Document:

Exhibit 10.1

Execution

 

AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT (this “Amendment”) is entered into as of December 14,
2007 with reference to the Second Amended and Restated Credit Agreement dated
as of January 3, 2007 (as heretofore amended, the “Credit Agreement”),
among Herbst Gaming, Inc., a Nevada corporation (the “Borrower”), the
Lenders referred to therein and Bank of America, N.A., as Administrative Agent
(the “Administrative Agent”).  The Credit
Agreement has previously been amended pursuant to an Amendment No. 1 dated
as of August 14, 2007.  Capitalized
terms used but not defined herein are used with the meanings set forth for
those terms in the Credit Agreement.  
The parties hereto hereby agree with reference to the following facts:

 

A.            Subject to the terms and conditions set forth in this
Amendment, Borrower and the Lenders have agreed to waive the financial
covenants set forth in Sections 7.12, 7.13 and 7.14 for the Fiscal Quarter
ending September 30, 2007 only, and to thereafter make certain changes to
the financial covenants.

 

B.           Concurrently herewith, Borrower shall:

 

(i)            use $25,000,000 of its cash on hand
to reduce the outstanding principal balance of the Revolving Loans;

 

(ii)           convert up to $60,000,000 of the
outstanding Revolving Loans held by willing Revolving Lenders to funded Term
Loans (on terms identical to the existing Term Loans), resulting in an
identical reduction to the Aggregate Revolving Commitments;

 

(iii)          further reduce the amount of the
Revolving Commitments by an additional $15,000,000.

 

C.            Giving effect to the transactions contemplated by clause
B above, the Aggregate Revolving Commitments shall be in the principal amount
of $100,000,000 (with approximately $46,000,000 outstanding thereunder) and the
aggregate outstanding principal amount of the Term Loans shall be $755,600,000.

 

D.            Borrower has agreed to increase the pricing associated
with the Obligations, all as set forth below.

 

E.             Borrower has also agreed to terminate its right to
increase the lending commitments under the Credit Agreements pursuant to Section 2.16
thereof.

 

NOW, THEREFORE, Borrower
and the Administrative Agent, acting with the consent of the Requisite Lenders
pursuant to Section 10.01 of the Credit Agreement, agree to amend the
Credit Agreement as follows:

 

1.             Defined Terms.  The following terms defined in Section 1.01
of the Credit Agreement are hereby amended to read in full as follows (or,
where not previously defined, to read in full as follows), with each such
amendment deemed effective from the effective date of this Amendment:

 

1

 

“Aggregate Revolving Commitments” means the
commitments of the Revolving Lenders to make Revolving Loans and to participate
in Swing Line Loans and the issuance of Letters of Credit, in an aggregate
amount not to exceed $100,000,000.  The
Aggregate Revolving Commitments are subject to being decreased pursuant to Section 2.08.

 

“Applicable Rate” means, for each Pricing Period, the rates per
annum set forth opposite the Senior Debt to EBITDA Ratio in effect as of the
Fiscal Quarter ending approximately two months prior to the first day of that
Pricing Period, provided that (a) prior to the first day of the
Pricing Period beginning March 1, 2008, Pricing Level III shall apply, (b) notwithstanding
clause (a) above, if Borrower fails to deliver a Compliance Certificate in
respect of any Fiscal Quarter prior to the first day of the related Pricing
Period, then Pricing Level III shall apply as of the first Business Day of such
Pricing Period until the date upon which the required Compliance Certificate is
delivered:

 

	
  Pricing

  Level

  	
   

  	
  Senior Debt to

  EBITDA Ratio

  	
   

  	
  Base

  Rate+

  	
   

  	
  Eurodollar

  Rate+

  Letters of

  Credit

  	
   

  	
  Revolving

  Commitment

  Fee

  	
   

  
	
  I

  	
   

  	
  Less than 4.25:1.00

  	
   

  	
  2.25

  	
  %

  	
  3.50

  	
  %

  	
  0.375

  	
  %

  
	
  II

  	
   

  	
  Greater than or equal 

  to 4.25:1.00, but less than 4.50:1.00

  	
   

  	
  2.75

  	
  %

  	
  4.00

  	
  %

  	
  0.400

  	
  %

  
	
  III

  	
   

  	
  Greater than or equal 

  to 4.50

  	
   

  	
  3.25

  	
  %

  	
  4.50

  	
  %

  	
  0.425

  	
  %

  

 

“Control Agreement” means an agreement
establishing “control” over a deposit, brokerage or other similar account in
favor of the Administrative Agent (as the term “control” used in Section 9-104
of the Uniform Commercial Code) which is in form and substance acceptable to
the Administrative Agent.

 

“EBITDA” means, with respect to any Person and
with respect to any fiscal period (and without duplication as to items (b) though (g)):

 

(a)           Net Income of such Person for that
period; plus

 

(b)           an amount equal to any extraordinary
or non-recurring loss plus any net loss realized by such Person and its
Subsidiaries in connection with any Disposition to the extent such losses were
deducted in computing Net Income; minus

 

(c)           any extraordinary or non-recurring
gain reflected in such Net Income; plus

 

(d)           Interest Charges for that period to
the extent deducted in computing such Net Income; plus

 

(e)           pre-opening expenses for that period
to the extent deducted in computing such Net Income; plus

 

(f)            depreciation, amortization and all
other non-cash charges for that period to the extent such deducted in computing
such Net Income; plus

 

2

 

(g)           any losses (whether cash or non-cash)
associated with the prepayment of Indebtedness;

 

provided, that (i) the EBITDA of any Person
(as calculated pursuant to clauses (a) through (g) above)
shall include, on a pro forma basis, the results of operations of each other
Person (or attributable to any assets) acquired by such Person or any of its
Subsidiaries during that period as if such Person or assets had been acquired
on the first day of the period, and including any pro forma expense and cost
reductions, in each case calculated on a basis consistent with Regulation S-X
under the Securities Act, (ii) the EBITDA of any Person (as calculated
pursuant to clauses (a) through (g) above) shall exclude,
on a pro forma basis, the results of operations of each other Person (or
attributable to any assets) sold by such Person or any of its Subsidiaries
during that period as if such Person or assets had been sold on the first day
of the period, (iii) the EBITDA of Borrower and its Subsidiaries for any
period which includes the Fiscal Quarter ending December 31, 2007 shall be
increased to the extent Net Income has been reduced by the loss associated with
the Borrower’s termination of the Terminated Swap in an amount not to exceed
$16,115,000, and (iv) EBITDA of Borrower and its Subsidiaries for the one
year period ending on the last day of the Fiscal Quarters ending September 30,
2007, December 31, 2007, March 31, 2008 and June 30, 2008 (but
not for any other periods) shall be adjusted on a pro  forma basis
to add thereto anticipated savings resulting from the re-negotiation of Route
Agreements in the amounts set forth below:

 

	
  Fiscal Quarter Ended

  	
   

  	
  EBITDA Adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  11,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  11,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  6,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  1,500,000

  	
   

  

 

“Excess Cash”
means, as of each date of determination, the amount by which the unrestricted
cash and cash equivalents owned by Borrower and its Subsidiaries as of that
date, exceed $85,000,000.

