Document:

Exhibit
10.1

 

CUSIP No:                        

SECOND
AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of
January 3, 2007

among

HERBST
GAMING, INC.,

as Borrower,

BANK OF AMERICA, N.A.,

as Administrative Agent,
Swing Line Lender

and L/C Issuer,

and

The Other Lenders Party
Hereto

LEHMAN
COMMERCIAL PAPER, INC. and WACHOVIA
BANK, NATIONAL 

ASSOCIATION, as Syndication Agents,

U.S.
BANK, NATIONAL ASSOCIATION, as Documentation Agent

and

LEHMAN
BROTHERS INC. AND WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and Joint Book
Runners

 

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.01.

  	
  Defined Terms

  	
   

  	
  2

  
	
  1.02.

  	
  Other Interpretive Provisions

  	
   

  	
  30

  
	
  1.03.

  	
  Accounting Terms

  	
   

  	
  31

  
	
  1.04.

  	
  Rounding

  	
   

  	
  31

  
	
  1.05.

  	
  Times of Day

  	
   

  	
  31

  
	
  1.06.

  	
  Letter of Credit Amounts

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  2.01.

  	
  Revolving Loans

  	
   

  	
  32

  
	
  2.02.

  	
  Term B Loans

  	
   

  	
  32

  
	
  2.03.

  	
  Delay Draw Term B Loans

  	
   

  	
  32

  
	
  2.04.

  	
  Borrowings, Conversions and Continuations of Loans

  	
   

  	
  32

  
	
  2.05.

  	
  Letters of Credit

  	
   

  	
  34

  
	
  2.06.

  	
  Swing Line Loans

  	
   

  	
  43

  
	
  2.07.

  	
  Prepayments

  	
   

  	
  46

  
	
  2.08.

  	
  Voluntary Termination or Reduction of the Revolving
  Commitments

  	
   

  	
  49

  
	
  2.09.

  	
  Amortization of the Term Loans; Mandatory Repayment
  of the Obligations

  	
   

  	
  50

  
	
  2.10.

  	
  Interest

  	
   

  	
  50

  
	
  2.11.

  	
  Fees

  	
   

  	
  51

  
	
  2.12.

  	
  Computation of Interest and Fees

  	
   

  	
  52

  
	
  2.13.

  	
  Evidence of Debt

  	
   

  	
  52

  
	
  2.14.

  	
  Payments Generally; Administrative Agent’s Clawback

  	
   

  	
  53

  
	
  2.15.

  	
  Sharing of Payments by Lenders

  	
   

  	
  54

  
	
  2.16.

  	
  Increase in Commitments

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  3.01.

  	
  Taxes

  	
   

  	
  57

  
	
  3.02.

  	
  Illegality

  	
   

  	
  59

  
	
  3.03.

  	
  Inability to Determine Rates

  	
   

  	
  59

  
	
  3.04.

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
   

  	
  59

  
	
  3.05.

  	
  Compensation for Losses

  	
   

  	
  61

  
	
  3.06.

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  62

  
	
  3.07.

  	
  Survival

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT
  EXTENSIONS

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  4.01.

  	
  Conditions of Initial Credit Extension

  	
   

  	
  63

  
	
  4.02.

  	
  Conditions to all Credit Extensions

  	
   

  	
  67

  

 

 i
 

 

 

	
  4.03.

  	
  Primm Closing Date Credit Extensions

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. REPRESENTATIONS AND WARRANTIES

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  5.01.

  	
  Existence, Qualification and Power; Compliance with
  Laws

  	
   

  	
  71

  
	
  5.02.

  	
  Authorization; No Contravention

  	
   

  	
  71

  
	
  5.03.

  	
  Governmental Authorization; Other Consents

  	
   

  	
  71

  
	
  5.04.

  	
  Binding Effect

  	
   

  	
  71

  
	
  5.05.

  	
  Financial Statements; No Material Adverse Effect.

  	
   

  	
  71

  
	
  5.06.

  	
  Litigation

  	
   

  	
  72

  
	
  5.07.

  	
  No Default

  	
   

  	
  72

  
	
  5.08.

  	
  Ownership of Property; Liens

  	
   

  	
  73

  
	
  5.09.

  	
  Environmental Compliance

  	
   

  	
  73

  
	
  5.10.

  	
  Insurance

  	
   

  	
  73

  
	
  5.11.

  	
  Taxes

  	
   

  	
  73

  
	
  5.12.

  	
  ERISA Compliance.

  	
   

  	
  73

  
	
  5.13.

  	
  Subsidiaries; Equity Interests

  	
   

  	
  74

  
	
  5.14.

  	
  Margin Regulations; Investment Company Act; Public
  Utility Holding Company Act

  	
   

  	
  74

  
	
  5.15.

  	
  Disclosure

  	
   

  	
  75

  
	
  5.16.

  	
  Compliance with Laws

  	
   

  	
  75

  
	
  5.17.

  	
  Intellectual Property; Licenses, Etc

  	
   

  	
  75

  
	
  5.18.

  	
  Route Agreements; Casino Leases

  	
   

  	
  75

  
	
  5.19.

  	
  Sands Regent Acquisition

  	
   

  	
  76

  
	
  5.20.

  	
  Primm Acquisition

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. AFFIRMATIVE COVENANTS

  	
   

  	
  77

  
	
   

  	
   

  	
   

  
	
  6.01.

  	
  Financial Statements

  	
   

  	
  77

  
	
  6.02.

  	
  Certificates; Other Information

  	
   

  	
  78

  
	
  6.03.

  	
  Notices

  	
   

  	
  79

  
	
  6.04.

  	
  Payment of Obligations

  	
   

  	
  80

  
	
  6.05.

  	
  Preservation of Existence, Etc

  	
   

  	
  80

  
	
  6.06.

  	
  Maintenance of Properties

  	
   

  	
  80

  
	
  6.07.

  	
  Maintenance of Insurance

  	
   

  	
  81

  
	
  6.08.

  	
  Compliance with Laws

  	
   

  	
  82

  
	
  6.09.

  	
  Books and Records

  	
   

  	
  82

  
	
  6.10.

  	
  Inspection Rights

  	
   

  	
  83

  
	
  6.11.

  	
  Use of Proceeds

  	
   

  	
  83

  
	
  6.12.

  	
  Additional Subsidiaries and Collateral

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
   

  	
  84

  
	
   

  	
   

  	
   

  
	
  7.01.

  	
  Liens

  	
   

  	
  84

  
	
  7.02.

  	
  Investments

  	
   

  	
  85

  
	
  7.03.

  	
  Indebtedness

  	
   

  	
  86

  
	
  7.04.

  	
  Fundamental Changes

  	
   

  	
  87

  

 

 ii
 

 

 

	
  7.05.

  	
  Dispositions

  	
   

  	
  87

  
	
  7.06.

  	
  Restricted Payments

  	
   

  	
  88

  
	
  7.07.

  	
  Prepayment of Subordinated Obligations

  	
   

  	
  89

  
	
  7.08.

  	
  Change in Nature of Business

  	
   

  	
  89

  
	
  7.09.

  	
  Transactions with Affiliates

  	
   

  	
  89

  
	
  7.10.

  	
  Burdensome Agreements

  	
   

  	
  90

  
	
  7.11.

  	
  Use of Proceeds

  	
   

  	
  90

  
	
  7.12.

  	
  Senior Debt to EBITDA Ratio

  	
   

  	
  90

  
	
  7.13.

  	
  Total Debt to EBITDA Ratio

  	
   

  	
  91

  
	
  7.14.

  	
  Interest Charge Coverage Ratio

  	
   

  	
  91

  
	
  7.15.

  	
  Capital Expenditures

  	
   

  	
  91

  
	
  7.16.

  	
  Hostile Acquisitions

  	
   

  	
  92

  
	
  7.17.

  	
  Interest Rate Hedging Arrangements

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  93

  
	
   

  	
   

  	
   

  
	
  8.01.

  	
  Events of Default

  	
   

  	
  93

  
	
  8.02.

  	
  Remedies Upon Event of Default

  	
   

  	
  95

  
	
  8.03.

  	
  Application of Funds

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. ADMINISTRATIVE AGENT

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01.

  	
  Appointment and Authority

  	
   

  	
  97

  
	
  9.02.

  	
  Rights as a Lender

  	
   

  	
  97

  
	
  9.03.

  	
  Exculpatory Provisions

  	
   

  	
  97

  
	
  9.04.

  	
  Reliance by Administrative Agent

  	
   

  	
  98

  
	
  9.05.

  	
  Delegation of Duties

  	
   

  	
  98

  
	
  9.06.

  	
  Resignation of Administrative Agent

  	
   

  	
  98

  
	
  9.07.

  	
  Non-Reliance on Administrative Agent and Other
  Lenders

  	
   

  	
  99

  
	
  9.08.

  	
  No Other Duties, Etc

  	
   

  	
  100

  
	
  9.09.

  	
  Collateral and Guaranty Matters

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  	
  101

  
	
   

  	
   

  	
   

  
	
  10.01.

  	
  Amendments, Etc

  	
   

  	
  101

  
	
  10.02.

  	
  Notices; Effectiveness; Electronic Communication.

  	
   

  	
  103

  
	
  10.03.

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  104

  
	
  10.04.

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  104

  
	
  10.05.

  	
  Payments Set Aside

  	
   

  	
  106

  
	
  10.06.

  	
  Successors and Assigns.

  	
   

  	
  107

  
	
  10.07.

  	
  Treatment of Certain Information; Confidentiality

  	
   

  	
  111

  
	
  10.08.

  	
  Right of Setoff

  	
   

  	
  112

  
	
  10.09.

  	
  Interest Rate Limitation

  	
   

  	
  112

  
	
  10.10.

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  112

  
	
  10.11.

  	
  Survival of Representations and Warranties

  	
   

  	
  113

  
	
  10.12.

  	
  Severability

  	
   

  	
  113

  
	
  10.13.

  	
  Replacement of Lenders

  	
   

  	
  113

  

 

 iii
 

 

 

	
  10.14.

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  114

  
	
  10.15.

  	
  Governing Law; Jurisdiction; Etc

  	
   

  	
  114

  
	
  10.16.

  	
  Waiver of Jury Trial

  	
   

  	
  115

  
	
  10.17.

  	
  USA PATRIOT Act Notice

  	
   

  	
  116

  
	
  10.18.

  	
  Time of the Essence

  	
   

  	
  116

  
	
  10.19.

  	
  Designation as Senior Debt

  	
   

  	
  116

  
	
   

  	
   

  	
   

  	
   

  

 

 iv
 

 

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Casino Leases

  	
   

  	
   

  
	
  5.05

  	
  Supplement to Interim Financial Statements

  	
   

  	
   

  
	
  5.09

  	
  Environmental Matters

  	
   

  	
   

  
	
  5.13

  	
  Subsidiaries

  	
   

  	
   

  
	
  5.17

  	
  Intellectual Property Matters

  	
   

  	
   

  
	
  7.01

  	
  Existing Liens

  	
   

  	
   

  
	
  7.03

  	
  Existing Indebtedness

  	
   

  	
   

  
	
  7.09

  	
  Transactions with Affiliates

  	
   

  	
   

  
	
  10.02

  	
  Administrative Agent’s Office; Certain Addresses for
  Notices

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Assignment and Assumption

  	
   

  	
   

  
	
  B

  	
  Compliance Certificate

  	
   

  	
   

  
	
  C

  	
  Form of Delay Draw Term B Note

  	
   

  	
   

  
	
  D

  	
  Loan Notice

  	
   

  	
   

  
	
  E

  	
  Form of Revolving Note

  	
   

  	
   

  
	
  F

  	
  Swing Line Loan Notice

  	
   

  	
   

  
	
  G

  	
  Form of Term B Note

  	
   

  	
   

  
	
  H

  	
  Form of Lender Addendum

  	
   

  	
   

  

 

 v

 

SECOND
AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDED AND
RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of
January 3, 2007, among HERBST GAMING, INC., a Nevada corporation (the “Borrower”),
each lender listed on the signature pages hereto or which from time to time
becomes a party hereto (collectively, the “Lenders”, and individually, a “Lender”),
BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer, LEHMAN COMMERCIAL PAPER, INC. and WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agents, and U.S. BANK, NATIONAL ASSOCIATION, as Documentation
Agent. LEHMAN BROTHERS INC. and WACHOVIA CAPITAL MARKETS, LLC have served as
the Joint Lead Arrangers and Joint Book Runners for the credit facilities
described herein.  The parties hereto
hereby agree with reference to the following facts:

A.            Pursuant to an Amended
and Restated Credit Agreement dated as of October 8, 2004 (as heretofore
amended, the “Existing Credit Agreement”), the lenders party thereto
made credit facilities available to Borrower.

B.            Pursuant to the Sands
Purchase Agreement described herein, it is proposed that Borrower acquire all
of the equity interests of The Sands Regent, a Nevada corporation (“Sands
Regent”) by means of a merger of Borrower’s wholly owned subsidiary, HGI–Casinos,
Inc., a Nevada corporation (“HGI–Casinos”), with and into Sands Regent,
with Sands Regent continuing as the surviving corporation and a wholly-owned
Subsidiary of Borrower (such acquisition is hereafter referred to as the “Sands
Acquisition”).  Sands Regent owns and
operates the hotel and casino properties known as the Sands Regency located in
Reno, Nevada, Gold Ranch Casino & RV Resort located in Verdi, Nevada, Rail
City Casino located in Sparks, Nevada, and the Depot Casino and Red Hawk Sports
Bar, both of which are located in Dayton, Nevada.

C.            Pursuant to the Primm
Purchase Agreement described herein, it is proposed that Borrower acquire all
of the membership interests in Primadonna Company, LLC, a Nevada corporation (“Primadonna”),
along with other assets owned by PRMA Land Development Company, a Nevada
corporation (“PRMA”) (such acquisition is hereafter referred to as the “Primm
Acquisition”).  Primadonna owns and
operates the hotel and casino properties known as Buffalo Bill’s, Primm Valley
and Whiskey Pete’s (with all associated properties described in the Primm
Acquisition Agreement, the “Primm Assets”), all of which are located in
Primm, Nevada.

D.            In order to finance
the Sands Acquisition and the Primm Acquisition, and for the other uses
described herein, the credit facilities provided pursuant to the Existing
Credit Agreement are being increased to $875,000,000 consisting of:

1)             Aggregate
Revolving Commitments in the principal amount of $175,000,000;

2)             Term B Loans in the
aggregate principal amount of $375,000,000; and

3)             Delay
Draw Term B Loans in the aggregate principal amount of $325,000,000.

 1
 

 

E.             Those of the Lenders
party to the Existing Credit Agreement which have elected not to continue as
Lenders hereunder (the “Exiting Lenders”) have executed an agreement
with Borrower and the Administrative Agent consenting to the termination of
their status as Lenders concurrently with the Closing Date.

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

ARTICLE  I.

DEFINITIONS AND ACCOUNTING TERMS

1.01.        Defined Terms.  As used
in this Agreement, the following terms shall have the meanings set forth below:

“Acquisition
Agreements” means, collectively, the Sands Purchase Agreement and the Primm
Purchase Agreement.

“Adjusted Cash
Interest Charges” means, as of each date of determination, Interest Charges
payable in cash for the four Fiscal Quarter period ending on that date, provided
that:

(a)           Adjusted
Cash Interest Charges as of March 31, 2007, June 30, 2007 and
September 30, 2007 shall be determined on the basis of Interest Charges
for the period beginning on January 1, 2007 and ending on the relevant
date, and annualized on a straight-line basis; and

(b)           notwithstanding
clause (a) above, in the event that the Primm Closing Date occurs after
the Closing Date, Adjusted Cash Interest Charges for any period shall be
adjusted to include (without duplication), on a pro forma basis, the amount of
Interest Charges attributable to Indebtedness in an amount equal to the cash
consideration paid in connection with the Primm Acquisition (as though
outstanding for the entire period for which Adjusted Cash Interest Charges is
otherwise calculated).

“Administrative Agent”
means Bank of America in its capacity as administrative agent under any of the
Loan Documents, or any successor administrative agent.

“Administrative Agent
Fee Letter” means the letter agreement, dated as of the Closing Date, among
Borrower, the Administrative Agent and BAS relating to certain fees.

“Administrative Agent’s
Office” means the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or account
as the Administrative Agent may from time to time notify to Borrower and the
Lenders.

“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.

“Affiliate” means,
with respect to any Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

 2
 

 

“Aggregate Delay Draw
Term B Commitments” means term lending commitments in the aggregate
principal amount of $325,000,000 in respect of the Delay Draw Term B
Loans, as such amount may be increased pursuant to Section 2.16.

“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 $175,000,000.  The Aggregate Revolving Commitments are
subject to being decreased pursuant to Section 2.08 and increased pursuant
to Section 2.16.

“Aggregate Revolving
Outstandings” means the aggregate Outstanding Amount of all Revolving
Loans, Swing Line Loans and all L/C Obligations.

“Agreement” means
this Second Amended and Restated Credit Agreement.

“Applicable
Rate” means:

(a)           with
respect to the Revolving Loans and Letters of Credit, for each Pricing Period,
the rates per annum set forth opposite the Total 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 (i) during the Pricing Period ending
June 1, 2007 Pricing Level V shall apply, (ii) notwithstanding
clause (i), following the Primm Closing Date, Pricing Level V shall apply
until the delivery of financial statements of Borrower pursuant to
Section 6.01(b) for the first full Fiscal Quarter ended after the Primm
Closing Date, and (iii) notwithstanding clauses (i) and (ii)
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 V 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

  	
   

  	
  Total Debt to 

  EBITDA Ratio

  	
   

  	
  Base Rate+

  	
   

  	
  Eurodollar Rate +

  Letters of Credit

  	
   

  	
  Revolving 

  Commitment Fee

  	
   

  
	
  I

  	
   

  	
  Less
  than 3.50:1.00

  	
   

  	
  0.000

  	
  %

  	
  1.000

  	
  %

  	
  0.250

  	
  %

  
	
  II

  	
   

  	
  Greater
  than or equal

  to
  3.50:1.00, but less

  than
  4.00:1.00

  	
   

  	
  0.000

  	
  %

  	
  1.250

  	
  %

  	
  0.250

  	
  %

  
	
  III

  	
   

  	
  Greater
  than or equal

  to
  4.00:1.00, but less

  than
  4.50:1.00

  	
   

  	
  0.250

  	
  %

  	
  1.500

  	
  %

  	
  0.250

  	
  %

  
	
  IV

  	
   

  	
  Greater
  than or equal

  to
  4.50:1.00, but less

  than
  5.00:1.00

  	
   

  	
  0.500

  	
  %

  	
  1.750

  	
  %

  	
  0.375

  	
  %

  
	
  V

  	
   

  	
  Greater
  than or equal

  to 5.00:1.00

  	
   

  	
  0.750

  	
  %

  	
  2.000

  	
  %

  	
  0.375

  	
  %

  

 

(b)           With
respect to Term B Loans, the Applicable Rate shall be 1.875% per annum for
Eurodollar Rate Loans and 0.625% per annum for any Base Rate Loans.

 3
 

 

(c)           With
respect to Delay Draw Term B Loans, the Applicable Rate shall be 1.875%
per annum for Eurodollar Rate Loans and 0.625% per annum for any Base Rate
Loans.

(d)           With
respect to any Incremental Term Loans, the Applicable Rate for Eurodollar Rate
Loans and Base Rate Loans shall be as set forth in the Incremental Term Joinder
Agreement.

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

“Assignment and
Assumption” means an assignment and assumption entered into by a Lender and
an Eligible Assignee (with the consent of any party whose consent is required
by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit A or any other form approved by the
Administrative Agent.

“Attributable
Indebtedness” means, on any date, (a) in respect of any capital lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP, and
(b) in respect of any Synthetic Lease Obligation, the capitalized amount
of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.

“Audited Financial
Statements” means the audited consolidated balance sheet of Borrower and
its Subsidiaries for the Fiscal Year ended December 31, 2005 and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such Fiscal Year of Borrower and its Subsidiaries, including
the notes thereto.

“Availability Period”
means the period from and including the Closing Date to the earliest of
(a) the Revolving Maturity Date, (b) the date of termination of the
Aggregate Revolving Commitments pursuant to Section 2.08, and (c) the
date of termination of the commitment of each Revolving Lender to make Loans
and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant
to Section 8.02.

“Bank of America”
means Bank of America, N.A. and its successors.

“BAS” means Banc
of America Securities LLC.

“Base Rate” means
for any day a fluctuating rate per annum equal to the higher of (a) the
Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its “prime
rate.”  The “prime rate” is a rate set by
Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.  Any change in
such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.

 4
 

 

“Base Rate Loan”
means a Loan that bears interest based on the Base Rate.

“Borrower” has the
meaning specified in the introductory paragraph hereto.

“Borrowing” means
a borrowing consisting of simultaneous Loans of the same Type and, in the case
of Eurodollar Rate Loans, having the same Interest Period made by each of the
Lenders pursuant to Article II.

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the
state where the Administrative Agent’s Office is located and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

“Capital Expenditures”
means for any period, with respect to any Person, the aggregate of all
expenditures by such Person for the acquisition or leasing (pursuant to a
Capital Lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) which
are required to be capitalized in accordance with GAAP on a balance sheet of
such Person.

“Capital Lease”
means, as to any Person, a lease of any real or personal property by that
Person as lessee that is, or should be in accordance with Financial Accounting
Standards Board Statement No. 13, as amended from time to time, or if such
Statement is not then in effect, such other statement of GAAP as may be
applicable, recorded as a “capital lease” on the balance sheet of that Person
prepared in accordance with GAAP.

“Cash Collateralize”
has the meaning specified in Section 2.05(g).

“Casino Lease”
means each of the leases described on Schedule 1.01.

“Change in Law”
means the occurrence, after the date of this Agreement, of any of the
following:  (a) the adoption or
taking effect of any law, rule, regulation or treaty, (b) any change in
any law, rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the
force of law) by any Governmental Authority.

“Change of
Control” means the occurrence of any of the following:

(a)           the
direct or indirect sale, lease, transfer conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the Property of Borrower and its
Subsidiaries, taken as a whole, to any Person other than a Principal, members
of the immediate families of the Principals, or trusts for their respective
benefit;

(b)           the
Principals, members of the immediate families of the Principals, or trusts for
their respective benefit cease to collectively own, beneficially and of record,
more than 70% of the Equity Interests of Borrower having ordinary voting power.

 5
 

 

“Closing Date”
means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.

“Code” means the
Internal Revenue Code of 1986.

“Collateral” means
all of the collateral which is subject to the Liens granted by the Collateral
Documents.

“Collateral Documents”
means, collectively, the Security Agreement (and each joinder thereto hereafter
executed pursuant to Section 6.12), the Pledge Agreement (and each joinder
thereto hereafter executed pursuant to Section 6.12), the Deeds of Trust, the
Preferred Ship Mortgage, and any other security agreement, pledge agreement,
deed of trust, mortgage, ship mortgage or other collateral security agreement
hereafter executed and delivered by Borrower or the Subsidiaries to secure the
Obligations.

“Commitments”
means, collectively, the Revolving Commitments, the Term B Commitments,
the Delay Draw Term B Commitments and any commitments to make Incremental Term
Loans hereafter extended pursuant to Section 2.16.

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

“Contingent Obligation”
means, as to any Person, (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such
Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into
for the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or
other obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
related primary obligation, or portion thereof, in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
obligor thereunder in good faith.  The
term “Contingent Obligation” as a verb has a corresponding meaning.

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

 6
 

 

“Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

“Credit Extension”
means each of the following:  (a) a
Borrowing and (b) an L/C Credit Extension.

“Debtor Relief Laws”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Deeds of Trust”
means (a) the deeds of trust executed on the Closing Date by Flamingo
Paradise, Market Gaming, E-T-T, Inc. and E-T-T Enterprises, L.L.C., encumbering
their respective interests in the four hotel, resort and casino properties
owned or leased by them in Las Vegas, Nevada, Pahrump, Nevada (two locations),
and Henderson, Nevada, and the office and warehouse space located on Russell
Road in Las Vegas to secure their respective Guarantees, (b) the deed of
trust executed by Borrower as of the Closing Date in respect of the training
facility on Russell Road, Las Vegas adjacent to the warehouse and office space,
(c) the deeds of trust executed by Sands Regent and its Subsidiaries on
the Closing Date, encumbering their interests in each of the hotel and casino
properties in Sparks, Nevada, Verdi, Nevada, Reno, Nevada and Dayton, Nevada to
secure the Sands Guaranty, (d) the deeds of trust executed by HGI-St. Jo,
HGI-Mark Twain and HGI-Lakeside with respect to the casino properties owned
through such Subsidiaries and located in Missouri and Iowa, (e), if when and if
executed, the fee and leasehold deeds of trust executed by the owners of the
assets to be acquired pursuant to the Primm Acquisition Agreement in respect of
the three casino and employee hotel properties located in Primm, Nevada, and
(e) any future deeds of trust executed by Borrower or its relevant
Subsidiaries in accordance with Sections 6.12(c).

