Document:

Exhibit
10.1

 

 

 

REGISTRATION
RIGHTS AGREEMENT

 

Dated
as of August 14, 2009

 

by
and among

 

PENN
NATIONAL GAMING, INC.

 

and

 

DEUTSCHE
BANK SECURITIES INC.

WELLS FARGO SECURITIES, LLC

BANC OF AMERICA SECURITIES LLC

RBS SECURITIES INC.

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and
entered into as of August 14, 2009 by and among PENN NATIONAL GAMING,
INC., a Pennsylvania corporation (the “Company”), DEUTSCHE BANK
SECURITIES INC. (“Deutsche Bank”), WELLS FARGO SECURITIES, LLC (“Wells
Fargo”), BANC OF AMERICA SECURITIES LLC (“BofA”) and RBS SECURITIES
INC. (“RBS”) and each of the other Initial Purchasers set forth on Schedule A
attached hereto (collectively with Deutsche Bank, Wells Fargo, BofA and RBS,
the “Initial Purchasers”).

 

This Agreement is made pursuant to the Purchase Agreement dated as of August 10,
2009 by and among the Company and the Initial Purchasers (the “Purchase Agreement”),
which provides for, among other things, the sale by the Company to the Initial
Purchasers of an aggregate of $325,000,000 principal amount of the Company’s
83⁄4% Senior Subordinated Notes due 2019 (the “Notes”) as described in the
Purchase Agreement.  In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement.  The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

1.                                       Definitions.  As used in this Agreement, the following
capitalized defined terms shall have the following meanings:

 

“Advice” shall have the meaning set
forth in the last paragraph of Section 3 hereof.

 

“Applicable Period” shall have the meaning set forth in Section 3(r) hereof.

 

“BofA” shall have the meaning set forth in the preamble to this
Agreement.

 

“Business Day” shall mean a day that is not a Saturday, a Sunday
or a day on which banking institutions in New York, New York are required or
permitted to be closed.

 

“Company” shall have the meaning
set forth in the preamble to this Agreement and also includes the Company’s successors
and permitted assigns.

 

“Depositary” shall mean The
Depository Trust Company or any other depositary appointed by the Company; provided, however, that
such depositary must have an address in the Borough of Manhattan, in the City
of New York.

 

 

“Deutsche Bank” shall have the meaning set forth in the preamble
to this Agreement.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

 

“Effectiveness Target Date” shall have the meaning set forth in Section 2(e) hereof.

 

“Event Date” shall have the meaning set forth in Section 2(e) hereof.

 

“Exchange Act” shall mean the United States Securities Exchange
Act of 1934, as amended.

 

“Exchange Notes” shall mean the 83⁄4% Senior Subordinated Notes
due 2019, issued by the Company pursuant to, and entitled to the benefits of,
the Indenture or a trust indenture which is substantially identical to the
Indenture (which, in either case, shall be qualified under the TIA), and
registered pursuant to an effective Registration Statement under the Securities
Act, to be offered to Holders of Notes in exchange for Transfer Restricted
Notes pursuant to the Exchange Offer, which shall be identical in all material
respects to the Transfer Restricted Notes (except that (i) interest
thereon shall accrue from the last date on which interest was paid on such
Notes or, if no such interest has been paid, from the Issue Date, (ii) the
transfer restrictions thereon shall be eliminated and (iii) such Exchange
Notes shall not be entitled to Liquidated Damages as set forth in Section 2(e) below).  The Exchange Notes will be issued as evidence
of the same continuing indebtedness of the Company and will not constitute the
creation of new indebtedness.

 

“Exchange Offer” shall mean the exchange offer by the Company of
Exchange Notes for Notes pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration” shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration Statement” shall mean an exchange
offer registration statement on an appropriate form under the Securities Act,
and all amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

 

“Exchange Period” shall have the meaning set forth in Section 2(a) hereof.

 

“Holder” shall mean each Initial
Purchaser, for so long as it owns any Transfer Restricted Notes, and each of
its direct and indirect successors, assigns and transferees who becomes or
become registered owners of Transfer Restricted Notes under the Indenture and
each Participating Broker-Dealer that holds Exchange Notes for so long as such 

 

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Participating Broker-Dealer is required to
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.

 

“Indenture” shall mean the
Indenture relating to the Notes dated as of August 14, 2009 between the
Company and Wells Fargo Bank, National Association, as trustee, as the same may
be amended from time to time in accordance with the terms thereof.

 

“Initial Purchasers” shall have the meaning set forth in the
preamble to this Agreement.

 

“Inspectors” shall have the meaning
set forth in Section 3(m) hereof.

 

“Issue Date” shall mean the date on which the Notes are
originally issued.

 

“Liquidated Damages” shall have the meaning set forth in Section 2(e) hereof.

 

“Majority Holders” shall mean, subject to Section 7(j), the
Holders of a majority of the aggregate principal amount of outstanding Transfer
Restricted Notes.

 

“Notes” shall have the meaning set forth in the preamble to this
Agreement.

 

“Participating Broker-Dealer” shall have the meaning set forth
in Section 3(r) hereof.

 

“Person” shall mean an individual,
partnership, corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.

 

“Private Exchange” shall have the meaning set forth in Section 2(a) hereof.

 

“Private Exchange Notes” shall have the meaning set forth in Section 2(a) hereof.

 

“Prospectus” shall mean the
prospectus included in a Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or supplemented by any
prospectus supplement, including a prospectus supplement with respect to the
terms of the offering of any portion of the Transfer Restricted Notes covered
by a Shelf Registration Statement, and by all other amendments and supplements
to a prospectus, including post-effective amendments, and in each case
including all material incorporated by reference therein.

 

“Purchase Agreement” shall have the meaning set forth in the
preamble to this Agreement.

 

“RBS” shall have the meaning set forth in the preamble to this
Agreement.

 

3

 

“Records” shall have the meaning
set forth in Section 3(m) hereof.

 

“Registration Default” shall have the meaning set forth in Section 2(e) hereof.

 

“Registration Expenses” shall mean any and all expenses incident
to performance of or compliance by the Company with this Agreement, including
without limitation:  (i) all
applicable SEC or Financial Industry Regulatory Authority (“FINRA”)
registration and filing fees, (ii) all fees and expenses incurred in
connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one counsel for any Holder that is an
Initial Purchaser in connection with blue sky qualification of any of the
Exchange Notes or Transfer Restricted Notes) and compliance with the rules of
FINRA, (iii) all applicable expenses incurred by the Company in preparing
or assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing any other documents
relating to the performance of and compliance with this Agreement, (iv) the
fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company, including the expenses of any “cold
comfort” letters (in connection with a Shelf Registration Statement) required
by or necessary for such performance or compliance, (v) the fees and
expenses of the Trustee, and any exchange agent or custodian, (vi) all fees
and expenses incurred in connection with the listing, if any, of any of the
Transfer Restricted Notes on any securities exchange or exchanges, if the
Company, in its discretion, elects to make any such listing, (vii) all rating
agency fees, if any, (viii) the reasonable fees and expenses of one
counsel, if any, designated in writing by the Majority Holders to act as
counsel for the Holders of the Transfer Restricted Notes in connection with a
Shelf Registration Statement (which counsel shall be reasonably satisfactory to
the Company) and (ix) any fees and disbursements to be paid by the Company
or sellers of securities and the fees and expenses of any special experts
retained by the Company in connection with any Shelf Registration Statement;
but excluding fees and disbursements of counsel to, or other advisors or experts
retained (severally or jointly) by the Holders (other than as set forth in (ii) and
(viii) above), agency and other fees, expenses, underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Transfer Restricted Notes by a Holder.

 

“Registration Statement” shall mean any registration statement
(including, without limitation, the Exchange Offer Registration Statement and
the Shelf Registration Statement) of the Company which covers any of the
Exchange Notes or the Transfer Restricted Notes pursuant to the provisions of
this Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.

 

“SEC” shall mean the United States
Securities and Exchange Commission.

 

4

 

“Securities Act” shall mean the United States Securities Act of
1933, as amended.

 

“Shelf Registration” shall mean a registration effected pursuant
to Section 2(b) hereof.

 

“Shelf Registration Event” shall have the meaning set forth in Section 2(b) hereof.

 

“Shelf Registration Statement” shall mean a “shelf” registration
statement of the Company relating to a “shelf” offering in accordance with Rule 415
of the Securities Act, or any similar rule that may be adopted by the SEC,
pursuant to the provisions of Section 2(b) hereof which covers all of
the Transfer Restricted Notes, on an appropriate form under the Securities Act,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.

 

“TIA” shall have the meaning set
forth in Section 3(k) hereof.

 

“Transfer Restricted Notes” shall mean each Note, and each
Private Exchange Note, if issued; provided, however, that each Note or Private Exchange Note, as the
case may be, shall cease to be a Transfer Restricted Note when (i) with
respect to a Note only, such Note has been exchanged by a person other than a
Participating Broker-Dealer in the Exchange Offer for an Exchange Note or, provided the Holder thereof received timely and proper
notice of the Exchange Offer, was entitled to be exchanged by such person in
the Exchange Offer by such person, but was not properly tendered into, or was
withdrawn from, the Exchange Offer, (ii) with respect to a Note only,
following the exchange by a Participating Broker-Dealer in the Exchange Offer
of a Note for an Exchange Note, such Exchange Note is sold to a purchaser who receives
from such Participating Broker-Dealer on or prior to the date of such sale a
copy of the Prospectus contained in the Exchange Offer Registration Statement,
as amended or supplemented, (iii) such Note or Private Exchange Note, as
the case may be, has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement, (iv) such
Note or Private Exchange Note, as the case may be, is distributed to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A)
under the Securities Act, (v) such Note or Private Exchange Note, as the
case may be, shall have been otherwise transferred by the holder thereof and a
new security not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such new security shall
not require registration or qualification under the Securities Act or any
similar state law then in force, or (vi) such Note or Private Exchange
Note, as the case may be, ceases to be outstanding.

 

“Trustee” shall mean the trustee
with respect to the Notes under the Indenture.

 

“Wells Fargo” shall have the meaning set forth in the preamble
to this Agreement.

 

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2.                                       Registration Under the Securities
Act.

 

(a)                                  Exchange Offer.  (i)  To the extent not prohibited by any
applicable law or applicable policy of the SEC, the Company shall, for the
benefit of the Holders, at the Company’s cost, (A) prepare and, on or
prior to 270 days after the Issue Date (or if such 270th day is not a Business
Day, on or prior to the first Business Day thereafter), file with the SEC an Exchange
Offer Registration Statement on an appropriate form under the Securities Act
covering the offer by the Company to the Holders who are not prohibited by any
law or policy of the SEC from participating in the Exchange Offer to exchange
all of the Transfer Restricted Notes for a like principal amount of Exchange
Notes, (B) use its reasonable best efforts to cause such Exchange Offer
Registration Statement to be declared effective under the Securities Act by the
SEC on or prior to 330 days after the Issue Date (or if such 330th day is not a
Business Day, on or prior to the first Business Day thereafter), (C) use
its reasonable best efforts to keep such Registration Statement effective for a
period of not less than 20 Business Days after the date notice of the Exchange
Offer is mailed to the Holders (or longer if required by applicable law) (such
period referred to herein as the “Exchange Period”) and (D) use its
reasonable best efforts to commence the Exchange Offer and, on or prior to 365
days after the Issue Date (or if such 365th day is not a Business Day, on or
prior to the first Business Day thereafter), issue Exchange Notes in exchange
for all Notes properly tendered and not withdrawn prior thereto in the Exchange
Offer.  Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder eligible
and electing to exchange Transfer Restricted Notes for Exchange Notes (assuming
that such Holder (a) is not an affiliate of the Company within the meaning
of Rule 405 under the Securities Act, (b) is not a broker-dealer
tendering Transfer Restricted Notes acquired directly from the Company (or an
affiliate of the Company) for its own account, (c) acquired the Exchange
Notes in the ordinary course of such Holder’s business and (d) has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing (within the meaning of the Securities
Act) the Exchange Notes) and to transfer such Exchange Notes from and after
their receipt without any limitations or restrictions on transfer under the Securities
Act and under state securities or blue sky laws.

 

(ii)                                  In connection
with the Exchange Offer, the Company shall:

 

(A)                              mail or caused
to be mailed as promptly as practicable after the Exchange Offer Registration
Statement has been declared effective under the Securities Act to each Holder a
copy of the Prospectus forming part of the Exchange Offer Registration Statement,
together with, in the case of a Holder who holds Notes held in physical
certificated form, an appropriate letter of transmittal and related documents
and, in the case of a Holder who is the beneficial owner of such Notes held in
book-entry form, instructions regarding the procedures for automated delivery
of such Notes pursuant to the Depositary’s Automated Tender Offer Program and
related documents;

 

(B)                                keep the
Exchange Offer open for acceptance during the Exchange Period;

 

6

 

(C)                                utilize the
services of the Depositary for the Exchange Offer;

 

(D)                               permit Holders
to withdraw tendered Transfer Restricted Notes at any time prior to 5:00 p.m.
(New York time) on the last Business Day of the Exchange Period by telegram,
telex, facsimile transmission or letter to the institution specified in the
notice, setting forth the name of such Holder, the principal amount of Notes
delivered for exchange, and a statement that such Holder is withdrawing its
election to have such Notes exchanged;

 

(E)                                 notify each
Holder that any Transfer Restricted Notes not tendered will remain outstanding
and continue to accrue interest but will not retain any rights under this
Agreement (except in the case of the Initial Purchasers and Participating Broker-Dealers
as provided herein); and

 

(F)                                 otherwise
comply in all material respects with all applicable laws relating to the Exchange
Offer.

 

(iii)                               If, prior to
consummation of the Exchange Offer, the Initial Purchasers hold any Transfer
Restricted Notes acquired by them and having the status of an unsold allotment
in the initial distribution, the Company upon the request of any Initial Purchaser
shall, to the extent not prohibited by any applicable law or applicable policy
of the SEC and to the extent the CUSIP Service Bureau will issue the same
(other than any letter, number or such other notation, the purpose of which is
to identify the Private Exchange Notes as securities subject to transfer
restrictions not applicable to the Exchange Notes) CUSIP numbers for the
Private Exchange Notes as for the Exchange Notes upon the request of the
Company described in (iv) below, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
Purchaser in exchange (the “Private Exchange”) for the Notes held by
such Initial Purchaser, a like principal amount of debt securities of the
Company, issued pursuant to, and entitled to the benefits of, the Indenture and
identical in all material respects to the Exchange Notes, except that such
securities shall bear appropriate transfer restrictions (the “Private Exchange
Notes”).

