance (subject to
customary deductibles and retentions) with responsible insurance companies in
such amounts (after giving effect to any self-insurance compatible with the
following standards) and against such risks as is carried by responsible
companies engaged in similar businesses and owning similar assets in the general
areas in which the Borrower and its Subsidiaries operate and, in any event, such
insurance as may be required under the Deeds of Trust. Each policy evidencing
such insurance shall name the Administrative Agent as loss payee and additional
insured, and provide that such insurance companies provide the Administrative
Agent thirty (30) days written notice before the termination thereof. Without
limiting the obligations of the Borrower under the foregoing provisions of this
Section 6.07, in the event the Borrower shall fail to maintain in full force and
effect insurance as required by the foregoing provisions of this Section 6.07,
then the Administrative Agent may, and shall if instructed so to do by the
Required Lenders, procure insurance covering the interests of the Lenders and
the Administrative Agent in such amounts and against such risks as otherwise
would be required hereunder and the Borrower shall reimburse the Administrative
Agent in respect of any premiums paid by the Administrative Agent in respect
thereof.

 

6.08 Compliance with Laws. The Borrower shall, and shall cause each Subsidiary
to comply in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09 Books and Records. The Borrower shall, and shall cause each Subsidiary to
(a) maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Subsidiary, as the case may be.

 

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6.10 Inspection Rights. The Borrower shall, and shall cause each Subsidiary to,
permit representatives and independent contractors of the Administrative Agent
and each Lender to visit and inspect the Collateral, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower.

 

6.11 Use of Proceeds. The Borrower shall use the proceeds of the Credit
Extensions for any one or more of the following: (i) to refinance the Existing
Credit Agreement and the senior debt of Coast, (ii) to fund all or a portion of
the prepayment and call/tender premium of Coast’s 9.50% Senior Subordinated
Notes due 2009, (iii) to fund a portion of the acquisition of Coast, (iv) to pay
fees and expenses related to the acquisition of Coast and (v) for working
capital and general corporate purposes not in contravention of any Law or of any
Loan Document.

 

6.12 Environmental Covenant. The Borrower shall, and shall cause each Subsidiary
to:

 

(a) use and operate all of its facilities and properties in material compliance
with all applicable Environmental Laws, keep all permits, approvals,
certificates, licenses and other authorizations required pursuant to applicable
Environmental Laws in effect and remain in material compliance therewith, and
handle all Hazardous Materials in material compliance with all applicable
Environmental Laws;

 

(b) promptly notify the Administrative Agent and provide copies upon receipt of
all written claims, complaints, notices or inquiries relating to the condition
of its facilities and properties under, or compliance of its facilities and
properties with, applicable Environmental Laws, and shall promptly commence and
diligently proceed to cure, to the reasonable satisfaction of the Administrative
Agent any actions and proceedings relating to violations of compliance with
applicable Environmental Laws; and

 

(c) provide such information and certifications which the Administrative Agent
may reasonably request from time to time to evidence compliance with this
Section 6.12.

 

6.13 Accuracy of Information. The Borrower shall cause all factual information
furnished after the date of execution and delivery of this Agreement by or on
behalf of the Borrower or any Guarantor in writing to the Administrative Agent
or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby to be true and accurate in every material
respect on the date as of which such information is dated or certified, and such
information shall not be incomplete by omitting to state any material fact
necessary to make such information not misleading.

 

6.14 Significant Subsidiaries. Promptly upon the determination that any
Subsidiary other than Omaha Partners has become a Significant Subsidiary, the
Borrower shall cause such

 

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Significant Subsidiary to execute and deliver to the Administrative Agent for
the benefit of the Lenders (i) an amendment to the Guaranty, if such Subsidiary
is not already a party thereto, joining such Subsidiary as a party thereto, (ii)
if such Subsidiary owns a Venture (other than real property that is not
necessary in connection with the operations of a Pledged Casino and does not,
individually or in the aggregate, have a market value in excess of $25,000,000)
that is not already a Pledged Casino, one or more Deeds of Trust and other
documentation required by Section 4.01(a)(v) hereof, together with a joinder to
the Hazardous Materials Indemnity and all other documentation required
thereunder including a so-called “phase one” environmental audit for the real
property to be encumbered by such Deed of Trust, encumbering such Venture, (iii)
an amendment to the Security Agreement, if such Subsidiary is not already a
party thereto, joining such Subsidiary as a party thereto, (iv) legal opinions
in form and substance satisfactory to the Administrative Agent, and (v) the
documentation required by clauses (vi) and (xiv) of Section 4.01(a) hereof in
respect of such Venture(s).

