Document:

Exhibit
10.1

 

 

$2,725,000,000

 

CREDIT
AGREEMENT

 

Dated as
of October 3, 2005 

 

among

 

PENN
NATIONAL GAMING, INC.,

as Borrower,

 

THE
SUBSIDIARY GUARANTORS PARTY HERETO,

as Subsidiary Guarantors,

 

THE
LENDERS PARTY HERETO,

 

THE L/C
LENDERS PARTY HERETO

 

and

 

DEUTSCHE
BANK SECURITIES INC.,

GOLDMAN SACHS CREDIT PARTNERS L.P. and

LEHMAN BROTHERS INC.,

as Joint Lead Arrangers and Joint Bookrunners,

 

and

 

GOLDMAN
SACHS CREDIT PARTNERS L.P. and

LEHMAN COMMERCIAL PAPER INC.,

as Co-Syndication Agents,

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Swingline Lender, Administrative Agent and Collateral Agent,

 

and

 

CALYON NEW
YORK BRANCH,

WELLS FARGO BANK, NATIONAL ASSOCIATION and

BANK OF SCOTLAND,

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I.

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS, ACCOUNTING MATTERS AND RULES OF CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Certain Defined Terms

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION 1.03.

  	
  Accounting Terms and Determinations

  	
   

  
	
  SECTION 1.04.

  	
  Classes and Types of Loans

  	
   

  
	
  SECTION 1.05.

  	
  Rules of Construction

  	
   

  
	
  SECTION 1.06.

  	
  Dollar Equivalent Calculations.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  
	
   

  	
   

  	
   

  
	
  CREDITS

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Loans

  	
   

  
	
  SECTION 2.02.

  	
  Borrowings

  	
   

  
	
  SECTION 2.03.

  	
  Letters of Credit

  	
   

  
	
  SECTION 2.04.

  	
  Termination and Reductions of Commitment

  	
   

  
	
  SECTION 2.05.

  	
  Fees

  	
   

  
	
  SECTION 2.06.

  	
  Lending Offices

  	
   

  
	
  SECTION 2.07.

  	
  Several Obligations of Lenders

  	
   

  
	
  SECTION 2.08.

  	
  Notes; Register

  	
   

  
	
  SECTION 2.09.

  	
  Optional Prepayments and Conversions or Continuations of Loans

  	
   

  
	
  SECTION 2.10.

  	
  Mandatory Prepayments

  	
   

  
	
  SECTION 2.11.

  	
  Replacement of Lenders

  	
   

  
	
  SECTION 2.12.

  	
  Incremental Loan Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  	
   

  	
   

  
	
  PAYMENTS OF PRINCIPAL AND INTEREST

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Repayment of Loans

  	
   

  
	
  SECTION 3.02.

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  
	
   

  	
   

  	
   

  
	
  PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
  ETC.

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payments

  	
   

  
	
  SECTION 4.02.

  	
  Pro Rata Treatment

  	
   

  
	
  SECTION 4.03.

  	
  Computations

  	
   

  

 

 

	
  SECTION 4.04.

  	
  Minimum Amounts

  	
   

  
	
  SECTION 4.05.

  	
  Certain Notices

  	
   

  
	
  SECTION 4.06.

  	
  Non-Receipt of Funds by Administrative Agent

  	
   

  
	
  SECTION 4.07.

  	
  Right of Setoff, Sharing of Payments; Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  	
   

  
	
  YIELD PROTECTION, ETC.

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Additional Costs

  	
   

  
	
  SECTION 5.02.

  	
  Inability To Determine Interest Rate

  	
   

  
	
  SECTION 5.03.

  	
  Illegality

  	
   

  
	
  SECTION 5.04.

  	
  Treatment of Affected Loans

  	
   

  
	
  SECTION 5.05.

  	
  Compensation

  	
   

  
	
  SECTION 5.06.

  	
  Net Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  
	
   

  	
   

  	
   

  
	
  GUARANTEES

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  The Guarantees

  	
   

  
	
  SECTION 6.02.

  	
  Obligations Unconditional

  	
   

  
	
  SECTION 6.03.

  	
  Reinstatement

  	
   

  
	
  SECTION 6.04.

  	
  Subrogation; Subordination

  	
   

  
	
  SECTION 6.05.

  	
  Remedies

  	
   

  
	
  SECTION 6.06.

  	
  Continuing Guarantee

  	
   

  
	
  SECTION 6.07.

  	
  General Limitation on Guarantee Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  
	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Conditions to Initial Extensions of Credit

  	
   

  
	
  SECTION 7.02.

  	
  Conditions to All Extensions of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Corporate Existence; Compliance with Law

  	
   

  
	
  SECTION 8.02.

  	
  Financial Condition; Etc.

  	
   

  
	
  SECTION 8.03.

  	
  Litigation

  	
   

  
	
  SECTION 8.04.

  	
  No Breach; No Default

  	
   

  
	
  SECTION 8.05.

  	
  Action

  	
   

  
	
  SECTION 8.06.

  	
  Approvals

  	
   

  
	
  SECTION 8.07.

  	
  ERISA and Foreign Employee Benefit Matters

  	
   

  
	
  SECTION 8.08.

  	
  Taxes

  	
   

  

 

ii

 

	
  SECTION 8.09.

  	
  Investment Company Act; Public Utility Holding Company Act; Other
  Restrictions

  	
   

  
	
  SECTION 8.10.

  	
  Environmental Matters

  	
   

  
	
  SECTION 8.11.

  	
  Use of Proceeds

  	
   

  
	
  SECTION 8.12.

  	
  Subsidiaries

  	
   

  
	
  SECTION 8.13.

  	
  Ownership of Property; Liens

  	
   

  
	
  SECTION 8.14.

  	
  Security Interest; Absence of Financing Statements; Etc.

  	
   

  
	
  SECTION 8.15.

  	
  Licenses and Permits

  	
   

  
	
  SECTION 8.16.

  	
  True and Complete Disclosure

  	
   

  
	
  SECTION 8.17.

  	
  Solvency

  	
   

  
	
  SECTION 8.18.

  	
  Subordinated Debt

  	
   

  
	
  SECTION 8.19.

  	
  Intellectual Property

  	
   

  
	
  SECTION 8.20.

  	
  Existing Indebtedness

  	
   

  
	
  SECTION 8.21.

  	
  Regulation H

  	
   

  
	
  SECTION 8.22.

  	
  Insurance

  	
   

  
	
  SECTION 8.23.

  	
  Real Estate

  	
   

  
	
  SECTION 8.24.

  	
  Leases

  	
   

  
	
  SECTION 8.25.

  	
  Mortgaged Real Property

  	
   

  
	
  SECTION 8.26.

  	
  New Jersey Joint Venture

  	
   

  
	
  SECTION 8.27.

  	
  Material Adverse Effect

  	
   

  
	
  SECTION 8.28.

  	
  Anti-Terrorism Law

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  
	
   

  	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Existence; Business Properties

  	
   

  
	
  SECTION 9.02.

  	
  Insurance

  	
   

  
	
  SECTION 9.03.

  	
  Taxes

  	
   

  
	
  SECTION 9.04.

  	
  Financial Statements, Etc.

  	
   

  
	
  SECTION 9.05.

  	
  Maintaining Records; Access to Properties and Inspections

  	
   

  
	
  SECTION 9.06.

  	
  Use of Proceeds

  	
   

  
	
  SECTION 9.07.

  	
  Compliance with Environmental Law

  	
   

  
	
  SECTION 9.08.

  	
  Equal Security for Loans and Notes; Pledge or Mortgage of Real Property
  and Vessels

  	
   

  
	
  SECTION 9.09.

  	
  Security Interests; Further Assurances

  	
   

  
	
  SECTION 9.10.

  	
  Interest Rate Protection Agreements

  	
   

  
	
  SECTION 9.11.

  	
  Additional Credit Parties

  	
   

  
	
  SECTION 9.12.

  	
  Limitation on Designations of Unrestricted
  Subsidiaries

  	
   

  
	
  SECTION 9.13.

  	
  Limitation
  on Designation of Immaterial Subsidiaries.

  	
   

  
	
  SECTION 9.14.

  	
  Trigger Event under Applicable Transfer Agreement.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.

  
	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  

 

iii

 

	
  SECTION 10.01.

  	
  Indebtedness

  	
   

  
	
  SECTION 10.02.

  	
  Liens

  	
   

  
	
  SECTION 10.03.

  	
  Sale and Leaseback Transactions

  	
   

  
	
  SECTION 10.04.

  	
  Investment, Loan and Advances

  	
   

  
	
  SECTION 10.05.

  	
  Mergers, Consolidations, Sales of Assets and Acquisitions

  	
   

  
	
  SECTION 10.06.

  	
  Restricted Payments

  	
   

  
	
  SECTION 10.07.

  	
  Transactions with Affiliates

  	
   

  
	
  SECTION 10.08.

  	
  Financial Covenants

  	
   

  
	
  SECTION 10.09.

  	
  Limitation on Modification of Argosy Acquisition Agreement

  	
   

  
	
  SECTION 10.10.

  	
  Certain Payments of Indebtedness

  	
   

  
	
  SECTION 10.11.

  	
  Limitation on Certain Restrictions Affecting Subsidiaries

  	
   

  
	
  SECTION 10.12.

  	
  Limitation on Lines of Business

  	
   

  
	
  SECTION 10.13.

  	
  Limitation on Changes to Fiscal Year; Limitation on Investment
  Company Status

  	
   

  
	
  SECTION 10.14.

  	
  Limitation on Amendments to Transfer Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI.

  
	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  Events of Default

  	
   

  
	
  SECTION 11.02.

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII.

  
	
   

  	
   

  	
   

  
	
  AGENTS

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
  Appointment

  	
   

  
	
  SECTION 12.02.

  	
  Delegation of Duties

  	
   

  
	
  SECTION 12.03.

  	
  Exculpatory Provisions

  	
   

  
	
  SECTION 12.04.

  	
  Reliance by Agents

  	
   

  
	
  SECTION 12.05.

  	
  Notice of Default

  	
   

  
	
  SECTION 12.06.

  	
  Nonreliance on Agents and Other Lenders

  	
   

  
	
  SECTION 12.07.

  	
  Indemnification

  	
   

  
	
  SECTION 12.08.

  	
  Agents in Their Individual Capacities

  	
   

  
	
  SECTION 12.09.

  	
  Holders

  	
   

  
	
  SECTION 12.10.

  	
  Resignation of Agents

  	
   

  
	
  SECTION 12.11.

  	
  Collateral Matters.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII.

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  Waiver

  	
   

  
	
  SECTION 13.02.

  	
  Notices

  	
   

  
	
  SECTION 13.03.

  	
  Expenses, Indemnification, Etc.

  	
   

  
	
  SECTION 13.04.

  	
  Amendments and Waiver

  	
   

  

 

iv

 

	
  SECTION 13.05.

  	
  Benefit of Agreement; Assignments; Participations

  	
   

  
	
  SECTION 13.06.

  	
  Survival

  	
   

  
	
  SECTION 13.07.

  	
  Captions

  	
   

  
	
  SECTION 13.08.

  	
  Counterparts; Interpretation; Effectiveness

  	
   

  
	
  SECTION 13.09.

  	
  Governing Law; Submission to Jurisdiction; Waivers; Etc.

  	
   

  
	
  SECTION 13.10.

  	
  Confidentiality

  	
   

  
	
  SECTION 13.11.

  	
  Independence of Representations, Warranties and Covenants

  	
   

  
	
  SECTION 13.12.

  	
  Severability

  	
   

  
	
  SECTION 13.13.

  	
  Gaming Laws

  	
   

  
	
  SECTION 13.14.

  	
  USA Patriot Act

  	
   

  
	
  SECTION 13.15.

  	
  Judgment Currency.

  	
   

  

 

	
  ANNEXES:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ANNEX A-1

  	
   

  	
  -

  	
   

  	
  Revolving Commitments

  
	
  ANNEX A-2

  	
   

  	
  -

  	
   

  	
  Term A Facility Commitments

  
	
  ANNEX A-3

  	
   

  	
  -

  	
   

  	
  Term B Facility Commitments

  
	
  ANNEX B-1

  	
   

  	
  -

  	
   

  	
  Applicable Margin For Revolving Loans,
  Swingline Loans and Term A Facility Loans and Applicable Fee Percentage

  
	
  ANNEX B-2

  	
   

  	
  -

  	
   

  	
  Applicable Margin For Term B Facility Loans

  
	
  ANNEX C-1

  	
   

  	
  -

  	
   

  	
  Amortization Payments - Term A
  Facility Loans

  
	
  ANNEX C-2

  	
   

  	
  -

  	
   

  	
  Amortization Payments - Term B
  Facility Loans

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1.01(A)

  	
   

  	
  -

  	
   

  	
  Ground Leases

  
	
  SCHEDULE 1.01(B)

  	
   

  	
  -

  	
   

  	
  Principal Assets

  
	
  SCHEDULE 1.01(C)

  	
   

  	
  -

  	
   

  	
  Mortgaged Real Property at Closing Date

  
	
  SCHEDULE 1.01(D)

  	
   

  	
  -

  	
   

  	
  Subsidiary Guarantors

  
	
  SCHEDULE 2.03(n)

  	
   

  	
  -

  	
   

  	
  Existing Letters of Credit

  
	
  SCHEDULE 8.03

  	
   

  	
  -

  	
   

  	
  Litigation

  
	
  SCHEDULE 8.07

  	
   

  	
  -

  	
   

  	
  ERISA

  
	
  SCHEDULE 8.08

  	
   

  	
  -

  	
   

  	
  Taxes

  
	
  SCHEDULE 8.10

  	
   

  	
  -

  	
   

  	
  Environmental Matters

  
	
  SCHEDULE 8.12(a)

  	
   

  	
  -

  	
   

  	
  Subsidiaries

  
	
  SCHEDULE 8.12(b)

  	
   

  	
  -

  	
   

  	
  Immaterial Subsidiaries

  
	
  SCHEDULE 8.12(c)

  	
   

  	
  -

  	
   

  	
  Unrestricted Subsidiaries

  
	
  SCHEDULE 8.13(a)

  	
   

  	
  -

  	
   

  	
  Ownership

  
	
  SCHEDULE 8.13(b)

  	
   

  	
  -

  	
   

  	
  Vessels; Mortgaged Vessels at Closing Date

  
	
  SCHEDULE 8.15

  	
   

  	
  -

  	
   

  	
  Licenses and Permits

  
	
  SCHEDULE 8.19

  	
   

  	
  -

  	
   

  	
  Intellectual Property

  
	
  SCHEDULE 8.20

  	
   

  	
  -

  	
   

  	
  Existing Indebtedness

  
	
  SCHEDULE 8.21

  	
   

  	
  -

  	
   

  	
  Regulation H

  
	
  SCHEDULE 8.23(a)

  	
   

  	
  -

  	
   

  	
  Real Property

  
	
  SCHEDULE 8.23(b)

  	
   

  	
  -

  	
   

  	
  Real Property Takings, Etc.

  

 

v

 

	
  SCHEDULE 8.24(a)

  	
   

  	
  -

  	
   

  	
  Leases

  
	
  SCHEDULE 8.24(b)

  	
   

  	
  -

  	
   

  	
  Existing Breaches and Defaults

  
	
  SCHEDULE 8.24(d)(x)

  	
   

  	
  -

  	
   

  	
  SNDA’s - Existing Fee Mortgagees

  
	
  SCHEDULE 8.24(d)(y)

  	
   

  	
  -

  	
   

  	
  SNDA’s - Future Fee Mortgagees

  
	
  SCHEDULE 8.25(a)

  	
   

  	
  -

  	
   

  	
  No Certificates of Occupancy; Violations,
  Etc.

  
	
  SCHEDULE 8.25(b)

  	
   

  	
  -

  	
   

  	
  Encroachment, Boundary, Location,
  Possession Disputes

  
	
  SCHEDULE 8.26

  	
   

  	
  -

  	
   

  	
  New Jersey Subsidiary Organizational
  Structure

  
	
  SCHEDULE 9.10

  	
   

  	
  -

  	
   

  	
  Interest Rate Protection Agreement

  
	
  SCHEDULE 10.02

  	
   

  	
  -

  	
   

  	
  Certain Existing Liens

  
	
  SCHEDULE 10.04

  	
   

  	
  -

  	
   

  	
  Investments

  
	
  SCHEDULE 10.08(d)

  	
   

  	
  -

  	
   

  	
  Capital Expenditures

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A-1

  	
   

  	
  -

  	
   

  	
  Form of Revolving Note

  
	
  EXHIBIT A-2

  	
   

  	
  -

  	
   

  	
  Form of Term A Facility Note

  
	
  EXHIBIT A-3

  	
   

  	
  -

  	
   

  	
  Form of Term B Facility Note

  
	
  EXHIBIT A-4

  	
   

  	
  -

  	
   

  	
  Form of Swingline Note

  
	
  EXHIBIT B

  	
   

  	
  -

  	
   

  	
  Form of Notice of Borrowing

  
	
  EXHIBIT C

  	
   

  	
  -

  	
   

  	
  Form of Notice of
  Conversion/Continuation

  
	
  EXHIBIT D

  	
   

  	
  -

  	
   

  	
  Form of Interest Rate Certificate

  
	
  EXHIBIT E

  	
   

  	
  -

  	
   

  	
  Form of Foreign Lender Certificate

  
	
  EXHIBIT F-1

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Skadden, Arps,
  Slate, Meagher & Flom LLP

  
	
  EXHIBIT F-2A

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Ballard Spahr
  Andrews & Ingersoll, LLP

  
	
  EXHIBIT F-2B

  	
   

  	
  -

  	
   

  	
  Form of Opinion (Intellectual
  Property) of Ballard Spahr Andrews & Ingersoll, LLP

  
	
  EXHIBIT F-3A

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Blitz,
  Bardgett & Deutsche L.C.

  
	
  EXHIBIT F-3B

  	
   

  	
  -

  	
   

  	
  Form of Opinion (Gaming) of Blitz,
  Bardgett & Deutsche L.C.

  
	
  EXHIBIT F-4

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Bowles Rice McDavid
  Graff & Love LLP

  
	
  EXHIBIT F-5

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Frank Weinberg
  Black, P.L.

  
	
  EXHIBIT F-6

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Hopkins &
  Huebner, P.C.

  
	
  EXHIBIT F-7A

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Ice Miller

  
	
  EXHIBIT F-7B

  	
   

  	
  -

  	
   

  	
  Form of Opinion (Real Estate) of Ice
  Miller

  
	
  EXHIBIT F-8

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Isaacson Rosenbaum
  P.C.

  
	
  EXHIBIT F-9

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Phelps Dunbar LLP

  
	
  EXHIBIT F-10

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Pierce Atwood LLP

  
	
  EXHIBIT F-11

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Schottenstein,
  Zox & Dunn Co., L.P.A.

  
	
  EXHIBIT F-12

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Shefsky &
  Froelich, Ltd.

  
	
  EXHIBIT F-13

  	
   

  	
  -

  	
   

  	
  Form of Opinion of Blake
  Cassels & Graydon LLP

  
	
  EXHIBIT F-14

  	
   

  	
  -

  	
   

  	
  Form of Opinion of McInnes Cooper

  
	
  EXHIBIT G

  	
   

  	
  -

  	
   

  	
  Form of Solvency Certificate

  
	
  EXHIBIT H

  	
   

  	
  -

  	
   

  	
  Form of Security Agreement

  
	
  EXHIBIT I

  	
   

  	
  -

  	
   

  	
  Form of Mortgage

  
	
  EXHIBIT J

  	
   

  	
  -

  	
   

  	
  Form of Ship Mortgage

  
	
  EXHIBIT K

  	
   

  	
  -

  	
   

  	
  Form of Assignment and Assumption
  Agreement

  
	
  EXHIBIT L

  	
   

  	
  -

  	
   

  	
  Form of Letter of Credit Request

  
	
  EXHIBIT M

  	
   

  	
  -

  	
   

  	
  Form of Joinder Agreement

  

 

vi

 

	
  EXHIBIT N

  	
   

  	
  -

  	
   

  	
  Form of Estoppel

  
	
  EXHIBIT O

  	
   

  	
  -

  	
   

  	
  Form of Perfection Certificate

  

 

vii

 

CREDIT
AGREEMENT, dated as of October 3, 2005, among PENN NATIONAL GAMING, INC., a Pennsylvania corporation (“Borrower”); the SUBSIDIARY GUARANTORS
party hereto from time to time; the LENDERS from
time to time party hereto; the L/C LENDERS party
hereto; DEUTSCHE BANK SECURITIES INC., GOLDMAN SACHS CREDIT PARTNERS L.P. and LEHMAN
BROTHERS INC., as joint lead arrangers and joint bookrunners (in
such capacities, together with their respective successors in such capacities, “Lead Arrangers”); GOLDMAN SACHS CREDIT
PARTNERS L.P. and LEHMAN COMMERCIAL PAPER
INC., as co-syndication agents (in such capacities, together with
their respective successors in such capacities, “Co-Syndication
Agents”); DEUTSCHE BANK TRUST
COMPANY AMERICAS, as swingline lender (in such capacity, together
with its successors in such capacity, “Swingline Lender”),
as administrative agent (in such capacity, together with its successors in such
capacity, “Administrative Agent”) and as
collateral agent (in such capacity, together with its successors in such
capacity, “Collateral Agent”); and CALYON NEW YORK BRANCH, WELLS FARGO BANK,
NATIONAL ASSOCIATION and BANK OF SCOTLAND, as co-documentation agents (in such capacities, together
with their respective successors in such capacities, “Co-Documentation
Agents”).

 

WHEREAS,
Borrower and Thoroughbred Acquisition Corp., a Delaware corporation and a
Wholly Owned Subsidiary of Borrower (“Merger Sub”),
have entered into the Argosy Acquisition Agreement (defined below) with Argosy
Gaming Company, a Delaware corporation (“Argosy”), pursuant
to which Borrower will acquire through merger (the “Argosy
Acquisition”) all of the capital stock of Argosy for cash and Merger
Sub will be merged with and into Argosy, with Argosy as the surviving entity.

 

NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained herein, the parties agree as follows:

 

ARTICLE I.

 

DEFINITIONS, ACCOUNTING MATTERS AND RULES OF
CONSTRUCTION

 

SECTION 1.01.    Certain
Defined Terms.  As used herein, the following terms shall
have the following meanings:

 

“ABR Loans” shall mean
Loans that bear interest at rates based upon the 

Alternate Base Rate.

 

“Acquisition” shall mean, with respect to any person, any
transaction or series of related transactions for the (a) acquisition of
all or substantially all of the Property of any other person, or of any
business or division of any other person (other than any then existing Company),
(b) acquisition of more than 50% of the Equity Interests of any other
person (other than any then existing Company), or otherwise causing any other
person (other than any then existing Company) to become a Subsidiary of such
person or (c) merger or consolidation of such person or any other
combination of such person with any other person (other than any of the
foregoing between or among any then existing Companies).

 

“Adjusted Net Income” shall mean,
for any Test Period, the net income or loss of Borrower and its Restricted
Subsidiaries for such period, adjusted by excluding (to the extent

 

 

taken into account in the calculation of such
consolidated net income (loss)) the effect of (a) gains or losses for such
period from Asset Sales not in the ordinary course of business and the net tax
consequences thereof for such period, (b) any non-recurring or
extraordinary items of income (other than the proceeds of business interruption
insurance) or non-recurring or extraordinary items of cost or expense for such
period and the net tax consequences thereof for such period (as determined in
good faith by Borrower), (c) transaction costs for the Transactions in an
amount not to exceed $200.0 million and debt prepayment and tender premiums
incurred in connection with the Argosy Refinancings, (d) non-cash
valuation adjustments, (e) any expenses related to the repurchase of stock
options to the extent not prohibited by this Agreement, (f) expenses
related to the grant of stock options, stock appreciation rights or other
equivalent or similar instruments, (g) income of any less than 50% owned
entities except to the extent such income is actually received in cash and (h) any
non-cash loss or charges associated with the write-down or impairment of assets
or intangibles (including any write-down of goodwill or other assets pursuant
to FASB 142 or write-offs or write-downs
relating to discontinued operations pursuant to FASB 144).

 

“Administrative Agent’s Fee Letter” shall
mean the fee letter agreement dated November 3, 2004 (as amended, amended
and restated, supplemented or otherwise modified from time to time), between
Borrower and DBTCA and DBSI.

 

“Affiliate” shall mean,
with respect to any person, any other person that directly or indirectly
controls, or is under common control with, or is controlled by, such
person.  As used in this definition, “control” (including,
with its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise); provided, however, that neither
any Agent nor any Lender (nor any Affiliate thereof) shall be considered an
Affiliate of Borrower or any Subsidiary thereof.

 

“Agent” shall mean any
of Administrative Agent, Collateral Agent, Lead Arrangers, Co-Syndication
Agents and/or Co-Documentation Agents, as applicable.  All discretionary authority vested in Collateral
Agent hereunder may be exercised in consultation with Lead Arrangers and/or
counsel to Lead Arrangers and Administrative Agent.

 

“Agent Related Parties” shall mean each Agent and any
sub-agent and their respective Affiliates, directors, officers, employees,
agents and advisors.

 

“Agreement” shall mean
this Credit Agreement, as amended, amended and restated, supplemented or
otherwise modified from time to time.

 

“Alternate Base Rate” shall mean for
any day, the higher of (i) the corporate base rate of interest announced
by Administrative Agent from time to time, changing effective on the date of
announcement of said corporate base rate changes, and (ii) the Federal
Funds Rate plus 0.50% per annum.  The corporate base rate is not
necessarily the lowest rate charged by Administrative Agent to its customers.

 

“Alternate Currency” shall mean Canadian dollars.

 

2

 

“Amortization Payment” shall mean
each scheduled installment of payments on the Term Loans as set forth in
Sections 3.01(b), 3.01(c) and 3.01(d).

 

“Applicable Fee Percentage” shall mean:  with respect to any Unutilized R/C
Commitments, (a) prior to the Trigger Date (as defined in this
definition), 0.50%; and (b) on and after the date (the “Trigger Date”) on which Borrower shall have delivered to
Administrative Agent and the Lenders the financial statements and Interest Rate
Certificate required by Sections 9.04(a) and 9.04(e) demonstrating
the then applicable Consolidated Total Leverage Ratio for the fiscal quarter
ended on September 30, 2005, the applicable percentage per annum set forth on Annex B-1 set forth opposite
the relevant Consolidated Total Leverage Ratio in Annex B-1 as evidenced
in the most recent Interest Rate Certificate delivered hereunder.  After the Trigger Date, any change in the
Consolidated Total Leverage Ratio shall be effective to adjust the Applicable
Fee Percentage on and as of the date of receipt by Administrative Agent of the
Interest Rate Certificate most recently delivered pursuant to Section 9.04(e).  If Borrower fails to deliver the financial
statements and Interest Rate Certificate within the times specified in Sections
9.04(a) or 9.04(b), as applicable, and 9.04(e) such ratio shall be
deemed to be at Level I as set forth in Annex B-1 from the date of any
such failure to deliver until Borrower delivers such Interest Rate Certificate
and financial statements.  For purposes of calculating the Consolidated
Total Leverage Ratio for the
fiscal quarter ended September 30,
2005 in determining the Applicable
Fee Percentage, (i) the
Transactions shall each be deemed to have occurred on September 30, 2005,
and the applicable Test Period shall be the four fiscal quarter-period ended September 30, 2005; and (ii) calculation of the Consolidated
Total Leverage Ratio shall
otherwise be subject to Section 10.08(e).

 

“Applicable Lending Office” shall
mean, for each Lender and for each Type of Loan, the “Lending Office” of such
Lender (or of an Affiliate of such Lender) designated for such Type of Loan on Annexes
A-1 through A-3 hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to
Administrative Agent and Borrower as the office by which its Loans of such Type
are to be made and maintained.

 

“Applicable Margin” shall mean:

 

(a)           in the case of Revolving Loans, Term
A Facility Loans or Swingline Loans, (i) prior to the Trigger Date, the
respective percentage per annum set
forth at Level II as set forth on Annex B-1 for such Type and Class of
Loan; and (ii) on and after the Trigger Date, the applicable percentage per annum as set forth on Annex B-1 for such Type and
Class of Loan, set forth opposite the relevant Consolidated Total Leverage
Ratio in Annex B-1 as evidenced in the most recent Interest Rate
Certificate delivered hereunder.  After
the Trigger Date, any change in the Consolidated Total Leverage Ratio shall be
effective to adjust the Applicable Margin on and as of the date of receipt by
Administrative Agent of the Interest Rate Certificate most recently delivered
pursuant to Section 9.04(e).  If
Borrower fails to deliver the financial statements and Interest Rate
Certificate within the times specified in Sections 9.04(a) or 9.04(b), as
applicable, and 9.04(e) such ratio shall be deemed to be at Level I as set
forth in Annex B-1 from the date of any such failure to deliver until
Borrower delivers such Interest Rate Certificate and financial statements; and

 

3

 

(b)           in the case of Term B Facility Loans,
(i) prior to the Trigger Date, the percentage per annum
set forth at Level I as set forth on Annex B-2 for such Type and Class of
Loan; and (ii) on and after the Trigger Date, the applicable percentage per annum as set forth on Annex B-2 for such Type and
Class of Loan, set forth opposite the relevant Consolidated Total Leverage
Ratio in Annex B-2 as evidenced in the most recent Interest Rate
Certificate delivered hereunder.  After
the Trigger Date, any change in the Consolidated Total Leverage Ratio shall be
effective to adjust the Applicable Margin on and as of the date of receipt by
Administrative Agent of the Interest Rate Certificate most recently delivered
pursuant to Section 9.04(e).  If
Borrower fails to deliver the financial statements and Interest Rate
Certificate within the times specified in Sections 9.04(a) or 9.04(b), as
applicable, and 9.04(e), as applicable, such ratio shall be deemed to be at Level
I as set forth in Annex B-2 from the date of any such failure to deliver
until Borrower delivers such Interest Rate Certificate and financial
statements.

 

For
purposes of calculating the Consolidated Total Leverage Ratio for the fiscal quarter ended September 30, 2005 in determining the Applicable Margin, (i) the Transactions shall each be
deemed to have occurred on September 30, 2005, and the applicable Test
Period shall be the four fiscal quarter-period ended September 30, 2005; and (ii) calculation of the Consolidated
Total Leverage Ratio shall
otherwise be subject to Section 10.08(e).

 

“Argosy Acquisition Agreement” shall mean the Agreement and
Plan of Merger, dated as of November 3, 2004, among Borrower, Merger Sub
and Argosy, together with all exhibits, appendices, schedules and annexes
thereto, as amended by the First Amendment to Agreement and Plan of Merger,
dated as of December 23, 2004, and as amended by the Argosy Letter
Agreement, and as further amended in accordance with Section 10.09.

 

“Argosy Baton Rouge Assets” shall have the meaning set forth
in the FTC Order.

 

“Argosy Letter Agreement” shall mean the letter agreement
dated August 11, 2005 among Borrower, Merger Sub and Argosy relating to
the closing date of the Argosy Acquisition (without any modifications or waiver
of any of the terms thereof, including capitalized terms therein but defined
elsewhere as of such date, unless otherwise consented to by Lead Arrangers and
Borrower).

 

“Argosy Louisiana Subsidiaries” shall mean, collectively, the
following Subsidiaries of Borrower: 
Argosy of Louisiana, Inc., a Louisiana corporation; Jazz
Enterprises, Inc., a Louisiana corporation; Catfish Queen Partnership in
Commendam, a Louisiana partnership in commendam; and Centroplex Centre
Convention Hotel, L.L.C., a Louisiana limited liability company.

 

4

 

“Argosy Material Adverse Effect” shall mean “Company Material
Adverse Effect” (as such term is defined in the Argosy Acquisition Agreement as
in effect on November 3, 2004 (without any modification or waiver of any
of the words thereof, including capitalized terms used therein but defined elsewhere,
as of such date, unless otherwise consented to by Lead Arrangers and
Borrower)).

 

“Argosy Notes Tender/Consent” shall mean, with respect to
each Existing Argosy Note, tender offers for such Existing Argosy Note and, in
connection therewith, the obtaining of consents to the elimination of all
significant covenants from the related Existing Argosy Indenture in connection
therewith subject to a minimum condition that the holders of more than 50% of
the aggregate principal amount outstanding of Existing Argosy Notes under such
Existing Argosy Indenture consent thereto.

 

“Asset Sale” shall mean (a) any
conveyance, sale, lease, transfer or other disposition (including by way of
merger or consolidation and including any sale and leaseback transaction) of
any Property (including accounts receivable and Equity Interests of any person
owned by Borrower or any of its Restricted Subsidiaries but not any Equity
Issuance) (whether owned on the Closing Date or thereafter acquired) by
Borrower or any of its Restricted Subsidiaries to any person (other than (i) with
respect to any Credit Party, to any Credit Party, and (ii) with respect to
any other Company, to any Company) to the extent that the aggregate value of
such Property sold in any single transaction or related series of transactions
is greater than or equal to $2.5 million and (b) any issuance or sale by
any Restricted Subsidiary of its Equity Interests to any person (other than any
Company).

 

“Assignment Agreement” shall mean an Assignment and
Assumption Agreement substantially in the form attached as Exhibit K
hereto.

 

“Bangor Facility” shall mean the Gaming Facility known as of
the Closing Date as “The Bangor Facility,” located in Bangor, Maine.

 

“Bank of Scotland” shall mean Bank of Scotland, in its
individual capacity, and any successor thereto by merger, consolidation or
otherwise.

 

“Bankruptcy Code” shall mean the
Title 11 of the United States Code entitled “Bankruptcy”, as now or hereinafter
in effect, or any successor statute thereto.

 

“Beneficial Owner” has the
meaning assigned to such term in Rules 13d-3 and 13d-5 under the Exchange
Act.  The terms “Beneficially
Owns” and “Beneficially
Owned” have a corresponding meaning.

 

“Boomtown Casino” shall mean the
Gaming Facility known as of the Closing Date as “The Boomtown Biloxi Casino,”
located in Biloxi, Mississippi.

 

“Borrower 2010 Note Maturity Date” shall mean the final
stated maturity date of the Borrower 2010 Notes unless the Borrower 2010 Notes
are repaid, redeemed, repurchased, defeased or Discharged in full on or prior
to the 180th day prior to such maturity date, in which case no
Borrower 2010 Note Maturity Date shall exist for purposes of this Agreement
(subject to the succeeding proviso); provided, however, that, if the Borrower 2010 Notes are refinanced in
full (other than with Indebtedness under this Agreement) on or prior to the 180th
day prior to such maturity date, then the latest final stated maturity
date of such other indebtedness as shall have refinanced the Borrower 2010
Notes shall be the “Borrower 2010 Note Maturity Date”.

 

“Borrower 2010 Notes” shall mean the outstanding 8 7/8%
Senior Subordinated Notes due 2010 of Borrower in the original aggregate
principal amount of $175.0 million.

 

5

 

“Borrower 2011 Note Maturity Date” shall mean the final
stated maturity date of the Borrower 2011 Notes unless the Borrower 2011 Notes
are repaid, redeemed, repurchased, defeased or Discharged in full on or prior
to the 180th day prior to such maturity date, in which case no
Borrower 2011 Note Maturity Date shall exist for purposes of this Agreement
(subject to the succeeding proviso); provided, however, that, if the Borrower 2011 Notes are refinanced in
full (other than with Indebtedness under this Agreement) on or prior to the 180th
day prior to such maturity date, then the latest final stated maturity date of
such other indebtedness as shall have refinanced the Borrower 2011 Notes shall be
the “Borrower 2011 Note Maturity Date”.

 

“Borrower 2011 Notes” shall mean the outstanding 6 7/8%
Senior Subordinated Notes of Borrower due 2011 in the original aggregate
principal amount of $200.0 million.

 

“Borrower 2015 Notes” shall mean the outstanding 6 3/4%
Senior Subordinated Notes due 2015 of Borrower in the original aggregate
principal amount of $250.0 million.

 

“Borrower Notes Maturity Date” shall mean the earlier to
occur of (a) the Borrower 2010 Note Maturity Date or (b) the Borrower
2011 Note Maturity Date.

 

“Borrower Outstanding Bonds” shall
mean the Borrower 2010 Notes, the Borrower 2011 Notes and the Borrower 2015
Notes.

 

“Borrower Outstanding Bond Indentures” shall
mean the indentures governing the Borrower Outstanding Bonds.

 

“Borrowing” shall mean (a) Loans
of the same Class and Type made, converted or continued on the same date
and, in the case of LIBOR Loans, as to which a single Interest Period is in
effect, or (b) a Swingline Loan.

 

“Business Day” shall mean any
day, except a Saturday or Sunday, (a) on which commercial banks are not
authorized or required to close in New York City and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a Continuation or Conversion of or into, or an Interest Period for, a LIBOR
Loan or a notice by Borrower with respect to any such borrowing, payment,
prepayment, Continuation, Conversion or Interest Period, that is also a day on
which dealings in Dollar deposits are carried out in the London interbank
market.

 

“Calyon” shall mean Calyon New York Branch, in its individual
capacity, and any successor thereto by merger, consolidation or otherwise.

 

“Canadian dollars” shall mean the lawful money of Canada.

 

“Capital Expenditures” shall mean,
for any period, with respect to any person, any expenditures by such person for
the acquisition or leasing of fixed or capital assets (including Capital Lease
Obligations) that should be capitalized in accordance with GAAP and any
expenditures by such person for maintenance, repairs, restoration or
refurbishment of the condition or usefulness of Property of such person that
should be capitalized in accordance with GAAP.

 

6

 

“Capital Lease” as applied to
any person, shall mean any lease of any Property by that person as lessee that,
in conformity with GAAP, is required to be classified and accounted for as a
capital lease on the balance sheet of that person.

 

“Capital Lease Obligations” shall
mean, for any person, all obligations of such person to pay rent or other
amounts under a Capital Lease, and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.

 

“Cash Equivalents” shall mean,
for any person:  (a) direct obligations
of the United States, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States, or by any agency thereof, in
either case maturing not more than one year from the date of acquisition thereof
by such person; (b) time deposits, certificates of deposit or bankers’
acceptances (including eurodollar deposits) issued by (i) any bank or
trust company organized under the laws of the United States or any state
thereof and having capital, surplus and undivided profits of at least $500.0
million that is assigned at least a “B” rating by Thomson Financial BankWatch
or (ii) any Lender (in each case, at the time of acquisition); (c) commercial
paper rated at least “A-2” or the equivalent thereof by S&P or at least “P-2”
or the equivalent thereof by Moody’s, respectively, maturing not more than one
year from the date of acquisition thereof by such person (in each case, at the
time of acquisition); (d) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b) above
(in each case, at the time of acquisition); (e) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, or by any political
subdivision or taxing authority thereof or by any foreign government, and rated
at least “A” by S&P or “A” by Moody’s (in each case, at the time of
acquisition); (f) securities with maturities of six months or less from
the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) above
at the time of acquisition thereof; or (g) money market mutual funds that
invest primarily in the foregoing items.

 

“Casualty Event” shall mean any
loss of title or any loss of or damage to or destruction of, or any
condemnation or other taking (including by any Governmental Authority) of, any
Property for which Borrower or any of its Restricted Subsidiaries receives
insurance proceeds or proceeds of a condemnation award or other compensation; provided, however, no such event shall constitute a Casualty Event if such
proceeds or other compensation in respect thereof is less than $2.5 million.  “Casualty Event” shall include, but not be
limited to, any taking of all or any part of any Real Property of Borrower or
any of its Restricted Subsidiaries or any part thereof, in or by condemnation
or other eminent domain proceedings pursuant to any Law, or by reason of the
temporary requisition of the use or occupancy of all or any part of any Real
Property of Borrower or any of its Restricted Subsidiaries or any part thereof
by any Governmental Authority, civil or military.

 

“CERCLA” shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.

 

“Change of Control” shall be
deemed to have occurred if:  (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) other than

 

7

 

Principal or a Related Party of Principal, is
or becomes the Beneficial Owner, directly or indirectly, of Voting Stock
representing more than 50% of the voting power of the total outstanding Voting
Stock of Borrower; (b) at any time a change of control occurs under and as
defined in any documentation relating to any material Indebtedness of Borrower or
any of its Restricted Subsidiaries; (c) the Principal ceases to be the
chairman of the board of directors of Borrower for any reason other than his
death or disability at a time when the Consolidated Total Leverage Ratio is
equal to or greater than 4.75 to 1.00 unless a replacement reasonably
satisfactory to Administrative Agent is appointed within 90 days; or (d) during
any period of one year, individuals who at the beginning of such period constituted
the board of directors of Borrower (together with any new directors whose
election to such board of directors or whose nomination for election was
approved by a vote of a majority of the directors of Borrower 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) cease for any
reason to constitute a majority of the board of directors of Borrower. 

 

“Charles Town Facility” shall mean the
Gaming Facility known as of the Closing Date as “The Charles Town Races” located
in Charles Town, West Virginia.

 

“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” shall mean all
of the Pledged Collateral, the Mortgaged Real Property, the Mortgaged Vessels,
all property encumbered pursuant to Sections 9.08 and 9.11, and all other
property, whether now owned or hereafter acquired, upon which a Lien securing
the Obligations is granted or purported to be granted under any Security Document.

 

“Collateral Account” shall have the
meaning assigned to such term in the Security Agreement.

 

“Collateral Agent” shall mean
DBTCA in its capacity as collateral agent in accordance with the introduction
hereto and in accordance with the terms of the Security Documents, as the case
may be.

 

“Commitment Letter” shall mean the
Commitment Letter among DBTCA, DBSI, LBI, LCPI and GSCP and Borrower, dated November 3,
2004 (as amended, amended and restated, supplemented or otherwise modified from
time to time), together with Exhibit A thereto.

 

“Commitments” shall mean the
Revolving Commitments, the Term Loan Commitments, the Swingline Commitment and
any New Incremental Term Loan Commitments.

 

“Companies” shall mean
Borrower and its Subsidiaries; and “Company” shall mean any one of them.

 

“Complementary
Assets” shall mean, with respect to any person (other
than any existing Company), the principal assets of such person which are
complementary to (solely as a result of the geographic proximity to other
businesses operated by Borrower and its Restricted

 

8

 

Subsidiaries) a business of the type
conducted by Borrower and its Restricted Subsidiaries or activities related or
ancillary thereto.

 

“Confidential Information Memorandum” shall
mean that certain confidential information memorandum distributed in connection
herewith dated May 2005.

 

“Consolidated Companies” shall mean
Borrower and each Subsidiary of Borrower (whether now existing or hereafter
created or acquired), the financial statements of which shall be (or should
have been) consolidated with the financial statements of Borrower in accordance
with GAAP.

 

“Consolidated EBITDA” shall mean,
for any Test Period, the sum (without duplication) of Adjusted Net Income for
such period, plus, in
each case to the extent deducted in calculating such Adjusted Net Income, (1) income
tax expense, (2) Consolidated Interest Expense, non-cash interest expense,
amortization of non-cash financing fees (including non-cash fees payable under
a Swap Contract) or deferred non-cash financing costs and costs in an aggregate
amount not to exceed $5.0 million incurred relating to termination of Interest
Rate Protection Agreements in effect prior to the Closing Date, (3) depreciation
and amortization expense, (4) any extraordinary non-cash items, (5) other
non-cash items of expense, other than to the extent such non-cash items require
an accrual or reserve for future cash expenses (provided that
if such accrual or reserve is for contingent items, the outcome of which is
subject to uncertainty, such non-cash items of expense will be added to
Adjusted Net Income and deducted when and to the extent actually paid in cash),
(6) any Pre-Opening Expenses and (7) in any fiscal quarter during
which a purchase of property subject to any Company’s operating lease shall
occur and during the three following fiscal quarters, an amount equal to the
quarterly payment in respect of such lease (as if such purchase did not occur)
times (a) 4 (in the case of the quarter in which such purchase occurs), (b) 3
(in the case of the quarter following such purchase), (c) 2 (in the case
of the second quarter following such purchase) and (d) 1 (in the case of
the third quarter following such purchase), all as determined on a consolidated
basis for Borrower and its Restricted Subsidiaries.  Consolidated EBITDA shall be further
calculated in accordance with Section 10.08(e).

 

“Consolidated Indebtedness” shall
mean, as at any date of determination, the aggregate amount of all Indebtedness
(but including in any event the then outstanding principal amount of all Loans,
Notes and Capital Lease Obligations (but excluding bankers’ acceptances,
surety, appeal and similar bonds and the aggregate undrawn portion of all
outstanding letters of credit and Indebtedness that has been Discharged)) of
Borrower and its Restricted Subsidiaries on a consolidated basis as determined
in accordance with GAAP; provided that,
for purposes of this definition, deferred purchase obligations shall be calculated
based on the net present value thereof. 
Consolidated Indebtedness shall be further calculated in accordance with
Section 10.08(e).

 

“Consolidated Interest Expense” shall
mean, for any period, the sum of all cash interest expense of Borrower and its
Restricted Subsidiaries for such period as determined on a consolidated basis
for Borrower and its Restricted Subsidiaries in accordance with GAAP, including
the interest portion of payments on Capital Leases (but excluding
(x) amortization of non-cash financing fees (including non-cash fees
payable under a Swap Contract) or deferred non-cash financing costs,
(y) costs in the aggregate amount not to exceed $5.0 million incurred

 

9

 

relating to termination of Interest Rate
Protection Agreements in effect prior to the Closing Date and (z) interest with
respect to Indebtedness that has been Discharged).  Consolidated Interest Expense shall be
further calculated in accordance with Section 10.08(e).

 

“Consolidated Senior Leverage Ratio” shall
mean, as at any date of determination, the ratio of (a) Consolidated
Indebtedness as of such date, minus, without
duplication, all unsecured senior subordinated or subordinated Indebtedness of
Borrower and its Restricted Subsidiaries as of such date, to (b) Consolidated
EBITDA for the Test Period in respect of such date.  The calculation of Consolidated Senior
Leverage Ratio shall be subject to Section 10.08(e).

 

“Consolidated Total Leverage Ratio” shall
mean, as at any date of determination, the ratio of (a) Consolidated
Indebtedness as of such date to (b) Consolidated EBITDA for the Test
Period in respect of such date.  The
calculation of Consolidated Total Leverage Ratio shall be subject to Section 10.08(e).

 

“Contingent Obligation” shall mean, as
to any person, any obligation of such person guaranteeing or intended to
guarantee any Indebtedness or other obligations (“primary obligations”) of any other person (the “primary
obligor”) in any manner, whether directly or indirectly, including
any obligation of such person, whether or not contingent, (a) to purchase
any such primary obligation or any property constituting direct or indirect
security therefor; (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor; (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation; or (d) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business and any lease guarantees executed by any Company in the ordinary
course of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or, if less, the maximum amount of such primary obligation for which
such person may be liable pursuant to the terms of the instrument evidencing
such Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated potential liability in respect thereof (assuming such
person is required to perform thereunder) as determined by such person in good
faith.

 

“Continue,” “Continuation” and “Continued” shall refer to
the continuation pursuant to Section 2.09 of a LIBOR Loan from one
Interest Period to the next Interest Period.

 

“Contractual Obligation” shall mean as
to any person, any provision of any security issued by such person or of any
mortgage, deed of trust, security agreement, pledge agreement, promissory note,
indenture, credit or loan agreement, guaranty, securities purchase agreement,
instrument, lease, contract, agreement or other contractual obligation to which
such person is a party or by which it or any of its Property is bound or subject.

 

“control” see definition of “Affiliate”.

 

10

 

“Convert,” “Conversion” and “Converted” shall refer to
a conversion pursuant to Section 2.09 of one Type of Loan (other than
Swingline Loans) into another Type of Loan, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one Applicable
Lending Office to another.

 

“Credit Documents” shall mean (a) this
Agreement, (b) the Notes, (c) the L/C Documents, (d) the
Security Documents, (e) the Administrative Agent’s Fee Letter, (f) the
Fee Letter, (g) each Perfection Certificate and (h) each other
agreement entered into by any Credit Party with Administrative Agent,
Collateral Agent and/or any Lender in connection herewith or therewith
evidencing or governing the Obligations or delivered in connection herewith or
therewith, all as amended from time to time, but shall not include a Swap
Contract for purposes of Sections 11.01(a), 11.01(b), 11.01(c) and
11.01(e).

 

“Credit Parties” shall mean
Borrower and the Subsidiary Guarantors.

 

“Creditor” shall mean
each of (a) each Agent, (b) each L/C Lender, (c) each Lender and
(d) each Swap Provider.

 

“Credit Swap Contracts” shall mean any Swap Contract between
Borrower and/or any or all of its Restricted Subsidiaries and a Swap Provider.

 

“DBSI” shall mean Deutsche Bank Securities Inc, in its
individual capacity, and any successor thereto by merger, consolidation or
otherwise.

 

“DBTCA” shall mean Deutsche Bank Trust Company Americas, in
its individual capacity, and any successor thereto by merger, consolidation or
otherwise.

 

“Debt Issuance” shall mean the
incurrence by Borrower or any Restricted Subsidiary of any Indebtedness after
the Closing Date (other than as permitted by Section 10.01) and,
notwithstanding the foregoing to the contrary in the parenthetical, any
Permitted Senior Indebtedness having an aggregate principal amount of at least
$10.0 million incurred by Borrower or any of its Restricted Subsidiaries
pursuant to Section 10.01(l) at the time when the Consolidated Senior
Leverage Ratio is equal to or greater than 3.50 to 1.00.  The issuance or sale of any debt instrument
convertible into or exchangeable or exercisable for any Equity Interests shall
be deemed a Debt Issuance for purposes of Section 2.10(a).  For purposes of this definition, Consolidated
Senior Leverage Ratio shall be calculated on a pro forma
basis in accordance with Section 10.08(e); provided,
however, that such pro forma
calculation shall, in the case of any Indebtedness incurred to finance an
acquisition that will not be consummated concurrently with such incurrence,
only give pro forma effect to such acquisition if (i) Borrower
or such Restricted Subsidiary is party to an executed acquisition or merger
agreement relating to such acquisition and (ii) such acquisition is
expected to, and in fact does, close within 90 days after such incurrence (it
being understood that if such acquisition does not close within such period and
the Consolidated Senior Leverage Ratio is equal to or greater than 3.50 to
1.00, then any such Debt Issuance shall be deemed to occur on such 90th day
after such incurrence).

 

“Default” shall mean any
event or condition that constitutes an Event of Default or that would become,
with notice or lapse of time or both, an Event of Default.

 

11

 

“Defaulting Lender” shall mean any Lender with respect to
which a Lender Default is in effect.

 

“Discharged” shall mean Indebtedness that
has been defeased (pursuant to a contractual or legal defeasance) or discharged
pursuant to the prepayment or deposit of amounts sufficient to satisfy such
Indebtedness as it becomes due or irrevocably called for redemption (and
regardless of whether such Indebtedness constitutes a liability on the balance
sheet of the obligors thereof); provided, however,
that the Indebtedness shall be deemed Discharged if the payment or deposit of
all amounts required for defeasance or discharge or redemption thereof have
been made even if certain conditions thereto have not been satisfied, so long
as such conditions are reasonably expected to be satisfied within 91 days after
such prepayment or deposit.

 

“Disqualified Capital Stock” shall
mean, with respect to any person, any Equity Interest of such person that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures (excluding
any maturity as the result of an optional redemption by the issuer thereof) or
is mandatorily redeemable or redeemable at the sole option of the holder
thereof (other than solely for Qualified Capital Stock or upon a sale of assets
or a change of control that constitutes an Asset Sale or a Change of Control
and is subject to the prior payment in full of the Obligations or as a result of
a redemption required by Gaming Law), pursuant to a sinking fund obligation or
otherwise (other than solely for Qualified Capital Stock) or exchangeable or
convertible into debt securities of the issuer thereof at the sole option of
the holder thereof, in whole or in part, on or prior to the date that is 181
days after the Final Maturity Date then in effect.

 

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

 

“Dollar Equivalent” shall mean, as of any date of
determination, (a) as to any amount denominated in Dollars, such amount on
such date, and (b) as to any amount denominated in the Alternate Currency,
the amount of Dollars which could be purchased with the amount of the Alternate
Currency involved in such computation at the spot exchange rate therefor as
quoted by the applicable L/C Lender (which issued such Letter of Credit) as of
11:00 A.M. (New York time) on the date two Business Days prior to the date
of any determination therefor for purchase on such date.

 

“Domestic Subsidiary” of any person shall mean any Subsidiary
of such person incorporated, organized or formed in the United States or any state
or territory thereof or the District of Columbia.

 

“Eligible Assignee” shall mean and include a commercial bank,
an insurance company, a finance company, a financial institution, any fund that
invests in loans or any other “accredited investor” (as defined in Regulation
D), but in any event excluding Borrower or any of Borrower’s Affiliates or
Subsidiaries.

 

“Employee Benefit Plan” shall mean an
employee benefit plan (as defined in Section 3(3) of ERISA) that is
maintained or contributed to by any ERISA Entity.

 

12

 

“Environment” shall mean
ambient air, surface water and groundwater (including potable water, navigable
water and wetlands), the land surface or subsurface strata, natural resources,
the workplace or as otherwise defined in any Environmental Law.

 

“Environmental Action” shall mean (a) any
notice, claim, demand or other written or, to the knowledge of Borrower, oral
communication alleging liability for investigation, remediation, removal,
cleanup, response, corrective action or other costs, damages to natural resources,
personal injury, property damage, fines or penalties resulting from, related to
or arising out of (i) the presence, Release or threatened Release in or
into the Environment of Hazardous Material at any location or (ii) any
violation of Environmental Law, and shall include, without limitation, any
claim seeking damages, contribution, indemnification, cost recovery, compensation
or injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to human health, safety or the Environment arising under
Environmental Law and (b) any investigation, monitoring, removal or
remedial activities undertaken by or on behalf of Borrower or any of its Subsidiaries,
arising under Environmental Law whether or not such activities are carried out
voluntarily.

 

“Environmental Law” shall mean any
and all applicable treaties, laws, statutes, ordinances, regulations, rules,
decrees, judgments, orders, consent orders, consent decrees and other binding
legal requirements, and the common law, relating to protection of public health
or the Environment, the Release or threatened Release of Hazardous Material, natural
resources or natural resource damages, or occupational safety or health.

 

“Equity Interests” shall mean,
with respect to any person, any and all shares, interests, participations or
other equivalents, including membership interests (however designated, whether
voting or non-voting), of equity of such person, including, if such person is a
partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnership,
whether outstanding on the Closing Date or issued after the Closing Date.

 

“Equity Issuance” shall mean (a) any
issuance or sale after the Closing Date by Borrower of any Equity Interests
(including any Equity Interests issued upon exercise of any Equity Rights) or
any Equity Rights, or (b) the receipt by Borrower after the Closing Date
of any capital contribution (whether or not evidenced by any Equity Interest
issued by the recipient of such contribution). 
The issuance or sale of any debt instrument convertible into or
exchangeable or exercisable for any Equity Interests shall be deemed a Debt
Issuance and not an Equity Issuance for purposes of the definition of Equity
Issuance Proceeds; provided, however,
that such issuance or sale shall be deemed an Equity Issuance upon the
conversion or exchange of such debt instrument into Equity Interests.

 

“Equity Issuance Proceeds” shall mean, with respect to any
Equity Issuance, the aggregate amount of all cash received in respect thereof
by the person consummating such Equity Issuance net of all investment banking
fees, discounts and commissions, legal fees, consulting fees, accountants’
fees, underwriting discounts and commissions and other fees and expenses
actually incurred in connection therewith.

 

13

 

“Equity Rights” shall mean,
with respect to any person, any then outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including
any stockholders’ or voting trust agreements) for the issuance, sale,
registration or voting of any additional Equity Interests of any class, or
partnership or other ownership interests of any type in, such person; provided, however, that a debt instrument convertible into
or exchangeable or exercisable for any Equity Interests shall not be deemed an
Equity Right.

 

“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Entity” shall mean any
member of an ERISA Group.

 

“ERISA Event” shall mean (a) any
“reportable event,” as defined in Section 4043 of ERISA or the regulations
issued thereunder, with respect to a Pension Plan (other than an event for
which the 30-day notice requirement is waived); (b) the existence with
respect to any Pension Plan of an “accumulated funding deficiency” (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, the failure by any ERISA Entity to make by its due date a required
installment under Section 412(m) of the Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(a) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Pension Plan; (d) the incurrence by any ERISA Entity of any
liability under Title IV of ERISA with respect to the termination of any
Pension Plan; (e) the receipt by any ERISA Entity from the PBGC or a plan
administrator of any notice indicating an intent to terminate any Pension Plan
or to appoint a trustee to administer any Pension Plan; (f) the occurrence
of any event or condition which would reasonably constitute grounds under ERISA
for the termination of or the appointment of a trustee to administer, any
Pension Plan; (g) the incurrence by any ERISA Entity of any liability with
respect to the withdrawal or partial withdrawal from any Pension Plan or
Multiemployer Plan; (h) the receipt by an ERISA Entity of any notice, or
the receipt by any Multiemployer Plan from any ERISA Entity of any notice,
concerning the imposition of Withdrawal Liability on any ERISA Entity or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (i) the making of
any amendment to any Pension Plan which would be reasonably likely to result in
the imposition of a lien or the posting of a bond or other security; or (j) the
occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975
of the Code or Section 406 of ERISA) which would reasonably be expected to
result in liability to Borrower or any of its Restricted Subsidiaries.

 

“ERISA Group” shall mean Borrower
or any of its Restricted Subsidiaries and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower and its Restricted Subsidiaries,
are treated as a single employer under Section 414(b) or (c) of
the Code.

 

“Estoppel” shall mean a
Lessor Consent, Waiver and Estoppel Certificate, which shall be substantially
in the form attached hereto as Exhibit N.

 

“Excess Cash Flow” shall mean,
for any Excess Cash Flow Period, the sum (without duplication) of:

 

14

 

(a)           consolidated net income (or loss) of
Borrower and its Restricted Subsidiaries for such Excess Cash Flow Period,
adjusted to exclude any gains or losses attributable to prepayment of any
Loans; plus

 

(b)           depreciation and amortization
deducted in determining such consolidated net income (or loss) for such Excess
Cash Flow Period; plus

 

(c)           other non-cash charges or losses
(except for such non-cash charges or losses representing or requiring an
accrual or reserve for future (including contingent) cash expenses, charges or
losses) deducted in determining such consolidated net income (or loss) for such
Excess Cash Flow Period; plus

 

(d)           the sum of (i) the amount, if
any, by which Working Capital decreased during such Excess Cash Flow Period plus (ii) the net amount, if any, by which the consolidated
deferred revenues and other consolidated accrued long-term liability accounts
of Borrower and its Restricted Subsidiaries increased during such Excess Cash
Flow Period plus (iii) the net amount, if any,
by which the consolidated accrued long-term asset accounts of Borrower and its
Restricted Subsidiaries decreased during such Excess Cash Flow Period; minus

 

(e)           the sum of (i) any non-cash
gains included in determining such consolidated net income (or loss) for such
Excess Cash Flow Period plus (ii) the
amount, if any, by which Working Capital increased during such Excess Cash Flow
Period plus (iii) the net amount, if any,
by which the consolidated deferred revenues and other consolidated accrued
long-term liability accounts of Borrower and its Restricted Subsidiaries decreased
during such Excess Cash Flow Period plus (iv) the
net amount, if any, by which the consolidated accrued long-term asset accounts
of Borrower and its Restricted Subsidiaries increased during such Excess Cash
Flow Period; minus

 

(f)            the sum of (i) Capital
Expenditures for such Excess Cash Flow Period (except to the extent
attributable to the incurrence of Capital Lease Obligations or otherwise
financed by incurring Indebtedness) plus (ii) cash
consideration paid during such Excess Cash Flow Period to make Permitted
Acquisitions (except to the extent financed by incurring Indebtedness) plus (iii) the amounts paid to make Investments
permitted under Section 10.04(l) plus (iv) cash
payments or cash deposits made to acquire or secure licenses to operate Gaming
Facilities; minus

 

(g)           the proceeds or amounts realized from
any Casualty Event (and any applicable insurance deductible in respect thereof)
or Asset Sale (only deducted to the extent included in the calculation of
consolidated net income) during such Excess Cash Flow Period; minus

 

(h)           the aggregate principal amount of
Indebtedness repaid or prepaid by Borrower and its Restricted Subsidiaries
during such Excess Cash Flow Period, excluding Indebtedness in respect of
Revolving Loans and Letters of Credit (unless the repayment of the principal
amount of such Revolving Loans is accompanied by a corresponding termination of
the Total Revolving Commitments); minus

 

15

 

(i)            the amounts paid to make Investments
permitted under Section 10.04(m).

 

“Excess Cash Flow Period” shall mean
each fiscal year of Borrower beginning the fiscal year ending December 31,
2006.

 

“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.

 

“Excluded Taxes” shall mean, with respect to any Agent, any
Lender, or any other recipient of any payment to be made by or on account of
any obligation of Borrower hereunder, (a) income or franchise Taxes
imposed on (or measured by) its net income or net profits by the United States,
or by the jurisdiction under the laws of which such recipient is organized, in
which its principal office is located or in which it is otherwise doing
business (other than a business deemed to arise solely by virtue of the
transactions contemplated by this Agreement) or, in the case of any Lender, in
which its Applicable Lending Office is located, (b) any branch profits
Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction
in which Borrower is located, (c) other than an assignee pursuant to a
request by Borrower under Section 2.11(a), any U.S. federal withholding
tax that is imposed on amounts payable to such person at the time such person
becomes a party to this Agreement (or designates a new Applicable Lending
Office), except to the extent that such person (or its assignor, if any) was
entitled, at the time of designation of a new Applicable Lending Office (or
assignment), to receive additional amounts from Borrower with respect to such
withholding Tax pursuant to Section 5.06(a), or (d) a U.S. federal
withholding tax that is attributable to such person’s failure to comply with Section 5.06(b) or
5.06(c).

 

“Existing Argosy Credit Facility” shall mean the Third
Amended and Restated Credit Agreement, dated as of September 30, 2004 (as
amended, supplemented or otherwise modified) among Argosy, the other borrowers
named therein, the lenders named therein, Calyon and Bank of Scotland, as
co-syndication agents, Morgan Stanley Bank, as documentation agent, and Wells
Fargo, as administrative agent, letter of credit issuer and swingline lender.

 

“Existing Argosy Indentures” shall mean the indentures
governing the Existing Argosy Notes.

 

“Existing Argosy Notes” shall mean,
collectively, Argosy’s outstanding 7% senior subordinated notes due 2014 and
Argosy’s outstanding 9% senior subordinated notes due 2011 and, in each case,
the Existing Argosy Indentures related thereto.

 

“Existing Borrower Credit Agreement” shall mean the Credit
Agreement, dated as of March 3, 2003 (the “Original
Borrower Credit Agreement”), as amended and restated as of December 5,
2003 (as amended) among Borrower, the subsidiary guarantors party thereto,
Bear, Stearns & Co. Inc., as sole lead arranger, sole bookrunner and
sole syndication agent in connection with the term D loan facility and the amendment
and restatement, Bear, Stearns & Co. Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as original joint lead arrangers and
original joint bookrunners, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as original syndication agent, Bear Stearns Corporate Lending
Inc., as swingline lender, administrative agent and collateral agent, and
Societe Generale and Credit Lyonnais New York Branch, as joint documentation
agents, and the lenders party thereto. 

 

16

 

“fair market value” shall mean,
with respect to any Property, a price (after taking into account any
liabilities relating to such Property), as determined in good faith by Borrower,
that could be negotiated in an arm’s-length free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction.

 

“FASB 142” shall mean
Statement of Financial Accounting Standards No. 142 issued on June 29,
2001 by the Financial Accounting Standards Board.

 

“FASB 144” shall mean
Statement of Financial Accounting Standards No. 144 issued August 2001
by the Financial Accounting Standards Board.

 

“Federal Funds Rate” shall mean,
for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, however, that (a) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (b) if such rate is not so published for any Business Day, the Federal
Funds Rate for such Business Day shall be the average rate quoted to Administrative
Agent on such Business Day on such transactions by three federal funds brokers
of recognized standing, as determined by Administrative Agent.

 

“Fee Letter” shall mean the
fee letter agreement dated November 3, 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time), among Borrower,
DBTCA, DBSI, GSCP, LBI and LCPI.

 

“Final Maturity Date” shall mean the latest of the R/C
Maturity Date, the Term A Facility Maturity Date, the Term B Facility
Maturity Date and the latest New Incremental Term Loan Maturity Date.

 

“Financial Maintenance Covenants” shall
mean the covenants set forth in Sections 10.08(a) through and including
10.08(d).

 

“FIRREA” shall mean the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended.

 

“Fixed Charge Coverage Ratio” shall
mean, as at any date of determination, the ratio of (x) Consolidated
EBITDA for the Test Period ending on such date minus Maintenance
Capital Expenditures for such Test Period to (y) Fixed Charges for the Test
Period ending on such date.

 

“Fixed Charges” shall mean, for any Test Period, the sum of,
without duplication, (a) Consolidated Interest Expense for such period to
the extent paid or mandatorily payable in cash during such period, (b) the
sum of all scheduled principal payments on any Indebtedness of Borrower and its
Restricted Subsidiaries (including, without duplication, any lease payments in
respect of Capital Leases (to the extent such lease payments would constitute a

 

17

 

payment of principal of such Capital Lease)
of Borrower and its Restricted Subsidiaries but excluding (x) any prepayment of
a type contemplated by Section 2.10 and (y) balloon or other payments at final
maturity thereof) and (c) all cash income tax expense actually paid to any
Governmental Authority by Borrower and its Restricted Subsidiaries for such
period (other than taxes related to Asset Sales not in the ordinary course of
business).  Notwithstanding the
foregoing, for the initial four Test Dates after the Closing Date, for the
purposes of calculation of Fixed Charges, Consolidated Interest Expense shall
equal the product of (x) Consolidated Interest Expense since the Closing Date
to the date in question and (y) a fraction, the numerator of which is 365 and
the denominator of which is the number of days since the Closing Date.

 

“Foreign Plan” shall mean any
employee benefit plan, program, policy, arrangement or agreement (excluding
employment agreements) maintained or contributed to by, or entered into with,
Borrower or any Restricted Subsidiary with respect to employees employed outside
the United States.

 

“Foreign Subsidiary” shall mean
each Subsidiary that is organized under the laws of a jurisdiction other than
the United States or any state thereof, or the District of Columbia.

 

“FTC Order” shall mean the proposed Agreement Containing
Consent Orders accepted July 26, 2005 by the Federal Trade Commission of
the United States of America in the case of Penn National Gaming, Inc.,
FTC File No. 0510029, together with the “Decision and Order” and “Order to
Hold Separate and Maintain Assets” referred to therein, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Funding Date” shall mean the
date of the making of any extension of credit (whether the making of a Loan or
the issuance of a Letter of Credit) hereunder (including the Closing Date).

 

“GAAP” shall mean
generally accepted accounting principles set forth as of the relevant date in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.

 

“Gaming Approval” shall mean any
and all approvals, authorizations, permits, consents, rulings, orders or
directives of any Governmental Authority (a) necessary to enable Borrower
or any of its Restricted Subsidiaries to engage in the casino, gambling, horse
racing or gaming business or otherwise continue to conduct its business
substantially as is presently conducted or contemplated to be conducted
following the Closing Date (after giving effect to the Transactions), (b) required
by any Gaming Authority or under any Gaming Law or (c) necessary as is contemplated
on the Closing Date (after giving effect to the Transactions), to accomplish
the financing and other transactions contemplated hereby after giving effect to
the Transactions.

 

“Gaming Authority” shall mean any
governmental agency, authority, board, bureau, commission, department, office
or instrumentality with regulatory, licensing or permitting authority or jurisdiction
over any gaming business or enterprise or any Gaming

 

18

 

Facility (including, without limitation, the
Alcohol and Gaming Commission of Ontario, the Colorado Division of Gaming, the
Colorado Limited Gaming Control Commission, the Illinois Gaming Board, Indiana
Gaming Commission, the Iowa Racing and Gaming Commission, the Louisiana Gaming
Control Board, the Maine Harness Racing Commission, the Maine Gambling Control
Board, the Mississippi Gaming Commission, the Mississippi State Tax Commission,
the Missouri Gaming Commission, the New Jersey Racing Commission, the New
Jersey Casino Control Commission, the Pennsylvania State Horse Racing
Commission, the Pennsylvania State Harness Racing Commission, the West Virginia
Racing Commission and the West Virginia Lottery Commission), or with
regulatory, licensing or permitting authority or jurisdiction over any gaming
operation (or proposed gaming operation) owned, managed or operated by Borrower
or any of its Restricted Subsidiaries.

 

“Gaming Facility” shall mean any
gaming establishment and other property or assets ancillary thereto or used in
connection therewith, including, without limitation, any casinos, hotels,
resorts, race tracks, off-track wagering sites, theaters, parking facilities,
recreational vehicle parks, timeshare operations, retail shops, restaurants,
other buildings, land, golf courses and other recreation and entertainment
facilities, marinas, vessels, barges, ships and related equipment.

 

“Gaming Laws” shall mean all
applicable provisions of all: (a) constitutions, treaties, statutes or
laws governing Gaming Facilities (including, without limitation, card club
casinos and pari mutuel race tracks) and rules, regulations, codes and
ordinances of, and all administrative or judicial orders or decrees or other
laws pursuant to which, any Gaming Authority possesses regulatory, licensing or
permit authority over gambling, gaming or Gaming Facility activities conducted
by Borrower or any of its Restricted Subsidiaries within its jurisdiction; (b) Gaming
Approvals; and (c) orders, decisions, determinations, judgments, awards
and decrees of any Gaming Authority.

 

“Gaming License” shall mean any Gaming Approval or other
casino, gambling, horse racing or gaming license issued by any Gaming Authority
covering any Gaming Facility.

 

“Governmental Authority” shall mean any
government or political subdivision of the United States or any other country,
whether federal, state, provincial or local, or any agency, authority, board,
bureau, central bank, commission, department or instrumentality thereof or
therein, including, without limitation, any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to such government or political subdivision including, without
limitation, any Gaming Authority.

 

“Governmental Real Property Disclosure Requirements” shall mean any Requirement of Law requiring notification of
the buyer, mortgagee or assignee of real property, or notification,
registration or filing to or with any Governmental Authority, in connection
with the sale, lease, mortgage, assignment or other transfer (including,
without limitation, any transfer of control) of any real property,
establishment or business, of the actual or threatened presence or release in
or into the Environment, or the use, disposal or handling of Hazardous Material
on, at, under or near the real property, facility or business to be sold,
mortgaged, assigned or transferred.

 

19

 

“Ground Leases” shall mean,
collectively, each ground lease set forth on Schedule 1.01(A) attached
hereto as each may be supplemented, replaced or modified from time to time.

 

“GSCP” shall mean Goldman Sachs Credit Partners L.P., in its
individual capacity, and any successor thereto by merger, consolidation or
otherwise.

 

“Guarantee” shall mean the
guarantee of each Subsidiary Guarantor pursuant to Article VI.

 

“Hazardous Material” shall mean any
material, substance, waste, constituent, compound, pollutant or contaminant
including, without limitation, petroleum (including, without limitation, crude
oil or any fraction thereof or any petroleum product or waste) subject to regulation
or which could reasonably be expected to give rise to liability under
Environmental Law.

 

“Illinois Principal Assets” shall mean the following
Principal Assets: (a) the Gaming Facility known as “Hollywood Casino
Aurora”, located in Aurora, Illinios; and (b) the Gaming Facility known as
“Empress Casino Joliet”, located in Joliet, Illinios

 

“Immaterial Subsidiary” shall mean, at any time, any
Restricted Subsidiary of Borrower having assets with an aggregate fair market
value of less than $25.0 million as of the last day of any fiscal quarter of
Borrower; provided, however,
that in no event shall the aggregate fair market value of the assets of all
Immaterial Subsidiaries exceed the Immaterial Subsidiary Threshold Amount as of
the last day of any fiscal quarter of Borrower.

 

“Immaterial Subsidiary Threshold Amount” shall mean $50.0
million.

 

“Incremental Commitment Amount” shall mean $300.0 million (as
the same may be reduced or terminated from time to time pursuant to Section 2.04);
provided, however,
that until the earlier of (a) the expiration or termination of the Pocono
Downs Put Obligation in accordance with the Pocono Downs Sale Documents or (b) the
date on which Borrower has fulfilled the Pocono Downs Put Obligation, $175.0
million of the Incremental Commitment Amount may only be utilized in connection
with the fulfillment of the Pocono Downs Put Obligation; provided,
further, that in no event shall the
aggregate amount of all Incremental Revolving Commitments provided pursuant to Section 2.12
exceed $100.0 million.

 

“Incremental Commitments” shall mean the Incremental
Revolving Commitments, the Incremental Term A/B Loan Commitments and the New
Incremental Term Loan Commitments.

 

“Incremental Term A/B Loan Commitments” shall mean the Incremental
Term A Loan Commitments and the Incremental
Term B Loan Commitments.

 

“Incremental Term A/B Loans” shall mean the Incremental Term
A Loans and the Incremental Term B Loans.

 

20

 

“Incremental Term Loan Commitments” shall mean the Incremental
Term A/B Loan Commitments and the New Incremental Term Loan Commitments.

 

“Incremental Term Loans” shall mean the Incremental Term A/B
Loans and the New Incremental Term Loans.

 

“incur” shall mean,
with respect to any Indebtedness or other obligation of any person, to create,
issue, incur (including by conversion, exchange or otherwise), permit to exist,
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation (and “incurrence,” “incurred” and “incurring” shall have meanings correlative to the foregoing).

 

“Indebtedness” of any person
shall mean, without duplication, (a) all obligations of such person for
borrowed money; (b) all obligations of such person evidenced by bonds, debentures,
notes or similar instruments; (c) all obligations of such person under
conditional sale or other title retention agreements relating to property
purchased by such person; (d) all obligations of such person issued or assumed
as the deferred purchase price of property or services (excluding (x) trade
accounts payable and accrued obligations incurred in the ordinary course of business,
(y) financing of insurance premiums in the ordinary course of business and (z)
any such obligations payable solely through the issuance of Equity Interests); (e) all
Indebtedness of others secured by any Lien on property owned or acquired by
such person, whether or not the obligations secured thereby have been assumed; provided, however, that if such obligations have not been assumed, the amount
of such Indebtedness included for the purposes of this definition will be the
amount equal to the lesser of the fair market value of such property and the
amount of the Indebtedness secured; (f) all Capital Lease Obligations of
such person; (g) all obligations of such person in respect of interest
rate protection agreements, foreign currency exchange agreements or other
interest or exchange rate hedging arrangements; (h) all obligations of
such person as an account party in respect of letters of credit and bankers’
acceptances, except obligations in respect of letters of credit issued in support
of obligations not otherwise constituting Indebtedness shall not constitute
Indebtedness except to the extent such letter of credit is drawn and not
reimbursed within ten Business Days; and (i) all Contingent Obligations of
such person in respect of Indebtedness of others of the kinds referred to in
clauses (a) through (h) above; provided, however, that for purposes of this definition, deferred
purchase obligations shall be calculated based on the net present value
thereof.  The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner unless recourse is limited, in which case the amount of such
Indebtedness shall be the amount such person is liable therefor (except to the
extent the terms of such Indebtedness expressly provide that such person is not
liable therefor).  The amount of
Indebtedness of the type referred to in clause (g) above of any person
shall be zero unless and until such Indebtedness shall be terminated, in which
case the amount of such Indebtedness shall be the then termination payment due
thereunder by such person.  The amount of
Indebtedness of the type described in clause (d) shall be calculated based
on the net present value thereof.  For
the avoidance of doubt, casino “chips” and gaming winnings of customers shall
not constitute Indebtedness.

 

“Indiana Mortgage Documents” shall mean, collectively, (a) the
Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture
Filing, by Indiana Gaming Company, L.P., as mortgagor, to Deutsche Bank Trust
Company Americas, as mortgagee, dated

 

21

 

as of the Closing Date, relating to Real
Property located in Dearborn County, Indiana, and (b) the Preferred Ship
Mortgage, by Indiana Gaming Company, L.P., as mortgagor, to Deutsche Bank Trust
Company Americas, as mortgagee, dated as of the Closing Date, relating to the
whole of the Argosy VI Vessel.

 

“Initial Perfection Certificate” has the meaning set forth in
the definition of “Perfection Certificate”.

 

“Interest Period” shall mean,
with respect to any LIBOR Loan, each period commencing on the date such LIBOR
Loan is made or Converted from an ABR Loan or the last day of the next
preceding Interest Period for such LIBOR Loan and (subject to the requirements
of Section 2.09) ending on the numerically corresponding day in the first,
second, third or sixth calendar month (or, to the extent requested by Borrower
and with the prior written consent of each applicable Lender, nine or twelve
months) thereafter, as Borrower may select as provided in Section 4.05
(but otherwise subject to the second sentence in Section 2.01(d)), except
that each Interest Period that commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of
the appropriate subsequent calendar month. 
Notwithstanding the foregoing:  (i) if
any Interest Period for any Revolving Loan would otherwise end after the R/C Maturity
Date, such Interest Period shall end on the R/C Maturity Date; (ii) each
Interest Period that would otherwise end on a day that is not a Business Day
shall end on the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iii) notwithstanding clause (i) above, except as
otherwise provided in Section 2.01(d), no Interest Period shall have a
duration of less than one month and, if the Interest Period for any LIBOR Loan
would otherwise be a shorter period, such Loan shall not be available hereunder
as a LIBOR Loan for such period.

 

“Interest Rate Certificate” shall
mean an Interest Rate Certificate substantially in the form of Exhibit D,
delivered pursuant to Section 9.04(e), demonstrating in reasonable detail
the calculation of the Consolidated Total Leverage Ratio as of any Test Date.

 

“Interest Rate Protection Agreement” shall
mean, for any person, an interest rate swap, cap or collar agreement or similar
arrangement between such person and one or more financial institutions
providing for the transfer or mitigation of interest risks either generally or
under specific contingencies.

 

“Investments” of any person shall mean (a) any loan or
advance of funds or credit by such person to any other person, (b) any
Contingent Obligation by such person in respect of the Indebtedness or other
obligation of any other person (provided that upon termination of any such
Contingent Obligation, no Investment in respect thereof shall be deemed
outstanding, except as contemplated in clause (e) below), (c) any
purchase or other acquisition of any Equity Interests or indebtedness or
obligations of any other person, (d) any capital contribution by such
person to any other person, (e) any payment under any Contingent
Obligation by such person in respect of the Indebtedness or other obligation of
any other person, or (f) holding any cash or Cash Equivalents.  For purposes of the definition of “Unrestricted
Subsidiary” and Section 10.04, “Investment” shall include the portion
(proportionate to Borrower’s Equity Interest in such Subsidiary) of the fair
market value of the net assets of any Subsidiary of Borrower at the time of
Designation of such Subsidiary as an Unrestricted

 

22

 

Subsidiary pursuant to Section 9.12; provided, however, that upon the Revocation of a
Subsidiary that was Designated as an Unrestricted Subsidiary after the Closing
Date, the amount of outstanding Investments is deemed to be reduced by the
lesser of (x) the fair market value of such Subsidiary at the time of such
Revocation and (y) the amount of Investments that was deemed to have been made
at the time of the Designation of such Subsidiary as an Unrestricted
Subsidiary.