 

(iv)                              The Exchange
Notes and the Private Exchange Notes shall be issued under (A) the
Indenture or (B) an indenture identical in all material respects to the
Indenture and which, in either case, has been qualified under the United States
Trust Indenture Act of 1939, as amended (the “TIA”) or is exempt from
such qualification and shall provide that the Exchange Notes (other than the
Private Exchange Notes) shall not be subject to the transfer restrictions set
forth in the Indenture.  The Indenture or
such indenture shall provide that the Exchange Notes, the Private Exchange
Notes and the Notes shall vote and consent together on all matters as one class
and that none of the Exchange Notes, the Private Exchange Notes or the Notes
shall have the right to vote or consent as a separate class on any matter.  The Private Exchange Notes shall be of the
same series as, and the Company shall request of the CUSIP Service Bureau to
issue the same CUSIP numbers for the Private Exchange Notes as for, the
Exchange Notes issued 

 

7

 

pursuant to the Exchange Offer.  The Company shall not have any liability
hereunder solely as a result of such Private Exchange Notes not bearing the
same CUSIP number as the Exchange Notes.

 

(v)                                 The Exchange Offer and the
Private Exchange shall not be subject to any conditions, other than (A) that,
in the opinion of counsel to the Company, the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable
policy of the SEC, (B) that no action or proceeding shall have been
instituted or threatened in any court or by any governmental agency which, in
the Company’s reasonable judgment, might impair the ability of the Company to
proceed with the Exchange Offer or the Private Exchange nor shall any material
adverse development have occurred in any such action or proceeding with respect
to the Company, (C) that all governmental approvals shall have been
obtained which approvals the Company deems necessary for the consummation of
the Exchange Offer or Private Exchange and (D) the due tendering of
Transfer Restricted Notes in accordance with the terms of the Exchange
Offer.  As soon as practicable after the
close of the Exchange Offer and/or the Private Exchange, as the case may be,
the Company shall:

 

(1)                                  accept for
exchange all Transfer Restricted Notes properly tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange, as the case
may be, in accordance with the terms of the Exchange Offer Registration
Statement and the letter of transmittal and related documents or automated
delivery instructions and related documents, as the case may be, of which shall
be exhibit thereto; and

 

(2)                                  deliver, or
cause to be delivered, to the Trustee for cancellation all Transfer Restricted
Notes so accepted for exchange by the Company, and issue, and cause the Trustee
under the Indenture to promptly authenticate and deliver to each Holder, a new
Exchange Note or Private Exchange Note, as the case may be, equal in principal
amount to the principal amount of the Notes surrendered by such Holder and
accepted for exchange.

 

(vi)                              To the extent not prohibited
by any law or applicable policy of the SEC, the Company shall use its
reasonable best efforts to complete the Exchange Offer as provided above, and
shall comply in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer.  Each Holder of Notes
who wishes to exchange such Notes for Exchange Notes in the Exchange Offer will
be required to make certain customary representations in connection therewith,
including representations that such Holder is not an affiliate of the Company
within the meaning of Rule 405 under the Securities Act, or if it is an
affiliate, that it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, that it is not a
broker-dealer tendering Transfer Restricted Notes acquired directly from the
Company (or an affiliate of the Company) for its own account, that any Exchange
Notes to be received by it will be acquired in the ordinary course of business
and that at the time of the commencement of the Exchange Offer it has no
arrangement or understanding with any Person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Notes.  Each Participating

 

8

 

Broker-Dealer will be required to further
represent that any Transfer Restricted Notes to be exchanged for Exchange Notes
were acquired by it as a result of market-making activities or other trading
activities and acknowledge that it will deliver the Prospectus included in the
Exchange Offer Registration Statement in connection with the resale of Exchange
Notes to the extent it is subject to the prospectus delivery requirements of
the SEC.  The Company may inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Notes in the
Exchange Offer.

 

(vii)                           Upon consummation of the
Exchange Offer in accordance with this Section 2(a), the provisions of
this Agreement shall continue to apply, modified as necessary, solely with
respect to Transfer Restricted Notes that are Private Exchange Notes, Exchange
Notes held by Participating Broker-Dealers and Transfer Restricted Notes
entitled to a Shelf Registration pursuant to the first paragraph of Section 2(b) hereof.

 

(b)                                 Shelf Registration.  (i)  In the event that (A) filing
the Exchange Offer Registration Statement would not be permitted by applicable
law or SEC policy, (B) the Exchange Offer is not consummated within 375
days after the Issue Date, (C) any Holder of Transfer Restricted Notes
notifies the Company within 20 Business Days after the commencement of the
Exchange Offer that (1) due to a change in applicable law or SEC policy it
is not entitled to participate in the Exchange Offer, (2) due to a change
in applicable law or SEC policy it may not resell the Exchange Notes to be
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration Statement
is not appropriate or available for such resales by such Holder or (3) it
is a broker-dealer and owns Transfer Restricted Notes acquired directly from
the Company or an affiliate of the Company or (D) the Majority Holders may
not resell the Exchange Notes acquired by them in the Exchange Offer to the
public without restriction under the Securities Act and without restriction
under applicable blue sky or state securities laws (any of the events specified
in (A)-(D) being a “Shelf Registration Event”), then the Company
shall, at its own cost, use its reasonable best efforts to file the Shelf
Registration Statement on or prior to 60 days (or if such 60th day is not a
Business Day, on or prior to the first Business Day thereafter) after such
filing obligation arises, and use its reasonable best efforts to cause the
Shelf Registration Statement to be declared or become effective, as applicable,
under the Securities Act on or prior to 180 days (or if such 180th day is not a
Business Day, on or prior to the first Business Day thereafter) after such
filing obligation arises; provided, however, that if the Company has not consummated the
Exchange Offer within 375 days (or if such 375th day is not a Business Day, on
or prior to the first Business Day thereafter) of the Issue Date, then the
Company will use its reasonable best efforts to file with the SEC on or prior
to the 405th day after the Issue Date (or if such 405th day is not a Business
Day, on or prior to the first Business Day thereafter) a Shelf Registration
Statement providing for the sale by the Holders of all of the Transfer
Restricted Notes, and shall use its reasonable best efforts to have such Shelf
Registration Statement be declared or become effective, as applicable, under
the Securities Act no later than 60 days (or if such 60th day is not a Business
Day, no later than the first Business Day thereafter) after such Shelf
Registration Statement was first filed with 

 

9

 

the SEC.  No Holder of Transfer
Restricted Notes may include any of its Transfer Restricted Notes in any Shelf
Registration pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing such information as the Company may, after conferring
with counsel with regard to information relating to Holders that would be required
by the SEC to be included in such Shelf Registration Statement or Prospectus
included therein, reasonably request for inclusion in any Shelf Registration
Statement or Prospectus included therein. 
Each Holder as to which any Shelf Registration is being effected agrees
to furnish to the Company all information with respect to such Holder necessary
to make any information previously furnished to the Company by such Holder not
materially misleading.

 

(ii)                                  The Company agrees to use
its reasonable best efforts to keep the Shelf Registration Statement
continuously effective until the second anniversary of the effective date of
the Shelf Registration Statement (subject to extension pursuant to the last paragraph
of Section 3 hereof) (or such shorter period that will terminate when all
of the Transfer Restricted Notes covered by such Shelf Registration Statement
have been sold pursuant thereto or cease to be outstanding or otherwise cease
to be Transfer Restricted Notes) (the “Effectiveness Period”).  The Company further agrees, if necessary, to
supplement or amend the Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registrations, and
the Company agrees to furnish to the Holders of Transfer Restricted Notes
copies of any such supplement or amendment (or, with respect to documents
incorporated by reference, to make available) promptly after its being used or
filed with the SEC.

 

(c)                                  Expenses.  The Company shall pay all Registration
Expenses in connection with any registration pursuant to Section 2(a) or
2(b) hereof.  Each Holder shall pay
all expenses of its counsel (other than as set forth otherwise in this
Agreement), all underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder’s Transfer Restricted
Notes pursuant to the Shelf Registration Statement.

 

(d)                                 Effective Registration
Statement.  An Exchange
Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be
deemed to have been declared or become effective, as applicable, unless it has
been declared effective by the SEC (unless it becomes effective automatically
upon filing); provided, however,
that if, after it has been declared or become effective, as applicable, the
offering of Transfer Restricted Notes pursuant to an Exchange Offer
Registration Statement or Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court, such Registration Statement will be deemed
not to have been effective during the period of such interference, until the
offering of Transfer Restricted Notes may legally resume.  The Company will be deemed not to have used
its reasonable best efforts to cause the Exchange Offer Registration Statement
or the Shelf Registration Statement, as the case may be, to become, or to
remain, effective during the requisite period if it voluntarily takes any
action that would result in any such Registration Statement not 

 

10

 

becoming effective under the Securities Act or in the Holders of
Transfer Restricted Notes covered thereby not being able to exchange or offer
and sell such Transfer Restricted Notes during that period, unless such action
is required by, or advisable under, applicable law.

 

(e)                                  Liquidated Damages.  (i)  In the event that (A) the
applicable Registration Statement is not filed with the SEC on or prior to the
date specified herein for such filing, (B) the applicable Registration
Statement has not been declared or become effective, as applicable, under the
Securities Act on or prior to the date specified herein for such effectiveness
(the “Effectiveness Target Date”), (C) the Exchange Offer is
required to be consummated hereunder and the Company fails to consummate the Exchange
Offer within 35 days (or if such 35th day is not a Business Day, on or prior to
the first Business Day thereafter) of the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement or (D) the applicable
Registration Statement is filed and has been declared or become effective, as
applicable, under the Securities Act prior to the Effectiveness Target Date but
shall thereafter cease to be effective or usable in connection with the
Exchange Offer or resales of Transfer Restricted Notes, as the case may be, during
the periods specified herein (as a result of an order suspending the effectiveness
of such Registration Statement or otherwise) without being immediately
succeeded by an additional Registration Statement covering the Transfer
Restricted Notes which has been filed and been declared or become effective, as
applicable, under the Securities Act (each such event referred to in clauses (A) through
(D), a “Registration Default”), then the Company shall pay Liquidated Damages
to each Holder of Transfer Restricted Notes as to which such Registration
Default relates (“Liquidated Damages”), with respect to the first 90-day
period (or portion thereof) while a Registration Default is continuing
immediately following the occurrence of such Registration Default, in an amount
equal to 0.25% per annum of the principal amount of the Transfer Restricted
Notes of such Holder.  The amount of
Liquidated Damages will increase by an additional 0.25% per annum of the
principal amount of the Transfer Restricted Notes of such Holder for each subsequent
90-day period (or portion thereof) while a Registration Default is continuing
until all Registration Defaults have been cured, up to a maximum amount of
0.50% per annum of the principal amount of the Transfer Restricted Notes of
such Holder.  Liquidated Damages shall be
computed based on the actual number of days elapsed during which any such
Registration Default exists.  Immediately
following the cure of a Registration Default, the accrual of Liquidated Damages
with respect to such Registration Default will cease and the interest rate will
revert to the original rate.

 

(ii)                                  The Company shall deliver to
the Trustee an Officers’ Certificate (as provided for in the Indenture) within
five Business Days after each and every date on which an event occurs in
respect of which Liquidated Damages are required to be paid (an “Event Date”).  Liquidated Damages shall be paid in arrears
by depositing with the Trustee, in trust, for the benefit of the Holders of
Transfer Restricted Notes, on or before the applicable semiannual interest payment
date, immediately available funds in sums sufficient to pay the Liquidated
Damages then due.  The Liquidated Damages
due shall be payable in arrears on each interest payment date to the record
Holder of Notes entitled to receive the interest payment to be paid on such
date as set forth in the Indenture.  Each
obligation to pay Liquidated Damages shall be deemed to accrue 

 

11

 

from, and including the day following, the
applicable Event Date.  The Company shall
not be required to pay Liquidated Damages for more than one Registration
Default at any given time.

 

(f)                                    Specific Enforcement.  Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it would not be possible to measure damages for such injuries precisely
and that, in the event of any such failure, the Initial Purchasers or any
Holder may obtain such relief as may be required to specifically enforce the
Company’s obligations under Section 2(a) and Section 2(b) hereof.