 

Upon the acquisition by the Borrower or any Significant Subsidiary (other than
Omaha Partners) of any real property or any vessel having (i) a purchase price,
or (ii) a combination of purchase price and anticipated capital expenditures in
connection therewith in excess of $25,000,000, the Borrower shall deliver or
cause any Significant Subsidiary (other than Omaha Partners) to deliver, a Deed
of Trust or First Preferred Ship Mortgage, as applicable, with respect thereto,
together with such title insurance (in the case of real estate) and other
ancillary documents as may be requested by the Administrative Agent.

 

ARTICLE VII

NEGATIVE COVENANTS

 

From the Effective Date and thereafter so long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid
or unsatisfied, or any Letter of Credit shall remain outstanding:

 

7.01 Liens. The Borrower shall not, and shall not permit any Subsidiary to,
directly or indirectly create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:

 

(a) Liens pursuant to any Loan Document;

 

(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);

 

(c) Liens for taxes, assessments or other governmental charges or levies not yet
delinquent or thereafter payable without penalty or which are being contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

 

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, Liens for
labor done and materials and services supplied and furnished or other like Liens
(i) which are not filed or recorded for a period of more than 60 days, (ii)
which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto

 

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are maintained on the books of the applicable Person, or (iii) which have been
bonded or which the Title Company has agreed to insure over, in either case in a
manner satisfactory to the Administrative Agent;

 

(e) pledges or deposits made or Liens incurred in the ordinary course of
business in connection with workers’ compensation, unemployment insurance and
other social security or employment or insurance legislation, other than any
Lien imposed by ERISA;

 

(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

 

(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, do not materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

 

(h) Liens securing writs of attachment or similar instruments or judgments for
the payment of money not constituting an Event of Default under Section 8.01(h)
or securing appeal or other surety bonds related to such judgments; and

 

(i) Liens securing Indebtedness permitted under Section 7.03(d); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition.

 

7.02 Investments. The Borrower shall not, and shall cause each Subsidiary not
to, directly or indirectly, make any Investments, except:

 

(a) Investments held by the Borrower or such Subsidiary in the form of cash
equivalents or short-term marketable securities;

 

(b) advances to officers, directors and employees of the Borrower and
Subsidiaries for travel, entertainment, relocation and analogous ordinary
business purposes consistent with past practice;

 

(c) purchases or redemption of the Borrower’s Capital Stock to the extent
permitted by Section 7.06;

 

(d) Investments of the Borrower in any Guarantor and Investments of any
Subsidiary in the Borrower or in a Guarantor;

 

(e) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

 

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(f) capital expenditures to the extent permitted by Section 7.12;

 

(g) Investments representing all or a portion of the sales price for property
sold to another Person;

 

(h) Investments in the Borgata in an amount not exceeding $35,500,000 to fund
amounts reflected on the Borrower’s financial statements for the year ended
December 31, 2003; and

 

(i) other Investments not exceeding the sum of (i) $250,000,000 plus (ii) any
return of capital to the Borrower or any Guarantor from a Person in which an
Investment was previously made pursuant to this Section 7.02(i), but not in
excess of the aggregate amount of all such Investments previously made in such
Person, plus (iii) an amount equal to any and all Investments made pursuant to
this Section 7.02(i) (net of any and all returns of capital described in clause
(i)) in any Person that becomes a Guarantor (at which time such Investments
shall be deemed to be capital expenditures for purposes of this Agreement), plus
(iv) Net Equity Proceeds.

 

7.03 Indebtedness. The Borrower shall not, and shall cause each Subsidiary not
to, directly or indirectly, create, incur, assume or suffer to exist any
Indebtedness secured by a Lien, except:

 

(a) Indebtedness under the Loan Documents;

 

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and
any refinancings, refundings, renewals or extensions thereof; provided that the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder;

 

(c) obligations under Swap Contracts entered into by the Borrower with any
Lender or Affiliate of any Lender, which obligations shall be ratably secured by
the Collateral; provided, in no event shall the notional principal amount for
such secured obligations exceed $750,000,000 in the aggregate (it being
understood that the notional amount of each such Swap Contract shall be included
in such calculation); and

 

(d) Indebtedness in respect of capital leases, Synthetic Lease Obligations,
purchase money obligations for fixed or capital assets within the limitations
set forth in Section 7.01(i) and other secured Indebtedness; provided, however,
that the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $100,000,000.