 

“Funded Debt”
means, as of each date of determination, for Borrower and its Subsidiaries on a
consolidated basis, (a) the outstanding principal amount of all
obligations, whether current or long-term, for borrowed money (including
Obligations hereunder) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, plus (b) all purchase
money Indebtedness, plus (c) all direct obligations arising under letters
of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, plus (d) all obligations
in respect of the deferred purchase price of property or services (other than
trade accounts payable in the ordinary course of business), plus (e) Attributable
Indebtedness in respect of Capital Leases and Synthetic Lease Obligations, plus
(f) without duplication, all Contingent Obligations with respect to
outstanding Indebtedness of the types specified in clauses (a) through (e) above
of Persons other than Borrower or any Subsidiary, plus (g) all
Indebtedness of the types referred to in clauses (a) through (f) above
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company) 

 

3

 

in which Borrower or a Subsidiary is a general partner
or joint venturer, unless such Indebtedness is expressly made non-recourse to
Borrower or such Subsidiary.

 

“Indentures” means the Indentures governing the
Senior Subordinated Notes, as amended from time to time.

 

“Intercreditor Agreement” means an
Intercreditor Agreement among Borrower, the Administrative Agent and the
holders of Qualifying Second Lien Indebtedness, the form of which shall be
acceptable to the Administrative Agent.

 

“Interest Charge
Coverage Ratio” means, as of each date of determination, the ratio of:

 

(a)           EBITDA for Borrower and its Subsidiaries
determined as of that date for the four Fiscal Quarter period then ending
(subject to any adjustments thereto required by the definition of “EBITDA”); to

 

(b)           Adjusted Cash Interest Charges as of
that date.

 

“Qualifying Additional
Debt Capital” means, collectively, any Qualifying Second Lien Indebtedness,
Qualifying Senior Notes and Qualifying Subordinated Obligations.

 

“Qualifying Second
Lien Indebtedness” means term Indebtedness of Borrower which is issued
pursuant to a credit agreement and other documentation which is determined by
the Administrative Agent to be substantively similar to the Credit Agreement
and the Loan Documents, provided that:

 

(a)           any Liens granted to secure such
Indebtedness or guarantees thereof may only be on Property which secures the
Obligations and shall be subject and subordinate to the Liens securing the
Obligations pursuant to an Intercreditor Agreement providing in any event for (i) a
standstill period of not less than 120 days in favor of the Lenders under the
Credit Agreement (during which period the Administrative Agent and the Lenders
will have the exclusive right to proceed against the Collateral), (ii) prohibiting  the holders of the Qualifying Second Lien
Indebtedness from contesting the validity, perfection or priority of the Liens
securing the Obligations, (iii) the release of the Liens supporting the
Qualifying Second Lien Indebtedness in the event of the sale or disposition of
the Collateral for the Obligations (subject only to the application of any
excess proceeds to the Qualifying Second Lien Indebtedness), (iv) consent
to any sale under Section 363 of the Bankruptcy Code supported by the
majority of the holders of the Obligations (except for rights to a subordinated
lien on sale proceeds), and (v) waiver of any right to require “adequate
protection” of their lien claims by the holders of the Qualifying Second Lien
Indebtedness (except to the extent that the holders of the Obligations receive
adequate protection and provided that (A) to the extent that the holders
of the Obligations are fully secured, then the holders of the Qualifying Second
Lien Indebtedness shall not be prohibited from seeking adequate protection in
the form of payments in the amount of current postpetition interest, incurred
fees and expenses or other cash payments and (B) the holders of the
Qualifying Second Lien Indebtedness may seek a subordinated replacement lien on
post-petition assets);

 

(b)           such Indebtedness shall not require
any amortization or have any mandatory prepayments unless the Obligations have
been paid in full (or, such prepayment requirements are no more restrictive
than, and apply only after satisfaction 

 

4

 

of, the requirements of the Credit Agreement), or have
any increase to the applicable interest rate or pricing following a date
certain;

 

(c)           such Indebtedness shall have a
maturity which is not shorter than six months following the final maturity of
the Obligations;

 

(d)           such Indebtedness shall not have the
benefit of a cross-default provision in respect of the Obligations with less
than a 90 day grace period (but may contain a cross acceleration or cross
payment default provision in respect of the Obligations and may be cross
defaulted to obligations other than the Obligations in a manner which is
similar to the provisions of Section 9.01(e) of the Credit
Agreement); and

 

(e)           any financial covenants benefiting
such Indebtedness shall be less restrictive than those benefiting the
Obligations.

 

“Qualifying Senior Notes” means term Indebtedness of Borrower:

 

(a)           which is issued pursuant to credit
documentation which is determined by the Administrative Agent (i) to
contain representations, warranties, covenants and defaults which are no more
onerous to the Borrower than those contained in the Credit Agreement or, (ii) if
such Indebtedness consists of high yield debt securities, to contain
representations, warranties, covenants and defaults customary for such debt
securities and which are, when considered as a whole, no more restrictive upon
Borrower and its Subsidiaries than the corresponding provisions of the Credit
Agreement;

 

(b)           which shall not require any
amortization or have any mandatory prepayments unless the Obligations have been
or concurrently are paid in full (other than customary offers to redeem or
repurchase such Indebtedness upon a change in control or asset sales on terms
reasonably acceptable to the Administrative Agent), or have any increase to the
applicable interest rate or pricing following a date certain;

 

(c)           which shall have a maturity which is
not shorter than one year following the final maturity of the Obligations; and

 

(d)           which does not have the benefit of a
cross-default provision to any other Indebtedness of Borrower and its
Subsidiaries (but may contain a cross acceleration or cross payment default
provision).

 

“Qualifying Subordinated Obligations” means term Indebtedness of
Borrower which:

 

(a)           issued pursuant to credit
documentation which is determined by the Administrative Agent to contain subordination
terms which are substantively identical to (or more favorable to holders of
senior debt than) those contained in the Indentures, and which contains
representations, warranties, covenants and events of default which are
determined by the Administrative Agent to be substantively similar, when taken
as a whole, to those contained in the Indentures (or determined by the
Administrative Agent to reflect customary terms for such securities which are,
when considered as a whole, no more restrictive upon the Borrower and its
Subsidiaries than the corresponding provisions of the Credit Agreement (and
including customary exceptions for senior credit facility debt sufficient to
allow the facilities contemplated by the Credit Agreement)):

 

5

 

(b)           which shall not require any
amortization or have any mandatory prepayments unless the Obligations have been
paid in full (other than customary offers to redeem or repurchase such
Indebtedness upon a change in control or asset sales on terms reasonably
acceptable to the Administrative Agent), or have any increase to the applicable
interest rate or pricing following a date certain; and

 

(c)           which shall have a maturity which is
not shorter than one year following the final maturity of the Obligations.