 

3.                                       Registration Procedures.  In connection with the obligations of the Company
with respect to the Registration Statements pursuant to Sections 2(a) and
2(b) hereof, the Company shall:

 

(a)                                  prepare and file as
prescribed by Section 2(a) and use its reasonable best efforts to
prepare and file as prescribed by Section 2(b), as applicable, with the
SEC a Registration Statement or Registration Statements within the relevant
time period specified in Section 2 hereof on the appropriate form under
the Securities Act, which form (i) shall be selected by the Company, (ii) shall,
in the case of a Shelf Registration, be available for the sale of the Transfer
Restricted Notes by the selling Holders thereof and (iii) shall comply as
to form in all material respects with the requirements of the applicable form
and include or incorporate by reference all financial statements required by
the SEC to be filed therewith; and use its reasonable best efforts to cause
such Registration Statement to be declared or become effective, as applicable,
and remain effective in accordance with Section 2 hereof.  The Company shall not file any Registration
Statement or Prospectus or any amendments or supplements thereto in respect of
which the Holders must provide information for inclusion therein without the
Holders being afforded an opportunity to review such documentation a reasonable
time prior to the filing of such document or if the Majority Holders or such
Participating Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object;

 

(b)                                 prepare and file with the
SEC such amendments and post-effective amendments to each Registration
Statement as may be necessary under applicable law to keep such Registration
Statement effective for the Effectiveness Period or the Applicable Period, as
the case may be; and cause each Prospectus to be supplemented by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule 424
(or any similar provision then in force) under the Securities Act, and comply
in all material respects with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder
applicable to them with respect to the disposition of all securities covered by
each Registration Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended method or 

 

12

 

methods of distribution by
the selling Holders thereof described in this Agreement (including sales by any
Participating Broker-Dealer);

 

(c)                                  in the case of a Shelf
Registration, (i) notify each Holder of Transfer Restricted Notes, at
least five Business Days prior to filing, that a Shelf Registration Statement
with respect to the Transfer Restricted Notes is being filed and advise such
Holder that the distribution of Transfer Restricted Notes will be made in
accordance with the method selected by the Majority Holders participating in
the Shelf Registration; (ii) furnish to each Holder of Transfer Restricted
Notes, without charge, as many copies of each Prospectus, and any amendment or
supplement thereto (other than any amendments or supplements pursuant to the
filing of periodic reports under the Exchange Act which are incorporated by
reference into such Prospectus) and such other documents as such Holder may
reasonably request, in order to facilitate the disposition of the Transfer
Restricted Notes; and (iii) subject to the last paragraph of Section 3
hereof, hereby consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Transfer Restricted Notes
in connection with the offering and sale of the Transfer Restricted Notes
covered by such Prospectus or any amendment or supplement thereto;

 

(d)                                 in the case of a Shelf
Registration, use its reasonable best efforts to register or qualify, as may be
required by applicable law, the Transfer Restricted Notes under all applicable
state securities or “blue sky” laws of such jurisdictions by the time the applicable
Registration Statement becomes effective under the Securities Act as any Holder
of Transfer Restricted Notes covered by a Registration Statement shall
reasonably request in advance of such date of effectiveness, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in each such jurisdiction of such
Transfer Restricted Notes owned by such Holder; provided,
however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d) or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;

 

(e)                                  in the case of (i) a
Shelf Registration or (ii) Participating Broker-Dealers who have notified
the Company that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(r) hereof,
notify each Holder of Transfer Restricted Notes, or such Participating
Broker-Dealers, as the case may be, their counsel, if any, promptly and confirm
such notice in writing (if such notice was not originally given in writing) (A) when
a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, other than any amendments
or supplements pursuant to the filing of periodic reports under the Exchange
Act which are incorporated by reference into such Registration Statement, (B) of
any request by the SEC or any state securities authority for amendments and 

 

13

 

supplements to a
Registration Statement or Prospectus or for additional information after the
Registration Statement has been declared or become effective, as applicable, (C) of
the issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (D) if the Company receives any
notification with respect to the suspension of the qualification of the
Transfer Restricted Notes to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction or the initiation of any proceeding for such
purpose, (E) of the happening of any event or the failure of any event to
occur or the discovery of any facts or otherwise during the Effectiveness
Period or the Applicable Period, as the case may be, which makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or which causes such Registration Statement or Prospectus to
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and (F) of
the Company’s reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;

 

(f)                                    use its reasonable best
efforts to obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement as soon as practicable;

 

(g)                                 in the case of a Shelf
Registration, furnish to each Holder of Transfer Restricted Notes, without
charge, one conformed copy of each Registration Statement relating to such
Shelf Registration and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);

 

(h)                                 in the case of a Shelf
Registration, cooperate with the selling Holders of Transfer Restricted Notes
to facilitate the timely preparation and delivery of certificates not bearing
any restrictive legends representing Transfer Restricted Notes covered by such
Shelf Registration to be sold and relating to the subsequent transfer of such
Notes; and cause such Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling
Holders may reasonably request at least three Business Days prior to the
closing of any sale of Transfer Restricted Notes;

 

(i)                                     in the case of a Shelf
Registration or an Exchange Offer Registration, upon the occurrence of any
circumstance contemplated by Section 3(e)(B), 3(e)(C), 3(e)(D), 3(e)(E) or
3(e)(F) hereof, use its reasonable best efforts to prepare a supplement or
post-effective amendment to the subject Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other
required document so that (subject to Section 3(a)), as thereafter
delivered to the purchasers of the Transfer Restricted Notes to whom a
Prospectus is being delivered by a Participating Broker-Dealer who has notified
the Company that it will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(a) hereof, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances 

 

14

 

under which they were made,
not misleading; and to notify each Holder or Participating Broker-Dealer, as
applicable, to suspend use of the Prospectus as promptly as practicable after
the occurrence of such an event;

 

(j)                                     use its reasonable best
efforts to obtain a CUSIP number for all Exchange Notes or, if issued, Private
Exchange Notes (with respect to the Private Exchange Notes, subject to the
provisions of the last two sentences of Section 2(a)(iv) hereof), as
the case may be, not later than the effective date of a Registration Statement,
and provide the Trustee with printed certificates for the Exchange Notes or the
Private Exchange Notes, as the case may be, in a form eligible for deposit with
the Depositary;

 

(k)                                  (i) cause the Indenture
or the indenture provided in Section 2(a) to be qualified under the
TIA, in connection with the registration of the Transfer Restricted Notes, (ii) cooperate
with the Trustee or any trustee under such indenture and the Holders to effect
such changes to the Indenture or such indenture as may be required for the Indenture
or such indenture to be so qualified in accordance with the terms of the TIA
and (iii) execute, and use its reasonable best efforts to cause the
Trustee or any trustee under such indenture to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture or such indenture to be so
qualified in a timely manner;

 

(l)                                     in the case of a Shelf
Registration, enter into underwriting agreements, agency agreements or similar
agreements, as appropriate, and take all such other customary and appropriate
actions in connection therewith, in each case, as are reasonably requested by
the Majority Holders in order to expedite or facilitate the disposition of such
Transfer Restricted Notes, and in such connection, (i) make such
representations and warranties to Holders of such Transfer Restricted Notes and
the underwriters (if any) with respect to the business of the Company and its
subsidiaries as then conducted and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested by the
Majority Holders; (ii) if an underwriting agreement is entered into,
obtain opinions of counsel to the Company in form and substance reasonably
satisfactory to the managing underwriters, addressed to each of the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and as may be reasonably requested by the managing
underwriters; (iii) if an underwriting agreement is entered into, obtain “cold
comfort” letters and updates thereof from the independent registered
accountants of the Company (and, if necessary, any other independent registered
accountants or certified public accountants, as the case may be, of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the Company and each of the
underwriters, such letters to be in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with underwritten
offerings;

 

15

 

and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures substantially identical to those set forth in Section 4
hereof (or such other provisions and procedures acceptable to the Company and
the Holders of a majority in aggregate principal amount of Transfer Restricted
Notes covered by such Registration Statement and the managing underwriters)
with respect to all parties to be indemnified pursuant to said Section (including,
without limitation, such selling Holders and such underwriters).  The above shall be done at each closing in respect
of the sale of Transfer Restricted Notes, or as and to the extent required thereunder;

 

(m)                               if a Shelf Registration is
filed pursuant to Section 2(b), make available for the period specified in
Section 2(b)(ii) for inspection by not more than one counsel for all
selling Holders of Transfer Restricted Notes and each such person who would be
an “underwriter” as a result of the sale by such person of the Transfer
Restricted Notes of any such Holder and any attorney or accountant retained by
any such underwriters (collectively, the “Inspectors”), at the offices
where normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries (collectively, the “Records”), and cause the officers, directors
and employees of the Company and its subsidiaries to supply all information in
each case reasonably requested by any such Inspector in connection with such
Shelf Registration Statement and, in each case as shall be reasonably
necessary, in the judgment of the respective counsel referred to above, to
enable them to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act.  Records which the
Company determines, in good faith, to be confidential and any Records which it
notifies the Inspectors are confidential shall be maintained in confidence and
shall not be disclosed by the Inspectors to any other Person until such time as
(1) the disclosure of such Records is required to be set forth in the
Shelf Registration Statement or the prospectus included therein or in an
amendment to such Shelf Registration Statement or an amendment or supplement to
such prospectus in order that such Shelf Registration Statement, prospectus,
amendment or supplement as the case may be, does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, (in which case the subject information
may only be disclosed to another Person following such time as the Shelf
Registration Statement in which such information is included is publicly filed
by the Company with the SEC), (2) such Person shall be legally compelled
to disclose such information pursuant to a subpoena or other order from a court
of competent jurisdiction (but only after such Person shall have given the
Company prior written notice of such requirement) or (3) the information
in such Records has been made generally available to the public.  Each such Inspector will be required to agree
to keep information obtained by it as a result of its inspections pursuant to
this Agreement confidential and not to use such information as the basis for
any market transactions in the securities of the Company unless and until such
is made generally available to the public. 
Each Inspector will be required to further agree that it will, upon
learning that disclosure of such Records is sought under (1) above, give
notice to the Company and allow the Company 

 

16

 

and its subsidiaries at
their expense to undertake appropriate action to prevent disclosure of the
Records deemed confidential;

 

(n)                                 comply with all applicable rules and
regulations of the SEC so long as the provisions of this Agreement are
applicable and make generally available to its security holders earnings
statements satisfying the provisions of  Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 60 days after the end of any 12-month
period (or 105 days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Transfer Restricted Notes are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;

 

(o)                                 upon consummation of an
Exchange Offer or a Private Exchange, obtain an opinion of counsel to the
Company addressed to the Trustee and which includes an opinion that (i) the
Company has duly authorized, executed and delivered each of the Exchange Notes
and Private Exchange Notes, as the case may be and (ii) the Exchange Notes
constitute a legal, valid and binding obligation of the Company, as the case
may be, enforceable against the Company in accordance with its respective terms
(in each case, with customary exceptions);

 

(p)                                 if an Exchange Offer or a
Private Exchange is consummated, upon proper delivery of Transfer Restricted
Notes by Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be, the Company shall mark, or cause to be marked, on such
Transfer Exchange Notes and on the books of the Trustee, the Note Registrar (as
defined in the Indenture) and, if necessary, the Depositary, delivered by such
Holders that such Transfer Restricted Notes are being canceled in exchange for
the Exchange Notes or the Private Exchange Notes, as the case may be; but in no
event shall such Notes be marked as paid or otherwise satisfied solely as a
result of being exchanged for Exchange Notes or Private Exchange Notes in the
Exchange Offer or the Private Exchange, as the case may be;

 

(q)                                 cooperate with each seller
of Transfer Restricted Notes covered by any Registration Statement
participating in the disposition of such Transfer Restricted Notes and one
counsel acting on behalf of all such sellers in connection with the filings, if
any, required to be made with FINRA; and

 

(r)                                    in the case of the Exchange
Offer Registration Statement (A) include in the Exchange Offer
Registration Statement a section entitled “Plan of Distribution,” which section
shall be reasonably acceptable to Deutsche Bank on behalf of the Initial
Purchasers, and which shall contain a summary statement of the positions publicly
taken

 

17

 

or policies made public by
the staff of the SEC with respect to the potential “underwriter” status of any
broker-dealer (a “Participating Broker-Dealer”) that holds Transfer Restricted
Notes acquired for its own account as a result of market-making activities or
other trading activities and that will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Notes to be received by such broker-dealer
in the Exchange Offer, including a statement that any such Participating
Broker-Dealer who receives Exchange Notes for Transfer Restricted Notes
pursuant to the Exchange Offer may be deemed a statutory underwriter and must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes, (B) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e) (that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided
in this Section 3(r)), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement thereto (other than any
amendment or supplement pursuant to the filing of periodic reports under the
Exchange Act which are incorporated by reference into such Prospectus), as such
Participating Broker-Dealer may reasonably request, (C) hereby consent to
the use of the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto by any Participating Broker-Dealers in
connection with the sale or transfer of the Exchange Notes covered by the
Prospectus or any amendment or supplement thereto, (D) use its reasonable
best efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by Participating Broker-Dealers for such
period of time as such Participating Broker-Dealers must comply with such
requirements in order to resell the Exchange Notes; provided,
however, that such period shall not be
required to exceed the earlier of (i) 180 days from the date the Exchange
Offer Registration Statement first became effective under the Securities Act
(or such longer period if extended pursuant to the last sentence of this Section 3)
and (ii) such time after the Exchange Offer is completed as the Company
reasonably believes that there are no Participating Broker-Dealers owning
Exchange Notes but not earlier than 90 days (the “Applicable Period”),
and (E) include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange Offer (1) a
provision substantially similar to the following:

 

“If the exchange offeree is
a broker-dealer holding Notes acquired for its own account as a result of
market-making activities or other trading activities, it will deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of Exchange Notes received in respect of such Notes pursuant to the
Exchange Offer”;

 

and (2) a statement to the effect that
by a broker-dealer making the acknowledgment described in clause (1) and
by delivering a Prospectus in connection with the resale of 

 

18

 

Exchange Notes, such broker-dealer will not
be deemed to admit that it is an underwriter within the meaning of the Securities
Act.

 

The Company may require each seller of Transfer Restricted Notes as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the proposed distribution of such
Transfer Restricted Notes as the Company may from time to time reasonably request
in writing.  The Company may exclude from
such registration the Transfer Restricted Notes of any seller who fails to
furnish such information within a reasonable time (not to exceed 15 Business
Days) after receiving such request and shall be under no obligation to
compensate any such seller for any lost income, interest or other opportunity
forgone, or any liability incurred, as a result of the Company’s decision to
exclude such seller.

 

In the case of (i) a Shelf Registration Statement or (ii) Participating
Broker-Dealers who have notified the Company that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided
in Section 3(r) hereof that are seeking to sell Exchange Notes and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 3(e)(B), 3(e)(C), 3(e)(D), 3(e)(E) or 3(e)(F) hereof,
such Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Transfer Restricted Notes or Exchange Notes, as the
case may be, pursuant to a Registration Statement until such Holder’s or
Participating Broker-Dealer’s, as the case may be, receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof
or until it is advised in writing (the “Advice”) by the Company that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company’s expense) all
copies in such Holder’s or Participating Broker-Dealer’s, as the case may be,
possession, other than permanent file copies then in such Holder’s or
Participating Broker-Dealer’s, as the case may be, possession, of the
Prospectus covering such Transfer Restricted Notes or Exchange Notes, as the
case may be, current at the time of receipt of such notice.  If the Company shall give any such notice to
suspend the disposition of Transfer Restricted Notes or Exchange Notes, as the
case may be, pursuant to a Registration Statement, the Company shall use its
reasonable best efforts to file as soon as practicable an amendment or
supplement to the Registration Statement and, in the case of an amendment, to
have such amendment declared effective as soon as practicable and shall extend
the period during which such Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days in the period from
and including the date of the giving of such notice to and including the date
when the Company shall have made available to the Holders or Participating
Broker-Dealers, as the case may be, (A) copies of the supplemented or
amended Prospectus necessary to resume such dispositions or (B) the Advice
(or such shorter period that will terminate when all of the Transfer Restricted
Notes covered by such Shelf Registration Statement have been sold pursuant
thereto or cease to be outstanding or otherwise cease to be Transfer Restricted
Notes).