 

7.04 Fundamental Changes. The Borrower shall not, and shall cause each
Significant Subsidiary not to, directly or indirectly, merge, dissolve,
liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:

 

(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary that is not a Guarantor, the Guarantor shall be the continuing or
surviving Person or such surviving Person shall execute and deliver a Guaranty;

 

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(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a Guarantor, then the
transferee must either be the Borrower or a Guarantor; and

 

(c) the Borrower or any Subsidiary may make a Disposition to the extent
permitted by Section 7.05.

 

7.05 Dispositions. The Borrower will not, and shall cause each Guarantor not to,
directly or indirectly, make any Disposition or enter into any agreement to make
any Disposition, except:

 

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

 

(b) Dispositions of inventory in the ordinary course of business;

 

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d) Dispositions of property by the Borrower or any Guarantor to any other
Guarantor or to the Borrower;

 

(e) Dispositions permitted by Section 7.04;

 

(f) any Disposition of the Barbary Coast Hotel and Casino and the Collateral
used in connection therewith;

 

(g) any Disposition of the Stardust Resort and Casino and the Collateral used in
connection therewith; and

 

(h) Dispositions by the Borrower and the Guarantors not otherwise permitted
under this Section 7.05; provided that (i) at the time of such Disposition, no
Default shall exist or would result from such Disposition and (ii) the aggregate
book value of all property Disposed of in reliance on this clause (h) in any
fiscal year shall not exceed $50,000,000;

 

provided, however, that any Disposition pursuant to clauses (a) through (h)
shall be for fair market value, as determined in good faith by the board of
directors of the Person disposing such Collateral.

 

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7.06 Restricted Payments. The Borrower shall not, and shall cause each
Subsidiary not to, directly or indirectly, declare or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that:

 

(a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other equity interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);

 

(b) the Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common equity
interests of such Person;

 

(c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire
shares of its common stock or other common equity interests or warrants or
options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
equity interests; and

 

(d) the Borrower may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash (i) in an amount not to
exceed $35,000,000 in the aggregate in any fiscal year if the Total Leverage
Ratio as of the end of the preceding fiscal quarter was greater than 4.50 to 1.0
and (ii) in an unlimited amount in any fiscal year if the Total Leverage Ratio
as of the end of the preceding fiscal quarter was 4.50 to 1.0 or less; provided
that immediately after giving effect to such proposed action, no Default would
exist. Notwithstanding the foregoing, this Section 7.06(d) shall not prohibit
the payment of any cash dividends within 60 days after the date of its
declaration if such dividend could have been paid on the date of its declaration
in compliance with such provisions.

 

7.07 Change in Nature of Business. The Borrower shall not, and shall cause each
Subsidiary not to, directly or indirectly, engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.

 

7.08 Transactions with Affiliates. The Borrower shall not, and shall cause each
Subsidiary not to, directly or indirectly, enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm’s length transaction with a
Person other than an Affiliate, provided that the foregoing restriction shall
not apply to transactions between or among the Borrower and any of its
wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries.

 

7.09 Burdensome Agreements. The Borrower shall not, and shall cause each
Subsidiary not to, directly or indirectly, enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the

 

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Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness
of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person; provided, however,
that this clause (iii) shall not prohibit any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section 7.03(b)
or Section 7.03(d) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure the Obligations.

 

7.10 Maintenance of Debt. The Borrower shall not permit the aggregate
outstanding principal amount of all senior unsecured public Indebtedness
(including debt issued pursuant to Rule 144A under the Securities Act of 1933,
as amended, that is intended to be registered) of the Borrower and all
Subordinated Debt of the Borrower to be less than $750,000,000 at any time
outstanding.

 

7.11 Financial Covenants. The Borrower shall not:

 

(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of
the end of any fiscal quarter of the Borrower from and after September 30, 2004
to be less than 1.25 to 1.00.