 

“Senior Debt” means, as of each date of
determination, Funded Debt as of that date minus (without duplication) the
Subordinated Debt and any Qualifying Additional Debt Capital as of that date.

 

“Senior Debt to EBITDA Ratio” means, as of any
date of determination, the ratio of (a) the outstanding principal amount
of the Senior Debt as of that date minus Excess Cash on that date, to (b) EBITDA
for Borrower and its Subsidiaries for the four Fiscal Quarter period then
ended.

 

“Slot Routes”
means that portion of the business of Borrower and its Subsidiaries which is
operated pursuant to Route Agreements.

 

“Terminated Swap”
means the Secured Swap Agreements established pursuant to the ISDA Master
Agreement between Borrower and Wachovia Bank, National Association, which were
terminated by Borrower on November 30, 2007 and settled on December 3,
2007.

 

“Total Debt to EBITDA
Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) Funded
Debt as of that date minus Excess Cash on that date, to (b) EBITDA
for Borrower and its Subsidiaries determined as of that date for the four
Fiscal Quarter period then ending (subject to any adjustments thereto required
by the definition of “EBITDA”).

 

“Zero Balance Account”
means any account maintained by Borrower or its Subsidiaries with a financial
institution solely for the purpose of payment of payroll checks, payments to
vendors or similar items, and in which Borrower and its Subsidiaries maintain
no funded balance other than funds remitted to the account following the
presentation of checks or other items for payment from such account.

 

2.             Reduction of the
Aggregate Revolving Commitments; Conversion of Revolving Loans.

 

(a)           Concurrently with the effectiveness
of this Amendment, Borrower agrees that the Aggregate Revolving Commitments
shall be reduced pursuant to Section 2.08 of the Credit Agreement by
$15,000,000.

 

(b)           Borrower further agrees to convert
the Revolving Loans having an aggregate outstanding principal balance of up to
$60,000,000 to funded Term Loans, having the same pricing, maturity and other
terms as the existing Term Loans concurrently with the effectiveness of this
Amendment.  No Revolving Lender shall be
required to convert any portion of its Revolving Loans to Term Loans.  No Revolving Lender shall be required to
consent to this Amendment as a condition to the conversion of a portion of its
Revolving Loans to Term Loans.

 

6

 

(c)           Each Revolving Lender which consents
to this Amendment shall be deemed to have requested conversion of its Revolving
Loans to Term Loans in an amount determined in accordance with clause (d) this
Section unless it notifies the Administrative Agent to the contrary
prior to the effective date of this Amendment. 
Each Revolving Lender which withholds its consent to this Amendment may
also elect to have a portion of its Revolving Loans in an amount determined in
accordance with clause (d) of this Section by written notice to the
Administrative Agent prior to the Business Day upon which this Amendment
becomes effective.

 

(d)           On the effective date of this
Amendment, the Administrative Agent shall calculate the aggregate principal
amount of the Revolving Loans held by Revolving Lenders which have requested conversion
of their Revolving Loans to Term Loans in accordance with clause (c) above,
and:

 

(1)           If such amount is less than or equal
to $60,000,000, the entire amount of such Loans shall be converted to Term
Loans; and

 

(2)           If such amount is greater than $60,000,000,
then each Revolving Lender which has requested conversion shall have a ratable
amount of its Revolving Loans converted to Term Loans such that Revolving Loans
in an aggregate principal amount equal to $60,000,000 are converted to Term
Loans.

 

(e)           The determination of the
Administrative Agent of the amount of the Loans to be so converted shall be
conclusive in the absence of manifest error.

 

(f)            Borrower agrees to issue a Term Note
to each Lender converting a portion of its Revolving Loans to Term Loans in
accordance with this Section promptly upon request by that Lender.

 

3.             Termination of Increase Option.  The right of Borrower to request increases to
the Aggregate Revolving Commitments, Additional Term Loans and Incremental Term
Loans pursuant to Section 2.16 is hereby terminated.

 

4.             Representations and Warranties.  Borrower represents and warrants to the
Administrative Agent and the Lenders that:

 

(a)           Giving effect to the
execution and delivery of this Amendment, no Default or Event of Default has
occurred and remains continuing;

 

(b)           The execution, delivery and performance
of this Amendment and the transactions contemplated to occur hereunder on the
effective date of this Amendment do not violate the terms of the Credit
Agreement or any other material Contractual Obligation to which Borrower and
its Subsidiaries are a party or affecting their respective Properties in any
material respect;

 

(c)           Each of the representations and
warranties set forth in Article 5 of the Credit Agreement (as modified by
this Amendment) are true and correct as of the date of this Amendment (other
than those representations which relate solely to a prior date, each of which
was true as of that date);

 

(d)           The Obligations are payable to the
Lenders pursuant to the terms of the Credit Agreement without deduction,
counterclaim or offset of any type or nature;

 

7

 

(e)           Giving effect to the
transactions contemplated by this Amendment, including all resulting
prepayments of the Loans, the aggregate consolidated cash balances maintained
by Borrower and its Subsidiaries were not less than $85,000,000;

 

(f)            The execution,
delivery and performance by each Loan Party of this Amendment have been duly
authorized by all necessary corporate or other organizational action, and do
not and will not:

 

(i)            contravene the terms of any Loan
Party’s Organization Documents;

 

(ii)           conflict with or result in any breach
or contravention of (A) any Contractual Obligation to which any Loan Party
is a party or affecting such Loan Party of its properties, or (B) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject;

 

(iii)          result in the creation of any Lien
under an instrument, document or agreement governing Indebtedness of any Loan
Party (other than the Liens in favor of the Administrative Agent contemplated
by Section 7.01(m)) or require any prepayment thereunder (other than the
prepayments contemplated by this Amendment); or

 

(iv)          violate any Law.

 

(g)           To the best knowledge of Borrower, the
aggregate annual savings to Borrower and its Subsidiaries resulting from
renegotiations of Route Agreements during the period between June 1, 2007
and November 15, 2007, determined in accordance with GAAP, is not less
than $19,500,000; and

 

(h)           Each deposit, brokerage or other similar
account maintained by Borrower and its Subsidiaries is listed on Exhibit A
to this Amendment.

 

5.             Waiver of Financial Covenants.  In reliance upon the representations and
warranties set forth in the preceding Section, the Lenders hereby waive
compliance with the covenants set forth in Sections 7.12 through 7.14 of the
Credit Agreement for the Fiscal Quarter ended September 30, 2007 only
(together with any delay in the submission of the Borrower’s Compliance
Certificate for such Fiscal Quarter). 
This is a one time waiver only, and the Borrower shall comply with such
Sections, as amended hereby, as of December 31, 2007 and the last day of
each subsequent Fiscal Quarter.

 

6.             Revised Form of Compliance
Certificate – Exhibit B.  The
form of the Compliance Certificate required by the Credit Agreement is hereby
amended to be as set forth on Exhibit B hereto.

