EXHIBIT 10.1

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

among

 

MTR GAMING GROUP, INC.,

as the Borrower

 

CERTAIN SUBSIDIARIES OF THE BORROWER,

as Guarantors

 

THE LENDERS SIGNATORY HERETO

 

and

 

ALADDIN CREDIT ADVISORS, L.P.,

as Administrative Agent

 

Dated as of March 18, 2010

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I Defined Terms

1

Section 1.1.

Definitions

1

Section 1.2.

Accounting Terms

27

 

 

 

ARTICLE II Term Loans

28

Section 2.1.

Term Loans

28

Section 2.2.

[Reserved]

28

Section 2.3.

Borrowing Mechanics

28

Section 2.4.

Pro Rata Shares

29

Section 2.5.

Use of Proceeds

29

Section 2.6.

Evidence of Debt; Register; Notes

29

Section 2.7.

Interest

30

Section 2.8.

Fees

32

Section 2.9.

Repayment

32

Section 2.10.

Optional Prepayments

32

Section 2.11.

Mandatory Prepayments; Mandatory Commitment Reductions

33

Section 2.12.

Application of Payments

34

Section 2.13.

General Provisions Regarding Payments

35

Section 2.14.

Ratable Sharing

36

Section 2.15.

Conversion and Continuation of Term Loans

37

 

 

 

ARTICLE III Conditions Precedent

37

Section 3.1.

Conditions Precedent; Closing Date

37

Section 3.2.

Conditions to all Term Loans

42

 

 

 

ARTICLE IV Representations and Warranties

42

Section 4.1.

Representations and Warranties

42

 

 

 

ARTICLE V Affirmative Covenants

50

Section 5.1.

Basic Reporting Requirements

50

Section 5.2.

Visitation; Verification

51

Section 5.3.

Maintenance of Properties

52

Section 5.4.

Notice of Material Events

52

Section 5.5.

Use of Proceeds

52

Section 5.6.

Further Assurances

53

Section 5.7.

[Reserved]

53

Section 5.8.

Insurance

53

Section 5.9.

Information Regarding Collateral

53

Section 5.10.

Existence; Conduct of Business

54

Section 5.11.

Payment of Obligations

54

Section 5.12.

Compliance with Laws

54

Section 5.13.

Subsidiaries

54

 

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Section 5.14.

Guarantors

54

Section 5.15.

Real Property

55

Section 5.16.

Broker’s Claims

55

Section 5.17.

Compliance with ERISA

55

Section 5.18.

Consents of and Notices to Gaming Authorities

56

 

 

 

ARTICLE VI Negative Covenants

56

Section 6.1.

Indebtedness

56

Section 6.2.

Liens

58

Section 6.3.

Sales and Lease-Backs

61

Section 6.4.

Transactions with Shareholders and Affiliates

61

Section 6.5.

Investments

61

Section 6.6.

[Reserved]

62

Section 6.7.

Merger; Disposition of Assets; Acquisitions

62

Section 6.8.

Fiscal Year; Fiscal Quarter

63

Section 6.9.

Restricted Payments

63

Section 6.10.

Subsidiaries

64

Section 6.11.

Conduct of Business

64

Section 6.12.

Restrictions on Subsidiary Distributions

64

Section 6.13.

Amendments to Organizational Documents, Senior Secured Notes Indenture and
Senior Subordinated Notes Indenture

64

Section 6.14.

Financial Covenants

65

 

 

 

ARTICLE VII Increased Costs; Taxes; Indemnification; Set Off; Etc.

68

Section 7.1.

Increased Costs; Capital Adequacy

68

Section 7.2.

Taxes; Withholding, etc.

68

Section 7.3.

Indemnification

70

Section 7.4.

Right of Set Off

71

Section 7.5.

Funding Breakage

72

Section 7.6.

Booking of LIBOR Loans

72

Section 7.7.

Inability to Determine LIBOR

72

Section 7.8.

Assignment of Loans Under Certain Circumstances; Duty to Mitigate

72

 

 

 

ARTICLE VIII Events of Default

73

Section 8.1.

Events of Default

73

Section 8.2.

Remedies

76

 

 

 

ARTICLE IX Administrative Agent

77

Section 9.1.

Appointment of Administrative Agent

77

Section 9.2.

Powers and Duties

77

Section 9.3.

Delegation of Duties

78

Section 9.4.

General Immunity

78

Section 9.5.

Administrative Agent Entitled to Act with the Borrower

79

Section 9.6.

Lenders’ Representations, Warranties and Acknowledgment

79

Section 9.7.

Right to Indemnity

80

Section 9.8.

Successor Administrative Agent

80

Section 9.9.

Security Documentation

81

 

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Section 9.10.

Notice of Default

82

Section 9.11.

Delivery of Documents, Notices, Etc.

82

 

 

 

ARTICLE X Miscellaneous

82

Section 10.1.

Amendments and Waivers

82

Section 10.2.

Notices

84

Section 10.3.

Expenses

85

Section 10.4.

Enforceability; Successors and Assigns

85

Section 10.5.

Lenders’ Obligations Several; Independent Nature of Lenders’ Rights

88

Section 10.6.

Integration

88

Section 10.7.

No Waiver; Remedies

88

Section 10.8.

Submission to Jurisdiction

88

Section 10.9.

Execution in Counterparts

88

Section 10.10.

Governing Law

88

Section 10.11.

Waiver of Jury

89

Section 10.12.

Severability

89

Section 10.13.

Survival

89

Section 10.14.

Maximum Lawful Interest

89

Section 10.15.

Interpretation

90

Section 10.16.

Ambiguities

90

Section 10.17.

First Lien Obligations

90

Section 10.18.

Confidentiality

90

Section 10.19.

Additional Gaming Provisions

91

 

Exhibit A-1:

 

Form of Borrowing Certificate

Exhibit A-2:

 

Form of Conversion/Continuation Notice

Exhibit B:

 

Form of Note

Exhibit C:

 

Form of Guaranty

Exhibit D:

 

Form of Joinder

Exhibit E:

 

Form of Compliance Certificate

Exhibit F:

 

Form of Security Agreement

Exhibit G:

 

Form of Mortgage

Exhibit H:

 

[Reserved]

Exhibit I:

 

MPI Real Property

Exhibit J:

 

PIDI Real Property

Exhibit K:

 

SDI Real Property

Exhibit L:

 

Form of Stock Pledge Agreement

Exhibit 3.1(k):

 

Form of Closing Date Certificate

Exhibit 3.1(l):

 

Form of Solvency Certificate

Exhibit 10.4(b):

 

Form of Assignment Agreement

 

 

 

Schedule 2.1

 

Term Loan Commitments

Schedule 3.1(r)

 

Closing Date Mortgaged Properties

Schedule 4.1(c)

 

Real Property

Schedule 4.1(j)

 

Partnerships

 

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Schedule 4.1(m)

 

Beneficial Owners of Capital Stock

Schedule 4.1(p)

 

Employee Benefit Plans

Schedule 4.1(s)

 

Intellectual Property

Schedule 4.1(v)

 

Material Contracts

Schedule 4.1(w)

 

Broker’s Fees

Schedule 4.1(bb)

 

Business on Non-Core Land/Unrestricted Subsidiary Transactions

Schedule 6.1

 

Existing Indebtedness

Schedule 6.2

 

Existing Liens

Schedule 6.5

 

Existing Investments

 

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CREDIT AGREEMENT, dated as of March 18, 2010, among MTR GAMING GROUP, INC., a
Delaware corporation (the “the Borrower”), CERTAIN SUBSIDIARIES OF MTR GAMING
GROUP, INC. listed on the signature pages hereto, as guarantors (each a
“Guarantor” and collectively the “Guarantors”), the lenders signatory hereto
(together with any other financial institutions or investors from time to time
as lenders hereunder, the “Lenders”), and ALADDIN CREDIT ADVISORS, L.P., a
Delaware limited partnership, as administrative agent (“Aladdin” and, in such
capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrower has requested, and the Lenders have agreed to provide
(a) a senior, first priority secured delayed-draw Term Loan facility (subject to
Permitted Liens) and (b) other financial accommodations as set forth herein,
but, in each case, only to the extent and on the conditions set forth herein;

 

WHEREAS, the Term Loan facility will constitute a Refinancing (as defined in the
Intercreditor Agreement) of the indebtedness under the Existing Agreement;

 

WHEREAS, the liens securing the Term Loan facility will be subject to the terms
of the Intercreditor Agreement; and

 

WHEREAS, the Borrower will use the proceeds of the Term Loans (a) to finance
ongoing working capital and general corporate needs of the Borrower and its
Subsidiaries, (b) to finance capital expenditures (including the potential
development of the Scioto Downs complex in Columbus, Ohio and the development of
the Presque Isle Downs complex for table games in Erie, Pennsylvania) and (c) to
pay transaction fees and expenses in respect of this Agreement and the
transactions contemplated hereby.

 

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

 

ARTICLE I

DEFINED TERMS

 

SECTION 1.1.           DEFINITIONS.  AS USED IN THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, THE PREAMBLE, RECITALS, EXHIBITS AND SCHEDULES HERETO, THE
FOLLOWING TERMS HAVE THE MEANINGS STATED:

 

“Account” has the meaning assigned to such term in the UCC as adopted and in
effect in the State of New York.

 

“Action” against a Person means an action, suit, litigation, arbitration,
investigation, complaint, contest, hearing, inquiry, inquest, audit, examination
or other proceeding threatened or pending against or affecting such Person or
its property, whether civil, criminal, administrative, investigative or
appellate, in law or equity before any arbitrator or Governmental Body.

 

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“Administrative Agent” means initially Aladdin, and thereafter, any successor
Administrative Agent appointed pursuant to Section 9.8.

 

“Affiliate” means, with respect to a specified Person, any other Person which
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with such Person, and without limiting
the generality of the foregoing, includes (a) any Person which beneficially owns
or holds ten (10%) percent or more of any class of Voting Stock of such Person
or other equity interests in such Person, (b) any Person of which such Person
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock or in which such Person beneficially owns or holds ten (10%) percent or
more of the equity interests and (c) any director or executive officer of such
Person.  For the purposes of this definition, the term “control” (including with
correlative meanings, the terms “controlled by” and “under common control
with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
agreement or otherwise.  For purposes of determining an Affiliate of the
Borrower and its Subsidiaries, the definition of “Affiliate” shall not include
Administrative Agent or any Lender.

 

“Aggregate Amounts Due” has the meaning set forth in Section 2.14.

 

“Agreement” means this Credit Agreement, as it may be amended, amended and
restated, supplemented or otherwise modified from time to time.

 

“Applicable Prepayment Premium” has the meaning set forth in Section 2.11(g).

 

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

 

“Asset Sale” means a sale, lease or sublease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than the Borrower or any Subsidiary
of the Borrower), in one transaction or a series of transactions, of all or any
part of the businesses of the Borrower or any Subsidiary of the Borrower, assets
or properties of any kind, whether real, personal, or mixed and whether tangible
or intangible (including any Intellectual Property), whether now owned or
hereafter acquired, including, without limitation, the Capital Stock of any
Subsidiary of the Borrower, other than (i) inventory, Intellectual Property,
damaged, worn out or other obsolete personal property or other assets sold,
leased, subleased, assigned, conveyed, transferred or disposed of in the
ordinary course of business and (ii) the sale, lease or sublease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than the
Borrower or any Subsidiary of the Borrower), in one transaction or a series of
transactions, of any Non-Core Land.

 

“Assignee” has the meaning set forth in Section 10.4(b).

 

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“Assignment” has the meaning set forth in Section 10.4(b).

 

“Assignment Agreement” has the meaning set forth in Section 10.4(b).

 

“Authorized Officer” means, as applied to any Person, any individual holding the
position of chairman of the board (if an office), chief executive officer,
president or one of its executive or senior vice presidents (or the equivalent
thereof), and such Person’s chief financial officer or treasurer.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

 

“Base Rate” means, for any day, a fluctuating rate per annum equal to the
greater of “prime rate” of interest in effect for such day as published in the
Wall Street Journal.    Notwithstanding the foregoing, if the “Base Rate” as
determined pursuant to the immediately preceding sentence is below 3.50% per
annum for any day, then for all purposes of this Agreement and the other Loan
Documents, “Base Rate” shall be deemed to be 3.50% for such day.

 

“Base Rate Loans” means Term Loans bearing interest at a rate determined by
reference to the Base Rate.

 

“Borrower” has the meaning assigned to that term in the preamble hereto.

 

“Borrowing” means the making of any Term Loan.

 

“Borrowing Certificate” means a Borrowing Certificate substantially in the form
of Exhibit A-1.

 

“Business Day” means a day other than Saturday or Sunday or other day on which
commercial banks in New York City, New York are authorized or required by law or
other governmental action to close; and, with respect to any borrowings,
disbursements and payments in respect of and calculations, interest rates and
interest periods pertaining to LIBOR Loans, such day is also a day on which
dealings are carried on for deposits in Dollars by and among banks in the London
interbank market.

 

“Capital Expenditures” means, for any Person for any period, amounts paid or
Indebtedness incurred by such Person or any of its Subsidiaries in connection
with the purchase or lease by the Borrower or any of its Subsidiaries of any
fixed asset, real property or improvements that would be treated as capital
expenditures and reflected as additions to property, plant or equipment on the
balance sheet of such Person in accordance with GAAP.

 

“Capital Lease Obligations” means, as applied to any Person, the obligations of
such Person under any lease of any property (whether real, personal or mixed) by
that Person as lessee that, in conformity with GAAP, is or should be accounted
for as a capital lease on the balance sheet of that Person.

 

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“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

 

“Cash” means cash, money or currency.

 

“Cash Equivalents” means, as at any date of determination:

 

(A)                                  SECURITIES ISSUED OR DIRECTLY AND FULLY
GUARANTEED OR INSURED BY THE UNITED STATES OF AMERICA OR ANY AGENCY OR
INSTRUMENTALITY THEREOF (PROVIDED, THAT THE FULL FAITH AND CREDIT OF THE UNITED
STATES OF AMERICA IS PLEDGED IN SUPPORT THEREOF);

 

(B)                                 TIME DEPOSITS, CERTIFICATES OF DEPOSIT,
BANKERS’ ACCEPTANCES AND COMMERCIAL PAPER ISSUED BY THE PARENT CORPORATION OF
ANY DOMESTIC COMMERCIAL BANK OF RECOGNIZED STANDING HAVING CAPITAL AND SURPLUS
IN EXCESS OF $500,000,000;

 

(C)                                  COMMERCIAL PAPER ISSUED BY OTHERS RATED AT
LEAST A-2 OR THE EQUIVALENT THEREOF BY S&P OR AT LEAST P-2 OR THE EQUIVALENT
THEREOF BY MOODY’S;

 

(D)                                 REPURCHASE OBLIGATIONS WITH A TERM OF NOT
MORE THAN SEVEN DAYS FOR· UNDERLYING SECURITIES OF THE TYPES DESCRIBED IN
(A) AND (B) ABOVE ENTERED INTO WITH ANY FINANCIAL INSTITUTION MEETING THE
QUALIFICATIONS SPECIFIED IN (B) ABOVE; OR

 

(E)                                  MONEY MARKET FUNDS, SUBSTANTIALLY ALL OF
THE ASSETS OF WHICH CONSTITUTE CASH EQUIVALENTS OF THE KINDS DESCRIBED IN
(A) THROUGH (D) OF THIS DEFINITION;

 

and in the case of each of (a), (b), and (c) maturing within one year after the
date of acquisition.

 

“Change of Control” means, at any time, (a) the direct or indirect sale, lease,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Borrower and its
Subsidiaries taken as a whole to any Person other than the Permitted Holder or a
Related Party of the Permitted Holder, (b) any Person or “group” (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (other than the
Permitted Holder or a Related Party of the Permitted Holder) shall have acquired
beneficial ownership of 35% or more on a fully diluted basis of the voting
interest in the Capital Stock of the Borrower; (c) the Continuing Directors
cease for any reason to constitute the majority of the Borrower’s board of
directors then in office; (d) the Borrower adopts a plan of liquidation; (e) the
Borrower consolidates with, or merges with or into, any Person other than the
Permitted Holder or a Related Party of the Permitted Holder, or any Person other
than the Permitted Holder or a Related Party of the Permitted Holder
consolidates with, or merges with or into, the Borrower, in any such event
pursuant to a transaction in which any of the outstanding voting equity
interests of the Borrower or such other Person is converted into or exchanged
for cash, securities or other property, other than any such transaction where
the voting equity interests of the

 

4

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Borrower outstanding immediately prior to such transaction constitute or are
converted into or exchanged for a majority of the outstanding shares of the
voting equity interests of such surviving or transferee Person (immediately
after giving effect to such transaction; (f) the occurrence of a “Change of
Control” as defined in the Senior Secured Notes Indenture or the occurrence of a
“Change of Control” as defined in the Senior Subordinated Notes Indenture; or
(g) the Borrower shall cease to beneficially own and control 100% on a fully
diluted basis of the economic and voting interest in the Capital Stock of each
of MPI, PIDI and SDI.

 

“Closing Date” means the date on which all of the conditions set forth in
Section 3.1 are satisfied or otherwise waived by the Lenders and Administrative
Agent.

 

“Closing Date Certificate” means a Closing Date Certificate substantially in the
form of Exhibit 3.1(k).

 

“Closing Date Mortgaged Property” has the meaning set forth in Section 3.1(r).

 

“Collateral” means, collectively, all of the real, personal and mixed property
in which Liens are purported to be granted pursuant to the Security
Documentation as security for the Obligations.

 

“Collateral Questionnaire” means a certificate in form satisfactory to
Administrative Agent that provides information with respect to the personal or
mixed property of each Credit Party.

 

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

 

“Consents” means any approval, consent, authorization or order of, notice to or
registration or filing with, or any other action by, any Governmental Body or
other Person.

 

“Consolidated EBITDA” means, with respect to any period, an amount determined
for the Borrower and its Subsidiaries on a consolidated basis equal to: (a) the
Consolidated Net Income of such Person and its Subsidiaries for such period,
plus (b) to the extent taken into account in calculating Consolidated Net
Income, the sum of (i) depreciation and amortization and other non-cash charges
including imputed interest and deferred compensation for such period, all in
accordance with GAAP (excluding any such non-cash charges to the extent that it
represents an accrual or reserve for potential cash items in any future period
or amortization of a prepaid cash item that was paid in a prior period), plus
(ii) Interest Expense for such period, plus (iii) Taxes for such period plus
(iv) other non-cash items to the extent such items reduce the Consolidated Net
Income of such Person for such period (excluding any such non-cash item to the
extent it represents an accrual or reserve for potential cash item in any prior
period) plus (v) pre-opening expenses, calculated and classified as such in
accordance with GAAP, incurred in connection with the opening of new facilities
plus (vi) non-recurring cash severance charges for such period plus
(vii) non-recurring cash expenses incurred in connection with the pursuit of
gaming in Ohio in an amount up to $10,000,000 for the Fiscal Year

 

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ended December 31, 2009 plus (viii) non-recurring impairment costs plus
(ix) cash settlement costs incurred in connection with the litigation with Edson
R. Arneault in an amount up to $1,600,000 for the Fiscal Year ended December 31,
2009 plus (x) non-recurring cash expense incurred in connection with procuring a
Gaming License with respect to the PIDI Facility in an amount up to $10,000,000
for the Fiscal Year ended December 31, 2009, minus (c) to the extent taken into
account in calculating Consolidated Net Income, the sum of (i) other non-cash
items to the extent such items increase the Consolidated Net Income of such
Person for such period (excluding any such non-cash item to the extent it
represents the reversal of an accrual or reserve for potential cash item in any
prior period) plus (ii) interest income.

 

“Consolidated Excess Cash Flow” means, with respect to any period, an amount (if
positive) determined for the Borrower and its Subsidiaries on a consolidated
basis equal to: (a) the sum, without duplication, of the amounts for such period
of (i) Consolidated EBITDA, plus (ii) cash interest income, plus (iii) other
non-ordinary course cash income deducted in the calculation of Consolidated
EBITDA (excluding any gains or losses attributable to Asset Sales), plus
(iv) the Working Capital Adjustment, minus (b) the sum, without duplication, of
the amounts for such period of (i) voluntary and scheduled repayments of 
Indebtedness, plus (ii) Capital Expenditures (net of any proceeds of (A) Net
Asset Sale Proceeds to the extent reinvested in accordance with Section 2.11(a),
(B) Net Insurance/Condemnation Proceeds to the extent reinvested in accordance
with Section 2.11(b) and (C) any proceeds of related financings with respect to
such expenditures), plus (iii) cash Interest Expense (assuming, in the case of
Fiscal Year 2010, that the Senior Secured Notes were issued on January 1, 2009)
plus (iv) provisions for current taxes based on income of such Person and its
Subsidiaries and payable in cash with respect to such period, plus (v) one-time
Gaming License fees in an aggregate amount not to exceed $16,500,000 payable on
or before June 30, 2010, plus (vi) proceeds from any tax refunds received by the
Credit Parties with respect to the 2009 Fiscal Year, in an aggregate amount not
to exceed $9,000,000.

 

“Consolidated Net Income” means, with respect to any Person for any period, the
aggregate of the net income (loss) of such Person and its consolidated
Subsidiaries, for such period (excluding to the extent included therein (a) any
extraordinary and/or one time or unusual and non-recurring gains or any non-cash
losses and (b) any non-operating income or gains and any interest income) after
deducting all charges which should be deducted before arriving at the net income
(loss) for such period and, without duplication, after deducting the Taxes for
such period, all as determined in accordance with GAAP; provided, however, net
income or losses from discontinued operations occurring prior to April 1, 2010,
shall not be included in Consolidated Net Income.  For the purposes of this
definition, net income excludes any gain or non-cash loss, together with any
related Taxes for such gain or non-cash loss, realized upon the sale or other
disposition of any assets that are not sold in the ordinary course of business
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or of any Capital Stock of such Person and any net income realized
or loss incurred as a result of changes in accounting principles or the
application thereof to such Person.

 

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“Consolidated Tangible Assets” means with respect to any Person, the
consolidated total assets of such Person and its Subsidiaries less all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other similar intangibles properly classified as intangibles in accordance with
GAAP, all as shown on the most recent balance sheet for such Person and computed
in accordance with GAAP.

 

“Continuing Directors” means during any period of 12 consecutive months after
the Closing Date, individuals who at the beginning of any such 12-month period
constituted the board of directors of the Borrower (together with any new
directors whose election by such board of directors or whose nomination for
election by the shareholders of the Borrower was approved by a vote of a
majority 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, including new directors designated in or provided for in
an agreement regarding the merger, consolidation or sale, transfer or other
conveyance, of all or substantially all of the assets of the Borrower, if such
agreement was approved by a vote of such majority directors).

 

“Conversion/Continuation Date” means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

 

“Conversion/Continuation Notice” means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2

 

“Copyright Security Agreement” has the meaning set forth in the Security
Agreements.

 

“Core Gaming Asset” means (a) all or substantially all of the property and
assets associated with the Borrower’s operations (excluding Non-Core Land) at
(i) Mountaineer Casino, Racetrack & Resort in Chester, West Virginia;
(ii) Presque Isle Downs & Casino in Erie, Pennsylvania; and (iii) Scioto Downs
in Columbus, Ohio, and (b) the Capital Stock of any subsidiary that, directly or
indirectly, owns or controls any of the property, assets or operations referred
to in clauses (a)(i) through (a)(iii) of this definition

 

“Credit Party” means each of the Borrower and Guarantors.

 

“Current Assets” means, with respect to any Person, as at any date of
determination, the total assets of such Person and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.

 

“Current Liabilities” means, with respect to any Person, as at any date of
determination, the total liabilities of such Person and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.

 

“Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.

 

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“Dollars” and the sign “$” mean the lawful money of the United States of
America.

 

“Eligible Assignee” means (a) any Lender or any Affiliate or Approved Fund of
any Lender and/or (b) any commercial bank, insurance company, investment or
mutual fund or other entity that is an “accredited investor” (as defined in
Regulation D under the Securities Act) and that extends credit or buys loans as
its primary business; provided, that neither the Borrower nor any of its
Affiliates shall be an Eligible Assignee; provided further, that (i) no finding
of unsuitability has been made or determined by any Gaming Authority against any
Eligible Assignee, (ii) no consent or approval is required with respect to such
Eligible Assignee which has not yet been obtained, (iii) Administrative Agent
has provided to the Borrower notice of such assignment and (iv) so long as no
Event of Default shall have occurred and be continuing, no Eligible Assignee
shall be a competitor or an Affiliate of a competitor of any Credit Party.

 

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or
required to be contributed by, the Borrower or any of its Subsidiaries and any
“employee benefit plan” as defined in Section 3(3) of ERISA which was sponsored,
maintained or contributed to by, or required to be contributed to by, the
Borrower of its Subsidiaries with respect to which the Borrower or any
Subsidiary could incur liability.

 

“Environmental Laws” means all federal, state, provincial, local and foreign
laws (including without limitation common law), statutes, regulations and
rules whether now or hereinafter in effect relating in any way to the protection
of the environment or the management, release or threatened release of any
Hazardous Material, including, without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Federal Clean Water Act, the Federal Clean Air Act and the Toxic Substances
Control Act, in each case as amended, and all rules, regulations, judgments,
decrees, orders and licenses arising under all such laws.

 

“Environmental Liability” means any actual or contingent liability or
obligations of any Credit Party directly or indirectly resulting from or based
on (a) violations or alleged violations of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Material, (c) exposure to any Hazardous Material, (d) the release or
threatened release of any Hazardous Material into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed by or imposed on such Credit Party with respect any of the foregoing.

 

“Environmental Permits” means all permits, licenses, authorizations,
registrations and other governmental consents required by applicable
Environmental Laws for the operations of any Credit Party.

 

“Equipment” means, as to any Credit Party, all of such Credit Party’s now owned
and hereafter acquired equipment, wherever located, including machinery, data

 

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processing and computer equipment (whether owned or licensed and including
embedded software), vehicles, tools, furniture, fixtures, all attachments,
accessions and property now or hereafter affixed thereto or used in connection
therewith, and substitutions and replacements thereof, wherever located.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.

 

“ERISA Affiliate” means, as applied to any Person, (a) any corporation which is
a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member,
(b) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is a member,
and (c) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person is a
member.  Any former ERISA Affiliate of any Credit Party shall continue to be
considered an ERISA Affiliate of such Credit Party within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate of such
Credit Party and with respect to liabilities with respect to such entity arising
after such period for which such Credit Party could be liable under the Internal
Revenue Code or ERISA.

 

“Event of Default” means each of the conditions or events set forth in
Section 8.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

 

“Existing Agreement” means the Fifth Amended and Restated Credit Agreement,
dated as of September 22, 2006, by and among MTR Gaming Group, Inc., Mountaineer
Park, Inc., Speakeasy Gaming of Las Vegas, Inc., Presque Isle Downs, Inc.,
Scioto Downs, Inc. and Speakeasy Gaming of Fremont, Inc., as borrowers, the
lenders from time to time party thereto, and Wells Fargo Bank, National
Association, as the issuer of letters of credit thereunder, administrative agent
and collateral agent, as amended, supplemented and otherwise modified prior to
the date hereof.

 

“FF&E Financing” means purchase money indebtedness and Capital Lease
Obligations, the proceeds of which are used solely by the Borrower and its
Subsidiaries to acquire or lease, respectively, furniture, fixtures and
equipment (including Gaming Equipment) in the ordinary course of business for
use in Gaming Facilities.

 

“Financial Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officers of the Borrower that such financial statements fairly
present, in all material respects, the financial condition of the Borrower and
its Subsidiaries on a consolidated basis as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.

 

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“Financial Statements” means as of the Closing Date, (a) the audited financial
statements of the Borrower and its Subsidiaries, on a consolidated and
consolidating basis, for the Fiscal Year ended December 31, 2008, consisting of
balance sheets and the related statements of income, stockholders’ equity and
cash flows for such Fiscal Year, (b) the management letters related to the
audited financial statements referenced in clause (a), (c) draft unaudited
financial statements of the Borrower and its Subsidiaries, on a consolidated and
consolidating basis, for the Fiscal year ended December 31, 2009, consisting of
balance sheets and the related statements of income, stockholders’ equity and
cash flows for such Fiscal Year and (d) for the interim period from January 1,
2010 through January 31, 2010, internally prepared, unaudited financial
statements of the Borrower and its Subsidiaries, consisting of a balance sheet
and the related consolidated statements of income, stockholders’ equity and cash
flows, in the case of clauses (c) and (d), certified by the chief financial
officer or the executive vice president of accounting and finance of the
Borrower that they fairly present, in all material respects, the financial
condition of the Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject, if applicable, to changes resulting from audit and normal year end
adjustments.

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of the Borrower and each Subsidiary of the
Borrower ending on December 31 of each calendar year.

 

“Foreign Lender” has the meaning set forth in Section 7.2(a).

 

“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 its business.

 

“Future Gaming Facility” means (i) any Gaming Facility owned or operated, or to
be owned or operated, by the Borrower or its Subsidiaries after the Closing Date
but which is not owned or operated by the Borrower or its Subsidiaries on the
Closing Date and (ii) gaming operations initially conducted following the
Closing Date at a Gaming Facility owned or operated by the Borrower as a result
of the approval of additional permitted gaming activities by the applicable
Gaming Authorities.

 

“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time, consistently applied throughout the periods to which
reference is made.

 

“Gaming Authority” means any agency, authority, board, bureau, commission,
department, office or instrumentality of any nature whatsoever of the United
States federal government, any foreign government, any state, province or city
or other political subdivision or otherwise, whether now or hereafter in
existence, or any officer or official thereof, or any other agency, in each
case, with authority to regulate any gaming or racing operation (or proposed
gaming or racing operation) owned, managed or operated by the Borrower and its
Subsidiaries.

 

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“Gaming Equipment” means slot machines, table games and other gaming equipment
permitted to be installed under applicable Gaming Laws governing the Gaming
Facility in which such Gaming Equipment will be installed, and any related
signage, accessories, surveillance and peripheral equipment.

 

“Gaming Facility” means any gaming or parimutuel wagering establishment and
other property or assets directly ancillary thereto or used in connection
therewith, including any building, restaurant, hotel, theater, parking
facilities, retail shops, land, golf courses and other recreation and
entertainment facilities, vessel, barge, ship and equipment, owned or operated
by the Borrower or its Subsidiaries.

 

“Gaming FF&E Financing” means FF&E Financing, the proceeds of which are used
solely by the Borrower and its Subsidiaries to acquire or lease Gaming Equipment
to be installed in Future Gaming Facilities.

 

“Gaming Law” means the provisions of any gaming or racing laws or regulations of
any jurisdiction or jurisdictions to which any of the Borrower and its
Subsidiaries is, or may at any time after the date of this Agreement, be
subject.

 

“Gaming License” means any Permit required to own, lease, operate or otherwise
conduct gaming or racing activities of the Borrower and its Subsidiaries.

 

“Governmental Body” means any agency, bureau, commission, court, department,
official, political subdivision, tribunal or other instrumentality of any
administrative, judicial, legislative, executive, regulatory, police or taxing
authority of any government, whether supranational, national, federal, state,
regional, provincial, local, domestic or foreign.

 

“Guarantors” means, collectively, the following (together with their respective
successors and assigns): (a) each of the Subsidiaries of the Borrower listed on
the signature pages hereto and (b) each other entity which becomes a Guarantor
pursuant to Section 5.14 (each sometimes being referred to herein individually
as a “Guarantor”).

 

“Guaranty” means the guaranty agreement substantially in the form set forth in
Exhibit C.

 

“Guaranties” means, collectively, the MPI Guaranty, the PDI Guaranty and the SDI
Guaranty.

 

“Hazardous Materials” means any hazardous or toxic substance, waste,
contaminant, pollutant, gas or material, including, without limitation,
radioactive materials, oil, petroleum and petroleum products and constituents
thereof, which are regulated under any Environmental Law, including, without
limitation, any substance, waste or material which is (a) designated a
“pollutant”, “hazardous substance”, “extremely hazardous substance” or “toxic
chemical” under any Environmental Law, or (b) regulated as hazardous or toxic in
any way under the Regulations of any state where any Credit Party conducts its
business or owns any real property or has any leasehold or in which any Relevant
Property is located.

 

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“Hotel/Casino Facility” means, individually, and “Hotel/Casino Facilities”
means, collectively, reference to the MPI Hotel/Casino Facilities, the SDI
Facility and the PIDI Facility, in each case, including any future expansions
thereof, related thereto or used in connection therewith, and all appurtenances
thereto.

 

“Immaterial Subsidiary” means as of any date of determination, any Subsidiary
that (a) has total assets as of such date with a fair market value not in excess
of $1,000,000, (b) conducted no business during, and has no revenue for, the
most recently ended four Fiscal Quarters, (c) neither has no Indebtedness as of
such date nor directly or indirectly, guarantees or otherwise provides direct
credit support for any Indebtedness of an Credit Party and (d) is not a licensee
under, and does not otherwise hold, a Gaming License; and provided further that
if more than one Subsidiary is deemed an Immaterial Subsidiary pursuant to this
definition, all Immaterial Subsidiaries shall be considered to be a single
consolidated subsidiary for purposes of determining whether the conditions
specified above are satisfied.

 

“Indebtedness” means, with respect to any Person, without duplication, the
following:  (a) all indebtedness of such Person for borrowed money; (b) all
obligations of such Person for the deferred purchase price of property or
services other than accounts payable and accrued liabilities that would be
classified as current liabilities under GAAP which payables and expenses are
incurred in respect of property or services purchased in the ordinary course of
business; (c) all obligations of such Person evidenced by notes, bonds,
debentures or similar borrowing or securities instruments; (d) all obligations
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person; (e) all
Capital Lease Obligations of such Person as lessee; (f) all obligations of such
Person in respect of banker’s acceptances and letters of credit; (g) all net
obligations of such Person in respect of any interest rate hedging agreements or
currency hedging agreements; (h) all obligations of such Person in respect of
any guaranty by such Person of any obligation of another Person of the type
described in clauses (a) through (g) of this definition; and (i) all obligations
of another Person of the type described in clauses (a) through (h) secured by a
Lien on the property or assets of such Person (whether or not such Person is
otherwise liable for such obligations of such other Person).

 

“Indemnified Person” has the meaning set forth in Section 7.3(a) hereof.

 

“Intellectual Property” means, collectively, all copyrights, all patents and all
trademarks, together with:  (a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets; (b) all licenses or user or
other agreements granted to any Credit Party with respect to any of the
foregoing, in each case whether now or hereafter owned or used including the
licenses or other agreements with respect to any Collateral; (c) all customer
lists, identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, recorded knowledge, surveys, engineering reports, test
reports, manuals, materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery software and programs;
(d) all field repair data, sales data and other information relating to sales or
service of products now or hereafter manufactured; (e) all accounting
information and all media in which or on

 

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which any information or knowledge or data or records may be recorded or stored
and all computer programs used for the compilation or printout of such
information, knowledge, records or data; and (f) all causes of action, claims
and warranties, in each case, now or hereafter owned or acquired by any Credit
Party in respect of any of the items listed above.

 

“Intercreditor Agreement” means the Collateral Agency and Intercreditor
Agreement, dated as of August 12, 2009, by and among the Borrower, MPI, PIDI,
SDI, Wells Fargo Bank, National Association, as administrative agent and
collateral agent for the initial first lien secured parties, the Second Lien
Trustee and the Second Lien Collateral Agent, as supplemented by the
Intercreditor Agreement Joinder.

 

“Intercreditor Agreement Joinder” means the First Lien Joinder Agreement, dated
as of the date hereof, by Administrative Agent and acknowledged and agreed to by
the Borrower, MPI, PIDI and SDI, pursuant to which Administrative Agent agrees
to become a party to the Intercreditor Agreement as a New Agent (as defined
therein), First Lien Administrative Agent (as defined therein) and a First Lien
Secured Party (as defined therein) under the Intercreditor Agreement.

 

“Interest Coverage Ratio” means, as of the last day of any Fiscal Quarter, the
ratio of (a) Consolidated EBITDA for the four-Fiscal Quarter period then ending,
to (b) consolidated Interest Expense for such four Fiscal Quarter period.

 

“Interest Expense” means, for any period, as to any Person, as determined in
accordance with GAAP, the total interest expense of such Person, whether paid or
accrued during such period (including the interest component of Capital Lease
Obligations for such period, the amortization of loan origination or structuring
fees and any consent fee paid or accrued in favor of the holders of the Senior
Subordinated Notes), including, without limitation, discounts in connection with
the sale of any Accounts and bank fees, commissions, discounts and other fees
and charges owed with respect to letters of credit, banker’s acceptances or
similar instruments, in each case attributable to such Person.

 

“Interest Payment Date” means with respect to (i) any Base Rate Loan, the last
day of each month, commencing on the first such date to occur after the Closing
Date; and (ii) any LIBOR Loan, the last day of each Interest Period applicable
to such LIBOR Loan; provided that in the case of each Interest Period of longer
than three months “Interest Payment Date” shall also include the date that is
ninety (90) days after the commencement of such Interest Period.

 

“Interest Period” means, in connection with a LIBOR Loan, an interest period of
one-, two-, three- or six- months, as selected by the Borrower in the applicable
Borrowing Certificate or Conversion/Continuation Notice, (i) initially,
commencing on the date of the Borrowing or Conversion/Continuation Date thereof,
as the case may be; and (ii) thereafter, commencing on the day on which the
immediately preceding Interest Period expires; provided, (a) if an Interest
Period would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business

 

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Day unless no further Business Day occurs in such month, in which case such
Interest Period shall expire on the immediately preceding Business Day; (b) 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, subject to clause (c), of this
definition, end on the last Business Day of a calendar month; and (c) no
Interest Period with respect to any portion of the Term Loans shall extend
beyond the Maturity Date.

 

“Interest Rate Determination Date” means, with respect to any Interest Period,
the date that is two Business Days prior to the first day of such Interest
Period

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

 

“Investment” means (a) any direct or indirect purchase, redemption, retirement
or other acquisition for value by any Credit Party of, or of a beneficial
interest in, any of the Securities (including any Capital Stock) of any Person
and (b) any direct or indirect loan, advance (other than advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by any
Credit Party to any other Person (other than the Borrower or any of its
Subsidiaries), including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from sales to that
other Person and/or constitute ordinary trade credit extended in the ordinary
course of business.  The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.

 

“Knowledge” means, with respect to any Credit Party as the context requires, the
knowledge of any of such Credit Party’s Authorized Officers after notice and
reasonable inquiry by such Authorized Officers.

 

“Landlord Access Agreement” means a landlord access agreement in a form
reasonably satisfactory to Administrative Agent.

 

“Leasehold Property” means any leasehold interest of any Credit Party as lessee
under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.

 

“Lenders” has the meaning set forth in the Preamble to this Agreement, together
with any of their successors and permitted assigns.

 

“Leverage Ratio” shall mean, as of the last day of any Fiscal Quarter, the ratio
of (a) total consolidated Indebtedness for the Borrower and its Subsidiaries as
of such day, to (b) Consolidated EBITDA for the four Fiscal Quarter period
ending on such date.

 

“Liabilities” has the meaning set forth in Section 10.4(d) hereof.

 

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“LIBOR” means, as to any Term Loan for any Interest Period, the rate per annum
obtained by dividing (and rounding upward to the next whole multiple of 1/16 of
1%) (a) the rate quoted by Bloomberg Information Service (or by any successor or
substitute for such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided by such
Service, as determined by Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, on the
applicable Interest Rate Determination Date, as the rate for Dollar deposits
with a maturity comparable to such Interest Period.  If such rate is not
available at such time for any reason, LIBOR as to any LIBOR Loan for any
Interest Period shall be the arithmetic mean (rounded upward, if necessary, to
the next 1/16 of 1%) of the offered quotations of at least two Reference Banks
to the prime banks in the London interbank market for dollar deposits with a
maturity comparable to such Interest Period at approximately 11:00 a.m., London
time, on the applicable Interest Rate Determination Date, by (b) an amount equal
to (i) one minus (ii) the LIBOR Reserve Requirement.  For purposes of this
definition, “Reference Banks” shall mean major banks in the London interbank
market reasonably selected by Administrative Agent.  Notwithstanding the
foregoing, if “LIBOR” as determined pursuant to the immediately preceding
sentences is below 2.50% per annum for any Interest Period, then for all
purposes of this Agreement and the other Loan Documents “LIBOR” shall be deemed
to be 2.50% per annum for such Interest Period.

 

“LIBOR Loans” means Term Loans bearing interest at a rate determined by
reference to LIBOR.

 

“LIBOR Reserve Requirement” means for any day as applied to a LIBOR Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves) under any regulations of the
Board of Governors of the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board of Governors of the Federal Reserve
System) maintained by a member bank of the Federal Reserve System.  The rate of
interest on LIBOR Loans shall be adjusted automatically on and as of the
effective date of any change in the LIBOR Reserve Requirement.

 

“License Agreement” has the meaning assigned to such term in Section 4.1(s).

 

“Lien” means any encumbrance, mortgage, pledge, hypothecation, hypothec, charge,
lien, assignment or other security interest of any kind securing any obligation
of any Person.

 

“Loan Document” means any of this Agreement, the Notes (if any), the Security
Documentation, the Intercreditor Agreement, the Intercreditor Agreement Joinder,
the Guaranties and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of Administrative Agent or any
Lender in connection herewith.

 

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“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, assets, liabilities, prospects or condition (financial or otherwise)
of the Borrower and all of its Subsidiaries taken as a whole or (b) the ability
of the Borrower or any other Credit Party to perform its obligations hereunder
or under of any of the other Loan Documents.

 

“Material Contracts” means, with respect to any Person, each contract listed on
Schedule 4.1(v), each contract which is a replacement or a substitute for any
contract listed on such Schedule and each other contract to which such Person is
a party which is material to the business, financial condition, operations,
performance, properties or reasonably foreseeable business prospects of such
Person and its Subsidiaries, taken as a whole.

 

“Maturity Date” means the earlier of (a) the three year anniversary of the
Closing Date and (b) the date on which the Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.

 

“Moody’s” means Moody’s Investor Services, Inc.

 

“Mortgage” means a mortgage substantially in the form of Exhibit G.

 

“MPI” means Mountaineer Park, Inc., a West Virginia corporation.

 

“MPI Guaranty” means the Guaranty, dated as of even date herewith, between  MPI
and Administrative Agent, whereby MPI shall have guarantied the Obligations.

 

“MPI Hotel/Casino Facilities” means the racetrack, hotel and casino business and
related activities conducted on the MPI Real Property known as “Mountaineer
Casino, Racetrack & Resort”, “Mountaineer Racetrack & Gaming Resort”,
“Mountaineer Lodge” and “Woodview Golf Course.”

 

“MPI Real Property” means the real property that is particularly described on
Exhibit I.

 

“MPI Stock Pledge Agreement” means the Stock Pledge Agreement, dated as of even
date herewith, between the Borrower and the Administrative Agent, whereby the
Borrower shall pledge the Capital Stock of MPI as security for the Obligations,
to the extent permitted by the applicable Gaming Authority.

 

“Multiemployer Plan” means any plan which is a “multi-employer plan” as defined
in Section 3(37) of ERISA.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal
to:  (a) cash payments received by the Borrower and any of its Subsidiaries from
such Asset Sale, minus (b) any bona fide direct costs incurred in connection
with such

 

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Asset Sale to the extent paid or payable to non-Affiliates, including
(i) income, franchise, sales, gains or other applicable taxes payable by the
seller as a result of any gain recognized in connection with such Asset Sale,
(ii) payment of the outstanding principal amount of, premium or penalty, if any,
and interest on any Indebtedness (other than the Term Loans and the Senior
Secured Notes) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale, and (iii) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller’s indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by the Borrower
or any of its Subsidiaries in connection with such Asset Sale; provided that
upon releases of such reserve, the amount released shall be considered Net Asset
Sale Proceeds.

 

“Net Insurance/Condemnation Proceeds” means an amount equal to: (a) any cash
payments or cash proceeds received by the Borrower or any of its Subsidiaries
(i) under any casualty, business interruption or “key man” insurance policies in
respect of any covered loss thereunder or (ii) as a result of the taking of any
assets of the Borrower and any of its Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a sale of any
such assets to a purchaser with such power under threat of such a taking, minus
(b)(i) any actual and reasonable costs incurred by the Borrower and any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
the Borrower or such Subsidiary in respect thereof, and (ii) any bona fide
direct costs incurred in connection with any sale of such assets as referred to
in clause (a)(ii) of this definition to the extent paid or payable to
non-Affiliates, including income taxes payable as a result of any gain
recognized in connection therewith.

 

“Non-Core Land” means each of the following parcels of land, each of which is
immaterial to the Borrower’s gaming operations and as to which the Borrower has
no intention to develop:

 

(A)                                  THE 255.896 ACRE PARCEL OF LAND KNOWN AS
THE “QUARRY PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(B)                                 THE 162.79 ACRE PARCEL OF LAND KNOWN AS THE
“WOODVIEW GOLF COURSE” IN HANCOCK, WEST VIRGINIA;

 

(C)                                  THE 11.45 ACRE PARCEL OF LAND KNOWN AS THE
“DOWNS PROPERTY” IN ERIE, PENNSYLVANIA;

 

(D)                                 THE 23 ACRE PARCEL OF LAND KNOWN AS THE
“INTERNATIONAL PAPER” SITE IN ERIE, PENNSYLVANIA;

 

(E)                                  THE 130 ACRE PARCEL OF LAND KNOWN AS THE
“TROYER PARCEL” IN ERIE, PENNSYLVANIA;

 

(F)                                    THE 82.373 ACRE PARCEL OF LAND KNOWN AS
THE “GREEN SHINGLE” IN ERIE, PENNSYLVANIA;

 

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(G)                                 THE APPROXIMATELY 395 ACRE PORTION OF THE
LAND KNOWN AS THE “ORIGINAL MOUNTAINEER PARCEL” WHICH IS LOCATED TO THE EAST OF
STATE ROUTE 2 SITE IN HANCOCK, WEST VIRGINIA;

 

(H)                                 THE 97.706 ACRE PARCEL OF LAND KNOWN AS THE
“COLDWELL PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(I)                                     THE 78.215 ACRE PARCEL OF LAND KNOWN AS
THE “HAZEL PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(J)                                     THE 69.09323 ACRE PARCEL OF LAND KNOWN
AS THE “KOURCE PARCEL” SITE IN HANCOCK, WEST VIRGINIA;

 

(K)                                  THE 1.755 ACRE PARCEL OF LAND KNOWN AS THE
“GLOVER/DAILY DOUBLE PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(L)                                     THE 6.788 ACRE PARCEL OF LAND KNOWN AS
THE “JUSCZAK PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(M)                               THE 13.8765 ACRE PARCEL OF LAND KNOWN AS THE
“J&T PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(N)                                 THE 109.01 ACRE PARCEL OF LAND KNOWN AS THE
“LSW SANITATION PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(O)                                 THE 0.92 ACRE PARCEL OF LAND KNOWN AS THE
“SMITH PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(P)                                 THE 69.076 ACRE PARCEL OF LAND KNOWN AS THE
“WATSON PARCEL” SITE IN HANCOCK, WEST VIRGINIA;

 

(Q)                                 THE 6.65 ACRE PARCEL OF LAND KNOWN AS THE
“PHILLIPS PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(R)                                    THE 234.99 ACRE PARCEL OF LAND KNOWN AS
TRACT 1 OF THE “LOGAN/REALM PARCELS” IN HANCOCK, WEST VIRGINIA;

 

(S)                                  THE APPROXIMATELY 0.955 ACRE PARCEL OF LAND
KNOWN AS THE “JEFFERSON SCHOOL PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(T)                                    THE 1.95 ACRE PARCEL OF LAND KNOWN AS THE
“CARTER PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(U)                                 THE APPROXIMATELY 1 ACRE PARCEL OF LAND
KNOWN AS THE “HOIT PARCEL” IN HANCOCK, WEST VIRGINIA;

 

(V)                                 THE 0.084 ACRE PARCEL OF LAND KNOWN AS THE
“MAFFEO PARCEL” IN ERIE, PENNSYLVANIA; AND

 

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(W)                               THE 37.11 ACRE PARCEL OF LAND KNOWN AS THE
“MARA PARCEL” IN FRANKLIN COUNTY, OHIO.

 

“Note” has the meaning set forth in Section 2.6(c).

 

“Obligations” means all Indebtedness, obligations and liabilities of each Credit
Party from time to time owed to Administrative Agent, the Lenders or any of
them, direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, arising or incurred under this
Agreement or any other Loan Document or in respect of any Term Loan, any Note or
any other instruments at any time evidencing any obligation under this Agreement
or any other Loan Document, whether for principal, prepayment premium, interest
(including, without limitation, interest, as provided in this Agreement accruing
after the filing of a petition initiating any insolvency proceedings, whether or
not such interest accrues or is recoverable against the Borrower after the
filing of such petition for purposes of the Bankruptcy Code or is an allowed
claim in such proceeding), fees, expenses, indemnification or otherwise.

 

“Patent Security Agreement” has the meaning set forth in the Security
Agreements.

 

“Pension Plan” means any “employee benefit plan” as defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) which is subject to Section 412 of the
Internal Revenue Code or Section 302 of ERISA and which is sponsored, maintained
or contributed to by, or required to be contributed by, the Borrower, any
Subsidiary of the Borrower or any of their respective ERISA Affiliates and any
“employee benefit plan” as defined in Section 3(3) of ERISA (other than a
Multiemployer Plan) which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA and which was sponsored, maintained or contributed to
by, or required to be contributed by, the Borrower, any Subsidiary of the
Borrower or any of their respective ERISA Affiliates with respect to which the
Borrower or any of its Subsidiaries could incur liability.

 

“Permit” means any permit, license, approval, consent, permission, notice,
franchise, confirmation, endorsement, waiver, certification, registration,
qualification, clearance or other authorization issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any federal, state, provincial, local or foreign Regulation.