 

(b) Senior Leverage Ratio. Permit the Senior Leverage Ratio on the last day of
any period of four fiscal quarters of the Borrower set forth below to be greater
than the ratio set forth below opposite such period:

 

Four Fiscal Quarters Ending

--------------------------------------------------------------------------------

   Maximum Senior
Leverage Ratio

--------------------------------------------------------------------------------

September 30, 2004 through June 30, 2006

   3.50 to 1.00

September 30, 2006 and December 31, 2006

   3.25 to 1.00

March 31, 2007 and each fiscal quarter thereafter

   3.00 to 1.00

 

(c) Total Leverage Ratio. Permit the Total Leverage Ratio on the last day of any
period of four fiscal quarters of the Borrower set forth below to be greater
than the ratio set forth below opposite such period:

 

Four Fiscal Quarters Ending

--------------------------------------------------------------------------------

   Maximum Total
Leverage Ratio

--------------------------------------------------------------------------------

September 30, 2004 through December 31, 2005

   5.75 to 1.00

March 31, 2006 and June 30, 2006

   5.50 to 1.00

September 30, 2006

   5.25 to 1.00

December 31, 2006

   5.00 to 1.00

March 31, 2007 and June 30, 2007

   4.75 to 1.00

September 30, 2007 and each fiscal quarter thereafter

   4.50 to 1.00

 

(d) Incurrence of Indebtedness. Incur Indebtedness if the incurrence of such
Indebtedness is reasonably expected to result in a Default under this Section
7.11.

 

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7.12 Capital Expenditures. The Borrower shall not, and shall not permit its
Subsidiaries to, directly or indirectly, make any expenditure in respect of the
purchase or other acquisition of any fixed or capital asset (excluding
Maintenance Capital Expenditures and any such purchase or acquisition that
constitutes an Investment by the Borrower or any Guarantor made pursuant to
Section 7.02(i)), except for capital expenditures not exceeding $500,000,000, in
the aggregate for the Borrower and it Subsidiaries during the term of this
Agreement exclusive of the following: up to $150,000,000 of Capital Expenditures
for the Blue Chip Casino, up to $55,000,000 of Capital Expenditures for Delta
Downs Racetrack and Casino, up to $400,000,000 of Capital Expenditures for the
South Coast Project and up to $40,000,000 of Capital Expenditures for the
Orleans Hotel and Casino, all as more particularly described on Schedule 7.12.

 

7.13 Use of Proceeds. The Borrower shall not use the proceeds of any Credit
Extension, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry margin stock (within the meaning of
Regulations U and X of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

 

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within five Business Days after the same becomes due, any
interest on any Loan or on any L/C Obligation, any fee due hereunder, or any
other amount payable hereunder or under any other Loan Document; or

 

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in Sections 7.04, 7.05, 7.06, 7.07, 7.10, 7.11,
7.12 or 7.13; or

 

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days after notice shall have been given to the Borrower by the
Administrative Agent; or

 

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

 

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due after giving effect to any applicable notice and cure periods
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) having an aggregate principal
amount (including undrawn committed or available

 

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amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $50,000,000, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, in each case after giving effect to
any applicable notice and cure periods, the effect of which default or other
event is to cause, or to permit the holder or holders of such Indebtedness or
the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii) any
counterparty under Swap Contract terminates such Swap Contract as a result of an
Early Termination Date (as defined in such Swap Contract) resulting from (A) any
event of default under such Swap Contract as to which the Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Borrower or such Subsidiary as a
result thereof is greater than $10,000,000 and the Borrower or such Subsidiary,
as the case may be, has not paid such Termination Value within 30 days of the
due date thereof, unless such termination or such Termination Value is being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves in accordance with GAAP have been provided; or

 

(f) Insolvency Proceedings, Etc. The Borrower or any of its Significant
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Significant
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 60 calendar days after its issue or levy; or

 

(h) Judgments. There is entered against the Borrower or any Significant
Subsidiary a final judgment or order for the payment of money in an aggregate
amount in excess of $50,000,000 (to the extent not covered by independent
third-party insurance of a solvent insurer and as to which the insurer does not
dispute coverage) and either (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of 20 consecutive
days during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or

 

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(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $10,000,000; or

 

(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect and, in the reasonable judgment of the Required Lenders, such
circumstance is materially adverse to the interests of the Lenders; or any Lien
in favor of the Administrative Agent on a material portion of the Collateral any
time after its perfection and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect and, in the reasonable judgment of the Required Lenders, such
circumstance is materially adverse to the interests of the Lenders; or any Loan
Party or any other Person contests in any manner the validity or enforceability
of any Loan Document; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or

