Document:

Exhibit 4.56
 

 

Jacobs Entertainment, Inc.,

as Issuer

and

The Subsidiary Guarantors

Named Herein

9.75% Senior Notes

due 2014

 

INDENTURE

Dated as of June 16, 2006

 

Wells Fargo Bank, National Association,

as Trustee

 

   
 

 

 

CROSS-REFERENCE
TABLE*

	
  Trust
  Indenture

  	
   

  	
  Indenture

  
	
  Act Section

  	
   

  	
  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  13.03

  
	
  (c)

  	
   

  	
  13.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  10.03

  
	
  (b)(2)

  	
   

  	
  7.07

  
	
  (c)

  	
   

  	
  7.06;13.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03

  
	
  (b)

  	
   

  	
  10.02

  
	
  (c)(1)

  	
   

  	
  13.04

  
	
  (c)(2)

  	
   

  	
  13.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  10.03, 10.09

  
	
  (e)

  	
   

  	
  13.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05,13.02

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last
  sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  2.12

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  13.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  13.01

  

N.A. means not
applicable.

* This Cross Reference
Table is not part of this Indenture.

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
   

  	
  Definitions.

  	
   

  	
  1

  
	
  SECTION 1.02.

  	
   

  	
  Other Definitions.

  	
   

  	
  26

  
	
  SECTION 1.03.

  	
   

  	
  Incorporation by Reference of Trust Indenture Act.

  	
   

  	
  27

  
	
  SECTION 1.04.

  	
   

  	
  Rules of Construction.

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE NOTES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  Form and Dating.

  	
   

  	
  28

  
	
  SECTION 2.02.

  	
   

  	
  Execution and Authentication.

  	
   

  	
  29

  
	
  SECTION 2.03.

  	
   

  	
  Registrar and Paying Agent.

  	
   

  	
  29

  
	
  SECTION 2.04.

  	
   

  	
  Paying Agent to Hold Money in Trust.

  	
   

  	
  30

  
	
  SECTION 2.05.

  	
   

  	
  Holder Lists.

  	
   

  	
  30

  
	
  SECTION 2.06.

  	
   

  	
  Transfer and Exchange.

  	
   

  	
  30

  
	
  SECTION 2.07.

  	
   

  	
  Replacement Notes.

  	
   

  	
  31

  
	
  SECTION 2.08.

  	
   

  	
  Outstanding Notes.

  	
   

  	
  31

  
	
  SECTION 2.09.

  	
   

  	
  Treasury Notes.

  	
   

  	
  32

  
	
  SECTION 2.10.

  	
   

  	
  Temporary Notes.

  	
   

  	
  32

  
	
  SECTION 2.11.

  	
   

  	
  Cancellation.

  	
   

  	
  32

  
	
  SECTION 2.12.

  	
   

  	
  Defaulted Interest.

  	
   

  	
  32

  
	
  SECTION 2.13.

  	
   

  	
  Deposit of Monies.

  	
   

  	
  33

  
	
  SECTION 2.14.

  	
   

  	
  CUSIP Number.

  	
   

  	
  33

  
	
  SECTION 2.15.

  	
   

  	
  Book-Entry Provisions for Global Notes.

  	
   

  	
  33

  
	
  SECTION 2.16.

  	
   

  	
  Registration of Transfers and Exchanges.

  	
   

  	
  34

  
	
  SECTION 2.17.

  	
   

  	
  Restrictive Legends.

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
   

  	
  Notices to Trustee.

  	
   

  	
  40

  
	
  SECTION 3.02.

  	
   

  	
  Selection of Notes to Be Redeemed.

  	
   

  	
  40

  
	
  SECTION 3.03.

  	
   

  	
  Notice of Redemption.

  	
   

  	
  41

  
	
  SECTION 3.04.

  	
   

  	
  Effect of Notice of Redemption.

  	
   

  	
  42

  
	
  SECTION 3.05.

  	
   

  	
  Deposit of Redemption Price.

  	
   

  	
  42

  
	
  SECTION 3.06.

  	
   

  	
  Notes Redeemed in Part.

  	
   

  	
  42

  
	
  SECTION 3.07.

  	
   

  	
  Optional Redemption.

  	
   

  	
  43

  
	
  SECTION 3.08.

  	
   

  	
  No Mandatory Redemption.

  	
   

  	
  43

  

 

 i
 

 

 

	
  SECTION 3.09.

  	
   

  	
  Mandatory Disposition in Accordance with Gaming
  Laws.

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  Payment of Notes.

  	
   

  	
  44

  
	
  SECTION 4.02.

  	
   

  	
  Maintenance of Office or Agency.

  	
   

  	
  44

  
	
  SECTION 4.03.

  	
   

  	
  Reports.

  	
   

  	
  45

  
	
  SECTION 4.04.

  	
   

  	
  Compliance Certificate.

  	
   

  	
  46

  
	
  SECTION 4.05.

  	
   

  	
  Taxes.

  	
   

  	
  46

  
	
  SECTION 4.06.

  	
   

  	
  Stay, Extension and Usury Laws.

  	
   

  	
  47

  
	
  SECTION 4.07.

  	
   

  	
  Restricted Payments.

  	
   

  	
  47

  
	
  SECTION 4.08.

  	
   

  	
  Incurrence of Indebtedness and Issuance of Preferred
  Stock.

  	
   

  	
  51

  
	
  SECTION 4.09.

  	
   

  	
  Liens.

  	
   

  	
  55

  
	
  SECTION 4.10.

  	
   

  	
  Dividend and Other Payment Restrictions Affecting
  Restricted Subsidiaries.

  	
   

  	
  55

  
	
  SECTION 4.11.

  	
   

  	
  Asset Sales.

  	
   

  	
  56

  
	
  SECTION 4.12.

  	
   

  	
  Business Activities.

  	
   

  	
  59

  
	
  SECTION 4.13.

  	
   

  	
  Corporate Existence.

  	
   

  	
  59

  
	
  SECTION 4.14.

  	
   

  	
  Offer to Repurchase upon Change of Control.

  	
   

  	
  59

  
	
  SECTION 4.15.

  	
   

  	
  Limitation on Issuances and Sales of Capital Stock
  in Wholly Owned Restricted Subsidiaries.

  	
   

  	
  61

  
	
  SECTION 4.16.

  	
   

  	
  Payments for Consent.

  	
   

  	
  61

  
	
  SECTION 4.17.

  	
   

  	
  Additional Subsidiary Guarantees.

  	
   

  	
  61

  
	
  SECTION 4.18.

  	
   

  	
  Maintenance of Books and Records.

  	
   

  	
  62

  
	
  SECTION 4.19.

  	
   

  	
  Transactions with Affiliates.

  	
   

  	
  62

  
	
  SECTION 4.20.

  	
   

  	
  Designation of Restricted and Unrestricted
  Subsidiaries.

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUCCESSORS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
   

  	
  Merger, Consolidation or Sale of Assets.

  	
   

  	
  64

  
	
  SECTION 5.02.

  	
   

  	
  Successor Corporation Substituted for the Company.

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFAULTS AND
  REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  Events of Default.

  	
   

  	
  66

  
	
  SECTION 6.02.

  	
   

  	
  Acceleration.

  	
   

  	
  68

  
	
  SECTION 6.03.

  	
   

  	
  Other Remedies.

  	
   

  	
  69

  
	
  SECTION 6.04.

  	
   

  	
  Waiver of Past Defaults.

  	
   

  	
  69

  
	
  SECTION 6.05.

  	
   

  	
  Control by Majority.

  	
   

  	
  69

  
	
  SECTION 6.06.

  	
   

  	
  Limitation on Suits.

  	
   

  	
  70

  

 

 ii
 

 

 

	
  SECTION 6.07.

  	
   

  	
  Rights of Holders to Receive Payment.

  	
   

  	
  70

  
	
  SECTION 6.08.

  	
   

  	
  Collection Suit by Trustee.

  	
   

  	
  70

  
	
  SECTION 6.09.

  	
   

  	
  Trustee May File Proofs of Claim.

  	
   

  	
  71

  
	
  SECTION 6.10.

  	
   

  	
  Priorities.

  	
   

  	
  71

  
	
  SECTION 6.11.

  	
   

  	
  Undertaking for Costs.

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
   

  	
  Duties of Trustee.

  	
   

  	
  72

  
	
  SECTION 7.02.

  	
   

  	
  Rights of Trustee.

  	
   

  	
  73

  
	
  SECTION 7.03.

  	
   

  	
  Individual Rights of Trustee.

  	
   

  	
  74

  
	
  SECTION 7.04.

  	
   

  	
  Trustee’s Disclaimer.

  	
   

  	
  74

  
	
  SECTION 7.05.

  	
   

  	
  Notice of Defaults.

  	
   

  	
  74

  
	
  SECTION 7.06.

  	
   

  	
  Reports by Trustee to Holders.

  	
   

  	
  75

  
	
  SECTION 7.07.

  	
   

  	
  Compensation and Indemnity.

  	
   

  	
  75

  
	
  SECTION 7.08.

  	
   

  	
  Replacement of Trustee.

  	
   

  	
  76

  
	
  SECTION 7.09.

  	
   

  	
  Successor Trustee by Merger, etc.

  	
   

  	
  77

  
	
  SECTION 7.10.

  	
   

  	
  Eligibility; Disqualification.

  	
   

  	
  77

  
	
  SECTION 7.11.

  	
   

  	
  Preferential Collection of Claims Against Company.

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DISCHARGE OF
  INDENTURE; LEGAL DEFEASANCE

  	
   

  	
   

  
	
  AND COVENANT
  DEFEASANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
   

  	
  Satisfaction and Discharge.

  	
   

  	
  77

  
	
  SECTION 8.02.

  	
   

  	
  Option to Effect Legal Defeasance or Covenant
  Defeasance.

  	
   

  	
  78

  
	
  SECTION 8.03.

  	
   

  	
  Legal Defeasance and Discharge.

  	
   

  	
  79

  
	
  SECTION 8.04.

  	
   

  	
  Covenant Defeasance.

  	
   

  	
  79

  
	
  SECTION 8.05.

  	
   

  	
  Conditions to Legal or Covenant Defeasance.

  	
   

  	
  80

  
	
  SECTION 8.06.

  	
   

  	
  Deposited Money and Government Securities to Be Held
  in Trust; Other Miscellaneous Provisions.

  	
   

  	
  81

  
	
  SECTION 8.07.

  	
   

  	
  Repayment to Company.

  	
   

  	
  82

  
	
  SECTION 8.08.

  	
   

  	
  Reinstatement.

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMENDMENT, SUPPLEMENT
  AND WAIVER

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
   

  	
  Without Consent of Holders.

  	
   

  	
  82

  
	
  SECTION 9.02.

  	
   

  	
  With Consent of Holders.

  	
   

  	
  84

  
	
  SECTION 9.03.

  	
   

  	
  Compliance with Trust Indenture Act.

  	
   

  	
  85

  
	
  SECTION 9.04.

  	
   

  	
  Revocation and Effect of Consents.

  	
   

  	
  85

  
	
  SECTION 9.05.

  	
   

  	
  Notation on or Exchange of Notes.

  	
   

  	
  85

  

 

 iii
 

 

 

	
  SECTION 9.06.

  	
   

  	
  Trustee to Sign Amendments, etc.

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SUBSIDIARY
  GUARANTEES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
   

  	
  Guarantees.

  	
   

  	
  86

  
	
  SECTION 10.02.

  	
   

  	
  Execution and Delivery of Subsidiary Guarantees.

  	
   

  	
  87

  
	
  SECTION 10.03.

  	
   

  	
  Subsidiary Guarantors May Consolidate, etc., on
  Certain Terms.

  	
   

  	
  88

  
	
  SECTION 10.04.

  	
   

  	
  Limitation of Subsidiary Guarantor’s Liability.

  	
   

  	
  89

  
	
  SECTION 10.05.

  	
   

  	
  Application of Certain Terms and Provisions to the
  Subsidiary Guarantors.

  	
   

  	
  90

  
	
  SECTION 10.06.

  	
   

  	
  Release of Guarantors.

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
   

  	
  Trust Indenture Act Controls.

  	
   

  	
  91

  
	
  SECTION 11.02.

  	
   

  	
  Notices.

  	
   

  	
  91

  
	
  SECTION 11.03.

  	
   

  	
  Communication by Holders with Other Holders.

  	
   

  	
  92

  
	
  SECTION 11.04.

  	
   

  	
  Certificate and Opinion as to Conditions Precedent.

  	
   

  	
  92

  
	
  SECTION 11.05.

  	
   

  	
  Statements Required in Certificate or Opinion.

  	
   

  	
  93

  
	
  SECTION 11.06.

  	
   

  	
  Rules by Trustee and Agents.

  	
   

  	
  93

  
	
  SECTION 11.07.

  	
   

  	
  No Personal Liability of Directors, Officers,
  Employees and Stockholders.

  	
   

  	
  93

  
	
  SECTION 11.08.

  	
   

  	
  Governing Law.

  	
   

  	
  94

  
	
  SECTION 11.09.

  	
   

  	
  No Adverse Interpretation of Other Agreements.

  	
   

  	
  94

  
	
  SECTION 11.10.

  	
   

  	
  Successors.

  	
   

  	
  94

  
	
  SECTION 11.11.

  	
   

  	
  Severability.

  	
   

  	
  94

  
	
  SECTION 11.12.

  	
   

  	
  Counterpart Originals.

  	
   

  	
  94

  
	
  SECTION 11.13.

  	
   

  	
  Table of Contents, Headings, etc.

  	
   

  	
  94

  

 

EXHIBITS

EXHIBIT A                                  FORM OF
NOTE AND SUBSIDIARY GUARANTEE

EXHIBIT B                                    FORM OF
CERTIFICATE OF TRANSFER

EXHIBIT C                                    FORM OF
TRANSFEREE LETTER OF REPRESENTATION

EXHIBIT D                                   FORM OF
CERTIFICATE TO BE DELIVERED IN CONNECTION WITH REGULATION S TRANSFERS

 

 iv

 

INDENTURE, dated as of June 16, 2006, among
Jacobs Entertainment, Inc., a Delaware corporation (the “Company”), the
Subsidiary Guarantors (as defined) and Wells Fargo Bank, National Association,
a national banking association, as trustee (the “Trustee”).

Each party agrees as follows for the benefit of each
other and for the equal and ratable benefit of the Holders:

ARTICLE 1

DEFINITIONS AND
INCORPORATION BY REFERENCE

SECTION 1.01.                                              Definitions.

“Accrued Bankruptcy
Interest” means, with respect to any Indebtedness, all interest
accruing thereon after the filing of a petition by or against the Company or
any of the Subsidiary Guarantors under any Bankruptcy Law, in accordance with
and at the rate (including any rate applicable upon any default or event of
default, to the extent lawful) specified in the documents evidencing or
governing such Indebtedness, whether or not the claim for such interest is
allowed as a claim after such filing in any proceeding under such Bankruptcy
Law.

“Acquired
Debt” means, with respect to any specified Person:

(1)           Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified
Person; and

(2)           Indebtedness
secured by a Lien encumbering any asset acquired by such spe­cified Person.

“Additional Interest”
means, at any time, all liquidated damages then owing pursuant to the Registration
Rights Agreement.

“Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control,” as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For the purposes of
this definition, the terms “controlling,” “controlled by” and “under common
control with” shall have the correlative meanings.

“Agent” means
any Registrar, Paying Agent or co-registrar.

 

 

“Asset Sale”
means:

(1)           the
sale, lease, conveyance, sublease, assignment, transfer or other disposition of
any assets or rights; provided that
the sale, conveyance or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole shall be governed
by the provisions of Section 4.14 and/or Section 5.01 and not by the
provisions of Section 4.11; and

(2)           the
issuance of Capital Stock in any of the Company’s Restricted Subsidiaries or
the sale of Capital Stock in any of its Subsidiaries.

Notwithstanding the
preceding, the following items shall not be deemed to be Asset Sales:

(1)           any
single transaction or series of related transactions that involves assets
having a fair market value of less than $500,000;

(2)           a
transfer of assets solely between or among the Company and its Wholly Owned
Restricted Subsidiaries that are Guarantors;

(3)           an
issuance of Capital Stock by a Wholly Owned Restricted Subsidiary that is a
Guarantor to the Company or to another Wholly Owned Restricted Subsidiary that
is a Guarantor;

(4)           the
sale or lease of equipment, accounts receivable or other assets in the ordinary
course of business;

(5)           the
sale or other disposition of cash or Cash Equivalents or obsolete, surplus or
worn-out equipment in the ordinary course of business and the abandonment or
other disposition of intellectual property that is, in the reasonable judgment
of the Company, no longer economically practicable to maintain or useful in the
conduct of the business of the Company and its Restricted Subsidiaries taken as
a whole;

(6)           a
Restricted Payment that is permitted by Section 4.07 or Permitted Investment;
and

(7)           the
Transactions.

“Attributable Debt”
in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

“Bankruptcy Code”
means Title 11, U.S. Code or any similar federal or state law for relief of
debtors.

 2
 

 

 

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular “person” (as that term is used in Section 13(d)(3) of
the Exchange Act), such “person” shall be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially
Owns” and “Beneficially Owned” shall have a corresponding meaning.

 “Board of Directors”
means:

(1)           with
respect to a corporation, the board of directors of the corporation;

(2)           with
respect to a partnership, the board of directors of the general partner of the
partnership; and

(3)           with
respect to any other Person, the board or committee of such Person serving a
similar function.

“Board Resolution”
means a resolution duly adopted by the Board of Directors and certified by an Officers’
Certificate.

“Business Day”
means any day other than a Legal Holiday.

“Capital Lease Obligation”
means, at the time any determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP.

“Capital
Stock” means:

(1)           in
the case of a corporation, corporate stock;

(2)           in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

(3)           in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

(4)           any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person;

and, in the case of each of the foregoing, all
warrants, options or rights to acquire the foregoing.

“Cash
Equivalents” means:

(1)           United
States dollars;

(2)           securities
issued or directly and fully Guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided
that the full faith 

 3
 

 

 

and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition;

(3)           certificates
of deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers’ acceptances with maturities not exceeding
six months and overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million;

(4)           repurchase
Obligations with a term of not more than seven days for underlying securities
of the types described in clauses (2) and (3) above entered into with
any financial institution meeting the qualifications specified in clause (3) above;

(5)           commercial
paper maturing within six months after the date of acquisition and having a
rating of at least A-1 from Moody’s or P-1 from S&P; and

(6)           money
market funds at least 95% of the assets of which constitute Cash Equivalents of
the kinds described in clauses (1) through (5) of this definition.

“Certificated Notes”
means one or more certificated Notes in registered form.

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

(1)           any
Person or group of related Persons for purposes of Section 13(d) of
the Exchange Act (a “Group”), other than the Principals and Related Parties, becomes
the Beneficial Owner of more than 33 1/3% of the total voting power of the
Company’s Voting Stock, and the Principals and Related Parties Beneficially Own,
in the aggregate, a lesser percentage of the total voting power of the Voting
Stock of the Company than such other Person or Group and do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company;

(2)           there
is consummated any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company to any Person or Group, together with any Affiliates thereof
(whether or not otherwise in compliance with the provisions of this Indenture),
other than to the Principals and Related Parties;

(3)           there
is consummated any consolidation or merger of the Company in which the Company
is not the continuing or surviving Person or pursuant to which the Common Stock
of the Company would be converted into cash, securities or other property,
other than a merger or consolidation of the Company in which the holders of the
Capital Stock of the Company outstanding immediately prior to the consolidation
or merger hold, directly or indirectly, at least a majority of the voting power
of the surviving corporation immediately after such consolidation or merger; or

(4)           the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.

 4
 

 

 

“Clearstream”
means Clearstream Banking, société anonyme.

“Code” means the
Internal Revenue Code, as amended.

“Commission”
means the Securities and Exchange Commission.

“Consolidated  EBITDA” means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus (without duplication):

(1)           an
amount equal to any extraordinary loss plus any net loss realized by such
Person or any of its Restricted Subsidiaries in connection with an Asset Sale,
to the extent such losses were deducted (and not added back) in computing such
Consolidated Net Income; plus

(2)           provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period (including, without limitation, any Tax Distributions
taken into account in calculating Consolidated Net Income), to the extent that
such provision for taxes was deducted (and not added back) in computing such
Consolidated Net Income; plus

(3)           Fixed
Charges; plus

(4)           depreciation,
amortization (including amortization or impairment of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that
was paid in a prior period) of such Person and its Restricted Subsidiaries for
such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted (and not added back) in computing such
Consolidated Net Income; plus

(5)           without
duplication of any items described above, to the extent such amounts were
deducted in computing Consolidated Net Income, the costs and expenses of the
Company incurred in connection with the consummation of the Transactions (not
to exceed $9.0 million); plus

(6)           Pre-Opening
Expenses; plus

(7)           the
aggregate amount of all other non-cash charges reducing Consolidated Net Income
(excluding any non-cash charge that results in an accrual of a reserve for cash
charges in any future period) for such period; plus

(8)           costs
and expenses in an aggregate amount not to exceed $10,367,000 associated with
the purchase by the Company or any of its Restricted Subsidiaries of all the
outstanding shares of Maryland-Virginia Racing Circuit, Inc., in August 2005;
minus

 5
 

 

 

(9)           non-cash
items and interest income, in each case increasing such Consolidated Net Income
for such period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in accordance
with GAAP.

Notwithstanding the preceding, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
other non-cash expenses of, a Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated EBITDA of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.

“Consolidated  Net  Income” means,
with respect to any specified Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided
that, without duplication:

(1)           the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
specified Person or a Wholly Owned Restricted Subsidiary thereof;

(2)           the
Net Income of any Restricted Subsidiary shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted without
any prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders;

(3)           the
cumulative effect of a change in accounting principles shall be excluded;

(4)           any
net gain (but not loss) resulting from an Asset Sale by the Person in question
or any of its Restricted Subsidiaries other than in the ordinary course of
business shall be excluded;

(5)           extraordinary
gains and losses shall be excluded;

(6)           in
the case of any Person that is a Flow Through Entity during such period, an
amount equal to the maximum amount of Tax Distributions made or which may be
made to the holders of Capital Stock of such Person in respect of the net
taxable income allocated by such Person to such holders for such period shall
be included as though such amounts had been paid as income taxes directly by
the Company;

 6
 

 

 

(7)           gains
and losses due solely to fluctuations in currency values and the related tax
effects determined in accordance with GAAP for such period shall be excluded;

(8)           earnings
resulting from any reappraisal, revaluation or write-up of assets shall be
excluded; and

(9)           unrealized
gains and losses with respect to Hedging Obligations for such period shall be
excluded.

“Consolidated
Net Worth” means, with respect to any specified Person as of any
date, the sum of:

(1)           the consolidated equity of the common
stockholders of such Person and its consolidated Subsidiaries as of such date; plus

(2)           the respective amounts reported on
such Person’s balance sheet as of such date with respect to any series of
Preferred Stock (other than Disqualified Stock) that by its terms is not
entitled to the payment of dividends unless such dividends may be declared and
paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
issuance of such Preferred Stock.

“Consulting Agreement”
means the amended and restated Consulting Agreement dated January 1, 2006,
between the Company and JIMCO.

“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors of the Company who:

(1)           was
a member of such Board of Directors on the Issue Date; or

(2)           was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.

“Corporate Trust Office”
shall be at the address of the Trustee specified in Section 11.02 hereof
or such other address as to which the Trustee may give notice to the Company.

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

“Depository”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in this Indenture as the Depository with
respect to the Notes, until a successor shall have been appointed and become
such Depository pursuant to the applicable provision of this Indenture, and,
thereafter, “Depository” shall mean or include such successor.

“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at
the 

 7
 

 

 

option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders
thereof have the right to require the Company to repurchase such Capital Stock
upon the occurrence of a Change of Control or an Asset Sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Section 4.07.

“Equity Offering”
means any public offering or private sale of Capital Stock (other than Disqualified
Stock) of the Company pursuant to which the Company receives net proceeds of at
least $10.0 million.

“Euroclear”
means Morgan Guaranty Trust Company of New York, Brussels office, as operator
of the Euroclear system.

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

“Exchange Notes”
means the Notes issued in the Exchange Offer.

“Exchange Offer”
means the offer that may be made by the Company pursuant to the Registration
Rights Agreement to exchange the Notes for the Exchange Notes.

“Existing Indebtedness”
means Indebtedness of the Company and its Subsidiaries (other than Indebtedness
described in clauses (a)-(d) of Section 4.08 hereof) in existence on
the Issue Date, until such amounts are repaid.

“Fixed Charge Coverage
Ratio” means with respect to any specified Person for any period,
the ratio of the Consolidated EBITDA of such Person and its Restricted Subsidiaries
for such period to the Fixed Charges of such Person and its Restricted
Subsidiaries for such period. In the event that the specified Person or any of
its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases or
redeems any Indebtedness (other than Indebtedness incurred under any revolving
credit facility) or issues, repurchases or redeems Preferred Stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase
or redemption of Preferred Stock, and the use of the proceeds therefrom as if
the same had occurred at the beginning of the applicable four-quarter reference
period.

In addition, for purposes
of calculating the Fixed Charge Coverage Ratio:

(1)           acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period or subsequent
to 

 8
 

 

 

such reference period and
on or prior to the Calculation Date shall be given pro forma
effect as if they had occurred on the first day of the four-quarter reference
period and Consolidated EBITDA for such reference period shall be calculated on
a pro forma basis in accordance with Regulation
S-X under the Securities Act, but without giving effect to clause (3) of
the proviso set forth in the definition of Consolidated Net Income;

(2)           the
Consolidated EBITDA attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded; and

(3)           the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the Obligations
giving rise to such Fixed Charges shall not be Obligations of the specified
Person or any of its Restricted Subsidiaries following the Calculation Date.

For purposes of this definition, whenever pro forma effect is to be given to a
transaction, the pro forma
calculations shall be made in good faith by a responsible financial or
accounting officer of the Company to the extent permitted by Regulation S-X,
promulgated pursuant to the Securities Act. If any Indebtedness bears a
floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated
as if the rate in effect on the Calculation Date had been the applicable rate
for the entire period (taking into account any Hedging Obligations applicable
to such Indebtedness). Interest on Capital Lease Obligations shall be deemed to
accrue at an interest rate reasonably determined by a responsible financial or
accounting officer of the Company to be the rate of interest implicit in such
Capital Lease Obligations in accordance with GAAP. For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma
basis shall be computed based upon the average daily balance of such Indebtedness
during the applicable period except as set forth in the first paragraph of this
definition. Interest on Indebtedness that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate
chosen as the Company may designate.

“Fixed
Charges” means, with respect to any specified Person for any period,
the sum, without duplication, of:

(1)           the
consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation, amortization
of debt issuance costs, original issue discount or premium and other financing
fees and expenses, non-cash interest payments, the interest component of any
deferred payment Obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers’ acceptance financings, and net of the effect of
all payments made or received pursuant to Hedging Obligations; plus

 9
 

 

 

(2)           the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus

(3)           any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus

(4)           the
amount of all dividends, whether paid or accrued and whether or not in cash, on
any series of Preferred Stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Capital Stock payable solely in Capital
Stock of the Company (other than Disqualified Stock) or to the Company or a
Subsidiary of the Company.

“Flow Through
Entity” means an entity that:

(1)           for Federal income tax purposes
constitutes

(a)            an “S corporation”, as defined in Section 1361(a) of
the Code,

(b)           a “qualified subchapter S subsidiary”,
as defined in Section 1361(b)(3)(B) of the Code,

(c)            a “partnership”, within the meaning
of Section 7701(a)(2) of the Code, other than a “publicly traded
partnership”, as defined in Section 7704 of the Code, or

(d)           an entity that is disregarded as an
entity separate from its owner under the Code, the Treasury regulations or any
published administrative guidance of the Internal Revenue Service; and

(2)           for
state and local jurisdictions in respect of which Tax Distributions are being
made, is subject to treatment on a basis under applicable state or local income
tax law substantially similar to a Federal Flow Through Entity.

“GAAP” means
generally accepted accounting principles in the United States that are in
effect from time to time.

“Gameco Video Poker Plaza
Acquisitions” means the acquisition by the Company or any Restricted
Subsidiary of video poker plazas from Gameco Holdings, Inc., the aggregate
consideration for each of which shall either (A) not exceed the lesser of (I) 7
multiplied by the EBITDA of such video poker plaza for the most recently ended
four full fiscal quarters and (II) the result of (x) the aggregate
consideration paid by Gameco Holdings, Inc. for such video poker plaza plus (y) the EBITDA of such video poker plaza for the
most recently ended four full fiscal quarters plus or minus,
as the case may be, (z) an adjustment for working capital as determined in
good faith by the Company (any such adjustment to be reasonably supportable and
quantifiable by the underlying accounting records of such video poker plaza),
or (B) be supported by an opinion as to the fairness to the Company of
such acquisition from a financial point

 

 10

 

 

of view issued by an independent nationally recognized
accounting, appraisal or investment banking firm.

“Gaming Authorities”
means any agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States or foreign
government, any state, province or city or other political subdivision, whether
now or hereafter existing, or any officer or official thereof, including,
without limitation, the gaming commission and any other agency with authority
to regulate any gaming operation or proposed gaming operation owned, managed or
operated by the Company or any of its Restricted Subsidiaries.

“Gaming Facility” means any gaming
establishment and other property or assets used or reasonably related thereto,
including any casinos, hotels, resorts, race tracks, theaters, parking
facilities, recreational vehicle parks, timeshare operations, condominiums,
retail shops, restaurants, other buildings, land, golf courses and other recreation
and entertainment facilities, marinas, vessels, barges, ships and related
equipment.

“Gaming Law”
means any gaming laws or regulations of any jurisdictions to which the Company
or any of its Subsidiaries is or may at any time after the Issue Date be subject.

“Gaming Licenses”
means every material license, material franchise, material registration,
material qualification, findings of suitability or other material approval or
authorization required to own, lease, operate or otherwise conduct or manage
riverboat, dockside or land-based gaming activities in any state or
jurisdiction in which the Company or any of its Restricted Subsidiaries
conducts business, and all applicable liquor licenses.

“Government Securities”
means direct Obligations of, or obligations Guaranteed by, the United States of
America for the payment of which Guarantee or obligations the full faith and
credit of the United States is pledged and which are not callable or redeemable
at the option of the issuer thereof.

“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness.

“Guarantors”
means each Restricted Subsidiary that executes a Subsidiary Guarantee in
accordance with this Indenture and its respective successors and assigns.

 “Hedging Obligations”
means, with respect to any specified Person, the Obligations of such Person
under:

(1)           interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements; and

(2)           other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.

 11
 

 

 

“Holder” means a
Person in whose name a Note is registered on the Registrar’s books.

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:

(1)           in
respect of borrowed money;

(2)           evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);

(3)           in
respect of banker’s acceptances;

(4)           representing
Capital Lease Obligations;

(5)           in
respect of the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable; or

(6)           representing
any Hedging Obligations,

if and to the extent any of the preceding items (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term “Indebtedness” includes (i) all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person), (ii) to the extent not
otherwise included, the Guarantee by the specified Person of any indebtedness
of any other Person, and (iii) all Disqualified Stock issued by such
Person with the amount of such Disqualified Stock being equal to the greater of
its voluntary or involuntary liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends, if any.

The amount of any
Indebtedness outstanding as of any date shall be:

(1)           the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and

(2)           the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.

For purposes hereof, the “maximum fixed repurchase
price” of any Disqualified Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Stock as
if such Disqualified Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such
price is based upon, or measured by, the fair market value of such Disqualified
Stock, such fair market value shall be determined reasonably and in good faith
by the Board of Directors of the issuer of such Disqualified Stock.

“Indenture”
means this Indenture, as amended, supplemented or otherwise modified in
accordance with the terms hereof from time to time.

 12
 

 

 

“Initial Purchasers”
means Credit Suisse Securities (USA) LLC, CIBC World Markets Corp., Libra
Securities, LLC, Wells Fargo Securities, LLC and KeyBanc Capital Markets, a
Division of McDonald Investments Inc., as initial purchasers of the Notes.

“Institutional Accredited
Investor” means an institution that is an “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act that is not also a QIB.

“Interest
Payment Date” means each June 15 and December 15,
commencing December 15, 2006.

“Investments”
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the form of loans (including
Guarantees or other Obligations), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Capital Stock or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in accordance
with GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Capital Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Wholly Owned Restricted Subsidiary of
the Company, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Capital
Stock of such Subsidiary not sold or disposed of in an amount determined as provided
in the final paragraph of Section 4.07. The acquisition by the Company or
any Subsidiary of the Company of a Person that holds an Investment in a third
Person shall be deemed to be an Investment by the Company or such Subsidiary in
such third Person in an amount equal to the fair market value of the Investment
held by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07.

“Issue Date”
means June 16, 2006.

“JIMCO” means
Jacobs Investments Management Co., Inc., an Ohio corporation.

“Legal Holiday”
means a Saturday, a Sunday or a day on which banking institutions in the City
of New York or at a place of payment are authorized by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.

“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and, any filing of or agreement to give any financing statement under the UCC
(or equivalent statutes) of any jurisdiction.

“Maturity Date”
means June 15, 2014.