 

19

 

4.                                       Indemnification and
Contribution.

 

(a)                                  The Company shall indemnify
and hold harmless each Initial Purchaser, each Holder, each Participating
Broker-Dealer, each underwriter who participates in an offering of Transfer Restricted
Notes pursuant to a Shelf Registration Statement, their respective affiliates,
and each Person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
as follows:

 

(i)                                     against any and
all loss, liability, claim, damage and expense whatsoever, joint or several, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto), pursuant to which Transfer Restricted Notes or Exchange
Notes were registered under the Securities Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii)                                  against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any
such settlement is effected with the prior written consent of the Company; and

 

(iii)                               against any and
all expenses whatsoever, as incurred (including reasonable fees and
disbursements of one counsel (in addition to any local counsel) chosen as provided
in Section 4(c) below) reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) of this Section 4(a);

 

provided, however, that
this indemnity does not apply to any loss, liability, claim, damage or expense
to the extent arising out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchasers,
such Holder, such Participating Broker-Dealer or any underwriter with respect
to such Initial Purchasers, Holder, Participating Broker-Dealer or underwriter,
as the case may be, expressly for use in the Registration Statement (or any
amendment or supplement thereto) or any Prospectus (or any amendment or supplement
thereto); provided, further,
that the foregoing indemnity with respect to losses, liabilities, claims,

 

20

 

damages, or expenses resulting from an untrue statement or omission or
alleged untrue statement or omission in a preliminary prospectus in any Shelf
Registration Statement shall not inure to the benefit of any Holder (or to the
benefit of any underwriter with respect to such Holder or to the benefit of any
person controlling such Holder or underwriter) from whom the person asserting
any such losses, claims, damages, expenses or liabilities purchased Transfer
Restricted Notes if (i) such untrue statement or omission or alleged
untrue statement or omission made in such preliminary prospectus was eliminated
or remedied in the final Prospectus (as amended or supplemented) if the Company
shall have furnished any amendments or supplements thereto to such Holder or
underwriter prior to confirmation for the sale of such Transfer Restricted
Notes to such person by such Holder or underwriter and (ii) a copy of the
final Prospectus (as so amended and supplemented) was not furnished to such
person at or prior to the written confirmation of the sale of such Transfer
Restricted Notes to such person, unless such failure to deliver was a result of
non-compliance by the Company with Section 3(c).

 

(b)                                 Each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
Initial Purchasers, and the other selling Holders and each of their respective
directors and each Person, if any, who controls any of the Company, the Initial
Purchasers, any underwriter or any other selling Holder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment or supplement thereto) or
any Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such selling Holder with respect to such Holder expressly for use in the
Registration Statement (or any supplement thereto), or any such Prospectus (or
any amendment thereto); provided, however, that, in the case of the Shelf Registration
Statement, no such Holder shall be liable for any claims hereunder in excess of
the amount of proceeds received by such Holder from the sale of Transfer
Restricted Notes pursuant to the Shelf Registration Statement.

 

(c)                                  Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this
indemnity agreement.  In the case of
parties indemnified pursuant to Section 4(a) above, counsel to all
the indemnified parties shall be selected by the Initial Purchasers, and, in
the case of parties indemnified pursuant to Section 4(b) above,
counsel to all the indemnified parties shall be selected by the Company.  An indemnifying party may participate at its
own expense in the defense of any such action, in which case, counsel to such
indemnifying party may also be counsel to the indemnified party; provided, however, that,
if such indemnified party at any time determines in its reasonable judgment
that (i) there exists a conflict of interest between the indemnified party
and the indemnifying party or (ii) there are legal defenses available 

 

21

 

to the indemnified party that would not be available to the
indemnifying party, then, counsel to the indemnifying party shall not be (or
shall cease to be, as applicable) counsel to the indemnified party.  For further clarification, should the
indemnifying party participate in the defense of such action under the
circumstances set forth in the proviso of the preceding sentence, the indemnifying
party shall indemnify the indemnified party against any and all expenses
described in subsection (a)(iii) above. 
If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it
and approved by the indemnified parties defendant (including any impleaded
parties) in such action, which approval shall not be unreasonably withheld, and
after notice from the indemnifying party to such indemnified party of its
election to so assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal expenses of other counsel, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation; provided, however, that,
if such indemnified party at any time determines in its reasonable judgment
that (i) there exists a conflict of interest between the indemnified party
and the indemnifying party or (ii) there are legal defenses available to
the indemnified party that would not be available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense.  If such indemnifying party is not entitled to
assume the defense of such action as a result of the proviso to the preceding
sentence, then counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party and,
for further clarification, the indemnifying party shall indemnify the
indemnified party against any and all expenses described in Section 4(a)(iii) above.  If any indemnifying party assumes the defense
of such action, the indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action.  In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions arising out of the same general allegations or circumstances.  No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 4 (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.

 

(d)                                 If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel incurred by such indemnified
party as contemplated under this Section 4, then such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have
received 

 

22

 

notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. 
Notwithstanding the immediately preceding sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, an indemnifying party shall not be
liable for any settlement of the nature contemplated by Section 4(a)(ii) effected
without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent the indemnifying
party, in its good faith judgment, considers such requests to be reasonable and
(ii) provides written notice to the indemnified party substantiating the
unpaid balance as unreasonable, in each case prior to the date of such
settlement.

 

(e)                                  (i)  In order to
provide for just and equitable contribution in circumstances under which any of
the indemnity provisions set forth in this Section 4 is for any reason
held to be unavailable to the indemnified parties although applicable in accordance
with its terms, the Company and the Holders, as applicable, shall contribute to
the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the
Holders; provided, however,
that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person that was
not guilty of such fraudulent misrepresentation.  As between the Company and the Holders, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the
Company, on the one hand, and the Holders of Transfer Restricted Notes, the
Participating Broker-Dealer or Initial Purchasers, as the case may be, on the
other hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

 

(ii)                                  The relative fault of the
Company, on the one hand, and the Holders of Transfer Restricted Notes, the
Participating Broker-Dealer or the Initial Purchasers, as the case may be, on
the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, or by the Holder of Transfer Restricted Notes, the
Participating Broker-Dealer or the Initial Purchasers, as the case may be, and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

 

(iii)                               Notwithstanding the
provisions of this Section 4, no Holder shall be required to contribute
any amount in excess of the amount by which the total price (without deduction
for any underwriter’s commission, discount or other fee) at which the Notes
sold by it under the Shelf Registration Statement exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

 

23

 

(iv)                              The Company and the Holders
of the Transfer Restricted Notes and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 4.

 

(v)                                 For purposes of this Section 4,
each affiliate of any Person, if any, who controls a Holder of Transfer
Restricted Notes, the Initial Purchasers or a Participating Broker-Dealer
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such Holder,
and each director of the Company, each affiliate of the Company, each executive
officer of the Company who signed the Registration Statement, and each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.

 

5.                                       Participation in
Underwritten Registrations.  No Holder may participate in any underwritten
registration hereunder unless such Holder (i) agrees to sell such Holder’s
Transfer Restricted Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (ii) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.  The
Company shall be under no obligation to compensate any Holder for lost income,
interest or other opportunity foregone, or other liability incurred, as a
result of the Company’s decision to exclude such Holder from any underwritten
registration if such Holder has not complied with the provisions of this Section 5
in all material respects following 15 Business Days’ written notice of
non-compliance and the Company’s decision to exclude such Holder.

 

6.                                       Selection of Underwriters.  The Holders of Transfer Restricted Notes covered
by the Shelf Registration Statement who desire to do so may sell the securities
covered by such Shelf Registration in an underwritten offering.  In any such underwritten offering, the underwriter
or underwriters and manager or managers that will administer the offering will
be selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Notes covered by the Shelf Registration Statement; provided, however, that
such underwriters and managers must be reasonably satisfactory to the Company.

 

7.                                       Miscellaneous.

 

(a)                                  No Inconsistent Agreements.  The rights granted to the Holders hereunder
do not, and will not for the term of this Agreement in any way conflict with
and are not, and will not during the term of this Agreement be inconsistent
with the rights granted to the holders of the Company’s other issued and
outstanding securities under any other agreements entered into by the Company.

 

(b)                                 Amendments and Waivers.  The provisions of this Agreement, including
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or 

 

24

 

consents to departures from the provisions hereof may not be given,
otherwise than with the prior written consent of the Company and the Majority
Holders; provided, however,
that no amendment, modification, or supplement or waiver or consent to the
departure with respect to the provisions of Section 4 hereof shall be
effective as against any Holder of Transfer Restricted Notes or the Company
unless consented to in writing by such Holder of Transfer Restricted Notes or
the Company, as the case may be.

 

(c)                                  Notices.  (i)  All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, facsimile, or any courier
guaranteeing overnight delivery (A) if to a Holder, at the most current
address given by such Holder to the Company by means of a notice given in accordance
with the provisions of this Section 7(c), which address initially is, with
respect to the Initial Purchasers, the addresses set forth in the Purchase
Agreement; and (B) if to the Company, initially at the Company’s address
set forth in the Purchase Agreement and thereafter at such other address,
notice of which is given in accordance with the provisions of this Section 7(c).

 

(ii)                                  All such notices and
communications shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is confirmed, if sent by facsimile; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.

 

(iii)                               Copies of all such notices,
demands, or other communications shall be concurrently delivered by the Person
giving the same to the Trustee, at the address specified in the Indenture.

 

(d)                                 Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Company and
the Initial Purchasers, including, without limitation, and without the need for
an express assignment, subsequent Holders. 
If any transferee of any Holder shall acquire Transfer Restricted Notes,
in any manner, whether by operation of law or otherwise, such Transfer
Restricted Notes shall be held subject to all of the terms of this Agreement,
and by taking and holding such Transfer Restricted Notes, such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.

 

(e)                                  Third Party Beneficiary.  Each Holder shall be a third party
beneficiary of the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

 

(f)                                    Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall 

 

25

 

be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

(g)                                 Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(h)                                 GOVERNING LAW AND SUBMISSION
TO JURISDICTION.  THIS
AGREEMENT, THE NOTES, THE EXCHANGE NOTES AND THE PRIVATE EXCHANGE NOTES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.  NO PROCEEDING RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE COMMENCED,
PROSECUTED OR CONTINUED IN ANY COURT OTHER THAN THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH COURTS SHALL HAVE
JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS, AND THE COMPANY HEREBY CONSENTS
TO THE JURISDICTION OF SUCH COURTS AND PERSONAL SERVICE WITH RESPECT
THERETO.  THE COMPANY HEREBY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT.  THE COMPANY AGREES THAT A FINAL JUDGMENT IN
ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING
UPON THE COMPANY AND MAY BE ENFORCED IN ANY OTHER COURTS IN THE JURISDICTION
OF WHICH THE COMPANY IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.

 

(i)                                     Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

(j)                                     Notes Held by the Company or
Any of Its Affiliates. 
Whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Notes is required hereunder, Transfer Restricted Notes held
by the Company or any of the Company’s affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

[Signature
page follows]

 

26

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

 

 

	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert S. Ippolito

  
	
   

  	
   

  	
  Name:

  	
  Robert S. Ippolito

  
	
   

  	
   

  	
  Title:

  	
  Vice President, Secretary
  and

  
	
   

  	
   

  	
   

  	
  Treasurer

  

 

 

	
  CONFIRMED AND ACCEPTED,

  	
   

  
	
  as of the date first above
  written:

  	
   

  
	
   

  	
   

  
	
  DEUTSCHE BANK SECURITIES
  INC.,

  	
   

  
	
  for itself and on behalf of the several

  	
   

  
	
  Initial Purchasers

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edwin Roland

  	
   

  
	
   

  	
  Name:

  	
  Edwin Roland

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Martin Arzac

  	
   

  
	
   

  	
  Name:

  	
  Martin Arzac

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WELLS FARGO SECURITIES,
  LLC,

  	
   

  
	
  for itself and on behalf of the several

  	
   

  
	
  Initial Purchasers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jason S. Miller

  	
   

  
	
   

  	
  Name:

  	
  Jason S. Miller

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BANC OF AMERICA SECURITIES
  LLC,

  	
   

  
	
  for itself and on behalf of the several

  	
   

  
	
  Initial Purchasers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John Cokinos

  	
   

  
	
   

  	
  Name:

  	
  John Cokinos

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  

 

 

	
  RBS SECURITIES INC.,

  	
   

  
	
  for itself and on behalf of the several

  	
   

  
	
  Initial Purchasers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael F. Newcomb II

  	
   

  
	
   

  	
  Name:

  	
  Michael F. Newcomb II

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  

 

 

SCHEDULE A

 

Initial Purchasers

 

Deutsche Bank Securities Inc.

Wells Fargo Securities, LLC

Banc of America Securities LLC

RBS Securities Inc.

Calyon Securities (USA) Inc.

Commerzbank Capital Markets Corp.

Daiwa Securities America Inc.

KeyBanc Capital Markets Inc.

TD Securities (USA) LLCExhibit 10.1

 

PROMISSORY NOTE

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE STATE
SECURITIES LAWS.  THIS PROMISSORY NOTE MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT AN
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM AND
COMPLIANCE WITH THE TERMS HEREOF.

 

May 15,
2009

 

FOR VALUE RECEIVED, the undersigned, SFOG ACQUISITION
A, INC., a Delaware corporation, SFOG ACQUISITION B, L.L.C., a Delaware limited
liability company, SFOT ACQUISITION I, INC., a Delaware corporation, and SFOT
ACQUISITION II, INC., a Delaware corporation (each, a “Borrower” and together, the “Borrowers”),
hereby promise, jointly and severally, to pay to the order of TW-SF LLC, a
Delaware limited liability company or its permitted assigns (the “Lender”) the principal sum of FIFTY-TWO MILLION, FIVE
HUNDRED SEVEN THOUSAND DOLLARS ($52,507,000.00), plus all accrued and unpaid
interest thereon, at such time and in such amounts as set forth herein.