 

“Joinder Agreements” shall mean
each Joinder Agreement substantially in the form of Exhibit M
attached hereto and each Joinder Agreement to be entered into pursuant to the
Security Agreement.

 

“Joint Venture” shall mean any person, other than an
individual or a Wholly Owned Subsidiary of Borrower, in which Borrower or a
Restricted Subsidiary of Borrower holds or acquires an ownership interests
(whether by way of capital stock, partnership or limited liability company
interest, or other evidence of ownership).

 

“Kansas City Facility” shall mean the
Gaming Facility currently known as “The Argosy Casino Riverside,” located near
Kansas City, Missouri.

 

“Lawrenceburg Facility” shall mean the
Gaming Facility currently known as “The Argosy Casino Lawrenceburg,” located in
Lawrenceburg, Indiana.

 

“Laws” shall mean,
collectively, all common law and all international, foreign, federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents, including without limitation the
interpretation thereof by any Governmental Authority charged with the
enforcement thereof.

 

“LBI” shall mean Lehman Brothers Inc., in its individual
capacity, and any successor thereto by merger, consolidation or otherwise.

 

“L/C Commitments” shall mean the
commitments of L/C Lender to issue Letters of Credit pursuant to Section 2.03.

 

“L/C Disbursements” shall mean a
payment or disbursement made by any L/C Lender pursuant to a Letter of Credit.

 

“L/C Documents” shall mean,
with respect to any Letter of Credit, collectively, any other agreements, instruments,
guarantees or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for (a) the rights
and obligations of the parties concerned or at risk with respect to such Letter
of Credit or (b) any collateral security for any of such obligations, each
as the same may be amended or modified and in effect from time to time.

 

“L/C Interest” shall mean,
for each Revolving Lender, such Lender’s participation interest (or, in the
case of L/C Lender, L/C Lender’s retained interest) in L/C Lender’s liability
under Letters of Credit and such Lender’s rights and interests in Reimbursement
Obligations and fees, interest and other amounts payable in connection with
Letters of Credit and Reimbursement Obligations.

 

23

 

“L/C Lender” shall mean, as
the context may require: (a) Wachovia Bank,
National Association or any of its Affiliates, in its capacity as issuer of
Letters of Credit issued by it hereunder (including certain of the Existing
Letters of Credit issued by it), together with its successors and assigns in
such capacity; (b) any other Lender or Lenders (1) selected by
Administrative Agent and reasonably satisfactory to Borrower or (2) that
becomes an L/C Lender pursuant to Section 2.03(l), in each case in its capacity
as issuer of Letters of Credit issued by such Lender hereunder, together with
its successors and assigns in such capacity; (c) Wells Fargo, in its
capacity as issuer of certain of the Existing Letters of Credit issued by it,
together with its successors and assigns in such capacity; or (d) collectively,
all of the foregoing.   

 

“L/C Liability” shall mean, at
any time, without duplication, the sum of (a) the Dollar Equivalent of the
Stated Amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all L/C Disbursements
that have not yet been reimbursed at such time (expressed in Dollars in the
amount of the Dollar Equivalent thereof in the case of any Letter of Credit
denominated in the Alternate Currency) in respect of all Letters of
Credit.  The L/C Liability of any
Revolving Lender at any time shall mean such Revolving Lender’s R/C Percentage
of the aggregate L/C Liabilities at such time.

 

“L/C Sublimit” shall mean an amount equal to the lesser of (a) $100.0
million and (b) the Total Revolving Commitments then in effect.  The L/C Sublimit is part of, and not in addition
to, the Total Revolving Commitments.

 

“LCPI” shall mean Lehman Commercial Paper Inc., in its
individual capacity, and any successor thereto by merger, consolidation or
otherwise.

 

“Lease” shall mean any
lease, sublease, franchise agreement, license, occupancy or concession
agreement.

 

“Lender Default” shall mean (a) the refusal (which has
not been retracted) or the failure of a Lender to make available or otherwise
fund its portion of any Borrowing (including participations in Swingline Loans)
or to fund its portion of any unreimbursed payment under Section 2.03 or (b) a
Lender having notified Administrative Agent and/or Borrower that it does not
intend to comply with the obligations under Section 2.01(a), 2.01(b),
2.01(c), 2.01(e) or 2.03.

 

“Lenders” shall mean (a) each
Person listed on Annexes A-1, A-2 and A-3 that is a party
to this Agreement, (b) any New Incremental Lender from time party hereto
pursuant to Section 2.12 and (c) any Person that becomes a “Lender”
hereunder pursuant to an Assignment Agreement, other than any such Person that
ceases to be a party hereto pursuant to an Assignment Agreement.  Unless the context requires otherwise, the
term “Lenders” shall include the Swingline Lender and L/C Lender.

 

“Letter
of Credit” shall have the meaning set
forth in Section 2.03(a) and shall include each Existing Letter of
Credit.

 

“LIBO Base Rate” shall mean,
with respect to any LIBOR Loan for any Interest Period therefor, the rate per annum determined by Administrative Agent to be the
arithmetic mean (rounded, if necessary, to the nearest 1/100th of 1%) of the
offered rates for deposits in Dollars with a term comparable to such Interest
Period that appears on the Telerate British

 

24

 

Bankers Assoc. Interest
Settlement Rates Page (defined below) at approximately 11:00 a.m.,
London, England time, on the second full Business Day preceding the first day
of such Interest Period; provided, however, that (i) if
no comparable term for an Interest Period is available, the LIBO Base Rate
shall be determined using the weighted average of the offered rates for the two
terms most nearly corresponding to such Interest Period and (ii) if there
shall at any time no longer exist a Telerate British Bankers Assoc. Interest
Settlement Rates Page, “LIBO Base Rate” shall mean, with respect to each day
during each Interest Period pertaining to LIBOR Loans comprising part of the same
borrowing, the rate per annum equal
to the rate at which Administrative Agent is offered deposits in Dollars at
approximately 11:00 a.m., London, England time, two Business Days prior to
the first day of such Interest Period in the London interbank market for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of such LIBOR Loan
to be outstanding during such Interest Period. 
“Telerate British Bankers Assoc. Interest Settlement
Rates Page” shall mean the
display designated as Page 3750 on the Telerate System Incorporated
Service (or such other page as may replace such page on such service
for the purpose of displaying the rates at which Dollar deposits are offered by
leading banks in the London interbank deposit markets).

 

“LIBO Rate” shall mean,
for any LIBOR Loan for any Interest Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) determined by Administrative Agent to be equal to the
LIBO Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Loan for
such Interest Period.

 

“LIBOR Loans” shall mean
Loans that bear interest at rates based on rates referred to in the definition of
“LIBO Rate”.

 

“License Revocation” shall mean the revocation, failure to
renew or suspension of, or the appointment of a receiver, supervisor or similar
official with respect to, any Gaming License covering any Gaming Facility
owned, leased, operated or used by Borrower or any of its Restricted
Subsidiaries, but excluding any such revocation, failure to renew, suspension
or appointment to the extent such Gaming License relates to a Gaming Facility
that is located on a Native American Indian reservation and/or in a
jurisdiction the Gaming Laws of which have permitted gambling in the form of
slot machines and table games to be conducted by any person or persons who are
not Native American Indians or are acting or managing gaming operations for or
on behalf of Native American Indians for less than two years at the time of any
such revocation, failure to renew, suspension or appointment.

 

“Lien” shall mean,
with respect to any Property, any mortgage, deed of trust, lien, pledge,
security interest, assignment, hypothecation or encumbrance for security of any
kind, or any filing of any financing statement under the UCC or any other
similar notice of lien under any similar notice or recording statute of any
Government Authority (other than such financing statement or similar notices
filed for informational or precautionary purposes only), any conditional sale
or other title retention agreement or any lease in the nature thereof.

 

“Loans” shall mean the
Revolving Loans, the Swingline Loans and the Term Loans.

 

25

 

“Losses” of any person
shall mean the losses, liabilities, claims (including those based upon
negligence, strict or absolute liability and liability in tort), damages,
reasonable expenses, obligations, penalties, actions, judgments, penalties,
fines, suits, reasonable and documented costs or disbursements of any kind or
nature whatsoever (including reasonable fees and expenses of counsel in
connection with any Proceeding commenced or threatened in writing, whether or
not such person shall be designated a party thereto) at any time (including
following the payment of the Obligations) incurred by, imposed on or asserted
against such person.

 

“Maintenance Capital Expenditures” shall
mean any capital expenditures by Borrower or any of its Restricted Subsidiaries
that are made to maintain, repair, restore or refurbish in the ordinary course
of business the condition or usefulness of property of Borrower or any of its
Restricted Subsidiaries, or otherwise to support the continuation of such person’s
day-to-day operations as then conducted, but that are not properly chargeable
to repairs and maintenance in accordance with GAAP, but excluding
any capital expenditures which materially add to or significantly improve any
such property.

 

“Margin Stock” shall mean
margin stock within the meaning of Regulation T, Regulation U and Regulation X.

 

“Material Adverse Effect” shall mean an
event, circumstance, occurrence or condition which has caused any of (a) any
change, condition, circumstance or effect that, individually or in the
aggregate with all other changes, circumstances and effects, is or is reasonably
likely to have a material adverse effect on the business, assets, results of
operations or financial condition of Borrower and the Restricted Subsidiaries,
taken as a whole, (b) a material adverse effect on the ability of the
Credit Parties to perform any of their material obligations under the Credit
Documents or (c) a material adverse effect on the legality, binding effect
or enforceability against any Credit Party of the Credit Documents to which it
is a party or any of the material rights and remedies of any Creditor
thereunder or the legality, priority or enforceability of the Liens on a
material portion of the Collateral.

 

“Moody’s” shall mean
Moody’s Investors Service, Inc., or any successor entity thereto.

 

“Mortgage” shall mean an
agreement, including, but not limited to, a mortgage, deed of trust or any
other document, creating and evidencing a first Lien (subject only to the Liens
permitted thereunder) in favor of Collateral Agent on behalf of the Secured
Parties on each Mortgaged Real Property, which shall be in substantially in the
form of Exhibit I, with such schedules and including such
provisions as shall be necessary to conform such document to applicable or
local law or as shall be customary under local law, as the same may at any time
be amended in accordance with the terms thereof and hereof and such changes
thereto as shall be acceptable to Administrative Agent.

 

“Mortgaged Real Property” shall mean (a) each
Real Property identified on Schedule 1.01(C) and (b) each
Real Property, if any, which shall be subject to a Mortgage delivered after the
Closing Date pursuant to Section 9.08.

 

26

 

“Mortgaged  Vessel” shall mean (a) each Vessel listed on Schedule 8.13(b) as
a “Mortgaged Vessel”, and (b) each Vessel or Replacement Vessel, if any,
which shall be subject to a Ship Mortgage after the Closing Date pursuant to Section 9.08.

 

“Multiemployer Plan” shall mean a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA (a) to
which any ERISA Entity is then making or accruing an obligation to make
contributions, (b) to which any ERISA Entity has within the preceding five
plan years made contributions, including any person which ceased to be an ERISA
Entity during such five year period or (c) with respect to which any
Company is reasonably likely to incur liability under Title IV of ERISA.

 

“NAIC” shall mean the National Association of Insurance
Commissioners.

 

“Net Available Proceeds” shall mean:

 

(i)            in the case of any Asset Sale
permitted by Sections 10.05(c) and 10.05(n), the aggregate amount of all
cash payments (including any cash payments received by way of deferred payment
of principal pursuant to a note or otherwise, but only as and when received) received
by Borrower or any Restricted Subsidiary directly or indirectly in connection
with such Asset Sale, net (without duplication) of (A) the amount of all reasonable
fees and expenses paid by or on behalf of Borrower or any Restricted Subsidiary
in connection with such Asset Sale; (B) any Taxes paid or estimated in
good faith to be payable by or on behalf of any Company as a result of such
Asset Sale (after application of all credits and other offsets that arise from
such Asset Sale); (C) any repayments by or on behalf of any Company of
Indebtedness (other than the Obligations) to the extent that such Indebtedness
is secured by a Permitted Lien on the subject Property required to be repaid as
a condition to the purchase or sale of such Property; (D) amounts required
to be paid to any person (other than any Company) owning a beneficial interest
in the subject Property; and (E) amounts reserved, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
Borrower or any of its Subsidiaries after such Asset Sale and related thereto,
including pension and other post-employment benefit liabilities, purchase price
adjustments, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officer’s Certificate delivered to Administrative Agent;

 

(ii)           in the case of any Casualty Event,
the aggregate amount of cash proceeds of insurance, condemnation awards and
other compensation received by the person whose Property was subject to such
Casualty Event in respect of such Casualty Event net of (A) fees and
expenses incurred by or on behalf of Borrower or any Restricted Subsidiary in
connection with recovery thereof, (B) repayments of Indebtedness (other
than Indebtedness hereunder) to the extent secured by a Lien on such Property
that is permitted by the Credit Documents, and (C) any Taxes paid or payable
by or on behalf of Borrower or any Restricted Subsidiary in respect of the
amount so recovered (after application of all credits and other offsets arising
from such Casualty Event) and amounts required to be paid to any person (other
than any Company) owning a beneficial interest in the subject Property; and

 

27

 

(iii)          in the case of any Debt Issuance, the
aggregate amount of all cash received in respect thereof by the person
consummating such Debt Issuance in respect thereof net of all investment
banking fees, discounts and commissions, legal fees, consulting fees,
accountants’ fees, underwriting discounts and commissions and other fees and
expenses, actually incurred in connection therewith.

 

“New Incremental Term Loan Facility” shall
mean the credit facility comprising the New Incremental Term Loan Commitments
and the New Incremental Term Loans, if any.

 

“New Incremental Term Loan Maturity Date” shall
mean, with respect to any New Incremental Term Loans to be made pursuant to the
related Incremental Joinder Agreement, the maturity date thereof as determined
in accordance with Section 2.12(c).

 

“New Incremental Term Loan Notes” shall
mean the promissory notes executed and delivered in connection with any New
Incremental Term Loan Commitments and the related New Incremental Term Loans.

 

“New Jersey Joint Venture” shall mean the joint venture
between Greenwood Racing, Inc. (and its successors and assigns) and Penn
National Holding Company (and its successors and assigns) comprising Pennwood
pursuant to an agreement dated October 30, 1998, and as amended on January 28,
1999.

 

“Non-Defaulting Lender” shall mean each Lender other than a
Defaulting Lender.

 

“Non-Principal Asset” shall mean any Property of Borrower or
any of its Restricted Subsidiaries other than a Property constituting a Principal
Asset.

 

“Notes” shall mean the
Revolving Notes, the Swingline Note and the Term Loan Notes.

 

“Notice of Borrowing” shall mean a
notice of borrowing substantially in the form of Exhibit B.

 

“Notice of Continuation/Conversion” shall mean a notice of
continuation/ conversion substantially in the form of Exhibit C.

 

“Obligations” shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing by any Credit Party to any Creditor or any of its Agent Related Parties
or their respective successors, transferees or assignees pursuant to the terms
of any Credit Document or any Credit Swap Contract, whether or not the right of
such person to payment in respect of such obligations and liabilities is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured and
whether or not such claim is discharged, stayed or otherwise affected by any
bankruptcy case or insolvency or liquidation proceeding.

 

28

 

“Officer’s Certificate” shall mean, as
applied to any entity, a certificate executed on behalf of such entity by its
chairman of the board of directors (or functional equivalent) (if an officer),
its chief executive officer, its president, any of its vice presidents, its
chief financial officer or its treasurer or controller (in each case, or an
equivalent officer) in their official (and not individual) capacities.

 

“Organizational Document” shall mean,
relative to any person, its certificate of incorporation, its by-laws, its
partnership agreement, its memorandum and articles of association, share
designations or similar organization documents and all shareholder agreements,
voting trusts and similar arrangements applicable to any of its authorized
Equity Interests.

 

“Original Borrower Credit Agreement” see definition of
Existing Borrower Credit Agreement.

 

“Other Debt” see the definition of “Repricing Transaction”.

 

“PBGC” shall mean the
Pension Benefit Guaranty Corporation referred to and defined in ERISA, or any
successor thereto.

 

“Penn National Race Course” shall mean the thoroughbred
racing facility located in Harrisburg, Pennsylvania.

 

“Pennwood” shall mean,
collectively, Pennwood Racing, Inc., a Delaware corporation, and its
subsidiaries, including, without limitation, GS Park Services, L.P., FR Park Services,
L.P., GS Park Racing, L.P. and FR Park Racing, L.P.

 

“Pension Plan” shall mean an
employee pension benefit plan (other than a Multiemployer Plan) that is covered
by Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code or Section 302 of ERISA and is maintained or contributed to by
any ERISA Entity or with respect to which any Company is reasonably likely to
incur liability under Title IV of ERISA.

 

“Perfection Certificate” shall mean that certain Perfection
Certificate, dated as of the Closing Date (the “Initial
Perfection Certificate”), executed and delivered by Borrower and
each of the Subsidiary Guarantors existing on the initial Funding Date, and
each other Perfection Certificate (which shall be substantially in the form of Exhibit O)
executed and delivered by the applicable Credit Party from time to time, in
each case, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with Section 9.04(j)(B).

 

“Permitted Acquisitions” shall mean any
acquisition, whether by purchase, merger, consolidation or otherwise, by
Borrower or any of its Restricted Subsidiaries of all or substantially all the
assets of, or all the Equity Interests in, a person or business of a person so
long as (a) such acquisition shall not have been consummated pursuant to a
tender offer that has not been approved by the board of directors (or
functional equivalent) of such person, (b) such assets are to be used in,
or such person so acquired is principally engaged in, as the case may be, a
business of the type conducted by Borrower and its Restricted Subsidiaries or
activities related or ancillary thereto, or such assets are Complementary
Assets and (c) immediately after giving

 

29

 

effect thereto, (i) no
Default has occurred and is continuing or would result therefrom, (ii) all
transactions related thereto are consummated in all material respects in
accordance with applicable Laws, (iii) Borrower and its Restricted
Subsidiaries are in compliance, on a pro forma basis
after giving effect to such acquisition, with the covenants set forth in Section 10.08
as of the most recently ended Test Period (it being understood that such pro forma calculation shall not include an aggregating of
pre-acquisition capital expenditures for purposes of Section 10.08(d)), as
if such acquisition (and any related incurrence or repayment of Indebtedness)
had occurred on the first day of such relevant Test Period (provided that any acquisition that occurs prior to the first
Test Period under such Sections 10.08(a), (b) and (c) shall be deemed
to have occurred during such first Test Period) and (iv) Borrower has
delivered to Administrative Agent an Officer’s Certificate to the effect set
forth in clauses (a), (b) and (c)(i) through (iii) above,
together with all relevant financial information for the person or assets to be
acquired.  Notwithstanding the foregoing
in this definition of “Permitted Acquisition”, the Argosy Acquisition” shall
constitute a “Permitted Acquisition” for purposes of this Agreement.

 

“Permitted Collateral Liens” shall mean:

 

(a)           in the case of all Pledged Collateral
other than Securities Collateral (as defined in the Security Agreement), Permitted
Liens of the type described in clauses (a), (b), (c), (d), (f), (g), (h), (i),
(j), (k), (m), (n), (o), (p), (q), (s), (t) and (u) of Section 10.02;

 

(b)           in the case of all Pledged Collateral
constituting Securities Collateral (as defined in the Security Agreement),
Permitted Liens of the type described in clauses (a) and (p) of Section 10.02;

 

(c)           in the case of each Mortgaged Real
Property, (i) on the date of the filing, recording or registering of the
related Mortgage, “Permitted Collateral Liens” shall mean Prior Mortgage Liens
and other Liens acceptable to Administrative Agent and (ii) any time
thereafter, “Permitted Collateral Liens” shall mean (A) such Prior
Mortgage Liens and such other Liens acceptable to Administrative Agent referred
to in clause (i) above and (B) Permitted Liens of the type described
in clauses (a), (b), (c), (d), (e), (f), (g), (i), (k), (n), (p) and (s) of Section 10.02;
and

 

(d)           in the case of each Mortgaged Vessel,
Permitted Liens of the type described in clauses (a), (b), (c), (d), (e), (f),
(g), (i), (k), (n), (o) and (p) of Section 10.02.

 

“Permitted Refinancing” shall mean,
with respect to any Indebtedness, any refinancing thereof; provided, however, that:  (a) no Default or Event of Default shall
have occurred and be continuing or would arise therefrom; (b) any such
refinancing Indebtedness shall (i) not have a stated maturity or weighted
average life that is shorter than that of the Indebtedness being refinanced (provided that the stated maturity or weighted average life
may be shorter if the stated maturity of any principal payment (including any
amortization payments) is not earlier than the earlier of (1) the stated
maturity in effect prior to such refinancing or (2) 91 days after the
Final Maturity Date then in effect), (ii) if the Indebtedness being refinanced
is subordinated by its terms or by the terms of any agreement or instrument
relating to such Indebtedness, be at least as subordinate to the Obligations as
the Indebtedness being refinanced (and unsecured if the refinanced Indebtedness
is unsecured) and (iii) be in a principal amount that does not exceed the
principal amount so refinanced, plus accrued
interest, plus any premium or other payment

 

30

 

required to be paid in
connection with such refinancing, plus, in either case, the amount of fees and reasonable expenses
of Borrower or any of its Restricted Subsidiaries incurred in connection with
such refinancing; and (c) the sole obligor on such refinancing
Indebtedness shall be Borrower or the original obligor on such Indebtedness
being refinanced; provided, however, that (i) any guarantor of the Indebtedness being
refinanced shall be permitted to guarantee the refinancing Indebtedness and (ii) any
Credit Party shall be permitted to guarantee any such refinancing Indebtedness
of any other Credit Party.

 

“Permitted Senior Indebtedness” shall mean unsecured
Indebtedness (including unsecured Indebtedness convertible into or exchangeable
or exercisable for any Equity Interests) of Borrower or all or any Restricted
Subsidiaries (other than subordinated Indebtedness); provided, however, that such
unsecured Indebtedness shall not have any scheduled principal payments due
prior to the date that is 91 days after the Final Maturity Date then in effect.

 

“Permitted Subordinated Indebtedness” shall
mean unsecured Indebtedness (including unsecured Indebtedness convertible into
or exchangeable or exercisable for any Equity Interests) of Borrower or all or
any Restricted Subsidiaries (a) that contains subordination provisions
that are reasonably satisfactory to Lead Arrangers (it being understood that
subordination provisions providing that such Indebtedness is at least as
subordinated in all material respects to the Obligations then outstanding as
the obligations under the Borrower Outstanding Bond Indentures, as in effect on
the date hereof, to the Obligations are reasonably satisfactory to Lead
Arrangers) and (b) that shall not have any scheduled principal payments
due prior to the date that is 91 days after the Final Maturity Date then in
effect.

 

“Permitted Vessel Liens” shall mean
maritime Liens on ships, barges or other vessels for damages arising out of a
maritime tort, wages of a stevedore, when employed directly by a person listed
in 46 U.S.C. § 31341, crew’s wages, salvage and general average, whether
now existing or hereafter arising and other maritime Liens which arise by
operation of law during normal operations of such ships, barges or other
vessels.

 

“person” or “Person” shall mean any individual, corporation, company,
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or Governmental Authority or any other entity.

 

“Pledged Collateral” has the
meaning set forth in the Security Agreement.

 

“Pocono Downs Assets” shall mean the “Partnership Interests,”
as such term is defined in the Pocono Downs Sale Documents.

 

“Pocono Downs Put Obligation” shall mean the obligation of
Borrower, the “Sellers” (as such term is defined in the definition of Pocono
Downs Sale Documents) or any of their respective affiliates to repurchase from
the buyer thereof the Pocono Downs Assets in accordance with the terms of the
Pocono Downs Sale Documents.

 

“Pocono Downs Sale Documents” shall mean the Purchase
Agreement, dated as of October 14, 2004, by and between PNGI Pocono, Corp.
(“PNGI Corp.”), PNGI, LLC (“PNGI LLC” and, together with PNGI Corp., “Pocono Sellers”) and the Mohegan Tribal Gaming Authority,
and all documents thereto and all exhibits, appendices, schedules and

 

31

 

annexes to any thereof relating
to the sale of the Pocono Downs Assets as in effect on the date hereof (without
any modifications or waiver of any of the terms thereof, including capitalized
terms therein but defined elsewhere as of such date unless otherwise consented
to by Administrative Agent and Borrower).

 

“Pre-Opening Expenses” shall mean,
with respect to any fiscal period, the amount of expenses (including
Consolidated Interest Expense) incurred with respect to capital projects which
are appropriately classified as “pre-opening expenses” on the applicable
financial statements of Borrower and its Subsidiaries for such period.

 

“Principal” shall mean
Peter M. Carlino.

 

“Principal Asset” shall mean (a) each of the Properties
of Borrower and its Restricted Subsidiaries as of the Closing Date listed on Schedule 1.01(B) and
(b) any other Property (excluding Equity Interests in a person other than
a Restricted Subsidiary) or Gaming Facility of Borrower or any of its Restricted
Subsidiaries from time to time that, individually, was responsible for at least
7.5% of Consolidated EBITDA during the most recently ended fiscal year of
Borrower.

 

“Principal Office” shall mean the
principal office of Administrative Agent, located on the Closing Date at 60
Wall Street, New York, NY 10005, or such other office as may be designated by
Administrative Agent.

 

“Prior Mortgage Liens” shall mean, with respect to each
Mortgaged Real Property, the Liens identified in Schedule B annexed
to the applicable Mortgage acceptable to Administrative Agent, as such Schedule B
may be amended from time to time to the satisfaction of Administrative Agent.

 

“Proceeding” shall mean any
claim, counterclaim, action, judgment, suit, hearing, governmental investigation,
arbitration or proceeding, including by or before any Governmental Authority
and whether judicial or administrative.

 

“Property” shall mean any
right, title or interest in or to property or assets of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible and including
all contract rights, income or revenue rights, real property interests,
trademarks, trade names, equipment and proceeds of the foregoing and Equity
Interests or other ownership interests of any person.

 

“Purchase Money Obligation” shall
mean, for any person, the obligations of such person in respect of Indebtedness
incurred for the purpose of financing all or any part of the purchase price of
any Property (including Equity Interests of any person) or the cost of installation,
construction or improvement of any property or assets and any refinancing
thereof; provided, however, that such Indebtedness is incurred (except in the case of a
refinancing) within 180 days after such acquisition of such Property or the
incurrence of such costs by such person.

 

“Qualified Capital Stock” shall mean,
with respect to any person, any Equity Interests of such person which is not
Disqualified Capital Stock.

 

32

 

“Qualified Contingent Obligation” shall mean
Contingent Obligations permitted by Section 10.04 in respect of
Indebtedness of any Joint Venture in which Borrower or any of its Restricted
Subsidiaries owns directly or indirectly at least 25% of the Equity Interests
of such Joint Venture or casinos or racinos managed by Borrower or any of its
Restricted Subsidiaries pursuant to a management or similar contract.

 

“Quarter” shall mean
each three month period ending on March 31, June 30, September 30
and December 31.

 

“Quarterly Dates” shall mean the
last Business Day of each Quarter in each year, commencing with the last
Business Day of the first full Quarter after the Closing Date.

 

“R/C Maturity Date” shall mean the
first to occur of (a) the date that is the fifth anniversary of the
Closing Date or (b) the date that is the 180th day prior to the Borrower
Notes Maturity Date.

 

“R/C Percentage” of any
Revolving Lender at any time shall mean a fraction (expressed as a percentage)
the numerator of which is the Revolving Commitment of such Revolving Lender at
such time and the denominator of which is the Total Revolving Commitments at
such time; provided, however,
that if the R/C Percentage of any Revolving Lender is to be determined after
the Total Revolving Commitments have been terminated, then the R/C Percentage
of such Revolving Lender shall be determined immediately prior (and without
giving effect) to such termination.

 

“Real Property” shall mean all
right, title and interest of Borrower or any of its Restricted Subsidiaries (including,
without limitation, any leasehold estate) in and to a parcel of real property
owned, leased or operated by Borrower or any of its Restricted Subsidiaries,
whether by lease, license or other use or occupancy agreement, together with,
in each case, all improvements and appurtenant fixtures (it being understood
that for purposes of Schedules 1.01(D) and 8.23(a),
Borrower shall not be required to describe such improvements and appurtenant
fixtures in such Schedules).

 

“redeem” shall mean
redeem, repurchase, repay, defease (covenant or legal), Discharge or otherwise
acquire or retire for value; and “redemption” and “redeemed” have correlative meanings.

 

“refinance” shall mean
refinance, renew, extend, replace, defease (covenant or legal) (with proceeds
of Indebtedness), Discharge (with proceeds of Indebtedness) or refund (with
proceeds of Indebtedness), in whole or in part, including successively; and “refinancing” and “refinanced” have correlative
meanings.

 

“Regulation D” shall mean Regulation D (12 C.F.R. Part 204) of the
Board of Governors of the Federal Reserve System of the United States (or any
successor), as the same may be amended, modified or supplemented and in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

 

“Regulation T” shall mean
Regulation T (12 C.F.R. Part 220) of the Board of Governors of the Federal
Reserve System of the United States (or any successor), as the same

 

33

 

may be amended, modified or
supplemented and in effect from time to time and all official rulings and
interpretations thereunder or thereof.

 

“Regulation U” shall mean Regulation U (12 C.F.R. Part 221)
of the Board of Governors of the Federal Reserve System of the United States
(or any successor), as the same may be amended, modified or supplemented and in
effect from time to time and all official rulings and interpretations
thereunder or thereof.

 

“Regulation X” shall mean Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve System of the United States
(or any successor), as the same may be amended, modified or supplemented and in
effect from time to time and all official rulings and interpretations
thereunder or thereof.

 

“Reimbursement Obligations” shall
mean the obligations of Borrower to reimburse L/C Disbursements in respect of
any Letter of Credit.

 

“Related Party” shall mean:

 

(a)           any immediate family member of
Principal; or

 

(b)           any trust, corporation, partnership
or other entity, in which Principal and/or such other persons referred to in
the immediately preceding clause (a) have an 80% or more controlling
interest.

 

“Release” shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating
or migrating of any Hazardous Material in, into, onto or through the
Environment.

 

“Replacement Vessel” shall mean the
replacement, in any manner, of any existing Mortgaged Vessel including, without
limitation, any replacement of such Mortgaged Vessel with a vessel, ship,
riverboat, barge or improvement on real property, whether such vessel,
riverboat, barge or improvement is acquired or constructed and whether or not
such vessel, ship, riverboat, barge or improvement is temporarily or permanently
moored or affixed to any real property.

 

“Repricing Transaction” shall mean (i) the incurrence by
Borrower or any of its Subsidiaries of a new tranche of replacement term loans
(including any Replacement Term Loans) under this Agreement (including by way
of conversion of Term B Facility Loans into any such new tranche of replacement
term loans) (x) having an effective interest rate margin for the respective
Type of such replacement term loan that is less than the Applicable Margin for
Term B Facility Loans of the respective Type (with the comparative
determinations of such margins to be made by Administrative Agent and to be
made after taking into account all upfront or similar fees or original issue
discount (amortized over the life (determined according to the maturity date
thereof) of such tranche of replacement term loans or Term B Facility Loans, as
the case may be) payable to all Lenders holding such replacement term loans or
Term B Facility Loans, as the case may be, but exclusive of any arrangement,
structuring or other fees payable in connection therewith that are not shared
with all Lenders holding such tranche of replacement term loans or Term B
Facility Loans, as the case may be, after giving effect to the syndication
thereof) and (y)

 

34

 

the proceeds of which are used
to repay, in whole or in part, principal of outstanding Term B Facility Loans
(it being understood that a conversion of Term B Facility Loans into any such
new tranche of replacement term loans shall constitute a repayment of principal
of outstanding Term B Facility Loans), (ii) any amendment, waiver or other
modification to this Agreement which would have the effect of reducing the
Applicable Margin for Term B Facility Loans (with the determination of such
effective reduction to be made in accordance with the applicable provisions set
forth in the parenthetical appearing in preceding clause (i)(x)) and/or (iii) the
incurrence by Borrower or any of its Subsidiaries of (x) any Incremental Term
Loans, (y) any other term loans (which, for the avoidance of doubt, does not
include bonds) other than under this Agreement or (z) any other bank debt other
than under this Agreement (such other term loans referred to in clause (y)
above in this clause (iii) and such other bank debt referred to in clause
(z) above above in this clause (iii) are individually referred to as “Other Debt”), the proceeds of which are used in whole or in
part to prepay or repay outstanding Term B Facility Loans (except to the extent
any such Other Debt is incurred as a direct result of a Change of Control) if
such Incremental Term Loans or Other Debt has a lower interest rate spread or
margin over the LIBOR Rate (or any comparable rate) or the Alternative Base
Rate (or any comparable rate), as applicable, than that of the Term B Facility
Loans at the time of prepayment or repayment thereof (with the comparative
determination of such interest rate spreads or margins to be made by Administrative
Agent taking into account all upfront or similar fees or original issue
discount (amortized over the life (determined according to the maturity date
thereof) of such Incremental Term Loans or Other Debt) payable to all lenders
holding such Incremental Term Loans or Other Debt after giving effect to the
syndication thereof).  Any such
determination by Administrative Agent as contemplated by preceding clauses
(i)(x), (ii) and (iii) shall be conclusive and binding on all Lenders
holding Term B Facility Loans.

 

“Required Lenders” shall mean, as of any date of
determination: (a) prior to the Closing Date, Lenders holding more than
50% of the aggregate amount of the Commitments; and (b) thereafter,
Non-Defaulting Lenders the sum of whose outstanding Term Loans, Revolving
Loans, Unutilized R/C Commitments, Swingline Exposure and L/C Liabilities then
outstanding represents more than 50% of the aggregate sum (without duplication)
of (i) all outstanding Term Loans of all Non-Defaulting Lenders, (ii) all
outstanding Revolving Loans of all Non-Defaulting Lenders, (iii) the
aggregate Unutilized R/C Commitments of all Non-Defaulting Lenders, (iv) the
Swingline Exposure of all Non-Defaulting Lenders and (v) the L/C
Liabilities of all Non-Defaulting Lenders.

 

“Required Revolving Lenders” shall
mean, as of any date of determination: (a) at any time prior to the
Closing Date, Lenders holding more than 50% of the aggregate amount of the
Revolving Commitments and (b) thereafter, Non-Defaulting Lenders holding
more than 50% of the aggregate sum of (without duplication) (i) the
aggregate principal amount of outstanding Revolving Loans of all Non-Defaulting
Lenders, (ii) the aggregate Unutilized R/C Commitments of all
Non-Defaulting Lenders, (iii) the Swingline Exposure of all Non-Defaulting
Lenders, and (iv) the L/C Liabilities of all Non-Defaulting Lenders.

 

“Required Tranche Lenders” shall
mean:  (a) with respect to Lenders
having Revolving Commitments or Revolving Loans, Non-Defaulting Lenders having
more than 50% of the aggregate sum of the Unutilized R/C Commitments, Revolving
Loans, Swingline Exposure and L/C Liabilities then outstanding; (b) with
respect to Lenders having Term A Facility Loans,

 

35

 

Term A Facility Commitments or
Incremental Term A Loan Commitments, Lenders having more than 50% of the
aggregate sum of the Term A Facility Loans, Term A Facility Commitments and
Incremental Term A Loan Commitments then outstanding; (c) with respect to
Lenders having Term B Facility Loans, Term B Facility Commitments or
Incremental Term B Loan Commitments, Lenders having more than 50% of the
aggregate sum of the Term B Facility Loans, Term B Facility Commitments and
Incremental Term B Loan Commitments then outstanding; and (d) for each New
Incremental Term Loan Facility, if applicable, with respect to Lenders having
New Incremental Term Loans or New Incremental Term Loan Commitments, in each
case, in respect of such New Incremental Term Loan Facility, Lenders having
more than 50% of the aggregate sum of such New Incremental Term Loans and New
Incremental Term Loan Commitments then outstanding.

 

“Requirement of Law” shall mean, as
to any person, any Law or determination of an arbitrator or any Governmental
Authority, in each case applicable to or binding upon such person or any of its
Property or to which such person or any of its Property is subject.

 

“Reserve Requirement” shall mean,
for any Interest Period for any LIBOR Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System of the United States in New York
City with deposits exceeding one billion Dollars against “Eurocurrency
liabilities” (as such term is used in Regulation D).

 

“Response Action” shall mean (a) “response”
as such term is defined in CERCLA, 42 U.S.C. § 9601(24), and (b) all
other actions required by any Governmental Authority or voluntarily undertaken
to:  (i) clean up, remove, treat,
abate or in any other way address any Hazardous Material in the Environment, (ii) prevent
the Release or threatened Release, or minimize the further Release, of any
Hazardous Material or (iii) perform studies and investigations in
connection with, or as a precondition to, clause (i) or (ii) above.

 

“Responsible Officer” shall mean the
chief executive officer of Borrower, the president of Borrower (if not the
chief executive officer), any senior or executive vice president of Borrower,
the chief financial officer or treasurer of Borrower or, with respect to
financial matters, the chief financial officer, senior financial officer or
treasurer of Borrower.

 

“Restricted Payment” shall mean
dividends (in cash, Property or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or other analogous
fund for, or the purchase, redemption, retirement or other acquisition of, any
Equity Interests or Equity Rights (other than outstanding securities
convertible into Equity Interests and other than any payment made relating to
any Transfer Agreement) of Borrower or any of its Restricted Subsidiaries, but
excluding dividends paid through the issuance of additional shares of Qualified
Capital Stock and any redemption or exchange of any Qualified Capital Stock of
Borrower or such Restricted Subsidiary through, or with the proceeds of, the
issuance of Qualified Capital Stock of Borrower or any of its Restricted Subsidiaries.

 

“Restricted Subsidiaries” shall mean all
existing and future Subsidiaries of Borrower other than the Unrestricted
Subsidiaries.

 

36

 

“Reverse Trigger Event” shall have the meaning set forth in
any applicable Transfer Agreement.

 

“Revolving Availability Period” shall
mean the period from and including the Closing Date to but excluding the
earlier of the R/C Maturity Date and the date of termination of the Revolving
Commitments.

 

“Revolving Borrowing” shall mean a
Borrowing comprised of Revolving Loans.

 

“Revolving Commitment” shall mean,
for each Revolving Lender, the obligation of such Lender to make Revolving
Loans in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set opposite the name of such Lender on Annex A-1
under the caption “Revolving Commitment”, or in the Assignment Agreement
pursuant to which such Lender assumed its Revolving Commitment, as applicable,
as the same may be (a) changed pursuant to Section 13.05(b), (b) reduced
or terminated from time to time pursuant to Sections 2.04 and/or 11.01, as
applicable, or (c) increased or otherwise adjusted from time to time in accordance
with this Agreement, including pursuant to Section 2.12.  The initial aggregate principal amount of the
sum of the Revolving Commitments of all Lenders is $750.0 million.

 

“Revolving Exposure” shall mean,
with respect to any Lender at any time, the aggregate principal amount at such
time of all outstanding Revolving Loans of such Lender, plus the
aggregate amount at such time of such Lender’s L/C Liability, plus the aggregate amount at such time of such Lender’s
Swingline Exposure.

 

“Revolving Facility” shall mean the
credit facility comprising the Revolving Commitments.

 

“Revolving Lenders” shall mean (a) on
the Closing Date, the Lenders having a Revolving Commitment on Annex A-1
hereof and (b) thereafter, the Lenders from time to time holding Revolving
Loans and/or a Revolving Commitment as in effect from time to time.

 

“Revolving Notes” shall mean the
promissory notes substantially in the form of Exhibit A-1.

 

“S&P” shall mean
Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies,
or any successor thereto.

 

“SEC” shall mean the
Securities and Exchange Commission of the United States or any successor
thereto.

 

“Secured Parties” shall mean the
Agents, the Lenders and any Swap Provider.

 

“Securities Act” shall mean the
Securities Act of 1933, as amended, and all rules and regulations of the
SEC promulgated thereunder.

 

“Security  Agreement” shall mean a security agreement substantially in the form
of Exhibit H among the Credit Parties and Collateral Agent, as the
same may be amended in accordance with the terms thereof and hereof, or such
other agreements, as the same may be

 

37

 

amended in accordance with the
terms thereof and hereof, reasonably acceptable to Collateral Agent as shall be
necessary to comply with applicable Requirements of Law and effective to grant
to Collateral Agent on behalf of the Secured Parties a first priority (subject
only to the Liens permitted thereunder) perfected security interest in the
Pledged Collateral covered thereby.

 

“Security Documents” shall mean the
Security Agreement, the Mortgages, the Ship Mortgages and each other security
document or pledge agreement, instrument or other document required by
applicable local law or otherwise executed and delivered by a Credit Party to
grant a valid, perfected security interest in any Property acquired or developed
that is of the kind and nature that would constitute Collateral on the Closing
Date, and any other document, agreement or instrument utilized to pledge or
grant as collateral for the Obligations any Property of whatever kind or
nature.

 

“Ship Mortgage” shall mean a
Ship Mortgage substantially in the form of Exhibit J made by the
applicable Credit Parties in favor of Collateral Agent for the benefit of the
Secured Parties, as the same may be amended in accordance with the terms
thereof and hereof, or such other agreements reasonably acceptable to
Collateral Agent as shall be necessary to comply with applicable Requirements
of Law and effective to grant in favor of Collateral Agent for the benefit of
the Secured Parties a first preferred mortgage on the Mortgaged Vessel covered
thereby, subject only to Permitted Collateral Liens.

 

“Solvent” and “Solvency” shall mean,
for any person on a particular date, that on such date (a) the fair value
of the Property of such person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such person, (b) the
present fair salable value of the assets of such person is not less than the
amount that will be required to pay the probable liability of such person on
its debts as they become absolute and matured, (c) such person does not
intend to, and does not believe that it will, incur debts and liabilities
beyond such person’s ability to pay as such debts and liabilities mature, (d) such
person is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such person’s Property would
constitute an unreasonably small capital and (e) such person is able to
pay its debts as they become due and payable. 
For purposes of this definition, the amount of contingent liabilities at
any time shall be computed as the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability, without duplication.

 

“Specified Defaults” shall mean any Default or Event of
Default arising from any of the following having occurred:  (a) any willful and material breach
(resulting from intentional acts or omissions within the control of Borrower or
any of its Subsidiaries) of any of the covenants contained in Article IX
(Affirmative Covenants) or Article X (Negative Covenants) (excluding the
financial covenants set forth in Sections 10.08); or (b) any event
described in Section 11.01(b) or 11.01(c); or (c) any event described
in Section 11.01(f)(i); or (d) any event described in Section 11.01(g) or
11.01(h)(i), (ii), (iii), (iv), (v) or (viii), in each case, with respect
to Borrower; or (e) any event described in Section 11.01(n).

 

“Specified Representations” shall
mean the following:

 

(a)           any representation or warranty
contained in any of the following:  Section 8.02
(“Financial Condition, Etc.”), Section 8.04(a) (“No Breach; No
Default”), Section 8.05

 

38

 

(“Action”), Section 8.06 (“Approvals”),
Section 8.11 (“Use of Proceeds”), Section 8.14 (“Security Interest;
Absence of Financing Statements; Etc.”), Section 8.16 (“True and Complete
Disclosure”) and Section 8.18 (“Subordinated Debt”); or

 

(b)           any other representations and
warranties contained in Article VIII (other than Section 8.27 (“Material
Adverse Effect”)) to the extent there has been a material and willful or
knowing breach resulting from an intentional act or omission within the control
or knowledge of Borrower or any of its Subsidiaries.

 

It
is understood that, for purposes of this definition of “Specified
Representations”, any representation or warranty contained in Section 8.16
(“True and Complete Disclosure”) as it pertains to Argosy and its subsidiaries
(without giving effect to the consummation of the Argosy Acquisition) shall be
deemed to be limited to the knowledge of Borrower and that no breach of any
representation or warranty contained in Section 8.16 (“True and Complete
Disclosure”) will be deemed to exist except to the extent that the matter(s)
resulting in such breach constitutes or otherwise resulted or would result in a
Material Adverse Effect. 

 

“Stated Amount” of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).

 

“Subsidiary” shall mean, as
to any person, (i) any corporation more than 50% of whose stock of any
class or classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether or not
at the time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time owned by such person and/or one or more Subsidiaries of such person
and (ii) any partnership, limited liability company, association, joint
venture or other entity in which such person and/or one or more Subsidiaries of
such person has more than a 50% equity interest at the time.  Unless otherwise qualified, all references to
a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of Borrower.

 

“Subsidiary Guarantors” shall mean
each of the persons listed on Schedule 1.01(D) attached hereto
and each person which may hereafter execute a Joinder Agreement pursuant to Section 9.11,
together with their successors and permitted assigns, and “Subsidiary
Guarantor” shall mean any
one of them; provided, however,
that notwithstanding the foregoing, Subsidiary Guarantors shall not include any
Subsidiary of Borrower that is a Foreign Subsidiary.

 

“Swap Contract” shall mean any
agreement entered into in the ordinary course of business (as a bona fide hedge
and not for speculative purposes) (including any master agreement and any schedule or
agreement, whether or not in writing, relating to any single transaction) that
is an interest rate swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap or option, bond option,
interest rate option, foreign exchange agreement, rate cap, collar or floor
agreement, currency swap agreement, cross-currency rate swap agreement, swap
option, currency option or any other similar agreement (including any option to
enter into any of the foregoing) and is designed to protect any Company against
fluctuations in interest rates, currency exchange rates, commodity prices, or
similar risks (including any Interest Rate Protection Agreement).

 

39

 

“Swap Provider” shall mean any person that is a party to a
Swap Contract with Borrower and/or any of its Restricted Subsidiaries if such
person was, at the date of entering into such Swap Contract, a Lender or
Affiliate of a Lender, and such person executes and delivers to Administrative
Agent a letter agreement in form and substance reasonably acceptable to Administrative
Agent pursuant to which such person (a) appoints Collateral Agent as its
agent under the applicable Credit Documents and (b) agrees to be bound by
the provisions of Section 12.03.

 

“Swingline Commitment” shall mean the
commitment of the Swingline Lender to make loans pursuant to Section 2.01(e),
as the same may be reduced from time to time pursuant to Section 2.04.

 

“Swingline Exposure” shall mean at
any time the aggregate principal amount at such time of all outstanding
Swingline Loans.  The Swingline Exposure
of any Revolving Lender at any time shall equal its R/C Percentage of the
aggregate Swingline Exposure at such time.

 

“Swingline Lender” shall have the
meaning assigned to such term in the preamble hereto.

 

“Swingline Loan” shall mean any
loan made by the Swingline Lender pursuant to Section 2.01(e).

 

“Swingline Note” shall mean the promissory note substantially
in the form of Exhibit A-4.

 

“Swingline Sublimit” shall mean the lesser of (a) $30.0
million and (b) the Total Revolving Commitments then in effect.  The Swingline Sublimit is part of, not in
addition to, the Total Revolving Commitments.

 

“Syndication Date” shall mean the date upon which Lead
Arrangers (collectively) determine in their sole discretion (and notify
Borrower and the Lenders) that the primary syndication of the Commitments (and
resultant addition of persons as Lenders pursuant to Section 13.05(b)) has
been completed.

 

“Taking” shall mean a
taking or voluntary conveyance during the term of this Agreement of all or part
of any Mortgaged Real Property or Mortgaged Vessel, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting any Mortgaged Real Property or Mortgaged Vessel or any
portion thereof, whether or not the same shall have actually been commenced.

 

“Taxes” shall mean (a) any
and all taxes, imposts, duties, charges, fees, levies or other charges or
assessments of whatever nature, including income, gross receipts, excise, real
or personal property, sales, withholding, social security, retirement,
unemployment, occupation, use, service, license, net worth, payroll, franchise,
and transfer and recording, imposed by the Internal Revenue Service or any
taxing authority (whether domestic or foreign, including any federal, state,
U.S. possession, county, local or foreign government or any subdivision or
taxing

 

40

 

agency thereof) including
interest, fines, penalties or additions to tax attributable to or imposed on or
with respect to any such taxes, charges, fees, levies or other assessments and (b) all
transferee, successor, joint and several or contractual liability (including,
without limitation, liability pursuant to Treas. Reg. § 1.1502-6 (or any
similar state, local or foreign provisions)) in respect of any items described
in clause (a).

 

“Term A Facility” shall mean the
credit facility comprising the Term A Facility Commitments, any Incremental
Term A Loan Commitments and the Term A Facility
Loans.

 

“Term  A Facility Commitment” shall mean, for each Term A Facility Lender, the obligation
of such Lender to make a Term A Facility Loan in a principal amount not to exceed
the amount set forth opposite the name of such Lender on Annex A-2 under
the caption “Term A Facility Commitment”, or in the Assignment Agreement
pursuant to which such Lender assumed its Term A Facility Commitment, as
applicable, as the same may be (a) changed pursuant to Section 13.05(b) or
(b) reduced or terminated from time to time pursuant to Section 2.04
or Section 11.01.  The initial
aggregate principal amount of the sum of the Term A Facility Commitments of all
Term A Facility Lenders is $325.0 million.

 

“Term A Facility Lenders” shall mean (a) on
the Closing Date, the Lenders having Term A Facility Commitments on Annex A-2
hereof and (b) thereafter, Lenders from time to time holding any
Incremental Term A Loan Commitments and/or Term A Facility Loans, as the case
may be, after giving effect to any assignments thereof permitted by Section 13.05(b).

 

“Term A Facility Loans” shall mean, collectively, (a) term
loans made pursuant to Section 2.01(b) and (b) term loans made
pursuant to any Incremental Term A Loan Commitments.

 

“Term A Facility Maturity Date” shall
mean the first to occur of (a) the date that is the sixth anniversary of
the Closing Date and (b) the date that is 180 days prior to the Borrower
Notes Maturity Date.

 

“Term A Facility Notes” shall mean the
promissory notes substantially in the form of Exhibit A-2.

 

“Term B Facility” shall mean the
credit facility comprising the Term B Facility Commitments, any Incremental
Term B Loan Commitments and the Term B Facility
Loans.

 

“Term  B Facility Commitment”
shall mean, for each Term B Facility Lender, the obligation of such Lender, if
any, to make a Term B Facility Loan to Borrower on the Closing Date in a
principal amount not to exceed the amount set forth opposite such Lender’s name
under the heading “Term B Facility Commitment” on Annex A-3, or in
the Assignment Agreement pursuant to which such Lender assumed its Term B
Facility Commitment, as applicable, as the same may be (i) changed
pursuant to Section 13.05(b) or (ii) reduced or terminated from
time to time pursuant to Section 2.04 or Section 11.01.  The initial aggregate principal amount of the
sum of the Term B Facility Commitments of all Term B Facility Lenders is $1.65
billion.

 

41

 

“Term B Facility Lenders” shall mean (a) on
the Closing Date, the Lenders having Term B Facility Commitments on Annex A-3
hereof and (b) thereafter, Lenders from time to time holding any
Incremental Term B Loan Commitments
and/or Term B Facility Loans, as the case may be, after giving effect to any assignments
thereof permitted by Section 13.05(b).

 

“Term B Facility Loans” shall mean (a) the term loans
made pursuant to Section 2.01(c) and (b) term loans made
pursuant to any Incremental Term B Loan Commitments.

 

“Term B Facility Maturity Date” shall
mean the first to occur of (a) the date that is the seventh anniversary of
the Closing Date or (b) the date that is 180 days prior to the Borrower
Notes Maturity Date.

 

“Term B Facility Notes” shall mean the
promissory notes substantially in the form of Exhibit A-3.

 

“Term Facilities” shall mean, collectively,
the credit facilities comprising the Term A Facility, the Term B Facility and
any New Incremental Term Loan Facilities.

 

“Term Loan Commitments” shall mean,
collectively, (a) the Term A Facility Commitments, (b) the Term B
Facility Commitments and (c) any Incremental Term Loan Commitments.

 

“Term Loan Notes” shall mean,
collectively, the Term A Facility Notes, the Term B Facility Notes and any New
Incremental Term Loan Notes.

 

“Term Loans” shall mean,
collectively, the Term A Facility Loans, the Term B Facility Loans and any New
Incremental Term Loans.

 

“Test Date” shall mean,
with respect to any Financial Maintenance Covenant, each date of determination
in accordance with such Financial Maintenance Covenant.

 

“Test Period” shall mean for
any date of determination the period of the four most recently ended
consecutive fiscal quarters of Borrower and its Restricted Subsidiaries for
which financial statements are available.

 

“Total Revolving Commitments” shall mean, at any time, the
Revolving Commitments of all the Revolving Lenders at such time.

 

“Tranche” shall mean (i) with
respect to Lenders, each of the following classes of Lenders:  (a) Lenders having Revolving Loans or Revolving
Commitments, (b) Lenders having Term A Facility Commitments, Incremental
Term A Loan Commitments or Term A Facility
Loans, (c) Lenders having Term B Facility Commitments, Incremental Term B
Loan Commitments or Term B Facility Loans,
and (d) for each New Incremental Term Loan Facility, Lenders having New
Incremental Term Loan Commitments or New Incremental Term Loans in respect of
such New Incremental Term Loan Facility, and (ii) with respect to Loans or
Commitments, each of the following classes of Loans or Commitments:  (a) Revolving Loans or Revolving
Commitments, (b) Term A Facility Commitments, Incremental Term A Loan

 

42

 

Commitments or Term A Facility
Loans, (c) Term B Facility Commitments, Incremental Term B Loan Commitments or Term B Facility Loans, and (d) for each
New Incremental Term Loan Facility, New Incremental Term Loan Commitments or
New Incremental Term Loans in respect of such New Incremental Term Loan
Facility.

 

“Transaction Documents” shall mean the
Credit Documents and the Argosy Acquisition Agreement and, in each case, all
documents related thereto and all exhibits, appendices, schedules and annexes
to any thereof.

 

“Transactions” shall mean the financings and transactions to
occur on the Closing Date, including the consummation of the Borrower Refinancings,
the Argosy Acquisition and the Argosy Refinancings, the borrowings hereunder on
such date and the payment of all fees and expenses in connection with the
foregoing.

 

“Transfer Agreements” shall mean (a) the
Transfer of Ownership Agreement by and among Argosy Gaming Company, Empress
Casino Joliet Corporation and the Illinois Gaming Board and the Trust Agreement
by and between Argosy Gaming Company and LaSalle Bank National Association,
each dated as of July 24, 2001, and (b) any other similar trust or similar
arrangement required by any Gaming Authority from time to time having the same
or similar effect as the agreement referred to in clause (a) above in this
definition, in each case with respect to clauses (a) and (b) above,
together with any trust agreements, management agreements, instruments,
documents and other agreements executed or delivered pursuant to or in
connection with such agreement or trust or similar arrangement, in each case as
such agreements, instruments or documents may be amended, supplemented,
extended, renewed or otherwise modified from time to time. 

 

“Trigger Date” shall have the meaning set forth in the
definition of “Applicable Fee Percentage”.

 

“Trigger Event” shall mean the transfer of
shares of capital stock of Empress Casino Corporation or any other Restricted
Subsidiary into trust pursuant to the terms of the applicable Transfer Agreement.

 

“UCC” shall mean the Uniform Commercial Code as from time to
time in effect in the applicable state or other jurisdiction.

 

“United States” shall mean the United States of America.

 

“Unrestricted Subsidiaries” shall mean (a) the
Subsidiaries listed on Schedule 8.12(c), (b) any Subsidiary of
Borrower designated as an “Unrestricted Subsidiary” pursuant to and in
compliance with Section 9.12 and (c) any Subsidiary of an
Unrestricted Subsidiary.

 

“Unutilized R/C Commitment” shall
mean, for any Revolving Lender, at any time, the excess of such Revolving
Lender’s Revolving Commitment at such time over the sum of (i) the
aggregate outstanding principal amount of all Revolving Loans made by such
Revolving Lender and (ii) such Revolving Lender’s L/C Liability at such
time.

 

43

 

“Vessel” shall mean a
gaming vessel, barge or riverboat and the fixtures and equipment located
thereon (it being understood that for purposes of Schedule 8.13(b),
Borrower shall not be required to describe such fixtures and equipment in such Schedule 8.13(b)).

 

“Voting Stock” shall mean,
with respect to any person, the capital stock (including any and all shares,
interests (including partnership, membership and other Equity Interests),
participations, rights in, or other equivalents of, such capital stock, and any
and all rights, warrants or options exchangeable for or convertible into such
capital stock) of such person, in each case, that ordinarily has voting power
for the election of directors (or persons performing similar functions) of such
person, whether at all times or only as long as no senior class of Equity Interests
has such voting power by reason of any contingency.

 

“Weighted Average Life to Maturity” shall
mean, on any date and with respect to the aggregate amount of the Term Loans,
an amount equal to (a) the scheduled repayments of such Term Loans to be
made after such date, multiplied by the number of days from such date to the
date of such scheduled repayments divided by (b) the aggregate principal
amount of such Term Loans.

 

“Wells Fargo” shall mean Wells Fargo Bank, National
Association, in its individual capacity, and any successor thereto by merger,
consolidation or otherwise.

 

“Wholly Owned Subsidiary” shall mean,
with respect to any person, any corporation, partnership, limited liability
company or other entity of which all of the Equity Interests (other than, in
the case of a corporation, directors’ qualifying shares or nominee shares
required under applicable law) are directly or indirectly owned or controlled
by such person and/or one or more Wholly Owned Subsidiaries of such
person.  Unless the context clearly
requires otherwise, all references to any Wholly Owned Subsidiary shall mean a
Wholly Owned Subsidiary of Borrower.

 

“Withdrawal Liability” shall mean
liability by an ERISA Entity to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined
in Part 1 of Subtitle E of Title IV of ERISA.

 

“Working Capital” shall mean an
amount determined for Borrower and its Restricted Subsidiaries equal to the sum
of all current assets (other than cash and Cash Equivalents) less the sum of
all current liabilities (other than the current portion of long-term
Indebtedness).

 

SECTION 1.02.    Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Act”

  	
   

  	
  13.14

  
	
  “Additional Credit Party”

  	
   

  	
  9.11

  
	
  “Administrative Agent”

  	
   

  	
  Introduction

  
	
  “Advance Date”

  	
   

  	
  4.06

  
	
  “Anti-Terrorism Laws”

  	
   

  	
  8.28(a)

  
	
  “Argosy”

  	
   

  	
  Recitals

  

 

44

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Argosy Acquisition”

  	
   

  	
  Recitals

  
	
  “Argosy Refinancings”

  	
   

  	
  7.01(x)(b)

  
	
  “Borrower”

  	
   

  	
  Introduction

  
	
  “Borrower Refinancings”

  	
   

  	
  7.01(x)(a)

  
	
  “Class”

  	
   

  	
  1.04

  
	
  “Closing Date”

  	
   

  	
  7.01

  
	
  “Co-Documentation Agents”

  	
   

  	
  Introduction

  
	
  “Complementary Asset
  Acquisition”

  	
   

  	
  10.04(j)

  
	
  “Co-Syndication Agents”

  	
   

  	
  Introduction

  
	
  “Covered Taxes”

  	
   

  	
  5.06(a)

  
	
  “Designation”

  	
   

  	
  9.12(a)

  
	
  “Designation Amount”

  	
   

  	
  9.12(a)(ii)

  
	
  “Event of Default”

  	
   

  	
  11.01

  
	
  “Excess Cash Flow
  Measurement Date”

  	
   

  	
  2.10(a)(iv)

  
	
  “Excluded Designation”

  	
   

  	
  9.13(a)

  
	
  “Excluded Immaterial
  Subsidiaries”

  	
   

  	
  9.13(a)

  
	
  “Executive Order”

  	
   

  	
  8.28(a)

  
	
  “Existing Indebtedness”

  	
   

  	
  8.20

  
	
  “Existing Letter of
  Credit”

  	
   

  	
  2.03(n)

  
	
  “Foreign Lender
  Certificate”

  	
   

  	
  5.06(b)

  
	
  “Guaranteed Obligations”

  	
   

  	
  6.01

  
	
  “Incremental Effective
  Date”

  	
   

  	
  2.12(b)

  
	
  “Incremental Joinder
  Agreement”

  	
   

  	
  2.12(b)

  
	
  “Incremental Lender”

  	
   

  	
  2.12(a)

  
	
  “Incremental Revolving
  Commitment”

  	
   

  	
  2.12(a)

  
	
  “Incremental Term A Loan
  Commitments”

  	
   

  	
  2.12(a)

  
	
  “Incremental Term A Loans”

  	
   

  	
  2.12(a)

  
	
  “Incremental Term B Loan
  Commitments”

  	
   

  	
  2.12(a)

  
	
  “Incremental Term B Loans”

  	
   

  	
  2.12(a)

  
	
  “Indemnitee”

  	
   

  	
  13.03(b)

  
	
  “Initial Cap Ex Amount”

  	
   

  	
  10.08(d)

  
	
  “Intellectual Property”

  	
   

  	
  8.19

  
	
  “Judgment Currency
  Conversion Date”

  	
   

  	
  13.15(a)

  
	
  “L/C Payment Notice”

  	
   

  	
  2.03(d)

  
	
  “Lead Arrangers”

  	
   

  	
  Introduction

  
	
  “Lender SNDA”

  	
   

  	
  8.24(d)

  
	
  “Letter of Credit Request”

  	
   

  	
  2.03(b)

  
	
  “Liquor Authorities”

  	
   

  	
  13.13(a)

  
	
  “Liquor Laws”

  	
   

  	
  13.13(a)

  
	
  “Mandatory Declined Amount”

  	
   

  	
  2.10(b)

  
	
  “Mandatory Excess Amount”

  	
   

  	
  2.10(b)

  
	
  “Mandatory Offer”

  	
   

  	
  2.10(b)

  
	
  “Merger Sub”

  	
   

  	
  Recitals

  
	
  “New Incremental Lender”

  	
   

  	
  2.12(a)

  
	
  “New Incremental Term
  Loans”

  	
   

  	
  2.12(a)

  

 

45

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “New Incremental Term
  Loan Commitment”

  	
   

  	
  2.12(a)

  
	
  “Non-Divested Argosy Baton
  Rouge Assets”

  	
   

  	
  9.08(e)(C)

  
	
  “Non-U.S. Lender”

  	
   

  	
  5.06(b)

  
	
  “Obligation Currency”

  	
   

  	
  13.15(a)

  
	
  “OFAC”

  	
   

  	
  8.28(b)(v)

  
	
  “Optional Declined Amount”

  	
   

  	
  2.09(b)(ii)

  
	
  “Optional Offer”

  	
   

  	
  2.09(b)(ii)

  
	
  “Optional Offered Amount”

  	
   

  	
  2.09(b)(ii)

  
	
  “Other Taxes”

  	
   

  	
  5.06(d)

  
	
  “Payor”

  	
   

  	
  4.06

  
	
  “Permits”

  	
   

  	
  8.15

  
	
  “Permitted Liens”

  	
   

  	
  10.02

  
	
  “Post-Increase Revolving Lenders”

  	
   

  	
  2.12(d)

  
	
  “Pre-Increase Revolving Lenders”

  	
   

  	
  2.12(d)

  
	
  “Prepayment New
  Incremental Term Loans”

  	
   

  	
  2.09(b)(ii)

  
	
  “Prepayment New
  Incremental Term Loan Lenders”

  	
   

  	
  2.09(b)(ii)

  
	
  “Projections”

  	
   

  	
  7.01(viii)

  
	
  “Redesignation”

  	
   

  	
  9.13(a)

  
	
  “Refinanced Term Loans”

  	
   

  	
  13.04(a)

  
	
  “Register”

  	
   

  	
  2.08(c)

  
	
  “Replaced Lender”

  	
   

  	
  2.11(a)

  
	
  “Replacement Lender”

  	
   

  	
  2.11(a)

  
	
  “Replacement Term Loans”

  	
   

  	
  13.04(a)

  
	
  “Required Payment”

  	
   

  	
  4.06

  
	
  “Retained Property”

  	
   

  	
  9.08(e)(C)

  
	
  “Revocation”

  	
   

  	
  9.12(b)

  
	
  “Revolving Loans”

  	
   

  	
  2.01(a)

  
	
  “Specified Cap Ex Amount”

  	
   

  	
  10.08(d)

  
	
  “Tax Benefit”

  	
   

  	
  5.06(f)

  
	
  “Tax Returns”

  	
   

  	
  8.08

  
	
  “Transfer Agreement
  Person”

  	
   

  	
  9.14

  
	
  “Type”

  	
   

  	
  1.04

  
	
  “Undelivered Closing Collateral”

  	
   

  	
  7.01

  
	
  “Unreimbursed Amount”

  	
   

  	
  2.03(e)

  

 

SECTION 1.03.    Accounting
Terms and Determinations.  Except as otherwise
provided in this Agreement, all computations and determinations as to
accounting or financial matters (including financial covenants) shall be made
in accordance with GAAP as in effect on the Closing Date consistently applied
for all applicable periods, and all accounting or financial terms shall have
the meanings ascribed to such terms by GAAP. 
If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Credit Document, and Borrower
notifies Administrative Agent that Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if

 

46

 

Administrative
Agent notifies Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance herewith.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Credit Document, and Borrower, Administrative Agent or Required Lenders shall
so request, Administrative Agent, Lenders and Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of Required
Lenders, not to be unreasonably withheld).

 

SECTION 1.04.    Classes and Types
of Loans.  Loans hereunder are distinguished by “Class”
and by “Type.”  The “Class” of a Loan (or
of a Commitment to make a Loan) refers to whether such Loan is a Revolving
Loan, Term A Facility Loan, Term B Facility Loan, New Incremental Term Loan or
Swingline Loan, each of which constitutes a Class.  The “Type” of a Loan refers to whether such
Loan is an ABR Loan or a LIBOR Loan, each of which constitutes a Type.  Loans may be identified by both Class and
Type.

 

SECTION 1.05.    Rules of
Construction.

 

(a)           In
each Credit Document, unless the context clearly requires otherwise (or such
other Credit Document clearly provides otherwise), references to (i) the
plural include the singular, the singular include the plural and the part include
the whole; (ii) persons include their respective permitted successors and
assigns or, in the case of governmental persons, persons succeeding to the
relevant functions of such persons; (iii) agreements (including this
Agreement), promissory notes and other contractual instruments include
subsequent amendments, assignments, and other modifications thereto, but only
to the extent such amendments, assignments or other modifications thereto are
not prohibited by their terms or the terms of any Credit Document; (iv) statutes
and regulations include any amendments, supplements or modifications of the
same from time to time and any successor statutes and regulations; (v) unless
otherwise expressly provided, any reference to any action of any Creditor by
way of consent, approval or waiver shall be deemed modified by the phrase “in
its/their reasonable discretion”; (vi) time shall be a reference to New
York City time; (vii) Obligations (other than L/C Liabilities) shall not
be deemed “outstanding” if such Obligations have been paid in full in cash
(except for contingent indemnification obligations not yet due and payable that
survive repayment), all of the Commitments of the Lenders to make any Loans
under the Credit Agreement have expired or been sooner terminated in full and
all of the commitments of any L/C Lender to issue Letters of Credit under the
Credit Agreement have expired or been sooner terminated in full; and (viii) L/C
Liabilities shall not be deemed “outstanding” if (x) such L/C Liabilities
have been cash collateralized or supported by a letter of credit in a manner
reasonably satisfactory to the applicable L/C Lender and (y) all Revolving
Commitments shall have been terminated; provided, however,
that notwithstanding the foregoing in this clause (viii), in no event shall
Borrower be relieved of its obligations to repay any such L/C Liabilities.

 

(b)           In
each Credit Document, unless the context clearly requires otherwise (or such
other Credit Document clearly provides otherwise), (i) “amend” shall mean “amend,
restate, amend and restate, supplement or modify”; and “amended,”
“amending” and

 

47

 

“amendment” shall have
meanings correlative to the foregoing; (ii) in the computation of periods
of time from a specified date to a later specified date, “from” shall mean “from and including”; “to” and “until” shall mean “to but excluding”; and “through” shall mean “to and including”; (iii) “hereof,” “herein” and “hereunder” (and similar
terms) in any Credit Document refer to such Credit Document as a whole and not
to any particular provision of such Credit Document; (iv) “including” (and similar
terms) shall mean “including without limitation” (and similarly for similar
terms); (v) “or” has the inclusive meaning represented by the phrase “and/or”;
(vi) references to “the date hereof” shall mean the date first set forth above; (vii) “asset” and “Property” shall have the
same meaning and effect and refer to all tangible and intangible assets and property,
whether real, personal or mixed and of every type and description; and (viii) a
“fiscal year” or
a “fiscal quarter” is
a reference to a fiscal year or fiscal quarter of Borrower.

 

(c)           In
this Agreement unless the context clearly requires otherwise, any reference to (i) an
Annex, Exhibit or Schedule is to an Annex, Exhibit or Schedule,
as the case may be, attached to this Agreement and constituting a part hereof,
and (ii) a Section or other subdivision is to a Section or such
other subdivision of this Agreement.

 

(d)           This
Agreement and the other Credit Documents are the result of negotiations among
and have been reviewed by counsel to Agents, Borrower and the other parties,
and are the products of all parties. 
Accordingly, they shall not be construed against the Lenders or Agents
merely because of Agents’ or Lenders’ involvement in their preparation.

 

SECTION 1.06.    Dollar Equivalent Calculations.

 

For purposes
of this Agreement, the Dollar Equivalent of each Letter of Credit denominated
in the Alternate Currency shall be calculated (a) on the date when any
such Letter of Credit is issued, (b) on each date the drawing under such
Letter of Credit was paid or disbursed by the applicable L/C Lender under such
Letter of Credit, (c) on the fifteenth day of each month (or, if such
fifteenth day is not a Business Day, the first Business Day occurring
immediately after such fifteenth day) and (d) on such additional dates as
designated from time to time by Administrative Agent or by L/C Lender that
issued such Letter of Credit.  Such
Dollar Equivalent shall remain in effect until the same is recalculated as
provided above and notice of such recalculation is received by Borrower, it
being understood that until such notice of such recalculation is received, the
Dollar Equivalent shall be that Dollar Equivalent as last reported to Borrower
by Administrative Agent.  L/C Lender that
issued a Letter of Credit denominated in the Alternate Currency shall calculate
such Dollar Equivalent at such times as provided above, and such L/C Lender
shall, on the date such calculation is so made, notify Administrative Agent of
such determination of the Dollar Equivalent. Administrative Agent shall promptly
notify Borrower and the Lenders of each such determination of the Dollar Equivalent.  

 

48

 

ARTICLE II.

 

CREDITS

 

SECTION 2.01.    Loans.

 

(a)           Revolving Loans.  Each
Revolving Lender agrees, severally and not jointly, on the terms and conditions
of this Agreement, to make revolving loans (the “Revolving
Loans”) to Borrower in
Dollars from time to time, on any Business Day during the Revolving
Availability Period, in an aggregate principal amount at any one time
outstanding not exceeding the amount of the Revolving Commitment of such
Revolving Lender as in effect from time to time; provided, however, that, after
giving effect to any Borrowing of Revolving Loans, (i) the sum of the
aggregate principal amount of (without duplication) all Revolving Loans and
Swingline Loans then outstanding plus the
aggregate amount of all L/C Liabilities shall not exceed the Total Revolving
Commitments as in effect at such time and (ii) the aggregate principal
amount of all Revolving Loans of such Revolving Lender then outstanding, plus such Revolving Lender’s L/C Liability, plus such Revolving Lender’s Swingline Exposure shall not
exceed such Revolving Lender’s Revolving Commitment as in effect at such
time.  Subject to the terms and
conditions of this Agreement, during the Revolving Availability Period,
Borrower may borrow, repay and re-borrow the amount of the Revolving Commitments
by means of ABR Loans and LIBOR Loans.

 

(b)           Term A Facility Loans. 
Each Lender with a Term A Facility Commitment agrees, severally and not
jointly, on the terms and conditions of this Agreement, to make a Term A
Facility Loan to Borrower in Dollars on the Closing Date in an aggregate
principal amount equal to the Term A Facility Commitment of such Lender.  Term A Facility Loans that are repaid or
prepaid may not be reborrowed.

 

(c)           Term B Facility Loans. 
Each Lender with a Term B Facility Commitment agrees, severally and not
jointly, on the terms and conditions of this Agreement, to make a Term B
Facility Loan to Borrower in Dollars on the Closing Date in an aggregate
principal amount equal to the Term B Facility Commitment of such
Lender.  Term B Facility Loans that are
repaid or prepaid may not be reborrowed.

 

(d)           Limit on LIBOR Loans. 
No more than fifteen separate Interest Periods in respect of LIBOR Loans
may be outstanding at any one time. 
Unless Lead Arrangers (collectively) otherwise agree in their sole
discretion or have determined that the Syndication Date has occurred (at which
time this second sentence of this Section 2.01(d) shall no longer be
applicable), prior to the 90th day following the Closing Date, Term
Loans and Revolving Loans in each case may only be incurred and maintained as,
and/or Continued as or Converted into, LIBOR Loans so long as all such
outstanding LIBOR Loans, together with all outstanding Revolving Loans that are
maintained as LIBOR Loans and all outstanding Term Loans that are maintained as
LIBOR Loans, are subject to an Interest Period of one month which begins and ends
on the same day, with the first such Interest Period to begin no sooner than
three Business Days after the Closing Date.

 

(e)           Swingline Loans.

 

(i)            Swingline
Commitment.  Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to Borrower from time to time during the Revolving Availability Period,
in an aggregate principal amount at any time outstanding that will not result
in (x) the aggregate principal amount of outstanding Swingline Loans exceeding
the Swingline Sublimit or (y) the sum of the total Revolving Exposures exceeding
the Total Revolving Commitments; provided, however, that the Swingline Lender

 

49

 

shall not be
required to make a Swingline Loan to refinance an outstanding Swingline
Loan.  Within the foregoing limits and
subject to the terms and conditions set forth herein, Borrower may borrow,
repay and re-borrow Swingline Loans.

 

(ii)           Swingline
Loans.  To request a Swingline Loan,
Borrower shall notify Administrative Agent of such request by telephone
(promptly confirmed in writing in the form of a Notice of Borrowing by telecopy
or facsimile), not later than 1:00 p.m., New York City time, on the day of
a proposed Swingline Loan.  Each such
notice shall be irrevocable and shall specify the requested date (which shall
be a Business Day) and amount of the requested Swingline Loan.  Administrative Agent will promptly advise the
Swingline Lender of any such notice received from Borrower.  The Swingline Lender shall make each
Swingline Loan available to Borrower by depositing the same by wire transfer of
immediately available funds in (or, in the case of an account of Borrower
maintained with the Swingline Lender, by crediting the same to) the account of
Borrower as directed by Borrower in the applicable Notice of Borrowing for such
Swingline Loan by 4:00 p.m., New York City time, on the requested date of
such Swingline Loan.  Swingline Loans
shall only be incurred and maintained as ABR Loans.  Borrower shall not request a Swingline Loan
if at the time of and immediately after giving effect to such request a Default
or an Event of Default has occurred and is continuing.  Swingline Loans shall be made in minimum
amounts of $250,000 and integral multiples of $250,000 above such amount.

 

(iii)          Prepayment.  Borrower shall have the right at any time and
from time to time to repay any Swingline Loan, in whole or in part, and without
any penalty or premium, upon giving written or telecopy notice (or telephone notice
promptly confirmed by written, or telecopy notice) to the Swingline Lender and
to Administrative Agent before 12:00 (noon), New York City time, on the date of
repayment at the Swingline Lender’s office as the Swingline Lender may from
time to time specify to Borrower and Administrative Agent.  All principal payments of Swingline Loans
shall be accompanied by accrued interest on the principal amount being repaid
to the date of payment.

 

(iv)          Participations.  The Swingline Lender may by written notice given
to Administrative Agent not later than 11:00 a.m., New York City time, on
any Business Day require the Revolving Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate
amount of Swingline Loans in which Revolving Lenders will participate.  Promptly upon receipt of such notice, Administrative
Agent will give notice thereof to each Revolving Lender, specifying in such
notice such Lender’s applicable percentage of such Swingline Loan or Swingline
Loans.  Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to Administrative Agent, for the account of the Swingline Lender,
such Lender’s R/C Percentage of such Swingline Loan or Swingline Loans.  Each Revolving Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever (provided that
such payment shall not cause such Lender’s Revolving Exposure to exceed such
Lender’s Revolving Commitment).  Each Revolving
Lender shall comply with its obligation under this paragraph by

 

50

 

wire transfer
of immediately available funds, in the same manner as provided in Section 4.01
with respect to Loans made by such Lender (and Section 4.01 shall apply,
mutatis mutandis, to the payment obligations of the Revolving Lenders), and
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. 
Administrative Agent shall notify Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to Administrative Agent and not to
the Swingline Lender.  Any amounts
received by the Swingline Lender from Borrower (or other party on behalf of
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to Administrative Agent; any such amounts received by Administrative Agent
shall be promptly remitted by Administrative Agent to the Revolving Lenders
that shall have made their payments pursuant to this paragraph and to the
Swingline Lender, as their interests may appear.  The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve Borrower of any default in
the payment thereof.

 

SECTION 2.02.    Borrowings.  Borrower shall give
Administrative Agent notice of each borrowing hereunder as provided in Section 4.05
in the form of a Notice of Borrowing. 
Not later than 12:00 noon, New York City time, on the date specified for
each borrowing hereunder, each Lender shall make available the amount of the
Loan or Loans to be made by it on such date to Administrative Agent, at an
account specified by Administrative Agent maintained at the Principal Office,
in immediately available funds, for the account of Borrower.  Each borrowing of Revolving Loans shall be
made by each Revolving Lender pro rata based
on its R/C Percentage.  The amounts so
received by Administrative Agent shall, subject to the terms and conditions of
this Agreement, be made available to Borrower not later than 4:00 p.m.,
New York City time, on the actual applicable Funding Date, by depositing the
same by wire transfer of immediately available funds in (or, in the case of an
account of Borrower maintained with the Administrative Agent at the Principal
Office, by crediting the same to) the account or accounts of Borrower or any
other account or accounts in each case as directed by Borrower in the
applicable Notice of Borrowing. 

 

SECTION 2.03.    Letters of
Credit.