 13
 

 

 

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

“Nautica Options”
means the right of the Company to purchase and/or lease land and certain
improvements on the west bank of the Cuyahoga River in Cleveland, Ohio pursuant
to several option agreements entered into by the Company.

“Nautica Properties”
means the properties subject to the Nautica Options.

“Net Income”
means, with respect to any specified Person for any period, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends to the extent such Preferred
Stock dividends do not reduce net income as determined in accordance with GAAP.

“Net Proceeds”
means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation,
any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and
investment banking fees, sales commissions, and any relocation expenses
incurred as a result thereof, and taxes paid or payable as a result thereof, amounts
required to be applied to the repayment of principal, premium, if any, and
interest on Senior Indebtedness required (other than required by clause (1) of
Section 4.11(b)) to be paid as a result of such transaction, in each case,
after taking into account any available tax credits or deductions and any tax
sharing arrangements, and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.

“Non-Recourse
Indebtedness” means Indebtedness:

(1)           as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;

(2)           no
default with respect to which (including any rights that the holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness
of the Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and

(3)           as
to which the lenders have been notified in writing that they shall not have any
recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

“Note Custodian”
means the Trustee, as custodian with respect to the Global Notes, or any
successor entity thereto.

 14
 

 

 

“Notes” means
the 9.75% Senior Notes due 2014 to be issued by the Company, and any Additional
Notes and, following the Exchange Offer, any Exchange Notes or Private Exchange
Notes issued in accordance with the terms of the Registration Rights Agreement.

“Obligations”
means any principal, interest (including any interest accruing subsequent to
the filing of a petition in bankruptcy, reorganization or similar proceeding at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable state, federal or foreign
law), penalties, fees, indemnifications, reimbursements (including
reimbursement obligations with respect to letters of credit and banker’s
acceptances), damages and other liabilities, and guarantees of payment of such
principal, interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities, payable under the documentation governing any Indebtedness.

“Offering” means
the offering of the Notes by the Company on the Issue Date.

“Offering Circular”
means the Company’s offering circular dated June 9, 2006, as supplemented,
relating to the Offering of the Notes.

“Officer” means,
with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer,
the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.

“Officers’ Certificate” means a certificate signed on behalf of the
Company or any Subsidiary by two Officers of the Company or such Subsidiary, as
applicable, one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the
Company or such Subsidiary, as applicable, that meets the requirements of Section 11.05
hereof.

“Opinion of Counsel”
means an opinion from legal counsel who is reasonably acceptable to the Trustee
that meets the requirements of Section 11.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Trustee.

“Participant”
means, with respect to the Depository, Euroclear or Clearstream, a Person who
has an account with the Depository, Euroclear or Clearstream, respectively
(and, with respect to The Depository Trust Company, shall include Euroclear and
Clearstream).

“Permitted  Business” means (i) the ownership and operation of one
or more Gaming Facilities (ii) those types of businesses in which the
Company and its Restricted Subsidiaries are engaged as of the Issue Date (or,
in the good faith judgment of the Board of Directors, which are substantially
related thereto or are reasonable extensions thereof), (iii) those types
of businesses otherwise contemplated in this offering circular or (iv) other
gaming businesses and the properties or assets ancillary thereto or used in
connection therewith, including, without limitation, casinos, hotels, resorts,
race tracks, theaters, parking facilities, recreational vehicle parks,
timeshare operations, condominiums, retail shops, restaurants, other buildings,
land, golf courses and other recreation and entertainment facilities, marinas,
vessels, barges, ships and related equipment; provided,
however, that none of the Company or its
Restricted Subsidiaries (other 

 15
 

 

 

than the Nautica Properties upon exercise of the
Nautica Options) shall be permitted to conduct any business of the type
conducted by the Nautica Properties on the Issue Date not otherwise permitted
under clauses (i) though (iv) of this definition.

“Permitted  Investments” means:

(1)           any
Investment in the Company or in a Wholly Owned Restricted Subsidiary of the
Company that is a Guarantor;

(2)           any
Investment in (w) cash or Cash Equivalents, (x) accounts receivable
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms, (y) negotiable
instruments held for collection in the ordinary course of business and (z) lease,
utility or other similar deposits in the ordinary course of business;

(3)           any
Investment (other than a Gameco Video Poker Plaza Acquisition) by the Company
or any Subsidiary of the Company in a Person, if as a result of such Investment:

(a)           such Person becomes
a Wholly Owned Restricted Subsidiary of the Company and a Guarantor; or

(b)           such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company that is a Guarantor

(including, without limitation,
Investments in connection with the Transactions);

(4)           any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.11;

(5)           any
acquisition of assets solely in exchange for the issuance of Capital Stock
(other than Disqualified Stock) of the Company;

(6)           Hedging
Obligations;

(7)           Investments
in securities of trade creditors or customers in the ordinary course of
business received upon foreclosure or pursuant to any plan of reorganization or
liquidation or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;

(8)           Investments
made by the Company or any Restricted Subsidiary in Publicly Traded Securities
in an aggregate amount not to exceed $3.0 million in any fiscal year; provided that on or immediately after
giving effect to the applicable Investment, the Company would have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.08(a); provided, 

 16
 

 

 

further, that (x) if the aggregate
amount of Investments made in any fiscal year shall be less than the maximum
amount of Investments permitted under this clause (8) for such fiscal year
(before giving effect to any carryover), then an amount of such shortfall may
be added to the amount of Investments permitted under this clause (8) for
the immediately succeeding (but not any other) fiscal year and (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to
such fiscal year (before giving effect to any carryover);

(9)           credit
extensions or other advances to gaming customers in the ordinary course of business
and consistent with industry practice;

(10)         Investments
consisting of redemptions or repurchases of Capital Stock or Indebtedness of
the Company or any of its Subsidiaries to the extent required by any Gaming
Authority or, if determined in the good faith judgment of the Board of
Directors of the Company, to prevent the loss, or to secure the grant or
establishment, of any Gaming License or other right to conduct lawful gaming
operations;

(11)         any
Investment in existence on the Issue Date;

(12)         the
Gameco Video Poker Plaza Acquisitions;

(13)         entering
into and exercising the Nautica Options; and

(14)         additional
Investments not to exceed $5.0 million at any one time outstanding.

“Permitted  Liens” means:

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

(2)           Liens
in respect of property of the Company or any Restricted Subsidiary imposed by
law, which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s,
landlord’s and mechanics’ liens and other similar Liens arising in the ordinary
course of business, and (i) which do not in the aggregate materially
detract from the value of the property or assets of the Company and its
Restricted Subsidiaries, taken as a whole, and do not materially impair the use
thereof in the operation of the business of the Company and its Restricted
Subsidiaries, taken as a whole and (ii) which are being contested in good
faith by appropriate proceedings for which adequate reserves have been established
in accordance with GAAP, which proceedings (or orders entered in connection 

 17
 

 

 

with such proceedings)
have the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;

(3)           Liens
on property and assets of the Company existing on the Issue Date;

(4)           easements,
rights-of-way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor
title deficiencies on or with respect to any real property, in each case
whether now or hereafter in existence, not (i) securing Indebtedness, (ii) individually
or in the aggregate materially impairing the value or marketability of such
real property and (iii) individually or in the aggregate materially interfering
with the conduct of the business of the Company or any Restricted Subsidiary at
such real property;

(5)           Liens
arising out of judgments or awards not resulting in a Default and in respect of
which the Company or any Restricted Subsidiary shall in good faith be prosecuting
an appeal or proceedings for review in respect of which there shall be secured
a subsisting stay of execution pending such appeal or proceedings; provided that the aggregate amount of all such judgments or
awards (and any cash and the fair market value of any property subject to such
Liens) does not exceed $5.0 million at any time outstanding;

(6)           Liens
(other than any Lien imposed by the United States Employee Retirement Income
Securities Act of 1974, as amended) (i) imposed by law or deposits made in
connection therewith in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security or public utility obligations, (ii) incurred in the ordinary
course of business to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds, statutory
bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of Obligations
for the payment of borrowed money) or (iii) arising by virtue of deposits
made in the ordinary course of business to secure liability for premiums to
insurance carriers; provided that (x) with
respect to clauses (i), (ii) and (iii) hereof such Liens are set
amounts not yet due and payable or delinquent or, to the extent such amounts
are so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings for orders entered in connection with
such proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien and (y) to the extent such
Liens are not imposed by law, such Liens shall in no event encumber any property
other than cash and Cash Equivalents; provided, further that the aggregate amount of deposits at any time
pursuant to clause (ii) and clause (iii) shall not exceed $1.0
million in the aggregate;

(7)           leases
with respect to the assets or properties of the Company or any Restricted
Subsidiary or its respective Subsidiaries, in each case entered into in the
ordinary course of the Company or any Restricted Subsidiary business so long as
such leases do not, individually or in the aggregate, (i) interfere in any
material respect with the ordinary conduct of the business of the Company or
any Restricted Subsidiary and (ii) materially impair the use (for its
intended purposes) or the value of the property subject thereto;

 18
 

 

 

(8)           Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any
Restricted Subsidiary in the ordinary course of business in accordance with the
past practices of the Company or any Restricted Subsidiary;

(9)           Liens
arising pursuant to Purchase Money Obligations or Capital Lease Obligations
incurred pursuant to the covenant described in Section 4.08
hereof; provided that (i) the Indebtedness
secured by any such Lien (including refinancings thereof) does not exceed 100%
of the cost of the property being acquired or leased at the time of the incurrence
of such Indebtedness and (ii) any such Liens attach only to the property
being financed pursuant to such Purchase Money Obligations or Capital Lease
Obligations and do not encumber any other property of the Company or any
Subsidiary (it being understood that all Indebtedness to a single lender shall
be considered to be a single Purchase Money Obligation, whether drawn at one
time or from time to time);

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

(11)         Liens
on assets of a Person existing at the time such Person is acquired or merged
with or into or consolidated with the Company or any Restricted Subsidiary (and
not created in anticipation or contemplation thereof) in accordance with the
provisions of this Indenture; provided that
such Liens were in existence prior to the contemplation of the merger or
consolidation and do not extend to assets not subject to such Liens at the time
of acquisition (other than improvements thereon) and are no more favorable to
the lienholders than the existing Lien;

(12)         Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary with respect to obligations (other than Indebtedness) that do not in
the aggregate exceed $3.0 million at any time outstanding;

(13)         Liens
securing Obligations under this Indenture, the Notes and the Subsidiary Guarantees;

(14)         Liens
securing Acquired Debt (and any Permitted Refinancing Indebtedness which
refinances such Acquired Debt) incurred in accordance with Section 4.08; provided that (a) such Liens secured the Acquired Debt
at the time of and prior to the incurrence of such Acquired Debt by the Company
or a Restricted Subsidiary and were not granted in connection with, or in
anticipation of the incurrence of such Acquired Debt by the Company or a
Restricted Subsidiary and (b) such Liens do not extend to or cover any
property or assets of the Company or of any of the Restricted Subsidiaries
other than the 

 19
 

 

 

property or assets that
secured the Acquired Debt prior to the time such Indebtedness became Acquired
Debt of the Company or a Restricted Subsidiary;

(15)         licenses
of the patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, trade names, copyrights,
trade-secrets, know-how and processes, granted by the Company or any Restricted
Subsidiary in the ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of the Company or any
Restricted Subsidiary;

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

(17)         Liens
in favor of the Company or any Guarantor;

(18)         Liens
securing the Company’s or any Restricted Subsidiary’s Obligation under the
Senior Credit Facilities;

(19)         the
filing of UCC financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods; and

(20)         Liens
securing other Indebtedness permitted to be incurred under this Indenture not
to exceed $5.0 million at any one time outstanding.

“Permitted  Refinancing  Indebtedness”
means any Indebtedness of the Company or any of its Restricted Subsidiaries
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness of the Company
or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1)           the
principal amount (or accreted value, if applicable) of such new Indebtedness
does not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);

(2)           such
new Indebtedness has a final maturity date the same as or later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the remaining Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded;

(3)           if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such new Indebtedness has a
final maturity date later than the final maturity date of, and is subordinated
in right of payment to, the Notes on terms at least as favorable to the Holders
of Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and

 

 20

 

 

(4)           such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.

“Person” means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.

“Preferred Stock”
means any Capital Stock of a Person, however designated, which entitles the
holder thereof to a preference with respect to dividends, distributions or liquidation
proceeds of such Person over the holders of other Capital Stock issued by such
Person.

“Pre-Opening Expenses”
means all costs of start-up activities related to a Gaming Facility that are
required to be expensed (and are not capitalized) in accordance with The American
Institute of Certified Public Accountants’s Statement of Position 98-5.

“Presumed Tax Rate”,
for any holder of Capital Stock of the Company or any Guarantor with respect to
any period, means (i) with respect to the excess, if any, of ordinary income
over ordinary loss (as determined for U.S. federal income tax purposes and, for
this purpose, including items taxable at the same rate as ordinary income, such
as net short-term capital gain) for such period, the sum of the maximum
marginal individual U.S. federal, state and local income tax rates applicable
to such income taking into account the deductibility of state and local income
taxes for U.S. federal income tax purposes, and (ii) with respect to the
net capital gain (as determined for U.S. federal income tax purposes) for such
period, the sum of the maximum marginal individual U.S. federal, state and
local income tax rates applicable to such income taking into account the
deductibility of state and local income taxes for U.S. federal income tax purposes.
For purposes of this definition of “Presumed Tax Rate”, the maximum marginal
individual U.S. federal, state or local income tax rate for each holder of
Capital Stock shall be the highest such marginal individual U.S. federal, state
or local income tax rate applicable to any holder of Capital Stock.

“Principals”
means Jeffrey P. Jacobs and Richard E. Jacobs.

“Private Exchange”
means the offer that may be made by the Company pursuant to the Registration
Rights Agreement to exchange the Notes for Private Exchange Notes.

“Private Exchange Notes”
means the Notes issued in the Private Exchange.

“Publicly Traded Securities”
shall mean any securities (other than securities issued by the Company or any
of its Affiliates) that are dealt in, quoted or traded on securities exchanges
or securities markets located in the United States.

“Purchase Money Obligations”
of any Person means any Obligations of such Person to any seller or any other
Person incurred or assumed to finance the purchase, or the cost of construction
or improvement, of real or personal property to be used in the business of such
Person or any of its Subsidiaries in an amount that is not more than 100% of
the cost, or fair market 

 21
 

 

 

value, as appropriate, of such property, and incurred
within 90 days after the date of such acquisition (excluding accounts
payable to trade creditors incurred in the ordinary course of business).

“QIB” or “Qualified Institutional Buyer” shall have the meaning
ascribed to “qualified institutional buyer” in Rule 144A promulgated under
the Securities Act.

“Record Date”
for interest payable on any Interest Payment Date (except a date for payment of
default interest) means the June 1 and December 1 (whether or not a
Business Day) as the case may be, immediately preceding such Interest Payment
Date.

“Redemption Date”
when used with respect to any Note to be redeemed means the date fixed for such
redemption pursuant to this Indenture.

“Registration Rights Agreement”
means the Registration Rights Agreement, dated as of the Issue Date, by and
among the Company, the Guarantors and the Initial Purchasers, as such agreement
may be amended, modified or supplemented from time to time relating to, among
other things, a registered exchange offer relating to the Notes.

“Regulation S”
means Regulation S promulgated under the Securities Act.

“Related
Party” means:

(1)           any
parent, spouse, sibling or lineal descendant of any Principal; or

(2)           any
trust, corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling interest
of which consist of any one or more Principals and/or such other Persons
referred to in the immediately preceding clause (1).

“Responsible
Officer,” when used with respect to the Trustee, means any officer
within the Corporate Trust Administration of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.

“Restricted Investment”
means an Investment other than a Permitted Investment.

“Restricted Security”
has the meaning set forth in Rule 144(a)(3) promulgated under the
Securities Act; provided that the Trustee shall
be entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.

“Restricted Subsidiary”
of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary.

“Rule 144”
means Rule 144 promulgated under the Securities Act.

“Rule 144A”
means Rule 144A promulgated under the Securities Act.

 22
 

 

 

“S&P” means
Standard & Poor’s Ratings Services, or any successor thereto.

“Securities Act”
means the Securities Act of 1933, as amended.

“Senior Credit
Facilities” means the credit facility under the credit agreement to
be entered into as of the Issue Date by and among the Company, the lenders
party thereto in their capacities as lenders thereunder and Credit Suisse, Cayman
Islands Branch, as Administrative Agent, including any guarantees, collateral
documents, instruments and agreements executed in connection therewith, and any
amendments, supplements, modifications, extensions, renewals, restatements,
refundings or refinancings thereof and any indentures or credit facilities or
commercial paper facilities with banks or other institutional lenders or investors
that replace, refund or refinance any part of the loans, notes, other credit
facilities or commitments thereunder, including any such replacement, refunding
or refinancing facility or indenture that increases the amount borrowable
thereunder or alters the maturity thereof (provided
that such increase in borrowings is permitted under Section 4.08).

“Senior Indebtedness”
means:

(1)           all
Indebtedness of the Company or any Guarantor outstanding under the Senior
Credit Facilities and related Guarantees (including interest accruing on or
after the filing of any petition in bankruptcy or similar proceeding or for
reorganization of the Company or any Guarantor (at the rate provided for in the
documentation with respect thereto, regardless of whether or not a claim for
post-filing interest is allowed in such proceedings)), and any and all
other fees, expense reimbursement obligations, indemnification amounts,
penalties, and other amounts (whether existing on the Issue Date or thereafter
created or incurred) and all obligations of the Company or any Guarantor to reimburse
any bank or other Person in respect of amounts paid under letters of credit, acceptances
or other similar instruments;

(2)           all
Hedging Obligations (and guarantees thereof) owing to a Lender (as defined in
the Senior Credit Facilities) or any Affiliate of such Lender (or any Person
that was a Lender or an Affiliate of such Lender at the time the applicable
agreement giving rise to such Hedging Obligation was entered into), provided that such Hedging Obligations are permitted to be
incurred under the terms of this Indenture;

(3)           any
other Indebtedness of the Company or any Guarantor permitted to be incurred
under the terms of this Indenture, unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes or any related Guarantee; and

(4)           all
Obligations with respect to the items listed in the preceding clauses (1), (2) and
(3);

provided, however,
that Senior Indebtedness shall not include:

(a)           any
obligation of such Person to the Company or any of its Subsidiaries;

 23
 

 

 

(b)           any
liability for federal, state, local or other taxes owed or owing by such
Person;

(c)           any
accounts payable or other liability to trade creditors arising in the ordinary
course of business;

(d)           any
Indebtedness or other Obligation of such Person which is subordinate or junior
in any respect to any other Indebtedness or other Obligation of such Person; or

(e)           that
portion of any Indebtedness which at the time of incurrence is incurred in
violation of this Indenture.

“Significant Subsidiary”
means any Subsidiary that would be a “significant subsidiary” as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act, as such Regulation is in effect on the date hereof.

“Stated Maturity”
means, with respect to any installment of interest or principal on any series
of Indebtedness, the date on which such payment of interest or principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and shall not include any contingent obligations to repay, redeem or repurchase
any such interest or principal prior to the date originally scheduled for the
payment thereof.

“Subsidiary”
means, with respect to any specified Person:

(1)           any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and

(2)           any
partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).

“Tax” or “Taxes” means (i) all federal, state, local or foreign
taxes, charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, alternative minimum, gross receipts, capital,
sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation, property and estimated
taxes, customs duties, fees, assessments and charges of any kind whatsoever, (ii) all
interest, penalties, fines, additions to tax or other additional amounts
imposed by any taxing authority in connection with any item described in clause
(i) and (iii) all transferee, successor, joint and several or contractual
liability (including, without limitation, liability pursuant to Treas. Reg.
§ 1.1502-6 (or any similar state, local or foreign provision)) in
respect of any items described in clause (i) or (ii).

 24
 

 

 

“Tax Period”
means a period with respect to which a holder of Capital Stock must pay U.S.
federal income taxes (including estimated taxes) whether quarterly, annual or
otherwise.

“Tax Return”
means all returns, declarations, reports, estimates, information returns and
statements required to be filed in respect of any Taxes.

“TIA” means the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
amended and as in effect on the date on which this Indenture is qualified under
the TIA.

“Transactions”
means, collectively, (a) the acquisition of two video poker plazas in
Denham Springs, Louisiana and Vinton, Louisiana from unaffiliated parties, (b) the
acquisition of all the assets of the Best Western Pinon Plaza Resort, (c) the
acquisition of three video poker plazas and land for a fourth video poker
plaza, each in Louisiana from Gameco Holdings, Inc., (d) the issuance
of the Notes, (e) the entry into the Senior Credit Facilities, (f) the
repurchase, redemption, repayment or other repayment in full of (i) the Company’s
existing $148.0 million aggregate principal amount of 11.875% senior secured
notes due 2009, (ii) all amounts outstanding under the Company’s Wells
Fargo Foothill Revolving Credit Facility, (iii) a note due to Pimlico
Racing Association and Laurel Racing Association and (iv) approximately
$19.5 million of notes payable to Affiliates, (g) a dividend by the
Company in an amount not to exceed $10.0 million, and (h) a return of
capital to the Principals and their Related Parties in respect of the December 2005
capital contribution made by such Persons, in an amount not to exceed $8.8
million.

“Trustee” means
the party named as such above until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.

“UCC” means the
Uniform Commercial Code as in effect on the date hereof and as it may hereafter
be in effect from time to time in the relevant states.

“Unrestricted Subsidiary”
means any Subsidiary of the Company that is designated by the Board of Directors
of the Company as an Unrestricted Subsidiary pursuant to a Board Resolution of
such Board of Directors, but only to the extent that such Subsidiary:

(1)           has
no Indebtedness other than Non-Recourse Indebtedness;

(2)           is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company;

(3)           is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect Obligation (a) to subscribe for
additional Capital Stock or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

 25
 

 

 

(4)           has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.

Any such designation by the Company shall be notified
by the Company to the Trustee by promptly filing with the Trustee a copy of the
resolution of the board of directors of the Company or any committee thereof
giving effect to such designation and an officer’s certificate certifying that
such designation complied with the foregoing provisions.

“Voting Stock”
of any Person as of any date means the Capital Stock of such Person that is at
the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at
any date, the quotient obtained by dividing:

(1)           the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that shall elapse between
such date and the making of such payment; by

(2)           the
sum of all such payments.

“Wholly Owned Restricted
Subsidiary” of any specified Person means a Restricted Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors’ qualifying shares) will at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person.

SECTION 1.02.                                              Other
Definitions.

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Additional Notes”

  	
   

  	
  2.02

  
	
  “Affiliate Transaction”

  	
   

  	
  4.19

  
	
  “Agent Member”

  	
   

  	
  2.15

  
	
  “Asset Sale Offer”

  	
   

  	
  4.11

  
	
  “Asset Sale Offer
  Payment Date”

  	
   

  	
  4.11

  
	
  “Authentication Order”

  	
   

  	
  2.02

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Change of Control
  Offer”

  	
   

  	
  4.14

  
	
  “Change of Control Purchase
  Price”

  	
   

  	
  4.14

  
	
  “Change of Control
  Payment Date”

  	
   

  	
  4.14

  
	
  “Company Obligations”

  	
   

  	
  4.01

  
	
  “Covenant Defeasance”

  	
   

  	
  8.04

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.11

  

 

 26
 

 

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Gaming Redemption”

  	
   

  	
  3.09

  
	
  “Global Note”

  	
   

  	
  2.01

  
	
  “Global Note Legend”

  	
   

  	
  2.17

  
	
  “Guarantee Obligations”

  	
   

  	
  10.01

  
	
  “incur”

  	
   

  	
  4.08

  
	
  “Legal Defeasance”

  	
   

  	
  8.03

  
	
  “Pari Passu Indebtedness”

  	
   

  	
  4.11

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Default”

  	
   

  	
  6.01

  
	
  “Permitted Indebtedness”

  	
   

  	
  4.08

  
	
  “Private Placement
  Legend”

  	
   

  	
  2.17

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Regulation S Global
  Note”

  	
   

  	
  2.01

  
	
  “Replacement Assets”

  	
   

  	
  4.11

  
	
  “Resale Restriction
  Termination Date”

  	
   

  	
  2.16

  
	
  “Restricted Payments”

  	
   

  	
  4.07

  
	
  “Rule 144A Global
  Note”

  	
   

  	
  2.01

  
	
  “Surviving Entity”

  	
   

  	
  5.01

  
	
  “Surviving Guarantor
  Entity”

  	
   

  	
  10.03

  
	
  “Tax Distributions”

  	
   

  	
  4.07

  

 

SECTION 1.03.                                              Incorporation
by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.

The following TIA terms
used in this Indenture have the following meanings:

“indenture securities”
means the Notes;

“indenture security holder”
means a Holder;

“indenture
to be qualified” means this Indenture;

“indenture trustee”
or “institutional trustee” means the
Trustee; and

“obligor” on the
Notes means the Company and any successor obligor upon the Notes.

All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by Commission
rule under the TIA have the meanings so assigned to them.

 27
 

 

 

SECTION 1.04.                                              Rules of
Construction.

Unless the context
otherwise requires:

(1)           a term has the meaning assigned to
it;

(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;

(3)           “or” is not exclusive;

(4)           words in the singular include the
plural, and in the plural include the singular;

(5)           provisions apply to successive events
and transactions; and

(6)           references to sections of or rules under
the Securities Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the Commission from time to time.

ARTICLE 2

THE NOTES

SECTION 2.01.                                              Form and
Dating.

(a)           General.
The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $2,000 and integral multiples of $1,000.

The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Subsidiary Guarantors and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.

(b)           Global
Notes. The Notes shall be issued initially in the form of two or more
permanent global Notes (the “Global Notes”). Notes offered and sold (i) in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in Exhibit A  (the “Rule 144A
Global Note”) and (ii) in offshore transactions in reliance on Regulation
S shall be issued initially in the form of one or more permanent global Notes
in registered form, substantially in the form set forth in Exhibit A  (the “Regulation S Global Note”). Global Notes
shall be substantially in the form of Exhibit A  attached hereto (including the Global Note
Legend). Notes issued in definitive form 

 28
 

 

 

shall be substantially in the form of Exhibit A
 attached hereto (but without the
Global Note Legend). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as appropriate,
to reflect exchanges and redemptions. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the aggregate principal
amount of outstanding Notes represented thereby shall be made by the Trustee or
the Note Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.

(c)           Euroclear
and Clearstream Procedures Applicable. The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of
Euroclear” and the “General Terms and Conditions of Clearstream” and “Customer
Handbook” of Clearstream shall be applicable to transfers of beneficial
interests in the Regulation S Global Notes that are held by Participants
through Euroclear or Clearstream.

SECTION 2.02.                                              Execution
and Authentication.

One Officer shall sign the Notes for the Company by
manual or facsimile signature. If an Officer whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid. A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture. The Trustee shall,
upon a written order of the Company signed by an Officer (an “Authentication
Order”), authenticate Notes for original issue up to the aggregate principal
amount of $210.0 million. Subject to compliance with Section 4.08, the
Trustee may authenticate Notes thereafter for issuance upon an Authentication Order
in an aggregate principal amount as specified by such Authentication Order (the
“Additional Notes”). The aggregate principal amount of Notes outstanding at any
time may not exceed such amount except as provided in Section 2.07 hereof.
In addition, upon receipt of an Authentication Order, the Trustee shall
authenticate an additional series of Notes in an aggregate principal amount not
to exceed the principal amount of the then outstanding Notes for issuance in
exchange for all Notes previously issued pursuant to an Exchange Offer
registered under the Securities Act or pursuant to a Private Exchange. The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.

SECTION 2.03.                                              Registrar
and Paying Agent.

The Company shall maintain an office or agency where
Notes may be presented for registration of transfer or for exchange (“Registrar”)
and an office or agency where Notes may be presented for payment (“Paying Agent”).
The Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term “Registrar” includes any co-registrar and the term “Paying
Agent” includes any additional paying agent. The Company may change any Pay-

 29
 

 

 

ing Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar. The
Company initially appoints The Depository Trust Company to act as Depository
with respect to the Global Notes. The Company initially appoints the Trustee to
act as the Registrar and Paying Agent.

SECTION 2.04.                                              Paying
Agent to Hold Money in Trust.

The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal, premium or Additional Interest, if any, or interest
on the Notes, and shall notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
Upon any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05.                                              Holder
Lists.

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA § 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each Interest Payment Date and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of the Holders
and the Company shall otherwise comply with TIA § 312(a).

SECTION 2.06.                                              Transfer
and Exchange.

Subject to the provisions of Sections 2.15 and 2.16,
when Notes are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations of the same series,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its requirements for such transaction are met; provided, however, that the
Notes presented or surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar’s or co-Registrar’s request. No
service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge in connection therewith payable by the
transferor of such Notes (other than any such transfer taxes or similar governmental

 

 30

 

 

charge payable upon exchanges or transfers pursuant to
Sections 2.10, 3.06, 4.11, 4.14 or 8.07, in which event the Company shall be
responsible for the payment of such taxes).

The Company shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the
opening of 15 Business Days before the mailing of a notice of redemption of
Notes and ending at the close of business on the day of such mailing and (ii) selected
for redemption in whole or in part pursuant to Article 3, except the
unredeemed portion of any Note being redeemed in part.

Any Holder of a Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interests in such Global
Notes may be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a beneficial interest
in the Note shall be required to be reflected in a book entry.

SECTION 2.07.                                              Replacement
Notes.

If a mutilated Note is surrendered to the Trustee or
if the Holder presents evidence to the satisfaction of the Company and the
Trustee that the Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Note. An indem­nity
bond may be required by the Company or the Trustee that is sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee or
any Agent from any loss which any of them may suffer if a Note is replaced. In
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or the theft of such Note and the ownership thereof. Each of
the Company and the Trustee may charge for its expenses in replacing a Note. In
the event any such mutilated, lost, destroyed or wrongfully taken Note has
become due and payable, the Company in its discretion may pay such Note instead
of issuing a new Note in replacement thereof. The provisions of this Section 2.07
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to replacement or payment of mutilated, lost, destroyed
or wrongfully taken Notes.

Every replacement Note is an additional Obligation of
the Company.

SECTION 2.08.                                              Outstanding
Notes.

Notes outstanding at any time are all Notes authenti­cated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.08 as not outstanding.

If a Note is replaced pursuant to Section 2.07
(other than a mutilated Note surrendered for replacement), it ceases to be
outstanding until the Company and the Trustee receive proof satisfactory to
each of them that the replaced Note is held by a protected purchaser. A mutilated
Note ceases to be outstanding upon surrender of such Note and replacement
thereof pursuant to Section 2.07.

If on a Redemption Date or the Maturity Date, the
Paying Agent holds U.S. legal tender sufficient to pay all of the principal and
interest due on the Notes payable on that date and

 31
 

 

 

is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.

SECTION 2.09.                                              Treasury
Notes.

In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver, consent or notice,
Notes owned by the Company or any of its Affiliates shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Responsible Officer actually knows are so owned
shall be so considered. The Company shall notify the Trustee, in writing, when
it or any of its Affiliates repurchases or otherwise acquires Notes, of the
aggregate principal amount of such Notes so repurchased or otherwise acquired.

SECTION 2.10.                                              Temporary
Notes.

Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes upon
receipt of a written order of the Company in the form of an Officers’ Certificate.
The Officers’ Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of an Authentication Order pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.

SECTION 2.11.                                              Cancellation.

The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar
or the Paying Agent, and no one else, shall cancel and, at the written
direction of the Company, dispose of and deliver evidence of such disposal of
all Notes surrendered for registration of transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Notes
to replace Notes that it has paid or delivered to the Trustee for cancellation.
If the Company shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Notes unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.

SECTION 2.12.                                              Defaulted
Interest.

The Company shall pay interest (including Accrued
Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 2% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful. The Company shall pay interest
(including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Additional Interest (without
regard to any 

 32
 

 

 

applicable grace period) at the rate equal to 2% per
annum in excess of the then applicable interest rate on the Notes to the extent
lawful.

If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest to the Persons who are Holders on a
subsequent special Record Date, which date shall be the fifteenth day next preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special Record Date, the Company shall mail to each
Holder, as of a recent date selected by the Company, with a copy to the
Trustee, a notice that states the subsequent special Record Date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.

Notwithstanding the foregoing, any interest which is
paid prior to the expiration of the 30-day period set forth in Section 6.01(1) shall
be paid to Holders as of the Record Date for the Interest Payment Date for
which interest has not been paid.

SECTION 2.13.                                              Deposit
of Monies.

Prior to 10:00 a.m., New York City time, on each
Interest Payment Date, Redemption Date, Change of Control Payment Date and Maturity
Date, the Company shall have deposited with the Paying Agent in immediately
available funds U.S. legal tender sufficient to make payments, if any, due on
such Interest Payment Date, Redemption Date, Change of Control Payment Date or
Maturity Date, as the case may be, in a timely manner which permits the Trustee
to remit payment to the Holders on such Interest Payment Date, Redemption Date,
Change of Control Payment Date or Maturity Date, as the case may be. The
principal and interest on Global Notes shall be payable to the Depository or
its nominee, as the case may be, as the sole registered owner and the sole
Holder of the Global Notes represented thereby. The principal and interest on
Notes in certificated form shall be payable at the office of the Paying Agent.

