Exhibit 10.1

 

AMENDMENT NO. 5 AND SECOND FORBEARANCE

AND STANDSTILL AGREEMENT

 

THIS AMENDMENT NO. 5 AND SECOND FORBEARANCE AND STANDSTILL AGREEMENT (this
“Agreement”) is made and entered into as of the [  ] day of November, 2008 by
and among each lender executing a counterpart hereof, WILMINGTON TRUST COMPANY,
as administrative agent (the “Administrative Agent”), HERBST GAMING, INC. (the
“Borrower”) and the Subsidiaries of the Borrower executing a counterpart hereof
(the “Grantors” and, together with the Borrower, the “Loan Parties”).

 

Statement of Purpose

 

WHEREAS, reference is made to the Second Amended and Restated Credit Agreement,
dated as of January 3, 2007, among the Borrower, the lenders party thereto (the
“Lenders”), certain other parties and the Administrative Agent (as amended by
Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of
August 14, 2007, Amendment No. 2 to Second Amended and Restated Credit
Agreement, dated as of December 14, 2007, Omnibus Amendment No. 3 and
Appointment and Acceptance, dated as of April 24, 2008, and Amendment No. 4 and
Forbearance and Standstill Agreement, dated as of May 15, 2008 (as amended by
Amendment to Amendment No. 4 and Forbearance and Standstill Agreement dated as
of September 30, 2008), and as further amended, supplemented and otherwise
modified from time to time, the “Credit Agreement”; capitalized terms used but
not defined herein (including in Schedule A hereto) being used herein as therein
defined);

 

WHEREAS, each Grantor has guaranteed the Obligations of the Borrower under the
Credit Agreement;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders amend the Credit Agreement in certain respects and forbear from
exercising certain rights and remedies under the Credit Agreement and the other
Loan Documents provisionally through the Forbearance Maturity Date (as defined
below) solely in respect of the events set forth in numbers 1 through and
including 9 on Schedule A hereto (the “Current Defaults” and, together with the
events described in number 10 on Schedule A hereto, the “Specified Defaults”);
and

 

WHEREAS, the Administrative Agent and the Lenders are willing to amend the
Credit Agreement in certain respects and forbear from exercising certain rights
and remedies under the Credit Agreement and the other Loan Documents
provisionally only through the Forbearance Maturity Date regarding the Specified
Defaults, subject to the express terms and provisions of this Agreement.

 

Agreement

 

NOW, THEREFORE in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1.             Acknowledgments by Loan Parties. To induce the Administrative
Agent and the Lenders to execute this Agreement, each Loan Party hereby
acknowledges, stipulates, represents, warrants and agrees as follows:

 

(a)           Each of the Current Defaults (including without limitation the
Event of Default under Section 8.01(a) of the Credit Agreement solely as a
result of the failure of the Borrower to pay the outstanding principal amount of
the Loans on November 6, 2008 as required pursuant to the Notice of Acceleration
delivered to the Borrower on such date) constitutes an Event of Default that has
occurred, remains uncured, has not been waived and is continuing as of the date

 

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hereof and cannot be cured. Except for the Current Defaults, no other Defaults
or Events of Default have occurred and are continuing as of the date hereof.
Except as expressly set forth in this Agreement, the agreements of the
Administrative Agent and the Lenders hereunder to forbear provisionally in the
exercise of their respective rights and remedies under the Credit Agreement and
the other Loan Documents in respect of the Specified Defaults during the
Forbearance Period (as defined below) does not in any manner whatsoever limit
any right of any of the Administrative Agent and the Lenders to insist upon
strict compliance by the Loan Parties with this Agreement or any Loan Document
during the Forbearance Period.