“Default” means
any event or condition that constitutes an Event of Default or that, with the
giving of any notice, the passage of time, or both, would be an Event of
Default.

“Default Rate”
means (a) when used with respect to Obligations other than Letter of
Credit Fees, an interest rate equal to (i) the Base Rate plus
(ii) the Applicable Rate, if any, applicable to Base Rate Loans plus
(iii) 2% per annum, provided, however, that with respect to
a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the
interest rate (including any Applicable Rate) otherwise applicable to such Loan
plus 2% per annum, and (b) when used with respect to Letter of Credit
Fees, a rate equal to the Applicable Rate plus 2% per annum.

“Defaulting Lender”
means any Lender that (a) has failed to fund any portion of the Loans,
participations in L/C Obligations or participations in Swing Line Loans
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required
to be paid by it hereunder within one Business Day of the date when 

 7
 

 

due, unless the subject of a good faith dispute, or
(c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.

“Delay Draw
Term B Commitments” means, as to each Lender, the commitment of that
Lender to make Delay Draw Term B Loans to Borrower pursuant to
Section 2.03. The amount of the Delay Draw Term B Commitment of each
Lender party hereto as of the Closing Date is set forth in the Lender Addendum
signed by that Lender

“Delay Draw
Term B Lenders” means those Lenders having Delay Draw Term B
Commitments or holding Delay Draw Term B Loans from time to time.

“Delay Draw
Term B Loan Amortization Amount” means, as to each relevant Quarterly
Payment Date, 0.25% of the aggregate initial principal balance of the Delay
Draw Term B Loans extended on the Primm Closing Date, provided that
if the Term Loan Maturity Date occurs on the seventh anniversary of the Closing
Date, then the Delay Draw Term B Loan Amortization Amount for each
Quarterly Payment Date following the sixth anniversary of the Closing Date
shall be one quarter of the principal balance of the Delay Draw Term B
Loans outstanding on the sixth anniversary of the Closing Date.

“Delay Draw
Term B Loans” means a Credit Extension by a Delay Draw Term B
Lender to Borrower under Section 2.03.

“Delay Draw
Term B Note” means a promissory note made by Borrower in favor of a
Delay Draw Term B Lender evidencing Delay Draw Term B Loans made by
that Lender, substantially in the form of Exhibit C.

“Delay Draw
Term B Percentage” means with respect to any Delay Draw Term B
Lender at any time, the percentage (carried out to the ninth decimal place) of
the Aggregate Delay Draw Term B Commitments represented by that Lender’s
Delay Draw Term B Commitment at such time. 
If the commitment of each Lender to make Delay Draw Term B Loans
have been terminated pursuant to Section 8.02 or if the Delay Draw
Term B Commitments have expired, then the Delay Draw Term B
Percentage of each Delay Draw Term B Lender shall be determined based on
the Delay Draw Term B Percentage of that Lender most recently in effect, giving
effect to any subsequent assignments. 
The Delay Draw Term B Percentage of each Lender party hereto as of
the Closing Date is set in its Lender Addendum, or in the Assignment and
Assumption pursuant to which that Delay Draw Term B Lender becomes a party
hereto.

“Disposition” or “Dispose”
means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction and each condemnation or other similar
involuntary taking of any property of a Person) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without recourse,
of any notes or accounts receivable or any rights and claims associated
therewith.

“Documentation Agent”
means U.S. Bank, National Association, when acting in its capacity as
Documentation Agent.

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

 8
 

 

“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

(g)           any
non-cash losses 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 and (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.

“Eligible Assignee”
means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuer and the Swing
Line Lender, and (ii) unless an Event of Default has occurred and is
continuing, Borrower (each such approval not to be unreasonably withheld or
delayed), provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include Borrower or any of Borrower’s Affiliates or
Subsidiaries.

“Environmental Laws”
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of 

 9
 

 

Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release
or threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the
Employee Retirement Income Security Act of 1974.

“ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control
with Borrower within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).

“ERISA Event”
means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
which constitutes grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon Borrower or any ERISA Affiliate.

“E-T-T Enterprises
L.L.C.” means E-T-T Enterprises L.L.C., a Nevada limited liability company,
its successors and permitted assigns.

“E-T-T Enterprises
L.L.C. Guaranty” means the guaranty executed on the Closing Date by E-T-T
Enterprises L.L.C. in favor of the Administrative Agent and the Lenders, as at
any time amended.

“E-T-T, Inc.”
means E-T-T, Inc., a Nevada corporation, its successors and permitted assigns.

 10
 

 

“E-T-T, Inc. Guaranty”
means the guaranty executed on the Closing Date by E-T-T, Inc. in favor of the
Administrative Agent and the Lenders, as at any time amended.

“Eurodollar Rate”
means for any Interest Period with respect to a Eurodollar Rate Loan, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at
such time for any reason, then the “Eurodollar Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.

“Eurodollar Rate Loan”
means a Loan that bears interest at a rate based on the Eurodollar Rate.

“Event of Default”
has the meaning specified in Section 8.01.

“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, exceeds $40,000,000.

“Excess Cash
Flow” means, for each Fiscal Year, Net Income for that Fiscal Year; plus

(a)           to
the extent deducted in arriving at such Net Income, depreciation expense,
amortization expense and other non-cash charges; plus

(b)           without
duplication as to (a), to the extent deducted in arriving at such Net Income,
any extraordinary or non-recurring non-cash losses and any non-cash loss
realized in connection with any Disposition; plus

(c)           the
net amount of any decrease (and minus the amount of any increase) in working
capital during that Fiscal Year; minus

(d)           to
the extent included in arriving at such Net Income, any extraordinary or
non-recurring non-cash gains during that Fiscal Year and any non-cash gain
realized in connection with any Disposition; minus

(e)           the
aggregate amount of Capital Expenditures made by Borrower or any of its
Subsidiaries in cash during that Fiscal Year (other than any Capital
Expenditures made to consummate the Primm Acquisition or the Sands
Acquisition); minus

 11
 

 

(f)            the
aggregate amount of principal payments made during that Fiscal Year in respect
of the Term Loans, Incremental Term Loans and (to the extent such payment is
accompanied by a corresponding optional reduction of Revolving Commitments)
Revolving Loans; minus

(g)           the
aggregate principal amount of all payments on Capital Leases and Synthetic
Leases (to the extent not deducted in arriving at Net Income) which are
allocable to principal (whether or not scheduled or required); minus

(h)           scheduled
payments in respect of other Indebtedness (other than of the types described in
(f) and (g)) described in clauses (a) and (d) of the definition of “Indebtedness;”
and minus

(i)            to
the extent not deducted in arriving at Net Income, Distributions made pursuant
to Section 7.06(d).

“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the L/C Issuer or
any other recipient of any payment to be made by or on account of any
obligation of Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed
by the United States or any similar tax imposed by any other jurisdiction in
which Borrower is located and (c) in the case of a Foreign Lender (other
than an assignee pursuant to a request by Borrower under Section 10.13),
any withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party hereto (or designates a new
Lending Office) or is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with
Section 3.01(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from Borrower with
respect to such withholding tax pursuant to Section 3.01(a).

“Existing Credit
Agreement” has the meaning specified in the recitals hereto.

“Exiting Lender”
has the meaning specified in the recitals hereto.

“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.

 12
 

 

“Fiscal Quarter”
means the fiscal quarter of Borrower ending on each March 31,
June 30, September 30, and December 31.

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

“Flamingo Paradise”
means Flamingo Paradise Gaming, LLC, a Nevada limited liability company, and
its successors and permitted assigns.

“Flamingo Paradise
Guaranty” means the guaranty executed on the Closing Date by Flamingo
Paradise Gaming, LLC, in favor of the Administrative Agent and the Lenders, as
at any time amended.

“Foreign Lender”
means any Lender that is organized under the laws of a jurisdiction other than
that in which Borrower is resident for tax purposes.  For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

“FRB” means the
Board of Governors of the Federal Reserve System of the United States.

“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

“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)
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, minus (h) Excess Cash.

“GAAP” means generally
accepted accounting principles in the United States set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession in the United
States, that are applicable to the circumstances as of the date of
determination, consistently applied.

 13
 

 

“Gaming Board” means,
collectively, (a) the Nevada Gaming Commission, (b) the Nevada State
Gaming Control Board, (c) Iowa Racing and Gaming Commission, (d) Iowa
Division of Criminal Investigation, Gaming Enforcement Bureau, (e) the
Missouri Gaming Commission and (f) any other Governmental Authority that
holds regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower and the Subsidiaries within its jurisdiction.

“Gaming Laws”
means all Laws pursuant to which any Gaming Board possesses regulatory,
licensing or permit authority over gambling, gaming or casino activities
conducted by Borrower and the Subsidiaries within its jurisdiction.

“General Subsidiary
Guaranty” means the guaranty executed by Cardivan Company, Nevada corporation,
Coral Coin, Inc., a Nevada corporation and Corral Country Coin, Inc., a Nevada
corporation, HGI-Lakeside, HGI-Mark Twain, HGI-St. Jo, and by each future
Subsidiary of Borrower which does not own real property, in favor of the
Administrative Agent and the Lenders, as at any time amended.

“Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central Bank).

“Guaranties”
means, collectively, (a) the Market Gaming Guaranty, (b) the Flamingo
Paradise Guaranty, (c) the E-T-T, Inc. Guaranty, (d) the E-T-T
Enterprises, L.L.C. Guaranty, (e) the General Subsidiary Guaranty,
(f) the Sands Guaranty, (g) when executed, the Primm Guaranty, and
(h) each other Guaranty of the Obligations executed by a Subsidiary in
favor of the Administrative Agent and the Lenders.

“Hazardous Materials”
means all explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.

“HGI–Casinos” has
the meaning specified in the recitals hereto.

“HGI–Lakeside”
means HGI–Lakeside, a Nevada corporation, its successors and permitted assigns.

“HGI–Mark Twain”
means HGI–Mark Twain, a Nevada corporation, its successors and permitted
assigns.

“HGI–St. Jo” means
HGI–St. Jo, a Nevada corporation, its successors and permitted assigns.

 14
 

 

“Incremental Term
Joinder Agreement” means an amendment or joinder agreement to this
Agreement to be entered into by Borrower, the Administrative Agent and any
Lenders providing Incremental Term Loans setting forth the terms, if any, by
which the pricing, maturity, amortization and other terms applicable to the
Incremental Term Loans differ from those applicable to the other Term Loans
(which variances shall be consistent with the definition of “Incremental Term
Loans” and the provisions of Section 2.16).

“Incremental Term
Loans” means any Term Loans made pursuant to Section 2.16 that are not
additional Term B Loans or Delay Draw Term B Loans.  The applicable interest rates, covenants and
other terms and conditions of any Incremental Term Loans shall be substantially
similar to the Term B Loans, provided that:

(a)           the
maturity date of any Incremental Term Loans may be later than, but shall be no
earlier than, the Term Loan Maturity Date and the weighted average life to
maturity of the Incremental Term Loans shall be no shorter than that of the
Term B Loans;

(b)           the
rate of amortization of any Incremental Term Loans shall not be greater than
the Term B Loans;

(c)           if
the interest rate margin applicable to the Incremental Term Loans is fixed for
the term thereof, such interest rate margin shall not be greater than the
interest rate margin applicable to the Term B Loans by more than 0.25% per
annum; and

(d)           if
the interest rate margin applicable to the Incremental Term Loans is variable
from time to time, it shall vary in accordance with a grid which is identical
to that set forth in the definition of “Applicable Rate” provided that the
various elements of the pricing grid may either be lower or may each be
increased by a rate per annum not in excess of 0.25% per annum.

Notwithstanding clauses (c) and (d) above,
the interest rate margins applicable to any Incremental Term Loans may be set
at higher levels agreed to by Borrower if the interest rate margins with
respect to the Revolving Loans, the Term B Loans and the Delay Draw Term
Loans are each increased by a rate per annum which is equal to the rate per
annum by which the interest rate margins for the Incremental Term Loans exceed
those otherwise payable pursuant to clauses (c) and (d), provided
that in determining the interest rate margin applicable to the existing Term B
Loans, Delay Draw Term Loans, the Revolving Loans and the Incremental Term
Loans, (x) original issue discount (“OID”) or upfront fees (which shall be
deemed to constitute like amounts of OID) payable by Borrower to the Lenders of
the Term B Loans and the Delay Draw Term B Loans, the existing Revolving
Loans or the Incremental Term Loans in the primary syndication thereof shall be
included (with OID being equated to interest based on an assumed four-year life
to maturity) and (y) customary arrangement or commitment fees payable to
the Arrangers (or their respective affiliates) in connection with the
Term B Loans and the Revolving Loans to one or more arrangers (or their
affiliates) of the Incremental Term Loans shall be excluded.

 15

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

(a)           all
obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;

(b)           all
direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;

(c)           net
obligations of such Person under any Swap Contract;

(d)           all
obligations of such Person to pay the deferred purchase price of property or
services (other than (i) trade accounts payable in the ordinary course of
business and (ii) any post-closing working capital or purchase price
adjustment set forth in the Sands Purchase Agreement or the Primm Purchase
Agreement);

(e)           indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;

(f)            Capital
Leases and Synthetic Lease Obligations;

(g)           all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h)           all
Contingent Obligations of such Person in respect of any of the foregoing.

For all purposes hereof,
the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount
of any net obligation under any Swap Contract on any date shall be deemed to be
the Swap Termination Value thereof as of such date.  The amount of any Capital Lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

“Indemnitees” has
the meaning specified in Section 10.04(b).

“Insolvency Event”
means any Event of Default of the type described in Section 8.01(f).

 16
 

 

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

(a)           EBITDA
for Borrower and its Subsidiaries for the four Fiscal Quarter period ending on
that date; to

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

“Interest Charges”
means, for any period, for Borrower and its Subsidiaries on a consolidated
basis, the sum of (a) all interest, premium payments, debt discount, fees,
charges and related expenses of Borrower and its Subsidiaries in connection
with borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense of
Borrower and its Subsidiaries with respect to such period under capital leases
that is treated as interest in accordance with GAAP.

“Interest Payment Date”
means, (a) as to any Loan other than a Base Rate Loan, the last day of
each Interest Period applicable to such Loan and the applicable Maturity Date, provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds
three months, the respective dates that fall every three months after the
beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the first
Business Day of each calendar month and the applicable Maturity Date.

“Interest Period”
means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months thereafter (or,
with the consent of each Lender making a Loan as part of the relevant Borrowing
of Eurodollar Rate Loans, nine months or twelve months thereafter), as selected
by Borrower in its Loan Notice, provided that:

(a)           any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day;

(b)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and

(c)           no
Interest Period for any Revolving Loan shall extend beyond the Revolving
Maturity Date.

(d)           no
Interest Period for any Term Loan shall extend beyond the Term Loan Maturity
Date (or, in the case of any Incremental Term Loans, any later date established
for the maturity thereof in the Incremental Term Joinder Agreement).

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Contingent Obligation

 17
 

 

or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person and any arrangement pursuant to which the investor issues Contingent
Obligations or accepts Indebtedness of such other Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit.  For purposes of covenant compliance, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.

“IP Rights” has
the meaning specified in Section 5.17.

“IRS” means the
United States Internal Revenue Service.

“ISP” means, with
respect to any Letter of Credit, the “International Standby Practices 1998”
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).

“Issuer Documents”
means with respect to any Letter of Credit, the Letter Credit Application, and
any other document, agreement and instrument entered into by the L/C Issuer and
Borrower (or any Subsidiary) or in favor the L/C Issuer and relating to any
such Letter of Credit.

“Joint Lead Arrangers”
means Lehman Brothers Inc. and Wachovia Capital Markets, LLC.

“Laws” means,
collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

“L/C Advance”
means, with respect to each Lender, such Lender’s funding of its participation
in any L/C Borrowing in accordance with its Revolving Percentage.

“L/C Borrowing”
means an extension of credit resulting from a drawing under any Letter of
Credit which has not been reimbursed on the date when made or refinanced as a
Borrowing.

“L/C Credit Extension”
means, with respect to any Letter of Credit, the issuance thereof or extension
of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means
Bank of America in its capacity as issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit hereunder.

“L/C Obligations”
means, as at any date of determination, the aggregate undrawn amount of all
outstanding Letters of Credit plus the aggregate of all Unreimbursed
Amounts, including all L/C Borrowings. For purposes of computing the amount
available to be drawn under any

 18
 

 

Letter of Credit, the amount of such Letter of Credit
shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

“Lead Arranger Fee
Letter” means the letter agreement, dated as of October 31, 2006,
among Borrower and the Joint Lead Arrangers relating to certain fees.

“Lender” has the
meaning specified in the introductory paragraph hereto and, as the context requires,
includes the Swing Line Lender.

“Lender Addendum”
means a Lender Addendum, substantially in the form of Exhibit H, to be executed
and delivered by such Lender on or prior to the Closing Date as provided in
Section 10.20.

“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify Borrower and the Administrative Agent.

“Letter of Credit”
means any standby letter of credit issued hereunder and shall include the
Existing Letters of Credit.

“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

“Letter of Credit
Expiration Date” means the day that is five Business Days prior to the
Revolving Maturity Date (or, if such day is not a Business Day, the next
preceding Business Day).

“Letter of Credit Fee”
has the meaning specified in Section 2.05(i).

“Letter of Credit
Sublimit” means an amount equal to the lesser of (a) $25,000,000 or
(b) the Aggregate Revolving Commitments. 
The Letter of Credit Sublimit is part of, and not in addition to, the
Aggregate Revolving Commitments.

“License Revocation”
means the revocation, failure to renew or suspension of, or the appointment of
a receiver, supervisor or similar official with respect to, any casino,
gambling or gaming license issued by any Gaming Board covering any casino or
gaming facility of Borrower or any of its Subsidiaries.

“Lien” means any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge, or preference, priority or other security
interest or preferential arrangement in the nature of a security interest of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title
to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

 19
 

 

“Loan” means an
extension of credit by a Lender to Borrower under Article II in the form of a
Loan or a Swing Line Loan.

“Loan Documents”
means this Agreement, each Note, each Issuer Document, each Secured Swap Contract,
the Lead Arranger Fee Letter, the Administrative Agent Fee Letter, each
Guaranty, and each Collateral Document.

“Loan Notice”
means a notice of (a) a Borrowing, (b) a conversion of Loans from one
Type to the other, or (c) a continuation of Eurodollar Rate Loans,
pursuant to Section 2.04(a), which, if in writing, shall be substantially
in the form of Exhibit D.

“Loan Parties”
means, collectively, Borrower and each Subsidiary of the Borrower.

“Market Gaming”
means Market Gaming, Inc., a Nevada corporation, its successors and permitted
assigns.

“Market Gaming
Guaranty” means the guaranty executed on the Closing Date by Market Gaming
in favor of the Administrative Agent and the Lenders, as at any time amended.

“Material Adverse
Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or
contingent), condition (financial or otherwise) or prospects of Borrower and
its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.

“Maturity Date”
means, as the context requires, the Revolving Maturity Date or the Term Loan
Maturity Date (or in the case of any Incremental Term Loans, any later date
established in the Incremental Term Joinder Agreement).

“Moody’s” means
Moody’s Investors Service, Inc., and any successor thereto.

“Multiemployer Plan”
means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

“Negative Pledge”
means a Contractual Obligation that contains a covenant binding on Borrower or
any of the Subsidiaries that prohibits Liens on any of its or their Property,
other than (a) any such covenant contained in a Contractual Obligation
granting a Lien permitted under Section 7.01 which affects only the
Property that is the subject of such permitted Lien and (b) any such
covenant that does not apply to Liens securing the Obligations.

“Net Cash
Proceeds” means:

(a)           with
respect to any Disposition by Borrower or any of its Subsidiaries, the excess,
if any, of:

 20
 

 

(i)            the
sum of cash and cash equivalents received in connection with such transaction
(including any cash or cash equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over

(ii)           the
sum of (A) the principal amount of any Indebtedness that is secured by the
applicable asset and that is required to be repaid in connection with such
transaction (other than Indebtedness under the Loan Documents), (B) the
reasonable and customary out-of-pocket expenses incurred by Borrower or such
Subsidiary in connection with such transaction, (C) income taxes
reasonably estimated to be actually payable within two years of the date of the
relevant transaction as a result of any gain recognized in connection
therewith; and (D) reserves established by Borrower or any of its Subsidiaries
in accordance with GAAP against liabilities reasonably anticipated and directly
attributable to such Disposition; provided that, if the amount of any estimated
taxes pursuant to subclause (C) exceeds the amount of taxes actually
required to be in such Disposition during such two year period, or if the
amount of the reserves established pursuant to clause (D) exceed the
amount of the liabilities actually realized in cash during such two year period
then, in each case, such excess shall be Net Cash Proceeds (and subject to the
provisions of Section 2.07(f) shall be paid to the Lenders for application to
the Obligations within thirty days following the last day of such two year
period);

(b)           with
respect to the sale or issuance of any Equity Interest by Borrower or any of
its Subsidiaries, or the incurrence or issuance of any Indebtedness by Borrower
or any of its Subsidiaries, the excess of (i) the sum of the cash and cash
equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by Borrower or such Subsidiary in connection
therewith.

“Net Income”
means, for any period, with respect to any Person and its Subsidiaries, the
consolidated net income of such Person and its Subsidiaries for that period
determined in accordance with GAAP, consistently applied.

“Notes” means,
collectively, the Revolving Notes, the Term B Notes, the Delay Draw Term
Notes, the Swing Line Note and the promissory notes evidencing any Incremental
Term Loans.

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under the Revolving Commitments, in respect
of the Term Loans or under any Loan Document (including without limitation any
Secured Swap Contract) or otherwise with respect to any Loan or Letter of
Credit, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or
against any Loan Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.

 21
 

 

“Organization
Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or
articles of formation or organization and operating agreement; and
(c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement
of formation or organization and any agreement, instrument, filing or notice
with respect thereto filed in connection with its formation or organization
with the applicable Governmental Authority in the jurisdiction of its formation
or organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes”
means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.

“Outstanding Amount”
means (i) with respect to Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans and Swing Line Loans, as the
case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by Borrower of Unreimbursed
Amounts.

“Participant” has
the meaning specified in Section 10.06(d).

“PBGC” means the
Pension Benefit Guaranty Corporation.

“Pension Plan”
means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject
to Title IV of ERISA and is sponsored or maintained by Borrower or any
ERISA Affiliate or to which Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other
plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

“Percentage” means
with respect to any Lender at any time, and as the context requires,
(a) that Lender’s Revolving Percentage, if any, (b) that Lender’s
Delay Draw Term B Loan Percentage or (c) that Lender’s percentage
(carried out to the ninth decimal place) of the then outstanding principal
amount of the Term B Loans, the Delay Draw Term B Loans or any
Incremental Term Loans, as applicable.

“Permitted Tax
Distributions” means distributions by Borrower to its shareholders made in
respect of each tax year in an aggregate amount equal to the aggregate tax
liabilities of its shareholders attributable to the taxable income of Borrower
for that tax year (assuming such payments are due at the Tax Rate, and
regardless of the actual tax status of such shareholders and any offsetting
amounts available to such shareholders by reason of their other tax
attributes), provided that in respect of each of the first three
quarterly tax payments in respect of any tax

 22
 

 

year, such distributions may be at a rate equal to
110% of the amount of income tax calculable in respect of the taxable income of
Borrower for the preceding tax year.

“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee
benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by Borrower or, with respect to any such plan that is subject to
Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Pledge Agreement”
means the pledge agreement executed and delivered by Borrower and its
Subsidiaries on the Closing Date with respect to all Equity Interests held by
them in their respective direct Subsidiaries, either as originally executed or
as it may from time to time be supplemented, modified, amended, extended or
supplanted.