SECTION 2.14.                                              CUSIP
Number.

The Company in issuing the Notes may use one or more “CUSIP”
numbers, and if so, the Trustee shall use such CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided
that any such notice may state that no represen­tation is made as to the correctness
or accuracy of the CUSIP numbers printed in the notice or on the Notes, and
that reli­ance may be placed only on the other identification numbers printed
on the Notes. The Company shall promptly notify the Trustee of any change in
the CUSIP number.

SECTION 2.15.                                              Book-Entry
Provisions for Global Notes.

(a)           The
Global Notes initially shall (i) be regis­tered in the name of the Depository
or the nominee of such Depository, (ii) be delivered to the Trustee as
custodian for such Depository and (iii) bear legends as set forth in Section 2.17.

Members of, or Participants in, the Depository (“Agent
Members”) shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Deposi-

 33
 

 

 

tory or under the Glo­bal Note, and the Depository may
be treated by the Company, the Trustee and any Agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
Agent of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder.

(b)           Interests
of beneficial owners in the Global Notes may be transferred or exchanged for
Certificated Notes in accordance with the rules and procedures of the
Depository and the provisions of Section 2.16. In addi­tion, Certificated
Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in Global Notes if (i) the Depository (x) notifies
the Company that it is unwilling or unable to continue as Depository for any
Global Note or (y) has ceased to be a clearing company registered under
the Exchange Act and, in each case, a successor depositary is not appointed by
the Company within 90 days of such notice or (ii) a Default or an
Event of Default has occurred and is continuing and the Registrar has received
a written request from the Depository to issue Certificated Notes.

(c)           In
connection with the transfer of Global Notes as an entirety to beneficial
owners pursuant to paragraph (b), the Global Notes shall be deemed to be
surrendered to the Trus­tee for cancellation, and the Company shall execute,
and the Trustee shall, upon receipt of an Authentication Order, authenticate
and deliver, to each beneficial owner identified by the Depository in writing
in exchange for its beneficial interest in the Global Notes, an equal aggregate
principal amount of Certificated Notes of authorized denominations.

(d)           Any
Certificated Note constituting a Restricted Security delivered in exchange for
an interest in a Global Note pursuant to paragraph (b) or (c) shall,
except as other­wise provided by Section 2.16, bear the Private Placement
Legend.

(e)           The
Holder of any Global Note may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent Members,
to take any action which a Holder is entitled to take under this Inden­ture or
the Notes.

SECTION 2.16.                                              Registration
of Transfers and Exchanges.

(a)           Transfer
and Exchange of Certificated Notes. When Certificated Notes are presented
to the Registrar or co-Registrar with a request:

(i)      to register the transfer of the
Certificated Notes; or

(ii)     to exchange such Certificated Notes for an
equal principal amount of Certificated Notes of other authorized denominations,

the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if the requirements under this Indenture
as set forth in this Section 2.16 for such transactions are met; provided, however, that
the Certificated Notes presented or surrendered for registration of transfer or
exchange:

 34
 

 

 

(I)            shall
be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and

(II)           in
the case of Certificated Notes the offer and sale of which have not been registered
under the Securities Act and are presented for transfer or exchange prior to (x) the
date which is two years after the later of the date of original issue and the
last date on which the Company or any Affiliate of the Company was the owner of
such Note or any predecessor thereto and (y) such later date, if any, as
may be required by any subsequent change in applicable law (the “Resale
Restriction Termination Date”), such Certificated Notes shall be accompanied,
in the sole discretion of the Company, by the following additional information
and documents, as applicable:

(A)          if such Certificated Note is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification to that effect (substantially in the form of Exhibit B
hereto); or

(B)           if such Certificated Note is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A, a
certification to that effect (substantially in the form of Exhibit B
hereto); or

(C)           if such Certificated Note is being transferred in reliance
on Regulation S, delivery of a certification to that effect (substantially in
the form of Exhibit B hereto) and a transferor certificate for
Regulation S transfers substantially in the form of Exhibit D
hereto; or

(D)          if such Certificated Note is being transferred to an
Institutional Accredited Investor, delivery of certification to that effect
(substantially in the form of Exhibit B hereto), certificates of
the transferee in substantially the form of Exhibit C and, at the
option of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the Securities
Act; or

(E)           if such Certificated Note is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a certification to that
effect substantially in the form of Exhibit B hereto and, at the option
of the Company, an Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the Securities Act; or

(F)           if such Certificated Note is being transferred in reliance
on another exemption from the registration requirements of the Securities Act,
a certification to that effect (substantially in the form of Exhibit B
hereto) and, at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is in compliance
with the Securities Act.

(b)           Restrictions
on Transfer of a Certificated Note for a Beneficial Interest in a Global Note.
A Certificated Note may not be exchanged for a beneficial interest in a Global 

 35
 

 

 

Note except upon satisfaction of the requirements set
forth below. Upon receipt by the Registrar or co-Registrar of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Registrar or co-Registrar, together with:

(A)          in the case of Certificated Notes the
offer and sale of which have not been registered under the Securities Act and
which are presented for transfer prior to the Resale Restriction Termination
Date, certification, substantially in the form of Exhibit B hereto,
that such Certificated Note is being transferred (I) to a Qualified
Institutional Buyer or (II) in an offshore transaction in reliance on
Regulation S (and, in the case of this clause II, the Company shall have
received a transferor certificate for Regulation S transfers substantially in
the form of Exhibit D hereto and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to the effect that
such transaction is in compliance with the Securities Act); and

(B)           written instructions from the Holder
thereof directing the Registrar or co-Registrar to make, or to direct the
Depository to make, an endorsement on the applicable Global Note to reflect an
increase in the aggregate amount of the Notes represented by the Global Note,

then the Registrar or co-Registrar shall cancel such
Certificated Note and cause, or direct the Depository to cause, in accordance
with the standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the principal amount of Notes represented by
the applicable Global Note to be increased accordingly. If no Global Note representing
Notes held by Qualified Institutional Buyers or Persons acquiring Notes in
offshore transactions in reliance on Regulation S, as the case may be, is
then outstanding, the Company shall issue and the Trustee shall, upon receipt
of an Authentication Order in accordance with Section 2.02, authenticate
such a Global Note in the appropriate principal amount.

(c)           Transfer
and Exchange of Global Notes. The transfer and exchange of Global Notes or
beneficial interests therein shall be effected through the Depository in accordance
with this Indenture (including the restrictions on transfer set forth herein)
and the procedures of the Depository therefor. Upon receipt by the Registrar or
co-Registrar of written instructions, or such other instruction as is customary
for the Depository, from the Depository or its nominee, requesting the registration
of transfer of an interest in a Rule 144A Global Note or Regulation S
Global Note, as the case may be, to another type of Global Note, together with
the applicable Global Notes (or, if the applicable type of Global Note required
to represent the interest as requested to be transferred is not then
outstanding, only the Global Note representing the interest being transferred),
the Registrar or Co-Registrar shall cancel such Global Notes (or Global Note)
and the Company shall issue and the Trustee shall, upon receipt of an Authentication
Order in accordance with Section 2.02, authenticate new Global Notes of the
types so cancelled (or the type so cancelled and applicable type required to
represent the interest as requested to be transferred) reflecting the
applicable increase and decrease of the principal amount of Notes represented
by such types of Global Notes, giving effect to such transfer. If the
applicable type of Global Note required to represent the interest as requested
to be transferred is not outstanding at the time of such request, the Company
shall issue and the Trustee shall, upon written instructions from the Company
in accordance with Section 2.02, authenticate a new Global Note of 

 36
 

 

 

such type in principal amount equal to the principal
amount of the interest requested to be transferred.

(d)           Transfer
of a Beneficial Interest in a Global Note for a Certificated Note.
(i) Any Person having a beneficial interest in a Global Note may upon
request exchange such beneficial interest for a Certificated Note. Upon receipt
by the Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depository, from the Depository or its nominee
on behalf of any Person having a beneficial interest in a Global Note and upon
receipt by the Trustee of a written order or such other form of instructions as
is customary for the Depository or the Person designated by the Depository as
having such a beneficial interest containing registration instructions and, in
the case of any such transfer or exchange of a beneficial interest in Notes the
offer and sale of which have not been registered under the Securities Act and
which Notes are presented for transfer or exchange prior to the Resale
Restriction Termination Date, the following additional information and
documents:

(A)          if such beneficial interest is being
transferred to the Person designated by the Depository as being the beneficial
owner, a certification from such Person to that effect (substantially in the
form of Exhibit B hereto); or

(B)           if such beneficial interest is being
transferred to a Qualified Institutional Buyer in accordance with Rule l44A,
a certification to that effect (substantially in the form of Exhibit B
hereto); or

(C)           if such beneficial interest is being
transferred in reliance on Regulation S, delivery of a certification to that
effect (substantially in the form of Exhibit B hereto) and a
transferor certificate for Regulation S transfers substantially in the form of Exhibit D
hereto; or

(D)          if such beneficial interest is being
transferred to an Institutional Accredited Investor, delivery of certification
(substantially in the form of Exhibit B hereto), a certificate of
the transferee in substantially the form of Exhibit C and, at the
option of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the Securities
Act; or

(E)           if such beneficial interest is being
transferred in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (substantially in the form of Exhibit B
hereto) and, at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is in compliance
with the Securities Act; or

(F)           if such beneficial interest is being
transferred in reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect (substantially in the
form of Exhibit B hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act,

 37
 

 

 

then the Registrar or co-Registrar shall cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Registrar or co-Registrar, the aggregate principal amount of
the applicable Global Note to be reduced and, following such reduction, the
Company shall execute and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate and deliver
to the transferee a Certificated Note in the appropriate principal amount.

(ii)           Certificated
Notes issued in exchange for a beneficial interest in a Global Note pursuant to
this Section 2.16(d) shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or
indirect Participants or otherwise, shall instruct the Registrar or
co-Registrar in writing. The Registrar or co-Registrar shall deliver such
Certificated Notes to the Persons in whose names such Certificated Notes are so
registered.

(e)           Restrictions
on Transfer and Exchange of Global Notes. Notwithstanding any other
provisions of this Indenture, a Global Note may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.

(f)            Private
Placement Legend. Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver only Notes that bear the Private
Placement Legend unless, and the Trustee is hereby authorized to deliver Notes
without the Private Placement Legend if (i) the Resale Restriction
Termination Date shall have occurred, (ii) there is delivered to the
Trustee an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of
the Securities Act or (iii) such Note has been sold pursuant to an effective
registration statement under the Securities Act.

(g)           General.
By its acceptance of any Note bearing the Private Placement Legend, each Holder
of such a Note acknowledges the restrictions on transfer of such Note set forth
in this Indenture and in the Private Placement Legend and agrees that it shall
transfer such Note only as provided in this Indenture.

The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Note (including any transfers between or
among Agent Members or beneficial owners of interest in any Global Note) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15
or this Section 2.16. The Company shall have the right 

 38
 

 

 

to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.

SECTION 2.17.                                              Restrictive
Legends.

Each Global Note and Certificated Note that
constitutes a Restricted Security shall bear the following legend (the “Private
Placement Legend”) on the face thereof until the Resale Restriction Termination
Date, unless otherwise agreed to by the Company and the Holder thereof:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) AGREES THAT IT WILL NOT, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE), RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF
SUBPARAGRAPH 501(a)(1), (2), (3), or (7) UNDER THE SECURITIES ACT THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER)
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS NOTE), (D) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) WILL
GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFER IS BEING
MADE PURSUANT TO CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER, THE
HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS 

 39
 

 

 

“OFFSHORE TRANSACTION,” “UNITED
STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.

Each Global Note shall
also bear the following legend (the “Global Note Legend”):

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16
OF THE INDENTURE.

ARTICLE 3

REDEMPTION

SECTION 3.01.                                              Notices
to Trustee.

If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 30 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a Redemption Date, an Officers’
Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the Redemption Date, (iii) the
principal amount of Notes to be redeemed, (iv) the amount of any interest
(including any Additional Interest) and (v) the redemption price.

In the event of a Gaming Redemption, the Company shall
notify the Trustee as soon as practicable but in any event before notice of the
Gaming Redemption, as the case may be, is to be mailed to any Holder (unless a
shorter notice shall be satisfactory to the Trustee).

SECTION 3.02.                                              Selection
of Notes to Be Redeemed.

If less than all of the Notes are to be redeemed at
any time, the Trustee shall select the Notes to be redeemed among the Holders
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers

 

 40

 

 

fair and appropriate; provided
that if a partial redemption is made with the proceeds of any Equity Offering,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the procedures
of the Depository), unless such method is otherwise prohibited. In the event of
partial redemption by lot, the particular Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days
prior to the Redemption Date by the Trustee from the outstanding Notes not
previously called for redemption.

The Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note selected
for partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $2,000 or integral multiples
of 1,000, except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not an integral
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.

SECTION 3.03.                                              Notice
of Redemption.

At least 30 days but not more than 60 days
before a Redemption Date (other than in connection with a Gaming Redemption),
the Company shall mail or cause to be mailed, by first class mail, postage
prepaid, an unconditional notice of redemption to each Holder (or the affected
Holder in the case of a Gaming Redemption) whose Notes are to be redeemed at
its registered address.

In the event of a Gaming Redemption, notice of
redemption shall be given in accordance with Section 3.09.

The notice shall identify
the Notes to be redeemed and shall state:

(a)           the
Redemption Date;

(b)           the
redemption price and the amount of interest (including Additional Interest), if
any;

(c)           if
any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the Redemption Date upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion
shall be issued upon cancellation of the original Note;

(d)           the
name and address of the Paying Agent;

(e)           that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

(f)            that,
unless the Company defaults in making such redemption payment, interest on
Notes called for redemption ceases to accrue on and after the Redemption Date;

 41
 

 

 

(g)           the
paragraph of the Notes and/or Section of this Indenture pursuant to which
the Notes called for redemption are being redeemed; and

(h)           that
no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.

At the Company’s request, the Trustee shall give the
notice of redemption in the Company’s name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to the
Redemption Date (or 5 days prior to the date of any Gaming Redemption, in the
case of a Gaming Redemption), an Officers’ Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.

SECTION 3.04.                                              Effect
of Notice of Redemption.

Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Notes called for redemption become irrevocably due
and payable on the Redemption Date at the redemption price. A notice of
redemption may not be conditional.

SECTION 3.05.                                              Deposit
of Redemption Price.

At least one Business Day prior to the Redemption
Date, the Company shall deposit with the Trustee or with the Paying Agent
immediately available funds sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date. The Trustee or the
Paying Agent shall promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary
to pay the redemption price of, and accrued interest on, all Notes to be
redeemed.

If the Company complies with the provisions of the
preceding paragraph, on and after the Redemption Date, interest shall cease to
accrue on the Notes or the portions of Notes called for redemption. If a Note
is redeemed on or after an interest Record Date but on or prior to the related
Interest Payment Date, then any accrued and unpaid interest shall be paid to
the Person in whose name such Note was registered at the close of business on
such Record Date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the Redemption Date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 2.12 hereof.

SECTION 3.06.                                              Notes
Redeemed in Part.

Upon surrender of a Note that is redeemed in part
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), the Company shall issue and, upon receipt of an Authentication Order,
the Trustee shall authenticate for the Holder at the expense of the Company a
new Note equal in principal amount to the unredeemed portion of the Note
surrendered.

 42
 

 

 

SECTION 3.07.                                              Optional
Redemption.

(a)           At
any time prior to June 15, 2009, the Company may on one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under this
Indenture at a redemption price of 109.75% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if any, to the
applicable Redemption Date, subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date, with the net cash proceeds of any Equity Offering; provided
that:

(1)           at least 65% of the aggregate
principal amount of Notes originally issued under this Indenture remains
outstanding immediately after the occurrence of each such redemption (excluding
Notes held by the Company and its Subsidiaries); and

(2)           the redemption must occur within 45
days after the date of the closing of such Equity Offering.

(b)           On
or after June 15, 2010, the Company may redeem all or a part of the Notes
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Additional Interest, if any,
thereon to the applicable Redemption Date, subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date, if redeemed during the 12-month period beginning
on June 15 of the years indicated below:

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2010

  	
   

  	
  104.875

  	
  %

  
	
  2011

  	
   

  	
  102.438

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

SECTION 3.08.                                              No
Mandatory Redemption.

Other than as set forth in Sections 3.09 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

SECTION 3.09.                                              Mandatory
Disposition in Accordance with Gaming Laws.

If any Gaming Authority requires that a Holder or
beneficial owner of Notes be licensed, qualified or found suitable under any
applicable Gaming Law and such Holder or beneficial owner (i) fails to apply
for a license, qualification or a finding of suitability within 30 days (or
such shorter period as may be required by the applicable Gaming Authority)
after being requested to do so by the Gaming Authority or (ii) is denied
such license or qualification or not found suitable, the Company shall have the
right, at its option, (1) to require any such Holder or beneficial owner
to dispose of its Notes within 30 days (or such earlier date as may be required
by the applicable Gaming Authority) of the occurrence of the event described in
clause (i) or (ii) above or (2) to redeem the Notes of such
Holder or beneficial owner at a redemption price equal to the lesser of (x) the
principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, to the earlier of the date of redemption or the
date of the denial of li-

 43
 

 

 

cense or qualification or of the finding of
unsuitability by such Gaming Authority, and (y) the price at which such
Holder or beneficial owner acquired the Notes, together with accrued and unpaid
interest and Additional Interest, if any, to the earlier of the date of
redemption or the date of the denial of license or qualification or of the
finding of unsuitability by such Gaming Authority. The Company shall notify the
Trustee in writing of any redemption pursuant to this Section 3.09 as soon
as practicable. A redemption of the Notes pursuant to this Section 3.09 is
herein referred to as a “Gaming Redemption.”

Immediately upon a determination by a Gaming Authority
that a Holder or beneficial owner of the Notes shall not be licensed, qualified
or found suitable, the Holder or beneficial owner will, to the extent required
by applicable law, have no further right (i) to exercise, directly or
indirectly, through any trustee or nominee or any other person or entity, any
right conferred by the Notes; or (ii) to receive any interest, dividend,
economic interests or any other distributions or payments with respect to the
Notes or any remuneration in any form with respect to the Notes from the
Company, the Subsidiary Guarantors or the Trustee.

The Holder or beneficial owner that is required to
apply for a license, qualification or a finding of suitability shall pay all
fees and costs of applying for and obtaining the license, qualification or
finding of suitability and of any investigation by the applicable Gaming
Authorities.

ARTICLE 4

COVENANTS

SECTION 4.01.                                              Payment
of Notes.

The Company shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in
the manner provided in the Notes and this Indenture. Principal, premium, if
any, and interest shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
New York City time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Additional Interest, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement. The Company’s Obligations under
the Notes, this Indenture and  the
Registration Rights Agreement are referred to herein as the “Company Obligations.”

SECTION 4.02.                                              Maintenance
of Office or Agency.

The Company shall maintain an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-Registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or 

 44
 

 

 

shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.

The Company may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.

The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03 hereof.

SECTION 4.03.                                              Reports.

(a)           Whether
or not required by the Commission, so long as any Notes are outstanding, the
Company shall furnish to the Holders, within the time periods specified in the
Commission’s rules and regulations,

(i)             all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to
file such forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual
information only, a report thereon by the Company’s certified independent accountants,

(ii)            If the Company has designated any of
its Subsidiaries as Unrestricted Subsidiaries, then the consolidated quarterly
and annual financial information required by subsection (i) shall include
a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto and in Management’s Discussion and
Analysis of Financial Condition and Results of Operations, of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Company’s Unrestricted Subsidiaries as required by the rules and
regulations of the Commission, and

(iii)           all current reports that would be
required to be filed with the Commission on Form 8-K if the Company
were required to file such reports.

(b)           In
addition, following consummation of the Exchange Offer, whether or not required
by the rules and regulations of the Commission, the Company shall file a
copy of all information and reports referred to in clause (a) with
the Commission for public availability within the time periods specified in the
Commission’s rules and regulations (unless the Commission shall not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall at all times comply with
TIA § 314(a).

(c)           For
so long as any Notes remain outstanding, the Company and the Subsidiary
Guarantors shall furnish to the Holders and to securities analysts and
prospective inves-

 45
 

 

 

tors, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(d)           Delivery
of the reports, information and other documents set forth in this Section 4.03
to the Trustee is for informational purposes only and the Trustee’s receipt of
such reports, information and other documents shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants
under this Indenture.

SECTION 4.04.                                              Compliance
Certificate.

(a)           The
Company and each Subsidiary Guarantor (to the extent that such Subsidiary
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers’ Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its Obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.

(b)           So
long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company’s independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.

(c)           The
Company shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

SECTION 4.05.                                              Taxes.

The Company shall pay or discharge or shall cause each
of its Subsidiaries to pay or discharge, before the same shall become
delinquent, (1) all material Taxes levied or imposed upon the Company or
any of its Subsidiaries or upon its or any of its Subsidiaries’ income, prof-

 46
 

 

 

its or property and (2) all lawful material
claims for labor, materials and supplies which, in each case, if unpaid, might
by law become a Lien upon the property of the Company or any of its
Subsidiaries; provided, however,
that neither the Company nor any of its Subsidiaries shall be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and for which disputed amounts adequate
reserves have been made in accordance with GAAP. The Company and each of its
Subsidiaries shall prepare and timely file with the appropriate governmental
agencies all Tax Returns required to be filed for any period (or portion
thereof), taking into account any extension of time to file granted to or
obtained on behalf of the Company and/or such Subsidiary, and each such Tax
Return shall be complete and accurate in all material respects.

SECTION 4.06.                                              Stay,
Extension and Usury Laws.

The Company and each of the Subsidiary Guarantors
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Company and each of the Subsidiary Guarantors (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

SECTION 4.07.                                              Restricted
Payments.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:

(1)           declare or pay any dividend or make
any other payment or distribution on account of the Company’s or any of its
Restricted Subsidiaries’ Capital Stock (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company’s or any of its Restricted Subsidiaries’ Capital Stock in their
capacity as such (other than (x) dividends or distributions payable solely
in Capital Stock (other than Disqualified Stock) of the Company or (y) dividends
or distributions payable by a Restricted Subsidiary so long as, in the case of
any dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary other than a Wholly-Owned
Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least
its pro rata share of such dividend or distribution in accordance with its
Capital Stock in such class or series of securities);

(2)           purchase, redeem or otherwise acquire
or retire for value (including, without limitation, in connection with any
merger or consolidation involving the Company) any Capital Stock of the
Company;

 47
 

 

 

(3)           make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated in right of payment to the Notes or the
Guarantees, except a payment of interest or principal at the Stated Maturity
thereof; or

(4)           make any Restricted Investment

(all such payments and other actions set forth in
clauses (1) through (4) above being collectively referred to as “Restricted
Payments”) unless, at the time of and immediately after giving effect to such Restricted
Payment:

(I)            no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof; and

(II)           the
Company would, after giving pro  forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.08(a); and

(III)         such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after the Issue
Date (excluding Restricted Payments permitted by clauses (2), (3), (5) and
(6) below), is less than the sum, without duplication, of:

(a)           50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period) from July 1,
2006 to the end of the Company’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus

(b)           100% of the aggregate net cash
proceeds received by the Company since the Issue Date (other than net cash
proceeds to the extent such net cash proceeds have been used as a basis for
incurring Indebtedness or Preferred Stock pursuant to Section 4.08(b)(12))
from the issue or sale of:

(i)    Capital
Stock of the Company, excluding cash proceeds received from the sale of Capital
Stock to members of management, directors or consultants of the Company
(excluding the Principals and Related Parties) and the Company’s Subsidiaries
after the Issue Date to the extent such amounts have been applied to Restricted
Payments made in accordance with clause (4) below;

(ii)    debt securities of the Company that have
been converted into or exchanged for such Capital Stock of the Company; or

 48
 

 

 

(iii)      other equity contributions made to the
Company or to any Restricted Subsidiary that is a Guarantor by the holders of
Capital Stock of the Company;

provided, however,
that this Section 4.07(b) shall not include the proceeds from (X) Capital
Stock or convertible debt securities of the Company sold to a Restricted Subsidiary,
as the case may be, or (Y) Disqualified Stock or debt securities that have
been converted into Disqualified Stock; plus

(c)           to the extent that any Restricted
Investment that was made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash (other than a sale to the Company or a Restricted
Subsidiary), the lesser of (i) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment; plus

(d)           in the case of the redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary or the merger or
consolidation of an Unrestricted Subsidiary into the Company or a Restricted
Subsidiary or the transfer of assets of an Unrestricted Subsidiary to the
Company or a Restricted Subsidiary, in each case after the Issue Date, the fair
market value of the Investment in such Unrestricted Subsidiary, as determined
by the Board of Directors of the Company in good faith at the time of the redesignation
of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of
such merger, consolidation or transfer of assets (other than an Unrestricted
Subsidiary to the extent the Investment in such Unrestricted Subsidiary
constituted a Permitted Investment); provided,
that the foregoing sum shall not exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments (excluding Permitted Investments)
previously made (and treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary; provided, further,
that no amount will be included under this Section 4.07(d) to the
extent it is already included in Consolidated Net Income.

(b)           The
preceding provisions will not prohibit:

(1)           the
payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the provisions
of this Indenture;

(2)           if
no Default has occurred and is continuing or would be caused thereby, the redemption,
repurchase, retirement, defeasance or other acquisition of any Indebtedness
that is subordinated in right of payment to the Notes or the Guarantees of the
Company or Wholly Owned Restricted Subsidiary that is a Guarantor, as
applicable, or of any Capital Stock of the Company in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of Capital Stock of the Company (other
than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (III) (b) of this Section 4.07;

 49
 

 

 

(3)           if
no Default has occurred and is continuing or would be caused thereby, the
defeasance, redemption, repurchase or other acquisition of Indebtedness that is
subordinated in right of payment to the Notes or the Guarantees of the Company
or any Wholly Owned Restricted Subsidiary that is a Guarantor, as the case may
be, with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;

(4)           if
no Default has occurred and is continuing or would be caused thereby, the
repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Company or any Restricted Subsidiary of the Company held
by any member of the Company’s (or any of its Restricted Subsidiaries’)
management (excluding the Principals and Related Parties) pursuant to any
management equity subscription agreement or stock option agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Capital Stock shall not exceed $500,000 in any 12-month
period;

(5)           with
respect to each Tax Period that the Company qualifies as a Flow Through Entity,
the distribution by the Company to the holders of the Capital Stock of the
Company of an amount, if any, equal to the aggregate local, state and federal
income tax liability such holders would have incurred as a result of each
holder’s ownership of its Capital Stock of the Company, calculated (1) using
the Presumed Tax Rate, (2) as if accruals and allocations from the Company
attributable to the Capital Stock of the Company held by such holder were, for
such Tax Period, the sole source of income and loss for such holder; and (3) by
taking into account the carryover of items of loss, deduction and expense
previously allocated by the Company to such holder. The amount distributable
under this clause (5) shall be adjusted to take into account the effect of
alternative minimum tax; tax adjustments; and any penalty and/or interest
charged by any taxing authority that is the result of an action or omission of
the Company. The distributions described in this clause (5) are referred
to as “Tax Distributions.”  If at any
time the sum of the permitted Tax Distributions received by the holders of
Capital Stock of the Company is greater than the actual taxes paid by such
holder for the Tax Period, then the excess amount, if any, shall be deducted
from future permitted Tax Distributions starting in the next Tax Period until
such excess amount is recouped;

(6)           the
Transactions; and

(7)           if
no Default has occurred and is continuing or would be caused thereby, other
Restricted Payments in an aggregate amount not to exceed $1.0 million in any
fiscal year.

The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the Restricted Payment of
the assets or securities proposed to be transferred or issued to or by the Company
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required to
be valued by this Section 4.07 shall be determined by the Board of
Directors of the Company whose Board Resolution with respect thereto shall be
delivered to the Trustee. The Company’s Board of Directors’ determination must
be based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm if the fair market value exceeds $2.0 million. Not
later than

 

 50

 

 

the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, together with a
copy of any fairness opinion or appraisal required by this Indenture.

As of the Issue Date, all of the Company’s
Subsidiaries will be Restricted Subsidiaries. The Company will not permit any
Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to
the last sentence of the definition of “Unrestricted Subsidiary.”  For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid) in the
Subsidiary so designated will be deemed to be Restricted Payments in an amount
determined as set forth in the last sentence of the definition of “Investment.”  Such designation will be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether pursuant
to Section 4.07(a) or Section 4.07(b)(7) and if such
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted
Subsidiaries will not be subject to any of the restrictive covenants set forth
in this Indenture.

SECTION 4.08.                                              Incurrence
of Indebtedness and Issuance of Preferred Stock.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise (collectively, “incur”),
with respect to any Indebtedness (including Acquired Debt), and the Company
shall not permit any of its Restricted Subsidiaries to issue any shares of
Preferred Stock; provided, however,
that if no Default or Event of Default has occurred and is continuing at the
time of or as a consequence of the incurrence of such Indebtedness, the Company
and any Guarantor may incur Indebtedness (including Acquired Debt) if the Fixed
Charge Coverage Ratio for the Company’s most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred would have
been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred and
the application of proceeds therefrom had occurred at the beginning of such
four-quarter period.

(b)                 Section 4.08(a) shall
not prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted Indebtedness”):

(1)           the incurrence by the Company and its
Restricted Subsidiaries of Indebtedness under the Senior Credit Facilities in
an aggregate principal amount not to exceed $100.0 million at any time
outstanding, less the amount of any such Indebtedness retired with the Net
Proceeds from any Asset Sale applied to permanently reduce the outstanding
amounts or commitments thereunder;

(2)           the incurrence by the Company and any
Wholly Owned Restricted Subsidiary of Indebtedness represented by Purchase
Money Obligations and Capital Lease Obligations in an aggregate principal
amount or accreted value, as applicable, not to exceed the greater of (x) $9.0
million and (y) 15% of Consolidated EBITDA of the Company and its
Restricted Subsidiaries for the most recently ended four full fiscal quarters 

 51
 

 

 

for which internal financial statements are available
immediately preceding the date on which such Indebtedness is incurred;

(3)           the incurrence by the Company and its
Restricted Subsidiaries of the Existing Indebtedness;

(4)           the incurrence by the Company and the
Guarantors of Indebtedness represented by $210.0 million aggregate principal
amount of the Notes and the related Subsidiary Guarantees issued on the Issue
Date and the Exchange Notes and the related Subsidiary Guarantees to be issued
pursuant to the Registration Rights Agreement;

(5)           the incurrence by the Company or any
of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund, refinance or
replace Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under Section 4.08(a) or clauses
(2), (3), (4), (5), (10) or (12) of this subsection (b);

(6)           the incurrence by the Company or any
of its Wholly Owned Restricted Subsidiaries of intercompany Indebtedness solely
between or among the Company and any Wholly Owned Restricted Subsidiary; provided, however, that:

(a)           such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Notes, in the case of the Company, or the Subsidiary Guarantee,
in the case of a Guarantor; and

(b)           (i) any subsequent issuance or
transfer of Capital Stock that results in any such Indebtedness being held by a
Person other than the Company or a Wholly Owned Restricted Subsidiary thereof
and (ii) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Wholly Owned Restricted Subsidiary thereof,
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Wholly Owned Restricted Subsidiary, as the case may be,
that was not permitted by this clause (6);

(7)           the incurrence by the Company or any
Restricted Subsidiary of Hedging Obligations that are incurred for the purpose
of fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding; provided that the notional
principal amount of each such Hedging Obligation does not exceed the principal
amount of the Indebtedness to which such Hedging Obligation relates;

(8)           the Guarantee by the Company or any
of the Restricted Subsidiaries of Indebtedness (other than Non-Recourse
Indebtedness of an Unrestricted Subsidiary) of the Company or a Guarantor that
was permitted to be incurred by another provision of this Section;

(9)           the accrual of interest, the
accretion or amortization of original issue discount, the payment of interest
on any Indebtedness in the form of additional Indebtedness 

 52
 

 

 

with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock; provided, in
each such case, that the amount thereof is included in Fixed Charges of the
Company as accrued;

(10)         the incurrence by the Company or any of
the Guarantors of additional Indebtedness that is contractually subordinated to
the Notes in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (10), not to exceed $25.0 million at any one time outstanding;

(11)         the incurrence by the Company’s
Unrestricted Subsidiaries of Non-Recourse Indebtedness; provided,
however, that if any such Indebtedness
ceases to be Non-Recourse Indebtedness of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this clause
(11);

(12)         the incurrence by the Company or any of
its Wholly-Owned Restricted Subsidiaries of Indebtedness equal to 200.0% of the
net cash proceeds received by the Company since the Issue Date from the
issuance or sale of Capital Stock of the Company or cash contributed to the
capital of the Company (in each case, other than proceeds of Disqualified Stock
or sales of Capital Stock to the Company or any of its Subsidiaries) to the
extent such proceeds have not been applied pursuant to Section 4.07(a)(III) to
make other Investments or payment pursuant to Section 4.07(b) or to
make Permitted Investments (other then those specified in clauses (1), (2) or
(3) of the definition thereof);

(13)         Indebtedness incurred by the Company or
any of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including letters of credit in respect of workers’ compensation claims, or
other Indebtedness with respect to reimbursement type obligations regarding
workers’ compensation claims; provided, however,
that upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 5 days following such
drawing or incurrence;

(14)         Indebtedness arising from agreements of
the Company or its Restricted Subsidiaries providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for the
purpose of financing such acquisition; provided, however,
that

(a)           such Indebtedness is not reflected on
the balance sheet of the Company, or any of its Restricted Subsidiaries
(contingent obligations referred to in a footnote to financial statements and
not otherwise reflected on the balance sheet will not be deemed to be reflected
on such balance sheet for purposes of this Section 4.08(14)(a)); and

 53
 

 

 

(b)           the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including non-cash proceeds (the fair market value of such non-cash proceeds
being measured at the time received and without giving effect to any subsequent
changes in value) actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;

(15)         obligations in respect of performance,
bid, appeal and surety bonds and completion guarantees provided by the Company
or any of its Restricted Subsidiaries in the ordinary course of business;

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

(17)         Indebtedness of the Company or any
Guarantor in an aggregate amount not to exceed $5.0 million at any time
outstanding; and

(18)         unsecured Indebtedness of the Company
or any Restricted Subsidiary in favor of Claude Penn, or his successor, heir or
assignee in an aggregate amount not to exceed $7.5 million.