 

(k) Change of Control. There occurs any Change of Control with respect to the
Borrower; or

 

(l) License Revocation. The occurrence of a License Revocation that continues
for fifteen consecutive calendar days with respect to gaming operations at any
gaming facility accounting for ten percent or more of the consolidated total
assets, consolidated gross revenues or Consolidated EBITDA of the Borrower and
its Subsidiaries; or

 

(m) Governmental Approvals. Any Loan Party shall fail to obtain, renew, maintain
or comply with any such governmental approvals as shall be necessary (1) for the
execution, delivery or performance by such Loan Party of its obligations, or the
exercise of its rights, under the Loan Documents, or (2) for the grant of the
Liens created under the Deeds of Trust, the First Preferred Ship Mortgages or
the Security Agreement or for the validity and enforceability or the perfection
of or exercise by the Administrative Agent of its rights and remedies under the
Deeds of Trust, the First Preferred Ship Mortgages or the Security Agreement; or
any such governmental approval shall be revoked, terminated, withdrawn,
suspended, modified or withheld or shall cease to be effective; or any
proceeding shall be commenced by or before any Governmental Authority for the
purpose of revoking, terminating, withdrawing, suspending, modifying or
withholding any such governmental approval and such proceeding is not dismissed
within 60 days; and such failure, revocation, termination, withdrawal,
suspension, modification, cessation or commencement is reasonably likely to
materially adversely affect (i) the rights or the interests of the Lenders under
the Loan Documents or (ii) the ability of the Loan Parties to perform their
obligations under the Loan Documents; or

 

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(n) Liens on Shares of Significant Subsidiaries. Any Lien, other than a Lien in
favor of the Administrative Agent on behalf of the Lenders, shall be placed on
any Capital Stock of any Significant Subsidiary.

 

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

 

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

 

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

 

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

 

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

 

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts other than principal and interest
(including Attorney Costs and amounts payable under Article III) payable to the
Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

 

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Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably
among the Lenders in proportion to the respective amounts described in this
clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings and payments due to any Lender or an
Affiliate of a Lender under any Swap Contract, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE IX

ADMINISTRATIVE AGENT

 

9.01 Appointment and Authorization of Administrative Agent.

 

(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term “agent” herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of

 

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Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in this Article IX and in the
definition of “Agent-Related Person” included the L/C Issuer with respect to
such acts or omissions, and (ii) as additionally provided herein with respect to
the L/C Issuer.

 

9.02 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

 

9.03 Liability of Administrative Agent. No Agent-Related Person shall (a) be
liable to any Lender or participant for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party or
any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Loan Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of any Loan Party or any Affiliate
thereof.

 

9.04 Reliance by Administrative Agent.

 

(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.

 

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(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Effective Date specifying its
objection thereto.

 

9.05 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default.” The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.

 

9.06 Credit Decision; Disclosure of Information by Administrative Agent. Each
Lender acknowledges to the Administrative Agent that no Agent-Related Person has
made any representation or warranty to it, and that no act by the Administrative
Agent hereafter taken, including any consent to and acceptance of any assignment
or review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents to the
Administrative Agent that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

 

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9.07 Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct, provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section, provided, further, that to the extent an L/C Issuer is
entitled to indemnification under this Section 9.07 solely in connection with
its role as an L/C Issuer, only the Revolving Lenders shall be required to
indemnify the L/C Issuer in accordance with this Section 9.07. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent (to the extent not reimbursed by or on behalf of any Loan Party and
without limiting the obligation of any Loan Party to do so), upon written demand
(specifying the basis of such demand) for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.

 

9.08 Administrative Agent in its Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Loan Parties and their respective Affiliates as though Bank of America were
not the Administrative Agent or, if applicable, the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or, if applicable, the L/C Issuer, and the terms
“Lender” and “Lenders” include Bank of America in its individual capacity.