 

SECTION 1.                                      Definitions.

 

(a)                                  As used herein, the following terms have
the meanings specified below:

 

“2009  Liquidity Put” means the Liquidity Put for the year 2009 for
each of the Georgia Park and the Texas Park.

 

“Acquisition Company
Guarantees” means, collectively, the Secured General and Continuing
Guarantee & Pledge Agreement of SFOG Acquisition A, Inc. and SFOG
Acquisition B, L.L.C., dated as of March 18, 1997, in respect of the
Georgia Park, and the General and Continuing Guarantee Agreement of SFOT
Acquisition I, Inc., and SFOT Acquisition II, Inc., dated as of January 6,
1998, in respect of the Texas Park.

 

“Affiliate”
means, as to any specified Person, any other Person that directly or indirectly
controls, or is under common control with, or is controlled by, such first
Person and, if such other Person is an individual, any member of the immediate
family (including parents, spouse, children) of such individual and any trust
whose principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) means 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).

 

 

“Bankruptcy
Case” means a voluntary chapter 11 bankruptcy case(s), if any,
commenced by SFI and certain of its Subsidiaries within 120 days of the
Borrowing Date but such case shall be considered the Bankruptcy Case only for
so long as a trustee or receiver with expanded powers has not been appointed in
such case and the case has not been converted to a case under chapter 7 of the
Bankruptcy Code.

 

“Bankruptcy
Code” means the Federal Bankruptcy Code of 1978, as amended from
time to time.

 

“Borrower
Bankruptcy Event” means, as to any Borrower, the occurrence of any
one or more of the following:

 

(i)                                     a proceeding or case shall be commenced,
without the application or consent of such Borrower, in any court of competent
jurisdiction, seeking (A) its reorganization, liquidation, dissolution,
arrangement or winding up, or the composition or readjustment of its debts, (B) the
appointment of a receiver, custodian, trustee, examiner, liquidator or the like
of such Borrower or of all or any substantial part of such Borrower’s Property,
or (C) similar relief in respect of such Borrower under any law relating
to bankruptcy, insolvency, reorganization, winding up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 30 or more
days; or an order for relief against such Borrower shall be entered in an
involuntary case under the Bankruptcy Code or any other applicable bankruptcy,
insolvency or similar laws;

 

(ii)                                  such Borrower shall (A) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a substantial
part of its Property, (B) make a general assignment for the benefit of its
creditors, (C) commence a voluntary case under the Bankruptcy Code or any
other applicable bankruptcy, insolvency or similar laws, (D) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding
up, or composition or readjustment of debts, or (E) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or any other
applicable bankruptcy, insolvency or similar laws; or

 

(iii)                               such Borrower shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due.

 

“Borrower Expenses”
means $50,000 per annum in respect of expenses of the Borrowers in the
aggregate.

 

“Borrower  Indebtedness”
of any Borrower means (i) all indebtedness of such Borrower for borrowed
money or for the deferred purchase price of Property or services (including reimbursement
and all other obligations with respect to surety bonds, letters of credit and
bankers’ acceptances, whether or not matured, but not including obligations to
trade creditors incurred in the ordinary course of business), (ii) all 

 

2

 

obligations of such Borrower evidenced by notes,
bonds, debentures or similar instruments, (iii) all indebtedness created
or arising under any conditional sale or other title retention agreements with
respect to Property acquired by such Borrower (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (iv) all
obligations under capital leases of such Borrower, (v) all Borrower
Indebtedness guaranteed by such Borrower to the extent of such guarantee, (vi) all
Borrower Indebtedness referred to in clause (i), (ii), (iii), (iv) or (v) above
secured by (or for which the holder of such Borrower Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contract rights) owned by such Borrower, even though
such Borrower has not assumed or become liable for the payment of such Borrower
Indebtedness, but only to the extent of the value of the Property, and (vii) any
obligations requiring payments in excess of the counter-party obligations under
any interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement or derivative agreement of such
Borrower.

 

“Beneficial
Share Assignment Agreement” means that certain Beneficial Share
Assignment Agreement, dated as of April 1, 1998, by and among TW-SPV Co.
and SFI (as successor to Premier Parks Inc.), as amended.

 

“Borrower”
has the meaning set forth in the preamble hereto.

 

“Borrowing Date”
means the date of this Note.

 

“Business” means  the business operated by SFI or any of its Subsidiaries.

 

“Business Day”
means a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close.

 

“Capital Stock”
means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants, rights or options to purchase any of the foregoing.

 

“Change of Control”
means, as to SFI, the occurrence of any one or more of the following: (i) any
“Person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall be deemed to
have “beneficial ownership” of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the voting stock
of SFI; (ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the board of directors of SFI
(together with any new directors whose election by such board of directors or
whose nomination for election by SFI’s shareholders was approved by a vote of a
majority of SFI’s directors then still in office who either were 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 SFI’s
directors then in office; (iii) any 

 

3

 

change in control with respect to SFI (or similar
event, however denominated) shall occur under and as defined in any SFI
Indenture, the SFI Convertible Indenture or any other agreement in respect of
Guarantor Indebtedness in an aggregate principal amount of at least $25,000,000
to which SFI or any of its Subsidiaries is a party, or (iv) SFI shall
cease to own directly or indirectly 100% of the Capital Stock of SFO or SFTP.

 

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

 

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

 

“Escrow Account”
has the  meaning set forth in the Subordinated
Indemnity Escrow Agreement.

 

“Event of  Default” has the meaning set forth in Section 11
hereto.

 

“Excess  Proceeds”  means  any  and all
proceeds received by the Borrowers (i) in respect of the Units held
thereby or (ii) from any other sources, less (x) Borrower
Expenses, (y) the amount of any interest paid or payable in accordance
with Section 2(a) hereof, and (z) amounts necessary to pay
Expenses owing from time to time after the Borrowing Date under Section 6.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Exchange Offer”
means (a) the Exchange Offer and the Consent Solicitation relating
to the debt securities of SFI, filed with the Securities and Exchange
Commission on April 20, 2009, and (b) the Exchange Offer and the
Consent Solicitation relating to the convertible securities of SFI, filed with
the Securities and Exchange Commission on May 6, 2009, each as amended,
modified or extended as permitted hereunder.

 

“Expenses” has
the meaning set forth in Section 6 hereto.

 

“GA Fund” means
Six Flags Fund, Ltd. (L.P.), a Georgia limited partnership.

 

“GA Overall Agreement”
means that certain Overall Agreement, dated as of February 15, 1997, by
and among GA Fund, the Salkin Family Trust, SFG, Inc., SFG-I, LLC, SFG-II,
LLC, Six Flags Over Georgia, Ltd. (now known as Six Flags Over Georgia, LLC),
SFOG Acquisition A, Inc., SFOG Acquisition B, L.L.C., Six Flags Over
Georgia, Inc., SFOG II, Inc., SFOG II Employee, Inc.,
Six Flags Services of Georgia, Inc., SFTP, and SFO (as successor to Six
Flags Entertainment Corporation).

 

“GAAP” means
generally accepted accounting principles in the United States set forth from
time to time in the opinions and pronouncements of the Accounting 

 

4

 

Principles Board and 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.

 

“Georgia Park”
has the meaning set forth in the Subordinated Indemnity Agreement.

 

“Governmental Authority”
means any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners) having jurisdiction over the
Business or the Property of the Loan Parties and their respective Subsidiaries.

 

“Guarantee”
means the Guarantee Agreement to be executed and delivered by the Guarantors in
favor of the Lender, substantially in the form attached hereto as Exhibit A,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Guaranteed Obligations” means the
collective reference to the unpaid principal of and interest on the Loan and
all other obligations, expenses and liabilities of the Borrowers to the Lender
(including the Expenses and interest accruing at the then applicable rate
provided in this Note after the maturity of the Loan and interest accruing at the
then applicable rate provided in this Note after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrowers whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Note, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including all
fees and disbursements of counsel to the Lender that are required to be paid by
the Borrowers pursuant to the terms of this Note).

 

“Guarantor
Bankruptcy Event” means, as to any Guarantor, the occurrence of any
one or more of the following:

 

(i)                                     a proceeding or case shall be commenced,
without the application or consent of such Guarantor, in any court of competent
jurisdiction, seeking (A) its reorganization, liquidation, dissolution,
arrangement or winding up, or the composition or readjustment of its debts, (B) the
appointment of a receiver, custodian, trustee, examiner, liquidator or the like
of such Guarantor or of all or any substantial part of such Guarantor’s
Property, or (C) similar relief in respect of such Guarantor under any law
relating to bankruptcy, insolvency, reorganization, winding up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, 

 

5

 

judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more days;
or an order for relief against such Guarantor shall be entered in an
involuntary case under the Bankruptcy Code or any other applicable bankruptcy,
insolvency or similar laws;

 

(ii)                                  such Guarantor shall (A) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a substantial
part of its Property, (B) make a general assignment for the benefit of its
creditors, (C) commence a voluntary case under the Bankruptcy Code or any
other applicable bankruptcy, insolvency or similar laws, (D) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding
up, or composition or readjustment of debts, or (E) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or any other
applicable bankruptcy, insolvency or similar laws; or

 

(iii)                               such Guarantor shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due.

 

“Guarantor Indebtedness” of any Guarantor means (i) all
indebtedness of such Guarantor for borrowed money or for the deferred purchase
price of Property or services (including reimbursement and all other
obligations with respect to surety bonds, letters of credit and bankers’
acceptances, whether or not matured, but not including obligations to trade
creditors and accrued expenses incurred in the ordinary course of business), (ii) all
obligations of such Guarantor evidenced by notes, bonds, debentures or similar
instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreements with respect to Property
acquired by such Guarantor (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such Property), (iv) all obligations under capital
leases of such Guarantor, (v) all Guarantor Indebtedness guaranteed by
such Guarantor to the extent of such guarantee, and (vi) all Guarantor
Indebtedness referred to in clause (i), (ii), (iii), (iv) or (v) above
secured by (or for which the holder of such Guarantor Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
Property (including accounts and contract rights) owned by such Guarantor, even
though such Guarantor has not assumed or become liable for the payment of such
Guarantor Indebtedness, but only to the extent of the value of the Property; provided,
that all references to “Guarantor Indebtedness” shall not include any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or derivative agreement of any Guarantor.

 

“Guarantors”
means SFI, SFO and SFTP, collectively; and “Guarantor”
means any of them.

 

“Indemnified Parties”
has the meaning set forth in Section 14 hereto.

 

“Interest Rate”
has the meaning set forth in Section 2(a) hereto.

 

“Lender” has the
meaning set forth in the preamble hereto.

 

6

 

“Liabilities”
has the meaning set forth in Section 8(d) hereto.

 

“License Agreements”
means, collectively, the Retail License (#8898-TOON), dated as of January 1,
1998, by and between Warner Bros. Consumer Products Inc. (as successor to
Warner Bros. Consumer Products Division, a division of Time Warner
Entertainment Company, L.P.) and SFTP, and the Amended and Restated License
Agreement #5854-WB/DC, dated as of April 1, 1998, by and among Warner
Bros. Consumer Products Inc. (as successor to Warner Bros. Consumer Products
Division, a division of Time Warner Entertainment Company, L.P.), DC Comics,
SFI (as successor to Premier Parks Inc.) and SFTP, in each case, as amended.

 

“Lien” means,
with respect to any Property, any mortgage, lien, pledge, charge, security
interest or encumbrance having the effect of security in respect of such
Property.  For purposes of the Loan
Documents, a Person shall be deemed to own subject to a Lien any Property that
it has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.

 

“Liquidity Put”
has the meaning as set forth in the GA Overall Agreement and the TX Overall
Agreement, respectively and as applicable.

 

“Loan” means the
loan made by the Lender to the Borrowers to fund their obligations with respect
to the 2009 Liquidity Put and evidenced by this Note.

 

“Loan Documents”
means this Note and the Guarantee.

 

“Loan Parties”
means, collectively, the Borrowers and the Guarantors, and “Loan Party” means any one of them.

 

“Losses” has the
meaning set forth in Section 14 hereto.

 

“Material Adverse Effect”  means any change, event, circumstance, fact, condition or
development that does or could
reasonably be expected to have a material adverse effect upon (i) the
Business, Property or financial condition of SFI and its Subsidiaries, taken as
a whole, (ii) the validity or enforceability of this Note or the Guarantee
or the rights or remedies of the Lender hereunder or thereunder, (iii) the
ability of a Borrower to perform the Obligations or (iv) the ability of a
Guarantor to pay the Guaranteed Obligations.

 

“Maturity Date”
means March 15, 2011.

 

“Obligations”
means (i) the unpaid principal of and interest on the Loan (including any
interest accruing after the Maturity Date and after any Borrower Bankruptcy
Event, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), (ii) all other obligations of the Borrowers
under or with respect to this Note and (iii) the obligations of each other
Loan Party under or with respect to the Loan Documents.

 

7

 

“Partnership Parks
Agreements” means the GA Overall Agreement, the TX Overall Agreement
and the Related Agreements (as such term is defined in the GA Overall Agreement
and the TX Overall Agreement, respectively).

 

“Person”  means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

 

“Property” means
any right or interest in or to property of any kind whatsoever, whether real
property, personal or mixed and whether tangible or intangible, including
Capital Stock.

 

“Related Indemnity
Agreements” means the Subordinated Indemnity Escrow Agreement and
the Beneficial Share Assignment Agreement.

 

“Requirement of Law”
means, as to any Person, the certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other 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.

 

“Responsible Officer”
means, as to any Person, the chief executive officer, president, chief
financial officer, senior vice president or treasurer of such Person, but in
any event, with respect to financial matters, the chief financial officer,
senior vice president-finance or treasurer of such Person.

 

“SFI” means Six
Flags, Inc., a Delaware corporation.