“Preferred Ship
Mortgage” means the first preferred ship mortgage executed by HGI Lakeside,
a Nevada corporation, with respect to the motor vessel Osceola.

“Pricing Period”
means the period of three months beginning on the first day of each March,
June, September and December during the term of this Agreement.

“Primadonna” has
the meaning specified in the recitals hereto.

“Primm Acquisition”
has the meaning specified in the recitals hereto.

“Primm Assets” has
the meaning specified in the recitals hereto.

“Primm Closing Credit
Extensions” means Credit Extensions made on the Primm Closing Date
consisting of Revolving Loans in an aggregate principal amount not to exceed
$75,000,000 and the Delay Draw Term Loans.

“Primm Closing Date”
means the date upon which the Primm Acquisition is consummated and the
conditions set forth in Section 4.03 are satisfied.

“Primm Guaranty”
means the guaranty executed on the Primm Closing Date by Primadonna and each
other entity acquired by Borrower in the Primm Acquisition in favor of the
Administrative Agent and the Lenders, as at any time amended.

“Primm Material
Adverse Effect” means any circumstance, development, change in, or effect
on the Primadonna and the Convenience Store (as defined in the Primm Purchase
Agreement) that, individually or in the aggregate with any other circumstances,
developments, changes in, or effects on, Primadonna and the Convenience Store
is, or is reasonably expected to be, directly or indirectly, materially adverse
to (a) the overall business and financial condition of Primadonna and the
Convenience Store taken as a single enterprise, or (b) the ability of New
York-New York Hotel and Casino LLC and PRMA to consummate the transactions
contemplated by the Primm Purchase Agreement. 
For the avoidance of doubt, a circumstance, development, change in, or
effect on Primadonna and the Convenience Store is not to be considered in
determining whether there has been a Primm Material Adverse Effect if
(i) such

 23
 

 

circumstance, development or change affects the gaming
industry generally, (ii) such circumstance, development, change or effect
is the result of general economic conditions, or (iii) such circumstance,
development, change or effect results from any act of terrorism, commencement or
escalation of armed hostilities in the U.S. or internationally or declaration
of war by the U.S. Congress. 
Accordingly, a Primm Material Adverse Effect does not include matters
such as legal, regulatory, economic, industry, political, industrial, climatic,
geographic or demographic conditions, factors, changes or circumstances or
financial, banking or capital market changes which are related to companies,
businesses or premises generally (domestically or internationally) or to
companies, businesses or premises in the gaming, recreational, resort,
entertainment, leisure or similar sectors within the State of Nevada,
throughout the United States or internationally.  For example, a national or local economic
recession or proposed legislation involving smoking areas in casinos throughout
Nevada or proposed legislative changes respecting expansion of gaming in other
jurisdictions, including California, is not a Primm Material Adverse Effect.

“Primm Purchase
Agreement” means the Purchase Agreement dated as of October 31, 2006 among
New York-New York Hotel & Casino, LLC, PRMA Land Development Company the
Primadonna Company, LLC and Borrower, as amended through the date of this
Agreement.

“Principals” means
Edward J. Herbst, Timothy P. Herbst and Troy D. Herbst.

“PRMA” has the
meaning specified in the recitals hereto.

“Property” means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.

“Quarterly Payment
Date” means the last Business Day of each March, June, September and December.

“Register” has the
meaning specified in Section 10.06(c).

“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.

“Request for Credit
Extension” means (a) with respect to a Borrowing, conversion or
continuation of Loans, a Loan Notice, (b) with respect to an L/C Credit
Extension, a Letter of Credit Application, and (c) with respect to a Swing
Line Loan, a Swing Line Loan Notice.

“Requisite Lenders”
means, as of any date of determination, those of the Lenders collectively
holding more than 50% of the Aggregate Revolving Commitments and the then
outstanding principal amount of the Term Loans (or, if the Revolving
Commitments have been terminated, Lenders holding in the aggregate more than
50% of the Total Outstandings) with the aggregate amount of each Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans
being deemed “held” by that Lender for purposes of this definition,

 24
 

 

provided that the Revolving
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Requisite Lenders.

“Responsible Officer”
means the chief executive officer, president, chief financial officer,
treasurer or assistant treasurer of a Loan Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other Equity Interest of
Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such capital stock or other Equity Interest, or on account of any return
of capital to Borrower’s stockholders, partners or members (or the equivalent
Person thereof).

“Revolving Commitment”
means, as to each Lender, its obligation to (a) make Revolving Loans to
Borrower pursuant to Section 2.01, (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth in the relevant Lender’s Lender Addendum or in the Assignment and
Assumption pursuant to which that Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.  The amount of the Term B
Commitment of each Lender as of the Closing Date is set forth in the Lender
Addendum signed by that Lender.

“Revolving Lenders”
means, those of the Lenders having Revolving Commitments.

“Revolving Loans”
means each Loan made under the Revolving Commitment.

“Revolving Maturity
Date” means December 2, 2011 if Borrower has not refinanced its 8-1/8%
Senior Subordinated Notes due 2012 on or prior to December 1, 2011 and
otherwise on the sixth anniversary of the Closing Date.

“Revolving Note”
means a promissory note made by Borrower in favor of a Lender evidencing
Revolving Loans made by that Lender, substantially in the form of
Exhibit E.

“Revolving Percentage”
means with respect to any Revolving Lender at any time, the percentage (carried
out to the ninth decimal place) of the Aggregate Revolving Commitments
represented by that Lender’s Revolving Commitment at such time.  If the commitment of each Revolving Lender to
make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02 or if the
Revolving Commitments have expired, then the Revolving Percentage of each
Revolving Lender shall be determined based on the Revolving Percentage of that
Lender most recently in effect, giving effect to any subsequent assignments.

 25
 

 

“Route Agreements”
means written agreements entered into by Borrower or any of its Subsidiaries
with another Person that provide for the installation and operation of slot
machines, video poker machines or other electronic gaming devises at premises
owned or operated by such Person.

“S&P” means
Standard & Poor’s Ratings Services, a division of McGraw Hill Companies,
Inc., and any successor thereto.

“Sands Acquisition”
has the meaning specified in the recitals hereto.

“Sands Guaranty”
means the guaranty executed on the Closing Date by Sands Regent and each of its
Subsidiaries in favor of the Administrative Agent and the Lenders, as at any
time amended.

“Sands Material
Adverse Effect” means any circumstance, development, event, condition,
effect or change that, individually or when taken together with all other
circumstances, developments, events, conditions, effects and changes, had or
has or, with the passage of time, would be reasonably likely to have a material
adverse effect on (a) the ability of the Sands Regent to consummate the
merger contemplated by the Sands Acquisition Agreement on or prior to the
Outside Date (as defined in the Sands Purchase Agreement) or (b) the
financial condition, business, assets or results of operations of the Sands
Regent and its Subsidiaries, taken as a whole, other than (i) the effects,
after May 16, 2006, of changes that are generally applicable to the gaming
industry, (ii) the effects, after May 16, 2006, of changes in general economic
or market conditions, (in the case of each of clauses (i) and (ii),
other than any change that had or has or with the passage of time, would be
reasonably likely to have a significantly disproportionate adverse effect on
the Sands Regent and its Subsidiaries, taken as a whole), (iii) any change
in the Sands Regent’s stock price or trading volume, in and of itself, or
(iv) the effect of the public announcement of this Sands Purchase
Agreement, the transactions contemplated thereby or the consummation of such
transactions.

“Sands Purchase
Agreement” means that certain Agreement and Plan of Merger by and among
Sands Regent, Borrower and HGI, as heretofore amended.

“Sands Regent” has
the meaning specified in the recitals hereto.

“SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

“Secured Swap Contract”
means each Swap Contract to which Borrower is now or hereafter a party with any
Lender or its Affiliates.

“Security Agreement”
means the amended and restated security agreement executed and delivered by
Borrower and each of its Subsidiaries, either as originally executed or as it
may from time to time be supplemented, modified, amended, extended or
supplanted.

“Senior Debt”
means, as of each date of determination, Funded Debt as of that date minus
Subordinated Debt as of that date.

 26
 

 

“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, to (b) EBITDA for Borrower and its
Subsidiaries for the four Fiscal Quarter period then ended.

“Senior Subordinated
Notes” means, collectively, Borrower’s (a) 8-1/8% Senior Subordinated
Notes due 2012, (b) 7% Senior Subordinated Notes due 2014 and (c) any
additional senior subordinated notes which may thereafter be issued pursuant to
Section 7.03(c).

“Solvent” means,
as to any Person, as of the date of determination that (a) the fair
saleable value of the assets of such Person, both at a fair valuation and at
present fair saleable value, will as of such date, exceed its liabilities,
including its probable liability in respect of contingent liabilities,
(b) such Person has sufficient capital for the conduct its business as
presently conducted and as proposed to be conducted and (c) such Person
has not incurred debts, and does not intend to incur debts, beyond its ability
to pay such debts as they mature.  For
purposes of this definition, “debt” means any liability on a claim, and “claim”
means (x) a right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, or (y) a
right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.  With respect to
any such contingent liabilities, such liabilities shall be computed at the
amount which, in light of all the facts and circumstances existing at the time,
represents the present value of the amount which can reasonably be expected to
become an actual or matured liability.

“Subordinated Debt”
means the Senior Subordinated Notes and any additional or replacement
Indebtedness that is contractually subordinated to the Loans and that is
permitted by Section 7.03.

“Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of Borrower.

“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the

 27
 

 

terms and conditions of, or governed by, any form of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related
schedules, a “Master Agreement”), including any such obligations or
liabilities under any Master Agreement.

“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating
to such Swap Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

“Swing Line” means
the revolving credit facility made available by the Swing Line Lender pursuant
to Section 2.06.

“Swing Line Borrowing”
means a borrowing of a Swing Line Loan pursuant to Section 2.06.

“Swing Line Lender”
means Bank of America in its capacity as provider of Swing Line Loans, or any
successor swing line lender hereunder.

“Swing Line Loan”
has the meaning specified in Section 2.06(a).

“Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.06(b), which, if in writing, shall be substantially in the form
of Exhibit F.

“Swing Line Note”
means a promissory note made by Borrower in favor of the Swing Line Lender in
connection with the Swing Line.

“Swing Line Sublimit”
means an amount equal to the lesser of (a) $10,000,000 and (b) the
Aggregate Revolving Commitments.  The
Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving
Commitments.

“Syndication Agents”
means Lehman Commercial Paper, Inc. and Wachovia Bank, National Association, in
their capacity as Syndication Agents.

“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

“Tax Rate” means
the maximum combined United States federal and Nevada state annual tax rate
applicable during the relevant period for amounts included in taxable income by
an individual resident of Nevada.

 28
 

 

“Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.

“Term B
Commitments” means, as to each Lender, the commitment of that Lender to
make Term B Loans to Borrower pursuant to Section 2.02 or
Section 2.16.  The amount of the
Term B Commitment of each Lender as of the Closing Date is set forth in the
Lender Addendum signed by that Lender.

“Term B Lenders”
means those of the Lenders having Term B Commitments or holding Term B
Loans from time to time.

“Term B Loan
Amortization Amount”  means, as to
each Quarterly Payment Date, 0.25% of the aggregate initial principal balance
of the Term B Loans extended on the Closing Date, provided that
(a) the Term B Loan Amortization Amount shall include 0.25% of the
aggregate initial amount of any additional Term B Loans extended pursuant
to 2.16, and (b) if the Term Loan Maturity Date occurs on the seventh
anniversary of the Closing Date, then the Term B Loan Amortization Amount
for each Quarterly Payment Date following the sixth anniversary of the Closing
Date shall be one quarter of the principal balance of the Term B Loans
outstanding on the sixth anniversary of the Closing Date.

“Term B Loans”
means the Credit Extensions by a Term B Lender to Borrower under
Section 2.02 or any Credit Extensions consisting of additional Term B
Loans made pursuant to Section 2.16.

“Term B Note”
means a promissory note made by Borrower in favor of a Term B Lender
evidencing Term B Loans made by that Lender, substantially in the form of
Exhibit G.

“Term Loan Maturity
Date” means December 2, 2011 if Borrower has not refinanced its 8-1/8%
Senior Subordinated Notes due 2012 on or prior to December 1, 2011 and otherwise
on the date that is the seventh anniversary of the Closing Date.

“Term Loans”
means, collectively, each of the Term B Loans, the Delay Draw Term B
Loans and any Incremental Term Loans.

“Terrible’s Hotel
& Casino” means Terrible’s Hotel and Casino, located at 4100 Paradise
Road, Las Vegas, Nevada.

“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, to
(b) EBITDA for Borrower and its Subsidiaries for the four Fiscal Quarter
period then ended.

“Total Outstandings”
means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

“Trademark License
Agreement” means the Trademark License Agreement dated as of
August 24, 2001 between Terrible Herbst, Inc., a Nevada corporation, and
Borrower, as Licensee.

 29
 

 

“Trademark Security
Agreement” means the trademark security agreement executed and delivered by
Borrower and each of its Subsidiaries, either as originally executed or as it
may from time to time be supplemented, modified, amended, extended or
supplanted.

“Type” means, with
respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“Unfunded Pension
Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

“United States”
and “U.S.” mean the United States of America.

“Unreimbursed Amount”
has the meaning specified in Section 2.05(c)(i).

“Unused Revolver
Availability” means, for each date of determination, the actual daily
amount by which the Aggregate Revolving Commitments exceed the sum of
(i) the Outstanding Amount of Revolving Loans (but not the Swing Line
Loans) and (ii) the Outstanding Amount of L/C Obligations.

1.02.        Other
Interpretive Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

(a)           The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  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.”  Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used
in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
the Loan Document in which such references appear, (v) any reference to
any law shall include all statutory and regulatory provisions consolidating,
amending replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation
as amended, modified or supplemented from time to time, and (vi) the words
“asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 30

 

(b)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”

(c)           Section headings herein and in the
other Loan Documents are included for convenience of reference only and shall
not affect the interpretation of this Agreement or any other Loan Document.

1.03.        Accounting
Terms.

(a)           Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either Borrower or the Requisite Lenders shall so request,
the Administrative Agent, the Lenders and Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Requisite Lenders), provided  that, until so amended,
(i) such ratio or requirement shall continue to be computed in accordance
with GAAP prior to such change therein and (ii) Borrower shall provide to
the Administrative Agent and the Lenders financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

1.04.        Rounding.  Any financial ratios required to be
maintained by Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

1.05.        Times
of Day.  Unless otherwise
specified, all references herein to times of day shall be references to Las
Vegas, Nevada local time.

1.06.        Letter
of Credit Amounts.  Unless
otherwise specified, all references herein to the amount of a Letter of Credit
at any time shall be deemed to mean the maximum face amount of such Letter of
Credit after giving effect to all increases thereof contemplated by such Letter
of Credit or the Issuer Documents related thereto, whether or not such maximum
face amount is in effect at such time.

 31
 

 

ARTICLE  II.

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01.        Revolving
Loans.  Subject to the terms
and conditions set forth herein, each Revolving Lender severally agrees to make
Revolving Loans to Borrower from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of that Lender’s Revolving Commitment, provided,
that after giving effect to any Borrowing:

(i)            the Aggregate Revolving Outstandings
shall not exceed the Aggregate Revolving Commitments; and

(ii)           the aggregate Outstanding Amount of
the Revolving Loans of any Lender, plus that Lender’s Revolving
Percentage of the Outstanding Amount of all L/C Obligations, plus that
Lender’s Revolving Percentage of the Outstanding Amount of all Swing Line Loans
shall not exceed that Lender’s Revolving Commitment.

Within the limits of each Revolving Commitment, and
subject to the other terms and conditions hereof, Borrower may borrow under
this Section 2.01, prepay under Section 2.07, and reborrow under this
Section 2.01.  Revolving Loans may
be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

2.02.        Term B
Loans.  Subject to the terms
and conditions set forth herein, each Term B Lender severally agrees to
make a Term B Loan to Borrower on the Closing Date in the amount of its
Term B Commitment, the aggregate amount of which is $375,000,000.  Term B Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.  No Term B Loan which is at any time
prepaid or repaid may be reborrowed, but each Term B Loan may be
converted, in whole or in part, to a Term B Loan of another Type, or
continued from time to time, in the manner contemplated by Section 2.04.

2.03.        Delay
Draw Term B Loans.  Subject to
the terms and conditions set forth herein, each Delay Draw Term B Lender
severally agrees to make a Delay Draw Term B Loan to Borrower on the Primm
Closing Date in the amount of its Delay Draw Term B Commitment, provided
that no Delay Draw Term B Lender shall be obligated to make its Delay Draw
Term B Loan if the Primm Closing Date has not occurred prior to the date which
is the one year anniversary of the Closing Date.  Delay Draw Term B Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.  No Delay Draw Term B Loan which is at
any time prepaid or repaid may be reborrowed, but each Delay Draw Term B
Loan may be converted, in whole or in part, to a Delay Draw Term B Loan of
another Type, or continued from time to time, in the manner contemplated by
Section 2.04.

2.04.        Borrowings,
Conversions and Continuations of Loans.

(a)           Each Borrowing, each conversion of
Loans from one Type to the other, and each continuation of Eurodollar Rate
Loans (whether such Borrowing consists of Revolving Loans or Term Loans) shall
be made upon Borrower’s irrevocable notice to the Administrative Agent, which
may be given by telephone.  Each such
notice must be

 32
 

 

received by the Administrative Agent not later than
11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by Borrower pursuant
to this Section 2.04(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of Borrower. 
Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Except as
provided in Sections 2.05(c) and 2.06(c), each Borrowing of or
conversion to Base Rate Loans shall be in a principal amount of $2,000,000 or a
whole multiple of $1,000,000 in excess thereof. 
Each Loan Notice (whether telephonic or written) shall specify
(i) whether the Loan Notice relates to the Revolving Commitments, the
Term B Loans, the Delay Draw Term B Loans or Incremental Loans,
(ii) whether Borrower is requesting a Borrowing, a conversion of Loans
from one Type to the other, or a continuation of Eurodollar Rate Loans,
(iii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iv) the principal amount
of Loans to be borrowed, converted or continued, (v) the Type of Loans to
be borrowed or to which existing Loans are to be converted, and (vi) if
applicable, the duration of the Interest Period with respect thereto.  If Borrower fails to specify a Type of Loan
in a Loan Notice or if Borrower fails to give a timely notice requesting a
conversion or continuation, then the applicable Loans shall be made as, or converted
to, Base Rate Loans.  Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans.  If Borrower requests a Borrowing
of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

(b)           Following receipt of a Loan Notice,
the Administrative Agent shall promptly notify each relevant Lender of the amount
of its Percentage of the applicable Loans, and if no timely notice of a
conversion or continuation is provided by Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base
Rate Loans described in the preceding subsection.  In the case of a Borrowing, each Lender
having a Percentage of the relevant Commitments shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at
the Administrative Agent’s Office not later than 1:00 p.m. on the Business
Day specified in the applicable Loan Notice. 
Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit Extension,
Section 4.01), the Administrative Agent shall make all funds so received
available to Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of Borrower on the books of Bank of
America with the amount of such funds or (ii) wire transfer of such funds,
in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by Borrower; provided, however,
that if, on the date the Loan Notice with respect to such Borrowing is given by
Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any such
L/C Borrowings, and second, shall be made available to Borrower as
provided above.

 33
 

 

(c)           Except as otherwise provided herein,
a Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan. 
During the existence of a Default, no Loans may be requested as,
converted to or continued as Eurodollar Rate Loans without the consent of the
Requisite Lenders.

(d)           The Administrative Agent shall
promptly notify Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify Borrower and the Lenders
of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e)           After giving effect to all
Borrowings, all conversions of Loans from one Type to the other, and all
continuations of Loans as the same Type, there shall not be more than fifteen
Interest Periods in effect with respect to Loans.

2.05.        Letters
of Credit.

(a)           The Letter of Credit Commitment.

(i)            Each Letter of Credit heretofore
issued and remaining outstanding under the Existing Credit Agreement shall be
deemed to be outstanding hereunder as of the Closing Date.  Subject to the terms and conditions set forth
herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the
Revolving Lenders set forth in this Section 2.05, (1) from time to
time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of
Borrower, and to amend or extend Letters of Credit previously issued by it, in
accordance with subsection (b) below, and (2) to honor drawings under
the Letters of Credit; and (B) the Revolving Lenders severally agree to
participate in Letters of Credit issued for the account of Borrower and any
drawings thereunder in accordance with their respective Revolving Percentages, provided
that after giving effect to any L/C Credit Extension with respect to any Letter
of Credit:

(x)            the
Aggregate Revolving Outstandings shall not exceed the Aggregate Revolving
Commitments;

(y)           the
aggregate Outstanding Amount of the Revolving Loans of any Lender, plus
that Lender’s Revolving Percentage of the Outstanding Amount of all L/C
Obligations, plus that Lender’s Revolving Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed that Lender’s Revolving
Commitment; and

(z)            the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit.

Each
request by Borrower for the issuance or amendment of a Letter of Credit shall
be deemed to be a representation by Borrower that the L/C Credit Extension

 34
 

 

so
requested complies with the conditions set forth in the proviso to the
preceding sentence.

Within
the foregoing limits, and subject to the terms and conditions hereof, Borrower’s
ability to obtain Letters of Credit shall be fully revolving, and accordingly
Borrower may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and
reimbursed.

(ii)           The L/C Issuer shall not issue any
Letter of Credit, if:

(A)          subject to Section 2.05(b)(iii),
the expiry date of such requested Letter of Credit would occur more than 180
days (for any commercial letter of credit) or twelve months (for any standby
letter of credit) after the date of issuance or last extension, unless all of
the Revolving Lenders have approved such expiry date; or

(B)           the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Expiration Date, unless
all the Revolving Lenders have approved such expiry date.

(iii)          The L/C Issuer shall not be under any
obligation to issue any Letter of Credit if:

(A)          any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the L/C
Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems
material to it;

(B)           the issuance of such Letter of Credit
would violate one or more policies of the L/C Issuer;

(C)           except as otherwise agreed by the
Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial
face amount less than $100,000, in the case of a commercial Letter of Credit,
or $500,000, in the case of a standby Letter of Credit;

(D)          such Letter of Credit is to be
denominated in a currency other than Dollars; or

 35
 

 

(E)           a default of any Revolving Lender’s
obligations to fund under Section 2.05(c) exists or any Revolving Lender
is at such time a Defaulting Lender hereunder, unless the L/C Issuer has
entered into satisfactory arrangements with Borrower or such Revolving Lender
to eliminate the L/C Issuer’s risk with respect to such Revolving Lender.

(iv)          The L/C Issuer shall not amend any
Letter of Credit if the L/C Issuer would not be permitted at such time to issue
such Letter of Credit in its amended form under the terms hereof.

(v)           The L/C Issuer shall be under no
obligation to amend any Letter of Credit if (A) the L/C Issuer would have
no obligation at such time to issue such Letter of Credit in its amended form
under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.

(vi)          The L/C Issuer shall act on behalf of
the Revolving Lenders with respect to any Letters of Credit issued by it and
the documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent in
Article IX with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in Article IX included the
L/C Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuer.

(b)           Procedures for Issuance and
Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i)            Each Letter of Credit shall be
issued or amended, as the case may be, upon the request of Borrower delivered
to the L/C Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of Borrower.  Such
Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days
(or such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the L/C Issuer:  (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to
be presented by such beneficiary in case of any drawing thereunder; and
(G) such other matters as the L/C Issuer may require.  In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in

 36
 

 

form and detail satisfactory to the L/C Issuer
(A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may
require.  Additionally, Borrower shall
furnish to the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

(ii)           Promptly after receipt of any Letter
of Credit Application, the L/C Issuer will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received a
copy of such Letter of Credit Application from Borrower and, if not, the L/C
Issuer will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written
notice from any Revolving Lender, the Administrative Agent or any Loan Party,
at least one Business Day prior to the requested date of issuance or amendment
of the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the L/C Issuer a risk participation in such Letter of Credit
in an amount equal to the product of such Lender’s Revolving Percentage times
the amount of such Letter of Credit.

(iii)          If Borrower so requests in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an “Auto-Extension Letter of Credit”), provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued.  Unless
otherwise directed by the L/C Issuer, Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration Date, provided,
however, that the L/C Issuer shall not permit any such extension if
(A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof (by reason of the provisions of
clause (ii) or (iii) of Section 2.05(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice Date
(1) from the Administrative Agent that the Requisite Lenders have

 37
 

 

elected not to permit such extension or (2) from
the Administrative Agent, any Lender or Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied, and
in each such case directing the L/C Issuer not to permit such extension.