 

“Permitted Acquisition” means any acquisition by the Borrower or any Guarantor,
whether by purchase, merger or otherwise, of all or substantially all of the
assets of, all of the Capital Stock of, or a business line or unit or a division
of, any Person; provided,

 

(a)                                  immediately prior to, and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing or would result therefrom;

 

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(b)                                 all transactions in connection therewith
shall be consummated, in all material respects, in accordance with all
applicable laws and in conformity with all applicable Permits;

 

(c)                                  in the case of the acquisition of Capital
Stock, all of the Capital Stock acquired or otherwise issued by such Person or
any newly formed Guarantor in connection with such acquisition shall be owned
100% by the Borrower or a Guarantor thereof, and to the extent such Person is a
domestic Subsidiary of the Borrower or a Guarantor, to the extent permitted by
any relevant Gaming Authorities, the Borrower shall have taken, or caused to be
taken, as of the date such Person becomes a Subsidiary of the Borrower, each of
the actions set forth in Sections 5.13 and 5.14 and shall cause such domestic
Subsidiary to be a “Grantor” under the Security Documentation;

 

(d)                                 the Borrower and its Subsidiaries shall be
in compliance with (i) the covenants set forth in Article VI on a pro forma
basis after giving effect to such acquisition and (ii) the financial covenants
set forth in Section 6.14 on a pro forma basis after giving effect to such
acquisition as of the last day of the Fiscal Quarter most recently ended, (as
determined in accordance with Section 6.14(d));

 

(e)                                  any Person or assets or division as
acquired in accordance herewith shall be in same business or lines of business
(or reasonably related or incidental thereto) in which the Borrower and/or its
Subsidiaries are engaged as of the Closing Date;

 

(f)                                    the Borrower shall have delivered to
Administrative Agent at least five Business Days prior to such proposed
acquisition, a Compliance Certificate evidencing compliance with Section 6.14 as
required by clause (e) above, together with all relevant financial information
with respect to such acquired assets, including, without limitation, the
aggregate consideration for such acquisition and any other information required
to demonstrate compliance with Section 6.14; and

 

(g)                                 the acquisition shall have been approved by
the board of directors or other governing body or controlling Person of the
Person acquired or the Person from whom such assets or division is acquired.

 

“Permitted Holder” means Jeffrey P. Jacobs.

 

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

 

“Permitted Refinancing” means, with respect to any Person, any modification,
refinancing, replacement, refunding, renewal or extension of any Indebtedness of
such Person; provided that (a) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so modified, refinanced, replaced, refunded,
renewed or extended except by an amount equal to unpaid accrued interest and
premium thereon plus other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such modification, refinancing,
replacement, refunding, renewal or extension and by an

 

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amount equal to any existing commitments unutilized thereunder, (b) such
modification, refinancing, replacement, refunding, renewal or extension has a
final maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being modified, refinanced, replaced,
refunded, renewed or extended; provided that any refinancing of the Senior
Subordinated Notes shall have a final maturity date that is at least six months
following the Maturity Date, (c) at the time thereof, no Event of Default shall
have occurred and be continuing, and (d) (i) to the extent such Indebtedness
being modified, refinanced, replaced, refunded, renewed or extended is
subordinated in right of payment to the Obligations, such modification,
refinancing, replacement, refunding, renewal or extension is subordinated in
right of payment to the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness being
modified, refinanced, replaced, refunded, renewed or extended, (ii) to the
extent such Indebtedness being modified, refinanced, replaced, refunded, renewed
or extended is secured by Liens that are subordinated to the Liens securing the
Obligations, such modification, refinancing, replacement, refunding, renewal or
extension is unsecured or secured by Liens that are subordinated to the Liens
securing the Obligations on terms at least as favorable to the Lenders as those
contained in the documentation (including any intercreditor or similar
agreements) governing the Indebtedness being modified, refinanced, replaced,
refunded, renewed or extended, (iii) the terms and conditions of any such
modified, refinanced, replaced, refunded, renewed or extended Indebtedness,
taken as a whole, are not materially less favorable to the interests of the
Lenders than the terms and conditions of the Indebtedness being modified,
refinanced, replaced, refunded, renewed or extended; provided that a certificate
of an Authorized Officer delivered to the Administrative Agent at least ten
Business Days prior to the incurrence of such Indebtedness, together with a
reasonably detailed description of the material terms and conditions of such
Indebtedness or drafts of the documentation relating thereto, stating that the
Borrower has determined in good faith that such terms and conditions satisfy the
foregoing requirement shall be conclusive evidence that such terms and
conditions satisfy the foregoing requirement unless the Administrative Agent
notifies the Borrower within such ten Business Day period that it disagrees with
such determination (including a reasonable description of the basis upon which
it disagrees) and (iv) such modification, refinancing, replacement, refunding,
renewal or extension is incurred by the Person who is the obligor of the
Indebtedness being modified, refinanced, replaced, refunded, renewed or
extended.

 

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether or
not legal entities, other legal entities and Governmental Bodies.

 

“PGCB” means the Pennsylvania Gaming Control Board and any successor thereto.

 

“PIDI” means Presque Isle Downs, Inc., a Pennsylvania corporation.

 

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“PIDI Facility” means the racetrack, hotel and casino business and related
activities conducted on the PIDI Real Property known as “Presque Isle Downs”.

 

“PIDI Guaranty” means the Guaranty, dated as of even date herewith, between PIDI
and Administrative Agent, whereby PIDI shall have guarantied the Obligations.

 

“PIDI Real Property” means the real property that is particularly described on
Exhibit J.

 

“Principal Office” means, for Administrative Agent, its office located at 6
Landmark Square, Stamford, CT 06901, Attention: Simmon Saraf, or such other
office as Administrative Agent may from time to time designate in writing to the
Borrower and each Lender.

 

“Pro Rata Share” means (i) prior to the Term Loan Commitments being terminated
or reduced to zero, the percentage obtained by dividing (A) the Term Loan
Commitment of such Lender by (B) the aggregate Term Loan Commitments of all
Lenders and (ii) from and after the time that the Term Loan Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (A) the
aggregate principal amount of Term Loans of such Lender by (B) the aggregate
principal amount of Term Loans of all Lenders.

 

“Projections” has the meaning set forth in Section 5.1(d).

 

“Rating Agencies” has the meaning set forth in Section 10.4(d) hereof.

 

“Register” has the meaning set forth in Section 2.6(b).

 

“Regulation” means each applicable law, rule, regulation, order, guidance or
recommendation (or any change in its interpretation or administration) by any
Governmental Body, central bank or comparable agency and any request or
directive (whether or not having the force of law) of any of those Persons and
each judgment, injunction, order, writ, decree or award of any Governmental
Body, arbitrator or other Person.

 

“Related Party” means (a) any controlling stockholder, majority owned
Subsidiary, immediate family member, lineal descendant (or spouse of such
immediate family member or lineal descendant) of the Permitted Holder or any
executor, administrator or legal representative for the estate, heirs and
beneficiaries of the Permitted Holder; or (b) any trust, corporation,
partnership, limited liability company or other entity, the beneficiaries,
stockholders, partners, members, owners or Persons beneficially holding a
majority (and controlling) interest of which consist of the Permitted Holder
and/or such other Persons referred to in the immediately preceding clause (a).

 

“Relevant Property” means, for the Borrower and its Subsidiaries, all sites,
facilities, locations, real property and leaseholds (a) presently owned, leased,
used or operated, or owned, leased, used or operated by the Borrower or any of
its Subsidiaries

 

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(whether or not such properties are currently owned, leased, used or operated by
any Credit Party), (b) at which any Hazardous Material has been transported,
disposed, treated, stored or released by the Borrower or any of its
Subsidiaries, or (c) that are directly adjacent to any sites, facilities,
locations, real property or leaseholds presently owned, leased, used or
operated, or owned, leased, used or operated by the Borrower or any of its
Subsidiaries.

 

“Required Lenders” means, at any time, one or more Lenders having or holding
Term Loan Commitments or Term Loans, and representing more than 50% of (i) prior
to the termination of the Term Loan Commitments, the aggregate Term Loan
Commitments and (ii) after the termination of the Term Loan Commitments, the
aggregate outstanding principal amount of the Term Loans.

 

“Restricted Payment” means (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of the Borrower
or its Subsidiaries now or hereafter outstanding, except a dividend payable
solely in shares of that class of Capital Stock to the holders of that class,
(b) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of the Borrower or its Subsidiaries now or hereafter outstanding;
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or its Subsidiaries now or hereafter outstanding;
(d) management or similar fees payable to any shareholder of the Borrower or any
of its Affiliates; and (e) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, the Senior Secured Notes, the Senior Subordinated Notes, any
unsecured Indebtedness or any subordinated Indebtedness.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

 

“SDI” means Scioto Downs, Inc., an Ohio Corporation.

 

“SDI Facility” means the real property, improvements and appurtenances located
on the SDI Real Property on which SDI owns and operates a harness horse racing
facility with parimutuel wagering known as “Scioto Downs”.

 

“SDI Guaranty” means the Guaranty, dated as of even date herewith, between SDI
and Administrative Agent, whereby SDI shall have guarantied the Obligations.

 

“SDI Real Property” means the real property that is particularly described on
Exhibit K.

 

“SDI Stock Pledge Agreement” means the Stock Pledge Agreement, dated as of even
date herewith, between the Borrower and the Administrative Agent, whereby the
Borrower shall pledge the Capital Stock of SDI as security for the Obligations,
to the extent permitted by the applicable Gaming Authority.

 

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“Second Lien Collateral Agent” means Wilmington Trust FSB, as collateral agent
for the Second Lien Secured Parties (as defined in the Intercreditor Agreement).

 

“Second Lien Trustee” means Wilmington Trust FSB, as trustee under the Senior
Secured Notes Indenture

 

“Secured Parties” means, collectively, Administrative Agent and the Lenders.

 

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Securitization” has the meaning set forth in Section 10.4(d) hereof.

 

“Securitization Parties” has the meaning set forth in Section 10.4(d) hereof.

 

“Security Agreements” means, collectively, (i) the Pledge and Security
Agreement, dated as of even date herewith, between the Borrower and
Administrative Agent, (ii) the Pledge and Security Agreement, dated as of even
date herewith, between MPI and Administrative Agent, (iii) the Security
Agreement, dated as of even date herewith, between PIDI and Administrative Agent
and (iv) the Pledge and Security Agreement, dated as of even date herewith,
between SIDI and Administrative Agent, in each case, substantially in the form
of Exhibit F.

 

“Security Documentation” means the Security Agreements, the Trademark Security
Agreements, the Copyright Security Agreements, the Patent Security Agreements,
the Stock Pledge Agreements, the Mortgages and all other instruments, documents
and agreements delivered by any Credit Party pursuant to this Agreement or any
of the other Loan Documents (including, without limitation, all UCC financing
statements) in order to grant to Administrative Agent, for the benefit of the
Secured Parties, a Lien on any real, personal or mixed property of that Credit
Party as security for the Obligations.

 

“Senior Secured Notes” means the 12.625% Senior Secured Notes due 2014 issued by
the Borrower under the Senior Secured Notes Indenture.

 

“Senior Secured Notes Indenture” means the Indenture, dated as of August 12,
2009, among MTR Gaming Group, Inc., as issuer, the guarantors party thereto and
the Wilmington Trust FSB, as trustee and collateral agent, governing the Senior
Secured Notes.

 

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“Senior Subordinated Notes” means the 9% unsecured Senior Subordinated Notes due
June 1, 2012 issued by the Borrower under the Senior Subordinated Notes
Indenture.

 

“Senior Subordinated Notes Indenture” means the Indenture, dated as of May 25,
2006, among MTR Gaming Group, Inc., as issuer, the guarantors party thereto and
the Wells Fargo Bank, N.A., as trustee, governing the Senior Subordinated Notes.

 

“Solvency Certificate” means a Solvency Certificate of the chief financial
officer of the Borrower substantially in the form of Exhibit 3.1(l).

 

“Solvent” means, at any time with respect to any Person, that at such time such
Person (a) is able to pay its debts as they mature and has (and has a reasonable
basis to believe it will continue to have) sufficient capital (and not
unreasonably small capital) to carry on its business consistent with its
practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

 

“Stock Pledge Agreement” means the Stock Pledge Agreement substantially in the
form of Exhibit L.

 

“Stock Pledge Agreements” means the MPI Stock Pledge Agreement and the SDI Stock
Pledge Agreement.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, provided, in
determining the percentage of ownership interests of any Person controlled by
another Person, no ownership interest in the nature of a “qualifying share” of
the former Person shall be deemed to be outstanding; provided further, that
Unrestricted Subsidiaries shall be excluded from this definition, for so long as
such Unrestricted Subsidiaries, either individually or in the aggregate, are
Immaterial Subsidiaries.

 

“Tax” means any present or future tax, levy, impost, duty, assessment, charge,
fee, deduction or withholding of any nature and whatever called, by whomsoever,
on whomsoever and wherever imposed, levied, collected, withheld or assessed,
provided,

 

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“Tax on the overall net income” of a Person shall be construed as a reference to
a tax imposed by the jurisdiction in which that Person is organized or in which
that Person’s applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part of the
net or gross income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case of a
Lender, its applicable lending office) or franchise taxes imposed on in lieu of
such taxes and any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located.

 

“Term Loans” means the Term Loans made pursuant to Section 2.1.

 

“Term Loan Commitment” means (i) with respect to each Lender that is a lender on
the Closing Date, the amount set forth opposite such Lender’s name on Schedule
2.1 as such Lender’s “Term Loan Commitment” and (ii) in the case of any Lender
that becomes a Lender after the Closing Date, the amount specified as such
Lender’s “Term Loan Commitment” in the Assignment Agreement pursuant to which
such Lender assumed such Term Loan.  The aggregate amount of the Term Loan
Commitments as of the Closing Date is $20,000,000.

 

“Term Loan Commitment Period” means the period from the date of this Agreement
to but excluding the Term Loan Commitment Termination Date.

 

“Term Loan Commitment Termination Date” means the earliest to occur of (i) the
date the Term Loan Commitments are permanently reduced to zero pursuant to
Section 2.10(a) or Section 2.11, (ii) the eighteen-month anniversary of the
Closing Date and (iii) the date of the termination of the Term Loan Commitments
pursuant to Section 8.1.

 

“Title Policy” has the meaning set forth in Section 3.1(r).

 

“Track Business Contingent Earnout Payment”, is as defined in the Agreement and
Plan of Merger, entered into as of December 23, 2002, by and among the Borrower,
Racing Acquisition, Inc., an Ohio corporation and a wholly owned subsidiary of
the Borrower, and Scioto Downs, Inc., an Ohio corporation, as such agreement is
in effect on the Closing Date, without giving effect to any amendment,
supplement or modification thereof.

 

“Trademark Security Agreement” has the meaning set forth in the Security
Agreements.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

 

“Unrestricted Subsidiary” means (a) Three Rivers Gaming, Inc, a Pennsylvania
corporation; Keystone State Development, Inc., a Pennsylvania corporation;
Mountaineer Magic, Inc., a West Virginia corporation; Speakeasy Gaming of
Reno, Inc., a Nevada

 

26

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corporation; RacelineBet, Inc., an Oregon corporation, Excal Energy
Operating, Inc., an Ohio corporation; Mid-America Racing, Inc., an Ohio
corporation; Excal Energy Corporation, a Michigan corporation; Jackson Trotting
Association, LLC, a Michigan limited liability company; Crystal Exploration
Co., Inc., a Michigan corporation; MTR-Harness, Inc., a Minnesota corporation;
Jackson Racing, Inc., a Michigan corporation; Speakeasy Gaming of Las
Vegas, Inc., a Nevada corporation; ExCal Energy Operating, Inc., an Ohio
corporation; SDRS, Inc., an Ohio corporation; Keystone Downs, LLC, a
Pennsylvania limited liability company; and Keystone State Properties, LLC, a
Pennsylvania limited liability company; and (b) any subsidiary of an
Unrestricted Subsidiary.

 

“Unsuitable Lender” has the meaning set forth in Section 10.4(e).

 

“Voting Stock” means with respect to any Person, (a) one (1) or more classes of
Capital Stock of such Person having general voting powers to elect at least a
majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency,
and (b) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (a) of this definition.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by (ii) the then outstanding principal amount of
such Indebtedness.

 

“Working Capital” means, as at any date of determination, the excess or
deficiency of Current Assets over Current Liabilities.

 

“Working Capital Adjustment” means, for any period of determination, the amount
(which may be a negative number) by which Working Capital as of the beginning of
such period exceeds (or is less than) the Working Capital as of the end of such
period.

 

SECTION 1.2.                                ACCOUNTING TERMS.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL ACCOUNTING TERMS NOT OTHERWISE DEFINED
HEREIN SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN CONFORMITY WITH GAAP. 
FINANCIAL STATEMENTS AND OTHER INFORMATION REQUIRED TO BE DELIVERED BY THE
BORROWER TO LENDERS PURSUANT TO SECTION 5.1(A), 5.1(B) AND 5.1(C) SHALL BE
PREPARED IN ACCORDANCE WITH GAAP AS IN EFFECT AT THE TIME OF SUCH PREPARATION
(AND DELIVERED TOGETHER WITH THE RECONCILIATION STATEMENTS PROVIDED FOR IN
SECTION 5.1(F), IF APPLICABLE).  SUBJECT TO THE FOREGOING, CALCULATIONS IN
CONNECTION WITH THE DEFINITIONS, COVENANTS AND OTHER PROVISIONS HEREOF SHALL
UTILIZE ACCOUNTING PRINCIPLES AND POLICIES IN CONFORMITY WITH THOSE USED TO
PREPARE THE FINANCIAL STATEMENTS.

 

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ARTICLE II
TERM LOANS

 

SECTION 2.1.                                TERM LOANS.

 

(A)                                  DURING THE TERM LOAN COMMITMENT PERIOD,
SUBJECT TO AND UPON THE TERMS AND CONDITIONS HEREOF AND RELYING ON THE
REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN, EACH LENDER, SEVERALLY, AND NOT
JOINTLY AND SEVERALLY, AGREES TO MAKE TERM LOANS TO THE BORROWER IN THE
AGGREGATE AMOUNT UP TO BUT NOT EXCEEDING SUCH LENDER’S TERM LOAN COMMITMENT.  NO
LENDER SHALL HAVE AN OBLIGATION TO MAKE A TERM LOAN IN EXCESS OF SUCH LENDER’S
PRO RATA SHARE OF THE TERM LOAN COMMITMENT.  ANY PRINCIPAL AMOUNTS OF THE TERM
LOAN SUBSEQUENTLY REPAID OR PREPAID MAY NOT BE RE-BORROWED.

 

(B)                                 EACH LENDER’S UNFUNDED TERM LOAN COMMITMENT
SHALL TERMINATE IMMEDIATELY AND WITHOUT FURTHER ACTION ON THE TERM LOAN
COMMITMENT TERMINATION DATE.

 

(C)                                  THE TERM LOANS SHALL (I) BEAR INTEREST AS
PROVIDED IN SECTION 2.7 HEREOF AND (II) BE ENTITLED TO THE SECURITY INTERESTS,
COLLATERAL AND OTHER RIGHTS AND BENEFITS PROVIDED PURSUANT TO THE OTHER LOAN
DOCUMENTS.

 

SECTION 2.2.                                [RESERVED].

 

SECTION 2.3.                                BORROWING MECHANICS.

 

(A)                                  TERM LOANS THAT ARE BASE RATE LOANS OR
LIBOR LOANS SHALL BE MADE, IN EACH CASE, IN AN AGGREGATE MINIMUM AMOUNT OF
$1,000,000 AND INTEGRAL MULTIPLES OF $1,000,000 IN EXCESS OF THAT AMOUNT (OR
SUCH LESSER AMOUNT AS SHALL CONSTITUTE THE ENTIRE TERM LOAN COMMITMENT THEN
AVAILABLE).

 

(B)                                 WHENEVER THE BORROWER DESIRES THAT THE
LENDERS MAKE TERM LOANS, THE BORROWER SHALL DELIVER TO ADMINISTRATIVE AGENT A
FULLY EXECUTED BORROWING CERTIFICATE NO LATER THAN 12:00 P.M. (NEW YORK CITY
TIME) AT LEAST TEN (10) BUSINESS DAYS IN ADVANCE OF THE PROPOSED BORROWING DATE
(OTHER THAN THE CLOSING DATE), WHICH BORROWING DATE SHALL BE A BUSINESS DAY.

 

(C)                                  NOTICE OF RECEIPT OF EACH BORROWING
CERTIFICATE IN RESPECT OF TERM LOANS, TOGETHER WITH THE AMOUNT OF EACH LENDER’S
PRO RATA SHARE THEREOF SHALL BE PROVIDED BY ADMINISTRATIVE AGENT TO EACH
APPLICABLE LENDER BY FACSIMILE WITH REASONABLE PROMPTNESS, BUT (PROVIDED,
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH NOTICE BY 10:00 A.M. (NEW YORK
CITY TIME)) NOT LATER THAN 10:00 A.M. (NEW YORK CITY TIME) ON THE NEXT BUSINESS
DAY FOLLOWING ADMINISTRATIVE AGENT’S RECEIPT OF SUCH BORROWING CERTIFICATE FROM
THE BORROWER.

 

(D)                                 EACH LENDER SHALL MAKE THE AMOUNT OF ITS
TERM LOAN AVAILABLE TO ADMINISTRATIVE AGENT NOT LATER THAN 12:00 P.M. (NEW YORK
CITY TIME) ON THE APPLICABLE BORROWING DATE BY WIRE TRANSFER OF SAME DAY FUNDS
IN DOLLARS, AT ADMINISTRATIVE AGENT’S PRINCIPAL OFFICE.  UPON SATISFACTION OR
WAIVER OF THE CONDITIONS PRECEDENT SPECIFIED HEREIN, ADMINISTRATIVE AGENT SHALL
MAKE THE PROCEEDS OF SUCH TERM LOANS AVAILABLE TO THE BORROWER ON THE APPLICABLE
BORROWING DATE BY CAUSING AN AMOUNT OF SAME DAY FUNDS IN DOLLARS EQUAL TO THE
PROCEEDS OF ALL SUCH TERM

 

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LOANS RECEIVED BY ADMINISTRATIVE AGENT FROM LENDERS TO BE CREDITED TO AN ACCOUNT
OF THE BORROWER DESIGNATED IN WRITING TO ADMINISTRATIVE AGENT.

 

SECTION 2.4.                                PRO RATA SHARES.  ALL TERM LOANS
SHALL BE MADE BY LENDERS SIMULTANEOUSLY AND PROPORTIONATELY TO THEIR RESPECTIVE
PRO RATA SHARE, IT BEING UNDERSTOOD THAT NO LENDER SHALL BE RESPONSIBLE FOR ANY
DEFAULT BY ANY OTHER LENDER IN SUCH OTHER LENDER’S OBLIGATION TO MAKE THE TERM
LOANS HEREUNDER.

 

SECTION 2.5.                                USE OF PROCEEDS.

 

(A)                                  THE PROCEEDS OF THE TERM LOANS SHALL BE
USED BY THE BORROWER SOLELY (I) TO FINANCE ONGOING WORKING CAPITAL AND GENERAL
CORPORATE NEEDS OF THE BORROWER AND ITS SUBSIDIARIES, (II) TO FINANCE CAPITAL
EXPENDITURES (INCLUDING THE POTENTIAL DEVELOPMENT OF THE SCIOTO DOWNS COMPLEX IN
COLUMBUS, OHIO AND THE DEVELOPMENT OF THE PRESQUE ISLE DOWNS COMPLEX FOR TABLE
GAMES IN ERIE, PENNSYLVANIA) AND (III) TO PAY TRANSACTION FEES AND EXPENSES IN
RESPECT OF THIS AGREEMENT AND TRANSACTIONS CONTEMPLATED HEREBY.  NO PORTION OF
THE PROCEEDS OF THE TERM LOANS SHALL BE USED BY THE BORROWER OR ANY SUBSIDIARY
OF THE BORROWER IN ANY MANNER THAT MIGHT CAUSE SUCH BORROWING OR THE APPLICATION
OF SUCH PROCEEDS TO VIOLATE REGULATION T, REGULATION U OR REGULATION X OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM OR ANY OTHER REGULATION THEREOF
OR TO VIOLATE THE EXCHANGE ACT, IN EACH CASE AS IN EFFECT ON THE DATE OR DATES
OF SUCH BORROWING AND SUCH USE OF PROCEEDS.

 

SECTION 2.6.                                EVIDENCE OF DEBT; REGISTER; NOTES.

 

(A)                                  LENDERS’ EVIDENCE OF DEBT.  EACH LENDER
SHALL MAINTAIN ON ITS INTERNAL RECORDS AN ACCOUNT OR ACCOUNTS EVIDENCING THE
INDEBTEDNESS OF THE BORROWER TO SUCH LENDER, INCLUDING THE AMOUNTS OF THE TERM
LOANS OWED TO IT AND EACH REPAYMENT AND PREPAYMENT IN RESPECT THEREOF.  ANY SUCH
RECORDATION SHALL BE CONCLUSIVE AND BINDING ON THE BORROWER, ABSENT MANIFEST
ERROR; PROVIDED, FAILURE TO MAKE ANY SUCH RECORDATION, OR ANY ERROR IN SUCH
RECORDATION, SHALL NOT AFFECT ANY LENDER’S TERM LOAN COMMITMENT, TERM LOANS OR
THE BORROWER’S OBLIGATIONS IN RESPECT OF ANY TERM LOANS; AND PROVIDED, FURTHER,
IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE REGISTER AND ANY LENDER’S RECORDS,
THE RECORDATIONS IN THE REGISTER SHALL GOVERN.

 

(B)                                 REGISTER.  ADMINISTRATIVE AGENT SHALL
MAINTAIN, AS AGENT FOR THE LENDERS, AT ADMINISTRATIVE AGENT’S PRINCIPAL OFFICE,
A REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF EACH LENDER AND THE
TERM LOANS OWED TO EACH LENDER (THE “REGISTER”).  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY THE BORROWER OR ANY LENDER AT ANY REASONABLE TIME
AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.  ADMINISTRATIVE AGENT SHALL
RECORD IN THE REGISTER THE FEES, INTEREST AND THE OUTSTANDING BALANCE OF THE
TERM LOANS, AND EACH REPAYMENT OR PREPAYMENT IN RESPECT OF THE PRINCIPAL AMOUNT
OF AND INTEREST, FEES AND OTHER AMOUNTS WITH RESPECT TO THE TERM LOANS, AND ANY
SUCH RECORDATION SHALL BE CONCLUSIVE AND BINDING ON THE BORROWER AND EACH
LENDER, ABSENT MANIFEST ERROR; PROVIDED, FAILURE TO MAKE ANY SUCH RECORDATION,
OR ANY ERROR IN SUCH RECORDATION, SHALL NOT AFFECT THE PRINCIPAL OUTSTANDING
AMOUNT OF THE TERM LOANS, OR THE BORROWER’S OBLIGATIONS IN RESPECT THERETO.  NO
TRANSFER OF THE TERM LOANS AND/OR ANY INTERESTS THEREIN SHALL BE EFFECTIVE UNTIL
SUCH TRANSFER IS RECORDED IN THE REGISTER.  THE BORROWER HEREBY DESIGNATES THE
ENTITY SERVING AS ADMINISTRATIVE AGENT TO SERVE AS THE BORROWER’S AGENT SOLELY
FOR PURPOSES OF MAINTAINING THE REGISTER AS PROVIDED IN THIS SECTION 2.6,

 

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AND THE BORROWER HEREBY AGREES THAT, TO THE EXTENT SUCH ENTITY SERVES IN SUCH
CAPACITY, THE ENTITY SERVING AS ADMINISTRATIVE AGENT AND ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS AND AFFILIATES SHALL CONSTITUTE “INDEMNIFIED
PERSONS” PURSUANT TO SECTION 7.3.

 

(C)                                  NOTES.  IF SO REQUESTED BY ANY LENDER BY
WRITTEN NOTICE TO THE BORROWER (WITH A COPY TO ADMINISTRATIVE AGENT) PRIOR TO
THE CLOSING DATE, OR AT ANY TIME THEREAFTER, THE BORROWER SHALL EXECUTE AND
DELIVER TO SUCH LENDER (AND/OR, IF APPLICABLE AND IF SO SPECIFIED IN SUCH
NOTICE, TO ANY PERSON WHO IS AN ASSIGNEE OF SUCH LENDER PURSUANT TO
SECTION 10.4) ON THE CLOSING DATE (OR, IF SUCH REQUEST IS DELIVERED AFTER THE
CLOSING DATE, PROMPTLY AFTER THE BORROWER’S RECEIPT OF SUCH REQUEST) A
PROMISSORY NOTE, IN THE FORM OF EXHIBIT B (A “NOTE”), TO EVIDENCE SUCH LENDER’S
TERM LOANS.

 

SECTION 2.7.                                INTEREST.

 

(A)                                  APPLICABLE RATES.  EXCEPT AS OTHERWISE SET
FORTH HEREIN, THE TERM LOANS OUTSTANDING SHALL BEAR INTEREST ON THE UNPAID
PRINCIPAL AMOUNT THEREOF FROM THE DATE MADE THROUGH REPAYMENT (WHETHER BY
ACCELERATION OR OTHERWISE) AT A RATE PER ANNUM EQUAL TO (I) IF A LIBOR LOAN,
LIBOR PLUS 7.00% PER ANNUM AND (II) IF A BASE RATE LOAN, THE BASE RATE PLUS
6.00% PER ANNUM.

 

(B)                                 DETERMINING THE APPLICABLE RATE OF
INTEREST.  THE BASIS FOR DETERMINING THE RATE OF INTEREST WITH RESPECT TO ANY
TERM LOAN, AND THE INTEREST PERIOD WITH RESPECT TO ANY LIBOR LOAN, SHALL BE
SELECTED BY THE BORROWER AND NOTIFIED TO ADMINISTRATIVE AGENT AND LENDERS
PURSUANT TO THE APPLICABLE BORROWING CERTIFICATE OR CONVERSION/CONTINUATION
NOTICE, AS THE CASE MAY BE.  IF ON ANY DAY A TERM LOAN IS OUTSTANDING WITH
RESPECT TO WHICH A BORROWING CERTIFICATE OR CONVERSION/CONTINUATION NOTICE HAS
NOT BEEN DELIVERED TO ADMINISTRATIVE AGENT IN ACCORDANCE WITH THE TERMS HEREOF
SPECIFYING THE APPLICABLE BASIS FOR DETERMINING THE RATE OF INTEREST, THEN FOR
THAT DAY SUCH TERM LOAN SHALL BE A BASE RATE LOAN.

 

(C)                                  LIBOR PERIODS.  IN CONNECTION WITH LIBOR
LOANS THERE SHALL BE NO MORE THAN FIVE (5) INTEREST PERIODS OUTSTANDING AT ANY
TIME.  IN THE EVENT THE BORROWER FAILS TO SPECIFY BETWEEN A BASE RATE LOAN OR A
LIBOR LOAN IN THE APPLICABLE BORROWING CERTIFICATE OR CONVERSION/CONTINUATION
NOTICE, SUCH LOAN (IF OUTSTANDING AS A LIBOR LOAN) WILL BE AUTOMATICALLY
CONVERTED INTO A BASE RATE LOAN ON THE LAST DAY OF THE THEN-CURRENT INTEREST
PERIOD FOR SUCH LOAN (OR IF OUTSTANDING AS A BASE RATE LOAN WILL REMAIN AS, OR
(IF NOT THEN OUTSTANDING) WILL BE MADE AS, A BASE RATE LOAN).  IN THE EVENT THE
BORROWER FAILS TO SPECIFY AN INTEREST PERIOD FOR ANY LIBOR LOAN IN THE
APPLICABLE BORROWING CERTIFICATE OR CONVERSION/CONTINUATION NOTICE, THE BORROWER
SHALL BE DEEMED TO HAVE SELECTED AN INTEREST PERIOD OF ONE MONTH.  AS SOON AS
PRACTICABLE AFTER 10:00 A.M. (NEW YORK CITY TIME) ON EACH INTEREST RATE
DETERMINATION DATE, ADMINISTRATIVE AGENT SHALL DETERMINE (WHICH DETERMINATION
SHALL, ABSENT MANIFEST ERROR, BE FINAL, CONCLUSIVE AND BINDING UPON ALL PARTIES)
THE INTEREST RATE THAT SHALL APPLY TO THE LIBOR LOANS FOR WHICH AN INTEREST RATE
IS THEN BEING DETERMINED FOR THE APPLICABLE INTEREST PERIOD AND SHALL PROMPTLY
GIVE NOTICE THEREOF (IN WRITING OR BY TELEPHONE CONFIRMED IN WRITING) TO THE
BORROWER AND EACH LENDER.

 

(D)                                 CALCULATION OF INTEREST RATES.  INTEREST
PAYABLE PURSUANT TO SECTION 2.7(A) SHALL BE COMPUTED ON THE BASIS OF A 360-DAY
YEAR FOR THE ACTUAL NUMBER OF DAYS ELAPSED IN THE PERIOD

 

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DURING WHICH IT ACCRUES.  IN COMPUTING INTEREST ON ANY TERM LOAN, THE DATE OF
THE MAKING OF SUCH TERM LOAN OR THE FIRST BUSINESS DAY OF AN INTEREST PERIOD
APPLICABLE TO SUCH TERM OR, WITH RESPECT TO A BASE RATE LOAN BEING CONVERTED
FROM A LIBOR LOAN, THE DATE OF CONVERSION OF SUCH LIBOR LOAN TO SUCH BASE RATE
LOANS, AS THE CASE MAY BE, SHALL BE INCLUDED, AND THE DATE OF PAYMENT OF SUCH
TERM LOAN OR THE EXPIRATION DATE OF AN INTEREST PERIOD APPLICABLE TO SUCH TERM
LOAN OR, WITH RESPECT TO A BASE RATE LOAN BEING CONVERTED TO A LIBOR LOAN, THE
DATE OF CONVERSION OF SUCH BASE RATE LOAN TO SUCH LIBOR LOAN, AS THE CASE MAY
BE, SHALL BE EXCLUDED; PROVIDED, IF SUCH TERM LOAN IS REPAID ON THE SAME DAY ON
WHICH IT IS MADE, ONE DAY’S INTEREST SHALL BE PAID ON SUCH TERM LOAN.

 

(E)                                  PAYMENT/ACCRUAL OF INTEREST.  EXCEPT AS
OTHERWISE PROVIDED HEREIN, ALL INTEREST ON THE TERM LOANS SHALL BE PAYABLE IN
ARREARS ON (I) EACH INTEREST PAYMENT DATE, (II) ANY DATE OF ANY PREPAYMENT OF
THE TERM LOANS, WHETHER VOLUNTARY OR MANDATORY, TO THE EXTENT ACCRUED ON THE
AMOUNT BEING PREPAID, AND (III) THE MATURITY DATE.

 

(F)                                    DEFAULT INTEREST.  UPON THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT DESCRIBED IN SECTION 8.1, THE
PRINCIPAL AMOUNT OF THE TERM LOANS AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY PAST DUE INTEREST PAYMENTS ON THE TERM LOANS OR ANY FEES OR OTHER
AMOUNTS OWED HEREUNDER, IN EACH CASE WHETHER AT STATED MATURITY, BY NOTICE OF
PREPAYMENT, BY ACCELERATION OR OTHERWISE, SHALL THEREAFTER BEAR INTEREST
(INCLUDING, WITHOUT LIMITATION, INTEREST, AS PROVIDED IN THIS AGREEMENT,
ACCRUING AFTER THE FILING OF A PETITION INITIATING ANY INSOLVENCY PROCEEDINGS,
WHETHER OR NOT SUCH INTEREST ACCRUES OR IS RECOVERABLE AGAINST THE BORROWER
AFTER THE FILING OF SUCH PETITION FOR PURPOSES OF THE BANKRUPTCY CODE OR IS AN
ALLOWED CLAIM IN SUCH PROCEEDING) PAYABLE ON DEMAND AT A RATE THAT IS 2.0% PER
ANNUM IN EXCESS OF THE INTEREST RATE OTHERWISE PAYABLE HEREUNDER WITH RESPECT TO
THE TERM LOANS; PROVIDED, IN THE CASE OF LIBOR LOANS, UPON THE EXPIRATION OF THE
INTEREST PERIOD IN EFFECT AT THE TIME ANY SUCH INCREASE IN INTEREST RATE IS
EFFECTIVE SUCH LIBOR LOANS SHALL THEREUPON BECOME BASE RATE LOANS AND SHALL
THEREAFTER BEAR INTEREST PAYABLE UPON DEMAND AT A RATE WHICH IS 2.0% PER ANNUM
IN EXCESS OF THE INTEREST RATE OTHERWISE PAYABLE HEREUNDER FOR BASE RATE LOANS.
PAYMENT OR ACCEPTANCE OF THE INCREASED RATES OF INTEREST PROVIDED FOR IN THIS
SECTION 2.7(F) IS NOT A PERMITTED ALTERNATIVE TO TIMELY PAYMENT AND SHALL NOT
CONSTITUTE A WAIVER OF ANY EVENT OF DEFAULT OR OTHERWISE PREJUDICE OR LIMIT ANY
RIGHTS OR REMEDIES OF ADMINISTRATIVE AGENT OR ANY LENDER.

 

(G)                                 CHANGED CIRCUMSTANCES.  IF THE INTRODUCTION
OF OR ANY CHANGE IN OR IN THE INTERPRETATION OF (IN EACH CASE, AFTER THE DATE
HEREOF) ANY LAW OR REGULATION APPLICABLE TO ANY LENDER MAKES IT UNLAWFUL, OR ANY
GOVERNMENTAL BODY ASSERTS, AFTER THE DATE HEREOF, THAT IT IS UNLAWFUL, FOR ANY
LENDER TO PERFORM ITS OBLIGATIONS HEREUNDER TO MAINTAIN THE TERM LOANS AT LIBOR,
SUCH LENDER SHALL NOTIFY ADMINISTRATIVE AGENT OF SUCH EVENT AND ADMINISTRATIVE
AGENT SHALL NOTIFY THE BORROWER OF SUCH EVENT, AND THE RIGHT OF THE BORROWER TO
APPLY LIBOR TO ANY SUBSEQUENT INTEREST PERIOD SHALL BE SUSPENDED UNTIL
ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER THAT THE CIRCUMSTANCES CAUSING
SUCH SUSPENSION NO LONGER EXIST, AND ALL TERM LOANS SHALL BE CONVERTED FROM
LIBOR LOANS TO BASE RATE LOANS; PROVIDED, THAT IF THE DATE OF SUCH REPAYMENT OR
PROPOSED CONVERSION IS NOT THE LAST DAY OF AN INTEREST PERIOD APPLICABLE TO THE
TERM LOANS, THE BORROWER SHALL ALSO PAY ANY AMOUNT DUE PURSUANT TO SECTION 7.5.

 

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SECTION 2.8.                                FEES.

 

(A)                                  THE BORROWER AGREES TO PAY TO
ADMINISTRATIVE AGENT ON THE CLOSING DATE, SOLELY FOR ITS OWN ACCOUNT, A
NON-REFUNDABLE UPFRONT FEE EQUAL TO 3.00% OF THE AGGREGATE TERM LOAN COMMITMENT
ON THE CLOSING DATE.

 

(B)                                 THE BORROWER AGREES TO PAY TO ADMINISTRATIVE
AGENT A NON-REFUNDABLE AGENCY FEE IN AN AMOUNT EQUAL TO $50,000 ON THE CLOSING
DATE AND ON EACH ANNIVERSARY THEREOF.

 

(C)                                  THE BORROWER AGREES TO PAY TO
ADMINISTRATIVE AGENT, DURING THE TERM LOAN COMMITMENT PERIOD, FOR THE ACCOUNT OF
THE LENDERS, COMMITMENT FEES EQUAL TO (I) THE AVERAGE DAILY AMOUNT OF TERM LOAN
COMMITMENTS THAT HAVE NOT BEEN FUNDED AS TERM LOANS, TIMES (II) 1.00% PER ANNUM.

 

(D)                                 ALL FEES REFERRED TO IN SECTION 2.8(C) SHALL
BE CALCULATED ON THE BASIS OF A 360 DAY YEAR AND THE ACTUAL NUMBER OF DAYS
ELAPSED AND SHALL BE PAYABLE MONTHLY IN ARREARS ON THE LAST BUSINESS DAY OF EACH
CALENDAR MONTH DURING THE TERM LOAN COMMITMENT PERIOD, COMMENCING ON THE FIRST
SUCH DATE TO OCCUR AFTER THE CLOSING DATE, AND ON THE TERM LOAN COMMITMENT
TERMINATION DATE.  ALL FEES REFERRED TO IN SECTION 2.8(C) SHALL BE PAID TO
ADMINISTRATIVE AGENT AT ITS PRINCIPAL OFFICE AND UPON RECEIPT, ADMINISTRATIVE
AGENT SHALL PROMPTLY DISTRIBUTE TO EACH LENDER ITS PRO RATA SHARE THEREOF.

 

SECTION 2.9.                                REPAYMENT.  SUBJECT TO SECTIONS 2.10
AND 2.11, THE TERM LOANS SHALL BE DUE AND PAYABLE, AND THE BORROWER SHALL BE
REQUIRED TO REPAY ALL OF THE OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ALL
ACCRUED AND UNPAID PRINCIPAL AND INTEREST ON THE PRINCIPAL AMOUNTS OF THE TERM
LOANS) ON THE MATURITY DATE.

 

SECTION 2.10.                         OPTIONAL PREPAYMENTS.

 

(A)                                  OPTIONAL PREPAYMENTS.  AT ANY TIME AND FROM
TIME TO TIME THE BORROWER MAY PREPAY THE TERM LOANS AND/OR REDUCE THE TERM LOAN
COMMITMENTS, SUBJECT TO THE APPLICABLE PREPAYMENT PREMIUM SET FORTH IN
SECTION 2.11(G) BELOW, ON ANY BUSINESS DAY IN WHOLE OR IN PART, IN AN AGGREGATE
MINIMUM AMOUNT OF $1,000,000 AND IN MULTIPLES OF $500,000 ABOVE SUCH AMOUNT (OR
SUCH LESSER AMOUNT AS SHALL CONSTITUTE THE ENTIRE AMOUNT OF THE TERM LOANS THEN
OUTSTANDING).  THE TERM LOANS SHALL BE PREPAID ACCORDING TO EACH LENDER’S PRO
RATA SHARE.

 

(B)                                 NOTICE OF OPTIONAL PREPAYMENT.  ALL SUCH
PREPAYMENTS SHALL BE MADE ON A BUSINESS DAY AND UPON NOT LESS THAN ONE BUSINESS
DAY’S PRIOR WRITTEN OR TELEPHONIC NOTICE, IN EACH CASE GIVEN TO ADMINISTRATIVE
AGENT BY 12:00 P.M. (NEW YORK CITY TIME) ON THE DATE REQUIRED AND, IF GIVEN BY
TELEPHONE, PROMPTLY CONFIRMED IN WRITING TO ADMINISTRATIVE AGENT (AND
ADMINISTRATIVE AGENT WILL PROMPTLY TRANSMIT SUCH TELEPHONIC OR ORIGINAL NOTICE
FOR THE TERM LOAN BY FACSIMILE OR TELEPHONE TO EACH LENDER).  UPON THE GIVING OF
ANY SUCH NOTICE, THE PRINCIPAL AMOUNT OF THE TERM LOAN SPECIFIED IN SUCH NOTICE
SHALL BECOME DUE AND PAYABLE ON THE DATE SPECIFIED THEREIN.

 

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SECTION 2.11.                         MANDATORY PREPAYMENTS; MANDATORY
COMMITMENT REDUCTIONS.

 

(A)                                  ASSET SALES.  NO LATER THAN FIVE BUSINESS
DAYS FOLLOWING THE DATE OF RECEIPT BY ANY CREDIT PARTY OF ANY NET ASSET SALE
PROCEEDS, THE BORROWER SHALL PREPAY THE TERM LOANS IN AN AGGREGATE AMOUNT EQUAL
TO SUCH NET ASSET SALE PROCEEDS, WHICH PREPAYMENT SHALL BE APPLIED TO
PERMANENTLY PREPAY THE TERM LOANS AS SET FORTH IN SECTION 2.12; PROVIDED THAT SO
LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
THE BORROWER SHALL HAVE THE OPTION, DIRECTLY OR THROUGH ONE OR MORE OF THE
GUARANTORS, TO INVEST NET ASSET SALE PROCEEDS WITHIN ONE HUNDRED EIGHTY (180)
DAYS OF RECEIPT THEREOF IN ASSETS TO BE USED IN THE BUSINESS OF THE BORROWER AND
ITS SUBSIDIARIES.

 

(B)                                 INSURANCE/CONDEMNATION PROCEEDS.  NO LATER
THAN FIVE BUSINESS DAYS FOLLOWING THE DATE OF RECEIPT BY ANY CREDIT PARTY, OR
ADMINISTRATIVE AGENT AS LOSS PAYEE, OF ANY NET INSURANCE/CONDEMNATION PROCEEDS,
THE BORROWER SHALL PREPAY THE TERM LOANS IN AN AGGREGATE AMOUNT EQUAL TO SUCH
NET INSURANCE/CONDEMNATION PROCEEDS, WHICH PREPAYMENT SHALL BE APPLIED TO
PERMANENTLY PREPAY THE TERM LOANS AS SET FORTH IN SECTION 2.12; PROVIDED THAT SO
LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
THE BORROWER SHALL HAVE THE OPTION, DIRECTLY OR THROUGH ONE OR MORE OF THE
GUARANTORS TO INVEST SUCH NET INSURANCE/CONDEMNATION PROCEEDS WITHIN ONE HUNDRED
EIGHTY (180) DAYS OF RECEIPT THEREOF IN THE REPAIR, RESTORATION OR REPLACEMENT
OF THE APPLICABLE ASSETS THEREOF OR IN ASSETS TO BE USED IN THE BUSINESS OF THE
BORROWER AND ITS SUBSIDIARIES.

 

(C)                                  ISSUANCE OF EQUITY SECURITIES.  WITHIN FIVE
BUSINESS DAYS OF THE DATE OF RECEIPT BY ANY CREDIT PARTY OF ANY CASH PROCEEDS
FROM A CAPITAL CONTRIBUTION TO, OR THE ISSUANCE OF CAPITAL STOCK OF ANY CREDIT
PARTY OR ANY OF ITS SUBSIDIARIES (OTHER THAN CAPITAL STOCK (I) ISSUED PURSUANT
TO ANY EMPLOYEE STOCK OR STOCK OPTION COMPENSATION PLAN OR (II) THE PROCEEDS OF
WHICH SHALL BE USED IN CONNECTION WITH THE CONSTRUCTION OF A FUTURE GAMING
FACILITY ON THE SDI PROPERTY, PROVIDED THAT WITH RESPECT TO THIS CLAUSE (II),
PRIOR TO THE ISSUANCE OF SUCH CAPITAL STOCK, THE BORROWER SHALL HAVE DELIVERED A
CERTIFICATE OF AN AUTHORIZED OFFICER OF THE BORROWER DESIGNATING THAT SUCH
PROCEEDS WILL BE USED IN SUCH A MANNER) THE BORROWER SHALL PERMANENTLY PREPAY
THE TERM LOANS IN AN AGGREGATE AMOUNT EQUAL TO 100% OF SUCH PROCEEDS, NET OF
UNDERWRITING DISCOUNTS AND COMMISSIONS AND OTHER REASONABLE COSTS AND EXPENSES
ASSOCIATED THEREWITH, INCLUDING REASONABLE LEGAL FEES AND EXPENSES, WHICH
PREPAYMENT SHALL BE APPLIED TO PERMANENTLY PREPAY THE TERM LOANS AS SET FORTH IN
SECTION 2.12.

 

(D)                                 ISSUANCE OF DEBT.  ON THE DATE OF RECEIPT BY
ANY CREDIT PARTY OF ANY CASH PROCEEDS FROM THE INCURRENCE OF ANY INDEBTEDNESS OF
ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES (OTHER THAN WITH RESPECT TO ANY
INDEBTEDNESS PERMITTED TO BE INCURRED PURSUANT TO SECTION 6.1), THE BORROWER
SHALL PERMANENTLY PREPAY THE TERM LOANS AND/OR THE TERM LOAN COMMITMENTS SHALL
BE PERMANENTLY REDUCED IN AN AGGREGATE AMOUNT EQUAL TO 100% OF SUCH PROCEEDS,
NET OF UNDERWRITING DISCOUNTS AND COMMISSIONS AND OTHER REASONABLE COSTS AND
EXPENSES ASSOCIATED THEREWITH, INCLUDING REASONABLE LEGAL FEES AND EXPENSES,
WHICH PREPAYMENT SHALL BE APPLIED TO PERMANENTLY PREPAY THE TERM LOANS AND/OR
REDUCE THE TERM LOAN COMMITMENTS AS SET FORTH IN SECTION 2.12.

 

(E)                                  CONSOLIDATED EXCESS CASH FLOW.  IN THE
EVENT THERE SHALL BE CONSOLIDATED EXCESS CASH FLOW FOR ANY FISCAL YEAR,
COMMENCING WITH THE FISCAL YEAR 2010, THE BORROWER SHALL, NO

 

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LATER THAN NINETY DAYS AFTER THE END OF SUCH FISCAL YEAR, PREPAY THE TERM LOANS
IN AN AGGREGATE AMOUNT EQUAL TO 50% OF SUCH CONSOLIDATED EXCESS CASH FLOW, WHICH
PREPAYMENT SHALL BE APPLIED TO PERMANENTLY PREPAY THE TERM LOANS AS SET FORTH IN
SECTION 2.12; PROVIDED THAT NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
PARAGRAPH (E), THE BORROWER SHALL NOT BE REQUIRED TO MAKE THAT PORTION OF A
PREPAYMENT HEREUNDER TO THE EXTENT THAT SUCH PREPAYMENT WOULD CAUSE THE
AGGREGATE AMOUNT OF CASH AND CASH EQUIVALENTS OF THE BORROWER AND ITS
SUBSIDIARIES (EXCLUDING (I) ANY UNREDEEMED WINNING TICKETS FROM THEIR RACING
OPERATIONS, (II) FUNDS RELATED TO HORSEMEN’S FINES AND CERTAIN SIMULCASTING
FUNDS THAT ARE RESTRICTED TO PAYMENTS FOR IMPROVING HORSEMEN’S FACILITIES AND
INCREASING RACING PURSES AT SDI, (III) SHORT-TERM CERTIFICATE OF DEPOSITS THAT
SERVE AS COLLATERAL FOR CERTAIN BONDING REQUIREMENTS, IN EACH CASE TO THE EXTENT
PERMITTED HEREIN AND (IV) CASH DEPOSITS SERVING AS COLLATERAL FOR OUTSTANDING
LETTERS OF CREDIT, TO THE EXTENT PERMITTED HEREIN) TO BE LESS THAN $25,000,000
(OR IF THE NEW SDI GAMING FACILITY IS OPERATIONAL, $30,000,000) AFTER GIVING
EFFECT THERETO.