(c)           For
purposes of determining compliance with this Section 4.08,

(1)           in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Indebtedness described in clauses (1) through
(18) above, or is entitled to be incurred pursuant to subsection (a) of
this Section 4.08, the Company will be permitted to classify or reclassify
such item of Indebtedness (or any portion thereof) on the date of its
incurrence, in any manner that complies with this Section; provided
that all Indebtedness outstanding under the Senior Credit Facilities on the
Issue Date will be treated as incurred on the Issue Date under Section 4.08(b)(1);
and

(2)           at
the time of incurrence, the Company will be entitled to divide and classify an
item of Indebtedness in more than one of the types of Indebtedness described in
Sections 4.08(a) and (b) above.

(d)           The
Company will not permit any Guarantor to, directly or indirectly, incur any
Indebtedness (including Acquired Debt) that is subordinated or junior in right
of payment to any Indebtedness of the Company or such Guarantor, as the case
may be, unless such Indebtedness is expressly subordinated in right of payment
to the Notes or such Guarantor’s Guarantee to the extent and in the same manner
as such Indebtedness is subordinated to other Indebtedness of the Company or
such Guarantor, as the case may be.

This Indenture will not treat (1) unsecured
Indebtedness as subordinated or junior to secured Indebtedness merely because
it is unsecured or (2) Senior Indebtedness as subordi-

 54
 

 

 

nated or junior to any other Senior Indebtedness
merely because it has junior priority with respect to the same collateral.

SECTION 4.09.                                              Liens.

The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (except Permitted Liens) of any kind that secures
obligations under any Indebtedness or any related Guarantee, on any asset or
property of the Company or any Guarantor, or any income or profits therefrom,
or assign or convey any right to receive income therefrom, unless:

(1)           in the case of Liens securing
Indebtedness that is subordinated in right of payment to the Notes and related
Guarantees, the Notes and related Guarantees are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens; or

(2)           in all other cases, the Notes or the
Guarantees are equally and ratably secured, except that the foregoing shall not
apply to (a) Liens securing the Notes and the related Guarantees and (b) Liens
securing Indebtedness of the Company or any Guarantor permitted to be incurred
under the Senior Credit Facilities, including any letter of credit facility
relating thereto, that was permitted by the terms of this Indenture to be
incurred pursuant to Section 4.08(b)(1) hereof.

SECTION 4.10.                                              Dividend
and Other Payment Restrictions Affecting Restricted Subsidiaries.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted Subsidiary
to:

(1)           pay dividends or make any other
distributions on its Capital Stock to the Company or any of its Restricted
Subsidiaries, or with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the Company or any of
its Restricted Subsidiaries;

(2)           make loans or advances to the Company
or any of its Restricted Subsidiaries; or

(3)           sell, lease or transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries.

(b)           The
preceding restrictions shall not apply to encumbrances or restrictions existing
under or by reason of:

(1)           Existing Indebtedness as in effect on
the Issue Date and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements,
re-

 55
 

 

 

newals, increases,
supplements, refundings, replacement or refinancings are no more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in such Existing Indebtedness, as in effect on the Issue
Date;

(2)           this Indenture, the Notes and the
Subsidiary Guarantees;

(3)           applicable law;

(4)           any instrument governing Indebtedness
or Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of this Indenture to be incurred;

(5)           customary non-assignment provisions
in leases entered into in the ordinary course of business and consistent with
past practices;

(6)           Purchase Money Obligations or Capital
Lease Obligations for property acquired or leased in the ordinary course of
business that impose restrictions of the nature described in clause (3) of
subsection (a) of this Section 4.10 on the property so acquired;

(7)           any agreement for the sale or other
disposition of a Restricted Subsidiary that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition;

(8)           Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive,
taken as a whole, than those contained in the agreements governing the Indebtedness
being refinanced;

(9)           Liens securing Indebtedness that
limit the right of the debtor to dispose of the assets subject to such Lien; provided that such Lien is otherwise permitted pursuant to Section 4.09
hereof; and

(10)         restrictions imposed by Gaming
Authorities on the payment of dividends by entities holding Gaming Licenses.

SECTION 4.11.                                              Asset
Sales.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:

(1)           the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value of the assets or Capital
Stock issued or sold or otherwise disposed of;

 56
 

 

 

(2)           in the case of an Asset Sale
involving consideration in excess of $1.0 million, such fair market value is
determined by the Company’s Board of Directors and evidenced by a Resolution of
the Board of Directors set forth in an Officers’ Certificate delivered to the
Trustee; and

(3)           at least 85% of the consideration
therefor received by the Company or such Restricted Subsidiary is in the form
of cash or Cash Equivalents. For purposes of this provision, each of the
following shall be deemed to be cash:

(a)           any liabilities (as shown on the
Company’s or such Restricted Subsidiary’s most recent balance sheet or in the
footnotes thereto), of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Subsidiary Guarantee) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further liability; and

(b)           any securities, notes or other
Obligations received by the Company or any such Restricted Subsidiary from such
transferee that are contemporaneously (subject to ordinary settlement periods)
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received in that conversion);

(b)            Within 360 days after the receipt of
any Net Proceeds from an Asset Sale, the Company (or the Restricted Subsidiary,
as the case may be) may apply such Net Proceeds to (1) make capital
expenditures, (2) the acquisition of all or substantially all of the
assets, or a majority of the Voting Stock of another Permitted Business; provided that (a) if such Investment
in any business is in the form of the acquisition of Capital Stock, such
Investment results in the Company or another of its Restricted Subsidiaries, as
the case may be, owning an amount of the Capital Stock of such business such
that it constitutes a Restricted Subsidiary and (b) if such Investment is
in the form of an acquisition of assets, such newly acquired assets are held by
the Company or a Restricted Subsidiary, (3) the acquisition of other
long-term assets in another Permitted Business (each of clauses (1), (2) and
(3) above, either individually or in the aggregate, “Replacement Assets”),
(4) retire and permanently reduce Indebtedness incurred under the Senior
Credit Facilities; provided, that
in the case of a revolver or similar arrangement that makes credit available,
such commitment is permanently reduced by such amount, and/or (5) repay
other Senior Indebtedness that is secured by a Lien incurred in compliance with
the terms of this Indenture in accordance with the terms thereof.

(c)            Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the preceding
paragraph will constitute “Excess Proceeds.” 
When the aggregate amount of Excess Proceeds exceeds $5.0 million, the
Company will make an Asset Sale Offer to all Holders and, if required by the
terms of any Indebtedness that is pari passu
with the Notes (“Pari Passu
Indebtedness”), to the holders of such Pari Passu Indebtedness (an “Asset Sale Offer”), to purchase the
maximum aggregate principal amount of Notes and such Pari Passu Indebtedness
that is in a minimum principal amount of $2,000 and integral multiples of
$1,000 that may be purchased out of the Excess Proceeds at an offer price in
cash in an amount equal to 

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100% of the principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in this Indenture.
The Company will commence an Asset Sale Offer with respect to Excess Proceeds
within thirty Business Days after the date that Excess Proceeds exceed
$5.0 million by mailing the notice required pursuant to the terms of this
Indenture, with a copy to the Trustee.

(d)        To
the extent that the aggregate amount of Notes and such Pari Passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes,
subject to applicable limitations arising from other covenants contained in
this Indenture. If the aggregate principal amount of Notes tendered into such
Asset Sale Offer or the Pari Passu Indebtedness surrendered by such holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis
based on the accreted value or principal amount of Notes or such Pari Passu
Indebtedness tendered. Upon completion of any such Asset Sale Offer, the amount
of Excess Proceeds shall be reset at zero.

(e)          Pending the final
application of any Net Proceeds pursuant to this Section 4.11, the holder
of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness
outstanding under a revolving credit facility or otherwise invest such Net
Proceeds in any manner not prohibited by this Indenture.

On a date which shall be not later than 60 days from the date notice of
an Asset Sale Offer is mailed (the “Asset Sale Offer Payment Date”), the
Company shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, Notes or portions
thereof tendered pursuant to the Asset Sale Offer, (2) deposit with the
Paying Agent U.S. legal tender sufficient to pay the purchase price plus
accrued and unpaid interest, and Additional Interest, if any, on the Notes to
be purchased or portions thereof, and (3) deliver or cause to be delivered
to the Trustee Notes so accepted together with an Officers’ Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 4.11. The Paying Agent shall
promptly mail to each Holder so accepted payment in an amount equal to the
purchase price for such Notes, and the Company shall execute and issue, and the
Trustee shall promptly authenticate and make available for delivery to such
Holder, a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered; provided that
each such new Note shall be issued in an original principal amount in denominations
of $2,000 and integral multiples of $1,000. The Company shall publicly announce
the results of the Asset Sale Offer on the Asset Sale Offer Payment Date.

(f)          The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the Asset Sales provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its Obligations under the
Asset Sale provisions of this Indenture by virtue of such compliance.

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SECTION 4.12.                                              Business
Activities.

The Company shall not, and shall not permit any
Restricted Subsidiary to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Subsidiaries taken as a whole.

SECTION 4.13.                                              Corporate
Existence.

Subject to Article 5 hereof, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence, and the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve
any such right, license or franchise, or the corporate, partnership or other
existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to
the Holders.

SECTION 4.14.                                              Offer
to Repurchase upon Change of Control.

(a)           If
a Change of Control occurs and unless the Company has previously or
concurrently mailed a redemption notice with respect to all of the outstanding
notes as set forth in Article 3 hereof, the Company shall be obligated to
make an offer to purchase (the “Change of Control Offer”) each Holder’s
outstanding Notes at a purchase price (the “Change of Control Purchase Price”)
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
and Additional Interest thereon, if any, to the Change of Control Payment Date
in accordance with the procedures set forth below.

(b)           Within
10 days of the occurrence of a Change of Control, the Company shall send by
first-class mail, postage prepaid, to the Trustee and to each Holder, at
the address appearing in the register maintained by the Registrar of the Notes,
a notice stating:

(1)           a Change of Control has occurred,
describing the Change of Control transaction and that the Change of Control
Offer is being made pursuant to this Section 4.14 and that all Notes
tendered shall be accepted for payment;

(2)           the Change of Control Purchase Price
and the purchase date (which shall be a Business Day no earlier than 30 days
nor later than 60 days from the date such notice is mailed (the “Change of
Control Payment Date”));

(3)           that any Note not tendered shall
continue to accrue interest;

(4)           that, unless the Company defaults in
the payment of the Change of Control Purchase Price, any Notes accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
on and after the Change of Control Payment Date;

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(5)           that Holders accepting the offer to
have their Notes purchased pursuant to a Change of Control Offer shall be
required to surrender the Notes, with the form entitled “Option of the Holder
to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day preceding the Change of Control Payment Date;

(6)           that Holders shall be entitled to
withdraw their acceptance if the Paying Agent receives, not later than the
close of business on the third Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes delivered for purchase,
and a statement that such Holder is withdrawing his election to have such Notes
purchased;

(7)           that Holders whose Notes are being
purchased only in part shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered;

(8)           any other procedures that a Holder
must follow to accept a Change of Control Offer or effect withdrawal of such
acceptance; and

(9)           the name and address of the Paying
Agent.

(c)           On
the Change of Control Payment Date, the Company shall, to the extent lawful:

(1)           accept for payment all Notes or
portions thereof properly tendered pursuant to the Change of Control Offer;

(2)           deposit with the Paying Agent an
amount equal to the aggregate Change of Control Payment in respect of all Notes
or portions thereof so tendered; and

(3)           deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers’ Certificate
stating the aggregate principal amount of Notes or portions thereof being purchased
by the Company.

(d)           The
Paying Agent shall promptly mail to each Holder of Notes so tendered the Change
of Control Purchase Price for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that
each such new Note shall be in a minimum principal amount of $2,000 or an
integral multiple of $1,000.

(e)           The
Company shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.

(f)            The
Company shall not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Indenture applica-

 

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ble to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

(g)           The
Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change
of Control provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Change of Control provisions of this
Indenture by virtue of such compliance.

SECTION 4.15.                                              Limitation
on Issuances and Sales of Capital Stock in Wholly Owned Restricted
Subsidiaries.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Capital Stock in any
Wholly Owned Restricted Subsidiary of the Company to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company), unless:

(1)           such transfer, conveyance, sale,
lease or other disposition is of all the Capital Stock in such Wholly Owned
Restricted Subsidiary; and

(2)           the cash Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.11.

(b)           The
Company shall not permit any Wholly Owned Restricted Subsidiary of the Company
to issue any of its Capital Stock (other than, if necessary, shares of its
Capital Stock constituting directors’ qualifying shares) to any Person other
than to the Company or a Wholly Owned Restricted Subsidiary of the Company.

SECTION 4.16.                                              Payments
for Consent.

The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid and is paid to all
Holders that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.

SECTION 4.17.                                              Additional
Subsidiary Guarantees.

If the Company or any of its Restricted Subsidiaries acquires or
creates another Subsidiary after the Issue Date, then that newly acquired or
created Subsidiary must become a Guarantor and, within ten Business Days of the
date on which it was acquired or created (except all Subsidiaries that have
been properly designated as Unrestricted Subsidiaries in accordance with this
Indenture for so long as they continue to constitute Unrestricted
Subsidiaries), execute and deliver to the Trustee (i) a supplemental Indenture
and (ii) an Opinion of Counsel.

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SECTION 4.18.                                              Maintenance
of Books and Records.

The Company shall, and shall cause each of its
Subsidiary Guarantors to, keep proper books of record and account, in which
full and correct entries shall be made of all financial transactions of the
Company and each of its Subsidiary Guarantors, in accordance with GAAP.

SECTION 4.19.                                              Transactions
with Affiliates.

(a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding,
loan, advance or Guarantee with, or for the benefit of, any Affiliate (each, an
“Affiliate Transaction”), unless:

(1)           such Affiliate Transaction is on
terms that are no less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person; and

(2)           the Company delivers to the Trustee:

(a)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a Board Resolution set forth in an
Officers’ Certificate certifying that such Affiliate Transaction complies with
this Section 4.19 and that such Affiliate Transaction has been approved by
a majority of the Board of Directors of the Company; and

(b)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $3.0 million, an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view issued by
an independent accounting, appraisal or investment banking firm.

(b)           The
following items shall not be deemed to be Affiliate Transactions and, therefore,
shall not be subject to the provisions of the immediately preceding paragraph:

(1)           subject to clause (2) of this
subsection (b), any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary;

(2)           any employment, consulting or other
similar compensation agreements with the Principals, so long as the annual
compensation paid under all such agreements with the Principals by the Company
and its Restricted Subsidiaries does not exceed $1.0 million in the aggregate
in any 12-month period;

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(3)           transactions solely between or among
the Company and/or its Wholly Owned Restricted Subsidiaries that are Guarantors;

(4)           payment of reasonable directors fees
to Persons who are not otherwise Affiliates of the Company;

(5)           sales of Capital Stock of the Company
(other than Disqualified Stock) to Affiliates of the Company;

(6)           so long as (i) no Default exists
and (ii) the Fixed Charge Coverage Ratio for the Company’s most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such payment is made would
have been at least 1.75 to 1, determined on a pro
forma basis, as if such payment had been
made during such four-quarter period, the payment of fees to JIMCO for the provision
of Gaming Facility development advisory services rendered to the Company and
its Restricted Subsidiaries in the amounts and at the times specified in the
Consulting Agreement, as in effect on the Issue Date or as thereafter amended
or replaced in any manner, that, taken as a whole, is not more adverse to the
interests of Holders in any material respect than such agreement as it was in
effect on the Issue Date; provided
that payments under this clause (6) shall in any event not exceed (i) $1,250,000
in any 12-month period plus (ii) an amount equal to the
documented out-of-pocket expenses of JIMCO incurred in connection with
rendering such services plus (iii) a
development fee not to exceed 2.5% of the Budgeted Cost (as defined in the
Consulting Agreement) of any Development (as defined in the Consulting
Agreement) for which JIMCO provides advisory services;

(7)           Restricted Payments that are
permitted by the provisions of this Indenture described in Section 4.07
and the definition of Permitted Investments;

(8)           management fees paid by Gameco
Holdings, Inc. to the Company or any of its Subsidiaries;

(9)           transactions with customers, clients,
suppliers, joint venture partners or purchasers or sellers of goods and
services, in each case in the ordinary course of business and otherwise not prohibited
by this Indenture;

(10)         the existence of, and the performance
by the Company or any Restricted Subsidiary of its obligations under the terms
of, any limited liability company, limited partnership or other organizational
document or securityholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party on the
Issue Date as in effect on the Issue Date, and similar agreements that it may
enter into thereafter; provided, however, that the existence of, or the performance by the
Company or any Restricted Subsidiary of obligations under, any amendment to any
such existing agreement or any such similar agreement entered into after the
Issue Date shall only be permitted by this Section 4.19(b)(10) to the
extent not more adverse to the interest of Holders in any material respect,
when taken as a whole, than any of such documents and agreements as in effect
on the Issue Date;

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(11)         any transaction with an Affiliate where
the only consideration paid by the Company or any Restricted Subsidiary is
Capital Stock (other than Disqualified Stock) of the Company; and

(12)         the Transactions.

SECTION 4.20.                                              Designation
of Restricted and Unrestricted Subsidiaries.

The Board of Directors may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would be in
compliance with the conditions set forth in the definition of “Unrestricted
Subsidiary”; provided that in no event shall
any business held or operated by the Company as of the Issue Date be
transferred to or held by an Unrestricted Subsidiary. If a Restricted Subsidiary
is designated as an Unrestricted Subsidiary, the aggregate fair market value of
all outstanding Investments owned by the Company and its Restricted Subsidiaries
in the Subsidiary so designated shall be deemed to be an Investment made as of
the time of such designation and shall either reduce the amount available for
Restricted Payments under Section 4.07(a) or reduce the amount
available for future Investments under one or more clauses of the definition of
Permitted Investments, as the Company shall determine in a manner which complies
with the requirements of such covenant or definition, as applicable. That
designation shall only be permitted if such Restricted Payment or Investment
would be permitted at that time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.

Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers’ Certificate certifying that such designation
complied with the conditions set forth in the definition of “Unrestricted
Subsidiary” and was permitted by Section 4.07. If, at any time, any
Unrestricted Subsidiary would fail to meet the conditions for continued designation
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date and, if such Indebtedness is not permitted to be incurred as of such
date pursuant to Section 4.08, the Company shall be in Default of such Section 4.08.
The Board of Directors of the Company may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.

Upon the redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, such Restricted Subsidiary shall execute a
supplemental Indenture to become a Subsidiary Guarantor.

ARTICLE 5

SUCCESSORS

SECTION 5.01.                                              Merger,
Consolidation or Sale of Assets.

The Company shall not, directly or indirectly:  (1) consolidate or merge with or into
another Person (whether or not the Company is the surviving corporation); or (2) sell,
as-

 64
 

 

 

sign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole (without giving effect to any property or assets
of any Unrestricted Subsidiary), in one or more related transactions, to
another Person; unless:

(1)           either (a) the Company is the
surviving corporation; or (b) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia (the “Surviving Entity”);

(2)           the Surviving Entity (if other than
the Company) assumes all the Obligations of the Company under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;

(3)           immediately after such transaction no
Default or Event of Default exists;

(4)           the transaction would not result in
the loss, suspension or material impairment of any Gaming License unless a
comparable replacement Gaming License is effective prior to or simultaneously
with the loss, suspension or material impairment;

(5)           the Surviving Entity:

(a)           shall have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction; and

(b)           shall, on the date of such transaction
after giving pro  forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.08(a); and

(6)           such transaction would not require
any Holder or Beneficial Owner of Notes to obtain a Gaming License or be
qualified or found suitable under the law of any applicable gaming
jurisdiction; provided that such Holder or
Beneficial Owner would not have been required to obtain a Gaming License or be
qualified or found suitable under the laws of any applicable gaming
jurisdiction in the absence of such transaction.

SECTION 5.02.                                              Successor
Corporation Substituted for the Company.

Upon any consolidation or merger, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company or any of its the Restricted
Subsidiaries in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company or
the Restricted Subsidiary is merged or to which such sale, assignment,
transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and after the date of such consolida-

 65
 

 

 

tion, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the “Company” or the
“Restricted Subsidiary” shall refer instead to the successor corporation and
not to the Company or the Restricted Subsidiary), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company or the Restricted Subsidiary
herein; provided, however,
that the predecessor of the Company shall not be relieved from the Obligation
to pay the principal of and interest on the Notes except in the case of a sale
of all of the Company’s or the Restricted Subsidiary assets that meets the
requirements of Section 5.01 hereof.

ARTICLE 6

DEFAULTS AND REMEDIES

SECTION 6.01.                                              Events
of Default.

An “Event of Default”
wherever used herein means any one of the following events:

(1)           default for 30 days in the payment
when due of interest on, or Additional Interest, if any, with respect to, the
Notes;

(2)           default in payment when due of the
principal of or premium, if any, on the Notes;

(3)           failure by the Company or any of its
Subsidiaries to comply with the provisions described in Section 4.07, 4.08,
4.11 or 4.14 or in Article 5 hereof;

(4)           failure by the Company or any of its
Subsidiaries for a period of 30 days after notice from the Trustee or Holders
of not less than 25% in aggregate principal amount of the Notes then
outstanding to comply with any of the other covenants or agreements contained
in this Indenture;

(5)           default under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness of the Company or any of its Subsidiaries (or the
payment of which is Guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or Guarantee now exists, or is created after the
Issue Date, if that default:

(a)           is caused by a failure to pay
principal of, or interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a “Payment Default”); or

(b)           results in the acceleration of such
Indebtedness prior to its express maturity,

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and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $5.0 million or more;

(6)           failure by the Company or any of its
Subsidiaries to pay final judgments aggregating in excess of $5.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;

(7)           [Reserved];

(8)           any revocation, suspension,
expiration without any previous or concurrent renewal, or loss of (i) any
Gaming License of the Company or any of its Restricted Subsidiaries relating to
a truck stop video gaming facility or pari-mutuel wagering facility, for more
than 60 days that, individually or in the aggregate, represents in excess of 5%
of the Company’s consolidated net revenues for its most recently completed four
fiscal quarters for which financial statements are available or (ii) any
other Gaming License of the Company or any of its Restricted Subsidiaries for
more than 60 days, in each case other than any voluntary relinquishment of a
Gaming License if such relinquishment, in the reasonable good faith judgment of
the Board of Directors of the Company, evidenced by a Board Resolution, is both
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and would not in any material respect impair
the Company’s ability to pay principal and interest on the Notes;

(9)           the cessation or suspension of any
gaming operations of the Company or any of its Restricted Subsidiaries for more
than 30 days that, individually or in the aggregate, represent in excess of 5%
of the Company’s consolidated net revenues for its most recently completed four
fiscal quarters for which financial statements are available (other than any
voluntary cessation of gaming operations if such cessation, in the reasonable
good faith judgment of the Board of Directors of the Company, evidenced by a
Board Resolution, is both desirable in the conduct of the business of the
Company and its Restricted Subsidiaries, taken as a whole, and would not in any
material respect impair the Company’s ability to pay principal and interest on
the Notes);

(10)         except as permitted by this Indenture,
any Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee;

(11)         [Reserved];

(12)         the Company or any of its Restricted
Subsidiaries pursuant to or within the meaning of any Bankruptcy Law:

(a)           commences a voluntary case,

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(b)           consents to the entry of an order for
relief against it in an involuntary case,

(c)           consents to the appointment of a
Custodian of it or for all or substantially all of its property,

(d)           makes a general assignment for the
benefit of its creditors, or

(e)           generally is not paying its debts as
they become due; or

(13)         a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that:

(a)           is for relief against the Company or
any Restricted Subsidiary in an involuntary case,

(b)           appoints a Custodian of the Company
or any Restricted Subsidiary or for all or substantially all of the property of
the Company or any Restricted Subsidiary, or

(c)           orders the liquidation of the Company
or any Restricted Subsidiary,

and the order or decree
remains unstayed and in effect for 60 consecutive days.

The term “Bankruptcy Law” means the Bankruptcy Code or
any similar federal or state law for the relief of debtors. The term “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

SECTION 6.02.                                              Acceleration.

If an Event of Default (other than an Event of Default
specified in clauses (12) and (13) of Section 6.01 relating to the Company
or any Significant Subsidiary or group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
principal amount of the then outstanding Notes by written notice to the Company
and the Trustee may declare the unpaid principal of and any accrued interest on
all the Notes to be due and payable. Upon such declaration the principal,
premium, if any, and interest shall be due and payable immediately (together
with the premium referred to in Section 6.02, if applicable). If an Event
of Default specified in clause (12) or (13) of Section 6.01 relating to
the Company or any Significant Subsidiary or group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary occurs, such
unpaid principal of, premium, if any, and any accrued interest (together with
the premium referred to in Section 6.02, if applicable) on the Notes shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in principal
amount of the then outstanding Notes by written notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree, the Company has paid or deposited with 

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the Trustee a sum sufficient to pay all sums paid or
advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agent and counsel, and if all existing Events
of Default (except nonpayment of principal or interest that has become due
solely because of the acceleration) have been cured or waived.

If an Event of Default occurs by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07
hereof, then, upon acceleration of the Notes, an equivalent premium shall also
become and be immediately due and payable, to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding; provided that, if such Event of Default occurs prior to June 15,
2010, such premium (expressed as a percentage of principal amount of the Notes)
shall equal the interest rate then borne by the Notes.

SECTION 6.03.                                              Other
Remedies.

If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal,
premium, if any, and interest and Additional Interest, if any, on the Notes or
to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder of a Note in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.

SECTION 6.04.                                              Waiver
of Past Defaults.

Holders of not less than a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium or interest, and Additional
Interest, if any, on the Notes (including in connection with an offer to purchase)
or in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.

SECTION 6.05.                                              Control
by Majority.

Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on the Trus-

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tee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders or that may involve
the Trustee in personal liability.

SECTION 6.06.                                              Limitation
on Suits.

A Holder of a Note may
pursue a remedy with respect to this Indenture or the Notes only if:

(a)           the
Holder of a Note gives to the Trustee written notice of a continuing Event of
Default;

(b)           the
Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;

(c)           such
Holder or Holders offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any cost, loss, liability or expense;

(d)           the
Trustee does not comply with such request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and

(e)           during
such 60-day period the Holders of a majority in principal amount of the
then outstanding Notes do not give the Trustee a direction inconsistent with
such request.

A Holder of a Note may not use this Indenture to
prejudice the rights of another Holder of a Note or to obtain a preference or
priority over another Holder of a Note.

SECTION 6.07.                                              Rights
of Holders to Receive Payment.

Notwithstanding any other provision of this Indenture,
the right of any Holder of a Note to receive payment of principal, premium and
interest on the Note, and Additional Interest, if any, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.

SECTION 6.08.                                              Collection
Suit by Trustee.

If an Event of Default specified in Section 6.01(1) or
(2) occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal of and premium and interest and Additional
Interest, if any, remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

 

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SECTION 6.09.                                              Trustee
May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and the Holders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be denied for any
reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

SECTION 6.10.                                              Priorities.

If the Trustee collects
any money pursuant to this Article, it shall pay out the money in the following
order:

First:  to
the Trustee, its agents and attorneys for all amounts due under Section 7.07
hereof, including payment of all compensation, expense and liabilities incurred,
and all advances made, by the Trustee and the costs and expenses of collection;

Second:  to
Holders for amounts due and unpaid on the Notes for principal and interest, and
Additional Interest, if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium and interest and Additional Interest, if any, respectively; and

Third:  to
the Company or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a Record Date and payment date for
any payment to Holders pursuant to this Section 6.10.

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SECTION 6.11.                                              Undertaking
for Costs.

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by
a Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest on any Note on or after the respective maturity or payment
dates expressed in such Note pursuant to Section 6.07 hereof, or a suit by
Holders of more than 10% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

SECTION 7.01.                                              Duties
of Trustee.

(a)           If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in its exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

(b)           Except
during the continuance of an Event of Default:

(i)           the duties of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trustee
need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or Obligations shall be read
into this Indenture against the Trustee; and

(ii)          in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.

(c)           The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

(i)            this paragraph does not limit the
effect of paragraph (b) of this Section;

(ii)          the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts; and

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(iii)           the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 hereof or in
exercising any trust or power conferred upon the Trustee under this Indenture.

(d)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to this Section 7.01 and Section 7.02.

(e)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability. The Trustee shall be under no obligation to
exercise any of its rights and powers under this Indenture at the request of
any Holders, unless such Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.

(f)            The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

SECTION 7.02.                                              Rights
of Trustee.

(a)           In
connection with the Trustee’s rights and duties under this Indenture, the
Trustee may conclusively rely upon and shall be protected from acting or
refraining from acting upon any document or instrument believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.

(b)           Before
the Trustee acts or refrains from acting under this Indenture, it may require
an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.

(c)           The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.

(e)           Unless
otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the
Company.

(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
unless such 

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Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.

(g)           Except
with respect to Section 4.01 hereof, the Trustee shall have no duty to
inquire as to the performance of the Company’s covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.01(1), 6.01(2) and 4.01 or (ii) any Default or
Event of Default of which the Trustee shall have received written notification
or obtained actual knowledge.

(h)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any Board Resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the Trustee may,
in its discretion, make such further inquiry or investigation into such facts
or matters as it may see fit and if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company personally or by agent or attorney.

SECTION 7.03.                                              Individual
Rights of Trustee.

The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the
Company or any Affiliate of the Company with the same rights it would have if
it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.

SECTION 7.04.                                              Trustee’s
Disclaimer.

The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company’s use of the proceeds from the
Notes or any money paid to the Company or upon the Company’s direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.

SECTION 7.05.                                              Notice
of Defaults.

If a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to Holders
a notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of, premium,
if any, or interest on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders.

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SECTION 7.06.                                              Reports
by Trustee to Holders.

Within 60 days after each May 15 beginning with
the May 15 following the Issue Date, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders a brief report dated as of
such reporting date that complies with TIA § 313(a) (but if no event
described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA § 313(c).

A copy of each report at the time of its mailing to
the Holders shall be mailed to the Company and filed with the Commission and
each stock exchange on which the Notes are listed in accordance with TIA
§ 313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.

SECTION 7.07.                                              Compensation
and Indemnity.

The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
rendered by it hereunder and thereunder. The Trustee’s compensation shall not
be limited by any law in regard to the law of compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request
for all reasonable disbursements, advances and expenses incurred or made by it
in addition to the compensation for its services. Such expenses shall include
the reasonable compensation, disbursements and expenses of the Trustee’s agents
and counsel.

The Company shall indemnify the Trustee and its
officers, directors, employees, agents and affiliates against any and all
losses, liabilities or expenses (including reasonable attorneys’ fees) incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture and any landlord waiver or consent, including
the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
may be attributable to its negligence or bad faith. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
Obligations hereunder or under any landlord waiver or consent. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its prior written consent, which consent shall not be unreasonably withheld.

The Obligations of the Company under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.

To secure the Company’s payment Obligations in this
Section, the Trustee shall have a Lien prior to the Notes on all money and
property held or collected by the Trustee, except money held in trust to pay
principal, premium, if any, and interest on particular Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.

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When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(1) or 6.01(2) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of TIA
§ 313(b)(2) to the extent applicable.

SECTION 7.08.                                              Replacement
of Trustee.

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section.

The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:

(a)           the
Trustee fails to comply with Section 7.10 hereof;

(b)           the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

(c)           a
custodian or public officer takes charge of the Trustee or its property; or

(d)           the
Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.

If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

If the Trustee, after written request by any Holder
who has been a Holder for at least six months, fails to comply with Section 7.10,
such Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers, trusts and duties of the
retiring Trustee under this Indenture. The successor Trustee shall mail a
notice of 

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its succession to Holders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 hereof shall continue for the benefit of
the retiring Trustee.

SECTION 7.09.                                              Successor
Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee.