 

(b)           To the knowledge of the Loan Parties, immediately prior to
executing this Agreement nothing has occurred that constitutes or otherwise can
be construed or interpreted as a waiver of, or otherwise to limit in any
respect, any rights or remedies the Lenders, the Administrative Agent or any of
them have or may have arising as the result of any Event of Default (including
any Specified Default) that has occurred or that may occur under the Credit
Agreement, the other Loan Documents or applicable law. The Administrative
Agent’s and the Lenders’ actions in entering into this Agreement are without
prejudice to the rights of any of the Administrative Agent and the Lenders to
pursue any and all remedies under the Loan Documents pursuant to applicable law
or in equity available to it in its sole discretion upon the termination
(whether upon expiration thereof, upon acceleration or otherwise) of this
Agreement.

 

(c)           The Revolving Loans outstanding as of the date hereof are in an
amount equal to $98,859,000. The Swing Line Loans outstanding as of the date
hereof are in an amount equal to $0. The Term Loans outstanding as of the date
hereof are in an amount equal to $747,962,500. The L/C Obligations of the
Borrower outstanding as of the date hereof are in an amount equal to $1,141,000.
The foregoing amounts do not include interest, fees and expenses and other
amounts that are chargeable or otherwise reimbursable under the Loan Documents.

 

(d)           All of the assets pledged, assigned, conveyed, mortgaged,
hypothecated or transferred to the Administrative Agent for the benefit of the
Lenders pursuant to the Collateral Documents (including without limitation the
Collateral (including without limitation all proceeds thereof)) are (and shall
continue to be) subject to valid and enforceable liens and security interests of
the Administrative Agent for the benefit of the Lenders and the other Secured
Parties (as defined in the Security Agreement (as defined in the Credit
Agreement)), as collateral security for all of the Obligations, subject to no
Liens other than Liens permitted by Section 7.01 of the Credit Agreement. Each
of the Loan Parties hereby reaffirms and ratifies its prior conveyance to the
Administrative Agent for the benefit of the Lenders and the other Secured
Parties of a continuing security interest in and lien on the Collateral.

 

(e)           The obligations of the Loan Parties under this Agreement of any
nature whatsoever, whether now existing or hereafter arising, are hereby deemed
to be “Obligations” for all purposes of the Credit Agreement and the other Loan
Documents.

 

(f)            The Obligations of the Loan Parties under this Agreement, the
Credit Agreement and the other Loan Documents constitute “Senior Debt” (as such
term is defined in the Credit Agreement).

 

(g)           Except as expressly modified by this Agreement or as required by
Gaming Laws in Nevada, Missouri and Iowa, all terms and provisions of the Credit
Agreement and the other Loan Documents are valid and enforceable and remain in
full force and effect according to their respective terms. Each Grantor, as
debtor, grantor, pledgor, guarantor, assignor or in other similar capacity in
which such party grants liens or security interests in its properties or
otherwise acts as an accommodation party or guarantor, as the case may be, under
the Loan Documents, hereto hereby (i) agrees that the Credit Agreement as
amended hereby is the Credit Agreement under and for all purposes of the
Guaranties and the Collateral Documents and (ii) confirms that

 

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the obligations of the Loan Parties under the Loan Documents as modified hereby
are entitled to the benefits of the guarantees set forth in the Guaranties and
constitute “Guaranteed Obligations” (as defined in each of the Guaranties).

 

(h)           The Lenders’ entry into, and covenants to perform in accordance
with, this Agreement and the Lenders’ consummation of the transactions
contemplated hereby constitute “new value” and “reasonably equivalent value”, as
those terms are used in Section 547 and 548 of Title 11 of the United States
Code (the “Bankruptcy Code”), received by the Loan Parties as of the closing of
this Agreement in contemporaneous exchange for the Loan Parties’ entry into, and
covenants to perform in accordance with, this Agreement and the documents
executed in connection with this Agreement, and the Loan Parties’ consummation
of the transactions contemplated hereby and thereby.