 

7.             Control Agreements.  Prior to the issuance of any Qualifying
Additional Debt Capital other than Subordinated Obligations, Borrower shall,
and shall cause each of its Subsidiaries to, enter into Control Agreements in
respect of each deposit, brokerage or other similar account which is maintained
by Borrower and its Subsidiaries, including without limitation those described
on Exhibit A hereto, provided  that (i) no Control
Agreements shall be required in respect of Zero-Balance Accounts, and (ii) each
Control Agreement shall permit the Borrower and its Subsidiaries to freely
access the related account and to make investments, withdrawals and other
transfers unless and until an Event of Default has occurred.  Thereafter, Borrower and its Subsidiaries
shall not maintain any deposit, brokerage or other 

 

8

 

similar
account (other than any Zero Balance Account) which is not the subject of a
Control Agreement in favor of the Administrative Agent.

 

Notwithstanding any Control Agreement or the exercise by the
Administrative Agent of any rights thereunder following any Event of Default,
the Administrative Agent may, but shall not be obligated to, from time to time
release from any deposit account which is subject to a Control Agreement any
amount requested by Borrower for the payment of payroll or other operating
expenses of Borrower and its Subsidiaries (other than debt service in respect
of Indebtedness other than the Obligations) without the requirement of prior
notice to or consent from the Lenders, provided  that the Required
Lenders may terminate the authority granted by this paragraph in their
discretion by written notice to the Administrative Agent.

 

8.             Section 5.05(c) –
MAE Bringdown.  Section 5.05(c) of
the Credit Agreement is hereby amended to read in full as follows:

 

“(c)         as of the date of
each Credit Extension, since September 30, 2007, there has been no event
or circumstances, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.”

 

9.             Section 6.01
- Monthly Reporting.  Section 6.01
of the Credit Agreement is hereby amended to add new clauses (d) and (e) thereto,
to read in full as follows:

 

“(d)         as soon as available,
but in any event on or prior to the 25th day of the succeeding
calendar month (including any calendar month which is the last month in any
Fiscal Quarter or Fiscal Year), Borrower shall deliver monthly financial
statements in a format similar to those attached as Exhibit C hereto.  It is acknowledged and agreed that the
monthly financial statements contemplated by this clause (d) are (i) internal
documents and not prepared for release to the public, (ii) subject to
quarter-end and year-end adjustments in accordance with management decisions,
and (iii) provided to the Lenders for informational purposes only and
should not be relied upon.  By accepting
such financial statements, each Lender agrees that the representation and
warranty set forth in Section 5.15 shall not apply to such financial
statements.  It is acknowledged and
agreed that the materials delivered pursuant to this clause (d) are
intended to be distributed only to those Lenders which have elected to be
treated as “private-side” Lenders in accordance with Section 6.02, and
that Borrower shall mark them conspicuously as “Private-Side Only.”

 

(e)           as soon as
available, but in any event within 25 days after the end of each calendar month
(including any calendar month which is the last month in any Fiscal Quarter or
Fiscal Year), a report listing any new deposit, brokerage or other similar
accounts opened by Borrower or its Subsidiaries.”

 

10.           Section 7.01
– Liens Supporting Qualifying Second Lien Obligations.  Section 7.01 of the Credit Agreement is
hereby amended to add a new clause (n) thereto, to read in full as
follows:

 

“(n)         Liens and Negative
Pledges securing Qualifying Second Lien Obligations in an aggregate principal
amount not to exceed $275,000,000 on or with respect to Property of Borrower
and its Subsidiaries which serves as Collateral for the Obligations, provided
that such Liens and Negative Pledges are subject and subordinate to the Liens
and Negative Pledges benefiting the Obligations pursuant to an Intercreditor
Agreement.”

 

9

 

11.           Section 7.03
– Qualifying Additional Debt Capital. 
Section 7.03 of the Credit Agreement is hereby amended so that (a) thereof
reads in full as follows:

 

“(a)         Indebtedness under
the Loan Documents and refinancings thereof consisting of Qualifying Additional
Debt Capital in an aggregate principal amount not to exceed $275,000,000 (and
guarantees of such Qualifying Additional Debt Capital by Subsidiaries of
Borrower which have guaranteed the Obligations under this Agreement and the
other Loan Documents), provided  that, giving effect to the
issuance of such Qualifying Additional Debt Capital and any application of the
proceeds thereof to other Indebtedness of Borrower and its Subsidiaries which
will occur on the date of such issuance (in each case on a pro forma basis as
of the last day of the then most recently ended Fiscal Quarter of Borrower for
which financial statements are required to have been delivered pursuant to Section 6.01
of the Credit Agreement), Borrower shall be in pro forma compliance with
Sections 7.12 and 7.13 of the Credit Agreement.”

 

12.           Section 7.06
– Certain Restricted Payments.   Section 7.06(e) of
the Credit Agreement is hereby amended to read in full as follows:

 

“(e)  if, as of the last day of any Fiscal Year ended after December 31,
2007, the Total Debt to EBITDA Ratio is less than 5.00:1.00 then, during the
succeeding Fiscal Year, Borrower may declare and pay such dividends in an
aggregate amount not to exceed the Company Percentage of Excess Cash Flow for
the preceding Fiscal Year, provided further that (i) any portion of the permitted
amount not paid in any Fiscal Year may be paid in subsequent Fiscal Years, (ii) prior
to the making of any such payment, Borrower shall have made all prepayments
then required by Section 2.07, and (iii) after adding the amount of
such cash dividends to the numerator of the Total Debt to EBITDA Ratio and
Senior Debt to EBITDA Ratio as of the last day of the then most recently ended
Fiscal Quarter, Borrower shall be in pro forma compliance with the covenants
set forth in Sections 7.12 and 7.13.”

 

13.           Section 7.12
– Senior Debt to EBITDA Ratio.  Section 7.12
of the Credit Agreement is hereby amended to read in full as follows:

 

“7.12  Senior Debt to EBITDA Ratio.  Permit the Senior Debt to EBITDA Ratio as of
the last day of any Fiscal Quarter ending during a period set forth below to
exceed the ratio set forth below opposite that period:

 

	
  Period

  	
   

  	
  Maximum Senior Debt to

  EBITDA Ratio

  	
   

  
	
  December 31,
  2007 through September 30, 2008

  	
   

  	
  6.85:1.00

  	
   

  
	
  December 31,
  2008 through June 30, 2009

  	
   

  	
  4.50:1.00

  	
   

  
	
  September 30,
  2009 and December 31, 2009

  	
   

  	
  4.30:1.00

  	
   

  
	
  March 31,
  2010 and June 30, 2010

  	
   

  	
  4.25:1.00

  	
   

  
	
  September 30,
  2010 and December 31, 2010

  	
   

  	
  4.00:1.00

  	
   

  
	
  March 31,
  2011 and June 30, 2011

  	
   

  	
  3.95:1.00

  	
   

  
	
  September 30,
  2011 and December 31, 2011

  	
   

  	
  3.90:1.00

  	
   

  
	
  March 31,
  2012 and June 30, 2012

  	
   

  	
  3.85:1.00

  	
   

  
	
  September 30,
  2012 and thereafter

  	
   

  	
  3.65:1.00.”