(iv)          Promptly after its delivery of any
Letter of Credit or any amendment to a Letter of Credit to an advising bank
with respect thereto or to the beneficiary thereof, the L/C Issuer will also
deliver to Borrower and the Administrative Agent a true and complete copy of
such Letter of Credit or amendment.  The
Administrative Agent agrees to supply each Lender with a copy of each notice
relating to the issuance of and amendment to each Letter of Credit.

(c)           Drawings and Reimbursements;
Funding of Participations.

(i)            Upon receipt from the beneficiary of
any Letter of Credit of any notice of a drawing under such Letter of Credit,
the L/C Issuer shall notify Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), Borrower shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing.  If Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s Revolving Percentage
thereof.  In such event, Borrower shall
be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on
the Honor Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.05 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized portion
of the Aggregate Revolving Commitments and the conditions set forth in
Section 4.02 (other than the delivery of a Loan Notice).  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.05(c)(i) may be given by
telephone if immediately confirmed in writing, provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.

(ii)           Each Lender shall upon any notice
pursuant to Section 2.05(c)(i) make funds available to the Administrative
Agent for the account of the L/C Issuer at the Administrative Agent’s Office in
an amount equal to its Revolving Percentage of the Unreimbursed Amount not
later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.05(c)(iii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Loan to Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the L/C Issuer.

(iii)          With respect to any Unreimbursed
Amount that is not fully refinanced by a Borrowing of Base Rate Loans because
the conditions set forth in

 38
 

 

Section 4.02 cannot be satisfied or for any other
reason, Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing
in the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate.  In
such event, each Revolving Lender’s payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.05(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Revolving Lender in satisfaction of its
participation obligation under this Section 2.05.

(iv)          Until each Revolving Lender funds its
Loan or L/C Advance pursuant to this Section 2.05(c) to reimburse the L/C
Issuer for any amount drawn under any Letter of Credit, interest in respect of
such Lender’s Revolving Percentage of such amount shall be solely for the
account of the L/C Issuer.

(v)           Each Revolving Lender’s obligation to
make Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under
Letters of Credit, as contemplated by this Section 2.05(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; provided, however, that each Revolving
Lender’s obligation to make Loans pursuant to this Section 2.05(c) is
subject to the conditions set forth in Section 4.02 (other than delivery
by Borrower of a Loan Notice).  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
Borrower to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.

(vi)          If any Revolving Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Revolving Lender pursuant to the foregoing
provisions of this Section 2.05(c) by the time specified in
Section 2.05(c)(ii), the L/C Issuer shall be entitled to recover from such
Revolving Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a
rate determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation.  A certificate of
the L/C Issuer submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.

 39
 

 

(d)           Repayment of Participations.

(i)            At any time after the L/C Issuer has
made a payment under any Letter of Credit and has received from any Revolving
Lender such Revolving Lender’s L/C Advance in respect of such payment in
accordance with Section 2.05(c), if the Administrative Agent receives for
the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Revolving Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Revolving
Lender’s L/C Advance was outstanding) in the same funds as those received by
the Administrative Agent.

(ii)           If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.05(c)(i) is required to be returned under any of the
circumstances described in Section 10.05 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Revolving
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such
Lender, at a rate per annum equal to the Federal Funds Rate from time to time
in effect.  The obligations of the
Revolving Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

(e)           Obligations Absolute.  The obligation of Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

(i)            any lack of validity or
enforceability of such Letter of Credit, this Agreement, or any other Loan
Document;

(ii)           the existence of any claim,
counterclaim, setoff, defense or other right that Borrower or any Subsidiary
may have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may
be acting), the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

(iii)          any draft, demand, certificate or
other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in

 40
 

 

any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under such
Letter of Credit;

(iv)          any payment by the L/C Issuer under
such Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or any payment
made by the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising
in connection with any proceeding under any Debtor Relief Law; or

(v)           any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, Borrower or any Subsidiary.

Borrower shall promptly
examine a copy of each Letter of Credit and each amendment thereto that is
delivered to it and, in the event of any claim of noncompliance with Borrower’s
instructions or other irregularity, Borrower will immediately notify the L/C
Issuer.  Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

(f)            Role of L/C Issuer.  Each Revolving Lender and Borrower agree
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Revolving
Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Requisite Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. 
Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit,
provided, however, that this assumption is not intended to, and shall not,
preclude Borrower’s pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable or responsible for
any of the matters described in clauses (i) through (v) of Section 2.05(e),
provided, however, that anything in such clauses to the contrary
notwithstanding, Borrower may have a claim against the L/C Issuer, and the L/C
Issuer may be liable to Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by Borrower
which Borrower proves were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C

 41
 

 

Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

(g)           Cash Collateral.  Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in an L/C Borrowing,
or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation
for any reason remains outstanding, Borrower shall, in each case, immediately
Cash Collateralize the then Outstanding Amount of all L/C Obligations.  Sections 2.06 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.05,
Section 2.06 and Section 8.02(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit
of the L/C Issuer and the Revolving Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Revolving Lenders).  Derivatives of such term have corresponding
meanings.  Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Revolving
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.

(h)           Applicability of ISP and UCP.  Unless otherwise expressly agreed by the L/C
Issuer and Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), the rules of the ISP
shall apply to each Letter of Credit.

(i)            Letter of Credit Fees.  Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Revolving
Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter
of Credit equal to the Applicable Rate times the daily maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit).  Letter of Credit Fees shall be
(i) computed on a quarterly basis in arrears and (ii) due and payable
on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand.  If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.  Notwithstanding anything to the contrary
contained herein, upon the

 42
 

 

request of the Requisite Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j)            Fronting Fee and Documentary and
Processing Charges Payable to L/C Issuer. 
Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit, at the rate per annum
specified in the Administrative Agent Fee Letter, computed on the actual daily
maximum amount available to be drawn under such Letter of Credit (whether or
not such maximum amount is then in effect under such Letter of Credit) and on a
quarterly basis in arrears, and due and payable on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter
of Credit Expiration Date and thereafter on demand.  In addition, Borrower shall pay directly to
the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.

(k)           Conflict with Issuer Documents.  In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

2.06.        Swing
Line Loans.

(a)           The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Revolving Lenders set forth in this Section 2.06, to make loans
(each such loan, a “Swing Line Loan”) to Borrower from time to time on any
Business Day during the Availability Period in an aggregate amount outstanding
not to exceed at any time the amount of the Swing Line Sublimit, provided,
however, that after giving effect to any Swing Line Loan:

(i)            the Aggregate Revolving Outstandings
shall not exceed the Aggregate Revolving Commitments; and

(ii)           the aggregate Outstanding Amount of
the Revolving Loans of any Lender, plus that Lender’s Revolving
Percentage of the Outstanding Amount of all L/C Obligations, plus that
Lender’s Revolving Percentage of the Outstanding Amount of all Swing Line Loans
shall not exceed that Lender’s Revolving Commitment; and

provided,
further, that Borrower shall not use the proceeds of any Swing Line Loan
to refinance any outstanding Swing Line Loan. 
The Swing Line Loans shall be evidenced by the note delivered by
Borrower to evidence the Swing Line Loans on the Closing Date.  Within the foregoing limits, and subject to
the other terms and conditions hereof, Borrower may borrow under this Section
2.06, prepay under Section 2.07, and reborrow under this Section 2.06.  Each Swing Line Loan shall be a Base Rate
Loan.  Immediately upon the making of a
Swing Line Loan, each Revolving Lender shall be deemed to, and

 43
 

 

hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender
a risk participation in such Swing Line Loan in an amount equal to the product
of that Lender’s Revolving Percentage times the amount of such Swing
Line Loan.

(b)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. 
Each such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum
of $100,000, and (ii) the requested borrowing date, which shall be a
Business Day.  Each such telephonic
notice must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of Borrower.  Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the Administrative Agent (by telephone or in
writing) of the contents thereof.  Unless
the Swing Line Lender has received notice (by telephone or in writing) from the
Administrative Agent (including at the request of any Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of
Section 2.06(a), or (B) that one or more of the applicable conditions
specified in Article V is not then satisfied, then, subject to the terms
and conditions hereof, the Swing Line Lender will, not later than
3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice,
make the amount of its Swing Line Loan available to Borrower at its office by
crediting the account of Borrower on the books of the Swing Line Lender in
immediately available funds.

(c)           Repayment and Refinancing of Swing
Line Loans.

(i)            Each Swing Line Loan shall be due
and payable by Borrower on the date which is on the earlier of the Revolving
Maturity Date and the tenth Business Day following the date such Swing Line
Loan is made.

(ii)           The Swing Line Lender may also
request, at any time in its sole and absolute discretion, on behalf of Borrower
(which hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Lender make a Base Rate Loan in an amount equal to
the product of that Lender’s Revolving Percentage times the amount of
Swing Line Loans then outstanding.  Such
request shall be made in writing (which written request shall be deemed to be a
Loan Notice for purposes hereof) and in accordance with the requirements of
Section 2.04, without regard to the minimum and multiples specified
therein for the principal amount of Base Rate Loans, but subject to the
unutilized portion of the Revolving Commitments and the conditions set forth in
Section 4.02.  The Swing Line Lender
shall furnish Borrower with a copy of the applicable Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each

 44
 

 

Revolving Lender shall make an amount equal to its
Revolving Percentage of the amount specified in such Loan Notice available to
the Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m.
on the day specified in such Loan Notice, whereupon, subject to
Section 2.06(c)(iv), each Revolving Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

(iii)          If for any reason any Swing Line Loan
cannot be refinanced by such a Borrowing in accordance with
Section 2.06(c)(i) or 2.06(c)(ii), the request for Base Rate Loans
submitted by the Swing Line Lender as set forth herein shall be deemed to be a
request by the Swing Line Lender that each of the Revolving Lenders fund its
risk participation in the relevant Swing Line Loan and each Revolving Lender’s
payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.06(c) shall be deemed payment in respect of such
participation.

(iv)          If any Revolving Lender fails to make
available to the Administrative Agent for the account of the Swing Line Lender
any amount required to be paid by that Revolving Lender pursuant to the
foregoing provisions of this Section 2.06(c) by the time specified in
Section 2.06(c)(ii), the Swing Line Lender shall be entitled to recover
from that Revolving Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender in accordance
with banking industry rules on interbank compensation.  A certificate of the Swing Line Lender
submitted to any Revolving Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive
absent manifest error.

(v)           Each Revolving Lender’s obligation to
make Loans or to purchase and fund risk participations in Swing Line Loans pursuant
to this Section 2.06(c) shall be absolute and unconditional and shall not
be affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which that Revolving Lender may have against
the Swing Line Lender, Borrower or any other Person for any reason whatsoever,
(B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing,
provided, however, that each Revolving Lender’s obligation to
make Loans pursuant to this Section 2.06(c) is subject to the conditions
set forth in Section 4.02.  No such
funding of risk participations shall relieve or otherwise impair the obligation
of Borrower to repay Swing Line Loans, together with interest as provided
herein.

 45

 

(d)                                 Repayment
of Participations.

(i)                                     At
any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will distribute
to that Revolving Lender its Revolving Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which that Revolving Lender’s risk participation was
funded) in the same funds as those received by the Swing Line Lender.

(ii)                                  If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Lender shall pay to the Swing Line Lender its
Revolving Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Rate.  The Administrative Agent will make such
demand upon the request of the Swing Line Lender.  The obligations of the Revolving Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e)                                  Interest
for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing Borrower for
interest on the Swing Line Loans.  Until
each Revolving Lender funds its Base Rate Loan or risk participation pursuant
to this Section 2.06 to refinance that Revolving Percentage of any Swing Line
Loan, interest in respect of such Revolving Percentage shall be solely for the
account of the Swing Line Lender.

(f)                                    Payments
Directly to Swing Line Lender. 
Borrower shall make all payments of principal and interest in respect of
the Swing Line Loans directly to the Swing Line Lender.

2.07.                        Prepayments.

(a)                                  Borrower
may, upon notice to the Administrative Agent, at any time or from time to time
voluntarily prepay Loans in whole or in part without premium or penalty, provided
that (i) such notice must be received by the Administrative Agent not
later than 11:00 a.m. (A) three Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of
Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in
a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess
thereof or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid.  The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of that Lender’s Percentage of

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such prepayment. 
If such notice is given by Borrower, Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.  Any prepayment
of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the
amount prepaid, together with any additional amounts required pursuant to
Section 3.05.  Each such prepayment
shall be applied to the Loans of the Lenders in accordance with their
respective Percentages.

(b)                                 Borrower
may, upon notice to the Swing Line Lender (with a copy to the Administrative
Agent), at any time or from time to time, voluntarily prepay Swing Line Loans
in whole or in part without premium or penalty, provided that
(i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the
prepayment, and (ii) any such prepayment shall be in a minimum principal
amount of $500,000.  Each such notice
shall specify the date and amount of such prepayment.  If such notice is given by Borrower, Borrower
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein.

(c)                                  If
for any reason the Aggregate Revolving Outstandings at any time exceed the
Aggregate Revolving Commitments then in effect, Borrower shall immediately
prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess, provided, however, that
Borrower shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.07(c) unless after the prepayment in full of
the Revolving Loans the Aggregate Revolving Outstandings exceed the Aggregate
Revolving Commitments then in effect. 
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05. 
Each such prepayment shall be applied to the Loans of the Lenders in
accordance with their respective Percentages.

(d)                                 Upon
the sale or issuance by Borrower or any of its Subsidiaries of any of its
Equity Interests or any other capital contribution (other than issuances of
Equity Interests or capital contributions to another Loan Party), Borrower
shall prepay an aggregate principal amount of Loans equal to 50% of all Net
Cash Proceeds received therefrom immediately upon receipt thereof by Borrower
or such Subsidiary (such prepayments to be applied as set forth in
clauses (h) and (i) below).

(e)                                  Upon
the incurrence or issuance by Borrower or any of its Subsidiaries of any
Indebtedness (other than Indebtedness permitted to be incurred or issued
pursuant to Section 7.03), Borrower shall prepay an aggregate principal
amount of Loans equal to 100% of all Net Cash Proceeds received therefrom
immediately upon receipt thereof by Borrower or such Subsidiary (such
prepayments to be applied as set forth in clauses (h) and (i) below).

(f)                                    If
Borrower or any of its Subsidiaries Dispose of any property (other than any
Disposition of any property permitted by Section 7.05(a) through
Section 7.05(e)) which results in the realization by such Person of Net
Cash Proceeds in excess of $2,000,000 or which results in the receipt of any
proceeds of insurance (other

 47
 

 

than proceeds of business interruption insurance to
the extent such proceeds constitute compensation for lost earnings) or
condemnation awards (and payments in lieu thereof) in each case in excess of
$2,000,000, Borrower shall prepay an aggregate principal amount of Loans equal
to the entire amount of such Net Cash Proceeds, insurance proceeds or
condemnation awards promptly (and in any event within thirty days) after
receipt thereof by such Person (such prepayments to be applied as set forth in
clauses (h) and (i) below), provided, however, that, with respect
to any Net Cash Proceeds, insurance proceeds or condemnation awards realized as
described in this Section 2.07(f) at the election of Borrower (as notified
by Borrower to the Administrative Agent on or prior to the date of such
realization), Borrower or such Subsidiary may reinvest all or any portion of
such Net Cash Proceeds, insurance proceeds or condemnation awards in operating,
restored or replacement assets so long as:

(A)                              no
Default shall have occurred and be continuing (other than any Default which is
not a default in payment of any of the Obligations and which has not been
asserted in writing by the Administrative Agent or the Required Lenders for a
period in excess of thirty days); and

(B)                                within
365 days after the receipt of such Net Cash Proceeds, insurance proceeds or
condemnation awards (or 450 days to the extent that, upon expiration of such
365-day period, such Net Cash Proceeds are committed (pursuant to binding
commitments with third parties) to be used to complete such purchase,
replacement or restoration), such purchase, replacement or restoration shall
have been consummated (as certified by Borrower in writing to the
Administrative Agent); and

(C)                                to
the extent that any such Net Cash Proceeds, insurance proceeds or condemnation
awards exceed $30,000,000, the Administrative Agent shall be reasonably
satisfied that the amount thereof is sufficient to restore or replace the
related assets.

provided
that any Net Cash Proceeds, insurance proceeds or condemnation awards not
subject to such definitive agreement or so reinvested shall be immediately
applied (at the end of such 365-day or 450-day period, as the case may be, in
the case of such election by Borrower) to the prepayment of the Loans as set
forth in this Section 2.07(f),

(g)                                 Commencing
with the Fiscal Year ending December 31, 2007, within five Business Days
after financial statements for any Fiscal Year have been delivered pursuant to
Section 6.01(a), Borrower shall prepay an aggregate principal amount of
Loans equal to 50% of Excess Cash Flow for the Fiscal Year covered by such
financial statements, provided that no such prepayment shall be due if,
as of the last day of such Fiscal Year, the Senior Debt to EBITDA Ratio as of
that date is less than 3.50:1.00.

(h)                                 Each
prepayment of the Term Loans pursuant to clause (a) hereof shall be
applied to the Term Loans in such manner and order as Borrower may direct.

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Each prepayment of the Loans pursuant to the foregoing
clauses (d), (e), (f) or (g) of this Section 2.07 shall be
applied:

(1)                                  first,
ratably to the Term Loans, Delay Draw Term B Loans and Incremental Term
Loans, and as to each such facility to installments due thereunder in inverse
order of maturity; and

(2)                                  second,
to the Outstanding Amounts under the Aggregate Revolving Commitments in the
manner set forth in clause (i) of this Section 2.07.

(i)                                     Prepayments
of the Outstanding Amounts under the Aggregate Revolving Commitments made
pursuant to this Section 2.07, first, shall be applied ratably to the L/C
Borrowings and the Swing Line Loans, second, shall be applied ratably to the
outstanding Revolving Loans, and, third, shall be used to Cash Collateralize
the remaining L/C Obligations; and, in the case of prepayments of the Revolving
Credit Facility required pursuant to this Section 2.07, the amount remaining,
if any, after the prepayment in full of all L/C Borrowings, Swing Line Loans
and Revolving Credit Loans outstanding at such time and the Cash
Collateralization of the remaining L/C Obligations in full may be retained by
Borrower for use in the ordinary course of its business.  Upon the drawing of any Letter of Credit that
has been Cash Collateralized, the funds held as Cash Collateral shall be
applied (without any further action by or notice to or from Borrower or any
other Loan Party) to reimburse the L/C Issuer or the Revolving Lenders, as
applicable.

2.08.                        Voluntary Termination or Reduction of the Revolving
Commitments.  Borrower may,
upon notice to the Administrative Agent, terminate the Aggregate Revolving
Commitments, or from time to time permanently ratably reduce the Aggregate
Revolving Commitments, provided that (i) any such notice shall be
received by the Administrative Agent not later than 11:00 a.m. five Business
Days prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $2,000,000 or any whole multiple
of $1,000,000 in excess thereof, (iii) Borrower shall not terminate or
reduce the Aggregate Revolving Commitments if, after giving effect thereto and
to any concurrent prepayments hereunder, the Outstanding Amounts under the
Aggregate Revolving Commitments would exceed the Aggregate Revolving
Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Revolving Commitments, the Letter of Credit Sublimit or the Swing
Line Sublimit exceeds the amount of the Aggregate Revolving Commitments, such
Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Revolving Lenders of any such notice of termination or reduction of the
Aggregate Revolving Commitments.  Any
reduction of the Aggregate Revolving Commitments shall be applied to the
Revolving Commitment of each Revolving Lender according to its Revolving
Percentage.  All fees accrued until the
effective date of any termination of the Aggregate Revolving Commitments shall
be paid on the effective date of such termination.

 49
 

 

2.09.                        Amortization of the Term Loans; Mandatory Repayment of the Obligations.

(a)                                  Borrower
shall repay the Term B Loans on each Quarterly Payment Date, commencing
March 31, 2007, in an aggregate principal amount equal to the Term B
Loan Amortization Amount for that Quarterly Payment Date, and shall in any
event repay the remaining principal balance of the Term B Loans on the
Term Loan Maturity Date.

(b)                                 Borrower
shall repay the principal amount of the Delay Draw Term B Loans on each
Quarterly Payment Date, commencing on the later of March 31, 2007 or the
first March 31, June 30, September 30 or December 31 which
is ninety days or more following the making of the Delay Draw Term B
Loans, in an aggregate principal amount equal to the Delay Draw Term B
Loan Amortization Amount for such Quarterly Payment Date, and shall in any
event repay the remaining principal balance of the Delay Draw Term B Loans
on the Term Loan Maturity Date.

(c)                                  In
any event, Borrower shall repay to the Lenders on the Revolving Maturity Date
the aggregate principal amount of the Revolving Loans outstanding on such date.

(d)                                 Borrower
shall repay each Swing Line Loan on the earlier to occur of (i) the date
ten Business Days after such Loan is made or (ii) the Revolving Maturity
Date.

2.10.                        Interest.

(a)                                  Subject
to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate for Revolving
Loans.

(b)                                 (i)                                     If
any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

(ii)                                  If
any amount (other than principal of any Loan) payable by Borrower under any
Loan Document is not paid when due (without regard to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, then upon
the request of the Requisite Lenders, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 50
 

 

(iii)                               If any Insolvency Event
occurs in respect of Borrower or any of its Subsidiaries, then Borrower shall
pay interest on the principal amount of all outstanding Obligations hereunder at
a fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(iv)                              Upon
the request of the Requisite Lenders, while any Event of Default exists,
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.

(v)                                 Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

(c)                                  Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.

2.11.                        Fees. 
In addition to certain fees described in subsections (i)
and (j) of Section 2.05:

(a)                                  Revolving
Commitment Fee.  Borrower shall pay
to the Administrative Agent for the account of each Revolving Lender in
accordance with its Revolving Percentage, a commitment fee equal to the
Applicable Rate times Unused Revolver Availability for each day.  The commitment fee shall accrue at all times
during the Availability Period, including at any time during which one or more
of the conditions in Article IV is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September
and December, commencing with the first such date to occur after the Closing
Date, and on the Revolving Maturity Date.

(b)                                 Delay
Draw Term B Loan Commitment Fee. 
Borrower shall pay to the Administrative Agent for the account of each Delay
Draw Term B Lender in accordance with its Delay Draw Term B Percentage, a
commitment fee equal to 0.50% per annum times $325,000,000 for each day
during the period between the Closing Date and the earliest to occur of
(i) the termination of the Delay Draw Term B Commitment pursuant to
Section 8.02(a), (ii) the first anniversary of the Closing Date, and
(iii) the Primm Closing Date.  This
fee shall accrue at all times during this period, including at any time during
which one or more of the conditions in Article IV is not met, and shall be
due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur
after the Closing Date, and on the date which is the earliest to occur of the
termination of the Delay Draw Term B Commitment pursuant to
Section 8.02(a), the first anniversary of the Closing Date and the Primm
Closing Date.  This fee shall be
calculated quarterly in arrears.

 51
 

 

(c)                                  Upfront
Fees.  On the Closing Date, Borrower
shall pay to each Lender through the Administrative Agent certain upfront fees
in the amounts specified in the Lead Arranger Fee Letter; the Administrative
Agent and each Lender having been heretofore advised of the amount of the
upfront fees to which it is entitled.

(d)                                 Arrangement
Fee.  On the Closing Date, Borrower
shall pay to each of the Joint Lead Arrangers and the Administrative Agent,
certain fees in the amounts specified in the Lead Arranger Fee Letter.

(e)                                  Other
Fees.  Borrower shall pay to the
Administrative Agent for its sole account fees in the amounts and at the times
specified in the Administrative Agent Fee Letter.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

2.12.                        Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.14(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

2.13.                        Evidence of Debt.

(a)                                  The
Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent
in the ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of Borrower hereunder to pay any amount owing with respect to the
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

(b)                                 In
addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance

 52
 

 

with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans.  In the event of
any conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.