 

(i)            The bank accounts listed in the April 15, 2008 schedule
previously disclosed by the Borrower to the Administrative Agent and any new
accounts established since May 15, 2008 in compliance with the immediately
following sentence (the “Existing Bank Accounts”) are the only bank accounts
held or owned by the Loan Parties as of the date hereof. Each Loan Party
covenants (i) to not establish any new bank account other than those set forth
on said schedule, unless such bank account is established and located in the
United States and either pursuant to applicable law or regulations or in the
ordinary course of business (such new bank accounts, together with the Existing
Bank Accounts, being herein called the “Permitted Bank Accounts”), provided that
the Borrower shall give written notice to the Administrative Agent of any
account so established within five Business Days of the occurrence thereof, and
(ii) to not use amounts held in the Permitted Bank Accounts for any purpose
other than (a) ordinary course funding of the operations of the Borrower and the
other Loan Parties, including without limitation capital expenditures made in
the ordinary course of business, in each case only as permitted by the Loan
Documents, (b) payments of interest, fees and expenses under the Credit
Agreement and (c) payment of fees and expenses of professionals in connection
with any restructuring or reorganization efforts of the Borrower and the other
Loan Parties.

 

2.             Provisional Forbearance and Limited Deferral. Subject to the
satisfaction of the conditions precedent specified in Section 5 below, but
effective as of the date hereof, the Administrative Agent and the Lenders agree,
except as set forth in this Agreement, to forbear provisionally in the exercise
of their respective rights and remedies under the Credit Agreement and the other
Loan Documents in respect of the Specified Defaults until the date (the
“Forbearance Maturity Date”; the period from the date the conditions precedent
specified in Section 5 below are satisfied until the Forbearance Maturity Date
being herein called the “Forbearance Period”) which is the earliest to occur of:

 

(a)           December 3, 2008 or, if the Administrative Agent shall have
received counterparts of a Restructuring Agreement (the “Restructuring
Agreement”) summarizing the terms of a proposed restructuring of the Obligations
and evidencing the parties’ intent to pursue and support the implementation of
such restructuring, executed and delivered by the Borrower, each other Loan
Party, the Lenders comprising Requisite Lenders and Edward J. Herbst, Timothy P.
Herbst, Troy D. Herbst, Jerry E. Herbst, Terrible Herbst, Inc. and any other
entities affiliated with Jerry E. Herbst and/or Terrible Herbst, Inc. that have
commercial arrangements with the Borrower or its Subsidiaries (collectively, the
“Herbst Parties”) on or before December 3, 2008, February 2, 2009 (each such
date, the “Scheduled Forbearance Termination Date”);

 

(b)           the occurrence of any Event of Default other than the Specified
Defaults; and

 

(c)           the date on which any breach of any of the conditions or
agreements provided in this Agreement shall occur, or the date on which any
breach by any Loan Party or any Herbst Party of any of the conditions or
agreements provided in the Restructuring Agreement shall occur (it being agreed
that the breach of any such condition or agreement shall constitute an immediate

 

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Event of Default under the Credit Agreement without the requirement of any
demand, presentment, protest or notice of any kind to any Loan Party (all of
which each Loan Party waives));

 

provided that (i) the Revolving Lenders shall have no obligation to make any
further Revolving Loans or other extensions of credit to any Loan Party, other
than in respect of Letters of Credit pursuant to Section 2.05(c) of the Credit
Agreement, (ii) each Loan Party shall comply with all limitations, restrictions,
covenants and prohibitions that would otherwise be effective or applicable under
the Loan Documents, (iii) nothing herein shall restrict, impair or otherwise
affect any of the Administrative Agent’s or the Lenders’ rights and remedies
under any agreement containing subordination provisions in favor of any of the
Administrative Agent or the Lenders (including without limitation the right to
give any payment blockage notices to any of the trustees in respect of the
Subordinated Debt (including without limitation any payment blockage notice
based upon any Specified Default)) and (iv) nothing herein shall be construed as
a waiver by the Administrative Agent or any Lender of any Specified Default.