 

(a)           Subject
to the terms and conditions hereof, the Revolving Commitments may be utilized,
upon the request of Borrower, in addition to the Revolving Loans provided for
by Section 2.01(a), for standby and commercial documentary letters of
credit (herein collectively called “Letters of Credit”)
issued by L/C Lender for the account of any Credit Party (provided
that Borrower shall be a co-applicant (and jointly and severally liable) with
respect to each Letter of Credit issued for the account of any Subsidiary); provided, however, that
in no event shall

 

(i)            the
aggregate amount of all L/C Liabilities, plus the
aggregate principal amount of all the Revolving Loans and
Swingline Loans then outstanding, exceed at any time the Total Revolving
Commitments as in effect at such time,

 

(ii)           the sum of the aggregate principal amount of all Revolving
Loans of any Revolving Lender then outstanding, plus
such Revolving Lender’s L/C Liability plus such
Revolving Lender’s Swingline Exposure exceed at any time such Revolving Lender’s
Revolving Commitment as in effect at such time,

 

51

 

(iii)          the outstanding aggregate amount of all L/C Liabilities
exceed the L/C Sublimit,

 

(iv)          the Dollar Equivalent of the Stated Amount of any Letter of
Credit be less than $100,000 or such lesser amount as is acceptable to L/C
Lender,

 

(v)           the expiration date of any Letter of Credit extend beyond
the earlier of (x) the fifth Business Day preceding the R/C Maturity Date and
(y) the date twelve months following the date of such issuance for standby
Letters of Credit or 180 days after the date of such issuance for commercial
documentary Letters of Credit, unless the Required Revolving Lenders have
approved such expiry date in writing (but never beyond the fifth Business Day
prior to the R/C Maturity Date); provided,  further, however, that
any standby Letter of Credit may be automatically extendible for periods of up
to one year (but never beyond the fifth Business Day prior to the R/C Maturity
Date),

 

(vi)          L/C Lender issue
any Letter of Credit after it has received notice from Borrower or the Required
Revolving Lenders stating that a Default exists until such time as L/C Lender
shall have received written notice of (x) rescission of such notice from the
Required Revolving Lenders, (y) waiver or cure of such Default in accordance
with this Agreement or (z) Administrative Agent’s good faith determination that
such Default has ceased to exist, or

 

(vii)         any Letter of Credit be issued in a
currency other than Dollars or the Alternate Currency nor at a tenor other than
sight.

 

(b)           Whenever
Borrower requires the issuance of a Letter of Credit it shall give L/C Lender
and Administrative Agent at least three Business Days written notice (or such
shorter period of notice acceptable to L/C Lender) (including by way of
facsimile transmission).  Each notice
shall be in the form of Exhibit L appropriately completed (each a “Letter of Credit Request”) and shall specify a date of
issuance not beyond the fifth Business Day prior to the R/C Maturity Date.  Each Letter of Credit Request must be
accompanied by documentation describing in reasonable detail the proposed
terms, conditions and format of the Letter of Credit to be issued, and if so
requested by L/C Lender each Letter of Credit Request shall be accompanied by
such L/C Lender’s form of application but which application shall not contain
any operating or financial covenants or any provisions inconsistent with this
Agreement.  If there is any conflict
between the  terms and conditions of this
Agreement and the terms and condition of any application, the terms and
conditions of this Agreement shall govern. 
Each Lender hereby authorizes L/C Lender to issue and perform its
obligations with respect to Letters of Credit and each Letter of Credit shall
be issued in accordance with the customary procedures of L/C Lender.  Borrower acknowledges and agrees that the
failure of L/C Lender to require an application at any time and from time to
time shall not restrict or impair such L/C Lender’s right to require such an
application or agreement as a condition to the issuance of any subsequent
Letter of Credit.

 

(c)           On
each day during the period commencing with the issuance by L/C Lender of any
Letter of Credit and until such Letter of Credit shall have expired or been
terminated, the Revolving Commitment of each Revolving Lender shall be deemed
to be utilized for all purposes hereof in an amount equal to such Lender’s R/C
Percentage of the Dollar Equivalent of the then Stated Amount of such Letter of
Credit plus the amount of any unreimbursed drawings thereunder (the amount of
such unreimbursed drawings shall be

 

52

 

expressed in
Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of
Credit denominated in the Alternate Currency). 
Each Revolving Lender (other than L/C Lender) severally agrees that,
upon the issuance of any Letter of Credit hereunder, it shall automatically
acquire from the L/C Lender that issued such Letter of Credit, without
recourse, a participation in L/C Lender’s obligation to fund drawings and
rights under such Letter of Credit in an amount equal to such Lender’s R/C Percentage
of such obligation (such obligation to fund drawings shall be expressed in
Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter
of Credit denominated in the Alternate Currency) and rights, and each Revolving
Lender (other than L/C Lender) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to L/C Lender to pay and discharge when due, its R/C
Percentage of L/C Lender’s obligation to fund drawings (such obligation to fund
drawings shall be expressed in Dollars in the amount of the Dollar Equivalent
thereof in the case of a Letter of Credit denominated in the Alternate
Currency) under such Letter of Credit. 
L/C Lender shall be deemed to hold an L/C Liability in an amount equal
to its retained interest in the related Letter of Credit after giving effect to
such acquisition by the Revolving Lenders other than L/C Lender of their
participation interests.

 

(d)           In
the event that L/C Lender has determined to honor a drawing under a Letter of
Credit, L/C Lender shall promptly notify (the “L/C Payment
Notice”) Administrative Agent and Borrower (through Administrative
Agent) of the amount paid by L/C Lender and the date on which payment is to be
made to such beneficiary.  In the case of
a Letter of Credit denominated in the Alternate Currency, Borrower shall
reimburse L/C Lender that issued such Letter of Credit in Dollars.  In the case of any such reimbursement in
Dollars of a drawing under a Letter of Credit denominated in the Alternate
Currency, the applicable L/C Lender shall notify Administrative Agent and
Borrower of the Dollar Equivalent of the amount of the drawing following the
determination thereof in accordance with Section 1.06.  Borrower hereby unconditionally agrees to pay
and reimburse L/C Lender for the amount of payment under such Letter of Credit
in Dollars, together with interest thereon at a rate per annum
equal to the Alternate Base Rate in effect from time to time plus the Applicable Margin applicable to Revolving Loans
that are maintained as ABR Loans as are in effect from time to time from the
date payment was made to such beneficiary to the date on which payment is due,
such payment to be made not later than the first Business Day after the date on
which Borrower receives the applicable L/C Payment Notice (or the second
Business Day thereafter if such L/C Payment Notice is received on a date that
is not a Business Day or after 1:00 p.m. (New York City time) on a
Business Day).  Any such payment due from
Borrower and not paid on the required date shall thereafter bear interest at
rates specified in Section 3.02(b) until paid.  Promptly upon receipt of the amount paid by
Borrower pursuant to the immediately prior sentence, L/C Lender shall notify
Administrative Agent of such payment and whether or not such payment constitutes
payment in full of the Reimbursement Obligation under the applicable Letter of
Credit.

 

(e)           Promptly
upon its receipt of a L/C Payment Notice referred to in Section 2.03(d),
Borrower shall advise L/C Lender and Administrative Agent whether or not Borrower
intends to borrow hereunder to finance its obligation to reimburse L/C Lender
for the amount of the related demand for payment under the applicable Letter of
Credit and, if it does so intend, submit a Notice of Borrowing for such
borrowing to Administrative Agent as provided in Section 4.05.  In the event that Borrower fails to reimburse
L/C Lender for a demand for payment under a Letter of Credit by the first
Business Day after the date of the applicable L/C

 

53

 

Payment Notice
(or the second Business Day thereafter if such L/C Payment Notice is received
on a date that is not a Business Day or after 1:00 p.m. (New York City
time) on a Business Day), such L/C Lender shall promptly notify Administrative
Agent of such failure by Borrower to so reimburse and of the amount of the
demand for payment (expressed in Dollars in the amount of the Dollar Equivalent
thereof in the case of a Letter of Credit denominated in the Alternate
Currency).  In the event that Borrower
fails to either submit a Notice of Borrowing to Administrative Agent pursuant
to the immediately prior sentence or reimburse L/C Lender for a demand for
payment under a Letter of Credit by the first Business Day after the date of
the applicable L/C Payment Notice (or the second Business Day thereafter if
such L/C Payment Notice is received on a date that is not a Business Day or
after 1:00 p.m. (New York City time) on a Business Day), Administrative
Agent shall give each Revolving Lender prompt notice of the amount of the
demand for payment (expressed in Dollars in the amount of the Dollar Equivalent
thereof in the case of a Letter of Credit denominated in the Alternate
Currency) (the “Unreimbursed Amount”), specifying
such Lender’s R/C Percentage thereof and requesting payment of such amount.

 

(f)            Each
Revolving Lender (other than L/C Lender) shall pay to Administrative Agent for
account of L/C Lender at the Principal Office in Dollars and in immediately
available funds, an amount equal to such Revolving Lender’s R/C Percentage of
the Unreimbursed Amount upon not less than one Business Day’s actual notice by
Administrative Agent as described in Section 2.03(e) to such
Revolving Lender requesting such payment and specifying such amount.  Administrative Agent will promptly remit the
funds so received to the applicable L/C Lender in Dollars.  Subject to the proviso in Section 2.03(m),
each such Revolving Lender’s obligation to make such payments to Administrative
Agent for the account of L/C Lender under this Section 2.03(f), and L/C
Lender’s right to receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including (i) the
failure of any other Revolving Lender to make its payment under this Section 2.03(f),
(ii) the financial condition of Borrower or the existence of any Default
or (iii) the termination of the Commitments.  Each such payment to L/C Lender shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(g)           Upon
the making of each payment by a Revolving Lender to L/C Lender pursuant to Section 2.03(f) in
respect of any Letter of Credit, such Revolving Lender shall, automatically and
without any further action on the part of Administrative Agent, L/C Lender or
such Revolving Lender, acquire (i) a participation in an amount equal to
such payment in the Reimbursement Obligation owing to L/C Lender by Borrower
hereunder and under the L/C Documents relating to such Letter of Credit and (ii) a
participation equal to such Revolving Lender’s R/C Percentage in any interest
or other amounts (such interest and other amounts expressed in Dollars in the
amount of the Dollar Equivalent thereof in the case of a Letter of Credit
denominated in the Alternate Currency) (other than cost reimbursements) payable
by Borrower hereunder and under such L/C Documents in respect of such
Reimbursement Obligation.  If L/C Lender
receives directly from or for the account of Borrower any payment in respect of
any Reimbursement Obligation or any such interest or other amounts (including
by way of setoff or application of proceeds of any collateral security), L/C
Lender shall promptly pay to Administrative Agent for the account of each
Revolving Lender which has satisfied its obligations under Section 2.03(f),
such Revolving Lender’s R/C Percentage of the Dollar Equivalent of such
payment, each such payment by L/C Lender to be made in Dollars.  In the

 

54

event any
payment received by L/C Lender and so paid to the Revolving Lenders hereunder
is rescinded or must otherwise be returned by L/C Lender, each Revolving Lender
shall, upon the request of L/C Lender (through Administrative Agent), repay to
L/C Lender (through Administrative Agent) the amount of such payment paid to
such Revolving Lender, with interest at the rate specified in Section 2.03(j).

 

(h)           Borrower shall pay
to Administrative Agent, for the account of the Revolving Lenders, in respect
of each Letter of Credit, a letter of credit commission equal to (x) the rate per annum equal to the Applicable Margin for Revolving Loans
that are LIBOR Loans in effect from time to time, multiplied by (y) the daily
Dollar Equivalent of the Stated Amount of each Letter of Credit (such Dollar
Equivalent to be determined in accordance with Section 1.06) for the
period from and including the date of issuance of each Letter of Credit (i) in
the case of a Letter of Credit which expires in accordance with its terms, to
and including such expiration date and (ii) in the case of a Letter of
Credit which is drawn in full or is otherwise terminated other than on the
stated expiration date of such Letter of Credit, to and excluding the date on
such Letter of Credit is drawn in full or is terminated.  Such commission will be non-refundable and is
to be paid quarterly in arrears on each Quarterly Date and on the R/C Maturity
Date.  In addition, Borrower shall pay to
L/C Lender, for such L/C Lender’s account, in respect of each Letter of Credit,
a non refundable letter of credit issuance commission in an amount equal to
0.25% per annum multiplied by the daily Dollar
Equivalent of the Stated Amount of each Letter of Credit from and including the
issuance date of each Letter of Credit through the expiry date of each Letter
of Credit (but in no event less than $500.00 per year per Letter of Credit)
payable quarterly in arrears on each Quarterly Date. In addition Borrower
agrees to pay to L/C Lender all charges, costs and expenses in the amounts
customarily charged by L/C Lender, from time to time in like circumstances,
with respect to the issuance, amendment, transfer, payment of drawings, and
other transactions relating thereto.

 

(i)            Upon the issuance
of or amendment or modification to a Letter of Credit, L/C Lender shall
promptly deliver to Administrative Agent and Borrower a written notice of such
issuance, amendment or modification and such notice shall be accompanied by a
copy of such Letter of Credit or the respective amendment or modification
thereto, as the case may be.  Promptly
upon receipt of such notice, Administrative Agent shall deliver to each Revolving
Lender a written notice regarding such issuance, amendment or modification, as
the case may be, and, if so requested by a Revolving Lender, Administrative
Agent shall deliver to such Revolving Lender a copy of such Letter of Credit or
amendment or modification, as the case may be.

 

(j)            If and to the
extent that any Revolving Lender fails to pay an amount required to be paid
pursuant to Section 2.03(f) or 2.03(g) on the due date therefor,
such Revolving Lender shall pay to L/C Lender (through Administrative Agent)
interest on such amount for each day from and including such due date to but
excluding the date such payment is made at a rate per annum equal
to the Federal Funds Rate (as in effect from time to time) for the first three
days and at the interest rate (in effect from time to time) applicable to
Revolving Loans that are maintained as ABR Loans for each day thereafter.

 

(k)           The issuance by L/C
Lender of any amendment or modification to any Letter of Credit hereunder that
would extend the expiry date or increase the Stated Amount thereof shall be
subject to the same conditions applicable under this Section 2.03 to the
issuance 

 

55

 

of new Letters
of Credit, and no such amendment or modification shall be issued hereunder
unless either (x) the respective Letter of Credit affected thereby would have
complied with such conditions had it originally been issued hereunder in such
amended or modified form or (y) the Required Revolving Lenders (or all of the
Revolving Lenders to the extent required by Section 13.04) shall have
consented thereto.

 

(l)            Notwithstanding the
foregoing, L/C Lender shall not be under any obligation to issue any Letter of
Credit if at the time of such issuance, any order, judgment or decree of any
Governmental Authority or arbitrator shall purport by its terms to enjoin or
restrain L/C Lender from issuing such Letter of Credit, any of L/C Lender’s
policies, any Requirement of Law applicable to L/C Lender or any request or
directive (whether or not having the force of law) from any Governmental Authority
shall prohibit the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such L/C Lender with respect to such
Letter of Credit any restriction or reserve or capital requirement (for which
L/C Lender is not otherwise compensated) not in effect on the Closing Date.  At any time that L/C Lender shall not be
under any obligation to issue Letters of Credit pursuant to this Section 2.03(l),
L/C Lender may be replaced by Borrower with another Lender reasonably
acceptable to Administrative Agent upon notice to L/C Lender and acceptance of
such appointment by such successor L/C Lender. 
Upon any such replacement, Administrative Agent shall notify the Lenders
of any such replacement of L/C Lender and the replacement L/C Lender shall
agree to be bound by the applicable provisions of this Agreement.  At the time any such replacement shall become
effective, Borrower shall pay all unpaid fees accrued for the account of the
replaced L/C Lender pursuant to Section 2.03(h).  From and after the effective date of any such
replacement, (i) the successor L/C Lender shall have all the rights and
obligations of L/C Lender under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “L/C
Lender” shall be deemed to refer to such successor or to any previous L/C
Lender, or to such successor and all previous L/C Lenders, as the context shall
require.  After the replacement of an L/C
Lender hereunder, the replaced L/C Lender shall remain a party hereto and shall
continue to have all the rights and obligations of an L/C Lender under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.

 

(m)          The obligations of
Borrower under this Agreement and any L/C Document to reimburse L/C Lender for
a drawing under a Letter of Credit, and to repay any drawing under a Letter of
Credit converted into Revolving Loans or Swingline Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C Document under all
circumstances, including the following:  (i) any
lack of validity or enforceability of this Agreement or any L/C Document; (ii) the
existence of any claim, setoff, defense or other right that Borrower may have
at any time against any beneficiary or any transferee of any Letter of Credit
(or any person for whom any such beneficiary or any such transferee may be acting),
L/C Lender or any other person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Documents or any unrelated
transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit;
or any defense based upon the failure of any drawing under a Letter of Credit
to conform to the

 

56

 

terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing; or (iv) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Borrower or a Subsidiary Guarantor; provided,
however, that neither Borrower nor any
Revolving Lender shall be obligated to reimburse L/C Lender for any wrongful
payment finally determined by a court of competent jurisdiction to have been
made by L/C Lender as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of L/C Lender.  To the extent that any provision of any L/C
Document is inconsistent with the provisions of this Section 2.03, the
provisions of this Section 2.03 shall control.

 

(n)           Borrower,
Administrative Agent and Revolving Lenders hereby agree that, as of the Closing
Date, each letter of credit identified on Schedule 2.03(n) (each,
an “Existing Letter of Credit”) shall be a
Letter of Credit as if originally issued under this Agreement, and that the
fees and other provisions set forth in this Section 2.03 shall be
applicable to each Existing Letter of Credit as of the Closing Date.

 

(o)           On the last Business
Day of each month, Borrower and each L/C Lender shall provide to Administrative
Agent such information regarding the outstanding Letters of Credit as
Administrative Agent shall reasonably request, in form and substance reasonably
satisfactory to Administrative Agent (and in such standard electronic format as
Administrative Agent shall reasonably specify), for purposes of Administrative
Agent’s ongoing tracking and reporting of outstanding Letters of Credit.  Administrative Agent shall maintain a record
of all outstanding Letters of Credit based upon information provided by
Borrower and L/C Lenders pursuant to this Section 2.03(o), and such record
of Administrative Agent shall, absent manifest error, be deemed a correct and
conclusive record of all Letters of Credit outstanding from time to time
hereunder.  Notwithstanding the foregoing,
if and to the extent Administrative Agent determines that there are one or more
discrepancies between information provided by Borrower and any L/C Lender
hereunder, Administrative Agent will notify Borrower and such L/C Lender
thereof and Borrower and such L/C Lender shall endeavor to reconcile any such
discrepancy.  In addition to and without
limiting the foregoing, with respect to commercial documentary Letters of
Credit, on the first Business Day of each week the applicable L/C Lender shall
deliver to Administrative Agent, by facsimile (or, if Administrative Agent and
the applicable L/C Lender agree, by e-mail), a report detailing the daily
outstanding commercial documentary Letters of Credit for the previous week for
such Letters of Credit issued in Dollars and for such Letters of Credit issued
in the Alternate Currency. 

 

SECTION 2.04.    Termination
and Reductions of Commitment.

 

(a)           (i)  The
Commitments shall be automatically and permanently terminated in their entirety
on the earlier of (x) December 31, 2005, if the Argosy Acquisition has
not occurred prior to such date, and (y) the termination of the Argosy
Acquisition Agreement (if the Argosy Acquisition has not previously been
consummated).

 

(ii)           In addition to any
other mandatory commitment reductions pursuant to this Section 2.04, the
aggregate amount of the Term A Facility Commitments shall be automatically and
permanently reduced to zero on the Closing Date (after giving effect to the
making of the Term A Facility Loans on such date).

 

57

 

(iii)          In addition to any
other mandatory commitment reductions pursuant to this Section 2.04, the
aggregate amount of the Term B Facility Commitments shall be automatically
and permanently reduced to zero on the Closing Date (after giving effect to the
making of the Term B Facility Loans in respect thereof on such date).

 

(iv)          In addition to any
other mandatory commitment reductions pursuant to this Section 2.04, the aggregate
amount of any Incremental Term Loan Commitments shall be automatically and permanently
reduced by the amount of Incremental Term Loans made in respect thereof from
time to time, and to zero on the date that is the third anniversary of the Closing
Date.

 

(v)           In addition to any
other mandatory commitment reductions pursuant to this Section 2.04, the
Incremental Commitment Amount shall be automatically and permanently reduced
from time to time by the amount of Incremental Term Loans made from time to
time and the amount of any Incremental Revolving Commitments provided pursuant
to Section 2.12, and to zero on the date that is the third anniversary of
the Closing Date.

 

(vi)          The aggregate amount
of the Revolving Commitments, the L/C Commitments and the Swingline Commitment
shall be automatically and permanently reduced to zero on the R/C Maturity
Date.

 

(b)           Borrower shall have
the right at any time or from time to time (without premium or penalty except
breakage costs (if any) pursuant to Section 5.05)) (i) so long as no
Revolving Loans, Swingline Loans or L/C Liabilities will be outstanding as of
the date specified for termination (after giving effect to all transactions
occurring on such date), to terminate the Revolving Commitments in their
entirety, and (ii) to reduce the aggregate amount of the Unutilized R/C
Commitments (which shall be pro rata among
Revolving Lenders); provided, however, that (x) Borrower shall give notice of each such
termination or reduction as provided in Section 4.05, and (y) each partial
reduction shall be in an aggregate amount at least equal to $5.0 million (or
any whole multiple of $1.0 million in excess thereof) or, if less, the
remaining Unutilized R/C Commitments.

 

(c)           Any Commitment once
terminated or reduced may not be reinstated.

 

(d)           Each reduction or
termination of any of the Commitments pursuant to this Section 2.04 shall
be applied ratably among the Lenders with such a Commitment, as the case may
be, in accordance with their respective Commitment, as applicable.

 

(e)           In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders (or Required Revolving Lenders or Required Tranche Lenders, to
the extent such change, waiver, discharge or termination requires the approval
of all affected Lenders or all affected Required Revolving Lenders or all
Lenders of such Tranche) as (and to the extent) provided in Section 13.04(b),
Borrower may, subject to its compliance with the requirements of Section 13.04(b),
upon three Business Days’ prior written notice to Administrative Agent at the
Principal Office (which notice Administrative Agent shall promptly transmit to
each of the Lenders) terminate all of the Commitments of such Lender, other
than any such Commitment which is being maintained by such Lender (and not
being terminated by 

 

58

 

Borrower) as
provided in Section 13.04(b), so long as all Loans (other than any such
Loans that are being maintained by such Lender (and not being repaid by
Borrower) as provided in Section 13.04(b)), together with accrued and
unpaid interest, fees and all other amounts, owing to such Lender (including
all amounts, if any, owing pursuant to Section 5.05) are repaid
concurrently with the effectiveness of such termination pursuant to Section 2.09(c) (at
which time Annexes A-1, A-2 and/or A-3, as
applicable, shall be deemed modified to reflect such changed amounts) and such
Lender’s L/C Liability is cash collateralized by Borrower in a manner
reasonably satisfactory to Administrative Agent and the respective L/C Lenders,
and at such time, unless the respective Lender continues to have outstanding
Loans or Commitments hereunder, such Lender shall no longer constitute a “Lender”
for purposes of this Agreement, except with respect to indemnifications under
this Agreement (including, without limitation, Sections 4.02, 5.01, 5.03,
5.05, 5.06 and 13.03), which shall survive as to such repaid Lender.

 

SECTION 2.05.    Fees.

 

(a)           Borrower shall pay
to Administrative Agent for the account of each Revolving Lender (other than a
Defaulting Lender) a commitment fee for the period from and including the
Closing Date to but not including the earlier of the date such Revolving
Commitment is terminated or expires and the R/C Maturity Date computed at a
rate per annum equal to the Applicable Fee
Percentage in effect from time to time during such period on the daily average
amount of such Revolving Lender’s Unutilized R/C Commitment.  For purposes of computing commitment fees
with respect to Revolving Commitments, a Revolving Commitment of a Revolving
Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and L/C Liability of such Revolving Lender (and the Swingline Exposure of
such Revolving Lender shall be disregarded for such purpose).  Any accrued commitment fee under this Section 2.05(a) shall
be payable in arrears on each Quarterly Date and on the earlier of the date the
Revolving Commitments are terminated or expire and the R/C Maturity Date.

 

(b)           Borrower shall pay
to Administrative Agent for its own account the annual administrative fee
pursuant to the Administrative Agent’s Fee Letter.

 

(c)           At the time of the
effectiveness of a Repricing Transaction prior to the first anniversary of the
Closing Date, Borrower agrees to pay to Administrative Agent, for the ratable
account of each Lender with outstanding Term B Facility Loans (including each
Lender that withholds its consent to such Repricing Transaction and is replaced
or is removed as a Lender under Section 2.11 or 2.09(c), as the case may
be), a fee in an amount equal to 1.0% of the aggregate principal amount of all
Term B Facility Loans outstanding on such date immediately prior to the
effectiveness of such Repricing Transaction. 
Such fee shall be due and payable upon the date of the effectiveness of
such Repricing Transaction.

 

SECTION 2.06.    Lending Offices.  The Loans of each Type made by each Lender
shall be made and maintained at such Lender’s Applicable Lending Office for
Loans of such Type.

 

SECTION 2.07.    Several Obligations of Lenders.  The failure of any Lender to make any Loan to
be made by it on the date specified therefor shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither any Lender nor
Administrative Agent shall be responsible for the failure of any other Lender
to make a Loan to 

 

59

 

be made by
such other Lender, and no Lender shall have any obligation to Administrative
Agent or any other Lender for the failure by such Lender to make any Loan
required to be made by such Lender.  No
Revolving Lender will be responsible for failure of any other Lender to fund
its participation in Letters of Credit.

 

SECTION 2.08.    Notes; Register.

 

(a)           At the request of
any Lender, its Loans of a particular Class shall be evidenced by a
promissory note, payable to such Lender (or its nominee) and otherwise duly completed,
substantially in the form of Exhibits A-1, A-2, A-3 and A-4
of such Lender’s Revolving Loans, Term A Facility Loans, Term B Facility Loans
and Swingline Loans, respectively; and in the case of any New Incremental Term
Loans, such form of promissory note provided pursuant to the applicable
Incremental Joinder Agreement.

 

(b)           The date, amount,
Type, interest rate and duration of the Interest Period (if applicable) of each
Loan of each Class made by each Lender to Borrower and each payment made
on account of the principal thereof, shall be recorded by such Lender (or its
nominee) on its books and, prior to any transfer of any Note evidencing the
Loans of such Class held by it, endorsed by such Lender (or its nominee)
on the schedule attached to such Note or any continuation thereof; provided, however, that
the failure of such Lender (or its nominee) to make any such recordation or
endorsement or any error in such recordation or endorsement shall not affect
the obligations of Borrower to make a payment when due of any amount owing
hereunder or under such Note.

 

(c)           Borrower hereby
designates Administrative Agent to serve as its agent, solely for purposes of
this Section 2.08, to maintain a register (the “Register”)
on which it will record the name and address of each Lender, the Commitment
from time to time of each of the Lenders, the principal amount of the Loans
made by each of the Lenders and each repayment in respect of the principal
amount of the Loans of each Lender. 
Failure to make any such recordation or any error in such recordation
shall not affect Borrower’s obligations in respect of such Loans.  The entries in the Register shall be prima
facie evidence of the information noted therein (absent manifest error), and
the parties hereto shall treat each person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of the Credit Documents, notwithstanding any notice to
the contrary.  The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice. 
No assignment shall be effective unless recorded in the Register.

 

SECTION 2.09.    Optional Prepayments and Conversions or
Continuations of Loans.

 

(a)           Subject to Section 4.04
and this Section 2.09(a), Borrower shall have the right to prepay Loans
(without premium or penalty, except as provided in Section 2.09(d)), or to
Convert Loans of one Type into Loans of another Type or to Continue Loans of
one Type as Loans of the same Type, at any time or from time to time.  Borrower shall give Administrative Agent
notice of each such prepayment, Conversion or Continuation as provided in Section 4.05
(and, upon the date specified in any such notice of prepayment, the amount to
be prepaid shall become due and payable hereunder).  Each notice of Conversion or Continuation shall
be 

 

60

 

substantially
in the form of Exhibit C.  If
LIBOR Loans are prepaid or Converted other than on the last day of an Interest
Period therefor, Borrower shall at such time pay all expenses and costs
required by Section 5.05.  Unless
Lead Arrangers (collectively) otherwise agree in their sole discretion or have
determined that the Syndication Date has occurred, prior to the 90th
day following the Closing Date, Conversions of ABR Loans into LIBOR Loans shall
be subject to the second sentence in Section 2.01(d).  Notwithstanding the foregoing, and without
limiting the rights and remedies of the Lenders under Article XI, in the
event that any Event of Default shall have occurred and be continuing, Administrative
Agent may (and, at the request of the Required Lenders, shall), upon written
notice to Borrower, have the right to suspend the right of Borrower to Convert
any Loan into a LIBOR Loan, or to Continue any Loan as a LIBOR Loan, in which
event all Loans shall be Converted (on the last day(s) of the respective
Interest Periods therefor) or Continued, as the case may be, as ABR Loans.  Swingline Loans may not be converted or
continued.  

 

(b)           Application.

 

(i)            The amount of any
optional prepayments described in Section 2.09(a) shall be applied to
prepay Loans outstanding in order of amortization, in amounts and Tranches, all
as determined by Borrower.

 

(ii)           With respect to any
optional prepayment to be made of the Term B Facility Loans or of the New
Incremental Term Loans that are subject to an Incremental Joinder Agreement
that gives the Lenders holding such New Incremental Term Loans the right to
decline prepayments as provided in the applicable Incremental Joinder Agreement
(such New Incremental Term Loans are collectively referred to as the “Prepayment New Incremental Term Loans” and the Lenders
holding such New Incremental Term Loans are collectively referred to as the “Prepayment New Incremental Term Loan Lenders”) pursuant to Section 2.09(a),
so long as any Term Loans (other than Term B Facility Loans or such Prepayment
New Incremental Term Loans, as the case may be) are then outstanding, Borrower
shall have the right, but not the obligation, to elect to offer the Term B
Facility Lenders or the Prepayment New Incremental Term Loan Lenders, as the
case may be, the right to decline such prepayment of the Term B Facility Loans
or the Prepayment New Incremental Term Loans, as the case may be (each, an “Optional Offer”).  If
Borrower makes such election, it shall provide notice thereof to Administrative
Agent, who shall promptly, and in any event within one Business Day of receipt,
provide such notice to the Term B Facility Lenders or the Prepayment New
Incremental Term Loan Lenders, as the case may be.  Any such notice shall specify the aggregate
amount that the Term B Facility Lenders or the Prepayment New Incremental Term
Loan Lenders, as the case may be, may decline to have applied towards the
prepayment of the Term B Facility Loans or the Prepayment New Incremental Term
Loans, as the case may be (each, an “Optional Offered Amount”).  Each Term B Facility Lender or each
Prepayment New Incremental Term Loan Lenders, as the case may be, may elect, in
its sole discretion, to accept the applicable Optional Offer with respect to an
amount equal to or less than an amount equal to (x) in the case such Optional
Offer relates to Term B Facility Loans, the applicable Optional Offered Amount
in respect of such Optional Offer times a fraction, the numerator of which is the
principal amount of Term B Facility Loans owed to such Term B Facility Lender
and the denominator of which is the principal amount of all Term B Facility
Loans outstanding and (y) in the case such Optional Offer relates to the
Prepayment New Incremental Term Loans, the 

 

61

 

applicable
Optional Offered Amount in respect of such Optional Offer times a fraction, the
numerator of which is the principal amount of the Prepayment New Incremental
Term Loans owed to such Prepayment New Incremental Term Loan Lenders and the
denominator of which is the principal amount of all Prepayment New Incremental
Term Loans outstanding (such amount declined by such Term B Facility Lender for
prepayment of its Term B Facility Loans or such amount declined by such
Prepayment New Incremental Term Loan Lenders for prepayment of its Prepayment
New Incremental Term Loans, as the case may be, referred to as the “Optional Declined Amount”). 
Any acceptance of an Optional Offer by a Term B Facility Lender or
Prepayment New Incremental Term Loan Lender, as the case may be, must be
evidenced by written notice delivered to Administrative Agent within five
Business Days of receipt of such Optional Offer specifying such Term B Facility
Lender’s or such Prepayment New Incremental Term Loan Lender’s, as the case may
be, Optional Declined Amount in respect thereof (if any).  Failure by a Term B Facility Lender or a
Prepayment New Incremental Term Loan Lender, as the case may be, to give such
notice will constitute a rejection of the Optional Offer by such Term B
Facility Lender or Prepayment New Incremental Term Loan Lender, as the case may
be.  In the case of any such acceptance,
the aggregate amount of the Optional Declined Amounts of all Term B Facility
Lenders or of all Prepayment New Incremental Term Loan Lenders, as the case may
be, in respect of the applicable Optional Offer shall be applied to the Term
Loans (other than Term B Facility Loans or Prepayment New Incremental Term
Loans, as the case may be), pro rata to the
remaining Amortization Payments of such Term Loans (other than Term B Facility
Loans or Prepayment New Incremental Term Loans, as the case may be); provided, however, that to the extent that the aggregate
principal amount of the Term Loans (other than Term B Facility Loans or
Prepayment New Incremental Term Loans, as the case may be) after giving effect
to such optional prepayment is less than the aggregate amount of such Optional
Declined Amounts, then such Optional Declined Amounts in excess of the amount
optionally applied to such Term Loans (other than Term B Facility Loans or
Prepayment New Incremental Term Loans, as the case may be) shall be allocated
among the Term B Facility Lenders or the Prepayment New Incremental Term Loan
Lenders, as the case may be, that accepted the Optional Offer pro rata based on the Optional Declined Amount of each Term
B Facility Lender or each Prepayment New Incremental Term Loan Lender, as the
case may be, as the case may be, in respect of such Optional Offer.

 

(iii)          In addition to the
foregoing, and provided that the Consolidated
Senior Leverage Ratio is less than 3.50 to 1.00, Borrower shall have the right
to elect to offer to prepay the Loans pro rata to the
Term A Facility Loans, the Term B Facility Loans and any New Incremental Term
Loans then outstanding and apply any amounts rejected for such prepayment to
repurchase, prepay, redeem, retire, acquire, defease or cancel Indebtedness in
accordance with and to the extent permitted by Section 10.10(e) and/or
to repurchase Equity Interests of Borrower. 
If Borrower makes such an election, it shall provide notice thereof to
Administrative Agent, who shall promptly, and in any event within one Business
Day of receipt, provide such notice to the holders of the Term Loans.  Any such notice shall specify the aggregate
amount offered to prepay the Term Loans. 
Each holder of a Term A Facility Loan, a Term B Facility Loan or a New
Incremental Term Loan may elect, in its sole discretion, to reject such prepayment
offer with respect to an amount equal to or less than (x) with respect to
holders of Term A Facility Loans, an amount equal to the aggregate amount so
offered to prepay Term A Facility Loans times a fraction, the numerator of
which is the principal amount of 

 

62

 

Term A Facility
Loans owed to such holder and the denominator of which is the principal amount
of Term A Facility Loans outstanding, (y) with respect to holders of Term
B Facility Loans, an amount equal to the aggregate amount so offered to prepay
Term B Facility Loans times a fraction, the numerator of which is the principal
amount of Term B Facility Loans owed to such holder and the denominator of
which is the principal amount of Term B Facility Loans outstanding or
(z) with respect to holders of New Incremental Term Loans, an amount equal
to the aggregate amount so offered to prepay New Incremental Term Loans times a
fraction, the numerator of which is the principal amount of New Incremental
Term Loans owed to such holder and the denominator of which is the principal
amount of New Incremental Term Loans outstanding.  Any rejection of such offer must be evidenced
by written notice delivered to Administrative Agent within five Business Days
of receipt of the offer for prepayment, specifying an amount of such prepayment
offer rejected by such holder, if any. 
Failure to give such notice will constitute an election to accept such offer.  Any portion of such prepayment offer so accepted
will be used to prepay the Term Loans held by the applicable holders within ten
Business Days of the date of receipt of the offer to prepay.  Any portion of such prepayment rejected may
be used by Borrower and its Restricted Subsidiaries as provided in Section 10.10(e) to
the extent permitted thereby or to repurchase Equity Interests of Borrower.

 

(c)           In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders (or Required Revolving Lenders or Required Tranche Lenders, to
the extent such change, waiver, discharge or termination requires the approval
of all affected Lenders or all affected Required Revolving Lenders or all
Lenders of such Tranche) as (and to the extent) provided in Section 13.04(b),
Borrower may, upon five Business Days’ prior written notice to Administrative
Agent at the Principal Office (which notice Administrative Agent shall promptly
transmit to each of the Lenders) repay all Loans of such Lender, together with
accrued and unpaid interest, fees and other amounts owing to such Lender (including
all amounts, if any, owing pursuant to Section 5.05) (or owing to such
Lender with respect to each Tranche which gave rise to the need to obtain such
Lender’s individual consent) in accordance with, and subject to the
requirements of, Section 13.04(b), so long as (i) in the case of the
repayment of Revolving Loans of any Lender pursuant to this Section 2.09(c),
(A) the Revolving Commitment of such Lender is terminated concurrently
with such repayment pursuant to Section 2.04(e) (at which time Annex A-1
shall be deemed modified to reflect the changed Revolving Commitments) and (B) such
Lender’s R/C Percentage of all outstanding Letters of Credit is cash
collateralized by Borrower in a manner reasonably satisfactory to Administrative
Agent and L/C Lenders and (ii) the consents, if any, required under Section 13.04(b) in
connection with the repayment pursuant to this Section 2.09(c) shall
have been obtained.

 

(d)           Any prepayment of
Term B Facility Loans pursuant to this Section 2.09 made prior to the
first anniversary of the Closing Date in connection with any Repricing
Transaction shall be subject to the fee described in Section 2.05(c).

 

SECTION 2.10.    Mandatory Prepayments.

 

(a)           Borrower shall
prepay the Loans as follows (each such prepayment to be effected in each case
in the manner, order and to the extent specified in Section 2.10(b) below):

 

(i)            Casualty Events.  Within three Business Days after Borrower or
any Restricted Subsidiary receives any Net Available Proceeds from any Casualty
Event (or notice of 

 

63

 

collection by Administrative Agent of the
same), in an aggregate principal amount equal to 100% of such Net Available
Proceeds (it being understood that applications pursuant to this Section 2.10(a)(i) shall
not be duplicative of Section 2.10(a)(iii) below); provided, however, that:

 

(x)            if no Default or Event of Default
then exists or would arise therefrom, the Net Available Proceeds thereof shall
not be required to be so applied on such date to the extent that Borrower
delivers an Officer’s Certificate to Administrative Agent stating that an
amount equal to such proceeds is intended to be used to fund the acquisition of
Property used or usable in the business of any Credit Party or repair, replace
or restore the Property or other Property used or usable in the business of any
Credit Party (in accordance with the provisions of the applicable Security
Document in respect of which such Casualty Event has occurred, to the extent
applicable), in each case within 365 days following the date of the receipt of
such Net Available Proceeds,

 

(y)           to the extent such Casualty Event
affects any of the Collateral or Property acquired to effect any repair,
replacement or restoration of such Collateral, such proceeds shall be made
subject to the Lien of the Security Documents in accordance with the provisions
of Section 9.08, and

 

(z)            if all or any portion of such Net
Available Proceeds not required to be applied to the prepayment of Loans
pursuant to this Section 2.10(a)(i) is not so used within 365 days
after the date of the receipt of such Net Available Proceeds, such remaining
portion shall be applied on the last day of such period as specified in Section 2.10(b);
provided, however,
that if any portion has not been so used within 365 days after such date and
any Credit Party is diligently pursuing the repair, replacement or restoration
of Property or the acquisition of Property, then such application of such
remaining portion shall not be required for so long as such repair, replacement
or restoration is being diligently pursued.

 

Notwithstanding
the foregoing provisions of this Section 2.10(a)(i) or otherwise, (A) no
mandatory prepayment shall be required pursuant to this Section 2.10(a)(i) until
the date on which the sum of (x) the Net Available Proceeds required to be
applied as mandatory prepayments pursuant to this Section 2.10(a)(i) in
the absence of this sentence plus (y) the
Net Available Proceeds required to be applied as mandatory prepayments pursuant
to Section 2.10(a)(iii) in the absence of the last sentence in such Section 2.10(a)(iii) equals
or exceeds $20.0 million and (B) amounts held pending application pursuant
to this clause may be used to repay Revolving Loans with no reduction in Revolving
Commitments.

 

(ii)           Debt Issuance.  Within three Business Days after any Debt Issuance
on or after the Closing Date, in an aggregate principal amount equal to 100% of
the Net Available Proceeds of such Debt Issuance.

 

(iii)          Asset Sales.  Within three Business Days after receipt by
Borrower or any of its Restricted Subsidiaries of any Net Available Proceeds
from any Asset Sale permitted by Sections 10.05(c) and 10.05(n), in an
aggregate principal amount equal to 100% of the Net 

 

64

 

Available Proceeds from such Asset Sale (it
being understood that applications pursuant to this Section 2.10(a)(iii) shall
not be duplicative of Section 2.10(a)(i) above); provided, however, that:

 

(x)            an amount equal to the Net Available
Proceeds from any Asset Sale permitted by Sections 10.05(c) and 10.05(n)
shall not be required to be applied as provided above on such date if (1) no
Default or Event of Default then exists or would arise therefrom and (2) Borrower
delivers an Officer’s Certificate to Administrative Agent stating that an
amount equal to such Net Available Proceeds is intended to be reinvested,
directly or indirectly, in assets (which may be pursuant to an acquisition of
Equity Interests of a person that directly or indirectly owns such assets) otherwise
permitted under this Agreement of (A) if such Asset Sale was effected by
any Credit Party, any Credit Party, and (B) if such Asset Sale was
effected by any other Company, any Company, in each case within 365 days
following the date of such Asset Sale (which certificate shall set forth the
estimates of the proceeds to be so expended);

 

(y)           to the extent such Net Available
Proceeds are from an Asset Sale of Collateral, an amount equal to the Net
Available Proceeds shall be used within such 365 day period to acquire or
invest in Property subject to or made subject to the Lien of the applicable
Security Documents in accordance with the provisions of Section 9.08; and

 

(z)            if all or any portion of such Net
Available Proceeds is not reinvested in assets in accordance with the Officer’s
Certificate referred to in clause (x) above (and, in the case of any Net
Available Proceeds from an Asset Sale of Collateral, in compliance with clause
(y) above) within such 365-day period, such remaining portion shall be applied
on the last day of such period as specified in Section 2.10(b) (it
being understood that the foregoing shall in no way affect the obligation of
any Company to obtain the consent of the Required Lenders if required pursuant
to this Agreement to effect any Asset Sale).

 

Notwithstanding
the foregoing provisions of this Section 2.10(a)(iii) or otherwise, (A) no
mandatory prepayment shall be required pursuant to this Section 2.10(a)(iii) until
the date on which the sum of (x) the Net Available Proceeds required to be
applied as mandatory prepayments pursuant to this Section 2.10(a)(iii) in
the absence of this sentence plus (y) the Net Available Proceeds required to
be applied as mandatory prepayments pursuant to Section 2.10(a)(i) in
the absence of the last sentence in such Section 2.10(a)(i) equals
or exceeds $20.0 million and (B) amounts held pending application pursuant
to this clause may be used to repay Revolving Loans with no reduction in Revolving
Commitments.

 

(iv)          Excess Cash Flow.  On a date not later than 100 days after each December 31
(each such December 31, an “Excess Cash Flow
Measurement Date”), beginning with the fiscal year ended December 31,
2006, (A) if the Consolidated Senior Leverage Ratio as of the Excess Cash
Flow Measurement Date is greater than or equal to 3.50 to 1.00, an amount equal
to 50% of Excess Cash Flow for the Excess Cash Flow Period ending on such
Excess Cash Flow Measurement Date or (B) if the Consolidated Senior
Leverage Ratio as of the Excess Cash 

 

65

 

Flow Measurement Date is less than 3.50 to
1.00, an amount equal to 0% of Excess Cash Flow for the Excess Cash Flow Period
ending on such Excess Cash Flow Measurement Date.

 

(v)           Other Required Prepayments.  If the terms of any agreement, instrument or
indenture pursuant to which any Indebtedness (other than the Obligations) pari
passu with or junior in right of payment to the Loans is outstanding (or
pursuant to which such Indebtedness is guaranteed) require prepayment of such
Indebtedness out of the Net Available Proceeds of any Asset Sale unless such
Net Available Proceeds are used to prepay other Indebtedness, then, to the
extent not otherwise required by this Section 2.10(a), if Borrower and its
Restricted Subsidiaries shall not have reinvested the Net Available Proceeds
thereof as permitted by Section 2.10(a)(iii) within the time frame
permitted thereby (but prior to the date required to be applied to such
Indebtedness), the Loans shall be repaid in an amount not less than the minimum
amount that would be required to be prepaid not later than the latest time as
and upon such terms so that such other Indebtedness will not be required to be
prepaid pursuant to the terms of the agreement, indenture or instrument or
guarantee governing such other Indebtedness.

 

(b)           Application.  The amount of any required prepayments
described in Section 2.10(a) shall be applied to prepay Loans as
follows:

 

(i)            First, the
amount of the required prepayment shall be applied to the reduction of
Amortization Payments on the Term Loans required by Sections 3.01(b), 3.01(c) and
3.01(d) pro rata among the Term Facilities
based upon the remaining unpaid aggregate principal amounts thereof and, in
each case, pro rata to the remaining Amortization
Payments;

 

(ii)           Second, after
such time as no Term Loans remain outstanding, with an amount equal to the
remaining amount of any such required prepayment that would have been applied
to the Term Loans, Borrower shall, first, repay
all outstanding Swingline Loans, and second, prepay
outstanding Revolving Loans (without any reduction in Revolving Commitments);
and

 

(iii)          Third, after
application of prepayments in accordance with clauses (i) and (ii) above,
Borrower shall be permitted to retain any such remaining excess.

 

Notwithstanding
Section 2.10(b)(i), if the amount that would otherwise be applied to the
mandatory repayment of the Term B Facility Loans or the Prepayment New
Incremental Term Loans, as the case may be, pursuant to such Section 2.10(b)(i) but
for this paragraph exceeds the aggregate scheduled Amortization Payments in
respect of such Term B Facility Loans or the Prepayment New Incremental Term
Loans, as the case may be, due within 12 months following such mandatory prepayment
(each such excess, the “Mandatory Excess Amount”),
then, so long as any Term Loans (other than Term B Facility Loans or Prepayment
New Incremental Term Loans, as the case may be) are then outstanding, Borrower
shall have the right, but not the obligation, to elect to offer the Term B
Facility Lenders or the Prepayment New Incremental Term Loan Lenders, as the
case may be, the right to decline such mandatory prepayment of the Term B
Facility Loans or the Prepayment New Incremental Term Loans, as the case may
be, with such applicable Mandatory Excess Amount (each, a “Mandatory
Offer”).  Any such notice
shall specify the aggregate amount of the Mandatory Excess Amount that the Term
B Facility Lenders or the Prepayment New Incremental Term Loan Lenders, as the
case 

 

66

 

may be, may decline to have applied towards
the mandatory prepayment of the Term B Facility Loans or the Prepayment New
Incremental Term Loans, as the case may be. 
Each Term B Facility Lender or each Prepayment New Incremental Term Loan
Lender, as the case may be, may elect, in its sole discretion, to accept a
Mandatory Offer with respect to an amount equal to or less than an amount equal
to (x) in the case such Mandatory Offer relates to Term B Facility Loans, the
Mandatory Excess Amount in respect of such Mandatory Offer times a fraction,
the numerator of which is the principal amount of Term B Facility Loans owed to
such Term B Facility Lender and the denominator of which is the principal
amount of all Term B Facility Loans outstanding and (y) in the case such
Mandatory Offer relates to Prepayment New Incremental Term Loans, the Mandatory
Excess Amount in respect of such Mandatory Offer times a fraction, the numerator
of which is the principal amount of Prepayment New Incremental Term Loans owed
to such Prepayment New Incremental Term Loan Lender, and the denominator of
which is the principal amount of all Prepayment New Incremental Term Loans
outstanding (such amount declined by such Term B Facility Lender for mandatory
prepayment of its Term B Facility Loans or such amount declined by such
Prepayment New Incremental Term Loan Lender, as the case may be, referred to as
the “Mandatory Declined Amount”).  Any acceptance of a Mandatory Offer by a Term
B Facility Lender or a Prepayment New Incremental Term Loan Lender, as the case
may be, must be evidenced by written notice delivered to Administrative Agent
within five Business Days of receipt of such Mandatory Offer specifying such
Term B Facility Lender’s or such Prepayment New Incremental Term Loan Lender’s,
as the case may be, Mandatory Declined Amount in respect thereof, if any.  Failure by a Term B Facility Lender or a
Prepayment New Incremental Term Loan Lender, as the case may be, to give such
notice will constitute a rejection of the Mandatory Offer by such Term B
Facility Lender or Prepayment New Incremental Term Loan Lender, as the case may
be.  In the case of any such acceptance,
the aggregate amount of the Mandatory Declined Amounts of all Term B Facility
Lenders or of all Prepayment New Incremental Term Loan Lenders, as the case may
be, in respect of the applicable Mandatory Offer shall be applied to the Term
Loans (other than Term B Facility Loans or Prepayment New Incremental Term
Loans, as the case may be), pro rata to the
remaining Amortization Payments of such Term Loans (other than Term B Facility
Loans or Prepayment New Incremental Term Loans, as the case may be); provided, however, that to the extent that the aggregate
principal amount of the Term Loans (other than Term B Facility Loans or
Prepayment New Incremental Term Loans, as the case may be) after giving effect
to such mandatory prepayment is less than the aggregate amount of such
Mandatory Declined Amounts, then such Mandatory Declined Amounts in excess of
the amount so mandatorily applied to such Term Loans (other than Term B
Facility Loans or Prepayment New Incremental Term Loans, as the case may be)
shall be allocated among the Term B Facility Lenders or the Prepayment New
Incremental Term Loan Lenders, as the case may be, that accepted the Mandatory
Offer pro rata based on the Mandatory Declined
Amount of each Term B Facility Lender or each Prepayment New Incremental Term
Loan Lender, as the case may be, in respect of such Mandatory Offer.

 

Notwithstanding
the foregoing, if the amount of any prepayment of Loans required under this Section 2.10
shall be in excess of the amount of the ABR Loans at the time outstanding, only
the portion of the amount of such prepayment as is equal to the amount of such
outstanding ABR Loans shall be immediately prepaid and, at the election of
Borrower, the balance of such required prepayment shall be either (i) deposited
in the Collateral Account and applied to the prepayment of LIBOR Loans on the
last day of the then next-expiring Interest Period for LIBOR Loans (with all
interest accruing thereon for the account of Borrower) or 

 

67

 

(ii) prepaid immediately, together with
any amounts owing to the Lenders under Section 5.05.  Notwithstanding any such deposit in the
Collateral Account, interest shall continue to accrue on such Loans until prepayment.

 

(c)           Revolving
Credit Extension Reductions. 
Until the R/C Maturity Date, Borrower shall from time to time
immediately prepay the Revolving Loans (and/or provide cover for L/C
Liabilities as specified in Section 2.10(d)) in such amounts as shall be
necessary so that at all times the aggregate outstanding amount of the
Revolving Loans and the Swingline Loans, plus the
aggregate outstanding L/C Liabilities shall not exceed the Total Revolving
Commitments as in effect at such time, such amount to be applied, first, to Revolving Loans outstanding and second, as cover for L/C Liabilities outstanding as
specified in Section 2.10(d).

 

(d)           Cover for
L/C Liabilities.  In the event
that Borrower shall be required pursuant to this Section 2.10 to provide
cover for L/C Liabilities, Borrower shall effect the same by paying to
Administrative Agent immediately available funds in an amount equal to the required
amount, which funds shall be retained by Collateral Agent in the Collateral
Account (as provided in the Security Agreement as collateral security in the
first instance for the L/C Liabilities) (in an amount not to exceed the amount
of then outstanding L/C Liabilities) until such time as all Letters of Credit
shall have been terminated and all of the then outstanding L/C Liabilities
shall have been paid in full.

 

(e)           Prepayment
of Term B Facility Loans.  Any
prepayment of Term B Facility Loans pursuant to Section 2.10(a)(ii) made
prior to the first anniversary of the Closing Date in connection with any
Repricing Transaction shall be subject to the fee described in Section 2.05(c).

 

SECTION 2.11.    Replacement of Lenders.

 

(a)           Borrower shall have
the right, if no Default then exists, to replace any Lender (the “Replaced Lender”) with one or more other Eligible Assignees
reasonably acceptable to Administrative Agent (collectively, the “Replacement Lender”) if (x) such Lender is charging Borrower
increased costs pursuant to Section 5.01 or 5.06 or such Lender becomes
incapable of making LIBOR Loans as provided in Section 5.03 when other
Lenders are generally able to do so and/or (y) as provided in Section 13.04(b),
such Lender refuses to consent to certain proposed amendments, waivers or
modifications with respect to this Agreement; provided,
however, that (i) at the time of
any replacement pursuant to this Section 2.11, the Replacement Lender
shall enter into one or more Assignment Agreements (and with all fees payable
pursuant to Section 13.05(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the Commitments
and outstanding Loans of, and in each case L/C Interests of, the Replaced
Lender (or if the Replaced Lender is being replaced as a result of clause (y)
above and the applicable consent requires approval of all Lenders of a
particular Tranche but not all Lenders, then the Replacement Lender shall
acquire all Commitments, Loans and L/C Interests of such Replaced Lender under
such Tranche) and, in connection therewith, shall pay to (x) the Replaced
Lender, an amount equal to the sum of (A) the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender (other than
any Loans not being acquired by the Replacement Lender), (B) all
Reimbursement Obligations (expressed in Dollars in the amount of the Dollar
Equivalent thereof in the case of Letter of Credit denominated in the Alternate
Currency) owing to such Replaced Lender, together with all then

 

68

 

unpaid
interest with respect thereto at such time, in the event Revolving Loans owing
to such Replaced Lender are being acquired and (C) all accrued, but
theretofore unpaid, fees owing to the Replaced Lender pursuant to Section 2.05
with respect to the Loans being so acquired, and (y) L/C Lender an amount equal
to such Replaced Lender’s R/C Percentage of any Reimbursement Obligations
(which at such time remains a Reimbursement Obligation) (expressed in Dollars
in the amount of the Dollar Equivalent thereof in the case of Letter of Credit
denominated in the Alternate Currency) to the extent such amount was not
theretofore funded by such Replaced Lender (if the Revolving Commitments of
such Replaced Lender are being assigned to the Replacement Lender), and (ii) all
obligations of Borrower owing to the Replaced Lender (other than those specifically
described in clause (i) above in respect of which the assignment purchase
price has been, or is concurrently being, paid, and other than those relating
to Loans or Commitments not being acquired by the Replacement Lender but
including any amounts which would be paid to a Lender pursuant to Section 5.05
if Borrower were prepaying a LIBOR Loan) shall be paid in full to such Replaced
Lender concurrently with such replacement. 
Upon the execution of the respective Assignment Agreement, the payment
of amounts referred to in clauses (i) and (ii) above, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder and be released of all its obligations as a Lender,
except with respect to indemnification provisions applicable to the Replaced
Lender under this Agreement, which shall survive as to such Replaced Lender and
except with respect to Loans, Commitments and L/C Interests of the Replaced
Lender not being acquired by the Replacement Lender.  

 

In the event
that a Replaced Lender does not execute an Assignment Agreement pursuant to
this Section 2.11, upon receipt by the Replaced Lender of all amounts required
to be paid to it pursuant to this Section 2.11, Administrative Agent shall
be entitled (but not obligated) and authorized to execute an Assignment
Agreement on behalf of such Replaced Lender, and any such Assignment Agreement
so executed by Administrative Agent on behalf of such Replaced Lender, the
Replacement Lender and, to the extent required pursuant to Section 13.05,
Administrative Agent shall be effective for purposes of this Section 2.11
and Section 13.05.

 

(b)           If Borrower receives
a notice from any applicable Gaming Authority that a Lender is not qualified to
make Loans to Borrower or to hold the securities of a casino licensee under
applicable Gaming Laws (and such Lender is notified by Borrower and
Administrative Agent in writing of such disqualification), Borrower shall have
the right to replace such Lender with a Replacement Lender in accordance with Section 2.11(a) or
prepay the Loans held by such Lender, even if a Default exists (notwithstanding
anything contained in such Section 2.11(a) to the contrary).  Any such prepayment shall be deemed an
optional prepayment, as set forth in Section 2.09 and shall not be
required to be made on a pro rata basis
with respect to Loans of the same Tranche as the Loans held by such
Lender.  Notice to such Lender shall be
given at least 10 days before the required date of transfer or prepayment
(unless a shorter period is required under applicable law), as the case may be,
and shall be accompanied by evidence demonstrating that such transfer or redemption
is required pursuant to Gaming Laws. 
Upon receipt of a notice in accordance with the foregoing, the Replaced
Lender shall cooperate with Borrower in effectuating the required transfer or
prepayment within the time period set forth in such notice, not to be less than
the minimum notice period set forth in the foregoing sentence (unless a shorter
period is required under applicable law). 
Further, if the transfer or prepayment is triggered by notice from the
Gaming Authority that the Lender is disqualified, commencing on

 

69

 

the date the
Gaming Authority serves the disqualification notice upon Borrower:  (i) such Lender shall no longer receive
any interest on the Loans; (ii) such Lender shall no longer exercise, directly
or through any trustee or nominee, any right conferred by the Loans; and (iii) such
Lender shall not receive any remuneration in any form from Borrower for
services or otherwise in respect of the Loans.

 

SECTION 2.12.    Incremental Loan Commitments.

 

(a)           Borrower
Request.  Borrower may, at any
time during the period commencing on the Closing Date and ending on the date
that is the third anniversary of the Closing Date, by written notice to Administrative
Agent, request (i) an increase to the existing Revolving Commitments (“Incremental Revolving Commitments”), (ii) the
establishment of additional Term A Facility Loans with terms and conditions
identical to the terms and conditions of existing Term A Facility Loans
hereunder (“Incremental Term A Loans” and the
related commitments, “Incremental Term A Loan Commitments”),
(iii) the establishment of additional Term B Facility Loans with terms and
conditions identical to the terms and conditions of existing Term B Facility
Loans hereunder (“Incremental Term B Loans”
and the related commitments, the “Incremental Term B Loan
Commitments”) and/or (iv) the establishment of one or more new
term loans (“New Incremental Term Loans” and
the related commitments, “New Incremental Term Loan
Commitments”); provided, however, that (x) the aggregate amount of all Incremental Commitments
provided pursuant to this Section 2.12 shall not exceed the Incremental
Commitment Amount and (y) any such request for Incremental Commitments
shall be in a minimum amount of $25.0 million. 
Each such notice shall specify the identity of each Eligible Assignee
(and any existing Lender) to whom Borrower proposes any portion of such
Incremental Commitments be allocated and the amounts of such allocations; provided, however, that (A) any
existing Lender approached to provide all or a portion of the Incremental
Commitments may elect or decline, in its sole discretion, to provide all or any
portion of such Incremental Commitment offered to it and (B) any Eligible
Assignee that is not an existing Lender which agrees to make available an
Incremental Commitment (a “New Incremental Lender”)
shall be approved by Administrative Agent (such approval not to be unreasonably
withheld or delayed) (each New Incremental Lender or existing Lender which
agrees to make available an Incremental Commitment shall be referred to as an “Incremental Lender”).

 

(b)           Incremental
Effective Date.  The Increased
Commitments shall be effected by a joinder agreement to this Agreement (the “Incremental Joinder Agreement”) executed by Borrower,
Administrative Agent and each Incremental Lender making
or providing such Incremental Commitment, in form and substance reasonably
satisfactory to each of them, subject, however, to the satisfaction of the
conditions precedent set forth in this Section 2.12.  The Incremental Joinder Agreement may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Credit Documents as may be necessary or appropriate, in
the opinion of Administrative Agent, to effect the provisions of this Section 2.12.  If the Incremental Commitments are provided
in accordance with this Section 2.12, Administrative Agent and Borrower
shall determine the effective date (each, an “Incremental
Effective Date”) and the final allocation of such Incremental
Commitments.  As a condition precedent to
any such Incremental Commitments the following shall have been satisfied to the
reasonable satisfaction of Administrative Agent:

 

70

 

(i)            each of the conditions set forth in Section 7.02
shall be satisfied with respect to the borrowing of the applicable Incremental
Term Loans;

 

(ii)           all fees required to be paid in
connection therewith at the time of such effectiveness shall have been paid;

 

(iii)          Borrower shall make any payments
required pursuant to Section 5.05 in connection with any adjustment of
Revolving Loans pursuant to Section 2.12(d), if applicable;

 

(iv)          Borrower shall deliver or cause to be
delivered any legal opinions or other documents reasonably requested by
Administrative Agent in connection with any such Incremental Commitments;

 

(v)           an Incremental Joinder Agreement
shall have been duly executed and delivered by Borrower, Administrative Agent
and each applicable Incremental Lender; and

 

(vi)          the pro forma
Consolidated Senior Leverage Ratio of Borrower (after giving effect to the
borrowing of any such applicable Incremental Term Loans and the application of
the proceeds therefrom) would not exceed the lesser of (A) 0.25 to 1.00
less than the maximum Consolidated Senior Leverage Ratio permitted by Section 10.08(b) at
such time or (B) 4.50 to 1.00.

 

Upon the
effectiveness of any Incremental Commitment pursuant to this Section 2.12,
any Incremental Lender that was not a Lender
hereunder at such time shall become a Lender hereunder.  Administrative Agent shall promptly notify
each Lender as to the effectiveness of any Incremental Commitments, and (i) in
the case of Incremental Revolving Commitments, the Total Revolving Commitments
under, and for all purpose of this Agreement, shall be increased by the
aggregate amount of such Incremental Revolving Commitments and Annex A-1
shall be modified to reflect the revised Revolving Commitments of the affected
Lenders, (ii) the Incremental Term A Loans (to the extent funded) shall be
deemed to be Term A Facility Loans hereunder, (iii) the Incremental Term B
Loans (to the extent funded) shall be deemed to be Term B Facility Loans
hereunder and (iv) any New Incremental Term Loans shall be deemed to be
additional Term Loans hereunder. 
Notwithstanding anything to the contrary contained herein, Borrower,
Collateral Agent and Administrative Agent may (and each of Collateral Agent and
Administrative Agent are authorized by each Creditor to) execute such
amendments and/or amendments and restatements of any Credit Documents as may be
necessary or advisable to effectuate the provisions of this Section 2.12.  Such amendments may include provisions
allowing New Incremental Term Loans to be treated on the same basis as Term B
Loans in connection with declining prepayments.

 

(c)           Terms of
Incremental Commitments and Loans. 
The terms and provisions of the Incremental Commitments and Loans made
pursuant thereto shall be as follows:

 

(i)            the terms and provisions of
Incremental Revolving Commitments and the related Revolving Loans shall be
identical to the existing Revolving Commitments and any provisions applicable
to Revolving Loans made hereunder;

 

71

 

(ii)           the terms and provisions of
Incremental Term A Loans shall be identical to the existing Term A Facility
Loans, with appropriate adjustments to the amortization schedule set forth
on Annex C-1 to address such Incremental Term A Loans;

 

(iii)          the terms and provisions of
Incremental Term B Loans shall be identical to the existing Term B Facility
Loans, with appropriate adjustments to the amortization schedule set forth
on Annex C-2 to address such Incremental Term B Loans; and

 

(iv)          the terms and provisions of any New
Incremental Term Loans shall be as set forth in this Agreement and as otherwise
determined by Borrower, Administrative Agent and Lenders under such Tranche of
New Incremental Term Loans and set forth in the related Incremental Joinder
Agreement; provided, however,

 

(A)          the
Weighted Average Life to Maturity of any Tranche of New Incremental Term Loans
shall be no shorter than the Weighted Average Life to Maturity of the existing
Term Loans; and

 

(B)           the
maturity date of the New Incremental Term Loans shall not be earlier than the
Final Maturity Date.

 

(d)           Adjustment
of Revolving Loans.  To the
extent the Revolving Commitments are being increased on the relevant
Incremental Effective Date, then each of the Revolving Lenders having a
Revolving Commitment prior to such Incremental Effective Date (the “Pre-Increase Revolving Lenders”) shall assign to any
Revolving Lender which is acquiring a new or additional Revolving Commitment on
the Incremental Effective Date (the “Post-Increase Revolving
Lenders”), and such Post-Increase Revolving Lenders shall purchase
from each Pre-Increase Revolving Lender, at the principal amount thereof, such
interests in the Revolving Loans and participation interests in L/C Liabilities
and Swingline Loans outstanding on such Incremental Effective Date as shall be
necessary in order that, after giving effect to all such assignments and purchases,
such Revolving Loans and participation interests in L/C Liabilities and
Swingline Loans will be held by Pre-Increase Revolving Lenders and
Post-Increase Revolving Lenders ratably in accordance with their Revolving
Commitments after giving effect to such Incremental Revolving Commitments.

 

(e)           Equal and
Ratable Benefit.  The Loans
and Commitments established pursuant to this Section 2.12 shall constitute
Loans and Commitments under, and shall be entitled to all the benefits afforded
by, this Agreement and the other Credit Documents, and shall, without limiting
the foregoing, benefit equally and ratably from the Guarantees and security interests
created by the Security Documents.  The
Credit Parties shall take any actions reasonably required by Administrative
Agent to ensure and/or demonstrate that the Lien and security interests granted
by the Security Documents continue to be perfected under the UCC or otherwise
after giving effect to the establishment of any Incremental Commitments or the
funding of Loans thereunder.

 

(f)            Supersede.  This Section 2.12
shall supersede any provisions in Section 13.04 to the contrary. 

 

72

 

ARTICLE III.

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

SECTION 3.01.    Repayment of Loans.

 

(a)           Revolving
Credit Loans and Swingline Loans. 
Borrower hereby promises to pay (i) to Administrative Agent for the
account of each Revolving Lender the entire outstanding principal amount of
such Revolving Lender’s Revolving Loans made to Borrower, and each Revolving
Loan shall mature, on the R/C Maturity Date and (ii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier
of the R/C Maturity Date and the first date after such Swingline Loan is made
that is the 15th or last day of a calendar month and is at least two Business
Days after such Swingline Loan is made; provided, however, that on each date that a Revolving Borrowing is
made, Borrower shall repay all Swingline Loans that were outstanding on the
date such Borrowing was requested.

 

(b)           Term A
Facility Loans.  Borrower
hereby promises to pay to Administrative Agent for the account of the Lenders
with Term A Facility Loans in repayment of the principal of the Term A Facility
Loans, on each date set forth on Annex C-1, that principal amount of
Term A Facility Loans, to the extent then outstanding, as is set forth opposite
such date (subject to adjustment for any prepayments made under Section 2.09
or Section 2.10 or Section 2.11(b) to the extent actually made
or as provided in Section 2.12); provided, however, that,
notwithstanding the foregoing in this Section 3.01(b) to the
contrary, if the Term A Facility Maturity Date occurs prior to the last
scheduled payment of the Term A Facility Loans, then Borrower shall, on the
Term A Facility Maturity Date, repay in full the aggregate principal amount of
Term A Facility Loans that remain outstanding on the Term A Facility Maturity
Date.

 

(c)           Term B
Facility Loans.  Borrower
hereby promises to pay to Administrative Agent for the account of the Lenders
with Term B Facility Loans in repayment of the principal of such Term B
Facility Loans, on each date set forth on Annex C-2, that principal
amount of such Term B Facility Loans, to the extent then outstanding, as is set
forth opposite such date (subject to adjustment for any prepayments made under Section 2.09
or Section 2.10 or Section 2.11(b) to the extent actually made
or as provided in Section 2.12); provided, however, that, notwithstanding
the foregoing in this Section 3.01(c) to the contrary, if the Term B
Facility Maturity Date occurs prior to the last scheduled payment of such
Term B Facility Loans, then Borrower shall, on the Term B Facility Maturity
Date, repay in full the aggregate principal amount of such Term B Facility
Loans that remain outstanding on the Term B Facility Maturity Date.

 

(d)           New
Incremental Term Loans.  New
Incremental Term Loans shall mature in installments as specified in the related
Incremental Joinder Agreement pursuant to which such New Incremental Term Loans
were made, subject, however, to Section 2.12(c).

 

SECTION 3.02.    Interest.

 

(a)           Borrower hereby
promises to pay to Administrative Agent for the account of each Lender interest
on the unpaid principal amount of each Loan made or maintained by such 

 

73

 

Lender to
Borrower for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full at the following rates per annum:

 

(i)            during such periods as such Loan
(including each Swingline Loan) is an ABR Loan, the Alternate Base Rate (as in
effect from time to time), plus the Applicable Margin, and

 

(ii)           during such periods as such Loan is a
LIBOR Loan, for each Interest Period relating thereto, the LIBO Rate for such
Loan for such Interest Period, plus the Applicable
Margin.

 

(b)           To the extent
permitted by Law, (i) overdue principal and overdue interest in respect of
each Loan shall, in each case, bear interest at a rate per annum
equal to the greater of (x) the rate which is 2% in excess of the rate borne by
such Loan immediately prior to the respective payment default and (y) the rate
which is 2% in excess of the rate otherwise applicable to ABR Loans of the
respective Tranche from time to time, and (ii) all Obligations not paid
when due other than Loans shall bear interest at the rate which is 2% in excess
of the rate otherwise applicable to ABR Loans which are Revolving Loans from
time to time.  Interest which accrues
under this paragraph shall be payable on demand.

 

(c)           Accrued interest on
each Loan shall be payable (i) in the case of each ABR Loan, (x) quarterly
in arrears on each Quarterly Date, (y) on the date of any repayment or
prepayment in full of all outstanding ABR Loans of any Tranche of Loans (or of
any Swingline Loan) (but only on the principal amount so repaid or prepaid),
and (z) at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand, and (ii) in the case of each LIBOR Loan, (x) on the
last day of each Interest Period applicable thereto and, if such Interest
Period is longer than three months, on each date occurring at three-month
intervals after the first day of such Interest Period, (y) on the date of any
repayment or prepayment thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid or Converted)
and (z) at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.  Promptly after the
determination of any interest rate provided for herein or any change therein,
Administrative Agent shall give notice thereof to the Lenders to which such
interest is payable and to Borrower.

 

(d)           If the weighted
average interest rate of any New Incremental Term Loans (whether in the form of
interest, fees, original issue discount or a combination thereof but excluding
arrangement, commitment or underwriting fees) is higher by more than 50 basis
points than the weighted average yield to maturity (including fees and original
issue discount but excluding arrangement or underwriting fees) payable in
respect to the Term B Facility Loans immediately prior to the incurrence of any
such New Incremental Term Loans, then the Applicable Margins then applicable to
the Term B Facility shall be increased to the extent necessary to result in the
weighted average interest rate applicable to the Term B Facility being equal to
the weighted average interest rate applicable to any such New Incremental Term
Loans.

 

74

 

ARTICLE IV.

 

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
ETC.

 

SECTION 4.01.    Payments.

 

(a)           All payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
Borrower under this Agreement and the Notes, and, except to the extent
otherwise provided therein, all payments to be made by the Credit Parties under
any other Credit Document, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to Administrative Agent at
its account at the Principal Office, not later than 12:00 p.m., New York
City time, on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day).

 

(b)           Borrower shall, at
the time of making each payment under this Agreement or any Note for the
account of any Lender, specify (in accordance with Sections 2.09 and 2.10, if
applicable) to Administrative Agent (which shall so notify the intended
recipient(s) thereof) or, in the case of Swingline Loans, to the Swingline
Lender, the Class and Type of Loans, Reimbursement Obligations or other
amounts payable by Borrower hereunder to which such payment is to be applied
(and in the event that Borrower fails to so specify, or if an Event of Default
has occurred and is continuing, Administrative Agent may distribute such
payment to the Lenders for application to the Obligations under the Credit
Documents in such manner as it or the Required Lenders, subject to Sections
2.09, 2.10, 4.02 and 11.02, may determine to be appropriate).

 

(c)           Except to the extent
otherwise provided in the third sentence of Section 2.03(h), each payment
received by Administrative Agent or by L/C Lender (through Administrative
Agent) under this Agreement or any Note for the account of any Lender shall be
paid by Administrative Agent or by L/C Lender (through Administrative Agent),
as the case may be, to such Lender, in immediately available funds, (x) if the
payment was actually received by Administrative Agent or by L/C Lender (through
Administrative Agent), as the case may be, prior to 12:00 p.m. (New York
City time) on any day, on such day and (y) if the payment was actually received
by Administrative Agent or by L/C Lender (through Administrative Agent), as the
case may be, after 12:00 p.m. (New York City time) on any day, by 1:00 p.m.
(New York City time) on the following Business Day (it being understood that to
the extent that any such payment is not made in full by Administrative Agent or
by L/C Lender (through Administrative Agent), as the case may be,
Administrative Agent shall pay to such Lender, upon demand, interest at the
Federal Funds Rate from the date such amount was required to be paid to such
Lender pursuant to the foregoing clauses until the date Administrative Agent
pays such Lender the full amount).

 

(d)           If the due date of
any payment under this Agreement or any Note would otherwise fall on a day that
is not a Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so extended for
the period of such extension at the rate then borne by such principal.

 

75

 

SECTION 4.02.    Pro Rata Treatment.  Except to the extent otherwise provided
herein:  (a) each borrowing of Loans
of a particular Class from the Lenders under Section 2.01 shall be
made from the relevant Lenders, each payment of commitment fees under Section 2.05
in respect of Commitments of a particular Class shall be made for account
of the relevant Lenders, and each termination or reduction of the amount of the
Commitments of a particular Class under Section 2.04 shall be applied
to the respective Commitments of such Class of the relevant Lenders pro rata according to the amounts of their respective
Commitments of such Class; (b) except as otherwise provided in Section 5.04,
LIBOR Loans of any Class having the same Interest Period shall be
allocated pro rata among the relevant Lenders according
to the amounts of their respective Revolving Commitments and Term Loan
Commitments (in the case of the making of Loans) or their respective Revolving
Loans and Term Loans (in the case of Conversions and Continuations of Loans); (c) except
as otherwise provided in Section 2.09(b), Section 2.09(c), Section 2.10(b) or
Section 2.11(b), each payment or prepayment of principal of Revolving
Loans or of any particular Class of Term Loans shall be made for the
account of the relevant Lenders pro rata in accordance
with the respective unpaid outstanding principal amounts of the Loans of such Class held
by them; and (d) except as otherwise provided in Section 2.09(b), Section 2.09(c),
Section 2.10(b) or Section 2.11(b), each payment of interest on
Revolving Loans and Term Loans shall be made for account of the relevant
Lenders pro rata in accordance with the amounts
of interest on such Loans then due and payable to the respective Lenders.

 

SECTION 4.03.    Computations.  Interest on LIBOR Loans, commitment fees and
Letter of Credit fees shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such amounts are payable and interest on ABR
Loans and Reimbursement Obligations shall be computed on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for which such
amounts are payable.  Notwithstanding the
foregoing, for each day that the Alternate Base Rate is calculated by reference
to the Federal Funds Rate, interest on ABR Loans and Reimbursement Obligations
shall be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day).

 

SECTION 4.04.    Minimum Amounts.  Except for mandatory prepayments made
pursuant to Section 2.10 and Conversions or prepayments made pursuant to Section 5.04,
each Borrowing, Conversion and partial prepayment of principal of Loans shall
be in an amount at least equal to (a) in the case of Term Loans, $5.0
million with respect to ABR Loans and $5.0 million with respect to LIBOR Loans
and in multiples of $100,000 in excess thereof and (b) in the case of
Revolving Loans and Swingline Loans, $2.5 million with respect to ABR Loans and
$2.5 million with respect to LIBOR Loans and in multiples of $100,000 in excess
thereof (borrowings, Conversions or prepayments of or into Loans of different
Types or, in the case of LIBOR Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions and prepayments
for purposes of the foregoing, one for each Type or Interest Period).  Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of LIBOR Loans having the same
Interest Period shall be in an amount at least equal to $1.0 million and in
multiples of $100,000 in excess thereof and, if any LIBOR Loans or portions
thereof would otherwise be in a lesser principal amount for any period, such
Loans or portions, as the case may be, shall be ABR Loans during such period.

 

76

 

SECTION 4.05.    Certain Notices.  Notices by Borrower to Administrative Agent
(or, in the case of repayment of the Swingline Loans, to the Swingline Lender)
of terminations or reductions of the Commitments, of Borrowings, Conversions,
Continuations and optional prepayments of Loans and of Classes of Loans, of
Types of Loans and of the duration of Interest Periods shall be irrevocable and
shall be effective only if received by Administrative Agent (or, in the case of
Swingline Loans, the Swingline Lender) by telephone not later than 1:00 p.m.
(New York City time) (promptly followed by written notice via facsimile) on at
least the number of Business Days prior to the date of the relevant
termination, reduction, Borrowing, Conversion, Continuation or prepayment or
the first day of such Interest Period specified in the table below.

 

NOTICE PERIODS

 

	
  Notice

  	
   

  	
  Number of 

  Business Days Prior

  
	
   

  	
   

  	
   

  
	
  Termination or reduction of Commitments

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Borrowing or optional prepayment of, or
  Conversions into, ABR Loans

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Borrowing or optional prepayment of,
  Conversions into, Continuations as, or duration of Interest Periods for,
  LIBOR Loans

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  Borrowing or repayment of Swingline Loans

  	
   

  	
  same day

  

 

Each such
notice of termination or reduction shall specify the amount and the Class of
the Commitments to be terminated or reduced. 
Each such notice of Borrowing, Conversion, Continuation or prepayment
shall specify the Class of Loans to be borrowed, Converted, Continued or
prepaid and the amount (subject to Section 4.04) and Type of each Loan to
be borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or prepayment (which shall be a Business Day).  Each such notice of the duration of an
Interest Period shall specify the Loans to which such Interest Period is to
relate.  Administrative Agent shall
promptly notify the Lenders of the contents of each such notice.  In the event that Borrower fails to select
the Type of Loan, or the duration of any Interest Period for any LIBOR Loan,
within the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a LIBOR Loan) will be automatically Converted into
an ABR Loan on the last day of the then current Interest Period for such Loan
or (if outstanding as an ABR Loan) will remain as, or (if not then outstanding)
will be made as, an ABR Loan.