SECTION 7.10.                                              Eligibility;
Disqualification.

There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate trust power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of
at least $100.0 million as set forth in its most recent published annual report
of condition.

This Indenture shall always have a Trustee who
satisfies the requirements of TIA § 310(a)(1), (2) and (5). The
Trustee is subject to TIA § 310(b).

SECTION 7.11.                                              Preferential
Collection of Claims Against Company.

The Trustee is subject to TIA § 311(a), excluding
any creditor relationship listed in TIA § 311(b). A Trustee who has
resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated therein.

ARTICLE 8

DISCHARGE OF INDENTURE;
LEGAL DEFEASANCE

AND COVENANT DEFEASANCE

SECTION 8.01.                                              Satisfaction
and Discharge.

This Indenture shall be discharged and shall cease to
be of further effect (except as to surviving rights or registration of transfer
or exchange of Notes) as to all outstanding Notes when:

(1)           either

(a)           all Notes theretofore authenticated
and delivered (except lost, stolen or destroyed Notes which have been replaced
or paid and Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the Trustee
for cancellation; or

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(b)           all Notes that have not been delivered
to the Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise or shall become due and payable
within one year and the Company or any Subsidiary Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as shall be
sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and accrued interest and Additional
Interest, if any, to the date of maturity or redemption;

(2)           no Default or Event of Default (other
than that resulting from borrowing funds to be applied to make such deposit)
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit shall not result in a breach
or violation of, or constitute a default under, any other instrument to which
the Company or any Subsidiary Guarantor is a party or by which the Company or
any Subsidiary Guarantor is bound;

(3)           the Company or any Subsidiary
Guarantor has paid or caused to be paid all sums payable by it under this
Indenture; and

(4)           the Company has delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited money
toward the payment of the Notes at maturity or the Redemption Date, as the case
may be.

In addition, the Company must deliver an Officers’
Certificate and an Opinion of Counsel stating that all conditions precedent to
satisfaction and discharge have been complied with.

Notwithstanding the foregoing paragraphs, the Company’s
Obligations in Article 2 and in Sections 4.01, 4.02, 7.07, 7.08, 8.07 and
8.08 shall survive until the Notes are no longer outstanding. After the Notes
are no longer outstanding, the Company’s Obligations in Sections 7.07, 8.07 and
8.08 shall survive.

After such delivery or irrevocable deposit the Trustee
upon request shall acknowledge in writing the discharge of the Company’s
Obligations under the Notes, the Guarantees and this Indenture except for those
surviving Obligations specified above.

SECTION 8.02.                                              Option
to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at the option of its Board of
Directors evidenced by a Board Resolution set forth in an Officers’
Certificate, at any time, elect to have either Section 8.03 or 8.04 hereof
be applied to all outstanding Notes upon compliance with the conditions set
forth below in this Article 8.

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SECTION 8.03.                                              Legal
Defeasance and Discharge.

Upon the Company’s exercise under Section 8.02
hereof of the option applicable to this Section 8.03, the Company and the
Subsidiary Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.05 hereof, be deemed to have been discharged from their
Obligations with respect to all outstanding Notes on the date the conditions
set forth below are satisfied (hereinafter, “Legal Defeasance”). For this
purpose, Legal Defeasance means that the Company and the Subsidiary Guarantors
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes, which shall thereafter be deemed to be “outstanding”
only for the purposes of Section 8.06 hereof and the other Sections of
this Indenture referred to in (1) and (2) below, and to have
satisfied all their other Obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder:  (1) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.05
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, and interest, if any, and Additional Interest, if any,
on such Notes when such payments are due, (2) the Company’s Obligations
with respect to such Notes under Article 2 and Section 4.02 hereof, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s Obligations in connection therewith and (4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.03 notwithstanding the prior exercise of its
option under Section 8.04 hereof.

SECTION 8.04.                                              Covenant
Defeasance.

Upon the Company’s exercise under Section 8.02
hereof of the option applicable to this Section 8.04, the Company and the
Subsidiary Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.05 hereof, be released from their Obligations under the
covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14,
4.15, 4.16, 4.17, 4.19 and 4.20 hereof with respect to the outstanding Notes on
and after the date the conditions set forth below are satisfied (hereinafter, “Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. In addition, upon the Company’s
exercise under Section 8.02 hereof of the option applicable to this Section 8.04
hereof, subject to the satisfaction of the conditions set forth in Section 8.05
hereof, the events set forth in Sections 6.01(3) through 6.01(10) hereof
shall not constitute Events of Default.

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SECTION 8.05.                                              Conditions
to Legal or Covenant Defeasance.

The following shall be the conditions to the
application of either Section 8.03 or 8.04 hereof to the outstanding
Notes:

In order to exercise
either Legal Defeasance or Covenant Defeasance:

(1)           the Company must irrevocably deposit
with the Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, Government Securities, or a combination thereof, in such amounts
as shall be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay (without reinvestment) the principal of,
premium and interest and Additional Interest, if any, on the outstanding Notes
on the stated date for payment thereof or on the applicable Redemption Date, as
the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular Redemption Date;

(2)           in the case of an election under Section 8.03
hereof, the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming that,
subject to customary assumptions and exclusions, (a) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the Issue Date, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;

(3)           in the case of an election under Section 8.04
hereof, the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming that,
subject to customary assumptions and exclusions,  the Holders of the outstanding Notes shall
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

(4)           no Default or Event of Default (other
than resulting from borrowing funds to be applied to make such deposit and the
granting of Liens in connection therewith) shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which shall be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Sections 6.01(12) or 6.01(13)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;

(5)           such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a
default under, any material agreement or instrument (other than this Indenture,
the Notes, the Subsidiary Guarantees and the Registration

 

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Rights
Agreement) to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;

(6)           the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that, assuming no intervening
bankruptcy of the Company between the date of deposit and the 91st day
following the deposit and assuming that no Holder is an “insider” of the
Company under applicable bankruptcy law, after 91 days following the deposit,
the trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally;

(7)           the Company shall have delivered to
the Trustee an Officers’ Certificate stating that the deposit was not made by
the Company with the intent of preferring the Holders over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company; and

(8)           the Company shall have delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.

SECTION 8.06.                                              Deposited
Money and Government Securities to Be Held in Trust; Other Miscellaneous
Provisions.

Subject to Section 8.07 hereof, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of
this Section 8.06, the “Trustee”) pursuant to Section 8.05 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal, premium,
if any, and interest, but such money need not be segregated from other funds,
except to the extent required by law.

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.05
hereof or the principal and interest received in respect thereof.

Anything in this Article 8 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government Securities
held by it as provided in Section 8.05 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.05(1) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

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SECTION 8.07.                                              Repayment
to Company.

Subject to applicable laws relating to abandoned property,
any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or premium or interest or
Additional Interest, if any, on any Note and remaining unclaimed for two years
after such principal, and premium, if any, Additional Interest, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as a creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may (but shall not be obligated to) at the
expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then remaining
shall be repaid to the Company.

SECTION 8.08.                                              Reinstatement.

If the Trustee or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in accordance with Section 8.03
or 8.04 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s Obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.03 or 8.04 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.03
or 8.04 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Note following the reinstatement of its
Obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND
WAIVER

SECTION 9.01.                                              Without
Consent of Holders.

Notwithstanding Section 9.02
of this Indenture, the Company and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Holder to:

(1)           cure any ambiguity, omission,
mistake, defect or inconsistency;

(2)           provide for uncertificated Notes in
addition to or in place of certificated Notes;

(3)           provide for the assumption of the
Company’s or any Subsidiary Guarantor’s Obligations to the Holders in the case
of a merger or consolidation pursuant to Arti-

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cles 5 or
12 hereof or a sale of all or substantially all of the Company’s or any
Subsidiary Guarantor’s assets;

(4)           provide for additional Subsidiary
Guarantors as set forth in Section 4.17 or to provide for the release of a
Subsidiary Guarantor pursuant to Section 10.06;

(5)           make any change that would provide
any additional rights or benefits to the Holders or that does not adversely
affect the rights hereunder of any Holder;

(6)           comply with requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the TIA;

(7)           to comply with the covenant relating
to mergers, consolidations and sales of assets;

(8)           to add covenants for the benefit of
the Holders or to surrender any right or power conferred upon the Company or
any Guarantor;

(9)           to evidence and provide for the
acceptance and appointment under this Indenture of a successor Trustee pursuant
to the requirements thereof;

(10)         to provide for the issuance of Exchange
Notes (as defined in the Registration Rights Agreement) or Private Exchange
Securities;

(11)         to conform the text of this Indenture,
the Guarantees or the Notes to any provision of the “Description of the Notes”
in the Offering Circular to the extent that such provision in the “Description
of the Notes” was intended to be a verbatim recitation of a provision of this
Indenture, the Guarantees or Notes; or

(12)         making any amendment to the provisions
of this Indenture relating to the transfer and legending of Notes as permitted
by this Indenture, including, without limitation to facilitate the issuance and
administration of the Notes; provided,
however, that (i) compliance
with this Indenture as so amended would not result in Notes being transferred
in violation of the Securities Act or any applicable securities law and (ii) such
amendment does not materially and adversely affect the rights of Holders to
transfer Notes.

The consent of the Holders is not necessary under this
Indenture to approve the particular form of any proposed amendment. It is sufficient
if such consent approves the substance of the proposed amendment.

Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of any amended
or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supple-

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mental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.

SECTION 9.02.                                              With
Consent of Holders.

Except as provided below in this Section 9.02,
the Company and the Trustee may amend or supplement this Indenture and the
Notes may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes). However,
without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):

(1)           reduce the principal amount of Notes
whose Holders must consent to an amendment, supplement or waiver of this
Indenture, the Notes, the Subsidiary Guarantees or the Registration Rights
Agreement;

(2)           reduce the principal of or change the
fixed final maturity of any Note or alter the provisions with respect to the
redemption of the Notes (other than provisions relating to Sections 4.11 and
4.14);

(3)           reduce the rate of or change the time
for payment of interest on any Note;

(4)           waive a Default or Event of Default
in the payment of principal of, or interest or premium, or Additional Interest,
if any, on the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a
waiver of the payment Default that resulted from such acceleration in
accordance with the provisions of Article 6);

(5)           make any Note payable in money other
than that stated in the Notes;

(6)           make any change in the provisions of
this Indenture relating to waivers of past Defaults or the rights of Holders to
receive payments of principal of, or interest or premium or Additional
Interest, if any, on the Notes;

(7)           waive a redemption payment with
respect to any Note (other than a payment required by Sections 4.11 and 4.14);

(8)           release any Subsidiary Guarantor from
any of its Obligations under its Subsidiary Guarantee or this Indenture, except
in accordance with the terms of this Indenture;

(9)           make any change that would adversely
affect the ranking of the Notes; or

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(10)         make any change in the preceding
amendment and waiver provisions.

It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

SECTION 9.03.                                              Compliance
with Trust Indenture Act.

Every amendment or supplement to this Indenture or the
Notes shall be set forth in a amended or supplemental Indenture that complies
with the TIA as then in effect.

SECTION 9.04.                                              Revocation
and Effect of Consents.

Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder’s Note, even if notation
of the consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.

SECTION 9.05.                                              Notation
on or Exchange of Notes.

The Trustee may (but shall not be obligated to) place
an appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee upon receipt of an Authentication Order, shall authenticate new
Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.

SECTION 9.06.                                              Trustee
to Sign Amendments, etc.

The Trustee shall sign any amended or supplemental
Indenture authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture is authorized or permitted by this Indenture.

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ARTICLE 10

SUBSIDIARY GUARANTEES

SECTION 10.01.                                        Guarantees.

Each of the current and future Restricted Subsidiaries
of the Company that are guarantors under the Senior Credit Facilities, and each
of their respective successors and assigns, shall also be Subsidiary Guarantors
under this Indenture. Subject to the provisions of this Article 10, each
Subsidiary Guarantor, jointly and severally with each other Subsidiary
Guarantor, hereby fully and unconditionally Guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that:  (a) the
principal of, and premium and interest and Additional Interest, if any, on the
Notes shall be duly and punctually paid in full when due, whether at maturity,
by acceleration or otherwise, and interest on overdue principal, and premium,
if any, and (to the extent permitted by law) interest on any interest, if any,
on the Notes and all other Obligations of the Company to the Holders or the Trustee
hereunder or under the Notes (including fees, expenses or other Obligations)
shall be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise
(collectively, the “Guarantee Obligations”). Failing payment when due of any
Guarantee Obligation or failing performance of any other Obligation of the
Company to the Holders, for whatever reason, each Subsidiary Guarantor shall be
obligated to pay, or to perform or to cause the performance of, the same
immediately. An Event of Default under this Indenture or the Notes shall constitute
an event of default under this Guarantee, and shall entitle the Trustee or the
Holders to accelerate the Guarantee Obligations of each Subsidiary Guarantor
hereunder in the same manner and to the same extent as the Company Obligations.
Each Subsidiary Guarantor hereby agrees that its Guarantee Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to enforce
the same, any waiver or consent by any Holder with respect to any thereof, the
entry of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor
hereby waives and relinquishes:  (a) any
right to require the Trustee, the Holders or the Company (each, a “Benefitted Party”)
to proceed against the Company, the Subsidiaries or any other Person or to
proceed against or exhaust any security held by a Benefitted Party at any time
or to pursue any other remedy in any secured party’s power before proceeding
against such Subsidiary Guarantor; (b) any defense that may arise by
reason of the incapacity, lack of authority, death or disability of any other
Person or Persons or the failure of a Benefitted Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other
proceeding) of any other Person or Persons; (c) demand, protest and notice
of any kind (except as expressly required by this Indenture), including but not
limited to notice of the existence, creation or incurring of any new or
additional Indebtedness or Obligation or of any action or non-action on the
part of the Subsidiary Guarantors, the Company, the Subsidiaries, any Benefitted
Party, any creditor of the Subsidiary Guarantors, the Company or the
Subsidiaries or on the part of any other Person whomsoever in connection with
any Obligations the performance of 

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which are hereby guaranteed; (d) any defense
based upon an election of remedies by a Benefitted Party, including but not limited
to an election to proceed against the Subsidiary Guarantors for reimbursement; (e) any
defense based upon any statute or rule of law which provides that the
Obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (f) any defense arising because
of a Benefitted Party’s election in any proceeding instituted under the
Bankruptcy Law of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Subsidiary
Guarantors hereby covenant that the Guarantees shall not be discharged except
by payment in full of all Guarantee Obligations, including the principal,
premium, if any, and interest on the Notes and all other costs provided for
under this Indenture, or as provided in Section 8.01.

If any Holder or the Trustee is required by any court
or otherwise to return to either the Company or the Subsidiary Guarantors, or
any trustee or similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by the Company or the Subsidiary
Guarantors to the Trustee or such Holder, the Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the
Subsidiary Guarantors agrees that it shall not be entitled to any right of subrogation
in relation to the Holders in respect of any Guarantee Obligations hereby until
payment in full of all such Obligations. Each Subsidiary Guarantor agrees that,
as between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes hereof,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guarantee Obligations, and (y) in the event
of any acceleration of such Obligations as provided in Article 6 hereof,
such Guarantee Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purpose of the
Guarantee.

SECTION 10.02.                                        Execution
and Delivery of Subsidiary Guarantees.

To evidence the Guarantees set forth in Section 10.01
hereof, each of the Subsidiary Guarantors agrees that a notation of the Guarantees
substantially in the form included in Exhibit A hereto shall be
endorsed on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of the Subsidiary Guarantors by the
President or one of the Vice Presidents of the Subsidiary Guarantors.

Each of the Subsidiary Guarantors agree that the
Subsidiary Guarantees set forth in this Article 10 shall remain in full
force and effect and apply to all the Notes notwithstanding any failure to
endorse on each Note a notation of the Subsidiary Guarantees.

If an Officer whose facsimile signature is on a Note
no longer holds that office at the time the Trustee authenticates the Note on
which the Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.

The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantees set forth in this Indenture on behalf of the Subsidiary
Guarantors.

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SECTION 10.03.                                        Subsidiary
Guarantors May Consolidate, etc., on Certain Terms.

(a)           Nothing
contained in this Indenture or in the Notes shall prevent any consolidation
or merger of a Subsidiary Guarantor with or into the Company or another Wholly
Owned Restricted Subsidiary that is a Subsidiary Guarantor, or shall prevent
the transfer of all or substantially all of the assets of a Subsidiary
Guarantor to the Company or another Wholly Owned Restricted Subsidiary that is
a Subsidiary Guarantor. Upon any such consolidation, merger, transfer or sale,
the Subsidiary Guarantee of such Subsidiary Guarantor shall no longer have any
force or effect.

(b)           Subject
to the provisions of clause (c) below, no Subsidiary Guarantor shall,
directly or indirectly, consolidate or merge with or into (whether or not such
Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person,
other than the Company or another Wholly Owned Restricted Subsidiary that is a
Subsidiary Guarantor, unless:

(1)           either:  (i) the Subsidiary Guarantor is the
surviving corporation; or (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Subsidiary Guarantor) is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia (the “Surviving Guarantor Entity”);

(2)           the Surviving Guarantor Entity (if
other than the Subsidiary Guarantor) assumes all the Obligations of the
Subsidiary Guarantor under its Subsidiary Guarantee, this Indenture and the
Registration Rights Agreement pursuant to agreements reasonably satisfactory to
the Trustee;

(3)           immediately after such transaction no
Default or Event of Default exists;

(4)           the transaction would not result in
the loss, suspension or material impairment of any Gaming License unless a
comparable replacement Gaming License is effective prior to or simultaneously
with the loss, suspension or material impairment;

(5)           (i)  the Company shall have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the transaction;
and

(ii)           the
Company shall, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred at
the beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.08(a); and

(6)           such transaction would not require
any Holder or beneficial owner of Notes to obtain a Gaming License or be
qualified or found suitable under the law of any applicable gaming
jurisdiction; provided that such Holder or
beneficial owner would not 

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have been required to obtain a Gaming License or be
qualified or found suitable under the laws of any applicable gaming
jurisdiction in the absence of such transaction.

The Trustee, subject to the provisions of Section 10.04
hereof, shall be entitled to receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption of Guarantee Obligations, comply with the
provisions of this Section 10.03. Such Officers’ Certificate and Opinion
of Counsel shall comply with the provisions of Section 10.05.

(c)           In
the event of:

(x)            a
sale or other disposition of all or substantially all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise; or

(y)           a
sale or other disposition of all of the Capital Stock of any Subsidiary
Guarantor, in each case to a Person which is not the Company or a Restricted
Subsidiary (but excluding a Restricted Subsidiary that is a Non-Guarantor
Restricted Subsidiary) or another Affiliate of the Company;

then such Subsidiary Guarantor (in the event of a sale
or other disposition, by way of such a merger, consolidation or otherwise, of
all of the Capital Stock of such Subsidiary Guarantor) or the Person acquiring
the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Subsidiary Guarantor) shall be released
and relieved of any Obligations under its Subsidiary Guarantee and this Indenture;
provided that:

(1)           the
Net Proceeds of such sale or other disposition are applied in accordance with
the provisions described in Section 4.11 hereof; and

(2)           all
Obligations of such Subsidiary Guarantor under all of its guarantees of, and
under all of its pledges of assets or other Liens which secure, Indebtedness of
the Company or any of its Subsidiaries, shall also terminate.

SECTION 10.04.                                        Limitation
of Subsidiary Guarantor’s Liability.

Each Subsidiary Guarantor, and by its acceptance hereof
each Holder, hereby confirms that it is the intention of all such parties that
the Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee
not constitute a fraudulent transfer or conveyance for purposes of any
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law. To effectuate the foregoing
intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree
that the Guarantee Obligations of such Subsidiary Guarantor under this Article 10
shall be limited to the maximum amount as shall, after giving effect to all
other contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the Guarantee Obligations of such
other Subsidiary Guarantor under this Article 10, result in the Guarantee
Obligations of such Subsidiary Guarantor under the Subsidiary Guarantee of such
Subsidiary Guarantor not constituting a fraudulent transfer or conveyance.

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SECTION 10.05.                                        Application
of Certain Terms and Provisions to the Subsidiary Guarantors. 

(a)           For
purposes of any provision of this Indenture which provides for the delivery by
any Subsidiary Guarantor of an Officers’ Certificate and/or an Opinion of Counsel,
the definitions of such terms in Section 1.01 shall apply to such
Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.

(b)           Any
request, direction, order or demand which by any provision of this Indenture is
to be made by any Subsidiary Guarantor, shall be sufficient if evidenced as described
in Section 11.02 hereof as if references therein to the Company were
references to such Subsidiary Guarantor.

(c)           Any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders to or on
any Subsidiary Guarantor may be given or served as described in Section 11.02
hereof as if references therein to the Company were references to such
Subsidiary Guarantor.

(d)           Upon
any demand, request or application by any Subsidiary Guarantor to the Trustee
to take any action under this Indenture, such Subsidiary Guarantor shall
furnish to the Trustee such certificates and opinions as are required in Section 11.04
hereof as if all references therein to the Company were references to such
Subsidiary Guarantor.

SECTION 10.06.                                        Release
of Guarantors.

A Guarantor shall be automatically and unconditionally
released from its obligations under its Guarantee upon:

(1)           (a)           any sale, exchange or transfer (by
merger or otherwise) of (i) the Capital Stock of the issuing Guarantor
(including any sale, exchange or transfer), after which the applicable
Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially
all the assets of such Guarantor which sale, exchange or transfer is made in
compliance with the applicable provisions of Section 5.01 hereof;

(b)           the
release or discharge of the guarantee by such Guarantor of the Senior Credit
Facilities, except a discharge or release by or as a result of payment under
such guarantee;

(c)           the
proper designation of the Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary pursuant to Section 4.20 hereof; or

(d)           the
Company exercising its legal defeasance option pursuant to Section 8.03
hereof or the Company’s obligations under this Indenture being discharged in
accordance with the terms hereof; and

 90
 

 

 

(2)           such
Guarantor delivering to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for in the Indenture
relating to such transaction have been complied with.

ARTICLE 11

MISCELLANEOUS

SECTION 11.01.                                        Trust
Indenture Act Controls.

If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by TIA § 318(c), the imposed duties
shall control.

SECTION 11.02.                                        Notices.

Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other’s address:

If to the Company:

                                                 Jacobs
Entertainment, Inc.

17301 W. Colfax Avenue

Suite 250

Golden, Colorado  80410

Attention:  President

Telephone No.:  (303) 215-5200

Telecopier No.:  (303) 215-5219

and a copy to:

                                                 Baker &
Hostetler LLP

1900 East 9th Street

3200 National City Center

Cleveland, Ohio  44114

Attention:  Robert Weible, Esq.

Telephone No.:  (216) 861-7553

Telecopier No.:  (216) 696-0740

 91
 

 

 

If to the Trustee:

                                                 Wells
Fargo Bank, National Association

213 Court Street, Suite 703

Middletown, CT  06457

Attention:  Corporate Trust Services

Telephone No.:  (860) 704-6217

Telecopier No.:  (860) 704-6219

The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

All notices and communications (other than those sent
to Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee); when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA § 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.

If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.

SECTION 11.03.                                        Communication
by Holders with Other Holders.

Holders may communicate pursuant to TIA § 312(b) with
other Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA § 312(c).

SECTION 11.04.                                        Certificate
and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee:

(a)           an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 11.05
hereof) stating 

 92
 

 

 

that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

(b)           an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 11.05 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

SECTION 11.05.                                        Statements
Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA § 314(a)(4)) shall comply with the
provisions of TIA § 314(e) and shall include:

(a)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

(b)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

(c)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

(d)           a
statement as to whether or not, in the opinion of such Person, such condition
or covenant has been satisfied.

SECTION 11.06.                                        Rules by
Trustee and Agents.

The Trustee may make reasonable rules for action
by or at a meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.

SECTION 11.07.                                        No Personal
Liability of Directors, Officers, Employees and Stockholders.

No past, present or future director, officer,
employee, incorporator or stockholder of the Company or any of its
Subsidiaries, as such, shall have any liability for any Obligations of the
Company under the Notes, the Subsidiary Guarantees, this Indenture or the
Registration Rights Agreement or for any claim based on, in respect of, or by
reason of, such Obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

 93
 

 

 

SECTION 11.08.                                        Governing
Law.

THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.

SECTION 11.09.                                        No
Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

SECTION 11.10.                                        Successors.

All agreements of the Company in this Indenture and
the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.

SECTION 11.11.                                        Severability.

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

SECTION 11.12.                                        Counterpart
Originals.

The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

SECTION 11.13.                                        Table
of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.

[Signatures on
following pages]

 

 94

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, all as of the day and year first above
written.

	
  

  	
  ISSUER:

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Name: Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  JACOBS PIÑON PLAZA ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS ELKO ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
  Its:

  	
  President

  

 

 

 

	
  

  	
  /s/ Stephen R. Roark

  
	
   

  	
  Stephen R. Roark, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  BLACK HAWK GAMING & DEVELOPMENT COMPANY,
  INC., as its President

  
	
   

  	
  GOLD DUST WEST CASINO, INC., as its Vice President

  
	
   

  	
  GILPIN VENTURES, INC., as its President

  
	
   

  	
  JALOU L.L.C., as its President and Manager

  
	
   

  	
  JALOU II INC., as its President

  
	
   

  	
   

  
	
   

  	
  GILPIN HOTEL VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Gilpin Ventures, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Black Hawk Gaming & Development

  Company, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACK HAWK/JACOBS ENTERTAINMENT, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Black Hawk Gaming & Development
  Company, Inc.

  
	
   

  	
  Its:

  	
  Authorized Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  

 

 2
 

 

 

	
  

  	
   

  	
   

  
	
   

  	
  DIVERSIFIED OPPORTUNITIES GROUP LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Jacobs Entertainment, Inc., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS DAKOTA WORKS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Jacobs Entertainment, Inc., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: Chief Financial Officer

  

 

 3
 

 

 

	
  

  	
  /s/ Stan Guidroz

  
	
   

  	
  Stan Guidroz, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  WINNER’S CHOICE
  CASINO, INC., as its President

  
	
   

  	
  JACE, INC., as
  its President

  
	
   

  	
  FUEL STOP 36,
  INC., as its President

  
	
   

  	
  HOUMA TRUCK
  PLAZA & CASINO, L.L.C., as its President and Manager

  
	
   

  	
  JALOU - CASH’S
  L.L.C., its President and Manager

  
	
   

  	
  LUCKY MAGNOLIA
  TRUCK STOP AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  BAYOU VISTA
  TRUCK PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  RACELAND TRUCK
  PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  JRJ PROPERTIES,
  LLC, as its President and Manager

  
	
   

  	
  JALOU OF LAROSE,
  LLC, as its President and Manager

  
	
   

  	
  JALOU BREAUX
  BRIDGE, LLC, as its President and Manager

  
	
   

  	
  JALOU OF
  JEFFERSON, LLC, as its President and Manager

  
	
   

  	
  JALOU EUNICE,
  LLC, as its President and Manager

  
	
   

  	
  JALOU OF ST.
  MARTIN, L.L.C., as its President and Manager

  
	
   

  	
  JALOU DIAMOND
  L.L.C., as its President and Manager

  
	
   

  	
  JALOU MAGIC
  L.L.C., as its President and Manager

  
	
   

  	
   

  

 

 4
 

 

 

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Ian M. Stewart

  
	
   

  	
  Ian M. Stewart, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  COLONIAL HOLDINGS, Inc., as its President

  
	
   

  	
  STANSLEY RACING CORP., as its President

  
	
   

  	
  COLONIAL DOWNS, LLC, as its Manager

  
	
   

  	
  VIRGINIA CONCESSIONS, LLC, as its Vice President

  
	
   

  	
   

  
	
   

  	
  COLONIAL DOWNS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Stansley Racing Corp., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian M. Stewart

  
	
   

  	
   

  	
  Name: Ian M. Stewart

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  

 

 5
 

 

 

	
  

  	
  TRUSTEE:

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK, NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph P. O’Donnell

  
	
   

  	
   

  	
  Name: Joseph P. O’Donnell

  
	
   

  	
   

  	
  Title: Vice President

  

 

 6

 

EXHIBIT A

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16
OF THE INDENTURE.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN DEFINITIVE FORM, THIS NOTE 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 DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE 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.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) AGREES THAT IT WILL NOT, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE), RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR
ANY SUB-

 

 A-1
 

 

 

SIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH 501(a)(1), (2), (3), or (7) UNDER
THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE
FOR THIS NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (2) WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, IF THE
PROPOSED TRANSFER IS BEING MADE PURSUANT TO CLAUSE (C) OR (E) ABOVE,
PRIOR TO SUCH TRANSFER, THE HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE
AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.

 

 A-2
 

 

 

(Face of Note)

CUSIP No: 
[                ]

9.75% Senior Notes
due 2014

	
  No. [            ]

  	
   

  	
  $

  

JACOBS
ENTERTAINMENT, INC.

promises to pay to
[         ] or registered assigns,

the principal sum of 
                              
Dollars on
[               ].

Interest Payment Dates:  June 15 and December 15, commencing
December 15, 2006

Record Dates:  June 1
and December 1

	
  

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 A-3
 

 

 

Certificate of
Authentication:

This is one of the Global
Notes

referred to in the within-mentioned Indenture:

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Trustee

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

Dated:

 

 A-4
 

 

 

(Back of Note)

9.75% Senior Notes due 2014

Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.

1.             Interest.
Jacobs Entertainment, Inc., a Delaware corporation (the “Company”),
promises to pay interest on the principal amount of this Note at 9.75% per
annum. The Company shall pay interest and Additional Interest, if any,
semi-annually on June 15 and December 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an “Interest
Payment Date”). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance of this Note. The Company shall pay interest (including Accrued
Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is 2%
per annum in excess of the rate then in effect; it shall pay interest
(including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Additional Interest (without
regard to any applicable grace periods) from time to time on demand at the same
rate to the extent lawful. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.

2.             Method of Payment. The Company shall
pay interest on the Notes (except defaulted interest) and Additional Interest
to the Persons who are registered Holders at the close of business on the June 1
or December 1 next preceding the Interest Payment Date, even if such Notes
are cancelled after such Record Date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture (as defined
below) with respect to defaulted interest. The Notes shall be payable as to
principal, premium, interest and Additional Interest, if any, at the office or
agency of the Company maintained for such purpose, or, at the option of the Company,
payment of interest and Additional Interest may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds shall be required with respect
to principal of and interest, premium and Additional Interest on all Global
Notes and all other Notes the Holders of more than $1,000 in aggregate
principal amount of Notes which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be 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.

3.             Paying Agent and Registrar. Initially,
Wells Fargo Bank, National Association, the Trustee under the Indenture, shall
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.

4.             Indenture. The Company issued the Notes
under an Indenture dated as of June 16, 2006 (“Indenture”) among the Company,
the Subsidiary Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act

 A-5
 

 

 

for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.

5.             Optional Redemption. On or after June 15,
2010, the Company may redeem all or a part of the Notes upon not less than 30
nor more than 60 days’ notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest, if any, thereon to the applicable Redemption
Date, subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date, if redeemed during
the 12-month period beginning on June 15 of the years indicated
below:

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2010

  	
   

  	
  104.875

  	
  %

  
	
  2011

  	
   

  	
  102.438

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time prior to June 15, 2009,
the Company may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes issued under the Indenture at a redemption price of
109.75% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, to the Redemption Date, subject to the right of
Holders of record on the Relevant Record Date to receive interest due on the
relevant Interest Payment Date, with the net cash proceeds of any Equity
Offering; provided that:

(1)           at
least 65% of the aggregate principal amount of Notes originally issued under
the Indenture remains outstanding immediately after the occurrence of each such
redemption (excluding Notes held by the Company and its Subsidiaries); and

(2)           the
redemption must occur within 45 days after the date of the closing of such
Equity Offering.

Except pursuant to the preceding paragraph, the Notes
shall not be redeemable at the Company’s option prior to June 15, 2010.

6.             Mandatory
Redemption. Other than as set forth in Paragraph 7 below, the Company shall
not be required to make mandatory redemption payments with respect to the
Notes.

7.             Mandatory
Disposition in Accordance with Gaming Laws. If any Gaming Authority
requires that a Holder or beneficial owner of Notes be licensed, qualified or
found suitable under any applicable Gaming Law and such Holder or beneficial
owner (i) fails to apply for a license, qualification or a finding of
suitability within 30 days (or such shorter period as may be required by the
applicable Gaming Authority) after being requested to do so by the Gaming
Authority or (ii) is denied such license or qualification or not found
suitable, the Company shall have the right, at its option (1) to require
any such Holder or beneficial owner to dispose of its Notes within 30 days (or
such earlier date as may be required by the applicable Gaming Authority) of the
occurrence of the event described in clause (i) or (ii) above or (2) to
redeem the

 

 A-6
 

 

 

Notes of such Holder or beneficial owner at a
redemption price equal to the lesser of (y) the principal amount thereof,
together with accrued and unpaid interest and Additional Interest, if any, to
the earlier of the date of redemption or the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority and (z) the
price at which such Holder or beneficial owner acquired the Notes, together
with accrued and unpaid interest and Additional Interest, if any, to the
earlier of the date of redemption or the date of the denial of license or
qualification or of the finding of unsuitability by such Gaming Authority. The
Company shall notify the Trustee in writing of any redemption pursuant to Section 3.09
of the Indenture as soon as practicable.