 

Upon expiration of the Forbearance Period, the agreement of the Administrative
Agent and the Lenders hereunder to forbear provisionally in the exercise of
their respective rights and remedies under the Credit Agreement and the other
Loan Documents in respect of the Specified Defaults during the Forbearance
Period shall immediately terminate without the requirement of any demand,
presentment, protest or notice of any kind to any Loan Party (all of which each
Loan Party waives). Each of the Loan Parties agrees that any of the
Administrative Agent and the Lenders may at any time thereafter proceed to
exercise any and of their respective rights and remedies under the Loan
Documents or applicable law, including without limitation their respective
rights and remedies with respect to the Specified Defaults.

 

Any agreement by any of the Administrative Agent and the Lenders to extend the
Forbearance Period must be set forth in writing and signed by each of the
Administrative Agent and the Requisite Lenders. The Administrative Agent and the
Lenders are not obligated to extend the Forbearance Period and may decide to do
so (or not to do so) in their sole discretion. Each of the Loan Parties
acknowledges that each of the Administrative Agent and the Lenders has not made
any assurances concerning the extension of the Forbearance Period.

 

3.             Amendments to Credit Agreement. Subject to the satisfaction of
the conditions precedent specified in Section 5 below, but effective (except as
otherwise expressly provided in this Section 3) as of the date hereof, the
Credit Agreement shall be amended as follows:

 

(a)           References Generally. References in the Credit Agreement
(including references to the Credit Agreement as amended hereby) to “this
Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and
“hereof”) shall be deemed to be references to the Credit Agreement as amended
hereby.

 

(b)           Definition of “Loan Documents”. The definition of “Loan Documents”
in Section 1.01 of the Credit Agreement is hereby amended in its entirety to
read as follows:

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, each
Secured Swap Contract, the Lead Arranger Fee Letter, the Administrative Agent
Fee Letter, each Guaranty, each Collateral Document, Amendment No. 1 to the
Second Amended and Restated Credit Agreement dated as of August 14, 2007,
Amendment No. 2 to the Second Amended and Restated Credit Agreement dated as of
August 14, 2007, the Omnibus Amendment No. 3 and Appointment and Acceptance
dated as of April 24, 2008 among Bank of America, N.A., Wilmington Trust
Company, the Borrower, the Lenders parties thereto and the Subsidiaries of the
Borrower, Amendment No. 4 and Forbearance and Standstill Agreement dated as of
May 15, 2008 among the Borrower, the other Loan Parties, certain Lenders parties
thereto and the Administrative Agent, Amendment No. 5 and Second Forbearance and
Standstill Agreement dated as of

 

4

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November [  ], 2008 among the Borrower, the other Loan Parties, certain Lenders
parties thereto and the Administrative Agent, and any other amendment or
certificate executed and/or delivered pursuant to or in connection with this
Agreement.

 

4.             Further Agreements. Subject to the satisfaction of the conditions
precedent specified in Section 5 below, but effective as of the date hereof,
notwithstanding anything in the Credit Agreement or any other Loan Document to
the contrary and in addition to the terms and provisions thereof and without
affecting in any respect the acknowledgments in Section 1 above and the other
acknowledgments and agreements of the Loan Parties under this Agreement:

 

(a)           The parties hereto hereby agree as follows:

 

(i)            All accrued interest and fees under the Credit Agreement shall be
payable on the first Business Day of each calendar month (commencing December 1,
2008) and otherwise in accordance with the terms of the Credit Agreement.

 

(ii)           During the Forbearance Period, the Default Rate shall not apply
and interest in respect of the Loans shall accrue at the rates set forth in the
Credit Agreement without regard to Section 2.10(b) thereof.

 

(iii)          During the Forbearance Period, the Borrower shall be entitled to
convert Loans into Eurodollar Rate Loans and continue Loans as Eurodollar Rate
Loans in accordance with Section 2.04 of the Credit Agreement, so long as any
such Interest Period shall end on or before the Scheduled Forbearance
Termination Date then in effect.