 

“SFI Indentures”
means, collectively, (i) the Indentures dated as of December 5, 2003,
April 16, 2003 and February 11, 2002, respectively, between SFI and
The Bank of New York, as trustee, in each case as amended, supplemented or otherwise
modified through the Borrowing Date and thereafter as permitted by the Loan
Documents, (ii) any loan agreement, indenture, note purchase agreement or
other instrument or agreement relating to any Guarantor Indebtedness that is
meant to refinance any Guarantor Indebtedness incurred under any SFI Indenture,
in each case as amended in accordance with the Loan Documents.

 

“SFI Convertible Indenture”
means the Indenture dated as of June 30, 1999, between SFI and The Bank of
New York, as trustee, as amended, supplemented or otherwise modified through
the Borrowing Date and thereafter as permitted by the Loan Documents.

 

“SFO” means Six
Flags Operations Inc., a Delaware corporation.

 

“SFTP” means Six
Flags Theme Parks Inc., a Delaware corporation.

 

8

 

“Six Flags Credit Agreement”
means the Second Amended and Restated Credit Agreement, dated as of May 25,
2007, among SFI, SFO and SFTP, as primary borrower, certain of its subsidiaries
named therein, the several banks and other financial institutions or entities
from time to time party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent, as amended, supplemented, restated or otherwise modified
in accordance with the Loan Documents.

 

“Six Flags Guarantees”
means, collectively, the General and Continuing Guarantee of SFTP and SFO (as
successor to Six Flags Entertainment Corporation), dated as of March 18,
1997, in respect of the Georgia Park, and the General and Continuing Guarantee
of SFTP and SFO (as successor to Six Flags Entertainment Corporation), dated as
of January 6, 1998, in respect of the Texas Park.

 

“Subordinated Indemnity
Agreement” means that certain Subordinated Indemnity Agreement,
dated as of April 1, 1998, by and among SFO (as successor to Six Flags
Entertainment Corporation), SFTP, SFOG II, Inc., SFT Holdings, Inc.,
Historic TW Inc. (formerly known as Time Warner Inc.), Warner Bros.
Entertainment Inc. (as successor to Time Warner Entertainment Company, L.P.),
TW-SPV Co., SFI (as successor to Premier Parks Inc.) and GP Holdings Inc., as
amended in accordance with the terms thereof.

 

“Subordinated Indemnity
Escrow Agreement” means that certain Subordinated Indemnity Escrow
Agreement, dated as of September 28, 2006, by and among SFI, Warner Bros.
Entertainment Inc. (as successor to Time Warner Entertainment Company, L.P.),
Historic TW Inc. (formerly known as Time Warner Inc.), the Bank of
New York Mellon and, as of the date hereof, the Borrowers, as amended in
accordance with the terms thereof.

 

“Subsidiary”
means, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as
any other corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held; provided, that all
references to a “Subsidiary” or to “Subsidiaries” in the Loan Documents shall
not include the joint venture established pursuant to the Great Escape
Agreements or any Inactive Subsidiary (each as defined in the Six Flags Credit
Agreement).

 

“Texas Park” has
the meaning set forth in the Subordinated Indemnity Agreement.

 

“Transactions”
means (i) the execution, delivery and performance by the Loan Parties of
the Loan Documents and the amendments described in Section 7(a) and (ii) the
borrowing of the Loan.

 

9

 

“Triggering
Default” has the  meaning set
forth in the Subordinated Indemnity Agreement.

 

“TX Fund”
means Six Flags Over Texas Fund, Ltd., a Texas limited partnership.

 

“TX Overall
Agreement” means, that certain Overall Agreement, dated as of November 24,
1997, by and among TX Fund, Flags’ Directors L.L.C., FD-II, L.L.C., Texas
Flags, Ltd., SFOT Employee, Inc., SFOT Acquisition I, Inc., SFOT
Acquisition II, Inc., Six Flags Over Texas, Inc., SFTP, and SFO
(as successor to Six Flags Entertainment Corporation), as amended through the
Borrowing Date.

 

“Units”
has the meaning as set forth in the GA Overall Agreement and the TX Overall
Agreement, respectively.

 

(b)           Unless
the context requires otherwise, (i) the words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Note shall refer to this Note as
a whole and not to any particular provision of this Note, and (ii) all
Section, Schedule and Exhibit references are to this Note unless otherwise
specified.

 

(c)           Except
as specifically provided herein, the meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.  Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words, “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be
construed to have the same meaning and effect as the word “shall.”

 

(d)           When
the payment of any obligation or the performance of any covenant, duty or
obligation is stated to be due or performance required on a day which is not a
Business Day, the date of such payment or performance shall extend to the
immediately succeeding Business Day.

 

SECTION 2.             Interest Rate.

 

(a)           The
Loan shall bear interest on the unpaid principal amount thereof from the
Borrowing Date until payment in full in cash at a rate per annum equal to 14%
(the “Interest Rate”) and shall be payable in
arrears from time to time, as soon as practicable and in no event later than
two (2) Business Days after the Borrowers have cash or cash equivalents on
hand in excess of (i) amounts used or to be used to pay Borrower Expenses
for which demand has been made, plus (i) $20,000. All accrued and unpaid
interest shall also be payable in full in cash on the Maturity Date.  Interest shall be calculated on the basis of
a 360-day year for the actual number of days elapsed.

 

(b)           Notwithstanding
the foregoing, but subject to applicable law, upon the occurrence of any Event
of Default, this Note shall bear interest which shall accrue during the
continuance of such Event of Default and shall be payable (subject to Section 11(b))
in immediately available funds, for each day during the continuance of such
Event 

 

10

 

of Default, at a rate equal to the Interest Rate plus 2% per
annum.  Such default interest shall be
payable at the times interest is otherwise payable in accordance with Section 2(a).

 

(c)           Notwithstanding
anything herein to the contrary, the interest payable by the Borrowers with
respect to the Loan shall not exceed the maximum amount permitted by applicable
law and, to the extent that any payments in excess of such permitted amount are
received by the Lender, such excess shall be considered payments in respect of
the principal amount of the Loan.

 

SECTION 3.             Use
of Proceeds.

 

The Borrowers shall use
the proceeds of the Loan solely to purchase Units pursuant to the 2009
Liquidity Put on the Borrowing Date.

 

SECTION 4.             Evidence
of Debt.

 

(a)           The
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Borrower Indebtedness of the Borrowers to the Lender
resulting from the Loan hereunder, including the amounts of principal and interest
payable and paid to the Lender from time to time hereunder.

 

(b)           The
entries made in the accounts of the Lender maintained pursuant to Section 4(a) above
shall, to the extent permitted by applicable law, be prima facie evidence of
the existence and amounts of the obligations of the Borrowers recorded therein;
provided, however, that the failure of the Lender to maintain
such accounts or any error therein shall not in any manner affect the
Obligations.  The Lender shall provide a
copy of the account(s) to the Borrowers upon the Borrowers’ request.

 

SECTION 5.             Method
of Payment; Repayment of Loan; and Priority of Payments.

 

(a)           Repayment of Loan.  Each Borrower hereby unconditionally
promises, jointly and severally, to pay to the Lender the then unpaid principal
amount of the Loan on the Maturity Date (or on such earlier date on which all
or a portion of the Loan becomes due and payable pursuant to Section 11 or
pursuant to Section 5(c)), with accrued and unpaid interest thereon.

 

(b)           Payments.  All payments (including any prepayments) to
be made by any Borrower hereunder, whether on account of principal, interest,
Expenses or otherwise, shall be made without set-off, counterclaim, deduction
or withholding and shall be made to the Lender by wire transfer of immediately
available funds to an account or by such other reasonable means as the Lender
may specify to the Borrowers, on or prior to 12:00 Noon, New York City time, on
the due date thereof, in U.S. Dollars and in immediately available funds.  If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day and interest thereon shall be payable at the
then applicable rate during such extension. 
Amounts repaid hereunder may not be reborrowed by the Borrowers.

 

11

 

(c)                                  Mandatory Prepayments. 
If any Borrower receives Excess Proceeds in excess of $20,000 in the
aggregate, the Loan shall be prepaid as soon as practicable and in no event
later than two (2) Business Days following the date of receipt of such
Excess Proceeds, by an amount equal to 100% of such Excess Proceeds.

 

(d)                                 Optional Prepayment. 
The
Borrowers may at any time and from time to time prepay the principal amount of
the Loan, in whole or in part, without premium or penalty, but together with
all accrued but unpaid interest.

 

(e)                                  Priority of Payments. 
Notwithstanding
anything herein to the contrary, all payments of principal, interest, or any
other amount hereunder in respect of the Loan (whether at the stated maturity,
by acceleration or otherwise) but, for the avoidance of doubt, excluding
Expenses, shall be made in the following order of priority:

 

(i)                                     first, payment of the accrued and unpaid
interest on the Loan due and payable on the date thereof;

 

(ii)                               second, payment of outstanding principal on the
Loan; and

 

(iii)                            third, payment of all other Obligations.

 

SECTION 6.             Expenses.

 

(a)           Each
of the Borrowers agrees, jointly and severally from time to time after the
Borrowing Date, to pay or reimburse the Lender for (i) reasonable
out-of-pocket costs and expenses (including fees and disbursements of counsel
(including reasonable fees and disbursements of Paul, Weiss, Rifkind, Wharton &
Garrison LLP) and accountants, costs and expenses of due diligence,
duplication, and messenger costs and expenses) of the Lender in connection with
the Transactions and any subsequent amendment or modification of the Loan
Documents and/or of the Subordinated Indemnity Agreement and Related Indemnity
Agreements necessary in connection therewith and (ii) all fees and
expenses of the Lender (including fees and disbursements of counsel (including
Paul, Weiss, Rifkind, Wharton & Garrison LLP)) incurred in connection
with the enforcement of any of its rights and remedies under the Loan Documents
(collectively, “Expenses”).

 

(b)           All
Expenses shall be paid within three (3) Business Days following demand by
the Lender and (except for Expenses incurred on or prior to the Borrowing Date)
made together with the delivery by Lender of a reasonable invoice therefor, in
immediately available funds.  Once paid,
none of the Expenses shall be refundable under any circumstances.  The Expenses shall not be creditable against
any other amount payable in connection with the Loan Documents or otherwise.

 

SECTION 7.             Conditions
Precedent.

 

The obligation of the
Lender to make the Loan on the Borrowing Date shall be subject to the
satisfaction or waiver by the Lender of the following conditions precedent:

 

12

 

(a)           Loan Documents.  The Lender shall have received: (i) this
Note, executed and delivered by a duly authorized officer of each Borrower; (ii) the
Guarantee, executed and delivered by a duly authorized officer of each
Guarantor; (iii) an amendment to the Subordinated Indemnity Agreement,
substantially in the form attached hereto as Exhibit B, and
executed and delivered by a duly authorized officer of each Borrower, each
Guarantor and each of their Subsidiaries party thereto; (iv) an amendment
to the Subordinated Indemnity Escrow Agreement, substantially in the form
attached hereto as Exhibit C, and executed and delivered by a duly
authorized officer of each Borrower, SFI and the Escrow Agent (as defined in
the Subordinated Indemnity Escrow Agreement); and (v) an amendment to the
Beneficial Share Assignment Agreement, substantially in the form attached
hereto as Exhibit D, and executed and delivered by a duly
authorized officer of SFI and each of its Subsidiaries party thereto.

 

(b)           Representations and Warranties.  Each of the
representations and warranties made by (i) the Borrowers pursuant to Section 8
hereof and (ii) the Guarantors pursuant to the Guarantee, in each case,
shall be true and correct in all respects both before and after giving effect
to such Loan and the use of the proceeds thereof.

 

(c)           Escrow Account.  Simultaneously with the receipt of the Loan,
the Borrowers shall have used funds from the Escrow Account in an amount equal
to $ $5,953,473.54 to purchase Units pursuant to the 2009 Liquidity Put.

 

(d)           SFI Indentures.  On May 14, 2009, SFI shall have
irrevocably deposited in immediately available funds with the Paying Agent (as
such term is defined in the SFI Indenture for the SFI 2013 Notes) the semi-annual
interest payment due on April 15, 2009 under the SFI 2013 Notes (as
defined in the Exchange Offer) in full.

 

(e)           Exchange Offer.  Except as set forth on Schedule 7(e), the
Exchange Offer has not been terminated, extended, amended or modified in any
manner.

 

(f)            Approvals.  All material Governmental Authority and third
party approvals necessary or, in the reasonable discretion of the Lender,
advisable to be obtained by the Borrowers in connection with the Transactions
shall have been obtained and be in full force and effect.

 

(g)           Expenses.  One or more of the Guarantors shall have
reimbursed the Lender for all Expenses accrued through the Borrowing Date.

 

(h)           Legal Opinions.  The Lender shall have received a legal
opinion from Paul, Hastings, Janofsky & Walker LLP, as counsel to the
Borrowers, in form and substance reasonably satisfactory to the Lender.

 

(i)            Officer’s
Certificate.  Each Loan
Party, with respect to themselves individually, shall have delivered to the
Lender a certificate, signed by an executive officer of such Loan Party, dated
as of the Borrowing Date, certifying the matters set forth in Sections 7(b),
7(c), 7(d) and 7(e).

 

13

 

SECTION 8.             Representations
and Warranties.

 

Each of the Borrowers
hereby jointly and severally represents and warrants to the Lender that, as of
the date hereof:

 

(a)           Existence; Compliance with Law.  Each of the Borrowers (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate (or equivalent)
power and authority, and the legal right, to own and operate its Property, to
lease the Property it operates as lessee and to conduct the Business in which
it is currently engaged, (iii) is duly qualified in all material respects
as a foreign entity and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
Business requires such qualification and (iv) is in compliance in all
material respects with all Requirements of Law.

 

(b)           Power; Authorization; Enforceable Obligations.  Each Borrower has the corporate (or
equivalent) power and authority, and the legal right, to make, deliver and
perform this Note and to consummate the Transactions.  Each Borrower has taken all necessary
corporate (or equivalent) action to authorize the execution, delivery and
performance of this Note on the terms and conditions herein.  No consent or authorization of, or filing
with, any Person is required in connection with the execution, delivery and
performance by each Borrower of this Note. 
This Note has been duly executed and delivered on behalf of each
Borrower.  This Note constitutes a legal,
valid and binding obligation of each Borrower, enforceable against each such
Borrower in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

(c)           No Legal Bar or Conflicts; No Default.  The
execution, delivery and performance of this Note by the Borrowers, the payments
hereunder, and the performance of the Transactions do not and will not, in any
material respects, conflict with, result in any violation or breach of,
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, require a consent or waiver
under, or result in the imposition of any Lien on any Borrower’s assets
pursuant to, any Requirement of Law or any Contractual Obligation of any of the
Borrowers.  No event has occurred that with the lapse of
time or the giving of notice or both would constitute a default by any Borrower
under, or a termination or acceleration event under, in any material respect,
any Contractual Obligation.  No Event of
Default has occurred and is continuing (without giving effect to any cure
period).