 

(F)                                    PREPAYMENT CERTIFICATE.  CONCURRENTLY
WITH ANY PREPAYMENT OF THE TERM LOANS PURSUANT TO SECTIONS 2.11(A) THROUGH
2.11(E) THE BORROWER SHALL DELIVER TO ADMINISTRATIVE AGENT A CERTIFICATE OF AN
AUTHORIZED OFFICER DEMONSTRATING THE CALCULATION OF THE AMOUNT OF THE APPLICABLE
NET PROCEEDS OR CONSOLIDATED EXCESS CASH FLOW.  IN THE EVENT THAT THE BORROWER
SHALL SUBSEQUENTLY DETERMINE THAT THE ACTUAL AMOUNT RECEIVED EXCEEDED THE AMOUNT
SET FORTH IN SUCH CERTIFICATE, THE BORROWER SHALL PROMPTLY MAKE AN ADDITIONAL
PREPAYMENT OF THE TERM LOANS AND/OR PERMANENTLY REDUCE THE TERM LOAN COMMITMENTS
IN ACCORDANCE WITH SECTION 2.12 AND IN AN AMOUNT EQUAL TO SUCH EXCESS, AND THE
BORROWER SHALL CONCURRENTLY THEREWITH DELIVER TO ADMINISTRATIVE AGENT A
CERTIFICATE OF AN AUTHORIZED OFFICER DEMONSTRATING THE DERIVATION OF SUCH
EXCESS.

 

(G)                                 PREPAYMENT PREMIUM.  IF, PURSUANT TO
SECTION 2.10(A) AND SECTION 2.11(D), THE BORROWER PREPAYS ALL OR ANY PART OF THE
PRINCIPAL BALANCE OF THE TERM LOANS AND/OR ANY TERM LOAN COMMITMENT IS REDUCED
OR TERMINATED PRIOR TO THE SECOND ANNIVERSARY OF THE CLOSING DATE, THE BORROWER
SHALL PAY TO ADMINISTRATIVE AGENT, FOR THE BENEFIT OF ALL LENDERS ENTITLED TO A
PORTION OF SUCH PREPAYMENT OR REDUCTION A PREPAYMENT PREMIUM (THE “APPLICABLE
PREPAYMENT PREMIUM”) ON THE AMOUNT SO PREPAID OR REDUCED AS FOLLOWS: (I) IF THE
PREPAYMENT OR REDUCTION OCCURS DURING THE PERIOD COMMENCING ON THE CLOSING DATE
BUT BEFORE THE FIRST ANNIVERSARY OF THE CLOSING DATE, AN AMOUNT EQUAL TO 1.00%
OF THE PRINCIPAL AMOUNT OF THE TERM LOANS BEING PREPAID OR TERM LOAN COMMITMENT
BEING REDUCED, AS OF THE PREPAYMENT DATE; (II) IF THE PREPAYMENT OCCURS DURING
THE PERIOD COMMENCING ON THE FIRST ANNIVERSARY OF THE CLOSING DATE BUT BEFORE
THE SECOND ANNIVERSARY OF THE CLOSING DATE, AN AMOUNT EQUAL TO 0.50% OF THE
PRINCIPAL AMOUNT OF THE TERM LOANS BEING PREPAID OR TERM LOAN COMMITMENT BEING
REDUCED, AS OF THE PREPAYMENT DATE; AND (III) IF THE PREPAYMENT OCCURS ON OR
AFTER THE SECOND ANNIVERSARY OF THE CLOSING DATE, AN AMOUNT EQUAL TO $0.

 

SECTION 2.12.                         APPLICATION OF PAYMENTS

 

(A)                                  APPLICATION OF MANDATORY PREPAYMENTS. 
ABSENT A DEFAULT OR AN EVENT OF DEFAULT, ANY MANDATORY PREPAYMENT OF THE TERM
LOANS SHALL BE APPLIED TO PREPAY THE TERM LOANS ON A PRO RATA BASIS IN
ACCORDANCE WITH THE PRO RATA SHARE OF EACH LENDER TOGETHER WITH ALL ACCRUED AND
UNPAID INTEREST ON THE DATE OF SUCH REPAYMENT.

 

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(B)                                 APPLICATION OF PAYMENTS FOLLOWING AN EVENT
OF DEFAULT.  FOLLOWING THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, ALL PREPAYMENTS AND OTHER PAYMENTS OR PROCEEDS RECEIVED BY
ADMINISTRATIVE AGENT HEREUNDER OR UNDER ANY SECURITY DOCUMENT IN RESPECT OF THE
OBLIGATIONS SHALL BE APPLIED AS FOLLOWS:

 

first, to the payment of all expenses specified in Section 10.3 and all fees;

 

second, to the payment of all other Obligations for the ratable benefit of the
Lenders; and

 

third, to whomsoever may be lawfully entitled.

 

(C)                                  FOR THE AVOIDANCE OF DOUBT, (I) ALL
REFERENCES TO AND THE USE OF THE TERMS “PREPAY”, “PREPAID”, OR “PREPAYMENT”
SHALL MEAN PAYMENT OF THE TERM LOANS PRIOR TO THE ORIGINAL MATURITY DATE AND
SHALL NOT MEAN PAYMENT OF THE TERM LOANS PRIOR TO ANY ACCELERATED MATURITY DATE
AND (II) ANY PREPAYMENT PREMIUM OR PREPAYMENT FEE REQUIRED TO BE PAID UNDER THIS
AGREEMENT SHALL ALSO BE PAID UPON OR AFTER ACCELERATION OF THE TERM LOANS.

 

(D)                                 ANY PREPAYMENT OF THE TERM LOANS PURSUANT TO
SECTION 2.10 OR SECTION 2.11 SHALL BE APPLIED FIRST TO BASE RATE LOANS TO THE
FULL EXTENT THEREOF BEFORE APPLICATION TO LIBOR LOANS, IN EACH CASE IN A MANNER
WHICH MINIMIZES THE AMOUNT OF ANY PAYMENTS REQUIRED TO BE MADE BY THE BORROWER
PURSUANT TO SECTION 7.5.

 

SECTION 2.13.                         GENERAL PROVISIONS REGARDING PAYMENTS.

 

(A)                                  PAYMENTS.  ALL PAYMENTS BY THE BORROWER OF
PRINCIPAL, INTEREST, FEES AND OTHER OBLIGATIONS SHALL BE MADE IN DOLLARS IN SAME
DAY FUNDS, WITHOUT DEFENSE, SETOFF OR COUNTERCLAIM, FREE OF ANY RESTRICTION OR
CONDITION, AND DELIVERED TO ADMINISTRATIVE AGENT NOT LATER THAN 2:00 P.M. (NEW
YORK CITY TIME) ON THE DATE DUE AT ADMINISTRATIVE AGENT’S PRINCIPAL OFFICE FOR
THE ACCOUNT OF LENDERS.  ALL FUNDS RECEIVED BY ADMINISTRATIVE AGENT AFTER THAT
TIME ON SUCH DUE DATE SHALL BE DEEMED TO HAVE BEEN PAID BY THE BORROWER ON THE
NEXT SUCCEEDING BUSINESS DAY.

 

(B)                                 NON-CONFORMING PAYMENTS.  ADMINISTRATIVE
AGENT SHALL DEEM ANY PAYMENT BY OR ON BEHALF OF THE BORROWER THAT IS NOT MADE IN
SAME DAY FUNDS PRIOR TO 2:00 P.M. (NEW YORK CITY TIME) ON THE DATE WHEN DUE TO
BE A NON-CONFORMING PAYMENT.  ANY SUCH PAYMENT SHALL NOT BE DEEMED TO HAVE BEEN
RECEIVED BY ADMINISTRATIVE AGENT UNTIL THE LATER OF (I) THE TIME SUCH FUNDS
BECOME AVAILABLE FUNDS AND (II) THE APPLICABLE NEXT BUSINESS DAY. 
ADMINISTRATIVE AGENT SHALL GIVE PROMPT TELEPHONIC NOTICE (CONFIRMED IN WRITING)
TO THE BORROWER AND EACH APPLICABLE LENDER IF ANY PAYMENT IS NON-CONFORMING.  TO
THE EXTENT ANY NON-CONFORMING PAYMENT MAY BE DEEMED TO HAVE BEEN RECEIVED ON A
DATE AFTER THE DATE SUCH PAYMENT WAS DUE HEREUNDER PURSUANT TO THE PROVISIONS OF
THE PRIOR SENTENCE, SUCH FAILURE OF SUCH PAYMENT TO HAVE BEEN MADE WHEN DUE WILL
CONSTITUTE OR BECOME A DEFAULT OR EVENT OF DEFAULT TO THE EXTENT SO PROVIDED
UNDER THE TERMS OF SECTION 8.1.  INTEREST SHALL CONTINUE TO ACCRUE ON ANY
PRINCIPAL AS TO WHICH A NON-CONFORMING PAYMENT IS MADE UNTIL SUCH FUNDS BECOME
AVAILABLE FUNDS (BUT IN NO EVENT LESS THAN THE PERIOD FROM THE DATE OF SUCH
PAYMENT TO THE NEXT SUCCEEDING APPLICABLE BUSINESS DAY) AT THE RATE OTHERWISE
APPLICABLE HEREUNDER (INCLUDING, IF APPLICABLE, PURSUANT TO SECTION 2.7(F)) FROM
THE DATE SUCH AMOUNT WAS DUE AND PAYABLE UNTIL THE DATE SUCH AMOUNT IS PAID IN
FULL.

 

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(C)                                  PAYMENTS TO INCLUDE ACCRUED INTEREST.  ALL
PAYMENTS IN RESPECT OF THE PRINCIPAL AMOUNT OF THE TERM LOANS (WHETHER MANDATORY
OR OPTIONAL) SHALL INCLUDE PAYMENT OF ACCRUED INTEREST ON THE PRINCIPAL AMOUNT
BEING REPAID OR PREPAID, AND ALL SUCH PAYMENTS (AND, IN ANY EVENT, ANY PAYMENTS
IN RESPECT OF THE TERM LOANS ON A DATE WHEN INTEREST IS DUE AND PAYABLE WITH
RESPECT TO THE TERM LOANS) SHALL BE APPLIED TO THE PAYMENT OF INTEREST BEFORE
APPLICATION TO PRINCIPAL.

 

(D)                                 DISTRIBUTIONS BY ADMINISTRATIVE AGENT. 
ADMINISTRATIVE AGENT SHALL PROMPTLY DISTRIBUTE TO EACH LENDER, SUCH LENDER’S
APPLICABLE PRO RATA SHARE OF ALL PAYMENTS AND PREPAYMENTS OF PRINCIPAL AND
INTEREST DUE HEREUNDER, TOGETHER WITH ALL OTHER AMOUNTS DUE THERETO, INCLUDING,
WITHOUT LIMITATION, ALL FEES PAYABLE WITH RESPECT THERETO, TO THE EXTENT
RECEIVED BY ADMINISTRATIVE AGENT.

 

(E)                                  BUSINESS DAYS.  WHENEVER ANY PAYMENT TO BE
MADE HEREUNDER SHALL BE STATED TO BE DUE ON A DAY THAT IS NOT A BUSINESS DAY,
SUCH PAYMENT SHALL BE MADE ON THE NEXT SUCCEEDING BUSINESS DAY (SUBJECT TO THE
DEFINITION OF INTEREST PERIOD) AND SUCH EXTENSION OF TIME SHALL BE INCLUDED IN
THE COMPUTATION OF THE PAYMENT OF INTEREST HEREUNDER.

 

SECTION 2.14.                         RATABLE SHARING.  LENDERS HEREBY AGREE
AMONG THEMSELVES THAT IF ANY OF THEM SHALL, WHETHER BY VOLUNTARY PREPAYMENT
(OTHER THAN A VOLUNTARY PREPAYMENT OF THE TERM LOANS MADE AND APPLIED IN
ACCORDANCE WITH THE TERMS HEREOF), THROUGH THE EXERCISE OF ANY RIGHT OF SETOFF
OR BANKER’S LIEN, BY COUNTERCLAIM OR CROSS-ACTION OR BY THE ENFORCEMENT OF ANY
RIGHT UNDER THE LOAN DOCUMENTS OR OTHERWISE, OR AS ADEQUATE PROTECTION OF A
DEPOSIT TREATED AS CASH COLLATERAL UNDER THE BANKRUPTCY CODE, RECEIVE PAYMENT OR
REDUCTION OF A PROPORTION OF THE AGGREGATE AMOUNT OF PRINCIPAL, INTEREST, FEES
AND OTHER AMOUNTS THEN DUE AND OWING TO SUCH LENDER HEREUNDER OR UNDER THE OTHER
LOAN DOCUMENTS (COLLECTIVELY, THE “AGGREGATE AMOUNTS DUE” TO SUCH LENDER) WHICH
IS GREATER THAN THE PROPORTION RECEIVED BY ANY OTHER LENDER IN RESPECT OF THE
AGGREGATE AMOUNTS DUE TO SUCH OTHER LENDER, THEN THE LENDER RECEIVING SUCH
PROPORTIONATELY GREATER PAYMENT SHALL (A) NOTIFY ADMINISTRATIVE AGENT AND EACH
OTHER LENDER OF THE RECEIPT OF SUCH PAYMENT AND (B) APPLY A PORTION OF SUCH
PAYMENT TO PURCHASE PARTICIPATIONS (WHICH IT SHALL BE DEEMED TO HAVE PURCHASED
FROM EACH SELLER OF A PARTICIPATION SIMULTANEOUSLY UPON THE RECEIPT BY SUCH
SELLER OF ITS PORTION OF SUCH PAYMENT) IN THE AGGREGATE AMOUNTS DUE TO THE OTHER
LENDERS SO THAT ALL SUCH RECOVERIES OF AGGREGATE AMOUNTS DUE SHALL BE SHARED BY
ALL LENDERS IN PROPORTION TO THE AGGREGATE AMOUNTS DUE TO THEM; PROVIDED, IF ALL
OR PART OF SUCH PROPORTIONATELY GREATER PAYMENT RECEIVED BY SUCH PURCHASING
LENDER IS THEREAFTER RECOVERED FROM SUCH LENDER UPON THE BANKRUPTCY OR
REORGANIZATION OF THE BORROWER OR OTHERWISE, THOSE PURCHASES SHALL BE RESCINDED
AND THE PURCHASE PRICES PAID FOR SUCH PARTICIPATIONS SHALL BE RETURNED TO SUCH
PURCHASING LENDER RATABLY TO THE EXTENT OF SUCH RECOVERY, BUT WITHOUT INTEREST. 
EACH CREDIT PARTY EXPRESSLY CONSENTS TO THE FOREGOING ARRANGEMENT AND AGREES
THAT ANY HOLDER OF A PARTICIPATION SO PURCHASED MAY EXERCISE ANY AND ALL RIGHTS
OF BANKER’S LIEN, SETOFF OR COUNTERCLAIM WITH RESPECT TO ANY AND ALL MONIES
OWING BY ANY OF THE CREDIT PARTIES TO THAT HOLDER WITH RESPECT THERETO AS FULLY
AS IF THAT HOLDER WERE OWED THE AMOUNT OF THE PARTICIPATION HELD BY THAT HOLDER.

 

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SECTION 2.15.                         CONVERSION AND CONTINUATION OF TERM LOANS.

 

(A)                                  SUBJECT TO ARTICLE VII AND SO LONG AS NO
DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND THEN BE CONTINUING, THE
BORROWER SHALL HAVE THE OPTION

 

(I)                                     TO CONVERT AT ANY TIME ALL OR ANY PART
OF ANY TERM LOAN EQUAL TO $1,000,000 AND INTEGRAL MULTIPLES OF $500,000 IN
EXCESS OF THAT AMOUNT FROM BASE RATE LOANS TO LIBOR LOANS OR FROM LIBOR LOANS TO
BASE RATE LOANS; PROVIDED, A LIBOR LOAN MAY ONLY BE CONVERTED ON THE EXPIRATION
OF THE INTEREST PERIOD APPLICABLE TO SUCH LIBOR LOAN UNLESS THE BORROWER SHALL
PAY ALL AMOUNTS DUE UNDER SECTION 7.5 IN CONNECTION WITH ANY SUCH CONVERSION; OR

 

(II)                                  UPON THE EXPIRATION OF ANY INTEREST PERIOD
APPLICABLE TO ANY LIBOR LOAN, TO CONTINUE ALL OR ANY PORTION OF SUCH LOAN EQUAL
TO $1,000,000 AND INTEGRAL MULTIPLES OF $500,000 IN EXCESS OF THAT AMOUNT AS A
LIBOR LOAN.

 

(B)                                 THE BORROWER SHALL DELIVER A
CONVERSION/CONTINUATION NOTICE TO ADMINISTRATIVE AGENT NO LATER THAN 10:00 A.M.
(NEW YORK CITY TIME) AT LEAST ONE BUSINESS DAY IN ADVANCE OF THE PROPOSED
CONVERSION DATE (IN THE CASE OF A CONVERSION TO A BASE RATE LOAN) AND AT LEAST
THREE BUSINESS DAYS IN ADVANCE OF THE PROPOSED CONVERSION/CONTINUATION DATE (IN
THE CASE OF A CONVERSION TO, OR A CONTINUATION OF, A LIBOR LOAN).  EXCEPT AS
OTHERWISE PROVIDED HEREIN, A CONVERSION/CONTINUATION NOTICE FOR CONVERSION TO,
OR CONTINUATION OF, ANY LIBOR LOANS (OR TELEPHONIC NOTICE IN LIEU THEREOF) SHALL
BE IRREVOCABLE ON AND AFTER THE RELATED INTEREST RATE DETERMINATION DATE, AND
THE BORROWER SHALL BE BOUND TO EFFECT A CONVERSION OR CONTINUATION IN ACCORDANCE
THEREWITH.

 

ARTICLE III
CONDITIONS PRECEDENT

 

SECTION 3.1.                                CONDITIONS PRECEDENT; CLOSING DATE. 
THE OBLIGATION OF ANY LENDER TO MAKE ANY TERM LOAN AND TO MAKE THE OTHER
FINANCIAL ACCOMMODATIONS DESCRIBED HEREIN ON THE CLOSING DATE IS SUBJECT TO THE
SATISFACTION, OR WAIVER IN ACCORDANCE WITH SECTION 10.1, OF THE FOLLOWING
CONDITIONS ON OR BEFORE THE CLOSING DATE:

 

(A)                                  LOAN DOCUMENTS.  ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED COPIES OF EACH LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, THE
CREDIT AGREEMENT, ANY NOTES, THE SECURITY AGREEMENTS, THE COPYRIGHT SECURITY
AGREEMENTS, THE TRADEMARK SECURITY AGREEMENTS, THE PATENT SECURITY AGREEMENTS,
THE GUARANTIES, THE STOCK PLEDGE AGREEMENTS AND THE INTERCREDITOR AGREEMENT
JOINDER, IN EACH CASE DULY EXECUTED AND DELIVERED.

 

(B)                                 INTERCREDITOR AGREEMENT REQUIREMENTS. THE
GRANTORS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) SHALL HAVE DELIVERED TO THE
SECOND LIEN COLLATERAL AGENT, WITH COPIES TO THE SECOND LIEN TRUSTEE AND TO EACH
PREVIOUSLY IDENTIFIED ADDITIONAL PARITY LIEN FACILITY REPRESENTATIVE (AS DEFINED
IN THE INTERCREDITOR AGREEMENT) EACH OF THE FOLLOWING:

 

(I)                                     AN OFFICERS’ CERTIFICATE STATING THAT
THE GRANTORS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) INTEND TO INCUR SUCH
ADDITIONAL FIRST LIEN INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT)
AS REFINANCING INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) OR
INDEBTEDNESS UNDER A NEW FIRST LIEN LOAN DOCUMENT (AS DEFINED IN THE
INTERCREDITOR AGREEMENT), AND CERTIFYING THAT (A) SUCH INCURRENCE IS

 

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PERMITTED AND DOES NOT VIOLATE OR RESULT IN ANY DEFAULT UNDER THE SECOND LIEN
NOTE DOCUMENTS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) OR ANY THEN EXISTING
ADDITIONAL PARITY LIEN FACILITY DOCUMENT (AS DEFINED IN THE INTERCREDITOR
AGREEMENT) (OTHER THAN ANY INCURRENCE OF FIRST LIEN OBLIGATIONS (AS DEFINED IN
THE INTERCREDITOR AGREEMENT) THAT WOULD SIMULTANEOUSLY REPAY ALL FIRST LIEN
OBLIGATIONS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) UNDER THE FIRST LIEN
LOAN DOCUMENTS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) UNDER WHICH SUCH
DEFAULT WOULD ARISE) AND (B) THE DEFINITIVE DOCUMENTATION ASSOCIATED WITH SUCH
ADDITIONAL FIRST LIEN INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT)
CONTAINS A WRITTEN AGREEMENT OF THE HOLDERS OF SUCH INDEBTEDNESS, FOR THE
ENFORCEABLE BENEFIT OF ALL HOLDERS OF EXISTING AND FUTURE SECOND LIEN
OBLIGATIONS (AS DEFINED IN THE INTERCREDITOR AGREEMENT), AND EACH EXISTING AND
FUTURE DEBT REPRESENTATIVE (AS DEFINED IN THE INTERCREDITOR AGREEMENT) AS
FOLLOWS: (X) THAT THE HOLDERS OF ALL OBLIGATIONS ASSOCIATED WITH SUCH ADDITIONAL
FIRST LIEN INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) ARE BOUND BY
THE PROVISIONS OF, AND AGREE TO THE TERMS OF, THE INTERCREDITOR AGREEMENT
(INCLUDING SECTION 5.6 OF THE INTERCREDITOR AGREEMENT) AND (Y) CONSENTING TO AND
DIRECTING ADMINISTRATIVE AGENT OR OTHER REPRESENTATIVE WITH RESPECT TO SUCH
ADDITIONAL FIRST LIEN INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT)
TO PERFORM ITS OBLIGATIONS UNDER THE INTERCREDITOR AGREEMENT;

 

(II)                                  EVIDENCE THAT THE GRANTORS (AS DEFINED IN
THE INTERCREDITOR AGREEMENT) HAVE DULY AUTHORIZED, EXECUTED (IF APPLICABLE) AND
RECORDED (OR CAUSED TO BE RECORDED), OR INTEND TO AUTHORIZE, EXECUTE AND RECORD
(IF APPLICABLE), IN EACH APPROPRIATE GOVERNMENTAL OFFICE ALL RELEVANT FILINGS
AND RECORDATIONS TO ENSURE THAT SUCH ADDITIONAL FIRST LIEN INDEBTEDNESS (AS
DEFINED IN THE INTERCREDITOR AGREEMENT) IS SECURED BY THE FIRST LIEN COLLATERAL
(AS DEFINED IN THE INTERCREDITOR AGREEMENT) IN ACCORDANCE WITH THE INTERCREDITOR
AGREEMENT AND THE FIRST LIEN SECURITY DOCUMENTS (AS DEFINED IN THE INTERCREDITOR
AGREEMENT) (INCLUDING ANY OPINIONS REASONABLY REQUESTED BY ADMINISTRATIVE AGENT
TO CONFIRM THE VALIDITY AND PERFECTION OF THE FIRST LIEN SECURED PARTIES’ (AS
DEFINED IN THE INTERCREDITOR AGREEMENT) LIENS (AS DEFINED IN THE INTERCREDITOR
AGREEMENT) IN THE FIRST LIEN COLLATERAL (AS DEFINED IN THE INTERCREDITOR
AGREEMENT) AFTER GIVING EFFECT TO SUCH ADDITIONAL FIRST LIEN INDEBTEDNESS (AS
DEFINED IN THE INTERCREDITOR AGREEMENT));

 

(III)                               A WRITTEN NOTICE SPECIFYING THE NAME AND
ADDRESS OF ADMINISTRATIVE AGENT OR REPRESENTATIVE IN RESPECT OF SUCH ADDITIONAL
FIRST LIEN INDEBTEDNESS (AS DEFINED IN THE INTERCREDITOR AGREEMENT) FOR PURPOSES
OF SECTION 9.9 OF THE INTERCREDITOR AGREEMENT; AND

 

(IV)                              A COPY OF THE EXECUTED FIRST LIEN JOINDER (AS
DEFINED IN THE INTERCREDITOR AGREEMENT), EXECUTED BY ADMINISTRATIVE AGENT (ON
BEHALF OF EACH SECURED PARTY).

 

(C)                                  [RESERVED].

 

(D)                                 SECRETARY’S CERTIFICATE.  ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A CERTIFICATE OF THE SECRETARY OR ASSISTANT SECRETARY,
THE MANAGER OR THE GENERAL PARTNER, AS THE CASE MAY BE, OF EACH CREDIT PARTY
WITH RESPECT TO (I) THE CERTIFICATE OF INCORPORATION, THE ARTICLES OF
INCORPORATION, THE CERTIFICATE OF FORMATION OR OTHER ORGANIZATIONAL DOCUMENTS,
AS THE CASE MAY BE, OF SUCH CREDIT PARTY, EACH AS AMENDED OR AMENDED AND
RESTATED TO DATE, (II) THE REGULATIONS, BYLAWS, OPERATING AGREEMENT OR LIMITED
PARTNERSHIP AGREEMENT, AS THE CASE MAY BE, OF SUCH CREDIT PARTY, EACH AS

 

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AMENDED OR AMENDED AND RESTATED TO DATE, (III) THE RESOLUTIONS OF THE BOARD OF
DIRECTORS, MANAGER OR GENERAL PARTNER, AS THE CASE MAY BE, OF SUCH CREDIT PARTY
APPROVING EACH LOAN DOCUMENT TO WHICH SUCH CREDIT PARTY IS A PARTY AND THE OTHER
DOCUMENTS TO BE DELIVERED BY SUCH CREDIT PARTY UNDER THE LOAN DOCUMENTS AND THE
PERFORMANCE OF THE OBLIGATIONS OF SUCH CREDIT PARTY THEREUNDER, AND (IV) THE
NAMES AND TRUE SIGNATURES OF THE OFFICERS OF SUCH CREDIT PARTY OR SUCH OTHER
PERSONS AUTHORIZED TO SIGN EACH LOAN DOCUMENT TO WHICH SUCH CREDIT PARTY IS A
PARTY AND THE OTHER DOCUMENTS TO BE DELIVERED BY IT UNDER THE LOAN DOCUMENTS.

 

(E)                                  GOOD STANDING CERTIFICATES.  ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A GOOD STANDING CERTIFICATE FROM THE APPLICABLE
GOVERNMENTAL BODY OF EACH CREDIT PARTY’S JURISDICTION OF INCORPORATION,
ORGANIZATION OR FORMATION AND IN EACH JURISDICTION IN WHICH IT IS QUALIFIED AS A
FOREIGN CORPORATION OR OTHER ENTITY TO DO BUSINESS, EACH DATED A RECENT DATE
PRIOR TO THE CLOSING DATE.

 

(F)                                    EXISTING INDEBTEDNESS.  ON THE CLOSING
DATE, THE CREDIT PARTIES SHALL HAVE (I) REPAID IN FULL ALL INDEBTEDNESS AND
OTHER OBLIGATIONS UNDER THE EXISTING AGREEMENT, (II) TERMINATED ANY COMMITMENTS
TO LEND OR MAKE OTHER EXTENSIONS OF CREDIT THEREUNDER, (III) DELIVERED TO
ADMINISTRATIVE AGENT ALL DOCUMENTS OR INSTRUMENTS NECESSARY TO RELEASE ALL LIENS
SECURING THE EXISTING INDEBTEDNESS OR OTHER OBLIGATIONS OF THE CREDIT PARTIES
THEREUNDER BEING REPAID ON THE CLOSING DATE, AND (IV) MADE ARRANGEMENTS
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT WITH RESPECT TO THE LETTERS OF
CREDIT OUTSTANDING THEREUNDER.

 

(G)                                 FINANCIAL STATEMENTS; PROJECTIONS. 
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED FROM THE BORROWER (I) THE FINANCIAL
STATEMENTS AND (II) THE PROJECTIONS.

 

(H)                                 MINIMUM CONSOLIDATED EBITDA.  THE FINANCIAL
STATEMENTS SHALL DEMONSTRATE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT THAT AS OF JANUARY 31, 2010, THE BORROWER SHALL HAVE
GENERATED TRAILING TWELVE MONTH CONSOLIDATED EBITDA OF AT LEAST $50,000,000.

 

(I)                                     MAXIMUM LEVERAGE RATIO.  THE FINANCIAL
STATEMENTS SHALL DEMONSTRATE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT THAT THE LEVERAGE RATIO FOR THE TWELVE-MONTH PERIOD ENDING
ON JANUARY 31, 2010 SHALL NOT BE GREATER THAN 5.75:1.0.

 

(J)                                     EVIDENCE OF INSURANCE.  ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A CERTIFICATE FROM THE BORROWER’S INSURANCE BROKER OR
OTHER EVIDENCE REASONABLY SATISFACTORY TO IT THAT ALL INSURANCE REQUIRED TO BE
MAINTAINED PURSUANT TO SECTION 5.8 IS IN FULL FORCE AND EFFECT AND THAT
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF LENDERS AND ADMINISTRATIVE AGENT, HAS
BEEN NAMED AS ADDITIONAL INSURED AND LOSS PAYEE, AS APPLICABLE, THEREUNDER.

 

(K)                                  CLOSING DATE CERTIFICATE.  ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED AN ORIGINALLY EXECUTED CLOSING DATE CERTIFICATE, FROM
THE BORROWER, TOGETHER WITH ANY ATTACHMENTS THERETO.

 

(L)                                     SOLVENCY CERTIFICATE.  ON THE CLOSING
DATE, ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A SOLVENCY CERTIFICATE FROM THE
BORROWER DATED AS OF THE CLOSING DATE AND ADDRESSED TO ADMINISTRATIVE AGENT AND
LENDERS, AND IN FORM, SCOPE AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT, WITH APPROPRIATE ATTACHMENTS AND DEMONSTRATING THAT AFTER
GIVING EFFECT TO

 

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THE BORROWING TO BE MADE ON THE CLOSING DATE, EACH OF THE BORROWER AND ITS
SUBSIDIARIES ON A CONSOLIDATED BASIS IS AND WILL BE SOLVENT.

 

(M)                               FINANCING STATEMENTS.  ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED UCC FINANCING STATEMENTS DULY AUTHORIZED BY EACH APPLICABLE
CREDIT PARTY WITH RESPECT TO ALL PERSONAL, REAL AND MIXED PROPERTY COLLATERAL OF
SUCH CREDIT PARTY, FOR FILING IN ALL JURISDICTIONS AS MAY BE NECESSARY OR, IN
THE OPINION OF THE LENDERS, DESIRABLE, TO PERFECT THE SECURITY INTERESTS CREATED
IN SUCH COLLATERAL PURSUANT TO THE SECURITY DOCUMENTATION.

 

(N)                                 COLLATERAL QUESTIONNAIRE.  ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A COMPLETED COLLATERAL QUESTIONNAIRE DATED THE CLOSING
DATE AND EXECUTED BY AN AUTHORIZED OFFICER OF EACH CREDIT PARTY, TOGETHER WITH
ALL ATTACHMENTS CONTEMPLATED THEREBY, INCLUDING (A) THE RESULTS OF A RECENT
SEARCH, BY A PERSON REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT, OF ALL
EFFECTIVE UCC FINANCING STATEMENTS (OR EQUIVALENT FILINGS) MADE WITH RESPECT TO
ANY PERSONAL OR MIXED PROPERTY OF ANY CREDIT PARTY IN THE JURISDICTIONS
SPECIFIED IN THE COLLATERAL QUESTIONNAIRE, TOGETHER WITH COPIES OF ALL SUCH
FILINGS DISCLOSED BY SUCH SEARCH, AND (B) UCC TERMINATION STATEMENTS (OR SIMILAR
DOCUMENTS) DULY AUTHORIZED BY ALL APPLICABLE PERSONS FOR FILING IN ALL
APPLICABLE JURISDICTIONS AS MAY BE NECESSARY TO TERMINATE ANY EFFECTIVE UCC
FINANCING STATEMENTS (OR EQUIVALENT FILINGS) DISCLOSED IN SUCH SEARCH (OTHER
THAN ANY SUCH FINANCING STATEMENTS IN RESPECT OF PERMITTED LIENS).

 

(O)                                 SECURITY COLLATERAL.  ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED THE CERTIFICATES, INSTRUMENTS AND PROMISSORY NOTES (WHICH
CERTIFICATES, INSTRUMENTS AND PROMISSORY NOTES SHALL BE ACCOMPANIED BY
INSTRUMENTS OF TRANSFER OR ASSIGNMENT DULY ENDORSED IN BLANK AND OTHERWISE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT) REPRESENTING
OR EVIDENCING ALL SECURITY COLLATERAL PLEDGED PURSUANT TO THE SECURITY
DOCUMENTATION.

 

(P)                                 OTHER ACTIONS TO PERFECT SECURITY
INTERESTS.  ADMINISTRATIVE AGENT SHALL HAVE RECEIVED EVIDENCE THAT EACH CREDIT
PARTY HAS AUTHORIZED ADMINISTRATIVE AGENT OR SHALL HAVE TAKEN OR CAUSED TO BE
TAKEN ANY OTHER ACTION, EXECUTED AND DELIVERED OR CAUSED TO BE EXECUTED AND
DELIVERED ANY OTHER AGREEMENT, DOCUMENT AND INSTRUMENT, AND MADE OR CAUSED TO BE
MADE ANY OTHER FILING AND RECORDING (OTHER THAN AS SET FORTH HEREIN) REASONABLY
REQUIRED BY ADMINISTRATIVE AGENT TO PERFECT ITS SECURITY IN THE COLLATERAL,
INCLUDING THE FILING OF THE FINANCING STATEMENTS RELATED TO PERFECTION OF THE
SECURITY INTEREST OF ADMINISTRATIVE AGENT IN THE COLLATERAL IN ALL APPROPRIATE
JURISDICTIONS.

 

(Q)                                 OPINION OF COUNSEL.  ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED AN ORIGINALLY EXECUTED COPY OF THE FAVORABLE WRITTEN
OPINIONS OF (I) MILBANK TWEED HADLEY & MCCLOY LLP, COUNSEL FOR THE CREDIT
PARTIES AND (II) RUBEN & ARONSON, LLP, COUNSEL FOR THE CREDIT PARTIES, IN EACH
CASE, AS TO SUCH MATTERS AS ADMINISTRATIVE AGENT MAY REASONABLY REQUEST, DATED
AS OF THE CLOSING DATE, AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT.

 

(R)                                    REAL ESTATE ASSETS.  IN ORDER TO CREATE
IN FAVOR OF ADMINISTRATIVE AGENT, FOR THE BENEFIT OF SECURED PARTIES, A VALID
AND, SUBJECT TO ANY FILING AND/OR RECORDING REFERRED TO HEREIN, PERFECTED FIRST
PRIORITY SECURITY INTEREST IN THE CREDIT PARTIES’ REAL ESTATE ASSETS (SUBJECT TO
PERMITTED LIENS), ADMINISTRATIVE AGENT SHALL HAVE RECEIVED FROM THE BORROWER AND
EACH APPLICABLE GUARANTOR:

 

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(I)                                     FULLY EXECUTED AND NOTARIZED MORTGAGES,
IN PROPER FORM FOR RECORDING IN ALL APPROPRIATE PLACES IN ALL APPLICABLE
JURISDICTIONS, ENCUMBERING EACH REAL ESTATE ASSET LISTED IN SCHEDULE
3.1(R) (EACH, A “CLOSING DATE MORTGAGED PROPERTY”);

 

(II)                                  AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT) IN EACH STATE IN WHICH A
CLOSING DATE MORTGAGED PROPERTY IS LOCATED WITH RESPECT TO THE ENFORCEABILITY OF
THE FORM(S) OF MORTGAGES TO BE RECORDED IN SUCH STATE AND SUCH OTHER MATTERS AS
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST, IN EACH CASE IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT;

 

(III)                               (A) ALTA MORTGAGEE TITLE INSURANCE POLICIES
OR UNCONDITIONAL COMMITMENTS THEREFOR ISSUED BY ONE OR MORE TITLE COMPANIES
REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT WITH RESPECT TO EACH CLOSING
DATE MORTGAGED PROPERTY (EACH, A “TITLE POLICY”), IN AMOUNTS NOT LESS THAN THE
FAIR MARKET VALUE OF EACH CLOSING DATE MORTGAGED PROPERTY, TOGETHER WITH A TITLE
REPORT ISSUED BY A TITLE COMPANY WITH RESPECT THERETO, DATED NOT MORE THAN
THIRTY DAYS PRIOR TO THE CLOSING DATE AND COPIES OF ALL RECORDED DOCUMENTS
LISTED AS EXCEPTIONS TO TITLE OR OTHERWISE REFERRED TO THEREIN, EACH IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT AND (B) EVIDENCE
SATISFACTORY TO ADMINISTRATIVE AGENT THAT SUCH CREDIT PARTY HAS PAID TO THE
TITLE COMPANY OR TO THE APPROPRIATE GOVERNMENTAL BODY ALL EXPENSES AND PREMIUMS
OF THE TITLE COMPANY AND ALL OTHER SUMS REQUIRED IN CONNECTION WITH THE ISSUANCE
OF EACH TITLE POLICY AND ALL RECORDING AND STAMP TAXES (INCLUDING MORTGAGE
RECORDING AND INTANGIBLE TAXES) PAYABLE IN CONNECTION WITH RECORDING THE
MORTGAGES FOR EACH CLOSING DATE MORTGAGED PROPERTY IN THE APPROPRIATE REAL
ESTATE RECORDS; AND

 

(IV)                              ALTA SURVEYS OF ALL CLOSING DATE MORTGAGED
PROPERTIES, CERTIFIED TO ADMINISTRATIVE AGENT.

 

(S)                                  [RESERVED].

 

(T)                                    GAMING LICENSES.  THE CREDIT PARTIES
SHALL HAVE ALL GAMING LICENSES MATERIAL TO OR REQUIRED FOR THE CONDUCT OF ITS
GAMING BUSINESSES AND THE CONDUCT OF GAMES OF CHANCE AT EACH HOTEL/CASINO
FACILITY AND SUCH GAMING LICENSES SHALL NOT THEN BE SUSPENDED, ENJOINED OR
PROHIBITED (FOR ANY LENGTH OF TIME) BY ANY GAMING AUTHORITY OR ANY OTHER
GOVERNMENTAL BODY.

 

(U)                                 FEES AND EXPENSES.  THE BORROWER SHALL HAVE
PAID ALL FEES AND EXPENSES (INCLUDING ATTORNEYS’ FEES) AND OUT OF POCKET
EXPENSES OF THE LENDERS AND ADMINISTRATIVE AGENT INCURRED IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

(V)                                 CONSENTS.  THE LENDERS SHALL HAVE RECEIVED
SUCH CONSENTS AND OTHER INFORMATION, APPROVALS, OPINIONS OR DOCUMENTS REASONABLY
REQUESTED BY ADMINISTRATIVE AGENT OR THE LENDERS IN CONNECTION WITH THE MAKING
OF ANY TERM LOAN AND THE GRANTING OF ANY SECURITY INTEREST, ON THE CLOSING DATE,
INCLUDING, WITHOUT LIMITATION, THE CONSENT OF NATIONAL CITY BANK WITH RESPECT TO
OBTAINING A MORTGAGE IN FAVOR OF ADMINISTRATIVE AGENT ON THE SDI PROPERTY.

 

(W)                               USE OF PROCEEDS.  THE BORROWER SHALL HAVE
CONFIRMED IN WRITING THAT THE PROCEEDS OF THE TERM LOANS SHALL BE USED ONLY IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 2.5.

 

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(X)                                   NO LITIGATION.  THERE SHALL NOT EXIST ANY
ACTION, SUIT, INVESTIGATION, LITIGATION OR PROCEEDING OR OTHER LEGAL OR
REGULATORY DEVELOPMENTS, PENDING OR THREATENED IN ANY COURT OR BEFORE ANY
ARBITRATOR OR GOVERNMENTAL BODY THAT, IN THE REASONABLE OPINION OF
ADMINISTRATIVE AGENT, SINGLY OR IN THE AGGREGATE, MATERIALLY IMPAIRS ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR THAT COULD HAVE A MATERIAL
ADVERSE EFFECT.

 

(Y)                                 DUE DILIGENCE.  OTHER THAN CHANGES OCCURRING
IN THE ORDINARY COURSE OF BUSINESS, NO INFORMATION OR MATERIALS ARE OR SHOULD
HAVE BEEN AVAILABLE TO THE BORROWER AND ITS SUBSIDIARIES AS OF THE CLOSING DATE
THAT ARE MATERIALLY INCONSISTENT WITH THE MATERIAL PREVIOUSLY PROVIDED TO
ADMINISTRATIVE AGENT FOR ITS DUE DILIGENCE REVIEW OF THE BORROWER AND ITS
SUBSIDIARIES.

 

(Z)                                   NO MATERIAL ADVERSE EFFECT.  NO MATERIAL
ADVERSE EFFECT SHALL HAVE OCCURRED AFTER GIVING EFFECT TO THE TERM LOANS MADE ON
THE CLOSING DATE.

 

SECTION 3.2.                                CONDITIONS TO ALL TERM LOANS.  THE
OBLIGATION OF EACH LENDER TO MAKE ANY TERM LOAN, ON ANY DATE, INCLUDING THE
CLOSING DATE, IS SUBJECT TO THE SATISFACTION, OR WAIVER OF THE FOLLOWING
CONDITIONS PRECEDENT:

 

(I)                                     ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
A FULLY EXECUTED AND DELIVERED BORROWING CERTIFICATE; PROVIDED THAT THE
BORROWING CERTIFICATE DELIVERED IN CONNECTION WITH THE BORROWING TO BE MADE ON
THE CLOSING DATE SHALL REQUEST THAT NO LESS THAN $10,000,000 OF TERM LOANS BE
MADE ON THE CLOSING DATE.

 

(II)                                  AFTER MAKING THE TERM LOANS REQUESTED ON
SUCH DATE, THE TERM LOANS OUTSTANDING SHALL NOT EXCEED THE TERM LOAN COMMITMENTS
THEN IN EFFECT;

 

(III)                               AS OF SUCH DATE, THE REPRESENTATIONS AND
WARRANTIES CONTAINED HEREIN AND IN THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF SUCH DATE TO THE SAME EXTENT AS
THOUGH MADE ON AND AS OF THAT DATE, EXCEPT TO THE EXTENT SUCH REPRESENTATIONS
AND WARRANTIES SPECIFICALLY RELATE TO AN EARLIER DATE, IN WHICH CASE SUCH
REPRESENTATIONS AND WARRANTIES SHALL HAVE BEEN TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF SUCH EARLIER DATE; AND

 

(IV)                              AT THE TIME OF AND AFTER GIVING EFFECT TO THE
BORROWING, THE BORROWER IS IN PRO FORMA COMPLIANCE WITH THE FINANCIAL COVENANTS
SET FORTH IN SECTION 6.14; AND

 

(V)                                 AS OF SUCH DATE, NO EVENT SHALL HAVE
OCCURRED AND BE CONTINUING OR WOULD RESULT FROM THE BORROWING OF THE TERM LOAN
THAT CONSTITUTES AN EVENT OF DEFAULT OR A DEFAULT.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 

SECTION 4.1.                                REPRESENTATIONS AND WARRANTIES.  IN
ORDER TO INDUCE ADMINISTRATIVE AGENT AND THE LENDERS TO ENTER INTO THIS
AGREEMENT AND TO MAKE THE BORROWING ON THE CLOSING DATE AND ON THE DATE OF EACH
OTHER BORROWING, EACH CREDIT PARTY HEREBY REPRESENTS AND WARRANTS

 

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(TO THE EXTENT SUCH REPRESENTATION OR WARRANTY IS APPLICABLE TO SUCH CREDIT
PARTY) TO ADMINISTRATIVE AGENT AND EACH LENDER AS FOLLOWS ON THE CLOSING DATE:

 

(A)                                  CORPORATE STATUS; CORPORATE AUTHORIZATION. 
EACH CREDIT PARTY IS DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING
UNDER THE LAWS OF ITS JURISDICTION OF ORGANIZATION AND IS DULY QUALIFIED AND IN
GOOD STANDING IN EVERY OTHER JURISDICTION WHERE IT IS DOING BUSINESS EXCEPT
WHERE THE FAILURE TO SO QUALIFY DOES NOT HAVE A MATERIAL ADVERSE EFFECT ON IT,
AND THE EXECUTION, DELIVERY AND PERFORMANCE BY EACH CREDIT PARTY OF THE LOAN
DOCUMENTS (I) ARE WITHIN ITS RESPECTIVE AUTHORITY, (II) HAVE BEEN DULY
AUTHORIZED AND (III) DO NOT CONFLICT WITH OR CONTRAVENE ITS RESPECTIVE CORPORATE
GOVERNANCE DOCUMENTS.  THE EXECUTION, DELIVERY, PERFORMANCE OF THEIR RESPECTIVE
OBLIGATIONS AND EXERCISE OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS BY
EACH CREDIT PARTY PARTY THERETO, INCLUDING, WITHOUT LIMITATION, THE MAKING OF
THE TERM LOANS UNDER THIS AGREEMENT, (I) DO NOT REQUIRE ANY CONSENTS THAT HAVE
NOT BEEN OBTAINED (OTHER THAN ANY CONSENTS FOR WHICH THE FAILURE TO OBTAIN WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT) AND (II) ARE NOT AND WILL NOT BE IN CONFLICT
WITH OR PROHIBITED OR PREVENTED BY (A) ANY REGULATION OR (B) ANY CORPORATE
GOVERNANCE DOCUMENT, CORPORATE MINUTE OR RESOLUTION OR (C) ANY INSTRUMENT,
AGREEMENT OR PROVISION THEREOF, IN EACH CASE BINDING ON ANY OF THEM OR AFFECTING
ANY OF THEIR PROPERTY EXCEPT AS WOULD NOT BE REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT;

 

(B)                                 EXECUTION AND BINDING EFFECT.  UPON
EXECUTION AND DELIVERY THEREOF, EACH LOAN DOCUMENT SHALL CONSTITUTE THE LEGAL,
VALID AND BINDING OBLIGATION OF EACH CREDIT PARTY WHICH IS A PARTY THERETO,
ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, EXCEPT AS THE ENFORCEABILITY THEREOF
MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR LAWS RELATING TO THE
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY AND BY GENERAL EQUITABLE PRINCIPLES;

 

(C)                                  PROPERTIES.

 

(I)                                     EACH CREDIT PARTY HAS GOOD AND
MARKETABLE TITLE TO ALL MATERIAL REAL PROPERTY OWNED OR PURPORTED TO BE OWNED BY
IT, IN EACH CASE FREE OF ALL LIENS OTHER THAN PERMITTED LIENS.

 

(II)                                  EACH CREDIT PARTY IS IN LAWFUL POSSESSION
OF A VALID AND SUBSISTING LEASEHOLD ESTATE IN AND TO ITS LEASEHOLD PROPERTIES
WHICH IT PURPORTS TO LEASE FREE AND CLEAR OF ALL LIENS OTHER THAN PERMITTED
LIENS.

 

(III)                               EACH CREDIT PARTY ENJOYS PEACEFUL AND
UNDISTURBED POSSESSION OF, OR A LICENSE TO USE, ALL PROPERTY (SUBJECT ONLY TO
THE PERMITTED LIENS) THAT IS NECESSARY FOR THEIR RESPECTIVE BUSINESSES.

 

(IV)                              SET FORTH ON SCHEDULE 4.1(C) IS A LIST, AS OF
THE DATE HEREOF, OF ALL REAL PROPERTY HELD, OR, TO THE KNOWLEDGE OF ANY CREDIT
PARTY, PLANNED TO BE HELD, BY ANY CREDIT PARTY, INDICATING IN EACH CASE WHETHER
THE RESPECTIVE PROPERTY IS (OR IS EXPECTED TO BE) OWNED OR LEASED, THE IDENTITY
OF THE OWNER OR LESSEE, THE LOCATION OF THE RESPECTIVE PROPERTY, IN THE CASE OF
REAL PROPERTY OWNED AND, IN THE CASE OF PROPERTY NOT YET OWNED OR LEASED, THE
ESTIMATED DATE OF ACQUISITION OR LEASING (IF KNOWN TO SUCH CREDIT PARTY ON THE
DATE HEREOF).

 

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(V)                                 EACH CREDIT PARTY OWNS, OR IS LICENSED OR
OTHERWISE HAS THE RIGHT TO USE THE INTELLECTUAL PROPERTY NECESSARY TO OWN AND
OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS PRESENTLY CONDUCTED AND
PRESENTLY PLANNED TO BE CONDUCTED WITHOUT CONFLICT WITH THE RIGHTS OF OTHERS,
EXCEPT FOR SUCH INSTANCES OF NON-COMPLIANCE THAT, INDIVIDUALLY OR IN THE
AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(D)                                 FINANCIAL STATEMENTS; PROJECTIONS.