 

(b)           The Loan Parties hereby agree as follows:

 

(i)            None of the Loan Parties shall make any payment (whether of
principal, interest, fees or any other amount, and whether or not scheduled),
nor fund, wholly or in part, any defeasance trust, on account of or in
connection with the Subordinated Debt, except for any payment made not in
violation of the terms of subordination governing such Subordinated Debt
(including without limitation any payment blockage notices delivered
thereunder).

 

(ii)           Without limiting the rights of the Administrative Agent and the
Lenders under Section 6.10 of the Credit Agreement, but subject to Section 10.07
of the Credit Agreement, the Loan Parties shall upon request give the
Administrative Agent and the Lenders and their advisors reasonably full and
timely access to the Loan Parties’ books, records, senior officers, directors,
senior level employees and any advisors hired by the Loan Parties, and shall
permit any of the foregoing Persons to review and copy all books and records
(including without limitation all books and records maintained in electronic
format) of each Loan Party.

 

(iii)          The Borrower shall pay, within 20 days following receipt of an
invoice thereof, all accrued fees and expenses of the Administrative Agent and
the Lenders incurred in connection with the Credit Agreement and the other Loan
Documents in accordance with the terms of the Credit Agreement and the other
Loan Documents. Nothing in this Agreement shall be construed or deemed to waive
or limit any obligation of the Borrower or any of the other Loan Parties to pay
fees and expenses (including without limitation legal fees) and expenses
incurred by the Administrative Agent or any Lender as provided in Section 10.04
of the Credit Agreement.

 

5.             Conditions. The agreements set forth in Sections 2, 3 and 4 above
shall become effective, as of the date hereof, upon satisfaction of the
following conditions:

 

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(a)           The Administrative Agent shall have received counterparts of this
Agreement, executed and delivered by the Borrower and each other Loan Party, the
Administrative Agent and the Requisite Lenders.

 

(b)           The Borrower shall have paid (i) the accrued interest and fees
under the Credit Agreement due on November 3, 2008, (ii) the accrued interest
(including without limitation default interest accruing at the Default Rate) and
fees under the Credit Agreement through the date immediately prior to the date
hereof, and (iii) all costs, expenses and fees (including without limitation of
legal counsel) as set forth in Section 10.04 of the Credit Agreement, in the
case of each of clause (ii) and (iii), as set forth on Schedule C hereto.

 

(c)           The representations and warranties contained in this Agreement
shall be true and correct and no Default or Event of Default (other than the
Current Defaults) shall have occurred and be continuing.

 

(d)           The Administrative Agent shall have received such other documents,
certificates and instruments as it or any Lender reasonably requests through the
date of this Agreement.

 

6.             Limited Effect of Agreement. Except as expressly provided in this
Agreement, the Credit Agreement and each other Loan Document shall continue to
be, and shall remain, in full force and effect. This Agreement shall not be
deemed or otherwise construed: (i) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document; (ii) to prejudice any other right or
rights that the Administrative Agent or any Lender, or any of them, may now have
or may have in the future under or in connection with the Credit Agreement or
any other Loan Document, as such documents may be amended, restated or otherwise
modified from time to time; or (iii) to be a commitment or any other undertaking
or expression of any willingness to engage in any further discussion with any
Loan Party or any other Person with respect to any waiver, amendment,
modification or any other change to the Credit Agreement or any other Loan
Document or any rights or remedies arising in favor of the Administrative Agent
and the Lenders, or any of them, under or with respect to any such documents.
Neither the requirements of good faith and fair dealing nor any other theory,
concept or argument shall require any Lender to impart upon any Loan Party any
further or greater benefits, to suffer any prejudice or impairment of any kind
whatsoever, or to tolerate any noncompliance with this Agreement and any other
Loan Document.