  	
   

  

 

14.           Section 7.13
- Total Debt to EBITDA Ratio.  Section 7.13
of the Credit Agreement is hereby amended to read in full as follows:

 

10

 

“7.13  Total Debt to EBITDA Ratio.  Permit the Total Debt to EBITDA Ratio as of
the last day of any Fiscal Quarter ending during a period set forth below to
exceed the ratio set forth below opposite that period:

 

	
  Period

  	
   

  	
  Maximum Total Debt to

  EBITDA Ratio

  	
   

  
	
  December 31,
  2007 through December 31, 2008

  	
   

  	
  9.65:1.00

  	
   

  
	
  March 31,
  2009 and June 30, 2009

  	
   

  	
  9.60:1.00

  	
   

  
	
  September 30,
  2009 and December 31, 2009

  	
   

  	
  9.25:1.00

  	
   

  
	
  March 31,
  2010 and June 30, 2010

  	
   

  	
  9.10:1.00

  	
   

  
	
  September 30,
  2010 and December 31, 2010

  	
   

  	
  8.60:1.00

  	
   

  
	
  March 31,
  2011 and June 30, 2011

  	
   

  	
  8.55:1.00

  	
   

  
	
  September 30,
  2011 and December 31, 2011

  	
   

  	
  8.50:1.00

  	
   

  
	
  March 31,
  2012 and June 30, 2012

  	
   

  	
  8.40:1.00

  	
   

  
	
  September 30,
  2012 and thereafter

  	
   

  	
  8.00:1.00.”

  	
   

  

 

15.           Section 7.14
– Interest Charge Coverage Ratio.  Section 7.14
of the Credit Agreement is hereby amended to read in full as follows:

 

“7.14  Interest Charge Coverage Ratio.  Permit the Interest Charge Coverage Ratio as
of the last day of any Fiscal Quarter ending during a period set forth below to
be less than the ratio set forth below opposite that period:

 

	
  Period

  	
   

  	
  Minimum Interest Charge

  Coverage Ratio

  	
   

  
	
  December 31,
  2007 through December 31, 2008

  	
   

  	
  1.10:1.00

  	
   

  
	
  March 31,
  2009 through June 30, 2010

  	
   

  	
  1.15:1.00

  	
   

  
	
  September 30,
  2010 through June 30, 2012

  	
   

  	
  1.20:1.00

  	
   

  
	
  September 30,
  2012 and thereafter

  	
   

  	
  1.25:1.00.”

  	
   

  

 

16.           Section 7.17
– Interest Rate Hedging Arrangements. 
Notwithstanding the termination of the Terminated Swap, Borrower shall
be deemed in compliance with the terms of Section 7.17 of the Credit
Agreement, provided that on or prior to December 31, 2008, Borrower
shall enter into new Swap Contracts with one or more of the Lenders (or other
Persons reasonably acceptable to the Administrative Agent as to
creditworthiness) which (a) are in respect of a notional amount of
Indebtedness which is sufficient to result in not less than 50% of the
consolidated Indebtedness of Borrower for borrowed money (other than current
Indebtedness) as of such date having a fixed interest rate or subject to Swap Contracts
which have the effect of fixing the interest rate thereunder, and (b) have
economic terms, including rate and tenor, which are reasonably acceptable to
the Administrative Agent.

 

17.           Conditions;
Effectiveness.  The effectiveness of this Amendment shall be subject
to the following conditions precedent:

 

(a)           The Administrative Agent shall have
received this Amendment executed by Borrower;

 

(b)           The Administrative Agent shall have
received a written consent hereto from Borrower’s Subsidiaries in the form of Exhibit D
hereto;

 

11

 

(c)           The Administrative Agent shall have
received written consent of the Requisite Lenders as required under Section 10.01
of the Credit Agreement in the form of Exhibit E hereto;

 

(d)           the Administrative Agent shall have
received a memorandum from its counsel acceptable to the Administrative Agent
concluding that the terms of the renegotiated Route Agreements provide for
annual savings to Borrower and its Subsidiaries in an amount which is not less
than $19,500,000 when compared to the prior terms of such Route Agreements.

 

(e)           Written legal opinions of Gibson,
Dunn & Crutcher LLP and local Nevada counsel to Borrower and its
Subsidiaries, as to the due authorization, execution and delivery of this
Amendment, and the instruments, documents and agreements executed in connection
therewith, the absence of conflicts between such agreements and other material
instruments, documents to which Borrower and its Subsidiaries are parties, and
such other matters as the Administrative Agent may request.

 

The Administrative Agent shall give prompt written
notice of the effectiveness of this Amendment to Borrower and the Lenders
(which shall be conclusive evidence that all facts and circumstances in respect
of which the Administrative Agent’s approval or consent is required pursuant to
this Section have occurred).

 

18.           Certain Fees.  Borrower agrees that it shall  pay the following fees in connection with
this Amendment:

 

(a)           for the sole account of BAS, an
arrangement fee in an amount set forth in a letter agreement between Borrower,
BAS and the Administrative Agent; and

 

(b)           to each Lender which has executed a
Consent to this Amendment substantially in the form of Exhibit E, and
delivered it to the Administrative Agent prior to 5:00 p.m. (New York City
local time) on December 14, 2007, an amendment fee in respect of its
Revolving Commitments and Term Loans (in each case, as in effect immediately
following the effective date of this Amendment) at the rate advised to the
Lenders by the Administrative Agent (which amendment fee rate shall be equal
for each Lender approving this Amendment).

 

The foregoing fees shall
be paid to BAS and the Lenders on the same Business Day upon which this
Amendment becomes effective (or, if this Amendment becomes effective following
2:00 p.m., New York City local time on any day, on the next Business Day).

 

19.           Supplemental
Prepayment Premium.   Notwithstanding
Section 2.07(a) of the Credit Agreement, and in addition to the prepayment
premiums required by Section 6 of Amendment No. 1 to the Credit
Agreement, in the event that Borrower makes any prepayment of the Term B Loans
or the Delay Draw Term B Loans prior to December 15, 2010 (other than the
mandatory prepayments required by the terms of Section 2.07(d), (e), (f) or
(g) of the Credit Agreement), then Borrower shall concurrently pay to the
Lenders holding the Term B Loans or the Delayed Draw Term Loans so prepaid, a
prepayment premium of 1% of the principal amount so prepaid, provided
that no such prepayment premium shall be required to be paid to the extent that
the prepayments are in an aggregate principal amount not in excess of
$275,000,000 and are made on or prior to December 31, 2008 using the
proceeds of (i) Qualifying Additional Debt Capital or (ii) the
proceeds of equity securities issued by Borrower.  Each amendment, modification or waiver of the
provisions of this Section 19 shall require the written consent of each of
Lender directly affected thereby.