Immediately upon a determination by a Gaming Authority
that a Holder or beneficial owner of the Notes will not be licensed, qualified
or found suitable, the Holder or beneficial owner will, to the extent required
by applicable law, have no further right (i) to exercise, directly or
indirectly, through any trustee or nominee or any other person or entity, any
right conferred by the Notes; or (ii) to receive any interest, dividend,
economic interests or any other distributions or payments with respect to the
Notes or any remuneration in any form with respect to the Notes from the Company,
the Subsidiary Guarantors or the Trustee.

The Holder or beneficial owner that is required to
apply for a license, qualification or a finding of suitability shall pay all
fees and costs of applying for and obtaining the license, qualification or finding
of suitability and of any investigation by the applicable Gaming Authorities.

8.             Change
of Control Offer. Upon the occurrence of a Change of Control, the Company
shall, unless the Company has previously or concurrently mailed a redemption notice
with respect to all of the outstanding Notes as set forth in Article 3 of
the Indenture, offer to repurchase all or any part (in minimum principal
amounts of $2,000 and integral multiples of $1,000) of such Holder’s Notes
pursuant to the offer described below at an offer price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest and
Additional Interest thereon to the date of purchase. Within 10 days following
any Change of Control, the Company shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
the Indenture and described in such notice. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.

9.             Denominations, Transfer, Exchange. The
Notes are in registered form without coupons in denominations of $2,000 and
integral multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 Business Days before a selection of Notes to be redeemed.

 

 A-7
 

 

 

10.           Persons Deemed Owners. The registered
holder of a Note may be treated as its owner for all purposes.

11.           Amendment, Supplement and Waiver. Subject
to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes, and any existing Default or
noncompliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes. Without the consent of any Holder of a Note, the Indenture
or the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place
of certificated Notes, to provide for the assumption of the Company’s obligations
to Holders in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA.

12.           Defaults and Remedies. Events of
Default are set forth in the Indenture. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events
of bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.

13.           Trustee Dealings with Company. The
Trustee, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.

14.           No Recourse Against Others. A director,
officer, employee, incorporator or stockholder, of the Company, as such, shall
not have any liability for any Obligations of the Company under the Notes or
the Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.

15.           Authentication. This Note shall not be
valid until authenticated by the manual signature of Trustee or an
authenticating agent.

 

 A-8

 

16.           Abbreviations. Customary abbreviations
may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

17.           Additional Rights of Holders of Notes. In
addition to the rights provided to Holders under the Indenture, Holders of
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of the Issue Date, among the Company, the Subsidiary Guarantors and
the Initial Purchasers.

18.           CUSIP Numbers. Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and
the Trustee may use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

The Company shall furnish to any Holder upon written
request and without charge a copy of this Indenture and/or the Registration
Rights Agreement. Requests may be made to:

Jacobs Entertainment, Inc.

17301 W. Colfax Avenue

Suite 250

Golden, Colorado  80410

Attention:  President

Telephone No.:  (303) 215-5200

Telecopier No.:  (303) 215-5219

 

 A-9
 

 

 

SUBSIDIARY GUARANTEE

The Subsidiary Guarantors listed below (hereinafter
referred to as the “Subsidiary Guarantors,” which term includes any successors
or assigns under the Indenture and any additional Subsidiary Guarantors), have
irrevocably and unconditionally guaranteed the Guarantee Obligations, which
include that:  (a) the principal of,
and premium and interest and Additional Interest, if any, on the 9.75% Senior
Notes due 2014 (the “Notes”) of Jacobs Entertainment, Inc. (the “Company”),
shall be duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on overdue principal, and premium, if
any, and (to the extent permitted by law) interest on any interest, if any, on
the Notes and all other Obligations of the Company to the Holders or the
Trustee hereunder or under the Notes (including fees, expenses or other) shall
be promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.

The Obligations of each Subsidiary Guarantor to the
Holders and to the Trustee pursuant to this Subsidiary Guarantee and this
Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to such Indenture for the precise terms of this Subsidiary
Guarantee.

No stockholder, officer, director or incorporator, as
such, past, present or future of each Subsidiary Guarantor shall have any
liability under this Subsidiary Guarantee by reason of his or its status as
such stockholder, officer, director or incorporator.

Except as set forth in the Indenture, this is a continuing
Guarantee and shall remain in full force and effect and shall be binding upon
each Subsidiary Guarantor and its successors and assigns until full and final
payment of all of the Company’s Obligations under the Notes and the Indenture
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders, and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Note
upon which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers.

The Obligations of each Subsidiary Guarantor under its
Subsidiary Guarantee shall be limited to the extent necessary to insure that it
does not constitute a fraudulent conveyance under applicable law.

THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE
INCORPORATED HEREIN BY REFERENCE.

 

 A-10
 

 

 

Capitalized terms used herein have the same meanings
given in this Indenture unless otherwise indicated.

Dated as of June 16,
2006

	
  

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  JACOBS PIÑON PLAZA ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS ELKO ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
  Its:

  	
  President

  

 

 A-11
 

 

 

	
  

  	
   

  
	
   

  	
  Stephen R. Roark, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
  BLACK HAWK GAMING & DEVELOPMENT COMPANY,
  INC., as its President

  
	
   

  	
  GOLD DUST WEST CASINO, INC., as its Vice President

  
	
   

  	
  GILPIN VENTURES, INC., as its President

  
	
   

  	
  JALOU L.L.C., as its President and Manager

  
	
   

  	
  JALOU II INC., as its President

  
	
   

  	
   

  
	
   

  	
  GILPIN HOTEL VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Gilpin Ventures, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Black Hawk Gaming & Development

  Company, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
  BLACK HAWK/JACOBS ENTERTAINMENT, LLC

  
	
   

  	
  By:

  	
  Black Hawk Gaming & Development
  Company, Inc.

  
	
   

  	
  Its:

  	
  Authorized Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  
	
   

  	
  DIVERSIFIED OPPORTUNITIES GROUP LTD.

  
	
   

  	
  By:

  	
  Jacobs Entertainment, Inc., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  JACOBS DAKOTA WORKS, LLC

  
	
   

  	
  By:

  	
  Jacobs Entertainment, Inc., its Sole Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Stephen R. Roark

  
	
   

  	
   

  	
  Its: Chief Financial Officer

  

 

 A-12
 

 

 

	
  

  	
   

  
	
   

  	
  Stan Guidroz, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  WINNER’S CHOICE
  CASINO, INC., as its President

  
	
   

  	
  JACE, INC., as
  its President

  
	
   

  	
  FUEL STOP 36,
  INC., as its President

  
	
   

  	
  HOUMA TRUCK
  PLAZA & CASINO, L.L.C., as its President and Manager

  
	
   

  	
  JALOU - CASH’S
  L.L.C., its President and Manager

  
	
   

  	
  LUCKY MAGNOLIA
  TRUCK STOP AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  BAYOU VISTA
  TRUCK PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  RACELAND TRUCK
  PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
  JRJ PROPERTIES,
  LLC, as its President and Manager

  
	
   

  	
  JALOU OF LAROSE,
  LLC, as its President and Manager

  
	
   

  	
  JALOU BREAUX
  BRIDGE, LLC, as its President and Manager

  
	
   

  	
  JALOU EUNICE,
  LLC, as its President and Manager

  
	
   

  	
  JALOU OF ST. MARTIN,
  L.L.C., as its President and Manager

  
	
   

  	
  JALOU DIAMOND
  L.L.C., as its President and Manager

  
	
   

  	
  JALOU MAGIC
  L.L.C., as its President and Manager

  
	
   

  	
  JALOU OF VINTON,
  LLC, as its President and Manager

  
	
   

  	
  JALOU OF
  VINTON-BINGO, LLC, as its President and Manager

  
	
   

  	
  JALOU OF ST.
  HELENA, LLC, as its President and Manager

  
	
   

  	
  JALOU OF JEFFERSON, LLC, as its President and
  Manager

  

 

 A-13
 

 

 

	
  

  	
   

  	
   

  
	
   

  	
  Ian M. Stewart, signing on behalf of the entities
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  
	
   

  	
  COLONIAL HOLDINGS, Inc., as its President

  
	
   

  	
  STANSLEY RACING CORP., as its President

  
	
   

  	
  COLONIAL DOWNS, LLC, as its Manager

  
	
   

  	
  VIRGINIA CONCESSIONS, LLC, as its Vice President

  
	
   

  	
  MARYLAND-VIRGINIA RACING CIRCUIT, INC., as its
  President

  
	
   

  	
   

  
	
   

  	
  COLONIAL DOWNS, L.P.

  
	
   

  	
  By:

  	
  Stansley Racing Corp., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Ian M. Stewart

  
	
   

  	
   

  	
  Its: President

  
	
   

  	
   

  	
   

  

 

 A-14
 

 

 

Assignment Form

To assign this Note, fill in the form below:  (I) or (we) assign and transfer this
Note to

	
  

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  

 

and irrevocably appoint
__________________________________________________________

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

Date:______________________

	
  

  	
  Your Signature: 

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the face of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee.

  

 

 A-15
 

 

 

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by
the Company pursuant to Section 4.11 or 4.14 of the Indenture, check the
box below:

	
  o Section 4.14

  	
   

  	
  o Section 4.11

  

 

If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.14 or 4.11 of the
Indenture, state the amount you elect to have purchased:  $___________

Date:                                                                                                        Your Signature:                                                                         
                                                                                        (Sign
exactly as your name appears on the Note)

Tax Identification No.:                                                    

Signature
Guarantee:                                                                                                                     

Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor program reasonably acceptable to the Trustee)

 A-16
 

 

 

SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL NOTE

The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Certificated Note, or exchanges
of a part of another Global Note or Certificated Note for an interest in this
Global Note, have been made:

	
  

  

  Date of Exchange

  	
   

  	
  

  Amount of decrease in

  Principal Amount of

  this Global Note

  	
   

  	
  

  Amount of increase in

  Principal Amount of

  this Global Note

  	
   

  	
  Principal Amount of

  this Global Note

  following such decrease

  (or increase)

  	
   

  	
  Signature of

  authorized officer of

  Trustee or Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 A-17

 

 

EXHIBIT B

FORM OF CERTIFICATE
OF TRANSFER

Re:                               Jacobs
Entertainment, Inc. (the “Company”) 

9.75% Senior Notes due 2014 (the “Notes”)

This Certificate relates
to $_______ principal amount of Notes held in the form of* ___ a beneficial
interest in a Global Note or* _______ Certificated Notes by ______ (the “Transferor”).

The Transferor:

o   has requested by written order that the
Registrar deliver in exchange for its beneficial interest in the Global Note
held by the Depository a Certificated Note or Certificated Notes in definitive,
registered form of authorized denominations and an aggregate number equal to
its beneficial interest in such Global Note (or the portion thereof indicated
above); or

o   has requested by written order that the
Registrar exchange or register the transfer of a Certificated Note or
Certificated Notes.

In connection with such
request and in respect of each such Note, the Transferor does hereby certify
that the Transferor is familiar with the Indenture relating to the above captioned
Notes and the restrictions on transfers thereof as provided in Section 2.16
of such Indenture, and that the transfer of the Notes does not require
registration under the Securities Act of 1933, as amended (the “Securities
Act”), because*:

o   Such Note is being acquired for the
Transferor’s own account, without transfer (in satisfaction of Section 2.16
of the Indenture).

o   Such Note is being transferred to a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act),
in reliance on Rule 144A.

o   Such Note is being transferred to an
institutional “accredited investor” (within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act) which
delivers a certificate to the Trustee in the form of Exhibit C to
the Indenture.

o   Such Note is being transferred in reliance on
Regulation S under the Securities Act and a transfer certificate for Regulation
S transfers in the form of Exhibit D to the Indenture accompanies
this certification. [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]

o   Such Note is being transferred in reliance on
Rule 144 under the Securities Act. [An Opinion of Counsel to the effect
that such transfer does not require registration under the Securities Act accompanies
this certification.]

 

 B-1
 

 

 

o   Such Note is being transferred in reliance on
and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144 under the Securities
Act to a person other than an institutional “accredited investor.”  [An Opinion of Counsel to the effect that
such transfer does not require registration under the Securities Act accompanies
this certification.]

	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  [INSERT NAME OF TRANSFEROR]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [Authorized Signatory]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
  *Check applicable box.

  	
   

  	
   

  	
   

  

 

 B-2

 

EXHIBIT C

Form of Transferee Letter of Representation

Wells Fargo Bank,
National Association

213 Court Street, Suite 703

Middletown, CT  06457

Attention:  Corporate Trust Services

Ladies and Gentlemen:

This certificate is delivered to request a transfer of
$________ principal amount of the 9.75% Senior Notes due 2014 of Jacobs
Entertainment, Inc. (the “Company”), and any guarantee thereof (the
“Notes”). Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:

	
  Name:

  	
   

  
	
  Address:

  	
   

  
	
  Taxpayer ID Number:

  	
   

  

 

The undersigned represents and warrants to you that:

1.             We
are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933 (the “Securities
Act”)) purchasing Notes for our own account or for the account of such an
institutional “accredited investor” and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and we invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.

2.             We
acknowledge that we have had access to such financial and other information,
and have been afforded the opportunity to ask such questions of representatives
of the Company and receive answers thereto, as we deem necessary.

3.             We
understand that the Notes have not been registered under the Securities Act
and, unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account for
which we are purchasing Notes that we shall not prior to the date (the “Resale
Restriction Termination Date”) that is two years after the later of the
original issuance of the Notes and the last date on which the Company or any
affiliate of the Company was the owner of such Notes (or any predecessor
thereto) offer, sell or otherwise transfer such Notes except (a) to the
Company or any subsidiary of the Company, (b) inside the United States to
a “qualified institutional buyer” in compliance with Rule 144A under the
Securities Act (c) inside the United States to an “institutional
accredited inves-

 

 C-1
 

 

 

tor” as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to the Trustee a signed letter
substantially in the form of this letter (d) outside the United States in
an offshore transaction in compliance with Rule 904 under the Securities
Act (e) pursuant to any other available exemption from the registration
requirements of the Securities Act or (f) pursuant to an effective registration
statement under the Securities Act. We acknowledge that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the
Resale Restriction Termination Date of the applicable Notes pursuant to clause (c) or
(e) above to require the delivery of an Opinion of Counsel, certification
and/or other information satisfactory to the Company and the Trustee.

We understand that the Trustee shall not be required
to accept for registration of transfer any Notes acquired by us, except upon
presentation of evidence satisfactory to the Company and the Trustee that the
foregoing restrictions on transfer have been complied with. We further
understand that any Notes purchased by us shall be in the form of definitive
physical certificates and that such certificates shall bear a legend reflecting
the substance of paragraph 3 of this letter. We further agree to provide
to any person acquiring any of the Notes from us a notice advising such person
that transfers of such Notes are restricted as stated herein and that certificates
representing such Notes shall bear a legend to that effect.

We represent that the Company and the Trustee and
others are entitled to rely upon the truth and accuracy of our acknowledgments,
representations and agreements set forth herein, and we agree to notify you
promptly in writing if any of our acknowledgments, representations or
agreements herein cease to be accurate and complete. You are also irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.

We represent to you that we have full power to make
the foregoing acknowledgments, representations and agreements on our own behalf
and on behalf of any investor account for which we are acting as fiduciary
agent.

As used herein, the terms “offshore transaction,” “United
States” and “U.S. person” have the respective meanings given to them in
Regulation S under the Securities Act.

THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

	
  Dated:

  	
   

  	
   

  	
  TRANSFEREE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  

 

 C-2

 

EXHIBIT D

Form of Certificate To Be

Delivered in Connection

with Regulation S Transfers

_______________,
____

Wells Fargo Bank,
National Association

213 Court Street, Suite 703

Middletown, CT  06457

Attention:  Corporate Trust Services

Re:                               Jacobs
Entertainment, Inc.’s

9.75% Senior Notes due 2014 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $__________
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the “Securities Act”), and, accordingly, we
represent that:

(1)           the
offer of the Notes was not made to a person in the United States;

(2)           either
(a) at the time the buy offer was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States, or (b) the transaction
was executed in, on or through the facilities of a designated off-shore
securities market and neither we nor any person acting on our behalf knows that
the transaction has been prearranged with a buyer in the United States;

(3)           no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;

(4)           the
transaction is not part of a plan or scheme to evade the registration requirements
of the Securities Act; and

(5)           we
have advised the transferee of the transfer restrictions applicable to the
Notes.

 

 D-1
 

 

 

You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Defined terms used herein
without definition have the respective meanings provided in Regulation S.

	
  

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of
  Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
				

 

 D-2Exhibit 10.22

EXECUTION
VERSION

$100,000,000

CREDIT AGREEMENT

dated as of June 16,
2006,

among

Jacobs
Entertainment, Inc.,

as Borrower,

the Lenders party
hereto

and

Credit Suisse
Securities (USA) LLC

and

CIBC World Markets Corp.,

as Joint Lead Arrangers and Joint Bookrunners,

and

CIBC World Markets
Corp.,

as Syndication Agent,

and

Wells Fargo Bank,
National Association,

as Documentation Agent and Swingline Lender,

and

CIT Lending
Services Corporation,

as Documentation Agent,

and

Credit Suisse,
Cayman Islands Branch,

as Issuing Bank, Administrative Agent and Collateral Agent

 

 

TABLE OF CONTENTS

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
   

  	
  Defined Terms

  	
   

  	
  2

  
	
  SECTION 1.02

  	
   

  	
  Classification of Loans and Borrowings

  	
   

  	
  48

  
	
  SECTION 1.03

  	
   

  	
  Terms Generally

  	
   

  	
  49

  
	
  SECTION 1.04

  	
   

  	
  Accounting Terms; GAAP

  	
   

  	
  49

  
	
  SECTION 1.05

  	
   

  	
  Resolution of Drafting Ambiguities

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE CREDITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
   

  	
  Commitments

  	
   

  	
  50

  
	
  SECTION 2.02

  	
   

  	
  Loans

  	
   

  	
  50

  
	
  SECTION 2.03

  	
   

  	
  Borrowing Procedure

  	
   

  	
  52

  
	
  SECTION 2.04

  	
   

  	
  Evidence of Debt; Repayment of Loans

  	
   

  	
  52

  
	
  SECTION 2.05

  	
   

  	
  Fees

  	
   

  	
  53

  
	
  SECTION 2.06

  	
   

  	
  Interest on Loans

  	
   

  	
  54

  
	
  SECTION 2.07

  	
   

  	
  Termination and Reduction of Commitments

  	
   

  	
  55

  
	
  SECTION 2.08

  	
   

  	
  Interest Elections

  	
   

  	
  56

  
	
  SECTION 2.09

  	
   

  	
  Amortization of Term Borrowings

  	
   

  	
  57

  
	
  SECTION 2.10

  	
   

  	
  Optional and Mandatory Prepayments of Loans

  	
   

  	
  57

  
	
  SECTION 2.11

  	
   

  	
  Alternate Rate of Interest

  	
   

  	
  61

  
	
  SECTION 2.12

  	
   

  	
  Yield Protection

  	
   

  	
  62

  
	
  SECTION 2.13

  	
   

  	
  Breakage Payments

  	
   

  	
  63

  
	
  SECTION 2.14

  	
   

  	
  Payments Generally; Pro Rata Treatment; Sharing of
  Setoffs

  	
   

  	
  64

  
	
  SECTION 2.15

  	
   

  	
  Taxes

  	
   

  	
  66

  
	
  SECTION 2.16

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  68

  
	
  SECTION 2.17

  	
   

  	
  Swingline Loans

  	
   

  	
  69

  
	
  SECTION 2.18

  	
   

  	
  Letters of Credit

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Organization; Powers

  	
   

  	
  77

  
	
  SECTION 3.02

  	
   

  	
  Authorization; Enforceability

  	
   

  	
  78

  
	
  SECTION 3.03

  	
   

  	
  No Conflicts

  	
   

  	
  78

  
	
  SECTION 3.04

  	
   

  	
  Financial Statements; Projections

  	
   

  	
  78

  
	
  SECTION 3.05

  	
   

  	
  Properties

  	
   

  	
  79

  

 

 i
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 3.06

  	
   

  	
  Intellectual Property

  	
   

  	
  80

  
	
  SECTION 3.07

  	
   

  	
  Equity Interests and Subsidiaries

  	
   

  	
  81

  
	
  SECTION 3.08

  	
   

  	
  Litigation; Compliance with Laws

  	
   

  	
  81

  
	
  SECTION 3.09

  	
   

  	
  Agreements

  	
   

  	
  82

  
	
  SECTION 3.10

  	
   

  	
  Federal Reserve Regulations

  	
   

  	
  82

  
	
  SECTION 3.11

  	
   

  	
  Investment Company Act

  	
   

  	
  82

  
	
  SECTION 3.12

  	
   

  	
  Use of Proceeds

  	
   

  	
  82

  
	
  SECTION 3.13

  	
   

  	
  Taxes

  	
   

  	
  82

  
	
  SECTION 3.14

  	
   

  	
  No Material Misstatements

  	
   

  	
  83

  
	
  SECTION 3.15

  	
   

  	
  Labor Matters

  	
   

  	
  83

  
	
  SECTION 3.16

  	
   

  	
  Solvency

  	
   

  	
  83

  
	
  SECTION 3.17

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  84

  
	
  SECTION 3.18

  	
   

  	
  Environmental Matters

  	
   

  	
  84

  
	
  SECTION 3.19

  	
   

  	
  Insurance

  	
   

  	
  86

  
	
  SECTION 3.20

  	
   

  	
  Security Documents

  	
   

  	
  86

  
	
  SECTION 3.21

  	
   

  	
  Acquisition Documents; Representations and
  Warranties in Acquisition Agreements

  	
   

  	
  87

  
	
  SECTION 3.22

  	
   

  	
  Anti-Terrorism Law

  	
   

  	
  87

  
	
  SECTION 3.23

  	
   

  	
  Licenses and Permits

  	
   

  	
  88

  
	
  SECTION 3.24

  	
   

  	
  Projects; Construction Contracts

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONDITIONS TO CREDIT EXTENSIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Conditions to Initial Credit Extension

  	
   

  	
  89

  
	
  SECTION 4.02

  	
   

  	
  Conditions to All Credit Extensions

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
   

  	
  Financial Statements, Reports, etc.

  	
   

  	
  97

  
	
  SECTION 5.02

  	
   

  	
  Litigation and Other Notices

  	
   

  	
  100

  
	
  SECTION 5.03

  	
   

  	
  Existence; Businesses and Properties

  	
   

  	
  101

  
	
  SECTION 5.04

  	
   

  	
  Insurance

  	
   

  	
  101

  
	
  SECTION 5.05

  	
   

  	
  Obligations and Taxes

  	
   

  	
  103

  
	
  SECTION 5.06

  	
   

  	
  Employee Benefits

  	
   

  	
  103

  
	
  SECTION 5.07

  	
   

  	
  Maintaining Records; Access to Properties and
  Inspections; Annual Meetings

  	
   

  	
  104

  
	
  SECTION 5.08

  	
   

  	
  Use of Proceeds

  	
   

  	
  104

  
	
  SECTION 5.09

  	
   

  	
  Compliance with Environmental Laws; Environmental Reports

  	
   

  	
  104

  
	
  SECTION 5.10

  	
   

  	
  Post-Closing Matters

  	
   

  	
  105

  
	
  SECTION 5.11

  	
   

  	
  Additional Collateral; Additional Guarantors

  	
   

  	
  107

  
	
  SECTION 5.12

  	
   

  	
  Security Interests; Further Assurances

  	
   

  	
  108

  
	
  SECTION 5.13

  	
   

  	
  Information Regarding Collateral

  	
   

  	
  109

  

 

 ii
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
  SECTION 5.14

  	
   

  	
  [Reserved]

  	
   

  	
  109

  
	
  SECTION 5.15

  	
   

  	
  Affirmative Covenants with Respect to Leases

  	
   

  	
  109

  
	
  SECTION 5.16

  	
   

  	
  License Renewals

  	
   

  	
  110

  
	
  SECTION 5.17

  	
   

  	
  Licenses and Permits

  	
   

  	
  110

  
	
  SECTION 5.18

  	
   

  	
  Construction of Project

  	
   

  	
  110

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEGATIVE COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
   

  	
  Indebtedness

  	
   

  	
  111

  
	
  SECTION 6.02

  	
   

  	
  Liens

  	
   

  	
  113

  
	
  SECTION 6.03

  	
   

  	
  Sale and Leaseback Transactions

  	
   

  	
  116

  
	
  SECTION 6.04

  	
   

  	
  Investment, Loan and Advances

  	
   

  	
  116

  
	
  SECTION 6.05

  	
   

  	
  Mergers and Consolidations

  	
   

  	
  118

  
	
  SECTION 6.06

  	
   

  	
  Asset Sales

  	
   

  	
  119

  
	
  SECTION 6.07

  	
   

  	
  Acquisitions

  	
   

  	
  120

  
	
  SECTION 6.08

  	
   

  	
  Dividends

  	
   

  	
  120

  
	
  SECTION 6.09

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  121

  
	
  SECTION 6.10

  	
   

  	
  Financial Covenants

  	
   

  	
  122

  
	
  SECTION 6.11

  	
   

  	
  Prepayments of Other Indebtedness; Modifications of
  Organizational Documents and Other Documents, etc.

  	
   

  	
  124

  
	
  SECTION 6.12

  	
   

  	
  Limitation on Certain Restrictions on Restricted
  Subsidiaries

  	
   

  	
  125

  
	
  SECTION 6.13

  	
   

  	
  Limitation on Issuance of Capital Stock

  	
   

  	
  126

  
	
  SECTION 6.14

  	
   

  	
  Limitation on Creation of Subsidiaries

  	
   

  	
  126

  
	
  SECTION 6.15

  	
   

  	
  Business

  	
   

  	
  126

  
	
  SECTION 6.16

  	
   

  	
  Limitation on Accounting Changes

  	
   

  	
  127

  
	
  SECTION 6.17

  	
   

  	
  Fiscal Year

  	
   

  	
  127

  
	
  SECTION 6.18

  	
   

  	
  Excluded Subsidiaries

  	
   

  	
  127

  
	
  SECTION 6.19

  	
   

  	
  No Further Negative Pledge

  	
   

  	
  127

  
	
  SECTION 6.20

  	
   

  	
  Anti-Terrorism Law; Anti-Money Laundering

  	
   

  	
  127

  
	
  SECTION 6.21

  	
   

  	
  Embargoed Person

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [RESERVED]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Events of Default

  	
   

  	
  128

  
	
  SECTION 8.02

  	
   

  	
  Rescission

  	
   

  	
  131

  
	
  SECTION 8.03

  	
   

  	
  Application of Proceeds

  	
   

  	
  132

  

 

 iii
 

 

 

	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
  ARTICLE IX

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Appointment and Authority

  	
   

  	
  133

  
	
  SECTION 9.02

  	
   

  	
  Rights as a Lender

  	
   

  	
  133

  
	
  SECTION 9.03

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  133

  
	
  SECTION 9.04

  	
   

  	
  Reliance by Agent

  	
   

  	
  134

  
	
  SECTION 9.05

  	
   

  	
  Delegation of Duties

  	
   

  	
  134

  
	
  SECTION 9.06

  	
   

  	
  Resignation of Agent

  	
   

  	
  135

  
	
  SECTION 9.07

  	
   

  	
  Non-Reliance on Agent and Other Lenders

  	
   

  	
  135

  
	
  SECTION 9.08

  	
   

  	
  No Other Duties, etc

  	
   

  	
  136

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE X

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
   

  	
  Notices

  	
   

  	
  136

  
	
  SECTION 10.02

  	
   

  	
  Waivers; Amendment

  	
   

  	
  139

  
	
  SECTION 10.03

  	
   

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  	
  142

  
	
  SECTION 10.04

  	
   

  	
  Successors and Assigns

  	
   

  	
  144

  
	
  SECTION 10.05

  	
   

  	
  Survival of Agreement

  	
   

  	
  148

  
	
  SECTION 10.06

  	
   

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  148

  
	
  SECTION 10.07

  	
   

  	
  Severability

  	
   

  	
  149

  
	
  SECTION 10.08

  	
   

  	
  Right of Setoff

  	
   

  	
  149

  
	
  SECTION 10.09

  	
   

  	
  Governing Law; Jurisdiction; Consent to Service of
  Process

  	
   

  	
  149

  
	
  SECTION 10.10

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  150

  
	
  SECTION 10.11

  	
   

  	
  Headings

  	
   

  	
  150

  
	
  SECTION 10.12

  	
   

  	
  Treatment of Certain Information; Confidentiality

  	
   

  	
  150

  
	
  SECTION 10.13

  	
   

  	
  USA PATRIOT Act Notice

  	
   

  	
  151

  
	
  SECTION 10.14

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  151

  
	
  SECTION 10.15

  	
   

  	
  Lender Addendum

  	
   

  	
  152

  
	
  SECTION 10.16

  	
   

  	
  Obligations Absolute

  	
   

  	
  152

  

 

ANNEXES

Annex I                                          Amortization
Table

SCHEDULES

Schedule 1.01(a)                           Refinancing Indebtedness
to Be Repaid

Schedule 1.01(b)                           Guarantors

Schedule 3.03                                Governmental
Approvals; Compliance with Laws

Schedule 3.07(b)                           Consents

Schedule 3.09                                Material
Agreements

Schedule 3.19                                Insurance

 iv
 

 

 

Schedule 3.23                                Licenses

Schedule 3.24                                Construction
Contracts

Schedule 4.01(g)                           Local
Counsel

Schedule 4.01(n)(vi)                     Landlord
Access Agreements

Schedule 4.01(o)(iii)(A)               Title
Insurance Amounts

Schedule 4.01(o)(iii)(B)                PZR
Reports

Schedule 6.01(b)                           Existing
Indebtedness

Schedule 6.02(c)                           Existing
Liens

Schedule 6.04(b)                           Existing
Investments

EXHIBITS

Exhibit A                                        Form of
Administrative Questionnaire

Exhibit B                                        Form of
Assignment and Assumption

Exhibit C                                        Form of
Borrowing Request

Exhibit D                                        Form of
Compliance Certificate

Exhibit E                                         Form of
Interest Election Request

Exhibit F                                         [Reserved]

Exhibit G                                        Form of
Landlord Lien Waiver, Access Agreement and Consent

Exhibit H                                        Form of
LC Request

Exhibit I                                          Form of
Lender Addendum

Exhibit J                                         Form of
Mortgage

Exhibit K-1                                     Form of
Tranche B Note

Exhibit K-2                                     Form of
Revolving Note

Exhibit K-3                                     Form of
Swingline Note

Exhibit L-1                                     Form of
Perfection Certificate

Exhibit L-2                                     Form of
Perfection Certificate Supplement

Exhibit M                                       Form of
Security Agreement

Exhibit N                                        Form of
Opinion of Borrower’s Counsel

Exhibit O                                        Form of
Solvency Certificate

Exhibit P                                         Form of
Intercompany Note

Exhibit Q                                        Form of
Non-Bank Certificate

Exhibit R                                        Form of
Guarantee Agreement

 v

 

CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”)
dated as of June 16, 2006, among Jacobs Entertainment, Inc., a
Delaware corporation (“Borrower”), the
Lenders, CIBC World Markets Corp., as syndication agent (in such capacity, “Syndication Agent”), Wells Fargo Bank, National Association,
as documentation agent (in such capacity “Documentation Agent”)
and as swingline lender (in such capacity, “Swingline
Lender”), CIT Lending Services Corporation, as documentation agent
(in such capacity “Documentation Agent”),
and Credit Suisse, Cayman Islands Branch, as issuing bank (in such capacity, “Issuing Bank”), as administrative agent (in such capacity, “Administrative Agent”) for the Lenders and as collateral
agent (in such capacity, “Collateral Agent”)
for the Secured Parties and the Issuing Bank.