 

(I)                                     THE FINANCIAL STATEMENTS WERE PREPARED
IN CONFORMITY WITH GAAP AND FAIRLY PRESENT, IN ALL MATERIAL RESPECTS, THE
FINANCIAL POSITION, ON A CONSOLIDATED BASIS, OF THE PERSONS DESCRIBED IN SUCH
FINANCIAL STATEMENTS AS AT THE RESPECTIVE DATES THEREOF AND THE RESULTS OF
OPERATIONS AND CASH FLOWS, ON A CONSOLIDATED BASIS, OF THE ENTITIES DESCRIBED
THEREIN FOR EACH OF THE PERIODS THEN ENDED, SUBJECT, IN THE CASE OF ANY SUCH
UNAUDITED FINANCIAL STATEMENTS, TO CHANGES RESULTING FROM AUDIT AND NORMAL
YEAR-END ADJUSTMENTS (EXCEPT IN THE CASE OF THE FINANCIAL STATEMENTS FOR THE
INTERIM PERIOD FROM JANUARY 1, 2010 TO THE LAST DAY OF THE MONTH MOST RECENTLY
ENDED PRIOR TO THE CLOSING DATE, FOR THE LACK OF FOOTNOTES).  AS OF THE CLOSING
DATE, NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES HAS ANY CONTINGENT
LIABILITY OR LIABILITY FOR TAXES, LONG-TERM LEASE OR UNUSUAL FORWARD OR
LONG-TERM COMMITMENT THAT IS NOT REFLECTED IN THE FINANCIAL STATEMENTS OR THE
NOTES THERETO AND WHICH IN ANY SUCH CASE IS REQUIRED BY GAAP SET FORTH THEREIN.

 

(II)                                  ON AND AS OF THE CLOSING DATE, THE
PROJECTIONS OF THE BORROWER AND ITS SUBSIDIARIES IS BASED ON GOOD FAITH
ESTIMATES AND ASSUMPTIONS MADE BY THE MANAGEMENT OF THE BORROWER; PROVIDED THAT
THE PROJECTIONS ARE NOT TO BE VIEWED AS FACT AND THAT ACTUAL RESULTS DURING THE
PERIOD OR PERIODS COVERED BY THE FINANCIAL PLAN MAY DIFFER FROM SUCH FINANCIAL
PLAN AND THAT THE DIFFERENCES MAY BE MATERIAL.

 

(E)                                  ABSENCE OF MATERIAL ADVERSE EFFECT.  THERE
HAS BEEN NO ACT, CONDITION OR EVENT WHICH HAS HAD OR IS REASONABLY LIKELY TO
HAVE A MATERIAL ADVERSE EFFECT SINCE DECEMBER 31, 2009.

 

(F)                                    LITIGATION.  THERE ARE NO LEGAL OR OTHER
PROCEEDINGS OR INVESTIGATIONS PENDING OR, TO THE KNOWLEDGE OF THE BORROWER,
THREATENED AGAINST ANY CREDIT PARTY BEFORE ANY COURT, TRIBUNAL OR REGULATORY
AUTHORITY WHICH WOULD, IF ADVERSELY DETERMINED, ALONE OR TOGETHER, HAVE A
MATERIAL ADVERSE EFFECT.

 

(G)                                 GOVERNMENTAL APPROVALS AND FILINGS.  NO
APPROVAL, ORDER, CONSENT, AUTHORIZATION, CERTIFICATE, LICENSE, PERMIT OR
VALIDATION OF, OR EXEMPTION OR OTHER ACTION BY, OR FILING, RECORDING OR
REGISTRATION WITH, OR NOTICE TO, ANY GOVERNMENTAL BODY WHICH HAS NOT BEEN
OBTAINED IS OR WILL BE NECESSARY IN CONNECTION WITH THE EXECUTION AND DELIVERY
OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, CONSUMMATION BY THE CREDIT PARTIES
OF THE TRANSACTIONS HEREIN OR THEREIN CONTEMPLATED, OR PERFORMANCE OF OR
COMPLIANCE WITH THE TERMS AND CONDITIONS HEREOF OR THEREOF, OTHER THAN THE
FILINGS AND RECORDATIONS CONTEMPLATED BY THE SECURITY DOCUMENTATION.  NO CREDIT
PARTY IS SUBJECT TO REGULATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF
2005, THE FEDERAL POWER ACT, THE INTERSTATE COMMERCE ACT OR THE INVESTMENT
COMPANY ACT OF 1940 OR TO ANY FEDERAL, STATE OR PROVINCIAL STATUTE OR REGULATION
LIMITING THE ABILITY OF THE BORROWER TO INCUR INDEBTEDNESS FOR MONEY BORROWED. 
NO CREDIT PARTY IS AN “INVESTMENT COMPANY” OR A COMPANY

 

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“CONTROLLED” BY AN “INVESTMENT COMPANY”, WITHIN THE MEANING OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED.

 

(H)                                 ABSENCE OF CONFLICTS.  THE EXECUTION AND
DELIVERY BY EACH CREDIT PARTY OF THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY AND PERFORMANCE BY IT HEREUNDER AND THEREUNDER WILL NOT
VIOLATE ANY LAW (INCLUDING, WITHOUT LIMITATION, REGULATIONS T, U AND X OF THE
FEDERAL RESERVE BOARD).  EXCEPT AS WOULD NOT BE REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT, THE EXECUTION AND DELIVERY BY EACH CREDIT PARTY OF THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND PERFORMANCE BY
IT HEREUNDER AND THEREUNDER, WILL NOT CONFLICT WITH OR RESULT IN A BREACH OF ANY
ORDER, WRIT, INJUNCTION, RESOLUTION, DECREE OR OTHER SIMILAR DOCUMENT OR
INSTRUMENT OF ANY COURT OR GOVERNMENTAL BODY OR ITS CERTIFICATE OF INCORPORATION
OR BY-LAWS OR SIMILAR CONSTITUENT DOCUMENTS OR CREATE (WITH OR WITHOUT THE
GIVING OF NOTICE OR LAPSE OF TIME, OR BOTH) A DEFAULT UNDER OR BREACH OF ANY
MATERIAL AGREEMENT, BOND, NOTE OR INDENTURE, IN EACH CASE TO WHICH IT IS A PARTY
(BY SUCCESSOR IN INTEREST OR OTHERWISE), OR BY WHICH IT IS BOUND OR ANY MATERIAL
PORTION OF ITS PROPERTIES OR ASSETS IS AFFECTED, OR, EXCEPT UNDER THE SECURITY
DOCUMENTATION, RESULT IN THE IMPOSITION OF ANY LIEN (OTHER THAN PERMITTED LIENS)
OF ANY NATURE WHATSOEVER UPON ANY OF THE PROPERTIES OR ASSETS OWNED BY OR USED
IN CONNECTION WITH THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES.

 

(I)                                     COLLATERAL.  FROM AND AFTER THE
EXECUTION AND DELIVERY OF THE SECURITY DOCUMENTATION AND THE FILING OF THE
DOCUMENTS THEREBY REQUIRED, ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED
PARTIES, SHALL HAVE A FIRST-PRIORITY PERFECTED SECURITY INTEREST IN AND TO ALL
OF THE COLLATERAL, FREE AND CLEAR OF ANY LIENS OTHER THAN THE PERMITTED LIENS,
AND ENTITLED TO PRIORITY UNDER APPLICABLE LAW, WITH NO FINANCING STATEMENTS,
HYPOTHECS, CHATTEL MORTGAGES, REAL ESTATE MORTGAGES OR SIMILAR FILINGS ON RECORD
ANYWHERE OTHER THAN SUCH FILINGS IN CONNECTION WITH THIS AGREEMENT, THE SECURITY
DOCUMENTATION OR THE PERMITTED LIENS.  EACH OF THE REPRESENTATIONS AND
WARRANTIES MADE BY EACH CREDIT PARTY IN THE SECURITY DOCUMENTATION TO WHICH IT
IS A PARTY IS TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF EACH DATE MADE OR
DEEMED MADE.

 

(J)                                     PARTNERSHIPS, ETC.  EXCEPT AS SET FORTH
ON SCHEDULE 4.1(J), NO CREDIT PARTY IS A PARTNER (GENERAL OR LIMITED) OF ANY
PARTNERSHIP, IS A PARTY TO ANY JOINT VENTURE OR OWNS (BENEFICIALLY OR OF RECORD)
ANY EQUITY OR SIMILAR INTEREST IN ANY SIMILAR PERSON (INCLUDING, WITHOUT
LIMITATION, ANY INTEREST PURSUANT TO WHICH ANY CREDIT PARTY HAS OR MAY IN ANY
CIRCUMSTANCE HAVE AN OBLIGATION TO MAKE CAPITAL CONTRIBUTIONS TO, OR BE
GENERALLY LIABLE FOR OR ON ACCOUNT OF THE LIABILITIES, ACTS OR OMISSIONS OF SUCH
OTHER PERSON).

 

(K)                                  FISCAL YEAR.  EACH FISCAL YEAR OF EACH OF
THE CREDIT PARTIES ENDS ON DECEMBER 31 OF EACH CALENDAR YEAR.

 

(L)                                     [RESERVED].

 

(M)                               CAPITALIZATION.

 

(I)                                     EACH CREDIT PARTY IS THE RECORD AND
BENEFICIAL OWNER OF ALL OF THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF
EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE 4.1(M) AS BEING OWNED BY SUCH CREDIT
PARTY AND THERE ARE NO PROXIES, IRREVOCABLE OR OTHERWISE, WITH RESPECT TO SUCH
SHARES AND NO EQUITY SECURITIES OF ANY OF THE

 

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SUBSIDIARIES ARE OR MAY BECOME REQUIRED TO BE ISSUED BY REASON OF ANY OPTIONS,
WARRANTS, RIGHTS TO SUBSCRIBE TO, CALLS OR COMMITMENTS OF ANY KIND OR NATURE AND
THERE ARE NO CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR ARRANGEMENTS BY WHICH ANY
SUBSIDIARY IS OR MAY BECOME BOUND TO ISSUE ADDITIONAL SHARES OF ITS CAPITAL
STOCK OR SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR SUCH SHARES.

 

(II)                                  AS OF THE CLOSING DATE, THE ISSUED AND
OUTSTANDING SHARES OF CAPITAL STOCK OF EACH CREDIT PARTY HAVE BEEN DULY
AUTHORIZED AND ARE FULLY PAID AND NON-ASSESSABLE, AND, EXCEPT WITH RESPECT TO
THE BORROWER, ARE FREE AND CLEAR OF ALL CLAIMS, LIENS, PLEDGES AND ENCUMBRANCES
OF ANY KIND, EXCEPT AS DISCLOSED IN WRITING TO ADMINISTRATIVE AGENT PRIOR TO THE
DATE HEREOF.

 

(III)                               THE CREDIT PARTIES ON A CONSOLIDATED BASIS
ARE SOLVENT AND WILL CONTINUE TO BE SOLVENT AFTER THE CREATION OF THE
OBLIGATIONS, THE SECURITY INTERESTS OF ADMINISTRATIVE AGENT AND THE OTHER
TRANSACTION CONTEMPLATED HEREUNDER.

 

(N)                                 MATERIAL MISSTATEMENTS AND OMISSIONS.  THERE
ARE NO FACTS PERTAINING TO ANY CREDIT PARTY, THEIR ASSETS OR PROPERTIES OR THEIR
BUSINESSES WHICH, INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT AND WHICH HAVE NOT BEEN DISCLOSED IN THIS
AGREEMENT.  NONE OF THE REPRESENTATIONS OR WARRANTIES OF ANY CREDIT PARTY
CONTAINED IN THE LOAN DOCUMENTS IS UNTRUE OR INCORRECT IN ANY MATERIAL RESPECT
WHEN MADE AND ON THE CLOSING DATE.  THERE IS NO INFORMATION, AS OF THE CLOSING
DATE, WHICH WOULD CONTRADICT OR IS INCONSISTENT IN ANY MATERIAL RESPECT WITH ANY
REPRESENTATION OR WARRANTY OF ANY CREDIT PARTY CONTAINED IN THE LOAN DOCUMENTS.

 

(O)                                 LABOR PRACTICES.  NO CREDIT PARTY IS ENGAGED
IN ANY UNFAIR LABOR PRACTICE THAT COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.  THERE IS NO (I) UNFAIR LABOR PRACTICE COMPLAINT
PENDING AGAINST ANY CREDIT PARTY OR THREATENED AGAINST ANY CREDIT PARTY BEFORE
THE NATIONAL LABOR RELATIONS BOARD AND NO GRIEVANCE OR ARBITRATION PROCEEDING
ARISING OUT OF OR UNDER ANY COLLECTIVE BARGAINING AGREEMENT THAT IS SO PENDING
AGAINST ANY CREDIT PARTY OR THREATENED AGAINST ANY CREDIT PARTY, (II) STRIKE OR
WORK STOPPAGE IN EXISTENCE OR THREATENED INVOLVING ANY CREDIT PARTY, AND
(III) UNION REPRESENTATION QUESTION EXISTING WITH RESPECT TO THE EMPLOYEES OF
ANY CREDIT PARTY, AS THE CASE MAY BE, AND NO UNION ORGANIZATION ACTIVITY THAT IS
TAKING PLACE, EXCEPT (WITH RESPECT TO ANY MATTER SPECIFIED IN CLAUSE (I),
(II) OR (III) ABOVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE) SUCH AS IS NOT
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.

 

(P)                                 EMPLOYEE BENEFITS.  EXCEPT AS SET FORTH ON
SCHEDULE 4.1(P), NEITHER THE BORROWER, ANY SUBSIDIARY OF THE BORROWER OR ANY OF
THEIR RESPECTIVE ERISA AFFILIATES SPONSORS, MAINTAINS OR CONTRIBUTES TO ANY
PENSION PLAN OR A MULTIEMPLOYER PLAN.  EACH CREDIT PARTY IS IN SUBSTANTIAL
COMPLIANCE WITH ALL APPLICABLE PROVISIONS AND REQUIREMENTS OF ERISA AND THE
INTERNAL REVENUE CODE AND THE REGULATIONS AND PUBLISHED INTERPRETATIONS
THEREUNDER WITH RESPECT TO EACH EMPLOYEE BENEFIT PLAN, AND HAVE PERFORMED ALL OF
THEIR OBLIGATIONS UNDER EACH EMPLOYEE BENEFIT PLAN, EXCEPT WHERE SUCH
NONCOMPLIANCE AND/OR FAILURE TO PERFORM SUCH OBLIGATIONS COULD NOT, INDIVIDUALLY
OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. 
EACH EMPLOYEE BENEFIT PLAN WHICH IS INTENDED TO QUALIFY UNDER SECTION 401(A) OF
THE INTERNAL REVENUE CODE IS SO QUALIFIED.  EXCEPT AS SET FORTH ON SCHEDULE
4.1(P) OR TO THE EXTENT REQUIRED UNDER

 

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SECTION 4980B OF THE INTERNAL REVENUE CODE OR SIMILAR STATE LAWS, NO EMPLOYEE
BENEFIT PLAN PROVIDES HEALTH OR WELFARE BENEFITS (THROUGH THE PURCHASE OF
INSURANCE OR OTHERWISE) FOR ANY RETIRED OR FORMER EMPLOYEE OF ANY CREDIT PARTY.

 

(Q)                                 ENVIRONMENTAL MATTERS.

 

(I)                                     NO CREDIT PARTY HAS ANY ENVIRONMENTAL
LIABILITIES AT ANY RELEVANT PROPERTY, WHICH INDIVIDUALLY OR IN THE AGGREGATE,
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(II)                                  EACH CREDIT PARTY:  (A) HAS OPERATED ITS
BUSINESS IN COMPLIANCE WITH ALL APPLICABLE ENVIRONMENTAL LAWS; (B) HAS OBTAINED
ALL ENVIRONMENTAL PERMITS REQUIRED BY APPLICABLE ENVIRONMENTAL LAWS FOR THE
OWNERSHIP AND OPERATION OF ITS PROPERTIES, AND ALL SUCH ENVIRONMENTAL PERMITS
ARE IN FULL FORCE AND EFFECT OR SUCH PERSON HAS MADE ALL APPROPRIATE FILINGS FOR
ISSUANCE OR RENEWAL OF SUCH ENVIRONMENTAL PERMITS; (C) IS NOT AWARE OF ANY ACTS,
OMISSIONS, EVENTS OR CIRCUMSTANCES THAT MAY INTERFERE WITH OR PREVENT CONTINUED
COMPLIANCE WITH THE ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS REFERRED TO IN
THE PRECEDING CLAUSES (A) AND (B); (D) HAS NOT RECEIVED WRITTEN NOTICE OF ANY
ASSERTED OR THREATENED CLAIM, ACTION, SUIT, PROCEEDING, HEARING, INVESTIGATION
OR WRITTEN REQUEST FOR INFORMATION RELATING TO ANY ENVIRONMENTAL MATTER; AND
(E) HAS NOT RECEIVED NOTICE FROM ANY GOVERNMENTAL BODY THAT ANY CREDIT PARTY IS
A POTENTIALLY RESPONSIBLE PARTY UNDER ANY ENVIRONMENTAL LAW AT ANY DISPOSAL SITE
CONTAINING HAZARDOUS MATERIALS, NOR DOES THERE EXIST ANY LIEN UNDER ANY
ENVIRONMENTAL LAW AGAINST ANY PROPERTY OF ANY CREDIT PARTY, EXCEPT IN EACH CASE
OF (A) THROUGH (E) ABOVE, FOR SUCH MATTERS THAT, INDIVIDUALLY OR IN THE
AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(R)                                    INSURANCE.  THE POLICIES, BINDERS OR
SELF-INSURANCE PROGRAMS FOR FIRE, LIABILITY, PRODUCT LIABILITY, WORKMEN’S
COMPENSATION, VEHICULAR AND OTHER INSURANCE CURRENTLY HELD BY OR ON BEHALF OF
EACH CREDIT PARTY INSURE THEIR RESPECTIVE MATERIAL PROPERTIES AND BUSINESS
ACTIVITIES AGAINST SUCH LOSSES AND RISKS AS ARE ADEQUATE TO PROTECT ITS
PROPERTIES IN ACCORDANCE WITH CUSTOMARY INDUSTRY PRACTICE WHEN ENTERED INTO OR
RENEWED.  AS OF THE DATE HEREOF, ALL SUCH POLICIES, BINDERS AND SELF-INSURANCE
PROGRAMS ARE IN FULL FORCE AND EFFECT.  AS OF THE DATE HEREOF, NO CREDIT PARTY
HAS RECEIVED NOTICE FROM ANY INSURER OR AGENT OF SUCH INSURER THAT SUBSTANTIAL
CAPITAL IMPROVEMENTS OR OTHER EXPENDITURES ARE REQUIRED.  AS OF THE DATE HEREOF,
NO CREDIT PARTY HAS RECEIVED NOTICE OF CANCELLATION OF ANY MATERIAL INSURANCE
POLICY OR BINDER.

 

(S)                                  INTELLECTUAL PROPERTY.  EACH CREDIT PARTY
OWNS OR LICENSES OR OTHERWISE HAS THE RIGHT TO USE ALL INTELLECTUAL PROPERTY
NECESSARY FOR THE OPERATION OF ITS BUSINESS AS PRESENTLY CONDUCTED.  AS OF THE
DATE HEREOF, THE CREDIT PARTIES DO NOT HAVE ANY INTELLECTUAL PROPERTY
REGISTERED, OR SUBJECT TO PENDING APPLICATIONS, IN THE UNITED STATES PATENT AND
TRADEMARK OFFICE OR ANY SIMILAR OFFICE OR AGENCY IN THE UNITED STATES, ANY STATE
THEREOF, ANY POLITICAL SUBDIVISION THEREOF OR IN ANY OTHER COUNTRY, OTHER THAN
THOSE DESCRIBED IN SCHEDULE 4.1(S) AND HAVE NOT GRANTED ANY LICENSES WITH
RESPECT THERETO OTHER THAN AS SET FORTH IN SCHEDULE 4.1(S).  TO THE KNOWLEDGE OF
THE CREDIT PARTIES, NO EVENT HAS OCCURRED WHICH PERMITS OR WOULD PERMIT AFTER
NOTICE OR PASSAGE OF TIME OR BOTH, THE REVOCATION, SUSPENSION OR TERMINATION OF
SUCH RIGHTS.  EXCEPT AS SET FORTH ON SCHEDULE 4.1(S), TO THE KNOWLEDGE OF ANY
CREDIT PARTY, NO SLOGAN OR OTHER

 

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ADVERTISING DEVICE, PRODUCT, PROCESS, METHOD, SUBSTANCE OR OTHER INTELLECTUAL
PROPERTY OR GOODS BEARING OR USING ANY INTELLECTUAL PROPERTY PRESENTLY
CONTEMPLATED TO BE SOLD BY OR EMPLOYED BY ANY CREDIT PARTY INFRINGES ANY PATENT,
TRADEMARK, SERVICEMARK, TRADENAME, COPYRIGHT, LICENSE OR OTHER INTELLECTUAL
PROPERTY OWNED BY ANY OTHER PERSON PRESENTLY AND NO CLAIM OR LITIGATION IS
PENDING OR THREATENED AGAINST OR AFFECTING ANY CREDIT PARTY CONTESTING ITS RIGHT
TO SELL OR USE ANY SUCH INTELLECTUAL PROPERTY.  SCHEDULE 4.1(S) SETS FORTH ALL
OF THE MATERIAL AGREEMENTS OR OTHER MATERIAL ARRANGEMENTS OF EACH CREDIT PARTY
PURSUANT TO WHICH, AS OF THE CLOSING DATE, SUCH CREDIT PARTY HAS A LICENSE OR
OTHER RIGHT TO USE ANY TRADEMARKS, LOGOS, DESIGNS, REPRESENTATIONS OR OTHER
INTELLECTUAL PROPERTY OWNED BY ANOTHER PERSON AS IN EFFECT ON THE DATE HEREOF
(OTHER THAN ANY “SHRINK-WRAP”, “CLICK-WRAP” AND OTHER NON-NEGOTIABLE STANDARD
END-USER SOFTWARE LICENSE AGREEMENTS) (COLLECTIVELY, TOGETHER WITH SUCH
AGREEMENTS OR OTHER ARRANGEMENTS AS MAY BE ENTERED INTO BY ANY CREDIT PARTY
AFTER THE DATE HEREOF, COLLECTIVELY, THE “LICENSE AGREEMENTS” AND INDIVIDUALLY,
A “LICENSE AGREEMENT”).  AS OF THE DATE HEREOF, ALL LICENSE AND RELATED RIGHTS
ARE IN FULL FORCE AND EFFECT, NO DEFAULT OR EVENT OF DEFAULT EXISTS WITH RESPECT
THERETO IN RESPECT OF THE OBLIGATIONS OF LICENSOR OR WITH RESPECT TO ANY ROYALTY
OR OTHER PAYMENT OBLIGATIONS OF ANY CREDIT PARTY OR ANY OBLIGATIONS OF ANY
CREDIT PARTY WITH RESPECT TO MANUFACTURING STANDARDS, QUALITY CONTROL OR
SPECIFICATIONS AND EACH CREDIT PARTY THERETO IS IN COMPLIANCE WITH THE TERMS
THEREOF AND NO OWNER, LICENSOR OR OTHER PARTY THERETO HAS SENT ANY NOTICE OF
TERMINATION OR ITS INTENTION TO TERMINATE SUCH LICENSE OR RIGHTS EXCEPT IN EACH
CASE AS WOULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

(T)                                    ABSENCE OF EVENTS OF DEFAULT.  NO EVENT
HAS OCCURRED AND IS CONTINUING AND NO CONDITION EXISTS WHICH CONSTITUTES AN
EVENT OF DEFAULT.

 

(U)                                 ABSENCE OF OTHER DEFAULTS.  NO CREDIT PARTY
IS IN DEFAULT UNDER ANY AGREEMENT, ORDINANCE, RESOLUTION, DECREE, BOND, NOTE,
INDENTURE, ORDER OR JUDGMENT TO WHICH IT IS A PARTY (BY SUCCESSOR IN INTEREST OR
OTHERWISE) OR BY WHICH IT IS BOUND, OR ANY OTHER AGREEMENT OR OTHER INSTRUMENT
BY WHICH ANY OF THE PROPERTIES OR ASSETS OWNED BY IT OR USED IN THE CONDUCT OF
ITS BUSINESS IS AFFECTED, WHICH INDIVIDUALLY OR IN THE AGGREGATE WOULD HAVE A
MATERIAL ADVERSE EFFECT.  EACH CREDIT PARTY HAS COMPLIED AND IS IN COMPLIANCE IN
ALL RESPECT WITH ALL LAWS, EXCEPT FOR SUCH INSTANCES OF NON-COMPLIANCE THAT,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

(V)                                 MATERIAL CONTRACTS.  SCHEDULE 4.1(V) SETS
FORTH A TRUE, CORRECT AND COMPLETE LIST AND DESCRIPTION OF ALL THE MATERIAL
CONTRACTS, AS OF THE CLOSING DATE, TO WHICH EACH CREDIT PARTY IS A PARTY.  NO
CREDIT PARTY IS IN DEFAULT IN THE PERFORMANCE, OBSERVANCE OR FULFILLMENT OF ANY
OF ITS OBLIGATIONS, COVENANTS OR CONDITIONS CONTAINED IN ANY OF THE MATERIAL
CONTRACTS, AND NO CONDITION EXISTS WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE
OF TIME OR BOTH, COULD CONSTITUTE SUCH A DEFAULT, EXCEPT WHERE THE CONSEQUENCES,
DIRECT OR INDIRECT, OF SUCH DEFAULT OR DEFAULTS, IF ANY, COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(W)                               BROKERAGE FEES.  EXCEPT AS SET FORTH ON
SCHEDULE 4.1(W), NO BROKER’S OR FINDER’S FEE OR COMMISSION WILL BE PAYABLE WITH
RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND NO OTHER SIMILAR FEES OR COMMISSIONS WILL BE PAYABLE BY THE
CREDIT PARTIES FOR ANY OTHER SERVICES RENDERED TO THE CREDIT PARTIES ANCILLARY
TO THE CREDIT TRANSACTIONS CONTEMPLATED HEREIN.

 

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(X)                                   MARGIN REGULATIONS.  NO PART OF THE
PROCEEDS OF THE TERM LOANS BORROWED HEREUNDER WILL BE USED FOR THE PURPOSE OF
BUYING OR CARRYING ANY MARGIN STOCK OR TO EXTEND CREDIT TO OTHERS FOR THE
PURPOSE OF BUYING OR CARRYING ANY MARGIN STOCK, IN EITHER CASE IN A MANNER WHICH
WOULD VIOLATE OR CONFLICT WITH REGULATIONS T, U OR X OF THE BOARD GOVERNORS OF
THE FEDERAL RESERVE SYSTEM.  NO CREDIT PARTY IS ENGAGED IN THE BUSINESS OF
EXTENDING CREDIT TO OTHERS FOR THE PURPOSE OF BUYING OR CARRYING MARGIN STOCK. 
NEITHER THE MAKING OF THE TERM LOANS NOR ANY USE OF PROCEEDS OF ANY SUCH TERM
LOANS WILL VIOLATE OR CONFLICT WITH THE PROVISIONS OF REGULATIONS T, U OR X OF
THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, AS AMENDED FROM TIME TO
TIME.

 

(Y)                                 TAXES.  EACH CREDIT PARTY HAS FILED ALL
FEDERAL AND OTHER MATERIAL TAX RETURNS REQUIRED TO BE FILED BY IT AND HAS NOT
FAILED TO PAY ANY MATERIAL TAXES, OR INTEREST AND PENALTIES RELATING THERETO, ON
OR BEFORE THE DUE DATES THEREOF EXCEPT FOR TAXES NOT YET DUE AND EXCEPT FOR
THOSE THE AMOUNT OR VALIDITY OF WHICH IS CURRENTLY BEING CONTESTED IN GOOD FAITH
BY APPROPRIATE PROCEEDINGS.  EXCEPT AS MAY BE PREVIOUSLY DISCLOSED TO
ADMINISTRATIVE AGENT AND TO THE EXTENT THAT RESERVES THEREFOR ARE REFLECTED IN
THE FINANCIAL STATEMENTS, (I) THERE ARE NO MATERIAL FEDERAL, STATE OR LOCAL TAX
LIABILITIES OF ANY CREDIT PARTY DUE OR TO BECOME DUE FOR ANY TAX YEAR ENDED ON
OR PRIOR TO THE DATE HEREOF RELATING TO ANY CREDIT PARTY, WHICH ARE NOT
REFLECTED IN THE FINANCIAL STATEMENTS IN ACCORDANCE WITH GAAP, AND (II) THERE
ARE NO MATERIAL CLAIMS PENDING, PROPOSED OR THREATENED IN WRITING AGAINST ANY
CREDIT PARTY FOR PAST FEDERAL, STATE OR LOCAL TAXES, EXCEPT THOSE, IF ANY, AS TO
WHICH PROPER RESERVES IN ACCORDANCE WITH GAAP ARE REFLECTED IN SUCH FINANCIAL
STATEMENTS.

 

(Z)                                   USA PATRIOT ACT; ETC.  EACH CREDIT PARTY
IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE USA PATRIOT ACT (TITLE III OF
PUB.L. 107-56 (SIGNED INTO LAW OCTOBER 26, 2001)).  NO PART OF THE PROCEEDS OF
THE EXTENSIONS OF CREDIT HEREUNDER WILL BE USED, DIRECTLY OR INDIRECTLY, FOR ANY
PAYMENTS TO ANY GOVERNMENTAL OFFICIAL OR EMPLOYEE, POLITICAL PARTY, OFFICIAL OF
A POLITICAL PARTY, CANDIDATE FOR POLITICAL OFFICE OR ANYONE ELSE ACTING IN AN
OFFICIAL CAPACITY, IN ORDER TO OBTAIN, RETAIN OR DIRECT BUSINESS OR OBTAIN ANY
IMPROPER ADVANTAGE, IN VIOLATION OF THE FEDERAL FOREIGN CORRUPT PRACTICES ACT OF
1977.

 

(AA)                            GAMING LICENSES.  ALL GAMING LICENSES REQUIRED
TO BE HELD BY THE CREDIT PARTIES ARE CURRENT AND IN GOOD STANDING AND THE CREDIT
PARTIES PRESENTLY HOLD ALL GAMING LICENSES NECESSARY FOR THE CONTINUED OPERATION
OF THE HOTEL/CASINO FACILITIES.

 

(BB)                          NON-CORE LAND/UNRESTRICTED SUBSIDIARIES.  EXCEPT
AS SET FORTH ON SCHEDULE 4.1(BB), NO CREDIT PARTY CONDUCTS ANY BUSINESS ON ANY
PROPERTY THAT IS CLASSIFIED AS NON-CORE LAND OTHER THAN BUSINESS THAT IS
IMMATERIAL, RELATED TO AND INCIDENTAL TO THE CREDIT PARTIES’ BUSINESS AS OF THE
CLOSING DATE.  EXCEPT AS SET FORTH ON SCHEDULE 4.1(BB), NO UNRESTRICTED
SUBSIDIARY CONDUCTS ANY BUSINESS WITH ANY CREDIT PARTY.  THE VALUE OF THE
CUMULATIVE ASSETS OF THE UNRESTRICTED SUBSIDIARIES IS LESS THAN $1,000,000.

 

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ARTICLE V
AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that so long as the Term Loans or any
other Obligation shall remain unpaid or unsatisfied, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all the covenants
in this Article V:

 

SECTION 5.1.                                BASIC REPORTING REQUIREMENTS.  THE
BORROWER SHALL FURNISH TO ADMINISTRATIVE AGENT AND THE LENDERS:

 

(A)                                  ANNUAL FINANCIAL STATEMENTS.  AS SOON AS
AVAILABLE, AND IN ANY EVENT WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL
YEAR, (I) THE CONSOLIDATED AND CONSOLIDATING BALANCE SHEETS OF THE BORROWER AND
ITS SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED CONSOLIDATED
AND CONSOLIDATING STATEMENTS OF INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF
THE BORROWER AND ITS SUBSIDIARIES FOR SUCH FISCAL YEAR, TOGETHER WITH A
FINANCIAL OFFICER CERTIFICATION WITH RESPECT THERETO; AND (II) WITH RESPECT TO
SUCH CONSOLIDATED FINANCIAL STATEMENTS A REPORT THEREON OF ERNST & YOUNG, LLP OR
OTHER INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF RECOGNIZED STANDING SELECTED
BY THE BORROWER, AND REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT (WHICH
REPORT SHALL BE UNQUALIFIED AS TO GOING CONCERN AND SCOPE OF AUDIT, AND SHALL
STATE THAT SUCH CONSOLIDATED FINANCIAL STATEMENTS FAIRLY PRESENT, IN ALL
MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL POSITION OF THE BORROWER AND ITS
SUBSIDIARIES AS AT THE DATES INDICATED AND THE RESULTS OF THEIR OPERATIONS AND
THEIR CASH FLOWS FOR THE PERIODS INDICATED IN CONFORMITY WITH GAAP AND THAT THE
EXAMINATION BY SUCH ACCOUNTANTS IN CONNECTION WITH SUCH CONSOLIDATED FINANCIAL
STATEMENTS HAS BEEN MADE IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING
STANDARDS) TOGETHER WITH A WRITTEN STATEMENT BY SUCH INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS STATING (1) THAT THEIR AUDIT EXAMINATION HAS INCLUDED A
REVIEW OF SECTION 6.14 (FINANCIAL COVENANTS), (2) WHETHER, IN CONNECTION
THEREWITH, ANY CONDITION OR EVENT THAT CONSTITUTES A DEFAULT OR AN EVENT OF
DEFAULT HAS COME TO THEIR ATTENTION AND, IF SUCH A CONDITION OR EVENT HAS COME
TO THEIR ATTENTION, SPECIFYING THE NATURE AND PERIOD OF EXISTENCE THEREOF, AND
(3) THAT NOTHING HAS COME TO THEIR ATTENTION THAT CAUSES THEM TO BELIEVE THAT
THE INFORMATION CONTAINED IN ANY COMPLIANCE CERTIFICATE IS NOT CORRECT OR THAT
THE MATTERS SET FORTH IN SUCH COMPLIANCE CERTIFICATE ARE NOT STATED IN
ACCORDANCE WITH THE TERMS HEREOF;

 

(B)                                 QUARTERLY FINANCIAL STATEMENTS.  AS SOON AS
AVAILABLE, AND IN ANY EVENT WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH
FISCAL QUARTER OF EACH FISCAL YEAR (INCLUDING THE FOURTH FISCAL QUARTER), THE
CONSOLIDATED AND CONSOLIDATING BALANCE SHEETS OF THE BORROWER AND ITS
SUBSIDIARIES AS AT THE END OF SUCH FISCAL QUARTER AND THE RELATED CONSOLIDATED
AND CONSOLIDATING STATEMENTS OF INCOME, STOCKHOLDERS’ EQUITY AND CASH FLOWS OF
THE BORROWER AND ITS SUBSIDIARIES FOR SUCH FISCAL QUARTER AND FOR THE PERIOD
FROM THE BEGINNING OF THE THEN CURRENT FISCAL YEAR TO THE END OF SUCH FISCAL
QUARTER, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE CORRESPONDING
FIGURES FOR THE CORRESPONDING PERIODS OF THE PREVIOUS FISCAL YEAR AND THE
CORRESPONDING FIGURES FROM THE PROJECTIONS FOR THE CURRENT FISCAL YEAR, ALL IN
REASONABLE DETAIL, TOGETHER WITH A FINANCIAL OFFICER CERTIFICATION WITH RESPECT
THERETO;

 

(C)                                  MONTHLY REPORTS.  AS SOON AS AVAILABLE, AND
IN ANY EVENT WITHIN THIRTY (30) DAYS AFTER THE END OF EACH MONTH, THE
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET OF THE BORROWER AND ITS
SUBSIDIARIES AS AT THE END OF SUCH MONTH AND THE RELATED CONSOLIDATED AND
CONSOLIDATING

 

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STATEMENTS OF INCOME, STATEMENTS OF STOCKHOLDERS’ EQUITY AND STATEMENTS OF CASH
FLOWS OF THE BORROWER AND ITS SUBSIDIARIES FOR SUCH MONTH AND FOR THE PERIOD
FROM THE BEGINNING OF THE THEN CURRENT FISCAL YEAR TO THE END OF SUCH MONTH,
SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE CORRESPONDING FIGURES FOR THE
CORRESPONDING PERIODS OF THE PREVIOUS FISCAL YEAR AND THE CORRESPONDING FIGURES
FROM THE PROJECTIONS FOR THE CURRENT FISCAL YEAR, ALL IN REASONABLE DETAIL,
TOGETHER WITH A SCHEDULE OF RECONCILIATIONS FOR ANY RECLASSIFICATIONS WITH
RESPECT TO PRIOR MONTHS OR PERIODS (AND, IN CONNECTION THEREWITH, COPIES OF ANY
RESTATED FINANCIAL STATEMENTS FOR ANY IMPACTED MONTH OR PERIOD) A FINANCIAL
OFFICER CERTIFICATION WITH RESPECT THERETO AND ANY OTHER OPERATING REPORTS
PREPARED BY MANAGEMENT FOR SUCH PERIOD;

 

(D)                                 PROJECTIONS.  AS SOON AS AVAILABLE, AND IN
NO EVENT LATER THAN THIRTY (30) DAYS FOLLOWING THE BEGINNING OF EACH FISCAL
YEAR, A CONSOLIDATED BUDGET AND FINANCIAL FORECAST FOR SUCH FISCAL YEAR AND EACH
FISCAL YEAR (OR PORTION THEREOF) THROUGH THE FINAL MATURITY DATE OF THE TERM
LOANS (THE “PROJECTIONS”), INCLUDING (I) A FORECASTED CONSOLIDATED BALANCE SHEET
AND FORECASTED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS OF THE BORROWER
AND ITS SUBSIDIARIES FOR EACH SUCH FISCAL YEAR, TOGETHER WITH AN EXPLANATION OF
THE ASSUMPTIONS ON WHICH SUCH FORECASTS ARE BASED, (II) FORECASTED CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOWS OF THE BORROWER AND ITS SUBSIDIARIES FOR
EACH MONTH OF THE FOLLOWING FISCAL YEAR AND FOR EACH QUARTER OF EACH SUBSEQUENT
FISCAL YEAR, (III) FORECASTS DEMONSTRATING PROJECTED COMPLIANCE WITH THE
REQUIREMENTS OF SECTION 6.14 (FINANCIAL COVENANTS) THROUGH THE MATURITY DATE,
AND (IV) FORECASTS DEMONSTRATING ADEQUATE LIQUIDITY THROUGH THE MATURITY DATE,
TOGETHER, IN EACH CASE, WITH AN EXPLANATION OF THE ASSUMPTIONS ON WHICH SUCH
FORECASTS ARE BASED ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT;

 

(E)                                  COMPLIANCE CERTIFICATE.  TOGETHER WITH EACH
DELIVERY OF FINANCIAL STATEMENTS OF THE BORROWER AND ITS SUBSIDIARIES PURSUANT
TO SECTIONS 5.1(A) AND 5.1(B), A DULY EXECUTED AND COMPLETED COMPLIANCE
CERTIFICATE;

 

(F)                                    STATEMENTS OF RECONCILIATION AFTER CHANGE
IN ACCOUNTING PRINCIPLES.  IF, AS A RESULT OF ANY CHANGE IN ACCOUNTING
PRINCIPLES AND POLICIES FROM THOSE USED IN THE PREPARATION OF THE FINANCIAL
STATEMENTS, THE CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS OF THE
BORROWER AND ITS SUBSIDIARIES DELIVERED PURSUANT TO SECTION 5.1(A) OR
5.1(B) WILL DIFFER IN ANY MATERIAL RESPECT FROM THE CONSOLIDATED AND
CONSOLIDATING FINANCIAL STATEMENTS THAT WOULD HAVE BEEN DELIVERED PURSUANT TO
SUCH SUBDIVISIONS HAD NO SUCH CHANGE IN ACCOUNTING PRINCIPLES AND POLICIES BEEN
MADE, THEN, TOGETHER WITH THE FIRST DELIVERY OF SUCH FINANCIAL STATEMENTS AFTER
SUCH CHANGE, ONE OR MORE STATEMENTS OF RECONCILIATION FOR ALL SUCH PRIOR
FINANCIAL STATEMENTS IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
ADMINISTRATIVE AGENT; AND

 

(G)                                 MANAGEMENT LETTERS.  COPIES OF ANY
MANAGEMENT LETTERS RECEIVED FROM TIME TO TIME BY ANY CREDIT PARTY FROM ITS
ACCOUNTANTS.

 

SECTION 5.2.                                VISITATION; VERIFICATION.  EACH
CREDIT PARTY SHALL KEEP TRUE AND ACCURATE BOOKS OF ACCOUNT IN ACCORDANCE WITH
GAAP.  ADMINISTRATIVE AGENT AND, IF ANY EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, ANY LENDER AND/OR ANY OF THEIR DESIGNATED REPRESENTATIVES, SHALL AT
ALL TIMES HAVE FULL AND FREE ACCESS (SO LONG AS NO EVENT DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE
NOTICE) TO ALL THE BOOKS, CORRESPONDENCE AND RECORDS OF EACH CREDIT PARTY AND
ADMINISTRATIVE AGENT AND, IF AN EVENT OF

 

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DEFAULT HAS OCCURRED AND IS CONTINUING, ANY LENDER, AND/OR ANY OF THEIR
DESIGNATED REPRESENTATIVES MAY EXAMINE THE SAME, TAKE EXTRACTS THEREFROM AND
MAKE PHOTOCOPIES THEREOF, AND EACH CREDIT PARTY AGREES TO RENDER TO
ADMINISTRATIVE AGENT, AND, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, ANY LENDER, AT SUCH CREDIT PARTY’S COST AND EXPENSE, SUCH CLERICAL
AND OTHER ASSISTANCE AS MAY BE REASONABLY REQUESTED WITH REGARD THERETO. 
ADMINISTRATIVE AGENT AND, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
ANY LENDER AND/OR ANY OF THEIR DESIGNATED REPRESENTATIVES SHALL AT ALL TIMES
ALSO HAVE THE RIGHT (SO LONG AS NO EVENT DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE) TO ENTER
ANY PREMISES OF EACH CREDIT PARTY AND INSPECT ANY PROPERTY OF EACH CREDIT PARTY
WHERE ANY OF THE COLLATERAL OF SUCH CREDIT PARTY GRANTED PURSUANT TO THE
SECURITY DOCUMENTATION IS LOCATED FOR THE PURPOSE OF INSPECTING THE SAME,
OBSERVING ITS USE OR OTHERWISE PROTECTING THEIR INTERESTS THEREIN. 
ADMINISTRATIVE AGENT AND, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
ANY LENDER AND/OR ANY OF THEIR DESIGNATED REPRESENTATIVES SHALL AT ALL TIMES
ALSO HAVE THE RIGHT (SO LONG AS NO EVENT DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, DURING NORMAL BUSINESS HOURS AND UPON REASONABLE NOTICE) TO DISCUSS
THE AFFAIRS, FINANCES AND ACCOUNTS OF SUCH PERSONS WITH, AND TO BE ADVISED AS TO
THE SAME BY, THE EXECUTIVES AND OFFICERS OF SUCH PERSONS.

 

SECTION 5.3.                                MAINTENANCE OF PROPERTIES.  EACH
CREDIT PARTY SHALL MAINTAIN ITS CORPORATE/LEGAL EXISTENCE AND BUSINESS, MAINTAIN
ITS ASSETS IN GOOD OPERATING CONDITIONS AND REPAIR (SUBJECT TO ORDINARY WEAR AND
TEAR AND TO ALL PROVISIONS OF THIS AGREEMENT PERMITTING SALES OF CERTAIN ASSETS
OF THE CREDIT PARTIES), KEEP ITS BUSINESS AND ASSETS ADEQUATELY INSURED,
MAINTAIN ITS CHIEF EXECUTIVE OFFICE IN THE UNITED STATES, CONTINUE TO ENGAGE IN
THE SAME OR SUBSTANTIALLY SIMILAR LINES OF BUSINESS, AND COMPLY IN ALL MATERIAL
RESPECTS WITH ALL REGULATIONS, INCLUDING, WITHOUT LIMITATION, ERISA AND
ENVIRONMENTAL LAWS, EXCEPT TO THE EXTENT THAT FAILURE TO SO ACT, WHICH EITHER
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

SECTION 5.4.                                NOTICE OF MATERIAL EVENTS.  EACH
CREDIT PARTY SHALL NOTIFY ADMINISTRATIVE AGENT AND THE LENDERS PROMPTLY IN
WRITING (I) OF THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT, (II) OF ANY
PROCEEDING ALLEGING NONCOMPLIANCE WITH ERISA OR ANY ENVIRONMENTAL LAW WHICH
WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON SUCH PERSON,
(III) OF ANY THREATENED OR PENDING LITIGATION OR OTHER PROCEEDING OR CLAIM, TO
THE KNOWLEDGE OF THE CREDIT PARTIES, AFFECTING THE BORROWER, ANY OF ITS
SUBSIDIARIES OR ANY OTHER CREDIT PARTY INVOLVING CLAIMS WHICH IN THE REASONABLE
JUDGMENT OF SUCH PERSON COULD RESULT IN LIABILITY IN EXCESS OF $750,000 IN THE
AGGREGATE OR ANY MATERIAL CHANGE IN ANY SUCH LITIGATION OR PROCEEDING PREVIOUSLY
REPORTED, (IV) OF ANY CLAIMS TO THE KNOWLEDGE OF THE CREDIT PARTIES, WHICH IN
THE REASONABLE JUDGMENT OF THE BORROWER COULD RESULT IN LIABILITY IN EXCESS OF
$750,000 IN THE AGGREGATE AGAINST ANY ASSETS OR PROPERTIES OF ANY CREDIT PARTY
ENCUMBERED IN FAVOR OF ADMINISTRATIVE AGENT AND/OR THE LENDERS AND (V) ANY OTHER
DEVELOPMENT THAT RESULTS IN, OR COULD REASONABLY BE EXPECTED TO RESULT IN, A
MATERIAL ADVERSE EFFECT.

 

SECTION 5.5.                                USE OF PROCEEDS.  THE BORROWER, EACH
OF ITS SUBSIDIARIES AND EACH OF THE OTHER CREDIT PARTIES SHALL USE THE PROCEEDS
OF THE TERM LOANS ONLY AS PERMITTED BY SECTION 2.5 HEREOF.

 

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SECTION 5.6.                                FURTHER ASSURANCES.

 

(A)                                  EACH CREDIT PARTY SHALL COOPERATE WITH
ADMINISTRATIVE AGENT, TAKE SUCH ACTION, EXECUTE SUCH DOCUMENTS, AND PROVIDE SUCH
INFORMATION AS ADMINISTRATIVE AGENT MAY FROM TIME TO TIME REASONABLY REQUEST IN
ORDER TO FURTHER EFFECT THE TRANSACTIONS CONTEMPLATED BY AND THE PURPOSES OF THE
LOAN DOCUMENTS.

 

(B)                                 EACH CREDIT PARTY SHALL PROMPTLY, UPON
REQUEST BY ANY LENDER, CORRECT, AND CAUSE EACH OF THE OTHER CREDIT PARTIES TO
ANY LOAN DOCUMENT TO PROMPTLY CORRECT, ANY DEFECT OR ERROR THAT MAY BE
DISCOVERED IN ANY LOAN DOCUMENT OR IN THE EXECUTION, ACKNOWLEDGMENT OR
RECORDATION OF ANY LOAN DOCUMENT.  PROMPTLY UPON REQUEST BY ADMINISTRATIVE AGENT
OR THE REQUIRED LENDERS, THE CREDIT PARTIES SHALL EXECUTE, ACKNOWLEDGE, DELIVER,
RECORD, FILE AND REGISTER, ANY AND ALL SUCH FURTHER ACTS, DEEDS, CONVEYANCES,
DOCUMENTS, SECURITY AGREEMENTS, PLEDGE AGREEMENTS, MORTGAGES, DEEDS OF TRUST,
TRUST DEEDS, ASSIGNMENTS, FINANCING STATEMENTS AND CONTINUATIONS, NOTICES OF
ASSIGNMENT, TRANSFERS, CERTIFICATES, ASSURANCES AND OTHER INSTRUMENTS AS
ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS MAY REASONABLY REQUIRE FROM TIME TO
TIME IN ORDER TO CARRY OUT MORE EFFECTIVELY THE PURPOSES OF EACH LOAN DOCUMENT. 
WITHOUT LIMITING THE FOREGOING, EACH CREDIT PARTY SHALL (A) AUTHORIZE
ADMINISTRATIVE AGENT TO FILE UCC-1 FINANCING STATEMENTS IN ALL JURISDICTIONS
DEEMED NECESSARY OR DESIRABLE BY ADMINISTRATIVE AGENT, AND (B) TAKE SUCH ACTION
FROM TIME TO TIME (INCLUDING, WITHOUT LIMITATION, FILING, EXECUTING AND
DELIVERING SUCH ASSIGNMENTS, SECURITY AGREEMENT AND OTHER INSTRUMENTS) AS SHALL
BE REASONABLY REQUESTED BY ADMINISTRATIVE AGENT TO CREATE, IN FAVOR OF THE
LENDERS, TO THE EXTENT REQUIRED UNDER THE RESPECTIVE SECURITY DOCUMENTATION AND
TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, A FIRST-PRIORITY PERFECTED
LIEN IN ALL OF THE COLLATERAL (SUBJECT TO PERMITTED LIENS).

 

SECTION 5.7.                                [RESERVED].