 

(d)           No Liabilities.  The Borrowers do not have any direct or
indirect indebtedness, liability, claim, loss, damage, deficiency, obligation
or responsibility, known or unknown, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise, whether or not of a kind required by GAAP to be set forth on a
financial statement or in the notes thereto

 

14

 

(“Liabilities”) other than pursuant to
the Subordinated Indemnity Agreement, the Related Indemnity Agreements, the
Partnership Parks Agreements, or as otherwise permitted hereunder.  None of the Borrowers has any knowledge of
any circumstance, condition, event or arrangement that may hereafter give rise
to such Liabilities of the Borrowers other than as set forth under the
documents specified in the prior sentence or as set forth herein.

 

(e)           Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority (i) in which any
Borrower is named as a primary defendant or (ii) in which any Borrower is
named as a co-defendant (A) with respect to any of the Loan Documents or
any of the Transactions or (B) that if adversely determined, either
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect, is pending or, to the knowledge of any
Borrower, threatened by or against any of the Borrowers or against any of their
respective Properties or revenues.

 

(f)            Subordinated Indemnity Agreement.  Since July 1, 2008, each of the
Borrowers has complied with the terms and provisions of (x) the
Subordinated Indemnity Agreement, (y) the GA Overall Agreement and (z) the
TX Overall Agreement.

 

(g)           Ownership of Property.  Each of the Borrowers has good and valid
title to the Units held thereby.

 

(h)           Taxes.  Each of the Borrowers has filed or caused to
be filed all Federal, state and other material tax returns that is required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its Property and all other
material taxes, fees or other charges imposed on it or any of its Property by
any Governmental Authority (in each case other than any taxes, fees or charges
the amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves (to the extent
required by GAAP)) have been provided on the books of the Borrowers; no
material tax Lien has been filed, and, to the knowledge of the Borrowers, no
claim is being asserted with respect to any such tax, fee or other charge.

 

(i)            Accuracy of Information, Etc.  No statement or information (other than pro
forma financial information and projections, estimates, forecasts and other
forward looking information, including budgets or information of a general
industry or economic nature) contained in this Note or contained in any other
document, certificate or statement furnished by or on behalf of any Borrower to
the Lender for use in connection with the Transactions, considered as a whole
as of the date such statement, information, document or certificate was so
furnished, does not contain any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they were made not
misleading.  The projections and pro forma
financial information contained in the materials referenced above were based
upon good faith estimates and assumptions believed by the management of such
Borrower to be reasonable at the time made, it being recognized by the Lender
that such financial information as it relates to future events is

 

15

 

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 or
pro forma results set forth therein by a material amount.

 

SECTION 9.             Affirmative
Covenants.

 

So long as this Note
remains outstanding and the principal of and interest on the Loan and all
Expenses have not been paid in full in cash, each of the Borrowers hereby
jointly and severally shall:

 

(a)           Subordinated Indemnity Agreement.  From time to time execute and deliver, or
cause to be executed and delivered, such additional amendments, instruments,
certificates or documents to the Subordinated Indemnity Agreement and Related
Indemnity Agreements, and to take all such actions with respect to such
additional amendments, instruments, certificates or documents, in each case, as
mutually agreed by the parties thereto;

 

(b)           Financial Statement and Other Information of the
Borrowers.  Deliver the
following financial statements, reports, notices and other information:

 

(i)            as soon as available and in any
event within 45 days after the end of each of the first three quarterly fiscal
periods of each fiscal year of each Borrower, interim condensed consolidated
statements of operations, shareholders’ equity and cash flows of such Borrower
for such period, and the related consolidated balance sheets of such Borrower;

 

(ii)           as soon as available and in any event
no later than 75 days after the end of each fiscal year of each Borrower, an
annual budget projection of such Borrower broken down on a month-by-month
basis;

 

(iii)          as soon as available and in any event
no later than 90 days after the end of each fiscal year of each Borrower, the
information required by clause (i) on a year-end basis;

 

(iv)          to the extent requested by the Lender,
any updated budgets or any internal updates of the information required by
clauses (i) through (iii) hereof to the extent related to the periods
for which such financial information was provided promptly after such updates
are produced; and

 

(v)           any other documents or information as
may be reasonably requested by the Lender from time to time;

 

(c)                                  Financial Statement and
Other Information of the Georgia Park and Texas Park. 
Use commercially reasonable efforts to cause SFI to deliver the
following financial statements, reports, notices and other information:

 

(i)            as soon as available and in any
event within two (2) Business Days after the end of each monthly fiscal
period of SFI, the daily

 

16

 

operating report of each
of the Georgia Park and the Texas Park for the last day of such monthly fiscal
period; and

 

(ii)           as soon as available and in any event
within 30 days after the end of each monthly fiscal period of SFI, interim
statements of operations, shareholders’ equity and cash flows of each of the
Georgia Park and the Texas Park for such period, and the related balance sheets
of each of the Georgia Park and the Texas Park;

 

(d)                                 Notices of Material Events. 
Furnish the following to the Lender in writing:

 

(i)            promptly after any officer of a
Borrower has actual knowledge of facts that would give him or her reason to
believe that any Event of Default has occurred, notice of such Event of
Default; and

 

(ii)           as soon as any officer of a Borrower
has actual knowledge of the facts that would give him or her reason to know of
the occurrence thereof, prompt notice of (A) all legal or arbitral
proceedings in which any Borrower is named as a primary defendant, and of all
proceedings by or before any governmental or regulatory authority or agency,
and of any material development in respect of such legal or other proceedings,
affecting a Borrower that, if adversely determined, could reasonably be
expected to result in aggregate liabilities or damages in excess of $100,000
over available insurance or indemnification by creditworthy third parties and (B) all
legal or arbitral proceedings in which any Borrower is named as a co-defendant,
and of any material development in respect of such legal or other proceedings,
affecting a Borrower that, if adversely determined, could reasonably be
expected to result in aggregate liabilities or damages in excess of $1,000,000
over available insurance or indemnification by creditworthy third parties;

 

Each
notice delivered under this Section 9(d) shall be accompanied by a
statement of a Responsible Officer of the applicable Borrower setting forth in
reasonable detail the facts and circumstances of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto;

 

(e)                                  Existence, Etc.

 

(i)            (A) Preserve, renew and
maintain in full force and effect its legal existence under the laws of the
jurisdiction of its organization and (B) take all reasonable action to
maintain all material rights, privileges (including its good standing),
permits, licenses and franchises necessary or desirable in the normal conduct
of its business;

 

(ii)           Pay and discharge all Federal income
taxes and all other material taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such
obligation, tax, assessment, charge or

 

17

 

levy the payment of which
is being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained to the extent required by GAAP;

 

(iii)          Maintain and preserve all of its
Properties material to the conduct of the Business of such Borrower in good
working order and condition;

 

(iv)          Keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied; and

 

(v)           Permit representatives of the Lender,
upon reasonable notice and during normal business hours (and, except if an
Event of Default shall have occurred and be continuing, not more frequently
than once each calendar quarter), to examine, copy and make extracts from its
books and records and to discuss its business, finances, condition and affairs
with its officers, all to the extent reasonably requested by the Lender.   Notwithstanding anything to the contrary in
this Section 9(e)(v), none of the Borrowers or any Subsidiary thereof will
be required to disclose, permit the inspection, examination or making copies or
abstracts of, or discussion of, any document, information or other matter that (A) constitutes
non-financial trade secrets or non-financial proprietary information or (B) in
respect of which disclosure to the Lender (or their respective representatives
or contractors) is prohibited by law or any binding agreement;

 

(f)                                    Compliance with
Contractual Obligations and Requirements of Law. 
Comply with Contractual Obligations and Requirements of Laws in all
material respects; and

 

(g)                                 Further Assurances. 
From time to time execute and deliver, or cause to be executed and
delivered, such additional instruments, certificates or documents, and take all
such actions, as the Lender may reasonably request for the purposes of
implementing or effectuating the provisions of this Note and the
Guarantee.  Upon the exercise by the
Lender of any power, right, privilege or remedy pursuant to this Note which
requires any consent, approval, recording, qualification or authorization of
any Governmental Authority, each Borrower will execute and deliver, or will
cause the execution and delivery of, all applications, certifications,
instruments and other documents and papers that the Lender may be required to
obtain from such Borrower for such governmental consent, approval, recording,
qualification or authorization.

 

SECTION 10.          Negative
Covenants.

 

So long as this Note
remains outstanding and the principal of and interest on the Loan and all Expenses
have not been paid in full in cash, each of the Borrowers shall not:

 

(a)                                  Borrower Indebtedness and
Liabilities.  Create, incur, assume or suffer to exist any
Borrower Indebtedness or any other Liabilities, except (i) Borrower
Indebtedness outstanding and other obligations owing hereunder, (ii) Liabilities
for which

 

18

 

not more than $50,000 is required to be expended in any year, in the
aggregate among all of the Borrowers, per annum, and (iii) Borrower
Indebtedness owing to any of the Guarantors on terms and conditions (including,
without limitation, as to subordination) reasonably satisfactory to the Lender
that is incurred to satisfy the obligations of the Borrowers in respect of
amounts owing under Section 6;

 

(b)                                 Prohibition on Liens. 
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired; except Liens not prohibited
by the Acquisition Company Guarantees;

 

(c)                                  Prohibition on Fundamental
Changes.  Enter into any merger, consolidation,
amalgamation or any other transaction fundamentally changing the organization
or structure of the Borrowers or engage in any type of business other than as
set forth in such Borrower’s organizational documents effective as of the date
hereof;

 

(d)                                 Prohibition on Sale of
Assets; Issuance of Equity.  Convey, sell,
lease, assign, transfer or otherwise dispose of any assets or Property
(including the Units), or issue any shares of Capital Stock of such Borrower;

 

(e)                                  Limitation on Investments,
Loans and Advances.  Make any advance, investment,
loan, extension of credit or capital contribution to, in or for the benefit of
any Person, except deposit accounts with one or more third-party financial
institutions;

 

(f)                                    Transactions with
Affiliates.  Enter into any transaction, including any
purchase, sale, lease or exchange of Property or the rendering of any service,
with any Affiliate; or

 

(g)                                 Dividends. 
Make dividends (in cash, Property or obligations) on, or other payments
or distributions on account of, or set apart of money for a sinking or other
analogous fund for, or purchase, redeem, retire or otherwise acquire any shares
of Capital Stock of such Borrower or of any warrants, options or other rights
to acquire the same (or to make any payments to any Person such as “phantom
stock” payments, where the amount thereof is calculated with reference to the
fair market or equity value of such Borrower).

 

Notwithstanding the
foregoing, nothing contained herein shall limit the Borrowers’ obligations to
make payments in respect of the Loan.

 

SECTION 11.          Events
of Default.

 

(a)                                  Each of the following events shall be an “Event of Default” hereunder:

 

(i)            any principal or interest due under
this Note, including any mandatory prepayments thereof, shall not have been
paid in full when and as the same shall become due and payable;

 

19

 

(ii)           any representation or warranty made
or deemed made by a Loan Party in or in connection with the Loan Documents or
the Transactions, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other instrument
furnished by a Loan Party in connection with or pursuant to the Loan Documents,
shall prove to have been false or misleading in any material respect when so
made, deemed made or furnished;

 

(iii)          (A) the Borrowers shall be in
material breach of any covenant, provision, agreement, representation or
warranty under Sections 9(d)(i), 9(e)(i)(A) or 10 hereof or (B) the
Guarantors shall be in material breach of any covenant, provision, agreement,
representation or warranty under Sections 11(a) or 13 of the Guarantee;

 

(iv)          the Loan Parties or their Subsidiaries
shall be in material breach of any other covenant, provision, agreement,
representation or warranty under the Loan Documents (other than as set forth in
clauses (i), (ii) or (iii) above), and such breach shall continue
unremedied for a period of 10 Business Days after the occurrence thereof;

 

(v)           any Borrower shall become the subject
of a Borrower Bankruptcy Event;

 

(vi)          judgments against, or with respect to
the Property of, any of the Borrowers in excess of $100,000 in the aggregate
(exclusive or in excess of judgment amounts to the extent covered by insurance
or indemnification of creditworthy third parties) shall be rendered by one or
more courts, administrative tribunals or other bodies having jurisdiction
against, and the same shall not be discharged (or provision shall not be made
for such discharge), or a stay of execution thereof shall not be procured,
within 45 days from the date of entry thereof, and the relevant Borrower shall
not, within such period of 45 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal;

 

(vii)         judgments for the payment of money of
any of the Guarantors in excess of $25,000,000 in the aggregate (exclusive of
judgment amounts to the extent covered by insurance or indemnification of
creditworthy third parties and other than judgments in, or as a consequence of,
the Bankruptcy Case so long as stayed), and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 60 days from the date of entry thereof,
and the relevant Borrower shall not, within such period of 60 days, or such
longer period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;

 

20

 

(viii)        defaults by any Borrower under
Contractual Obligations to which such Borrower is bound and under which it
could reasonably be expected to incur liabilities as a result of such default
in excess of $100,000;

 

(ix)           the occurrence of a Triggering
Default under the Subordinated Indemnity Agreement, subject to the expiration
of any applicable cure periods therein;

 