WITNESSETH:

WHEREAS, Borrower has entered into an agreement with
Gameco Holdings, Inc. (“Gameco”), dated
as of May 26, 2006 (as amended, supplemented or otherwise modified from
time to time in accordance with the provisions thereof, the “TPSH Agreement”), pursuant to which certain Restricted
Subsidiaries of Borrower will acquire (the “TPSH
Acquisition”) two truck stop gaming plazas in Vinton and Denham
Springs, Louisiana from unrelated third parties for aggregate consideration in
an amount not to exceed $5.8 million (including transaction costs), (b) an
asset purchase agreement dated November 2, 2005 (as amended, supplemented
or otherwise modified from time to time in accordance with the provisions
hereof and thereof, the “Pinon Agreement”)
with Capital City Entertainment, Inc. (the “Seller”)
pursuant to which a Restricted Subsidiary of Borrower will acquire (the “Pinon Acquisition”) all of the assets of the Best Western
Pinon Plaza Resort, a division of the Seller (“Pinon Plaza”), and (c) an asset purchase agreement with
Gameco dated as of May 16, 2006 (as amended, supplemented or otherwise
modified from time to time in accordance with the provisions thereof, the “Gameco Agreement”) pursuant to which Borrower will acquire
(the “Gameco Acquisition”) three truck stop
gaming plazas and land for a fourth truck stop gaming plaza, each in Louisiana,
for aggregate consideration in an amount not to exceed $15.0 million (a portion
of such consideration is accounted for as a Dividend in accordance with GAAP);

WHEREAS, Borrower intends to refinance the outstanding
$148.0 million aggregate principal amount of its 11.875% senior secured notes
due 2009 (the “Existing Notes”) and other
outstanding Indebtedness of approximately $26.5 million and pay related
premiums (approximately $9.4 million), fees and expenses;

WHEREAS, in connection with the Refinancing, Borrower
will offer to purchase the Existing Notes pursuant to a tender offer (the “Tender Offer”) and on the Closing Date (as defined herein)
will give an irrevocable notice of redemption with respect to any Existing
Notes not tendered in the early consent portion of the Tender Offer (such
notice and the delivery thereof, the “Existing Notes Redemption
Notice” and all transactions related to such redemption and the
consummation thereof, the “Existing Notes Redemption”);

 

 

WHEREAS, Borrower intends to issue approximately
$210.0 million in aggregate principal amount of Senior Notes in connection with
the TPSH Acquisition, the Pinon Acquisition, the Gameco Acquisition, the
Refinancing and the Additional Transactions;

WHEREAS, except for the Pinon Acquisition which is
expected to be consummated on or prior to September 30, 2006, the TPSH
Acquisition which is expected to be consummated within 60 days of the Closing
Date and the redemption of Existing Notes not purchased in the Tender Offer,
but that have been irrevocably called for redemption, the Refinancing, the
Acquisitions, the Additional Transactions and the issuance of the Senior Notes
shall be consummated simultaneously herewith;

WHEREAS, Borrower has requested the Lenders to extend
credit in the form of (a) Tranche B Loans on the Closing Date, in an
aggregate principal amount not in excess of $40,000,000, (b) Delayed Draw
Tranche B Loans after the Closing Date, in an aggregate principal amount not in
excess of $20,000,000, and (c) Revolving Loans at any time after the
Closing Date and from time to time prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$40,000,000;

WHEREAS, Borrower has requested the Swingline Lender
to make Swingline Loans, at any time and from time to time prior to the
Revolving Maturity Date, in an aggregate principal amount at any time outstanding
not in excess of $5,000,000;

WHEREAS, Borrower has requested the Issuing Bank to
issue letters of credit, in an aggregate face amount at any time outstanding
not in excess of $5,000,000, to support payment obligations incurred in the
ordinary course of business by Borrower and its Restricted Subsidiaries; and

WHEREAS, the proceeds of the Loans are to be used in
accordance with Section 3.12.

NOW, THEREFORE, the Lenders are willing to extend such
credit to Borrower and the Issuing Bank is willing to issue letters of credit
for the account of Borrower on the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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

“ABR” when used
in reference to any Loan or Borrowing, is used when such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference
to the Alternate Base Rate.

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

 2
 

 

 

“ABR Loan” shall
mean any ABR Term Loan, ABR Revolving Loan or Swingline Loan.

“ABR Revolving Loan”
shall mean any Revolving Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of Article II.

“ABR Term Loan”
shall mean any Tranche B Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of Article II.

“Accounting Change”
shall have the meaning assigned to such term in Section 1.04.

“Acquisition Agreements”
means the TPSH Agreement, the Pinon Agreement and the Gameco Agreement.

“Acquisition Consideration”
shall mean the purchase consideration for any Permitted Acquisition or
Permitted Truck Plaza Acquisition and all other payments by Borrower or any of
its Restricted Subsidiaries in exchange for, or as part of, or in connection
with, any Permitted Acquisition or Permitted Truck Plaza Acquisition, whether
paid in cash or by exchange of Equity Interests or of properties or otherwise
and whether payable at or prior to the consummation of such Permitted
Acquisition or Permitted Truck Plaza Acquisition or deferred for payment at any
future time, whether or not any such future payment is subject to the occurrence
of any contingency, and includes any and all payments representing the purchase
price and any assumptions of Indebtedness, “earn-outs” and other agreements to
make any payment the amount of which is, or the terms of payment of which are,
in any respect subject to or contingent upon the revenues, income, cash flow or
profits (or the like) of any person or business; provided
that any such future payment that is subject to a contingency shall be considered
Acquisition Consideration only to the extent of the reserve, if any, required
under GAAP at the time of such sale to be established in respect thereof by
Borrower or any of its Restricted Subsidiaries.

“Acquisition Documents”
shall mean the Acquisition Agreements and all other documents executed and
delivered with respect to the Acquisition Agreements.

“Acquisitions”
shall mean the TPSH Acquisition, the Pinon Acquisition and the Gameco
Acquisition.

“Additional
Transactions” shall mean (a) a Dividend by Borrower in an
amount not to exceed $10.0 million and (b) a return of capital in an
amount not to exceed $8.8 million to the holders of Borrower’s Equity Interests
in respect of the December 2005 capital contribution made by such holders.

“Adjusted LIBOR Rate”
shall mean, with respect to any LIBOR Borrowing for any Interest Period, (a) an
interest rate per annum determined by the Administrative Agent to be equal to
the LIBOR Rate for such LIBOR Borrowing in effect for such Interest Period
divided by (b) 1 minus the
Statutory Reserves (if any) for such LIBOR Borrowing for such Interest Period.

 3
 

 

 

“Administrative Agent”
shall have the meaning assigned to such term in the preamble hereto and
includes each other person appointed as the successor pursuant to Article X.

“Administrative Agent Fees”
shall have the meaning assigned to such term in Section 2.05(b).

“Administrative
Questionnaire” shall mean an Administrative Questionnaire in substantially
the form of Exhibit A.

“Affiliate”
shall mean, when used with respect to a specified 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; provided, however, that,
for purposes of Section 6.09, the term “Affiliate” shall also
include (i) any person that directly or indirectly owns more than 10% of
any class of Equity Interests of the person specified or (ii) any person
that is an executive officer or director of the person specified.

“Agents” shall
mean the Syndication Agent, each of the Documentation Agents, the
Administrative Agent and the Collateral Agent; and “Agent”
shall mean any of them.

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

“Alternate Base Rate”
shall mean, for any day, a rate per annum (rounded upward, if necessary, to the
nearest 1/100th of 1%) equal to the greater of (a) the Base Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 0.50%. If the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the preceding sentence until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Base Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Base Rate or the Federal
Funds Effective Rate, respectively.

“Anti-Terrorism Laws”
shall have the meaning assigned to such term in Section 3.22.

“Applicable Fee”
shall mean, for any day, with respect to (i) any Revolving Commitment,
0.50% per annum and (ii) any Delayed Draw Tranche B Commitment, 1.00% per
annum.

“Applicable Margin”
shall mean, for any day, with respect to any Tranche B Loan, 2.50% in the case
of Eurodollar Loans and 1.50% in the case of ABR Loans and, with respect to any
Revolving Loan, the applicable percentage set forth below under the appropriate
caption based upon the Total Leverage Ratio as of the most recent determination
date:

 4
 

 

 

	
  Total

  	
   

  	
  Revolving Loans

  	
   

  
	
  Leverage Ratio

  	
   

  	
  LIBOR

  	
   

  	
  ABR

  	
   

  
	
  Level I

  > 5.50

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  Level
  II

  5.00 > but < 5.50

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  
	
  Level
  III

  4.50 > but < 5.00x

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  Level IV

  < 4.50x

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  

 

Each change in the Applicable Margin resulting from a
change in the Total Leverage Ratio shall be effective with respect to all Revolving
Loans and Letters of Credit outstanding on and after the date of delivery to
the Administrative Agent of the financial statements and certificates required
by Section 5.01(a) or (b) and Section 5.01(d),
respectively, indicating such change until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, the Total Leverage Ratio
shall be deemed to be in Level III from the Closing Date to the date of delivery
to the Administrative Agent of the financial statements and certificates
required by Section 5.01(b) and Section 5.01(d) for
the fiscal period ended after the Closing Date and shall be deemed to be in
Level I (i) at any time during which Borrower has failed to deliver
the financial statements and certificates required by Section 5.01(a) or
(b) and Section 5.01(d), respectively, and (ii) at
any time during the existence of an Event of Default.

“Approved Fund”
shall mean 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.

“Arrangers”
shall mean Credit Suisse Securities (USA) LLC and CIBC World Markets Corp as
Joint Lead Arranger and Joint Bookrunners.

“Asset Sale”
shall mean (a) any conveyance, sale, lease, sublease, assignment, transfer
or other disposition (including by way of merger or consolidation and including
any Sale and Leaseback Transaction) of any property (including any Colonial
Downs Sale) excluding sales of inventory and dispositions of cash and Cash
Equivalents, in each case, in the ordinary course of business, by Borrower or
any of its Restricted Subsidiaries and (b) any issuance or sale of any
Equity Interests of any Subsidiary of Borrower, in each case, to any person
other than (i) Borrower, (ii) any Guarantor or (iii) other than
for purposes of Section 6.06, any other Subsidiary.

“Assignment and Assumption”
shall mean an assignment and assumption entered into by a Lender and an
Eligible Assignee (with the consent of any party whose consent is 

 5
 

 

 

required by Section 10.04(b)), and
accepted by the Administrative Agent, in substantially the form of Exhibit B,
or any other form approved by the Administrative Agent.

“Attributable Indebtedness”
shall mean, when used with respect to any Sale and Leaseback Transaction, as at
the time of determination, the present value (discounted at a rate equivalent
to the rate of interest implicit in such Sale and Leaseback Transaction, determined
in accordance with GAAP) of the total obligations of the lessee for net rental
payments during the remaining term of the lease included in any such Sale and
Leaseback Transaction.

“Base Rate”
shall mean the rate per annum as announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office in New
York City; each change in the Base Rate shall be effective from and including
the date such change is effective. The prime rate is not necessarily the lowest
rate charged by the Administrative Agent to its customers.

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular “person” (as that term is used in Section 13(d)(3) of
the Exchange Act), such “person” shall be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially
Owns” and “Beneficially Owned” shall have a corresponding meaning.

“Board” shall
mean the Board of Governors of the Federal Reserve System of the United States.

“Board of Directors”
shall mean, with respect to any person, (i) in the case of any corporation,
the board of directors of such person, (ii) in the case of any limited
liability company, the board of managers of such person, if applicable, (iii) in
the case of any partnership, the Board of Directors of the general partner of
such person, if applicable, and (iv) in any other case, the functional
equivalent of the foregoing.

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

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

“Borrowing Request”
shall mean a request by Borrower in accordance with the terms of Section 2.03
and substantially in the form of Exhibit C, or such other form as
shall be approved by the Administrative Agent.

“Business Day”
shall mean any day other than a Saturday, Sunday or other day on which banks in
New York City are authorized or required by law to close; provided, however, that when used in connection with a LIBOR Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 6
 

 

 

“Capital Assets” shall mean,
with respect to any person, all equipment, fixed assets and Real Property or
improvements of such person, or replacements or substitutions therefor or
additions thereto, that, in accordance with GAAP, have been or should be
reflected as additions to property, plant or equipment on the balance sheet of
such person.

“Capital Expenditures”
shall mean, for any period, without duplication, all expenditures made directly
or indirectly by Borrower and its Restricted Subsidiaries during such period
for Capital Assets (whether paid in cash or other consideration, financed by
the incurrence of Indebtedness or accrued as a liability), but excluding (i) expenditures
made in connection with the replacement, substitution or restoration of
property pursuant to Section 2.10(f) and (ii) any portion
of such expenditures attributable solely to acquisitions of property, plant and
equipment in Permitted Acquisitions. For purposes of this definition, the
purchase price of equipment or other fixed assets that are purchased
simultaneously with the trade-in of existing assets or with insurance proceeds
shall be included in Capital Expenditures only to the extent of the gross
amount by which such purchase price exceeds the credit granted by the seller of
such assets for the assets being traded in at such time or the amount of such
insurance proceeds, as the case may be.

“Capital Lease Obligations”
of any person shall mean the obligations of such person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance
sheet of such person under GAAP, and the amount of such obligations shall be
the capitalized amount thereof determined in accordance with GAAP.

“Cash Equivalents”
shall mean, as to any person, (a) securities issued, or directly,
unconditionally and fully guaranteed or insured, by the United States or any
agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
having maturities of not more than one year from the date of acquisition by
such person; (b) time deposits, certificates of deposit and Eurodollar
time deposits of any Lender or any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the laws
of the United States, any state thereof or the District of Columbia having,
capital and surplus aggregating in excess of $500.0 million and a rating of “A”
(or such other similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under
the Securities Act) with maturities of not more than one year from the date of
acquisition by such person; (c) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, which repurchase obligations
are secured by a valid perfected security interest in the underlying
securities; (d) commercial paper issued by any person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard &
Poor’s Rating Service or at least P-1 or the equivalent thereof by Moody’s
Investors Service Inc., and in each case maturing not more than one year after
the date of acquisition by such person; (e) investments in money market
funds at least 95% of whose assets are comprised of securities of the types described
in clauses (a) through (d) above; and (f) demand deposit
accounts maintained in the ordinary course of business.

 7
 

 

 

“Cash Interest Expense”
shall mean, for any period, Consolidated Interest Expense for such period, less the sum of (a) interest on any debt paid by the
increase in the principal amount of such debt including by issuance of
additional debt of such kind, (b) items described in clause (c) of
the definition of “Consolidated Interest Expense” and (c) gross interest
income of Borrower and its Restricted Subsidiaries for such period.

“Casino Bankroll”
shall mean only the amount of cash or Cash Equivalents required by the
provisions of applicable Gaming Law (including Section 6.150 of the Regulations
of the Nevada Gaming Commission) to satisfy the casino minimum bankroll
requirements, mandatory game security reserves, allowances for redemption of
casino chips and tokens, or payment of winning wagers to gaming patrons.

“Casualty Event”
shall mean any involuntary loss of title, any involuntary loss of, damage to or
any destruction of, or any condemnation or other taking (including by any Governmental
Authority) of, any property of Borrower or any of its Restricted Subsidiaries.
“Casualty Event” shall include but not be limited to any taking of all or any
part of any Real Property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Requirement of
Law, or by reason of the temporary requisition of the use or occupancy of all
or any part of any Real Property of any person or any part thereof by any Governmental
Authority, civil or military, or any settlement in lieu thereof.

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

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

(a)           the
occurrence of a change of control as defined under the documents governing or
evidencing any Material Indebtedness;

(b)           any
person or group of related persons for purposes of Section 13(d) of
the Exchange Act (a “Group”), other
than the Permitted Holders, becomes the Beneficial Owner of more than 33-1/3%
of the total voting power of Borrower’s Voting Stock, and the Permitted Holders
Beneficially Own, in the aggregate, a lesser percentage of the total voting
power of the Voting Stock of Borrower than such other person or Group and do
not have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of Directors of Borrower;

(c)           there
is consummated any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of Borrower to any person or Group, together with any Affiliates thereof
(whether or not otherwise in compliance with the provisions of the Indenture),
other than to the Permitted Holders;

(d)           there
is consummated any consolidation or merger of Borrower in which Borrower is not
the continuing or surviving person or pursuant to which the common stock of
Borrower would be converted into cash, securities or other property, other than
a 

 8
 

 

 

merger or consolidation
of Borrower in which the holders of the capital stock of Borrower outstanding
immediately prior to the consolidation or merger hold, directly or indirectly,
at least a majority of the voting power of the surviving corporation
immediately after such consolidation or merger; or

(e)           the
first day on which a majority of the members of the Board of Directors of
Borrower are not Continuing Directors.

For purposes of this
definition, a person shall not be deemed to have beneficial ownership of Equity
Interests subject to a stock purchase agreement, merger agreement or similar
agreement until the consummation of the transactions contemplated by such
agreement.

“Change in Law”
shall mean the occurrence, after the date of this Agreement, of any of the
following:  (a) the adoption or taking
into effect of any law, treaty, order, policy, rule or regulation, (b) any
change in any law, treaty, order, policy, rule or regulation 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.

“Charges” shall
have the meaning assigned to such term in Section 10.14.

“Class,” when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Loans, Tranche B Loans or
Swingline Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment, Tranche B Commitment or
Swingline Commitment, in each case, under this Agreement as originally in
effect.

“Closing Date”
shall mean the date of the initial Credit Extension hereunder, which shall not
be later than June 30, 2006.

“Code” shall
mean the Internal Revenue Code of 1986.

“Collateral”
shall mean, collectively, all of the Security Agreement Collateral, the
Mortgaged Property and all other property of whatever kind and nature subject
or purported to be subject from time to time to a Lien under any Security Document.

“Collateral Agent”
shall have the meaning assigned to such term in the preamble hereto.

“Colonial Downs
Business” shall mean the business and assets owned by Borrower and
its Restricted Subsidiaries on the date hereof at the Colonial Downs track facility
in New Kent, Virginia and the satellite wagering facilities in the State of
Virginia and any business or assets within the State of Virginia hereafter
acquired prior to the first, if any, asset sale pursuant to Section 6.06(g) which
are substantially related thereto or are reasonable extensions thereof
(including instant racing assets).

 9
 

 

 

“Colonial Downs Sale”
shall mean any conveyance, sale, lease, sublease, assignment, transfer or other
disposition (including by way of merger or consolidation and including any Sale
and Leaseback Transaction) of all or part of the Colonial Downs Business after
the Closing Date.

“Commercial Letter of
Credit” shall mean any letter of credit or similar instrument issued
for the purpose of providing credit support in connection with the purchase of
materials, goods or services by Borrower or any of its Restricted Subsidiaries
in the ordinary course of their businesses.

“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Commitment,
Tranche B Commitment or Swingline Commitment.

“Commitment Fee”
shall have the meaning assigned to such term in Section 2.05(a).

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

“Completion
Certificate” means a certificate executed by Borrower, the applicable
Loan Party, General Contractor and Inspecting Engineer stating that the
applicable Project is completed and the facility affected by the work is
completely operational subject to punch list and similar post-completion items.

“Completion Date”
means the earlier of the date upon which the applicable Construction Contract
contemplates completion of the applicable Project, or the date a Completion
Certificate is issued for the applicable Project executed by Borrower, the
applicable Loan Party, General Contractor and Inspecting Engineer, whichever
shall first occur.

“Compliance Certificate”
shall mean a certificate of a Financial Officer substantially in the form of Exhibit D.

“Confidential Information
Memorandum” shall mean that certain confidential information memorandum
dated May 2006.

“Consolidated Amortization
Expense” shall mean, for any period, the amortization expense of
Borrower and the Guarantors for such period, determined on a consolidated basis
in accordance with GAAP.

“Consolidated Current
Assets” shall mean, as at any date of determination, the total
assets of Borrower and the Guarantors which may properly be classified as
current assets on a consolidated balance sheet of Borrower and the Guarantors
in accordance with GAAP, excluding Casino Bankroll.

“Consolidated Current
Liabilities” shall mean, as at any date of determination, the total
liabilities of Borrower and the Guarantors which may properly be classified as
current 

 10
 

 

 

liabilities (other than the current portion of any
Loans) on a consolidated balance sheet of Borrower and the Guarantors in accordance
with GAAP.

“Consolidated Depreciation
Expense” shall mean, for any period, the depreciation expense of
Borrower and the Guarantors for such period, determined on a consolidated basis
in accordance with GAAP.

“Consolidated EBITDA”
shall mean, for any period, Consolidated Net Income for such period, adjusted
by (x) adding thereto, in each case only to the
extent (and in the same proportion) deducted in determining such Consolidated
Net Income and without duplication (and with respect to the portion of
Consolidated Net Income attributable to any Guarantor only if a corresponding
amount would be permitted at the date of determination to be distributed to Borrower
by such Guarantor without prior approval (that has not been obtained), pursuant
to the terms of its Organizational Documents and all agreements, instruments
and Requirements of Law applicable to such Guarantor or its equityholders):

(a)           Consolidated
Interest Expense for such period;

(b)           Consolidated
Amortization Expense for such period;

(c)           Consolidated
Depreciation Expense for such period;

(d)           Consolidated
Tax Expense for such period;

(e)           costs
and expenses directly incurred in connection with the Transactions (not to exceed
$9,000,000);

(f)            Pre-Opening
Expenses;

(g)           costs
and expenses in an aggregate amount not to exceed $10,500,000 associated with
Borrower’s purchase (through a Guarantor) of all the outstanding Equity Interests
of Maryland-Virginia Racing Circuit, Inc. in August 2005;

(h)           the
aggregate amount of all other non-cash charges (including (x) goodwill
impairment charges in accordance with Statement of Financial Accounting
Standards No. 142 and (y) non-cash management compensation expense)
reducing Consolidated Net Income (excluding any non-cash charge that results in
an accrual of a reserve for cash charges in any future period) for such period;

(i)            transaction
expenses related to Permitted Acquisitions; and

(j)            reasonable
transaction expenses or out-of-pocket fees incurred in connection with any
other debt financing, equity offering, acquisition or disposition allowed under
this Agreement; and

 11
 

 

 

(y) subtracting therefrom
the sum of (i) the aggregate amount of all non-cash items increasing Consolidated
Net Income (other than the accrual of revenue or recording of receivables in
the ordinary course of business) and (ii) interest income, in each case
for such period.

Other than for purposes of calculating Excess Cash
Flow, Consolidated EBITDA shall be calculated on a Pro Forma Basis to give
effect to the Acquisitions, the commencement of operations of any Substantial
Project, any Permitted Acquisition and Asset Sales (other than any dispositions
in the ordinary course of business) consummated at any time on or after the
first day of the Test Period thereof as if the Acquisitions and each such
Permitted Acquisition or commencement of operations of any Substantial Project
had been effected on the first day of such period and as if each such Asset Sale
had been consummated on the day prior to the first day of such period.

“Consolidated Interest
Coverage Ratio” shall mean, for any Test Period, the ratio of (x) Consolidated
EBITDA for such Test Period to (y) Cash Interest Expense for such Test Period.

“Consolidated Interest
Expense” shall mean, for any period, the total consolidated interest
expense of Borrower and the Guarantors for such period determined on a consolidated
basis in accordance with GAAP plus, without
duplication:

(a)           imputed
interest on Capital Lease Obligations and Attributable Indebtedness of Borrower
and the Guarantors for such period;

(b)           commissions,
discounts and other fees and charges owed by Borrower or any of the Guarantors
with respect to letters of credit securing financial obligations, bankers’
acceptance financing and receivables financings for such period;

(c)           amortization
of debt issuance costs, debt discount or premium and other financing fees and
expenses incurred by Borrower or any of the Guarantors for such period;

(d)           cash
contributions to any employee stock ownership plan or similar trust made by
Borrower or any of the Guarantors to the extent such contributions are used by
such plan or trust to pay interest or fees to any person (other than Borrower
or a Wholly Owned Restricted Subsidiary) in connection with Indebtedness
incurred by such plan or trust for such period;

(e)           all
interest paid or payable with respect to discontinued operations of Borrower or
any of the Guarantors for such period; and

(f)            the
interest portion of any deferred payment obligations of Borrower or any of the
Guarantors for such period;

provided that (a) to the
extent directly related to the Transactions, debt issuance costs, debt discount
or premium and other financing fees and expenses shall be excluded from the
calculation of Consolidated Interest Expense and (b) Consolidated Interest
Expense shall be calculated after 

 12
 

 

 

giving effect to Hedging Agreements related to
interest rates (including associated costs), but excluding unrealized gains and
losses with respect to Hedging Agreements related to interest rates.

Consolidated Interest Expense shall be calculated on a
Pro Forma Basis to give effect to any Indebtedness incurred, assumed or
permanently repaid or extinguished during the relevant Test Period in
connection with the Acquisitions, any Permitted Acquisitions, Substantial
Projects and Asset Sales (other than any dispositions in the ordinary course of
business) as if such incurrence, assumption, repayment or extinguishing had
been effected on the first day of such period. Notwithstanding anything to the
contrary in this definition, Consolidated Interest Expense will not include any
interest expense incurred on the Existing Notes.

“Consolidated Net Income”
shall mean, for any period, the consolidated net income (or loss) of Borrower
and the Guarantors determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein), without duplication:

(a)           the
net income (or loss) of any Unrestricted Subsidiary or any person (other than a
Guarantor) in which any person other than Borrower and the Guarantors has an
ownership interest, in each case except to the extent that cash in an amount
equal to any such income has actually been received by Borrower or (subject to
clause (b) below) any of the Guarantors during such period;

(b)           the
net income of any Guarantor during such period to the extent that the
declaration or payment of dividends or similar distributions by such Guarantor
of that income is not permitted by operation of the terms of its Organizational
Documents or any agreement, instrument or Requirement of Law applicable to that
Guarantor during such period, except that Borrower’s equity in net loss of any
such Guarantor for such period shall be included in determining Consolidated
Net Income;

(c)           any
gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by Borrower
or any of the Guarantors upon any Asset Sale (other than any dispositions in
the ordinary course of business) by Borrower or any of the Guarantors;

(d)           gains
and losses due solely to fluctuations in currency values and the related tax
effects determined in accordance with GAAP for such period;

(e)           earnings
resulting from any reappraisal, revaluation or write-up of assets;

(f)            unrealized
gains and losses with respect to Hedging Obligations for such period;

(g)           any
extraordinary gain (or extraordinary loss), together with any related provision
for taxes on any such gain (or the tax effect of any such loss), recorded or recognized
by Borrower or any of the Guarantors during such period;

 13
 

 

 

(h)           the
cumulative effect of any change in accounting principles; and

(i)            if
Borrower is a Flow Through Entity during such period, an amount equal to the
maximum Permitted Tax Distribution made or that could be made.

“Consolidated Net Total
Debt” means, as of any date
of determination, (x) the aggregate amount of all Indebtedness of Borrower
and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP
plus Contingent Obligations of
the type described in clause (b)(i) of the definition thereof minus (y) the aggregate amount of cash and Cash Equivalents
that would appear on the consolidated balance sheet of Borrower and its
Restricted Subsidiaries in excess of
Casino Bankroll, in each case as of such date of determination.

“Consolidated Tax Expense”
shall mean, for any period, the tax expense of Borrower and the Guarantors for
such period, determined on a consolidated basis in accordance with GAAP plus, without duplication, any Permitted Tax Distribution
solely to the extent deducted in calculating Consolidated Net Income.

“Construction
Completion Bond” means a bond, in form and substance reasonably
satisfactory to the Administrative Agent, issued by a bonding company
reasonably acceptable to the Administrative Agent, in an amount and for a
period of time necessary to complete the applicable Project pursuant to the Plans
and Specifications therefor, and including such endorsements as Administrative
Agent may reasonably require.

“Construction
Contracts” means (i) those certain contracts described in Schedule
3.24 hereto and (ii) any and all contracts, written or oral, between
Borrower, any applicable Loan Party and any Contractor and any subcontractor
and between any of the foregoing and any other person relating in any way to
the construction of any Project, including the performing of labor or the
furnishing of standard or specially fabricated materials in connection
therewith.

“Consulting Agreement”
shall mean the Amended and Restated Consulting Agreement dated January 1,
2006 between Borrower and Jacobs Investments Management Co., Inc.

“Contested Collateral Lien
Conditions” shall mean, with respect to any Permitted Lien of the
type described in clauses (a), (b), (e) and (f) of Section 6.02,
the following conditions:

(a)           Borrower
shall cause any proceeding instituted contesting such Lien to stay the sale or
forfeiture of any portion of the Collateral on account of such Lien;

(b)           at
the option and at the request of the Administrative Agent, to the extent such
Lien is in an amount in excess of $500,000 the appropriate Loan Party shall maintain
cash reserves in an amount sufficient to pay and discharge such Lien and the
Administrative Agent’s reasonable estimate of all interest and penalties
related thereto; and

(c)           such
Lien shall in all respects be subject and subordinate in priority to the Lien
and security interest created and evidenced by the Security Documents, except
if 

 14
 

 

 

and to the extent that
the Requirement of Law creating, permitting or authorizing such Lien provides
that such Lien is or must be superior to the Lien and security interest created
and evidenced by the Security Documents.

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

“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors of Borrower who:

(1)           was
a member of such Board of Directors on the date hereof; or

(2)           was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.

“Contractor”
means and includes any person or entity, including any General Contractor,
engaged to work on or furnish materials or supplies for any Project.

“Control” shall
mean 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
ownership of voting securities, by agreement or otherwise, and the terms “Controlling” and “Controlled”
shall have meanings correlative thereto.

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

 15
 

 

 

“Controlled Investment
Affiliate” means, as to any person, any other person which directly
or indirectly is in Control of, is Controlled by, or is under common Control
with, such person and is organized by such person (or any person Controlling
such person) primarily for making equity or debt investments in Borrower or
other portfolio companies.

“Credit Extension”
shall mean, as the context may require, (i) the making of a Loan by a
Lender or (ii) the issuance of any Letter of Credit, or the amendment,
extension or renewal of any existing Letter of Credit, by the Issuing Bank.

“Dakota Development”
shall mean the acquisition from Dakota/Blackhawk, LLC of 2.2258 acres of
undeveloped land in Gilpin County, Colorado, 40,788 square feet of which are
situated within the Black Hawk Gaming District, and the development and construction
of a parking facility thereon.

“D-E Completion Date”
shall mean the date that the Completion Date shall have occurred with respect
to both the Dakota Development and the Elko Development and operations have commenced
in each location.

“Debt Issuance”
shall mean the incurrence by Borrower or any of its Restricted Subsidiaries of
any Indebtedness after the Closing Date (other than as permitted by Section 6.01).

“Debt Service”
shall mean, for any period, Cash Interest Expense for such period plus
scheduled principal amortization of all Indebtedness for such period.

“Default” shall
mean any event, occurrence or condition which is, or upon notice, lapse of time
or both would constitute, an Event of Default.

“Default Rate”
shall have the meaning assigned to such term in Section 2.06(c).

“Defaulted Loan”
shall have the meaning assigned to such term in Section 2.16(c).

“Defaulting Lender”
shall have the meaning assigned to such term in Section 2.16(c).

“Default Period”
shall have the meaning assigned to such term in Section 2.16(c).

“Delayed Draw Tranche B
Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make a Delayed Draw Tranche B Loan hereunder after
the Closing Date in the amount set forth on Schedule I to the Lender
Addendum executed and delivered by such Lender, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Delayed Draw Tranche B
Commitment, as applicable, as the same may be (a) reduced from time to
time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04.
The 

 16
 

 

 

aggregate amount of the Lenders’ Delayed Draw Tranche
B Commitments on the date hereof is $20,000,000.

“Delayed Draw Tranche B
Lender” shall mean a Lender with a Delayed Draw Tranche B Commitment
or an outstanding Delayed Draw Tranche B Loan.

“Delayed Draw Tranche B
Loan” shall mean the term loans made by the Lenders to Borrower
pursuant to Section 2.01(a)(ii). Each Delayed Draw Tranche B Loan
shall be either an ABR Term Loan or a LIBOR Term Loan.

“Disqualified Capital Stock”
shall mean any Equity Interest which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, (a) matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Final Maturity Date, (b) is
convertible into or exchangeable (unless at the sole option of the issuer
thereof) for (i) debt securities or (ii) any Equity Interests
referred to in (a) above, in each case at any time on or prior to the
first anniversary of the Final Maturity Date, or (c) contains any repurchase
obligation which may come into effect prior to payment in full of all
Obligations; provided, however,
that any Equity Interests that would not constitute Disqualified Capital Stock
but for provisions thereof giving holders thereof (or the holders of any
security into or for which such Equity Interests is convertible, exchangeable
or exercisable) the right to require the issuer thereof to redeem such Equity
Interests upon the occurrence of a change in control or an asset sale occurring
prior to the first anniversary of the Final Maturity Date shall not constitute
Disqualified Capital Stock if such Equity Interests provide that the issuer
thereof will not redeem any such Equity Interests pursuant to such provisions
prior to the repayment in full of the Obligations.

“Dividend” with
respect to any person shall mean that such person has declared or paid a
dividend or returned any equity capital to the holders of its Equity Interests
or authorized or made any other distribution, payment or delivery of property
(other than Qualified Capital Stock of such person) or cash to the holders of
its Equity Interests as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for consideration any of its Equity Interests
outstanding (or any options or warrants issued by such person with respect to
its Equity Interests), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for consideration any of the Equity Interests of such person
outstanding (or any options or warrants issued by such person with respect to
its Equity Interests). Without limiting the foregoing, “Dividends” with respect
to any person shall also include all payments made or required to be made by
such person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.

“Documentation Agent”
shall have the meaning assigned to such term in the preamble hereto.

“dollars” or “$” shall mean lawful money of the United States.

 17
 

 

 

“Domestic Subsidiary”
shall mean any Subsidiary that is organized or existing under the laws of the
United States, any state thereof or the District of Columbia.

“Eligible Assignee”
shall mean a person that is (I) to the extent required under applicable
Gaming Laws, a Qualified Person, and (II) (a) if the assignment does
not include assignment of a Revolving Commitment, (i) any Lender, (ii) an
Affiliate of any Lender, (iii) an Approved Fund and (iv) any other
person approved by the Administrative Agent and Borrower (each such approval
not to be unreasonably withheld or delayed) and (b) if the assignment includes
assignment of a Revolving Commitment, (i) any Revolving Lender and (ii) any
other person approved by the Administrative Agent, the Issuing Bank, the
Swingline Lender and Borrower (each such approval not to be unreasonably
withheld or delayed); provided that
in each clause (a) and (b), (x) no approval of Borrower shall be
required during the continuance of a Default or prior to the completion of the
primary syndication of the Commitments and Loans (as determined by the
Arrangers) and (y) “Eligible Assignee” shall not include Borrower or any
of its Affiliates or Subsidiaries or any natural person.