 

7.             Release. Each Loan Party, on behalf of itself, and any Person
claiming by, through or under such Loan Party (collectively, the “Loan Party
Group”) acknowledges that it has no claim, counterclaim, setoff, recoupment,
action or cause of action of any kind or nature whatsoever (“Claims”) against
all or any of the Administrative Agent or any of the Lenders or any of their
respective directors, officers, employees, agents, attorneys, financial
advisors, legal representatives, affiliates, shareholders, partners, successors
and assigns (the Administrative Agent or any of the Lenders and their respective
directors, officers, employees, agents, attorneys, financial advisors, legal
representatives, affiliates, shareholders, partners, successors and assigns are
jointly and severally referred to as the “Lender Group”), that directly or
indirectly arise out of or are based upon or in any manner connected with any
“Prior Event” (as defined below), and each Loan Party on behalf of itself and
all the other members of the Loan Party Group hereby releases each member of the
Lender Group from any liability whatsoever should any Claims nonetheless exist.
As used herein the term “Prior Event” means any transaction, event,
circumstances, action, failure to act or occurrence of any sort or type, whether
known or unknown, which occurred, existed, was taken, permitted or begun prior
to the execution of this Agreement and occurred, existed, was taken, permitted
or begun in accordance with, pursuant to or by virtue of any terms of the Credit
Agreement, this Agreement, any other Loan Document or any of the transactions
contemplated herein or therein or any oral or written agreement relating to any
of the foregoing, including without limitation any approval or acceptance given
or denied. This Section 7 shall survive the termination of this Agreement and
shall remain in full force and effect even if any of the conditions set forth in
Section 5 above are not satisfied.

 

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8.             Representations and Warranties. By its execution hereof, each of
the Loan Parties hereby certifies that each of the representations and
warranties set forth in the Credit Agreement (as amended hereby) and the other
Loan Documents in respect of such Loan Party is true and correct in all material
respects as of the date hereof as if fully set forth herein (other than as a
result of the occurrence of the Current Defaults and except to the extent such
representation or warranty is expressly stated to have been made as of a
specified date, in which case such representation or warranty shall be true and
correct in all material respects as of such specified date), except for those
representations and warranties listed on Schedule B hereto, and that as of the
date hereof no Default or Event of Default (other than the Current Defaults) has
occurred and is continuing.

 

9.             Reversal of Payments. To the extent any Loan Party makes a
payment or payments to the Administrative Agent or any Lender pursuant to this
Agreement or any other Loan Document that are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause (in each case, in whole or in part), then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative Agent
or such Lender, as the case may be.

 

10.           Governing Law; Counterparts; Electronic Execution; Misc. This
Agreement shall be governed, construed and interpreted in accordance with the
laws of the State of New York applicable to contracts made and to be performed
in such State and shall be subject to Section 10.16 of the Credit Agreement. The
terms of this Agreement may be waived, altered or amended only by an instrument
in writing duly executed by each Loan Party and the Administrative Agent (with
the consent of the Requisite Lenders). This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement. Delivery of an
executed counterpart of this Agreement by electronic transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement.
Except as provided in this Agreement, the Credit Agreement shall remain
unchanged and in full force and effect.

 

11.           Survival of Obligations. All covenants, agreements and other
obligations of the Loan Parties under this Agreement which do not terminate on
the Forbearance Maturity Date pursuant to their express terms shall survive the
occurrence of the Forbearance Maturity Date and shall thereafter be enforceable
against the Loan Parties according to their terms.

 

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

 

 

 

WILMINGTON TRUST COMPANY,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ James A. Hanley

 

 

Name: James A. Hanley

 

 

Title: Vice President

 

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HERBST GAMING, INC.

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

FLAMINGO PARADISE GAMING, LLC

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Manager

 

 

 

 

 

 

 

MARKET GAMING, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

CARDIVAN COMPANY

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

CORRAL COIN, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

CORRAL COUNTRY COIN, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

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E-T-T ENTERPRISES L.L.C.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Manager

 

 

 

 

 

 

 

E-T-T, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

HGI – ST. JO, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

HGI – LAKESIDE, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

HGI – MARK TWAIN, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

THE SANDS REGENT

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

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ZANTE INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

LAST CHANCE, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

CALIFORNIA PROSPECTORS, LTD.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Manager

 

 

 

 

 

 

 

PLANTATION INVESTMENTS, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

DAYTON GAMING, INC.