(x)            (A) (i) from the
period beginning on the date hereof and ending on the earlier of (x) a
Borrower Bankruptcy Event and (y) the date that is 120 days from the date
hereof or (ii) after the successful completion of the Exchange Offer, a
Guarantor shall fail to pay any of its obligations under any Guarantor
Indebtedness the total principal amount of which exceeds $25,000,000, including
at maturity (after giving effect to any grace periods), or any event or
condition shall occur after the Borrowing Date that gives rise to a default or
event of default (after giving effect to any grace periods) under such
Guarantor Indebtedness entitling the holders thereof to accelerate such Guarantor
Indebtedness prior to the maturity thereof, if applicable, (B) for the
duration of the Bankruptcy Case, if applicable,
a Guarantor shall fail to pay any amounts when due (after giving effect to any
applicable grace periods), other than amounts due solely as a result of the
commencement of the Bankruptcy Case, with respect to any Guarantor Indebtedness
the total principal amount of which exceeds $25,000,000 unless the payment
thereof has been stayed in the Bankruptcy Case or the approval thereof has not
been granted in connection with the Bankruptcy Case, and (C) for periods
on and after the expiration of the period described in clause (A)(i) or
(B), which ever is later, (1) any Guarantor shall default in the payment
when due (after giving effect to any applicable grace periods) of any principal
of or interest on any of its Guarantor Indebtedness the total principal amount
of which exceeds $25,000,000, or (2) a default or event of default shall
have occurred and be continuing (after giving effect to any applicable grace
periods) under any Guarantor Indebtedness the total principal amount of which
exceeds $25,000,000 which entitles the holder(s) thereof or a trustee or
agent on behalf of such holder or holders (with the giving of any notice or the
lapse of time or both) to cause such Guarantor Indebtedness to become due prior
to its stated maturity; provided, that any subsequent cure by such
Guarantor or waiver by the holders of such Guarantor Indebtedness thereof of
any default or event of default referred to in the preceding clauses shall
constitute a cure hereunder unless prior to such cure or waiver the Lender
shall have declared the Loan to be due and payable under Section 11(b) in
reliance upon such default or event of default;

 

(xi)           any amendment, supplement,
restatement or other modification of the Six Flags Credit Agreement that
directly or indirectly (A) restricts the ability of the Borrowers to pay
the Lender under this Note in accordance with the terms hereof, (B) restricts
the ability of the Guarantors to perform under the Guarantee in accordance with
the terms thereof, (C) restricts the Loan Parties’ and their Subsidiaries’
ability to make loans to, or other investments (to a greater extent than it is
restricted on the date hereof) in, the

 

21

 

Borrowers or (D) restricts
the ability of the Loan Parties and their Subsidiaries to perform their
obligations under the License Agreements, the Partnership Parks Agreements, the
Subordinated Indemnity Agreement or the Related Indemnity Agreements in
accordance with the terms thereof;

 

(xii)          the termination, withdrawal,
amendment, modification or extension of the Exchange Offer (other than any
amendment that is immaterial to the interests of the Lender or upon the
commencement of the Bankruptcy Case);

 

(xiii)         the failure of SFI or any of its
Subsidiaries to perform any of their material obligations under the License
Agreements, and such failure shall continue unremedied for a period of 10
Business Days after the occurrence thereof;

 

(xiv)        (A) following a Guarantor
Bankruptcy Event, the failure of the Guarantors to ratify and, to the extent
required, reinstate or reaffirm, their obligations under the Loan Documents,
the Six Flags Guarantees, the License Agreements, the Subordinated Indemnity
Agreement and the Related Indemnity Agreements in connection with any
bankruptcy plan of reorganization or the assumption of the Beneficial Share
Assignment Agreement; or (B) any Borrower, Guarantor or any of their
respective Subsidiaries shall seek approval of a plan of reorganization or the
assumption of the Beneficial Share Assignment Agreement following a Borrower
Bankruptcy Event or a Guarantor Bankruptcy Event, as applicable, in either
case, that does not provide as a condition precedent thereto for the
ratification and, to the extent required, reinstatement and reaffirmation of
their respective obligations under the Loan Documents, the Subordinated
Indemnity Agreement and the Related Indemnity Agreements, and such failure shall
continue unremedied for a period of 10 Business Days after the occurrence
thereof;

 

(xv)         the Guarantors shall become the subject
of a Guarantor Bankruptcy Event other than the Bankruptcy Case;

 

(xvi)         a Change of Control shall occur, other
than as a result of (x) the Exchange Offer or (y) the Bankruptcy
Case; or

 

(xvii)       the Guarantee shall cease, for any
reason, to be in full force and effect with respect to any Guarantor or any
Guarantor shall so assert.

 

(b)           Upon
the occurrence of an Event of Default, the Lender may, at its option, (i) by
written notice to the Borrowers, declare the entire unpaid principal balance of
the Loan, together with all accrued interest thereon, immediately due and
payable regardless of any prior forbearance; provided, that the Loan and
all other amounts due hereunder (including the Obligations) shall automatically
become due and payable upon the occurrence of any Event of Default described in
clause (v) of Section 11(a) or the filing of a voluntary
petition in bankruptcy by any of the Guarantors (other than the Bankruptcy
Case) (ii) exercise any and all rights and remedies available to it under
this

 

22

 

Note, and (iii) exercise any and all rights and remedies available
to it under applicable law, including the right to collect from the Borrowers
all sums due under the Loan.

 

SECTION 12.          No
Waiver.

 

The Lender shall not by any act (except by a written instrument signed
by the Lender), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Event of
Default.  No failure to exercise, nor any
delay in exercising, on the part of the Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. 
No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. 
A waiver by the Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Lender would otherwise have hereunder on any future occasion.

 

SECTION 13.          Assignment,
Etc.

 

This Note shall be binding upon the Borrowers and the
Lender and their respective successors and permitted assigns; provided, however,
no Borrower may assign this Note or otherwise transfer any rights or
obligations hereunder, and the Lender may assign this Note (x) to an
Affiliate thereof or (y) with the prior written consent of the Borrowers
(such consent not to be unreasonably withheld), to any other Person.

 

SECTION 14.          Indemnification.

 

Each of the Borrowers agrees to pay, indemnify, and
hold harmless the Lender and its Affiliates and their officers, directors,
employees, agents and advisors (together, the “Indemnified
Parties”) from and against any and all losses, damages,
deficiencies, awards, assessments, amounts paid in good faith settlement,
judgments, fines, penalties, actions, suits, interest, costs and expenses
(including reasonable legal and other advisory fees, costs and expenses) or
disbursements of any kind or nature whatsoever (“Losses”)
arising out of, relating to or otherwise in connection with (a) the
enforcement of any rights of the Lender under this Note in accordance with this
Note, (b) any claim (whether or not asserted in any legal proceeding),
litigation, investigation, arbitration or proceeding arising out of, relating
to or otherwise in connection with this Note and (c) the use of the
proceeds of the Loan; provided that the Indemnified Parties shall not be
indemnified for any Losses suffered or incurred by the Indemnified Parties that
are attributable to such Indemnified Party (other than the Borrowers’)  or agent’s (or such Indemnified Party’s Affiliates’,
officers’, directors’, employees’, agents’ or advisors’) gross negligence,
willful misconduct or fraud.  This Section 14
shall survive the termination of this Note for the benefit of the Indemnified
Parties.

 

SECTION 15.          Governing
Law.

 

This Note and the rights and obligations of the
Borrowers and the Lender under this Note shall be governed by, and construed
and enforced in accordance with, the

 

23

 

laws of the State of New York, excluding any
conflict-of-laws rule or principle that might refer the governance or the
construction of this Note to the law of another jurisdiction.

 

SECTION 16.          Waivers
of Jury Trial; Judicial Proceedings.

 

(a)           THE
BORROWERS AND, BY ACCEPTANCE HEREOF, THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE OR
ANY OTHER DOCUMENTS RELATED HERETO AND FOR ANY COUNTERCLAIM THEREIN.

 

(b)           THE
BORROWERS AND, BY ACCEPTANCE HEREOF, THE LENDER AGREE THAT ANY ACTION, SUIT OR
PROCEEDING AGAINST ANY OF THE PARTIES HERETO ARISING UNDER OR RELATING IN ANY
WAY TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY ONLY BE
BROUGHT OR ENFORCED IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND EACH OF THE PARTIES HERETO
IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF EACH SUCH COURT IN
RESPECT OF ANY SUCH ACTION, SUIT OR PROCEEDING. EACH OF THE PARTIES HERETO FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH ACTION, SUIT OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PRE-PAID, RETURN RECEIPT REQUESTED, PROPERLY ADDRESSED TO SUCH PARTY AT
ITS ADDRESSES PROVIDED FOR NOTICES HEREUNDER.

 

(c)           THE
BORROWERS AND, BY ACCEPTANCE HEREOF, THE LENDER HEREBY IRREVOCABLY WAIVE ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE THE LAYING OF VENUE OF ANY
ACTION, SUIT OR PROCEEDING ARISING UNDER OR RELATING IN ANY WAY TO
DISAGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURT LOCATED IN THE
STATE OF NEW YORK AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT A COURT
LOCATED IN THE STATE OF NEW YORK IS NOT A CONVENIENT FORUM FOR ANY SUCH ACTION,
SUIT OR PROCEEDING.

 

SECTION 17.          Notices.

 

All notices hereunder shall be in writing (including
facsimile transmission or email) and shall be sent to the parties at the
following address or such other address as such party may, by written notice
received by the other parties, have designated as its address for such purpose:

 

(a)                                  if to the Borrowers, to:

 

SFOG Acquisition A, Inc.

SFOG Acquisition B, L.L.C.

 

24

 

SFOT Acquisition I, Inc.

SFOT Acquisition II, Inc.

c/o Lord/SPV

48 Wall Street, 27th Floor

New York, New York 10005

Facsimile:        (212) 346-9012

 

With a copy to:

 

c/o Six Flags, Inc.

1540 Broadway, 15th Floor

New York, New York 10036

Attention: 
General Counsel

Telecopy: 
212-354-3089

 

Paul, Hastings, Janofsky & Walker LLP

75 E. 55th Street, First Floor

New York, New York 10022

Attention:  Michele J. Cohen

Facsimile:  (212) 230-7862

 

(b)                                 if to the Lender, to:

 

TW-SF LLC

c/o Time Warner Inc.

One Time Warner Center

New York, New York 10019

Attention:  Chief Financial
Officer

Facsimile:  (212) 484-7175

 

With a copy to:

 

TW-SF LLC

c/o Time Warner Inc.

One Time Warner Center

New York, New York 10019

Attention:  Treasurer

Facsimile:  (212) 484-7151

 

TW-SF LLC

c/o Time Warner Inc.

One Time Warner Center

New York, New York 10019

Attention:  General Counsel

Facsimile:  (212) 484-7167

 

25

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Attention:  Robert B. Schumer, Esq.

                  Ariel J.
Deckelbaum, Esq.

Facsimile:  (212) 757-3990

 

Notices
sent by facsimile or email transmission shall be deemed to have been given when
sent; notices sent by mail shall be deemed to have been given three Business
Days after the date when sent by registered or certified mail, postage prepaid;
and notices sent by hand delivery or overnight courier service shall be deemed
to have been given when received.

 

SECTION 18.          Amendments
and Waivers.

 

No amendment, modification, termination or waiver of
any provision hereof, or consent to any departure by any Loan Party therefrom,
shall in any event be effective without the written consent of the parties
hereto.

 

SECTION 19.       Severability.

 

Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

SECTION 20.          No
Presumption.

 

With regard to each and every term and condition
hereof, the parties hereto understand and agree that the same have or has been
mutually negotiated, prepared and drafted, and if at any time the parties
hereto desire or are required to interpret or construe any such term or
condition or any agreement or instrument subject hereto, no consideration will
be given to the issue of which party hereto actually prepared, drafted or
requested any term or condition hereof.

 

SECTION 21.          Entire
Agreement.

 

This Note constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other
prior letters and understandings, both written and verbal, among the parties or
any of them with respect to the subject matter hereof; provided,
however, that nothing contained herein shall limit, affect, alter, amend or
otherwise modify the rights and obligations of the parties hereto and their
respective Affiliates under the Subordinated Indemnity Agreement, the Related
Indemnity Agreements or the Partnership Parks Agreements.

 

26

 

SECTION 22.          Non-Recourse.

 

No Affiliate (other than the Loan Parties), equity
holder, member, officer, employee or director of the Loan Parties shall have
any liability in respect of any of the Obligations, and the Lender shall have
no recourse against any of them in respect of any of the Obligations (other
than the Loan Parties).

 

[Remainder of Page Intentionally Left Blank]

 

27

 

IN WITNESS WHEREOF, the Borrowers have each caused a duly authorized
officer of such Borrower, solely in such officer’s capacity as such, to duly
execute this Note on behalf of such Borrower as of the date hereof.

 

	
   

  	
  SFOG ACQUISITION A, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Shapiro

  
	
   

  	
   

  	
  Name:  Mark Shapiro

  
	
   

  	
   

  	
  Title:    President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SFOG ACQUISITION B, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Shapiro

  
	
   

  	
   

  	
  Name:  Mark Shapiro

  
	
   

  	
   

  	
  Title:    President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SFOT
  ACQUISITION I, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Shapiro

  
	
   

  	
   

  	
  Name:  Mark Shapiro

  
	
   

  	
   

  	
  Title:    President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SFOT ACQUISITION II, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Shapiro

  
	
   

  	
   

  	
  Name:  Mark Shapiro

  
	
   

  	
   

  	
  Title:    President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED TO

  this 15th day
  of May, 2009

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TW-SF LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Edward B. Ruggiero

  	
   

  	
   

  
	
   

  	
  Name:  Edward B. Ruggiero

  	
   

  	
   

  
	
   

  	
  Title:    Senior Vice President &
  Treasurer

  	
   

  	
   

  

 

[Signature Page to Promissory
Note]

 

 

SCHEDULE
7(E)

 

Exchange
Offers

 

Except as set forth herein, the Exchange Offers have
not been terminated, extended, amended or modified in any manner:

 

1.                                      On May 8,
2009, Six Flags, Inc. changed the Withdrawal Deadline (as such term is
defined in the offering documents related to the Exchange Offer and the Consent
Solicitation filed with the SEC on April 20, 2009 (the “Offering
Documents”)) to 5:00 p.m., New York City time, on May 28,
2009.  Such change was noticed in a
supplemental offering memorandum, which was distributed to all holders of SFI
Notes (as that term is defined in the Offering Documents) and was filed as Exhibit 99.1
to Six Flags’ Form 8-K filed with the SEC on May 8, 2009.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]