 

9.09 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders; provided that any such
resignation by Bank of America shall also constitute its resignation as L/C
Issuer. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default

 

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(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and L/C Issuer and the respective
terms “Administrative Agent” and “L/C Issuer” shall mean such successor
administrative agent and Letter of Credit issuer, the retiring Administrative
Agent’s appointment, powers and duties as Administrative Agent shall be
terminated and the retiring L/C Issuer’s rights, powers and duties as such shall
be terminated, without any other or further act or deed on the part of such
retiring L/C Issuer or any other Lender, other than the obligation of the
successor L/C Issuer to issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or to make other
arrangements satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

 

9.10 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making

 

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of such payments directly to the Lenders, to pay to the Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

9.11 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,

 

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration, termination or Cash Collateralization of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 10.01, if approved, authorized or ratified in writing by the
Required Lenders;

 

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and

 

(c) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11.

 

9.12 Other Agents; Arrangers and Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“co-syndication agent,” “co-documentation agent,” “managing agent,” “joint book
manager” or “joint lead arranger” shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified (in the aforementioned capacities) in deciding to
enter into this Agreement or in taking or not taking action hereunder.

 

ARTICLE X

MISCELLANEOUS

 

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower or
any other Loan

 

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Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:

 

(a) extend or increase the Commitment of any Lender without the written consent
of such Lender;

 

(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) without the written consent of each Lender directly affected thereby;

 

(c) reduce or forgive the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso
to this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate;

 

(d) change Section 2.13 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

 

(e) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

 

(f) impose any greater restriction on the ability of any Lender to assign any of
its rights or obligations hereunder without the written consent of Lenders
having more than 50% of the sum of (x) the Aggregate Revolving Commitments then
in effect and (y) the outstanding principal amount of Term Loans at such time
within each of the following classes of Commitments, Loans and other Credit
Extensions: (i) the class consisting of the Revolving Commitment, and (ii) the
class consisting of the Term Loans. For purposes of this clause, the aggregate
amount of each Revolving Lender’s risk participation and funded participation in
L/C Obligations and Swing Line Loans shall be deemed to be held by such Lender;

 

(g) release all or substantially all of the Guarantors from the Guaranty without
the written consent of each Lender; or

 

(h) release all or substantially all of the Collateral without the written
consent of each Lender;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights

 

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or duties of the Swing Line Lender under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.07(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
the Fee Letters may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

10.02 Notices and Other Communications; Facsimile Copies.

 

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed certified or
registered mail, faxed or delivered to the applicable address, facsimile number
or (subject to subsection (c) below) electronic mail address, and all notices
and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:

 

(i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing
Line Lender, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02 or to such other
address, facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the other parties; and

 

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Borrower, the
Administrative Agent, the L/C Issuer and the Swing Line Lender.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

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(c) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on all Loan Parties, the
Administrative Agent and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

 

(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent-Related Person and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, (b) to pay or
reimburse the Administrative Agent for all reasonable out-of-pocket costs and
expenses incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any “workout”
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs, and (c) after the occurrence and during the continuance of an Event of
Default, to pay or reimburse each Lender for all reasonable out-of-pocket costs
and expenses incurred in connection with any “workout” or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The

 

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foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent. All amounts due under this Section 10.04 shall be payable
within ten Business Days after demand therefor. The agreements in this Section
shall survive the termination of the Aggregate Commitments and repayment of all
other Obligations.

 

10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents, trustees, investment advisors
and attorneys-in-fact (collectively the “Indemnitees”) from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Indemnitee in any way relating to or
arising out of or in connection with (a) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement,
letter or instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (c) any
actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower, any Subsidiary
or any other Loan Party, or any Environmental Liability related in any way to
the Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section 10.05 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive after the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

10.06 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part

 

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thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.

 

10.07 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void ab initio). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) Any Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations and in Swing Line Loans held
by any Revolving Lender) at the time owing to it); provided that (i) except in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as
defined in subsection (g) of this Section) with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $1,000,000
(treating assignments to two or more Approved Funds under common management as
one assignment for purposes of the minimum amount) unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans; (iii) any assignment of a

 

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Revolving Commitment must be approved by the Administrative Agent, the L/C
Issuer, the Swing Line Lender and, so long as no Event of Default has occurred
and is continuing, the Borrower (each consent not to be unreasonably withheld or
delayed) unless the Person that is the proposed assignee is itself a Revolving
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee) or an Affiliate thereof; (iv) any assignment of a Term Loan
must be approved by the Administrative Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower (each consent not to be
unreasonably withheld or delayed) unless the Person that is the proposed
assignee is itself a Lender, an Affiliate of a Lender or an Approved Fund
(whether or not the proposal assignee would otherwise qualify as an Eligible
Assignee); and (v) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.