2.14.                        Payments Generally; Administrative Agent’s Clawback.

(a)                                  General.  All payments to be made by Borrower shall be
made without condition or deduction for any counterclaim, defense, recoupment
or setoff.  Except as otherwise expressly
provided herein, all payments by Borrower hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  The Administrative Agent will
promptly distribute to each Lender its Revolving Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by Borrower shall
come due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

(b)                                 (i)                                     Funding
by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with Section 2.03
and may, in reliance upon such assumption, transfer or make available to
Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is transferred or made
available to Borrower to but excluding the date of payment to the
Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (B) in the case of a payment to be made by Borrower, the
interest rate applicable to Base Rate Loans. 
If Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to Borrower the amount of such interest paid by
Borrower for such period.  If such Lender
pays its share of the applicable Borrowing to the Administrative Agent, then
the amount so paid shall constitute such Lender’s Loan included in such
Borrowing.  Any payment by Borrower shall
be without prejudice to any claim Borrower may have against a Lender that shall
have failed to make such payment to the Administrative Agent.

 53
 

 

(ii)                                  Payments
by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from Borrower prior to the date on which any payment is due to
the Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that Borrower will not make such payment, the Administrative Agent
may assume that Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders
or the L/C Issuer, as the case may be, the amount due.  In such event, if Borrower has not in fact
made such payment, then each of the Lenders or the L/C Issuer, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or the L/C Issuer, in immediately
available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

A notice of the
Administrative Agent to any Lender or Borrower with respect to any amount owing
under this subsection (b) shall be conclusive, absent manifest error.

(c)                                  Failure
to Satisfy Conditions Precedent.  If
any Lender makes available to the Administrative Agent funds for any Loan to be
made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the
terms hereof, the Administrative Agent shall return such funds (in like funds
as received from such Lender) to such Lender, without interest.

(d)                                 Obligations
of Lenders Several.  The obligations
of the Lenders hereunder to make Loans, to fund participations in Letters of
Credit and Swing Line Loans and to make payments pursuant to
Section 10.04(c) are several and not joint.  The failure of any Lender to make any Loan,
to fund any such participation or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan, to purchase its participation or to make its payment under
Section 10.04(c).

(e)                                  Funding
Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan in any particular place
or manner.

2.15.                        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, or the participations
in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of such Loans or
participations and accrued interest thereon greater than its pro  rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the

 54
 

 

Administrative Agent of
such fact, and (b) purchase (for cash at face value) participations in the
Loans and subparticipations in L/C Obligations and Swing Line Loans of the
other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

(i)                                     if
any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii)                                  the
provisions of this Section shall not be construed to apply to (x) any
payment made by Borrower pursuant to and in accordance with the express terms
of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant,
other than to Borrower or any Subsidiary thereof (as to which the provisions of
this Section shall apply).

Each Loan Party consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of such Loan Party in the amount of such participation.

2.16.                        Increase in Commitments.

(a)                                  Request
for Increase.  Provided there exists
no Default, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), Borrower may from time to time, request an increase in the
Aggregate Revolving Commitments or additional Term Loans (or any combination
thereof), or by the making of Incremental Term Loans in an aggregate principal
amount (for all such requests) not exceeding $250,000,000, provided that
(i) any such request for an increase shall be in a minimum amount of
$50,000,000 (and in increments of $5,000,000 in excess thereof), and
(ii) Borrower may make a maximum of three such requests.  Each Incremental Term Loan shall comply with
the criteria set forth in the definition of “Incremental Term Loans.”

(b)                                 Notification
by Administrative Agent; Additional Lenders.  Subject to the approval of the Administrative
Agent, the L/C Issuer and the Swing Line Lender (which approvals shall not be
unreasonably withheld), Borrower may nominate additional Eligible Assignees
which are reasonably acceptable to the Administrative Agent to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel, and to thereby provide additional Revolving
Commitments, make additional Term B Loans or make Incremental Term Loans.

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(c)                                  Effective
Date and Allocations.  If the
Aggregate Revolving Commitments are increased or additional Term Loans or
Incremental Term Loans are issued in accordance with this Section, the
Administrative Agent and Borrower shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such increased Revolving
Commitments, additional Term Loans or Incremental Term Loans, as the case may
be.  The Administrative Agent shall
promptly notify Borrower and the Lenders of the final allocation of such
increase and the Increase Effective Date.

(d)                                 Conditions
to Effectiveness of Increase.  As
conditions precedent to such increase:

(w)                               Borrower
shall deliver to the Administrative Agent a certificate of each Loan Party
dated as of the Increase Effective Date (in sufficient copies for each Lender)
signed by a Responsible Officer of such Loan Party (i) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting to
such increase, and (ii) in the case of Borrower, certifying that, before
and after giving effect to such increase, (A) the representations and
warranties contained in Articles V and VI and the other Loan
Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and except that
for purposes of this Section 2.14, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01, and (B) no Default or
Event of Default exists or would result therefrom;

(x)                                   Borrower
shall, and shall cause each of its Subsidiaries to, deliver to the
Administrative Agent such additional Notes as the Lenders may request, together
with such amendments to the Loan Documents as the Administrative Agent may
reasonably request, including reaffirmations of the guarantees issued by each
Subsidiary of Borrower, amendments to each of the Deeds of Trust and other
Collateral Documents, authorizing resolutions, opinions of counsel to Borrower
and the like, together with endorsements to the title insurance policies issued
in favor of the Administrative Agent and the Lenders increasing the amount
thereof, together with such endorsements to coverage and reinsurance as the
Administrative Agent may reasonably request; and

(z)                                   Borrower
shall prepay any Revolving Loans outstanding on the Increase Effective Date
(and pay any additional amounts required pursuant to Section 3.05) to the
extent necessary to keep the outstanding Revolving Loans ratable with any
revised Percentages arising from any nonratable increase in the Commitments
under this Section.

(e)                                  Conflicting
Provisions.  This Section shall
supersede any provisions in Section 2.15 or 10.01 to the contrary.

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ARTICLE 
III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01.                        Taxes.

(a)                                  Payments
Free of Taxes.  Any and all payments
by or on account of any obligation of Borrower hereunder or under any other
Loan Document shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes, provided that if
Borrower shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) Borrower shall make such deductions and (iii) Borrower
shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

(b)                                 Payment
of Other Taxes by Borrower.  Without
limiting the provisions of subsection (a) above, Borrower shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

(c)                                  Indemnification
by Borrower.  Borrower shall
indemnify the Administrative Agent, each Lender and the L/C Issuer, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to Borrower by a Lender or the
L/C Issuer (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive absent manifest error.

(d)                                 Evidence
of Payments.  As soon as practicable
after any payment of Indemnified Taxes or Other Taxes by Borrower to a
Governmental Authority, Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)                                  Status
of Lenders.  Any Foreign Lender that
is entitled to an exemption from or reduction of withholding tax under the law
of the jurisdiction in which Borrower is resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by Borrower or the Administrative Agent,
such

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properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by Borrower
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable law or reasonably requested by Borrower or the Administrative
Agent as will enable Borrower or the Administrative Agent to determine whether
or not such Lender is subject to backup withholding or information reporting
requirements.

Without limiting the
generality of the foregoing, in the event that Borrower is resident for tax
purposes in the United States, any Foreign Lender shall deliver to Borrower and
the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the request
of Borrower or the Administrative Agent, but only if such Foreign Lender is
legally entitled to do so), whichever of the following is applicable:

(i)                                     duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,

(ii)                                  duly
completed copies of Internal Revenue Service Form W-8ECI,

(iii)                               in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of Borrower within the meaning of
section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code and
(y) duly completed copies of Internal Revenue Service Form W-8BEN, or

(iv)                              any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit Borrower to determine the withholding or deduction required to be made.

(f)                                    Treatment
of Certain Refunds.  If the
Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by Borrower or with respect to which Borrower has
paid additional amounts pursuant to this Section, it shall pay to Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the L/C Issuer, as the
case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that
Borrower, upon the request of the Administrative Agent, such Lender or the L/C
Issuer, agrees to repay the amount paid

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over to Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. 
This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to Borrower
or any other Person.

3.02.                        Illegality. 
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or
to determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and
Borrower that the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice,
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. 
Upon any such prepayment or conversion, Borrower shall also pay accrued
interest on the amount so prepaid or converted.

3.03.                        Inability to Determine Rates.  If the Requisite Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan,
(b) adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan , or (c) the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not
adequately and fairly reflect the cost to that Lenders of funding such Loan,
the Administrative Agent will promptly so notify Borrower and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Requisite Lenders) revokes
such notice.  Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into a request for a Borrowing of Base Rate Loans
in the amount specified therein.

3.04.                        Increased Costs; Reserves on Eurodollar Rate Loans.

(a)                                  Increased
Costs Generally.  If any Change in
Law shall:

(1)                                  impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by,

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any Lender (except any reserve requirement
contemplated by Section 3.04(e)) or the L/C Issuer;

(2)                                  subject
any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit
or any Eurodollar Loan made by it, or change the basis of taxation of payments
to that Lender or the L/C Issuer in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any
change in the rate of, any Excluded Tax payable by that Lender or the L/C
Issuer); or

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

and the result of any of the foregoing shall be to
increase the cost to that Lender of making or maintaining any Eurodollar Loan
(or of maintaining its obligation to make any such Loan), or to increase the
cost to that Lender or the L/C Issuer of participating in, issuing or
maintaining any Letter of Credit (or of maintaining its obligation to participate
in or to issue any Letter of Credit), or to reduce the amount of any sum
received or receivable by that Lender or the L/C Issuer hereunder (whether of
principal, interest or any other amount) then, upon request of that Lender or
the L/C Issuer, Borrower will pay to that Lender or the L/C Issuer, as the case
may be, such additional amount or amounts as will compensate that Lender or the
L/C Issuer, as the case may be, for such additional costs incurred or reduction
suffered.

(b)                                 Capital
Requirements.  If any Lender or the
L/C Issuer determines that any Change in Law affecting that Lender or the L/C
Issuer or any Lending Office of that Lender or that Lender’s or the L/C Issuer’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on that Lender’s or the L/C Issuer’s
capital or on the capital of that Lender’s or the L/C Issuer’s holding company,
if any, as a consequence of this Agreement, the Commitments of that Lender or
the Loans made by, or participations in Letters of Credit held by, that Lender,
or the Letters of Credit issued by the L/C Issuer, to a level below that which
that Lender or the L/C Issuer or that Lender’s or the L/C Issuer’s holding
company could have achieved but for such Change in Law (taking into
consideration that Lender’s or the L/C Issuer’s policies and the policies of
that Lender’s or the L/C Issuer’s holding company with respect to capital
adequacy), then from time to time Borrower will pay to that Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will
compensate that Lender or the L/C Issuer or that Lender’s or the L/C Issuer’s
holding company for any such reduction suffered.

(c)                                  Certificates
for Reimbursement.  A certificate of
a Lender or the L/C Issuer setting forth the amount or amounts (and the basis
for calculation of such amount or amounts) necessary to compensate that Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to Borrower shall be
conclusive absent manifest error. 
Borrower shall pay that

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Lender or the L/C Issuer, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.

(d)                                 Delay
in Requests.  Failure or delay on the
part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing
provisions of this Section shall not constitute a waiver of that Lender’s or
the L/C Issuer’s right to demand such compensation, provided that
Borrower shall not be required to compensate a Lender or the L/C Issuer
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
that Lender or the L/C Issuer, as the case may be, notifies Borrower of the
Change in Law giving rise to such increased costs or reductions and of that
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to include
the period of retroactive effect thereof).

(e)                                  Reserves
on Eurodollar Rate Loans.  Borrower
shall pay to each Lender, as long as that Lender shall be required to maintain
reserves with respect to liabilities or assets consisting of or including Eurocurrency
funds or deposits (currently known as “Eurocurrency liabilities”), additional
interest on the unpaid principal amount of each Eurodollar Rate Loan equal to
the actual costs of such reserves allocated to such Loan by that Lender (as
determined by that Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided Borrower shall have received at least 10
days’ prior notice (with a copy to the Administrative Agent) of such additional
interest from that Lender.  If a Lender
fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such
notice.

3.05.                        Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, Borrower shall promptly compensate
that Lender for and hold that Lender harmless from any loss, cost or expense
(excluding any loss of anticipated profits) incurred by it as a result of:

(a)                                  any
continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b)                                 any
failure by Borrower (for a reason other than the failure of that Lender to make
a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate
Loan on the date or in the amount notified by Borrower; or

(c)                                  any
assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by Borrower pursuant to
Section 10.13; and

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(d)                                 any
loss or expense (other than any loss of anticipated profits) arising from the
liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.  Borrower shall also pay any
customary administrative fees charged by that Lender in connection with the
foregoing.

For purposes of
calculating amounts payable by Borrower to the Lenders under this
Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan
was in fact so funded.

3.06.                        Mitigation Obligations; Replacement of Lenders.

(a)                                  Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 3.04, or Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if
any Lender gives a notice pursuant to Section 3.02, then that Lender shall
use reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of that
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be,
in the future, or eliminate the need for the notice pursuant to Section 3.02,
as applicable, and (ii) in each case, would not subject that Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to that
Lender.  Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

(b)                                 Replacement
of Lenders.  If any Lender requests
compensation under Section 3.04, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.01, Borrower may replace that Lender
in accordance with Section 10.13.

3.07.                        Survival. 
All of Borrower’s obligations under this Article III shall survive
termination of the Revolving Commitments and repayment of all other Obligations
hereunder.

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ARTICLE  IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01.                        Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

(a)                                  The
Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan Party,
each dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and each of the Lenders:

(i)                                     executed
counterparts of this Agreement, sufficient in number for distribution to the
Administrative Agent, each Lender and Borrower;

(ii)                                  Revolving
Notes executed by Borrower in favor of each Lender which has requested a
Revolving Note;

(iii)                               Term B
Loan Notes executed by Borrower in favor of each Lender which has requested a
Term B Loan Note;

(iv)                              Swing
Line Note executed by Borrower in favor of the Swing Line Lender;

(v)                                 The
Guarantees executed by each Subsidiary of Borrower (other than HGI-Casinos,
Inc., a transitory merger subsidiary);

(vi)                              the
Security Agreement executed by Borrower and each of the Subsidiaries of
Borrower (other than HGI-Casinos, Inc.);

(vii)                           the
Trademark Security Agreement executed by Borrower and each of the Subsidiaries
of Borrower (other than HGI-Casinos, Inc.);

(viii)                        the Pledge
Agreement executed by Borrower and each of its Subsidiaries (other than
HGI-Casinos, Inc.), together with any certificates evidencing the interests
pledged thereunder;

(ix)                                the
Deeds of Trust executed by each of the applicable parties thereto;

(x)                                   in
respect of those properties described in the Deeds of Trust constituting
leaseholds, landlord consents acceptable to the Administrative Agent to the
extent requested by the Administrative Agent, provided that the
Administrative Agent may in its discretion defer the requirement of landlord
consents in respect of one or more Properties for up to sixty days following
the Closing Date;

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(xi)                                the
commitment of United Title, as agent for Chicago Title Insurance Company, to
issue endorsements affecting an increase to the title insurance policies issued
under the Existing Credit Agreement in respect of the Nevada properties owned
by Borrower and its Subsidiaries to $255,000,000 (subject to pro tanto
reduction endorsements), and to issue similar policies in respect of the Deeds
of Trust executed by Sands Regent and its Subsidiaries, and other title
insurance matters acceptable to the Administrative Agent;

(xii)                             the
commitment of Commonwealth Title Insurance Company to endorse its policies with
respect to the Deeds of Trust in respect of the assets of Borrower and its
Subsidiaries located in Missouri and Iowa to reflect the continued priority and
perfection of such Deeds of Trust;

(xiii)                          the
Preferred Ship Mortgage with respect to the motor vessel Osceola;

(xiv)                         a letter
agreement executed by Terrible Herbst, Inc. in respect of the Trademark License
Agreement, consenting to the collateral assignment of the rights of Borrower
thereunder to the Administrative Agent;

(xv)                            such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;

(xvi)                         such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that Borrower
and each Loan Party is validly existing, in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification,
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect;

(xvii)                      a favorable
opinion of Gibson, Dunn & Crutcher LLP and local Nevada counsel to the
Loan Parties, addressed to the Administrative Agent and each Lender, as to such
matters concerning the Loan Parties and the Loan Documents as the
Administrative Agent or the Requisite Lenders may reasonably request;

(xviii)                   a certificate
of a Responsible Officer of each Loan Party either (A) attaching copies of
all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Loan Party and the validity against such Loan
Party of the Loan Documents to which it is a party, and such consents, licenses
and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;

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(xix)                           a
certificate signed by a Responsible Officer of Borrower certifying
(A) that the conditions specified in Sections 4.02(a) through
(d) have been satisfied, and (B) that there has been no event or
circumstance since the Closing Date that has had or could be reasonably
expected to have, either individually or in the aggregate, a Sands Material
Adverse Effect;

(xx)                              a
Certificate executed by a Responsible Officer of Borrower attaching executed
copies of the Acquisition Agreements executed prior to the Closing Date, and
certifying that the copies of the exhibits and schedules thereto delivered to
the Administrative Agent’s counsel are accurate and complete;

(xxi)                           (A) copies
of satisfactory audited consolidated financial statements for the Sands Regent
and its Subsidiaries for the three Fiscal Years most recently ended for which
financial statements are available and copies of interim unaudited financial
statements for each Fiscal Quarter ended since the last audited financial
statements for which financial statements are available, and (B) pro forma
consolidated financial statements for Borrower and its Subsidiaries for the four
Fiscal Quarter period most recently ended prior to the Closing Date for which
financial statements are available giving pro forma effect to the Sands
Acquisition (and, if the Primm Acquisition is being consummated on the Closing
Date, the Primm Acquisition) (prepared in accordance with Regulation S-X
under the Securities Act of 1933, as amended, and all other rules and
regulations of the SEC under such Securities Act, and including other
adjustments reasonably acceptable to Administrative Agent) and a pro forma
balance sheet of Borrower and its Subsidiaries as of the Closing Date;

(xxii)                        a solvency
certificate signed by the chief financial officer of Borrower with respect to
Borrower and its Subsidiaries, attaching the closing projections and a pro
forma balance sheet for Borrower and its Subsidiaries both before and after
giving effect to the Sands Acquisition, and otherwise in form and detail
satisfactory to the Administrative Agent;

(xxiii)                     evidence that
all insurance required to be maintained pursuant to the Loan Documents has been
obtained and is in effect, together with an executed lenders loss payable
endorsement and additional insured endorsement, as applicable, with respect
thereto; and

(xxiv)                    the
Administrative Agent Fee Letter.

(b)                                 Any
fees required to be paid on or before the Closing Date shall have been paid.

(c)                                  Unless
waived by the Administrative Agent, Borrower shall have paid all reasonable
fees, charges and disbursements of counsel to the Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts
of such fees, charges and disbursements as shall constitute its reasonable
estimate of such

 65
 

 

fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between Borrower and
the Administrative Agent).

(d)                                 Each
of the Exiting Lenders shall concurrently receive the payment of all of the
outstanding Obligations owed to that Exiting Lender.

(e)                                  The
credit facilities contemplated by this Agreement shall have received indicative
ratings from Moody’s and S&P.

(f)                                    By
making the request for such Credit Extension, Borrower represents and warrants
that (i) the Sands Acquisition is in a position to be concurrently consummated
pursuant to the Sands Purchase Agreement (and without any waiver of any
material term or provision or closing condition of the Primm Purchase Agreement
which is not disclosed to, and reasonably acceptable to, the Administrative Agent),
subject only to the funding of the purchase price, (ii)  the Primm Acquisition is in material
compliance with all applicable Laws, and that all approvals of Governmental
Agencies required for the consummation of such transactions have been obtained.

(g)                                 Concurrently
with the Sands Acquisition, the Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the of the Sands Acquisition (or,
in the case of certificates of governmental officials, a recent date before the
date of the Sands Acquisition) and each in form and substance satisfactory to
the Administrative Agent and each of the Lenders:

(i)                                     the
Sands Guaranty;

(ii)                                  a
joinder to the Security Agreement executed by Sands Regent and each of the
Subsidiaries of Sands Regent;

(iii)                               a
joinder to the Trademark Security Agreement executed by Sands Regent and each
of the Subsidiaries of Sands Regent;

(iv)                              a
joinder to the Pledge Agreement executed by Sands Regent and each of the
Subsidiaries of Sands Regent, together with any certificates evidencing the
interests pledged thereunder;

(v)                                 one
or more Deeds of Trust executed by Sands Regent and each of its Subsidiaries
encumbering their interests in the hotel and casino properties in Reno, Nevada,
Verdi, Nevada, Sparks, Nevada, and Dayton, Nevada;

(vi)                              with
respect to Sands Regent and each of its Subsidiaries,  certificates of the types described in
Section 4.01(a)(xv), (xvi) and (xviii);

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(vii)                           evidence
that the credit facilities with Wells Fargo Bank, National Association and Sand
Regent and its Subsidiaries have been or concurrently with the Sands
Acquisition will be terminated and all existing Liens, except for Liens
permitted hereunder, on the assets of the Sands Regent and its Subsidiaries
have been or concurrently with the Sands Acquisition will be terminated;

(viii)                        evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect with respect to the assets which are the subject
of the Sands Acquisition, together with an executed lenders loss payable
endorsement and additional insured endorsement, as applicable, with respect
thereto;

(ix)                                evidence
acceptable to the Administrative Agent that HGI-Casinos, Inc. has been merged
with and into Sands Regent, with Sands Regent the survivor.

Without
limiting the generality of the provisions of Section 9.04, for purposes of
determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02.                        Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Loan Notice requesting only a
conversion of Loans to the other Type, or a continuation of Eurodollar Rate
Loans) is subject to the following conditions precedent:

(a)                                  The
representations and warranties of Borrower and each other Loan Party contained
in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Credit Extension in all
material respects, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01.

(b)                                 In
respect of Credit Extensions made on the Closing Date, no Sands Material
Adverse Effect shall have occurred.

(c)                                  Other
than requests for Credit Extensions on the Closing Date and Primm Closing
Credit Extensions, since the date of the Audited Financial Statements, there
shall not have occurred any event or circumstance, either individually or in
the

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aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.

(d)                                 No
Default shall exist, or would result from such proposed Credit Extension or
from the application of the proceeds thereof.

(e)                                  The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.

Each Request for Credit
Extension (other than a Loan Notice requesting only a conversion of Loans to
the other Type or a continuation of Eurodollar Rate Loans) submitted by
Borrower shall be deemed to be a representation and warranty that the conditions
specified in Sections 4.02(a) through (d) have been satisfied on and
as of the date of the applicable Credit Extension.