 

12

 

20.           Savings Provision
– Timing of Issuance of Qualifying Additional Debt Capital and Related Swap
Contracts.    It is acknowledged that
the reduction of the required Senior Debt to EBITDA Ratio to 4.50:1.00 as of December 31,
2008 (as contemplated by this Amendment) is likely to require the issuance of
Qualifying Additional Debt Capital.  The
Administrative Agent and the Lenders reserve all rights arising under Section 7.12
and the other provisions of the Credit Agreement arising from any failure to
comply with Section 7.12 of the Credit Agreement and Section 16 of
this Amendment as and when required, provided however that, in the event
that:

 

(i)            Borrower issues any
Qualifying Additional Debt Capital and/or enters into Swap Contracts conforming
with the requirements of Section 16 of this Amendment during the period
following December 31, 2008 and prior to the date upon which Borrower is
required to have delivered a Compliance Certificate in respect of the Fiscal
Quarter ending on December 31, 2008;

 

(ii)           as of the date of
both the issuance of the relevant Qualifying Additional Debt Capital and the
execution of such Swap Contracts, the Administrative Agent has not made demand
for payment of the Obligations; and

 

(iii)          the issuance of
such Qualifying Additional Debt Capital and the application of the proceeds
thereof results in pro forma compliance with the terms of Section 7.12 of
the Credit Agreement;

 

then the
issuance of such Qualifying Additional Debt Capital shall be deemed to have
cured any Event of Default in respect of Section 7.12 of the Credit
Agreement as of December 31, 2008 and the issuance of such Swap Contracts
shall be deemed to have cured any Event of Default in respect of Section 16
of this Amendment.

 

21.           Effectiveness of the Credit
Agreement.  Except as hereby expressly amended, the
Credit Agreement remains in full force and effect, and is hereby ratified and
confirmed in all respects.

 

22.           Counterparts.  This
Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

 

[Remainder of this page intentionally left
blank – Signature pages follow.]

 

13

 

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

 

	
   

  	
  HERBST
  GAMING, INC., a Nevada corporation,

  
	
   

  	
  as
  Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Edward
  J. Herbst

  	
   

  
	
   

  	
  Name:

  	
  Edward
  J. Herbst

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.,

  as Administrative Agent and L/C Issuer  

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maurice E. Washington

  	
   

  
	
   

  	
  Name:

  	
  Maurice
  E. Washington

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
										

 

14

 

Exhibit A to
Amendment

 

List of Deposit, Brokerage and Similar Accounts

 

Exhibit B to
Amendment

 

Exhibit C to Amendment

 

15

 

Exhibit D to
Amendment

 

CONSENT OF GUARANTORS

 

This Consent of Guarantors
is delivered with reference to the Second Amended and Restated Credit Agreement
dated as of January 3, 2007 (the “Credit Agreement”), among Herbst Gaming, Inc.,
a Nevada corporation (the “Borrower”), the lenders from time to time party
thereto (the “Lenders”) and Bank of America, N.A. as Administrative Agent (“Administrative
Agent”). Capitalized terms used herein are used with the meanings set forth for
those terms in the Credit Agreement.

 

The undersigned consent to
and approve Borrower’s execution and delivery of the proposed Amendment No. 2
to the Credit Agreement, and hereby reaffirm their respective guarantees of the
Credit Agreement.

 

	
   

  	
  CALIFORNIA PROSPECTORS, LTD.,

  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  CARDIVAN COMPANY, a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  CORRAL COIN, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  CORRAL COUNTRY COIN, INC., a Nevada

  corporation

  
	
   

  	
   

  
	
   

  	
  DAYTON GAMING, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  E-T-T ENTERPRISES L.L.C., a Nevada limited 

  liability company

  
	
   

  	
   

  
	
   

  	
  E-T-T, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  FLAMINGO PARADISE GAMING, LLC, a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  HGI – LAKESIDE, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  HGI – MARK TWAIN, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  HGI – ST. JO, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  LAST CHANCE, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  MARKET GAMING, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  PLANTATION INVESTMENTS, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  THE PRIMADONNA COMPANY, LLC, a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  THE SANDS REGENT, a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  ZANTE INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized signatory
  for each of the foregoing

  

 

16

 

Exhibit E to
Amendment

 

CONSENT OF LENDER

 

Reference is hereby made to the Second Amended and
Restated Credit Agreement dated as of January 3, 2007 (the “Credit
Agreement”), among Herbst Gaming, Inc., a Nevada corporation (the “Borrower”),
the lenders party thereto (collectively, the “Lenders”) and Bank of America,
N.A. as Administrative Agent (the “Administrative Agent”).  Capitalized terms used herein are used with
the meanings set forth for those terms in the Loan Agreement.

 

The undersigned Lender hereby consents to the
execution and delivery of the proposed Amendment No. 2 to Amended and
Restated Credit Agreement (the “Amendment”) by the Administrative Agent on its
behalf, substantially in the form of the draft thereof presented to the Lenders
via the Intralinks system.

 

If the undersigned Lender is a Revolving Lender, it
consents to the conversion of a portion of its Revolving Loans to Term Loans in
accordance with Section 2 of the Amendment, unless
it has initialed the box set forth below.

 

o                                                                                    By initialing the box to the left of this
paragraph, the undersigned Revolving Lender elects NOT to have any portion of
its Revolving Loans converted to funded Term Loans in accordance with Section 2
of the Amendment.

 

	
  Dated as of                       ,2007.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Lender]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

[Note to consenting Lender - Please fax or
email this consent to:

 

William M. Scott IV

Sheppard, Mullin Richter & Hampton, LLP

333 South Hope Street, 48th Floor

Los Angeles, California, 90071
 bscott@sheppardmullin.com

telecopier: (213) 443-2717 

telephone (213) 617-4276

 

Email submissions will be confirmed by return
email.  

There is no need to submit original signatures.]

 

17Exhibit 10.1

 

AMENDED
AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT

 

This
Amended and Restated Principal Underwriting Agreement (hereinafter this “Agreement”)
is made and entered into as of this 1st day of June, 2006, by and
between Lincoln Benefit Life Company (“LBL”) a life insurance company organized
under the laws of the state of Nebraska on its own and on behalf of each
separate account of LBL set forth on Schedule A, as such Schedule may be
amended from time (each such account herein referred to as the “Account”), and
ALFS, Inc. (“ALFS”), a corporation organized under the laws of the state
of Delaware.

 

WHEREAS, ALFS has acted as the principal underwriter for the
variable annuity contracts set forth on Schedule A since the respective
effective dates set forth herein;

 

WHEREAS, the parties desire to amend and restate any and all
previous Principal Underwriting Agreements or arrangements with respect to
variable annuity products; and

 

NOW THEREFORE, in consideration of the mutual promises and
covenants exchanged by the parties in this Agreement, the parties hereby amend
and restate such Principal Underwriting Agreement in its entirety to read as
follows. LBL confirms its grant to ALFS of the right to be and ALFS agrees to
serve as Principal Underwriter for the sale of such variable annuity contracts
during the term of this Agreement and the parties agree as follows:

 

ARTICLE
I.