 

SECTION 5.8.                                INSURANCE.  EACH CREDIT PARTY SHALL
MAINTAIN AND/OR SHALL CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN, AT ITS
RESPECTIVE EXPENSE, AND KEEP IN EFFECT WITH RESPONSIBLE INSURANCE COMPANIES,
SUCH LIABILITY INSURANCE FOR BODILY INJURY AND THIRD-PARTY PROPERTY DAMAGE AS IS
CUSTOMARY IN THE CASE OF COMPANIES ENGAGED IN THE SAME OR SIMILAR BUSINESS OR
HAVING SIMILAR PROPERTIES, SIMILARLY SITUATED.  EACH CREDIT PARTY SHALL, AND
SHALL CAUSE EACH OF ITS SUBSIDIARIES TO, KEEP AND MAINTAIN, AT ITS EXPENSE, ITS
MATERIAL REAL AND PERSONAL PROPERTY INSURED AGAINST LOSS OR DAMAGE BY FIRE,
THEFT, EXPLOSION, SPOILAGE AND ALL OTHER RISKS ORDINARILY INSURED AGAINST BY
OTHER OWNERS OR USERS OF SUCH PROPERTIES IN SIMILAR BUSINESSES IN AN AMOUNT
EQUAL TO THE FULL REPLACEMENT OR CASH VALUE THEREOF, SUBJECT TO DEDUCTIBLE
AMOUNTS WHICH THE BORROWER, IN ITS REASONABLE JUDGMENT, DEEMS PRUDENT.  EACH
SUCH POLICY OF INSURANCE SHALL (I) NAME ADMINISTRATIVE AGENT, ON BEHALF OF
SECURED PARTIES AS AN ADDITIONAL INSURED THEREUNDER AS ITS INTERESTS MAY APPEAR,
AND (II) IN THE CASE OF EACH CASUALTY INSURANCE POLICY, CONTAIN A LOSS PAYABLE
CLAUSE OR ENDORSEMENT, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO
ADMINISTRATIVE AGENT, THAT NAMES ADMINISTRATIVE AGENT, ON BEHALF OF SECURED
PARTIES AS THE LOSS PAYEE THEREUNDER AND PROVIDES FOR AT LEAST THIRTY DAYS’
PRIOR WRITTEN NOTICE TO ADMINISTRATIVE AGENT OF ANY MODIFICATION OR CANCELLATION
OF SUCH POLICY.

 

SECTION 5.9.                                INFORMATION REGARDING COLLATERAL. 
THE BORROWER WILL FURNISH TO ADMINISTRATIVE AGENT PROMPT WRITTEN NOTICE OF ANY
CHANGE IN (I) ANY CREDIT PARTY’S CORPORATE NAME OR ANY TRADE NAME USED TO
IDENTIFY IT IN THE CONDUCT OF ITS BUSINESS OR ANY CREDIT PARTY’S CHIEF EXECUTIVE
OFFICE, ITS PRINCIPAL PLACE OF BUSINESS OR ITS JURISDICTION OF ORGANIZATION, OR
(II) ANY CREDIT PARTY’S FEDERAL TAXPAYER IDENTIFICATION NUMBER.  THE BORROWER
WILL NOT EFFECT OR PERMIT

 

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ANY CHANGE REFERRED TO IN THE PRECEDING SENTENCE UNLESS ALL FILINGS HAVE BEEN
MADE UNDER THE UCC AND ALL OTHER ACTIONS HAVE BEEN TAKEN THAT ARE REQUIRED SO
THAT SUCH CHANGE WILL NOT AT ANY TIME ADVERSELY AFFECT THE VALIDITY, PERFECTION
OR PRIORITY OF ANY LIEN ESTABLISHED UNDER ANY LOAN DOCUMENT ON THE COLLATERAL.

 

SECTION 5.10.                         EXISTENCE; CONDUCT OF BUSINESS.  EACH
CREDIT PARTY WILL DO OR CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE, RENEW
AND KEEP IN FULL FORCE AND EFFECT ITS LEGAL EXISTENCE AND THE RIGHTS, LICENSES,
PERMITS (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL PERMITS) PRIVILEGES,
FRANCHISES, PATENT, COPYRIGHTS, TRADEMARKS AND TRADE NAMES MATERIAL TO THE
CONDUCT OF ITS BUSINESS, EXCEPT TO THE EXTENT THAT FAILURE TO SO ACT, WHICH
EITHER INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

SECTION 5.11.                         PAYMENT OF OBLIGATIONS.  EACH CREDIT PARTY
WILL PAY ITS INDEBTEDNESS AND OTHER OBLIGATIONS, INCLUDING TAX LIABILITY, BEFORE
THE SAME SHALL BECOME DELINQUENT OR IN DEFAULT, EXCEPT WHERE (A) THE VALIDITY OR
AMOUNT THEREOF IS BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS,
(B) SUCH CREDIT PARTY HAS SET ASIDE ON ITS BOOKS ADEQUATE RESERVES WITH RESPECT
THERETO IN ACCORDANCE WITH GAAP AND (C) THE FAILURE TO MAKE PAYMENT PENDING SUCH
CONTEST COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 5.12.                         COMPLIANCE WITH LAWS.   EACH CREDIT PARTY
WILL COMPLY WITH ALL LAWS (INCLUDING, WITHOUT LIMITATION, ALL ENVIRONMENTAL
LAWS), RULES, LICENSES, PERMITS, REGULATIONS AND ORDERS OF ANY GOVERNMENTAL BODY
APPLICABLE TO IT OR ITS PROPERTY, EXCEPT WHERE FAILURE TO COMPLY, IN THE
AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
EFFECT.

 

SECTION 5.13.                         SUBSIDIARIES.

 

(A)                                  IF ANY SUBSIDIARY IS FORMED OR ACQUIRED
AFTER THE CLOSING DATE, THE BORROWER SHALL, PRIOR TO THE DATE UPON WHICH SUCH
SUBSIDIARY IS FORMED OR ACQUIRED, NOTIFY ADMINISTRATIVE AGENT AND THE LENDERS
THEREOF AND IMMEDIATELY FOLLOWING SUCH FORMATION OR ACQUISITION AND RECEIPT OF
ALL REQUIRED APPROVALS OF THE APPLICABLE GAMING AUTHORITIES, CAUSE ANY ASSETS
OWNED BY, OR INDEBTEDNESS OWNED BY OR ON BEHALF OF ANY CREDIT PARTY TO BE ADDED
TO THE COLLATERAL, INCLUDING WITHOUT LIMITATION, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BY EXECUTING A STOCK PLEDGE AGREEMENT IN THE FORM OF EXHIBIT L
HERETO.

 

(B)                                 IF AT ANY TIME ANY UNRESTRICTED SUBSIDIARY,
INDIVIDUALLY OR COLLECTIVELY WITH THE OTHER UNRESTRICTED SUBSIDIARIES, NO LONGER
SATISFIES THE REQUIREMENTS TO BE AN IMMATERIAL SUBSIDIARY, THE BORROWER SHALL
CAUSE ONE OR MORE SUCH UNRESTRICTED SUBSIDIARIES TO SATISFY THE REQUIREMENTS OF
SECTION 5.13(A) AND SECTION 5.14 AS IF SUCH UNRESTRICTED SUBSIDIARIES WERE
FORMED OR ACQUIRED AFTER THE CLOSING DATE.

 

SECTION 5.14.                         GUARANTORS.  SUBJECT TO THE RECEIPT OF ALL
REQUIRED APPROVALS OF APPLICABLE GAMING AUTHORITIES, THE BORROWER SHALL CAUSE
EACH OF ITS SUBSIDIARIES FORMED OR ACQUIRED AFTER THE CLOSING DATE TO BECOME A
GUARANTOR HEREUNDER BY (I) EXECUTING A JOINDER TO THIS AGREEMENT IN THE FORM OF
EXHIBIT D HERETO AND (II) EXECUTING A GUARANTY IN THE FORM OF EXHIBIT C HERETO. 
UPON DELIVERY OF ANY SUCH JOINDERS AND GUARANTY TO ADMINISTRATIVE AGENT, NOTICE
OF WHICH IS HEREBY WAIVED BY THE PARTIES HERETO, EACH SUCH GUARANTOR SHALL BE AS
FULLY A PARTY HERETO AS IF SUCH GUARANTOR WERE AN ORIGINAL SIGNATORY HEREOF.
 EACH GUARANTOR EXPRESSLY AGREES THAT ITS

 

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OBLIGATIONS ARISING HEREUNDER SHALL NOT BE AFFECTED OR DIMINISHED BY THE
ADDITION OR RELEASE OF ANY OTHER GUARANTOR HEREUNDER, NOR BY ANY ELECTION OF
ADMINISTRATIVE AGENT NOT TO CAUSE ANY SUBSIDIARY OF THE BORROWER TO BECOME A
GUARANTOR HEREUNDER.

 

SECTION 5.15.                         REAL PROPERTY.  IN THE EVENT THAT ANY
CREDIT PARTY (I) ACQUIRES A REAL ESTATE ASSET AFTER THE CLOSING DATE, THEN SUCH
CREDIT PARTY, CONTEMPORANEOUSLY WITH ACQUIRING SUCH REAL ESTATE ASSET, SHALL,
SUBJECT TO RECEIPT OF ALL REQUIRED APPROVALS OF APPLICABLE GAMING AUTHORITIES,
TAKE ALL SUCH ACTIONS AND EXECUTE AND DELIVER, OR CAUSE TO BE EXECUTED AND
DELIVERED, ALL SUCH MORTGAGES, DOCUMENTS, INSTRUMENTS, AGREEMENTS, OPINIONS AND
CERTIFICATES SIMILAR TO THOSE DESCRIBED IN SECTION 3.1(R) THAT ADMINISTRATIVE
AGENT SHALL REASONABLY REQUEST TO CREATE IN FAVOR OF ADMINISTRATIVE AGENT, FOR
THE BENEFIT OF SECURED PARTIES, A VALID AND, SUBJECT TO ANY FILING AND/OR
RECORDING REFERRED TO HEREIN, PERFECTED FIRST PRIORITY SECURITY INTEREST IN SUCH
REAL ESTATE ASSETS (SUBJECT TO PERMITTED LIENS); AND (II) LEASES ANY LEASEHOLD
PROPERTY AFTER THE CLOSING DATE WITH AN ANNUAL RENT IN EXCESS OF $1,000,000,
THEN SUCH CREDIT PARTY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO DELIVER TO
ADMINISTRATIVE AGENT A LANDLORD ACCESS AGREEMENT WITH RESPECT TO SUCH REAL
PROPERTY.

 

SECTION 5.16.                         BROKER’S CLAIMS.  THE BORROWER HEREBY
INDEMNIFIES AND AGREES TO HOLD EACH LENDER AND ADMINISTRATIVE AGENT HARMLESS
FROM AND AGAINST ANY AND ALL LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES
WHICH MAY BE SUFFERED OR INCURRED BY SUCH LENDER OR ADMINISTRATIVE AGENT, AS THE
CASE MAY BE, IN RESPECT OF ANY CLAIM, SUIT, ACTION OR CAUSE OF ACTION NOW OR
HEREAFTER ASSERTED BY A BROKER OR ANY PERSON ACTING IN A SIMILAR CAPACITY
ARISING FROM OR IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THEREIN, EXCEPT TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH LENDER OR ADMINISTRATIVE AGENT AS DETERMINED BY A
COURT OF COMPETENT JURISDICTION IN A FINAL, NON-APPEALABLE ORDER.  THIS
SECTION 5.16 SHALL SURVIVE TERMINATION OF THIS AGREEMENT.

 

SECTION 5.17.                         COMPLIANCE WITH ERISA.  EACH CREDIT PARTY
SHALL:  (I) MAINTAIN EACH EMPLOYEE BENEFIT PLAN IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH THE APPLICABLE PROVISIONS OF ERISA, THE INTERNAL REVENUE CODE AND
OTHER FEDERAL AND STATE LAW; (II) CAUSE EACH EMPLOYEE BENEFIT PLAN WHICH IS
QUALIFIED UNDER SECTION 401(A) OF THE INTERNAL REVENUE CODE TO MAINTAIN SUCH
QUALIFICATION; (III) NOT, AND SHALL CAUSE EACH OF ITS ERISA AFFILIATES TO NOT,
TERMINATE ANY PENSION PLAN SO AS TO INCUR ANY MATERIAL LIABILITY TO THE PENSION
BENEFIT GUARANTY CORPORATION; (IV) NOT ALLOW OR SUFFER TO EXIST ANY PROHIBITED
TRANSACTION INVOLVING ANY EMPLOYEE BENEFIT PLAN OR ANY TRUST CREATED THEREUNDER
WHICH WOULD SUBJECT SUCH CREDIT PARTY TO A MATERIAL TAX OR OTHER LIABILITY ON
PROHIBITED TRANSACTIONS IMPOSED UNDER SECTION 4975 OF THE INTERNAL REVENUE CODE
OR ERISA; (V) MAKE, AND SHALL CAUSE EACH OF ITS ERISA AFFILIATES TO MAKE, ALL
REQUIRED CONTRIBUTIONS TO ANY PENSION PLAN WHICH IT IS OBLIGATED TO PAY UNDER
SECTION 302 OF ERISA, SECTION 412 OF THE INTERNAL REVENUE CODE OR THE TERMS OF
SUCH EMPLOYEE BENEFIT PLAN; (VI) NOT, AND SHALL CAUSE EACH OF ITS ERISA
AFFILIATES TO NOT, ALLOW OR SUFFER TO EXIST ANY FAILURE TO SATISFY THE MINIMUM
FUNDING STANDARD, WHETHER OR NOT WAIVED, WITH RESPECT TO ANY PENSION PLAN;
(VII) NOT, AND SHALL CAUSE EACH OF ITS ERISA AFFILIATES TO NOT, ENGAGE IN A
TRANSACTION THAT COULD BE SUBJECT TO SECTION 4069 OR 4212(C) OF ERISA; OR
(VIII) NOT, AND SHALL CAUSE EACH OF ITS ERISA AFFILIATES TO NOT, ALLOW OR SUFFER
TO EXIST ANY OCCURRENCE OF A REPORTABLE EVENT (WITHIN THE MEANING OF
SECTION 4043 OF ERISA) OR ANY OTHER EVENT OR CONDITION WHICH PRESENTS A MATERIAL
RISK OF TERMINATION BY THE PENSION BENEFIT GUARANTY CORPORATION OF ANY PENSION
PLAN THAT IS A

 

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SINGLE EMPLOYER PLAN, WHICH TERMINATION COULD RESULT IN ANY MATERIAL LIABILITY
TO THE PENSION BENEFIT GUARANTY CORPORATION.

 

SECTION 5.18.                         CONSENTS OF AND NOTICES TO GAMING
AUTHORITIES.

 

(A)                                  THE BORROWER SHALL, AND SHALL CAUSE EACH OF
ITS SUBSIDIARIES TO, COMPLY IN ALL MATERIAL RESPECTS WITH AND KEEP IN FULL FORCE
AND EFFECT, AS AND WHEN REQUIRED, ALL GAMING LICENSES AND ALL OTHER MATERIAL
PERMITS OBTAINED FROM ANY GAMING AUTHORITY OR OTHER GOVERNMENTAL BODY THAT ARE
REQUIRED FOR THE OPERATION AND USE OF THE MPI HOTEL/CASINO FACILITIES, THE SDI
FACILITY AND THE PIDI FACILITY.

 

(B)                                 THE BORROWER SHALL, AND SHALL CAUSE EACH OF
ITS SUBSIDIARIES TO, MAKE ALL NECESSARY APPLICATIONS TO AND PROCURE ALL
NECESSARY CONSENTS AND APPROVALS OF THE APPLICABLE GAMING AUTHORITIES TO THE: 
(I) RESTRICTIONS ON TRANSFER AND PLEDGE OF THE STOCK OF MPI, PIDI AND SDI
CONTAINED HEREIN AND (II) THE TERMS SET FORTH IN THE CREDIT AGREEMENT AND EACH
OF THE LOAN DOCUMENTS, TO THE EXTENT WHICH MAY BE REQUIRED BY THE WEST VIRGINIA
GAMING AUTHORITIES, THE PENNSYLVANIA GAMING AUTHORITIES AND/OR THE OHIO GAMING
AUTHORITIES.

 

(C)                                  THE BORROWER SHALL, AND SHALL CAUSE EACH OF
ITS SUBSIDIARIES TO, COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE
STATUTES, RULES AND REGULATIONS REQUIRING REPORTS AND DISCLOSURES TO ALL
APPLICABLE GAMING AUTHORITIES, INCLUDING, BUT NOT LIMITED TO, REPORTING THIS
TRANSACTION AS MAY BE REQUIRED BY THE WEST VIRGINIA GAMING AUTHORITIES, THE
PENNSYLVANIA GAMING AUTHORITIES AND/OR THE OHIO GAMING AUTHORITIES.

 

(D)                                 IN THE EVENT OF A FORECLOSURE, DEED IN LIEU
OF FORECLOSURE OR OTHER SIMILAR TRANSFER OF A GAMING FACILITY OR FUTURE GAMING
FACILITY TO ADMINISTRATIVE AGENT OR ITS DESIGNEE, THE BORROWER SHALL, AND SHALL
CAUSE ITS SUBSIDIARIES TO, REASONABLY COOPERATE WITH ADMINISTRATIVE AGENT OR ITS
DESIGNEE IN OBTAINING ALL GAMING LICENSES AND OTHER GOVERNMENTAL APPROVALS
NECESSARY TO CONDUCT ALL GAMING OPERATIONS AT SUCH GAMING FACILITY OR FUTURE
GAMING FACILITY.  FOLLOWING A FORECLOSURE, DEED IN LIEU OF FORECLOSURE OR OTHER
SIMILAR TRANSFER OF A GAMING FACILITY OR FUTURE GAMING FACILITY TO
ADMINISTRATIVE AGENT OR ITS DESIGNEE, SUBJECT TO RECEIPT OF REQUISITE APPROVALS
FROM ANY APPLICABLE GAMING AUTHORITY, THE BORROWER SHALL, AND SHALL CAUSE ITS
SUBSIDIARIES TO, REASONABLY COOPERATE WITH THE TRANSITION OF THE GAMING
OPERATIONS AT SUCH GAMING FACILITY OR FUTURE GAMING FACILITY TO ANY NEW GAMING
OPERATOR (INCLUDING, WITHOUT LIMITATION, ADMINISTRATIVE AGENT OR ITS DESIGNEE).

 

ARTICLE VI
NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that so long as the Term Loans or any
other Obligation shall remain unpaid or unsatisfied, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Article VI:

 

SECTION 6.1.                                INDEBTEDNESS.  NO CREDIT PARTY
SHALL, OR SHALL PERMIT ANY OF ITS SUBSIDIARIES TO, INCUR, CREATE, ASSUME, BECOME
OR BE LIABLE IN ANY MANNER WITH RESPECT TO, OR PERMIT TO EXIST, ANY
INDEBTEDNESS, OR GUARANTEE, ASSUME, ENDORSE, OR OTHERWISE BECOME RESPONSIBLE FOR
(DIRECTLY OR INDIRECTLY), THE INDEBTEDNESS, PERFORMANCE, OBLIGATIONS OR
DIVIDENDS OF ANY OTHER PERSON, EXCEPT:

 

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(A)                                  THE OBLIGATIONS;

 

(B)                                 FF&E FINANCING; PROVIDED, THAT THE AGGREGATE
PRINCIPAL AMOUNT OF ALL SUCH INDEBTEDNESS (INCLUDING ANY PERMITTED REFINANCING
THEREOF) OUTSTANDING AT ANY TIME SHALL NOT EXCEED $15,000,000;

 

(C)                                  INDEBTEDNESS INCURRED BY THE BORROWER OR
ANY GUARANTOR TO FINANCE THE ACQUISITION, DEVELOPMENT OR CONSTRUCTION OF ANY
FUTURE GAMING FACILITY OR ANY GAMING FACILITY AT WHICH GAMING OPERATIONS ARE NOT
CONDUCTED ON THE CLOSING DATE, BUT ARE CONDUCTED FOLLOWING THE CLOSING DATE AS A
RESULT OF THE APPROVAL OF ADDITIONAL GAMING ACTIVITIES BY THE APPLICABLE GAMING
AUTHORITY; PROVIDED THAT (I) ALL SUCH INDEBTEDNESS SHALL BE UNSECURED AND
SUBORDINATED IN RIGHT OF PAYMENT TO THE PAYMENT IN FULL OF THE OBLIGATIONS
PURSUANT TO THE TERMS OF A SUBORDINATION AGREEMENT THAT IS REASONABLY
SATISFACTORY TO ADMINISTRATIVE AGENT, (II) NO PART OF THE PRINCIPAL OR INTEREST
OF WHICH IS REQUIRED TO BE PAID (WHETHER BY MANDATORY SINKING FUND, MANDATORY
REDEMPTION OR MANDATORY PREPAYMENT), PRIOR TO THE DATE THAT IS SIX MONTHS AFTER
THE MATURITY DATE, (III) UPON THE INCURRENCE OF SUCH INDEBTEDNESS AND AFTER
GIVING PRO FORMA EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING AND (IV) UPON THE INCURRENCE OF SUCH INDEBTEDNESS AND
AFTER GIVING EFFECT THERETO, THE BORROWER SHALL BE IN PRO FORMA COMPLIANCE WITH
THE FINANCIAL COVENANTS SET FORTH IN SECTION 6.14 AND SHALL DELIVER TO
ADMINISTRATIVE AGENT A COMPLIANCE CERTIFICATE AT LEAST FIVE BUSINESS DAYS PRIOR
TO THE DATE OF THE INCURRENCE OF SUCH INDEBTEDNESS DEMONSTRATING THE SAME;

 

(D)                                 INDEBTEDNESS OF ANY GUARANTOR TO THE
BORROWER OR TO ANY OTHER GUARANTOR, OR OF THE BORROWER TO ANY GUARANTOR;
PROVIDED, (I) ALL SUCH INDEBTEDNESS SHALL BE UNSECURED AND SUBORDINATED IN RIGHT
OF PAYMENT TO THE PAYMENT IN FULL OF THE OBLIGATIONS PURSUANT TO THE TERMS OF
THE APPLICABLE PROMISSORY NOTES OR AN INTERCOMPANY SUBORDINATION AGREEMENT THAT
IN ANY SUCH CASE, IS REASONABLY SATISFACTORY TO ADMINISTRATIVE AGENT AND
(II) ANY PAYMENT BY ANY SUCH GUARANTOR UNDER ANY GUARANTY OF THE OBLIGATIONS
SHALL RESULT IN A PRO TANTO REDUCTION OF THE AMOUNT OF ANY INDEBTEDNESS OWED BY
SUCH SUBSIDIARY TO THE BORROWER OR TO ANY OF ITS SUBSIDIARIES FOR WHOSE BENEFIT
SUCH PAYMENT IS MADE;

 

(E)                                  THE INDEBTEDNESS SET FORTH ON SCHEDULE 6.1
TO THIS AGREEMENT; PROVIDED, THAT, (I) THE BORROWER AND GUARANTORS MAY ONLY MAKE
REGULARLY SCHEDULED PAYMENTS OF PRINCIPAL AND INTEREST IN RESPECT OF SUCH
INDEBTEDNESS IN ACCORDANCE WITH THE TERMS OF THE AGREEMENT OR INSTRUMENT
EVIDENCING OR GIVING RISE TO SUCH INDEBTEDNESS AS IN EFFECT ON THE DATE HEREOF,
(II) THE BORROWER AND GUARANTORS SHALL NOT, DIRECTLY OR INDIRECTLY, (A) AMEND,
MODIFY, ALTER OR CHANGE THE TERMS OF SUCH INDEBTEDNESS OR ANY AGREEMENT,
DOCUMENT OR INSTRUMENT RELATED THERETO AS IN EFFECT ON THE DATE HEREOF IN A
MANNER THAT IS ADVERSE TO THE LENDERS EXCEPT, THAT, THE BORROWER AND GUARANTORS
MAY, AFTER PRIOR WRITTEN NOTICE TO ADMINISTRATIVE AGENT, AMEND, MODIFY, ALTER OR
CHANGE THE TERMS THEREOF SO AS TO EXTEND THE MATURITY THEREOF, OR DEFER THE
TIMING OF ANY PAYMENTS IN RESPECT THEREOF, OR TO FORGIVE OR CANCEL ANY PORTION
OF SUCH INDEBTEDNESS (OTHER THAN PURSUANT TO PAYMENTS THEREOF), OR TO REDUCE THE
INTEREST RATE OR ANY FEES IN CONNECTION THEREWITH, OR (B) REDEEM, RETIRE,
DEFEASE, PURCHASE OR OTHERWISE ACQUIRE SUCH INDEBTEDNESS, OR SET ASIDE OR
OTHERWISE DEPOSIT OR INVEST ANY SUMS FOR SUCH PURPOSE, AND (III) THE BORROWER
AND EACH GUARANTOR SHALL FURNISH TO ADMINISTRATIVE AGENT ALL NOTICES OR DEMANDS
IN CONNECTION WITH SUCH INDEBTEDNESS EITHER RECEIVED BY THE BORROWER OR SUCH
GUARANTOR OR ON ITS BEHALF, PROMPTLY AFTER

 

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THE RECEIPT THEREOF, OR SENT BY THE BORROWER OR SUCH GUARANTOR OR ON ITS BEHALF,
CONCURRENTLY WITH THE SENDING THEREOF, AS THE CASE MAY BE;

 

(F)                                    INDEBTEDNESS WHICH MAY BE DEEMED TO EXIST
PURSUANT TO ANY GUARANTIES, PERFORMANCE, SURETY, STATUTORY, APPEAL OR SIMILAR
OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS;

 

(G)                                 SO LONG AS THE INTERCREDITOR AGREEMENT IS IN
FULL FORCE AND EFFECT, (I) THE SENIOR SECURED NOTES IN AN AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $260,000,000 LESS ANY REPAYMENTS OF PRINCIPAL OR
REDEMPTIONS THEREOF AND (II) ADDITIONAL SENIOR SECURED NOTES AND (III) ANY
PERMITTED REFINANCING THEREOF, PROVIDED THAT WITH RESPECT TO THIS CLAUSE (II),
ADMINISTRATIVE AGENT SHALL HAVE CONSENTED TO THE INCURRENCE AND USE OF PROCEEDS
OF SUCH ADDITIONAL SENIOR SECURED NOTES, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD OR DELAYED;

 

(H)                                 THE SENIOR SUBORDINATED NOTES AND ANY
PERMITTED REFINANCING THEREOF IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$125,000,000 LESS ANY REPAYMENTS OF PRINCIPAL OR REDEMPTIONS THEREOF;

 

(I)                                     IF NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, OTHER UNSECURED INDEBTEDNESS OF ANY CREDIT PARTY IN
AN AGGREGATE AMOUNT OUTSTANDING AT ANY TIME NOT TO EXCEED $5,000,000;

 

(J)                                     INDEBTEDNESS IN RESPECT OF NETTING
SERVICES, OVERDRAFT PROTECTIONS AND OTHERWISE IN CONNECTION WITH DEPOSIT
ACCOUNTS;

 

(K)                                  INDEBTEDNESS WHICH MAY BE DEEMED TO EXIST
PURSUANT TO ANY GUARANTIES, PERFORMANCE, STATUTORY, SURETY, APPEAL OR SIMILAR
OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS;

 

(L)                                     GUARANTIES IN THE ORDINARY COURSE OF
BUSINESS OF THE OBLIGATIONS OF SUPPLIERS, CUSTOMERS, FRANCHISEES AND LICENSEES
OF THE BORROWER AND ITS SUBSIDIARIES;

 

(M)                               GUARANTIES BY THE BORROWER OF INDEBTEDNESS OF
A GUARANTOR OR GUARANTIES BY A SUBSIDIARY OF THE BORROWER OF INDEBTEDNESS OF THE
BORROWER OR A GUARANTOR WITH RESPECT, IN EACH CASE, TO INDEBTEDNESS OTHERWISE
PERMITTED TO BE INCURRED PURSUANT TO THIS SECTION 6.1; AND

 

(N)                                 INDEBTEDNESS INCURRED FOR THE PURPOSE OF
FINANCING INSURANCE PREMIUMS (INCLUDING, WITHOUT LIMITATION, EXTENDED PAYMENT
TERMS) UP TO AN AGGREGATE AMOUNT OF $500,000 AT ANY TIME OUTSTANDING.

 

SECTION 6.2.                                LIENS.  NO CREDIT PARTY SHALL CREATE
OR INCUR, OR CAUSE ANY OF ITS SUBSIDIARIES TO CREATE OR INCUR, ANY LIENS ON ANY
OF THE PROPERTY OR ASSETS OF SUCH PERSON, EXCEPT:

 

(A)                                  THE SECURITY INTERESTS AND LIENS OF
ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE SECURED PARTIES GRANTED PURSUANT TO
THE SECURITY DOCUMENTATION;

 

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(B)                                 SO LONG AS THE INTERCREDITOR AGREEMENT IS IN
FULL FORCE AND EFFECT, LIENS ON THE COLLATERAL IN FAVOR OF THE SECOND LIEN
COLLATERAL AGENT SECURING THE SENIOR SECURED NOTES AND ANY PERMITTED REFINANCING
AND GUARANTEES THEREOF;

 

(C)                                  LIENS SECURING THE PAYMENT OF TAXES,
ASSESSMENTS OR OTHER GOVERNMENTAL CHARGES OR LEVIES EITHER NOT YET OVERDUE OR
THE VALIDITY OF WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS DILIGENTLY PURSUED AND AVAILABLE TO SUCH CREDIT PARTY OR ITS
SUBSIDIARY, AS THE CASE MAY BE AND WITH RESPECT TO WHICH ADEQUATE RESERVES HAVE
BEEN SET ASIDE ON ITS BOOKS;

 

(D)                                 STATUTORY LIENS OF CARRIERS, WAREHOUSEMEN,
MECHANICS, MATERIAL MEN, LANDLORDS, REPAIRMEN OR OTHER LIKE LIENS ARISING BY
OPERATION OF LAW IN THE ORDINARY COURSE OF BUSINESS PROVIDED THAT (1) THE
UNDERLYING OBLIGATIONS ARE NOT OVERDUE FOR A PERIOD OF MORE THAN 60 DAYS, OR
(2) SUCH LIENS ARE BEING CONTESTED IN GOOD FAITH AND BY APPROPRIATE PROCEEDINGS
AND ADEQUATE RESERVES WITH RESPECT THERETO ARE MAINTAINED ON THE BOOKS OF THE
BORROWER OR ITS SUBSIDIARY IN ACCORDANCE WITH GAAP;

 

(E)                                  LIENS SECURING THE PERFORMANCE OF BIDS,
TRADE CONTRACTS (OTHER THAN BORROWED MONEY), LEASES, STATUTORY OBLIGATIONS,
SURETY AND APPEAL BONDS, PERFORMANCE BONDS AND OTHER OBLIGATIONS OF A LIKE
NATURE INCURRED IN THE ORDINARY COURSE OF BUSINESS;

 

(F)                                    ZONING RESTRICTIONS, EASEMENTS, LICENSES,
COVENANTS AND OTHER RESTRICTIONS AFFECTING THE USE OF REAL PROPERTY WHICH DO NOT
INTERFERE IN ANY MATERIAL RESPECT WITH THE USE OF SUCH REAL PROPERTY OR ORDINARY
CONDUCT OF THE BUSINESS OF SUCH CREDIT PARTY OR ITS SUBSIDIARY AS PRESENTLY
CONDUCTED THEREON OR MATERIALLY IMPAIR THE VALUE OF THE REAL PROPERTY WHICH MAY
BE SUBJECT THERETO;

 

(G)                                 LIENS ARISING FROM FF&E FINANCING PERMITTED
TO BE INCURRED PURSUANT TO SECTION 6.1(B) (AND ANY PERMITTED REFINANCING
THEREOF); PROVIDED THAT SUCH LIENS RELATE SOLELY TO THE PROPERTY WHICH IS
SUBJECT TO SUCH FF&E FINANCING.

 

(H)                                 PLEDGES AND DEPOSITS OF CASH BY ANY CREDIT
PARTY OR ITS SUBSIDIARY IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH
WORKERS’ COMPENSATION, UNEMPLOYMENT INSURANCE AND OTHER TYPES OF SOCIAL SECURITY
OR EMPLOYEE BENEFITS CONSISTENT WITH THE CURRENT PRACTICES OF SUCH CREDIT PARTY
OR ITS SUBSIDIARY AS OF THE DATE HEREOF;

 

(I)                                     PLEDGES AND DEPOSITS OF CASH BY ANY
CREDIT PARTY OR ITS SUBSIDIARY TO SECURE THE PERFORMANCE OF TENDERS, BIDS,
LEASES, TRADE CONTRACTS (OTHER THAN FOR THE REPAYMENT OF INDEBTEDNESS),
STATUTORY OBLIGATIONS AND OTHER SIMILAR OBLIGATIONS IN EACH CASE IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH THE CURRENT PRACTICES OF SUCH CREDIT PARTY OR
ITS SUBSIDIARY AS OF THE DATE HEREOF;

 

(J)                                     LIENS ARISING FROM (I) OPERATING LEASES
AND THE PRECAUTIONARY UCC FINANCING STATEMENT FILINGS IN RESPECT THEREOF AND
(II) EQUIPMENT OR OTHER MATERIALS WHICH ARE NOT OWNED BY ANY CREDIT PARTY OR ITS
SUBSIDIARY LOCATED ON THE PREMISES OF SUCH CREDIT PARTY OR ITS SUBSIDIARY (BUT
NOT IN CONNECTION WITH, OR AS PART OF, THE FINANCING THEREOF) FROM TIME TO TIME
IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH CURRENT PRACTICES OF SUCH
CREDIT PARTY OR ITS SUBSIDIARY AND THE PRECAUTIONARY UCC FINANCING STATEMENT
FILINGS IN RESPECT THEREOF;

 

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(K)                                  JUDGMENTS AND OTHER SIMILAR LIENS ARISING
IN CONNECTION WITH COURT PROCEEDINGS THAT DO NOT CONSTITUTE AN EVENT OF DEFAULT;
PROVIDED, THAT, (I) SUCH LIENS ARE BEING CONTESTED IN GOOD FAITH AND BY
APPROPRIATE PROCEEDINGS DILIGENTLY PURSUED, (II) ADEQUATE RESERVES OR OTHER
APPROPRIATE PROVISION, IF ANY, AS ARE REQUIRED BY GAAP HAVE BEEN MADE THEREFOR,
AND (III) A STAY OF ENFORCEMENT OF ANY SUCH LIENS IS IN EFFECT;

 

(L)                                     THE SECURITY INTERESTS AND LIENS SET
FORTH ON SCHEDULE 6.2;

 

(M)                               PURPORTED LIENS EVIDENCED BY THE FILING OF
PRECAUTIONARY UCC FINANCING STATEMENTS RELATING SOLELY TO OPERATING LEASES OF
PERSONAL PROPERTY ENTERED INTO BY THE BORROWER OR ANY OF ITS SUBSIDIARIES IN THE
ORDINARY COURSE OF BUSINESS;

 

(N)                                 LEASES OR SUBLEASES GRANTED TO OTHER PERSONS
IN THE ORDINARY COURSE OF BUSINESS NOT MATERIALLY INTERFERING WITH THE CONDUCT
OF THE BUSINESS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR MATERIALLY
DETRACTING FROM THE VALUE OF THE RELATIVE ASSETS OF THE BORROWER OR ANY
SUBSIDIARY;

 

(O)                                 LIENS ARISING SOLELY BY VIRTUE OF ANY
STATUTORY OR COMMON LAW PROVISIONS RELATING TO BANKERS LIENS, RIGHTS OF SET-OFF
OR SIMILAR RIGHTS AND REMEDIES AS TO DEPOSIT ACCOUNTS OR OTHER FUNDS MAINTAINED
WITH A DEPOSITARY INSTITUTION; PROVIDED, THAT (I) SUCH DEPOSIT ACCOUNT IS NOT A
DEDICATED CASH COLLATERAL ACCOUNT AND IS NOT SUBJECT TO RESTRICTIONS AGAINST
ACCESS BY THE BORROWER IN EXCESS OF THOSE SET FORTH BY REGULATIONS PROMULGATED
BY THE FEDERAL RESERVE BOARD AND (II) SUCH DEPOSIT ACCOUNT IS NOT INTENDED BY
THE BORROWER OR ANY SUBSIDIARY TO PROVIDE COLLATERAL TO THE DEPOSITARY
INSTITUTION;

 

(P)                                 ANY LIEN EXISTING ON ANY PROPERTY OR ASSET
PRIOR TO THE ACQUISITION THEREOF BY THE BORROWER OR ANY SUBSIDIARY OR EXISTING
ON ANY PROPERTY OR ASSETS OF ANY PERSON THAT BECOMES A SUBSIDIARY AFTER THE DATE
HEREOF PRIOR TO THE TIME SUCH PERSON BECOMES A SUBSIDIARY, AS THE CASE MAY BE;
PROVIDED THAT (I) SUCH LIEN IS NOT CREATED IN CONTEMPLATION OF OR IN CONNECTION
WITH SUCH ACQUISITION OR SUCH PERSON BECOMING A SUBSIDIARY, (II) SUCH LIEN DOES
NOT APPLY TO ANY OTHER PROPERTY OR ASSETS OF THE BORROWER OR ANY SUBSIDIARY, AND
(III) SUCH LIEN SECURES ONLY THOSE OBLIGATIONS WHICH IT SECURES ON THE DATE OF
SUCH ACQUISITION OR THE DATE SUCH PERSON BECOMES A SUBSIDIARY, AS THE CASE MAY
BE;

 

(Q)                                 ANY ENCUMBRANCE OR RESTRICTION (INCLUDING
PUT AND CALL ARRANGEMENTS) WITH RESPECT TO CAPITAL STOCK OF ANY JOINT VENTURE OR
SIMILAR ARRANGEMENT PURSUANT TO ANY MINORITY OWNED JOINT VENTURE;

 

(R)                                    LIENS ON ANY CLOSING DATE MORTGAGED
PROPERTY WHICH ARE SHOWN AS EXCEPTIONS ON SCHEDULE B OF THE TITLE POLICIES;

 

(S)                                  LIENS CREATING A SECURITY INTEREST IN THE
PROCEEDS OF THE INSURANCE POLICY OR POLICIES, THE PREMIUMS OF WHICH ARE FINANCED
AS PERMITTED UNDER SECTION 6.01(N); AND

 

(T)                                    OTHER LIENS ON ASSETS SECURING
INDEBTEDNESS IN AN AGGREGATE AMOUNT NOT TO EXCEED $1,500,000 AT ANY TIME
OUTSTANDING.

 

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NOTWITHSTANDING ANY IN THE FOREGOING TO THE CONTRARY, NO CREDIT PARTY SHALL
PERMIT ANY LIEN ON, OR GRANT ANY SECURITY INTEREST IN, THE CAPITAL STOCK OF THE
GUARANTORS OTHER THAN A LIEN OR SECURITY INTEREST IN FAVOR OF ADMINISTRATIVE
AGENT.

 

SECTION 6.3.                                SALES AND LEASE-BACKS.  NO CREDIT
PARTY SHALL, NOR SHALL IT PERMIT ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR
INDIRECTLY, BECOME OR REMAIN LIABLE AS LESSEE OR AS A GUARANTOR OR OTHER SURETY
WITH RESPECT TO ANY LEASE OF ANY PROPERTY (WHETHER REAL, PERSONAL OR MIXED),
WHETHER NOW OWNED OR HEREAFTER ACQUIRED, WHICH SUCH CREDIT PARTY (A) HAS SOLD OR
TRANSFERRED OR IS TO SELL OR TO TRANSFER TO ANY OTHER PERSON (OTHER THAN THE
BORROWER OR A GUARANTOR), OR (B) INTENDS TO USE FOR SUBSTANTIALLY THE SAME
PURPOSE AS ANY OTHER PROPERTY WHICH HAS BEEN OR IS TO BE SOLD OR TRANSFERRED BY
SUCH CREDIT PARTY TO ANY PERSON (OTHER THAN THE BORROWER OR A GUARANTOR) IN
CONNECTION WITH SUCH LEASE; PROVIDED, HOWEVER, A CREDIT PARTY SHALL BE PERMITTED
TO ENTER INTO A SALE-LEASEBACK TRANSACTION WITH RESPECT TO ITS FURNITURE,
FIXTURES AND EQUIPMENT BUT (I) SUCH TRANSACTION SHALL BE COUNTED ON A
DOLLAR-FOR-DOLLAR BASIS AGAINST THE BASKET SET FORTH IN SECTION 6.1(B) AND
(II) THE PROCEEDS RECEIVED ANY CREDIT PARTY FROM SUCH TRANSACTION SHALL BE
APPLIED PURSUANT TO SECTION 2.12(A).

 

SECTION 6.4.                                TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES.  WITHOUT THE PRIOR CONSENT OF ADMINISTRATIVE AGENT, NO CREDIT PARTY
SHALL, NOR SHALL IT PERMIT ANY OF ITS SUBSIDIARIES TO DIRECTLY OR INDIRECTLY:

 

(I)                                     ENTER INTO OR PERMIT TO EXIST ANY
TRANSACTION (INCLUDING THE PURCHASE, SALE, LEASE OR EXCHANGE OF ANY PROPERTY OR
THE RENDERING OF ANY SERVICE) WITH ANY AFFILIATE OF ANY CREDIT PARTY, EXCEPT IN
THE ORDINARY COURSE OF BUSINESS PURSUANT TO THE REASONABLE REQUIREMENTS OF SUCH
CREDIT PARTY’S BUSINESS (AS THE CASE MAY BE) AND UPON FAIR AND REASONABLE TERMS
NO LESS FAVORABLE TO SUCH CREDIT PARTY THAN SUCH CREDIT PARTY WOULD OBTAIN IN A
COMPARABLE ARM’S LENGTH TRANSACTION WITH AN UNAFFILIATED PERSON; AND

 

(II)                                  MAKE ANY PAYMENTS (WHETHER BY DIVIDEND,
LOAN OR OTHERWISE) OF MANAGEMENT, CONSULTING OR OTHER FEES FOR MANAGEMENT OR
SIMILAR SERVICES TO ANY AFFILIATE THAT IS NOT A CREDIT PARTY OR AN UNRESTRICTED
SUBSIDIARY.

 

SECTION 6.5.                                INVESTMENTS.  NO CREDIT PARTY SHALL,
NOR SHALL IT PERMIT ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, MAKE OR
OWN ANY INVESTMENT IN ANY PERSON, INCLUDING WITHOUT LIMITATION ANY JOINT
VENTURE, EXCEPT:

 

(A)                                  INVESTMENTS IN CASH AND CASH EQUIVALENTS;

 

(B)                                 EQUITY INVESTMENTS OWNED AS OF THE CLOSING
DATE IN ANY SUBSIDIARY AND INVESTMENTS MADE AFTER THE CLOSING DATE IN ANY
WHOLLY-OWNED GUARANTOR;

 

(C)                                  INVESTMENTS (I) IN ANY SECURITIES RECEIVED
IN SATISFACTION OR PARTIAL SATISFACTION THEREOF FROM FINANCIALLY TROUBLED
ACCOUNT DEBTORS, AND (II) DEPOSITS, PREPAYMENTS AND OTHER CREDITS TO SUPPLIERS
MADE IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH THE PAST PRACTICES OF
THE BORROWER AND ITS SUBSIDIARIES;

 

(D)                                 INTERCOMPANY LOANS TO THE EXTENT PERMITTED
UNDER SECTION 6.1(D);

 

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(E)                                  CAPITAL EXPENDITURES;

 

(F)                                    PERMITTED ACQUISITIONS FOR AN AGGREGATE
CONSIDERATION AMOUNT NOT TO EXCEED $1,000,000 DURING THE TERM OF THIS AGREEMENT;

 

(G)                                 INVESTMENTS DESCRIBED ON SCHEDULE 6.5;

 

(H)                                 INVESTMENTS IN AN AMOUNT NOT TO EXCEED
$500,000 AT ANY TIME OUTSTANDING; AND

 

(I)                                     INVESTMENTS IN AN AMOUNT NOT TO EXCEED
$300,000 IN THE AGGREGATE IN CONNECTION WITH THE CLOSURE OF JACKSON TROTTING
ASSOCIATION, LLC.

 

SECTION 6.6.                                [RESERVED].

 

SECTION 6.7.                                MERGER; DISPOSITION OF ASSETS;
ACQUISITIONS.  NO CREDIT PARTY SHALL, NOR SHALL IT PERMIT ANY OF ITS
SUBSIDIARIES TO, ENTER INTO ANY TRANSACTION OF MERGER OR CONSOLIDATION,
LIQUIDATE, WIND-UP OR DISSOLVE ITSELF (OR SUFFER ANY LIQUIDATION OR
DISSOLUTION), OR CONVEY, SELL, LEASE OR SUB-LEASE (AS LESSOR OR SUBLESSOR),
EXCHANGE, TRANSFER OR OTHERWISE DISPOSE OF, IN ONE TRANSACTION OR A SERIES OF
TRANSACTIONS, ALL OR ANY PART OF ITS BUSINESS, ASSETS OR PROPERTY OF ANY KIND
WHATSOEVER, WHETHER REAL, PERSONAL OR MIXED AND WHETHER TANGIBLE OR INTANGIBLE,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED, OR ACQUIRE BY PURCHASE OR OTHERWISE
(OTHER THAN PURCHASES OR OTHER ACQUISITIONS OF INVENTORY, MATERIALS AND
EQUIPMENT AND CAPITAL EXPENDITURES IN THE ORDINARY COURSE OF BUSINESS) THE
BUSINESS, PROPERTY OR FIXED ASSETS OF, OR STOCK OR OTHER EVIDENCE OF BENEFICIAL
OWNERSHIP OF, ANY PERSON OR ANY DIVISION OR LINE OF BUSINESS OR OTHER BUSINESS
UNIT OF ANY PERSON, EXCEPT:

 

(A)                                  ANY SUBSIDIARY AND ANY UNRESTRICTED
SUBSIDIARY OF THE BORROWER MAY BE MERGED WITH OR INTO THE BORROWER OR ANY
GUARANTOR, OR BE LIQUIDATED, WOUND UP OR DISSOLVED, OR ALL OR ANY PART OF ITS
BUSINESS, PROPERTY OR ASSETS MAY BE CONVEYED, SOLD, LEASED, TRANSFERRED OR
OTHERWISE DISPOSED OF, IN ONE TRANSACTION OR A SERIES OF TRANSACTIONS, TO THE
BORROWER OR ANY GUARANTOR; PROVIDED, IN THE CASE OF SUCH A MERGER, THE BORROWER
OR SUCH GUARANTOR, AS APPLICABLE SHALL BE THE CONTINUING OR SURVIVING PERSON;

 

(B)                                 SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING, ASSET SALES, THE PROCEEDS OF WHICH ARE
LESS THAN $750,000 WHEN AGGREGATED WITH THE PROCEEDS OF ALL OTHER ASSET SALES
MADE WITHIN THE SAME FISCAL YEAR; PROVIDED (A) THE CONSIDERATION RECEIVED FOR
SUCH ASSETS SHALL BE IN AN AMOUNT AT LEAST EQUAL TO THE FAIR MARKET VALUE
THEREOF (DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS OF THE BORROWER (OR
SIMILAR GOVERNING BODY)), (B) NO LESS THAN 75% THEREOF SHALL BE PAID IN CASH,
AND (C) THE NET ASSET SALE PROCEEDS THEREOF SHALL BE APPLIED AS REQUIRED BY
SECTION 2.11(A);

 

(C)                                  DISPOSALS OF OBSOLETE OR WORN OUT PROPERTY;
AND

 

(D)                                 INVESTMENTS, INCLUDING, WITHOUT LIMITATION,
PERMITTED ACQUISITIONS, MADE IN ACCORDANCE WITH SECTION 6.5.

 

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SECTION 6.8.                                FISCAL YEAR; FISCAL QUARTER.  NO
CREDIT PARTY SHALL CHANGE ITS OR ANY OF ITS SUBSIDIARIES’ FISCAL YEAR OR FISCAL
QUARTER WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUIRED LENDERS.

 

SECTION 6.9.                                RESTRICTED PAYMENTS.  NO CREDIT
PARTY SHALL, NOR SHALL IT PERMIT ANY OF ITS SUBSIDIARIES THROUGH ANY MANNER OR
MEANS OR THROUGH ANY OTHER PERSON TO, DIRECTLY OR INDIRECTLY, DECLARE, ORDER,
PAY, MAKE OR SET APART, OR AGREE TO DECLARE, ORDER, PAY, MAKE OR SET APART, ANY
SUM FOR ANY RESTRICTED PAYMENT, EXCEPT:

 

(A)                                  THE REPURCHASE OF CAPITAL STOCK OF THE
BORROWER UPON THE EXERCISE OF STOCK OPTIONS REPRESENTING THE EXERCISE PRICE
THEREOF;

 

(B)                                 ANY DIVIDEND, DISTRIBUTION OR OTHER PAYMENT
BY ANY OF THE GUARANTORS OR SUBSIDIARIES OF ANY CREDIT PARTY ON ITS CAPITAL
STOCK THAT IS PAID PRO RATA TO ALL HOLDERS OF SUCH CAPITAL STOCK;

 

(C)                                  SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
EXISTS, REPURCHASES, REDEMPTIONS, OR OTHER RETIREMENTS OR ACQUISITIONS OF
CAPITAL STOCK FROM THE BORROWER’S EMPLOYEES OR DIRECTORS OR MANAGERS (OR THEIR
HEIRS OR ESTATES) OR EMPLOYEES OR DIRECTORS OR MANAGERS (OR THEIR HEIRS OR
ESTATES) OF ITS SUBSIDIARIES UPON THE DEATH, DISABILITY OR TERMINATION OF
EMPLOYMENT OR PURSUANT TO THE TERMS OF ANY SUBSCRIPTION, STOCKHOLDER OR OTHER
AGREEMENT OR PLAN IN EFFECT ON THE CLOSING DATE IN AN AGGREGATE AMOUNT PURSUANT
TO THIS CLAUSE (C) TO ALL EMPLOYEES, DIRECTORS OR MANAGERS (OR THEIR HEIRS OR
ESTATES) NOT TO EXCEED (I) $250,000 PER FISCAL YEAR ON AND AFTER THE CLOSING
DATE, OR (II) $1,000,000 IN THE AGGREGATE PURSUANT TO THIS CLAUSE (C); AND

 

(D)                                 REGULARLY SCHEDULED PAYMENTS OF INTEREST IN
RESPECT OF THE SENIOR SECURED NOTES REQUIRED PURSUANT TO THE INSTRUMENTS
EVIDENCING SUCH SENIOR SECURED NOTES AND THE SENIOR SECURED NOTES INDENTURE;

 

(E)                                  REGULARLY SCHEDULED PAYMENTS OF INTEREST IN
RESPECT OF THE SENIOR SUBORDINATED NOTES REQUIRED PURSUANT TO THE INSTRUMENTS
EVIDENCING SUCH SENIOR SUBORDINATED NOTES AND THE SENIOR SUBORDINATED NOTES
INDENTURE TO THE EXTENT SUCH PAYMENTS ARE NOT BLOCKED OR PROHIBITED UNDER THE
TERMS OF SUCH SENIOR SUBORDINATED NOTES AND THE SENIOR SUBORDINATED NOTES
INDENTURE;

 

(F)                                    SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING, PAYMENTS TO THE HOLDERS OF THE SENIOR
SUBORDINATED NOTES REQUIRED PURSUANT TO SECTION 4.20 OF THE SENIOR SUBORDINATED
NOTES INDENTURE IN AN AMOUNT NOT TO EXCEED THE AMOUNT REQUIRED THEREUNDER;

 

(G)                                 SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
EXISTS OR WOULD RESULT THEREFROM, OTHER RESTRICTED PAYMENTS IN AN AGGREGATE
AMOUNT NOT TO EXCEED $1,000,000 SINCE THE CLOSING DATE

 

(H)                                 SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
EXISTS OR WOULD RESULT THEREFROM, REGULARLY SCHEDULED PAYMENTS IN RESPECT OF THE
INDEBTEDNESS PERMITTED PURSUANT TO SECTION 6.1; AND

 

(I)                                     TRACK BUSINESS CONTINGENT EARNOUT
PAYMENTS.