 

SECTION 4.06.    Non-Receipt of Funds by Administrative Agent.  Unless Administrative Agent shall have
received written notice from a Lender or Borrower (the “Payor”)
prior to the date on which the Payor is to make payment to Administrative Agent
of (in the case of a Lender) the proceeds of a Loan to be made by such Lender
hereunder or a payment to Administrative Agent for the account of one or more
of the Lenders hereunder (such payment being herein called the “Required Payment”), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required Payment to
Administrative Agent, 

 

77

 

Administrative
Agent may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient(s) on such date; and, if the Payor has not
in fact made the Required Payment to Administrative Agent, the recipient(s) of
such payment shall, on demand, repay to Administrative Agent the amount so made
available together with interest thereon in respect of each day during the period
commencing on the date (the “Advance Date”)
such amount was so made available by Administrative Agent until the date
Administrative Agent recovers such amount at a rate per annum equal
to the Federal Funds Rate for such day and, if such recipient(s) shall fail
promptly to make such payment, Administrative Agent shall be entitled to
recover such amount, on demand, from the Payor, together with interest as
aforesaid; provided, however,
that if neither the recipient(s) nor the Payor shall return the Required
Payment to Administrative Agent within three Business Days of the date such
demand was made, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows (without double recovery):

 

(i)            if the Required Payment shall
represent a payment to be made by Borrower to the Lenders, Borrower and the
recipient(s) shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate set forth in Section 3.02(b) (without
duplication of the obligation of Borrower under Section 3.02 to pay
interest on the Required Payment at the rate set forth in Section 3.02(b)),
it being understood that the return by the recipient(s) of the Required Payment
to Administrative Agent shall not limit such obligation of Borrower under Section 3.02
to pay interest at the rate set forth in Section 3.02(b) in respect
of the Required Payment; and

 

(ii)           if the Required Payment shall
represent proceeds of a Loan to be made by the Lenders to Borrower, the Payor,
or Borrower, shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment pursuant to Section 3.02, it
being understood that the return by Borrower of the Required Payment to Administrative
Agent shall not limit any claim Borrower may have against the Payor in respect
of such Required Payment.

 

SECTION 4.07.    Right of Setoff, Sharing of Payments; Etc.

 

(a)           If any Event of
Default shall have occurred and be continuing, each Credit Party agrees that,
in addition to (and without limitation of) any right of setoff, banker’s lien
or counterclaim a Lender may otherwise have, each Lender shall be entitled, at
its option (to the fullest extent permitted by law), to set off and apply any
deposit (general or special, time or demand, provisional or final), or other
indebtedness, held by it for the credit or account of such Credit Party at any
of its offices, in Dollars or in any other currency, against any principal of
or interest on any of such Lender’s Loans, Reimbursement Obligations or any
other amount payable to such Lender hereunder that is not paid when due (regardless
of whether such deposit or other indebtedness is then due to such Credit
Party), in which case it shall promptly notify such Credit Party and Administrative
Agent thereof; provided, however,
that such Lender’s failure to give such notice shall not affect the validity
thereof.

 

(b)           Each of the Lenders
agrees that, if it should receive (other than pursuant to Section 2.09(b),
Section 2.09(c), Section 2.10(b), Section 2.11(b), Article V
or the Administrative Agent’s Fee Letter) any amount hereunder (whether by
voluntary payment, by 

 

78

 

realization
upon security, by the exercise of the right of setoff or banker’s lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents (including any guarantee), or otherwise) which is applicable to the
payment of the principal of, or interest on, the Loans, Reimbursement
Obligations or fees, the sum of which with respect to the related sum or sums received
by other Lenders is in a greater proportion than the total of such amounts then
owed and due to such Lender bears to the total of such amounts then owed and
due to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or warranty
from the other Lenders an interest in the Obligations of the respective Credit
Party to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount; provided, however, that if all or any portion of such excess amount
is thereafter recovered from such Lender, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.  Borrower consents to the
foregoing arrangements.

 

(c)           Borrower agrees that
any Lender so purchasing such a participation may exercise all rights of
setoff, banker’s lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or other amounts (as
the case may be) owing to such Lender in the amount of such participation.

 

(d)           Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other Indebtedness or obligation of any Credit
Party.  If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim

 

ARTICLE V.

 

YIELD PROTECTION, ETC.

 

SECTION 5.01.    Additional Costs.

 

(a)           If the adoption of,
or any change in, in each case after the date hereof, any Requirement of Law or
in the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority or the NAIC made subsequent to the
Closing Date (other than such adoptions or changes as may relate to the certain
Lenders’ indirect ownership of Borrower and its Restricted Subsidiaries):

 

(i)            shall subject any Lender or L/C
Lender to any tax of any kind whatsoever with respect to this Agreement, any
Note, any Letter of Credit or any Lender’s participation therein, any L/C
Document or any Loan made by it or change the basis of taxation of payments to
such Lender in respect thereof by any Governmental Authority (except for taxes
covered by or expressly excluded from coverage by, and expressly subject to, Section 5.06,
Excluded Taxes, changes in the rate of tax on the overall net income or net
profits of such Lender or its Applicable Lending Office, or any Affiliate
thereof or franchise taxes or similar 

 

79

 

taxes imposed with respect to or in lieu of
its net income or net profits by any Governmental Authority);

 

(ii)           shall impose, modify or hold
applicable any reserve, special deposit, compulsory loan, insurance charge or
similar requirement (excluding any Reserve Requirement reflected in the LIBOR Rate)
against assets held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender or L/C Lender which is not otherwise included
in the determination of the LIBO Rate hereunder; or

 

(iii)          impose on any Lender or L/C Lender or
the London interbank market any other condition, cost or expense affecting this
Agreement or LIBOR Loans made by such Lender or any Letter of Credit or
participation therein;

 

and the result
of any of the foregoing is to materially increase the cost to such Lender or
L/C Lender of making, converting into, continuing or maintaining LIBOR Loans or
issuing or participating in Letters of Credit, then, in any such case, Borrower
shall, within 10 days of written demand therefor, pay such Lender or L/C Lender
any additional amounts necessary to compensate such Lender or L/C Lender on a
net after-tax basis (taking into account any additional tax costs or tax
benefits) for such increased cost.  If
any Lender or L/C Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify Borrower, through
Administrative Agent, of the event by reason of which it has become so
entitled.  A certificate as to any
additional amounts setting forth the calculation of such additional amounts pursuant
to this Section 5.01 submitted by such Lender or L/C Lender, through
Administrative Agent, to Borrower shall be conclusive in the absence of clearly
demonstrable error.  Without limiting the
survival of any other covenant hereunder, this Section 5.01 shall survive
the termination of this Agreement and the payment of the Notes and all other
Obligations payable hereunder.

 

(b)           In the event that
any Lender or L/C Lender shall have determined that the adoption after the
Closing Date of any law, rule, regulation or guideline regarding capital adequacy
(or any change after the Closing Date therein or in the interpretation or
application thereof) or compliance by any Lender or L/C Lender or any
corporation controlling such Lender or L/C Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
central bank or other Governmental Authority or the NAIC, in each case, made
subsequent to the Closing Date, including, without limitation, the issuance
after the Closing Date of any final rule, regulation or guideline, does or
shall have the effect of materially reducing the rate of return on such Lender’s
or L/C Lender’s or such corporation’s capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below that which
such Lender or L/C Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such Lender’s or L/C
Lender’s or such corporation’s policies with respect to capital adequacy), then
from time to time, after submission by such Lender or L/C Lender to Borrower
(with a copy to Administrative Agent) of a written request therefor (setting
forth in reasonable detail the amount payable to the affected Lender or L/C
Lender and the basis for such request), Borrower shall promptly pay to such
Lender or L/C Lender such additional amount or amounts as will compensate such
Lender or L/C Lender on a net after-tax basis for such reduction.

 

80

 

(c)           Failure or delay on
the part of any Lender or L/C Lender to demand compensation pursuant to this Section 5.01
shall not constitute a waiver of such Lender’s or L/C Lender’s right to demand
such compensation; provided, however, that Borrower shall not be required to compensate
a Lender or L/C Lender pursuant to this Section 5.01 for any increased
costs or reductions incurred more than 90 days prior to the date that such
Lender or L/C Lender, as the case may be, notifies Borrower of the change in
law giving rise to such increased costs or reductions and of such Lender’s or
L/C Lender’s intention to claim compensation therefor; provided, further, that if the
change in law giving rise to such increased costs or reductions is retroactive,
then the 90-day period referred to above shall be extended to include the
period of retroactive effect thereof.

 

SECTION 5.02.    Inability To Determine Interest Rate.  If prior to the first day of any Interest
Period:  (a) Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBO Base Rate
for such Interest Period, or (b) Administrative Agent shall have received
notice from Required Lenders that Dollar deposits are not available in the
relevant amount and for the relevant Interest Period available to the Required
Lenders in their relevant market, Administrative Agent shall give telecopy or
telephonic notice thereof to Borrower and the Lenders as soon as practicable
thereafter.  If such notice is given (x)
any LIBOR Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans that were to have been Converted on
the first day of such Interest Period to LIBOR Loans shall be Converted to or
Continued as ABR Loans and (z) any outstanding LIBOR Loans shall be Converted,
on the first day of such Interest Period, to ABR Loans.  Until such notice has been withdrawn by
Administrative Agent, no further LIBOR Loans shall be made or Continued as
such, nor shall Borrower have the right to Convert Loans to, LIBOR Loans.

 

SECTION 5.03.    Illegality.  Notwithstanding any other provision of this
Agreement, in the event that any change after the date hereof in any
Requirement of Law or in the interpretation or application thereof shall make
it unlawful for any Lender or L/C Lender or its Applicable Lending Office to
honor its obligation to make or maintain LIBOR Loans or issue Letters of Credit
hereunder (and, in the sole opinion of such Lender or L/C Lender, the designation
of a different Applicable Lending Office would either not avoid such
unlawfulness or would be disadvantageous to such Lender or L/C Lender), then
such Lender or L/C Lender shall promptly notify Borrower thereof (with a copy
to Administrative Agent) and such Lender’s or L/C Lender’s obligation to make
or Continue, or to Convert Loans of any other Type into, LIBOR Loans or issue
Letters of Credit shall be suspended until such time as such Lender or L/C
Lender may again make and maintain LIBOR Loans or issue Letters of Credit (in
which case the provisions of Section 5.04 shall be applicable).

 

SECTION 5.04.    Treatment of Affected Loans.  If the obligation of any Lender to make LIBOR
Loans or to Continue, or to Convert ABR Loans into, LIBOR Loans shall be
suspended pursuant to Section 5.03, such Lender’s LIBOR Loans shall be
automatically Converted into ABR Loans on the last day(s) of the then current
Interest Period(s) for such LIBOR Loans (or on such earlier date as such Lender
may specify to Borrower with a copy to Administrative Agent as is required by
law) and, unless and until such Lender gives notice as 

 

81

 

provided below
that the circumstances specified in Section 5.03 which gave rise to such
Conversion no longer exist:

 

(i)            to the extent that such Lender’s
LIBOR Loans have been so Converted, all payments and prepayments of principal
which would otherwise be applied to such Lender’s LIBOR Loans shall be applied
instead to its ABR Loans; and

 

(ii)           all Loans which would otherwise be
made or Continued by such Lender as LIBOR Loans shall be made or Continued
instead as ABR Loans and all ABR Loans of such Lender which would otherwise be
Converted into LIBOR Loans shall remain as ABR Loans.

 

If such Lender
gives notice to Borrower with a copy to Administrative Agent that the circumstances
specified in Section 5.03 which gave rise to the Conversion of such Lender’s
LIBOR Loans pursuant to this Section 5.04 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when LIBOR Loans are outstanding, such Lender’s ABR Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding LIBOR Loans, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans
and by such Lender are held pro rata (as
to principal amounts, Types and Interest Periods) in accordance with their respective
Commitments.

 

SECTION 5.05.    Compensation.

 

(a)           Borrower agrees to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (1) default by
Borrower in payment when due of the principal amount of or interest on any
LIBOR Loan, (2) default by Borrower in making a borrowing of, Conversion
into or Continuation of LIBOR Loans after Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (3) default
by Borrower or in making any prepayment after Borrower has given a notice thereof
in accordance with the provisions of this Agreement, or (4) the Conversion
or the making of a payment or a prepayment (including any repayments or
prepayments made pursuant to Sections 2.09 or 2.10 or as a result of an
acceleration of Loans pursuant to Section 11.01 or as a result of the
replacement of a Lender pursuant to Section 2.11 or 13.04(b)) of LIBOR
Loans on a day which is not the last day of an Interest Period with respect
thereto, including in each case, any such loss (but excluding any lost profit
or loss of margin) or expense arising from the reemployment of funds obtained
by it or from fees payable to terminate the deposits from which such funds were
obtained.

 

(b)           For the purpose of
calculation of all amounts payable to a Lender under this Section 5.05
each Lender shall be deemed to have actually funded its relevant LIBOR Loan
through the purchase of a deposit bearing interest at the LIBO Rate in an
amount equal to the amount of the LIBOR Loan and having a maturity comparable
to the relevant Interest Period; provided, however, that each
Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection.  Any
Lender requesting compensation pursuant to this Section 5.05 will furnish
to Administrative Agent and Borrower a certificate setting forth the basis and
amount of such request and such certificate, absent manifest error, shall be
conclusive.  Without limiting the 

 

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survival of
any other covenant hereunder, this covenant shall survive the termination of
this Agreement and the payment of the Obligations and all other amounts payable
hereunder.

 

SECTION 5.06.    Net Payments.

 

(a)           Except as provided
in Section 5.06(b), all payments made by any Credit Party hereunder or
under any Note or any Guarantee will be made without setoff, counterclaim or
other defense.  Except as provided in Section 5.06(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future Taxes now or hereafter imposed by any
Governmental Authority or taxing authority with respect to such payments (but
excluding any Excluded Tax) (all such Taxes (other than Excluded Taxes) being
referred to collectively as “Covered Taxes”).  If any Covered Taxes are so levied or imposed,
each Credit Party agrees on a joint and several basis to pay the full amount of
such Covered Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement, the Guarantees or any
other Credit Document, after withholding or deduction for or on account of any
Covered Taxes, will not be less than the amount provided for herein or in such
other Credit Document; provided, however,
that no such additional amount shall be required to be paid to any Lender under
this Section 5.06 to the extent such additional amount relates to a portion
of any sums paid or payable to such Lender under any Note or Guarantee with
respect to which such Lender does not act for its own account unless the
Beneficial Owner would otherwise be entitled to such additional amount.  The relevant Credit Party shall timely pay
the amount of any Covered Taxes to the relevant Governmental Authority in
accordance with applicable law.  The
relevant Credit Party shall furnish to Administrative Agent within 45 days
after the date the payment of any Covered Taxes is due pursuant to applicable
law documentation reasonably satisfactory to such Lender evidencing such payment
by such Credit Party.  The Credit Parties
agree to jointly and severally indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Covered
Taxes so levied or imposed and paid by such Lender.  Such written request shall include a certificate
of such Lender setting forth in reasonable detail the basis of such request and
such certificate, absent manifest error, shall be conclusive.

 

(b)           Each Lender that is
not a “United States person” (as such term is defined in Section 7701(a)(30)
of the Code) (a “Non-U.S. Lender”) agrees to
deliver to Borrower and Administrative Agent on or prior to the Closing Date
or, in the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 13.05 (unless the assigned or
transferee Lender was already a Lender hereunder immediately prior to such
assignment or transfer and was in compliance with this Section 5.06(b) as
of the date of such assignment or transfer), on the date of such assignment or
transfer to such Lender, (i) two accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI or W-8BEN (or successor
forms) certifying to such Lender’s entitlement to exemption from or reduction
in the rate of United States withholding tax with respect to payments to be
made under this Agreement and under any other Credit Document or any Guarantee
(or, with respect to any assignee Lender, at least as extensive as the
assigning Lender), or (ii) if the Lender is not a “bank” within the meaning
of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or W-8BEN pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit E (any such
certificate, a “Foreign Lender Certificate”) and
(y) two accurate and complete original signed copies of Internal Revenue
Service Form W-8 (or 

 

83

 

successor
form) certifying to such Lender’s entitlement to exemption from or reduction in
the rate of United States withholding tax with respect to payments to be made
under this Agreement and under any Note (or, with respect to any assignee
Lender, at least as extensive as the assigning Lender).  Each Non-U.S. Lender, to the extent it does
not act or ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender hereunder or under any Note, Guarantee or
any other Credit Document, shall deliver to Administrative Agent and to
Borrower, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof), on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), or on such later date when such Lender ceases to act for its own
account with respect to any portion of such sums paid or payable, and at such
other times as may be necessary in the determination of Borrower or Administrative
Agent, (i) two original copies of the forms or statements required to be
provided by such Lender under this Section 5.06(b), properly completed and
duly executed by such Lender, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account and is not
subject to United States withholding tax, and (ii) two original copies of
Internal Revenue Service Form W 8IMY (or any successor forms)
properly completed and duly executed by such Lender, together with any
information, if any, such Lender chooses to transmit with such form, and any
other certificate or statement of exemption required under the Code or the
regulations issued thereunder, to establish that such Lender is not acting for
its own account with respect to a portion of any such sums paid or payable to
such Lender.  In addition, each Lender
agrees that from time to time after the Closing Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to Borrower and Administrative
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or W-8BEN, or Form W-8 and a Foreign Lender
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note or any Guarantee, or it shall immediately
notify Borrower and Administrative Agent of its inability to deliver any such Form or
Certificate, in which case such Lender shall not be required to deliver any
such form or certificate pursuant to this Section 5.06(b).  Notwithstanding the foregoing, no Lender
shall be required to deliver any such form or certificate if a change in
treaty, law or regulation has occurred prior to the date on which such delivery
would otherwise be required that renders any such form or certificate inapplicable
or would prevent the Lender from duly completing and delivering any such form
or certificate with respect to it and such Lender so advises Borrower.

 

(c)           Each Lender and
Administrative Agent that is a “United States person” (as such term is defined
in Section 7701(a)(30) of the Code) (other than persons that are
corporations or otherwise exempt from United States backup withholding tax)
shall deliver at the time(s) and in the manner(s) prescribed by applicable law,
to Borrower and Administrative Agent (as applicable), a properly completed and
duly executed Internal Revenue Service Form W-9, or any successor form,
certifying that such person is exempt from United States backup withholding Tax
on payments made hereunder.

 

(d)           In addition,
Borrower agrees to (and shall timely) pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under the Notes or from the execution,

 

84

 

delivery,
filing, recordation or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as “Other Taxes”).

 

(e)           Any Lender claiming
any additional amounts payable pursuant to this Section 5.06 agrees to use
(at the Credit Parties’ expense) reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such change would avoid the need
for, or in the opinion of such Lender, materially reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the sole
judgment of such Lender, be otherwise disadvantageous to such Lender.

 

(f)            If (i) Administrative
Agent or any Lender receives a cash refund in respect of an overpayment of
Taxes from a Governmental Authority with respect to, and actually resulting
from, an amount of Taxes actually paid to or on behalf of Administrative Agent
or such Lender by Borrower (a “Tax Benefit”)
and (ii) Administrative Agent or such Lender determines in its good faith
sole discretion that such Tax Benefit has been correctly paid by such Governmental
Authority, and will not be required to be repaid to such Governmental
Authority, then Administrative Agent or such Lender shall notify Borrower of
such Tax Benefit and forward the proceeds of such Tax Benefit (or relevant
portion thereof) to Borrower as reduced by any reasonable expense or liability
incurred by Administrative Agent or such Lender in connection with obtaining
such Tax Benefit; provided, however, that Borrower, upon the request of Administrative Agent or
such Lender, agrees to repay the amount paid over to Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to Administrative Agent or such Lender in the event Administrative
Agent or such Lender is required to repay such refund to such Governmental
Authority.  This Section 5.06(f) 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 Borrower or any other person.  Notwithstanding anything to the contrary, in
no event will any Lender be required to pay any amount to Borrower the payment
of which would place such Lender in a less favorable net after-tax position
than such Lender would have been in if the additional amounts giving rise to
such refund of any Taxes had never been paid.

 

ARTICLE VI.

 

GUARANTEES

 

SECTION 6.01.    The Guarantees.  The Subsidiary Guarantors hereby jointly and
severally guarantee as primary obligors and not as sureties to each Creditor
and their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest (including any interest, fees, costs or charges that would accrue
but for the provisions of the Bankruptcy Code after any bankruptcy or
insolvency petition under the Bankruptcy Code) on the Loans made by the Lenders
to, and the Notes held by each Lender of, Borrower, and all other Obligations
from time to time owing to the Creditors by any Credit Party under any Credit
Document or Swap Contract entered into with a Swap Provider, in each case
strictly in accordance with the terms thereof, but, in the case of Swap Contracts
not if such Swap Provider provides notice to Borrower that it does not want
such Swap Contract to be secured (such obligations being herein collectively
called the “Guaranteed Obligations”).  The Subsidiary Guarantors hereby jointly and
severally agree that 

 

85

 

if Borrower or
other Subsidiary Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, such Subsidiary Guarantors will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration
or otherwise) in accordance with the terms of such extension or renewal.

 

SECTION 6.02.    Obligations Unconditional.  The obligations of the Subsidiary Guarantors
under Section 6.01 shall constitute a guaranty of payment and are
absolute, irrevocable and unconditional, joint and several, irrespective of the
value, genuineness, validity, regularity or enforceability of the Guaranteed
Obligations of Borrower under this Agreement, the Notes or any other agreement
or instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law, irrespective
of any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or Subsidiary Guarantor (except for
payment in full).  Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of the Subsidiary
Guarantors hereunder which shall remain absolute, irrevocable and unconditional
under any and all circumstances as described above:

 

(i)            at any time or from time to time,
without notice to the Subsidiary Guarantors, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;

 

(ii)           the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations shall be
amended in any respect, or any right under the Credit Documents or any other
agreement or instrument referred to herein or therein shall be amended or
waived in any respect or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with;

 

(iii)          any Lien or security interest granted
to, or in favor of, L/C Lender or any Lender or Agent as security for any of
the Guaranteed Obligations shall fail to be perfected; or

 

(iv)          the release of any other Subsidiary
Guarantor.

 

The Subsidiary
Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that any Creditor
thereof exhaust any right, power or remedy or proceed against Borrower under
this Agreement or the Notes or any other agreement or instrument referred to
herein or therein, or against any other person under any other guarantee of, or
security for, any of the Guaranteed Obligations.  The Subsidiary Guarantors waive any and all
notice of the creation, renewal, extension, waiver, termination or accrual of
any of the Guaranteed Obligations and notice of or proof of reliance by any
Creditor thereof upon this guarantee or acceptance of this guarantee, and the
Guaranteed Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this guarantee, and all
dealings between Borrower and the Creditors shall likewise be conclusively
presumed to have been had or consummated in reliance upon this 

 

86

 

guarantee. 
This guarantee shall be construed as a continuing, absolute, irrevocable
and unconditional guarantee of payment without regard to any right of offset
with respect to the Guaranteed Obligations at any time or from time to time
held by the Creditors, and the obligations and liabilities of the Subsidiary
Guarantors hereunder shall not be conditioned or contingent upon the pursuit by
the Creditors or any other person at any time of any right or remedy against
Borrower or against any other person which may be or become liable in respect
of all or any part of the Guaranteed Obligations or against any collateral security
or guarantee therefor or right of offset with respect thereto.  This guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Subsidiary Guarantors and the successors and assigns thereof, and shall inure
to the benefit of the Lenders, and their respective successors and assigns,
notwithstanding that from time to time during the term of this Agreement there
may be no Guaranteed Obligations outstanding.

 

SECTION 6.03.    Reinstatement.  The obligations of the Subsidiary Guarantors
under this Article VI shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of Borrower or other Credit Party
in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise.  The Subsidiary Guarantors jointly and
severally agree that they will indemnify each Creditor on demand for all
reasonable costs and expenses (including reasonable fees of counsel) incurred
by such Creditor in connection with such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law, other than any costs
or expenses resulting from the gross negligence or bad faith of such Creditor.

 

SECTION 6.04.    Subrogation; Subordination.  Each Subsidiary Guarantor hereby agrees that
until the payment and satisfaction in full in cash of all Guaranteed
Obligations and the expiration and termination of the Commitments of the
Lenders under this Agreement it shall not exercise any right or remedy arising
by reason of any performance by it of its guarantee in Section 6.01,
whether by subrogation or otherwise, against Borrower or any other Subsidiary
Guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.  The payment of
any amounts due with respect to any indebtedness of Borrower or any other
Subsidiary Guarantor now or hereafter owing to any Subsidiary Guarantor or
Borrower by reason of any payment by such Subsidiary Guarantor under the Guarantee
in this Article VI is hereby subordinated to the prior payment in full in
cash of the Guaranteed Obligations.  Each
Subsidiary Guarantor agrees that it will not demand, sue for or otherwise
attempt to collect any such indebtedness of Borrower to such Subsidiary
Guarantor until the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence,
any Subsidiary Guarantor shall prior to the payment in full in cash of the
Guaranteed Obligations collect, enforce or receive any amounts in respect of
such indebtedness, such amounts shall be collected, enforced and received by
such Subsidiary Guarantor as trustee for Creditors and be paid over to
Administrative Agent on account of the Guaranteed Obligations without affecting
in any manner the liability of such Subsidiary Guarantor under the other
provisions of the guaranty contained herein.

 

87

 

SECTION 6.05.    Remedies.  The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of Borrower under this Agreement and the Notes may be declared to
be forthwith due and payable as provided in Article XI (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Article XI) for purposes of Section 6.01,
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable
arising under the Bankruptcy Code or any other federal or state bankruptcy,
insolvency or other law providing for protection from creditors) as against Borrower
and that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or not
due and payable by Borrower) shall forthwith become due and payable by the
Subsidiary Guarantors for purposes of Section 6.01.

 

SECTION 6.06.    Continuing Guarantee.  The guarantee in this Article VI is a
continuing guarantee of payment, and shall apply to all Guaranteed Obligations
whenever arising.

 

SECTION 6.07.    General Limitation on Guarantee Obligations.  In any action or proceeding involving any
state corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of any Subsidiary Guarantor under Section 6.01 would otherwise
be held or determined to be void, voidable, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 6.01, then, notwithstanding any other provision
to the contrary, the amount of such liability shall, without any further action
by such Subsidiary Guarantor, any Creditor or any other person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

 

ARTICLE VII.

 

CONDITIONS PRECEDENT

 

SECTION 7.01.    Conditions to Initial Extensions of Credit.  The obligations of the Lenders to make any
initial extension of credit hereunder (whether by making a Loan or issuing a
replacement and/or new Letter of Credit) are subject to the satisfaction of the
following (the date of the satisfaction (or waiver) of all of the conditions to
the initial extension of credit in this Section 7.01, the “Closing Date”):

 

(i)            Corporate Documents.  Certified true and complete copies of the
charter and by-laws and all amendments thereto (or equivalent documents) of
each Credit Party and of all corporate or other authority for each Credit Party
(including board of directors (or the functional equivalent thereof) resolutions
and evidence of the incumbency, including specimen signatures, of officers)
with respect to the execution, delivery and performance of such of the Credit
Documents to which each such Credit Party is intended to be a party and each
other document to be delivered by each such Credit Party from time to time in
connection herewith and the extensions of credit hereunder and the consummation
of the Transactions, certified as of the Closing Date as complete and correct
copies thereof by the Secretary or an Assistant Secretary of each such Credit
Party.

 

88

 

(ii)           Officer’s Certificate.  An Officer’s Certificate of Borrower, dated
the Closing Date, certifying (a) to the effect set forth in Sections
7.02(i)(a) and 7.02(i)(b) (giving effect to the provisions contained
therein) and (b) to the effect that all conditions precedent to the making
of any extension of credit to be effected on the Closing Date have been satisfied.

 

(iii)          Opinions of Counsel.  The following opinions, each of which shall
be reasonably satisfactory to Lead Arrangers in form and substance and dated
the date of the initial extension of credit hereunder:

 

(a)           an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel
to the Credit Parties, in the form of Exhibit F-1;

 

(b)           opinions
of Ballard Spahr Andrews & Ingersoll, LLP, Pennsylvania, Delaware and
special counsel to the Credit Parties, in the forms of Exhibit F-2A
and Exhibit F-2B;

 

(c)           opinions
of Blitz, Bardgett & Deutsche L.C., Missouri counsel to those Credit
Parties identified therein, in the forms of Exhibit F-3A and Exhibit F-3B;

 

(d)           an
opinion of Bowles Rice McDavid Graff & Love LLP, West Virginia counsel
to those Credit Parties identified therein, in the form of Exhibit F-4;

 

(e)           an
opinion of Frank Weinberg Black, P.L., Florida counsel to those Credit Parties
identified therein, in the form of Exhibit F-5;

 

(f)            an
opinion of Hopkins & Huebner, P.C., Iowa counsel to those Credit
Parties identified therein, in the form of Exhibit F-6;

 

(g)           opinions
of Ice Miller, Indiana counsel to those Credit Parties identified therein, in
the forms of Exhibit F-7A and Exhibit F-7B;

 

(h)           an
opinion of Isaacson Rosenbaum P.C., Colorado counsel to those Credit Parties
identified therein, in the form of Exhibit F-8;

 

(i)            an
opinion of Phelps Dunbar LLP, Louisiana and Mississippi counsel and maritime
counsel to those Credit Parties identified therein, in the form of Exhibit F-9;

 

(j)            an
opinion of Pierce Atwood LLP, Maine counsel to those Credit Parties identified
therein, in the form of Exhibit F-10;

 

(k)           an
opinion of Schottenstein, Zox & Dunn Co., L.P.A., Ohio counsel to
those Credit Parties identified therein, in the form of Exhibit F-11;

 

(l)            an
opinion of Shefsky & Froelich, Ltd., Illinois counsel to those Credit
Parties identified therein, in the form of Exhibit F-12; and

 

(m)          an
opinion of Blake Cassels & Graydon LLP, Canadian counsel to those
Credit Parties identified therein, in the form of Exhibit F-13; and

 

89

 

(n)           an
opinion of McInnes Cooper, Nova Scotia counsel to CHC Casinos Canada Limited,
in the form of Exhibit F-14.

 

(iv)          Notes.  The Notes, duly completed and executed for
each Lender that has requested Notes prior to the Closing Date.

 

(v)           The Credit Agreement.  This Agreement (a) executed and delivered
by a duly authorized officer of each Credit Party and (b) executed and
delivered by a duly authorized officer of each Lender and Agent, which
Agreement shall be reasonably satisfactory to Lead Arrangers in form and
substance. 

 

(vi)          Collateral Matters.

 

(a)           Filings and Lien Searches.  (A) (i) UCC financing statements, (ii) certificates
of ownership with respect to each Mortgaged Vessel identified on Schedule 8.13(b) and
results of lien searches conducted in the jurisdictions and against Borrower
and its Restricted Subsidiaries, (iii) United States Patent and Trademark
Office and United States Copyright Office filings and (iv) evidence of
payment (or arrangement for payment) of taxes, fees and other charges for
recording of all Security Documents executed and delivered on or prior to the
Closing Date, and (B) the taking of all actions as may be necessary or, in
the reasonable opinion of Lead Arrangers, desirable, to perfect the Liens
created, or purported to be created, by the Security Documents (subject to any
applicable provisions set forth in the Security Agreement with respect to
limitations as to perfection of Liens on the Pledged Collateral described
therein).  All of the foregoing in this
clause (vi)(a) shall be reasonably satisfactory to Lead Arrangers in form
and substance.

 

(b)           Security Agreement.  With respect to the Credit Parties (after
giving effect to the Argosy Acquisition), the Security Agreement, such other
pledge agreements reasonably satisfactory to Lead Arrangers, and the Initial
Perfection Certificate, in each case duly authorized, executed and delivered by
the applicable Credit Parties, and the certificates identified under the name
of such Credit Parties in Schedule 5 to the Initial Perfection
Certificate evidencing or representing “Pledged Securities” (as such term is
defined in the Security Agreement), accompanied by undated stock powers,
instruments of assignment or issuer acknowledgments executed in blank if
applicable, and the promissory notes, intercompany notes, instruments and
chattel paper identified under the name of such Credit Parties in Schedule 9
to the Initial Perfection Certificate (other than such promissory notes, intercompany
notes, instruments and chattel paper that constitute “Special Property” (as
such term is defined in the Security Agreement) of the type described in
clauses (a)(2) and (a)(g) of the definition of “Special Property”),
accompanied by undated notations or instruments of assignment executed in
blank, and all of the foregoing shall be reasonably satisfactory to Lead
Arrangers in form and substance (in each case to the extent required to be
delivered pursuant to the terms of the Security Agreement).

 

(c)           Mortgage Matters.

 

(i)            Mortgaged Real Property. 
On or prior to the Closing Date, each applicable Credit Party shall have
caused to be duly executed, acknowledged and delivered, as appropriate, to
Collateral Agent, on behalf of the Secured Parties:  (1) a Mortgage encumbering 

 

90

 

each Mortgaged
Real Property identified on Schedule 1.01(C) reasonably
satisfactory to Lead Arrangers and in form for recording in the recording
office of each political subdivision where each such Mortgaged Real Property is
situated, which Mortgage shall, when recorded, be effective to create in favor
of the Collateral Agent on behalf of the Secured Parties a valid, enforceable
and perfected Lien on such Mortgaged Real Property subordinate to no Liens
other than Permitted Collateral Liens and (2) with respect to each
Mortgaged Real Property and Mortgage, such fixture filings, title insurance
policies, insurance certificates, surveys, consents, estoppels, subordination,
nondisturbance and attornment agreements, Governmental Real Property Disclosure
Requirements, certificates, affidavits, instruments, returns and other
documents delivered in connection with the Existing Borrower Credit Agreement
substantially in the form delivered thereunder with such changes thereto as shall
be necessary to reflect the Transactions and otherwise reasonably satisfactory
to Lead Arrangers and, to the extent such Mortgaged Real Property was not
encumbered by a Mortgage in connection with the Original Borrower Credit
Agreement, all of the foregoing shall be required to the same extent as would
have been required by Sections 7.01(xi), 7.01(xii), 9.09, 9.10 and 9.13 of the
Original Borrower Credit Agreement with such changes thereto and exceptions
therefrom as shall be necessary to reflect the Transactions and otherwise
reasonably satisfactory to Lead Arrangers, and all of the foregoing shall be
reasonably satisfactory to Lead Arrangers in form and substance.

 

(ii)           Ship Mortgages. 
Administrative Agent shall have received with respect to each Mortgaged
Vessel identified on Schedule 8.13(b), (1) a Ship Mortgage
reasonably satisfactory to Lead Arrangers and granting in favor of Collateral
Agent for the benefit of the Secured Parties a legal, valid and enforceable
first preferred ship mortgage on such Mortgaged Vessel under Chapter 313
of Title 46 of the United States Code subject to Permitted Collateral Liens,
executed and delivered by a duly authorized officer of the appropriate Credit
Party, in each case, together with such certificates, affidavits and
instruments as shall be reasonably required in connection with filing or
recordation thereof and to grant a Lien on each such Mortgaged Vessel, and (2) certificates
of insurance as required by each Ship Mortgage, which certificates shall comply
with the insurance requirements contained in Section 9.02 and the
applicable Ship Mortgage, and all of the foregoing shall be reasonably
satisfactory to Lead Arrangers in form and substance.

 

(d)           Insurance.  Evidence of insurance complying with the
requirements of Section 9.02 and the Security Documents and certificates
naming Collateral Agent as an additional insured and/or loss payee.

 

(e)           Appraisals.  The Lenders shall have received appraisals
for such Mortgaged Real Properties as Lead Arrangers shall have determined to
be reasonably required under FIRREA and shall have requested not less than 60
days prior to the Closing Date.

 

(vii)         Financial Statements.  Lead Arrangers and the Lenders shall have received
the following:

 

(a)           the financial statements referred to
in Section 8.02; and

 

(b)           (i) the audited consolidated
balance sheets of Argosy and its subsidiaries (before giving effect to the
Transactions) as of December 31, 2002, 2003 and 2004 and the related statements
of earnings, changes in stockholders’ equity and cash flows for the fiscal
years 

 

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ended on those dates, together with reports
thereon by then certified public accountants of Argosy and (ii) unaudited
interim consolidated balance sheet of Argosy and its subsidiaries (before giving
effect to the Transactions) and the related statements of earnings, changes in
stockholders’ equity and cash flows for each fiscal quarter ended after December 31,
2004 and at least 45 days prior to the Closing Date;

 

(viii)        Projections.  On or prior to the Closing Date, Lead
Arrangers and, only to the extent they agree to receive them, the Lenders shall
have received projected consolidated financial statements of Borrower and its
Subsidiaries certified by the chief financial officer or the chief operating
officer of Borrower for the fiscal years 2005 through 2010 (the “Projections”), which Projections shall reflect the
forecasted consolidated financial conditions and income and expenses of
Borrower and its Subsidiaries both before and after giving effect to the
Transactions and the related financing thereof and the other transactions
contemplated hereby (it being understood that nothing contained in the Projections
or any certificate relating thereto shall constitute a representation that the
results forecasted in such Projections will in fact be achieved).

 

(ix)           Credit Documents in Full
Force and Effect; Fee Letter. 
The Credit Documents required to be executed and delivered on or prior
to the Closing Date shall be in full force and effect.  Borrower shall have complied in all respects
with its obligations under the Fee Letter and the Administrative Agent’s Fee
Letter to the extent applicable.

 

(x)            Repayment of Indebtedness.

 

(a)           Borrower and its Restricted
Subsidiaries shall have effected (or will, on the Closing Date, effect) the
repayment in full of all obligations and indebtedness of Borrower and its
Restricted Subsidiaries in respect of the Existing Borrower Credit Agreement,
including, without limitation, the termination of all outstanding commitments
in effect under the Existing Borrower Credit Agreement (with the exception of
obligations relating to each applicable Existing Letter of Credit issued
thereunder), on terms and conditions and pursuant to documentation reasonably
satisfactory to Lead Arrangers.  All
Liens and guarantees in respect of such obligations shall have been terminated
and released (or will, on the Closing Date, be terminated and released) (with
the exception of obligations relating to each applicable Existing Letter of
Credit issued thereunder) and Lead Arrangers shall have received (or will, on
the Closing Date, receive) evidence thereof reasonably satisfactory to Lead
Arrangers and a “pay-off” letter or letters reasonably satisfactory to Lead
Arrangers with respect to such obligations and such UCC termination statements,
mortgage releases and other instruments, in each case in proper form for
recording, as Lead Arrangers shall have reasonably requested to release and
terminate of record the Liens securing such obligations (or arrangements for
such release and termination reasonably satisfactory to Lead Arrangers shall
have been made).  (All of the foregoing
in this clause (a) shall be referred to as the “Borrower
Refinancings”.)

 

(b)           Borrower and its Restricted
Subsidiaries shall have effected (or will, on the Closing Date, effect) the
repayment in full of all obligations and indebtedness of Argosy and its
subsidiaries (without giving effect to the consummation of the Transactions) in
respect of the Existing Argosy Credit Facility, including, without limitation,
the termination of all outstanding commitments in effect under the Existing
Argosy Credit Facility (with the exception of obligations relating to each
applicable Existing Letter of Credit issued thereunder) on terms and 

 

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conditions and pursuant to documentation
reasonably satisfactory to Lead Arrangers. 
All Liens and guarantees in respect of such Indebtedness shall have been
terminated and released (or will, on the Closing Date, be terminated and
released) and Lead Arrangers shall have received evidence thereof reasonably
satisfactory to Lead Arrangers and a “pay-off” letter or letters reasonably
satisfactory to Lead Arrangers with respect to such Indebtedness; in addition,
from any person holding any Lien securing any such Indebtedness, such Uniform
Commercial Code termination statements, mortgage releases and other
instruments, in each case in proper form for recording, as Lead Arrangers shall
have reasonably requested to release and terminate of record the Liens securing
such Indebtedness (or arrangements for such release and termination reasonably
satisfactory to Lead Arrangers shall have been made).  In addition, Borrower shall, or shall have
caused one of its Restricted Subsidiaries or Argosy to, have commenced the
Argosy Notes Tender/Consent in accordance with the applicable Existing Argosy
Indentures and with all applicable laws, rules and regulations and all
Existing Argosy Notes validly tendered pursuant to the Argosy Notes Tender/Consent
shall have been purchased (or will, on the Closing Date, be purchased) and a
supplemental indenture eliminating all significant restrictive covenants
therein that is in a form and substance reasonably satisfactory to Lead
Arrangers shall have been executed by the applicable trustees and Argosy.  After giving effect to the Argosy Notes
Tender/Consent, all Existing Argosy Notes tendered pursuant thereto shall cease
to be outstanding and shall have been discharged.  All of the foregoing in this clause (b) shall
be referred to as the “Argosy Refinancings”.

 

(xi)           Existing Indebtedness.  Immediately upon giving effect to the Transactions
and the credit extensions on the Closing Date, Borrower and its Restricted Subsidiaries
shall have outstanding no Indebtedness or preferred stock (or direct or
indirect guarantees or other credit support in respect thereof) outstanding
other than the Existing Indebtedness and intercompany Indebtedness.

 

(xii)          Consummation of Transactions.

 

(a)           The Transactions and the consummation
thereof shall be in compliance in all material respects with all applicable
Laws (including Gaming Laws and Regulation T, Regulation U and Regulation X)
and all applicable gaming approvals and other applicable regulatory
approvals.  After giving effect to the
Transactions, there shall be no conflict with, or default under, any material
Contractual Obligation of Borrower and its Restricted Subsidiaries (including
any such material Contractual Obligations (i) acquired pursuant to the
Argosy Acquisition, (ii) entered into pursuant to the Transactions and (iii) in
respect of the Borrower Outstanding Bonds) (except as Lead Arrangers shall
otherwise agree).

 

(b)           The Argosy Acquisition shall have
been (or shall be contemporaneously with or immediately following the making of
the initial Loans hereunder) consummated in a manner consistent with the Argosy
Acquisition Agreement, unless otherwise consented to by Lead Arrangers (such
consent not to be unreasonably withheld or delayed).  Any documentation executed and delivered in
connection with the Argosy Acquisition Agreement not delivered to Lead
Arrangers on or prior to November 3, 2004 shall be reasonably satisfactory
in form and substance to Lead Arrangers. 
All conditions precedent to the consummation of the Argosy Acquisition,
as set forth in the Argosy Acquisition Agreement, shall have been satisfied in
all material respects, and not otherwise waived in any material respect except,
in each case, with the consent of Lead Arrangers (such consent not to be
unreasonably withheld or delayed), to the 

 

93

 

satisfaction of Lead Arrangers.  Lead Arrangers shall have received a true and
correct copy of a certificate of merger filed (or to be filed concurrently with
or immediately following the making of the initial Loans hereunder) with the
Secretary of State of the State of Delaware evidencing the effectiveness of the
Argosy Acquisition.

 

(xiii)         Approvals.  All necessary gaming approvals and
Governmental Authority and third party approvals and/or consents in connection
with the Transactions, including without limitation, the transactions
contemplated by the Credit Documents (excluding consents from third parties
pertaining to collateral and security for the Loans which are addressed
elsewhere in this Article VII) shall have been obtained and shall remain
in full force and effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
enjoins, prevents or imposes materially adverse conditions upon the
consummation of the Transactions.  In
addition, there shall not exist any judgment, order, injunction or other
restraint, and there shall be no pending litigation or proceeding by any
Governmental Authority, prohibiting, enjoining or imposing materially adverse
conditions upon the Transactions, or on the consummation thereof.  Notwithstanding the foregoing, it is understood
that up to one asset sale in each of the State of Illinois and the State of
Louisiana to the extent required by gaming, regulatory or antitrust authorities
of such respective States in connection with the transactions contemplated
hereby shall not be deemed to restrain, enjoin, prevent or otherwise impose
materially adverse conditions upon the Transactions or on the consummation
thereof.  If
requested, Lead Arrangers shall have received copies of any such approvals or
consents referred to above that are so obtained.

 

(xiv)        Argosy Material Adverse
Effect.  Since November 3,
2004, there shall not have occurred any Argosy Material Adverse Effect.

 

(xv)         Solvency.  The Lenders shall have received a certificate
in the form of Exhibit G from the chief financial officer of
Borrower with respect to the Solvency (on a consolidated basis) of the Credit
Parties, taken as a whole, immediately after giving effect to the consummation
of the Transactions (which may assume the absence of a Default or Event of Default,
regardless of the existence thereof).

 

(xvi)        Environmental Reports.  Lead Arrangers shall have received (if reasonably
requested by them) Phase I reports from environmental consultants (which consultants
shall be reasonably satisfactory to Lead Arrangers), and such Phase II reports
(if reasonably requested by Lead Arrangers) as recommended or prudently
suggested by the Phase I reports with respect to the real properties of Argosy
and its subsidiaries.

 

(xvii)       Payment of Fees and
Expenses.  All costs, fees,
expenses (including, without limitation, reasonable legal fees and expenses of
Cahill Gordon & Reindel LLP and of local counsel to Lead Arrangers, if
any) of Administrative Agent, Lead Arrangers and (in the case of fees only) the
Lenders, and other compensation contemplated hereby, by the Fee Letter and by
the Administrative Agent’s Fee Letter, in each case payable to Administrative
Agent, Lead Arrangers and/or the Lenders in respect of the Transactions shall
have been paid to the extent due.

 

(xviii)      Documents.  Administrative Agent and Lead Arrangers shall
have received copies of the Transfer Agreements in effect on the Closing Date
and any amendments 

 

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thereto and each material document and instrument delivered in
connection therewith, in each case duly executed by each party thereto, and
certified by a Responsible Officer as true and correct copies thereof.

 

Notwithstanding anything contained in
Sections 7.01(vi)(b), 7.01(vi)(c) and 7.01(xiii) to the contrary, in each
case, it is understood and agreed that no Lien(s), Mortgage(s) or Ship Mortgage(s)
in favor of Collateral Agent on any Property of the applicable Restricted
Subsidiary and/or no Guarantee of the applicable Restricted Subsidiary in each
case shall be required to be granted or delivered at the Closing Date as a
result of such being prohibited by the applicable Gaming Authorities or
applicable Law; provided, however, that Borrower has used its
commercially reasonable efforts to obtain such approvals for such at the
Closing Date (in each case, such Lien(s), Mortgage(s), Ship Mortgage(s) and/or
Guarantee(s) not so delivered or granted, an “Undelivered
Closing Collateral”). 
Notwithstanding the foregoing, it is understood and agreed that no
Lien(s), Mortgage(s) or Ship Mortgage(s) in favor of Collateral Agent on any of
the Argosy Baton Rouge Assets and no Guarantee of any of the Argosy Louisiana
Subsidiaries in each case shall be granted or delivered at the Closing Date as
a result of the FTC Order.

 

SECTION 7.02.    Conditions to All Extensions of Credit.  The obligations of the Lenders to make any
Loan or otherwise extend any credit to Borrower upon the occasion of each
Borrowing or other extension of credit (whether by making a Loan or issuing a
Letter of Credit) hereunder (including the initial borrowing) is subject to the
further conditions precedent that:

 

(i)            No Default or Event of
Default; Representations and Warranties True.  Both immediately prior to the making of such
Loan or other extension of credit and also after giving pro forma effect
thereto and to the intended use thereof:

 

(a)           no
Default or Event of Default shall have occurred and be continuing; provided, however, that,
in the case of the Closing Date and the making of Loans and extensions of
credit in connection therewith, this condition shall be limited to no Specified
Default having occurred and being continuing;

 

(b)           each
of the representations and warranties made by the Credit Parties in Article VIII
and by each Credit Party in each of the other Credit Documents to which it is a
party shall be true and correct in all material respects on and as of the date
of the making of such Loan or other extension of credit with the same force and
effect as if made on and as of such date (it being understood and agreed that
any such representation or warranty which by its terms is made as of an earlier
date shall be required to be true and correct in all material respects only as
such earlier date); provided, however, that, in the case of the Closing Date and the
making of Loans and extensions of credit in connection therewith, the condition
set forth in this clause shall only relate to the Specified Representations;
and

 

(c)           the
sum of the aggregate amount of the outstanding Revolving Loans, plus the aggregate amount of the outstanding Swingline Loans
plus the 

 

95

 

aggregate outstanding L/C Liabilities shall
not exceed the Total Revolving Commitments then in effect.

 

(ii)           Notice of Borrowing.  Administrative Agent shall have received a
Notice of Borrowing and/or Letter of Credit Request, as applicable, duly
completed and complying with Section 4.05. 
Each Notice of Borrowing or Letter of Credit Request delivered by
Borrower hereunder shall constitute a representation and warranty by Borrower
that on and as of the date of such notice and on and as of the relevant
borrowing date or date of issuance of a Letter of Credit (both immediately
before and after giving effect to such borrowing or issuance and the
application of the proceeds thereof) that the applicable conditions in
Sections 7.01 or 7.02, as the case may be, have been satisfied.

 

ARTICLE VIII.

 

REPRESENTATIONS AND WARRANTIES

 

Each Credit
Party represents and warrants to the Creditors that at and as of the Closing
Date (with respect to the Specified
Representations only) and at and as of each Funding Date (but with
respect to the Specified Representations
only on the initial Funding Date), in
each case immediately before and immediately after giving effect to the
transactions to occur on such date (including, with respect to the Closing
Date, the Transactions):

 

SECTION 8.01.    Corporate Existence; Compliance with Law.

 

(a)           Borrower and each
Restricted Subsidiary (i) is a corporation, partnership, limited liability
company or other entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization; (ii) has all
requisite corporate or other power and authority, and has all governmental
licenses, authorizations, consents and approvals necessary to own its Property
and carry on its business as now being conducted; and (iii) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary; except, in the case of clauses (i), (ii) and (iii) where
the failure thereof individually or in the aggregate would not have a Material
Adverse Effect; and

 

(b)           Neither Borrower nor
any Restricted Subsidiary nor any of its Property is in violation of, nor will
the continued operation of Borrower’s or such Restricted Subsidiary’s Property
as currently conducted violate, any Requirement of Law (including, without
limitation, any zoning or building ordinance, code or approval or permits or
any restrictions of record or agreements affecting the Real Property) or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violations or defaults would have a Material
Adverse Effect.

 

SECTION 8.02.    Financial Condition; Etc. Borrower has delivered to the Lenders (i) the
audited consolidated balance sheets of Borrower and its Subsidiaries (before giving
effect to the Transactions) as of December 31, 2002, 2003 and 2004 and the
related statements of earnings, changes in stockholders’ equity and cash flows
for the fiscal years ended on those dates, together with reports thereon by BDO
Seidman LLP, certified public accountants, (ii) unaudited interim consolidated
balance sheet of Borrower and its Subsidiaries (before giving 

 

96

 

effect to the
Transactions) and the related statements of earnings, changes in stockholders’
equity and cash flows for each fiscal quarter ended after December 31,
2004 and at least 45 days prior to the Closing Date, and (iii) unaudited
interim consolidated balance sheet of Borrower and its Subsidiaries (before
giving effect to the Transactions) and the related statements of earnings,
changes in stockholders’ equity and cash flows for each fiscal month (excluding
fiscal months ending on the same date as any fiscal quarter) ended after December 31,
2004 through the fiscal month ended July 2005.  All of said financial statements, including
in each case the related schedules and notes, are true, complete and correct in
all material respects and have been prepared in accordance with GAAP
consistently applied and present fairly in all material respects the financial
position of Borrower and its Subsidiaries as of the respective dates of said
balance sheets and the results of their operations for the respective periods
covered thereby, subject (in the case of interim statements) to normal
period-end audit adjustments and the absence of footnotes.

 

SECTION 8.03.    Litigation.  Except as set forth on Schedule 8.03,
there is no Proceeding (other than any (a) qui tam Proceeding,
to which this Section 8.03 is limited to Borrower’s knowledge, and (b) normal
overseeing reviews of the Gaming Authorities) pending against, or to the
knowledge of Borrower, threatened in writing against or affecting, Borrower or
any of its Restricted Subsidiaries or any of its respective Properties before
any Governmental Authority or private arbitrator that (i) either
individually or in the aggregate, would have a Material Adverse Effect or (ii) challenges
the validity or enforceability of any of the Credit Documents.

 

SECTION 8.04.    No Breach; No Default.

 

(a)           None of the
execution, delivery and performance by any Credit Party of any Credit Document
or Transaction Document to which it is a party nor the consummation of the
transactions herein and therein contemplated (including the Transactions) do or
will (i) conflict with or result in a breach of, or require any consent
(which has not been obtained and is in full force and effect) under, any
Organizational Document of any Credit Party or any applicable Requirement of
Law (including, without limitation, any Gaming Law) or any order, writ, injunction
or decree of any Governmental Authority binding on any Credit Party, or
tortiously interfere with, result in a breach of, or require termination of,
any term or provision of any Contractual Obligation of any Credit Party or (ii) constitute
(with due notice or lapse of time or both) a default under any such Contractual
Obligation, or (iii) result in or require the creation or imposition of
any Lien (except for the Liens created pursuant to the Security Documents) upon
any Property of any Credit Party pursuant to the terms of any such Contractual
Obligation, except with respect to each of the foregoing which would not result
in a Material Adverse Effect.

 

(b)           No Default or Event
of Default has occurred and is continuing.

 

SECTION 8.05.    Action.  Each Company has all necessary corporate or
other organizational power, authority and legal right to execute, deliver and
perform its obligations under each Credit Document and Transaction Document to
which it is a party and to consummate the transactions herein and therein
contemplated; the execution, delivery and performance by each Company of each
Credit Document and Transaction Document to which it is a party and the
consummation of the transactions herein and therein contemplated have been duly
authorized by all necessary corporate, partnership or other organizational
action on its part; 

 

97

 

and this
Agreement has been duly and validly executed and delivered by each Credit Party
and constitutes, and each of the Notes and the other Credit Documents and
Transaction Documents to which it is a party when executed and delivered by
such Credit Party (in the case of the Notes, for value) will constitute, its
legal, valid and binding obligation, enforceable against each Credit Party in
accordance with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
of general applicability from time to time in effect affecting the enforcement
of creditors’ rights and remedies and (b) the application of general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

 

SECTION 8.06.    Approvals.  No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
any Company of the Credit Documents and the Transaction Documents to which it
is a party or for the legality, validity or enforceability hereof or thereof or
for the consummation of the transactions herein and therein contemplated,
except for: (i) filings and recordings in respect of the Liens created
pursuant to the Security Documents, (ii) the filing of executed copies of
the Credit Agreement, the Security Agreement and the Notes executed on the
Closing Date with the Mississippi Gaming Commission within 30 days after the
Closing Date, (iii) the delivery of executed copies of the Credit
Agreement, the Security Agreement, the Notes executed on the Closing Date and
the Indiana Mortgage Documents to the Indiana Gaming Commission, (iv) the
filings referred to in Section 8.14, (v) waiver by the Gaming
Authorities of any qualification requirement on the part of the Lenders who do
not otherwise qualify or are not banks or licensed lending institutions, (vi) prior
approval of the Transactions by the Gaming Authorities, and (vii) consents,
authorizations and filings that have been obtained or made and are in full
force and effect or the failure of which to obtain would not have a Material
Adverse Effect.

 

SECTION 8.07.    ERISA and Foreign Employee Benefit Matters.  Except as set forth on Schedule 8.07,
no ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, would result in a Material Adverse Effect.  Except as set forth on Schedule 8.07,
as of the Closing Date, no member of the ERISA Group maintains or contributes
to any Pension Plan.  Except as set forth
on Schedule 8.07, each ERISA Entity is in compliance with the
presently applicable provisions of ERISA and the Code with respect to each
Employee Benefit Plan (other than to the extent such failure to comply would
not have a Material Adverse Effect). 
Except as disclosed on Schedule 8.07, using actuarial assumptions
and computation methods consistent with Part 1 of Subtitle E of Title IV
of ERISA, the aggregate liabilities of any ERISA Entity to all Multiemployer
Plans in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Multiemployer Plan that precedes the Closing
Date, would not result in a Material Adverse Effect.

 

Each Foreign
Plan is in compliance in all material respects with all laws, regulations and rules applicable
thereto and the respective requirements of the governing documents for such
Foreign Plan (other than to the extent such failure to comply would not have a
Material Adverse Effect).  The aggregate
of the liabilities to provide all of the accrued benefits under any funded
Foreign Plan (based on reasonable assumptions used by such Foreign Plan) does
not as of the most recent valuation report (or as of the end of the most recent
plan year if 

 

98

 

there is no recent valuation report) exceed the
current fair market value of the assets held in the trust or other funding
vehicle for such Foreign Plan by an amount that would have a Material Adverse
Effect.  Other than to the extent such
failure to comply would not have a Material Adverse Effect, with respect to any
unfunded Foreign Plan, reasonable reserves have been established in accordance
with prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Foreign Plan is maintained.  There are no actions, suits or claims (other
than routine claims for benefits) pending or, to Borrower’s knowledge, threatened
against Borrower or any of its Restricted Subsidiaries or any ERISA Entity with
respect to any Foreign Plan that would result in a Material Adverse Effect.

 

SECTION 8.08.    Taxes.  Except as set forth on Schedule 8.08
or as would not have a Material Adverse Effect, (i) all tax returns,
statements, reports and forms or other documents (including estimated Tax or
information returns and including any required, related or supporting
information) (collectively, the “Tax Returns”)
required to be filed with any taxing authority by, or with respect to, Borrower
and each of its Restricted Subsidiaries have been timely filed in accordance
with all applicable laws; (ii) Borrower and each of its Restricted Subsidiaries
has timely paid or made provision for payment of all Taxes shown as due and
payable on Tax Returns that have been so filed or that are otherwise due and
payable (other than Taxes which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and such proceedings operate to suspend collection of the
contested Taxes and enforcement of a Lien in respect thereof) and each Tax Return
is accurate and complete in all material respects; and (iii) Borrower and
each of its Restricted Subsidiaries has made adequate provision in accordance
with GAAP for all Taxes payable by Borrower or such Restricted Subsidiary for
which no Tax Return has yet been filed. 
Neither Borrower nor any of its Restricted Subsidiaries has received
written notice of any proposed or pending tax assessment, audit or deficiency
against Borrower or such Restricted Subsidiary that would in the aggregate have
a Material Adverse Effect.  As of the
Closing Date, there are no material Tax sharing
agreements or similar arrangements (including Tax indemnity arrangements) with
respect to or involving Borrower or any of its Restricted Subsidiaries other
than between or among Borrower and its Restricted Subsidiaries.

 

SECTION 8.09.    Investment Company Act; Public Utility
Holding Company Act; Other Restrictions.  Neither Borrower nor any of its Restricted
Subsidiaries is an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as
amended.  Neither Borrower nor any of its
Restricted Subsidiaries is a “holding company,” or an “affiliate” of a “holding
company” or a “subsidiary company” of a “holding company,” within the meaning
of the Public Utility Holding Company Act of 1935, as amended.  Neither Borrower nor any of its Restricted
Subsidiaries is subject to regulation under any law or regulation which limits
its ability to incur Indebtedness, other than Regulation X and the Gaming Laws.

 

SECTION 8.10.    Environmental Matters.  Except as set forth on Schedule 8.10
or as would not, individually or in the aggregate, result in a Material Adverse
Effect:  (i) each of Borrower and
its Restricted Subsidiaries and each of their businesses, operations and Real
Property is and in the last five years has been in material compliance with,
and each has no liability under any Environmental Law; (ii) each of
Borrower and its Restricted Subsidiaries has obtained all Permits material to,
and required for, the conduct of their businesses and operations,

 

99

 

and the
ownership, operation and use of their assets, all as currently conducted, under
any Environmental Law, all such Permits are valid and in good standing and,
under the currently effective business plans of Borrower and its Restricted
Subsidiaries, no material expenditures or operational adjustments could
reasonably be expected to be required during the next five years in order to
renew or modify such Permits; (iii) there has been no Release or
threatened Release of Hazardous Material on, at, under or from any real
property or facility presently or formerly owned, leased, operated or, to the
knowledge of Borrower and its Restricted Subsidiaries, used for waste disposal
by Borrower or any of its Restricted Subsidiaries, or any of their respective
predecessors in interest that could reasonably be expected to result in
liability to Borrower or any of its Restricted Subsidiaries under any
Environmental Law; (iv) there is no Environmental Action pending or, to
the knowledge of Borrower and its Restricted Subsidiaries, threatened, against
Borrower or any of its Restricted Subsidiaries or, relating to real property
currently or formerly owned, leased, operated or, to the knowledge of Borrower
and its Restricted Subsidiaries, used for waste disposal, by Borrower or any of
its Restricted Subsidiaries or relating to the operations of Borrower or its
Restricted Subsidiaries; (v) none of Borrower or any of its Restricted
Subsidiaries is obligated to perform any action or otherwise incur any expense
under any Environmental Law pursuant to any legally binding order, decree,
judgment or agreement by which it is bound or has assumed by contract or
agreement, and none of Borrower or any of its Restricted Subsidiaries is
conducting or financing any Response Action pursuant to any Environmental Law
with respect to any location; (vi) no circumstances exist that could
reasonably be expected to (a) form the basis of an Environmental Action
against Borrower or any of its Restricted Subsidiaries, or any of their Real
Property, facilities or assets or (b) cause any such Real Property, facilities
or assets to be subject to any restriction on ownership, occupancy, use or
transferability under any Environmental Law; (vii) no real property or
facility presently or formerly owned, operated or leased by Borrower or any of
its Restricted Subsidiaries and, to the knowledge of Borrower and its
Restricted Subsidiaries, no real property or facility presently or formerly
used for waste disposal by Borrower or any of its Restricted Subsidiaries or
owned, leased, operated or used for waste disposal by any of their respective
predecessors in interests is (a) listed or proposed for listing on the
National Priorities List promulgated pursuant to CERCLA or (b) included on
any similar list maintained by any Governmental Authority including, without
limitation, any such list relating to petroleum; (viii) no real property
or facility presently or formerly owned, or presently leased or operated by Borrower
or any of its Restricted Subsidiaries and, to the knowledge of Borrower and its
Restricted Subsidiaries, no real property or facility formerly leased or operated
by Borrower or any of its Restricted Subsidiaries is listed on the
Comprehensive Environmental Response, Compensation, and Liability Information
System promulgated pursuant to CERCLA as potentially requiring future Response
Action; (ix) no Lien has been recorded or, to the knowledge of Borrower
and its Restricted Subsidiaries, threatened under any Environmental Law with
respect to any Real Property or other assets of Borrower or any of its
Restricted Subsidiaries; and (x) the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
will not affect the validity or require the transfer of any Permit held by
Borrower or any of its Restricted Subsidiaries under any Environmental Law, and
will not require any notification, registration, filing, reporting, disclosure,
investigation, remediation or cleanup pursuant to any Governmental Real
Property Disclosure Requirements with respect to each of Borrower and its
Restricted Subsidiaries or any of their respective predecessors in interest.

 

100

 

SECTION 8.11.    Use of Proceeds.

 

(a)           Borrower will use
the proceeds of:

 

(i)            Term A Facility Loans and the
Term B Facility Loans to finance the Transactions, and

 

(ii)           Revolving Loans for working capital,
capital expenditures to the extent permitted hereunder, Permitted Acquisitions
to the extent permitted hereunder and general corporate purposes; provided, however, that
not more than $662.5 million of the proceeds of Revolving Loans may be used by
Borrower to finance the Transactions.

 

(b)           No Company is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock.  No part
of the proceeds of any extension of credit (including any Loans and Letters of
Credit) hereunder will be used directly or indirectly and whether immediately,
incidentally or ultimately to purchase or carry any Margin Stock or to extend credit
to others for such purpose or to refund Indebtedness originally incurred for
such purpose or for any purpose that entails a violation of, or this is
inconsistent with, the provisions of Regulation T, Regulation U or Regulation
X.  The pledge of any Equity Interests by
any Credit Party pursuant to the Security Agreement does not violate such
regulations.

 

SECTION 8.12.    Subsidiaries.

 

(a)           Schedule 8.12(a) sets
forth a true and complete list of the following:  (i) all the Subsidiaries of Borrower as
of the Closing Date after giving effect to the Argosy Acquisition; (ii) the
name and jurisdiction of incorporation or organization of each such Subsidiary
as of the Closing Date after giving effect to the Argosy Acquisition; and (iii) as
to each such Subsidiary, the percentage and number of each class of Equity
Interests of such Subsidiary owned by Borrower and its Subsidiaries as of the
Closing Date after giving effect to the Argosy Acquisition.

 

(b)           Schedule 8.12(b) sets
forth a true and complete list of all the Immaterial Subsidiaries as of the
Closing Date after giving effect to the Argosy Acquisition.

 

(c)           Schedule 8.12(c) sets
forth a true and complete list of all the Unrestricted Subsidiaries as of the
Closing Date after giving effect to the Argosy Acquisition.

 

SECTION 8.13.    Ownership of Property; Liens.

 

(a)           Except as set forth
on Schedule 8.13(a), Borrower and each of its Restricted
Subsidiaries has good and valid title to, or a valid (with respect to Real
Property) leasehold interest in, all material assets and Property (including
Mortgaged Real Property) (tangible and intangible) owned by it (except insofar
as marketability may be limited by any laws or regulations of any Governmental
Authority affecting such assets), and all such assets and Property are free and
clear of all Liens other than Permitted Liens and are subject to no Liens other
than Permitted Collateral Liens.  Except
as may be disclosed to the Lenders and/or Collateral Agent prior to the date of
the applicable Borrowing substantially all of the assets and 

 

101

 

Property owned
by, leased to or used by Borrower and each of its Restricted Subsidiaries in
its respective businesses are in good operating condition and repair in all
material respects, ordinary wear and tear excepted, except in each case where
the failure of such asset to meet such requirements would not result in a
Material Adverse Effect.

 

(b)           Schedule 8.13(b) sets
forth a true, complete and correct list of each of the Vessels owned, used or
occupied by Borrower or a Restricted Subsidiary as of the Closing Date, including
the owner of the Vessel, the name of the Vessel, the official number (if any)
of the Vessel and the location where such Vessel is docked or stored.  Borrower or a Restricted Subsidiary owns all
right, title and interest in and to each of the Mortgaged Vessels free and
clear of all Liens other than Permitted Liens and subject to no Liens other
than Permitted Collateral Liens. 

 

SECTION 8.14.    Security Interest; Absence of Financing
Statements; Etc.

 

(a)           The Security
Documents, once executed and delivered, will create, in favor of Collateral
Agent for the benefit of the Secured Parties, as security for the obligations
purported to be secured thereby, a valid and enforceable security interest in
and Lien upon all of the Collateral, and upon (i) filing, recording,
registering or taking such other actions as listed in Schedule 7 to
the Perfection Certificate with the appropriate Governmental Authorities
(including payment of applicable filing and recording taxes), (ii) the
taking of possession or control by Collateral Agent of the Pledged Collateral
with respect to which a security interest may be perfected only by possession
or control which possession or control shall be given to Collateral Agent to
the extent possession or control by Collateral Agent is required by the Security
Agreement) and (iii) delivery of the applicable documents to Collateral
Agent in accordance with the provisions of the applicable Security Documents,
for the benefit of the Secured Parties, such security interest shall be a
perfected security interest in and Lien upon all of the Collateral (subject to
any applicable provisions set forth in the Security Agreement with respect to
limitations as to perfection of Liens on the Pledged Collateral described
therein) superior to and prior to the rights of all third persons and subject
to no Liens other than Permitted Collateral Liens.

 

(b)           Each Ship Mortgage,
once executed and delivered, will be effective to create, and will create upon
filing and/or recording of such Ship Mortgage with the appropriate Governmental
Authorities (including payment of applicable filing and recording taxes), in
favor of Collateral Agent for the benefit of the Secured Parties a legal, valid
and enforceable preferred mortgage over the whole of the applicable Mortgaged
Vessel as collateral security for the payment and performance of the Loans and
the other Obligations, and each Ship Mortgage, upon filing and recording in the
National Vessel Documentation Center of the United States Coast Guard, creates
in favor of Collateral Agent for the benefit of the Secured Parties a preferred
mortgage upon the applicable Mortgaged Vessel under Chapter 313 of Title 46 of
the United States Code, free and clear of all Liens other than Permitted Liens
and subject to no Liens other than Permitted Collateral Liens.

 

SECTION 8.15.    Licenses and Permits.  Except as set forth on Schedule 8.15,
Borrower and each of its Restricted Subsidiaries hold all material governmental
permits, licenses, authorizations, consents and approvals necessary for
Borrower and its Restricted 

 

102

 

Subsidiaries
to own, lease, and operate their respective Properties and to operate their
respective businesses as now being conducted (collectively, the “Permits”), except for Permits the failure of which to obtain
would not have a Material Adverse Effect. 
None of the Permits has been modified in any way since the Closing Date
that would have a Material Adverse Effect. 
Except as set forth on Schedule 8.15, all Permits are in
full force and effect except where the failure to be in full force and effect
would not have a Material Adverse Effect. 
Except as set forth on Schedule 8.15, neither Borrower nor
any of its Restricted Subsidiaries has received written notice that any Gaming
Authority has commenced proceedings to suspend, revoke or not renew any such
Permits where such suspensions, revocations or failure to renew would have a
Material Adverse Effect.

 

SECTION 8.16.    True and Complete Disclosure.  The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of any
Credit Party to any Creditor in connection with this Agreement and the other
Credit Documents or included or delivered pursuant thereto, but in each case
excluding all projections, whether prior to or after the date of this
Agreement, when taken as a whole, do not, contain any untrue statement of
material fact or omit to state a material fact necessary in order to make the
statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. 
The projections and pro forma financial information furnished at any
time by any Credit Party to any Creditor pursuant to this Agreement have been
prepared in good faith based on assumptions believed by Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount and no Credit Party, however, makes any representation as
to the ability of any Company to achieve the results set forth in any such projections.  As of the Closing Date, the documents filed
by Borrower with the SEC under the Exchange Act (including, in each case, all
amendments and supplements thereto) since December 31, 2003, in each case,
shall be true and correct in all material respects and no such document
contains any untrue statement of material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading.  Each of the
representations and warranties contained in the Argosy Acquisition Agreement
made by each of Borrower and Argosy and their respective Subsidiaries therein
are true and correct in all material respects when made and at and as of the
Closing Date as if made on and as of the Closing Date (unless expressly stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date) (it being understood that the representation or warranty in this
sentence that pertains to representations and warranties in the Argosy
Acquisition Agreement made by Argosy and its Subsidiaries (without giving
effect to the consummation of the Argosy Acquisition) shall be limited to the
knowledge of Borrower).  There is no fact
known to Borrower or any of its Restricted Subsidiaries that would have a
Material Adverse Effect that has not been disclosed herein, in the other Credit
Documents, in the Confidential Information Memorandum, or in any other
documents, certificates and written statements furnished to Lead Arrangers, the
other Agents and the Lenders for use in connection with the transactions contemplated
hereby and by the other Credit Documents, or in any documents filed by Borrower
with the SEC under the Exchange Act. 
Each Credit Party understands that all such statements, representations
and 

 

103

 

warranties
shall be deemed to have been relied upon by the Lenders as a material
inducement to make each extension of credit hereunder.

 

SECTION 8.17.    Solvency.  As of each Funding Date, immediately prior to
(in the case of the initial Funding Date) and immediately following the
consummation of the Transactions and the extensions of credit to occur on such
Funding Date, Borrower (on a consolidated basis with its Restricted
Subsidiaries) is and will be Solvent (after giving effect to Section 6.07)
(in the case of the initial Funding Date, assuming the absence of a Default or
Event of Default, regardless of the existence thereof).

 

SECTION 8.18.    Subordinated Debt.  The Obligations are senior debt with respect
to all Indebtedness of Borrower or any of its Restricted Subsidiaries that is
contractually subordinated in right of payment to any other Indebtedness of
Borrower or any such Restricted Subsidiary and entitled to the full benefits of
all subordination provisions therein and such subordination provisions are in
full force and effect.

 

SECTION 8.19.    Intellectual Property.  Except as set forth on Schedule 8.19,
Borrower and each of its Restricted Subsidiaries owns or possesses adequate
licenses or otherwise has the right to use all of the patents, patent applications,
trademarks, trademark applications, service marks, service mark applications,
trade names, copyrights, trade secrets, know-how and processes (collectively, “Intellectual Property”) (including, as of the Closing Date,
all Intellectual Property listed in Schedules 11(a), 11(b) and
11(c) to the Initial Perfection Certificate) that are necessary for
the operation of its business as presently conducted except where failure to
own or have such right would not have a Material Adverse Effect and, as of the
Closing Date, all registrations listed in Schedules 11(a), 11(b) and
11(c) to the Initial Perfection Certificate are valid and in full
force and effect, except where the invalidity of such registrations would not,
individually or in the aggregate, have a Material Adverse Effect.  Except as set forth on Schedule 8.19,
as of the Closing Date, no claim is pending or, to the knowledge of Borrower,
threatened to the effect that Borrower or any of its Restricted Subsidiaries
infringes or conflicts with the asserted rights of any other person under any
material Intellectual Property, except for such claims that would not, individually
or in the aggregate, have a Material Adverse Effect.  Except as set forth on Schedule 8.19,
as of the Closing Date, no claim is pending or, to the knowledge of Borrower,
threatened to the effect that any such material Intellectual Property owned or
licensed by Borrower or any of its Restricted Subsidiaries or which Borrower or
any of its Restricted Subsidiaries otherwise has the right to use is invalid or
unenforceable, except for such claims that would not, individually or in the
aggregate, have a Material Adverse Effect.

 

SECTION 8.20.    Existing Indebtedness.  Schedule 8.20 sets forth a true
and complete list of all Indebtedness of Borrower and its Restricted
Subsidiaries (other than any intercompany Indebtedness) as of the Closing Date
(after giving effect to the Transactions) (the “Existing
Indebtedness”), in each case (other than the Obligations (other than
Indebtedness under Credit Swap Contracts)) showing the aggregate principal
amount thereof and the name of each respective borrower and any other entity
that guaranteed such Indebtedness.

 

SECTION 8.21.    Regulation H.  Except for the Real Property listed on Schedule 8.21
attached hereto, as of the Closing Date, no Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and 

 

104

 

Urban
Development as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968.

 

SECTION 8.22.    Insurance.  Borrower and each of its Restricted Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged.

 

SECTION 8.23.    Real Estate.

 

(a)           Schedule 8.23(a) sets
forth a true, complete and correct list of all Real Property owned and all Real
Property leased by Borrower or any of its Restricted Subsidiaries as of the
Closing Date, including a brief description thereof, including, in the case of
leases, the street address (to the extent available) and landlord name.  Borrower has delivered to Collateral Agent
true, complete and correct copies of all such leases.

 

(b)           Except as set forth
on Schedule 8.23(b), as of the Closing Date, to the best of
Borrower’s knowledge no Taking has been commenced or is contemplated with
respect to all or any portion of the Real Property or for the relocation of
roadways providing access to such Real Property that either individually or in
the aggregate would have a Material Adverse Effect.  

 

(c)           As of the Closing
Date, the Mortgaged Real Property includes (i) every parcel of Real
Property described by an appropriate legal description owned by Borrower or any
of its Restricted Subsidiaries having a fair market value, individually, in
excess of $10.0 million, and (ii) every material interest in Real Property
consisting of a lease having a fair market value, individually, in excess of
$10.0 million that expressly permits the tenant to mortgage its lease and that
expressly permits the tenant to mortgage its leasehold estate, except for (A) the
parcels of Real Property described on Schedule 8.23(a) on
which Liens were not granted or delivered at the Closing Date pursuant to the
last paragraph of Section 7.01 and (B) the Skrmetta Lease (as defined
in the Security Agreement). 

 

SECTION 8.24.    Leases.

 

(a)           Schedule 8.24(a) sets
forth a true and complete list of all material leases of Real Property as of
the Closing Date under which Borrower or any of its Restricted Subsidiaries is
a tenant.  Borrower and its Restricted
Subsidiaries have paid all material payments required to be made by it under
leases of Real Property where any of the Collateral is or may be located from
time to time, including, without limitation, the Ground Leases (other than any
amount the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of Borrower or such Restricted Subsidiary, as the
case may be, and any amounts that are due but not yet delinquent) except where
failure to make such payments would not have a Material Adverse Effect.

 

(b)           As of the Closing
Date, each of the material leases of Real Property listed on Schedule 8.24(a) is
in full force and effect and is legal, valid, binding and enforceable against
the Credit Party party thereto, in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws of general applicability
from time to time in effect affecting the enforcement of 

 

105

 

creditors’
rights and remedies and (ii) the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).  As of the Closing
Date, no such lease has been amended, modified or assigned in any materially
adverse manner except as set forth on Schedule 8.24(b).  Except as set forth on Schedule 8.24(b),
as of the Closing Date, Borrower has not received written notice from any
landlord under any such lease listed on Schedule 8.24(a) of
any existing breach, default, event of default or, to the best of Borrower’s
knowledge, event that, with or without notice or lapse of time or both, would
constitute a breach, default or an event of default by any Credit Party party
to such lease that would have a Material Adverse Effect.

 

(c)           As of the Closing
Date, with respect to each Ground Lease with respect to which a Credit Party
has granted a Mortgage on its interest thereunder, Borrower has used
commercially reasonable efforts (which shall not include the payment of
consideration other than reasonable attorneys’ fees and other expenses
reasonably incidental thereto) to obtain the applicable Estoppel from the
ground lessor, and, to the extent obtained, such Estoppel does not reveal any
breach or default by any party thereto or any facts which would, in the case of
any of the foregoing, constitute a Material Adverse Effect.

 

(d)           As of the Closing
Date, the interest of the tenant under the Ground Leases is vested in the applicable
Credit Party as set forth on Schedule 8.23(a).  Borrower will, and will cause each applicable
Restricted Subsidiary to, use its commercially reasonable efforts (which shall
not include the payment of consideration other than reasonable attorneys’ fees
and other expenses reasonably incidental thereto) to (x) obtain duly executed
and delivered subordination, non-disturbance and attornment agreements (“Lender SNDAs”) in form and
substance reasonably satisfactory to Administrative Agent by the fee mortgagees
under the Leases set forth on Schedule 8.24(d)(x) and (y) obtain
the agreement of the ground lessors under the Leases set forth on Schedule 8.24(d)(y)
that they will obtain Lender SNDAs from any future fee mortgagees and cause any
existing or future fee mortgage on all or any part of the ground lessor’s
interest in any Real Property under a Ground Lease with respect to which
Borrower or a Restricted Subsidiary has granted a Mortgage on its leasehold
interest thereunder to be at all times subject and subordinate to, and not
attach to or encumber or otherwise affect, the lien of the applicable
Mortgages.  If, at any time after the
Closing Date, Borrower or any Restricted Subsidiary obtains knowledge of or
receives written notice from a ground lessor under a Ground Lease with respect
to which Borrower or any Restricted Subsidiary has granted a Mortgage on its
interest thereunder that a fee mortgage is encumbering the fee interest
underlying any other Ground Lease not set forth on Schedule 8.24(d)(x)
or Schedule 8.24(d)(y), Borrower will, and will cause each
applicable Restricted Subsidiary to, use its commercially reasonable efforts
(which shall not include the payment of consideration other than attorneys’
fees and other expenses reasonably incidental thereto) to obtain a duly
executed and delivered Lender SNDA by the fee mortgagee. 