ALFS DUTIES AND OBLIGATIONS

 

1.01.        ALFS,
a broker-dealer registered under the Securities Exchange Act of 1934 (the “1934
Act”) and a member of the National Association of Securities Dealers, Inc.
(“NASD”), will serve as principal underwriter and distributor for the variable
annuity contracts listed in Schedule A (the “Contracts”) which will be issued
by LBL.

 

1.02.        ALFS
shall be duly registered or licensed or otherwise qualified under the insurance
and securities laws of the states in which the Contracts are authorized for
sale.

 

1.03.        ALFS
proposes to act as principal underwriter on an agency best efforts basis in the
marketing and distribution of the Contracts. ALFS will use its best efforts to
provide information and marketing assistance and related servicing activity to
licensed insurance agents and broker-dealers (“Selling Broker-Dealers”) on a
continuing basis.

 

1.04.        ALFS
shall be responsible for compliance with the requirements of state
broker-dealer regulations and the 1934 Act as each applies to ALFS in
connection with its duties as distributor of the Contracts.  Moreover, ALFS shall conduct its affairs in
accordance with the Rules of Fair Practice of the NASD.

 

1.05.        As
a principal underwriter, ALFS shall permit the offer and sale of Contracts to
the public only by and through persons who are appropriately licensed under the
securities laws 

and who are appointed in writing by LBL to be
authorized insurance agents (unless such persons are exempt from such licensing
and appointment requirements).

 

1.06.        To
the extent that any statements made in applicable registration statements, or
any amendment or supplement thereto, are made in reliance upon and in
conformity with written information furnished to LBL by ALFS expressly for use
therein, such statements will, when they become effective or are filed with the
Securities Exchange Commission (“SEC”), as the case may be, conform in all
material respects to the requirements of the Securities Act of 1933 (the “1933
Act”) and the rules and regulations of the Commission thereunder, and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.

 

1.07.        Subject
to agreement with LBL, ALFS may enter into selling agreements with
broker-dealers which are registered under the 1934 Act and/or authorized by
applicable law or exemptions to sell the Contracts.  Any such contractual arrangement is expressly
made subject to this Agreement, and ALFS will at all times be responsible to
LBL for supervision of compliance with federal securities laws regarding
distribution of the Contracts.

 

ARTICLE
II.

LBL’S DUTIES AND OBLIGATIONS

 

2.01.        LBL
is validly existing as a stock life insurance company in good standing under
the laws of the State of Nebraska, and has been duly qualified for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business.

 

2.02.        LBL represents that:

 

(a)                                  Registration
statements for each of the Contracts identified in Schedule A shall have been
filed with the SEC in the form previously delivered to ALFS and that copies of
any and all amendments thereto will be forwarded to ALFS at the time that they
are filed with the SEC;

 

(b)                                 Each Account is
a duly organized, validly existing separate account, established by resolution
of the Board of Directors of LBL for the purpose of issuing the Contracts; and

 

(c)                                  LBL has
registered or will register the Account as a unit investment trust under the
Investment Company Act of 1940 (the “1940 Act”).

 

2.03.        Each
registration statement and any further amendments or supplements thereto will,
when they became effective, conform in all material respects to the
requirements of the 1933 Act and the rules and regulations of the
Commission under such Act and will not contain any 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; provided, however,
that this representation and warranty shall not apply to any statement or
omission made in reliance upon 

 

2

and in conformity with information furnished in
writing to LBL by ALFS expressly for use therein.

 

2.04.        LBL
shall be responsible for the licensing and appointing of registered
representatives of Selling Broker-Dealers as required by state insurance laws.

 

ARTICLE
III.

RECORDS

 

3.01.        ALFS
shall keep, in a manner and form approved by LBL and in accordance with Rules 17a-3
and 17a-4 under the 1934 Act, accurate records and books of account as required
to be maintained by a registered broker-dealer, acting as principal
underwriter, of all transactions entered into on behalf of LBL with respect its
activities under this Agreement.  ALFS
shall make such records of account available for inspection by the SEC and LBL
shall have the right to inspect, make copies of or take possession of such
records and books of account at any time upon demand.

 

3.02.        Subject
to applicable SEC or NASD restrictions, LBL will send confirmations of Contract
transactions to Contract owners.  LBL
will make such confirmations and records of transactions available to ALFS upon
request.  LBL will also maintain Contract
owner records on behalf of ALFS to the extent permitted by applicable
securities law.

 

3.03.        ALFS
and LBL shall keep confidential the records, books of account and other
information (“Records”) concerning the Contract owners, annuitants, insureds,
beneficiaries or any persons who have rights arising out of the Contracts.  ALFS or LBL may disclose the Records and such
information only if the other has authorized disclosure and if the disclosure
is required by applicable law.  In the
event ALFS or LBL is served with a subpoena, court order or demand from a
regulatory organization which mandates disclosure of the Records or such
information, such party must notify the other and allow such other party
sufficient time to authorize disclosure or to intervene in the judicial
proceeding or matter so as to protect its interest.

 

3.04.        For
the purpose of determining the other party’s compliance with this Agreement,
each party to this Agreement shall have reasonable access during normal
business hours to any Records which are maintained by the other party.

 

3.05.        Both
LBL and ALFS agree to keep all information required by applicable laws, to
maintain the books, accounts and records as to clearly and accurately disclose
the precise nature and details of the transaction and to assist one another in
the timely preparation of any reports required by law.

 

3.06.        ALFS
and LBL shall furnish to the other any reports and information which the other
may request for the purpose of meeting reporting and recordkeeping requirements
under the laws of Nebraska or any other state or jurisdiction.

 

3

ARTICLE
IV.

SALES MATERIALS

 

4.01.        ALFS
will utilize the currently effective prospectus relating to the Contracts in
connection with its underwriting, marketing and distribution efforts.  As to other types of sales material, ALFS
hereby agrees and will require Selling Broker-Dealers to agree to use only
sales materials which have been authorized for use by LBL, which conform to the
requirements of federal and state laws and regulations, and which have been
filed where necessary with the appropriate regulatory authorities including the
NASD.

 

4.02.        ALFS
will not distribute any prospectus, sales literature or any other printed
matter or material in the underwriting and distribution of any Contract if, to
the knowledge of ALFS, any of the foregoing misstates the duties, obligation or
liabilities of LBL or ALFS.

 

ARTICLE
V.