4.03.                        Primm Closing Date Credit Extensions.  The obligation of the Delay Draw Term B
Lenders to make the Delay Draw Term B Loans and of the Revolving Lenders
to make Primm Closing Credit Extensions is subject to the following conditions
precedent:

(a)                                  the
Administrative Agent shall have received, and shall have distributed to the
Lenders, the following, each of which shall be originals or telecopies
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, and each in form
and substance satisfactory to the Administrative Agent:

(i)                                     Delay
Draw Term B Loan Notes executed by Borrower in favor of each Lender which has
requested a Delay Draw Term B Loan Note;

(ii)                                  A
Guaranty executed by the Primadonna Company and each other entity acquired by
Borrower in the Primm Acquisition;

(iii)                               a
joinder to the Security Agreement executed by the Primadonna Company and each
other entity acquired by Borrower in the Primm Acquisition;

(iv)                              a
joinder to the Trademark Security Agreement executed by the Primadonna Company
and each other entity acquired by Borrower in the Primm Acquisition;

(v)                                 a
joinder to the Pledge Agreement executed by the Primadonna Company and each
other entity acquired by Borrower in the Primm Acquisition, together with any
certificates evidencing the interests pledged thereunder;

(vi)                              One
or more Deeds of Trust acceptable to the Administrative Agent with respect to
the fee and leasehold interests purchased pursuant to the Primm Purchase
Agreement (and in any event including the

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leasehold interests underlying Whiskey Pete’s, Buffalo
Bill’s, the Primm Valley Resort) other  than the convenience store
acquired in connection therewith;

(vii)                           The
commitment of United Title of Nevada, as agent for Chicago Title Company, to
issue one or more ALTA title insurance policies in the amount of $655,000,000
(or any higher amount required to reflect any Incremental Term Loans then
issued)with respect to the Deeds of Trust referred to in clause (iv), and to
increase the amount of its coverage in respect of the other properties subject
to the Deeds of Trust which are located in the State of Nevada to $655,000,000
(or any higher amount required to reflect any Incremental Term Loans then
issued), in each case subject to pro tanto reduction endorsements in a manner
which is acceptable to the Administrative Agent;

(viii)                        Primadonna
Company shall have requested or shall concurrently request an estoppel
certificate from its landlords in respect of the properties subject to the
Primm Acquisition to the extent that it is entitled to do so under the related
leases;

(ix)                                (A) copies
of satisfactory audited consolidated financial statements for Primadonna and
its Subsidiaries for the three Fiscal Years most recently ended (including
Fiscal Year 2006 in the event that the Primm Acquisition is consummated after
March 31, 2007) for which financial statements are available and copies of
interim unaudited financial statements for each quarterly period ended since
the last audited financial statements for which financial statements are
available and (B) if the Primm Acquisition is consummated after the
Closing Date, pro forma consolidated financial statements for Borrower and its
Subsidiaries for the four Fiscal Quarter period most recently ended prior to
the date on which the Primm Acquisition is consummated for which financial
statements are available giving pro forma effect to the Primm Acquisition
(prepared in accordance with Regulation S-X under the Securities Act
of 1933, as amended, and all other rules and regulations of the SEC under
such Securities Act, and including other adjustments reasonably acceptable to
the Arrangers) and a pro forma balance sheet of Borrower and its Subsidiaries
as of the date on which the Primm Acquisition is consummated;

(x)                                   a
solvency certificate signed by the chief financial officer of Borrower with
respect to Borrower and its Subsidiaries, attaching the closing projections and
a pro forma balance sheet for Borrower and its Subsidiaries both before and
after giving effect to the Primm Acquisition, and otherwise in form and detail
satisfactory to the Administrative Agent;

(xi)                                legal
opinions of Gibson, Dunn & Crutcher LLP and local Nevada counsel reasonably
acceptable to the Administrative Agent;

(xii)                             with
respect to the Primadonna Company and each other entity acquired by Borrower in
the Primm Acquisition, certificates of the types described in Section
4.01(a)(xv), (xvi) and (xviii);

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(xiii)                          a
Certificate of Borrower executed by a Responsible Officer of Borrower as to the
accuracy matters described in clauses (b), (c) and (d) of this
Section;

(xiv)                         evidence
that all existing Liens, except for Liens permitted hereunder, on the assets of
the Primadonna Company and each other entity acquired by Borrower in the Primm
Acquisition have been or concurrently with the Primm Acquisition will be
terminated;

(xv)                            evidence
that the Primadonna Company and each other entity acquired by Borrower in the
Primm Acquisition have been or concurrently with the Primm Acquisition will be
released from all existing guarantees or other credit support arrangements not
otherwise permitted hereunder;

(xvi)                         evidence
that all insurance required to be maintained pursuant to the Loan Documents has
been obtained and is in effect with respect to the assets which are the subject
of the Primm Acquisition, together with an executed lenders loss payable endorsement
and additional insured endorsement, as applicable, with respect thereto; and

(xvii)                      such other
assurances, certificates, documents, consents or opinions as the Administrative
Agent or the Requisite Lenders reasonably may require.

(b)                                 By
making the request for such Credit Extension, Borrower represents and warrants
that (i) the Primm Acquisition is in a position to be concurrently consummated
pursuant to the Primm Purchase Agreement (and without any waiver of any
material term or provision or closing condition of the Primm Purchase Agreement
which is not disclosed to, and reasonably acceptable to, the Administrative
Agent), subject only to the funding of the purchase price, (ii) the Primm
Acquisition is in material compliance with all applicable Laws, and that all
approvals of Governmental Agencies required for the consummation of such
transactions have been obtained;

(c)                                  No
Default or Event of Default shall have then occurred and remain continuing or
shall result from the consummation of the Primm Acquisition or the other
transactions contemplated to occur on the Primm Closing Date; and

(d)                                 No
Primm Material Adverse Effect shall have occurred.

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ARTICLE  V.

REPRESENTATIONS AND WARRANTIES

Borrower represents and
warrants to the Administrative Agent and the Lenders that:

5.01.                        Existence, Qualification and Power; Compliance with
Laws.  Each Loan Party
(a) is duly organized or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or organization,
(b) has all requisite power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (i) own its assets and
carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws; except in each case referred to in
clause (b)(i), (c) or (d), to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.

5.02.                        Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a
party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law.  Each Loan Party is in compliance with all
Contractual Obligations referred to in clause (b)(i), except to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

5.03.                        Governmental Authorization; Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by any Loan Party of
this Agreement or any other Loan Document, except for prior to the Primm
Closing Date, approvals required to be obtained from any Nevada Gaming Board
with respect to the Primm Acquisition.

5.04.                        Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms.

5.05.                        Financial Statements; No Material Adverse Effect.

(a)                                  The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period

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covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of Borrower and its Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness.

(b)                                 The
unaudited consolidated balance sheet of Borrower and its Subsidiaries dated
September 30, 2006 and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the Fiscal Quarter ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of Borrower and
its Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii),
to the absence of footnotes and to normal year-end audit adjustments.  Schedule 5.05 sets forth all material
indebtedness and other liabilities, direct or contingent, of Borrower and its
consolidated Subsidiaries not reflected on the September 30, 2006 financial
statements referred to above, including liabilities for taxes, material
commitments and Indebtedness, which will exist as of the Closing Date.

(c)                                  As
of the Closing Date, no event or circumstance has occurred that, either
individually or in the aggregate, constitutes a Sands Material Adverse Effect.
As of the Primm Closing Date, no event or circumstance has occurred that,
either individually or in the aggregate, constitutes a Primm Material Adverse
Effect.  As of the date of each Credit
Extension other than the Closing Date and the date upon which the Primm Closing
Credit Extensions are made, since the date of the Audited Financial Statements,
there has been no event or circumstance, either individually or in the
aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

(d)                                 The
consolidated forecasted balance sheet and statements of income and cash flows
of Borrower and its Subsidiaries delivered pursuant to Section 6.01(c)
were prepared in good faith on the basis of the assumptions stated therein,
which assumptions were fair in light of the conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, Borrower’s
best estimate of its future financial performance.

5.06.                        Litigation. 
There are no actions, suits, proceedings, claims or disputes pending or,
to the knowledge of Borrower and its Subsidiaries, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, by or
against Borrower or any of its Subsidiaries or against any of their properties
or revenues that (a) as of each date other than the Sands Closing Date or the
Primm Closing Date, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, or (b) as of the Closing Date,
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby.

5.07.                        No Default. 
Neither Borrower nor any Subsidiary is in default under or with respect
to any Contractual Obligation including any Route Agreements that could, either

 72
 

 

individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.

5.08.                        Ownership of Property; Liens.  Each of Borrower and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  The property of Borrower and its Subsidiaries
is subject to no Liens, other than Liens permitted by Section 7.01.

5.09.                        Environmental Compliance.  Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and
properties, and as a result thereof Borrower has reasonably concluded that, it
has no material liability for such matters, except as specifically disclosed in
Schedule 5.09.  None of the matters
disclosed on Schedule 5.09 may, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.10.                        Insurance. 
The properties of Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of Borrower,
in such amounts with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where Borrower or the applicable Subsidiary operates.

5.11.                        Taxes. 
Borrower and its Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP.  Neither any Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement.

5.12.                        ERISA Compliance.

(a)                                  Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter
from the IRS or an application for such a letter is currently being processed
by the IRS with respect thereto and, to the knowledge of Borrower and its
Subsidiaries, nothing has occurred which would prevent, or cause the loss of, such
qualification.  Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

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(b)                                 There
are no pending or, to the knowledge of Borrower and its Subsidiaries,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect.  There has been
no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

(c)                                  (i) No
ERISA Event has occurred or is reasonably expected to occur (in the case of
each date following the Closing Date, with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of
$10,000,000); (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

5.13.                        Subsidiaries; Equity Interests.  As of the Closing Date, Borrower has no
Subsidiaries other than those specifically disclosed in Schedule 5.13, and
all of the outstanding Equity Interests in such Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by a Loan Party in the
amounts specified on Schedule 5.13 free and clear of all Liens.  As of the Closing Date, Borrower has no equity
investments in any other corporation or entity other than those specifically
disclosed in Schedule 5.13.  All of
the outstanding Equity Interests in Borrower have been validly issued and are
fully paid and nonassessable, and are, as of the Closing Date, owned by the
Principals.

5.14.                        Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.

(a)                                  Borrower
is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the
purpose of purchasing or carrying margin stock.

(b)                                 None
of Borrower, any Person Controlling Borrower, or any Subsidiary (i) is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or
(ii) is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

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5.15.                        Disclosure. 
No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered
hereunder or under any other Loan Document (in each case, as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time that
such projected financial information is provided to the Administrative Agent
and the Lenders.

5.16.                        Compliance with Laws.  Each of Borrower and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order,
writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted or (b) the failure to comply therewith,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

5.17.                        Intellectual Property; Licenses, Etc.  Borrower and its Subsidiaries own, or possess
the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, “IP Rights”) that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person except for those the failure to own or possess the right to
use which, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.  To
the knowledge of Borrower and its Subsidiaries, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by Borrower or any Subsidiary
infringes upon any rights held by any other Person except for such
infringements which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. 
Except as specifically disclosed in Schedule 5.17, no claim or
litigation regarding any of the foregoing is pending or, to the knowledge of
Borrower and its Subsidiaries, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.  The Trademark License Agreement is in full
force and effect, and Borrower and its Subsidiaries are not in material breach
of the Trademark License Agreement.

5.18.                        Route Agreements; Casino Leases.

(a)                                  As
of the Closing Date, Borrower and its Subsidiaries are party to Route
Agreements providing for the operation of not less than 6800 slot machines,
video poker machines or other electronic gaming devises at premises owned or
operated by the counterparties thereto. 
There is no default on behalf of Borrower or any of its Subsidiaries in
respect of any Route Agreements accounting, in the aggregate, for more than 5%
of the EBITDA of Borrower and its Subsidiaries which would entitle the
counterparties to such Route Agreements to terminate the same.

 75
 

 

(b)                                 As
of the Closing Date, no default on behalf of Borrower or any of its
Subsidiaries exists under any of the Casino Leases which would entitle the
landlords under any of the Casino Leases to terminate the same.

5.19.                        Sands Regent Acquisition.  As of the Closing Date, the Sands Regent
Acquisition has been or shall concurrently be consummated in material
compliance with the terms and conditions of the Sands Purchase Agreement, and
without material waiver or amendment of any of the conditions set forth in the
Sands Purchase Agreement, and all approvals of Governmental Authorities
required for the consummation thereof have been obtained.  Giving effect to the Sands Regent
Acquisition, the making of the Loans, issuance of Liens and Guarantees and
other transactions contemplated by the Sands Regent Acquisition to occur
concurrently therewith, Borrower and its Subsidiaries, taken as a whole, are
Solvent.

5.20.                        Primm Acquisition.  As of the Primm Closing Date, the Primm
Acquisition has been or shall concurrently be consummated in material
compliance with the terms and conditions of the Primm Purchase Agreement, and
without material waiver or amendment of any of the conditions set forth in the
Primm Purchase Agreement, and all approvals of Governmental Authorities
required for the consummation thereof have been obtained.  Giving effect to the Primm Acquisition, the
making of the Loans, issuance of Liens and Guarantees and other transactions
contemplated by the Primm Acquisition to occur concurrently therewith, Borrower
and its Subsidiaries, taken as a whole, are Solvent.

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ARTICLE  VI.

AFFIRMATIVE COVENANTS

So long as any Lender
shall have any Commitment hereunder, any Loan or other Obligation to pay money
hereunder (other than unmatured indemnity obligations) shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Borrower shall,
and shall (except in the case of the covenants set forth in Sections 6.01,
6.02, and 6.03) cause each Subsidiary to:

6.01.                        Financial Statements .  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Requisite Lenders:

(a)                                  as
soon as available, but in any event within 90 days after the end of each Fiscal
Year of Borrower, a consolidated balance sheet of Borrower and its Subsidiaries
as at the end of such Fiscal Year, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail and prepared in accordance with GAAP,
such consolidated statements to be audited and accompanied by a report and
opinion of an independent certified public accountant of nationally recognized
standing reasonably acceptable to the Requisite Lenders, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like qualification
or exception or any qualification or exception as to the scope of such audit;
and

(b)                                 as
soon as available, but in any event within two calendar months after the end of
each Fiscal Quarter (including the fourth Fiscal Quarter in each Fiscal Year of
Borrower), a consolidated balance sheet of Borrower and its Subsidiaries as at
the end of such Fiscal Quarter, and the related consolidated statements of
income or operations and cash flows for such Fiscal Quarter and for the portion
of Borrower’s Fiscal Year then ended, setting forth in each case in comparative
form the figures for the corresponding Fiscal Quarter of the previous Fiscal
Year and the corresponding portion of the previous Fiscal Year, all in
reasonable detail, such consolidated statements to be certified by a
Responsible Officer of Borrower as fairly presenting the financial condition,
results of operations and cash flows of Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes, together with a report listing any new trademarks and
trademark registrations of Borrower and its Subsidiaries;

(c)                                  as
soon as available, but in any event at least 15 days before the end of each
Fiscal Year of Borrower, forecasts prepared by management of Borrower, in form
satisfactory to the Administrative Agent and the Requisite Lenders, of consolidated
balance sheets and statements of income or operations of Borrower and its
Subsidiaries on a quarterly basis for the immediately following Fiscal Year
(including the Fiscal Year in which the last Maturity Date occurs) and by
Fiscal Year for each of the next succeeding Fiscal Years through the last
Maturity Date, substantially in the form of the

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financial projections delivered to the Administrative
Agent and the Lenders prior to the Closing Date.

As to any information contained in materials furnished
pursuant to Section 6.02(c), Borrower shall not be separately required to
furnish such information under clause (a) or (b) above, but the
foregoing shall not be in derogation of the obligation of Borrower to furnish
the information and materials described in clauses (a) and (b) above
at the times specified therein.

6.02.                        Certificates; Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Requisite Lenders:

(a)                                  concurrently
with the delivery of the financial statements referred to in
Section 6.01(b), a duly completed Compliance Certificate signed by a
Responsible Officer of Borrower;

(b)                                 promptly
after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of
Borrower by independent accountants in connection with the accounts or books of
Borrower or any Subsidiary, or any audit of any of them;

(c)                                  promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of
Borrower, and, within 5 days of their filing with the SEC, copies of all
annual, regular, periodic and special reports and registration statements which
Borrower may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

(d)                                 promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-United States
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party or any Subsidiary thereof; and

(e)                                  promptly
after request by the Administrative Agent, copies of the Nevada
“Regulation 6.090 Report” and “6-A Report”, and copies of any written
communication to Borrower or any of the Subsidiaries from any Gaming Board
advising it of a material violation of or non-compliance with any Gaming Law by
Borrower or any of the Subsidiaries.

Documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c)
(to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which Borrower posts such
documents, or provides a link thereto on Borrower’s website on the Internet at
the website address listed on Schedule 10.02; or (ii) on which such
documents are posted on Borrower’s behalf on an Internet or intranet website,
if any, to which

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each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent), provided that: 
(i) Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such
documents.  Notwithstanding anything
contained herein, in every instance Borrower shall be required to provide paper
copies of the Compliance Certificates required by Section 6.02(b) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by Borrower
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.

Borrower hereby
acknowledges that (a) certain portions of the Information (the “Borrower
Materials”) will be made available by the Administrative Agent and/or the
Arranger to the Lenders and the L/C Issuer by posting Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to Borrower or its securities)
(each, a “Public Lender”).  Borrower
hereby agrees that (w) Borrower will clearly and conspicuously mark all Borrower
Materials that are to be made available to Public Lenders “PUBLIC” (which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof); (x) by marking Borrower Materials “PUBLIC,” Borrower
shall be deemed to have authorized the Administrative Agent, the Arranger, the
L/C Issuer and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to Borrower or its securities for purposes of United
States Federal and state securities laws; (y) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (z) the Administrative Agent
and the Arranger shall be entitled to treat any Borrower Materials that are not
marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Investor.”  While
the use of Platforms is an approved method of distributing information, the use
of Platforms by the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders shall be subject to their obligations under Section 10.7.

6.03.                        Notices. 
Promptly notify the Administrative Agent and each Lender:

(a)                                  of
the occurrence of any Default;

(b)                                 Promptly
upon a Responsible Officer becoming aware that (i) any Person has
commenced a legal proceeding with respect to a claim against Borrower or any of
the Subsidiaries that is $5,000,000 or more in excess of the amount thereof
that is fully covered by insurance, (ii) any creditor or lessor under a
written credit agreement or material lease has asserted a default thereunder on
the part of Borrower or any of the Subsidiaries, (iii) any Person has
commenced a legal proceeding with respect to a claim against Borrower or any of
the Subsidiaries under a contract that is not a credit agreement

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or material lease in excess of $5,000,000 or which
otherwise may reasonably be expected to result in a Material Adverse Effect,
(iv) any labor union has notified Borrower of its intent to strike
Borrower or any of the Subsidiaries on a date certain and such strike would
involve more than 100 employees of Borrower and the Subsidiaries, or
(v) any Gaming Board has indicated its intent to consider or act upon a
License Revocation affecting locations generating, in the aggregate, 5% or more
of Borrower’s EBITDA or a fine or penalty of $500,000 or more with respect to
Borrower or any of the Subsidiaries, a written notice describing the pertinent
facts relating thereto and what action Borrower or the Subsidiaries are taking
or propose to take with respect thereto;

(c)                                  of
the occurrence of any ERISA Event; and

(d)                                 of
any material change in accounting policies or financial reporting practices by
Borrower or any Subsidiary thereof.

Each notice pursuant to
this Section shall be accompanied by a statement of a Responsible Officer of
Borrower setting forth details of the occurrence referred to therein and
stating what action Borrower has taken and proposes to take with respect
thereto.  Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions
of this Agreement and any other Loan Document that have been breached.

6.04.                        Payment of Obligations.  Pay and discharge as the same shall become
due and payable, all its material obligations and liabilities, including
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in
good faith by appropriate proceedings diligently conducted and adequate
reserves in accordance with GAAP are being maintained by Borrower or such
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.

6.05.                        Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and
(c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

6.06.                        Maintenance of Properties.  (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (c) use the standard of care typical
in the industry in the operation and maintenance of its facilities.

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6.07.                        Maintenance of Insurance.

(a)                                  Maintain
with financially sound and reputable insurance companies not Affiliates of
Borrower, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons and providing for not
less than 30 days’ prior notice to the Administrative Agent of termination,
lapse or cancellation of such insurance.

(b)                                 Without
limitation on the foregoing, Borrower and its Subsidiaries shall maintain
liability, casualty and other insurance which is substantially consistent with
the primary coverages maintained by Borrower and its Subsidiaries as of the
Closing Date (but with similar coverages for the Primm Acquisition or other
acquisitions), and in any event covering such risks and with such deductibles
as are customary in the case of similar businesses owning similar properties in
localities where Borrower or the applicable Subsidiary operates, provided that
the Borrower may increase any deductibles or self insurance limits or
retentions to up to $1,000,000 in its discretion by notice to the
Administrative Agent.  All such insurance
shall be carried through insurance companies rated A+ or better by A.M. Best.

(c)                                  In
any event, Borrower shall maintain and keep in force the following insurance:

(i)                                     at
all times during any period of construction of any material capital projects,
and with respect to any Property affected by such construction, a policy or
policies of builder’s “all risk” insurance in nonreporting form in an amount
not less than the full insurable completed value of such portion of the
affected Property on a replacement cost basis;

(ii)                                  a
policy or policies of fire and hazards “all risk” insurance for each Property
providing extended coverage in an amount not less than the full insurable value
of such Property on a replacement cost basis;

(iii)                               business
interruption insurance (including insurance against income loss during a period
of at least one year);

(iv)                              comprehensive
liability insurance naming on an “occurrence” basis, against claims for
“personal injury” liability, including bodily injury, death or property damage
liability, with an aggregate limit of not less than $25,000,000;

(v)                                 policies
of worker’s compensation insurance as may be required by applicable laws
(including employer’s liability insurance, if required by the Administrative
Agent), covering all employees of Borrower, its Subsidiaries and each relevant
contractor and subcontractor; and

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(vi)                              If
any Property is required to be insured pursuant to the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1968, and the
regulations promulgated thereunder, because it is located in an area which has
been identified by the Secretary of Housing and Urban Development as a Flood
Hazard Area, then Borrower shall provide, maintain and keep in force at all
times a flood insurance policy covering the Property in limits that would
exceed the damage caused by what is expected to be the most severe flood (or
any greater limits to the extent required by applicable law from time to time).

(d)                                 Each
such policy shall name the Administrative Agent as an additional insured, and
shall to the extent relevant, include a waiver of subrogation against the
Administrative Agent and the Lenders, contain a provision that provides for a
severability of interests, and shall provide that an act or omission by one of
the insured shall not reduce or avoid coverage with respect to the other
insureds, insure against loss or damage by hazards customarily included within
“all risk” and “extended coverage” policies and any other risks or hazards
which the Administrative Agent or the Majority Lenders may reasonably specify
(and shall include boiler and machinery insurance), shall contain a Lender’s
Loss Payable Endorsement in a form acceptable to the Administrative Agent in favor
of the Administrative Agent and shall be primary and noncontributory with any
other insurance carried by the Administrative Agent or the Lenders.

(e)                                  Borrower
shall supply the Administrative Agent with certificates of each policy required
hereunder and any other policy of insurance maintained in connection with any
of the Property, and, if requested, an original or underlyer of each such
policy and all endorsements thereto. 
When any insurance policy required hereunder expires, Borrower shall
furnish the Administrative Agent with proof acceptable to the Administrative
Agent that the policy has been reinstated, renewed or a new policy issued,
continuing in force the insurance covered by the policy which expired.  If Borrower fails to pay any such premium, the
Administrative Agent shall have the right, but not the obligation, to obtain
reasonable replacement coverage and advance funds to pay the premiums for it on
behalf of the Lenders.  Borrower shall
repay the Administrative Agent immediately on demand for any advance for such
premiums, which shall be considered to be an additional Loan bearing interest
from the date of demand at the Default Rate.

6.08.                        Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted;
or (b) the failure to comply therewith could not reasonably be expected to
have a Material Adverse Effect.

6.09.                        Books and Records.  Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of Borrower or such Subsidiary, as the case may be.

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6.10.                        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and (subject to Section 10.07) to make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants, all at the expense of
Borrower and at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to Borrower, provided,
however, that when an Event of Default exists the Administrative Agent
or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of Borrower at any time
during normal business hours and without advance notice.  The Administrative Agent and the Lenders
acknowledge that the provisions of Borrower’s Route Agreements are of a
confidential and proprietary nature.

6.11.                        Use of Proceeds.  Use the proceeds of the Credit Extensions
(a) on the Closing Date to refinance the obligations under the Existing
Credit Agreement and to consummate the Sands Acquisition (and, if then
scheduled to occur, the Primm Acquisition), and to pay related transactional
expenses, (b) on the Primm Closing Date, to consummate the Primm
Acquisition and to pay related transactional expenses and (c) at any time,
for proper working capital and general corporate purposes of Borrower and its
Subsidiaries not in contravention of any Law or of any Loan Document.

6.12.                        Additional Subsidiaries and Collateral.

(a)                                  Notify
the Administrative Agent at the time that any Person becomes a Subsidiary, and
promptly thereafter (and in any event within thirty days), cause such Person
(except to the extent that the Gaming Laws of the relevant jurisdiction do not
permit the same); to (i) execute and deliver to the Administrative Agent a
Guaranty or a joinder to a Guaranty, as the Administrative Agent shall deem
appropriate for such purpose, and (ii) deliver to the Administrative Agent
Collateral Documents of the types referred to in Section 4.01(a) and
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clauses (i) and (ii));

(b)                                 Notify
the Administrative Agent at the time of acquisition or the formation of any
Subsidiary, cause to be delivered to the Administrative Agent a pledge all of
the Equity Interests held by Borrower and its Subsidiaries in each such
Subsidiary  (except to the extent that
the Gaming Laws of the relevant jurisdiction do not permit the pledge of the
Equity Interests in any Person which is the holder of a gaming license);

(c)                                  Notify
the Administrative Agent at the time of the acquisition by Borrower or any of
its Subsidiaries of any fee or leasehold interest in real property, notice
thereof and, if requested by the Administrative Agent, a joinder to the
Security Agreement and the Pledge Agreement, a Deed of Trust and other
Collateral Documents in relation thereto.

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ARTICLE 
VII.