 

SECTION 8.25.    Mortgaged Real Property.  Except as set forth on Schedule 8.25(a),
with respect to each Mortgaged Real Property, as of the Closing Date (a) there
has been issued a valid and proper certificate of occupancy or other local
equivalent, if any, for the use then being made of such Mortgaged Real Property
to the extent required by applicable Requirements of Law and there is no outstanding
citation, notice of violation or similar notice indicating that the Mortgaged
Real Property contains conditions which are not in compliance 

 

106

 

with local
codes or ordinances relating to building or fire safety or structural soundness
and (b) except as set forth on Schedule 8.25(b), there are no
material disputes regarding boundary lines, location, encroachment or
possession of such Mortgaged Real Property and Borrower has no knowledge of any
state of facts existing which could give rise to any such claim other than
those that would not have a Material Adverse Effect; provided, however, that with
respect to any Mortgaged Real Property in which Borrower or a Restricted
Subsidiary has a leasehold estate, the foregoing certifications shall be to
Borrower’s knowledge only.

 

SECTION 8.26.    New Jersey Joint Venture.  The ownership structure of the New Jersey
Joint Venture as of the Closing Date is as set forth on Schedule 8.26.

 

SECTION 8.27.    Material Adverse Effect.  Since December 31, 2004, there shall not
have occurred a Material Adverse Effect.

 

SECTION 8.28.    Anti-Terrorism Law.

 

(a)           No Credit Party and,
to the knowledge of the Credit Parties, none of its Affiliates is in violation
of any Requirement of Law relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, Public Law 107-56.

 

(b)           No Credit Party and,
to the knowledge of the Credit Parties, no Affiliate or broker or other agent
of any Credit Party acting or benefiting in any capacity in connection with the
Loans is any of the following:

 

(i)            a
person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order;

 

(ii)           a
person owned or controlled by, or acting for or on behalf of, any person that
is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order;

 

(iii)          a
person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;

 

(iv)          a
person that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order; or

 

(v)           a
person that is named as a “specially designated national and blocked person” on
the most current list published by the U.S. Treasury Department Office of Foreign
Assets Control (“OFAC”) at its official website or
any replacement website or other replacement official publication of such list.

 

(c)           No Credit Party and,
to the knowledge of the Credit Parties, no broker or other agent of any Credit
Party acting in any capacity in connection with the Loans (i) conducts any
business or engages in making or receiving any contribution of funds, goods or
services to or 

 

107

 

for the
benefit of any person described in Section 8.28(b), (ii) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order, or (iii) engages in or
conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

 

ARTICLE IX.

 

AFFIRMATIVE COVENANTS

 

Each Credit
Party, for itself and on behalf of its Restricted Subsidiaries, covenants and
agrees with the Creditors that, so long as any Commitment, Loan or L/C
Liability is outstanding and until payment in full of all amounts payable by
Borrower hereunder (other than contingent indemnification obligations described
in Section 13.03(b) which are not yet due and payable and, in the
case of any L/C Liability, except to the extent cash has been provided to L/C
Lender to collateralize to the reasonable satisfaction of L/C Lender the
aggregate amount of all such L/C Liabilities) (and each Credit Party covenants
and agrees that it will cause its Restricted Subsidiaries to observe and
perform the covenants herein set forth applicable to any such Restricted
Subsidiary):

 

SECTION 9.01.    Existence; Business Properties.

 

(a)           Borrower and each of
its Restricted Subsidiaries shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence,
except in a transaction permitted by Section 10.05 or, in the case of any
Restricted Subsidiary, where the failure to perform such obligations, individually
or in the aggregate, would not result in a Material Adverse Effect.

 

(b)           Borrower and each of
its Restricted Subsidiaries shall do or cause to be done all things necessary
to obtain, preserve, renew, extend and keep in full force and effect the
rights, licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its business except where
the failure to do so, individually or in the aggregate, would not result in a
Material Adverse Effect; comply with all applicable Requirements of Law
(including any and all Gaming Laws and any and all zoning, building, ordinance,
code or approval or any building permits or any restrictions of record or
agreements affecting the Real Property) and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the failure
to comply, individually or in the aggregate, would not result in a Material Adverse
Effect and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition (ordinary wear and tear excepted); provided, however, that nothing
in this Section 9.01(b) shall prevent (i) sales, conveyances,
transfers or other dispositions of assets, consolidations or mergers by or
involving any Company or any other transaction in accordance with Section 10.05;
(ii) the withdrawal by any Company of its qualification as a foreign
corporation in any jurisdiction where such withdrawal, individually or in the
aggregate, would not result in a Material Adverse Effect; or (iii) the
abandonment by any Company of any rights, permits, authorizations, copyrights,
trademarks, trade names, franchises, licenses and patents that such Company reasonably
determines are not useful to its business.

 

108

 

SECTION 9.02.    Insurance.

 

(a)           Borrower and its
Restricted Subsidiaries shall maintain with financially sound and reputable
insurance companies not Affiliates of Borrower insurance on its Property in at
least such amounts and against at least such risks as are customarily insured
against by companies engaged in the same or a similar business and owning
similar properties in localities where Borrower or the applicable Restricted
Subsidiary operates; and furnish to Administrative Agent, upon written request,
information as to the insurance carried. 
All insurance shall provide that no cancellation thereof shall be
effective until at least 30 days after receipt by Collateral Agent of written
notice thereof.  Collateral Agent shall
be named as an additional insured on all liability insurance policies of Borrower
and each of its Restricted Subsidiaries (other than directors and officers
liability insurance) and Collateral Agent shall be named as loss payee on all
property insurance policies of each such person.

 

(b)           Borrower and each of
its Restricted Subsidiaries shall deliver to Administrative Agent on behalf of
the Secured Parties, (i) on or prior to the Closing Date, a certificate
dated on or prior (but close) to the Closing Date showing the amount and types
of insurance coverage as of such date, (ii) promptly following receipt of
any notice from any insurer of cancellation or material change in coverage from
that existing on the Closing Date, a copy of such notice (or, if no copy is
available, notice thereof), and (iii) promptly after such information has
been received in written form by Borrower or any of its Restricted
Subsidiaries, information as to any claim for an amount in excess of $5.0
million with respect to any property and casualty insurance policy maintained
by Borrower or any of its Restricted Subsidiaries.

 

(c)           In the event that
the proceeds of any insurance claim are paid after Collateral Agent has
exercised its right to foreclose after an Event of Default such proceeds shall
be paid to Collateral Agent to satisfy any deficiency remaining after such
foreclosure.  Collateral Agent shall
retain its interest in the policies required to be maintained pursuant to this Section 9.02
during any redemption period.

 

SECTION 9.03.    Taxes.  Borrower and each of its Restricted
Subsidiaries shall timely file all material Tax Returns required to be filed by
it (which Tax Returns shall be accurate and complete in all material respects)
and pay and discharge promptly when due all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect
of its property, before the same shall become delinquent or in default; provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and Borrower and each of its Restricted Subsidiaries shall have set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of a Lien and, in the
case of Collateral, Borrower and each of its Restricted Subsidiaries shall have
otherwise complied with the provisions of the applicable Security Document in
connection with such nonpayment.

 

SECTION 9.04.    Financial Statements, Etc.  Borrower shall deliver to Administrative
Agent (for distribution by Administrative Agent to the Lenders) (unless a
Lender expressly declines in writing to accept) (and, in the case of Section 9.04(f) only,
to the West Virginia Lottery Commission and the West Virginia Racing
Commission):

 

109

 

(a)           Quarterly Financials.  As soon as available
and in any event within 50 days after the end of each of the first three
quarterly fiscal periods of each fiscal year beginning with the fiscal quarter
ending September 30, 2005, consolidated statements of operations, cash
flows and stockholders’ equity of Consolidated Companies for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheet of Consolidated
Companies as at the end of such period, setting forth in each case in
comparative form the corresponding consolidated statements of operations, cash
flows and stockholders’ equity for the corresponding period in the preceding
fiscal year to the extent such financial statements are available, accompanied
by a certificate of a Responsible Officer of Borrower, which certificate shall
state that said consolidated financial statements fairly present in all
material respects the consolidated financial condition, results of operations
and cash flows of Consolidated Companies in accordance with GAAP, consistently
applied, as at the end of, and for, such period (subject to normal year-end audit
adjustments and except for the absence of footnotes);

 

(b)           Annual Financials.  As soon as available
and in any event within 95 days after the end of each fiscal year beginning
with the fiscal year ending December 31, 2005, consolidated and
consolidating statements of operations, cash flows and stockholders’ equity of
Consolidated Companies for such year and the related consolidated and
consolidating balance sheet of Consolidated Companies as at the end of such
year, setting forth in each case in comparative form the corresponding
consolidated and consolidating information as of the end of and for the
preceding fiscal year to the extent such financial statements are available,
and, in the case of such consolidated financial statements, accompanied by an
opinion, without a going concern or similar qualification or exception as to
scope, thereon of BDO Seidman LLP or other independent certified public accountants
of recognized national standing which opinion shall state that said
consolidated financial statements fairly present in all material respects the
consolidated financial condition, results of operations and cash flows of
Consolidated Companies as at the end of, and for, such fiscal year in
conformity with GAAP, consistently applied; all such information will be
prepared in conformity with GAAP consistently applied;

 

(c)           Auditor’s Certificate;
Compliance Certificate.  (i) 
Concurrently with the delivery of the financial statements referred to in Section 9.04(b),
a certificate (which certificate may be limited or eliminated to the extent
required by accounting rules or guidelines) of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any Event
of Default relating to the Financial Maintenance Covenants, except as specified
in such certificate; and (ii) at the time it furnishes each set of
financial statements pursuant to Section 9.04(a) or Section 9.04(b),
a certificate of a Responsible Officer of Borrower (I) to the effect that no
Default has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the action
that the Companies have taken and propose to take with respect thereto) and
(II) setting forth in reasonable detail the computations necessary to determine
whether Borrower and its Restricted Subsidiaries are in compliance with Section 10.08
as of the end of the respective fiscal quarter or fiscal year;

 

110

 

(d)           Other Financial
Information.  Promptly upon filing, copies of all
financial statements, proxy statements and reports which Borrower or any
Restricted Subsidiary may make to or file with the SEC or any successor or
analogous Governmental Authority not otherwise required to be delivered
pursuant to this Agreement;

 

(e)           Interest Rate Certificates.
 From
and after the Trigger Date, together with the financial statements delivered
pursuant to Section 9.04(a) or Section 9.04(b), an Interest Rate
Certificate;

 

(f)            Notice of Default.  Promptly after any Responsible Officer of any
Company knows that any Default has occurred, a notice of such Default, breach
or violation describing the same in reasonable detail and a description of the
action that the Companies have taken and propose to take with respect thereto;

 

(g)           Environmental Matters.  Written notice of any claim, release of Hazardous
Material, condition, circumstance, occurrence or event arising under Environmental
Law which would have, individually or in the aggregate, a Material Adverse Effect;

 

(h)           Annual Budgets.
 Unless
a Lender declines to accept, beginning with the fiscal year of Borrower
commencing on January 1, 2006, as soon as practicable and in any event
within 10 days after the approval thereof by the board of directors of Borrower
(but not later than 90 days after the beginning of each fiscal year of
Borrower), a consolidated plan and financial forecast for such fiscal year,
including a forecasted consolidated balance sheet and forecasted consolidated
statements of income and cash flows of Consolidated Companies for such fiscal
year and for each quarter of such fiscal year, together with an Officer’s
Certificate containing an explanation of the assumptions on which such
forecasts are based and stating that such plan and projections have been
prepared using assumptions believed in good faith by management of Borrower to
be reasonable at the time made (it being recognized by the Lenders that such
plan and projections are not to be viewed as fact and that actual results
during the period or periods covered by such plan and projections may differ
from the forecasted results set forth therein by a material amount and no
Company makes any representation as to the ability of any Company to achieve
the results set forth in any such plan or projections);

 

(i)            Auditors’ Reports.
 Promptly
upon receipt thereof, copies of all annual, interim or special reports issued
to Borrower or any Restricted Subsidiary by independent certified public
accountants in connection with each annual, interim or special audit of Borrower’s
or such Restricted Subsidiary’s books made by such accountants, including any
management letter commenting on Borrower’s or such Restricted Subsidiary’s
internal controls issued by such accountants to management in connection with
their annual audit; provided, however, that such reports shall only be made available to
Administrative Agent and to those Lenders who request such reports through
Administrative Agent;

 

111

 

(j)            Lien Matters; Casualty and Damage to Collateral.

 

(A)          Prompt written notice of (i) the
incurrence of any Lien (other than a Permitted Lien (but excluding Liens
incurred pursuant to Section 10.02(l))) on the Collateral or any part
thereof, (ii) any Casualty Event or other insured damage to any material
portion of the Collateral or (iii) the occurrence of any other event that
in Borrower’s judgment is reasonably likely to materially adversely affect the
aggregate value of the Collateral; and

 

(B)           Each
year, at the time of delivery of annual financial statements with respect to
the preceding fiscal year pursuant to Section 9.04(b), a certificate of a
Responsible Officer of Borrower setting forth the information required pursuant
to Schedules  1(a), 1(b), 2, 3(a), 3(b),
4, 5, 8, 9, 10, 11(a) 11(b), 11(c),
12(a), 12(b), 12(c) and 13 to the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Initial Perfection Certificate or the date of the most
recent certificate delivered pursuant to this Section 9.04(j)(B);

 

(k)           Notice of Material Adverse
Effect.  Written notice of the
occurrence of any Material Adverse Effect;

 

(l)            Governmental Filings and Notices.
 Promptly
upon request by Administrative Agent, copies of any other material reports or
documents that were filed by Borrower or any of its Restricted Subsidiaries
with any Governmental Authority and copies of any and all material notices and
other material communications from any Governmental Authority with respect to
Borrower or any of its Restricted Subsidiaries;

 

(m)          ERISA Information.  Promptly after the occurrence of any ERISA
Event that, alone or together with any other ERISA Events that have occurred,
would reasonably be expected to result in liability to Borrower and its
Restricted Subsidiaries in an aggregate amount exceeding $50.0 million, a
written notice specifying the nature thereof, what action the Companies or
other ERISA Entity have taken, are taking or propose to take with respect
thereto, and, when known, any action taken or threatened by the IRS, Department
of Labor, PBGC or Multiemployer Plan sponsor with respect thereto; and

 

(n)           Miscellaneous.  Promptly, such financial information,
reports, documents and other information with respect to Borrower or any of its
Restricted Subsidiaries as Administrative Agent or the Required Lenders may
from time to time reasonably request.

 

Reports and
documents required to be delivered pursuant to Section 9.04 may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which Borrower posts such reports and/or
documents, or provides a link thereto on Borrower’s website on the Internet at
the website address specified below Borrower’s name on the signature hereof or
such other website address as provided in accordance with Section 13.02;
or (ii) on which such reports and/or documents are posted on Borrower’s
behalf on an Internet or intranet website, if any, to which each Lender and
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by Administrative Agent); provided that: (i) Borrower
shall deliver paper copies of such reports and/or documents to Administrative 

 

112

 

Agent upon request of Administrative Agent or
any Lender until a written request to cease delivering paper copies is given by
Administrative Agent or such Lender and (ii) Borrower shall provide to
Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such reports and/or documents and
Administrative Agent shall post such reports and/or documents and notify (which
may be by facsimile or electronic mail) each Lender of the posting of any such
reports and/or documents. 
Notwithstanding anything contained herein, in every instance Borrower
shall be required to provide paper copies of the compliance certificate and the
Interest Rate Certificate required by Section 9.04(c)(ii) and Section 9.04(e),
respectively, to Administrative Agent.

 

SECTION 9.05.    Maintaining Records; Access to Properties
and Inspections.  Borrower and its Restricted Subsidiaries
shall keep proper books of record and account in which entries true and correct
in all material respects and in material conformity with GAAP and all material
Requirements of Law are made.  Borrower
and its Restricted Subsidiaries will, subject to applicable Gaming Laws, permit
any representatives designated by Administrative Agent or any Lender to visit
and inspect the financial records and the property of Borrower or such
Restricted Subsidiary at reasonable times, upon reasonable notice and as often
as reasonably requested, and permit any representatives designated by
Administrative Agent or any Lender to discuss the affairs, finances and
condition of such Restricted Subsidiaries with the officers thereof and
independent accountants therefor (provided
Borrower has the opportunity to participate in such meetings); provided that, in the absence of a continuing Default or
Event of Default, only one such inspection by the Lenders (in their capacity as
Lenders) shall be permitted in any fiscal year (at the Lenders’ expense).  Borrower shall cause each of its Restricted
Subsidiaries to (i) maintain accounting records and other corporate
records and its documents separate from its Unrestricted Subsidiaries, (ii) maintain
its own bank accounts in their own name, separate from its Unrestricted
Subsidiaries and (iii) not pay or become liable for the Indebtedness of
its Unrestricted Subsidiaries except to the extent expressly permitted under
this Agreement.  Notwithstanding anything
to the contrary in this Section 9.05, no Company will be required to
disclose, permit the inspection, examination or making of extracts, or
discussion of, any document, information or other matter that (i) in
respect of which disclosure to Administrative Agent (or its designated
representative) or any Lender is then prohibited by law or contract or (ii) is
subject to attorney-client or similar privilege or constitutes attorney work
product.

 

SECTION 9.06.    Use of Proceeds.  Borrower shall use the proceeds of the Loans
only for the purposes set forth in Section 8.11.

 

SECTION 9.07.    Compliance with Environmental Law.  Borrower and its Subsidiaries shall (a) comply
with Environmental Law, and will keep or cause all Real Property to be kept
free of any Liens under Environmental Law, unless, in each case, failure to do
so would not have a Material Adverse Effect; (b) in the event of any
Hazardous Material at, on, under or emanating from any Real Property which
could result in liability under or a violation of any Environmental Law, in
each case which would have a Material Adverse Effect, undertake, and/or cause
any of their respective tenants or occupants to undertake, at no cost or expense
to Administrative Agent or any Creditor, any action required pursuant to
Environmental Law to mitigate and eliminate such condition; provided, however, that no Company shall be required to comply with any order
or directive which is being contested in good faith and by proper 

 

113

 

proceedings so
long as it has maintained adequate reserves with respect to such compliance to
the extent required in accordance with GAAP; and (c) at the written
request of Administrative Agent, in its reasonable discretion, provide, at no
cost or expense to Administrative Agent or any Creditor, an environmental site
assessment (including, without limitation, the results of any soil or groundwater
or other testing conducted at Administrative Agent’s request) concerning any
Real Property now or hereafter owned, leased or operated by Borrower or any of
its Restricted Subsidiaries, conducted by an environmental consulting firm
proposed by such Credit Party and approved by Administrative Agent in its
reasonable discretion indicating the presence or absence of Hazardous Material
and the potential cost of any required action in connection with any Hazardous
Material on, at, under or emanating from such Real Property; provided, however, that such request may be made only if (i) there has
occurred and is continuing an Event of Default, or (ii) circumstances
exist that reasonably could be expected to form the basis of an Environmental
Action against such Company or any such Real Property which would have a
Material Adverse Effect; if Borrower or any of its Restricted Subsidiaries
fails to provide the same within 60 days after such request was made (or in
such longer period as may be approved by Administrative Agent, in its reasonable
discretion), Administrative Agent may but is under no obligation to conduct the
same, and Borrower or its Restricted Subsidiary shall grant and hereby grants
to Administrative Agent and its agents access at reasonable times, and upon
reasonable notice to Borrower, to such Real Property and specifically grants
Administrative Agent an irrevocable non-exclusive license, subject to the
rights of tenants, to undertake such an assessment, all at no cost or expense
to Administrative Agent or any Creditor. 
Administrative Agent will use its reasonable best efforts to obtain from
the firm conducting any such assessment usual and customary agreements to
secure liability insurance and to treat its work as confidential and shall
promptly provide Borrower with all documents relating to such assessment.

 

SECTION 9.08.    Equal Security for Loans and Notes; Pledge
or Mortgage of Real Property and Vessels.

 

(a)           Subject to
compliance with applicable Gaming Laws, if any Credit Party shall acquire any
Property after the Closing Date, including, without limitation, pursuant to any
Permitted Acquisition (other than any Property described in Section 9.08(b) or
9.08(c)), or as to which Collateral Agent, for the benefit of the Secured
Parties, does not have a perfected Lien and as to which the Security Documents
are intended to cover, such Credit Party shall (subject to any applicable
provisions set forth in the Security Agreement with respect to limitations on
grant of security interests in certain types of Pledged Collateral and
perfections of Liens on such Pledged Collateral) promptly (i) execute and
deliver to Collateral Agent such amendments to the Security Documents or such
other documents as Collateral Agent deems necessary or advisable in order to
grant to Collateral Agent, for the benefit of the Secured Parties, security
interests in such Property and (ii) take all actions necessary or
advisable to grant to Collateral Agent, for the benefit of the Secured Parties,
a perfected first priority security interest, subject to no Liens other than
Permitted Collateral Liens.

 

(b)           If, after the
Closing Date, any Credit Party acquires, including, without limitation,
pursuant to any Permitted Acquisition, a fee interest with a fair market value
of $25.0 million or more in any other Real Property (other than to the extent
such Real Property was financed through the incurrence of any Purchase Money
Obligation permitted by Section 10.01), such Credit Party shall notify
Collateral Agent and, if requested by Required Lenders or 

 

114

 

Collateral Agent and subject to any applicable Gaming Laws, (i) take
such actions and execute such documents as Collateral Agent shall reasonably
require to confirm the Lien of an existing Mortgage, if applicable, or to
create a new Mortgage on such additional Real Property and (ii) cause to
be delivered to Collateral Agent, for the benefit of the Secured Parties, all
documents and instruments reasonably requested by Collateral Agent or as shall
be necessary in the opinion of counsel to Collateral Agent to create on behalf
of the Secured Parties a valid perfected mortgage Lien, subject only to
Permitted Collateral Liens, including the
following:

 

(1)                                  a
Mortgage in favor of Collateral Agent, for the benefit of the Secured Parties,
in form for recording in the recording office of the jurisdiction where such
Mortgaged Real Property is situated, together with such other documentation as
shall be required to create a valid mortgage Lien under applicable law, which
Mortgage and other documentation shall be reasonably satisfactory to Collateral
Agent and shall be effective to create in favor of Collateral Agent for the
benefit of the Secured Parties a Mortgage Lien on such Mortgaged Real Property
subject to no Liens other than Permitted Collateral Liens; and

 

(2)                                  with
respect to each Mortgage and each Mortgaged Real Property, in each case to the
extent reasonably requested by Required Lenders or Collateral Agent, each of
the items set forth in Sections 7.01(iii)(c), 7.01(vi)(c)(i)(2) and
7.01(xvi).

 

(c)                                  If,
after the Closing Date, any Credit Party acquires, including, without
limitation, pursuant to any Permitted Acquisition, a fee interest in any other
Vessel or a Replacement Vessel (in the case of such other Vessel or Replacement
Vessel located or otherwise maintained in the United States, such other Vessel
or Replacement Vessel that is registered with the United States Coast Guard)
(other than to the extent such other Vessel or Replacement Vessel was financed
through the incurrence of any Purchase Money Obligation permitted by Section 10.01),
such Credit Party shall notify Collateral Agent and, if requested by Required
Lenders or Collateral Agent and subject to any applicable Gaming Laws, (i) take
such actions and execute such documents as Collateral Agent shall reasonably
require to confirm the Lien of an existing Ship Mortgage, if applicable, or to
create a new Ship Mortgage on such other Vessel or Replacement Vessel and (ii) cause
to be delivered to Collateral Agent, for the benefit of the Secured Parties,
all documents and instruments reasonably requested by Collateral Agent or as
shall be necessary in the opinion of counsel to Collateral Agent to create on
behalf of the Secured Parties a legal, valid and enforceable first preferred
ship mortgage under Chapter 313 of Title 46 of the United States Code
subject to Permitted Collateral Liens, including the
following:

 

(1)                                  a
Ship Mortgage reasonably satisfactory to Collateral Agent, granting in favor of
Collateral Agent for the benefit of the Secured Parties a legal, valid and
enforceable first preferred ship mortgage on each such other Vessel or
Replacement Vessel under Chapter 313 of Title 46 of the United States Code
subject to Permitted Collateral Liens, executed and delivered by a duly
authorized officer of the appropriate Credit Party, together with such
certificates, affidavits and instruments as shall be reasonably required in
connection with filing or recordation thereof and to grant a Lien on each such
other Vessel or Replacement Vessel; and

 

(2)                                  with
respect to each Ship Mortgage and each such other Vessel or Replacement Vessel,
in each case to the extent reasonably requested by Required Lenders

 

115

 

or Collateral Agent, certificates of insurance as required by each Ship
Mortgage, which certificates shall comply with the insurance requirements
contained in Section 9.02 and the applicable Ship Mortgage.

 

(d)                                 Notwithstanding
anything contained in Sections 9.08(a), 9.08(b) and 9.08(c) to the
contrary, in each case, it is understood and agreed that no Lien(s),
Mortgage(s) and/or Ship Mortgage(s) in favor of Collateral Agent on any after
acquired Property of the applicable Credit Party shall be required to be
granted or delivered at such time as provided in such Sections (as applicable)
as a result of such Lien(s), Mortgage(s) and/or Ship Mortgage(s) being
prohibited by the applicable Gaming Authorities or applicable Law; provided, however,
that Borrower has used its commercially reasonable efforts to obtain such approvals.

 

(e)                                  (A)                              With
respect to an Undelivered Closing Collateral or any part thereof, at such time
as Borrower reasonably believes such prohibition no longer exists, Borrower
shall use commercially reasonable efforts to seek the approval of the applicable
Gaming Authorities for any such Undelivered Closing Collateral and, if such
approval is so obtained, Borrower shall comply with Section 9.08 (treating
any Property or Restricted Subsidiary, as the case may be, that would have been
subject to any Undelivered Closing Collateral as Property or Restricted
Subsidiary acquired after the Closing Date) and with clauses (A) and (B) in
Section 9.11. 

 

(B)                                With respect to
Lien(s), Mortgage(s) and/or Ship Mortgage(s) relating to any Property acquired
by any Credit Party after the Closing Date or any Property of any Additional
Credit Party or with respect to any Guarantee of any Additional Credit Party,
in each case that were not granted or delivered pursuant to Section 9.08(d) or
to the second paragraph in Section 9.11, as the case may be, at such time
as Borrower reasonably believes such prohibition no longer exists, Borrower
shall use commercially reasonable efforts to seek the approval from the
applicable Gaming Authorities for such Lien(s), Mortgage(s), Ship Mortgage(s)
and/or Guarantee and, if such approval is so obtained, Borrower shall comply
with Sections 9.08(a), 9.08(b) and/or 9.08(c) or with Section 9.11,
as the case may be.

 

(C)                                If at such time as
Borrower shall no longer be required to divest all or any part of the Argosy
Baton Rouge Assets in accordance with and pursuant to the FTC Order (any such Argosy
Baton Rouge Assets not required to be divested, the “Non-Divested
Argosy Baton Rouge Assets”), or Borrower retains any Property
pursuant to the approval of the Federal Trade Commission of the United States
as provided in the FTC Order (the “Retained Property”),
Borrower shall, in each case, use commercially reasonable efforts to seek the approval
of the applicable Gaming Authorities for any Lien(s), Mortgage(s) or Ship
Mortgage(s), as applicable, in favor of the Collateral Agent on the
Non-Divested Argosy Baton Rouge Assets or the Retained Property, as the case
may be, and for the Guarantee of any Argosy Louisiana Subsidiary (to the extent
that the Equity Interests of such Argosy Louisiana Subsidiary constitutes part
of the Non-Divested Argosy Baton Rouge Assets), and if such approval is so
obtained, Borrower shall comply with Section 9.08 (treating any such
Non-Divested Argosy Baton Rouge Assets or Retained Property as Property, or
such Argosy Louisiana Subsidiary as a Restricted Subsidiary, in each case as
acquired after the Closing Date) and with clauses (A) and (B) in Section 9.11.

 

116

 

SECTION 9.09.           Security Interests;
Further Assurances.  Each Credit Party shall, promptly, upon the
reasonable request of Collateral Agent, and assuming the request does not
violate any Gaming Law or, if necessary, is approved by the Gaming Authority,
at Borrower’s expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by Collateral Agent reasonably
necessary or desirable to create, protect or perfect or for the continued
validity, perfection and priority of the Liens on the Collateral covered
thereby (subject to any applicable provisions set forth in the Security
Agreement with respect to limitations on grant of security interests in certain
types of Pledged Collateral and perfections of Liens on such Pledged
Collateral) subject to no Liens other than Permitted Collateral Liens, or use
commercially reasonable efforts to obtain any consents, including, without
limitation, landlord or similar lien waivers and consents, as may be reasonably
requested by Collateral Agent (it being understood that no landlord consents
shall be required in respect of Properties which efforts were unsuccessfully
made under the Existing Borrower Credit Agreement) necessary or appropriate in
connection therewith.  Upon the exercise
by Collateral Agent or the Lenders of any power, right, privilege or remedy
pursuant to any Credit Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority,
Borrower and each of its Restricted Subsidiaries shall execute and deliver all
applications, certifications, instruments and other documents and papers that
Collateral Agent or the Lenders may be so required to obtain.  If Collateral Agent reasonably determines
that it is required by applicable law or regulation to have appraisals prepared
in respect of the Real Property of any Credit Party constituting Collateral,
Borrower shall provide to Collateral Agent appraisals that satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of
FIRREA.

 

SECTION 9.10.           Interest Rate Protection
Agreements.  On or
within 100 days after the Closing Date not less than 50% of the aggregate
principal amount of then outstanding Consolidated Indebtedness (other than
Indebtedness under the Revolving Facility) shall be either (x) fixed rate debt or
(y) debt subject to Interest Rate Protection Agreements having terms and
conditions reasonably satisfactory to Administrative Agent (with a term that
shall not be required to be later than the third anniversary of the Closing
Date) and with one or more persons that at the time of execution of such
Interest Rate Protection Agreements are Lenders or their respective Affiliates,
including, without limitation, the Interest Rate Protection Agreement listed on
Schedule 9.10, or (z) any combination of (x) and (y) above.

 

SECTION 9.11.           Additional Credit Parties.  Upon (i) any
Credit Party creating or acquiring any Subsidiary that is a Restricted
Subsidiary (other than an Immaterial Subsidiary) after the Closing Date, (ii) any
Restricted Subsidiary of a Credit Party ceasing to be an Immaterial Subsidiary
or otherwise designated pursuant to Section 9.13 as an Excluded Immaterial
Subsidiary or (iii) any Unrestricted Subsidiary becoming a Restricted
Subsidiary (other than an Immaterial Subsidiary) pursuant to Section 9.12
(such Restricted Subsidiary referenced in clause (i), (ii) or (iii) above,
an “Additional Credit Party”), such Credit
Party shall, assuming and to the extent that it does not violate any Gaming Law
or assuming it obtains the approval of the Gaming Authority to the extent such
approval is required by applicable Gaming Laws, (A) cause each such
Restricted Subsidiary (other than a Foreign Subsidiary) to promptly (but in any
event within 45 days (or 95 days, in the event of any Discharge of any

 

117

 

Indebtedness in connection with the acquisition of any such Subsidiary)
after the later of such event described in clause (i), (ii), (iii) or (iv) above
or receipt of such approval (or such longer period of time as Administrative
Agent may agree to in its sole discretion), execute and deliver all such
agreements, guarantees, documents and certificates (including Joinder Agreements,
any amendments to the Credit Documents and a Perfection Certificate)) as
Administrative Agent may reasonably request in order to have such Restricted
Subsidiary become a Subsidiary Guarantor and (B) promptly (I) execute and
deliver to Collateral Agent such amendments to or additional Security Documents
as Collateral Agent deems necessary or advisable in order to grant to Collateral
Agent for the benefit of the Secured Parties, a perfected security interest in
the Equity Interests and debt securities of such new Subsidiary which are owned
by any Credit Party and required to be pledged pursuant to the Security
Agreement, (II) deliver to Collateral Agent the certificates (if any)
representing such Equity Interests and debt securities, together with (x) in
the case of such Equity Interests, undated stock powers endorsed in blank, and
(y) in the case of such debt securities, endorsed in blank, in each case
executed and delivered by a Responsible Officer of Borrower or such Subsidiary,
as the case may be, (III) cause such new Restricted Subsidiary (other than
a Foreign Subsidiary) to take such actions necessary or advisable (including
executing and delivering a Joinder Agreement) to grant to Collateral Agent for
the benefit of the Secured Parties, a perfected security interest in the
collateral described in (subject to any requirements set forth in the Security
Agreement with respect to limitations on grant of security interests in certain
types of Pledged Collateral and perfections of Liens on such Pledged Collateral)
the Security Agreement and all other Property of such Restricted Subsidiary in
accordance with the provisions of Section 9.08 hereof with respect to such
new Restricted Subsidiary, or by law or as may be reasonably requested by
Collateral Agent, and (IV) deliver to Collateral Agent all legal opinions
reasonably requested relating to the matters described above covering matters
similar to those covered in the opinions in Exhibits F-1 through F-13,
as applicable, with respect to such Subsidiary Guarantor; provided,
however, that Borrower shall use its
commercially reasonable efforts to obtain such approvals for any Mortgage(s),
Ship Mortgage(s) and Lien(s) (including pledge of the Equity Interests of such
Subsidiary) to be granted by such Restricted Subsidiary and for the Guarantee
of such Restricted Subsidiary as soon as reasonably practicable.  All of the foregoing actions shall be at the
sole cost and expense of the Credit Parties. 

 

Notwithstanding
the foregoing in this Section 9.11 to the contrary, it is understood and
agreed that no Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee of the
applicable Additional Credit Party shall be required to be granted or delivered
at such time as provided in the paragraph above in this Section 9.11 as a
result of such Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee being
prohibited by the applicable Gaming Authorities, any other applicable
Governmental Authorities or applicable Law; provided, however, that Borrower has used its commercially reasonable
efforts to obtain such approvals for such Lien(s), Mortgage(s), Ship
Mortgage(s) and/or Guarantee.

 

SECTION 9.12.           Limitation
on Designations of Unrestricted Subsidiaries.

 

(a)                                  Borrower
may, on or after the Closing Date, designate any Subsidiary of Borrower (other
than a Subsidiary of Borrower which (1) owns one or more Principal Assets
or

 

118

 

(2) was a Credit Party as of the Closing Date) as an “Unrestricted
Subsidiary” under this Agreement (a “Designation”)
only if:

 

(i)                                     no Default or
Event of Default shall have occurred and be continuing at the time of or after
giving effect to such Designation; and

 

(ii)                                  Borrower would be
permitted under this Agreement to make an Investment at the time of Designation
(assuming the effectiveness of such Designation) in an amount (the “Designation Amount”) equal to the sum of (A) the fair
market value of the Equity Interest of such Subsidiary owned by Borrower and/or
any of the Restricted Subsidiaries on such date and (B) the aggregate
amount of Indebtedness of such Subsidiary owed to Borrower and the Restricted
Subsidiaries on such date.

 

(b)                                 Borrower
may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”), whereupon such Subsidiary shall then
constitute a Restricted Subsidiary, if:

 

(i)                                     no Default or
Event of Default shall have occurred and be continuing at the time and after
giving effect to such Revocation;

 

(ii)                                  after giving effect
to such Revocation as of the end of the most recently ended fiscal quarter of
Borrower on a pro forma basis, no Default or
Event of Default would exist under the financial covenants set forth in
Sections 10.08(a), 10.08(b) and 10.08(c); and

 

(iii)                               all Liens and
Indebtedness of such Unrestricted Subsidiary and its Subsidiaries outstanding
immediately following such Revocation would, if incurred at the time of such
Revocation, have been permitted to be incurred for all purposes of this
Agreement.

 

(c)                                  All
Designations and Revocations must be evidenced by an Officer’s Certificate of
Borrower delivered to Administrative Agent with the Responsible Officer so
executing such certificate certifying compliance with the foregoing provisions
of this Section 9.12(a) (in the case of any such Designations) and of
Section 9.12(b) (in the case of any such Revocations).

 

(d)                                 If
Borrower designates a Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with this Section 9.12, so long as no Default or Event of
Default exists, the Obligations of such Subsidiary Guarantor under the Credit
Documents shall terminate and be of no further force and effect and all Liens
granted by such Subsidiary Guarantor under the applicable Security Documents
shall terminate and be released and be of no further force and effect, and all
Liens on the Equity Interests of such Subsidiary Guarantor shall be terminated
and released and of no further force and effect, in each case, without any
action required by Administrative Agent or Collateral Agent; and, at Borrower’s
request, Administrative Agent and Collateral Agent will execute and deliver any
instrument evidencing such termination and Collateral Agent shall take all
actions appropriate in order to effect such termination and release of such
Liens and without recourse or warranty by Collateral Agent (including the
execution and delivery of appropriate UCC termination statements and such other
instruments and releases as

 

119

 

may be necessary and appropriate to effect such release).  Any such foregoing actions taken by
Administration Agent and/or Collateral Agent shall be at the sole cost and
expenses of Borrower.

 

SECTION 9.13.           Limitation
on Designation of Immaterial Subsidiaries.

 

(a)                                  If
any of the following events occurs:  (i) Borrower
or any Credit Party acquires or forms any Subsidiary having assets with an
aggregate fair market value of less than $25.0 million, (ii) any existing
Subsidiary that had not been an Immaterial Subsidiary subsequently has assets
with an aggregate fair market value of less than $25.0 million or (iii) the
aggregate fair market value of all the assets of an existing Subsidiary
increases but the aggregate fair market value thereof still is less than $25.0
million, and as a result of any of the foregoing events referred to in
clause (i), (ii) or (iii) above the aggregate fair market value
of the assets of all the Immaterial Subsidiaries exceeds the Immaterial
Subsidiary Threshold Amount, then, promptly after the occurrence of such event
that causes the aggregate fair market value of all Immaterial Subsidiaries to
exceed the Immaterial Subsidiary Threshold Amount, Borrower shall designate (an
“Excluded Designation”) one or more Immaterial
Subsidiaries that, but for this sentence, shall not constitute Immaterial
Subsidiaries for all purposes of this Agreement (an “Excluded
Immaterial Subsidiary”). 
Borrower may redesignate (a “Redesignation”)
an Excluded Immaterial Subsidiary as constituting an Immaterial Subsidiary for
purposes of this Agreement so long as such redesignated Excluded Immaterial
Subsidiary is in compliance with the requirements of the definition of
Immaterial Subsidiary and such Redesignation does not cause or otherwise result
in the aggregate fair market value of the assets of all Immaterial Subsidiaries
(after giving effect to the Redesignation of the Excluded Immaterial Subsidiary
as an Immaterial Subsidiary) to exceed the Immaterial Subsidiary Threshold
Amount.  For purposes of this Section 9.13(a),
fair market value shall be determined as of the most recently ended fiscal
quarter of Borrower.

 

(b)                                 Any
such Excluded Designation or Redesignation must be evidenced by an Officer’s
Certificate of Borrower delivered to Administrative Agent with the Responsible
Officer executing such certificate certifying compliance with this Section 9.13.  

 

(c)                                  If
Borrower redesignates an Excluded Immaterial Subsidiary as an Immaterial
Subsidiary in accordance with this Section 9.13, so long as no Default or
Event of Default exists, the Obligations of such Excluded Immaterial Subsidiary
(as a Subsidiary Guarantor) under the Credit Documents shall terminate and be
of no further force and all Liens granted by such Excluded Immaterial
Subsidiary (as a Subsidiary Guarantor) under the applicable Security Documents
shall terminate and be released and be of no further force and effect, in each
case, without any action required by Administrative Agent or Collateral Agent;
and, at Borrower’s request, Administrative Agent and Collateral Agent will
execute and deliver any instrument evidencing such termination and Collateral
Agent shall take all actions appropriate in order to effect the termination and
release of such Lien and without recourse or warranty by Collateral Agent
(including the execution and delivery of appropriate UCC termination statements
and such other instruments and releases as may be necessary and appropriate to
effect such release).  Any such foregoing
actions taken by Administration Agent and/or Collateral Agent shall be at the
sole cost and expense of Borrower.

 

SECTION 9.14.           Trigger
Event under Applicable Transfer Agreement.   If a Trigger Event occurs, Borrower
shall use commercially reasonable efforts to cause the

 

120

 

“manager” (as defined in the applicable Transfer Agreement) (or such
other equivalent person or persons identified in the applicable Transfer Agreement)
(each such manager or other equivalent person, a “Transfer
Agreement Person”) to comply with all terms and conditions of each
Credit Document applicable to a Restricted Subsidiary as if such person were a
Restricted Subsidiary hereunder and to comply with Section 9.11 as if each
such Person were acquired as a Restricted Subsidiary on the date of such
Trigger Event. 

 

ARTICLE X.

 

NEGATIVE COVENANTS

 

Each Credit
Party, for itself and on behalf of its Restricted Subsidiaries, covenants and
agrees with the Creditors that, so long as any Commitment, Loan or L/C
Liability is outstanding and until payment in full of all amounts payable by
Borrower hereunder (other than contingent indemnification obligations described
in Section 13.03(b) which are not yet due and payable and, in the
case of any L/C Liability, except to the extent cash or letters of credit have
been provided to L/C Lender to collateralize to the reasonable satisfaction of
L/C Lender the aggregate amount of all such L/C Liabilities) (and each Credit
Party covenants and agrees that it will cause its Restricted Subsidiaries to
observe and perform the covenants herein set forth applicable to any such Restricted
Subsidiary):

 

SECTION 10.01.    Indebtedness.  Borrower and its Restricted Subsidiaries will
not incur any Indebtedness, except:

 

(a)                                  Indebtedness
incurred pursuant to this Agreement and the other Credit Documents;

 

(b)                                 Indebtedness
outstanding on the Closing Date and listed on Schedule 8.20, and
any Permitted Refinancings thereof;

 

(c)                                  (i) Indebtedness
under Interest Rate Protection Agreements entered into in compliance with Section 9.10;
(ii) Indebtedness under any other Interest Rate Protection Agreements, provided that (x) such Interest Rate Protection Agreements
relate to payment obligations on Indebtedness otherwise permitted to be
incurred by the Credit Documents, (y) the notional principal amount of
such Interest Rate Protection Agreements at the time incurred does not exceed
the principal amount of the Indebtedness to which such Interest Rate Protection
Agreements relate and (z) the entering into of such Interest Rate Protection
Agreements are bona fide hedging activities and
are not for speculative purposes; and (iii) Indebtedness under any other
Swap Contracts (other than Interest Rate Protection Agreements) so long as such
other Swap Contracts are unsecured and the entering into of such other Swap
Contracts are bona fide hedging activities and
are not for speculative purposes;

 

(d)                                 intercompany
Indebtedness of Borrower and the Restricted Subsidiaries outstanding to the
extent permitted by Section 10.04(e);

 

(e)                                  in
addition to any Indebtedness permitted by the preceding Section 10.01(d),
Indebtedness of any Restricted Subsidiary to Borrower or another Restricted
Subsidiary or of Borrower to a Restricted Subsidiary constituting the purchase
price in respect of

 

121

 

intercompany transfers of goods and services made in the ordinary
course of business to the extent not constituting Indebtedness for borrowed
money;

 

(f)                                    Indebtedness
in respect of workers’ compensation claims, self-insurance obligations,
performance bonds, surety appeal or similar bonds, completion guarantees and
trade-related letters of credit provided by Borrower or any of its Restricted
Subsidiaries in the ordinary course of its business (including to support
Borrower’s or any of its Restricted Subsidiaries’ applications for Gaming
Licenses);

 

(g)                                 Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished within five
Business Days of its incurrence;

 

(h)                                 Indebtedness
(other than Indebtedness referred to in Section 10.01(b)) in respect of
Purchase Money Obligations and Capital Lease Obligations and refinancings or renewals
thereof, in an aggregate principal amount not to exceed at any time outstanding,
$100.0 million;

 

(i)                                     Indebtedness
arising in connection with endorsement of instruments for deposit in the
ordinary course of business;

 

(j)                                     (A) guarantees
by Borrower or Restricted Subsidiaries of Indebtedness otherwise permitted to
be incurred by Borrower or any Restricted Subsidiary under this Section 10.01
and (B) Investments permitted under Section 10.04(l) or 10.04(m) and
refinancings thereof;

 

(k)                                  Indebtedness
of a person that becomes a Subsidiary of Borrower or any of its Restricted
Subsidiaries after the date hereof in connection with a Permitted Acquisition; provided, however, that such Indebtedness existed at the time such person
became a Subsidiary and was not created in anticipation or contemplation
thereof, and Permitted Refinancings thereof;

 

(l)                                     so
long as no Default or Event of Default has occurred and is continuing,
Permitted Subordinated Indebtedness and Permitted Refinancings thereof or
Permitted Senior Indebtedness and Permitted Refinancings thereof;

 

(m)                               other
Indebtedness of any Company or Disqualified Capital Stock of Borrower not to
exceed $25.0 million in aggregate principal amount at any time outstanding; provided, however, that any Liens which secure any Indebtedness incurred
pursuant to this Section 10.01(m) shall be permitted to the extent
permitted to be incurred pursuant to Section 10.02(l) and such Liens shall
be junior or otherwise subordinated in all respects to any Liens in favor of
Collateral Agent on any of the Collateral to the reasonable satisfaction of
Administrative Agent;

 

(n)                                 unsecured
Indebtedness of the kind described in clause (d) of the definition of
“Indebtedness”;

 

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(o)                                 the
Pocono Downs Put Obligation (to the extent constituting Indebtedness); and

 

(p)                                 unsecured
Indebtedness of Borrower or any Restricted Subsidiary in an aggregate principal
amount not to exceed $10.0 million at any time outstanding;

 

provided; however,
that in the case of any incurrence of Indebtedness pursuant to this Section 10.01
in excess of $50.0 million (A) Borrower and its Restricted Subsidiaries
shall be in compliance, on a pro forma
basis after giving effect to such incurrence of Indebtedness and to the application
of all proceeds thereof, with the covenants set forth in Sections 10.08(a) and
10.08(b) as of the most recently ended Test Period, as if such
Indebtedness and such applications had occurred on the first day of such
relevant Test Period and (B) Borrower has delivered to Administrative
Agent an Officer’s Certificate to the effect set forth in clause (A) above.

 

In the event that
any item of Indebtedness meets more than one of the categories set forth above
in this Section 10.01, Borrower may classify such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one or
more of such clauses, at its election.

 

SECTION 10.02.    Liens.  Neither Borrower nor any Restricted Subsidiary
shall create, incur, grant, assume or permit to exist, directly or indirectly,
any Lien on any Property now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except (the “Permitted Liens”):

 

(a)                                  inchoate
Liens for taxes, assessments or governmental charges or levies not yet due and
payable or delinquent and Liens for taxes, assessments or governmental charges
or levies, which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with GAAP,
which proceedings (or orders entered in connection with such proceedings) have
the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;

 

(b)                                 Liens
in respect of property of Borrower or any Restricted Subsidiary imposed by law,
which were incurred in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlord’s
and mechanics’ liens, maritime liens and other similar Liens arising in the
ordinary course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that are being contested in good faith by
appropriate proceedings, so long as adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;

 

(c)                                  Liens
in existence on the Closing Date and set forth on Schedule 10.02
and Liens relating to any refinancing of the obligations secured by such Liens;
provided, however,
that (i) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase (except to the extent of fees and
interest on such Indebtedness, refinancings, refundings, renewals or
extensions); and (ii) such Liens do not encumber any Property other than
the Property (including proceeds) subject thereto on the Closing Date of
Borrower or any Restricted Subsidiary;

 

123

 

(d)                                 easements,
rights-of-way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor
title deficiencies on or with respect to any Real Property, in each case
whether now or hereafter in existence, not (i) securing Indebtedness and (ii) individually
or in the aggregate materially interfering with the conduct of the business of
Borrower and its Restricted Subsidiaries, taken as a whole;

 

(e)                                  Liens
arising out of judgments or awards not resulting in a Default;

 

(f)                                    Liens
(other than any Lien imposed by ERISA) (i) imposed by law or deposits made
in connection therewith in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, (ii) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise taxes),
surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money), (iii) arising by virtue of deposits made in the ordinary course of
business to secure liability for premiums to insurance carriers or (iv) Liens
on deposits made to secure Borrower’s or any of its Subsidiaries’ Gaming License
applications or to secure the performance of surety or other bonds issued in
connection therewith; provided, however, that to the extent such Liens are not imposed by
Law, such Liens shall in no event encumber any Property other than cash and
Cash Equivalents or, in the case of clause (iii), proceeds of insurance policies;

 

(g)                                 Leases
with respect to the assets or properties of any Credit Party or its respective
Subsidiaries, in each case entered into in the ordinary course of such Credit
Party’s or Subsidiary’s business so long as each of the material Leases entered
into after the date hereof are subordinate in all respects to the Liens granted
and evidenced by the Security Documents and do not, individually or in the
aggregate, (x) interfere in any material respect with the ordinary conduct of
the business of the Credit Parties and their respective Subsidiaries, taken as
a whole, or (y) materially impair the use (for its intended purposes) or the
value of the Properties of the Credit Parties and their respective
Subsidiaries, taken as a whole;

 

(h)                                 Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Borrower or such Restricted
Subsidiary in the ordinary course of business;

 

(i)                                     Liens
arising pursuant to Purchase Money Obligations or Capital Lease Obligations
incurred pursuant to Section 10.01(h); provided, however, that (i) the Indebtedness secured by any such
Lien (including refinancings thereof) does not exceed 100% of the cost of the
property being acquired, constructed, improved or leased at the time of the
incurrence of such Indebtedness (plus, in the case of refinancings, accrued
interest on the Indebtedness refinanced and fees relating thereto) and (ii) any
such Liens attach only to the property being financed pursuant to such Purchase
Money Obligations or Capital Lease Obligations (and directly related assets,
including proceeds and replacements thereof) and do not encumber any other
Property of Borrower or any Restricted Subsidiary (it being understood that all
Indebtedness to a single lender shall be

 

124

 

considered to
be a single Purchase Money Obligation, whether drawn at one time or from time to
time);

 

(j)                                     bankers’
Liens, rights of setoff and other similar Liens existing solely with respect to
cash and Cash Equivalents on deposit in one or more accounts maintained by Borrower
or any Restricted Subsidiary, in each case granted in the ordinary course of
business in favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled accounts and
netting arrangements; provided, however, that, unless
such Liens are non-consensual and arise by operation of law, in no case shall
any such Liens secure (either directly or indirectly) the repayment of any
Indebtedness;

 

(k)                                  Liens
on assets of a person existing at the time such person is acquired or merged
with or into or consolidated with Borrower or any Restricted Subsidiary (and
not created in connection with or in anticipation or contemplation thereof); provided, however, that
such Liens do not extend to assets not subject to such Liens at the time of
acquisition (other than improvements thereon) and are no more favorable to the
lienholders than the existing Lien;

 

(l)                                     other
Liens incurred with respect to any Indebtedness or other obligations of
Borrower or any of its Subsidiaries; provided, however, that (i) the
aggregate amount of such Indebtedness and other obligations secured by such
Liens shall not exceed $25.0 million at any time outstanding and (ii) any
such Liens shall be junior or otherwise subordinated in all respects to any
Liens in favor of Collateral Agent on any of the Collateral to the reasonable
satisfaction of Administrative Agent;

 

(m)                               licenses
of Intellectual Property granted by Borrower or any Restricted Subsidiary in
the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Borrower and its Restricted Subsidiaries,
taken as a whole;

 

(n)                                 Liens
pursuant to the Security Documents;

 

(o)                                 Permitted
Vessel Liens;

 

(p)                                 Liens
arising under applicable Gaming Laws; provided, however, that no such Lien constitutes a Lien securing repayment
of Indebtedness;

 

(q)                                 Liens
to secure Indebtedness and other obligations permitted under Section 10.01(c)(i) to
the extent that the secured party under such Indebtedness and other obligations
is a Swap Provider;

 

(r)                                    Liens
to secure Indebtedness and other obligations permitted under Section 10.01(c)(ii) to
the extent that the secured party under such Indebtedness and other obligations
is a Swap Provider;

 

125

 

(s)                                  Prior
Mortgage Liens with respect to the applicable Mortgaged Real Property;

 

(t)                                    Liens
on cash and Cash Equivalents deposited to Discharge, redeem or defease
Indebtedness; 

 

(u)                                 Liens
arising from precautionary UCC financing statements filings regarding operating
leases or consignment of goods entered into in the ordinary course of business;
and

 

(v)                                 Liens
created by the applicable Transfer Agreements.

 

In connection
with the granting of Liens of the types described in clauses (c), (i), (k),
(l), (s), (t) and (u) of this Section 10.02 by Borrower of any of its
Restricted Subsidiaries, Administrative Agent and Collateral Agent shall be
authorized to take any actions deemed appropriate by it in connection therewith
(including, without limitation, by executing appropriate lien subordination or
intercreditor agreements).  

 

Notwithstanding the foregoing to the contrary
in this Section 10.02 or in any other Credit Document, with respect to (i) any
Property of any Restricted Subsidiary on which Lien(s), Mortgage(s) and/or Ship
Mortgage(s) were not granted or delivered at the Closing Date pursuant to the
first sentence in the last paragraph of Section 7.01, (ii) any of the
Argosy Baton Rouge Assets on which Lien(s), Mortgage(s) and/or Ship Mortgage(s)
were not granted or delivered at the Closing Date pursuant to the second
sentence in the last paragraph of Section 7.01 and any Retained Property, (iii) any
Property acquired by any Credit Party after the Closing Date on which Lien(s),
Mortgage(s) and/or Ship Mortgage(s) were not granted or delivered pursuant to Section 9.08(d),
and (iv) any Property of any Additional Credit Party on which Lien(s),
Mortgage(s) and/or Ship Mortgage(s) were not granted or delivered pursuant to
the second paragraph in Section 9.11, neither Borrower nor any Restricted
Subsidiary shall create, incur, grant, assume or permit to exist, directly or indirectly,
any Lien on any such Property or Argosy Baton Rouge Assets unless and until
such time as Liens(s), Mortgage(s) and/or Ship Mortgage(s), as applicable, on
such Property or Argosy Baton Rouge Assets have been granted in favor of
Collateral Agent for the benefit of the Secured Parties, other than Permitted
Liens (excluding Permitted Liens of the types described in clauses (l), (q),
(r), (s) and (t) of this Section 10.02).

 

SECTION 10.03.    Sale and Leaseback
Transactions.  Neither
Borrower nor any Restricted Subsidiary will enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred unless (a) the sale of such
property is permitted by Section 10.05 and (b) any Liens arising in
connection with its use of such property are permitted by Section 10.02.

 

SECTION 10.04.    Investment, Loan and Advances.
 Neither Borrower nor any Restricted
Subsidiary will, directly or indirectly, make any Investment, except for the following:

 

126

 

(a)                                  Borrower
and its Restricted Subsidiaries may consummate the Transactions in accordance
with the provisions of the Transaction Documents;

 

(b)                                 Investments
outstanding on the Closing Date and identified on Schedule 10.04
and any Investments received in respect thereof without the payment of
additional consideration (other than through the issuance of or exchange of
Qualified Capital Stock);

 

(c)                                  Investments
in cash and Cash Equivalents; provided, however, that during
any time that Revolving Loans or Swingline Loans are outstanding, the aggregate
amount of cash and Cash Equivalents held by Borrower and its Restricted
Subsidiaries (other than (A) cash and Cash Equivalents utilized to
Discharge or redeem Indebtedness, (B) “cage cash” and other cash used in
the operation of Borrower’s and its Restricted Subsidiaries’ gaming and related
businesses, (C) cash and Cash Equivalents which Borrower and its
Restricted Subsidiaries reasonably expect to utilize in the succeeding 45 days,
(D) cash and Cash Equivalents used for the purposes described in Section 10.02(f),
and (E) cash and Cash Equivalents constituting an amount equal to the Net
Available Proceeds held pending application under Section 2.10(a)(i) or
Section 2.10(a)(iii)) shall not exceed 10% of the consolidated Companies’
gross revenues for the most recent period of twelve fiscal months for which
financial statements are available (calculated on a pro forma basis to give effect to acquisitions occurring
prior to any date of determination as if such acquisition had occurred on the
first day of such twelve-month period) for any period of ten (10) consecutive
Business Days (or such longer period as Administrative Agent may agree);

 

(d)                                 Borrower
may enter into Swap Contracts to the extent permitted by Section 10.01(c);

 

(e)                                  Investments
(i) by Borrower in any Restricted Subsidiary, (ii) by any Restricted
Subsidiary in Borrower and (iii) by a Restricted Subsidiary in another
Restricted Subsidiary; provided, however, that any
intercompany loans (other than intercompany loans payable by any Argosy
Louisiana Subsidiary) shall be evidenced by promissory notes and, to the extent
that the payee, holder or lender of such intercompany loan is a Credit Party,
such promissory note shall be pledged (and delivered) by such Credit Party as
Pledged Collateral pursuant to the Security Agreement in accordance with Section 9.08;

 

(f)                                    Borrower
and the Restricted Subsidiaries may sell or transfer assets to the extent
permitted by Section 10.05;

 

(g)                                 Investments
in securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers or in settlement of delinquent or overdue accounts
in the ordinary course of business;

 

(h)                                 Investments
made by Borrower or any Restricted Subsidiary as a result of consideration
received in connection with an Asset Sale made in compliance with Section 10.05;

 

(i)                                     Investments
consisting of moving, entertainment and travel expenses, drawing accounts and
similar expenditures made to officers, directors and employees in the ordinary
course of business not to exceed $10.0 million in the aggregate at any time outstanding;

 

127

 

(j)                                     Permitted
Acquisitions; provided,
however, that if such Permitted Acquisition
involves the acquisition of assets principally comprised of Complementary
Assets (a “Complementary Asset Acquisition”),
Borrower and/or any of its Restricted Subsidiaries shall not be permitted to
consummate such Complementary Asset Acquisition if, after giving effect to such
Complementary Asset Acquisition, the aggregate purchase price of all
Complementary Assets acquired or purchased in all Complementary Asset
Acquisitions during the term of this Agreement exceeds $25.0 million;

 

(k)                                  extensions
of trade credit (including to gaming customers) in the ordinary course of
business;

 

(l)            in addition to
Investments otherwise permitted by this Section 10.04, Investments (other than
Investments consisting of Principal Assets) by Borrower or any of its
Restricted Subsidiaries so long as such Investments to be made, together with
all existing Investments made pursuant to this Section 10.04(l), do not exceed
in the aggregate at any time outstanding $250.0 million plus
the aggregate amount of Equity Issuance Proceeds to the extent not previously
applied pursuant to Section 10.04(m). (For purposes of this Section 10.04(l),
the amount of such Investments outstanding shall be deemed to equal the
aggregate amount of such Investments minus the
amounts received by Borrower and its Restricted Subsidiaries with respect to
such Investments (including with respect to contracts related to such
Investments and including principal, interest, dividends, distributions, sale
proceeds, payments under contracts relating to such Investments or other
amounts));

 

(m)          in addition to
Section 10.04(l) above and other than Investments consisting of Principal
Assets, Investments (A) in Joint Ventures in which Borrower or any of its
Restricted Subsidiaries has control or with whom it has a management or similar
contract, (B) in any Joint Venture in which Borrower or any of its Restricted
Subsidiaries owns (directly or indirectly) at least 25% of the Equity Interest
of such Joint Venture or (C) in casinos and “racinos” where Borrower or any of
its Restricted Subsidiaries has entered into a management or similar contract
and such contract remains in full force and effect at the time of such
Investment; provided, however, that, if, on a pro forma basis after giving effect to any existing
Investments pursuant to this Section 10.04(m) and any Investments to be made
pursuant to this Section 10.04(m), the Consolidated Senior Leverage Ratio would
exceed 3.00 to 1.00, then Borrower and its Restricted Subsidiaries shall only
be permitted to make Investments pursuant to this Section 10.04(m) so long as
such Investments to be made pursuant to this Section 10.04(m), together with
(x) that portion of any Investment made pursuant to this Section 10.04(m) that
caused the Consolidated Senior Leverage Ratio to exceed 3.00 to 1.00 and (y) any
Investments made pursuant to this Section 10.04(m) while the Consolidated
Senior Leverage Ratio exceeds 3.00 to 1.00, do not exceed in the aggregate at
any time outstanding $300.0 million plus the
aggregate amount of Equity Issuance Proceeds to the extent not previously
applied pursuant to Section 10.04(l). 
(For purposes of this Section 10.04(m), the amount of such Investments
outstanding shall be deemed to equal the aggregate amount of such Investments minus the amounts received by Borrower and its Restricted
Subsidiaries with respect to such Investments (including with respect to any
management or similar contracts related to such Investments and including
principal, interest, dividends, distributions, sale proceeds, payments under
management or similar contracts relating to such Investments or other
amounts));

 

128

 

(n)                                 the
occurrence of a Reverse Trigger Event under any applicable Transfer Agreement;
and

 

(o)                                 the
acquisition of the Pocono Downs Assets pursuant to the Pocono Downs Sale
Documents;

 

provided; however,
in the case of any Investment made pursuant to this Section 10.04 in
excess of $50.0 million, (A) Borrower and its Restricted Subsidiaries
shall be in compliance, on a pro forma
basis after giving effect to such Investment, with the covenants set forth in
Sections 10.08(a), 10.08(b) and 10.08(c) as of the most recently
ended Test Period, as if such Investment had occurred on the first day of such
relevant Test Period and (B) Borrower has delivered to Administrative
Agent an Officer’s Certificate to the effect set forth in clause (A) above.

 

Notwithstanding
the foregoing in this Section 10.04, in no event shall the Credit Parties
make Investments in excess of $25.0 million in the aggregate in the Subsidiary
of Borrower that is the subject of a Transfer Agreement or the Transfer
Agreement Person in each case after the occurrence of the related Trigger Event
and prior to the occurrence of the related Reverse Trigger Event.

 

SECTION 10.05.    Mergers, Consolidations, Sales
of Assets and Acquisitions. 
Neither Borrower nor any Restricted Subsidiary will wind up, liquidate
or dissolve its affairs or enter into any transaction of merger or
consolidation (other than solely to change the jurisdiction of organization (to
the extent done in compliance with the applicable provisions of the Security
Agreement)), or convey, sell, lease or sublease (as lessor or sublessor),
transfer or otherwise dispose of any Principal Asset or all or any substantial
part of its business, property or assets, or purchase or otherwise acquire (in
one or a series of related transactions) all or substantially all the business,
property or fixed assets of, or Equity Interests in, any person or any division
or line of business of any person, except for:

 

(a)                                  Capital
Expenditures by Borrower and the Restricted Subsidiaries to the extent not
prohibited by Section 10.08(d);

 

(b)                                 Asset
Sales of used, worn out, obsolete or surplus Property by Borrower and the
Restricted Subsidiaries in the ordinary course of business and the abandonment
or other Asset Sale of Intellectual Property that is, in the reasonable
judgment of Borrower, no longer economically practicable to maintain or useful
in the conduct of the business of Borrower and its Restricted Subsidiaries
taken as a whole shall be permitted; and the termination or assignment of
Contractual Obligations to the extent such termination does not have a Material
Adverse Effect;

 

(c)                                  so
long as no Default or Event of Default then exists or would arise therefrom,
any Asset Sale of Non-Principal Assets for fair market value shall be permitted
so long as the Net Available Proceeds therefrom shall be applied as specified
in Section 2.10(a)(iii);

 

(d)                                 Investments
may be made to the extent permitted by Sections 10.04(a), (b), (c), (d), (e),
(g), (i), (k), (l) and (m) and Restricted Payments may be made to the extent permitted
by Section 10.06;

 

129

 

(e)                                  Borrower
and the Restricted Subsidiaries may dispose of cash and Cash Equivalents;

 

(f)                                    Borrower and the Restricted Subsidiaries may lease (as lessor or sublessor)
real or personal property;

 

(g)                                 licenses and sublicenses by Borrower or any of its Restricted
Subsidiaries of software and Intellectual Property in the ordinary course of
business shall be permitted;

 

(h)                                 Permitted Acquisitions (including by way of mergers or consolidations)
to the extent permitted pursuant to Section 10.04(j);

 

(i)                                     (A) Borrower or any Restricted Subsidiary may transfer or lease
property to or acquire or lease property from Borrower or any Restricted
Subsidiary; provided, however, that
the sum of (x) the aggregate fair market value of all Property transferred by
Borrower and Domestic Subsidiaries of Borrower that are Restricted Subsidiaries
to Foreign Subsidiaries of Borrower and acquired by Foreign Subsidiaries of
Borrower from Borrower and Domestic Subsidiaries of Borrower that are
Restricted Subsidiaries under this clause (A) plus
(y) all lease payments made by Borrower and Domestic Subsidiaries of Borrower
that are Restricted Subsidiaries to Foreign Subsidiaries of Borrower in respect
of leasing of property by Borrower and Domestic Subsidiaries of Borrower that
are Restricted Subsidiaries from Foreign Subsidiaries under this clause (A) shall
not exceed $25.0 million in any fiscal year of Borrower; (B) any
Restricted Subsidiary may merge or consolidate with or into Borrower (as long
as Borrower is the surviving corporation) or any Subsidiary Guarantor (as long
as, if such Restricted Subsidiary is to survive, such Restricted Subsidiary at
the time of such merger or consolidation is a Subsidiary Guarantor); (C) any
Restricted Subsidiary may merge or consolidate with or into any other
Restricted Subsidiary that is not a Subsidiary Guarantor (so long as, if either
Restricted Subsidiary is a Subsidiary Guarantor, the surviving Restricted
Subsidiary is or becomes a Subsidiary Guarantor in compliance with Section 9.11);
and (D) any Restricted Subsidiary may be voluntarily liquidated, voluntarily
wound up or voluntarily dissolved (so long as any such liquidation or winding
up does not constitute or involve an Asset Sale to any person other than to
Borrower or any other Restricted Subsidiary unless such Asset Sale is otherwise
permitted pursuant to Section 10.05); provided, however, that, in each case with respect to the foregoing in this Section 10.05(i),
the Lien on such property granted in favor of Collateral Agent under the
Security Documents shall be maintained in accordance with the provisions of this
Agreement and the applicable Security Documents.  Notwithstanding the proviso in the
immediately preceding sentence to the contrary, with respect to any property to
be transferred to any Argosy Louisiana Subsidiary pursuant this Section 10.05(i) and
any Lien granted in favor of Collateral Agent under the Security Documents
exists on such property and such property is required by the FTC Order to be
free and clear of any such Liens or Borrower otherwise reasonably determines
that it is necessary that such property be free and clear of any such Lien in
order comply with the FTC Order, then such Liens shall not be required to be
maintained on such property, in which case, upon such transfer, Collateral
Agent shall take all actions appropriate in order to effect the foregoing at
the sole cost and expense of Borrower and without recourse or warranty by
Collateral Agent (including the execution and delivery of appropriate UCC
termination statements and such other instruments and releases as may be
necessary and appropriate to effect such release);

 

130

 

(j)                                     voluntary
terminations of Swap Contracts shall be permitted in the ordinary course of
business;

 

(k)                                  conveyances,
sales, leases, transfers or other dispositions which would otherwise constitute
Asset Sales but for the dollar thresholds contained in the definition of Asset
Sales shall be permitted; 

 

(l)                                     the
transfer of capital stock of the Subsidiary of Borrower that is the subject of
the applicable Transfer Agreement to the related Trustee (as defined in the
applicable Transfer Agreement) in connection with the occurrence of a Trigger
Event pursuant to the terms of such Transfer Agreement and any transfer of such
capital stock to Borrower or any Restricted Subsidiary of Borrower by such
Trustee in connection with a Reverse Trigger Event pursuant to the terms of
such Transfer Agreement; 

 

(m)                               Borrower
or any Restricted Subsidiary may acquire the Pocono Downs Assets pursuant to
the terms of the Pocono Downs Sale Documents; and

 

(n)                                 so
long as no Default or Event of Default then exists or would arise therefrom, an
Asset Sale of only one of the Illinois Principal Assets for fair market value
shall be permitted, if and only if such Asset Sale is required by the Illinios
Gaming Board or pursuant to an agreement entered into between Borrower and the
Illinois Gaming Board and so long as the Net Available Proceeds therefrom shall
be applied as specified in Section 2.10(a)(iii). 

 

Notwithstanding
anything contained in this Agreement to the contrary, in no event may any
transfer, sale, conveyance or other disposition constitute all or substantially
all of Borrower’s property or assets.

 

To the extent
the Required Lenders waive the provisions of this Section 10.05 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 10.05, so long as no Default or Event of Default exists,
such Collateral (unless sold to Borrower or a Subsidiary Guarantor) shall be
sold free and clear of the Liens created by the Security Documents, and Collateral
Agent shall take all actions appropriate in order to effect the foregoing at
the sole cost and expense of Borrower and without recourse or warranty by
Collateral Agent (including the execution and delivery of appropriate UCC
termination statements and such other instruments and releases as may be
necessary and appropriate to effect such release).  To the extent the Collateral so sold
constitutes at least a majority of the Equity Interests in a Subsidiary Guarantor,
so long as no Default or Event of Default exists, the Obligations of such
Subsidiary Guarantor and all obligations of such Subsidiary Guarantor under the
Credit Documents shall terminate and be of no further force and effect, and
each of Administrative Agent and Collateral Agent shall take such actions, at
the sole expense of Borrower, as are appropriate in connection with such termination.

 

SECTION 10.06.    Restricted Payments.  Neither Borrower nor any of its Restricted
Subsidiaries shall, directly or indirectly, declare or make any Restricted
Payment at any time, except, without duplication, (a) Borrower or any
Restricted Subsidiary may make Restricted Payments to the extent permitted
pursuant to Section 2.09(b)(iii), (b) any Restricted Subsidiary of Borrower
may declare and make Restricted Payments to Borrower or any Wholly Owned
Subsidiary of Borrower which is a Restricted Subsidiary, (c) any
Restricted Subsidiary of

 

131

 

Borrower, if such Restricted Subsidiary is not a Wholly Owned
Subsidiary, may declare and make Restricted Payments in respect of its Equity
Interests to all holders of such Equity Interests generally so long as Borrower
or its respective Restricted Subsidiary that owns such Equity Interest or
interests in the person making such Restricted Payments receives at least its
proportionate share thereof (based upon its relative ownership of the subject
Equity Interests and the terms thereof), (d) Borrower and its Restricted
Subsidiaries may consummate the Transaction in accordance with the provisions
of the Transaction Documents, (e) Borrower and its Restricted Subsidiaries
may engage in transactions to the extent permitted by Section 10.04 and Section 10.05,
(f) Borrower and its Restricted Subsidiaries may make Restricted Payments
in respect of Disqualified Capital Stock issued in compliance with the terms
hereof and (g) Borrower may repurchase common stock or common stock
options from present or former officers, directors or employees (or heirs of, estates
of or trusts formed by such persons) of any Company upon the death, disability,
retirement or termination of employment of such officer, director or employee
or pursuant to the terms of any stock option plan or like agreement; provided, however, that
the aggregate amount of payments under this clause (g) shall not exceed
$10.0 million in any fiscal year of Borrower.

 

SECTION 10.07.    Transactions with Affiliates.  Neither Borrower nor any of its Restricted
Subsidiaries shall enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of Property, the rendering of any service
or the payment of any management, advisory or similar fees, with any Affiliate
(other than Borrower or any Restricted Subsidiary) unless such transaction is
otherwise permitted under this Agreement at the time entered into and upon fair
and reasonable terms no less favorable to Borrower or such Restricted
Subsidiary, as the case may be, than it would obtain in a comparable arm’s
length transaction with a person that is not an Affiliate; provided, however, that
notwithstanding the foregoing, Borrower and its Restricted Subsidiaries (i) may
enter into indemnification and employment agreements and arrangements with
directors, officers and employees, (ii) may enter into the transactions
described in Borrower’s SEC filings prior to the Closing Date, (iii) may
make Investments and Restricted Payments permitted hereunder and (iv) may
enter into the transactions contemplated by each applicable Transfer Agreement.

 

SECTION 10.08.    Financial Covenants.

 

(a)                                  Maximum Consolidated Total Leverage Ratio.  Borrower shall not permit the Consolidated
Total Leverage Ratio as of the last day of a fiscal quarter of Borrower set
forth in the table below to exceed the ratio set forth opposite such fiscal
quarter in the table below:  

 

	
  Fiscal Quarter Ending:

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  6.50 to 1.00

  
	
  December 31, 2005

  	
   

  	
  6.50 to 1.00

  
	
  March 31, 2006

  	
   

  	
  6.50 to 1.00

  
	
  June 30, 2006

  	
   

  	
  6.25 to 1.00

  
	
  September 30, 2006

  	
   

  	
  6.25 to 1.00

  
	
  December 31, 2006

  	
   

  	
  6.00 to 1.00

  
	
  March 31, 2007

  	
   

  	
  6.00 to 1.00

  
	
  June 30, 2007

  	
   

  	
  5.75 to 1.00

  

 

132

 

	
  Fiscal Quarter Ending:

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  September 30, 2007

  	
   

  	
  5.50 to 1.00

  
	
  December 31, 2007

  	
   

  	
  5.25 to 1.00

  
	
  March 31, 2008

  	
   

  	
  5.25 to 1.00

  
	
  June 30, 2008

  	
   

  	
  5.00 to 1.00

  
	
  September 30, 2008

  	
   

  	
  5.00 to 1.00

  
	
  December 31, 2008

  	
   

  	
  4.75 to 1.00

  
	
  March 31, 2009

  	
   

  	
  4.75 to 1.00

  
	
  June 30, 2009

  	
   

  	
  4.75 to 1.00

  
	
  September 30, 2009

  	
   

  	
  4.75 to 1.00

  
	
  December 31, 2009 and each fiscal quarter
  of Borrower thereafter

  	
   

  	
  4.50 to 1.00

  

 

 

(b)                                 Maximum Consolidated Senior Leverage Ratio.  Borrower shall not permit the Consolidated
Senior Leverage Ratio as of the last day of a fiscal quarter of Borrower set
forth in the table below to exceed the ratio set forth opposite such fiscal
quarter in the table below:  

 

	
  Fiscal Quarter Ending:

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  5.25 to 1.00

  
	
  December 31, 2005

  	
   

  	
  5.25 to 1.00

  
	
  March 31, 2006

  	
   

  	
  5.25 to 1.00

  
	
  June 30, 2006

  	
   

  	
  5.25 to 1.00

  
	
  September 30, 2006

  	
   

  	
  5.00 to 1.00

  
	
  December 31, 2006

  	
   

  	
  4.75 to 1.00

  
	
  March 31, 2007

  	
   

  	
  4.50 to 1.00

  
	
  June 30, 2007

  	
   

  	
  4.25 to 1.00

  
	
  September 30, 2007

  	
   

  	
  4.00 to 1.00

  
	
  December 31, 2007

  	
   

  	
  4.00 to 1.00

  
	
  March 31, 2008

  	
   

  	
  3.75 to 1.00

  
	
  June 30, 2008

  	
   

  	
  3.75 to 1.00

  
	
  September 30, 2008

  	
   

  	
  3.50 to 1.00

  
	
  December 31, 2008

  	
   

  	
  3.50 to 1.00

  
	
  March 31, 2009

  	
   

  	
  3.50 to 1.00

  
	
  June 30, 2009

  	
   

  	
  3.50 to 1.00

  
	
  September 30, 2009

  	
   

  	
  3.25 to 1.00

  
	
  December 31, 2009

  	
   

  	
  3.25 to 1.00

  
	
  March 31, 2010

  	
   

  	
  3.25 to 1.00

  
	
  June 30, 2010

  	
   

  	
  3.25 to 1.00

  
	
  September 30, 2010

  	
   

  	
  3.25 to 1.00

  
	
  December 31, 2010

  	
   

  	
  3.25 to 1.00

  
	
  March 31, 2011 and each fiscal quarter
  of Borrower thereafter

  	
   

  	
  3.00 to 1.00

  

 

133

 

(c)                                  Minimum Fixed Charge Coverage Ratio.  Borrower shall not permit the Fixed Charge
Coverage Ratio as of the last day of a fiscal quarter of Borrower set forth in
the table below to be less than the ratio set forth opposite such fiscal
quarter in the table below:

 

	
  Fiscal Quarter Ending:

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  1.10 to 1.00

  
	
  December 31, 2005

  	
   

  	
  1.10 to 1.00

  
	
  March 31, 2006

  	
   

  	
  1.10 to 1.00

  
	
  June 30, 2006

  	
   

  	
  1.10 to 1.00

  
	
  September 30, 2006

  	
   

  	
  1.10 to 1.00

  
	
  December 31, 2006

  	
   

  	
  1.15 to 1.00

  
	
  March 31, 2007

  	
   

  	
  1.15 to 1.00

  
	
  June 30, 2007

  	
   

  	
  1.15 to 1.00

  
	
  September 30, 2007

  	
   

  	
  1.15 to 1.00

  
	
  December 31, 2007

  	
   

  	
  1.15 to 1.00

  
	
  March 31, 2008

  	
   

  	
  1.15 to 1.00

  
	
  June 30, 2008

  	
   

  	
  1.15 to 1.00

  
	
  September 30, 2008

  	
   

  	
  1.15 to 1.00

  
	
  December 31, 2008 and each fiscal
  quarter of Borrower thereafter

  	
   

  	
  1.20 to 1.00

  

 

(d)                                 Limitation on Capital Expenditures.  Borrower and its Restricted Subsidiaries
shall not make or incur any Capital Expenditure, except (i) Maintenance
Capital Expenditures, (ii) any such purchase or acquisition that
constitutes an Investment by Borrower or any of its Restricted Subsidiary made
pursuant to Section 10.04(l) or 10.04(m), (iii) amounts expended in
connection with Permitted Acquisitions, (iv) amounts expended with any
Equity Issuance Proceeds, (v) amounts expended with Net Available Proceeds
from Casualty Events, (vi) amounts expended with Net Available Proceeds
from Asset Sales, (vii) Capital Expenditures not exceeding $500.0 million
in the aggregate for Borrower and its Restricted Subsidiaries during the term
of this Agreement (the “Initial Cap Ex Amount”); provided, however, that
the Initial Cap Ex Amount will be increased by that portion of the Specified
Cap Ex Amount not used for Capital Expenditures for any of the Gaming
Facilities listed on Schedule 10.08(d), and (viii) the Capital
Expenditures set forth on Schedule 10.08(d); provided, however, that (A) the aggregate Capital Expenditure
amount for any Gaming Facility listed on Schedule 10.08(d) (excluding
amounts expended pursuant to clauses (i) through and including (vi) above
in this Section 10.08(d)) may not exceed $300.0 million and (B) the
aggregate Capital Expenditure amounts expended pursuant to this clause (viii) in
respect of all Gaming Facilities listed on Schedule 10.08(d) during
the term of this Agreement may not exceed $896,601,000 (the “Specified Cap Ex Amount”) plus
any portion of the Initial Cap Ex Amount (without giving effect to any increase
of the Initial Cap Ex Amount pursuant to the proviso in such clause (vii)) not
used. 