 

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THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS SUBSIDIARIES TO,
DIRECTLY OR INDIRECTLY, MAKE ANY RESTRICTED PAYMENT CONSISTING OF ANY CORE
GAMING ASSET.

 

SECTION 6.10.                         SUBSIDIARIES.  NO CREDIT PARTY SHALL FORM,
OR CAUSE TO BE FORMED, ANY OTHER SUBSIDIARY, EXCEPT IN COMPLIANCE WITH SECTIONS
5.13(A) AND 5.14.

 

SECTION 6.11.                         CONDUCT OF BUSINESS.  FROM AND AFTER THE
CLOSING DATE, NO CREDIT PARTY SHALL, NOR SHALL PERMIT ANY OF ITS SUBSIDIARIES
TO, ENGAGE IN ANY BUSINESS OTHER THAN THE BUSINESS ENGAGED IN BY SUCH CREDIT
PARTY ON THE CLOSING DATE AND SIMILAR OR RELATED BUSINESSES.

 

SECTION 6.12.                         RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. 
EXCEPT AS OTHERWISE PERMITTED HEREIN, NO CREDIT PARTY SHALL, NOR SHALL IT PERMIT
ANY OF ITS SUBSIDIARIES TO, CREATE OR OTHERWISE CAUSE OR SUFFER TO EXIST OR
BECOME EFFECTIVE ANY CONSENSUAL ENCUMBRANCE OR RESTRICTION OF ANY KIND ON THE
ABILITY OF ANY SUBSIDIARY OF THE BORROWER TO (A) PAY DIVIDENDS OR MAKE ANY OTHER
DISTRIBUTIONS ON ANY OF SUCH SUBSIDIARY’S CAPITAL STOCK OWNED BY THE BORROWER OR
ANY OTHER SUBSIDIARY OF THE BORROWER, (B) REPAY OR PREPAY ANY INDEBTEDNESS OWED
BY SUCH SUBSIDIARY TO THE BORROWER OR ANY SUBSIDIARY OF THE BORROWER, (C) MAKE
LOANS OR ADVANCES TO THE BORROWER OR ANY OTHER SUBSIDIARY OF THE BORROWER, OR
(D) TRANSFER ANY OF ITS PROPERTY OR ASSETS TO THE BORROWER OR ANY OTHER
SUBSIDIARY OF THE BORROWER OTHER THAN RESTRICTIONS (I) IN AGREEMENTS EVIDENCING
INDEBTEDNESS PERMITTED BY SECTION 6.1(B) THAT IMPOSE RESTRICTIONS ON THE
PROPERTY SO ACQUIRED, (II) IN THE SENIOR SECURED NOTES INDENTURE AND THE SENIOR
SUBORDINATED NOTES INDENTURE, (III) BY REASON OF CUSTOMARY PROVISIONS
RESTRICTING ASSIGNMENTS, SUBLETTING OR OTHER TRANSFERS CONTAINED IN LEASES,
LICENSES, JOINT VENTURE AGREEMENTS AND SIMILAR AGREEMENTS ENTERED INTO IN THE
ORDINARY COURSE OF BUSINESS, (IV) ANY PERMITTED LIEN OR ANY DOCUMENT OR
INSTRUMENT GOVERNING ANY PERMITTED LIEN; PROVIDED THAT ANY SUCH RESTRICTION
CONTAINED THEREIN RELATES ONLY TO THE ASSET OR ASSETS SUBJECT TO SUCH PERMITTED
LIEN, (V) THAT ARE OR WERE CREATED BY VIRTUE OF ANY TRANSFER OF, AGREEMENT TO
TRANSFER OR OPTION OR RIGHT WITH RESPECT TO ANY PROPERTY, ASSETS OR CAPITAL
STOCK NOT OTHERWISE PROHIBITED UNDER THIS AGREEMENT, (VI) IMPOSED BY APPLICABLE
LAW, (VII) CONTAINED IN THE LOAN DOCUMENTS AND (VIII) IN AGREEMENTS EVIDENCING
INDEBTEDNESS PERMITTED BY CLAUSES (C), (E), (F), (I), (K) AND (M) OF
SECTION 6.1.

 

SECTION 6.13.                         AMENDMENTS TO ORGANIZATIONAL DOCUMENTS,
SENIOR SECURED NOTES INDENTURE AND SENIOR SUBORDINATED NOTES INDENTURE.  NONE OF
THE CREDIT PARTIES SHALL SUPPLEMENT, MODIFY, AMEND, RESTATE, EXTEND OR OTHERWISE
CHANGE  THE TERMS OF OR WAIVE ANY PROVISION OF (A) ANY CREDIT PARTY’S ARTICLES
OF INCORPORATION, CERTIFICATE OF FORMATION, BYLAWS, OPERATING AGREEMENT OR
LIMITED PARTNERSHIP AGREEMENT OR ANY SIMILAR ORGANIZATIONAL DOCUMENT, IF SUCH
SUPPLEMENT, MODIFICATION, AMENDMENT, RESTATEMENT, EXTENSION, CHANGE OR WAIVER
WOULD BE MATERIALLY ADVERSE TO ADMINISTRATIVE AGENT OR THE LENDERS OR (B) THE
SENIOR SECURED NOTES INDENTURE OR THE SENIOR SUBORDINATED NOTES INDENTURE OR ANY
DOCUMENT RELATED THERETO THAT WOULD:

 

(I)                                     INCREASE THE PRINCIPAL AMOUNT OF THE
SENIOR SECURED INDENTURE OR THE SENIOR SUBORDINATED INDENTURE IN EXCESS OF THE
AMOUNT PERMITTED UNDER THIS AGREEMENT;

 

(II)                                  INCREASE THE INTEREST RATE OR YIELD
PROVISIONS APPLICABLE TO THE SENIOR SECURED NOTES OR THE SENIOR SUBORDINATED
NOTES;

 

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(III)                               CHANGE ANY DEFAULT OR EVENT OF DEFAULT OR
CONDITION TO A DEFAULT OR AN EVENT OF DEFAULT WITH RESPECT THERETO (OTHER THAN
TO ELIMINATE ANY SUCH EVENT OF DEFAULT OR INCREASE ANY GRACE PERIOD RELATED
THERETO) OR ADD ANY EVENT OF DEFAULT OR CHANGE (TO AN EARLIER DATE) ANY DATE
UPON WHICH PAYMENT OF PRINCIPAL, INTEREST OR PREMIUM (IF ANY) IS DUE THEREON;

 

(IV)                              ADD OR MAKE ANY MODIFICATION THAT HAS THE
EFFECT OF ADDING ANY FINANCIAL MAINTENANCE COVENANT OR DEBT INCURRENCE COVENANT
THEREIN;

 

(V)                                 CHANGE THE PREPAYMENT PROVISIONS THEREOF IN
ANY WAY THAT WOULD HAVE THE EFFECT OF ADDING ANY NEW MANDATORY PREPAYMENT, OR
INCREASING THE AMOUNT OF ANY EXISTING MANDATORY PREPAYMENT, OR REQUIRING THAT
ANY EXISTING MANDATORY PREPAYMENT BE MADE ON AN EARLIER DATE;

 

(VI)                              INCREASE MATERIALLY THE OBLIGATIONS OF THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR CONFER ANY ADDITIONAL MATERIAL RIGHTS
UPON, THE HOLDERS OF SENIOR SECURED NOTES OR THE SENIOR SUBORDINATED NOTES (OR
THE TRUSTEE, AGENT OR OTHER AUTHORIZED REPRESENTATIVE FOR SUCH HOLDERS) (IN EACH
CASE, INCLUDING WITHOUT LIMITATION, BY AMENDING OR ADDING COVENANTS) WHICH WOULD
BE ADVERSE TO THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ADMINISTRATIVE AGENT OR
ANY LENDER;

 

(VII)                           CONTRAVENE THE PROVISIONS OF THIS AGREEMENT OR
THE INTERCREDITOR AGREEMENT;

 

(VIII)                        GRANT OR PERMIT ADDITIONAL LIENS ON ANY ASSET OR
PROPERTY TO SECURE ANY SENIOR SECURED NOTES UNLESS SUCH ADDITIONAL LIENS SECURE
THE OBLIGATIONS AND ARE EXPRESSLY SUBJECT TO THE INTERCREDITOR AGREEMENT;

 

(IX)                                GRANT OR PERMIT ANY LIENS ON ANY ASSET OR
PROPERTY TO SECURE THE SENIOR SUBORDINATED NOTES; OR

 

(X)                                   AMEND OR OTHERWISE MODIFY THE
SUBORDINATION PROVISIONS CONTAINED IN THE SENIOR SUBORDINATED NOTES INDENTURE OR
MAKE ANY AMENDMENT OR MODIFICATION WHICH CAUSES THE OBLIGATIONS TO NO LONGER BE
CLASSIFIED AS “SENIOR DEBT” AND “DESIGNATED SENIOR DEBT” THEREUNDER.

 

SECTION 6.14.                         FINANCIAL COVENANTS.

 

(A)                                  MAXIMUM LEVERAGE RATIO.  THE BORROWER SHALL
NOT PERMIT THE LEVERAGE RATIO AS OF ANY DATE THAT IS THE END OF THE FISCAL
QUARTER SET FORTH BELOW TO BE MORE THAN THE RATIO SET FORTH OPPOSITE SUCH DATE:

 

Fiscal Quarter Ending

 

Maximum Leverage Ratio

June 30, 2010

 

7.00:1.00

September 30, 2010

 

7.00:1.00

December 31, 2010

 

7.00:1.00

 

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March 31, 2011

 

7.00:1.00

June 30, 2011

 

6.50:1.00

September 30, 2011

 

6.00:1.00

December 31, 2011

 

6.00:1.00

March 31, 2012

 

6.00:1.00

June 30, 2012

 

6.00:1.00

September 30, 2012

 

4.50:1.00

December 31, 2012

 

4.50:1.00

 

(B)                                 INTEREST COVERAGE RATIO.  THE BORROWER SHALL
NOT PERMIT THE INTEREST COVERAGE RATIO FOR THE FOUR FISCAL QUARTER PERIOD ENDING
ON EACH FISCAL QUARTER SET FORTH BELOW TO BE LESS THAN THE AMOUNT OR RATIO SET
FORTH OPPOSITE SUCH FISCAL QUARTER PERIOD:

 

Four Fiscal Quarter
Ending

 

Interest Coverage Ratio

June 30, 2010

 

1.10:1.00

September 30, 2010

 

1.10:1.00

December 31, 2010

 

1.10:1.00

March 31, 2011

 

1.15:1.00

June 30, 2011

 

1.15:1.00

September 30, 2011

 

1.30:1.00

December 31, 2011

 

1.30:1.00

March 31, 2012

 

1.30:1.00

June 30, 2012

 

1.30:1.00

September 30, 2012

 

1.30:1.00

December 31, 2012

 

1.50:1.00

 

(C)                                  MINIMUM CONSOLIDATED EBITDA.  THE BORROWER
SHALL NOT PERMIT CONSOLIDATED EBITDA FOR THE FOUR FISCAL QUARTER PERIOD ENDING
ON EACH FISCAL QUARTER SET FORTH BELOW TO BE LESS THAN THE AMOUNT OR RATIO SET
FORTH OPPOSITE SUCH FISCAL QUARTER PERIOD:

 

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Four Fiscal Quarter
Ending

 

Consolidated EBITDA

 

June 30, 2010

 

$

54,000,000

 

September 30, 2010

 

$

54,000,000

 

December 31, 2010

 

$

54,000,000

 

March 31, 2011

 

$

55,000,000

 

June 30, 2011

 

$

60,000,000

 

September 30, 2011

 

$

60,000,000

 

December 31, 2011 and at all times thereafter

 

$

65,000,000

 

 

(D)                                 MAXIMUM CAPITAL EXPENDITURES.  THE BORROWER
SHALL NOT, AND SHALL NOT PERMIT ITS SUBSIDIARIES TO, MAKE OR INCUR CAPITAL
EXPENDITURES DURING EACH FISCAL YEAR INDICATED BELOW IN EXCESS OF THE AMOUNT SET
FORTH OPPOSITE SUCH FISCAL YEAR, EVIDENCE OF WHICH SHALL BE DELIVERED TO
ADMINISTRATIVE AGENT WITH THE APPLICABLE FINANCIAL STATEMENTS AND CERTIFICATIONS
REQUIRED UNDER SECTION 5.1:

 

Fiscal Year

 

Maximum Capital
Expenditures

 

2010

 

$

32,000,000

 

2011

 

$

23,000,000

 

2012

 

$

23,000,000

 

2013

 

$

5,600,000

 

 

; provided, however, that to the extent that actual Capital Expenditures
incurred in any such Fiscal Year shall be less than the maximum amount set forth
above for such Fiscal Year (without giving effect to the carryover permitted by
this proviso), 50% of the difference between stated maximum amount set forth
above and such actual Capital Expenditures shall, in addition to any amount
permitted above, be available for Capital Expenditures in the next succeeding
Fiscal Year; provided, further, that (i) any Capital Expenditures incurred in
the next succeeding Fiscal Year shall be applied first, to the amounts permitted
pursuant to this Section 6.14(d) without giving effect to the preceding proviso
and second, to the carryover amount from the previous Fiscal Year; and (ii) any
carryover amount not used in the next succeeding Fiscal Year shall not be
available in the following Fiscal Years.

 

(E)                                  CERTAIN CALCULATIONS.  WITH RESPECT TO ANY
PERIOD DURING WHICH AN INVESTMENT, AN ASSET SALE OR A PERMITTED ACQUISITION HAS
OCCURRED, FOR PURPOSES OF DETERMINING COMPLIANCE WITH THE FINANCIAL COVENANTS
SET FORTH IN THIS SECTION 6.14, CONSOLIDATED EBITDA SHALL BE CALCULATED WITH
RESPECT TO SUCH PERIOD ON A PRO FORMA BASIS (INCLUDING PRO FORMA ADJUSTMENTS
ARISING OUT OF EVENTS WHICH ARE DIRECTLY ATTRIBUTABLE TO A SPECIFIC TRANSACTION,
ARE FACTUALLY SUPPORTABLE AND ARE EXPECTED TO HAVE A CONTINUING IMPACT, IN EACH
CASE DETERMINED ON A BASIS CONSISTENT WITH ARTICLE 11 OF REGULATION S-X
PROMULGATED UNDER THE SECURITIES ACT AND AS INTERPRETED BY THE STAFF OF THE
SECURITIES AND EXCHANGE COMMISSION, WHICH WOULD INCLUDE COST SAVINGS RESULTING
FROM HEAD

 

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COUNT REDUCTION, CLOSURE OF FACILITIES AND SIMILAR RESTRUCTURING CHARGES, WHICH
PRO FORMA ADJUSTMENTS SHALL BE CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF THE
BORROWER) USING THE HISTORICAL AUDITED FINANCIAL STATEMENTS OF ANY BUSINESS SO
ACQUIRED OR TO BE ACQUIRED OR SOLD OR TO BE SOLD AND THE CONSOLIDATED FINANCIAL
STATEMENTS OF THE BORROWER AND ITS SUBSIDIARIES WHICH SHALL BE REFORMULATED AS
IF SUCH INVESTMENT, ASSET SALE OR PERMITTED ACQUISITION AND ANY INDEBTEDNESS
INCURRED OR REPAID IN CONNECTION THEREWITH, HAD BEEN CONSUMMATED OR INCURRED OR
REPAID AT THE BEGINNING OF SUCH PERIOD (AND ASSUMING THAT SUCH INDEBTEDNESS
BEARS INTEREST DURING ANY PORTION OF THE APPLICABLE MEASUREMENT PERIOD PRIOR TO
THE RELEVANT ACQUISITION AT THE WEIGHTED AVERAGE OF THE INTEREST RATES
APPLICABLE TO THE OUTSTANDING TERM LOANS INCURRED DURING SUCH PERIOD).

 

ARTICLE VII
INCREASED COSTS; TAXES; INDEMNIFICATION; SET OFF; ETC.

 

SECTION 7.1.                                INCREASED COSTS; CAPITAL ADEQUACY. 
IN THE EVENT THAT ANY LENDER SHALL HAVE DETERMINED THAT THE ADOPTION,
EFFECTIVENESS, PHASE IN OR APPLICABILITY AFTER THE CLOSING DATE OF ANY
REGULATION (OR ANY PROVISION THEREOF) REGARDING CAPITAL ADEQUACY APPLICABLE TO
SUCH LENDER, OR ANY CHANGE THEREIN OR IN THE INTERPRETATION OR ADMINISTRATION
THEREOF BY ANY GOVERNMENTAL BODY, CENTRAL BANK OR COMPARABLE AGENCY CHARGED WITH
THE INTERPRETATION OR ADMINISTRATION THEREOF, OR COMPLIANCE BY ANY LENDER (OR
ITS APPLICABLE LENDING OFFICE) WITH ANY GUIDELINE, REQUEST OR DIRECTIVE
REGARDING CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW) OF ANY SUCH
GOVERNMENTAL BODY, CENTRAL BANK OR COMPARABLE AGENCY APPLICABLE TO SUCH LENDER,
HAS OR WOULD HAVE THE EFFECT OF REDUCING THE RATE OF RETURN ON THE CAPITAL OF
SUCH LENDER OR ANY COMPANY CONTROLLING SUCH LENDER AS A CONSEQUENCE OF, OR WITH
REFERENCE TO, SUCH LENDER’S OBLIGATIONS HEREUNDER WITH RESPECT TO THE TERM LOANS
TO A LEVEL BELOW THAT WHICH SUCH LENDER OR SUCH CONTROLLING CORPORATION COULD
HAVE ACHIEVED BUT FOR SUCH ADOPTION, EFFECTIVENESS, PHASE IN, APPLICABILITY,
CHANGE OR COMPLIANCE (TAKING INTO CONSIDERATION THE POLICIES OF SUCH LENDER OR
SUCH CONTROLLING CORPORATION WITH REGARD TO CAPITAL ADEQUACY), THEN FROM TIME TO
TIME, AFTER THE ADOPTION, EFFECTIVENESS OR APPLICABILITY OF SUCH REGULATION,
WITHIN TEN BUSINESS DAYS AFTER RECEIPT BY THE BORROWER FROM SUCH LENDER OF THE
STATEMENT REFERRED TO IN THE NEXT SENTENCE, THE BORROWER SHALL PAY TO SUCH
LENDER SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH LENDER OR SUCH
CONTROLLING COMPANY ON AN AFTER TAX BASIS FOR SUCH REDUCTION.  SUCH LENDER SHALL
DELIVER TO THE BORROWER (WITH A COPY TO ADMINISTRATIVE AGENT) A WRITTEN
STATEMENT, SETTING FORTH IN REASONABLE DETAIL THE BASIS FOR CALCULATING THE
ADDITIONAL AMOUNTS OWED TO LENDER UNDER THIS SECTION 7.1, WHICH STATEMENT SHALL
BE CONCLUSIVE AND BINDING UPON ALL PARTIES HERETO ABSENT MANIFEST ERROR.

 

SECTION 7.2.                                TAXES; WITHHOLDING, ETC.

 

(A)                                  PAYMENTS TO BE FREE AND CLEAR.  ALL SUMS
PAYABLE BY ANY CREDIT PARTY HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS SHALL
(EXCEPT TO THE EXTENT REQUIRED BY LAW) BE PAID FREE AND CLEAR OF, AND WITHOUT
ANY DEDUCTION OR WITHHOLDING ON ACCOUNT OF, ANY TAX (OTHER THAN A TAX ON THE
OVERALL NET INCOME OF ADMINISTRATIVE AGENT OR ANY LENDER) IMPOSED, LEVIED,
COLLECTED, WITHHELD OR ASSESSED BY OR WITHIN THE UNITED STATES OF AMERICA OR ANY
POLITICAL SUBDIVISION IN OR OF THE UNITED STATES OF AMERICA OR ANY OTHER
JURISDICTION FROM OR TO WHICH A PAYMENT IS MADE BY OR ON BEHALF OF ANY CREDIT
PARTY OR BY ANY FEDERATION OR ORGANIZATION OF WHICH THE UNITED STATES OF AMERICA
OR ANY SUCH JURISDICTION IS A MEMBER AT THE TIME OF PAYMENT; PROVIDED, HOWEVER,
THAT THE BORROWER SHALL BE UNDER NO OBLIGATION TO INCREASE THE SUM PAYABLE TO
ANY LENDER NOT

 

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ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR A STATE THEREOF (A “FOREIGN
LENDER”) BY AN AMOUNT EQUAL TO THE AMOUNT OF THE UNITED STATES TAX REQUIRED TO
BE WITHHELD UNDER UNITED STATES LAW FROM THE SUMS PAID TO SUCH FOREIGN LENDER,
IF SUCH WITHHOLDING IS CAUSED BY THE FAILURE OF SUCH FOREIGN LENDER TO BE
ENGAGED IN THE ACTIVE CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES, OR
ALL AMOUNTS OF INTEREST AND FEES TO BE PAID TO SUCH FOREIGN LENDER HEREUNDER ARE
NOT EFFECTIVELY CONNECTED WITH SUCH TRADE OR BUSINESS WITHIN THE MEANING OF U.S.
TREASURY REGULATION 1.1441-1(A) OR SUCH FOREIGN LENDER FAILS TO COMPLY WITH
SECTION 7.2(C) AND BORROWER SHALL BE UNDER NO OBLIGATION TO INCREASE THE SUM
PAYABLE TO ANY LENDER THAT IS NOT A FOREIGN LENDER IF SUCH LENDER FAILS TO
COMPLY WITH SECTION 7.2(D).

 

(B)                                 WITHHOLDING OF TAXES.  IF ANY CREDIT PARTY
IS REQUIRED BY LAW TO MAKE ANY DEDUCTION OR WITHHOLDING ON ACCOUNT OF ANY TAX
(OTHER THAN A TAX ON THE OVERALL INCOME OF ADMINISTRATIVE AGENT AND LENDER OR A
TAX REFERRED TO IN THE PROVISO TO SECTION 7.2(A)) FROM ANY SUM PAID OR PAYABLE
BY ANY CREDIT PARTY TO ADMINISTRATIVE AGENT OR ANY LENDER ON ACCOUNT OF A
TRANSACTION UNDER ANY OF THE LOAN DOCUMENTS, BUT NOT ANY TAX IMPOSED ON
ADMINISTRATIVE AGENT OR ANY LENDER IN THE ORDINARY OR GENERAL CONDUCT OF
BUSINESS, WHICH ADMINISTRATIVE AGENT OR LENDER WOULD HAVE BEEN SUBJECT TO
WITHOUT REGARD TO WHETHER IT HAD ENGAGED IN ANY TRANSACTION UNDER ANY OF THE
LOAN DOCUMENTS: (I) THE BORROWER SHALL NOTIFY ADMINISTRATIVE AGENT OF ANY SUCH
REQUIREMENT OR ANY CHANGE IN ANY SUCH REQUIREMENT AS SOON AS THE BORROWER
BECOMES AWARE OF IT, (II) THE BORROWER SHALL PAY ANY SUCH TAX BEFORE THE DATE ON
WHICH PENALTIES ATTACH THERETO, SUCH PAYMENT TO BE MADE (IF THE LIABILITY TO PAY
IS IMPOSED ON ANY CREDIT PARTY) FOR ITS OWN ACCOUNT OR (IF THAT LIABILITY IS
IMPOSED ON ADMINISTRATIVE AGENT OR SUCH LENDER, AS THE CASE MAY BE) ON BEHALF OF
AND IN THE NAME OF ADMINISTRATIVE AGENT OR SUCH LENDER, (III) THE SUM PAYABLE BY
SUCH CREDIT PARTY IN RESPECT OF WHICH THE RELEVANT DEDUCTION, WITHHOLDING OR
PAYMENT IS REQUIRED SHALL BE INCREASED TO THE EXTENT NECESSARY TO ENSURE THAT,
AFTER THE MAKING OF THAT DEDUCTION, WITHHOLDING OR PAYMENT, ADMINISTRATIVE AGENT
OR SUCH LENDER, AS THE CASE MAY BE, RECEIVES ON THE DUE DATE A NET SUM EQUAL TO
WHAT IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTION, WITHHOLDING OR PAYMENT BEEN
REQUIRED OR MADE, AND (IV) WITHIN 30 DAYS AFTER PAYING ANY SUM FROM WHICH IT IS
REQUIRED BY LAW TO MAKE ANY DEDUCTION OR WITHHOLDING, AND WITHIN 30 DAYS AFTER
THE DUE DATE OF PAYMENT OF ANY TAX WHICH IT IS REQUIRED BY CLAUSE (II) ABOVE TO
PAY, THE BORROWER SHALL DELIVER TO ADMINISTRATIVE AGENT EVIDENCE SATISFACTORY TO
THE OTHER AFFECTED PARTIES OF SUCH DEDUCTION, WITHHOLDING OR PAYMENT AND OF THE
REMITTANCE THEREOF TO THE RELEVANT TAXING OR OTHER AUTHORITY.

 

(C)                                  FOREIGN LENDERS.  EACH FOREIGN LENDER
AGREES THAT IT WILL DELIVER TO THE BORROWER AND ADMINISTRATIVE AGENT (I) TWO
(2) DULY COMPLETED COPIES OF UNITED STATES INTERNAL REVENUE SERVICE FORM W-8BEN
OR W-8ECI OR OTHER APPLICABLE UNITED STATES INTERNAL REVENUE SERVICE FORMS, OR
SUCCESSOR APPLICABLE FORM(S), AS THE CASE MAY BE, TOGETHER WITH ANY OTHER
CERTIFICATE OR STATEMENT OF EXEMPTION REQUIRED UNDER THE INTERNAL REVENUE CODE
OR REGULATIONS ISSUED THEREUNDER.  EACH SUCH FOREIGN LENDER ALSO AGREES TO
DELIVER TO THE BORROWER AND ADMINISTRATIVE AGENT TWO (2) FURTHER COPIES OF SAID
FORM W-8BEN OR W-8ECI OR OTHER APPLICABLE UNITED STATES INTERNAL REVENUE SERVICE
FORMS, OR SUCCESSOR APPLICABLE FORM(S) OR OTHER MANNER OF CERTIFICATION, AS THE
CASE MAY BE, ON OR BEFORE THE DATE THAT ANY SUCH FORM EXPIRES OR BECOMES
OBSOLETE OR AFTER THE OCCURRENCE OF ANY EVENT REQUIRING A CHANGE IN THE MOST
RECENT FORM PREVIOUSLY DELIVERED BY IT TO THE BORROWER AND ADMINISTRATIVE AGENT,
AND SUCH EXTENSIONS OR RENEWALS THEREOF AS MAY REASONABLY BE REQUESTED BY THE
BORROWER OR ADMINISTRATIVE AGENT, UNLESS IN ANY SUCH CASE AN EVENT (INCLUDING,
WITHOUT LIMITATION, ANY CHANGE IN TREATY, LAW OR REGULATION) HAS OCCURRED PRIOR

 

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TO THE DATE ON WHICH ANY SUCH DELIVERY WOULD OTHERWISE BE REQUIRED WHICH RENDERS
ALL SUCH FORMS INAPPLICABLE OR WHICH WOULD PREVENT SUCH FOREIGN LENDER FROM DULY
COMPLETING AND DELIVERING ANY SUCH FORM WITH RESPECT TO IT AND SUCH FOREIGN
LENDER SO ADVISES THE BORROWER AND ADMINISTRATIVE AGENT.  SUCH FOREIGN LENDER
SHALL CERTIFY IN THE CASE OF A FORM W-8BEN OR W-8ECI OR OTHER APPLICABLE UNITED
STATES INTERNAL REVENUE SERVICE FORMS THAT IT IS ENTITLED TO RECEIVE PAYMENTS
UNDER THIS AGREEMENT WITHOUT DEDUCTION OR WITHHOLDING OF ANY UNITED STATES
FEDERAL INCOME TAXES AND THAT IT IS ENTITLED TO AN EXEMPTION FROM UNITED STATE
BACKUP WITHHOLDING TAX.

 

(D)                                 DOMESTIC LENDERS.  EACH LENDER THAT IS NOT A
FOREIGN LENDER AGREES THAT IT WILL DELIVER TO THE BORROWER AND ADMINISTRATIVE
AGENT TWO (2) DULY COMPLETED COPIES OF UNITED STATES INTERNAL REVENUE SERVICE
FORM W-9 OR SUCCESSOR FORM(S), AS THE CASE MAY BE, TOGETHER WITH ANY OTHER
CERTIFICATE OR STATEMENT OF EXEMPTION REQUIRED UNDER THE INTERNAL REVENUE CODE
OR REGULATIONS ISSUED THEREUNDER, CERTIFYING THAT SUCH LENDER IS ENTITLED TO AN
EXEMPTION FROM UNITED STATES BACKUP WITHHOLDING TAX WITH RESPECT TO PAYMENTS
UNDER THIS AGREEMENT.

 

(E)                                  TREATMENT OF CERTAIN REFUNDS.  IF
ADMINISTRATIVE AGENT, OR A LENDER DETERMINES, IN ITS SOLE DISCRETION, THAT IT
HAS RECEIVED A REFUND OF ANY TAXES WITH RESPECT TO WHICH THE BORROWER HAS PAID
INCREASED AMOUNTS PURSUANT TO SECTION 7.2(B), IT SHALL PAY TO THE BORROWER AN
AMOUNT EQUAL TO SUCH REFUND (BUT ONLY TO THE EXTENT OF THE INCREASED AMOUNTS
PAID BY THE BORROWER GIVING RISE TO SUCH REFUND), NET OF ALL OUT-OF-POCKET
EXPENSES OF ADMINISTRATIVE AGENT OR SUCH LENDER AND WITHOUT INTEREST (OTHER THAN
ANY INTEREST PAID BY THE RELEVANT GOVERNMENTAL BODY WITH RESPECT TO SUCH
REFUND), PROVIDED THAT THE BORROWER, UPON THE REQUEST OF ADMINISTRATIVE AGENT OR
SUCH LENDER AGREES TO REPAY THE AMOUNT PAID OVER TO THE BORROWER (PLUS ANY
PENALTIES, INTEREST OR OTHER CHARGES IMPOSED BY THE RELEVANT GOVERNMENTAL BODY)
TO THE ADMINISTRATIVE AGENT OR SUCH LENDER IN THE EVENT ADMINISTRATIVE AGENT OR
SUCH LENDER IS REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY. 
THIS PARAGRAPH SHALL NOT BE CONSTRUED TO REQUIRE ADMINISTRATIVE AGENT OR ANY
LENDER TO MAKE AVAILABLE ITS TAX RETURNS (OR ANY OTHER INFORMATION RELATING TO
ITS TAXES THAT IT DEEMS CONFIDENTIAL) TO THE BORROWER OR ANY OTHER PERSON.

 

(F)                                    INDEMNIFICATION BY THE BORROWER.  THE
BORROWER SHALL INDEMNIFY ADMINISTRATIVE AGENT AND EACH LENDER FOR ANY TAX
REFERRED TO IN SECTION 7.2(A) (OTHER THAN A TAX ON THE OVERALL INCOME OF
ADMINISTRATIVE AGENT AND LENDER OR A TAX REFERRED TO IN THE PROVISO TO
SECTION 7.2(A)) PAID BY ADMINISTRATIVE AGENT OR SUCH  LENDER AND ANY PENALTIES,
INTEREST AND REASONABLE EXPENSES ARISING THEREFROM OR WITH RESPECT THERETO.

 

SECTION 7.3.                                INDEMNIFICATION.

 

(A)                                  INDEMNIFICATION BY THE CREDIT PARTIES.  THE
CREDIT PARTIES WILL INDEMNIFY AND DEFEND ADMINISTRATIVE AGENT, THE LENDERS AND
EACH OF THEIR RESPECTIVE SHAREHOLDERS, PARTNERS, MEMBERS, MANAGERS, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS AND AFFILIATES (COLLECTIVELY, THE
“INDEMNIFIED PERSONS”) AGAINST AND HOLD EACH INDEMNIFIED PERSON HARMLESS FROM
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, COSTS, EXPENSES, CLAIMS,
PENALTIES, ACTIONS, JUDGMENTS, DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER,
INTEREST, FINES, CLEANUP COSTS, SETTLEMENTS, COSTS OF PREPARATION AND
INVESTIGATION, COSTS INCURRED IN ENFORCING THIS INDEMNITY AND REASONABLE AND
REASONABLY DOCUMENTED ATTORNEYS’ FEES AND EXPENSES (COLLECTIVELY, “LOSSES”),

 

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THAT ANY OF THE INDEMNIFIED PERSONS MAY INCUR, SUFFER, SUSTAIN OR BECOME SUBJECT
TO ARISING OUT OF, RELATING TO, OR DUE TO (I) THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,  (II) ANY MATERIAL
INACCURACY OR BREACH OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF ANY CREDIT
PARTY CONTAINED IN ANY CREDIT  DOCUMENT OR IN ANY CERTIFICATE DELIVERED
THEREUNDER, (III) THE NON-FULFILLMENT OR BREACH OF ANY COVENANT, UNDERTAKING,
AGREEMENT OR OTHER OBLIGATION OF ANY CREDIT PARTY CONTAINED IN ANY LOAN DOCUMENT
OR IN ANY CERTIFICATE DELIVERED THEREUNDER, (IV) ANY ENVIRONMENTAL LIABILITY,
AND/OR (V) ANY USE OF PROCEEDS OF ANY TERM LOAN; PROVIDED THAT SUCH INDEMNITY
SHALL NOT, AS TO ANY INDEMNIFIED PERSON, BE AVAILABLE TO THE EXTENT SUCH LOSSES
ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED BY A
COURT OF COMPETENT JURISDICTION IN A FINAL, NON-APPEALABLE ORDER, OF SUCH
INDEMNIFIED PERSON.  UPON REQUEST OF AN INDEMNIFIED PERSON, THE BORROWER SHALL
RETAIN COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PERSON TO REPRESENT
THE INDEMNIFIED PERSON(S) IN CONNECTION WITH ANY LOSSES OR THREATENED LOSSES AND
SHALL PAY THE REASONABLE AND REASONABLY DOCUMENTED FEES AND DISBURSEMENTS OF
SUCH COUNSEL.  EACH INDEMNIFIED PERSON SHALL HAVE THE RIGHT TO EMPLOY ITS OWN
COUNSEL AT THE EXPENSE OF THE BORROWER IF (I) THE EMPLOYMENT OF COUNSEL BY THE
INDEMNIFIED PERSON AT THE EXPENSE OF THE BORROWER HAS BEEN AUTHORIZED IN WRITING
BY THE BORROWER, (II) THE BORROWER HAS NOT EMPLOYED COUNSEL TO REPRESENT THE
INDEMNIFIED PERSON WITHIN A REASONABLE TIME AFTER RECEIVING NOTICE OF A REQUEST
FOR THE RETENTION OF COUNSEL OR (III) BOTH THE INDEMNIFIED PERSON AND THE
BORROWER ARE IMPLICATED WITH RESPECT TO THE LOSSES OR THE THREATENED LOSSES, AND
REPRESENTATION OF BOTH PARTIES BY THE SAME COUNSEL WOULD BE INAPPROPRIATE DUE TO
ACTUAL OR POTENTIAL CONFLICTS IN REPRESENTING BOTH PARTIES BETWEEN THEM, IN EACH
OF WHICH CASES THE REASONABLE AND REASONABLY DOCUMENTED FEES AND EXPENSES OF
COUNSEL (INCLUDING LOCAL COUNSEL) WILL BE AT THE EXPENSE OF THE BORROWER, AND
ALL SUCH FEES AND EXPENSES WILL BE REIMBURSED PROMPTLY AS THEY ARE INCURRED. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, SECTION 7.3 SHALL NOT
APPLY TO TAXES WHICH ARE COVERED SOLELY BY SECTION 7.2(F).

 

(B)                                 CONTRIBUTION.  IF THE INDEMNIFICATION
PROVIDED FOR IN SECTION 7.3(A) IS PROHIBITED UNDER APPLICABLE REGULATIONS TO AN
INDEMNIFIED PERSON, THEN THE BORROWER, IN LIEU OF INDEMNIFYING THE INDEMNIFIED
PERSON, WILL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY THE INDEMNIFIED PERSON
AS A RESULT OF THE LOSSES IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE
RELATIVE FAULT OF THE BORROWER, ON THE ONE HAND, AND OF THE INDEMNIFIED PERSON,
ON THE OTHER, IN CONNECTION WITH THE EVENTS OR CIRCUMSTANCES WHICH RESULTED IN
THE LOSSES AS WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.

 

SECTION 7.4.                                RIGHT OF SET OFF.  IN ADDITION TO
ANY RIGHTS NOW OR HEREAFTER GRANTED UNDER APPLICABLE LAW AND NOT BY WAY OF
LIMITATION OF ANY SUCH RIGHTS, UPON THE OCCURRENCE AND DURING THE CONTINUATION
OF ANY EVENT OF DEFAULT, EACH LENDER AND ADMINISTRATIVE AGENT ARE HEREBY
AUTHORIZED BY EACH CREDIT PARTY AT ANY TIME OR FROM TIME TO TIME, WITHOUT NOTICE
TO ANY CREDIT PARTY OR TO ANY OTHER PERSON, ANY SUCH NOTICE BEING HEREBY
EXPRESSLY WAIVED, TO SET OFF AND TO APPROPRIATE AND TO APPLY ANY AND ALL
DEPOSITS (GENERAL OR SPECIAL, INCLUDING INDEBTEDNESS EVIDENCED BY CERTIFICATES
OF DEPOSIT, WHETHER MATURED OR UNMATURED, BUT NOT INCLUDING TRUST ACCOUNTS) AND
ANY OTHER INDEBTEDNESS AT ANY TIME HELD OR OWING BY SUCH LENDER OR
ADMINISTRATIVE AGENT TO OR FOR THE CREDIT OR THE ACCOUNT OF ANY CREDIT PARTY
AGAINST AND ON ACCOUNT OF THE OBLIGATIONS OF ANY CREDIT PARTY TO SUCH LENDER OR
ADMINISTRATIVE AGENT HEREUNDER, IRRESPECTIVE OF WHETHER OR NOT (A) SUCH LENDER
OR ADMINISTRATIVE AGENT SHALL HAVE MADE ANY DEMAND HEREUNDER OR (B) THE
PRINCIPAL OF OR THE INTEREST ON THE TERM LOANS OR ANY

 

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OTHER AMOUNTS DUE HEREUNDER OR THE OTHER LOAN DOCUMENTS SHALL HAVE BECOME DUE
AND PAYABLE AND ALTHOUGH SUCH OBLIGATIONS AND LIABILITIES, OR ANY OF THEM, MAY
BE CONTINGENT OR UNMATURED.

 

SECTION 7.5.                                FUNDING BREAKAGE.  IN ADDITION TO
THE COMPENSATION REQUIRED UNDER SECTION 7.1, THE BORROWER SHALL PAY ALL
ADMINISTRATIVE FEES CHARGED BY LENDER AND INDEMNIFY EACH LENDER AGAINST ANY LOSS
OR EXPENSE (INCLUDING LOSS OF MARGIN) WHICH SUCH LENDER HAS INCURRED AS A
CONSEQUENCE OF ANY PAYMENT OR PREPAYMENT OF ANY TERM LOAN ON A DAY OTHER THAN
THE LAST DAY OF THE CORRESPONDING INTEREST PERIOD (WHETHER OR NOT SUCH PAYMENT
IS MANDATORY OR AUTOMATIC AND WHETHER OR NOT SUCH PAYMENT OR PREPAYMENT IS THEN
DUE).  IF ANY LENDER SUSTAINS OR INCURS ANY SUCH LOSS OR EXPENSE OR IF ANY
LENDER HAS CHARGED THE BORROWER FOR AN ADMINISTRATIVE EXPENSE IT SHALL FROM TIME
TO TIME PROMPTLY NOTIFY THE BORROWER AND ADMINISTRATIVE AGENT IN WRITING SETTING
FORTH IN REASONABLE DETAIL THE AMOUNT DETERMINED IN GOOD FAITH BY SUCH LENDER
(SUCH DETERMINATION SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR) TO BE NECESSARY
TO INDEMNIFY SUCH LENDER FOR SUCH LOSS OR EXPENSE AND THE AMOUNT OF SUCH
ADMINISTRATIVE EXPENSE.  SUCH AMOUNT SHALL BE DUE AND PAYABLE BY THE BORROWER TO
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF SUCH LENDER, FIVE BUSINESS DAYS AFTER
SUCH NOTICE IS GIVEN.

 

SECTION 7.6.                                BOOKING OF LIBOR LOANS.  ANY LENDER
MAY MAKE, CARRY OR TRANSFER LIBOR LOANS AT, TO OR FOR THE ACCOUNT OF ANY OF ITS
BRANCH OFFICES OR THE OFFICE OF AN AFFILIATE OF SUCH LENDER.

 

SECTION 7.7.                                INABILITY TO DETERMINE LIBOR.  IN
THE EVENT THAT ADMINISTRATIVE AGENT SHALL HAVE DETERMINED (WHICH DETERMINATION
SHALL BE FINAL AND CONCLUSIVE AND BINDING UPON ALL PARTIES HERETO), ON ANY
INTEREST RATE DETERMINATION DATE WITH RESPECT TO LIBOR LOANS, THAT BY REASON OF
CIRCUMSTANCES AFFECTING THE LONDON INTERBANK MARKET ADEQUATE AND FAIR MEANS DO
NOT EXIST FOR ASCERTAINING THE INTEREST RATE APPLICABLE TO THE TERM LOANS ON THE
BASIS PROVIDED FOR IN THE DEFINITION OF LIBOR, ADMINISTRATIVE AGENT SHALL ON
SUCH DATE GIVE NOTICE IN WRITING TO THE BORROWER AND EACH LENDER OF SUCH
DETERMINATION, WHEREUPON (I) NO TERM LOANS MAY BE MADE AS, OR CONVERTED TO LIBOR
LOANS UNTIL SUCH TIME AS ADMINISTRATIVE AGENT NOTIFIES THE BORROWER AND THE
LENDERS THAT THE CIRCUMSTANCES GIVING RISE TO SUCH NOTICE NO LONGER EXIST, AND
(II) ANY BORROWING CERTIFICATE OF NOTICE OF CONVERSION/CONTINUATION GIVEN BY THE
BORROWER WITH RESPECT TO THE TERM LOANS IN RESPECT OF WHICH SUCH DETERMINATION
WAS MADE SHALL BE DEEMED TO BE RESCINDED BY THE BORROWER.

 

SECTION 7.8.                                ASSIGNMENT OF LOANS UNDER CERTAIN
CIRCUMSTANCES; DUTY TO MITIGATE.

 

(A)                                  IN THE EVENT (I) ANY LENDER DELIVERS A
WRITTEN STATEMENT REQUESTING COMPENSATION PURSUANT TO SECTION 7.1, (II) THE
BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY LENDER OR ANY
GOVERNMENTAL BODY ON ACCOUNT OF ANY LENDER PURSUANT TO SECTION 7.2 OR (III) ANY
LENDER REFUSES TO CONSENT TO ANY AMENDMENT, WAIVER OR OTHER MODIFICATION OF ANY
LOAN DOCUMENT REQUESTED BY THE BORROWER THAT REQUIRES THE CONSENT OF EACH LENDER
AND SUCH AMENDMENT, WAIVER OR OTHER MODIFICATION IS CONSENTED TO BY
ADMINISTRATIVE AGENT AND REQUIRED LENDERS, THE BORROWER, AT ITS SOLE EXPENSE AND
EFFORT, UPON NOTICE TO SUCH LENDER AND ADMINISTRATIVE AGENT, MAY REQUIRE SUCH
LENDER (OTHER THAN ANY LENDER AFFILIATED WITH THE ADMINISTRATIVE AGENT) TO
TRANSFER AND ASSIGN (IN ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS
CONTAINED IN SECTION 10.4) ALL OF ITS TERM LOANS AND TERM LOAN COMMITMENTS UNDER
THIS AGREEMENT TO AN ELIGIBLE

 

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ASSIGNEE THAT SHALL ASSUME SUCH ASSIGNED TERM LOANS AND TERM LOAN COMMITMENTS
(WHICH ELIGIBLE ASSIGNEE MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH
ASSIGNMENT); PROVIDED THAT (X) SUCH ASSIGNMENT SHALL NOT CONFLICT WITH ANY LAW,
RULE OR REGULATION OR ORDER OF ANY COURT OR OTHER GOVERNMENTAL BODY HAVING
JURISDICTION, (Y) IN THE EVENT OF ANY ASSIGNMENT REQUIRED OF A NON-CONSENTING
LENDER PURSUANT TO CLAUSE (III) ABOVE, SUCH ELIGIBLE ASSIGNEE SHALL CONSENT, AT
THE TIME OF SUCH ASSIGNMENT, TO EACH MATTER IN RESPECT OF WHICH SUCH ASSIGNING
LENDER WAS A NON-CONSENTING LENDER AND (Z) THE BORROWER OR SUCH ELIGIBLE
ASSIGNEE SHALL HAVE PAID TO THE AFFECTED LENDER IN IMMEDIATELY AVAILABLE FUNDS
AN AMOUNT EQUAL TO THE SUM OF THE PRINCIPAL OF AND INTEREST ACCRUED TO THE DATE
OF SUCH PAYMENT ON THE OUTSTANDING LOANS OF SUCH LENDER, PLUS ALL FEES AND OTHER
AMOUNTS ACCRUED FOR THE ACCOUNT OF SUCH LENDER HEREUNDER WITH RESPECT THERETO
(INCLUDING, WITHOUT LIMITATION, ANY AMOUNTS UNDER SECTION 2.11(G) (TREATING SUCH
ASSIGNMENT AS A VOLUNTARY PREPAYMENT UNDER SECTION 2.10), SECTION 7.1 AND
SECTION 7.2); PROVIDED FURTHER THAT, IF PRIOR TO ANY SUCH TRANSFER AND
ASSIGNMENT THE CIRCUMSTANCES OR EVENT THAT RESULTED IN SUCH LENDER’S CLAIM FOR
COMPENSATION UNDER SECTION 7.1 OR THE AMOUNTS PAID PURSUANT TO SECTION 7.2, AS
THE CASE MAY BE, CEASE TO CAUSE SUCH LENDER TO SUFFER INCREASED COSTS OR
REDUCTIONS IN AMOUNTS RECEIVED OR RECEIVABLE OR REDUCTION IN RETURN ON CAPITAL
OR CEASE TO RESULT IN AMOUNTS BEING PAYABLE UNDER SECTION 7.2, AS THE CASE MAY
BE, OR IF SUCH LENDER SHALL WAIVE ITS RIGHT TO CLAIM FURTHER COMPENSATION UNDER
SECTION 7.1 IN RESPECT OF SUCH CIRCUMSTANCES OR EVENT OR SHALL WAIVE ITS RIGHT
TO FURTHER PAYMENTS UNDER SECTION 7.2 IN RESPECT OF SUCH CIRCUMSTANCES OR EVENT
OR SHALL CONSENT TO THE PROPOSED AMENDMENT, WAIVER, CONSENT OR OTHER
MODIFICATION, AS THE CASE MAY BE, THEN SUCH LENDER SHALL NOT THEREAFTER BE
REQUIRED TO MAKE ANY SUCH TRANSFER AND ASSIGNMENT HEREUNDER. EACH LENDER HEREBY
GRANTS TO THE BORROWER AN IRREVOCABLE POWER OF ATTORNEY (WHICH POWER IS COUPLED
WITH AN INTEREST) TO EXECUTE AND DELIVER, ON BEHALF OF SUCH LENDER AS ASSIGNOR,
ANY ASSIGNMENT AGREEMENT NECESSARY TO EFFECTUATE ANY ASSIGNMENT OF SUCH LENDER’S
INTERESTS HEREUNDER IN THE CIRCUMSTANCES CONTEMPLATED BY THIS SECTION 7.8(A).