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Secretary

 

 

 

 

 

 

 

THE PRIMADONNA COMPANY, LLC

 

 

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

 

Name: Troy D. Herbst

 

 

Title: Manager

 

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Schedule A

 

Specified Defaults

 

1.               The failure of the Loan Parties to deliver on March 31, 2008 an
audited financial statement that is not subject to any “going concern” or like
qualification or exception in accordance with Section 6.01(a) of the Credit
Agreement (the “Financial Statement Default”).

 

2.               An Event of Default under Section 6.02(a) of the Credit
Agreement solely with respect to the inability to certify as to paragraph 3 of
the Compliance Certificate as a result of the Financial Statement Default, the
Financial Covenant Default (as defined below), the SEC Reporting Default (as
defined below), the Senior Subordinated Notes Default (as defined below) and the
other Specified Defaults set forth herein.

 

3.               An Event of Default under Section 6.04 of the Credit Agreement
solely as a result of failure to pay amounts due under the Senior Subordinated
Notes.

 

4.               An Event of Default under Sections 7.12, 7.13 and 7.14 of the
Credit Agreement solely with respect to the Fiscal Quarters ending March 31,
2008, June 30, 2008, September 30, 2008 and December 31, 2008 (together, the
“Financial Covenant Default”).

 

5.               An Event of Default under Section 8.01(a) of the Credit
Agreement solely as a result of the failure of the Borrower to pay the
outstanding interest amount of the Loans on November 3, 2008; provided that the
parties acknowledge that such interest payment has been paid as of the date of
this Agreement.

 

6.               An Event of Default under Section 8.01(a) of the Credit
Agreement solely as a result of the failure of the Borrower to pay the
outstanding principal amount of the Loans on November 6, 2008 as required
pursuant to the Notice of Acceleration delivered to the Borrower on such date.

 

7.               An Event of Default under Section 8.01(e) of the Credit
Agreement solely as a result of failure to (i) file reports with the Securities
and Exchange Commission (“SEC”) within the time periods specified in the SEC’s
rules and regulations, including the Company’s failure to satisfactorily file
management’s report on internal control over financial reporting in connection
with its Annual Report on Form 10-K for the year ended December 31, 2007 (the
“SEC Reporting Default”), and (ii) pay interest due under the Senior
Subordinated Notes (the “Senior Subordinated Notes Default”), in each case
unless such Event of Default results in the acceleration of any of the Senior
Subordinated Notes.

 

8.               An Event of Default under Section 8.01(g) of the Credit
Agreement solely with respect to the failure to make required payments under the
Senior Subordinated Notes to the extent that such failure is deemed to mean that
the Borrower has become unable or has failed generally to pay its debts as they
become due.

 

9.               An Event of Default under Section 8.01(j) of the Credit
Agreement solely resulting from the succession to Wilmington Trust Company as
administrative agent from the predecessor Administrative Agent under the Credit
Agreement.

 

10.         Events of Default pursuant to Sections 6.01(b), (d) and (e) of the
Credit Agreement so long as any such Event of Default is cured within five
Business Days after the occurrence thereof.

 

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Schedule B

 

Representations and Warranties Not Subject to Paragraph 8

 

1.               The representation and warranty in the second sentence of
Section 5.02 of the Credit Agreement with respect to compliance with Contractual
Obligations solely to the extent the Borrower has not made, or does not make,
required payments under the Senior Subordinated Notes.

 

2.               The representations and warranties in Section 5.07 of the
Credit Agreement solely to the extent (a) the Borrower has not made, or does not
make, required payment under the Senior Subordinated Notes or (b) Specified
Defaults have occurred and are continuing under the Credit Agreement and the
other Loan Documents.

 

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Schedule C

 

Fee Schedule

 

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