 

(e)                                  Calculations.  For
purposes of calculating Consolidated Total Leverage Ratio, Consolidated Senior
Leverage Ratio and Consolidated Interest Expense, the following shall be
excluded from the calculations thereof:

 

134

 

(i)                                     any Contingent
Obligations in respect of Indebtedness (including any Consolidated Interest
Expense relating thereto) of (A) any Joint Venture in which Borrower or
any of its Restricted Subsidiaries owns (directly or indirectly) at least 25%
of the Equity Interest of such Joint Venture permitted under Section 10.04(m)
and (B) any Joint Venture permitted under Section 10.04(m) in which
Borrower or any of its Restricted Subsidiaries has control;

 

(ii)                                  any Contingent
Obligations (including any Consolidated Interest Expense relating thereto) of
Borrower or any of its Restricted Subsidiaries provided in connection with any
casinos or “racinos” managed or controlled by Borrower or any of its Restricted
Subsidiaries pursuant to a management or similar contract permitted under Section 10.04(m);
and

 

(iii)                               the Pocono Downs Put
Obligation;

 

provided,
however, that with respect to each of
clauses (i) and (ii) above in this Section 10.08(e), if and when
any such Contingent Obligation is demanded for payment, then the amounts of
such Contingent Obligation shall be included in such calculations.

 

Components of
Consolidated EBITDA shall be calculated on a pro forma basis
(and shall be calculated, except for pro
forma adjustments reasonably contemplated by Borrower and reasonably
acceptable to Administrative Agent which may be included in such calculations,
otherwise in accordance with Regulation S-X under the Securities Act) to give effect
to the Argosy Acquisition and any other Acquisition and Asset Sales consummated
since the beginning of any Test Period of Borrower as if the Argosy Acquisition
and each such other Acquisition had been effected on the first day of such Test
Period and as if each such Asset Sale had been consummated on the day prior to
the first day of such period.  

 

In addition,
if Borrower or any Restricted Subsidiary has incurred any Indebtedness (including,
without limitation, Incremental Term Loans) or repaid, repurchased, acquired,
defeased or otherwise Discharged any Indebtedness since the beginning of any
Test Period, Consolidated Indebtedness, Consolidated EBITDA and Consolidated
Interest Expense shall each be calculated (for all purposes in this Agreement)
after giving effect on a pro forma basis
to such incurrence, repayment, repurchase, acquisition, defeasance or Discharge
and the applications of any proceeds thereof as if it had occurred prior to the
first day of such Test Period.  If any
Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Protection Agreement applicable to such Indebtedness if such Interest Rate
Protection Agreement has a remaining term in excess of 12 months).  Interest on a Capital Lease Obligation shall
be deemed to accrue at an interest rate reasonably determined by a Responsible
Officer to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP.  Interest on
Indebtedness that may optionally be determined at an interest rate based upon a
factor of a prime or similar rate, a eurodollar interbank offered rate, or
other rate, shall be deemed to have been based upon the rate actually chosen,
or if none, then based upon such optional rate chosen as Borrower may
designate.  If any Indebtedness has been
incurred under a revolving credit facility or revolving advances and is being
given pro forma effect, the interest on such
Indebtedness shall be calculated based on the average daily balance of such
Indebtedness for the four fiscal quarters subject to the pro forma
calculation.

 

135

 

SECTION 10.09.    Limitation
on Modification of Argosy Acquisition Agreement.  Neither Borrower nor any of its
Restricted Subsidiaries shall amend or modify, or permit the amendment or
modification of, the Argosy Acquisition Agreement, in each case except for
amendments or modifications which are not in any way adverse in any material respect
to the interests of the Lenders.

 

SECTION 10.10.    Certain Payments of
Indebtedness.  None of
Borrower or any of its Restricted Subsidiaries will, nor will they permit any
Restricted Subsidiary to, make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect
of any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation
or termination of any Indebtedness, except with respect to:

 

(a)                                  Indebtedness
created under the Credit Documents;

 

(b)                                 payment
of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness;

 

(c)                                  refinancings
of Indebtedness to the extent permitted by Section 10.01 and Indebtedness
incurred pursuant to Section 10.01(m) or 10.01(p);

 

(d)                                 payment
of secured Indebtedness out of the proceeds of any sale or transfer of the
property or assets securing such Indebtedness plus interest and fees owing
thereon;

 

(e)                                  so
long as the Consolidated Senior Leverage Ratio is less than 3.50 to 1.00,
payment of or repurchase, redemption, retirement, acquisition, defeasance or
cancellation of Borrower’s and its Restricted Subsidiaries’ Indebtedness with
all or any portion of the amounts by which Borrower offered to prepay the Term
Loans (pro rata to the Term A Facility Loans,
the Term B Facility Loans and any New Incremental Term Loans then outstanding)
in accordance with Section 2.09(b)(iii) but that were declined in
accordance with such Section 2.09(b)(iii);

 

(f)                                    payment
of Indebtedness owing to Borrower or any Subsidiary Guarantor;

 

(g)                                 redemptions,
repurchases, defeasances or acquisitions of the Existing Argosy Notes;

 

(h)                                 Capital
Lease Obligations, Purchase Money Obligations and interest rate swaps otherwise
permitted under the Credit Documents;

 

(i)                                     conversions
of Permitted Subordinated Indebtedness or Permitted Senior Indebtedness in
accordance with the terms of such Permitted Subordinated Indebtedness or Permitted
Senior Indebtedness, respectively;

 

(j)                                     redemptions,
repurchases, defeasances or acquisitions of the Borrower Outstanding Bonds;

 

136

 

(k)                                  exchanges
of Indebtedness issued in private placements and resold in reliance on
Regulation S/Rule 144A for Indebtedness having substantially equivalent
terms pursuant to customary “A/B exchange offers”; and

 

(l)                                     repayment,
prepayment, purchase, defeasance, redemption or acquisition of Indebtedness of
persons acquired in Permitted Acquisitions.

 

SECTION 10.11.    Limitation on Certain
Restrictions Affecting Subsidiaries.  None of Borrower or any of its Restricted
Subsidiaries shall, directly or indirectly, create any consensual encumbrance
or restriction on the ability of any Restricted Subsidiary of Borrower to (a) pay
dividends or make any other distributions on such Restricted Subsidiary’s Equity
Interests or any other interest or participation in its profits owned by
Borrower or any of its Restricted Subsidiaries, or pay any Indebtedness or any
other obligation owed to Borrower or any of its Restricted Subsidiaries, (b) make
Investments in or to Borrower or any of its Restricted Subsidiaries, or (c) transfer
any of its Property to Borrower or any of its Restricted Subsidiaries, except that each of the following shall be permitted (i) any
such encumbrances or restrictions existing under or by reason of (x) applicable
Law (including any Gaming Law and any regulations, order or decrees of any
Gaming Authority or other applicable Governmental Authority) or (y) the Credit
Documents, (ii) restrictions on the transfer of Property subject to a
Permitted Lien, (iii) customary restrictions on subletting or assignment
of any lease or sublease governing a leasehold interest of any Company, (iv) restrictions
on the transfer of any Property subject to a contract with respect to an Asset
Sale or other transfer, conveyance or disposition permitted under this
Agreement, (v) restrictions contained in the Existing Indebtedness, (vi) restrictions
contained in Indebtedness of persons acquired after the Closing Date in
Permitted Acquisitions so long as (x) such restrictions are terminated or (y)
such Indebtedness is Discharged or repaid in full (including, without
limitation, all outstanding commitments in respect of such Indebtedness are
terminated), as applicable, in either case with respect to clauses (x) or (y)
in this clause (vi), within 95 days of the closing of such Permitted
Acquisition, (vii) restrictions contained in Permitted Senior Indebtedness
and Permitted Refinancings thereof, or Permitted Subordinated Indebtedness and
Permitted Refinancings thereof, or other Indebtedness permitted hereunder, in
each case to the extent no more restrictive, taken as a whole, than those under
the Borrower Outstanding Bonds, (viii) customary restrictions in joint
venture arrangements or management contracts or management contracts, and (ix) customary
non-assignment provisions or other customary restrictions arising under
licenses and other contracts entered into in the ordinary course of business.

 

SECTION 10.12.    Limitation on Lines of
Business.  Neither
Borrower nor any Restricted Subsidiary shall directly or indirectly engage to
any material extent (determined on a consolidated basis) in any line or lines
of business activity other than the business of the type conducted or proposed
to be conducted by the Companies as of the Closing Date (after giving effect to
the Transactions) and any other businesses reasonably related or incidental
thereto.

 

SECTION 10.13.    Limitation
on Changes to Fiscal Year; Limitation on Investment Company Status.  Neither Borrower nor any Restricted
Subsidiary shall change its fiscal year end (December 31 of each
year).  No Credit Party shall be or
become an investment company subject to the registration requirements under the
Investment Company Act of 1940, as amended.

 

137

 

SECTION 10.14.    Limitation
on Amendments to Transfer Agreements.  Neither Borrower nor any Subsidiary shall
amend, modify or waive any term or provision of any Transfer Agreement or any
document or instrument delivered in connection therewith in any respect or
consent to any release of a party therefrom, or agree to amend, modify or waive
any term or provision of any Transfer Agreement or any document or instrument
delivered in connection therewith or waive any rights thereunder in any respect
or agree to consent to any release of a party therefrom; except, in each case,
for amendments, releases, waivers and/or modifications (i) made solely to
correct ministerial errors, (ii) that do not materially and adversely
affect the Lenders or (iii) made to the extent any such amendment,
release, waiver or modification is required by the applicable Gaming Laws or
Gaming Authorities or any other applicable Governmental Authorities.

 

ARTICLE XI.

 

EVENTS OF DEFAULT

 

SECTION 11.01.    Events of Default.  If one or more of the following events
(herein called “Events of Default”) shall occur
and be continuing:

 

(a)                                  any
representation or warranty made or deemed made pursuant to any Credit Document
or the borrowings or issuances of Letters of Credit hereunder, or any representation,
warranty, statement or information contained in any report, certificate, financial
statement or other instrument furnished pursuant to any Credit Document, shall
prove to have been false or misleading in any material respect when so made,
deemed made or furnished;

 

(b)                                 default
shall be made in the payment of (i) any principal of any Loan or the
reimbursement with respect to any Reimbursement Obligation when and as the same
shall become due and payable (whether at the stated maturity upon prepayment or
repayment or by acceleration thereof or otherwise) and (ii) any interest
on any Loans when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three Business Days;

 

(c)                                  default
shall be made in the payment of any fee or any other amount (other than an
amount referred to in (b) above) due under any Credit Document, when and
as the same shall become due and payable, and such default shall continue
unremedied for a period of five Business Days;

 

(d)                                 default
shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in Section 9.01(a), 9.04(f) or
9.06 or in Article X;

 

(e)                                  default
shall be made in the due observance or performance by Borrower or any of its
Restricted Subsidiaries of any covenant, condition or agreement contained in
any Credit Document (other than those specified in Section 11.01(b), 11.01(c) or
11.01(d)) and such default shall continue unremedied or shall not be waived for
a period of 30 days after written notice thereof from Administrative Agent to
Borrower;

 

138

 

(f)                                    Borrower
or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary)
shall (i) fail to pay any principal or interest, regardless of amount, due
in respect of any Indebtedness (other than the Obligations), when and as the
same shall become due and payable (after giving effect to any applicable grace
period), or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness or any event or condition occurs, if the effect
of any failure or occurrence referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a trustee on its or
their behalf (with or without the giving of notice but giving effect to
applicable grace periods) to cause, such Indebtedness (other than Qualified
Contingent Obligations) to become due prior to its stated maturity; provided, however, that it shall not constitute an Event of Default pursuant
to this paragraph (f) unless the aggregate amount of all such Indebtedness
referred to in clauses (i) and (ii) exceeds $50.0 million at any one
time;

 

(g)                                 an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction in either case under the Bankruptcy
Code or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law, in each case seeking (i) relief in respect of
Borrower or any of its Restricted Subsidiaries (other than any Immaterial
Subsidiary), or of a substantial part of the property or assets of Borrower or
any of its Restricted Subsidiaries (other than any Immaterial Subsidiary); (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Borrower or any of its Restricted Subsidiaries (other than
any Immaterial Subsidiary) or for a substantial part of the property or assets
of Borrower or any of its Restricted Subsidiaries (other than any Immaterial
Subsidiary); or (iii) the winding-up or liquidation of Borrower or of its
Restricted Subsidiaries (other than any Immaterial Subsidiary); and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;

 

(h)                                 Borrower
or any of its Restricted Subsidiaries (other than any Immaterial Subsidiary)
shall (i) voluntarily commence any proceeding or file any petition seeking
relief under the Bankruptcy Code or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law; (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in Section 11.01(g); (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Borrower or any of its
Restricted Subsidiaries (other than any Immaterial Subsidiary) or for a
substantial part of the property or assets of Borrower or any of its Restricted
Subsidiaries (other than any Immaterial Subsidiary); (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors; (vi) become
unable, admit in writing its inability or fail generally to pay its debts as
they become due; (vii) take any action for the purpose of effecting any of
the foregoing; or (viii) wind up or liquidate (except as permitted
hereunder);

 

(i)                                     one
or more judgments for the payment of money in an aggregate amount in excess of
$50.0 million (to the extent not covered by third party insurance) shall be
rendered against Borrower or any of its Restricted Subsidiaries (other than any

 

139

 

Immaterial
Subsidiary) or any combination thereof and the same shall remain undischarged
for a period of 60 consecutive days during which execution shall not be
effectively stayed, or any action (to the extent such action is not effectively
stayed) shall be legally taken by a judgment creditor to levy upon assets or
properties of Borrower or any of its Restricted Subsidiaries to enforce any
such judgment;

 

(j)                                     an
ERISA Event shall have occurred that, when taken together with all other such
ERISA Events, is reasonably likely to result in a liability of Borrower or any
of its Restricted Subsidiaries in an aggregate amount exceeding $50.0 million;

 

(k)                                  with
respect to any material Collateral, any security interest and Lien purported to
be created by the applicable Security Document shall cease to be in full force
and effect, or shall cease to give Collateral Agent, for the benefit of the
Secured Parties, the first priority Liens and rights, powers and privileges in
each case purported to be created and granted under such Security Document in
favor of Collateral Agent, or shall be asserted by any Credit Party or any
Affiliate thereof not to be a valid, perfected (except as otherwise provided in
this Agreement or such Security Document) security interest in or Lien on the
Collateral covered thereby;

 

(l)                                     any
Guarantee shall cease to be in full force and effect or any of the Subsidiary
Guarantors repudiates, or attempts to repudiate, any of its obligations under
any of the Guarantees (except to the extent such Guarantee ceases to be in
effect in connection with any transaction permitted pursuant to Section 10.05);

 

(m)                               any
Credit Document (other than a Security Document which, for the avoidance of
doubt, shall be governed by Section 11.01(k)) or any material provisions
thereof shall at any time and for any reason be declared by a court of
competent jurisdiction to be null and void, or a proceeding shall be commenced
by any Credit Party or any other person seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Credit Party shall repudiate or deny that it has any
liability or obligation for the payment of principal or interest or other
obligations purported to be created under any Credit Document;

 

(n)                                 there
shall have occurred a Change of Control; or

 

(o)                                 there
shall have occurred a License Revocation by any Gaming Authority in a
jurisdiction in which Borrower or any of its Restricted Subsidiaries owns or
operates a Gaming Facility which, individually or in the aggregate, could
reasonably be expected to result in a reduction of more than 10% of the gross
revenues of Borrower and its Restricted Subsidiaries on a consolidated basis; provided, however, that
such License Revocation continues for at least 30 consecutive days;

 

then, and in
every such event (other than an event described in Section 11.01(g) or
11.01(h) with respect to Borrower), and at any time thereafter during the
continuance of such event, Administrative Agent, at the request of the Required
Lenders, shall, by notice to Borrower, take any or all of the following
actions, at the same or different times: 
(i) terminate forthwith the Commitments, (ii) declare the
Loans and Reimbursement Obligations then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans and

 

140

 

Reimbursement
Obligations so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued fees and all other liabilities and Obligations
of Borrower accrued hereunder and under any other Credit Document (other than
Swap Contracts), shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by Borrower, anything contained herein or in any other Credit
Document (other than Swap Contracts) to the contrary notwithstanding; and (iii) direct
Borrower to pay (and Borrower hereby agrees upon receipt of such notice, or
upon the occurrence of any Event of Default specified in Section 11.01(g) or
11.01(h) with respect to Borrower, to pay) to Collateral Agent at the
Principal Office such additional amounts of cash, to be held as security by
Collateral Agent for L/C Liabilities then outstanding, equal to the aggregate
L/C Liabilities then outstanding; and in any event described in Section 11.01(g) or
11.01(h) above with respect to Borrower, the Commitments shall automatically
terminate and the principal of the Loans and Reimbursement Obligations then outstanding,
together with accrued interest thereon and any unpaid accrued fees and all
other liabilities and Obligations of Borrower accrued hereunder and under any
other Credit Document (other than Swap Contracts), shall automatically become
due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by Borrower, anything contained
herein or in any other Credit Document (other than Swap Contracts) to the contrary
notwithstanding.

 

SECTION 11.02.    Application
of Proceeds.  The proceeds
received by Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Collateral pursuant to the
exercise by Collateral Agent of its remedies shall be applied, in full or in
part, together with any other sums then held by Collateral Agent pursuant to
this Agreement, promptly by Collateral Agent as follows:

 

(a)                                  First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other realization
including compensation to Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by Collateral Agent in
connection therewith and all amounts for which Collateral Agent is entitled to
indemnification pursuant to the provisions of any Credit Document;

 

(b)                                 Second, to the payment of all other reasonable costs and
expenses of such sale, collection or other realization and of any receiver of
any part of the Collateral appointed pursuant to the applicable Security
Documents including compensation to the other Secured Parties and their agents
and counsel and all costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith;

 

(c)                                  Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the indefeasible payment in full
in cash, pro rata, of the Obligations; and

 

(d)                                 Fourth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Credit Party or its successors or assigns) or
as a court of competent jurisdiction may direct.

 

In the event
that any such proceeds are insufficient to pay in full the items described in
clauses (a) through (c) of this Section 11.02, the Credit
Parties shall remain liable, jointly and severally, for any deficiency.

 

141

 

ARTICLE XII.

 

AGENTS

 

SECTION 12.01.    Appointment.  Each Lender hereby irrevocably designates and
appoints DBTCA as Administrative Agent of such Lender (for purposes of this Article XII,
the term “Administrative Agent” shall mean DBTCA in its capacity as
Administrative Agent hereunder and as Collateral Agent pursuant to the Security
Documents), to act as specified herein and in the other Credit Documents, and
each such Lender hereby irrevocably authorizes each Agent to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to such Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto, including, in the case of the Administrative Agent and the Collateral
Agent, the execution and filing of a “Corporate Securities and Finance
Compliance Affidavit” with the Missouri Gaming Commission pursuant to 11
CSR 45-10.040 and other regulatory requirements of any Gaming Authority
consistent with the intents and purposes of this Agreement and the other Credit
Documents (it being understood and agreed that neither any Co-Documentation
Agent nor any Co-Syndication Agent has any duties or responsibilities hereunder
or under any other Credit Documents). 
Each of the Agents agrees to act as such upon the express conditions
contained in this Article XII. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any other Credit Document, each Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Credit Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against such Agent.  The provisions of this Article XII are
solely for the benefit of each Agent and the Lenders, and neither Borrower nor
any of its Subsidiaries shall have any rights as a third party beneficiary of
any of the provisions hereof except to the extent set forth in Section 12.10.

 

SECTION 12.02.    Delegation of Duties.  Each Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents (or
sub-agents) and/or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents (or sub-agents) or attorneys-in-fact
selected by it with reasonable care.

 

SECTION 12.03.    Exculpatory Provisions.  Neither any Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it
or such person in its capacity as an Agent under or in connection with this
Agreement or the other Credit Documents (except for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a
final and non-appealable decision) or (ii) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by Borrower, any of its Subsidiaries or any of their respective officers
contained in this Agreement or the other Credit Documents, any other document
or in any certificate, report, statement or other document referred to or
provided for in, or received by any Agent under or in connection with, this
Agreement or any other document or for any failure of Borrower or any of its
Subsidiaries or any of their respective officers to perform its obligations
hereunder or thereunder.  No Agent shall
be

 

142

 

under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or the other documents, or to inspect the properties, books
or records of Borrower or any of its Subsidiaries (except to the extent
expressly requested to do so by the Required Lenders).  No Agent shall be responsible to any Lender
for the effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other document or for any representations,
warranties, recitals or statements made herein or therein or made in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by such Agent to the Lenders or by or on behalf of
Borrower or any of its Subsidiaries to any Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the
terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default.

 

SECTION 12.04.    Reliance by Agents.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
facsimile, telex or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper person or persons and upon advice and
statements of legal counsel (including, without limitation, counsel to Borrower
or any of their respective Subsidiaries), independent accountants and other
experts selected by it.  Each Agent shall
be fully justified in failing or refusing to take any action under this Agreement
or any other Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  Each Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

SECTION 12.05.    Notice of Default.  No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless such Agent
has actually received notice from a Lender or 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 give prompt notice thereof to the Lenders.  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, however, 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 12.06.    Nonreliance on Agents and
Other Lenders.  Each
Lender expressly acknowledges that no Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of Borrower or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by such
Agent to any

 

143

 

Lender.  Each Lender represents
to each Agent that it has, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other condition, prospects and creditworthiness
of Borrower and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon any Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
condition, prospects and creditworthiness of Borrower and its
Subsidiaries.  No Agent shall have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
and other condition, prospects or creditworthiness of any Borrower or any of
its Subsidiaries which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

SECTION 12.07.    Indemnification.  The Lenders agree to reimburse and indemnify
each Agent in its capacity as such ratably according with its “percentage” as
used in determining the Required Lenders at such time or, if the Commitments
have terminated and all Loans have been repaid in full, as determined immediately
prior to such termination and repayment (with such “percentages” to be
determined as if there are no Defaulting Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, reasonable expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against such
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Credit Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted to be taken by such Agent under or in connection with any of the
foregoing, but only to the extent that any of the foregoing is not paid by
Borrower or any of its Subsidiaries; provided, however, that no Lender shall be liable to any Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
(x) resulting primarily from the gross negligence or willful misconduct of
such Agent (as determined by a court of competent jurisdiction in a final and
non-appealable decision) or (y) relating to or arising out of the Fee
Letter or the Administrative Agent’s Fee Letter.  If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.  The agreements in this Section 12.07
shall survive the payment of all Obligations.

 

SECTION 12.08.    Agents in Their Individual
Capacities.  Each Agent
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with Borrower and its Subsidiaries as though such Agent
were not an Agent hereunder.  With
respect to the Loans made by it and all Obligations owing to it, each Agent
shall have the same rights and powers under this Agreement as any Lender and
may exercise the same as though it were not an Agent and the terms “Lender” and
“Lenders” shall include each Agent in its individual capacity.

 

144

 

SECTION 12.09.    Holders.  Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with Administrative Agent.  Any request, authority or consent of any
person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.

 

SECTION 12.10.    Resignation of Agents.

 

(a)                                  Administrative Agent. 

 

(i)                                     Administrative
Agent may resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 30 Business Days’
prior written notice to the Lenders and, unless a Default or an Event of
Default under Section 11.01(g) or 11.01(h) then exists,
Borrower.  Any such resignation by an
Administrative Agent hereunder shall also constitute its resignation (if
applicable) as an L/C Lender and Swingline Lender, in which case the resigning
Administrative Agent (x) shall not be required to issue any further Letters of
Credit or make any additional Swingline Loans hereunder and (y) shall maintain
all of its rights as an L/C Lender or Swingline Lender, as the case may be,
with respect to any Letter of Credit issued by it, or Swingline Loans made by
it, prior to the date of such resignation. 
Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (ii) and (iii) below of this
Section 12.10(a) or as otherwise provided below.

 

(ii)                                  Upon
any such notice of resignation, the Required Lenders shall appoint a successor
Administrative Agent hereunder and/or thereunder who shall be a commercial bank
or trust company reasonably acceptable to Borrower, which acceptance shall not
be unreasonably withheld or delayed; provided, however, that
Borrower’s approval shall not be required if a Default or an Event of Default
then exists.

 

(iii)                               If
a successor Administrative Agent shall not have been so appointed within such
30 Business Day period, Administrative Agent, with the consent of Borrower
(which consent shall not be unreasonably withheld or delayed; provided, however, that Borrower’s consent shall not be
required if a Default or an Event of Default then exists), shall then appoint a
successor Administrative Agent who shall serve as Administrative Agent
hereunder and/or thereunder until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.

 

(iv)                              If
no successor Administrative Agent has been appointed pursuant to Section 12.10(a)(ii) or
12.10(a)(iii) by the 30th Business Day after the date such notice of
resignation was given by Administrative Agent, Administrative Agent’s
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of Administrative Agent hereunder and/or under any other
Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.

 

145

 

(b)                                 Collateral Agent.  

 

(i)                                     Collateral
Agent may resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 30 Business Days’
prior written notice to Administrative Agent, the Lenders and, unless a Default
or an Event of Default under Section 11.01(g) or 11.01(h) then
exists, Borrower.  Such resignation shall
take effect upon the appointment of a successor Collateral Agent pursuant to
clauses (ii) and (iii) below of this Section 12.10(b) or as
otherwise provided below.

 

(ii)                                  Upon
any such notice of resignation, the Required Lenders shall appoint a successor
Collateral Agent hereunder and/or thereunder who shall be a commercial bank or
trust company reasonably acceptable to Borrower, which acceptance shall not be
unreasonably withheld or delayed; provided, however, that
Borrower’s approval shall not be required if a Default or an Event of Default
then exists.

 

(iii)                               If
a successor Collateral Agent shall not have been so appointed within such 30
Business Day period, Collateral Agent, with the consent of Borrower (which
consent shall not be unreasonably withheld or delayed; provided,
however, that Borrower’s consent shall not be required if a Default
or an Event of Default then exists), shall then appoint a successor Collateral Agent
who shall serve as Collateral Agent hereunder and/or thereunder until such
time, if any, as the Required Lenders appoint a successor Collateral Agent as
provided above.

 

(iv)                              If
no successor Collateral Agent has been appointed pursuant to Section 12.10(a)(ii) or
12.10(a)(iii) by the 30th Business Day after the date such notice of
resignation was given by Collateral Agent, Collateral Agent’s resignation shall
become effective and Administrative Agent shall thereafter perform all the
duties of Collateral Agent hereunder and/or under any other Credit Document
until such time, if any, as the Required Lenders appoint a successor Collateral
Agent as provided above (except that in the case of any Collateral security
held by the retiring Collateral Agent for the benefit of the Secured Parties
under any of the Credit Documents, the retiring Collateral Agent shall continue
to hold such Collateral security as nominee until such time as a successor
Collateral Agent is appointed).

 

(c)                                  Other Agents.

 

(i)                                     Each
Lead Arranger may resign from the performance of all its functions and duties
hereunder and/or under the other Credit Documents at any time by giving five
Business Days’ prior written notice to the other Agents and the Lenders.  Such resignation shall take effect at the end
of such five Business Day period.  Upon
the effectiveness of the resignation of such Lead Arranger, Administrative
Agent shall assume all of the functions and duties, if any, of such Lead
Arranger hereunder and/or under the other Credit Documents.

 

(ii)                                  Each
Co-Syndication Agent may resign as a Co-Syndication Agent hereunder and/or
under the other Credit Documents at any time by giving five Business Days’
prior written notice to the other Agents and the Lenders.  Such resignation shall take effect at the end
of such five Business Day period.  Upon
the effectiveness of the resignation of such Co-Syndication Agent,
Administrative Agent shall assume all of the functions and duties, if any, of
such Co-Syndication Agent hereunder and/or under the other Credit Documents.

 

146

 

(iii)                               Each
Co-Documentation Agent may resign as a Co-Documentation Agent and/or under the
other Credit Documents at any time by giving five Business Days’ prior written
notice to the other Agents and the Lenders. 
Such resignation shall take effect at the end of such five Business Day
period.  Upon the effectiveness of the resignation
of such Co-Documentation Agent, Administrative Agent shall assume all of the
functions and duties, if any, of such Co-Documentation Agent hereunder and/or
under the other Credit Documents.

 

(d)                                 Continued Indemnification.  Upon
a resignation of any Agent pursuant to this Section 12.10, such Agent
shall remain indemnified to the extent provided in this Agreement and the other
Credit Documents and the provisions of this Article XII shall continue in
effect for the benefit of such Agent for all of its actions and inactions while
serving as such Agent.

 

SECTION 12.11.    Collateral
Matters.

 

(a)                                  Each
Lender authorizes and directs Collateral Agent to enter into the Security
Documents for the benefit of the Secured Parties.  Collateral Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or further
consent from any Lender, from time to time prior to an Event of Default, to
take any action with respect to any Collateral or Security Documents which may
be necessary to perfect and maintain perfected the security interest in and
liens upon the Collateral granted pursuant to the Security Documents.  The Lenders hereby authorize Collateral
Agent, at its option and in its discretion, to release any Lien granted to or
held by Collateral Agent upon any Collateral (i) upon termination of the
Commitments and payment and satisfaction of all of the Obligations at any time
arising under or in respect of this Agreement or the Credit Documents or the
transactions contemplated hereby or thereby, (ii) upon the sale or other
disposition thereof, to the extent required pursuant to the last paragraph in Section 10.05,
(iii) if approved, authorized or ratified in writing by the Required
Lenders (or all of the Lenders hereunder, to the extent required by Section 13.04)
or (iv) as otherwise may be provided herein or in the relevant Security
Documents.  Upon request by
Administrative Agent at any time, the Lenders will confirm in writing
Collateral Agent’s authority to release particular types or items of Collateral
pursuant to this Section 12.11.

 

(b)                                 Collateral
Agent shall have no obligation whatsoever to the Lenders, the other Secured
Parties or any other person to assure that the Collateral exists or is owned by
any Credit Party or is cared for, protected or insured or that the Liens
granted to Collateral Agent pursuant to the applicable Security Documents have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to Collateral Agent in Section 12.01 or in this Section 12.11
or in any of the Security Documents, it being understood and agreed that in
respect of the Collateral or any part thereof, or any act, omission or event
related thereto, Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given Collateral Agent’s own interest in
the Collateral or any part thereof as one of the Lenders and that Collateral
Agent shall have no duty or liability whatsoever to the Lenders or the other
Secured Parties, except for its gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable decision).

 

147

 

ARTICLE XIII.

 

MISCELLANEOUS

 

SECTION 13.01.    Waiver.  No failure on the part of any Creditor to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under any Credit Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under any Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

 

SECTION 13.02.    Notices.

 

(a)                                  General.  Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including by facsimile transmission).  All such written notices shall be mailed
certified or registered mail, faxed or delivered to the applicable address,
telecopy or facsimile number or (subject to Section 13.02(b) below)
electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

 

(i)                                     if to any Credit
Party, any Agent, L/C Lender, and the Swingline Lender, to the address,
facsimile number, electronic mail address or telephone number specified for
such Person below its name on the signature pages hereof;

 

(ii)                                  if to any other
Lender, to the address, facsimile number, electronic mail address or telephone
number specified for such Person below its name on the signature pages hereof
or, in the case of any assignee Lender, the applicable Assignment Agreement.

 

Notices sent
by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
facsimile or telecopy shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in Section 13.02(b) below,
shall be effective as provided in such Section 13.02(b).

 

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

 

Unless
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested”

 

148

 

function, as available, return e-mail or other written
acknowledgement); provided, however,  that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

 

(c)                                  Change of Address, Etc. 
Each Credit Party, each Agent, L/C Lender and the Swingline Lender may
change its address, telecopier, facsimile or telephone number for notices and
other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to Borrower, Administrative Agent, L/C Lender and the Swingline
Lender.

 

(d)                                 Reliance by
Agents and Lenders.  The
Agents and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Notices of Borrowing and Letter of Credit Requests)
purportedly given by or on behalf of Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  Borrower shall indemnify each
Indemnitee from all Losses resulting from the reliance by such Indemnitee on
each notice purportedly given by or on behalf of Borrower (except to the extent
resulting from such Indemnitee’s own gross negligence or willful
misconduct).  All telephonic notices to
and other communications with Administrative Agent may be recorded by
Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

SECTION 13.03.    Expenses, Indemnification,
Etc.

 

(a)                                  The
Credit Parties, jointly and severally, agree to pay or reimburse:

 

(i)                                     Agents and the
Swingline Lender for all of their reasonable out-of-pocket costs and expenses
(including the reasonable fees, expenses and disbursements of counsel
(including Cahill Gordon & Reindel LLP) and one local counsel in each
jurisdiction reasonably deemed necessary by Agents) and any “ClearPar” costs
and expenses) in connection with (1) the negotiation, preparation,
execution and delivery of the Credit Documents and the extension and
syndication of credit (including the Loans and Commitments) hereunder and (2) the
negotiation, preparation, execution and delivery of any modification,
supplement, amendment or waiver of any of the terms of any Credit Document
(whether or not consummated or effective) requested by the Credit Parties;

 

(ii)                                  each Creditor for all
reasonable out-of-pocket costs and expenses of such Creditor (including the
fees, expenses and disbursements of one legal counsel for Lenders and Agents
and of one local counsel in each jurisdiction reasonably deemed necessary by
Agents) in connection with (1) any enforcement or collection proceedings
resulting from any Default, including all manner of participation in or other
involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings

 

149

 

(whether or not the workout, restructuring or transaction contemplated
thereby is consummated), (2) following the occurrence and during the
continuance of an Event of Default, the enforcement of any Credit Document, (3) the
enforcement of this Section 13.03 and (4) any documentary taxes; and

 

(iii)                               Administrative Agent or
Collateral Agent for all reasonable costs, expenses, assessments and other
charges (including reasonable fees and disbursements of counsel) incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated by any Credit Document or any other document referred
to therein.

 

Without
limiting the rights of any Lender under this Section 13.03(a), each
Lender, promptly after a request of Borrower from time to time, will advise
Borrower of an estimate of any amount anticipated to be recovered under this Section 13.03(a).  

 

(b)                                 The
Credit Parties, jointly and severally, hereby agree to indemnify each Creditor
and their respective Affiliates, directors, trustees, officers, employees,
representatives, advisors and agents (each, an “Indemnitee”)
from, and hold each of them harmless against, and that no Indemnitee will have
any liability for, any and all Losses incurred by, imposed on or asserted
against any of them (including any and all Losses incurred by any Agent, the
Swingline Lender or L/C Lender to any Lender, whether or not any Creditor is a
party thereto) directly or indirectly arising out of or by reason of or
relating to the negotiation, execution, delivery, performance, administration
or enforcement of any Credit Document, any of the transactions contemplated by
the Credit Documents (including the Transactions), any breach by any Company of
any representation, warranty, covenant or other agreement contained in any
Credit Document in connection with any of the Transactions, the use or proposed
use of any of the Loans or Letters of Credit, the issuance of or performance
under any Letter of Credit or the use of any collateral security for the
Obligations (including the exercise by any Creditor of the rights and remedies
or any power of attorney with respect thereto and any action or inaction in
respect thereof), including all amounts payable by any Lender pursuant to Section 12.07,
but excluding any such Losses arising from the gross negligence, bad faith or
willful misconduct or material breach of the Indemnitee.

 

Without
limiting the generality of the foregoing, the Credit Parties, jointly and severally,
will indemnify each Creditor and each other Indemnitee from, and hold each
Creditor and each other Indemnitee harmless against, any Losses incurred by,
imposed on or asserted against any of them arising under any Environmental Law
as a result of (i) the past, present or future operations of any Company
(or any predecessor-in-interest to any Company), (ii) the past, present or
future condition of any site or facility owned, operated, leased or used at any
time by any Company (or any such predecessor-in-interest) to the extent such
Losses arise from or relate to the parties’ relationship under the Credit
Documents or to any Company’s (or such predecessor-in-interest’s) (A) ownership,
operation, lease or use of such site or facility or (B) any aspect of the
respective business or operations of such parties, and, in each case shall
include, without limitation, any and all such Losses for which any Company
could be found liable, or (iii) any Release or threatened Release of any
Hazardous Materials at, on, under or from any such site or facility to the
extent such Losses arise from or relate to the parties’ relationship under the
Credit Documents or to any Company’s (or such predecessor-in-interest’s) (A) ownership,
operation, lease or use of such site or facility or (B) any aspect of the
respective

 

150

 

business or operations of such parties, and, in each case shall
include, without limitation, any and all such Losses for which any Company
could be found liable, including any such Release or threatened Release that
shall occur during any period when any Creditor shall be in possession of any
such site or facility following the exercise by such Creditor of any of its
rights and remedies hereunder or under any of the Security Documents; provided, however, that the indemnity hereunder shall be subject to the
exclusions from indemnification set forth in the preceding sentence.

 

To the extent
that the undertaking to indemnify and hold harmless set forth in this Section 13.03
or any other provision of any Credit Document providing for indemnification is
unenforceable because it is violative of any law or public policy or otherwise,
the Credit Parties, jointly and severally, shall contribute the maximum portion
that each of them is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnified liabilities incurred by any of the
persons indemnified hereunder.

 

SECTION 13.04.    Amendments and Waiver.

 

(a)                                  Neither
this Agreement nor any other Credit Document (other than Swap Contracts) nor
any terms hereof or thereof may be amended, modified, changed or waived, unless
such amendment, modification, change or waiver is in writing signed by the respective
Credit Parties party thereto and the Required Lenders (or Administrative Agent
with the consent of the Required Lenders); provided, however, that no such amendment, modification, change or
waiver shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly affected thereby in the case of the
following clause (i)), (i) extend the final scheduled maturity of any Loan
or Note or extend the stated maturity of any Letter of Credit beyond the R/C
Maturity Date, or reduce the rate or extend the time of payment of interest
(other than as a result of any waiver of the applicability of any post-default
increase in interest rates) or fees thereon, or forgive or reduce the principal
amount thereof (it being understood that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in any
rate of interest or fees for purposes of this clause (i), notwithstanding the
fact that such amendment or modification actually results in such a reduction),
(ii) release (x) all or substantially all of the Collateral (except as
provided in the Security Documents) under all the Security Documents or
(y) all or substantially all of the Subsidiary Guarantors from the
Guarantees, (iii) amend, modify, change or waive any provision of Section 11.02
or this Section 13.04 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Term Loans and
the Revolving Commitments and/or Revolving Loans), (iv) reduce the
percentage specified in the definition of Required Lenders or otherwise amend
the definition of Required Lenders (it being understood that, with the consent
of the Required Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Loans and Commitments are
included on the Closing Date), (v) amend, modify, change or waive Section 4.02
or Section 4.07(b) in a manner that would alter the pro rata sharing of payments required thereby (except for
technical amendments with respect to additional extensions of credit pursuant
to this Agreement which afford the protections to such additional extensions of
credit of the type provided to the Term Loans or the Revolving Commitments
and/or Revolving Loans), or (vi) consent to the assignment or transfer by
Borrower or any Subsidiary Guarantor of any of

 

151

 

its respective rights and obligations under this Agreement or any other
Credit Document; provided, further,
that no such amendment, modification, change or waiver shall (A) increase
the Commitments of any Lender over the amount thereof then in effect without
the consent of such Lender (it being understood that waivers or modifications
of conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the total Commitment shall not constitute an increase of the
Commitment of any Lender, (B) without the consent of each L/C Lender,
amend, modify, change or waive any provision of Section 2.03 or alter its
rights or obligations with respect to Letters of Credit, (C) without the
consent of the Swingline Lender, alter its rights or obligations with respect
to Swingline Loans, (D) without the consent of any applicable Agent,
amend, modify, change or waive any provision of Article XII as same
applies to such Agent or any other provision as same relates to the rights or
obligations of such Agent, (E) without the consent of Collateral Agent,
amend, modify, change or waive any provision relating to the rights or obligations
of Collateral Agent, (F) without the consent of the Required Tranche
Lenders of a relevant Tranche, reduce the amount of or extend the date of, any
scheduled principal repayment (except that, if additional Loans are made
pursuant to a given Tranche, the repayments of such Tranche may be increased on
a proportionate basis without the consent otherwise required by this clause
(F)), or (G) amend, modify, change or waive Section 2.09(b) or Section 2.10(b) in
a manner that by its terms adversely affects the rights in respect of
prepayments due to Lenders holding Loans of one Tranche differently from the
rights of Lenders holding Loans of any other Tranche without the prior written
consent of the Required Tranche Lenders of each adversely affected Tranche
(such consent being in lieu of the consent of the Required Lenders required
above in this Section 13.04(a)); provided, however, the Required Lenders may waive, in whole or in
part, any prepayment so long as the application, as between Tranches, of any
portion of such prepayment which is still required to be made is not altered,
or (H) amend or modify the definition of “Alternate Currency” or Section 1.06
without the prior written consent of all the Revolving Lenders (such consent
being in lieu of the consent of the Required Lenders required above in this Section 13.04(a)).

 

In addition,
notwithstanding the foregoing, the Fee Letter and the Administrative Agent’s
Fee Letter each may only be amended, modified or changed, or rights or
privileges thereunder waived, only by the parties thereto in accordance with
the respective provisions thereof.

 

In addition,
notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the consent of Administrative Agent, Borrower and the Lenders providing
the relevant Replacement Term Loans (as defined below) to permit the refinancing
of all outstanding Term Loans or any Tranche of Term Loans (“Refinanced Term Loans”) with a replacement
term loan facility hereunder which shall be Term Loans hereunder (“Replacement Term Loans”); provided, however, that (i) the
aggregate principal amount of such Replacement Term Loans shall not exceed the
aggregate principal amount of such Refinanced Term Loans, (ii) the
Applicable Margin for such Replacement Term Loans shall not be higher than the
Applicable Margin for such Refinanced Term Loans, (iii) the weighted average
life to maturity of such Replacement Term Loans shall not be shorter than the
weighted average life to maturity of such Refinanced Term Loans at the time of
such refinancing and (iv) all other terms applicable to such Replacement
Term Loans shall be substantially similar to, or less favorable to the Lenders
providing such Replacement Term Loans than, those applicable to such Refinanced
Term Loans, except to the extent necessary to provide for covenants and other
terms applicable

 

152

 

to any period after the latest final maturity of the Term Loans in
effect immediately prior to such refinancing.

 

(b)                                 If,
in connection with any proposed amendment, modification, change or waiver of or
to any of the provisions of this Agreement as contemplated by clauses (i) through
(vi), inclusive, of the first proviso to Section 13.04(a), the consent of
the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have the
right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Lender or Lenders (or, at
the option of Borrower if the respective Lender’s consent is required with
respect to less than all Tranches of Loans (or related Commitments), to replace
only the respective Tranche of Commitments and/or Loans of the respective
non-consenting Lender which gave rise to the need to obtain such Lender’s
individual consent) with one or more Replacement Lenders pursuant to Section 2.11
so long as at the time of such replacement, each such Replacement Lender
consents to the proposed amendment, modification, change or waiver or (B) terminate
such non-consenting Lender’s Commitment (if such Lender’s consent is required
as a result of its Commitment) and/or repay each Tranche of outstanding Loans
of such Lender which gave rise to the need to obtain such Lender’s consent
and/or cash collateralize its applicable R/C Percentage of the L/C Liability,
in accordance with Sections 2.04(e) and/or 2.09(c); provided, however, that, unless the Commitments which are terminated
and Loans which are repaid pursuant to preceding clause (B) are
immediately replaced in full at such time through the addition of new Lenders
or the increase of the Commitments and/or outstanding Loans of existing Lenders
(who in each case must consent thereto), then, in the case of any action
pursuant to preceding clause (B), the Required Lenders (determined after giving
effect to the proposed action) shall specifically consent thereto; provided, further, that Borrower shall not have the right to
replace a Lender, terminate its Commitment or repay its Loans solely as a
result of the exercise of such Lender’s rights (and the withholding of any
required consent by such Lender) pursuant to the second proviso to Section 13.04(a).

 

SECTION 13.05.    Benefit of Agreement;
Assignments; Participations.

 

(a)                                  This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided, however, no
Credit Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written consent
of all of the Lenders and provided, further, that, although any Lender may transfer, assign or
grant participations in its rights hereunder, such Lender shall remain a
“Lender” for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments, Loans or related Obligations hereunder except as
provided in Section 13.05(b)) and the participant shall not constitute a
“Lender” hereunder and provided, further, that no Lender shall transfer, assign or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the R/C Maturity Date) 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
post-default increase in interest rates) or reduce the principal amount

 

153

 

thereof, or increase the amount of the participant’s participation over
the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the total Commitments or of a mandatory prepayment shall
not constitute a change in the terms of such participation, that an increase in
any Commitment (or the available portion thereof) or Loan shall be permitted
without the consent of any participant if the participant’s participation is
not increased as a result thereof and that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in any rate of interest or fees for purposes of this clause (i)), (ii) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under this Agreement or other
Credit Document to which it is a party or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans or Letters
of Credit hereunder in which such participant is participating.  In the case of any such participation, the
participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by Borrower hereunder shall be determined as if such Lender had
not sold such participation.

 

(b)                                 Notwithstanding
the foregoing, any Lender (or any Lender together with one or more other
Lenders) may (x) assign all or a portion of its Commitments, Loans and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Tranche have terminated, outstanding Loans and Obligations) hereunder to (i)(A) its
parent company and/or any Affiliate of such Lender which is at least 50% owned
by such Lender or its parent company or (B) one or more other Lenders or
any Affiliate of any such other Lender which is at least 50% owned by such
other Lender or its parent company (provided that any fund that invests in
loans and is managed or advised by the same investment advisor of another fund
which is a Lender (or by an Affiliate of such investment advisor) shall be
treated as an Affiliate of such other Lender for the purposes of this subclause
(x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests
in loans, any other fund that invests in loans and is managed or advised by the
same investment advisor of any Lender or by an Affiliate of such investment
advisor or (y) assign all, or if less than all, a portion equal to at least
$1.0 million in the aggregate (unless Administrative Agent and, so long as no
Event of Default has occurred and is continuing, Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed)) for the assigning
Lender or assigning Lenders of any of its Tranche of Commitments and/or Loans
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Loans and related Obligations)
hereunder to one or more Eligible Assignees (treating any fund that invests in
loans and any other fund that invests in loans and is managed or advised by the
same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Assignee), each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment Agreement; provided, however, that (i) at
such time, Annex A-1, A-2 or A-3, as applicable,
shall be deemed modified to reflect the Commitments and/or outstanding Loans,
as the case may be, of such new Lender and of the existing Lenders, (ii) upon
the surrender of the relevant Notes by the assigning Lender (or, upon such
assigning Lender’s indemnifying Borrower for any lost Note pursuant to a
customary indemnification agreement) new Notes will be issued, at Borrower’s expense,
to such new Lender and to the assigning Lender upon the request of such new
Lender or assigning Lender, such new Notes to be in conformity with the
requirements of Section 2.08 (with appropriate

 

154

 

modifications) to the extent needed to reflect the revised Commitments
and/or outstanding Loans, as the case may be, (iii) the consent of
Administrative Agent shall be required in connection with any assignments
pursuant to clause (y) above (which consent shall not be unreasonably withheld
or delayed) and, so long as no Default or Event of Default then exists, the
consent of Borrower shall be required in connection with any such assignment of
any Revolving Commitments, Revolving Loans and related Obligations pursuant to
clause (y) above (which consent shall not be unreasonably withheld or delayed),
(iv) Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500, (v) no such transfer or
assignment will be effective until recorded by Administrative Agent on the
Register pursuant to Section 2.08 and (vi) such assignments may be
made on a pro rata basis among Commitments and/or
Loans (and related Obligations).  To the
extent of any assignment pursuant to this Section 13.05(b), the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments and outstanding Loans. 
At the time of each assignment pursuant to this Section 13.05(b) to
a person which is not already a Lender hereunder, the respective assignee
Lender shall, to the extent legally entitled to do so, provide to Borrower and
Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable,
a Foreign Lender Certificate) as described in Section 5.06(b) or
5.06(c), as applicable.  To the extent
that an assignment of all or any portion of a Lender’s Commitments, Loans and
related outstanding Obligations pursuant to Section 2.11 or this Section 13.05(b) would,
at the time of such assignment, result in increased costs under Section 5.01,
5.03 or (subject to clause (c) in the definition of Excluded Taxes as it
relates to assignments pursuant to Section 2.11(a)) 5.06 from those being
charged by the respective assigning Lender prior to such assignment, then
Borrower shall not be obligated to pay such increased costs (although Borrower,
in accordance with and pursuant to the other provisions of this Agreement,
shall be obligated to pay any other increased costs of the type described above
resulting from changes in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, after the
date of the respective assignment).

 

(c)                                  Nothing
in this Agreement shall prevent or prohibit any Lender from pledging its Loans
and Notes hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank and, with prior notification to
Administrative Agent (but without the consent of Administrative Agent or
Borrower), any Lender which is a fund may pledge all or any portion of its
Loans and Notes to its trustee or to a collateral agent providing credit or
credit support to such Lender in support of its obligations to such trustee,
such collateral agent or a holder of such obligations, as the case may be.  No pledge pursuant to this Section 13.05(c) shall
release the transferor Lender from any of its obligations hereunder or permit
the pledgee to become a lender hereunder without otherwise complying with Section 13.05(b).

 

SECTION 13.06.    Survival.  The obligations of the Credit Parties under
Sections 5.01, 5.05, 5.06 and 13.03, the obligations of each Subsidiary
Guarantor under Section 6.03, and the obligations of the Lenders under
Sections 5.06 and 12.07, in each case shall survive the repayment of the Loans
and the other Obligations and the termination of the Commitments and, in the
case of any Lender that may assign any interest in its Commitments, Loans or
L/C Interest (and any related Obligations) hereunder, shall (to the extent
relating to such time as it was a Lender) survive the making of such
assignment, notwithstanding that such assigning Lender may cease to be a
“Lender” hereunder.  In addition, each
representation and warranty

 

155

 

made, or deemed to be made by a notice of any extension of credit,
herein or pursuant hereto shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of this
Agreement and the Notes and the making of any extension of credit hereunder,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that Administrative Agent or any Lender may have had notice
or knowledge of any Default or incorrect representation or warranty.

 

SECTION 13.07.    Captions.  The table of contents and captions and Section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

 

SECTION 13.08.    Counterparts; Interpretation;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and the other Credit Documents,
constitute the entire contract among the parties thereto relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof, other than
the Administrative Agent’s Fee Letter and the Fee Letter, which are not
superseded and survive solely as to the parties thereto (to the extent provided
therein).  This Agreement shall become
effective when the Closing Date shall have occurred and this Agreement shall
have been executed and delivered by the Credit Parties and each Agent and when
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement.  Upon the Closing
Date, all commitments to provide any financing pursuant to the Commitment
Letter shall permanently terminate.

 

SECTION 13.09.    Governing Law; Submission to
Jurisdiction; Waivers; Etc.

 

(a)                                  Each
Credit Document shall be governed by, and construed in accordance with, the law
of the State of New York (except in the case of the other Credit Documents, to
the extent otherwise expressly stated therein). 
Each Credit Party hereby irrevocably and unconditionally:  (i) submits for itself and its Property
in any Proceeding relating to any Credit Document to which it is a party, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Supreme Court of the State of New
York sitting in New York County, the courts of the United States for the
Southern District of New York, and appellate courts thereof; (ii) consents
that any such Proceeding may be brought in any such court; (iii) agrees
that service of process in any such Proceeding may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to Borrower at its address set forth on the signature
page hereto or at such other address of which Administrative Agent shall
have been notified pursuant thereto; and (iv) agrees that nothing herein
shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction.

 

156

 

(b)                                 EACH
CREDIT PARTY, EACH AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR
ANY COUNTERCLAIM THEREIN.

 

SECTION 13.10.    Confidentiality.  Each Agent and each Lender agrees to keep
information obtained by it pursuant to the Credit Documents confidential in
accordance with such Agent’s or such Lender’s customary practices and agrees
that it will only use such information in connection with the transactions
contemplated hereby and not disclose any of such information other than (a) to
such Agent’s or such Lender’s employees, representatives, directors, attorneys,
auditors, agents, professional advisors, trustees or Affiliates who are advised
of the confidential nature thereof or to any direct or indirect creditor or
contractual counterparty in swap agreements or such creditor’s or contractual
counterparty’s professional advisor (so long as such contractual counterparty
or professional advisor to such contractual counterparty agrees to be bound by
the provision of this Section 13.10, such Agent or such Lender being
liable for any breach of confidentiality by any person described in this clause
(a) and with respect to disclosures to Affiliates to the extent disclosed
by such Lender to such Affiliate), (b) to the extent such information
presently is or hereafter becomes available to such Agent or such Lender on a
non-confidential basis from a person not an Affiliate of such Agent or such
Lender not known to such Agent or such Lender to be violating a confidentiality
obligation by such disclosure, (c) to the extent disclosure is required by
any Law, subpoena or judicial order or process (provided that
notice of such requirement or order shall be promptly furnished to Borrower
unless such notice is legally prohibited) or requested or required by bank,
securities, insurance or investment company regulations or auditors or any
administrative body or commission (including the Securities Valuation Office of
the NAIC) to whose jurisdiction such Agent or such Lender is subject, (d) to
any rating agency to the extent required in connection with any rating to be
assigned to such Agent or such Lender; provided that
notice thereof is promptly furnished to Borrower, (e) to pledgees under Section 13.05(c),
assignees, participants, prospective assignees or prospective participants, in
each case who agree in writing to be bound by the provisions of this Section 13.10,
(f) to the extent required in connection with any litigation between any
Credit Party and any Creditor with respect to the Loans or any Credit Document
or (g) with Borrower’s prior written consent.

 

SECTION 13.11.    Independence of
Representations, Warranties and Covenants.  The representations, warranties and covenants
contained herein shall be independent of each other and no exception to any
representation, warranty or covenant shall be deemed to be an exception to any
other representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exception be deemed to permit any action or
omission that would be in contravention of applicable law.

 

SECTION 13.12.    Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Agreement.

 

157

 

SECTION 13.13.    Gaming Laws.

 

(a)                                  This
Agreement and the other Credit Documents are subject to the Gaming Laws and the
laws involving the sale, distribution and possession of alcoholic beverages
(the “Liquor Laws”).  Without limiting the foregoing, each of
Administrative Agent, Lead Arrangers, Co-Syndication Agents, Co-Documentation
Agents, Lenders and participants acknowledges that (i) it is the subject
of being called forward by the Gaming Authority or Governmental Authority enforcing
the Liquor Laws (the “Liquor Authorities”),
in their discretion, for licensing or a finding of suitability or to file or
provide other information, and (ii) all rights, remedies and powers under
this Agreement and the other Credit Documents, including with respect to the entry
into and ownership and operation of the Gaming Facilities, and the possession
or control of gaming equipment, alcoholic beverages or a gaming or liquor
license, may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of the Gaming Laws and Liquor Laws and only
to the extent that required approvals (including prior approvals) are obtained
from the requisite Governmental Authorities.

 

(b)                                 Each
of Administrative Agent, Lead Arrangers, Co-Syndication Agents and
Co-Documentation Agents and Lenders agrees to cooperate with the Gaming
Authority (or to be subject to Section 2.11) in connection with the
provisions of such documents or other information as may be requested by such
Gaming Authority or Liquor Authorities relating to Borrower and its
Subsidiaries or to the Credit Documents.

 

SECTION 13.14.    USA Patriot Act.  Each Lender that is subject to the Act (as
hereinafter defined) to the extent required hereby, notifies Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow such Lender to identify Borrower in accordance with
the Act, and Borrower agrees to provide such information from time to time to
any Lender.

 

SECTION 13.15.    Judgment
Currency.

 

(a)                                  Borrower’s
obligations hereunder and under the other Credit Documents to make payments in
Dollars (the “Obligation Currency”) shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by Administrative Agent, the Collateral Agent, the respective L/C
Lender or the respective Lender of the full amount of the Obligation Currency
expressed to be payable to Administrative Agent, the Collateral Agent, such L/C
Lender or such Lender under this Agreement or the other Credit Documents.  If, for the purpose of obtaining or enforcing
judgment against Borrower in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation
Currency, the conversion shall be made at the Dollar Equivalent thereof and, in
the case of other currencies the rate of exchange (as quoted by Administrative
Agent or if Administrative Agent does not quote a rate of exchange on such
currency, by a known dealer in such currency designated by Administrative Agent)
determined, in each case, as of the day on which the judgment is given (such
day being hereinafter referred to as the “Judgment Currency
Conversion Date”).

 

158

 

(b)                                 If
there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion and the date of actual payment of the amount due by
Borrower, Borrower covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.

 

(c)                                  For
purposes of determining the Dollar Equivalent or any other rate of exchange for
this Section 13.15, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.  

 

[Signature Pages Follow]

 

159

 

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

 

	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
  Address for Notices for Borrower and each

  Subsidiary Guarantor:

  
	
   

  	
   

  	
   

  
	
   

  	
  Penn
  National Gaming, Inc.

  	
   

  
	
   

  	
  825
  Berkshire Boulevard

  	
   

  
	
   

  	
  Suite 200

  	
   

  
	
   

  	
  Wyomissing, Pennsylvania
  19610

  
	
   

  	
   

  	
   

  
	
   

  	
  Contact person: Robert S. Ippolito

  
	
   

  	
  Facsimile No.: (610) 376-2842

  
	
   

  	
  TelephoneNo.: (610) 378-8384

  
	
   

  	
  Email: 
  robert.ippolito@pngaming.com

  
	
   

  	
  Website: www.pngaming.com

  
						

 

 

	
   

  	
  SUBSIDIARY
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  BSL, INC.

  
	
   

  	
  BTN, INC.

  
	
   

  	
  CHC CASINOS CORP.

  
	
   

  	
  CRC HOLDINGS, INC.

  
	
   

  	
  HOLLYWOOD CASINO CORPORATION

  
	
   

  	
  HWCC-TUNICA, INC.

  
	
   

  	
  LOUISIANA CASINO CRUISES, INC.

  
	
   

  	
  MOUNTAINVIEW THOROUGHBRED

  RACING ASSOCIATION

  
	
   

  	
  PENN BULLPEN, INC.

  
	
   

  	
  PENN BULLWHACKERS, INC.

  
	
   

  	
  PENN NATIONAL HOLDING COMPANY

  
	
   

  	
  PENNSYLVANIA NATIONAL TURF

  CLUB, INC.

  
	
   

  	
  ARGOSY GAMING COMPANY

  
	
   

  	
  THE INDIANA GAMING COMPANY

  
	
   

  	
  INDIANA GAMING HOLDING COMPANY

  
	
   

  	
  THE MISSOURI GAMING COMPANY

  
	
   

  	
  OHIO RACING COMPANY

  
	
   

  	
  RACEWAY PARK, INC.

  
	
   

  	
  CRAZY HORSES, INC.

  
	
   

  	
  For each of the foregoing entities:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PNGI CHARLES
  TOWN GAMING

  LIMITED LIABILITY COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Penn
  National Holding Company,

  
	
   

  	
   

  	
  Its Managing
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  

 

 

	
   

  	
  PNGI CHARLES
  TOWN FOOD &

  BEVERAGE LIMITED LIABILITY

      COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDIANA
  GAMING II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Indiana
  Gaming Holding Company

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDIANA
  GAMING COMPANY, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  The Indiana
  Gaming Company

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENN
  NATIONAL GSFR, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Penn
  National Gaming, Inc.

  
	
   

  	
  Its:

  	
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
					

 

 

	
   

  	
  ALTON GAMING
  COMPANY

  
	
   

  	
  ARGOSY OF
  IOWA, INC.

  
	
   

  	
  BANGOR
  ACQUISITION CORP.

  
	
   

  	
  BANGOR
  HISTORIC TRACK, INC.

  
	
   

  	
  EMPRESS
  CASINO JOLIET CORPORATION

  
	
   

  	
  HOLLYWOOD
  CASINO-AURORA, INC.

  
	
   

  	
  IOWA GAMING
  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin
  DeSanctis

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin
  DeSanctis

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BELLE OF
  SIOUX CITY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Iowa Gaming
  Company

  	
   

  
	
   

  	
  Its:

  	
  General
  Partner

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin
  DeSanctis

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kevin
  DeSanctis

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
							

 

 

	
   

  	
  DEUTSCHE
  BANK SECURITIES INC.,

  
	
   

  	
  as Joint
  Lead Arranger and Joint Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elena Maguire

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Elena Maguire

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nicholas Hayes

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nicholas Hayes

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Deutsche
  Bank Securities Inc.

  
	
   

  	
  60 Wall
  Street

  
	
   

  	
  New York,
  New York 10005

  
	
   

  	
  Attention:

  
	
   

  	
  Email:

  
						

 

 

	
   

  	
  LEHMAN
  BROTHERS INC.,

  
	
   

  	
  as Joint
  Lead Arranger and Joint Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ V. Paul Arzouian

  	
   

  
	
   

  	
   

  	
  Name:

  	
  V. Paul Arzouian

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
  Lehman
  Commercial Paper Inc.

  
	
   

  	
  745 Seventh
  Avenue

  
	
   

  	
  New York,
  New York, 10019

  
	
   

  	
  Attention:

  
	
   

  	
  Email:

  
					

 

 

	
   

  	
  GOLDMAN
  SACHS CREDIT PARTNERS

  L.P., as Joint Lead Arranger, Joint

  Bookrunner, Co-Syndication Agent and

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Archer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William Archer

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Goldman
  Sachs Credit Partners L.P.

  
	
   

  	
  85 Broad
  Street

  
	
   

  	
  New York,
  New York 10004

  
	
   

  	
  Attention:

  
	
   

  	
  Email:

  
					

 

 

	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.,

  
	
   

  	
  as
  Co-Syndication Agent and Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig Malloy

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Craig Malloy

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Lehman
  Commercial Paper Inc.

  
	
   

  	
  745 Seventh
  Avenue

  
	
   

  	
  New York,
  New York, 10019

  
	
   

  	
  Attention:

  
	
   

  	
  Email:

  
					

 

 

	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS, as Administrative Agent,

  Swingline Lender, Collateral Agent and

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven P. Lapham

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steven P. Lapham

  
	
   

  	
   

  	
  Title:

  	
  Managing Director 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Kay Coyle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mary Kay Coyle

  
	
   

  	
   

  	
  Title:

  	
  Managing Director 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Deutsche
  Bank Trust Company Americas

  
	
   

  	
  60 Wall
  Street

  
	
   

  	
  New York,
  New York 10005

  
	
   

  	
  Email:

  
					

 

 

	
   

  	
  CALYON NEW
  YORK BRANCH,

  
	
   

  	
  as
  Co-Documentation Agent and Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dianne M. Scott

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dianne M. Scott

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F. Frank Herrera

  	
   

  
	
   

  	
   

  	
  Name:

  	
  F. Frank Herrera

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notices:

  
	
   

  	
   

  
	
   

  	
  Calyon Los
  Angeles Branch

  
	
   

  	
  515 Flower
  Street, Suite 2200

  
	
   

  	
  Los Angeles,
  CA 90071

  
	
   

  	
  Email:

  
	
   

  	
  Website:

  
					

 

 

	
   

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as Co-Documentation

  Agent, Lender and L/C Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Buntin

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen Buntin

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
  Wells Fargo
  Gaming Division

  
	
   

  	
  5340 Kietzke
  Lane # 201

  
	
   

  	
  Reno, NV
  89511

  
	
   

  	
  Email:

  
					

 

 

	
   

  	
  BANK OF
  SCOTLAND, as Co-Documentation

  Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amena Nabi

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Amena Nabi

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
  565 Fifth
  Avenue

  
	
   

  	
  New York, NY
  10017

  
	
   

  	
  Email:

  
					

 

 

[OTHER LENDERS]

 

 

ANNEX B-1

 

Applicable
Margin For Revolving Loans, 

Swingline Loans and Term A Facility Loans

and 

Applicable Fee Percentage

 

	
  Pricing Level

  	
   

  	
  Consolidated Total Leverage

  Ratio

  	
   

  	
  Applicable Margin

  for

  Revolving Loans

  and Swingline Loans(1)

  	
   

  	
  Applicable Margin

  for

  Term A Facility Loans

  	
   

  	
  Applicable

  Fee

  Percentage(2)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  LIBOR+

  	
   

  	
  ABR+

  	
   

  	
  LIBOR+

  	
   

  	
  ABR+

  	
   

  	
   

  	
   

  
	
  Level I

  	
   

  	
  Greater than 5.50 to 1.00

  	
   

  	
  2.250

  	
  %

  	
  1.250

  	
  %

  	
  2.250

  	
  %

  	
  1.250

  	
  %

  	
  0.500

  	
  %

  
	
  Level II

  	
   

  	
  Less than or equal to 5.50 to 1.00 but
  greater than 5.00 to 1.00

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  	
  0.500

  	
  %

  
	
  Level III

  	
   

  	
  Less than or equal to 5.00 to 1.00 but
  greater than 4.50 to 1.00

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  	
  0.375

  	
  %

  
	
  Level IV

  	
   

  	
  Less than or equal to 4.50 to 1.00 but
  greater than 4.00 to 1.00

  	
   

  	
  1.500

  	
  %

  	
  0.500

  	
  %

  	
  1.500

  	
  %

  	
  0.500

  	
  %

  	
  0.300

  	
  %

  
	
  Level V

  	
   

  	
  Less than or equal to 4.00 to 1.00 but
  greater than 3.50 to 1.00

  	
   

  	
  1.250

  	
  %

  	
  0.250

  	
  %

  	
  1.250

  	
  %

  	
  0.250

  	
  %

  	
  0.250

  	
  %

  
	
  Level VI

  	
   

  	
  Less than or equal to 3.50 to 1.00

  	
   

  	
  1.000

  	
  %

  	
  0.000

  	
  %

  	
  1.000

  	
  %

  	
  0.000

  	
  %

  	
  0.250

  	
  %

  

 

(1)                                  Swingline
Loans may only be maintained as ABR Loans.

 

(2)                                  Applies
to Revolving Facility.

 

 

ANNEX B-2

 

Applicable
Margin For Term B Facility Loans

 

	
  Pricing Level

  	
   

  	
  Consolidated Total Leverage
  Ratio

  	
   

  	
  Applicable Margin

  for

  Term B Facility Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  LIBOR+

  	
   

  	
  ABR+

  	
   

  
	
  Level I

  	
   

  	
  Greater than 5.25 to 1.00

  	
   

  	
  2.00

  	
   

  	
  1.00

  	
  %

  
	
  Level II

  	
   

  	
  Less than or equal to 5.25 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  0.750

  	
  %

  

 

 

ANNEX C-1

 

AMORTIZATION PAYMENTS

TERM A FACILITY LOANS

 

	
  DATE(1)

  	
   

  	
  PRINCIPAL AMOUNT

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2006

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2006

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2006

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  0

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  0

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  0

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  16,250,000.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  16,250,000.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  16,250,000.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  16,250,000.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  20,312,500.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  24,375,000.00

  	
   

  
	
  March 31,
  2011

  	
   

  	
  $

  	
  24,375,000.00

  	
   

  
	
  June 30,
  2011

  	
   

  	
  $

  	
  24,375,000.00

  	
   

  
	
  The date
  that is the sixth anniversary of the Closing Date

  	
   

  	
  $

  	
  24,375,000.00

  	
   

  

 

(1) 
If such date is not a Business Day, then the date shall be the next succeeding
Business Day.

 

 

ANNEX C-2

 

AMORTIZATION PAYMENTS

TERM B FACILITY LOANS

 

	
  DATE(1)

  	
   

  	
  PRINCIPAL AMOUNT

  	
   

  
	
  December 31,
  2005

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2006

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2006

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2006

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  March 31,
  2011

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  June 30,
  2011

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  $

  	
  4,125,000.00

  	
   

  
	
  December 31,
  2011

  	
   

  	
  $

  	
  387,750,000.00

  	
   

  
	
  March 31,
  2012

  	
   

  	
  $

  	
  387,750,000.00

  	
   

  
	
  June 30,
  2012

  	
   

  	
  $

  	
  387,750,000.00

  	
   

  
	
  The date
  that is the seventh anniversary of the Closing Date

  	
   

  	
  $

  	
  387,750,000.00

  	
   

  

 

(1) 
If such date is not a Business Day, then the date shall be the next succeeding
Business Day.

 

 

SCHEDULE 10.08(d)

 

	
  Gaming Facility

  	
   

  	
  Capital Expenditure amount*

  	
   

  
	
  Charles Town
  Facility

  	
   

  	
  $

  	
  136,000,000

  	
   

  
	
  Penn
  National Race Course

  	
   

  	
  $

  	
  255,001,000

  	
   

  
	
  Bangor
  Facility

  	
   

  	
  $

  	
  139,000,000

  	
   

  
	
  Repurchases
  of certain Leases pertaining to certain Gaming Facilities

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
  Boomtown
  Casino

  	
   

  	
  $

  	
  3,600,000

  	
   

  
	
  Kansas City
  Facility

  	
   

  	
  $

  	
  73,000,000

  	
   

  
	
  Lawrenceburg
  Facility

  	
   

  	
  $

  	
  250,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  896,601,000

  	
   

  

 

* Subject to
limitations set forth in Section 10.08(d) and as provided in Section 10.08(d),
it is understood that any portion of the Capital Expenditure amount set forth
in the table above with respect to any Gaming Facility referred to in such table
that is not used for such Gaming Facility may be used for any other Gaming
Facility referred to therein.

 

** For
purposes of Section 10.08(d) and this Schedule 10.08(d),
Penn National Race Course shall mean and include a building large enough to
hold up to 3,000 slot machines, an integrated racing facility, parking garage,
buffet, food court, terrace dining, and related FF&E.

 

*** Such
Leases pertain to certain Gaming Facilities identified by Borrower to (and
agreed by) Lead Arrangers prior to the Closing Date.Exhibit 10.2

 

Execution
Version

 

 

SECURITIES
PURCHASE AGREEMENT

 

 

dated as of
October 3, 2005

 

 

between

 

 

ARGOSY
GAMING COMPANY, as Seller

 

 

and

 

 

CP BATON
ROUGE CASINO, L.L.C., as Buyer

 

 

and

 

 

WIMAR TAHOE
CORPORATION, as Parent Guarantor

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE AND
  SALE OF SHARES; PURCHASE PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Purchase
  and Sale of Shares

  	
   

  
	
  Section 2.2

  	
  Purchase Price

  	
   

  
	
  Section 2.3

  	
  Deposit

  	
   

  
	
  Section 2.4

  	
  Post-Closing Adjustment to Purchase Price

  	
   

  
	
  Section 2.5

  	
  Excluded Assets

  	
   

  
	
  Section 2.6

  	
  Allocation
  of Purchase Price

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Closing Date

  	
   

  
	
  Section 3.2

  	
  Deliveries
  at Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Organization
  and Qualification of the ACBR Entities

  	
   

  
	
  Section 4.2

  	
  Authority;
  No Conflict; Required Filings and Consents

  	
   

  
	
  Section 4.3

  	
  Capitalization

  	
   

  
	
  Section 4.4

  	
  Financial
  Statements

  	
   

  
	
  Section 4.5

  	
  No
  Undisclosed Liabilities

  	
   

  
	
  Section 4.6

  	
  Real Property

  	
   

  
	
  Section 4.7

  	
  Intellectual
  Property

  	
   

  
	
  Section 4.8

  	
  Agreements,
  Contracts and Commitments

  	
   

  
	
  Section 4.9

  	
  Litigation;
  Orders

  	
   

  
	
  Section 4.10

  	
  Environmental
  Matters

  	
   

  
	
  Section 4.11

  	
  Permits;
  Compliance with Laws

  	
   

  
	
  Section 4.12

  	
  Labor Matters

  	
   

  
	
  Section 4.13

  	
  Employee
  Benefits

  	
   

  
	
  Section 4.14

  	
  Brokers

  	
   

  
	
  Section 4.15

  	
  Taxes

  	
   

  
	
  Section 4.16

  	
  Insurance

  	
   

  
	
  Section 4.17

  	
  Vessel

  	
   

  
	
  Section 4.18

  	
  Computer
  Software

  	
   

  
	
  Section 4.19

  	
  Personal
  Property

  	
   

  
	
  Section 4.20

  	
  Property
  and Assets Sufficient for Conduct of Business

  	
   

  
	
  Section 4.21

  	
  No Other
  Representations

  	
   

  

 

i

 

	
  ARTICLE V REPRESENTATIONS
  AND WARRANTIES OF BUYER AND PARENT GUARANTOR

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Organization
  and Qualification of Buyer and Parent Guarantor

  	
   

  
	
  Section 5.2

  	
  Authority;
  No Conflict; Required Filings and Consents

  	
   

  
	
  Section 5.3

  	
  Brokers

  	
   

  
	
  Section 5.4

  	
  Financing

  	
   

  
	
  Section 5.5

  	
  Licensability
  of Principals

  	
   

  
	
  Section 5.6

  	
  Compliance with Gaming Laws

  	
   

  
	
  Section 5.7

  	
  Purchase For Investment

  	
   

  
	
  Section 5.8

  	
  Investigation by Buyer; Seller’s
  Liability

  	
   

  
	
  Section 5.9

  	
  Litigation

  	
   

  
	
  Section 5.10

  	
  Citizenship

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Conduct of
  Business of the ACBR Entities

  	
   

  
	
  Section 6.2

  	
  Cooperation;
  Notice; Cure

  	
   

  
	
  Section 6.3

  	
  No Solicitation

  	
   

  
	
  Section 6.4

  	
  Employee Matters

  	
   

  
	
  Section 6.5

  	
  Access to
  Information and the Property

  	
   

  
	
  Section 6.6

  	
  Governmental
  Approvals

  	
   

  
	
  Section 6.7

  	
  Publicity

  	
   

  
	
  Section 6.8

  	
  Further Assurances and Actions

  	
   

  
	
  Section 6.9

  	
  Transfer Taxes

  	
   

  
	
  Section 6.10

  	
  Reservations; Chips

  	
   

  
	
  Section 6.11

  	
  Insurance
  Policies

  	
   

  
	
  Section 6.12

  	
  Certain
  Transactions

  	
   

  
	
  Section 6.13

  	
  Insurance; Casualty and Condemnation

  	
   

  
	
  Section 6.14

  	
  Customer Data

  	
   

  
	
  Section 6.15

  	
  Certain Notifications

  	
   

  
	
  Section 6.16

  	
  Post-Closing Use of Marks Associated
  with Seller

  	
   

  
	
  Section 6.17

  	
  No Control

  	
   

  
	
  Section 6.18

  	
  Employee Solicitation

  	
   

  
	
  Section 6.19

  	
  Excluded Property

  	
   

  
	
  Section 6.20

  	
  Witter Lease

  	
   

  
	
  Section 6.21

  	
  Subsidiary Guarantees of Penn Notes

  	
   

  
	
  Section 6.22

  	
  Sheraton
  Hotel License Agreement

  	
   

  
	
  Section 6.23

  	
  Sales and
  Franchise Tax Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Conditions
  to Each Party’s Obligation to Effect the Closing

  	
   

  
	
  Section 7.2

  	
  Additional
  Conditions to Obligations of Buyer

  	
   

  
	
  Section 7.3

  	
  Additional
  Conditions to Obligations of Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  TERMINATION AND AMENDMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Termination

  	
   

  
	
  Section 8.2

  	
  Effect of
  Termination

  	
   

  

 

ii

 

	
  ARTICLE IX
  SURVIVAL; INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Survival of
  Representations, Warranties, Covenants and Agreements

  	
   

  
	
  Section 9.2

  	
  Indemnification

  	
   

  
	
  Section 9.3

  	
  Limits on
  Indemnification

  	
   

  
	
  Section 9.4

  	
  Indemnification
  Procedures

  	
   

  
	
  Section 9.5

  	
  Exclusive Remedy

  	
   

  
	
  Section 9.6

  	
  Losses Net
  of Insurance, Tax Benefits

  	
   

  
	
  Section 9.7

  	
  Effect of
  Knowledge

  	
   

  
	
  Section 9.8

  	
  No
  Consequential Damages

  	
   

  
	
  Section 9.9

  	
  Duty to Mitigate

  	
   

  
	
  Section 9.10

  	
  Subrogation of
  Rights

  	
   

  
	
  Section 9.11

  	
  Treatment
  of Indemnification Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  As Is, Where Is

  	
   

  
	
  Section 10.2

  	
  Title to Land
  and Vessel

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Governing
  Law; Consent to Jurisdiction; Waiver of Trial by Jury

  	
   

  
	
  Section 11.2

  	
  Notices

  	
   

  
	
  Section 11.3

  	
  Headings;
  Table of Contents

  	
   

  
	
  Section 11.4

  	
  Entire
  Agreement; No Third Party Beneficiaries

  	
   

  
	
  Section 11.5

  	
  Severability

  	
   

  
	
  Section 11.6

  	
  Assignment

  	
   

  
	
  Section 11.7

  	
  Parties of
  Interest

  	
   

  
	
  Section 11.8

  	
  Counterparts

  	
   

  
	
  Section 11.9

  	
  Mutual Drafting

  	
   

  
	
  Section 11.10

  	
  Amendment

  	
   

  
	
  Section 11.11

  	
  Extension; Waiver

  	
   

  
	
  Section 11.12

  	
  Time of Essence

  	
   

  
	
  Section 11.13

  	
  Disclosure
  Letters

  	
   

  
	
  Section 11.14

  	
  Parent Guaranty

  	
   

  
	
  Section 11.15

  	
  FTC Approval

  	
   

  

 

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Deposit Escrow Agreement

  	
   

  
	
  Exhibit B

  	
  Form of Non-Foreign Affidavit

  	
   

  
	
  Exhibit C

  	
  Form of License Agreement

  	
   

  
	
  Exhibit D

  	
  Transition Services Agreement

  	
   

  
	
  Exhibit E(1)

  	
  Title Commitment

  	
   

  
	
  Exhibit E(2)

  	
  UCC-11 Search

  	
   

  
	
  Exhibit F

  	
  Vessel Abstract

  	
   

  
	
  Exhibit G

  	
  Survey

  	
   

  
	
  Exhibit H

  	
  ACBR Customer Database

  	
   

  

 

iii

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”) is made and entered
into as of October 3, 2005, among Argosy Gaming Company, a Delaware
corporation and a wholly owned subsidiary of Penn (as defined below) (“Seller”), CP Baton Rouge Casino, L.L.C., a Louisiana limited
liability company (“Buyer”), and
(solely with respect to Article V,
Sections 6.6, 6.12, 6.18(b) and
6.22 and Article XI) Wimar Tahoe Corporation, a
Nevada corporation and the parent company of Buyer (“Parent Guarantor”). 
Capitalized terms used herein but not otherwise defined have the
respective meanings set forth in Article I.