 

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice. In addition, at any time that a request for a consent
for a material or other substantive change to the Loan Documents is pending, any
Lender wishing to consult with other Lenders in connection therewith may request
and receive from the Administrative Agent a copy of the Register.

 

(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender’s obligations

 

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under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification that (i) reduces the fees, interest rate
or principal payable directly or indirectly to such Participant (or such Lender
in respect of such Participant), (ii) increases the Commitment of such
Participant (or such Lender in respect of such Participant) or (iii) extends the
final maturity date for the Loans held by such Participant (or such Lender in
respect of such Participant). Subject to subsection (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.09 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender.

 

(e) A Participant shall not be entitled to receive any greater payment under
Section 3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.

 

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of Borrower or the Administrative Agent, collaterally
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities.

 

(g) As used herein, the following terms have the following meanings:

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, and in the case of assignments of Revolving
Commitments only, the L/C Issuer and the Swing Line Lender, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

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“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of business.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower (an “SPC”) the option to provide all or any part of any
Committed Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Committed Loan, the Granting Lender shall be obligated to make such Committed
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 2.12(c)(ii). Each party
hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by
any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrower under this Agreement
(including its obligations under Section 3.04), (ii) no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement for which a
Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder. The
making of a Committed Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Committed Loan were made
by such Granting Lender. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and with the
payment of a processing fee of $3,500, assign all or any portion of its right to
receive payment with respect to any Committed Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.

 

(i) Notwithstanding anything to the contrary contained herein, if at any time
Bank of America assigns all of its Revolving Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 30 days’ notice to the Borrower
and the Revolving Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Borrower shall be entitled to appoint from among
the Revolving Lenders a successor L/C Issuer hereunder; provided,

 

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however, that no failure by the Borrower to appoint any such successor shall
affect the resignation of Bank of America as L/C Issuer. If Bank of America
resigns as L/C Issuer, it shall retain all the rights and obligations of the L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Revolving Lenders to make
Base Rate Committed Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)).

 

(j) Notwithstanding anything to the contrary contained herein, if at any time
Wells assigns all of its Revolving Commitment and Loans pursuant to subsection
(b) above, Wells may, upon 30 days’ notice to the Borrower and the Revolving
Lenders, resign as Swing Line Lender. In the event of any such resignation as
Swing Line Lender, the Borrower shall be entitled to appoint from among the
Revolving Lenders a successor Swing Line Lender hereunder; provided, however,
that no failure by the Borrower to appoint any such successor shall affect the
resignation of Wells as Swing Line Lender. If Wells resigns as Swing Line
Lender, it shall retain all the rights and obligations of the Swing Line Lender
hereunder with respect to all Swing Line Loans outstanding as of the effective
date of its resignation as Swing Line Lender (including the right to require the
Revolving Lenders to make Base Rate Committed Loans pursuant to Section
2.04(c)).

 

(k) Notwithstanding anything in this Section 10.07 to the contrary, the rights
of the Lenders to make assignments of their Loans and corresponding Commitments
therefor shall be subject to the approval of any Gaming Board, to the extent
required by applicable Gaming Laws.

 

10.08 Confidentiality. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives that need to know such information (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (ii) any pledgee
referred to in Section 10.07(f), or (iii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Borrower
and its obligations, (g) with the consent of the Borrower or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than the Borrower. For
purposes of this Section, “Information” means all information received from the
Borrower or any of its Subsidiaries relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a

 

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nonconfidential basis prior to disclosure to any such Person by the Borrower or
any Subsidiary, provided that, in the case of information received from the
Borrower or any Subsidiary after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

10.09 Set-off. In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of any Event of Default,
after obtaining the prior written consent of the Administrative Agent, each
Lender is authorized at any time and from time to time, without prior notice to
the Borrower or any other Loan Party, any such notice being waived by the
Borrower (on its own behalf and on behalf of each Loan Party) to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.

 

10.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

 

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

 

10.12 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights

 

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or remedies in favor of the Administrative Agent or the Lenders in any other
Loan Document shall not be deemed a conflict with this Agreement. Each Loan
Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

 

10.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.14 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.15 Tax Forms. (a) (i) Each Lender that is not a “United States person” within
the meaning of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.

 

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(ii) Each Foreign Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.