 

(B)                                 IF (I) ANY LENDER SHALL REQUEST COMPENSATION
UNDER SECTION 7.1 OR (II) THE BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT
TO ANY LENDER OR ANY GOVERNMENTAL BODY ON ACCOUNT OF ANY LENDER PURSUANT TO
SECTION 7.2, THEN SUCH LENDER SHALL USE REASONABLE EFFORTS (WHICH SHALL NOT
REQUIRE SUCH LENDER TO INCUR AN UNREIMBURSED LOSS OR UNREIMBURSED COST OR
EXPENSE OR OTHERWISE TAKE ANY ACTION INCONSISTENT WITH ITS INTERNAL POLICIES OR
LEGAL OR REGULATORY RESTRICTIONS OR SUFFER ANY DISADVANTAGE OR BURDEN DEEMED BY
IT TO BE SIGNIFICANT) (X) TO FILE ANY CERTIFICATE OR DOCUMENT REASONABLY
REQUESTED IN WRITING BY THE BORROWER OR (Y) TO ASSIGN ITS RIGHTS AND DELEGATE
AND TRANSFER ITS OBLIGATIONS HEREUNDER TO ANOTHER OF ITS OFFICES, BRANCHES OR
AFFILIATES, IF SUCH FILING OR ASSIGNMENT WOULD REDUCE ITS CLAIMS FOR
COMPENSATION UNDER SECTION 7.1 OR WOULD REDUCE AMOUNTS PAYABLE PURSUANT TO
SECTION 7.2, AS THE CASE MAY BE, IN THE FUTURE.  THE BORROWER HEREBY AGREES TO
PAY ALL REASONABLE COSTS AND EXPENSES INCURRED BY ANY LENDER IN CONNECTION WITH
ANY SUCH FILING OR ASSIGNMENT, DELEGATION AND TRANSFER.

 

ARTICLE VIII
EVENTS OF DEFAULT

 

SECTION 8.1.                                EVENTS OF DEFAULT.  ANY ONE OR MORE
OF THE FOLLOWING EVENTS WHICH SHALL OCCUR AND BE CONTINUING SHALL CONSTITUTE AN
“EVENT OF DEFAULT”:

 

(A)                                  FAILURE TO MAKE PAYMENTS WHEN DUE.  THE
BORROWER FAILS TO PAY ANY OF THE OBLIGATIONS, INCLUDING FAILURE BY THE BORROWER
TO PAY WHEN DUE ANY PAYMENT OF PRINCIPAL OF, OR

 

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INTEREST ON, THE TERM LOANS, WHETHER AT STATED MATURITY, BY ACCELERATION, BY
NOTICE OF VOLUNTARY PREPAYMENT, BY MANDATORY PREPAYMENT OR OTHERWISE, OR ANY FEE
OR ANY OTHER AMOUNT DUE HEREUNDER, AND SOLELY WITH RESPECT TO INTEREST, SUCH
FAILURE TO PAY IS CONTINUING FOR THREE (3) DAYS AFTER THE DUE DATE THEREFOR.

 

(B)                                 BREACH OF CERTAIN COVENANTS.  FAILURE OF ANY
CREDIT PARTY TO PERFORM OR COMPLY WITH ANY TERM OR CONDITION CONTAINED IN
SECTION 2.5, SECTIONS 5.1, 5.4, 5.5, 5.10, 5.12 OR SECTIONS 6.1, 6.2, 6.3, 6.4,
6.5, 6.7, 6.9, 6.11 AND 6.14.

 

(C)                                  BREACH OF REPRESENTATIONS, ETC.  ANY
REPRESENTATION, WARRANTY, CERTIFICATION OR OTHER STATEMENT MADE OR DEEMED MADE
BY ANY CREDIT PARTY IN ANY LOAN DOCUMENT OR IN ANY STATEMENT OR CERTIFICATE AT
ANY TIME GIVEN BY ANY CREDIT PARTY OR ANY OF ITS SUBSIDIARIES IN WRITING,
PURSUANT HERETO OR THERETO OR IN CONNECTION HEREWITH OR THEREWITH SHALL BE FALSE
IN ANY MATERIAL RESPECT AS OF THE DATE MADE OR DEEMED MADE.

 

(D)                                 OTHER DEFAULTS UNDER LOAN DOCUMENTS.  ANY
CREDIT PARTY SHALL DEFAULT IN THE PERFORMANCE OF OR COMPLIANCE WITH ANY TERM
CONTAINED IN ANY OF THE OTHER LOAN DOCUMENTS, OTHER THAN ANY SUCH TERM REFERRED
TO IN ANY OTHER SUBSECTION OF THIS SECTION 8.1, AND SUCH DEFAULT SHALL NOT HAVE
BEEN REMEDIED OR WAIVED WITHIN THIRTY (30) DAYS AFTER THE EARLIER OF (I) AN
OFFICER OF SUCH CREDIT PARTY BECOMING AWARE OF SUCH DEFAULT, OR (II) RECEIPT BY
THE BORROWER OF WRITTEN NOTICE FROM ADMINISTRATIVE AGENT OR ANY LENDER OF SUCH
DEFAULT.

 

(E)                                  DEFAULT IN OTHER AGREEMENTS.  (I)  FAILURE
OF ANY CREDIT PARTY TO PAY WHEN DUE ANY PRINCIPAL OF OR INTEREST ON OR ANY OTHER
AMOUNT PAYABLE IN RESPECT OF ONE OR MORE ITEMS OF INDEBTEDNESS IN AN AGGREGATE
PRINCIPAL AMOUNT OF $2,500,000 OR MORE, IN EACH CASE BEYOND THE GRACE PERIOD, IF
ANY, PROVIDED THEREFOR, OR (II) BREACH OR DEFAULT BY ANY CREDIT PARTY WITH
RESPECT TO ANY OTHER MATERIAL TERM OF (A) ONE OR MORE ITEMS OF INDEBTEDNESS IN
THE INDIVIDUAL OR AGGREGATE PRINCIPAL AMOUNTS REFERRED TO IN CLAUSE (I) ABOVE OR
(B) ANY LOAN AGREEMENT, MORTGAGE, INDENTURE OR OTHER AGREEMENT RELATING TO SUCH
ITEM OF INDEBTEDNESS, IN EACH CASE BEYOND THE GRACE PERIOD, IF ANY, PROVIDED
THEREFOR, IF THE EFFECT OF SUCH BREACH OR DEFAULT IS TO CAUSE, OR TO PERMIT THE
HOLDER OR HOLDERS OF SUCH INDEBTEDNESS (OR A TRUSTEE ON BEHALF OF SUCH HOLDER OR
HOLDERS) TO CAUSE, SUCH INDEBTEDNESS TO BECOME OR BE DECLARED DUE AND PAYABLE
(OR REDEEMABLE) PRIOR TO ITS STATED MATURITY OR THE STATED MATURITY OF ANY
UNDERLYING OBLIGATION, AS THE CASE MAY BE, IN EITHER CASE AS A RESULT OF SUCH
BREACH OR DEFAULT.

 

(F)                                    INVOLUNTARY BANKRUPTCY, APPOINTMENT OF
RECEIVER, ETC.  (I) A COURT OF COMPETENT JURISDICTION SHALL ENTER A DECREE OR
ORDER FOR RELIEF IN RESPECT OF ANY CREDIT PARTY IN AN INVOLUNTARY CASE UNDER THE
BANKRUPTCY CODE OR UNDER ANY OTHER APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR
LAW NOW OR HEREAFTER IN EFFECT, WHICH DECREE OR ORDER IS NOT STAYED WITHIN 60
DAYS, OR ANY OTHER SIMILAR RELIEF SHALL BE GRANTED UNDER ANY APPLICABLE FEDERAL
OR STATE LAW, OR (II) AN INVOLUNTARY CASE SHALL BE COMMENCED AGAINST ANY CREDIT
PARTY UNDER THE BANKRUPTCY CODE OR UNDER ANY OTHER APPLICABLE BANKRUPTCY,
INSOLVENCY OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT, OR A DECREE OR ORDER OF A
COURT HAVING JURISDICTION IN THE PREMISES FOR THE APPOINTMENT OF A RECEIVER,
INTERIM RECEIVER, RECEIVER-MANAGER, LIQUIDATOR, SEQUESTRATOR, TRUSTEE, CUSTODIAN
OR OTHER OFFICER HAVING SIMILAR POWERS OVER ANY CREDIT PARTY, OR OVER ALL OR A
SUBSTANTIAL PART OF SUCH CREDIT PARTY’S PROPERTY, SHALL HAVE BEEN ENTERED; OR
THERE SHALL HAVE OCCURRED THE INVOLUNTARY APPOINTMENT OF AN INTERIM RECEIVER,
TRUSTEE OR OTHER CUSTODIAN OF ANY CREDIT PARTY FOR ALL OR A SUBSTANTIAL PART OF
ITS PROPERTY

 

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OR A WARRANT OF ATTACHMENT, EXECUTION OR SIMILAR PROCESS SHALL HAVE BEEN ISSUED
AGAINST ANY SUBSTANTIAL PART OF THE PROPERTY OF ANY CREDIT PARTY, AND ANY SUCH
EVENT DESCRIBED IN THIS CLAUSE (II) SHALL CONTINUE FOR 60 DAYS WITHOUT HAVING
BEEN DISMISSED, BONDED OR DISCHARGED.

 

(G)                                 VOLUNTARY BANKRUPTCY, APPOINTMENT OF
RECEIVER, ETC.  (I) ANY CREDIT PARTY SHALL HAVE AN ORDER FOR RELIEF ENTERED WITH
RESPECT TO IT OR SHALL COMMENCE A VOLUNTARY CASE UNDER THE BANKRUPTCY CODE OR
UNDER ANY OTHER APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW NOW OR
HEREAFTER IN EFFECT, OR SHALL CONSENT TO THE ENTRY OF AN ORDER FOR RELIEF IN AN
INVOLUNTARY CASE, OR TO THE CONVERSION OF AN INVOLUNTARY CASE TO A VOLUNTARY
CASE, UNDER ANY SUCH LAW, OR SHALL CONSENT TO THE APPOINTMENT OF OR TAKING
POSSESSION BY A RECEIVER, INTERIM RECEIVER, RECEIVER-MANAGER, TRUSTEE OR OTHER
CUSTODIAN FOR ALL OR A SUBSTANTIAL PART OF ITS PROPERTY; OR ANY CREDIT PARTY
SHALL MAKE ANY ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR (II) ANY CREDIT PARTY
SHALL BE UNABLE, OR SHALL FAIL GENERALLY, OR SHALL ADMIT IN WRITING ITS
INABILITY, TO PAY ITS DEBTS AS SUCH DEBTS BECOME DUE; OR THE BOARD OF DIRECTORS
(OR SIMILAR GOVERNING BODY) OF ANY CREDIT PARTY (OR ANY COMMITTEE THEREOF) SHALL
ADOPT ANY RESOLUTION OR OTHERWISE AUTHORIZE ANY ACTION TO APPROVE ANY OF THE
ACTIONS REFERRED TO HEREIN OR IN SECTION 8.1(F).

 

(H)                                 JUDGMENTS AND ATTACHMENTS.  ANY MONEY
JUDGMENT, WRIT OR WARRANT OF ATTACHMENT OR SIMILAR PROCESS INVOLVING IN AN
AGGREGATE AT ANY TIME AN AMOUNT IN EXCESS OF $2,000,000 (TO THE EXTENT NOT
ADEQUATELY COVERED BY INSURANCE AS TO WHICH A SOLVENT AND UNAFFILIATED INSURANCE
COMPANY HAS ACKNOWLEDGED COVERAGE) SHALL BE ENTERED OR FILED AGAINST ANY CREDIT
PARTY OR ANY OF THEIR RESPECTIVE ASSETS AND SHALL REMAIN UNDISCHARGED,
UNVACATED, UNBONDED OR UNSTAYED FOR A PERIOD OF 45 DAYS (OR IN ANY EVENT LATER
THAN 5 DAYS PRIOR TO THE DATE OF ANY PROPOSED SALE THEREUNDER).

 

(I)                                     DISSOLUTION.  ANY ORDER, JUDGMENT OR
DECREE SHALL BE ENTERED AGAINST ANY CREDIT PARTY DECREEING THE DISSOLUTION OR
SPLIT UP OF ANY CREDIT PARTY AND SUCH ORDER SHALL REMAIN UNDISCHARGED OR
UNSTAYED FOR A PERIOD IN EXCESS OF FIFTEEN (15) DAYS, OR ANY CREDIT PARTY SHALL
OTHERWISE DISSOLVE OR CEASE TO EXIST (EXCEPT AS PERMITTED BY SECTION 6.7).

 

(J)                                     CHANGE OF CONTROL.  A CHANGE OF CONTROL
SHALL OCCUR.

 

(K)                                  MATERIAL ADVERSE EFFECT.  A MATERIAL
ADVERSE EFFECT SHALL OCCUR.

 

(L)                                     TERMINATION BY PGBC.  THE PGCB ORDERS
THE TERMINATION OF THIS AGREEMENT OR ANY RELATED LOAN DOCUMENT PURSUANT TO 58
PA. CODE § 441A.13.

 

(M)                               SECURITY DOCUMENTATION AND OTHER LOAN
DOCUMENTS.  AT ANY TIME AFTER THE EXECUTION AND DELIVERY THEREOF, (I) (X) THIS
AGREEMENT OR ANY LOAN DOCUMENT CEASES TO BE IN FULL FORCE AND EFFECT (OTHER THAN
BY REASON OF A RELEASE OF COLLATERAL IN ACCORDANCE WITH THE TERMS HEREOF OR
THEREOF OR THE SATISFACTION IN FULL OF THE OBLIGATIONS IN ACCORDANCE WITH THE
TERMS HEREOF) OR SHALL BE DECLARED NULL AND VOID, OR (Y) ADMINISTRATIVE AGENT
SHALL NOT HAVE OR SHALL CEASE TO HAVE A VALID AND PERFECTED FIRST PRIORITY LIEN
IN ANY COLLATERAL PURPORTED TO BE COVERED BY THE SECURITY DOCUMENTATION (EXCEPT
(1) AS EXPRESSLY PERMITTED BY THE LOAN DOCUMENTS OR (2) AS A RESULT OF THE
ACTIONS OR FAILURES TO ACT OF ADMINISTRATIVE AGENT OR ANY LENDER), OR (II) ANY
CREDIT PARTY SHALL CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY LOAN DOCUMENT
IN WRITING OR DENY IN WRITING THAT IT HAS ANY FURTHER LIABILITY UNDER ANY LOAN
DOCUMENT TO WHICH IT IS A PARTY.

 

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(N)                                 GAMING LICENSES.  THE SUSPENSION OR LOSS
(EXCLUDING ANY VOLUNTARY TERMINATION OF SUCH RIGHTS IN CONNECTION WITH A SALE,
LEASE OR CLOSURE OF A SITE (OTHER THAN THE MPI HOTEL/CASINO FACILITIES AND THE
PIDI HOTEL/CASINO FACILITIES), PROVIDED THAT SUCH SALE, LEASE OR CLOSURE WAS
OTHERWISE PERMITTED BY, AND COMPLIED WITH THE PROVISIONS OF, THE INDENTURE) OF
THE BORROWER’S OR ANY OF THE BORROWER’S SUBSIDIARIES’ LEGAL RIGHT TO OPERATE
SLOT MACHINES OR TO CONDUCT OTHER GAMING OPERATIONS (OTHER THAN PARIMUTUEL
WAGERING) AT THE HOTEL/CASINO FACILITIES AND SUCH SUSPENSION OR LOSS CONTINUES
FOR MORE THAN 90 CONSECUTIVE DAYS OR FOR 120 DAYS WITHIN ANY CONSECUTIVE 180-DAY
PERIOD.

 

SECTION 8.2.                                REMEDIES.  UPON AND AFTER THE
OCCURRENCE OF AN EVENT OF DEFAULT:

 

(A)                                  NON-BANKRUPTCY RELATED
DEFAULTS/TERMINATION.  IN THE CASE OF ANY EVENT OF DEFAULT SPECIFIED IN ANY
SECTION OTHER THAN SECTION 8.1(F), 8.1(G) OR 8.1(L), ADMINISTRATIVE AGENT MAY,
AND AT THE REQUEST OF THE REQUIRED LENDERS SHALL, BY NOTICE TO THE BORROWER FROM
TIME TO TIME DECLARE THE UNPAID PRINCIPAL AMOUNT OF THE TERM LOANS, INTEREST
ACCRUED THEREON AND ALL OTHER OBLIGATIONS TO BE IMMEDIATELY DUE AND PAYABLE,
WHICH SHALL BECOME IMMEDIATELY DUE AND PAYABLE WITHOUT PRESENTMENT, DEMAND,
PROTEST OR OTHER NOTICE OF ANY KIND, ALL OF WHICH ARE HEREBY WAIVED BY THE
BORROWER.

 

(B)                                 BANKRUPTCY EVENTS OF DEFAULT/TERMINATION. 
IN THE CASE OF EITHER OF THE EVENTS OF DEFAULT SPECIFIED IN SECTION 8.1(F),
8.1(G) OR 8.1(L), AUTOMATICALLY, WITHOUT ANY NOTICE TO THE BORROWER OR ANY OTHER
ACT BY ADMINISTRATIVE AGENT OR ANY LENDER, EACH OF THE FOLLOWING SHALL
IMMEDIATELY BECOME DUE AND PAYABLE WITHOUT PRESENTMENT, DEMAND, PROTEST OR OTHER
NOTICE OF ANY KIND, ALL OF WHICH ARE HEREBY WAIVED BY THE BORROWER:  (I) THE
UNPAID PRINCIPAL AMOUNT OF AND INTEREST ON THE TERM LOANS AND (II) ALL OTHER
OBLIGATIONS.

 

(C)                                  REMEDIES IN ALL EVENTS OF DEFAULT. 
ADMINISTRATIVE AGENT SHALL, AT THE REQUEST OF OR WITH THE CONSENT OF THE
REQUIRED LENDERS, (I) EXERCISE ALL RIGHTS AND REMEDIES PROVIDED IN THE LOAN
DOCUMENTS, (II) EXERCISE ANY RIGHT OF COUNTERCLAIM, SETOFF, BANKER’S LIEN OR
OTHERWISE WHICH IT MAY HAVE WITH RESPECT TO MONEY OR PROPERTY OF THE BORROWER,
(III) BRING ANY LAWSUIT, ACTION OR OTHER PROCEEDING PERMITTED BY LAW FOR THE
SPECIFIC PERFORMANCE OF, OR INJUNCTION AGAINST ANY VIOLATION OF, ANY LOAN
DOCUMENT AND MAY EXERCISE ANY POWER GRANTED UNDER OR TO RECOVER JUDGMENT UNDER
ANY LOAN DOCUMENT, (IV) ENFORCE ANY AND ALL LIENS AND SECURITY INTERESTS CREATED
PURSUANT TO LOAN DOCUMENTS, AND (V) EXERCISE ANY OTHER RIGHT OR REMEDY PERMITTED
BY APPLICABLE REGULATIONS.

 

(D)                                 LENDERS’ REMEDIES.  UNLESS OTHERWISE
DIRECTED BY THE REQUIRED LENDERS, IN CASE ANY ONE OR MORE OF THE EVENTS OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AND WHETHER OR NOT THE LENDERS
SHALL HAVE ACCELERATED THE MATURITY OF THE TERM LOANS PURSUANT TO SECTION 8.2,
THE REQUIRED LENDERS, IF OWED ANY AMOUNT WITH RESPECT TO THE TERM LOANS, MAY
PROCEED TO PROTECT AND ENFORCE THEIR RIGHTS BY SUIT IN EQUITY, ACTION AT LAW OR
OTHER APPROPRIATE PROCEEDING,  INCLUDING AS PERMITTED BY APPLICABLE LAW THE
OBTAINING OF THE EX PARTE APPOINTMENT OF A RECEIVER, AND, IF SUCH AMOUNT SHALL
HAVE BECOME DUE, BY DECLARATION OR OTHERWISE, PROCEED TO ENFORCE THE PAYMENT
THEREOF OR ANY OTHER LEGAL OR EQUITABLE RIGHT OF SUCH LENDERS.

 

(E)                                  REMEDIES CUMULATIVE.  NO REMEDY HEREIN
CONFERRED UPON ANY LENDER OR ADMINISTRATIVE AGENT OR THE HOLDER OF A NOTE IS
INTENDED TO BE EXCLUSIVE OF ANY OTHER REMEDY AND

 

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EACH AND EVERY REMEDY SHALL BE CUMULATIVE AND SHALL BE IN ADDITION TO EVERY
OTHER REMEDY GIVEN HEREUNDER OR NOW OR HEREAFTER EXISTING AT LAW OR IN EQUITY OR
BY STATUTE OR ANY OTHER PROVISION OF LAW.

 

(F)                                    PREPAYMENTS.  ANY PREPAYMENT BY THE
BORROWER OF ALL OR ANY PART OF THE TERM LOANS FOLLOWING AN EVENT OF DEFAULT AND
AN ACCELERATION OF THE ORIGINAL MATURITY DATE, SHALL INCLUDE, AS COMPENSATION TO
THE LENDERS OF THE TERM LOAN FOR SUCH PREPAYMENT, THE APPLICABLE PREPAYMENT
PREMIUM REQUIRED UNDER SECTION 2.11(G).  THE BORROWER SPECIFICALLY ACKNOWLEDGES
AND AGREES THAT IT SHALL BE LIABLE FOR THE PREPAYMENT PREMIUM ON ANY
ACCELERATION OF THE TERM LOAN IN ACCORDANCE WITH THEIR TERMS AT ANY TIME.

 

(G)                                 LICENSING OF ADMINISTRATIVE AGENT AND
LENDERS.  IN THE EVENT OF THE OCCURRENCE OF AN EVENT OF DEFAULT HEREUNDER OR
UNDER ANY OF THE LOAN DOCUMENTS AND IT SHALL BECOME NECESSARY, OR IN THE OPINION
OF REQUIRED LENDERS ADVISABLE, FOR AN AGENT, SUPERVISOR, RECEIVER OR OTHER
REPRESENTATIVE OF ADMINISTRATIVE AGENT AND LENDERS TO BECOME LICENSED UNDER THE
PROVISIONS OF THE LAWS AND/OR REGULATIONS OF ANY GAMING AUTHORITY AS A CONDITION
TO RECEIVING THE BENEFIT OF ANY COLLATERAL ENCUMBERED BY THE MORTGAGES OR OTHER
LOAN DOCUMENTS FOR THE BENEFIT OF LENDERS OR OTHERWISE TO ENFORCE THEIR RIGHTS
HEREUNDER, BORROWER HEREBY GIVES ITS CONSENT TO THE GRANTING OF SUCH LICENSE OR
LICENSES AND AGREES TO EXECUTE SUCH FURTHER DOCUMENTS AS MAY BE REQUIRED IN
CONNECTION WITH THE EVIDENCING OF SUCH CONSENT.

 

(H)                                 EXERCISE OF RIGHTS SUBJECT TO APPLICABLE
LAW.  ALL RIGHTS, REMEDIES AND POWERS PROVIDED BY THIS ARTICLE VIII MAY BE
EXERCISED ONLY TO THE EXTENT THAT THE EXERCISE THEREOF DOES NOT VIOLATE ANY
APPLICABLE PROVISION OF THE LAWS OF ANY GOVERNMENTAL BODY AND ALL OF THE
PROVISIONS OF THIS ARTICLE VIII ARE INTENDED TO BE SUBJECT TO ALL APPLICABLE
MANDATORY PROVISIONS OF LAW THAT MAY BE CONTROLLING AND TO BE LIMITED TO THE
EXTENT NECESSARY SO THAT THEY WILL NOT RENDER THIS AGREEMENT INVALID,
UNENFORCEABLE OR NOT ENTITLED TO BE RECORDED OR FILED UNDER THE PROVISIONS OF
ANY APPLICABLE LAW.

 

ARTICLE IX
ADMINISTRATIVE AGENT

 

SECTION 9.1.                                APPOINTMENT OF ADMINISTRATIVE
AGENT.  ALADDIN IS HEREBY APPOINTED ADMINISTRATIVE AGENT HEREUNDER AND UNDER
EACH OTHER LOAN DOCUMENT, AND EACH LENDER HEREBY AUTHORIZES ALADDIN TO ACT AS
ITS AGENT IN ACCORDANCE WITH THE TERMS HEREOF AND THE OTHER LOAN DOCUMENTS.  
ADMINISTRATIVE AGENT HEREBY AGREES TO ACT UPON THE EXPRESS CONDITIONS CONTAINED
HEREIN AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE.  THE PROVISIONS OF THIS
ARTICLE IX ARE SOLELY FOR THE BENEFIT OF ADMINISTRATIVE AGENT AND THE LENDERS
AND NO CREDIT PARTY SHALL HAVE ANY RIGHTS AS A THIRD-PARTY BENEFICIARY OF ANY OF
THE PROVISIONS THEREOF.  IN PERFORMING ITS FUNCTIONS AND DUTIES HEREUNDER,
ADMINISTRATIVE AGENT SHALL ACT SOLELY AS AN AGENT OF THE LENDERS AND DOES NOT
ASSUME, AND SHALL NOT BE DEEMED TO HAVE ASSUMED, ANY OBLIGATION TOWARDS OR
RELATIONSHIP OF AGENCY OR TRUST WITH OR FOR THE BORROWER OR ANY OF ITS
SUBSIDIARIES.  ADMINISTRATIVE AGENT, WITHOUT CONSENT OF OR NOTICE TO ANY PARTY
HERETO, MAY ASSIGN ANY AND ALL OF ITS RIGHTS OR OBLIGATIONS HEREUNDER TO ANY OF
ITS AFFILIATES.

 

SECTION 9.2.                                POWERS AND DUTIES.  EACH LENDER
IRREVOCABLY AUTHORIZES ADMINISTRATIVE AGENT TO TAKE SUCH ACTION ON SUCH LENDER’S
BEHALF AND TO EXERCISE SUCH POWERS, RIGHTS AND

 

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REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS AS ARE SPECIFICALLY
DELEGATED OR GRANTED TO ADMINISTRATIVE AGENT BY THE TERMS HEREOF AND THEREOF,
TOGETHER WITH SUCH POWERS, RIGHTS AND REMEDIES AS ARE REASONABLY INCIDENTAL
THERETO.  ADMINISTRATIVE AGENT SHALL HAVE ONLY THOSE DUTIES AND RESPONSIBILITIES
THAT ARE EXPRESSLY SPECIFIED HEREIN AND THE OTHER LOAN DOCUMENTS. 
ADMINISTRATIVE AGENT MAY EXECUTE ANY OF ITS DUTIES UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS BY OR THROUGH AGENTS OR ATTORNEYS-IN-FACT, OR MAY ASSIGN
SUCH DUTIES TO ITS WHOLLY OWNED NOMINEE WITHOUT THE CONSENT OF THE LENDERS, AND
SHALL BE ENTITLED TO RELY ON ADVICE OF COUNSEL CONCERNING ALL MATTERS PERTAINING
TO SUCH DUTIES.  ADMINISTRATIVE AGENT SHALL NOT HAVE, BY REASON HEREOF OR ANY OF
THE OTHER LOAN DOCUMENTS, A FIDUCIARY RELATIONSHIP IN RESPECT OF ANY LENDER AND
NOTHING HEREIN OR ANY OF THE OTHER LOAN DOCUMENTS, EXPRESSED OR IMPLIED, IS
INTENDED TO OR SHALL BE SO CONSTRUED AS TO IMPOSE UPON ADMINISTRATIVE AGENT ANY
OBLIGATIONS IN RESPECT HEREOF OR ANY OF THE OTHER LOAN DOCUMENTS EXCEPT AS
EXPRESSLY SET FORTH HEREIN OR THEREIN.

 

SECTION 9.3.                                DELEGATION OF DUTIES. 
ADMINISTRATIVE AGENT MAY EXECUTE ANY OF ITS DUTIES UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BY OR THROUGH THIRD PARTIES, AGENTS, EMPLOYEES OR
ATTORNEYS-IN-FACT (ANY SUCH ENTITY, A “SUB-AGENT”) OR MAY ASSIGN SUCH DUTIES TO
ITS WHOLLY OWNED NOMINEE WITHOUT THE CONSENT OF THE LENDERS, AND SHALL BE
ENTITLED TO ADVICE OF COUNSEL CONCERNING ALL MATTERS PERTAINING TO SUCH DUTIES. 
ADMINISTRATIVE AGENT SHALL NOT BE RESPONSIBLE FOR THE NEGLIGENCE OR MISCONDUCT
OF ANY SUB- AGENT THAT IT SELECTS AS LONG AS SUCH SELECTION WAS MADE WITH
REASONABLE CARE.  THE BORROWER AND EACH LENDER HEREBY AGREE THAT ANY SUB- AGENT
APPOINTED HEREUNDER SHALL BE ENTITLED TO THE BENEFIT OF THE PROVISIONS OF
SECTIONS 7.3, 9.2, 9.4, 9.5, 9.6, 9.7, 9.10 AND 9.11 OF THIS AGREEMENT AS IF
SUCH SUB-AGENT IS A PARTY TO THIS AGREEMENT.

 

SECTION 9.4.                                GENERAL IMMUNITY.

 

(A)                                  NO RESPONSIBILITY FOR CERTAIN MATTERS. 
ADMINISTRATIVE AGENT SHALL NOT BE RESPONSIBLE TO ANY LENDER FOR THE EXECUTION,
EFFECTIVENESS, GENUINENESS, VALIDITY, ENFORCEABILITY, COLLECTABILITY OR
SUFFICIENCY HEREOF OR ANY OTHER LOAN DOCUMENT OR FOR ANY REPRESENTATIONS,
WARRANTIES, RECITALS OR STATEMENTS MADE HEREIN OR THEREIN OR MADE IN ANY WRITTEN
OR ORAL STATEMENTS OR IN ANY FINANCIAL OR OTHER STATEMENTS, INSTRUMENTS, REPORTS
OR CERTIFICATES OR ANY OTHER DOCUMENTS FURNISHED OR MADE BY ADMINISTRATIVE AGENT
TO ANY LENDER OR BY OR ON BEHALF OF ANY CREDIT PARTY TO ADMINISTRATIVE AGENT OR
ANY LENDER IN CONNECTION WITH THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED THEREBY OR FOR THE FINANCIAL CONDITION OR BUSINESS AFFAIRS OF ANY
CREDIT PARTY OR ANY OTHER PERSON LIABLE FOR THE PAYMENT OF ANY OBLIGATIONS, NOR
SHALL ADMINISTRATIVE AGENT BE REQUIRED TO ASCERTAIN OR INQUIRE AS TO THE
PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS, CONDITIONS, PROVISIONS, COVENANTS
OR AGREEMENTS CONTAINED IN ANY OF THE LOAN DOCUMENTS OR AS TO THE USE OF THE
PROCEEDS OF THE TERM LOANS OR AS TO THE EXISTENCE OR POSSIBLE EXISTENCE OF ANY
EVENT OF DEFAULT OR DEFAULT.  ANYTHING CONTAINED HEREIN TO THE CONTRARY
NOTWITHSTANDING, ADMINISTRATIVE AGENT SHALL NOT HAVE ANY LIABILITY ARISING FROM
CONFIRMATIONS OF THE AMOUNT OF THE OUTSTANDING TERM LOANS.

 

(B)                                 EXCULPATORY PROVISIONS.  NONE OF
ADMINISTRATIVE AGENT NOR ANY OF ITS OFFICERS, TRUSTEES, PARTNERS, MEMBERS,
DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS SHALL BE LIABLE TO LENDERS FOR ANY
ACTION TAKEN OR OMITTED BY ADMINISTRATIVE AGENT UNDER OR IN CONNECTION WITH ANY
OF THE LOAN DOCUMENTS, EXCEPT TO THE EXTENT CAUSED BY ADMINISTRATIVE AGENT’S
GROSS NEGLIGENCE OR

 

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WILLFUL MISCONDUCT.  ADMINISTRATIVE AGENT SHALL BE ENTITLED TO REFRAIN FROM ANY
ACT OR THE TAKING OF ANY ACTION (INCLUDING THE FAILURE TO TAKE AN ACTION) IN
CONNECTION HEREWITH OR ANY OF THE OTHER LOAN DOCUMENTS OR FROM THE EXERCISE OF
ANY POWER, DISCRETION OR AUTHORITY VESTED IN IT HEREUNDER OR THEREUNDER UNLESS
AND UNTIL ADMINISTRATIVE AGENT SHALL HAVE RECEIVED INSTRUCTIONS IN RESPECT
THEREOF FROM THE REQUIRED LENDERS (OR SUCH OTHER LENDERS AS MAY BE REQUIRED TO
GIVE SUCH INSTRUCTIONS UNDER SECTION 10.1) AND, UPON RECEIPT OF SUCH
INSTRUCTIONS FROM THE REQUIRED LENDERS (OR SUCH OTHER LENDERS, AS THE CASE MAY
BE), ADMINISTRATIVE AGENT SHALL BE ENTITLED TO ACT OR (WHERE SO INSTRUCTED)
REFRAIN FROM ACTING, OR TO EXERCISE SUCH POWER, DISCRETION OR AUTHORITY, IN
ACCORDANCE WITH SUCH INSTRUCTIONS.  WITHOUT PREJUDICE TO THE GENERALITY OF THE
FOREGOING, (I) ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RELY, AND SHALL BE
FULLY PROTECTED IN RELYING, UPON ANY COMMUNICATION, INSTRUMENT OR DOCUMENT
BELIEVED BY IT TO BE GENUINE AND CORRECT AND TO HAVE BEEN SIGNED OR SENT BY THE
PROPER PERSON OR PERSONS, AND SHALL BE ENTITLED TO RELY AND SHALL BE PROTECTED
IN RELYING ON OPINIONS AND JUDGMENTS OF ATTORNEYS (WHO MAY BE ATTORNEYS FOR THE
BORROWER AND ITS SUBSIDIARIES), ACCOUNTANTS, EXPERTS AND OTHER PROFESSIONAL
ADVISORS SELECTED BY IT, AND (II) NO LENDER SHALL HAVE ANY RIGHT OF ACTION
WHATSOEVER AGAINST ADMINISTRATIVE AGENT AS A RESULT OF ADMINISTRATIVE AGENT
ACTING OR REFRAINING FROM ACTING HEREUNDER OR ANY OF THE OTHER LOAN DOCUMENTS IN
ACCORDANCE WITH THE INSTRUCTIONS OF THE REQUIRED LENDERS (OR SUCH OTHER LENDERS
AS MAY BE REQUIRED TO GIVE SUCH INSTRUCTIONS UNDER SECTION 10.1). 
ADMINISTRATIVE AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR REFUSING TO TAKE ANY
ACTION UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WHICH INVOLVES
DISCRETIONARY DECISION MAKING ABSENT EXPRESS WRITTEN INSTRUCTIONS FROM THE
REQUIRED LENDERS WITH RESPECT THERETO.

 

SECTION 9.5.                                ADMINISTRATIVE AGENT ENTITLED TO ACT
WITH THE BORROWER.  ADMINISTRATIVE AGENT AND ITS AFFILIATES MAY ACCEPT DEPOSITS
FROM, LEND MONEY TO AND GENERALLY ENGAGE IN ANY KIND OF BANKING, TRUST,
FINANCIAL ADVISORY OR OTHER BUSINESS WITH THE BORROWER OR ANY OF ITS AFFILIATES
AS IF IT WERE NOT PERFORMING THE DUTIES SPECIFIED HEREIN, AND MAY ACCEPT FEES
AND OTHER CONSIDERATION FROM THE BORROWER FOR SERVICES IN CONNECTION HEREWITH
AND OTHERWISE WITHOUT HAVING TO ACCOUNT FOR THE SAME TO LENDERS.

 

SECTION 9.6.                                LENDERS’ REPRESENTATIONS, WARRANTIES
AND ACKNOWLEDGMENT.

 

(A)                                  EACH LENDER REPRESENTS AND WARRANTS THAT IT
HAS MADE ITS OWN INDEPENDENT INVESTIGATION OF THE FINANCIAL CONDITION AND
AFFAIRS OF THE BORROWER AND ITS SUBSIDIARIES IN CONNECTION WITH THE
BORROWING(S) HEREUNDER AND THAT IT HAS MADE AND SHALL CONTINUE TO MAKE ITS OWN
APPRAISAL OF THE CREDITWORTHINESS OF THE BORROWER AND ITS SUBSIDIARIES. 
ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTY OR RESPONSIBILITY, EITHER INITIALLY
OR ON A CONTINUING BASIS, TO MAKE ANY SUCH INVESTIGATION OR ANY SUCH APPRAISAL
ON BEHALF OF LENDERS OR TO PROVIDE ANY LENDER WITH ANY CREDIT OR OTHER
INFORMATION WITH RESPECT THERETO, WHETHER COMING INTO ITS POSSESSION BEFORE THE
MAKING OF THE TERM LOANS OR AT ANY TIME OR TIMES THEREAFTER, AND ADMINISTRATIVE
AGENT SHALL NOT HAVE ANY RESPONSIBILITY WITH RESPECT TO THE ACCURACY OF OR THE
COMPLETENESS OF ANY INFORMATION PROVIDED TO LENDERS.

 

(B)                                 EACH LENDER, BY DELIVERING ITS SIGNATURE
PAGE TO THIS AGREEMENT AND FUNDING OR HOLDING ANY OF ITS TERM LOANS ON THE
CLOSING DATE, SHALL BE DEEMED TO HAVE ACKNOWLEDGED RECEIPT OF, AND CONSENTED TO
AND APPROVED, EACH LOAN DOCUMENT AND EACH OTHER DOCUMENT REQUIRED TO BE APPROVED
BY ADMINISTRATIVE AGENT OR LENDERS, AS APPLICABLE ON THE CLOSING DATE.

 

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(C)                                  EACH LENDER REPRESENTS AND WARRANTS THAT IT
IS IN THE BUSINESS OF PROVIDING DEBT CAPITAL TO ENTERPRISES AND EACH TERM LOAN
WILL BE MADE IN THE ORDINARY COURSE OF SUCH LENDER’S BUSINESS.

 

(D)                                 ADMINISTRATIVE AGENT AND EACH LENDER, BY
DELIVERING ITS SIGNATURE PAGE TO THIS AGREEMENT AND FUNDING OR HOLDING ANY OF
ITS TERM LOANS ON THE CLOSING DATE AGREES, FOR THE  ENFORCEABLE BENEFIT OF ALL
HOLDERS OF EXISTING AND FUTURE SECOND LIEN OBLIGATIONS (AS DEFINED IN THE
INTERCREDITOR AGREEMENT), AND EACH EXISTING AND FUTURE DEBT REPRESENTATIVE (AS
DEFINED IN THE INTERCREDITOR AGREEMENT) AS FOLLOWS: (X) THAT ADMINISTRATIVE
AGENT AND THE LENDERS ARE BOUND BY THE PROVISIONS OF, AND AGREE TO THE TERMS OF,
THE INTERCREDITOR AGREEMENT (INCLUDING SECTION 5.6 OF THE INTERCREDITOR
AGREEMENT) AND (Y) THAT EACH LENDER CONSENTS TO AND DIRECTS ADMINISTRATIVE AGENT
TO PERFORM ITS OBLIGATIONS UNDER THE INTERCREDITOR AGREEMENT.

 

SECTION 9.7.                                RIGHT TO INDEMNITY.  EACH LENDER, IN
PROPORTION TO ITS PRO RATA SHARE, SEVERALLY (AND NOT JOINTLY) AGREES TO
INDEMNIFY ADMINISTRATIVE AGENT AND ITS STOCKHOLDERS, DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS AND AFFILIATES (EACH AN “INDEMNIFIED ADMINISTRATIVE
AGENT PERSON”), TO THE EXTENT THAT ADMINISTRATIVE AGENT SHALL NOT HAVE BEEN
REIMBURSED BY ANY CREDIT PARTY, FOR AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING LEGAL FEES AND DISBURSEMENTS) OR DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST
SUCH INDEMNIFIED ADMINISTRATIVE AGENT PERSON IN EXERCISING ITS POWERS, RIGHTS
AND REMEDIES OR PERFORMING ITS DUTIES HEREUNDER OR UNDER THE OTHER LOAN
DOCUMENTS OR OTHERWISE IN ITS CAPACITY AS ADMINISTRATIVE AGENT IN ANY WAY
RELATING TO OR ARISING OUT HEREOF OR IN CONNECTION WITH THE LOAN DOCUMENTS;
PROVIDED, NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS RESULTING FROM ADMINISTRATIVE AGENT’S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.  IF ANY INDEMNITY FURNISHED TO ADMINISTRATIVE AGENT FOR
ANY PURPOSE SHALL, IN THE OPINION OF SUCH ADMINISTRATIVE AGENT, BE INSUFFICIENT
OR BECOME IMPAIRED, ADMINISTRATIVE AGENT MAY CALL FOR ADDITIONAL INDEMNITY AND
CEASE, OR NOT COMMENCE, TO DO THE ACTS INDEMNIFIED AGAINST UNTIL SUCH ADDITIONAL
INDEMNITY IS FURNISHED; PROVIDED, FURTHER, IN NO EVENT SHALL THIS SENTENCE
REQUIRE ANY LENDER TO INDEMNIFY ADMINISTRATIVE AGENT AGAINST ANY LIABILITY,
OBLIGATION, LOSS, DAMAGE, PENALTY, ACTION, JUDGMENT, SUIT, COST, EXPENSE OR
DISBURSEMENT IN EXCESS OF SUCH LENDER’S PRO RATA SHARE THEREOF, AND PROVIDED,
FURTHER, THIS SENTENCE SHALL NOT BE DEEMED TO REQUIRE ANY LENDER TO INDEMNIFY
ADMINISTRATIVE AGENT AGAINST ANY LIABILITY, OBLIGATION, LOSS, DAMAGE, PENALTY,
ACTION, JUDGMENT, SUIT, COST, EXPENSE OR DISBURSEMENT DESCRIBED IN THE PROVISO
IN THE IMMEDIATELY PRECEDING SENTENCE.

 

SECTION 9.8.                                SUCCESSOR ADMINISTRATIVE AGENT.

 

(A)                                  ADMINISTRATIVE AGENT MAY RESIGN AT ANY TIME
BY GIVING NOT LESS THAN THIRTY (30) BUSINESS DAYS’ PRIOR WRITTEN NOTICE THEREOF
TO THE LENDERS AND THE BORROWER.  UPON ANY SUCH RESIGNATION, THE REQUIRED
LENDERS SHALL HAVE THE RIGHT TO APPOINT A SUCCESSOR ADMINISTRATIVE AGENT, WHICH
SHALL BE (I) ONE OF THE LENDERS OR AN AFFILIATE OF ONE OF THE LENDERS OR (II) A
PERSON WHO WOULD BE AN ELIGIBLE SUCCESSOR AGENT IF APPOINTED BY THE RESIGNING
ADMINISTRATIVE AGENT UNDER SECTION 9.8(B).

 

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(B)                                 IF NO SUCCESSOR ADMINISTRATIVE AGENT SHALL
HAVE BEEN SO APPOINTED BY THE LENDERS WITHIN TWENTY (20) BUSINESS DAYS AFTER THE
RESIGNING ADMINISTRATIVE AGENT’S GIVING OF NOTICE OF RESIGNATION, THEN THE
RESIGNING ADMINISTRATIVE AGENT MAY APPOINT, ON BEHALF OF THE BORROWER AND THE
LENDERS, A SUCCESSOR ADMINISTRATIVE AGENT, WHICH SHALL BE A COMMERCIAL BANK
ORGANIZED UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR OF ANY STATE THEREOF
AND HAVING A COMBINED CAPITAL AND SURPLUS OF AT LEAST $250,000,000.  IN THE
EVENT THAT ADMINISTRATIVE AGENT IS UNABLE TO APPOINT A REPLACEMENT SUCCESSOR
WITHIN TEN (10) BUSINESS DAYS AFTER IT IS ENTITLED TO DO SO AFTER USING
REASONABLE EFFORTS, ADMINISTRATIVE AGENT MAY NONETHELESS RESIGN BY DELIVERING A
WRITTEN RESIGNATION TO THE LENDERS AND THE BORROWER, PROVIDED THAT IN SUCH
CIRCUMSTANCES, AND UNLESS AND UNTIL A SUCCESSOR ADMINISTRATIVE AGENT IS
APPOINTED, ADMINISTRATIVE AGENT SHALL REMAIN ADMINISTRATIVE AGENT SOLELY FOR THE
PURPOSE OF SERVING AS SECURED PARTY OF RECORD WITH RESPECT TO THE COLLATERAL,
ITS SOLE DUTY IN THAT CAPACITY SHALL BE TO TAKE SUCH MINISTERIAL ACTIONS AS IT
SHALL BE DIRECTED TO TAKE BY THE LENDERS (INCLUDING, WITHOUT LIMITATION, THE
EXECUTION AND DELIVERY OF DOCUMENTS OR INSTRUMENTS RELATING TO THE COLLATERAL),
AND ADMINISTRATIVE AGENT SHALL BE ENTITLED TO REIMBURSEMENT FROM THE BORROWER
FOR ITS REASONABLE OUT-OF-POCKET COSTS AND EXPENSES AND REASONABLE COMPENSATION
FROM THE BORROWER FOR ITS SERVICES.  IF ADMINISTRATIVE AGENT HAS RESIGNED AND NO
SUCCESSOR ADMINISTRATIVE AGENT HAS BEEN APPOINTED, SUBJECT TO THE PRECEDING
SENTENCE, THE LENDERS SHALL PERFORM THE DUTIES OF ADMINISTRATIVE AGENT
HEREUNDER, AND THE BORROWER SHALL MAKE ALL PAYMENTS IN RESPECT OF THE
OBLIGATIONS TO THE APPLICABLE LENDERS AND SHALL DEAL DIRECTLY WITH THE LENDERS.

 

(C)                                  NO SUCCESSOR ADMINISTRATIVE AGENT SHALL BE
DEEMED TO BE APPOINTED HEREUNDER UNTIL SUCH SUCCESSOR ADMINISTRATIVE AGENT HAS
ACCEPTED THE APPOINTMENT IN WRITING.  UPON THE ACCEPTANCE OF ANY APPOINTMENT AS
ADMINISTRATIVE AGENT HEREUNDER BY A SUCCESSOR ADMINISTRATIVE AGENT AND UPON THE
EXECUTION AND FILING OF SUCH FINANCING STATEMENTS, OR AMENDMENTS THERETO, AND
SUCH OTHER INSTRUMENTS AND NOTICES, AS MAY BE NECESSARY OR DESIRABLE OR AS THE
REQUIRED LENDERS MAY REQUEST, IN ORDER TO CONTINUE THE PERFECTION OF THE LIENS
GRANTED OR PURPORTED TO BE GRANTED UNDER THE SECURITY DOCUMENTATION, SUCH
SUCCESSOR ADMINISTRATIVE AGENT SHALL SUCCEED TO AND BECOME VESTED WITH ALL THE
RIGHTS, POWERS, DISCRETION, PRIVILEGES AND DUTIES OF THE RESIGNING
ADMINISTRATIVE AGENT, AND THE RESIGNATION OR TERMINATION OF ADMINISTRATIVE AGENT
SHALL THEN BE EFFECTIVE FOR ALL PURPOSES.  UPON THE EFFECTIVENESS OF THE
RESIGNATION OR TERMINATION OF ADMINISTRATIVE AGENT, THE RESIGNING OR TERMINATED
ADMINISTRATIVE AGENT SHALL BE DISCHARGED FROM ITS DUTIES AND OBLIGATIONS UNDER
THE LOAN DOCUMENTS.  AFTER THE EFFECTIVENESS OF THE RESIGNATION OR TERMINATION
OF AN ADMINISTRATIVE AGENT, THE PROVISIONS OF SECTION 7.3 AND THIS ARTICLE IX
SHALL CONTINUE TO INURE TO THE FORMER ADMINISTRATIVE AGENT’S BENEFIT AS TO ANY
ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT WHILE IT WAS ACTING AS ADMINISTRATIVE
AGENT UNDER THIS AGREEMENT.

 

SECTION 9.9.                                SECURITY DOCUMENTATION.

 

(A)                                  ADMINISTRATIVE AGENT AS ADMINISTRATIVE
AGENT UNDER SECURITY DOCUMENTATION.  EACH LENDER HEREBY FURTHER AUTHORIZES
ADMINISTRATIVE AGENT, ON BEHALF OF AND FOR THE BENEFIT OF THE LENDERS, TO BE
ADMINISTRATIVE AGENT FOR AND REPRESENTATIVE OF THE LENDERS WITH RESPECT TO THE
COLLATERAL AND THE SECURITY DOCUMENTATION.  SUBJECT TO SECTION 10.1, WITHOUT
FURTHER WRITTEN CONSENT OR AUTHORIZATION FROM THE LENDERS, ADMINISTRATIVE AGENT
MAY EXECUTE ANY DOCUMENTS OR INSTRUMENTS NECESSARY TO RELEASE ANY LIEN
ENCUMBERING ANY ITEM OF COLLATERAL THAT IS THE SUBJECT

 

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OF A SALE OR OTHER DISPOSITION OF ASSETS PERMITTED HEREBY OR TO WHICH THE
LENDERS HAVE OTHERWISE CONSENTED IN THE MANNER PROVIDED HEREIN.

 

(B)                                 ADMINISTRATIVE AGENT’S RIGHT TO REALIZE ON
COLLATERAL.  ANYTHING CONTAINED IN ANY OF THE LOAN DOCUMENTS TO THE CONTRARY
NOTWITHSTANDING, THE BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREE
THAT (I) NO LENDER SHALL HAVE ANY RIGHT INDIVIDUALLY TO REALIZE UPON ANY OF THE
COLLATERAL, IT BEING UNDERSTOOD AND AGREED THAT ALL POWERS, RIGHTS AND REMEDIES
HEREUNDER MAY BE EXERCISED SOLELY BY ADMINISTRATIVE AGENT, ON BEHALF OF LENDERS
IN ACCORDANCE WITH THE TERMS HEREOF, AND (II) IN THE EVENT OF A FORECLOSURE BY
ADMINISTRATIVE AGENT ON ANY OF THE COLLATERAL PURSUANT TO A PUBLIC OR PRIVATE
SALE, ADMINISTRATIVE AGENT OR ANY LENDER MAY BE THE PURCHASER OF ANY OR ALL OF
SUCH COLLATERAL AT ANY SUCH SALE AND ADMINISTRATIVE AGENT, AS AGENT FOR AND
REPRESENTATIVE OF LENDERS (BUT NOT ANY LENDER OR LENDERS IN ITS OR THEIR
RESPECTIVE INDIVIDUAL CAPACITIES UNLESS THE REQUIRED LENDERS SHALL OTHERWISE
AGREE IN WRITING) SHALL BE ENTITLED, FOR THE PURPOSE OF BIDDING AND MAKING
SETTLEMENT OR PAYMENT OF THE PURCHASE PRICE FOR ALL OR ANY PORTION OF THE
COLLATERAL SOLD AT ANY SUCH PUBLIC SALE, TO USE AND APPLY ANY OF THE OBLIGATIONS
AS A CREDIT ON ACCOUNT OF THE PURCHASE PRICE FOR ANY COLLATERAL PAYABLE BY
ADMINISTRATIVE AGENT AT SUCH SALE.