 

WHEREAS, Seller owns (i) all
of the outstanding shares of capital stock of Argosy of Louisiana, Inc., a
Louisiana corporation (“AGL” and,
such shares of capital stock the “AGL
Shares”), (ii) all of the
outstanding shares of capital stock of Jazz Enterprises, Inc., a Louisiana
corporation (“Jazz” and, such shares of capital
stock, the “Jazz  Shares”), and (iii) all of the
outstanding limited liability company interests of Centroplex Centre Convention
Hotel, L.L.C., a Louisiana limited liability company (“Centroplex” and, such limited liability
company interests, the “Centroplex Interests”
and, together with the AGL Shares and the Jazz Shares, the “Shares”);

 

WHEREAS, AGL and Jazz
together own all of the outstanding partnership interests (the “Partnership Interests”) of Catfish Queen
Partnership In Commendam, a Louisiana partnership in commendam (“Catfish” and, collectively with AGL, Jazz
and Centroplex, the “ACBR Entities”);

 

WHEREAS, Centroplex owns the
hotel commonly known as Centroplex Centre Convention Hotel, and Catfish owns
the casino commonly known as Argosy Casino Baton Rouge;

 

WHEREAS, pursuant to an
Agreement and Plan of Merger, dated as of November 3, 2004 (as it may be
amended from time to time, the “Merger Agreement”),
by and among Penn National Gaming, Inc., a Pennsylvania corporation (“Penn”), Thoroughbred Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Penn (“Merger Sub”), and Seller, Penn acquired Seller through a
merger of Merger Sub with and into Seller, with Seller surviving as a wholly
owned subsidiary of Penn (the “Merger”);

 

WHEREAS, Penn also owns and
operates a gaming facility in Baton Rouge, Louisiana, commonly known as Casino
Rouge (“Casino Rouge”);

 

WHEREAS, in connection with
the Merger, pursuant to an Agreement Containing Consent Orders dated July 12,
2005 (the “Consent Decree”) and a
related Order to Hold Separate and Maintain Assets Agreement (which includes a
Trustee agreement) issued on July 26, 2005 (the “Hold Separate Order” and together with the
Consent Decree, the “FTC Documents”)
by the United States Federal Trade Commission (the “FTC”), Penn is required to cause the Property to be divested
following the consummation of the Merger;

 

WHEREAS, Seller and Buyer have
entered into a Transition Services Agreement dated the date hereof, and in the
form attached hereto as Exhibit D,
for the transitional use of certain services provided to the Property by Seller
and its Affiliates;

 

WHEREAS, the Board of
Directors of Seller believes that it is in the best interests of Seller and its
stockholder to sell the Shares; and

 

WHEREAS, Buyer desires to
purchase the Shares, on the terms and subject to the conditions set forth
herein.

 

 

NOW, THEREFORE, the parties
hereto, in consideration of the premises and of the mutual representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                   Definitions

 

(a)                                  As used in this Agreement
and the Exhibits and Schedules delivered pursuant to this Agreement, the
following terms shall have the following respective meanings.

 

“ACBR
Material Adverse Effect” means any change, condition, circumstance,
event or effect that, individually or in the aggregate with all other changes,
conditions, circumstances, events or effects, is or is reasonably likely to
have a material adverse effect on the business, assets, financial condition or
results of operations of the ACBR Entities taken as a whole; provided,
that none of the following, individually or in the aggregate, shall be deemed
to have an ACBR Material Adverse Effect itself or be considered in any
determination as to whether an ACBR Material Adverse Effect has occurred or is
continuing:  (i) any change, event
or effects arising out of or resulting from changes in or affecting the (x)
travel, hospitality or gaming industries generally, (y) travel, hospitality or
gaming industries in the markets or jurisdictions where the Property is located
or (z) the financial, banking, currency or capital markets in general, (ii) any
change, event or effect resulting from the entering into or public announcement
of the transactions contemplated by the Agreement to Execute or this Agreement
or developments with respect to the transactions contemplated by the FTC
Documents or the Merger Agreement (including any facts or circumstances
relating to Buyer, its equity owners or investors or their respective
Affiliates (including their respective identities)), (iii) any change,
event or effect resulting from any act of terrorism, commencement, escalation,
continuation or cessation of armed hostilities in the United States or
internationally or declaration of war by or against or otherwise involving the
United States, (iv) any change in or effect on any of the Excluded Assets,
and (v) any change, event or effects arising out of or resulting from any
termination by landlord of, or any other action by or inaction of landlord under,
the Witter Lease, provided that such termination, action or inaction was not a
result of the breach by Penn, Seller or Seller’s Affiliates of its obligations
under Section 6.20.  Further, no event or condition that results
primarily from such events shall be deemed to have, individually or in the
aggregate, an ACBR Material Adverse Effect.

 

“Acquisition
Proposal” means any proposal or offer from any Person relating to (a) any
direct or indirect acquisition or purchase of substantially all of the assets
of the ACBR Entities (taken as a whole) other than any proposal or offer
relating to any Excluded Asset, (b) any sale of shares of capital stock,
limited liability company interests, or partnership interests, as the case may
be (including by way of a tender offer or exchange offer) of any of the ACBR
Entities, or (c) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving any
of the ACBR Entities and a third party, in each case, other than the
transactions contemplated by this Agreement.

 

“Affiliate”
means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first-mentioned Person.

 

2

 

“Agreement to Execute” means the Agreement to Execute, dated as
of June 20, 2005, by and among Penn, Buyer and Columbia Sussex
Corporation, as amended by the letter agreement dated October 3, 2005, by
and amongn Penn, Argosy, Buyer, Columbia Sussex Corporation and Parent
Guarantor.

 

“Assumed Litigation” means the following: (a) the items
listed in Section 1.1(a) of
the Seller Disclosure Letter under the caption “Assumed Litigation” (and any
other litigation or Proceedings against any of the ACBR Entities, Seller or
Seller’s Affiliates that arise out of the same issues or operative facts as the
items so listed in Section 1.1(a) of
the Seller Disclosure Letter), and (b) other than the Retained Litigation, any and
all current and future litigation or other Proceedings against any of the ACBR
Entities or any of their properties or assets, which arise out of the operation
of the Property and which also name Seller or any of Sellers’ Affiliates (in
addition to any of the ACBR Entities), whether or not Seller or any of Seller’s
Affiliates (in addition to any of the ACBR Entities) is named initially as a
party or is later added or named as a party.

 

“Buyer
Material Adverse Effect” means any change, condition, circumstance,
event or effect that, individually or in the aggregate with all other changes,
conditions, circumstances, events or effects, is or is reasonably likely to
have a material adverse effect on the business, assets, financial condition or
results of operations of Buyer or the ability of Buyer to perform its
obligations under this Agreement or consummate the transactions contemplated
hereby; provided, that none of the following, individually or in the
aggregate, shall be deemed to have a Buyer Material Adverse Effect itself or be
considered in any determination as to whether a Buyer Material Adverse Effect
has occurred or is continuing:  (i) any
change, event or effects arising out of or resulting from changes in or
affecting the (x) travel, hospitality or gaming industries generally, (y)
travel, hospitality or gaming industries in the markets or jurisdictions where
the Property is located or (z) the financial, banking, currency or capital
markets in general, (ii) any change, event or effect resulting from the
entering into or public announcement of the transactions contemplated by this
Agreement or developments with respect to the transactions contemplated by the
Merger Agreement, and (iii) any change, event or effect resulting from any
act of terrorism, commencement, escalation, continuation or cessation of armed
hostilities in the United States. or internationally or declaration of war by
or against or otherwise involving the United States.  Further, no event or condition that results
primarily from such events shall be deemed to have, individually or in the
aggregate, a Buyer Material Adverse Effect.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Contract” means any agreement, arrangement or understanding,
whether or not in writing.

 

“Credit” means an amount equal to three hundred twenty-five
thousand dollars ($325,000).

 

“Customer Database” means all customer databases, customer
lists, historical records of customers and any other customer information
collected and used by Seller or its Affiliates in connection with marketing and
promoting the Property.

 

“Encumbrance” means any lien, pledge, mortgage, security
interest or restriction with respect to the Property.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Excluded Assets” means any and all of the following assets:

 

(a)                                  the Excluded Intellectual
Property;

 

3

 

(b)                                 the Excluded Real Property;

 

(c)                                  the Customer Database,
excluding the ACBR Customer Database; and

 

(d)                                 any assets listed in Section 2.5(a) of the Seller
Disclosure Letter under the caption “Other Excluded Assets.”

 

“Excluded Intellectual Property” means any (i) Intellectual
Property listed in Section 2.5(a) of
the Seller Disclosure Letter under the caption “Excluded Intellectual Property,”
and (ii) Intellectual Property owned, licensed to, or used by Seller or
its Affiliates, other than, with respect to clause (ii), any and all
Intellectual Property owned exclusively by the ACBR Entities.

 

“Excluded Real Property” means the property listed in Section 2.5(a) of the Seller
Disclosure Letter under the caption “Excluded Real Property.”

 

“Franchise
Tax Litigation” means the following (and any other litigation or
Proceedings against any of the ACBR Entities, Seller or Seller’s Affiliates
that arise out of the same issues or operative facts as the following):  (a) Secretary,
Department of Revenue, State of Louisiana v. Argosy Gaming Company, Inc.,
Nineteenth Judicial District Court, Parish of East Baton Rouge, State of
Louisiana, Number 502,835, Section ”22”,
and (b) Argosy Gaming Company v.
Cynthia Bridges, Secretary, Department of Revenue, Nineteenth
Judicial District Court, Parish of East Baton Rouge, State of Louisiana, Number
526,145, Division “D”.

 

“GAAP” means, with respect to a specified date or period,
generally accepted accounting principles that are consistent with the
principles promulgated or adopted by the United States Financial Accounting
Standards Board and its predecessors in effect for such date or period.

 

“Gaming
Approvals” means all licenses, permits, approvals, authorizations,
registrations, findings of suitability, franchises, entitlements, waivers and
exemptions issued by any Gaming Authority required to permit the parties hereto
to consummate the transactions contemplated by this Agreement or necessary to
permit Buyer to own the Shares, and the ACBR Entities to operate the Property,
in each case, after the Closing in substantially the same manner as owned and
operated by Seller and its subsidiaries prior to the Closing.

 

“Gaming
Authorities” means any governmental authority or agency with
regulatory control or jurisdiction over the conduct of lawful gaming or
gambling, including, without limitation, the Louisiana Gaming Control Board and
the Louisiana State Police.

 

“Gaming Laws”
means any federal, state, local or foreign statute, ordinance, rule,
regulation, permit, consent, registration, finding of suitability, approval,
license, judgment, order, decree, injunction or other authorization, including
any condition or limitation placed thereon, governing or relating to the
current or contemplated casino and gaming activities and operations and
manufacturing and distributing operations of the Property, the ACBR Entities,
Seller, Buyer or any of their respective Affiliates.

 

“Governmental Entity” means any court, administrative agency,
commission, Gaming Authority or other governmental authority or
instrumentality.

 

“Intellectual
Property” means all kinds of intellectual property, foreign or
domestic, including all patents, patent applications, inventions (whether or
not patentable), processes, products, technologies, discoveries, copyrightable
and copyrighted works, apparatus, trade secrets, trademarks, trademark
registrations and applications, domain names, service marks, service mark
registrations and applications,

 

4

 

trade names, trade secrets, brandmarks, brand names, logos, know-how,
trade dress, copyright registrations, customer lists, confidential marketing
and customer information, licenses, confidential technical information, and all
documentation thereof.

 

“IRS”
means the Internal Revenue Service, a division of the United States Treasury
Department, or any successor thereto.

 

“knowledge”
means (a) when used in the phrase “knowledge of Seller” or “Seller’s
knowledge” and words of similar import, knowledge based solely on the documents
available in the on-line dataroom hosted by Merrill Corporation relating to the
sale of the ACBR Entities, and (b) when used in the phrase “knowledge of
Buyer” or “Buyer’s knowledge” and words of similar import, the actual knowledge
of:  Joseph Yung.  For avoidance of doubt, “actual knowledge”
shall not include constructive knowledge or imputed knowledge.

 

“Land”
means those certain parcels of real property more particularly described in Attachments
4.6(a)(1) and 4.6(a)(2) to Section 4.6(a) of the Seller Disclosure Letter.

 

“Law”
means any foreign or domestic law, statute, code, ordinance, rule, regulation,
order, judgment, writ, stipulation, award, injunction, decree or arbitration
award, policies, guidance, court decision, rule of common law or finding.

 

“Leases”
means leases, occupancy and concession agreements affecting the Property.

 

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

 

“Material
Contract” means any Contract to which any ACBR Entity is a party
that (i) has a remaining obligation for payment or services by or to an
ACBR Entity in excess of Two Hundred Fifty Thousand Dollars ($250,000), and (ii) is
not cancelable by any ACBR Entity upon thirty (30) days or less notice.

 

“Order”
means any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Entity or by any arbitrator.

 

“Outside Date”
means the date that is the one year
anniversary of the date of this Agreement.

 

“Permitted
Encumbrances” means:

 

(i)                                     Encumbrances
that are disclosed in the Financial Information, including the notes thereto,
or the Reference Date Balance Sheet or that are shown by the Title Commitment,
UCC-11 Search (except for those mortgages and UCC financing statements in favor
of Wells Fargo Bank, National Association, as agent), Survey or Vessel Abstract
(except for that certain preferred mortgage in favor of Wells Fargo Bank,
National Association, as agent, recorded on June 8, 1999 in the amount of
$875,000,000 in Book 99-45, 699);

 

(ii)                                  subject to the
proviso to this definition, Encumbrances for mechanics’ and materialmen’s Liens
or Encumbrances not filed of record and charges, assessments and other
governmental charges not delinquent or which are currently being contested in
good faith by appropriate proceedings or for which Seller shall have provided
bond or other security;

 

5

 

(iii)                               subject to the
proviso to this definition, maritime liens that arise by operation of law
during normal operations which (a) are paid in the ordinary course of
business, (b) have not yet been recorded on any vessel abstract or
judicially asserted and (c) are not past due or which are currently being
contested in good faith by appropriate proceedings.

 

(iv)                              subject to the
proviso to this definition, Encumbrances for Taxes not yet due and payable or
which are being contested in good faith and by appropriate proceedings;

 

(v)                                 subject to the
proviso to this definition, Encumbrances in respect of judgments or awards with
respect to which Seller shall in good faith currently be prosecuting an appeal
or other proceeding for review and with respect to which the ACBR Entities
shall have secured a stay of execution pending such appeal or such proceeding
for review;

 

(vi)                              subject to the
proviso to this definition, all matters of record;

 

(vii)                           Encumbrances
approved in writing or created by Buyer;

 

(viii)                        easements,
conditions, reservations or similar rights of others in, or minor defects and
irregularities in title to, property or assets of the ACBR Entities; provided
that, such easements, conditions, reservations, rights, defects or
irregularities do not materially impair the use of such property or assets for
the purposes for which they are held;

 

(ix)                                riparian,
littoral and other rights created by the fact that any portion of the Property
formerly or currently comprises shores or bottoms of navigable waters;

 

(x)                                   zoning and
subdivision ordinances;

 

(xi)                                terms and
conditions of licenses, permits and approvals for the Leased Property as are
identified in the Title Commitment, and Laws of any Governmental Entity having
jurisdiction over the Property;

 

(xii)                             Encumbrances
created by or arising from (A) any Lease with respect to real property
disclosed in Section 4.6(a) or
4.6(b) of the Seller
Disclosure Letter, (B) any Material Contract disclosed in Section 4.8(a) of the Seller Disclosure
Letter or (C) subject to the proviso to this definition, any other
Contract to which any of the ACBR Entities is a party or to which any of their
respective properties is subject or by which any of the ACBR Entities or any of
their respective properties is bound;

 

(xiii)                          rights of
tenants under operating leases whose occupancy may be terminated on thirty (30)
days or less notice and rights of guests in possession or holding reservations
for future use or occupancy of the Property; and

 

(xiv)                         any Encumbrances
disclosed in Section 1.1(b) of
the Seller Disclosure Letter;

 

provided, that the
Encumbrances described in clauses (ii) through
(vi) above and in clause (xii)(C) above are not,
individually or in the aggregate, material in character, amount or extent and
do not materially detract from the value, or materially impair the use, of the
property or assets affected thereby for the purposes for which they are held.

 

“Person”
means an individual, corporation, limited liability company, partnership,
association, trust, unincorporated organization, other entity or “group” (as
defined in Rule 13d-5(b)(1) under the Exchange Act).

 

6

 

“Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative, investigative, or informal)
commenced, brought, conducted, or heard by or before or otherwise involving any
Governmental Entity or arbitrator.

 

“Property”
means the Land, the Vessel and all personal property (including, without
limitation, the deck barges SR 331, EDIC 68 and WorkFlat M1), fixtures, and
improvements owned by the ACBR Entities and placed on, attached to, or located
at and used in connection with the operation of the Land and/or the Vessel, in
each case other than any Excluded Assets.

 

“Retained
Litigation” means the following (and any other litigation or
Proceedings against any of the ACBR Entities, Seller or Seller’s Affiliates
that arise out of the same issues or operative facts as the following): (a) the
Sales Tax Litigation, (b) the Franchise Tax Litigation, (c) Capitol House Preservation Company L.L.C. v. Perryman
Consultants, Inc. et al, Nineteenth
Judicial District Court, Parish of East Baton Rouge, State of Louisiana, Number
418,525, Division “H”, (d) In re Steven
Urie, Margaret Urie v. Argosy Gaming Company, United States Bankruptcy Court, District of Nevada (Reno), Adversary
Proceeding No. 05-05027-gwz, (e) Lodgenet
Entertainment Corporation and Official Committee of Unsecured Creditors v.
Argosy Gaming Company et al., United States Bankruptcy Court,
District of Nevada (Reno), Case No. BK-N-03-54224-GWZ and (f) Friends and Company, L.L.C. and Don Adams v. Jazz
Enterprises, Inc., The Argosy Gaming Company and The Belle of Baton Rouge,
Nineteenth Judicial District Court, Parish of East Baton Rouge, State of
Louisiana, Number 452785, Division “M,” subsequently transferred to United States
District Court for the Middle District of Louisiana, Civil Action Number 02-417-C-M2.

 

“Sales Tax
Litigation” means the following (and any other litigation or
Proceedings against any of the ACBR Entities, Seller or Seller’s Affiliates
that arise out of the same issues or operative facts as the following):  (a) Cynthia
Bridges, Secretary Department of Revenue, State of Louisiana v. Catfish Queen
Partnership In Commendam, and partners, Argosy of Louisiana, Inc. and Jazz
Enterprises, Inc., Nineteenth
Judicial District Court, Parish of East Baton Rouge, State of Louisiana, Number
502,541, Section ”22”, and (b) Cynthia
Bridges, Secretary of the Department of Revenue v. Catfish Queen Partnership In
Commendam, Nineteenth Judicial District Court, Parish of East Baton
Rouge, State of Louisiana, Number 527,640, Division “22”.

 

 “Securities Act”
means the Securities Act of 1933, as amended.

 

“Subsidiary”
means, with respect to any party, any corporation or other organization,
whether incorporated or unincorporated, of which (i) such party or any
other Subsidiary of such party is a general partner or managing member or (ii) at
least 50% of the securities or other equity interests having by their terms
voting power to elect a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization that
is, directly or indirectly, owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its Subsidiaries.

 

“Survey”
means that certain ALTA/ACSM survey by SJB Group, Inc., dated July 19, 2005,
and attached as Exhibit G to
this Agreement.

 

“Taxes”
means any and all taxes, charges, fees, levies, tariffs, duties, liabilities,
impositions or other assessments of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Tax authority or other Governmental Entity,
including, income, gross receipts, profits, gaming, excise, real or personal
property, environmental, sales, use, value-added, ad valorem, withholding,
social security, retirement, employment, unemployment, workers’ compensation,
occupation, service, license, net worth, capital stock, payroll, franchise,
gains,

 

7

 

stamp, transfer and recording taxes, and any Liability for the Taxes of
any other Person under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local, or foreign Law), or as a transferee or
successor, by contract, or otherwise.

 

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

 

“Title
Commitment” means that certain Title Insurance Commitment which is
attached as Exhibit E(1) to this
Agreement.

 

“UCC-11 Search” means that certain UCC-11 search which is
attached as Exhibit E(2) to
the Agreement.

 

“Vessel”
means the vessel known as Argosy III Riverboat, Official Number 1023758,
including: (i) all superstructure currently constructed thereon; (ii) plans
and specifications therefor, if owned by and in the possession of Seller; (iii) existing
warranties therefor; and (iv) all parts, spares, tools, equipment,
machinery, gear, implements, broached and unbroached consumable stores,
provisions for furniture, fixtures, fuel, pumps, anchors, cables, chains,
apparel, rigging, tackle, fittings, accessories appurtenances, appliances, supplies
therefor, inventory parts, ramps, generators and related equipment (including,
but not limited to, existing walkways), and all other appurtenances and
accessories related to the Vessel, whether located onboard the Vessel or
elsewhere.

 

“Vessel Abstract”
means that certain abstract of the Vessel which is attached as Exhibit F to this Agreement.

 

“WARN Act”
means the Worker Adjustment and Retraining Notification Act of 1988 and
analogous state and local Law.

 

“Witter Lease”  means the
lease between Phillips Connell Witter, as landlord, and Catfish, as tenant,
dated as of June 27, 2002 and recorded in the real property records on September 27,
2002, as Original 900, Bundle 11394, as extended by that certain Exercise of
Option to Renew Parking Lot Lease by Catfish, dated as of August 3, 2004,
for the lease of 2 parking lots located on South Front Street.

 

(e)                                  The following
are defined elsewhere in this Agreement, as indicated below: 

 

	
  Terms

  	
   

  	
  Cross
  Reference

  Section in Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACBR Customer Database

  	
   

  	
  Section 3.2(h)

  	
   

  
	
  ACBR Permits

  	
   

  	
  Section 4.11(a)

  	
   

  
	
  Adjustments

  	
   

  	
  Section 2.2(b)

  	
   

  
	
  AGL

  	
   

  	
  Recitals

  	
   

  
	
  Agreement

  	
   

  	
  Preamble

  	
   

  
	
  Argosy Property Employees

  	
   

  	
  Section 4.13

  	
   

  
	
  Argosy Related Marks

  	
   

  	
  Section 6.16(a)

  	
   

  
	
  Assumed Litigation Claims

  	
   

  	
  Section 9.4(c)

  	
   

  
	
  Assumed Software

  	
   

  	
  Section 4.18

  	
   

  
	
  Audited Financial Information

  	
   

  	
  Section 4.4

  	
   

  
	
  Base Purchase Price

  	
   

  	
  Section 2.2(a)

  	
   

  

 

8

 

	
  Terms

  	
   

  	
  Cross
  Reference

  Section in Agreement

  	
   

  
	
  Broker

  	
   

  	
  Section 4.14

  	
   

  
	
  Buyer

  	
   

  	
  Preamble

  	
   

  
	
  Buyer Disclosure Letter

  	
   

  	
  ARTICLE V

  	
   

  
	
  Buyer Indemnified Part(y)(ies)

  	
   

  	
  Section 9.2(a)

  	
   

  
	
  Buyer Permits

  	
   

  	
  Section 5.6(a)

  	
   

  
	
  Cap

  	
   

  	
  Section 9.3(b)

  	
   

  
	
  Casino Rouge

  	
   

  	
  Recitals

  	
   

  
	
  Catfish

  	
   

  	
  Recitals

  	
   

  
	
  Centroplex

  	
   

  	
  Recitals

  	
   

  
	
  Centroplex Interests

  	
   

  	
  Recitals

  	
   

  
	
  Closing

  	
   

  	
  Section 3.1

  	
   

  
	
  Closing Balance Sheet

  	
   

  	
  Section 2.4(a)

  	
   

  
	
  Closing Date

  	
   

  	
  Section 3.1

  	
   

  
	
  Closing Escrow Agreement

  	
   

  	
  Section 3.2(c)

  	
   

  
	
  Commitment Letter

  	
   

  	
  Section 5.4

  	
   

  
	
  Confidentiality Agreements

  	
   

  	
  Section 6.5(a)

  	
   

  
	
  Consent Decree

  	
   

  	
  Recitals

  	
   

  
	
  Consents

  	
   

  	
  Section 4.2(j)

  	
   

  
	
  Current Assets

  	
   

  	
  Section 2.4(d)(i)

  	
   

  
	
  Current Liabilities

  	
   

  	
  Section 2.4(d)(ii)

  	
   

  
	
  Deductible

  	
   

  	
  Section 9.3(a)

  	
   

  
	
  Deposit

  	
   

  	
  Section 2.3(a)

  	
   

  
	
  Deposit Escrow Agreement

  	
   

  	
  Section 2.3(a)

  	
   

  
	
  ERISA

  	
   

  	
  Section 4.13

  	
   

  
	
  Escrow Agent

  	
   

  	
  Section 2.3

  	
   

  
	
  Estimated Working Capital

  	
   

  	
  Section 2.2(c)

  	
   

  
	
  Final Purchase Price Adjustment

  	
   

  	
  Section 2.4(c)

  	
   

  
	
  Financial Information

  	
   

  	
  Section 4.4

  	
   

  
	
  Financing Sources

  	
   

  	
  Section 5.4

  	
   

  
	
  FTC Documents

  	
   

  	
  Recitals

  	
   

  
	
  Governmental Approvals

  	
   

  	
  Section 6.6(a)

  	
   

  
	
  Hold Separate Order

  	
   

  	
  Recitals

  	
   

  
	
  HSR Action

  	
   

  	
  Section 6.6(a)

  	
   

  
	
  Indemnified Party

  	
   

  	
  Section 9.4(a)

  	
   

  
	
  Indemnifying Party

  	
   

  	
  Section 9.4(a)

  	
   

  
	
  Inspection

  	
   

  	
  Section 6.5(a)

  	
   

  
	
  Jazz

  	
   

  	
  Recitals

  	
   

  
	
  License Agreement

  	
   

  	
  Section 3.2(h)

  	
   

  
	
  Losses

  	
   

  	
  Section 9.2(a)

  	
   

  
	
  Leased Properties

  	
   

  	
  Section 4.6(b)

  	
   

  
	
  Merger Agreement

  	
   

  	
  Recitals

  	
   

  
	
  Monthly Financial Information

  	
   

  	
  Section 4.4

  	
   

  
	
  New Gaming Activities

  	
   

  	
  Section 6.14

  	
   

  
	
  Notification Deadline

  	
   

  	
  Section 9.1

  	
   

  
	
  Partnership Interests

  	
   

  	
  Recitals

  	
   

  
	
  Penn Confidentiality Agreement

  	
   

  	
  Section 6.5

  	
   

  
	
  Permits

  	
   

  	
  Section 4.11(a)

  	
   

  
	
  Preliminary Closing Balance Sheet

  	
   

  	
  Section 2.2(c)

  	
   

  
	
  Preliminary Purchase Price Adjustment

  	
   

  	
  Section 2.2(c)

  	
   

  

 

9

 

	
  Terms

  	
   

  	
  Cross
  Reference

  Section in Agreement

  	
   

  
	
  Property Benefit Plans

  	
   

  	
  Section 4.13

  	
   

  
	
  Property Employees

  	
   

  	
  Section 4.13

  	
   

  
	
  Purchase Price

  	
   

  	
  Section 2.2

  	
   

  
	
  Purchase Price Adjustment

  	
   

  	
  Section 2.4(c)

  	
   

  
	
  Real Properties

  	
   

  	
  Section 4.6(a)

  	
   

  
	
  Reference Balance Sheet

  	
   

  	
  Section 2.2(b)

  	
   

  
	
  Reference Date

  	
   

  	
  Section 2.2(b)

  	
   

  
	
  Reference Date Working Capital

  	
   

  	
  Section 2.2(b)

  	
   

  
	
  Representatives

  	
   

  	
  Section 6.3

  	
   

  
	
  Retained Litigation Claims

  	
   

  	
  Section 9.4(b)

  	
   

  
	
  Seller

  	
   

  	
  Preamble

  	
   

  
	
  Seller Confidentiality Agreement

  	
   

  	
  Section 6.5

  	
   

  
	
  Seller Disclosure Letter

  	
   

  	
  Article IV

  	
   

  
	
  Seller Indemnified Part(y)(ies)

  	
   

  	
  Section 9.2(b)

  	
   

  
	
  Severance Plan

  	
   

  	
  Section 6.4(c)

  	
   

  
	
  Shares

  	
   

  	
  Recitals

  	
   

  
	
  Survival Period

  	
   

  	
  Section 9.1(b)

  	
   

  
	
  Third Party Claims

  	
   

  	
  Section 9.4(a)

  	
   

  
	
  Title Matters

  	
   

  	
  Section 10.2(a)

  	
   

  
	
  Transferred Employees

  	
   

  	
  Section 6.4(a)

  	
   

  
	
  Transition Services Agreement

  	
   

  	
  Section 3.2(i)

  	
   

  
	
  Unaudited Financial Information

  	
   

  	
  Section 4.4

  	
   

  
	
  Updated Seller Disclosure Letter

  	
   

  	
  Section 11.13

  	
   

  
	
  Working Capital

  	
   

  	
  Section 2.4(d)

  	
   

  

 

Section 1.2                                   Interpretation

 

For all purposes of this
Agreement, except as otherwise expressly provided,

 

(a)                                  the terms defined in this Article I have the meanings assigned to them in this Article I and include the plural as well as the
singular,

 

(b)                                 all accounting terms not
otherwise defined herein have the meanings assigned under GAAP, as in effect on
the date hereof, unless otherwise stated,

 

(c)                                  all references in this
Agreement to designated “Articles,” “Sections” and other subdivisions are to
the designated Articles, Sections and other subdivisions of the body of this
Agreement,

 

(d)                                 all references in this
Agreement to designated Exhibits or Schedules are to the designated Exhibit or
Schedule to this Agreement, unless otherwise indicated, and all Exhibits
and Schedules to this Agreement are incorporated herein by reference,

 

(e)                                  pronouns of either gender or
neuter shall include, as appropriate, the other pronoun forms,

 

(f)                                    the words “herein,” “hereof,” “herewith,” “hereunder” and “hereto” and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision,

 

10

 

(g)                                 the words “include,” “including” and
other words of similar import mean “include, without
limitation” or “including, without
limitation,” regardless of whether any reference to “without
limitation” or words of similar import is made,

 

(h)                                 the phrase “made available” in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available,

 

(i)                                     each of Buyer, Seller and
the ACBR Entities will be referred to herein individually as a “party” and collectively as “parties” (except where the context
otherwise requires), and

 

(j)                                     “reasonable
best efforts” when used in this Agreement shall not include efforts
which require the performing party (A) to do any act that is unreasonable
under the circumstances, (B) to make any capital expenditures not
expressly contemplated hereunder, (C) to amend or waive, any rights under
this Agreement, (D) to incur or expend any funds other than reasonable
expenses incurred in satisfying its obligations hereunder, including the fees,
expenses and disbursements of its accountants, actuaries, counsel and other
professionals, or (E) in the case of Seller and its Affiliates, to solicit
or obtain consents or waivers from any of its creditors or debt holders; and “best efforts” when used in this Agreement
shall not include efforts which require the performing party to take any action
set forth in clause (D) or (E) above.

 

ARTICLE II

 

PURCHASE
AND SALE OF SHARES; PURCHASE PRICE

 

Section 2.1                                   Purchase
and Sale of Shares

 

On the terms and subject to
the conditions set forth in this Agreement, at the Closing, Buyer agrees to
purchase, acquire and accept from Seller, and Seller agrees to sell, transfer,
assign, convey and deliver to Buyer, all of the Shares.

 

Section 2.2                                   Purchase
Price

 

(a)                                  In consideration for the
sale, transfer, assignment, conveyance and delivery to Buyer of all of the
Shares, at the Closing, Buyer shall deliver or cause to be delivered to Seller
an aggregate amount in cash equal to the sum (such sum, the “Purchase Price”) of:  (i) one hundred fifty million dollars ($150,000,000) (the “Base
Purchase Price”) (minus the
Credit), against which the amount of the Deposit released to Seller pursuant to
Section 2.3(a) hereof
and Section 6(a)(iii) of the Deposit Escrow Agreement shall be
credited, and (ii) the Preliminary Purchase Price Adjustment, if any, in
accordance with Section 2.2(c),
by wire transfer or otherwise in immediately available funds in accordance with
instructions delivered by Seller to Buyer at least two Business Days prior to
the Closing Date.  The Purchase Price
shall be subject to a Final Purchase Price Adjustment after the Closing
pursuant to Section 2.4.

 

(b)                                 Seller has delivered to
Buyer an unaudited consolidated balance sheet of the ACBR Entities as of March 31,
2005 (the “Reference Date”), a
copy of which is set forth in Section 2.2(b) of
the Seller Disclosure Letter (the “Reference
Balance Sheet”).  The
Reference Balance Sheet reflects the Adjustments required by the “Adjustment
Notes” set forth therein (the “Adjustments”),
and except for the Adjustments, has been prepared in accordance with GAAP and
on a basis consistent with the Financial Information of the ACBR Entities.  The Reference Balance Sheet sets forth the
amount of

 

11

 

Working Capital of the ACBR Entities as of the Reference Date (the “Reference Date Working Capital”).

 

(c)                                  At least five business days
before the Closing, Seller shall deliver to Buyer a preliminary Closing Balance
Sheet (prepared as of the end of the most recent calendar month for which
balance sheet data is available in the ordinary course business) (the “Preliminary Closing Balance Sheet”).  The Preliminary Closing Balance Sheet will
reflect the Adjustments and, except for the Adjustments, will be prepared in
accordance with GAAP and on a basis consistent with the Financial Information
of the ACBR Entities.  The Preliminary
Closing Balance Sheet will set forth a good faith estimate of the amount of
Working Capital of the ACBR Entities as of the Closing Date (such estimate, the
“Estimated Working Capital”).  The “Preliminary
Purchase Price Adjustment” (which may be positive or negative) shall
equal the difference between (x) Estimated Working Capital and (y) Reference
Date Working Capital, and shall be made as follows:  (i) if the Estimated Working Capital is
greater than the Reference Date Working Capital, then the Preliminary Purchase
Price Adjustment shall be positive, and the Base Purchase Price shall be
increased by the amount of such difference as provided in Section 2.2(a)(ii), and (ii) if
the Estimated Working Capital is less than the Reference Date Working Capital,
then the Preliminary Purchase Price Adjustment shall be negative, and the Base
Purchase Price shall be reduced by the amount of such difference as provided in
Section 2.2(a)(ii).

 

(d)                                 At or prior to Closing, (i) Seller
shall make such transfers of funds, settle such intercompany accounts and take
such other actions as are necessary to make effective, as of the Closing, the
Adjustments, and (ii) Seller shall have paid off, had released or
otherwise satisfied the mortgages and UCC financing statements, shown on the
UCC-11 Search, in favor of Wells Fargo Bank, National Association, as agent,
and that certain preferred mortgage, shown on the Vessel Abstract, in favor of
Wells Fargo Bank, National Association, as agent, recorded on June 8, 1999
in the amount of $875,000,000 in Book 99-45, 699.

 

Section 2.3                                   Deposit  

 

(a)                                  On the date of execution of
the Agreement to Execute, Buyer deposited an amount equal to fifteen million
dollars ($15,000,000) (such amount, including the interest accrued thereon, the “Deposit”) with First American Title Company, Philadelphia Branch (the “Escrow Agent”), pursuant to an escrow
agreement dated as of the date of execution of the Agreement to Execute and
attached hereto as Exhibit A
(the “Deposit Escrow Agreement”)
executed and delivered by Penn, Buyer and the Escrow Agent.  At the Closing, the Deposit shall be credited
against the Purchase Price and the Deposit shall be promptly released and paid
by the Escrow Agent to Seller pursuant to this Section 2.3(a) and the terms of the Deposit Escrow
Agreement.  Upon the termination of this
Agreement, the Deposit shall be payable pursuant to Section 8.2(c), and thereafter shall be promptly released
by the Escrow Agent to Buyer or Seller, as applicable, pursuant to Section 8.2(c) and the terms of
the Deposit Escrow Agreement.

 

(b)                                 Seller and Buyer agree to
execute and be bound by such other reasonable and customary escrow instructions
as may be necessary or reasonably required by the Escrow Agent or the parties
hereto in order to consummate the purchase and sale contemplated herein, or
otherwise to distribute and pay the funds held in escrow as provided in this
Agreement and the Deposit Escrow Agreement; provided that such escrow
instructions are consistent with the terms of this Agreement and the Deposit
Escrow Agreement.  In the event of any
inconsistency between the terms and provisions of such supplemental escrow
instructions and the terms and provisions of this Agreement, or any
inconsistency between the terms and provisions of the Deposit Escrow Agreement
and the terms and provisions of this Agreement, the terms and provisions of
this Agreement shall control, absent an express written agreement between the
parties hereto to the contrary which acknowledges this Section 2.3(b).

 

12

 

Section 2.4                                   Post-Closing
Adjustment to Purchase Price

 

(a)                                  As soon as reasonably
practical following (but not more than 60 days after) the Closing Date, Seller
and Buyer shall jointly prepare an unaudited consolidated balance sheet of the
ACBR Entities as of the Closing Date (the “Closing
Balance Sheet”).  The Closing
Balance Sheet will reflect the Adjustments and, except for the Adjustments,
will be prepared in accordance with GAAP and on a basis consistent with the
Financial Information of the ACBR Entities. 
The Closing Balance Sheet will set forth the actual amount of Working
Capital of the ACBR Entities as of the Closing Date (the “Closing Date Working Capital”).

 

(b)                                 The Closing Balance Sheet,
including the Closing Date Working Capital, shall become final and binding upon
the parties unless within 60 days following the Closing Date, Seller and Buyer
have been unable to agree on a final Closing Balance Sheet, including the
Closing Date Working Capital, in which case Seller and Buyer shall negotiate in
good faith to resolve any differences for an additional 30 days.  If by the end of the additional 30 day period
such differences have not been resolved, they shall be resolved by the
Philadelphia, Pennsylvania office of an accounting firm mutually acceptable to
Seller and Buyer, and such firm’s opinion thereon and the resulting Closing Balance
Sheet, including the Closing Date Working Capital, shall be final, binding and
not subject to any appeal.  The fees and
expenses of such accounting firm in connection with any such resolution shall
be paid one-half by Seller and one-half by Buyer.

 

(c)                                  Within 10 days following the
final determination of the Closing Balance Sheet and the Closing Date Working
Capital, a final adjustment to the Purchase Price (the “Final Purchase Price Adjustment”) shall be
made and paid as follows:  (i) if
the Closing Date Working Capital is less than the Estimated Working Capital,
then Seller shall promptly pay, or cause to be paid to Buyer, in cash, an
amount equal to the amount of such difference; and (ii) if the Closing
Date Working Capital is greater than the Estimated Working Capital, then Buyer
shall promptly pay, or cause to be paid to Seller, in cash, an amount equal to
the amount of such difference; and

 

(d)                                 As used herein, the term “Working Capital” means the calculation,
using the same methodology set forth on the Reference Balance Sheet, of the
current assets of the ACBR Entities (other than Excluded Assets) minus the
current liabilities of the ACBR Entities as set forth on the Reference Date
Balance Sheet, the Preliminary Closing Balance Sheet and the Closing Date
Balance Sheet, as applicable.

 

(e)                                  Any and all payments
required to be made pursuant to this Section 2.4
shall be made by wire transfer or otherwise in immediately available funds in
accordance with instructions delivered by the applicable payee to the
applicable payor prior to the time such payment is required to be made.

 

(f)                                    Nothing in this Section 2.4 shall preclude any party
from exercising, or shall adversely affect or otherwise limit in any respect
the exercise of, any right or remedy available to it hereunder for any
misrepresentation or breach of warranty hereunder, but neither Buyer nor Seller
shall have any right to dispute the Closing Balance Sheet, or the Closing Date
Working Capital, or any portion thereof once it has been finally determined in
accordance with Section 2.4(b).

 

Section 2.5                                   Excluded
Assets

 

Notwithstanding anything to
the contrary contained in this Agreement, the sale of the Shares shall not
include the Excluded Assets and, prior to the Closing, Seller and its
Affiliates shall be entitled to retain or remove from the Property, as
applicable (or cause the ACBR Entities to transfer to Seller and/or such
Affiliates of Seller), in each case, without additional remuneration therefor,
any and all of the

 

13

 

Excluded Assets.  Notwithstanding
anything to the contrary contained in this Agreement, Seller and its Affiliates
may retain and use, at their own expense, archival copies of all of the
documents or materials transferred hereunder (including, without limitation,
all customer databases, customer lists and all historical records of customers
of which Seller or its Affiliates will retain copies and the right to use in
connection with their marketing and loyalty programs or otherwise, subject to
the provisions of Section 6.14),
in each case, which (a) are used in connection with Seller’s or its
Affiliates’ businesses, other than the Property, except to the extent
prohibited by the FTC Documents, or (b) Seller in good faith determines it
is reasonably likely to need access to in connection with the defense (or any
counterclaim, cross-claim or similar claim in connection therewith) of any
suit, claim, action, proceeding or investigation against or by the ACBR
Entities, Seller or any of its Affiliates pending or threatened as of the
Closing Date.

 

Section 2.6                                   Allocation
of Purchase Price

 

Within 60 days following the
Closing, Seller will prepare a purchase price allocation schedule in
respect of the AGL Shares, the Jazz Shares, and the assets represented by the
Centroplex Interests, including with respect to the Centroplex Interests the
preparation of Internal Revenue Service Form 8594, and subject to the
review and reasonable approval by Buyer within 30 days after receipt of such
allocation schedule, Buyer and Seller agree to (i) prepare and file each
of their respective Tax Returns on a basis consistent with such allocation schedule and
(ii) unless otherwise required by applicable Law, take no position
inconsistent with such allocation schedule on any applicable Tax Return,
in any audit or proceeding before any taxing authority, in any report made for
tax, financial accounting, or for any other purpose.  Buyer and Seller shall resolve in good faith
any differences with respect to the purchase price allocation schedule.

 

ARTICLE III

 

CLOSING

 

Section 3.1                                   Closing
Date.

 

The closing of the purchase
and sale of the Shares provided for in this Agreement (the “Closing”) shall take place at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP located at 300 South Grand Avenue, Suite 3400,
Los Angeles, California 90071, on a date (the “Closing Date”) to be specified by Seller and Buyer, which date
shall be no later than the fifth business day following the date on which all
conditions to Closing set forth in Article VII
have been satisfied or, if permissible, waived by the party entitled to make
such a waiver, or at such other time as Seller and Buyer may agree.  Subject to Article VIII,
failure to consummate the purchase and sale provided for in this Agreement on
the date and time and at the place determined pursuant to this Section 3.1 will not result in termination of this
Agreement and will not relieve any party of any obligations under this
Agreement.

 

Section 3.2                                   Deliveries
at Closing

 

The following documents will
be executed and delivered, as applicable, by Seller and/or Buyer, as described
below, at or prior to the Closing:

 

(a)                                  Shares.  At the Closing, Seller shall deliver or cause
to be delivered to Buyer certificates representing the Shares, duly endorsed
(or accompanied by duly executed stock powers) for transfer to Buyer.

 

14

 

(b)                                 Resignations.  At the Closing, Seller shall use reasonable
efforts to deliver or cause to be delivered to Buyer written resignations of
any and all directors, officers and committee chairpersons of the ACBR
Entities.

 

(c)                                  Purchase Price.  Buyer shall deliver or cause to be delivered
cash in the amount of the Purchase Price pursuant to Section 2.2.

 

(d)                                 Buyer Certificates.  Buyer shall deliver to Seller the
certificates required by Sections 7.3(a) and (b).

 

(e)                                  Seller Certificates.  Seller shall deliver to Buyer the
certificates required by Sections 7.2(a) and
(b).

 

(f)                                    Non-Foreign Affidavit.  Seller (or the appropriate Affiliate of
Seller) shall execute and deliver a Non-Foreign Affidavit in the form attached
hereto as Exhibit B.

 

(g)                                 License Agreement.  Seller and Buyer shall execute and deliver
the form of license agreement attached hereto as Exhibit C (the “License
Agreement”) for the transitional use of the Intellectual Property
set forth therein.

 

(h)                                 ACBR Customer Database.  Seller shall deliver to Buyer a copy (in either
electronic or printed form as reasonably requested by Buyer) of that portion of
the Customer Database that includes the names and certain key tendencies (with
respect to the Property) of customers listed in the Customer Database who have
visited the Property prior to the Closing (the “ACBR  Customer Database”),
which ACBR Customer Database shall be in the format and contain the categories
of information set forth on Exhibit H
and which information shall date from approximately mid 2002 to the Closing.

 

(i)                                     Consents.  Seller shall deliver to Buyer copies of the
executed consents and approvals, if any, listed in Section 4.2(c) of the Seller Disclosure Letter.

 

(j)                                     Other Documents.  Each party shall deliver any other documents,
instruments or agreements which are reasonably requested by the other party
that are reasonably necessary to consummate the transactions contemplated
hereby and have not previously been delivered.

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES OF SELLER

 

Seller represents and
warrants to Buyer, except as set forth herein and in the Disclosure Letter
delivered by Seller to Buyer on the date of this Agreement (the “Seller Disclosure Letter”), as follows:

 

Section 4.1                                   Organization
and Qualification of the ACBR Entities

 

Each of Seller and the ACBR
Entities (i) is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, (ii) has the requisite
corporate, partnership or similar power and authority to own, lease and operate
its properties and to carry on its business as now conducted, and (iii) is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing

 

15

 

necessary, except where the failure to be so qualified or licensed and
in good standing would not have an ACBR Material Adverse Effect.

 

Section 4.2                                   Authority;
No Conflict; Required Filings and Consents

 

(a)                                  Each of Seller and the ACBR
Entities has the requisite power and authority to execute and deliver this
Agreement and to consummate the transactions to which it is a party that are
contemplated by this Agreement.  The execution
and delivery of this Agreement by each of Seller and the ACBR Entities and the
consummation by each of Seller and the ACBR Entities of the transactions to
which it is a party that are contemplated by this Agreement have been duly
authorized by all necessary action on the part of each of Seller and the ACBR
Entities, respectively.  This Agreement
has been duly executed and delivered by each of Seller and the ACBR Entities,
and assuming this Agreement constitutes the valid and binding obligation of the
other parties hereto, this Agreement constitutes the valid and binding
obligation of each of Seller and the ACBR Entities, enforceable against each of
Seller and the ACBR Entities, respectively, in accordance with its terms,
subject, as to enforcement, to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect
affecting creditors’ rights generally and (ii) general principles of
equity.

 

(b)                                 The execution and delivery
of this Agreement by each of Seller and the ACBR Entities does not, and the
consummation by each of Seller and the ACBR Entities of the transactions to
which it is a party that are contemplated by this Agreement will not, (i) conflict
with, or result in any violation or breach of, any provision of the
organizational documents of Seller or any of the ACBR Entities, (ii) result
in any violation or breach of, or constitute (with or without notice or lapse
of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture or other agreement to which
Seller or any of the ACBR Entities is a party or otherwise bound, or (iii) subject
to the governmental filings and other matters referred to in Section 4.2(c), contravene, conflict with, or result in
a violation of any of the terms or requirements of, or give any Governmental
Entity or any other Person the right to revoke, withdraw, suspend, cancel,
terminate, or modify any permit, concession, franchise, license, judgment, or
Law applicable to any of the ACBR Entities, except in the case of clauses (ii) and
(iii) for any such breaches, contraventions, rights, conflicts,
violations, defaults, terminations, cancellations, accelerations, losses or
failures to obtain any such consent or waiver which (x) are not, individually
or in the aggregate, reasonably likely to have an ACBR Material Adverse Effect
or (y) would not materially impair or materially delay the Closing.

 

(c)                                  No consent, approval, order
or authorization of, or registration, declaration or filing with any
Governmental Entity is required by or with respect to Seller or any of the ACBR
Entities in connection with the execution and delivery of this Agreement by
Seller or any of the ACBR Entities or the consummation by Seller or any of the
ACBR Entities of the transactions to which it is a party that are contemplated
hereby, except for (i) any approvals or filing of notices required under
the Gaming Laws, (ii) such consents, approvals, orders, authorizations,
permits, filings, declarations or registrations related to, or arising out of,
compliance with statutes, rules or regulations regulating the consumption,
sale or serving of alcoholic beverages or the renaming or rebranding of the
operations at the Property, (iii) such other filings, consents, approvals,
orders, authorizations, permits, registrations and declarations as may be
required under the Laws of any jurisdiction in which Seller or any of the ACBR
Entities conducts any business or owns any assets, the failure of which to make
or obtain would not, individually or in the aggregate, be reasonably likely to
have an ACBR Material Adverse Effect, (iv) the consents, approvals, orders,
authorizations, registrations, permits, declarations or filings listed in Section 4.2(c) of the Seller
Disclosure Letter, and (v) any consents, approvals, orders,
authorizations, registrations, permits, declarations or filings required to be
obtained or made by Buyer or any of its Subsidiaries, Affiliates or key
employees (including, without limitation, under the Gaming Laws).

 

16

 

Section 4.3                                   Capitalization

 

(a)                                  Section 4.3(a) of the Seller
Disclosure Letter sets forth: (a) the authorized capital of each of the
ACBR Entities, (b) the number of issued and outstanding shares of capital
stock, limited liability company interests or partnership interests, as the
case may be, of the ACBR Entities, and (c) the record owners of such
shares of capital stock, limited liability company interests and partnership
interests.  On the Closing Date, Seller
will be the record and beneficial owner and holder of all of the Shares, and AGL
and Jazz will be the record and beneficial owner and holder of all of the
Partnership Interests, in each case, free and clear of all Encumbrances (other
than Encumbrances approved in writing or created by Buyer), and any other
limitation or restriction (including any restriction on the right to vote or
sell the same (except for any restrictions on transfer as may be provided as a
matter of Law or any restrictions on ownership as may be provided under the
Gaming Laws) and any agreements, subscriptions, options, warrants, calls,
proxies, commitments or rights (contingent or otherwise) of any character
granting to any person, any interest in or right to vote or acquire from the
holder thereof at any time, or upon the happening of any stated event, any
Shares or Partnership Interests).  All of
the Shares and Partnership Interests have been duly authorized, and all of the
AGL Shares and all of the Jazz Shares are validly issued, fully paid and
nonassessable.  The Shares and the
Partnership Interests have not been issued in violation of, and are not subject
to, any preemptive, stock purchase or other rights to acquire equity interests
in any of the ACBR Entities.

 

(b)                                 Other than as set forth in Section 4.3(a) of the Seller
Disclosure Letter, (i) there are no outstanding equity securities of any
of the ACBR Entities, (ii) except for this Agreement, there are no
agreements, arrangements, options, warrants, calls, rights or commitments
relating to the issuance, sale, purchase, exchange, conversion, transfer or
redemption of any equity interests in any of the ACBR Entities, and (iii) none
of the ACBR Entities owns or has any contract to acquire any equity interests
of any person (other than another ACBR Entity) or any direct or indirect equity
or ownership interests in any other business.

 

Section 4.4                                   Financial
Statements

 

Section 4.4
of the Seller Disclosure Letter contains a true and complete copy of: (i) the
audited balance sheets as of, and statements of income for the twelve month
periods ending, December 31, 2003 and December 31, 2004, for Catfish
(the “Audited Financial Information”),
(ii) the unaudited balance sheets as of December 31, 2003 and December 31,
2004, and the unaudited statements of income for each month in the twelve month
period ending December 31, 2003 and December 31, 2004, for each of AGL,
Jazz and Centroplex (the “Unaudited Financial
Information”), and (iii) the unaudited monthly statements of
income for the three month period ending on the Reference Date, for each of the
ACBR Entities (the “Monthly Financial
Information,” and, collectively with the Audited Financial
Information and the Unaudited Financial Information, the “Financial Information”).  Except as noted therein and except for normal
period-end adjustments and the lack of footnotes with respect to the Unaudited
Financial Information, the Financial Information was prepared in accordance
with GAAP in effect at the time of such preparation applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such Financial Information) and fairly presented in all material respects
the consolidated financial position of the ACBR Entities as of such date,
subject, in the case of the Unaudited Financial Information, to normally
recurring year-end audit adjustments. 
Notwithstanding the foregoing, Buyer acknowledges that such Financial
Information was prepared by Seller or its Affiliates for internal purposes,
reflects allocation of some but not necessarily all costs incurred by
Affiliates of the ACBR Entities for their benefit, and that no representation
or warranty is made that Buyer will be able to operate the Property for the
costs reflected in the Financial Information.

 

17

 

Section 4.5                                   No
Undisclosed Liabilities

 

None of the
ACBR Entities has any liabilities of any nature required by GAAP to be
reflected on the balance sheet of such ACBR Entity or in the notes thereto,
except (i) liabilities that are reflected in, reserved against or
disclosed in the Financial Information or any of the notes thereto, (ii) liabilities
that were incurred after the Reference Date in the ordinary course of business
of the ACBR Entities, (iii) liabilities that are set forth in Section 4.5 of the Seller Disclosure Letter or (iv) liabilities
that would not have, individually or in the aggregate, an ACBR Material Adverse
Effect.

 

Section 4.6                                   Real
Property

 

(a)                                  Section 4.6(a) of the Seller
Disclosure Letter sets forth a list of all real property owned by the ACBR
Entities (collectively, other than the Excluded Property, the “Real Properties”).  Seller has good and valid fee title to the
Real Properties, free and clear of all Encumbrances, except for Permitted
Encumbrances.  None of the ACBR Entities
has received any written notices that any condemnation, eminent domain or
similar proceeding affecting all or any material portion of its respective Real
Property is pending or threatened, which if determined adversely to the ACBR
Entities would reasonably be expected to have, individually or in the
aggregate, an ACBR Material Adverse Effect. 
Except as set forth in Section 4.6(a) of
the Seller Disclosure Letter, none of the ACBR Entities has leased or otherwise
granted to any person any leasehold interest in any Real Property.

 

(b)                                 Section 4.6(b) of the Seller
Disclosure Letter sets forth a list of all real property leased by the ACBR
Entities as of the date of this Agreement (collectively, the “Leased Properties”).  Except as set forth in Section 4.6(b) of
the Seller Disclosure Letter, and except as would not reasonably be expected to
have, individually or in the aggregate, an ACBR Material Adverse Effect, each
of the ACBR Entities has a valid leasehold, license or other interest in its
applicable Leased Property, free and clear of all Encumbrances, except for
Permitted Encumbrances.

 

Section 4.7                                   Intellectual
Property

 

Section 4.7 of the Seller
Disclosure Letter sets forth the registered Intellectual Property and
applications therefor that are owned by the ACBR Entities and will be
transferred to Buyer pursuant to the transactions contemplated by this
Agreement.  To Seller’s knowledge, the
ACBR Entities own or possess adequate and enforceable rights to use such
Intellectual Property set forth in Section 4.7
of the Seller Disclosure Letter.

 

Section 4.8                                   Agreements,
Contracts and Commitments

 

(a)                                  All Contracts to which any
of the ACBR Entities is a party or to which any of the ACBR Entities or any of
its properties is subject or by which any of the ACBR Entities or any of its
properties is bound that are Material Contracts are listed in Section 4.8(a) of the Seller Disclosure Letter.

 

(b)                                 Except as would not
reasonably be expected to have, individually or in the aggregate, an ACBR
Material Adverse Effect, the Material Contracts are, to the knowledge of
Seller, valid and binding obligations of the applicable ACBR Entity, as the
case may be, enforceable by such ACBR Entity in accordance with their
respective terms, subject, as to enforcement, to (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and (ii) general principles of
equity (regardless of whether enforcement is sought in equity or at law).

 

(c)                                  Except as set forth in Section 4.8(c) of the Seller Disclosure Letter, (i) none
of the ACBR Entities is (with or without the lapse of time or the giving of
notice, or both) in breach of or in default

 

18

 

under any of the Material Contracts, and (ii) to the knowledge of
Seller, no other party to any of the Material Contracts is (with or without the
lapse of time or the giving of notice, or both) in breach of or in default
under any of the Material Contracts, except, in the case of each of clauses (i) and
(ii), for such breaches or defaults that would not reasonably be expected to
have, individually or in the aggregate, an ACBR Material Adverse Effect.

 

Section 4.9                                   Litigation;
Orders

 

Except as set forth in Section 4.9 of the Seller Disclosure Letter, (a) there
is no Proceeding pending or, to the knowledge of Seller, threatened against any
of the ACBR Entities or any of their properties or assets (other than the
Excluded Assets), before any Governmental Entity that would reasonably be
expected to have, individually or in the aggregate, an ACBR Material Adverse
Effect, and (b) there is no Order outstanding against any of the ACBR
Entities that would reasonably be expected to have, individually or in the
aggregate, an ACBR Material Adverse Effect. 
To the knowledge of Seller, none of the ACBR Entities is in default
under any Order of any Governmental Entity, except for any such default or
defaults that would not reasonably be expected to have, individually or in the
aggregate, an ACBR Material Adverse Effect.

 

Section 4.10                            Environmental
Matters 

 

Except as set forth in Section 4.10 of the Seller Disclosure Letter and except
as would not reasonably be expected to have, individually or in the aggregate,
an ACBR Material Adverse Effect, to the knowledge of Seller, (i) the ACBR
Entities are in compliance with all applicable federal, state, and local laws
governing pollution or the protection of the environment (“Environmental Laws”), (ii) none of the
ACBR Entities has received any written notice with respect to the business of,
or any property owned or leased by, any of the ACBR Entities from any
Governmental Entity or third party alleging that the ACBR Entities are not in
compliance with any Environmental Law, and (iii) none of the ACBR Entities
has caused any “release” of a “hazardous substance,” as those terms are defined
in the Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. § 9601 et seq.,
on any real property owned or leased by any of the ACBR Entities that requires
remediation or investigation under Environmental Laws.  The representations and warranties in this Section 4.10 constitute the sole representations and
warranties concerning environmental matters in this Agreement.

 

Section 4.11                            Permits;
Compliance with Laws 

 

(a)                                  The ACBR Entities and, to
Seller’s knowledge, each of their respective directors, officers, Persons
performing management functions similar to officers and partners hold all
permits, registrations, findings of suitability, licenses, variances,
exemptions, certificates of occupancy, orders and approvals of all Governmental
Entities (including all authorizations under Gaming Laws, the Merchant Marine
Act of 1920 and the Shipping Act of 1916 and Certificates of Inspection issued
by the U.S. Coast Guard) (collectively “Permits”),
necessary to conduct the business and operations conducted at the Property,
except for such Permits, the failure of which to hold, would not reasonably be
expected to have, individually or in the aggregate, an ACBR Material Adverse
Effect (the “ACBR Permits”), each of which ACBR
Permit is in full force and effect in all material respects, and, to Seller’s
knowledge, no event has occurred which permits, or upon the giving of notice or
passage of time or both, would permit, revocation, non-renewal, modification,
suspension, limitation or termination of any ACBR Permit that currently is in
effect, the loss of which either, individually or in the aggregate, would be
reasonably likely to have an ACBR Material Adverse Effect.  The ACBR Entities, and to Seller’s knowledge,
each of their respective directors, officers, key employees and Persons
performing management functions similar to officers and partners, are in
compliance with the terms of the ACBR Permits, except for such failures to
comply which would not, individually or in the aggregate, be reasonably likely
to have an ACBR Material

 

19

 

Adverse Effect.  To Seller’s
knowledge, and except as set forth in Section 4.11
of the Seller Disclosure Letter, the businesses conducted by the ACBR Entities
are not being conducted in violation of any applicable Law of any Governmental
Entity (including, without limitation, any Gaming Laws), except for possible
violations which, individually or in the aggregate, do not and would not be
reasonably likely to have an ACBR Material Adverse Effect.  The ACBR Entities have not received a notice
of any investigation or review by any Governmental Entity with respect to the
ACBR Entities or the Property that is pending, and, to the knowledge of Seller,
no investigation or review is threatened, nor has any Governmental Entity
indicated any intention to conduct the same, other than those the outcome of
which would not, individually or in the aggregate, be reasonably likely to have
an ACBR Material Adverse Effect.

 

(b)                                 None of the ACBR Entities
or, to Seller’s knowledge, any of their respective directors, officers, key
employees or Persons performing management functions similar to officers or
partners has received any written claim, demand, notice, complaint, court order
or administrative order from any Governmental Entity in the past three years
under, or relating to any violation or possible violation of any Gaming Laws
related to actions or inactions at the Property which did or would be
reasonably likely to result in fines or penalties of $100,000 or more.  To Seller’s knowledge, there are no facts,
which if known to the regulators under the Gaming Laws will or would be
reasonably likely to result in the revocation, limitation or suspension of any
material license, finding of suitability, registration, permit or approval
related to the ACBR Entities or the Property under the Gaming Laws.

 

Section 4.12                            Labor
Matters

 

Except as set forth in Section 4.12 of the Seller Disclosure Letter, (a) there
are no written collective bargaining agreements to which any of the ACBR
Entities is a party or by which any of the ACBR Entities is bound, (b) there
is no labor strike, slowdown, work stoppage or lockout pending, or to the
knowledge of Seller, threatened against any of the ACBR Entities which would be
reasonably likely to have, individually or in the aggregate, an ACBR Material
Adverse Effect, and (c) there is no material unfair labor practice charge
or complaint pending or, to the knowledge of Seller, threatened against any of
the ACBR Entities, before the National Labor Relations Board which would be
reasonably likely to have, individually or in the aggregate, an ACBR Material
Adverse Effect.

 

Section 4.13                            Employee
Benefits

 

Section 4.13 of the Seller
Disclosure Letter sets forth an accurate and complete list of all (a) ”employee
welfare benefit plans,” within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations thereunder (“ERISA”); (b) ”employee
pension benefit plans,” within the meaning of Section 3(2) of ERISA;
and (c) bonus, stock option, stock purchase, restricted stock, incentive,
fringe benefit, profit-sharing, pension or retirement, deferred compensation,
medical, life insurance, disability, accident, salary continuation, severance,
accrued leave, vacation, sick pay, sick leave, supplemental retirement,
unemployment and other employee benefit plans, programs, agreements and
arrangements (whether or not insured) maintained or contributed to or required
to be contributed to by (i) Seller (with respect to the Property) or (ii) the
ACBR Entities (with respect to the Property) for the benefit of employees
employed by any of the ACBR Entities in the Property’s business (the “Property Employees”) or employees employed
in the Property’s business that have entered into management contracts with
Seller (the “Argosy Property Employees”).  The plans, programs, agreements and
arrangements described in the preceding sentence are sometimes referred to
herein as the “Property Benefit Plans.”

 

20

 

Section 4.14                            Brokers

 

Except for Bear, Stearns & Co. Inc. (the
“Broker”), none of Seller, the ACBR
Entities nor any of their respective Affiliates or Representatives has employed
any broker, financial advisor or finder or incurred any Liability for any
brokerage fees, commissions or finder’s fees in connection with the
transactions contemplated by this Agreement. 
Seller shall be solely obligated to pay Broker any and all fees,
commissions and finder fees in connection with this transaction.  The provisions of this Section 4.14 shall survive the Closing
or earlier termination of this Agreement.

 

Section 4.15                            Taxes

 

There is no tax sharing
agreement that will require any payment by the ACBR Entities after the Closing
Date.  There are no Encumbrances for
Taxes except for Permitted Encumbrances.

 

Section 4.16                            Insurance

 

The insurance policies
maintained by Seller, the ACBR Entities or their respective Affiliates in
respect of the Property insure against risks and liabilities customary in the
industry.

 

Section 4.17                            Vessel

 

(a)                                  The Vessel is currently
documented with the United States Coast Guard. 
Seller has good and merchantable title to the Vessel free and clear of
all Encumbrances except Permitted Encumbrances. 
The Seller does not make any representations or warranties as to the
condition or seaworthiness of the Vessel.

 

(b)                                 Each of Seller and the ACBR
Entities is, and on the Closing Date, will be, a citizen of the United States,
within the meaning of Section 2 of the Shipping Act, 1916, as amended (“Shipping Act”), and the Vessel is U.S. flagged, U.S. built
and fully qualified to engage in the coastwise trade of the United States.  To Seller’s and ACBR Entities’ knowledge (i) at
no time has the Vessel been sold, leased or chartered to a person other than a
citizen of the United States within the meaning of the Shipping Act, and (ii) at
no time has the Vessel been flagged, documented, registered or operated under
the authority or registry of a country other than the United States.

 

Section 4.18                            Computer
Software

 

Section 4.18 of the Seller
Disclosure Letter sets forth a true and correct list of all material computer
software used at the Property by the ACBR Entities that is intended to continue
to be available for use by the ACBR Entities following the Closing (the “Assumed Software”).

 

Section 4.19                            Personal
Property

 

Except for Permitted
Encumbrances and excluding the Excluded Assets, the ACBR Entities have good and
valid title to, or an adequate leasehold interest in, or other legal right to,
all tangible personal property necessary to conduct its business as presently
conducted, except as would not have an ACBR Material Adverse Effect.  Notwithstanding anything contained in this Section 4.19, the representations contained
herein do not concern the Real Properties, the Leased Properties or the
Intellectual Property, which are the subject of the representations in Sections 4.6 and 4.7, respectively.

 

21

 

Section 4.20                            Property
and Assets Sufficient for Conduct of Business

 

Subject to the terms of the
License Agreement, the Transition Services Agreement and Section 6.16, the Property and other
assets and rights of the ACBR Entities, other than the Excluded Assets,
constitute all of the assets, properties, and rights required for the operation
of the business of the ACBR Entities substantially in the manner as it is
presently operated.

 

Section 4.21                            No
Other Representations

 

Except for the
representations and warranties made by Seller that are contained in this Article IV and in the Seller Disclosure Letter, none of
Seller or the ACBR Entities, nor any other person or entity acting on behalf of
Seller or the ACBR Entities, makes any representations or warranty, express or
implied, and the Sellers hereby disclaim any other representations and
warranties made by Seller, or any of their respective officers, directors,
employees, shareholders, controlling persons, Affiliates, agents, advisors or
other representatives, with respect to the execution and delivery of this
Agreement or the transactions contemplated hereby, notwithstanding the delivery
or disclosure to any of them or their respective representatives of any
documentation or other information with respect to any one or more of the
foregoing.

 

ARTICLE V

 

REPRESENTATIONS
AND WARRANTIES OF BUYER AND PARENT GUARANTOR

 

Each of Buyer and Parent
Guarantor represents and warrants to Seller, except as set forth herein and in
the Disclosure Letter delivered by Buyer to Seller on the date of this
Agreement (the “Buyer Disclosure Letter”), as
follows:

 

Section 5.1                                   Organization
and Qualification of Buyer and Parent Guarantor

 

Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Louisiana.  Buyer will, upon the
consummation of the transactions contemplated by this Agreement, have all
necessary power and authority to own, lease and operate the Property and to
carry on the business of the ACBR Entities as now conducted.  Parent Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada.

 

Section 5.2                                   Authority;
No Conflict; Required Filings and Consents

 

(a)                                  Each of Buyer and Parent
Guarantor has the requisite power and authority to execute and deliver this
Agreement and to consummate the transactions to which it is a party that are
contemplated by this Agreement.  The
execution and delivery of this Agreement by each of Buyer and Parent Guarantor
and the consummation by each of Buyer and Parent Guarantor of the transactions
to which it is a party that are contemplated by this Agreement have been duly
authorized by all necessary action on the part of each of Buyer and Parent
Guarantor, respectively.  This Agreement
has been duly executed and delivered by each of Buyer and Parent Guarantor, and
assuming this Agreement constitutes the valid and binding obligation of the
other parties hereto, this Agreement constitutes the valid and binding
obligation of each of Buyer and Parent Guarantor, enforceable against each of
Buyer and Parent Guarantor, respectively, in accordance with its terms,
subject, as to enforcement, to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereinafter in effect
affecting creditors’ rights generally and (ii) general principles of
equity.

 

22

 

(b)                                 The execution and delivery
of this Agreement by each of Buyer and Parent Guarantor does not, and the
consummation by each of Buyer and Parent Guarantor of the transactions to which
it is a party that are contemplated by this Agreement will not, (i) conflict
with, or result in any violation or breach of, any provision of the
organization documents of Buyer or Parent Guarantor, respectively, (ii) result
in any violation or breach of, or constitute (with or without notice or lapse
of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material benefit)
under, or require a consent or waiver under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture or other agreement to which
Buyer or Parent Guarantor, respectively, is a party or otherwise bound, or (iii) subject
to the governmental filings and other matters referred to in Section 5.2(c), contravene, conflict with, or result in
a violation of any of the terms or requirements of, or give any Governmental
Entity or any other Person the right to revoke, withdraw, suspend, cancel, terminate,
or modify any permit, concession, franchise, license, judgment, or Law
applicable to Buyer or Parent Guarantor, respectively, or any of its properties
or assets.

 

(c)                                  No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Buyer or Parent Guarantor
in connection with the execution and delivery of this Agreement by Buyer or
Parent Guarantor, respectively, or the consummation by Buyer or Parent Guarantor,
respectively, of the transactions to which it is a party that are contemplated
hereby, except for (i) any approvals or filing of notices required under
the Gaming Laws, (ii) such consents, approvals, orders, authorizations,
permits, filings, declarations or registrations related to, or arising out of,
compliance with statutes, rules or regulations regulating the consumption,
sale or serving of alcoholic beverages or the renaming or rebranding of the
operations at the Property owned and operated by Buyer, (iii) such other
filings, consents, approvals, orders, authorizations, permits, registrations
and declarations as may be required under the Laws of any jurisdiction in which
Buyer or Parent Guarantor, respectively, conducts any business or owns any
assets, and (iv) any consents, approvals, orders, authorizations,
registrations, permits, declaration or filings required to be obtained or made
by Seller, any of the ACBR Entities or any of their Affiliates or key employees
(including, without limitation, under the Gaming Laws).

 

Section 5.3                                   Brokers

 

Except as set forth in Section 5.3 of the Buyer Disclosure
Letter, none of Buyer nor any of its Affiliates or Representatives has employed
any broker, financial advisor or finder or incurred any Liability for any brokerage
fees, commissions or finder’s fees in connection with the transactions
contemplated by this Agreement.

 

Section 5.4                                   Financing

 

Buyer and Parent Guarantor
have as of the date hereof and will have available on the Closing Date
sufficient funds to enable Buyer to pay the Purchase Price, and all fees and
expenses necessary or related to the consummation of the transactions
contemplated by this Agreement.

 

Section 5.5                                   Licensability
of Principals

 

Neither Buyer nor any of its
Representatives or Affiliates has ever been denied, or had revoked, a gaming
license by a Governmental Entity or Gaming Authority.  Buyer and each of its Representatives and
Affiliates is in good standing in each of the jurisdictions in which Buyer or
any of its Affiliates owns or operates gaming facilities.  There are no facts, which if known to the
regulators under the Gaming Laws, that would (a) be reasonably likely to
result in the denial, revocation, limitation or suspension of a gaming license
or (b) result in a negative outcome to any finding of suitability
proceedings currently pending, or under the suitability proceedings necessary
for the consummation of this Agreement.

 

23

 

Section 5.6            Compliance with Gaming Laws

 

(a)           Buyer,
and  each of its directors, officers, key
employees and Persons performing management functions similar to officers and
partners hold all Permits necessary to conduct the business and operations of
Buyer (the “Buyer Permits”), each of which
Buyer Permit is in full force and effect in all material respects and, to Buyer’s
knowledge, no event has occurred which permits, or upon the giving of notice or
passage of time or both would permit, revocation, non-renewal, modification,
suspension, limitation or termination of any Buyer Permit that currently is in
effect the loss of which either, individually or in the aggregate, would be
reasonably likely to have a Buyer Material Adverse Effect.  Buyer, and to Buyer’s knowledge, each of its
directors, officers, key employees and Persons performing management functions
similar to officers and partners are in compliance with the terms of the Buyer
Permits, except for such failures to comply, which singly or in the aggregate,
would not, individually or in the aggregate, be reasonably likely to have a
Buyer Material Adverse Effect.  Buyer has
not received notice of any investigation or review by any Governmental Entity
under any Gaming Law with respect to Buyer or any of its Affiliates that is
pending, and, to the knowledge of Buyer, no investigation or review is
threatened, nor has any Governmental Entity indicated any intention to conduct
the same, other than those the outcome of which would not, individually or in
the aggregate, be reasonably likely to have a Buyer Material Adverse Effect.

 

(b)           Neither
Buyer, nor any director, officer, key employee or partner of Buyer or their
Affiliates has received any written claim, demand, notice, complaint, court
order or administrative order from any Governmental Entity in the past three
years under, or relating to any violation or possible violation of any Gaming
Laws which did or would be reasonably likely to result in fines or penalties of
$100,000 or more.  To the knowledge of Buyer,
there are no facts, which if known to the regulators under the Gaming Laws will
or could reasonably be expected to result in the revocation, limitation or
suspension of a material license, finding of suitability, registration, permit
or approval of them, or any of their officers, directors, key employees or
Persons performing management functions similar to an officer or partner, or
limited partner under any Gaming Laws. 
Neither Buyer nor any officer, director, key employee or Person
performing any management functions similar to an officer or partner of Buyer
or their Affiliates, has suffered a suspension or revocation of any Buyer
Permit held under the Gaming Laws.

 

Section 5.7            Purchase For Investment

 

Buyer is acquiring the
Shares for its own account and for investment purposes, and not with a view to,
or for offer or sale in connection with, any distribution of the Shares.  Buyer (i) is knowledgeable,
sophisticated and experienced in business and financial matters and fully
understands the limitations on transfer, and (ii) is an “accredited
investor” as such term is defined in Rule 501(a) of Regulation D
under the Securities Act.

 

Section 5.8            Investigation by Buyer; Seller’s Liability

 

Buyer acknowledges and
agrees that it has conducted its own independent investigation, review and
analysis of the business, operations, assets, liabilities, results of
operations, financial condition, software, technology and prospects of the
Property and the ACBR Entities, which investigation, review and analysis was done
by Buyer and its Affiliates and, to the extent Buyer deemed appropriate, by
Buyer’s Representatives.  Without
limitation of the foregoing, Buyer acknowledges that the Purchase Price has
been negotiated based on Buyer’s express agreement that there would be no
contingencies (financial or otherwise) to Closing other than the conditions set
forth in Article VII.  Buyer acknowledges that,
should the Closing occur, Buyer will acquire the Property and the ACBR Entities
and their respective properties, assets and liabilities in an “As Is” condition
and on a “Where Is” basis, as set

 

24

 

forth in Section 10.1, without any
representation or warranty of any kind, express or implied, except such
representations and warranties expressly set forth in this Agreement.  Further, without limiting any representation,
warranty or covenant of Seller or the ACBR Entities expressly set forth herein,
Buyer acknowledges that it has waived and hereby waives as a condition to Closing
any further due diligence reviews, inspections or examinations with respect to
the Property or the ACBR Entities, including, without limitation, with respect
to engineering, environmental, title, survey, financial, operational,
regulatory and legal compliance matters.

 

Section 5.9            Litigation

 

There are no Proceedings
pending or, to Buyer’s knowledge, threatened against Buyer before any
Governmental Entity, which, if determined adversely, could prevent or
materially delay Buyer from completing any of the transactions contemplated by
this Agreement.

 

Section 5.10         Citizenship

 

On the Closing Date, Buyer
is a citizen of the United States, within the meaning of Section 2 of the
Shipping Act.

 

ARTICLE VI

 

COVENANTS

 

Section 6.1            Conduct
of Business of the ACBR Entities

 

(a)           During
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement and the Closing, subject to the limitations
set forth below, Seller shall cause the ACBR Entities to carry on their business
in the ordinary course in substantially the same manner as previously
conducted, pay their debts and Taxes when due (subject to good faith disputes
over such debts or Taxes), and, to the extent consistent with the operation of
the Property in the ordinary course of business, use reasonable best efforts to
preserve intact their present business organization, keep available the
services of their present officers and key employees and preserve their
relationships with customers, suppliers, distributors, and others having
business dealings with them, in each case, except to the extent that Buyer
shall otherwise consent in writing, which consent shall not be unreasonably
withheld.  Notwithstanding the
foregoing, Seller’s obligations to comply with this Section 6.1(a) shall be subject to the limitations
set forth in the FTC Documents and Section 6.1(f) below.

 

(b)           Without
limiting the generality of the foregoing, except (i) as expressly
contemplated by this Agreement, (ii) as is required by, or necessary
pursuant to, the FTC Documents to maintain the viability and marketability of
the Property and to prevent the destruction, removal, wasting, deterioration, or
impairment of the Property, except for ordinary wear and tear (including, but
not limited to, regular repair and maintenance efforts, continuation of any
planned capital expenditures, and marketing and promotional programs), but
subject to Section 6.1(f) below, (iii) as
disclosed in Section 6.1(b) of
the Seller Disclosure Letter, or (iv) with respect to the Excluded Assets,
which Excluded Assets Seller and its Affiliates shall be entitled to retain,
and the ACBR Entities shall transfer to Seller and/or such Affiliates of Seller
on or prior to the Closing as provided in Section 2.5,
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement and the Closing, without the
written consent of Buyer (which consent shall not be unreasonably withheld),
Seller agrees that it shall not cause the ACBR Entities to:

 

25

 

(i)            sell, pledge, lease, dispose of, grant, encumber or
otherwise authorize the sale, pledge, disposition, grant or Encumbrance of the
Property except for (1) sales of current assets in the ordinary course of
business in connection with the operation of the Property, (2) sales of
equipment and other non-current assets in the ordinary course of business in
connection with the operation of the Property or (3) other sales which do
not exceed, either individually or in the aggregate, the amounts set forth in Section 6.1(b)(i)(3) of the
Seller Disclosure Letter;

 

(ii)           incur any material Liabilities, except in the ordinary
course of business; or make or agree to make any capital expenditures, other
than capital expenditures that are made in the ordinary course of business
consistent with past practice (as determined by the ACBR Entities without
interference by the Seller) and that are made (x) substantially in accordance
with the levels (in dollars), categories and timing for capital expenditures
contained in the 2005 capital expenditure budget attached to Section 6.1(b)(ii) of the Seller
Disclosure Letter or (y) otherwise consistent with the ACBR Entities’ past
practice and operating strategy and, in the case of this clause (y) in an
aggregate amount that does not exceed the amount set forth in Section 6.1(b)(ii) of the Seller
Disclosure Letter;

 

(iii)          modify, amend or terminate any of the Material Contracts or
waive, release or assign any rights or claims, except in the ordinary course of
business or as required by applicable Law;

 

(iv)          except in the ordinary course of business, subject the
Property to any Encumbrance, other than Permitted Encumbrances;

 

(v)           fail to maintain the existing insurance coverage of all
types relating to the Property (however, in the event any such coverage shall
be terminated or lapse, to the extent available at reasonable cost, the ACBR
Entities may procure substantially similar substitute insurance policies which
in all material respects are in at least such amounts and against such risks as
are currently covered by such policies);

 

(vi)          except (x) in the ordinary course of business or (y) as may
be required by Contract, award or increase any bonuses, salaries, or other
compensation to any member, director, officer, or Property Employee, or enter
into any employment, severance, or similar Contract with any member, director,
officer, or Property Employee; or

 

(vii)         enter into a Contract to do any of the foregoing, or to
authorize or announce an intention to do any of the foregoing.