 

(iii) The Borrower shall not be required to pay any additional amount to any
Foreign Lender under Section 3.01 (A) with respect to any Taxes required to be
deducted or withheld on the basis of the information, certificates or statements
of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.

 

(iv) The Administrative Agent may, without reduction, withhold any Taxes
required to be deducted and withheld from any payment under any of the Loan
Documents with respect to which the Borrower is not required to pay additional
amounts under this Section 10.15(a).

 

(b) Upon the request of the Administrative Agent, each Lender that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Administrative Agent two duly signed completed copies of IRS Form
W-9. If such Lender fails to deliver such forms, then the Administrative Agent
may withhold from any interest payment to such Lender an amount equivalent to
the applicable back-up withholding tax imposed by the Code, without reduction.

 

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(c) If any Governmental Authority asserts that the Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.

 

10.16 Replacement of Lenders. The Borrower shall have the right to remove a
Lender as a party to this Agreement at any time upon notice to the
Administrative Agent and such Lender, including but not limited to a Lender who
is disqualified by the Gaming Authorities. If the Borrower elects to remove a
Lender pursuant to this Section 10.16, the Lender being removed shall within
five Business Days after notice of removal pursuant to this Section 10.16
execute and deliver an Assignment and Assumption covering its Loans and
Commitments in favor of one or more Eligible Assignees designated by the
Borrower and reasonably acceptable to the Administrative Agent, subject to
payment of a purchase price by such Eligible Assignees in an amount equal to the
principal, interest and fees (including accrued Letter of Credit Fees under
Section 2.03) owed to such Lender and any costs and compensation owed to such
Lender under Article III; provided that no Lender shall be required to make such
an assignment to any such Eligible Assignee to the extent such Lender is not
legally permitted to make such an assignment to such Eligible Assignee. In
addition to the foregoing, so long as there does not exist a Default or Event of
Default, the Borrower may upon five Business Days’ notice to the Administrative
Agent and any Lender, prepay the Loans of such Lender, terminate such Lender’s
Commitments and reduce the applicable Commitment by the amount of such Lender’s
Commitment. The Commitment of any such Lender shall be terminated upon the
payment by the Borrower of a purchase price in an amount equal to the principal,
interest and fees (including accrued Letter of Credit Fees under Section 2.03)
owed to such Lender and any costs and compensation owed to such Lender under
Article III.

 

10.17 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEVADA APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

10.18 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

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10.19 USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify the
Borrower in accordance with the Act.

 

10.20 Designation as Senior Debt. All Obligations shall be “Designated Senior
Indebtedness” for purposes of and as defined in any existing or future Indenture
between the Borrower and a trustee relating to Subordinated Debt, if and to the
extent that such term (or any comparable term) is defined therein as providing
specific rights to certain holders of senior indebtedness.

 

10.21 Gaming Boards. Each Lender and the Administrative Agent agrees to use its
best efforts to cooperate with all Gaming Boards in connection with the
administration of their regulatory jurisdiction over the Borrower and its
Affiliates, including by providing in a timely manner such documents or other
information as may be requested by any such Gaming Authority relating to the
Borrower or any of its Affiliates or to the Loan Documents. The Borrower and
each of its Affiliates hereby consents to any such disclosure by the Lenders and
Administrative Agent to any Gaming Board and releases such parties from any
liability for any such disclosure.

 

10.22 Gaming Regulations. Each party to this Agreement hereby acknowledges that
the consummation of the transactions contemplated by the Loan Documents is
subject to applicable Gaming Laws, including but not limited to any licensing or
qualification requirements imposed on the Lenders and the Loan Parties thereby.
The Borrower represents and warrants that it will use its best efforts to obtain
all requisite approvals necessary in connection with the transactions
contemplated hereby and in the other Loan Documents.

 

[Remainder of page intentionally left blank.]

 

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

 

BOYD GAMING CORPORATION By:  

/s/ Ellis Landau

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Name:   Ellis Landau Title:   Executive Vice President and     Chief Financial
Officer

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BANK OF AMERICA, N.A., as Administrative Agent By:  

/s/    JANICE HAMMOND

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Name:  

Janice Hammond

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Title:  

Vice President

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BANK OF AMERICA, N.A., as a Lender and L/C Issuer By:  

/s/    JUSTIN LIEN

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Name:  

Justin Lien

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Title:  

Vice President

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