NEGATIVE COVENANTS

So long as any Lender
shall have any Commitment hereunder, any Loan or other Obligation to pay money
hereunder (other than unmatured indemnity obligations) shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Borrower shall
not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01.                        Liens. 
Create, incur, assume or suffer to exist any Lien or Negative Pledge
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:

(a)                                  Liens
and Negative Pledges pursuant to any Loan Document;

(b)                                 Liens
and Negative Pledges existing on the date hereof and listed on
Schedule 7.01 (including without limitation the Liens and Negative Pledges
existing on the date hereof in respect of the assets subject to the Sands
Acquisition and the Primm Acquisition and set forth on Schedule 7.01) and
any renewals or extensions thereof, provided that (i) the property
covered thereby is not changed, (ii) the amount secured or benefited
thereby is not increased, (iii) the direct or any contingent obligor with
respect thereto is not changed, and (iv) any renewal or extension of the
obligations secured or benefited thereby is permitted by Section 7.03(b);

(c)                                  Liens
and Negative Pledges on or with respect to Property acquired by Borrower or any
Subsidiaries that were in existence at the time of the acquisition of such
Property and were not created in contemplation of such acquisition;

(d)                                 any
Lien or Negative Pledge created by an agreement or instrument entered into by
Borrower or any Subsidiary in the ordinary course of its business which
consists of a restriction on the assignability, transfer or hypothecation of
such agreement or instrument;

(e)                                  Liens
for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;

(f)                                    carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

(g)                                 pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation, other
than any Lien imposed by ERISA;

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(h)                                 deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

(i)                                     easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person;

(j)                                     Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;

(k)                                  Liens
securing Indebtedness permitted under Section 7.03(f) and Negative Pledges
with respect to the property financed by such Indebtedness, provided
that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition;

(l)                                     Liens
securing Indebtedness permitted under Section 7.03(h) and Negative Pledges
with respect to the property financed by such Indebtedness, provided
that the same are released promptly following the repayment of such
Indebtedness; and

(m)                               Other
Liens on Property having an aggregate value not in excess of $5,000,000.

7.02.                        Investments.  Make any Investments, except:

(a)                                  Investments
consisting of the Sands Acquisition and the Primm Acquisition made through
Borrower or HGI–Casinos;

(b)                                 Investments
held by Borrower or any of its Subsidiaries in the form of cash equivalents or
short-term marketable debt securities;

(c)                                  advances
to officers, directors and employees of Borrower and Subsidiaries in the
ordinary course of business for travel, entertainment, relocation and analogous
ordinary business purposes;

(d)                                 Investments
of Borrower in any Subsidiary and Investments of any Subsidiary in Borrower or
in another Subsidiary;

(e)                                  Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial

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satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;

(f)                                    Contingent
Obligations permitted by Section 7.03;

(g)                                 Investments
made in the ordinary course of business by Borrower and its Subsidiaries in
Persons with whom they are parties to Route Agreements;

(h)                                 any
Investment made in settlement of gambling debts incurred by patrons of any
casino owned or operated by Borrower or any of its Subsidiaries which
settlements have been entered into in the ordinary course of business;

(i)                                     Investments
permitted by Section 7.09(e); and

(j)                                     other
Investments made when no Default or Event of Default has occurred and remains
continuing in an aggregate amount not to exceed $20,000,000 at any one time
outstanding.

7.03.                        Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:

(a)                                  Indebtedness
under the Loan Documents;

(b)                                 Indebtedness
under the Senior Subordinated Notes and under additional or replacement
Subordinated Debt having a maturity which is at least one year following the
last to occur of (A) Revolving Maturity Date, (B) the Term Loan
Maturity Date, or (C) or, in the case of any replacement Subordinated
Debt, not earlier than that of the Senior Subordinated Notes refinanced, and in
each case having representations, warranties, covenants, defaults and other material
provisions (other than economic terms) which are either (i) substantively
identical to those contained in the Indenture for the Senior Subordinated Notes
existing as of the Closing Date, or (ii) on terms and conditions when
taken as a whole that are no less favorable to the Lenders nor more onerous to
Borrower and the other Loan Parties than those contained in the Indenture for
the Senior Subordinated Notes existing as of the Closing Date, in each case as
reasonably determined by Administrative Agent;

(c)                                  Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof, provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder, and (ii) the terms
relating to principal amount, amortization, maturity, collateral (if any) and
subordination (if any), and (when taken as a whole) other material terms, of
any such refinancing, refunding, renewing or extending Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith,
are no less favorable in any material respect to the Loan Parties or the
Lenders than the terms of any agreement or instrument governing the
Indebtedness being refinanced, refunded, renewed or extended and the interest
rate applicable to any such refinancing, refunding,

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renewing or extending Indebtedness does not exceed the
then applicable market interest rate;

(d)                                 Contingent
Obligations of Borrower and its Subsidiaries in respect of Indebtedness
otherwise permitted hereunder of Borrower;

(e)                                  obligations
(contingent or otherwise) of Borrower or any Subsidiary existing or arising
under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view;” and (ii) except for
customary netting provisions, such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

(f)                                    Indebtedness
in respect of Capital Leases, Synthetic Lease Obligations and purchase money
obligations for fixed or capital assets within the limitations set forth in
Section 7.01(k), provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$25,000,000;

(g)                                 unsecured
Indebtedness in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding;

(h)                                 Indebtedness
assumed in connection with the Sands Acquisition and not created in
contemplation thereof in an aggregate principal amount not in excess of
$5,000,000; and

(i)                                     Indebtedness
assumed in connection with the Primm Acquisition and not created in
contemplation thereof in an aggregate principal amount not in excess of
$5,000,000.

7.04.                        Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:

(a)                                  any
Subsidiary may merge with Borrower, provided that Borrower shall be the
continuing or surviving Person; and

(b)                                 any
Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to Borrower or to another Subsidiary; provided
that if the transferor in such a transaction is a wholly-owned Subsidiary, then
the transferee must either be Borrower or a wholly-owned Subsidiary.

7.05.                        Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:

 87
 

 

(a)                                  Dispositions
of obsolete, surplus or worn out property, whether now owned or hereafter
acquired, in the ordinary course of business;

(b)                                 Dispositions
of inventory in the ordinary course of business;

(c)                                  Dispositions
of equipment or real property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such Disposition reinvested or otherwise applied
as set forth in Section 2.07(f);

(d)                                 Dispositions
of property by Borrower or any Subsidiary to Borrower or to any Subsidiary;

(e)                                  Dispositions
permitted by Section 7.04; and

(f)                                    Other
Dispositions of Property which either:

(i)                                   have
an aggregate value, during the term of this Agreement, not to exceed
$30,000,000, or

(ii)                                if the Senior Debt to
EBITDA Ratio as of the last day of the then most recent Fiscal Quarter is less
than 3.50:1.00, do not result in the pro forma Senior Debt to EBITDA Ratio
(after giving pro forma effect to reduction of Senior Debt in the amount of any
consideration received, and to reduction of EBITDA by the amount of EBITDA
associated with the assets Disposed of) as of such Fiscal Quarter being higher
than 3.50:1.00.

provided, however, that each
Disposition pursuant to this Section (other than clause (d) or (e))
shall be for fair market value.

7.06.                        Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:

(a)                                  so
long as no Default shall have occurred and be continuing or would result
therefrom, each Subsidiary may make Restricted Payments to Borrower, the Subsidiaries
and any other Person that owns an Equity Interest in such Subsidiary, ratably
according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;

(b)                                 Borrower
and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person;

(c)                                  so
long as no Default shall have occurred and be continuing or would result
therefrom, Borrower and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the

 88
 

 

substantially concurrent issue of new shares of its
common stock or other common Equity Interests;

(d)                                 for
so long at Borrower maintains its Subchapter S Election under the Internal
Revenue Code (or is a limited liability company or other entity, the tax
attributes of which are passed through to its owners pursuant to applicable
law), Borrower may make Permitted Tax Distributions not sooner than five
Business Days prior to the date upon which the related tax payments by the
ultimate owners of the Equity Interests in Borrower are due;

(e)                                  so
long as no Default shall have occurred and be continuing or would result
therefrom, Borrower may declare and pay cash dividends to its shareholders in
an aggregate amount not to exceed $7,000,000 during any Fiscal Year, provided
that if, as of the last day of any Fiscal Year ended after the Closing Date,
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 50% 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 Leverage Ratio and
Senior Leverage 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.

7.07.                        Prepayment of Subordinated Obligations.  Pay any (a) scheduled interest on any
Subordinated Debt unless the payment thereof is then required and permitted
pursuant to the terms of the indenture or other agreement governing such
Subordinated Debt, or (b) principal (including sinking fund payments) or
any other amount (other than scheduled interest payments) with respect to any
Subordinated Debt, or purchase or redeem (or offer to purchase or redeem) any
Subordinated Debt, or deposit any monies, securities or other Property with any
trustee or other Person to provide assurance that the principal or any portion
thereof of any Subordinated Debt will be paid when due or otherwise to provide
for the defeasance of any Subordinated Debt unless the payment thereof is then
required and permitted pursuant to the terms of the indenture or other
agreement governing such Subordinated Debt and except to the extent that the
source of such payment, purchase or redemption consists entirely of proceeds
from the issuance of Equity Interests in Borrower or new Subordinated Debt, provided,
in each case, that in no event shall Borrower make any such payment, purchase
or redemption if such payment, purchase or redemption is prohibited by the
applicable terms of subordination.

7.08.                        Change in Nature of Business.  Engage in any material line of business
substantially different from those lines of business conducted by Borrower and
its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

7.09.                        Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of Borrower, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to Borrower
or such Subsidiary as would be

 89
 

 

obtainable by Borrower or
such Subsidiary at the time in a comparable arm’s length transaction with a
Person other than an Affiliate, except:

(a)                                  Restricted
Payments permitted by Section 7.06;

(b)                                 transactions
amongst Borrower and any wholly-owned Subsidiary of Borrower, or amongst such
Subsidiaries;

(c)                                  customary
fees, indemnities and reimbursements may be paid to officers, consultants and
directors of Borrower and its Subsidiaries;

(d)                                 Borrower
and its Subsidiaries may enter into and make payments pursuant to employment
arrangements with officers and senior management employees in the ordinary
course of business; and

(e)                                  transactions
set forth on Schedule 7.09 hereto.

7.10.                        Burdensome Agreements.  Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that limits the ability
(a) of any Subsidiary to make Restricted Payments to Borrower or any
Subsidiary or to otherwise transfer property to Borrower or any Subsidiary, or
(b) of any Subsidiary to guarantee the Indebtedness of Borrower, except
for any limitation existing under or by reason of (i) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of Borrower or a Subsidiary; (ii) customary provisions
restricting assignment of any agreement entered into by Borrower or a
Subsidiary in the ordinary course of business; (iii) agreements with any
holder of a Lien permitted by Section 7.01 restricting the transfer of the
property subject thereto; (iv) customary restrictions and conditions
contained in any agreement relating to the Disposition of any property
permitted under Section 7.05 pending the consummation of such Disposition;
(v) any agreement in effect at the time such Subsidiary becomes a
Subsidiary of Borrower, so long as such agreement was not entered into in connection
with or in contemplation of such person becoming a Subsidiary of Borrower;
(vi) restrictions on cash or other deposits imposed by suppliers or
landlords under contracts entered into in the ordinary course of business; and
(vii) any restriction on property acquired or leased pursuant to any
instrument governing Indebtedness permitted by Section 7.03(c)
and (f), provided that none of the provisions of the indentures for
the Senior Subordinated Notes existing as of the date of this Agreement (or the
provisions of any indenture in respect of additional or replacement
Subordinated Debt permitted by Section 7.03(b)) shall be deemed to violate this
Section.

7.11.                        Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred
for such purpose.

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, provided that in
respect of each Fiscal Quarter ending prior to

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the consummation of the
Primm Acquisition, the maximum permitted Senior Debt to EBITDA Ratio shall be
4.00:1.00 or such lower ratio as may be otherwise required:

	
  Period

  	
   

  	
  Maximum Senior Debt to

  EBITDA Ratio

  
	
  Closing Date
  through and including June 30, 2008

  	
   

  	
  5.00:1.00

  
	
  September 30,
  2008 and December 31, 2008

  	
   

  	
  4.75:1.00

  
	
  March 31,
  2009 through December 31, 2009

  	
   

  	
  4.25:1.00

  
	
  March 31,
  2010 through December 31, 2010

  	
   

  	
  3.75:1.00

  
	
  March 31,
  2011 through December 31, 2011

  	
   

  	
  3.25:1.00

  
	
  March 31,
  2012 and thereafter

  	
   

  	
  3.00:1.00

  

 

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, provided that in
respect of each Fiscal Quarter ending prior to the consummation of the Primm
Acquisition, the maximum permitted Total Debt to EBITDA Ratio shall be
6.00:1.00 or such lower ratio as may be otherwise required:

	
  Period

  	
   

  	
  Maximum Total Debt to

  EBITDA Ratio

  
	
  Closing Date
  through and including June 30, 2008

  	
   

  	
  7.00:1.00

  
	
  September 30,
  2008 and December 31, 2008

  	
   

  	
  6.75:1.00

  
	
  March 31,
  2009 through December 31, 2009

  	
   

  	
  6.25:1.00

  
	
  March 31,
  2010 through December 31, 2010

  	
   

  	
  5.75:1.00

  
	
  March 31,
  2011 through December 31, 2011

  	
   

  	
  5.25:1.00

  
	
  March 31,
  2012 and thereafter

  	
   

  	
  5.00:1.00

  

 

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

  
	
  Closing Date through and including December 31,
  2008

  	
   

  	
  1.75:1.00

  
	
  March 31, 2009 through and including December 31,
  2010

  	
   

  	
  2.00:1.00

  
	
  March 31, 2011 through and including December 31,
  2011

  	
   

  	
  2.25:1.00

  
	
  March 31, 2012 and thereafter

  	
   

  	
  2.50:1.00

  

 

7.15.                        Capital Expenditures.  Make or become legally obligated to make any
Capital Expenditure other than:

(a)                                  to
the extent construed as a Capital Expenditure, the Sands Regent Acquisition and
the Primm Acquisition;

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(b)                                 to
the extent construed as a Capital Expenditure, Net Cash Proceeds, proceeds of
insurance or condemnation awards (or payments in lieu thereof) applied pursuant
to Section 2.07(f);

(c)                                  Capital
Expenditures in an amount not to exceed $8,000,000 incurred in connection with
the expansion of the Rail City Casino; and

(d)                                 
in addition to the foregoing Capital Expenditures, during each Fiscal Year,
Capital Expenditures in an aggregate amount not to exceed 7% of the gross
revenues of Borrower and its Subsidiaries during the immediately preceding
Fiscal Year, as calculated in accordance with GAAP.

7.16.                        Hostile Acquisitions.  Directly or indirectly use the proceeds of
any Loan in connection with the acquisition of part or all of a voting interest
of five percent or more in any corporation or other business entity if such
acquisition is opposed by the board of directors or management of such corporation
or business entity.

7.17.                        Interest Rate Hedging Arrangements.  Fail to enter into and maintain the following
Swap Contracts:

(a)                                  Prior
to the date which is 90 days following the Closing Date enter into Swap
Contracts with one or more of the Lenders (or other Persons reasonably
acceptable to the Arrangers) having a tenor of at least three years 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 that date having a fixed interest rate or
being subject to such Swap Agreements, and on terms otherwise acceptable to the
Joint Lead Arrangers.

(b)                                 Prior
to the date which is 90 days following the Primm Closing Date enter into
additional Swap Contracts with one or more of the Lenders (or other Persons
reasonably acceptable to the Arrangers) having a tenor of at least three years
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 being subject to such Swap Contracts, and on terms otherwise acceptable
to the Joint Lead Arrangers.

(c)                                  Prior
to the date which is 90 days following the making of any Incremental Term
Loans, enter into additional Swap Contracts with one or more of the Lenders (or
other Persons reasonably acceptable to the Arrangers) having a tenor of at
least three years 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 being subject to such Swap Contracts, and on
terms otherwise acceptable to the Joint Lead Arrangers.

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ARTICLE  VIII.

EVENTS
OF DEFAULT AND REMEDIES

8.01.                        Events of Default.  Any of the following shall constitute an
Event of Default:

(a)                                  Non-Payment.  Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any
Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or

(b)                                 Specific
Covenants.  Borrower fails to perform
or observe any term, covenant or agreement contained in any of
Section 6.01, 6.02, 6.03, 6.05 (as to existence), 6.10, 6.11 or 6.12
or Article VII; or

(c)                                  Other
Defaults.  Any Loan Party fails to
perform or observe any other covenant or agreement (not specified in
subsection (a) or (b) above) contained in any Loan Document on its
part to be performed or observed and such failure continues for 30 days after
the earlier of (i) the date upon which Borrower has knowledge of such default,
or (ii) the date upon which written notice thereof is provided to Borrower by
the Administrative Agent or any Lender; or

(d)                                 Representations
and Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of Borrower or any other Loan Party herein, in any other Loan Document,
or in any document delivered in connection herewith or therewith shall be
incorrect or misleading when made or deemed made; or

(e)                                  Cross-Default.  (i) Borrower or any Subsidiary
(A) fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any
Indebtedness or Contingent Obligation (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $20,000,000, or (B) fails to observe or perform any other agreement
or condition relating to any such Indebtedness or Contingent Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs (other than any due on sale provision), the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Contingent Obligation to become payable
or cash collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early 

 93
 

 

Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to
which Borrower or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (B) any Termination Event (as so defined) under such
Swap Contract as to which Borrower or any Subsidiary is an Affected Party (as
so defined) and, in either event, the Swap Termination Value owed by Borrower
or such Subsidiary as a result thereof is greater than $20,000,000; or

(f)                                    Insolvency
Proceedings, Etc.  Any Loan Party or
any of its Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for 60 calendar days, or an order
for relief is entered in any such proceeding; or

(g)                                 Inability
to Pay Debts; Attachment. 
(i) Borrower or any Subsidiary becomes unable or admits in writing
its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is
issued or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 30 days after its
issue or levy; or

(h)                                 Judgments.  There is entered against Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding $20,000,000 to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could
reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B) there is a period of 20
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or

(i)                                     ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $10,000,000, or (ii) Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in excess of
$10,000,000; or

(j)                                     Invalidity
of Loan Documents.  Any provision of
any Loan Document, at any time after its execution and delivery and for any
reason other than as 

 94
 

 

expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations to pay money (other than unmatured
indemnity obligations), ceases to be in full force and effect; or any Loan
Party or any other Person contests in any manner the validity or enforceability
of any provision of any Loan Document; or any Loan Party denies that it has any
or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any provision of any Loan Document; or

(k)                                  Change
of Control.  Any Change of Control
occurs;

(l)                                     License
Revocation.  Any License Revocation
in respect of locations accounting, in the aggregate, for more than 7.5% of
Borrower’s EBITDA occurs and remains continuing for more than five Business
Days, except in connection with any Disposition of the relevant gaming licensee
which is not prohibited by the terms of this Agreement.

8.02.                        Remedies Upon Event of Default.  If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Requisite Lenders, take any or all of the following actions:

(a)                                  declare
the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b)                                 declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by Borrower;

(c)                                  require
that Borrower Cash Collateralize the L/C Obligations (in an amount equal to the
then Outstanding Amount thereof); and

(d)                                 exercise
on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents;

provided, however, that upon
the occurrence of an actual or deemed entry of an order for relief with respect
to Borrower under the Bankruptcy Code of the United States, the obligation of
each Lender to make Loans and any obligation of the L/C Issuer to make L/C
Credit Extensions shall automatically terminate, the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of Borrower to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender. Each of the Administrative Agent and the Lenders acknowledges that its
ability to pursue the remedies described above is subject to, and limited by,
the terms of applicable Gaming Laws.

8.03.                        Application of Funds.  After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the 

 95
 

 

proviso to
Section 8.02), any amounts received on account of the Obligations shall be
applied by the Administrative Agent in the following order:

First,
to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;

Second,
to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal and interest) payable to the Lenders
and the L/C Issuer (including fees, charges and disbursements of counsel to the
respective Lenders and the L/C Issuer (including fees and time charges for
attorneys who may be employees of any Lender or the L/C Issuer) and amounts
payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;

Third,
to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans, L/C Borrowings and other Obligations (including without
limitation Secured Swap Contracts, ratably among the Lenders and the L/C Issuer
(and, in the case of any Secured Swap Contracts, any relevant Affiliate of any
Lender counterparties thereto)), ratably among the Lenders and the L/C Issuer
in proportion to the respective amounts described in this clause Third payable
to them;

Fourth,
to payment of that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Fourth held by
them;

Fifth,
to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and

Last,
the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to Borrower or as otherwise required by Law.

Subject to Section 2.05(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
clause Fifth above shall be applied to satisfy drawings under such
Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 96
 

 

ARTICLE  IX.

ADMINISTRATIVE
AGENT

9.01.                        Appointment and Authority.  Each of the Lenders and the L/C Issuer hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither Borrower nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions.

9.02.                        Rights as a Lender.  The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

9.03.                        Exculpatory Provisions.  The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, the Administrative Agent:

(a)                                  shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

(b)                                 shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Requisite Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

(c)                                  shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to Borrower or any of its Affiliates that is communicated
to or obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.

The Administrative Agent
shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Requisite Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in 

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good faith shall be necessary, under the circumstances
as provided in Sections 10.01 and 8.02) or (ii) in the absence
of its own gross negligence or willful misconduct (as determined by a court of
competent jurisdiction by final and nonappealable judgment).  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by Borrower, a Lender or the L/C
Issuer.

The Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection
with this Agreement or any other Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.

9.04.                        Reliance by Administrative Agent.  The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or
the L/C Issuer, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Administrative Agent
shall have received notice to the contrary from such Lender or the L/C Issuer
prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with
legal counsel (who may be counsel for Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants or
experts.

9.05.                        Delegation of Duties.  The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article
shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

9.06.                        Resignation of Administrative Agent.  The Administrative Agent may at any time give
notice of its resignation to the Lenders, the L/C Issuer and Borrower.  Upon receipt of any such notice of
resignation, the Requisite Lenders shall have the right, in consultation with
Borrower, to appoint a successor, which shall be a bank with an office in the
United States, or an 

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Affiliate of any such
bank with an office in the United States. 
If no such successor shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer,
appoint a successor Administrative Agent meeting the qualifications set forth
above, provided that if the Administrative Agent shall notify Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the
retiring Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender and the L/C Issuer directly, until such time as the Requisite Lenders
appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between Borrower and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall continue
in effect for the benefit of such retiring Administrative Agent, its sub agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting
as Administrative Agent.

Any resignation by Bank
of America as Administrative Agent pursuant to this Section shall also
constitute its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring
L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangement satisfactory to the retiring L/C Issuer to
effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit.

9.07.                        Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon the Administrative Agent
or any other Lender or any of their Related Parties and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or 

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based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.

9.08.                        No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, none of the Joint Lead Arrangers, Syndication Agents or
Documentation Agent listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent,
a Lender or the L/C Issuer hereunder.

9.09.                        Collateral and Guaranty Matters.  The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion:

(a)                                  to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Revolving
Commitments and payment in full of the Term Loans and all other Obligations
(other than contingent indemnification obligations) and the expiration or
termination of all Letters of Credit, (ii) that is sold or to be sold as
part of or in connection with any sale permitted hereunder or under any other Loan
Document, or (iii) subject to Section 10.01, if approved, authorized
or ratified in writing by the Requisite Lenders;

(b)                                 to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is permitted by Section 7.01(k); and

(c)                                  to
release any Subsidiary from its Guaranty if such Person ceases to be a  Subsidiary as a result of a transaction
permitted hereunder.

Upon request by the
Administrative Agent at any time, the Requisite Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Subsidiary from its
Guaranty pursuant to this Section 9.09.

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ARTICLE  X.

MISCELLANEOUS

10.01.                  Amendments,
Etc.

(a)                                  No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by Borrower or any other Loan Party
therefrom, shall be effective unless in writing signed by the Requisite Lenders
and Borrower or the applicable Loan Party, as the case may be, and acknowledged
by the Administrative Agent, provided that:

(i)                                     interest
rates and other monetary amounts payable in respect of the Revolving
Commitments may be reduced, and the Revolving Maturity Date may be extended, by
the Revolving Lenders directly affected thereby, without the approval of the
Term Lenders; and

(ii)                                  interest
rates and other monetary amounts payable in respect of the Term Loans and the
Term Commitments may be reduced, and the date upon which any installment of
principal under the Term Loan or the Term Loan Maturity Date may be extended,
by those of the Term Lenders directly affected thereby without the approval of
the Revolving Lenders.