 

(c)           Notwithstanding
anything in this Agreement (including the restrictions set forth in Sections 6.1(a) and (b)), but subject to Section 6.1(f) below, nothing
herein shall preclude Seller, the ACBR Entities or any of their respective
Affiliates from taking any action that is required by, or necessary pursuant
to, the FTC Documents to
maintain the viability and marketability of the Property and to prevent the
destruction, removal, wasting, deterioration, or impairment of the Property,
except for ordinary wear and tear (including, but not limited to, regular
repair and maintenance efforts, continuation of any planned capital
expenditures, and marketing and promotional programs), or any action
that Seller or Penn in good faith determines is reasonably required in order to
consummate the transactions contemplated thereby.

 

(d)           On
or before the Closing Date, Seller shall terminate or cause to be terminated
any tax sharing agreement solely among or between any ACBR Entities and Seller.

 

(e)           For
purposes of this Section 6.1,
“ordinary course of business” or “ordinary course” shall mean the ordinary
course of business of the ACBR Entities, Seller or Penn.

 

26

 

(f)            None
of Section 6.1(c), clause (ii) of
the first paragraph of Section 6.1(b) or
the last sentence of Section 6.1(a) (collectively,
the “FTC Provisions”) shall permit
Seller to create any liability other than a current liability or create any
post-Closing obligation of the ACBR Entities or Buyer, in each case, unless
otherwise permitted or not prohibited by the provisions of this Section 6.1 other than the FTC
Provisions.  If, pursuant to the FTC
Provisions, Seller creates any liability other than a current liability or
creates any post-Closing obligation of the ACBR Entities or Buyer, then, in
each such case, the parties agree that such liability or obligation shall be
reflected as a current liability for purposes of calculating Working Capital.

 

Section 6.2            Cooperation;
Notice; Cure

 

Subject to compliance with
applicable Law (including, without limitation, antitrust Laws and Gaming Laws),
from the date hereof until the Closing, Seller and Buyer shall confer on a
regular and frequent basis with one or more representatives of the other party
to report on the general status of ongoing operations of the Property.  Seller and Buyer shall promptly notify each
other in writing of, and will use reasonable best efforts to cure before the
Closing Date, any event, transaction or circumstance, as soon as practical
after it becomes known to such party, that causes or will cause any covenant or
agreement of Seller or Buyer under this Agreement to be breached in any
material respect or that renders or will render untrue in any material respect
any representation or warranty of Seller or Buyer contained in this
Agreement.  Nothing contained in Section 6.1 shall prevent Seller from
giving such notice, using such efforts or taking any action to cure or curing
any such event, transaction or circumstance. 
No notice given pursuant to this Section 6.2
shall have any effect on the representations, warranties, covenants
or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein.

 

Section 6.3            No Solicitation

 

Subject to obligations
imposed by applicable Law, prior to the earlier of the Closing and the
termination of this Agreement in accordance with Section 8.1, Seller shall not and shall cause the  ACBR Entities not to, directly or indirectly,
through any of their respective officers, directors, employees, financial
advisors, agents or other representatives (collectively, “Representatives”) (i) solicit or
initiate any inquiries or proposals that constitute, or could reasonably be
expected to lead to, an Acquisition Proposal with respect to the ACBR Entities,
(ii) engage in negotiations with any Person (or group of Persons) other
than Buyer or its respective Affiliates concerning, or (iii) provide any
non-public information to any person or entity relating to, any Acquisition
Proposal, in the case of each of clauses (i), (ii) and (iii), except to
the extent that the Board of Directors of Seller reasonably determines in good
faith that such actions would be required for directors of Seller to comply
with, or that failure to take such actions could reasonably be expected to
constitute a failure to comply with, their respective fiduciary duties under
applicable Laws.

 

Section 6.4            Employee
Matters

 

(a)           Prior
to the Closing, Buyer shall consider causing the ACBR Entities to make written
offers of employment to all Argosy Property Employees, and, to the extent any
such offers are made, such offers shall remain open for at least ten days from
the date on which they are delivered to such Argosy Property Employees, and
which offers, in the exercise of each Argosy Property Employee’s sole
discretion, may be accepted (any accepted offer becoming effective as of the
Closing) or rejected by such Argosy Property Employee.  In the event that an Argosy Property Employee
elects not to accept such offer or such offer is not made to such Argosy
Property Employee, such Argosy Property Employee shall continue to be employed
by Seller or its Affiliates on the same terms and conditions, subject to such
Argosy Property Employee and Seller or its Affiliates mutually agreeing on a
new position for such

 

27

 

employee.  All Property Employees who are employed by
the ACBR Entities in the Property’s business as of the Closing shall continue
as employees of the ACBR Entities as of the Closing and, together with all
Argosy Property Employees who are offered and accept employment with the ACBR
Entities, shall be referred to herein as “Transferred
Employees.”

 

(b)           For
a period of at least one year immediately following the Closing Date, Buyer
shall provide benefits to each Transferred Employee remaining employed by the
ACBR Entities that are, in the aggregate, at least as favorable as those
provided to similarly situated employees of Affiliates of Buyer.

 

(c)           From
and after the Closing Date, Buyer shall honor in accordance with their
respective terms (as in effect on the date of this Agreement), all the
employment, severance and termination agreements disclosed in Section 4.13 of the Seller Disclosure
Letter with respect to all Transferred Employees.  With respect to Transferred Employees who
have been designated as Key Employees under the Argosy Gaming Company Corporate
and Key Employee Severance Pay Plan (the “Severance
Plan”), for a period of at least one year immediately following the
Closing Date, Buyer shall honor the Severance Plan in accordance with its terms
as in effect on the date of this Agreement for a period of at least one year
immediately following the Closing Date.

 

(d)           With
respect to any employee or employee benefit plan, program or arrangement
maintained by Buyer, for all purposes of determining eligibility to participate
and vesting, and (with respect only to any severance plan, program or
arrangement) for purposes of benefit accrual, a Transferred Employee’s service
with the ACBR Entities or Seller shall be treated as service with Buyer; provided, however, that such service need
not be recognized to the extent that such recognition would result in any
duplication of benefits.

 

(e)           Buyer
shall waive, or cause to be waived, to the extent permitted by Buyer’s benefit
plans, any pre-existing condition limitation under any welfare benefit plan
maintained by Buyer or any of its Affiliates in which Transferred Employees (and
their eligible dependents) will be eligible to participate from and after the
Closing, except to the extent such pre-existing condition limitation would have
been applicable under the comparable Property Benefit Plan immediately prior to
the Closing.  Buyer shall recognize the
dollar amount of all expenses incurred by each Transferred Employee (and his or
her eligible dependents) during the calendar year in which the Closing occurs
for purposes of satisfying such year’s deductible and co-payment limitations
under the relevant welfare benefit plans in which they will be eligible to
participate from and after the Closing, to the extent such deductibles and
co-payments credits are permitted by Buyer’s benefit plans.

 

(f)            Buyer
shall not, and shall cause each of its Affiliates not to, at any time during
the ninety (90) days following the Closing Date, effectuate a “plant closing”
or “mass layoff,” as those terms are defined in the WARN Act, affecting in
whole or in part any site of employment, facility, operating unit or employee
of Seller, without complying fully with the notice requirements and other
provisions of the WARN Act, and Buyer shall give concurrent notice to Seller in
the event that Buyer of any of its Affiliates effectuates any of the foregoing.  Buyer agrees that from and after the Closing
Date, Buyer shall be responsible for any notification required under the WARN
Act with respect to the Transferred Employees.

 

(g)           Notwithstanding
anything to the contrary in this Section 6.4,
(i) Seller and Buyer each shall pay one-half of any retention bonuses
required to be paid pursuant to the Argosy Gaming Company Retention Bonus Plan
(other than any retention bonuses payable to Frank Quigley), and (ii) Seller
shall pay 100% of any amounts required to be paid to Frank Quigley, as a result
of the consummation of the transactions contemplated by this Agreement or his
termination by Seller, pursuant to (x) the Argosy Gaming Company Retention
Bonus Plan and (y) the Argosy Gaming Company Corporate and Key

 

28

 

Employee Severance Plan
pursuant to the modification to Seller offer letter to Frank Quigley dated May 16,
2005.

 

Section 6.5            Access
to Information and the Property

 

(a)           Upon
reasonable notice, subject to applicable Law, including without limitation,
antitrust Laws and Gaming Laws, Seller shall permit Buyer’s Representatives to
have reasonable access, during normal business hours during the period from the
date hereof to the Closing, to the Property and to all of the ACBR Entities’
respective personnel, properties, books, Property Benefit Plans, insurance
records, Tax Returns, Contracts and records, in each case, other than any
information pertaining to Excluded Assets, as Buyer may reasonably request
(collectively, the “Inspection”); provided, however, that (i) Buyer
shall provide Seller and the ACBR Entities with at least twenty-four hours’
prior written notice of any Inspection; (ii) if Seller or any of the ACBR
Entities so requests, Buyer’s Representatives shall be accompanied by a
Representative of Seller or the ACBR Entities; (iii) Buyer shall not
initiate contact with employees or other representatives of Seller or the ACBR
Entities other than Seller’s or the ACBR Entities’ Representatives or other
individuals designated by any of Seller’s or the ACBR Entities’ Representatives
without the prior written consent of Seller’s or the ACBR Entities’
Representatives, which consent shall not be unreasonably withheld or delayed; (iv) Buyer’s
Representatives shall not be entitled to perform any physical testing of any
nature with respect to any portion of the Property without Seller’s prior
written consent, which consent may be withheld if in the judgment of Seller’s
Representatives such testing would interfere with the operation of the business
conducted at the Property; (v) Buyer shall not unduly interfere with the
operation of the business conducted at the Property; (vi) Buyer shall, at
its sole cost and expense, promptly repair any damage to the Property or any
other property owned by a Person other than Buyer arising from or caused by
such Inspection, and shall reimburse Seller for any loss arising from or caused
by any Inspection, and restore the Property or such other third-party property
to substantially the same condition as existed prior to such Inspection, and
shall indemnify, defend and hold harmless the ACBR Entities, Seller and their
respective Affiliates from and against any personal injury or property damage
claims, liabilities, judgments or expenses (including reasonable attorneys’
fees) incurred by any of them arising or resulting therefrom; and (vii) in
no event shall the results of any such Inspection or Buyer’s satisfaction
therewith be a condition to Buyer’s obligations hereunder, it being the intent
of Buyer to purchase the Property in an “As Is” condition and on a “Where Is”
basis as set forth in Section 10.1.  Buyer will hold and cause its Representatives
to hold any such information furnished to it by Seller, which is nonpublic in
confidence in accordance with (x) the confidentiality agreement dated April 26,
2005 between Penn and Buyer (the “Penn
Confidentiality Agreement”), and
(y) the confidentiality agreement dated April 26, 2005 between Seller and
Buyer (the “Seller  Confidentiality Agreement” and, together
with the Penn Confidentiality Agreement, the “Confidentiality
Agreements”).  The
Confidentiality Agreements shall survive the Closing and continue in full force
and effect thereafter.  Notwithstanding
anything to the contrary, in the event any proprietary information or knowledge
relating to an Excluded Asset is obtained, revealed or otherwise made known to
Buyer, Buyer shall not reveal, disclose, employ or otherwise use any such
proprietary information and will hold such information in confidence in
accordance with the Confidentiality Agreements. 
No information or knowledge obtained in any investigation pursuant to
this Section 6.5 shall affect
or be deemed to modify any representation or warranty contained in this
Agreement or the conditions to the obligations of the parties to consummate the
transactions contemplated herein.

 

(b)           Following
the Closing, upon reasonable notice, Buyer and Seller shall (and shall cause
their respective Affiliates and Representatives (including, in the case of
Buyer, the ACBR Entities) to) provide the other parties hereto and their
respective Affiliates and Representatives with reasonable access and
duplicating rights, during normal business hours, to all of Buyer’s, the ACBR
Entities, and Seller’s  personnel,
properties, books, Tax Returns, insurance records, Property Benefit Plans,
contracts, commitments and records included in or related to the ACBR Entities,
the Property, the Argosy Property

 

29

 

Employees or the Property
Employees and shall cooperate with the requesting party, as reasonably
necessary for such requesting party to pursue any Proceeding relating to the
claims in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, any suit, claim, action, proceeding or
investigation related to the Excluded Assets and any current or former Argosy
Property Employees or Property Employees. 
Notwithstanding the foregoing, no party shall be required to provide any
information which (i) it reasonably believes it may not provide to the
requesting party or its respective Affiliates and Representatives by reason of
applicable Law or by a confidentiality agreement with a third party, and if, in
the case of a confidentiality agreement, the non-requesting party has used
reasonable best efforts to obtain the consent of such party to such disclosure,
or (ii) constitutes information protected by the attorney/client and/or
attorney work product privilege.  If any
material is withheld by the non-requesting party pursuant to the immediately
preceding sentence, such non-requesting party shall inform the requesting party
as to the general nature of the material which is being withheld.

 

Section 6.6            Governmental
Approvals

 

(a)           Subject
to Section 6.1(c), Parent
Guarantor, Buyer and Seller shall cooperate with each other and use their
respective best efforts to (i) as promptly as practicable, take, or cause
to be taken, all appropriate action, and do or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions governed by this Agreement as promptly as
practicable and to permit Buyer to own the Shares, and the ACBR Entities to
operate the Property, in each case, after the Closing in substantially the same
manner as owned and operated by Seller and its subsidiaries prior to the
Closing, (ii) obtain all Gaming Approvals, (iii) obtain from any
Governmental Entities any consents, licenses, permits, waivers, approvals, authorizations
or orders required (A) to be obtained or made by the ACBR Entities, Seller
or Buyer or any of their respective Affiliates or any of their respective
Representatives and (B) to avoid any action or proceeding by any
Governmental Entity, in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions governed
herein, and (iv) make all necessary filings, and thereafter make any other
required submissions with respect to this Agreement, as required under (A) any
applicable federal or state securities Laws, (B) the Gaming Laws, (C) antitrust
laws, including the Hart-Scott-Rodino Improvements Act of 1976 (the “HSR Act”), and (D) any other
applicable Law (the Gaming Approvals and the other consents, licenses, permits,
waivers, approvals, authorizations, orders, filings and other submissions
referred to in clauses (ii) through (iv), collectively, the “Governmental Approvals”), and to comply
with the terms and conditions of all such Governmental Approvals.  The parties hereto and their respective
Representatives and Affiliates shall file within ten days after the date
hereof, all required initial applications and documents in connection with
obtaining the Governmental Approvals (including without limitation under
applicable Gaming Laws) and shall act diligently and promptly to pursue the
Governmental Approvals and shall cooperate with each other in connection with
the making of all filings referenced in the preceding sentence, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith.  Buyer and Seller shall use reasonable best
efforts to schedule and attend any hearings or meetings with Governmental
Entities to obtain the Governmental Approvals as promptly as possible.  Buyer and Seller shall have the right to
review in advance and, to the extent practicable, each will consult the other
parties hereto on, in each case, subject to applicable Laws relating to the
exchange of information (including, without limitation, antitrust laws and any
Gaming Laws), all the information relating to Buyer, Seller or the ACBR
Entities, as the case may be, and any of their respective Affiliates or
Representatives which appear in any filing made with, or written materials
submitted to, any third party or any Governmental Entity in connection with the
transactions governed by this Agreement. 
Without limiting the foregoing, Buyer and Seller will notify the other
parties hereto promptly of the receipt of comments or requests from
Governmental Entities relating to Governmental

 

30

 

Approvals, and will supply the
other party with copies of all correspondence between the notifying party or
any of its Representatives and Governmental Entities with respect to
Governmental Approvals.

 

(b)           Without
limiting Section 6.6(a),
Parent Guarantor, Buyer and Seller shall:

 

(i)            each use its reasonable best efforts to avoid the entry
of, or to have vacated or terminated, any decree, order, or judgment that would
restrain, prevent or delay the Closing, on or before the Outside Date,
including defending through litigation on the merits any claim asserted in any
court by any Person;

 

(ii)           each use its reasonable best efforts to avoid or eliminate
each and every impediment under any antitrust, competition or trade regulation
Law that may be asserted by any Governmental Entity with respect to the Closing
so as to enable the Closing to occur as soon as reasonably possible (and in any
event no later than the Outside Date), including implementing, contesting or
resisting any litigation before any court or quasi-judicial administrative
tribunal seeking to restrain or enjoin the Closing; provided, however,
that Buyer and its Affiliates shall not be required to (and, except as required
by the FTC Documents, nothing in this Agreement shall require Seller, Penn, the
ACBR Entities or any of their respective Affiliates to) enter into or commit to
any divestitures, licenses or hold separate or similar arrangements with
respect to its, or their respective assets or conduct of business arrangements,
to the extent necessary to obtain any approval from a Governmental Entity
required to consummate the transactions contemplated hereby; and

 

(iii)          cooperate with each other and each use its best efforts to,
as promptly as practicable, take, or cause to be taken, all appropriate action,
and to do or cause to be done, all things required by, or necessary, proper or
advisable under applicable Law or otherwise (including, in the case of Buyer,
all things reasonably requested by Seller) to carry out the terms, intent and
purposes of, the FTC Documents.

 

(c)           Buyer
and Seller shall promptly advise each other upon receiving any communication
from any Governmental Entity whose consent or approval is required for
consummation of the transactions governed by this Agreement which causes such
party to reasonably believe that there is a reasonable likelihood that such
consent or approval from such Governmental Entity will not be obtained or that
the receipt of any such approval will be materially delayed.  Buyer and Seller shall use their reasonable
best efforts to take, or cause to be taken, all actions reasonably necessary to
defend any lawsuits or other legal proceedings challenging this Agreement or
the consummation of the transactions governed by this Agreement, seeking to
prevent the entry by any Governmental Entity of any decree, injunction or other
order challenging this Agreement or the consummation of the transactions
governed by this Agreement, appealing as promptly as possible any such decree,
injunction or other order and having any such decree, injunction or other order
vacated or reversed.

 

(d)           From
the date of this Agreement until the Closing, each party shall promptly notify
the other party hereto in writing of any pending or, to the knowledge of Seller
or Buyer, as appropriate, threatened action, suit, arbitration or other proceeding
or investigation by any Governmental Entity or any other Person (i) challenging
or seeking damages in connection with the Closing or any other transaction
governed by this Agreement or (ii) seeking to restrain or prohibit the
consummation of the Closing.

 

(e)           Parent
Guarantor shall cause Buyer to be capitalized to the extent and in the manner
necessary for Buyer to satisfy the financial suitability requirements for
licensure under the Gaming Laws.

 

31

 

Section 6.7            Publicity

 

Seller and Buyer shall agree
on the form and content of the initial press release regarding the transactions
contemplated hereby, thereafter shall consult with each other before issuing,
and shall provide each other the opportunity to review and comment upon and use
all reasonable efforts to agree upon, any press release or other public
statement with respect to any of the transactions contemplated hereby.  Seller and Buyer shall not issue any such
press release or make any such public statement prior to such consultation and
prior to considering in good faith any such comments, except as may be required
by applicable Law (including without limitation the Securities Act, the
Exchange Act, any rules and regulations of the National Association of
Securities Dealers, Inc. and any Gaming Laws) or any listing agreement
with the New York Stock Exchange or the NASDAQ Stock Market.  Notwithstanding anything to the contrary
herein, Buyer and Seller or their respective Affiliates may make any public
statement in response to specific questions by the press, analysts, investors
or those attending industry conferences or financial analyst conference calls,
so long as any such statements are not inconsistent with previous press
releases, public disclosures or public statements made jointly by Buyer and
Seller and do not reveal non-public information regarding the ACBR Entities,
Buyer or Seller.

 

Section 6.8            Further Assurances and Actions

 

(a)           Subject
to the terms and conditions herein, each party hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things reasonably necessary, proper or
advisable under applicable Laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including, without limitation,
using its reasonable best efforts (i) to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of Governmental
Entities and parties to Contracts with each party hereto as are necessary for
consummation of the transactions contemplated by this Agreement, and (ii) to
fulfill all conditions precedent applicable to such party pursuant to this
Agreement.

 

(b)           In
case at any time after the Closing any further action is necessary to carry out
the purposes of this Agreement or to vest Buyer with full title to the Shares,
the proper officers and/or directors of Buyer and Seller shall take all action
reasonably necessary (including executing and delivering further notices,
assumptions, releases and acquisitions); provided, that if such action
is necessary due to events or circumstances particular to Buyer, Buyer shall
bear the cost of such action.

 

Section 6.9            Transfer Taxes 

 

All transfer, documentary,
sales, use, stamp, registration and other such Taxes (including all applicable
real estate transfer or gains Taxes) and related fees (including any penalties,
interest and additions to Tax) incurred with respect to the Shares pursuant to
this Agreement shall be borne by Buyer. 
Except as required by applicable Law, Buyer shall prepare, execute and
file all Tax Returns and other documentation on a timely basis as may be
required to comply with the provisions of any such Tax Laws.

 

Section 6.10         Reservations; Chips

 

(a)           Reservations.  Buyer will honor the terms and rates of all
pre-Closing reservations (in accordance with their terms) at the Property by
customers, including advance reservation cash deposits, for services confirmed
by the ACBR Entities for dates after the Closing Date, to the extent that such
reservations were made in the ordinary course of business consistent with past
practices of the ACBR Entities.  The ACBR
Entities may continue to accept reservations for periods after the Closing in
the ordinary course of business in operating the Property, consistent with past
practices of the ACBR Entities.  Buyer
recognizes that such reservations may include discounts or other benefits,
including, without

 

32

 

limitation, benefits extended
under Seller’s player loyalty program or any other frequent player or casino
awards programs, group discounts, other discounts or requirements that food,
beverage or other benefits be delivered by Buyer to the guest(s) holding such
reservations.  Buyer will honor all
banquet facility and service agreements which have been granted to groups,
persons or other customers for periods after the Closing Date at the rates and
terms provided in such agreements, to the extent that such agreements were made
in the ordinary course of business consistent with past practices of the ACBR
Entities.  Buyer agrees that neither
Seller nor the ACBR Entities can make any representation or warranty that any
party holding a reservation or agreement for facilities or services will
utilize such reservation or honor such agreement.  Buyer, by the execution hereof, solely
assumes the risk of non-utilization of reservations and non-performance of such
agreements from and after the Closing.

 

(b)           Destruction
of Chips.  Upon the expiration or
earlier termination of the License Agreement, Buyer will (i) cease to
issue or use and will not reissue or reuse any of Seller’s gaming chips, tokens
or plaquemines and (ii) be solely responsible and liable for compliance
with applicable Louisiana Gaming Regulations or other Gaming Laws, including
any obligation to destroy such gaming chips, tokens or plaquemines.

 

Section 6.11         Insurance
Policies

 

The ACBR Entities’ fire and
casualty insurance and other insurance policies shall be cancelled by Seller or
any of its Affiliates as of the Closing Date, and any refunded premiums shall
be retained by Seller.  Buyer will be
solely responsible for acquiring and placing its casualty insurance, business
interruption insurance, liability insurance and other insurance policies for
periods after the Closing.

 

Section 6.12         Certain
Transactions

 

(a)           Prior
to the Closing, Buyer shall not take, or agree to commit to take, any action
that (or fail to take, or agree to fail to take, any action, which failure to
take) would or is reasonably likely to delay the receipt of, or to adversely
impact the ability of Buyer to obtain, any Governmental Approval necessary for
the consummation of the transactions contemplated by this Agreement or necessary
to permit Buyer to own the Shares, and the ACBR Entities to operate the
Property, in each case, after the Closing in substantially the same manner as
owned and operated by Seller and its subsidiaries prior to the Closing.

 

(b)           Prior
to the Closing, Parent Guarantor and Buyer’s and Parent Guarantor’s respective
Affiliates and Representatives shall not (i) take, or agree or commit to
take, any fraudulent or criminal action that would or is reasonably likely to
delay the receipt of, or to adversely impact the ability of Buyer to obtain, or
(ii) take, or agree or commit to take, any other action (or fail to take,
or agree to fail to take, any action) with the intent of delaying the receipt
of, or adversely impacting the ability of Buyer to obtain, in each case, any
Governmental Approval necessary for the consummation of the transactions
contemplated by this Agreement or necessary to permit Buyer to own the Shares,
and the ACBR Entities to operate the Property, in each case, after the Closing
in substantially the same manner as owned and operated by Seller and its
subsidiaries prior to the Closing.

 

(c)           Without
limiting the foregoing:

 

(i)            neither Parent Guarantor nor Buyer nor any of their
respective Affiliates shall withdraw, rescind, revoke or otherwise terminate or
cancel any applications, filings or other submissions made in connection with
obtaining any Governmental Approvals (or shall cause any of the foregoing to
occur); and

 

33

 

(ii)           if (a) any Governmental Entity has issued an order,
decree or ruling or taken any other action, in each case, denying Buyer any
necessary Governmental Approvals or determining or indicating that such
Governmental Entity will not issue to Buyer all necessary Governmental Approvals,
or (b) a court of competent jurisdiction or other Governmental Entity
shall have issued an order, decree or ruling or taken any other action having
the effect of permanently restraining, enjoining or otherwise prohibiting the
Closing and the transactions contemplated hereby, Buyer, Parent Guarantor and
their Affiliates shall use their respective best efforts to have vacated,
lifted, reversed or overturned any such order, decree, ruling or action and to
have issued such Governmental Approvals (including exhausting all available
remedies, challenges and appeals).

 

Section 6.13         Insurance; Casualty and Condemnation  

 

(a)           If,
before the Closing, the Property is damaged by fire or other casualty, and such
damage does not result in an ACBR Material Adverse Effect, the Closing shall
proceed as scheduled and Seller shall, as of the Closing Date, (i) promptly
pay to Buyer all insurance proceeds received by Seller, the ACBR Entities or
their respective Affiliates with respect to such damage, destruction or other
loss, less any proceeds applied to the physical restoration of the Property,
and (ii) assign to Buyer all rights of Seller, the ACBR Entities and their
respective Affiliates against third parties (other than against its insurance
carriers) with respect to any causes of action, whether or not litigation has
commenced as of the Closing Date, in connection with such damage, destruction
or other loss, provided, that the proceeds of such insurance shall be
subject to (and recovery thereon shall be reduced by the amount of) any
applicable deductibles and co-payment provisions or any payment or
reimbursement and shall constitute full compensation for the damage to the
Property, and Seller shall have no responsibility for restoration or repair of
the Property or any resultant loss, directly, by subrogation, or otherwise.

 

(b)           In
the event a condemnation proceeding or payment in lieu of condemnation occurs
relative to any part of the Property prior to the Closing Date, and such
proceeding does not result in an ACBR Material Adverse Effect, Seller shall
assign and turn over to Buyer, and Buyer shall be entitled to receive and keep,
all awards for the taking by condemnation and Buyer shall be deemed to have
accepted the Property subject to the taking without reduction in the Purchase
Price.

 

(c)           In
the event a casualty or condemnation occurs prior to the Closing Date that
results in an ACBR Material Adverse Effect, Buyer shall have the option, by
written notice to Seller and the Escrow Agent, to either (i) proceed with
the Closing whereby the provisions of this Section 6.13
shall govern as if the casualty or condemnation did not result in an ACBR
Material Adverse Effect, or (ii) terminate this Agreement whereby the
Deposit shall be immediately refunded to Buyer and Buyer shall have no further
liability or obligations hereunder.

 

Section 6.14         Customer Data

 

Except as set forth in this Section 6.14, within ten days following the Closing Date,
Seller and its Affiliates shall (i) expunge the ACBR Customer Database
from the Customer Database, and (ii) implement access restrictions to
prevent Casino Rouge (and Penn, Seller and their respective Affiliates) from
accessing the ACBR Customer Database. 
Notwithstanding the foregoing, nothing in this Section 6.14 shall restrict or
prohibit Seller or any of its Affiliates from marketing to any customer in the
ACBR Customer Database if (i) such customer appears on customer or
marketing lists or other databases of Seller or any of its Affiliates due to
visiting casinos affiliated with Penn, Seller or their respective Affiliates,
other than the Property, (ii) such customer initiates gaming activities at
any of the other properties or facilities of Seller or any of its Affiliates,
including Casino Rouge (“New Gaming
Activities”) and prior to such New Gaming Activities, Seller has not
breached the terms of this

 

34

 

Agreement with respect to such
customer, or (iii) such customer is contacted by Seller or its Affiliates
as part of a general marketing campaign without use of the ACBR Customer
Database.

 

Section 6.15         Certain Notifications

 

From the date of this
Agreement until the Closing, Seller and Buyer shall promptly notify the other
parties hereto in writing regarding any:

 

(a)           breach
of any covenant or obligation of such party hereunder, as applicable; and

 

(b)           fact,
circumstance, event or action which will result in, or would reasonably be
expected to result in, the failure of such party to timely satisfy any of the
closing conditions specified in Article VII,
as applicable.

 

Section 6.16         Post-Closing Use of Marks Associated with Seller

 

(a)           Buyer agrees
that at and after the Closing (a) Buyer and the ACBR Entities shall not
have the right to use any of the following (the “Argosy-Related Marks”): 
the word “Argosy” or any other name, or any Intellectual Property, that
relates to or is deceptively or confusingly similar to the name “Argosy” or to
any Intellectual Property used by Seller (including, without limitation, the
Excluded Intellectual Property), or that would in any way suggest a
relationship or affiliation with Seller, or any other Excluded Intellectual
Property, in conducting any business endeavor of any kind or nature whatsoever;
and (b) Buyer and the ACBR Entities shall comply with the terms and
provisions of the License Agreement. 
Without limiting the foregoing, except as expressly permitted by the
License Agreement, promptly following the Closing (and in no event later than
the 90th day after the Closing) the ACBR Entities shall delete the
word “Argosy” from their respective names, logos, marks, d/b/as (if any), and
any other uses in association with their other Intellectual Property, other
property or assets.

 

(b)           Without
limiting the foregoing, except as expressly permitted by the License Agreement,
as soon as reasonably practicable after the Closing Date, but in any event no
later than 90 days from the Closing Date, Buyer shall cause the ACBR Entities
to remove or cover the name “Argosy” and any other Argosy-Related Marks from
all signs, billboards, advertising materials, chips, cards, gaming supplies and
equipment, telephone listings, labels, stationery, office forms, packaging or
other materials of the ACBR Entities, and thereafter, Buyer shall neither use
nor permit any of the ACBR Entities to use such names or any other Argosy
Related Marks in connection with the businesses of ACBR Entities or
otherwise.  As soon as reasonably
practicable after the Closing, but in any event no later than 90 days thereafter,
Buyer shall cause each of the ACBR Entities to amend its certificate of
incorporation, partnership agreement, limited liability company agreement and
other applicable documents, subject to any required consent or approval of any
other partner or member, which Buyer shall use their reasonable efforts to
obtain, so as to delete any reference to “Argosy” in its legal name and, within
such 90-day period, to make all required filings with Governmental Authorities
to effect such amendments.

 

(c)           Each
of the parties hereto acknowledges and agrees that the remedy at Law for any
breach of the requirements of this Section 6.16
would be inadequate, and agrees and consents that without intending to limit
any additional remedies that may be available, temporary and permanent
injunctive and other equitable relief may be granted without proof of actual
damage or inadequacy of legal remedy in any Proceeding which may be brought to
enforce any of the provisions of this Section 6.16.

 

35

 

Section 6.17         No Control

 

Except as permitted by the
terms of this Agreement, prior to the Closing, Buyer shall not directly or
indirectly control, supervise, direct or interfere with, or attempt to control,
supervise, direct or interfere with, the Property.  Until the Closing, the operations and affairs
of the Property are the sole responsibility of and under the ACBR Entities’
complete control, except as provided for in this Agreement or in the FTC
Documents.

 

Section 6.18         Employee Solicitation

 

(a)           Beginning on
the date of this Agreement and continuing through the period ending on the
first anniversary of the Closing Date, none of Penn, Seller or any of Seller’s
Affiliates shall, directly or indirectly, solicit, entice, or encourage any
person who shall have been a Property Employee or an Argosy Property Employee
during such time, or any other employee of Buyer or the ACBR Entities during
such time, to leave such person’s employment with Seller, Buyer or the ACBR
Entities; provided, however, that the foregoing shall not apply
to (x) a general solicitation of the public for employment so long as such
general solicitation is not specifically targeted to any employee, officer or
director of Buyer or any of the ACBR Entities, as the case may be, or (y) to
individuals who initiate contact with Penn, Seller or any of Seller’s
Affiliates regarding such employment without any encouragement or solicitation
by Penn, Seller or any of Seller’s Affiliates.

 

(b)           Beginning
on the date of this Agreement and continuing through the period ending on the
first anniversary of the Closing Date, none of Parent Guarantor, Buyer or any
of their Affiliates shall, directly or indirectly, solicit, entice, or
encourage any person who shall have been an employee of Penn, Seller or their
Affiliates (other than the ACBR Entities) during such time, and with whom
Parent Guarantor, Buyer or any of their Affiliates had contact in connection
with, or who were specifically identified to Parent Guarantor, Buyer or any of
their Affiliates for purposes of, the transactions contemplated by this
Agreement or the Agreement to Execute, to leave such person’s employment with
Penn, Seller or their Affiliates (other than the ACBR Entities); provided,
however, that the foregoing shall not apply to (x) a general
solicitation of the public for employment so long as such general solicitation
is not specifically targeted to any employee, officer or director of Penn,
Seller or any of their Affiliates (other than the ACBR Entities), as the case
may be, or (y) to individuals who initiate contact with Parent Guarantor, Buyer
or any of their Affiliates regarding such employment without any encouragement
or solicitation by Parent Guarantor, Buyer or any of their Affiliates.

 

Section 6.19         Excluded Property

 

(a)           None of Penn, Seller or any of their
respective Affiliates shall, prior to or after the Closing, directly (or
indirectly through their respective Representatives or otherwise), use the
Excluded Property for any purpose that is, or is reasonably likely to be,
competitive with any of the Property, or that is, or is reasonably likely to,
adversely affect the business, assets,
financial condition or results of operations of Buyer or any of the ACBR
Entities.

 

(b)           Notwithstanding the foregoing, Section 6.19(a) shall
not prohibit, restrict or otherwise apply to (i) the transfer by Seller or
its Affiliates of any Excluded Property to the City of Baton Rouge or any other
Governmental Entity, the use of such property by the City of Baton Rouge or any
such other Governmental Entity or any consideration or benefits received by
Seller and its Affiliates in exchange therefor, provided that the
agreement or other instrument effecting such transfer shall contain a provision
imposing use restrictions substantially similar to those set forth in Section 6.19(a) (in a form
approved by Buyer, such approval not to be unreasonably withheld or delayed),
or (ii) any other transfer by Seller or its Affiliates of any Excluded
Property, the use of such property by the transferee thereof or

 

36

 

any consideration or benefits
received by Seller and its Affiliates in exchange therefor, provided
that a written instrument evidencing the use restrictions set forth in Section 6.19(a), in a form reasonably approved by counsel for
Buyer and Seller, shall have been previously recorded against the Excluded
Property constituting real estate.

 

Section 6.20         Witter Lease

 

None of Penn, Seller or any
of their respective Affiliates shall, prior to or after the Closing, directly
(or indirectly through their respective Representatives or otherwise), solicit,
entice, or encourage the landlord under the Witter Lease to terminate the
Witter Lease or take, or agree to commit to take, any action that (or fail to
take, or agree to fail to take, any action, which failure to take) would or is
reasonably likely to result in such a termination.  In the event that the Witter Lease is
terminated prior to or after Closing, none of Penn, Seller or any of their respective
Affiliates shall, directly (or indirectly through their respective
Representatives or otherwise), enter into a new lease for or acquire any
interest in the property subject to the Witter Lease, or attempt to do so, or
aid or assist anyone else to do so.

 

Section 6.21         Subsidiary Guarantees of Penn Notes

 

Concurrent with the Closing,
the ACBR Entities shall be released from their Subsidiary Guarantees (as
defined in the respective indentures) of Penn’s 87/8%
Senior Subordinated Notes due 2010 and Penn’s 67/8%
Senior Subordinated Notes 2011 pursuant to the respective indentures governing
such Notes.

 

Section 6.22         Sheraton Hotel License Agreement

 

(a)           Parent
Guarantor and Buyer shall cooperate with Seller and each shall use their
respective best efforts to, as promptly as practicable, take, or cause to be
taken, all appropriate action, and to do or cause to be done, all things
necessary, proper or advisable, to assist Seller in obtaining, pursuant to the
License Agreement, dated as of September 15, 2002 (the “Sheraton Agreement”), between The Sheraton
Corporation (“Sheraton”) and
Centroplex, the consent of Sheraton (the “Sheraton
Consent”) to the “Transfer of Control” or “Transfer” (as such terms
are defined in the Sheraton Agreement) that will result from the Closing of the
transactions contemplated by this Agreement.

 

(b)           If
Seller is unable to obtain the Sheraton Consent and, after the Closing,
Sheraton elects to terminate the Sheraton Agreement as a result of Seller’s
failure to obtain the Sheraton consent, then Buyer shall pay all amounts due to
Sheraton pursuant to the Sheraton Agreement upon such termination.

 

Section 6.23         Sales
and Franchise Tax Litigation

 

Seller and Buyer shall share, pro rata, based
on the number of days in the applicable tax period prior to the Closing Date
(in the case of Seller) and on and after the Closing Date (in the case of
Buyer), any additional assessments made by the Department of Revenue, State of
Louisiana, (a) for sales taxes for tax periods beginning on or after September 30,
2003 (the last day of the last tax period subject to the Sales Tax Litigation),
which assessments arise out of the same issues as presented in the Sales Tax
Litigation, and (b) for franchise taxes for tax periods beginning on or
after December 31, 2001 (the last day of the last tax period subject to
the Franchise Tax Litigation), which assessments arise out of the same issues
as presented in the Franchise Tax Litigation.

 

37

 

ARTICLE VII

 

CONDITIONS
TO CLOSING

 

Section 7.1            Conditions
to Each Party’s Obligation to Effect the Closing

 

The respective obligations
of each party to this Agreement to effect the Closing are subject to the
satisfaction of each of the following conditions on or prior to the Closing
Date, any of which may be waived in whole or in part in a writing executed by
all of the parties hereto:

 

(a)           No Injunctions.  No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any order, executive order, stay,
decree, judgment or injunction or statute, rule, regulation which is in effect
(whether temporary, preliminary or permanent) and which prevents or prohibits
the consummation of any of the transactions contemplated by the Agreement or
that makes it illegal for either party hereto to perform its obligations
hereunder.

 

(b)           Governmental Consents.  (i) Buyer, Seller and the ACBR Entities
shall have obtained any and all Governmental Approvals and other approvals
required to be obtained in connection with the transactions contemplated by
this Agreement, and (ii) any waiting period under the HSR Act applicable
to the transactions contemplated by this Agreement shall have expired or early
termination shall have been granted without limitation, restriction or
condition that has had or would reasonable be expected to have, individually or
in the aggregate, an ACBR Material Adverse Effect.

 

Section 7.2            Additional
Conditions to Obligations of Buyer

 

The obligation of Buyer to
effect the Closing is subject to the satisfaction of each of the following
conditions on or prior to the Closing Date, any of which may be waived in whole
or in part in writing exclusively by Buyer:

 

(a)           Representations and Warranties.  The representations and warranties of Seller
contained in this Agreement shall be true and correct (without giving effect to
any limitation as to “materiality” or “ACBR Material Adverse Effect” set forth
therein) at and as of the Closing as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such
earlier date), except where the failure of such representations and warranties
to be true and correct would not, individually or in the aggregate, result in
an ACBR Material Adverse Effect.  Buyer
shall have received a certificate signed on behalf of Seller by an officer of
Seller to such effect.

 

(b)           Performance of Obligations of Seller and the
ACBR Entities.  Seller and the
ACBR Entities shall have performed in all material respects all covenants,
agreements and obligations required to be performed by it under this Agreement
at or prior to the Closing, including without limitation delivery of items
listed in Section 3.2.  Buyer shall have received a certificate
signed on behalf of Seller and the ACBR Entities, respectively, by an officer
of Seller and the ACBR Entities, respectively, to such effect.

 

(c)           ACBR
Material Adverse Effect.  Since the
date of the Agreement to Execute, there shall have been no ACBR Material
Adverse Effect.

 

(d)           Title Policy. 
Buyer shall have received a title policy or a marked-up Title Commitment
relating to, and irrevocably committing to insure in accordance with the Title
Commitment, title to the Real Properties.

 

38

 

Section 7.3            Additional
Conditions to Obligations of Seller

 

The obligation of Seller to
effect the Closing is subject to the satisfaction of each of the following
conditions on or prior to the Closing Date, any of which may be waived in whole
or in part in writing exclusively by Seller:

 

(a)           Representations and Warranties.  The representations and warranties of Buyer
and Parent Guarantor contained in this Agreement shall be true and correct
(without giving effect to any limitation as to “materiality” or “Buyer Material
Adverse Effect” set forth therein) at and as of the Closing as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such earlier date), except where the failure of such
representations and warranties to be true and correct would not, individually
or in the aggregate, result in a Buyer Material Adverse Effect.  Seller shall have received a certificate
signed on behalf of Buyer and Parent Guarantor, respectively, by its chief
executive officer or chief financial officer to such effect.

 

(b)           Performance of Obligations of Buyer.  Buyer and Parent Guarantor shall have
performed in all material respects all covenants, agreements and obligations
required to be performed by it under this Agreement at or prior to the Closing,
including without limitation delivery of items listed in Section 3.2.  Seller shall have received a certificate
signed on behalf of Buyer and Parent Guarantor, respectively, by the chief
executive officer or chief financial officer of Buyer and Parent Guarantor,
respectively, to such effect.

 

ARTICLE VIII

 

TERMINATION
AND AMENDMENT

 

Section 8.1            Termination

 

This Agreement may be
terminated at any time prior to the Closing (with respect to Sections 8.1(b) through 8.1(f), by written notice by the
terminating party to the other party):

 

(a)           (i) by
mutual agreement of Seller and Buyer or (ii) pursuant to Section 11.15(b)(A);

 

(b)           by
either Buyer or Seller, if the transactions contemplated hereby shall not have
been consummated on or prior to the Outside Date; provided, however, that the right to
terminate this Agreement under this Section 8.1(b) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement has been the primary cause of or resulted in the failure of the
Closing to occur on or before the Outside Date;

 

(c)           by
either Buyer or Seller, if any Governmental Entity has issued a nonappealable
final order, decree or ruling or taken any other nonappealable final action, in
each case, denying Buyer any necessary Governmental Approvals or determining
that such Governmental Entity will not issue to Buyer all necessary
Governmental Approvals; provided, however, that Buyer shall not
have the right to terminate this Agreement pursuant to this Section 8.1(c) unless Buyer has
complied with all of its obligations under Sections
6.6 and 6.12 (provided,
that in determining whether Buyer has complied with all of its obligations
under Sections 6.6 and 6.12, any breaches thereof which,
individually and in the aggregate, are not material, have been cured and do not
result in, or contribute to, such denial or the failure of Buyer to receive all
necessary Governmental Approvals shall not be taken into account);

 

39

 

(d)           by
either Buyer or Seller, if a court of competent jurisdiction or other
Governmental Entity shall have issued a nonappealable final order, decree or
ruling or taken any other nonappealable final action, in each case, having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Closing and the transactions contemplated hereby; provided, however, that the right to
terminate this Agreement under this Section 8.1(d) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or materially contributed to, such
action; and provided  further, that if such order, decree or
ruling shall have been issued, or such action shall have been taken, by a
Gaming Authority or in respect of any Gaming Approval, Buyer shall not have the
right to terminate this Agreement pursuant to this Section 8.1(d) unless Buyer has complied with all of
its obligations under Sections 6.6
and 6.12 (provided, that in
determining whether Buyer has complied with all of its obligations under Sections 6.6 and 6.12, any breaches thereof which, individually and in the
aggregate, are not material, have been cured and do not result in, or
contribute to, the issuance of such order, decree or ruling, or the taking of
such action, by a Gaming Authority shall not be taken into account);

 

(e)           by
Buyer, if Seller or any of the ACBR Entities has breached any representation,
warranty, covenant or agreement on the part of Seller or any of the ACBR
Entities, respectively, set forth in this Agreement which (i) would result
in a failure of a condition set forth in Section 7.2(a) or
(b) and (ii) is not
cured in all material respects within thirty (30) calendar days after written
notice thereof; provided, however,
that if such breach cannot reasonably be cured within such thirty (30) day
period but can be reasonably cured prior to the Outside Date, and Seller or any
of the ACBR Entities is diligently proceeding to cure such breach, this
Agreement may not be terminated pursuant to this Section 8.1(e); provided, further, that Buyer’s right to
terminate this Agreement under this Section 8.1(e) shall
not be available if, at the time of such intended termination, Seller has the
right to terminate this Agreement under Section 8.1(b),
(c), (d) or (f);
and

 

(f)            by
Seller, if Buyer or Parent Guarantor has breached any representation, warranty,
covenant or agreement on the part of Buyer or Parent Guarantor, respectively,
set forth in this Agreement which (i) would result in a failure of a
condition set forth in Section 7.3(a) or (b) and (ii) is not cured in all
material respects within thirty (30) calendar days after written notice
thereof; provided, however,
that if such breach cannot reasonably be cured within such thirty (30) day
period but can be reasonably cured prior to the Outside Date, and Buyer or
Parent Guarantor is diligently proceeding to cure such breach, this Agreement
may not be terminated pursuant to this Section 8.1(f);
provided, further,
that Seller’s right to terminate this Agreement under this Section 8.1(f) shall not be
available if, at the time of such intended termination, Buyer has the right to
terminate this Agreement under Section 8.1(b),
(c), (d) or (e).

 

Section 8.2            Effect
of Termination

 

(a)           Liability.  In the event of termination of this Agreement
as provided in Section 8.1,
this Agreement shall immediately become void and there shall be no Liability on
the part of Buyer, Seller, or any of the ACBR Entities or their respective
Affiliates or Representatives, other than pursuant to Sections 6.5(a)(iii), 6.5(a)(vi), 8.2  (c) and Article XI, and
the Confidentiality Agreements; provided, however, that nothing
contained in this Section 8.2 shall relieve or limit the Liability of
either party to this Agreement for (x) any fraudulent or willful breach of its
representations or warranties set forth in this Agreement or (y) any
material breach of its covenants or agreements set forth in this Agreement.

 

(b)           Fees and Expenses.  Except as otherwise expressly provided in
this Agreement, all fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses, whether or not the Closing is consummated.

 

40

 

(c)           Application
of the Deposit

 

(i)            Upon the termination of this Agreement pursuant to Section 8.1(a), (b), (c), (d) or (e), the Deposit shall be paid to Buyer.

 

(ii)           Upon the termination of this Agreement pursuant to Section 8.1(f), the Deposit (excluding
any interest accrued thereon) shall be paid to Seller, and any interest accrued
on the Deposit shall be paid one-half to Seller and one-half to Buyer.

 

ARTICLE IX

 

SURVIVAL;
INDEMNIFICATION

 

Section 9.1            Survival
of Representations, Warranties, Covenants and Agreements

 

(a)           Except
as set forth in Article VIII and Section 9.1(b), the representations,
warranties, covenants and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any Person controlling any such party
or any of their Representatives whether prior to or after the execution of this
Agreement.

 

(b)           The
representations and warranties made by Seller and Buyer in this Agreement shall
survive the Closing until (and claims based upon or arising out of such
representations and warranties may be asserted at any time before) one year
after the Closing Date.  The period of
time a representation or warranty survives the Closing pursuant to the
preceding sentence shall be the “Survival Period”
with respect to such representation or warranty.  The parties intend for the preceding two
sentences to shorten the otherwise applicable statute of limitations and agree
that, subject to Section 9.1(c),
no claim may be brought based upon, directly or indirectly, any of the
representations and warranties contained in this Agreement after the Survival
Period with respect to such representation or warranty.  The covenants and agreements of the parties
hereto in this Agreement shall not survive the Closing, other than those
covenants and agreements that are expressly required to remain in full force
and effect after the Closing.

 

(c)           Any
claim for indemnification pursuant to this Article IX
must be given in accordance with Section 9.4
prior to the first anniversary of the Closing Date (the “Notification  Deadline”); provided, further, however,
that if a written notice of a claim has been given in good faith, with
reasonable specificity as to the circumstances giving rise to, and the nature
and amount of, such claim, in accordance with Section 9.4
prior to the Notification Deadline, then the party giving such notice shall
continue to have the right to be indemnified with respect to the matter or
matters to which such claim relates until such claim has been finally
determined by (i) mutual written agreement of Buyer and Seller or (ii) a
court of competent jurisdiction by final and nonappealable judgment.

 

Section 9.2            Indemnification

 

(a)           From
and after the Closing, Seller shall indemnify, save and hold harmless Buyer and
its Affiliates and their respective Representatives (each, a “Buyer Indemnified Party” and collectively, the “Buyer Indemnified Parties”) from and against any and all
costs, losses, Liabilities, obligations, damages, claims, demands and expenses
(whether or not arising out of third party claims), including interest,
penalties, reasonable attorneys’ fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (herein, “Losses”),
incurred in connection with, arising out of or resulting from:

 

(i)            any breach of any representation or warranty made by
Seller in this Agreement;

 

41

 

(ii)           any breach of any covenant or agreement made, or to be
performed, by Seller or, prior to Closing, the ACBR Entities in this Agreement;

 

(iii)          the Excluded Assets; and

 

(iv)          the Retained Litigation;

 

provided, that for
purposes of this Section 9.2(a),
in determining the amount of any Losses incurred in connection with, arising
out of or resulting from any breach of any representation or warranty made by
Seller in this Agreement or any breach of any covenant or agreement made, or to
be performed, by Seller or, prior to Closing, the ACBR Entities, in this
Agreement, any qualifications or limitations as to materiality (whether by
reference to ACBR Material Adverse Effect or otherwise) contained in such
representation, warranty, covenant or agreement shall be disregarded.

 

(b)           From
and after the Closing, Buyer shall indemnify, save and hold harmless Seller and
its Affiliates and their respective Representatives (each, a “Seller Indemnified Party” and collectively, the “Seller Indemnified Parties”) from and against any and all
Losses incurred in connection with, arising out of or resulting from:

 

(i)            any breach of any representation or warranty made by
Buyer or Parent Guarantor in this Agreement;

 

(ii)           any breach of any covenant or agreement made, or to be
performed, by Buyer or Parent Guarantor in this Agreement;

 

(iii)          the Assumed Litigation; and

 

(iv)          the operation of the Property by Buyer, or Buyers’
ownership, operation or use of the assets and liabilities of the ACBR Entities
or their business (except for matters for which Seller has agreed to indemnify
the Buyer Indemnified Parties hereunder);

 

provided, that for
purposes of this Section 9.2(b),
in determining the amount of any Losses incurred in connection with, arising
out of or resulting from any breach of any representation or warranty made by
Buyer or Parent Guarantor in this Agreement or any breach of any covenant or
agreement made, or to be performed, by Buyer or Parent Guarantor in this
Agreement, any qualifications or limitations as to materiality (whether by
reference to Buyer Material Adverse Effect or otherwise) contained in such
representation, warranty, covenant or agreement shall be disregarded.

 

Section 9.3            Limits
on Indemnification

 

Notwithstanding anything to
the contrary contained in this Agreement:

 

(a)           the
Buyer Indemnified Parties shall not be entitled to indemnification pursuant to Section 9.2(a), unless and until the aggregate
amount of otherwise indemnifiable Losses equals or exceeds seven hundred fifty
thousand dollars ($750,000) (such amount, the “Deductible”), after which there may only be recovered those
Losses in excess of the Deductible, subject to the limitations set forth in Section 9.3(b);

 

(b)           the
maximum amount of indemnifiable Losses which may be recovered pursuant to Section 9.2(a) shall be an amount
equal to one million five hundred thousand dollars ($1,500,000) (the “Cap”); provided,
however, that all Losses of the Buyer Indemnified Parties shall be: (i) applied
first to

 

42

 

satisfy the Deductible as
provided in Section 9.3(a),
and (ii) then recovered from Seller, up to a maximum amount not to exceed
seven hundred fifty thousand dollars ($750,000); and

 

(c)           the
Deductible and the Cap shall not apply to any Losses arising out of or
resulting from (i) fraud or criminal acts, (ii) a breach by Seller of
Section 6.4(g), 6.19, 6.20, 6.21 or 6.23
or (iii) the Retained Litigation.

 

Section 9.4            Indemnification
Procedures

 

(a)           Indemnification
Procedures Other Than for Retained Litigation Claims.  This Section 9.4(a) shall
not apply to any Retained Litigation Claims, which shall be governed instead by
Section 9.4(b), or any
Assumed Litigation Claims, which shall be governed instead by Section 9.4(c).

 

(i)            For purposes of this Section 9.4(a) a
party against which indemnification may be sought is referred to as the “Indemnifying Party” and the party which may
be entitled to indemnification is referred to as the “Indemnified Party.”

 

(ii)           The obligations of Indemnifying Parties under this Article IX with respect to Losses
arising from claims of any third party which are subject to the indemnification
provided for in this Article IX
(“Third Party Claims;” provided
that “Third Party Claims” shall not include any Retained Litigation Claims,
which shall be governed instead by Section 9.4(b),
or any Assumed Litigation Claims, which shall be governed instead by Section 9.4(c)) shall be governed by and contingent upon
the following additional terms and conditions: 
if an Indemnified Party shall receive written notice of any Third Party
Claim, the Indemnified Party shall promptly give notice of such Third Party
Claim to Seller (if the Indemnified Party is a Buyer Indemnified Party) or to
Buyer (if the Indemnified Party is a Seller Indemnified Party), as applicable;
provided that a failure to give such notice shall not relieve the Indemnifying
Party from any liability which the Indemnifying Party may have on account of
this indemnity or otherwise, except to the extent the Indemnifying Party shall
have been materially prejudiced by such failure.  The notice of claim shall describe in
reasonable detail the facts known to the Indemnified Party giving rise to such
indemnification claim, and the amount or good faith estimate of the amount
arising therefrom.  The Indemnified Party
shall deliver to Seller (if the Indemnified Party is a Buyer Indemnified Party)
or to Buyer (if the Indemnified Party is a Seller Indemnified Party), as
applicable, promptly after the Indemnified Party’s receipt thereof, copies of
all notices and documents (including court papers) received by the Indemnified
Party relating to a Third Party Claim.

 

(iii)          Seller (if the Indemnified Party is a Buyer Indemnified
Party), or Buyer (if the Indemnified Party is a Seller Indemnified Party) shall
be entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives written notice of its
intention to do so to the Indemnified Party within thirty (30) days of the
receipt of such notice from the Indemnified Party in which case the
Indemnifying Party shall not be liable to the Indemnified Party for any fees of
counsel or any other expenses with respect to the defense of such Third Party
Claim; provided, however, that if the Indemnified Party
reasonably determines based upon written advice of counsel that a conflict of
interest exists that would make it inappropriate for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel at the expense of
the Indemnifying Party; provided, further, that the Indemnifying
Party shall not in such event be responsible hereunder for the fees and
expenses of more than one firm of separate counsel in connection with any Third
Party Claim in the same jurisdiction, in addition to any local counsel.  In the event that Seller or Buyer exercises
the right to undertake any such defense against such Third Party Claim as
provided above, the Indemnified Party shall cooperate with Seller or Buyer, as
applicable, in such defense and make available to Seller or Buyer, as
applicable, at the Indemnifying Party’s expense with respect to any
out-of-pocket expenses incurred, all witnesses, pertinent records,

 

43

 

materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably requested by or on behalf of the Indemnifying
Party.  Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against
any such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
at the Indemnifying Party’s expense, all such witnesses, records, materials and
information in the Indemnifying Party’s possession or under the Indemnifying
Party’s control relating thereto as is reasonably requested by the Indemnified
Party.  No compromise or settlement of
such Third Party Claim may be effected by either the Indemnified Party, on the
one hand, or Seller (if the Indemnified Party is a Buyer Indemnified Party) or
Buyer (if the Indemnified Party is a Seller Indemnified Party), on the other
hand, without the consent of the other (which shall not be unreasonably
withheld or delayed).

 

(b)           Indemnification
Procedures for Retained Litigation Claims. 
This Section 9.4(b) shall
apply only to claims of any third party which are subject to the
indemnification provided for in Section 9.2(a)(iv) (“Retained Litigation Claims”).

 

(i)            Seller shall assume and control the defense of all
Retained Litigation Claims at its expense and through counsel of its choice,
and Seller shall not be liable to the Buyer Indemnified Parties for any fees of
counsel or any other expenses with respect to the defense of any Retained
Litigation Claim.  The Buyer Indemnified
Parties shall cooperate with Seller in such defense and make available to
Seller at Seller’s expense with respect to any out-of-pocket expenses incurred,
all witnesses, pertinent records, materials and information in the Buyer
Indemnified Parties’ possession or under the Buyer Indemnified Parties’ control
relating thereto as is reasonably requested by or on behalf of Seller.  The Buyer Indemnified Parties shall agree to
any settlement, compromise or discharge for money of any Retained Litigation
Claim that Seller may recommend and that, by its terms, discharges the Buyer
Indemnified Parties from the full amount of liability in connection with such
Retained Litigation Claim (taking into account the indemnification provided in
this Article IX).  Except as set forth in the preceding
sentence, no compromise or settlement of any Retained Litigation Claim may be
effected by either the Buyer Indemnified Parties, on the one hand, or Seller,
on the other hand, without the consent of the other (which shall not be
unreasonably withheld or delayed); unless the party wishing to settle fully
indemnifies the other party in writing with respect to such liability in a
manner reasonably satisfactory to such other party.

 

(ii)           The Buyer Indemnified Parties’ right to indemnification
provided in Section 9.2(a)(iv) shall
constitute the sole and exclusive remedy for all claims with respect to
Retained Litigation, and Seller shall have no other Liability for any
Proceedings, settlements, compromises or Losses relating thereto, in connection
therewith or arising or resulting therefrom, to the ACBR Entities or the Buyer
Indemnified Parties.  In furtherance of
the foregoing, each of the Buyer Indemnified Parties hereby waives, to the
fullest extent permitted under applicable Law, any and all rights, claims and
causes of action it may have against Seller with respect to the Retained
Litigation, other than the right to seek indemnity pursuant to Section 9.2(a)(iv).

 

(c)           Indemnification
Procedures for Litigation Claims. 
This Section 9.4(c) shall
apply only to claims of any third party which are subject to the
indemnification provided for in Section 9.2(b)(iii) (“Assumed Litigation Claims”).

 

(i)            Buyer shall assume and control the defense of all Assumed
Litigation Claims at its expense and through counsel of its choice, and Buyer
shall not be liable to the Seller Indemnified Parties for any fees of counsel
or any other expenses with respect to the defense of any Assumed Litigation
Claim.  The Seller Indemnified Parties
shall cooperate with Buyer in such defense and make available to Buyer at Buyer’s
expense with respect to any out-of-pocket expenses incurred, all witnesses,

 

44

 

pertinent records, materials
and information in the Seller Indemnified Parties’ possession or under the
Seller Indemnified Parties’ control relating thereto as is reasonably requested
by or on behalf of Buyer.  The Seller
Indemnified Parties shall agree to any settlement, compromise or discharge for
money of any Assumed Litigation Claim that Buyer may recommend and that, by its
terms, discharges the Seller Indemnified Parties from the full amount of
liability in connection with such Assumed Litigation Claim (taking into account
the indemnification provided in this Article IX).  Except as set forth in the preceding
sentence, no compromise or settlement of any Assumed Litigation Claim may be
effected by either the Seller Indemnified Parties, on the one hand, or Buyer,
on the other hand, without the consent of the other (which shall not be
unreasonably withheld or delayed); unless the party wishing to settle fully
indemnifies the other party in writing with respect to such liability in a
manner reasonably satisfactory to such other party.

 

(ii)           The Seller Indemnified Parties’ right to indemnification provided
in Section 9.2(b)(iii) shall
constitute the sole and exclusive remedy for all claims with respect to Assumed
Litigation, and Buyer shall have no other Liability for any Proceedings,
settlements, compromises or Losses relating thereto, in connection therewith or
arising or resulting therefrom, to the Seller Indemnified Parties.  In furtherance of the foregoing, each of the
Seller Indemnified Parties hereby waives, to the fullest extent permitted under
applicable Law, any and all rights, claims and causes of action it may have
against Buyer with respect to the Assumed Litigation, other than the right to
seek indemnity pursuant to Section 9.2(b)(iii).

 

(d)           Claims
Other Than Third Party Claims.  A
claim for indemnification for any matter not including a Third Party Claim
shall be asserted by written notice to Seller (if the Indemnified Party is a
Buyer Indemnified Party) or to Buyer (if the Indemnified Party is a Seller
Indemnified Party), as applicable.

 

Section 9.5            Exclusive
Remedy

 

Following the Closing, the
sole and exclusive remedy for each of the Buyer Indemnified Parties and Seller
Indemnified Parties with respect to any and all claims relating to a breach of
this Agreement (other than claims of, or causes of action arising from, fraud
or criminal acts) shall be pursuant to the indemnification provisions set forth
in this Article IX.  In furtherance of the foregoing, each of the
Buyer Indemnified Parties and the Seller Indemnified Parties hereby waives, to
the fullest extent permitted under applicable Law, any and all rights, claims
and causes of action it may have against the other parties hereto, arising
under or based upon any Federal, state, local or foreign Law, other than the
right to seek indemnity pursuant to this Article IX.  Notwithstanding anything to the contrary in
this Agreement, this Section 9.5
shall not limit a party’s right to specific performance or injunctive relief in
connection with the other party’s breach of its covenants in this Agreement.

 

Section 9.6            Losses
Net of Insurance, Tax Benefits

 

The amount of any Loss
subject to indemnification hereunder shall be calculated net of (i) any
net insurance proceeds actually
received by the Indemnified Party from any insurer on account of such Loss (as
reduced by any related retrospective or prospective increase in premiums and
taking into account all costs and expenses reasonably incurred in procuring
such proceeds, and (ii) any net Tax benefit recognized by the Indemnified
Party arising from the recognition of the Loss (net of all out-of-pocket
expenses reasonably incurred in procuring such Tax benefit).  An Indemnified Party shall submit claims
under and diligently pursue recovery under all insurance policies under which any Losses may be insured.

 

45

 

Section 9.7            Effect
of Knowledge

 

No person shall be liable
for, and no Buyer Indemnified Party shall be entitled to indemnification under
this Article IX for, any Loss
resulting from any breach of a representation or warranty if any of Buyer’s
Representatives had actual knowledge of such breach prior to the execution and
delivery of this Agreement by Buyer.  For
avoidance of doubt, “actual knowledge” shall not include constructive knowledge
or imputed knowledge.

 

Section 9.8            No
Consequential Damages

 

Notwithstanding anything to
the contrary contained in this Agreement, no person shall be liable to or
otherwise responsible for consequential, incidental or punitive damages.

 

Section 9.9            Duty to
Mitigate

 

Buyer shall, and shall cause
the ACBR Entities to, use reasonable best efforts to mitigate any Losses
suffered, incurred or sustained by Buyer, the Property and the ACBR Entities
arising out of any matter for which any Buyer Indemnified Party is entitled to
indemnification pursuant hereto.

 

Section 9.10         Subrogation
of Rights

 

In the event any payment is
made in respect of Losses pursuant to this Article IX,
the Indemnifying Party who made such payment shall be subrogated to the extent
of such payment to any related rights of recovery of the Indemnified Party
receiving such payment against any unaffiliated third party.

 

Section 9.11         Treatment
of Indemnification Payments

 

All indemnification payments
made pursuant to this Article IX
shall be treated by the parties for income Tax purposes as adjustments to the
Purchase Price, unless otherwise required by applicable Law.

 

ARTICLE X

 

PROPERTY

 

Section 10.1         As Is, Where Is

 

Buyer or its Representatives
shall have fully examined and inspected the Property prior to the execution of
this Agreement, and subject to the provisions of this Article X
and Article IV, Buyer agrees to accept the Property in an
“As Is” condition and on a “Where Is” basis as of the Closing.  Buyer agrees that, except as provided in Article IV, Buyer is not relying upon any
representations, statements, or warranties (oral or written, implied or
express) of any officer, employee, agent or Representative of Seller or the
ACBR Entities, or any salesperson or broker (if any) involved in this
transaction as to the Property, including, but not limited to: (a) any
representation, statements or warranties as to the physical or environmental
condition of the Property, (b) the fitness and/or suitability of the
Property for use as a casino; (c) the financial performance of the
Property; (d) the compliance of the Property with applicable building,
zoning, subdivision, environmental, or land use Laws, codes, ordinances, rules or
regulations; (e) the state of repair of the Property; (f) the value
of the Property; (g) the manner or quality of construction of the
Property; (h) the income derived or to be derived from the Property; or (i) the
fact that the Property may be located on earthquake faults or in seismic
hazardous zones, flood zones or hurricane

 

46

 

zones.  Buyer, for itself and its successors and
assigns, waives any right to assert any claim against Seller or the ACBR
Entities, at Law or in equity, relating to any such matter, whether latent or
patent, disclosed or undisclosed, known or unknown, in contract or tort, now
existing or hereafter arising.

 

Section 10.2         Title
to Land and Vessel 

 

(a)           Title Commitment.  Buyer agrees to accept the Title Commitment
attached hereto as Exhibit E(1) and
the UCC-11 Search attached hereto as Exhibit E(2) as
evidence of the status of the ACBR Entities’ title to the Land.  Seller and Buyer each shall pay one-half of
the premium for the Policy of Title Insurance at Closing.  Buyer agrees to accept title to the Property
subject to (i) all matters shown by the Title Commitment and the UCC-11
Search (except for those mortgages and UCC filings in favor of Wells Fargo
Bank, National Association, as agent), and (ii) Permitted Encumbrances
(clauses (i) and (ii), the “Title
Matters”).

 

(b)           Survey.  Buyer agrees to accept the Land subject to (i) all
matters shown by the Survey and (ii) Title Matters.

 

(c)           Title
to Vessel.  Buyer agrees to accept
the Vessel Abstract attached hereto as Exhibit F
as evidence of the status of Seller’s title to the Vessel.  Seller shall pay the premium for the Vessel
Abstract.  Buyer agrees to accept the
Vessel subject to (i) all matters shown by the Vessel Abstract (except for
that certain preferred mortgage in favor of Wells Fargo Bank, National
Association, as Agent recorded on June 8, 1999 in the amount of
$875,000,000 in Book 99-45, Page 699), and (ii) Permitted
Encumbrances.

 

(d)           Defects.  Seller shall have no obligation to, or to
cause any of the ACBR Entities to remove or cure any title defect or any other
matter or Encumbrance on any of the Property and any failure or refusal to do
so shall not be a default of Seller under this Agreement.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1         Governing
Law; Consent to Jurisdiction; Waiver of Trial by Jury

 

(a)           This
Agreement and the transactions contemplated hereby, and all disputes between
the parties under or related to the Agreement or the facts and circumstances
leading to its execution, whether in contract, tort or otherwise, shall be
governed by and construed in accordance with the Laws of the State of New York
applicable to contracts made and to be performed in the State of New York,
including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law and New York Civil Practice Laws and Rules 327(b).

 

(b)           Each
of the parties hereto hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of any New York State
court, or Federal court of the United States of America, sitting in New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the agreements delivered in connection
herewith or the transactions contemplated hereby or thereby or for recognition
or enforcement of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (A) agrees not to commence any such action
or proceeding except in such courts, (B) agrees that any claim in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by Law, in such Federal court, (C) waives,
to the fullest extent it may legally and

 

47

 

effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
action or proceeding in any such New York State or Federal court, (D) waives,
to the fullest extent permitted by Law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such New York State or
Federal court, and (E) to the extent such party is not otherwise subject
to service of process in the State of New York, as to Seller, appoints CT
Corporation System as such party’s agent in the State of New York, as to the
ACBR Entities, appoints CT Corporation System as such party’s agent in the State of New York, and as to Buyer,
appoints CT Corporation System as such party’s agent in the State of New York,
for acceptance of legal process and agrees that service made on any such agent
shall have the same legal force and effect as if served upon such party
personally within such state.  Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law.  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 11.2.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by Law.

 

(c)           EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, 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 EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY,
AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.1(c).

 

Section 11.2         Notices

 

All notices and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, delivered by facsimile (which is confirmed) or mailed by
registered or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

 

(a)           if
to Buyer, to

 

CP Baton Rouge
Casino, L.L.C.

c/o Wimar Tahoe Corporation

207 Grandview Drive

Ft. Mitchell, Kentucky  41017

Attn: Vice President–Finance and Chief Legal Counsel

Fax:   (859) 578-1190

 

48

 

with a copy
to:

 

Katz, Teller,
Brant & Hild

255 E. Fifth Street, Suite 2400

Cincinnati, Ohio  45202

Attn:  Andrew R. Berger, Esq.

Fax:  (513) 762-0078

 

(b)           if
to Seller or the ACBR Entities, to

 

Argosy Gaming
Company

c/o Penn National Gaming, Inc.

825 Berkshire Blvd., Suite 200

Wyomissing, PA 19610

Attn:  General Counsel

Fax::  (610) 373-4710

 

with a copy
to:

 

Skadden, Arps,
Slate, Meagher & Flom LLP

300 South Grand Avenue, Suite 3400 

Los Angeles, CA 90071

Attn:  Rod A. Guerra, Esq.

Fax:  (213) 621-5217

 

Section 11.3         Headings;
Table of Contents

 

The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.  The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.

 

Section 11.4         Entire
Agreement; No Third Party Beneficiaries

 

This Agreement and all
documents and instruments referred to herein constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof; provided that the Confidentiality
Agreements shall remain in full force and effect after the Closing.  Each party hereto agrees that, except for the
representations and warranties contained in this Agreement and the respective
Disclosure Letters, none of Seller, the ACBR Entities or Buyer makes any other
representations or warranties, and each hereby disclaims any other
representations and warranties made by itself or any of its respective
Representatives or other representatives, with respect to the execution and
delivery of this Agreement or the transactions contemplated hereby,
notwithstanding the delivery or disclosure to any of them or their respective
representatives of any documentation or other information with respect to any
one or more of the foregoing.

 

Section 11.5         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 shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions

 

49

 

contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall 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 transactions contemplated hereby are fulfilled to the
extent possible.

 

Section 11.6         Assignment

 

Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
operation of Law (including, without limitation, by merger or consolidation) or
otherwise without the prior written consent of the other party.  Any assignment in violation of this Section 11.6 shall be void.

 

Section 11.7         Parties
of Interest

 

This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
respective successors and assigns, and nothing in this Agreement, express or
implied is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 11.8         Counterparts

 

This Agreement may be
executed by facsimile and/or in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.

 

Section 11.9         Mutual
Drafting

 

Each party hereto has
participated in the drafting of this Agreement, which each party acknowledges
is the result of extensive negotiations between the parties.  In the event of any ambiguity or question of
intent arises, this Agreement shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

 

Section 11.10       Amendment

 

This Agreement may be
amended by Buyer and Seller.  This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of Buyer and Seller.

 

Section 11.11       Extension;
Waiver

 

At any time prior to the
Closing, Buyer and Seller by action taken or authorized by their respective
boards of directors may, to the extent legally allowed (i) extend the time
for or waive the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions
contained herein.  Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.

 

50

 

Section 11.12       Time
of Essence

 

Time is of the essence with
respect to this Agreement and all terms, provisions, covenants and conditions
herein.

 

Section 11.13       Disclosure
Letters

 

The Seller Disclosure Letter
shall be arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Agreement and the disclosure in any paragraph
shall, to the extent applicable, qualify other paragraphs in this
Agreement.  The Buyer Disclosure Letter
shall be arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Agreement and the disclosure in any paragraph
shall, to the extent applicable, qualify other paragraphs in this
Agreement.  Notwithstanding anything to
the contrary in this Agreement, during the period after the date of this
Agreement but prior to the Closing, subject to the reasonable approval of
Buyer, Seller shall be entitled to update, amend or supplement the Seller
Disclosure Letter to the extent information contained therein, which was true,
complete and accurate as of the date of this Agreement, becomes untrue,
incomplete or inaccurate after the date of this Agreement as a result of
occurrences after the date of this Agreement but prior to the Closing by
delivering such update, amendment or supplement to Buyer; provided, that any
such update, amendment or supplement delivered to Buyer shall be deemed
reasonably approved by Buyer if Buyer does not provide written notice to Seller
within seven days after delivery to Buyer of such update, amendment or
supplement that such update, amendment or supplement is not reasonably
satisfactory to Buyer (each such update, amendment or supplement reasonably
approved or deemed reasonably approved by Buyer, an “Updated Seller Disclosure Letter”).  Buyer shall not be obligated to approve any
change or changes to the Seller Disclosure Letter which would have, or which
would reasonably be expected to have, individually or in the aggregate, an ACBR
Material Adverse Effect.  Any such
update, amendment or supplement, to the extent practicable, shall be marked to
show changes from the Seller Disclosure Letter, as updated by any Updated
Seller Disclosure Letters, previously delivered to Buyer.  If Seller delivers to Buyer one or more
Updated Seller Disclosure Letters, all references in this Agreement to the
Seller Disclosure Letter shall thereafter mean the Seller Disclosure Letter as
updated by each such Updated Seller Disclosure Letter.

 

Section 11.14       Parent
Guaranty

 

(a)           Parent
Guarantor hereby guarantees the punctual payment and performance by Buyer of
all of Buyer’s obligations under this Agreement.

 

(b)           Parent
Guarantor hereby waives notice of the acceptance hereof, presentment, demand
for payment, protest, notice of protest, or any and all notice of non-payment,
non-performance or non-observance, or other proof, or notice or demand with
respect to the obligations guaranteed under this Section 11.14 (the “Guaranteed
Obligations”).

 

(c)           The
guarantee provided for in this Section 11.14
(this “Guarantee”) shall remain
and continue in full force and effect as to any modification, extension or
renewal of this Agreement.  None of
Seller or its Affiliates shall be under a duty to protect, secure or insure any
security or lien provided by this Agreement or any other collateral, and Parent
Guarantor acknowledges that other indulgences or forbearance may be granted
under such document, all of which may be made, done or suffered without notice
to, or further consent of, Parent Guarantor.

 

(d)           Parent
Guarantor hereby waives the pleading of any statute of limitations applicable
to any of the Guaranteed Obligations, as a defense to the obligation hereunder.

 

51

 

(e)           PARENT
GUARANTOR WAIVES ANY RIGHT OR CLAIM OF RIGHT TO CAUSE SELLER TO PROCEED AGAINST
BUYER BEFORE PROCEEDING UNDER THIS GUARANTEE. 
PARENT GUARANTOR EXPRESSLY WAIVES AND RELINQUISHES ALL SURETYSHIP RIGHTS
AND REMEDIES (INCLUDING ANY RIGHTS OF SUBROGATION) APPLICABLE AGAINST SELLER
ACCORDED TO PARENT GUARANTOR BY APPLICABLE LAW.

 

(f)            Parent Guarantor agrees that the
validity of this Guarantee and Parent Guarantor’s obligations under this
Agreement shall in no way be terminated, affected or impaired by reason of (i) the
assertion by Seller of any rights or remedies which Seller may have under or
with respect to any of the other provisions of this Agreement (ii) the
failure by Seller to exercise, or delay in exercising, any right or remedy
which Seller may have hereunder or in respect to this Agreement; (iii) the
commencement of a case under the Bankruptcy Code by or against Buyer; or (iv) any
payment made on the obligations guaranteed by this Guarantee or any other
indebtedness arising under this Agreement which is required to be refunded
pursuant to the order of any court having jurisdiction over the bankruptcy or
insolvency of Buyer; it being understood that no payment so refunded shall be
considered as a payment of any portion of the obligations guaranteed hereby,
nor shall it have the effect of reducing the liability of Parent Guarantor
under this Agreement.

 

Section 11.15       FTC Approval

 

All terms and conditions of this Agreement shall be
subject to FTC approval and the substitution or addition of such modified or
other terms and conditions as the FTC may require.

 

(a)           Each
party hereto agrees to accept such changes to this Agreement as shall be
required by the FTC and to execute promptly an appropriate amendment to this
Agreement and to modify this Agreement to reflect such required changes (such
amendment and such modification, together, an “Amendment”), unless (A) such changes would have, in the
aggregate, an ACBR Material Adverse Effect, in which case the parties hereto
shall not be required to execute an Amendment, or (B) if the FTC requests
or requires any change to this Agreement that would adversely affect the
economics of the transactions contemplated by this Agreement, in which case the
party whose economics would be adversely affected (the “Affected Party”) may elect not to execute
an Amendment, and, in the case of each of clauses (A) and (B), the parties
hereto shall take the actions set forth in clause (b) below.

 

(b)           If
(x) the FTC requires any changes that would have, in the aggregate, an ACBR
Material Adverse Effect or (y) if the Affected Party elects not to execute an
Amendment pursuant to the preceding clause (b), then the parties hereto shall,
in good faith, use their respective best efforts to reach prompt (but in any
event within seven days after receiving the FTC’s request to make the required
changes) mutual agreement with respect to such changes, including, without limitation,
to adjust the Purchase Price to offset the adverse economics to the extent that
the Affected Party recognizes an equivalent benefit through such change.  If the parties hereto, after complying with
the preceding sentence, are unable to reach mutual agreement with respect to
such changes within such seven day period, then (A) in the case of the
preceding clause (x), either party may elect to terminate this Agreement
pursuant to Section 8.1(a)(ii),
and (B) in the case of the preceding clause (y), the parties shall submit
the matters that the parties have been unable to resolve with respect to such
changes to an independent nationally recognized investment banking firm,
independent nationally recognized accounting firm or other independent arbitrator
(“Arbitrator”) mutually agreed
upon by Seller and Buyer for final and binding resolution of such dispute in
accordance with procedures mutually agreed upon by Seller and Buyer.  If Buyer and Seller are unable to agree on an
Arbitrator, then Buyer and Seller shall each select such an Arbitrator and the
two Arbitrators so selected shall select a third Arbitrator.  The findings of the Arbitrator so selected by
Buyer and Seller (or, if Buyer and Seller are unable to agree on an Arbitrator,
so selected by the

 

52

 

Arbitrators pursuant to the
foregoing sentence) shall be final and binding on all of the parties hereto,
and the fees and expenses of the Arbitrator(s) shall be paid by one-half by
Seller and one-half by Buyer.

 

[signature page follows]

 

53

 

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

 

	
   

  	
  Argosy Gaming Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert
  S. Ippolito

  	
   

  
	
   

  	
  Name:

  	
  Robert S.
  Ippolito

  	
   

  
	
   

  	
  Its:

  	
  Treasurer
  and Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP Baton Rouge Casino, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
  Name:

  	
  William J. Yung

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Wimar Tahoe Corporation

  
	
   

  	
  (solely with respect to Article V,
  Sections 6.6, 6.12,

  6.18(b) and 6.22 and Article XI)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
  Name:

  	
  William J. Yung

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  
						

 

ACBR Securities Purchase
Agreement

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