 

SECTION 9.10.                         NOTICE OF DEFAULT.  ADMINISTRATIVE AGENT
SHALL NOT BE DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE OCCURRENCE OF ANY DEFAULT
OR EVENT OF DEFAULT HEREUNDER UNLESS ADMINISTRATIVE AGENT HAS RECEIVED NOTICE
FROM A LENDER OR THE BORROWER REFERRING TO THIS AGREEMENT, DESCRIBING SUCH
DEFAULT OR EVENT OF DEFAULT AND STATING THAT SUCH NOTICE IS A “NOTICE OF
DEFAULT”.  IN THE EVENT THAT ADMINISTRATIVE AGENT RECEIVES SUCH A NOTICE,
ADMINISTRATIVE AGENT SHALL PROMPTLY GIVE NOTICE THEREOF TO THE LENDERS AND, IF
REQUIRED BY ANY GAMING AUTHORITY, THE BORROWER SHALL FORWARD A COPY OF SUCH
NOTICE TO SUCH GAMING AUTHORITY.  ADMINISTRATIVE AGENT SHALL TAKE SUCH ACTION
WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS SHALL BE REASONABLY DIRECTED
BY THE REQUIRED LENDERS; PROVIDED THAT UNLESS AND UNTIL ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED SUCH DIRECTIONS, ADMINISTRATIVE AGENT MAY (BUT SHALL NOT BE
OBLIGATED TO) TAKE SUCH ACTION, OR REFRAIN FROM TAKING SUCH ACTION, WITH RESPECT
TO SUCH DEFAULT OR EVENT OF DEFAULT AS IT SHALL DEEM ADVISABLE IN THE BEST
INTERESTS OF THE LENDERS.

 

SECTION 9.11.                         DELIVERY OF DOCUMENTS, NOTICES, ETC.  IN
ADDITION TO, AND IN FURTHERANCE OF ANY REQUIREMENT PLACED UPON ADMINISTRATIVE
AGENT HEREIN TO DELIVER, PROVIDE, DISTRIBUTE, NOTIFY OR OTHERWISE CONVEY ITEMS
RECEIVED FROM THE BORROWER TO THE LENDERS, ADMINISTRATIVE AGENT SHALL PROMPTLY
NOTIFY LENDERS OF ANY NOTICES, DOCUMENTS, REQUESTS, DEMANDS OR OTHER ITEMS
ADMINISTRATIVE AGENT RECEIVED FROM THE BORROWER AND PROMPTLY DELIVER OR CONVEY,
TO THE EXTENT THEY ARE IN WRITTEN FORM, SUCH NOTICES, DOCUMENTS, REQUESTS,
DEMANDS OR ITEMS TO THE LENDERS.

 

ARTICLE X

MISCELLANEOUS

 

SECTION 10.1.                         AMENDMENTS AND WAIVERS.

 

(A)                                  GENERAL.  SUBJECT TO SECTION 10.1(B) AND
SECTION 10.1(C) BELOW, NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER OF ANY
PROVISION OF THE LOAN DOCUMENTS, OR CONSENT TO ANY DEPARTURE BY ANY CREDIT PARTY
THEREFROM, SHALL BE EFFECTIVE WITHOUT THE WRITTEN CONSENT OF THE REQUIRED
LENDERS.

 

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(B)                                 OTHER CONSENT.  NOTWITHSTANDING THE
PROVISIONS OF SECTION 10.1(A) ABOVE, NO AMENDMENT, MODIFICATION, TERMINATION OR
WAIVER OF ANY PROVISION OF THE LOAN DOCUMENTS, OR CONSENT TO ANY DEPARTURE BY
ANY CREDIT PARTY THEREFROM, SHALL:

 

(I)                                     AMEND, MODIFY, TERMINATE OR WAIVE ANY
PROVISION OF ARTICLE IX AS THE SAME APPLIES TO ADMINISTRATIVE AGENT, OR ANY
OTHER PROVISION HEREOF AS THE SAME APPLIES TO THE RIGHTS OR OBLIGATIONS OF
ADMINISTRATIVE AGENT, IN EACH CASE WITHOUT THE CONSENT OF ADMINISTRATIVE AGENT;

 

(II)                                  INCREASE ANY TERM LOAN COMMITMENT OF ANY
LENDER OVER THE AMOUNT THEREOF THEN IN EFFECT WITHOUT THE CONSENT OF SUCH
LENDER; PROVIDED THAT NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER OF ANY
CONDITION PRECEDENT, COVENANT (INCLUDING ANY AMENDMENT, MODIFICATION,
TERMINATION OR WAIVER OF THE VOLUNTARY OR MANDATORY PREPAYMENT COVENANTS),
DEFAULT OR EVENT OF DEFAULT SHALL CONSTITUTE AN INCREASE IN ANY TERM LOAN
COMMITMENT OF ANY LENDER.

 

(C)                                  PRIOR UNANIMOUS WRITTEN CONSENT.  WITHOUT
THE PRIOR UNANIMOUS WRITTEN CONSENT OF THE AFFECTED LENDERS:

 

(I)                                     NO AMENDMENT, CONSENT OR WAIVER SHALL
(A) AFFECT THE AMOUNT OR EXTEND THE TIME OF THE OBLIGATION OF ANY LENDER TO MAKE
THE TERM LOANS OR (B) EXTEND THE ORIGINALLY SCHEDULED TIME OR TIMES OF REPAYMENT
OF THE PRINCIPAL OF THE TERM LOANS OR (C) ALTER THE TIME OR TIMES OF PAYMENT OF
INTEREST ON THE TERM LOANS OR OF ANY FEES PAYABLE FOR THE ACCOUNT OF THE LENDERS
OR (D) ALTER THE AMOUNT OF THE PRINCIPAL OF THE TERM LOANS OR THE RATE OF
INTEREST THEREON OR (E) ALTER THE AMOUNT OF ANY FEE PAYABLE HEREUNDER TO THE
ACCOUNT OF THE LENDERS OR (F) PERMIT ANY SUBORDINATION OF THE PRINCIPAL OF OR
INTEREST ON THE TERM LOANS OR (G) PERMIT THE SUBORDINATION OF THE LIEN CREATED
BY THE SECURITY DOCUMENTATION IN ANY OF THE COLLATERAL OR (H) CONSENT TO THE
ASSIGNMENT OR TRANSFER BY ANY CREDIT PARTY OF ANY OF ITS RIGHTS AND OBLIGATIONS
UNDER ANY LOAN DOCUMENT OR (I) AFFECT THE DEFINITION OF “REQUIRED LENDERS” OR
“PRO RATA SHARE”;

 

(II)                                  NO COLLATERAL, OTHER THAN IN CONNECTION
WITH AN ASSET SALE OR ANY OTHER SALE MADE IN ACCORDANCE WITH THE TERMS HEREOF OR
AS OTHERWISE SPECIFICALLY PERMITTED IN THIS AGREEMENT OR THE SECURITY
DOCUMENTATION, SHALL BE RELEASED FROM THE LIEN OF THE SECURITY DOCUMENTATION;

 

(III)                               NONE OF THE PROVISIONS OF SECTION 2.14 SHALL
BE AMENDED, MODIFIED OR WAIVED; AND

 

(IV)                              NONE OF THE PROVISIONS OF SECTION 10.1(B) OR
THIS SECTION 10.1(C) SHALL BE AMENDED.

 

(D)                                 EFFECT OF NOTICES, WAIVERS OR CONSENTS.  ANY
WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE
SPECIFIC PURPOSE FOR WHICH IT WAS GIVEN.  NO NOTICE TO OR DEMAND ON ANY CREDIT
PARTY IN ANY CASE SHALL ENTITLE ANY CREDIT PARTY TO ANY OTHER OR FURTHER NOTICE
(EXCEPT AS OTHERWISE SPECIFICALLY REQUIRED HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT) OR DEMAND IN SIMILAR OR OTHER CIRCUMSTANCES.  ANY AMENDMENT,
MODIFICATION, TERMINATION, WAIVER

 

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OR CONSENT EFFECTED IN ACCORDANCE WITH THIS SECTION 10.1 SHALL BE BINDING UPON
EACH LENDER AT THE TIME OUTSTANDING, EACH FUTURE LENDER AND, IF SIGNED BY A
CREDIT PARTY, ON SUCH CREDIT PARTY.

 

SECTION 10.2.                         NOTICES.  ALL NOTICES, REQUESTS, DEMANDS
AND OTHER COMMUNICATIONS TO ANY PARTY OR GIVEN UNDER ANY LOAN DOCUMENT
(COLLECTIVELY, THE “NOTICES”) WILL BE IN WRITING AND DELIVERED INITIALLY BY
ELECTRONIC MAIL TO THE E-MAIL ADDRESS LISTED BELOW TO BE FOLLOWED BY DELIVERY BY
OVERNIGHT COURIER OR BY REGISTERED MAIL TO THE PARTIES AT THE FOLLOWING ADDRESS
OR SENT BY FACSIMILE, WITH CONFIRMATION RECEIVED, TO THE FACSIMILE NUMBER
SPECIFIED BELOW (OR AT SUCH OTHER ADDRESS OR FACSIMILE NUMBER AS WILL BE
SPECIFIED BY A PARTY BY LIKE NOTICE GIVEN AT LEAST FIVE CALENDAR DAYS PRIOR
THERETO):

 

(A)                                  IF TO THE BORROWER, AT:

 

MTR Gaming Group, Inc.

State Route 2 South

P.O. Box 356

Chester, WV 26034

Attention: Chief Financial Officer

Facsimile: (304) 387-2167

 

with a copy to:

 

Milbank Tweed Hadley & McCloy LLP

601 South Figueroa Street, 30th Floor

Los Angeles, California 90017

Facsimile: 213-892-4771 (Ruosch) and 213-892-4748 (Song)

Attention: Deborah Ruosch and Wansun Song

 

(B)                                 IF TO ADMINISTRATIVE AGENT, AT:

 

Aladdin Credit Partners LLC

6 Landmark Square

Stamford, CT 06901

Attention:

Simmon Saraf

Telephone:

(203) 326-6891

Facsimile:

(203) 487-6740

Email:

ssaraf@aladdincapital.com

 

With a copy to:

 

Richards Kibbe & Orbe LLP

One World Financial Center

New York, New York 10281

Telephone:

(212) 530-1800

Facsimile:

(212) 530-1801

Attention:

Nicholas A. Whitney

Email:

nwhitney@rkollp.com

 

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(C)                                  IF (I) TO THE LENDERS THAT ARE RELATED
FUNDS OF ADMINISTRATIVE AGENT, TO THE NOTICE ADDRESS FOR ADMINISTRATIVE AGENT
PROVIDED ABOVE AND (II) TO ANY OTHER LENDER, TO THE ADDRESS FOR SUCH LENDER SET
FORTH ON THE SIGNATURE PAGES HEREOF OR IN THE ASSIGNMENT AGREEMENT DELIVERED BY
SUCH LENDER.

 

All Notices will be deemed delivered when actually received.  Each of the
parties will hereafter notify the other parties in accordance with this
Section 10.2 of any change of address or telecopy number to which notice is
required to be mailed.

 

SECTION 10.3.                         EXPENSES.  WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE CONSUMMATED OR ANY TERM LOAN SHALL BE MADE, THE
BORROWER AGREES TO PAY PROMPTLY:

 

(A)                                  ALL THE ACTUAL AND REASONABLE AND
REASONABLY DOCUMENTED COSTS AND EXPENSES OF PREPARATION OF THE LOAN DOCUMENTS
AND ANY CONSENTS, AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS THERETO; THE
REASONABLE AND REASONABLY DOCUMENTED FEES, EXPENSES AND DISBURSEMENTS OF COUNSEL
TO ADMINISTRATIVE AGENT IN CONNECTION WITH THE NEGOTIATION, PREPARATION,
EXECUTION AND ADMINISTRATION OF THE LOAN DOCUMENTS AND ANY CONSENTS, AMENDMENTS,
SUPPLEMENTS, WAIVERS OR OTHER MODIFICATIONS THERETO AND ANY OTHER DOCUMENTS OR
MATTERS REQUESTED BY THE BORROWER;

 

(B)                                 ALL THE ACTUAL COSTS AND REASONABLE AND
REASONABLY DOCUMENTED EXPENSES OF CREATING AND PERFECTING LIENS IN FAVOR OF
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT HERETO,
INCLUDING, WITHOUT LIMITATION, FILING AND RECORDING FEES, EXPENSES AND TAXES,
STAMP OR DOCUMENTARY TAXES, SEARCH FEES, TITLE INSURANCE PREMIUMS AND REASONABLE
FEES, EXPENSES AND DISBURSEMENTS OF COUNSEL TO ADMINISTRATIVE AGENT AND LENDERS;
AND

 

(C)                                  AFTER THE OCCURRENCE OF A DEFAULT OR AN
EVENT OF DEFAULT, ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES
(INCLUDING, WITHOUT LIMITATION, ALLOCATED COSTS OF INTERNAL COUNSEL), AUDITORS,
ACCOUNTANTS, CONSULTANTS, ADVISORS, AGENTS AND APPRAISERS AND COSTS OF
SETTLEMENT, INCURRED BY ANY ADMINISTRATIVE AGENT AND/OR LENDERS IN ENFORCING ANY
OBLIGATIONS OF OR IN COLLECTING ANY PAYMENTS DUE FROM ANY CREDIT PARTY HEREUNDER
OR UNDER THE OTHER LOAN DOCUMENTS BY REASON OF SUCH DEFAULT OR EVENT OF DEFAULT
(INCLUDING IN CONNECTION WITH THE SALE OF, COLLECTION FROM, OR OTHER REALIZATION
UPON ANY OF THE COLLATERAL OR THE ENFORCEMENT OF ANY GUARANTY) OR IN CONNECTION
WITH ANY NEGOTIATIONS, REVIEWS, REFINANCING OR RESTRUCTURING OF THE CREDIT
ARRANGEMENTS PROVIDED HEREUNDER, INCLUDING, WITHOUT LIMITATION, IN THE NATURE OF
A “WORK OUT” OR PURSUANT TO ANY INSOLVENCY OR BANKRUPTCY CASES OR PROCEEDINGS.

 

SECTION 10.4.                         ENFORCEABILITY; SUCCESSORS AND ASSIGNS.

 

(A)                                  ENFORCEABILITY; SUCCESSORS AND ASSIGNS. 
THIS AGREEMENT WILL BE BINDING UPON AND INURE TO THE BENEFIT OF AND IS
ENFORCEABLE BY THE RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS OF THE PARTIES
HERETO.  THIS AGREEMENT MAY NOT BE ASSIGNED BY THE BORROWER HERETO WITHOUT THE
PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT AND EACH LENDER.  ANY ASSIGNMENT
OR ATTEMPTED ASSIGNMENT IN CONTRAVENTION OF THIS SECTION 10.4 WILL BE VOID AB
INITIO AND WILL NOT RELIEVE THE ASSIGNING PARTY OF ANY OBLIGATION UNDER THIS
AGREEMENT.

 

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(B)                                 ASSIGNMENTS.  EACH LENDER MAY ASSIGN (EACH,
AN “ASSIGNMENT”) TO ONE OR MORE ELIGIBLE ASSIGNEES (EACH, AN “ASSIGNEE”) ALL OR
A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A
PORTION OF SUCH LENDER’S TERM LOANS AND NOTES, AS THE CASE MAY BE).  ASSIGNMENT
SHALL BE SUBJECT TO THE FOLLOWING:

 

(I)                                     ASSIGNMENTS SHALL BE MADE WITH THE PRIOR
WRITTEN CONSENT (NOT TO BE UNREASONABLY WITHHELD OR DELAYED) OF ADMINISTRATIVE
AGENT, PROVIDED THAT NO CONSENT OF ADMINISTRATIVE AGENT SHALL BE REQUIRED FOR AN
ASSIGNMENT TO AN ASSIGNEE THAT IS A LENDER OR AN AFFILIATE OF A LENDER OR AN
APPROVED FUND;

 

(II)                                  EXCEPT IN THE CASE OF AN ASSIGNMENT TO A
LENDER OR AN AFFILIATE OF A LENDER OR TO AN APPROVED FUND, THE AMOUNT OF THE
TERM LOAN OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT (DETERMINED AS
OF THE DATE THE ASSIGNMENT AGREEMENT WITH RESPECT TO SUCH ASSIGNMENT IS
DELIVERED TO ADMINISTRATIVE AGENT) SHALL NOT BE LESS THAN $1,000,000 OR AN
ASSIGNMENT OF THE ENTIRE REMAINING AMOUNT OF THE ASSIGNING LENDER’S TERM LOAN
(IF LESS THAN $1,000,000) UNLESS ADMINISTRATIVE AGENT OTHERWISE CONSENTS;

 

(III)                               THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE
AND DELIVER TO ADMINISTRATIVE AGENT AN ASSIGNMENT AGREEMENT, IN THE FORM OF
EXHIBIT 10.4(B) (EACH, AN “ASSIGNMENT AGREEMENT”); AND

 

(IV)                              UPON ITS RECEIPT OF A DULY EXECUTED AND
COMPLETED ASSIGNMENT AGREEMENT, ADMINISTRATIVE AGENT SHALL RECORD THE
INFORMATION CONTAINED IN SUCH ASSIGNMENT AGREEMENT IN THE REGISTER, SHALL GIVE
PROMPT NOTICE THEREOF TO THE BORROWER AND SHALL MAINTAIN A COPY OF SUCH
ASSIGNMENT AGREEMENT IN ITS PRINCIPAL OFFICE.  FROM AND AFTER THE EFFECTIVE DATE
OF AN ASSIGNMENT, THE ASSIGNEE SHALL BE A PARTY HERETO AND, TO THE EXTENT OF THE
INTEREST ASSIGNED PURSUANT TO THE ASSIGNMENT, HAVE THE RIGHTS AND OBLIGATIONS OF
A “LENDER” UNDER THIS AGREEMENT, AND THE ASSIGNING LENDER SHALL, TO THE EXTENT
OF THE INTEREST ASSIGNED, BE RELEASED FROM ITS OBLIGATIONS UNDER THIS
AGREEMENT.  THE BORROWER HEREBY CONSENTS TO THE DISCLOSURE OF ANY INFORMATION
OBTAINED BY LENDER IN CONNECTION WITH THIS AGREEMENT TO ANY PERSON TO WHICH SUCH
LENDER SELLS, OR PROPOSES TO SELL, ITS TERM LOANS OR NOTES.

 

(C)                                  PARTICIPATIONS.  EACH LENDER MAY SELL
PARTICIPATIONS TO ONE OR MORE PERSONS IN ALL OR A PORTION OF SUCH LENDER’S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF SUCH
LENDER’S TERM LOANS AND NOTES, AS THE CASE MAY BE); PROVIDED THAT (I) SUCH
LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED, (II) SUCH
LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE BORROWER FOR THE PERFORMANCE OF
SUCH OBLIGATIONS, AND (III) THE BORROWER AND ADMINISTRATIVE AGENT 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 SUCH LENDER SELLS A PARTICIPATION SHALL PROVIDE THAT SUCH
LENDER SHALL RETAIN THE SOLE RIGHT TO ENFORCE THE LOAN DOCUMENTS AND TO APPROVE
ANY AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THE LOAN DOCUMENTS;
PROVIDED THAT SUCH AGREEMENT OR INSTRUMENT MAY PROVIDE THAT SUCH LENDER WILL
NOT, WITHOUT THE CONSENT OF THE PARTICIPANT, AGREE TO ANY AMENDMENT,
MODIFICATION OR WAIVER TO (I) EXTEND THE FINAL SCHEDULED MATURITY OF ANY TERM
LOAN OR NOTE IN WHICH SUCH PARTICIPANT IS PARTICIPATING, OR REDUCE THE RATE OR
EXTEND THE TIME OF PAYMENT OF INTEREST OR FEES THEREON (EXCEPT IN CONNECTION
WITH A WAIVER OF APPLICABILITY OF ANY

 

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POST-DEFAULT INCREASE IN INTEREST RATES) OR REDUCE THE PRINCIPAL AMOUNT THEREOF,
OR INCREASE THE AMOUNT OF THE PARTICIPANT’S PARTICIPATION OVER THE AMOUNT
THEREOF THEN IN EFFECT, (II) CONSENT TO THE ASSIGNMENT OR TRANSFER BY ANY CREDIT
PARTY OF ANY OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT OR (III) RELEASE
ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL UNDER THE SECURITY DOCUMENTATION OR
ALL OR SUBSTANTIALLY ALL OF THE GUARANTORS FROM THE GUARANTY (IN EACH CASE,
EXCEPT AS EXPRESSLY PROVIDED IN THE LOAN DOCUMENTS) SUPPORTING THE TERM LOANS
HEREUNDER.  THE BORROWER AGREES THAT EACH PARTICIPANT ALSO SHALL BE ENTITLED TO
THE BENEFITS OF SECTION 7.1, 7.2 AND 7.5 TO THE SAME EXTENT AS IF IT WERE A
LENDER AND HAD ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO CLAUSE (B) OF
THIS SECTION; PROVIDED THAT (I) A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE
ANY GREATER PAYMENT UNDER SECTION 7.1 OR 7.2 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 AND (II) A PARTICIPANT THAT WOULD BE A
FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE ENTITLED TO THE BENEFITS OF
SECTION 7.2 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 7.2 AS THROUGH IT WERE A LENDER. TO THE EXTENT PERMITTED BY
LAW, EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF SECTION 7.4 AS THOUGH
IT WERE A LENDER, PROVIDED SUCH PARTICIPANT AGREES TO BE SUBJECT TO SECTION 2.14
AS THROUGH IT WERE A LENDER.  THE BORROWER HEREBY CONSENTS TO THE DISCLOSURE OF
ANY INFORMATION OBTAINED BY A LENDER IN CONNECTION WITH THIS AGREEMENT AND/OR
ANY OTHER LOAN DOCUMENT TO ANY PERSON TO WHICH SUCH LENDER PARTICIPATES, OR
PROPOSES TO PARTICIPATE, ITS TERM LOANS OR NOTES.

 

(D)                                 IN THE EVENT ANY LENDER IS FOUND UNSUITABLE
AS A LENDER UNDER THE CREDIT AGREEMENT BY ANY GAMING AUTHORITY (“UNSUITABLE
LENDER”), THEN TO THE EXTENT PERMITTED BY APPLICABLE LAWS: (A) THE BORROWER
SHALL HAVE THE RIGHT TO MAKE A VOLUNTARY PREPAYMENT OF THE TERM LOANS IN THE
AMOUNT NECESSARY TO REDUCE THE AGGREGATE TERM LOAN COMMITMENT BY THE AMOUNT OF
THE TERM LOANS HELD BY THE UNSUITABLE LENDER, AND ANY PAYMENTS REQUIRED IN
CONNECTION WITH SUCH PREPAYMENT SHALL BE MADE TO THE UNSUITABLE LENDER AND NOT
ON A PRO RATA BASIS TO ALL LENDERS, (TOGETHER WITH THE APPLICABLE PREPAYMENT
PREMIUM BUT OTHERWISE, WITHOUT ANY ADDITIONAL PENALTIES, INCLUDING ANY LIBOR
BREAKAGE COSTS) UNTIL A REPLACEMENT LENDER, IF ANY, COMMITS TO ACQUIRE THE TERM
LOANS OF THE UNSUITABLE LENDER, AT WHICH TIME THE AGGREGATE TERM LOAN COMMITMENT
SHALL BE INCREASED BY THE AMOUNT OF SUCH PREPAYMENT, AND (B) UPON FULL PAYMENT
OF ALL OUTSTANDING AMOUNTS OF PRINCIPAL AND INTEREST OWING IT, SUCH UNSUITABLE
LENDER SHALL EXECUTE SUCH DOCUMENTS AS MAY BE REQUIRED BY ADMINISTRATIVE AGENT,
THE BORROWER OR ANY APPLICABLE GAMING AUTHORITY TO EVIDENCE THAT SUCH UNSUITABLE
LENDER NO LONGER RETAINS ANY INTEREST UNDER THE CREDIT DOCUMENTS (OTHER THAN
PROVISIONS THAT EXPRESSLY SURVIVE THE REPAYMENT IN FULL OF THE OBLIGATIONS).  NO
CREDIT PARTY SHALL BE REQUIRED TO PAY OR REIMBURSE ANY UNSUITABLE LENDER IN
APPLYING FOR A LICENSE, QUALIFICATION OR A FINDING OF SUITABILITY.

 

(E)                                  NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY CONTAINED HEREIN, ANY LENDER MAY ANY TIME PLEDGE ITS TERM LOANS AND
SUCH LENDER’S RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO A
FEDERAL RESERVE BANK AND, IN THE CASE OF ANY LENDER THAT IS A FUND, TO ITS
TRUSTEE FOR THE BENEFIT OF ITS INVESTORS; PROVIDED, THAT NO SUCH PLEDGE TO A
FEDERAL RESERVE BANK (OR IN THE CASE OF ANY LENDER THAT IS A FUND, TO ITS
TRUSTEE FOR THE BENEFIT OF ITS INVESTORS) SHALL RELEASE SUCH LENDER FROM SUCH
LENDER’S OBLIGATIONS HEREUNDER OR UNDER ANY OTHER CREDIT  DOCUMENT.

 

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SECTION 10.5.                         LENDERS’ OBLIGATIONS SEVERAL; INDEPENDENT
NATURE OF LENDERS’ RIGHTS.  THE OBLIGATION OF EACH LENDER HEREUNDER IS SEVERAL
AND NOT JOINT AND NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER SHALL BE
RESPONSIBLE FOR THE OBLIGATION OF ANY OTHER LENDER HEREUNDER.  NOTHING CONTAINED
IN ANY LOAN DOCUMENT AND NO ACTION TAKEN BY ADMINISTRATIVE AGENT OR ANY LENDER
PURSUANT HERETO OR THERETO SHALL BE DEEMED TO CONSTITUTE LENDERS TO BE A
PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR ANY OTHER KIND OF ENTITY.  THE
AMOUNTS PAYABLE AT ANY TIME HEREUNDER TO EACH LENDER SHALL BE A SEPARATE AND
INDEPENDENT DEBT, AND, PROVIDED ADMINISTRATIVE AGENT FAILS OR REFUSES TO
EXERCISE ANY INDEPENDENT DEBT, AND, PROVIDED ADMINISTRATIVE AGENT FAILS OR
REFUSES TO EXERCISE ANY REMEDIES AGAINST THE BORROWER AFTER RECEIVING THE
DIRECTION OF THE LENDERS, EACH LENDER SHALL BE ENTITLED TO PROTECT AND ENFORCE
ITS RIGHTS ARISING OUT OF THIS AGREEMENT AND IT SHALL NOT BE NECESSARY FOR ANY
OTHER LENDER TO BE JOINED AS AN ADDITIONAL PARTY IN ANY PROCEEDING FOR SUCH
PURPOSE.

 

SECTION 10.6.                         INTEGRATION.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS CONTAIN AND CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR NEGOTIATIONS,
AGREEMENTS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, OF THE PARTIES HERETO.

 

SECTION 10.7.                         NO WAIVER; REMEDIES.  NO FAILURE OR DELAY
BY ANY PARTY IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE UNDER THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS WILL OPERATE AS A WAIVER OF SUCH RIGHT, POWER OR
PRIVILEGE.  A SINGLE OR PARTIAL EXERCISE OF ANY RIGHT, POWER OR PRIVILEGE WILL
NOT PRECLUDE ANY OTHER OR FURTHER EXERCISE OF THE RIGHT, POWER OR PRIVILEGE OR
THE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE.  THE RIGHTS AND REMEDIES
PROVIDED IN THE LOAN DOCUMENTS WILL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY
RIGHTS OR REMEDIES PROVIDED BY LAW.

 

SECTION 10.8.                         SUBMISSION TO JURISDICTION.  EACH CREDIT
PARTY, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY (A) AGREES THAT ANY ACTION
WITH RESPECT TO ANY LOAN DOCUMENT MAY BE BROUGHT ONLY IN THE NEW YORK STATE
COURTS SITTING IN NEW YORK COUNTY OR FEDERAL COURTS OF THE UNITED STATES OF
AMERICA SITTING IN THE SOUTHERN DISTRICT OF NEW YORK AND NEW YORK COUNTY,
(B) ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF SUCH COURTS, (C) IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION IN THOSE JURISDICTIONS, AND
(D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE COURTS REFERRED
TO ABOVE IN ANY ACTION BY THE MAILING OF COPIES OF THE PROCESS TO THE PARTIES
HERETO AS PROVIDED IN SECTION 10.2.  SERVICE EFFECTED AS PROVIDED IN THIS MANNER
WILL BECOME EFFECTIVE TEN (10) CALENDAR DAYS AFTER THE MAILING OF THE PROCESS.

 

SECTION 10.9.                         EXECUTION IN COUNTERPARTS.  THIS AGREEMENT
MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS AND BY DIFFERENT PARTIES ON
SEPARATE COUNTERPARTS, EACH OF WHICH, WHEN EXECUTED AND DELIVERED, SHALL BE
DEEMED TO BE AN ORIGINAL, AND ALL OF WHICH, WHEN TAKEN TOGETHER, SHALL
CONSTITUTE BUT ONE AND THE SAME AGREEMENT.  DELIVERY OF AN EXECUTED COUNTERPART
OF THIS AGREEMENT BY FACSIMILE OR A SCANNED COPY BY ELECTRONIC MAIL SHALL BE
EQUALLY AS EFFECTIVE AS DELIVERY OF AN ORIGINAL EXECUTED COUNTERPART OF THIS
AGREEMENT.

 

SECTION 10.10.                  GOVERNING LAW.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AND ALL CLAIMS, DISPUTES AND MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO, WILL BE

 

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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN THAT
STATE, WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS.

 

SECTION 10.11.                  WAIVER OF JURY.  THE PARTIES HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION,
OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED
ON CONTRACT, TORT, OR ANY OTHER THEORY).  EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, ADMINISTRATIVE AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 10.12.                  SEVERABILITY.  IF ANY TERM OR OTHER PROVISION OF
THIS AGREEMENT IS INVALID, ILLEGAL OR INCAPABLE OF BEING ENFORCED BY ANY RULE OF
LAW, OR PUBLIC POLICY, ALL OTHER CONDITIONS AND PROVISIONS OF THIS AGREEMENT
WILL NEVERTHELESS REMAIN IN FULL FORCE AND EFFECT SO LONG AS THE ECONOMIC OR
LEGAL SUBSTANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY IS NOT AFFECTED IN ANY
MANNER ADVERSE TO ANY PARTY.  UPON SUCH DETERMINATION THAT ANY TERM OR OTHER
PROVISION IS INVALID, ILLEGAL OR INCAPABLE OF BEING ENFORCED, THE PARTIES HERETO
WILL NEGOTIATE IN GOOD FAITH TO MODIFY THIS AGREEMENT SO AS TO EFFECT THE
ORIGINAL INTENT OF THE PARTIES AS CLOSELY AS POSSIBLE IN AN ACCEPTABLE MANNER TO
THE END THAT THE TRANSACTIONS CONTEMPLATED HEREBY ARE FULFILLED TO THE EXTENT
POSSIBLE.

 

SECTION 10.13.                  SURVIVAL.  ALL REPRESENTATIONS, WARRANTIES,
COVENANTS, AGREEMENTS, AND CONDITIONS CONTAINED IN OR MADE PURSUANT TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL SURVIVE (A) THE MAKING OF THE TERM
LOANS AND THE PAYMENT OF THE OBLIGATIONS AND (B) THE PERFORMANCE, OBSERVANCE AND
COMPLIANCE WITH THE COVENANTS, TERMS AND CONDITIONS, EXPRESS OR IMPLIED, OF ALL
LOAN DOCUMENTS, UNTIL THE DUE AND PUNCTUAL (I) INDEFEASIBLE PAYMENT OF THE
OBLIGATIONS AND (II) PERFORMANCE, OBSERVANCE AND COMPLIANCE WITH THE COVENANTS,
TERMS AND CONDITIONS, EXPRESS OR IMPLIED, OF THIS AGREEMENT AND ALL OF THE OTHER
LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT THE PROVISIONS OF SECTION 5.16,
SECTION 7.1, SECTION 7.2, SECTION 7.3, SECTION 9.4, SECTION 9.6 AND SECTION 9.7
SHALL SURVIVE (I) INDEFEASIBLE PAYMENT OF THE OBLIGATIONS AND (II) PERFORMANCE,
OBSERVANCE AND COMPLIANCE WITH THE COVENANTS, TERMS AND CONDITIONS, EXPRESS OR
IMPLIED, OF THIS AGREEMENT AND ALL OF THE OTHER LOAN DOCUMENTS.

 

SECTION 10.14.                  MAXIMUM LAWFUL INTEREST.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL THE AMOUNT OF
INTEREST AND OTHER CHARGES FOR THE USE OF MONEY PAYABLE UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT EXCEED THE MAXIMUM AMOUNTS PERMISSIBLE UNDER ANY LAW
THAT A COURT OF COMPETENT JURISDICTION SHALL, IN A FINAL DETERMINATION, DEEM
APPLICABLE.  THE BORROWER AND THE LENDERS, IN EXECUTING AND DELIVERING THIS
AGREEMENT, INTEND LEGALLY TO AGREE UPON THE RATE OR RATES OF INTEREST AND OTHER
CHARGES FOR THE USE OF MONEY AND MANNER OF PAYMENT STATED WITHIN IT; PROVIDED,
HOWEVER, THAT, ANYTHING CONTAINED HEREIN TO

 

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THE CONTRARY NOTWITHSTANDING, IF THE AMOUNT OF SUCH INTEREST AND OTHER CHARGES
FOR THE USE OF MONEY OR MANNER OF PAYMENT EXCEEDS THE MAXIMUM AMOUNT ALLOWABLE
UNDER APPLICABLE LAW, THEN, IPSO FACTO AS OF THE CLOSING DATE, THE BORROWER IS
AND SHALL BE LIABLE ONLY FOR THE PAYMENT OF SUCH MAXIMUM AS ALLOWED BY LAW, AND
PAYMENT RECEIVED FROM THE BORROWER IN EXCESS OF SUCH LEGAL MAXIMUM, WHENEVER
RECEIVED, SHALL BE APPLIED TO REDUCE THE PRINCIPAL BALANCE OF THE TERM LOANS TO
THE EXTENT OF SUCH EXCESS.

 

SECTION 10.15.                  INTERPRETATION.  AS USED IN THIS AGREEMENT,
REFERENCES TO THE SINGULAR WILL INCLUDE THE PLURAL AND VICE VERSA AND REFERENCES
TO THE MASCULINE GENDER WILL INCLUDE THE FEMININE AND NEUTER GENDERS AND VICE
VERSA, AS APPROPRIATE.  UNLESS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT
(A) THE WORDS “HEREOF”, “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT
WHEN USED IN THIS AGREEMENT WILL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO
ANY PARTICULAR PROVISION OF THIS AGREEMENT AND (B) ARTICLE, SECTION, SUBSECTION,
SCHEDULE AND EXHIBIT REFERENCES ARE REFERENCES WITH RESPECT TO THIS AGREEMENT
UNLESS OTHERWISE SPECIFIED.  UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERM
“INCLUDING” WILL MEAN “INCLUDING, WITHOUT LIMITATION.”  THE HEADINGS IN THIS
AGREEMENT AND IN THE SCHEDULES ARE INCLUDED FOR CONVENIENCE OF REFERENCE ONLY
AND WILL NOT AFFECT IN ANY WAY THE MEANING OR INTERPRETATION OF THIS AGREEMENT.

 

SECTION 10.16.                  AMBIGUITIES.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS WERE NEGOTIATED BETWEEN LEGAL COUNSEL FOR THE PARTIES AND ANY
AMBIGUITY IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL NOT BE CONSTRUED
AGAINST THE PARTY WHO DRAFTED THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENTS.

 

SECTION 10.17.                  FIRST LIEN OBLIGATIONS.  THE BORROWER AND EACH
OTHER CREDIT PARTY ACKNOWLEDGES AND AGREES THAT (A) THE OBLIGATIONS HEREUNDER
HAVE BEEN USED TO “REFINANCE” (AS SUCH TERM IS DEFINED IN THE INTERCREDITOR
AGREEMENT) ALL OUTSTANDING OBLIGATIONS UNDER THE EXISTING AGREEMENT, (B) THE
OBLIGATIONS SHALL CONSTITUTE “FIRST LIEN OBLIGATIONS” (AS DEFINED IN THE
INTERCREDITOR AGREEMENT) FOR ALL PURPOSES OF THE INTERCREDITOR AGREEMENT,
INCLUDING, WITHOUT LIMITATION, SECTION 6.1 THEREOF, (C) THIS AGREEMENT SHALL
CONSTITUTE A “CREDIT AGREEMENT” (AS DEFINED IN THE SENIOR SECURED NOTES
INDENTURE) FOR ALL PURPOSES OF THE SENIOR SECURED NOTES INDENTURE, (D) (I) THIS
AGREEMENT SHALL CONSTITUTE THE “FIRST LIEN CREDIT AGREEMENT”, (II) THE LOAN
DOCUMENTS SHALL CONSTITUTE THE “FIRST LIEN LOAN DOCUMENTS”, (III) THE “TERM
LOANS” SHALL CONSTITUTE “FIRST LIEN LOANS” AND (IV) THE SECURITY DOCUMENTATION
SHALL CONSTITUTE “FIRST LIEN SECURITY DOCUMENTS”, IN EACH CASE, FOR ALL PURPOSES
OF THE INTERCREDITOR AGREEMENT AND (E) THE OBLIGATIONS SHALL CONSTITUTE “SENIOR
DEBT” AND “DESIGNATED SENIOR DEBT” (AS EACH SUCH TERM IS DEFINED IN THE
SUBORDINATED NOTES INDENTURE) FOR ALL PURPOSES OF THE SUBORDINATED NOTES
INDENTURE.

 

SECTION 10.18.                  CONFIDENTIALITY.  ADMINISTRATIVE AGENT AND EACH
LENDER AGREES TO HOLD ANY NON-PUBLIC INFORMATION THAT IT MAY RECEIVE FROM THE
BORROWER OR ANY OTHER CREDIT PARTY PURSUANT TO THIS AGREEMENT (OR PURSUANT TO
ANY OTHER LOAN DOCUMENT) IN CONFIDENCE AND CONSISTENT WITH THEIR RESPECTIVE
POLICIES FOR HANDLING MATERIAL NON-PUBLIC INFORMATION, EXCEPT FOR DISCLOSURE:
(A) TO THE OTHER LENDERS; (B) TO LEGAL COUNSEL AND ACCOUNTANTS FOR THE BORROWER,
ANY OTHER CREDIT PARTY, ADMINISTRATIVE AGENT OR ANY LENDER; (C) TO THE OTHER
PROFESSIONAL ADVISORS TO THE BORROWER, ANY OTHER CREDIT PARTY, ADMINISTRATIVE
AGENT OR ANY LENDER, PROVIDED THAT THE RECIPIENT IS ADVISED OF AND AGREES TO BE
BOUND BY THE PROVISIONS OF THIS SECTION 10.18; (D) TO REGULATORY OFFICIALS
HAVING JURISDICTION OVER ADMINISTRATIVE AGENT OR THE APPLICABLE LENDER; (E)

 

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TO ANY GAMING AUTHORITY HAVING REGULATORY JURISDICTION OVER THE BORROWER OR ANY
OTHER CREDIT PARTY, PROVIDED THAT EACH OF ADMINISTRATIVE AGENT AND THE LENDERS
AGREES TO ENDEAVOR TO NOTIFY THE BORROWER OF ANY SUCH DISCLOSURE; (F) AS
REQUIRED BY LAW OR LEGAL PROCESS OR IN CONNECTION WITH ANY LEGAL PROCEEDING,
PROVIDED THAT SUCH DISCLOSING ADMINISTRATIVE AGENT OR LENDER USES REASONABLE
EFFORTS TO NOTIFY THE BORROWER PRIOR TO ANY SUCH DISCLOSURE; (G) TO ANY RATING
AGENCY WHEN REQUIRED BY IT, PROVIDED THAT, PRIOR TO ANY DISCLOSURE, SUCH RATING
AGENCY SHALL UNDERTAKE IN WRITING TO PRESERVE THE CONFIDENTIALITY OF ANY
CONFIDENTIAL INFORMATION RELATING TO THE CREDIT PARTIES RECEIVED BY IT FROM
ADMINISTRATIVE AGENT OR ANY LENDER; AND (H) TO ANOTHER FINANCIAL INSTITUTION IN
CONNECTION WITH A DISPOSITION OR PROPOSED DISPOSITION TO THAT FINANCIAL
INSTITUTION OF ALL OR PART OF THAT LENDER’S TERM LOANS HEREUNDER, WHETHER BY
ASSIGNMENT OR PARTICIPATION, PROVIDED THAT THE RECIPIENT IS ADVISED OF AND
AGREES TO BE BOUND BY THE PROVISIONS OF THIS SECTION 10.18.  FOR PURPOSES OF THE
FOREGOING, “NON-PUBLIC INFORMATION” SHALL MEAN ANY INFORMATION RESPECTING THE
BORROWER OR ANY OTHER CREDIT PARTY REASONABLY CONSIDERED BY THE BORROWER TO BE
MATERIAL AND NOT AVAILABLE TO THE PUBLIC AND WHICH HAS BEEN IDENTIFIED AS SUCH
BY THE APPLICABLE CREDIT PARTY, OTHER THAN (I) INFORMATION PREVIOUSLY FILED WITH
ANY GOVERNMENTAL AGENCY AND AVAILABLE TO THE PUBLIC, (II) INFORMATION WHICH IS
AVAILABLE TO THE GENERAL PUBLIC AT THE TIME OF USE OR DISCLOSURE,
(III) INFORMATION WHICH BECOMES AVAILABLE TO THE GENERAL PUBLIC, OTHER THAN BY
MANNER OF UNAUTHORIZED DISCLOSURE OR USE, OR (IV) INFORMATION PREVIOUSLY
PUBLISHED IN ANY PUBLIC MEDIUM FROM A SOURCE OTHER THAN, DIRECTLY OR INDIRECTLY,
ADMINISTRATIVE AGENT OR ANY LENDER.  NOTHING IN THIS SECTION SHALL BE CONSTRUED
TO CREATE OR GIVE RISE TO ANY FIDUCIARY DUTY ON THE PART OF ADMINISTRATIVE AGENT
OR THE LENDERS TO THE BORROWER OR ANY OTHER CREDIT PARTY.

 

SECTION 10.19.                  ADDITIONAL GAMING PROVISIONS.

 

(A)                                  NOTWITHSTANDING ANYTHING CONTAINED IN THIS
AGREEMENT OR IN THE SECURITY DOCUMENTATION TO THE CONTRARY RELATING TO
COLLATERAL LOCATED IN THE COMMONWEALTH OF PENNSYLVANIA, ADMINISTRATIVE AGENT
HEREBY CONFIRMS THAT IT DOES NOT AND WILL NOT HAVE OR OTHERWISE CLAIM A SECURITY
INTEREST IN, OR LIEN ON, MONIES AND OTHER FUNDS ON ACCOUNT FOR TAXES OWED TO THE
COMMONWEALTH OF PENNSYLVANIA UNDER CHAPTER 14 OF THE PENNSYLVANIA RACE HORSE
DEVELOPMENT AND GAMING ACT, 4 PA. CONS. STAT. ANN. § 1101 ET. SEQ.

 

(B)                                 THE LENDERS ACKNOWLEDGE THAT (I) THE PGCB
HAS THE AUTHORITY PURSUANT TO 58 PA. CODE § 441A.13 TO REVIEW AGREEMENTS
PERTAINING TO PIDI, (II) IF THE PGCB FINDS THAT AN AGREEMENT IS NOT IN THE
PUBLIC INTEREST OR IS INIMICAL TO THE INTEREST OF GAMING IN THE COMMONWEALTH OF
PENNSYLVANIA, THE PGCB MAY, BY ORDER, REQUIRE THE TERMINATION OF THE AGREEMENT
OR ASSOCIATION OF ANY PERSON ASSOCIATED THEREWITH, OR PURSUE ANY REMEDY OR
COMBINATION OF REMEDIES AUTHORIZED BY APPLICABLE LAW.  THE LENDERS FURTHER
ACKNOWLEDGE THAT THE BORROWER AND THE GUARANTORS MAY TERMINATE THIS AGREEMENT,
OR ANY RELATED LOAN DOCUMENT, IF THE PGCB ORDERS THE TERMINATION OF THIS
AGREEMENT OR ANY RELATED LOAN DOCUMENT PURSUANT TO 58 PA. CODE § 441A.13.  UPON
ANY SUCH TERMINATION AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING
AND ALL OBLIGATIONS (INCLUDING THE APPLICABLE PREPAYMENT PREMIUM) SHALL BE
IMMEDIATELY DUE AND PAYABLE.

 

NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT OR IN THE SECURITY
DOCUMENTATION TO THE CONTRARY, THE COLLATERAL SHALL NOT INCLUDE, AND NO SECURITY
INTEREST SHALL BE GRANTED WITH RESPECT TO, ANY GAMING LICENSE OR GAMING
EQUIPMENT IF AND TO THE EXTENT THAT A SECURITY INTEREST IN SUCH GAMING LICENSE
OR GAMING EQUIPMENT (I) IS PROHIBITED BY APPLICABLE LAW, RULE OR

 

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REGULATION OR (II) REQUIRES THE CONSENT OF ANY GOVERNMENTAL AUTHORITY OR GAMING
AUTHORITY (INCLUDING, BUT NOT LIMITED TO, THE WEST VIRGINIA LOTTERY COMMISSION) 
WHICH HAS NOT YET BEEN OBTAINED.

 

LENDERS ACKNOWLEDGE THAT (I) ANY LENDER THAT IS NOT A BANK OR OTHER LICENSED
LENDING INSTITUTION MUST BE APPROVED BY THE WEST VIRGINIA LOTTERY COMMISSION
PRIOR TO THE EXTENSION OF CREDIT AND (II) ALTHOUGH ADVANCE APPROVAL IS NOT
REQUIRED BY THE PGCB, THE PGCB RETAINS THE RIGHT, UPON A FINDING OF PROBABLE
CAUSE, TO INVESTIGATE THE SUITABILITY OF LENDERS; PROVIDED, THAT THE CREDIT
PARTIES ACKNOWLEDGE THAT AS OF THE CLOSING DATE, THE LENDERS PARTY HERETO HAVE
BEEN APPROVED BY THE WEST VIRGINIA LOTTERY COMMISSION.

 

[Remainder of page intentionally left blank; signatures on following pages.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

 

BORROWER:

 

 

 

MTR GAMING GROUP, INC.

 

 

 

 

 

 

 

By:

/s/ DAVID R. HUGHES

 

 

Name: David R. Hughes

 

 

Title: Corporate Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

GUARANTORS:

 

 

 

 

MOUNTAINEER PARK, INC.

 

 

 

 

 

 

 

By:

/s/ JOHN W. BITTNER, JR.

 

 

Name: John W. Bittner, Jr.

 

 

Title: Treasurer

 

 

 

 

 

 

 

PRESQUE ISLE DOWNS, INC.

 

 

 

 

 

 

 

By:

/s/ JOHN W. BITTNER, JR.

 

 

Name: John W. Bittner, Jr.

 

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

SCIOTO DOWNS, INC.

 

 

 

 

 

 

 

By:

/s/ JOHN W. BITTNER, JR.

 

 

Name: John W. Bittner, Jr.

 

 

Title: Chief Financial Officer

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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

 

 

ADMINISTRATIVE AGENT:

 

 

 

ALADDIN CREDIT ADVISORS, L.P.

 

 

 

 

By:

ACA Holdings LLC, its General Partner

 

 

 

 

 

 

 

By:

/s/ LUKE GOSSELIN

 

 

Name: Luke Gosselin

 

 

Title: Managing Member

 

 

 

 

 

 

 

LENDERS:

 

 

 

 

ALADDIN CREDIT PARTNERS I, L.P.

 

 

 

 

By:

 Aladdin Credit Partners, LLC, its General Partner

 

 

 

 

 

 

 

By:

/s/ LUKE GOSSELIN

 

 

Name: Luke Gosselin

 

 

Title: Managing Member

 

 

 

 

 

 

 

ALADDIN CREDIT INTERMEDIATE FUND LLC

 

 

 

 

By:

Aladdin Credit Offshore Fund I, L.P., its Managing Member

 

 

 

 

By:

Aladdin Credit Advisors, LLC, its General Partner

 

 

 

 

 

 

 

By:

/s/ LUKE GOSSELIN

 

 

Name: Luke Gosselin

 

 

Title: Managing Member

 

 

 

 

 

 

 

MC CREDIT PRODUCTS DIP SMA, L.P.

 

 

 

 

By:

 Aladdin Credit Partners, LLC, its General Partner

 

 

 

 

 

 

 

By:

/s/ LUKE GOSSELIN

 

 

Name: Luke Gosselin

 

 

Title: Managing Member

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

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SCHEDULE 2.1

 

TERM LOAN COMMITMENTS

 

Lender

 

Term Loan Commitments

 

Aladdin Credit Partners I, L.P.

 

$

264,000

 

Aladdin Credit Intermediate Fund LLC

 

$

17,988,000

 

MC Credit Products DIP SMA, L.P.

 

$

1,748,000

 

Total

 

$

20,000,000

 

 

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