(b)                                 Notwithstanding
any other provision of this Agreement or the other Loan Documents to the
contrary, no amendment, waiver or consent of this Agreement or the other Loan
Documents shall:

(i)                                     waive
any condition set forth in Section 4.01(a) without the written consent of each
Lender;

(ii)                                  waive
any condition set forth in Section 4.03 without the written consent of
each Delay Draw Term B Lender;

(iii)                               extend
or increase the Commitments of any Lender (or reinstate any Commitments
terminated pursuant to Section 8.02) without the written consent of that
Lender;

(iv)                              postpone
any date fixed by this Agreement or any other Loan Document for any payment or
mandatory prepayment of principal, interest, fees or other amounts due to the
Lenders (or any of them) or any scheduled or mandatory reduction of any of the
Commitments hereunder or under any other Loan Document, without the written
consent of each Lender directly affected thereby;

(v)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (c)(v) below regarding the Administrative
Agent Fee Letter) any fees or other amounts payable hereunder or under any
other Loan Document, without the written consent of each Lender directly
affected thereby; provided, however, that only the consent of the

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Requisite Lenders shall be necessary (i) to amend
the definition of “Default Rate” or to waive any obligation of Borrower to pay
interest or Letter of Credit Fees at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;

(vi)                              change
Section 2.15 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

(vii)                           change
any provision of this Section or the definition of “Requisite Lenders” or any
other provision hereof specifying the number or percentage of Lenders required
to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

(viii)                        impose any
greater restriction on the ability of any Lender to assign any of its rights or
obligations under any Commitment of that Lender hereunder without the written
consent of Lenders having more than 50% of the same class of Commitment;

(ix)                                release
any Subsidiary from its Guaranty without the written consent of each Lender
(except in the case of any permitted sale or disposition of that Subsidiary);
or

(x)                                   release
any Collateral having a value which is in excess of $5,000,000 from the Lien of
the Collateral Documents without the written consent of each Lender (except in
connection with the permitted sale, transfer or other disposition of that
Collateral to a Person other than Borrower or a Subsidiary).

(c)                                  Notwithstanding
the foregoing provisions of this Section, (i) no amendment, waiver or
consent shall, unless in writing and signed by the L/C Issuer in addition to
the Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit issued
or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; and (iv) Section 10.06(h) may
not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at
the time of such amendment, waiver or other modification; and (v) the
Administrative Agent Fee Letter and the Lead Arranger Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.

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(d)                                 Each
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

(e)                                  Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that
the Commitments of that Lender may not be increased or extended without the
consent of that Lender.

10.02.                  Notices;
Effectiveness; Electronic Communication.

(a)                                  Notices
Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

(i)                                     if
to Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender,
to the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and

(ii)                                  if
to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.

Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through
electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).

(b)                                 Electronic
Communications.  Notices and other
communications to the Lenders and the L/C Issuer hereunder may be delivered or
furnished by electronic communication (including e mail and Internet or
intranet websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to Article II if such Lender or the L/C Issuer, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent or Borrower may, in
its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

Unless the Administrative Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement 

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from the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

(c)                                  Change
of Address, Etc.  Each of Borrower,
the Administrative Agent, the L/C Issuer and the Swing Line Lender may change
its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to Borrower, the Administrative Agent, the L/C Issuer and the Swing
Line Lender.

(d)                                 Reliance
by Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent, the L/C Issuer and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on
behalf of Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof.  Borrower shall indemnify the Administrative
Agent, the L/C Issuer, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of Borrower.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

10.03.                  No Waiver; Cumulative Remedies.  No failure by any Lender, the L/C Issuer or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

10.04.                  Expenses;
Indemnity; Damage Waiver.

(a)                                  Costs
and Expenses.  Borrower shall pay
(i) all reasonable out of pocket expenses incurred by the Administrative
Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out of pocket
expenses incurred by the 

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L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out of pocket expenses incurred by the
Administrative Agent, any Lender or the L/C Issuer (including the fees, charges
and disbursements of any counsel for the Administrative Agent, any Lender or
the L/C Issuer), and shall pay all fees and time charges for attorneys who may
be employees of the Administrative Agent, any Lender or the L/C Issuer, in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of
Credit issued hereunder, including all such out of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

(b)                                 Indemnification
by Borrower.  Borrower shall
indemnify the Administrative Agent, the Joint Lead Arrangers, the Syndication
Agents, and the Documentation Agent (and any sub-agents of such persons), each
Lender and the L/C Issuer, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from
all fees and time charges and disbursements for attorneys who may be employees
of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by Borrower or any other Loan Party arising
out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to Borrower or any of its Subsidiaries,
or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by Borrower or any other
Loan Party, and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by Borrower or any
other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if Borrower or such
Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

(c)                                  Reimbursement
by Lenders.  To the extent that
Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this 

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Section to be paid by it to the Administrative Agent
(or any sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity.  The obligations of the
Lenders under this subsection (c) are subject to the provisions of
Section 2.14(d).

(d)                                 Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. 
No Indemnitee referred to in subsection (b) above shall be liable
for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby.

(e)                                  Payments.  All amounts due under this Section shall be
payable not later than ten Business Days after demand therefor.

(f)                                    Survival.  The agreements in this Section shall survive
the resignation of the Administrative Agent and the L/C Issuer, the replacement
of any Lender, the termination of the Aggregate Revolving Commitments and the
repayment, satisfaction or discharge of the Term Loans and all the other
Obligations.

10.05.                  Payments Set Aside.  To the extent that any payment by or on
behalf of Borrower is made to the Administrative Agent, the L/C Issuer or any
Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each
Lender and the L/C Issuer severally agrees to pay to the Administrative Agent
upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect.  The obligations of 

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the Lenders and the L/C
Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

10.06.                  Successors
and Assigns.

(a)                                  Successors
and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that neither Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section, or (iv) to an SPC in accordance with
the provisions of subsection (h) of this Section 10.06 and any other
attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b)                                 Assignments
by Lenders.  Any Lender may at any
time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitments and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to
it), provided that:

(i)                                     except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitments and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitments (which for this
purpose includes Loans outstanding thereunder) or, if the Commitments are not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than, with respect to
(A) Revolving Commitments or Revolving Loans, $5,000,000 and (B) Term
Commitments or Term Loans, $1,000,000, unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided that assignments shall be aggregated in respect of related
Approved Funds for purposes of such minimum assignment amount;

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(ii)                                  each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitments assigned, except that this
clause (iii) shall not apply to rights in respect of Swing Line Loans;

(iii)                               each
assignment must be approved by the Administrative Agent, the L/C Issuer and the
Swing Line Lender unless the Person that is the proposed assignee is itself a
Lender or an Affiliate or an Approved Fund with respect to a Lender (whether or
not the proposed assignee would otherwise qualify as an Eligible Assignee),
which in the case of any assignment of a Revolving Commitment, is already the
holder of a Revolving Commitment; and

(iv)                              the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500 (provided that only one such fee shall be payable in the case of
multiple contemporaneous assignments to or by related Approved Funds), and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, Borrower (at
its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c)                                  Register.  The Administrative Agent, acting solely for
this purpose as an agent of Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register
shall be available for inspection by each of Borrower and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a
consent for a material or substantive change to the Loan Documents is 

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pending, any Lender wishing to consult with other
Lenders in connection therewith may request and receive from the Administrative
Agent a copy of the Register.  The Administrative
Agent shall provide the Lenders with a copy of the Register upon request not
more frequently than quarterly, or more often if reasonably requested by the
Lead Arrangers.

(d)                                 Participations.  Any Lender may at any time, without the
consent of, or notice to, Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or Borrower or any of
Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of that Lender’s rights and/or obligations under this Agreement
(including all or a portion of any of its Commitments and/or the Loans
(including that Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it), provided that (i) that Lender’s obligations
under this Agreement shall remain unchanged, (ii) that Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) Borrower, the Administrative Agent, the Lenders and
the L/C Issuer shall continue to deal solely and directly with that Lender in
connection with that Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any  provision of this
Agreement, provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant.  Subject to subsection (e) of this
Section, Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section.  To
the extent permitted by law, each Participant also shall be entitled to the benefits
of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender.

(e)                                  Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with Borrower’s
prior written consent.  A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of
Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f)                                    Certain
Pledges.  Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

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(g)                                 Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

(h)                                 Special
Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and Borrower (an “SPC”) the option to provide all or any part of any Loan
that such Granting Lender would otherwise be obligated to make pursuant to this
Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.14(b)(ii).  Each party hereto hereby agrees that
(i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of Borrower under this Agreement (including its obligations under
Section 3.04), (ii) no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including
the approval of any amendment, waiver or other modification of any provision of
any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State
thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without
prior consent of Borrower and the Administrative Agent and with the payment of
a processing fee of $3,500, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (ii) disclose
on a confidential basis any non-public information relating to its funding of
Loans to any rating agency, commercial paper dealer or provider of any surety
or Contingent Obligation or credit or liquidity enhancement to such SPC.

(i)                                     Resignation
as L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may,
(i) upon 30 days’ notice to Borrower and the Lenders, resign as L/C 

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Issuer and/or (ii) upon 30 days’ notice to
Borrower, resign as Swing Line Lender. 
In the event of any such resignation as L/C Issuer or Swing Line Lender,
Borrower shall be entitled to appoint from among the Lenders a successor L/C
Issuer or Swing Line Lender hereunder, provided, however, that no
failure by Borrower to appoint any such successor shall affect the resignation
of Bank of America as L/C Issuer or Swing Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.05(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.06(c).

10.07.                  Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders
and the L/C Issuer agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),
(c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto,
(e) in connection with the exercise of any remedies hereunder or under any
other Loan Document or any action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same
as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or
its advisors) to any swap or derivative transaction relating to Borrower and
its obligations, (g) with the consent of Borrower or (h) to the
extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than Borrower.

For purposes of this
Section, “Information” means all information received from Borrower or
any Subsidiary relating to Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis
prior to disclosure by Borrower or any Subsidiary.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information, provided that the use
of the IntraLinks system (or any other similar Platform described in
Section 6.02) in the manner described in that 

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Section shall be consistent with the obligations of
the Administrative Agent, the Lenders and the L/C Issuer under this sentence.

10.08.                  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, but only
after obtaining the prior written consent of the Administrative Agent, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit
or the account of Borrower or any other Loan Party against any and all of the
obligations of Borrower or such Loan Party now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer,
irrespective of whether or not such Lender or the L/C Issuer shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of Borrower or such Loan Party may be contingent or unmatured or
are owed to a branch or office of such Lender or the L/C Issuer different from
the branch or office holding such deposit or obligated on such
indebtedness.  The rights of each Lender,
the L/C Issuer and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such
Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to
notify Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

10.09.                  Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to Borrower. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.

10.10.                  Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of
a manually executed counterpart of this Agreement.

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10.11.                  Survival of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto
or thereto or in connection herewith or therewith shall survive the execution
and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation to pay money
hereunder (other than unmatured indemnity obligations) shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.

10.12.                  Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable,
(a) the legality, validity and enforceability of the remaining provisions
of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.13.                  Replacement of Lenders.  If any Lender requests compensation under
Section 3.04, or if Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, if any Lender is a Defaulting Lender or if any other
circumstance exists hereunder that gives Borrower the right to replace a Lender
as a party hereto, then Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

(a)                                  Borrower
shall have paid to the Administrative Agent the assignment fee specified in
Section 10.06(b);

(b)                                 such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or
Borrower (in the case of all other amounts);

(c)                                  in
the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such
compensation or payments thereafter; and

(d)                                 such
assignment does not conflict with applicable Laws.

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A Lender shall not be
required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling
Borrower to require such assignment and delegation cease to apply.

10.14.                  No Advisory or Fiduciary Responsibility.  In connection with all aspects of each
transaction contemplated hereby, Borrower acknowledges and agrees that:  (i) the credit facilities provided for
hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification
hereof or of any other Loan Document) are an arm’s-length commercial
transaction between Borrower and the other Loan Parties, on the one hand, and
the Administrative Agent and the Arrangers, on the other hand, and Borrower and
each other Loan Party are capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and the Arrangers
each is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary, for Borrower or the other Loan Parties or any of
their respective Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor any Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of Borrower or the other Loan
Parties with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of
whether the Administrative Agent or any Arranger has advised or is currently
advising Borrower or the other Loan Parties or any of their respective
Affiliates on other matters) and neither the Administrative Agent nor any
Arranger has any obligation to Borrower or the other Loan Parties or any of
their respective Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other
Loan Documents; (iv) the Administrative Agent and the Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of Borrower or the other Loan Parties
or any of their respective Affiliates, and neither the Administrative Agent nor
any Arranger has any obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Administrative
Agent and the Arrangers have not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and Borrower and the other Loan Parties
have consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate. 
Borrower and each other Loan Party hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent or the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty.

10.15.                  Governing
Law; Jurisdiction; Etc.

(a)                                  GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

(b)                                 SUBMISSION
TO JURISDICTION.  BORROWER AND EACH
OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, 

 114
 

 

FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c)                                  WAIVER
OF VENUE.  BORROWER AND EACH OTHER
LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (B) OF THIS SECTION.  EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)                                 SERVICE
OF PROCESS.  EACH LOAN PARTY  IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

10.16.                  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR 

 115
 

 

OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.17.                  USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies Borrower, which information includes the
name and address of Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify Borrower in accordance
with the Act.

10.18.                  Time of the Essence.  Time is of the essence of the Loan Documents.

10.19.                  Designation as Senior Debt.  All Obligations are hereby certified and
designated to be “Designated Senior Indebtedness” for purposes of and as
defined in the Indenture dated as of June 11, 2004, between Borrower and
U.S. Bank National Association, as trustee, and all supplemental indentures
thereto and in the Indenture dated as of November 22, 2004, between
Borrower and U.S. Bank National Association, as trustee, and all supplemental
indentures thereto.

10.20.                  Delivery of Lender Addenda.  Each Lender which is a party to this Credit
Agreement as of the Closing Date shall become a party to this Agreement by
delivering to the Administrative Agent a Lender Addendum duly executed by such
Lender, the Borrower and the Administrative Agent setting forth the amount of
its Revolving Commitment, Term Loan B Commitment and Delay Draw Term Loan
Commitments (in each case, if any).

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

	
  

  	
  HERBST GAMING, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst

  
	
   

  	
   

  	
  President and Chief Executive Officer

  

 

 

[Herbst Credit Agreement]

 

 

	
  

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna F. Kimbrough

  	
   

  
	
   

  	
   

  	
  Donna F. Kimbrough

  
	
   

  	
   

  	
  Assistant Vice President

  

 

 

[Herbst Credit Agreement]

 

 

	
  

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as a Lender, L/C Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter J. Vitale

  	
   

  
	
   

  	
   

  	
  Peter J. Vitale

  
	
   

  	
   

  	
  Senior Vice President

  

 

 

[Herbst Credit Agreement]

 

 

	
  

  	
  LEHMAN BROTHERS COMMERCIAL

  
	
   

  	
  BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Janes

  	
   

  
	
   

  	
   

  	
  George Janes

  
	
   

  	
   

  	
  Chief Credit Officer

  

 

	
  

  	
  LEHMAN COMMERCIAL PAPER INC.,

  
	
   

  	
  as a Lender and as a Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Hughes

  	
   

  
	
   

  	
   

  	
  William J. Hughes

  
	
   

  	
   

  	
  Managing Director

  

 

 

[Herbst Credit Agreement]

 

 

	
  

  	
  WACHOVIA BANK, N.A.,
  as a Lender and as a

  
	
   

  	
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Lee Wagner, Jr.

  	
   

  
	
   

  	
   

  	
  G. Lee Wagner, Jr.

  
	
   

  	
   

  	
  Vice President

  

 

 

[Herbst Credit Agreement]

 

 

	
  

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as a Lender and as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Denette Corrales

  	
   

  
	
   

  	
   

  	
  Denette Corrales

  
	
   

  	
   

  	
  Senior Vice President

  

 

 

[Herbst Credit Agreement]Exhibit
4(f)

[Face of Note]

Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

	
  CUSIP NO.                        

  	
   

  	
  PRINCIPAL AMOUNT: $                       

  
	
  ISIN                                   

  	
   

  	
   

  
	
  Common Code No.                 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED NO.       

  	
   

  	
   

  

 

TARGET
CORPORATION

       %
Notes due               

TARGET
CORPORATION, a corporation duly organized and existing under the laws of the
State of Minnesota (hereinafter called the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of                                                     
Dollars ($                     )
on                         
and to pay interest thereon from                       
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for semi-annually on                        
and                       
of each year, commencing                                      ,
at the rate of          % per
annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest next preceding such Interest Payment Date.  The Regular Record Date for an Interest
Payment Date shall be the date 15 calendar days prior that that Interest
Payment Date (whether or not a Business Day). 
“Business Day” as used hereinabove is a day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York.

Any
interest not punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special

 

Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.

Payment
of interest on this Security will be made in immediately available funds at the
office or agency of the Company maintained for that purpose in New York, New
York in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided, however, that, at the option of the Company,
payment of interest may be paid by check mailed to the Person entitled thereto
at such Person’s last address as it appears in the Security Register or by wire
transfer to such account as may have been designated by such Person.  Payment of principal of and interest on this
Security at Maturity will be made against presentation of this Security at the
office or agency of the Company maintained for that purpose in New York, New
York.

Reference
is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

 

IN
WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.

	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TARGET CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

	
  TRUSTEE’S CERTIFICATE OF

  
	
  AUTHENTICATION

  
	
  This is one of the Securities of the

  
	
  series designated therein referred to

  
	
  in the within-mentioned Indenture.

  
	
   

  
	
  THE BANK OF NEW YORK TRUST COMPANY, N.A.,

  
	
  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

[Reverse of Note]

TARGET
CORPORATION

           %
Notes due               

This
Security is one of a duly authorized issue of securities of the Company (herein
called the “Securities”), issued and to be issued in one or more series under
an indenture dated as of August 4, 2000, as amended or supplemented from time
to time (herein called the “Indenture”), between the Company and The Bank of New York Trust Company, N.A.  (as
successor in interest to Bank One Trust Company, N.A.), as Trustee (herein
called the “Trustee,” which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.  This
Security is one of the series designated on the face hereof, such series being
limited in initial aggregate principal amount to $                      ;
provided, however, that the Company may,
without the consent of the Holders of the Securities of this series, issue
additional Securities with the same terms as the Securities of this series, and
such additional Securities shall be considered part of the same series under
the Indenture as the Securities of this series.

The Securities of this series
are not subject to repayment at the option of the Holder hereof prior to                                   .  The Securities of this series will not be
entitled to any sinking fund.

The Securities of this series are redeemable at the option of the
Company at any time, in whole or in part, at a Redemption Price equal to the
greater of the following amounts, plus, in each case, accrued and unpaid
interest thereon to the Redemption Date: 
(i) 100% of the principal amount of the Securities to be redeemed;
and (ii) the sum of the present values of the Remaining Scheduled
Payments.

In determining the present values of the Remaining
Scheduled Payments, such payments will be discounted to the Redemption Date on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) using a discount rate equal to the Treasury Rate plus      %
(                         
basis points).  The Quotation Agent for
purposes of determining the Redemption Price is                         .

“Treasury Rate” means, with respect to any
Redemption Date, the rate per annum equal to the semi-annual equivalent yield
to maturity or interpolated yield to maturity of the Comparable Treasury
Issue.  In determining this rate, the price
for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) will be assumed to be equal to the Comparable Treasury Price for such
Redemption Date.

 

“Comparable Treasury Issue” means the United
States Treasury security selected by an Independent Investment Banker as having
an actual or interpolated maturity comparable to the remaining term of the
Securities of this series to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of such Securities.

“Independent Investment
Banker” means each of                                                                                 
or their respective successors as may be appointed from time to time by the Quotation
Agent after consultation with the Company; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a “primary treasury dealer”),
another primary treasury dealer shall be substituted therefor by the Company.

“Comparable Treasury Price” means (A) the
arithmetic average of the Reference Treasury Dealer Quotations for such
Redemption Date after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (B) if the Quotation Agent obtains fewer than three
Reference Treasury Dealer Quotations, the arithmetic average of all Reference
Treasury Dealer Quotations for such Redemption Date.

“Reference Treasury Dealer Quotations” means,
with respect to each Reference Treasury Dealer and any Redemption Date, the
arithmetic average, as determined by the Quotation Agent, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by
such Reference Treasury Dealer by 3:30 p.m. on the third Business Day preceding
such Redemption Date.

“Reference Treasury Dealer” means each of                                                                  
or their respective successors and any other primary treasury dealer selected
by the Quotation Agent after consultation with the Company.

“Remaining Scheduled Payments” means, with
respect to any Security of this series, the remaining scheduled payments of the
principal and interest thereon that would be due after the related Redemption
Date but for such redemption; provided, however,
that, if such Redemption Date is not an Interest Payment Date with respect to
such Security, the amount of the next scheduled interest payment thereon will
be reduced by the amount of interest accrued thereon to such Redemption Date.

A partial redemption of the Securities of this series may be effected
by such method as the Trustee shall deem fair and appropriate and may provide
for the selection for redemption of a portion of the principal amount of the
Securities of this series equal to an authorized denomination.

Notice of any redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of the
Securities of this series to be redeemed.

 

Unless the Company defaults in payment of the
Redemption Price, on and after the Redemption Date interest will cease to
accrue on the Securities of this series or portions thereof called for
redemption.

If an
Event of Default (as defined in the Indenture) with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. 
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

The
Indenture contains provisions for defeasance at any time of (i) the entire
indebtedness on this Security and (ii) certain restrictive covenants and
certain Events of Default, upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Security.

Upon
due presentment for registration of transfer of this Security at the office
or  agency of the Company in New York,
New York, a new Security or Securities of this series in authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, as provided in the Indenture and subject to the
limitations provided therein and to the limitations described below, without
charge except for any tax or other governmental charge imposed in connection
therewith.

This
Security is exchangeable for definitive Securities in registered form only if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for this Security or if at any time the Depositary
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and a successor depositary is not appointed within 90 days, (ii)
the Company, in its sole discretion, determines that this Security shall be
exchangeable for definitive Securities in registered form and notifies the
Trustee thereof or (iii) an Event of Default with respect to the Securities
represented hereby has occurred and is continuing.  If this Security is exchangeable pursuant to
the preceding sentence, it shall be exchangeable for definitive Securities in
registered form, bearing interest at the same rate, having the same date of
issuance, redemption provisions, Stated Maturity and other terms and of
authorized denominations aggregating a like amount.

This
Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the

 

Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor.  Except as provided
above, owners of beneficial interests in this global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be
considered the Holders hereof for any purpose under the Indenture.

No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed, except that in the event the Company deposits money or Government
Obligations as provided in Section 401 or 403 of the Indenture, such
payments will be made only from proceeds of such money or Government
Obligations.

Prior
to due presentment of this Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

No
recourse shall be had for the payment of the principal of or the interest on
this Security, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental thereto,
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

All
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture unless otherwise defined in this
Security.

 

ABBREVIATIONS

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

	
  TEN COM

  	
  —

  	
  as tenants in common

  
	
  TEN ENT

  	
  —

  	
  as tenants by the entireties

  
	
  JT TEN

  	
  —

  	
  as joint tenants with right

  
	
   

  	
   

  	
  of survivorship and not

  
	
   

  	
   

  	
  as tenants in common

  

 

	
  UNIF GIFT MIN ACT —  

  	
                                           
  

  	
  Custodian

  	
                                           
  

  	
   

  
	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  

 

Under Uniform Gifts to Minors Act

	
                                                 

  	
   

  
	
  (State)

  	
   

  

 

Additional abbreviations may also be used though
not in the above list.

FOR VALUE RECEIVED, the undersigned hereby
sell(s) and transfer(s) unto

Please
Insert Social Security or

Other Identifying Number of Assignee

	
  

  	
   

  
	
   

  
	
   

  
	
   

  

 

(Please print or type
name and address including postal zip code of Assignee)

 

the within Security of TARGET CORPORATION and does
hereby irrevocably constitute and appoint                                    
attorney to transfer the said Security on the books of the Company, with full
power of substitution in the premises.

	
  Dated:

  	
   

  	
   

  

 

	
  

  	
   

  
	
   

  	
   

  

 

 

NOTICE:  The
signature to this assignment must correspond with the name as written upon the
face of the within instrument in every particular, without alteration or
enlargement or any change whatever.

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