COMPENSATION

 

5.01.        LBL
agrees to reimburse ALFS for direct expenses incurred by ALFS on behalf of
LBL.  Such direct expenses shall include,
but not be limited to, (a) the marketing allowances paid by ALFS with
regards to the Contracts under the Proprietary Channel Wholesaling and
Marketing Support Agreement dated June 1, 2006 between LBL, ALFS, Allstate
Life Insurance Company of New York, American Skandia Marketing, Inc. and
Prudential Insurance Agency, LLC, (b) commissions and trail commissions
payable under selling agreements in connection with the Contracts among
broker-dealers, LBL and ALFS, (c) the costs of goods and services
purchased from outside vendors, (d) travel expenses and (e) state and
federal regulatory fees incurred on behalf of LBL.

 

5.02.        ALFS
shall present a statement after the end of each quarter showing the amount due
with respect to marketing allowances as provided in Section 5.01 and the
apportionment of other services rendered and the direct expenses incurred in
connection therewith.  Settlements are
due and payable within thirty days.

 

ARTICLE
VI.

UNDERWRITING TERMS

 

6.01.        ALFS
makes no representations or warranties regarding the number of Contracts to be
sold by Selling Broker-Dealer and the registered representatives of Selling
Broker-Dealer.  ALFS does, however,
represent that it will actively engage in its duties under this Agreement on a
continuous basis while there are effective registration statements with the
SEC.

 

6.02.        ALFS
will use its best efforts to ensure that the Contracts shall be offered for
sale by registered broker-dealers and registered representatives (who are duly
licensed as insurance agents) on the terms described in the currently effective
prospectus describing such Contracts.

 

6.03.        LBL
will use its best efforts to assure that the Contracts are continuously
registered under the 1933 Act (and under any applicable state “blue sky” laws)
and to file for approval under state insurance laws when necessary.

 

4

ARTICLE
VII.

LEGAL AND REGULATORY ACTIONS

 

7.01.        LBL
agrees to advise ALFS immediately of:

 

(a)                                  any request by
the SEC for amendment of the registration statements or for additional
information relating to the Contracts;

 

(b)                                 the issuance by
the SEC of any stop order suspending the effectiveness of the registration
statements relating to the Contracts or the initiation of any proceedings for
that purpose; and

 

(c)                                  the happening
of any known material event which makes untrue any statement made in the
registration statements relating to the Contracts or which requires the making
of a change therein in order to make any statement made therein not misleading.

 

7.02.        Each
of the undersigned parties agrees to notify the other in writing upon being
apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.

 

7.03.        During
any legal action or inquiry, LBL will furnish to ALFS such information with
respect to the Contracts in such form and signed by such of its officers as
ALFS may reasonably request and will warrant that the statements therein
contained when so signed are true and correct.

 

7.04.        If
changes in insurance laws or regulations could reasonably be expected to affect
the sales and administration of Contracts under this Agreement, LBL shall
notify ALFS within a reasonable time after LBL receives notice of those
changes. Such notice shall be in writing except, if circumstances so require,
the notice may be communicated by telephone or facsimile and confirmed in
writing.

 

ARTICLE
VIII.

TERMINATION

 

8.01.        This
Agreement shall terminate at either party’s option, without penalty:

 

(a)                                  without cause,
on not less than 180 days’ prior written notice to the other party;

 

(b)           upon the mutual written consent of the parties;

 

(c)                                  upon written
notice of one party to the other in the event of bankruptcy or insolvency of
the party to which notice is given;

 

(d)                                 upon the
suspension or revocation of any material license or permit held by a party by
the appropriate governmental agency or authority; however, 

 

5

such
termination shall extend only to the jurisdiction(s) where the party is
prohibited from doing business; or

 

(e)                                  upon the
finding by any regulatory body in a formal proceeding of material wrongdoing by
a party regarding its duties under this Agreement.

 

8.02.        If
either party breaches this Agreement or is in default in the performance of any
of its duties and obligations hereunder (the “Defaulting Party”), the
non-defaulting party may give written notice thereof to the Defaulting Party,
and if such breach or default is not remedied within 60 days after such written
notice is given, then the non-defaulting party may terminate this Agreement by
giving 30 days’ prior written notice of such termination to the Defaulting
Party.

 

8.03.        The
parties agree to cooperate and give reasonable assistance to one another in
effecting an orderly transition following termination.

 

ARTICLE IX.

INDEMNIFICATION

 

9.01                           LBL agrees to
indemnify ALFS for any liability that it may incur to a Contract owner or
party-in-interest under a Contract:

 

(a)                                  arising out of any act or
omission in the course of or in connection with rendering services under this
Agreement; or

 

(b)                                 arising out of
the purchase, retention or surrender of a contract; provided, however that LBL
will not indemnify ALFS for any such liability that results from the willful
misfeasance, bad faith or gross negligence of ALFS or from the reckless
disregard by ALFS of its duties and obligations arising under this Agreement.

 

ARTICLE
X.

GENERAL PROVISIONS

 

10.01       This Agreement shall be subject to the laws of the State of
Nebraska.

 

10.02       This Agreement, along with any schedules attached hereto and
incorporated herein by reference, may be amended from time to time by mutual
agreement and consent of the under signed parties.

 

10.03       In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

6

IN WITNESS WHEREOF, the undersigned parties
have caused this Agreement to be duly executed, to be effective as of June 1,
2006 and retroactively effective as to particular Contracts as of the
respective dates set forth on Schedule A.

 

	
  Lincoln Benefit Life
  Company

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/ Samuel H. Pilch

  	
   

  	
  December 14,
  2007

  	 

	
  Samuel H. Pilch

  	
   

  	
   

  	
  Date

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Group Vice President and
  Controller

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 

	
  ALFS, Inc.

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/ Steven C. Verney

  	
   

  	
  December 14,
  2007

  	 

	
  Steven C. Verney

  	
   

  	
   

  	
  Date

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Assistant Treasurer

  	
   

  	
   

  	
   

  	 

									

 

7

SCHEDULE A

 

	
  Separate Account

  	
   

  	
  Effective Date

  	
   

  	
  Contract(s)

  	
   

  	
  Form#(s)

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  2/2/04

  	
   

  	
  Consultant Solutions VA - Classic

  	
   

  	
  VAP0310

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  2/2/04

  	
   

  	
  Consultant Solutions VA - Elite

  	
   

  	
  VAP0320

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  2/2/04

  	
   

  	
  Consultant Solutions VA - Plus

  	
   

  	
  VAP0330

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  2/2/04

  	
   

  	
  Consultant Solutions VA - Select

  	
   

  	
  VAP0340

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable

  Annuity Account

  	
   

  	
  8/17/98

  	
   

  	
  Consultant VAI

  	
   

  	
  VAP9830

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  8/17/98

  	
   

  	
  Consultant VAII

  	
   

  	
  VAP9840

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable

  Annuity Account

  	
   

  	
  1/2/94

  	
   

  	
  Investor’s Select

  	
   

  	
  VAP9330

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable

  Annuity Account

  	
   

  	
  8/16/01

  	
   

  	
  LBL Advantage VA

  	
   

  	
  VAP0100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lincoln Benefit Life Variable 

  Annuity Account

  	
   

  	
  10/18/99

  	
   

  	
  Premier Planner VA

  	
   

  	
  VAP9950

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]