“Elko Development”
shall mean the development, renovation and upgrading of a leased 37,000 square
foot building located on six acres of land in Elko, Nevada for gaming and food
and beverage operations.

“Embargoed Person”
shall have the meaning assigned to such term in Section 6.21.

“Employee Benefit Plan”
shall mean an employee benefit plan (as defined in Section 3(3) of
ERISA) that is maintained or contributed to by any Company (or with respect to
an employee benefit plan subject to Title IV of ERISA, any Company or its ERISA
Affiliate) or with respect to which a Company could incur liability.

“Engagement Letter”
shall mean the letter agreement dated May 3, 2006 between the Borrower and
the Arrangers.

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

“Environmental Claim”
shall mean any claim, notice, demand, order, action, suit, proceeding or other
communication alleging liability for or obligation with respect to any
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines,
penalties or other costs resulting from, related to or arising out of (i) the
presence, Release or threatened Release in or into the Environment of Hazardous
Material at any location or (ii) any violation or alleged violation of any
Environmental Law, and shall include any claim seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from, related to or arising out of the presence, Release or threatened Release
of Hazardous Material or alleged injury or threat of injury to health, safety
or the Environment.

 18
 

 

 

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

“Environmental Permit”
shall mean any permit, license, approval, registration, notification,
exemption, consent or other authorization required by or from a Governmental Authority
under Environmental Law.

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

“Equity Interest”
shall mean, with respect to any person, any and all shares, interests,
participations or other equivalents, including membership interests (however
designated, whether voting or nonvoting), of equity of such person, including,
if such person is a partnership, partnership interests (whether general or
limited) and any other interest or participation that confers on a person the
right to receive a share of the profits and losses of, or distributions of property
of, such partnership, whether outstanding on the date hereof or issued
thereafter, but excluding debt securities convertible or exchangeable into such
equity.

“Equity Issuance”
shall mean, without duplication, (i) any issuance or sale by Borrower
after the Closing Date of any Equity Interests in Borrower (including any
Equity Interests issued upon exercise of any warrant or option) or any warrants
or options to purchase Equity Interests or (ii) any contribution to the
capital of Borrower; provided, however, that an Equity Issuance shall not include (x) any
Preferred Stock Issuance or Debt Issuance, (y) any such sale or issuance
by Borrower of not more than an aggregate amount of 3.0% of its Equity
Interests (including its Equity Interests issued upon exercise of any warrant or
option or warrants or options to purchase its Equity Interests but excluding
Disqualified Capital Stock), in each case, to directors, officers or employees
of any Company and (z) any Excluded Issuance.

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

“ERISA Affiliate”
shall mean, with respect to any person, any trade or business (whether or not
incorporated) that, together with such person, is treated as a single employer
under Section 414 of the Code.

“ERISA Event”
shall mean (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived by regulation); (b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived; (c) the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan
or the failure to make any required contribution to a Multiemployer Plan; (d) the
filing pursuant to Section 412(d) of the 

 19
 

 

 

Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence by any Company or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (f) the receipt by any Company or any of its ERISA Affiliates from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, or
the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (g) the incurrence by any Company or any
of its ERISA Affiliates of any liability with respect to the withdrawal from
any Plan or Multiemployer Plan; (h) the receipt by any Company or its
ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) the
“substantial cessation of operations” within the meaning of Section 4062(e) of
ERISA with respect to a Plan; (j) the making of any amendment to any Plan
which could result in the imposition of a lien or the posting of a bond or
other security; and (k) the occurrence of a nonexempt prohibited
transaction (within the meaning of Section 4975 of the Code or Section 406
of ERISA) which could reasonably be expected to result in liability to any
Company.

“Event of Default”
shall have the meaning assigned to such term in Section 8.01.

“Excess Amount”
shall have the meaning assigned to such term in Section 2.10(h).

“Excess Cash Flow”
shall mean, for any Excess Cash Flow Period, Consolidated EBITDA for such
Excess Cash Flow Period, minus, without
duplication:

(a)           Debt
Service for such Excess Cash Flow Period;

(b)           any
voluntary prepayments of Tranche B Loans and any permanent voluntary reductions
to the Revolving Commitments to the extent that an equal amount of the
Revolving Loans simultaneously is repaid, in each case so long as such amounts
are not already reflected in Debt Service, during such Excess Cash Flow Period;

(c)           Capital
Expenditures during such Excess Cash Flow Period that are paid in cash, net of
all proceeds received during such Excess Cash Flow Period of any Indebtedness to
the extent used to finance any Capital Expenditure (other than Indebtedness under
this Agreement to the extent there is no corresponding deduction to Excess Cash
Flow above in respect of the use of such borrowings);

(d)           Consolidated
Tax Expense to the extent actually paid;

(e)           the
absolute value of the difference, if negative, of the amount of Net Working
Capital at the end of the prior Excess Cash Flow Period over the amount of Net
Working Capital at the end of such Excess Cash Flow Period;

 20
 

 

 

(f)            losses
excluded from the calculation of Consolidated Net Income by operation of
clause (c) of the definition thereof that are paid in cash during
such Excess Cash Flow Period; and

(g)           to
the extent added to determine Consolidated EBITDA, all items that did not result
from a cash payment to Borrower or any of its Restricted Subsidiaries on a consolidated
basis during such Excess Cash Flow Period;

provided that any amount deducted
pursuant of any of the foregoing clauses that will be paid after the close of
such Excess Cash Flow Period shall not be deducted again in a subsequent Excess
Cash Flow Period; plus, without duplication:

(i) the difference, if positive, of the amount of
Net Working Capital at the end of the prior Excess Cash Flow Period over the
amount of Net Working Capital at the end of such Excess Cash Flow Period;

(ii) income or gain excluded from the calculation of
Consolidated Net Income by operation of clause (c) of the definition
thereof that is realized in cash during such Excess Cash Flow Period (except to
the extent such gain is subject to Section 2.10(c), (d) or
(f));

(iii) if and to the extent deducted in the
computation of Consolidated EBITDA, interest income; and

(iv) to the extent subtracted in determining
Consolidated EBITDA, all items that did not result from a cash payment by
Borrower or any of its Restricted Subsidiaries on a consolidated basis during
such Excess Cash Flow Period.

“Excess Cash Flow Period”
shall mean (i) the period taken as one accounting period from January 1,
2007 and ending on December 31, 2007 and (ii) each fiscal year of Borrower
thereafter.

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

“Excluded Issuance”
shall mean an issuance and sale of Qualified Capital Stock of Borrower (other
than to a Subsidiary of Borrower) to the extent such Qualified Capital Stock is
used, or the Net Cash Proceeds thereof shall be, within 45 days of the consummation
of such issuance and sale, used, without duplication, to prepay Tranche B Loans
or Revolving Loans (with a dollar-for-dollar reduction in Revolving Commitments
pursuant to Section 2.10(a)), or finance Expansion Capital
Expenditures or one or more Investments permitted pursuant to Sections 6.04
(e),  (i),  (k),  (l) or  (m); provided
that such Net Cash Proceeds are not used as the basis for incurring
Indebtedness pursuant to Section 6.01 (f).

“Excluded Subsidiary”
shall mean each Subsidiary of Borrower designated as such by Borrower after the
Closing Date by providing written notice to the Administrative Agent of such
designation; provided that any
Subsidiary designated as an Excluded Subsidiary which 

 21
 

 

 

merges or consolidates with or into any other
Subsidiary of Borrower that is a Guarantor shall cease to be an “Excluded
Subsidiary” for purposes hereof.

“Excluded Taxes”
shall mean, with respect to the Administrative Agent, any Lender, the Issuing
Bank 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), franchise taxes imposed on it (in
lieu of net income taxes) and branch profits taxes imposed on it, by a jurisdiction
(or any political subdivision thereof) as a result of the recipient being
organized or having its principal office or, in the case of any Lender, its
applicable lending office in such jurisdiction and (b) in the case of a Foreign
Lender, any U.S. federal withholding tax that (i) 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), except (x) 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 2.15(a) or
(y) if such Foreign Lender is an assignee pursuant to a request by
Borrower under Section 2.16; provided
that this subclause (b)(i) shall not apply to any Tax imposed
on a Lender in connection with an interest or participation in any Loan or
other obligation that such Lender was required to acquire pursuant to Section 2.14(d),
or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.15(e).

“Executive Order” shall have the meaning assigned to such
term in Section 3.22.

“Existing Lien”
shall have the meaning assigned to such term in Section 6.02(c).

“Existing Notes”
shall have the meaning assigned to such term in the recitals hereto.

“Existing Notes Redemption”
shall have the meaning assigned to such term in the recitals hereto.

“Existing Notes Redemption
Notice” shall have the meaning assigned to such term in the recitals
hereto.

“Expansion Capital
Expenditures” shall mean Capital Expenditures other than Maintenance
Capital Expenditures and otherwise attributable to increasing the size or
capabilities of Gaming Facilities owned by Borrower or its Restricted
Subsidiaries.

“Federal Funds Effective
Rate” shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
of the United States arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
of the quotations for the day for such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing selected
by it.

“Fees” shall
mean the Commitment Fees, the Administrative Agent Fees, the LC Participation
Fees and the Fronting Fees.

 22
 

 

 

“Final Maturity Date”
shall mean the later of the Revolving Maturity Date and the Tranche B
Maturity Date.

“Financial Officer”
of any person shall mean the chief financial officer, principal accounting officer,
treasurer or controller of such person.

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

“Flow Through Entity” shall mean an entity that:

(1)           for
Federal income tax purposes constitutes

(a)           an “S
corporation,” as defined in Section 1361(a) of the Code,

(b)           a “qualified
subchapter S subsidiary,” as defined in Section 1361(b)(3)(B) of the
Code,

(c)           a “partnership,”
within the meaning of Section 7701(a)(2) of the Code, other than a “publicly
traded partnership,” as defined in Section 7704 of the Code, or

(d)           an
entity that is disregarded as an entity separate from its owner under the Code,
the Treasury regulations or any published administrative guidance of the
Internal Revenue Service; and

(2)           for state and local jurisdictions in
respect of which Tax Distributions are being made, is
subject to treatment on a basis under applicable state or local income tax law
substantially similar to a Federal Flow Through Entity.

“Foreign Lender”
shall mean any Lender that is not, for United States federal income tax
purposes, (i) an individual who is a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof, (iii) an estate whose
income is subject to U.S. federal income taxation regardless of its source or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such trust.

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

“Former Lender”
shall have the meaning assigned to such term in Section 10.04(h).

“Fronting Fee”
shall have the meaning assigned to such term in Section 2.05(c).

 23
 

 

 

“Fund” shall
mean any 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.

“GAAP” shall
mean generally accepted accounting principles in the United States applied on a
consistent basis.

“Gameco” shall
have the meaning assigned to such term in the recitals hereto.

“Gameco Acquisition”
shall have the meaning assigned to such term in the recitals hereto.

“Gameco Agreement”
shall have the meaning assigned to such term in the recitals hereto.

“Gaming Authorities” shall mean any
agency, authority, board, bureau, commission, department, office or
instrumentality of any nature whatsoever of the United States or foreign
government, any state, province or city or other political subdivision, or any
officer or official thereof, including, without limitation, each gaming commission
and any other agency with authority to regulate any gaming operation or
proposed gaming operation owned, managed or operated by Borrower or any of its
Subsidiaries.

“Gaming Facility” shall mean any gaming establishment and other
property or assets directly ancillary thereto or used in connection therewith,
including any casinos, hotels, resorts, race tracks, theaters, parking
facilities, recreational vehicle parks, timeshare operations, retail shops,
restaurants, other buildings, land, golf courses and other recreation and
entertainment facilities, marinas, vessels, barges, ships and related
equipment.

“Gaming Law” shall mean any
gaming laws or regulations of any jurisdictions to which Borrower or any of its
Subsidiaries is or may at any time after the date hereof be subject.

“Gaming Licenses” shall mean
every material license, material franchise, material registration, material
qualification, findings of suitability or other material approval or authorization
required to own, lease, operate or otherwise conduct or manage riverboat,
dockside or land-based gaming activities in any state or jurisdiction in which
Borrower or any of its Subsidiaries conducts business, and all applicable
Liquor Licenses.

“General Contractor”
means the person who contracts for the construction of any entire Project,
rather than for a portion of the work relating thereto and otherwise has the obligation
to retain and pay subcontractors and coordinates the work to be performed.

“Governmental Authority”
shall mean the government of the United States or any other nation, or of any
political subdivision thereof, whether state, provincial 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).

 24
 

 

 

“Governmental Real Property
Disclosure Requirements” shall mean any Requirement of Law of any
Governmental Authority requiring notification of the buyer, lessee, mortgagee,
assignee or other transferee of any Real Property, facility, establishment or
business, or notification, registration or filing to or with any Governmental
Authority, in connection with the sale, lease, mortgage, assignment or other
transfer (including any transfer of control) of any Real Property, facility,
establishment or business, of the actual or threatened presence or Release in
or into the Environment, or the use, disposal or handling of Hazardous Material
on, at, under or near the Real Property, facility, establishment or business to
be sold, leased, mortgaged, assigned or transferred.

“Guarantee Agreement”
shall mean a Guarantee Agreement substantially in the form of Exhibit R
among the Loan Parties and Collateral Agent.

“Guaranteed Obligations”
shall have the meaning assigned to such term in the Guarantee Agreement.

“Guarantees”
shall mean the guarantees issued pursuant to the Guarantee Agreement by the
Guarantors.

“Guarantors”
shall mean each Restricted Subsidiary listed on Schedule 1.01(b),
and each other Restricted Subsidiary that is or becomes a party to the
Guarantee Agreement pursuant to Section 5.11, in each case other
than Excluded Subsidiaries.

“Hazardous Materials”
shall mean the following:  hazardous
substances; hazardous wastes; polychlorinated biphenyls (“PCBs”)
or any substance or compound containing PCBs; asbestos or any
asbestos-containing materials in any form or condition; radon or any other
radioactive materials including any source, special nuclear or by-product
material; petroleum, crude oil or any fraction thereof; and any other pollutant
or contaminant or chemicals, wastes, materials, compounds, constituents or substances,
subject to regulation or which can give rise to liability under any Environmental
Laws.

“Hedging Agreement”
shall mean any swap, cap, collar, forward purchase or similar agreements or
arrangements dealing with interest rates, currency exchange rates or commodity
prices, either generally or under specific contingencies.

“Hedging Obligations”
shall mean obligations under or with respect to Hedging Agreements.

“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or advances; (b) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments; (c) all
obligations of such person upon which interest charges are customarily paid or
accrued; (d) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person;
(e) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable and
accrued obligations incurred in the ordinary course of business on normal trade
terms and not overdue by more than 90 days); (f) all Indebtedness of
others secured by any Lien on property owned or acquired by such person,
whether or 

 25
 

 

 

not the obligations secured thereby have been assumed,
but limited to the fair market value of such property; (g) all Capital
Lease Obligations, Purchase Money Obligations and synthetic lease obligations
of such person; (h) all Hedging Obligations to the extent required to be
reflected on a balance sheet of such person; (i) all Attributable
Indebtedness of such person; (j) all obligations of such person for the
reimbursement of any obligor in respect of letters of credit, letters of guaranty,
bankers’ acceptances and similar credit transactions; and (k) all
Contingent Obligations of such person in respect of Indebtedness or obligations
of others of the kinds referred to in clauses (a) through (j) above.
The Indebtedness of any person shall include the Indebtedness of any other
entity (including any partnership in which such person is a general partner) to
the extent such person is liable therefor as a result of such person’s
ownership interest in or other relationship with such entity, except (other
than in the case of general partner liability) to the extent that terms of such
Indebtedness expressly provide that such person is not liable therefor. With
respect to the Companies, Indebtedness shall not include the amount of any
Existing Notes that have been validly called for redemption pursuant to the
Existing Notes Redemption Notice and for which cash or Cash Equivalents have
been deposited with the trustee under, and pursuant to the terms of, the
indenture governing the Existing Notes.

“Indemnified Taxes”
shall mean all Taxes other than Excluded Taxes.

“Indemnitee”
shall have the meaning assigned to such term in Section 10.03(b).

“Information”
shall have the meaning assigned to such term in Section 10.12.

“Initial Pledge
Agreement” shall have the meaning assigned to such term in the
Security Agreement.

“Initial Tranche B
Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make a Tranche B Loan hereunder on the Closing Date
in the amount set forth on Schedule I to the Lender Addendum executed and
delivered by such Lender, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Initial Tranche B Commitment, as applicable,
as the same may be reduced from time to time pursuant to Section 2.07.
The initial aggregate amount of the Lenders’ Initial Tranche B Commitments on
the date hereof is $40,000,000.

“Initial Tranche B Loans”
shall mean Tranche B Loans made on the Closing Date pursuant to Section 2.01(a)(i).

“Inspecting Engineer”
means an engineer licensed to practice in the state where the applicable
Project is located, that is independent of the Borrower and the other Loan
Parties and is reasonably acceptable to the Administrative Agent.

“Insurance Policies”
shall mean the insurance policies and coverages required to be maintained by
each Loan Party which is an owner of Mortgaged Property with respect to the
applicable Mortgaged Property pursuant to Section 5.04 and all
renewals and extensions thereof.

“Insurance Requirements”
shall mean, collectively, all provisions of the Insurance Policies, all
requirements of the issuer of any of the Insurance Policies and all orders,
rules, 

 26
 

 

 

regulations and any other requirements of the National
Board of Fire Underwriters (or any other body exercising similar functions)
binding upon each Loan Party which is an owner of Mortgaged Property and
applicable to the Mortgaged Property or any use or condition thereof.

“Intellectual Property”
shall have the meaning assigned to such term in Section 3.06(a).

“Intercompany Note”
shall mean a promissory note substantially in the form of Exhibit P.

“Interest Election Request”
shall mean a request by Borrower to convert or continue a Revolving Borrowing
or Term Borrowing in accordance with Section 2.08(b), substantially
in the form of Exhibit E.

“Interest Payment Date”
shall mean (a) with respect to any ABR Loan (including Swingline Loans),
the last Business Day of each March, June, September and December to
occur during any period in which such Loan is outstanding, commencing with September 29,
2006, (b) with respect to any LIBOR Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the
case of a LIBOR Loan with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period,
(c) with respect to any Revolving Loan or Swingline Loan, the Revolving
Maturity Date or such earlier date on which the Revolving Commitments are
terminated and (d) with respect to a Tranche B Loan, the Tranche B Maturity
Date.

“Interest Period”
shall mean, with respect to any LIBOR Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as Borrower
may elect; provided that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding Business
Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day, and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.

“Investments”
shall have the meaning assigned to such term in Section 6.04.

“Issuing Bank”
shall mean, as the context may require, (a) Credit Suisse, Cayman Islands
Branch, in its capacity as issuer of Letters of Credit issued by it; (b) any
other Lender that may become an Issuing Bank pursuant to Sections 2.18(j)
and (k) in its capacity as issuer of Letters of Credit issued by such
Lender; or (c) collectively, all of the foregoing.

“Joinder Agreement”
shall mean a supplement to the Guarantee Agreement substantially in the form of
Annex I to the Guarantee Agreement.

 27
 

 

 

“Landlord Access Agreement”
shall mean a Landlord Access Agreement, substantially in the form of Exhibit G,
or such other form as may reasonably be acceptable to the Administrative Agent.

“LC Commitment”
shall mean the commitment of the Issuing Bank to issue Letters of Credit
pursuant to Section 2.18. The amount of the LC Commitment shall
initially be $5,000,000, but in no event exceed the Revolving Commitment.

“LC Disbursement”
shall mean a payment or disbursement made by the Issuing Bank pursuant to a
drawing under a Letter of Credit.

“LC Exposure”
shall mean at any time the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all Reimbursement Obligations outstanding at such
time. The LC Exposure of any Revolving Lender at any time shall mean its Pro
Rata Percentage of the aggregate LC Exposure at such time.

“LC Participation Fee”
shall have the meaning assigned to such term in Section 2.05(c).

“LC Request”
shall mean a request by Borrower in accordance with the terms of Section 2.18(b)
and substantially in the form of Exhibit H, or such other form as
shall be approved by the Administrative Agent.

“Leases” shall
mean any and all leases, subleases, tenancies, options, concession agreements,
rental agreements, occupancy agreements, franchise agreements, access
agreements and any other agreements (including all amendments, extensions,
replacements, renewals, modifications and/or guarantees thereof), whether or
not of record and whether now in existence or hereafter entered into, affecting
the use or occupancy of all or any portion of any Real Property.

“Lender Addendum”
shall mean, with respect to any Lender on the date hereof, a lender addendum in
the form of Exhibit I, to be executed and delivered by such Lender
on the date hereof as provided in Section 10.15.

“Lenders” shall
mean (a) the financial institutions that have become a party hereto pursuant
to a Lender Addendum and (b) any financial institution that has become a
party hereto pursuant to an Assignment and Assumption, other than, in each
case, any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Assumption. Unless the context clearly indicates
otherwise, the term “Lenders” shall include the Swingline Lender.

“Letter of Credit”
shall mean any (i) Standby Letter of Credit and (ii) Commercial Letter
of Credit, in each case, issued or to be issued by an Issuing Bank for the
account of Borrower pursuant to Section 2.18.

“Letter of Credit
Expiration Date” shall mean the date which is fifteen days prior to
the Revolving Maturity Date.

 

 28

 

 

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

“LIBOR Loan”
shall mean any LIBOR Revolving Loan or LIBOR Term Loan.

“LIBOR Rate”
shall mean, with respect to any LIBOR Borrowing for any Interest Period, the
rate per annum determined by the Administrative Agent at approximately 11:00 a.m.,
London, England time, on the second full Business Day preceding the first day
of such Interest Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in Dollars (as set forth by the
Bloomberg Information Service or any successor thereto or any other service
selected by the Administrative Agent which has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “LIBOR Rate” shall be the interest rate per annum determined by
the Administrative Agent to be the average of the rates per annum at which
deposits in Dollars are offered for such relevant Interest Period to major
banks in the London interbank market in London, England by the Administrative
Agent at approximately 11:00 a.m. (London time) on the date that is two
Business Days prior to the beginning of such Interest Period.

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

“LIBOR Revolving Loan”
shall mean any Revolving Loan bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate in accordance with the provisions of Article II.

“LIBOR Term Borrowing”
shall mean a Borrowing comprised of LIBOR Term Loans.

“LIBOR Term Loan”
shall mean any Tranche B Loan bearing interest at a rate determined by
reference to the Adjusted LIBOR Rate in accordance with the provisions of Article II.

“License Revocation”
shall mean the revocation, suspension, expiration without any previous or
concurrent renewal, or loss of any Gaming License of any of the Companies for
more than 60 days, in each case other than any voluntary relinquishment of a Gaming
License if such relinquishment, in the reasonable good faith judgment of the
Board of Directors of Borrower, evidenced by a resolution of such Board of
Directors, is both desirable in the conduct of the business of Borrower and its
Restricted Subsidiaries, taken as a whole, and would not in any material
respect impair the Loan Parties’ ability to meet their obligations hereunder,
or the appointment of a receiver, supervisor or similar official with respect
to, any Gaming License or other casino, gambling or gaming license issued by
any Gaming Authority covering any Gaming Facility owned, leased, operated or
used by any of the Companies.

“Lien” shall
mean, with respect to any property, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, claim, charge, assignment, hypothecation, security
interest or encumbrance of any kind or any arrangement to provide priority or
preference or any filing of any fi-

 29
 

 

 

nancing statement under the UCC or any other similar
notice of lien under any similar notice or recording statute of any
Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing; (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such property;
and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.

“Liquor Authorities”
shall mean any agency, authority, board, bureau, commission, department, office
or instrumentality of any nature whatsoever of the United States or foreign
government, any state, province or any city or other political subdivision,
whether now or hereafter existing, or any officer or official thereof,
including, without limitation, any other agency with authority to regulate the
sale or distribution of alcoholic beverages.

“Liquor Laws”
shall mean the statutes regarding the sale and distribution of alcoholic
beverages enforced by the Liquor Authorities and the rules and regulations
of the Liquor Authorities.

“Liquor License”
shall mean any license, permit, registration, qualification or other approval
required to sell, dispense or distribute alcoholic beverages under the Liquor
Laws.

“Loan Documents”
shall mean this Agreement, the Letters of Credit, the Notes (if any), the
Guarantee Agreement and the Security Documents.

“Loan Parties”
shall mean Borrower and the Guarantors.

“Loans” shall
mean, as the context may require, a Revolving Loan, a Tranche B Loan or a
Swingline Loan.

“Maintenance Capital
Expenditures” shall mean expenditures made by Borrower or any of its
Restricted Subsidiaries that are made to maintain, restore or refurbish the
condition or usefulness of property of Borrower or any of its Restricted
Subsidiaries, or otherwise to support the continuation of such person’s
day-to-day operations as then conducted, but that are not properly chargeable
to repairs and maintenance in accordance with GAAP, other than such expenditures
made pursuant to Section 2.10(f).

“Margin Stock”
shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect”
shall mean (a) a material adverse effect on the business, property,
assets, nature of business, operations or condition (financial or otherwise) or
material agreements of Borrower and its Restricted Subsidiaries, taken as a
whole; (b) material impairment of the ability of the Loan Parties, taken
as a whole, to fully and timely perform any of their obligations under any Loan
Document; (c) material impairment of the rights of or benefits or remedies
available to the Lenders or the Collateral Agent under any Loan Document; or (d) a
material adverse effect on the Collateral or the Liens in favor of the
Collateral Agent (for its 

 30
 

 

 

benefit and for the benefit of the other Secured
Parties) on the Collateral or the priority of such Liens.

“Material Indebtedness”
shall mean (a) the Senior Notes and (b) any other Indebtedness (other
than the Loans and Letters of Credit) or Hedging Obligations of Borrower or any
of its Restricted Subsidiaries in an outstanding principal amount exceeding
$3.0 million. For purposes of determining Material Indebtedness, the “principal
amount” in respect of any Hedging Obligations of any Loan Party at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that such Loan Party would be required to pay if the related Hedging Agreement
were terminated at such time.

“Material Real
Property” shall mean any Real Property or option to purchase Real
Property reasonably determined by the Administrative Agent to have a material
value in excess of $500,000.

“Maximum Rate”
shall have the meaning assigned to such term in Section 10.14.

“Mortgage” shall
mean an agreement, including, but not limited to, a mortgage, deed of trust or
any other document, creating and evidencing a Lien on a Mortgaged Property,
which shall be substantially in the form of Exhibit J or other form
reasonably satisfactory to the Collateral Agent, in each case, with such
schedules and including such provisions as shall be necessary to conform such
document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.

“Mortgaged Property”
shall mean (a) each Real Property identified as a Mortgaged Property on Schedule 8(a)
to the Perfection Certificate dated the Closing Date and (b) each Real
Property, if any, which shall be subject to a Mortgage delivered after the
Closing Date pursuant to Section 5.11(c).

“Multiemployer Plan”
shall mean a multiemployer plan within the meaning of Section 4001(a)(3) or
Section 3(37) of ERISA (a) to which any Company or any ERISA Affiliate
is then making or accruing an obligation to make contributions; (b) to
which any Company or any ERISA Affiliate has within the preceding five plan
years made contributions; or (c) with respect to which any Company could
incur liability.

“Nautica Options”
shall mean the right of Borrower to purchase and/or lease land and certain
improvements on the west bank of the Cuyahoga River in Cleveland, Ohio pursuant
to several option agreements entered into by Borrower as in effect on the date
hereof.

“Net Cash
Proceeds” shall mean:

(a)           with
respect to any Asset Sale (other than any issuance or sale of Equity Interests),
the cash proceeds received by Borrower or any of its Restricted Subsidiaries
(including cash proceeds subsequently received (as and when received by
Borrower or any of its Restricted Subsidiaries) in respect of non-cash
consideration initially received) net of (i) selling expenses (including
reasonable brokers’ fees or commissions, legal, accounting, investment banking
and other professional and transactional fees, transfer and 

 31
 

 

 

similar taxes and
Borrower’s good faith estimate of income taxes paid or payable in connection
with such sale); (ii) amounts provided as a reserve, in accordance with
GAAP, against (x) any liabilities under any indemnification obligations
associated with such Asset Sale or (y) any other liabilities retained by
Borrower or any of its Restricted Subsidiaries associated with the properties
sold in such Asset Sale (provided that,
to the extent and at the time any such amounts are released from such reserve,
such amounts shall constitute Net Cash Proceeds); (iii) Borrower’s good
faith estimate of payments required to be made with respect to unassumed
liabilities relating to the properties sold within 90 days of such Asset
Sale (provided that, to the extent such cash
proceeds are not used to make payments in respect of such unassumed liabilities
within 90 days of such Asset Sale, such cash proceeds shall constitute Net
Cash Proceeds); and (iv) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by a Lien on the properties sold in such Asset Sale (so long as such
Lien was permitted to encumber such properties under the Loan Documents at the
time of such sale) and which is repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such properties);

(b)           with
respect to any Debt Issuance, any Equity Issuance or any other issuance or sale
of Equity Interests by Borrower or any of its Restricted Subsidiaries, the cash
proceeds thereof, net of customary fees, commissions, costs and other expenses
incurred in connection therewith; and

(c)           with
respect to any Casualty Event, the cash insurance proceeds, condemnation awards
and other compensation received in respect thereof, net of all reasonable costs
and expenses incurred in connection with the collection of such proceeds,
awards or other compensation in respect of such Casualty Event.

“Net Working Capital”
shall mean, at any time, Consolidated Current Assets at such time minus
Consolidated Current Liabilities at such time.

“Non-Guarantor Subsidiary”
shall mean each Subsidiary that is not a Guarantor.

“Notes” shall
mean any notes evidencing the Tranche B Loans, Revolving Loans or Swingline
Loans issued pursuant to this Agreement, if any, substantially in the form of Exhibit K-1,
K-2 or K-3, as the case may be.

“Obligations”
shall mean (a) obligations of Borrower and the other Loan Parties from
time to time arising under or in respect of the due and punctual payment of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (ii) each payment
required to be made by Borrower under this Agreement and Borrower and the other
Loan Parties under the other Loan Documents in respect of any Letter of Credit,
when and as due, including payments in respect of Reimbursement Obligations,
interest thereon and obligations to provide cash collat-

 

 32
 

 

 

eral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such proceeding),
of Borrower under this Agreement and Borrower and the other Loan Parties under
the other Loan Documents, and (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of Borrower under or
pursuant to this Agreement and Borrower and the other Loan Parties under the
other Loan Documents.

“OFAC” shall
have the meaning assigned to such term in Section 3.22.

“Officers’ Certificate”
shall mean a certificate executed by the chairman of the Board of Directors (if
an officer), the chief executive officer or the president and one of the Financial
Officers, each in his or her official (and not individual) capacity.

“Organizational Documents”
shall mean, with respect to any person, (i) in the case of any
corporation, the certificate of incorporation and by-laws (or similar
documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership,
the partnership agreement (or similar document) of such person and (v) in
any other case, the functional equivalent of the foregoing.

“Other Taxes”
shall mean 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.

“Participant”
shall have the meaning assigned to such term in Section 10.04(d).

“PBGC” shall
mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Perfection Certificate”
shall mean a certificate in the form of Exhibit L-1 or any
other form approved by the Collateral Agent, as the same shall be supplemented
from time to time by a Perfection Certificate Supplement or otherwise.

“Perfection Certificate
Supplement” shall mean a certificate supplement in the form of Exhibit L-2
or any other form approved by the Collateral Agent.

“Permitted Acquisition”
shall mean any transaction or series of related transactions for the direct or
indirect (a) acquisition of all or substantially all of the property of
any person, or of any business or division of any person; (b) acquisition
of 100% of the Equity Interests of any person, and otherwise causing such
person to become a Restricted Subsidiary of such person; or (c) merger or
consolidation or any other combination with any person, if each of the following
conditions is met:

 33
 

 

 

(i) no Default then exists or would result
therefrom;

(ii) after giving effect to such transaction on a
Pro Forma Basis, (A) Borrower shall be in compliance with the covenants set
forth in Sections 6.10(b), (c) and (e) as of the most
recent Test Period (assuming, for purposes of Section 6.10, that
such transaction, and all other Permitted Acquisitions consummated since the
first day of the relevant Test Period for each of the financial covenants set
forth in Section 6.10 ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test Period), (B) Bor­rower
shall be in compliance with the covenant set forth in Section 6.10(a)
as of the most recent Test Period (assuming, for purposes of Section 6.10(a),
that such transaction, and all other Permitted Acquisitions consummated since
the first day of the relevant Test Period for the financial covenant set forth
in Section 6.10(a) ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test Period) by at
least 0.50:1.00 and (C) the Total Unused Revolving Commitment shall be at
least $10.0 million;

(iii) no Company shall, in connection with any such
transaction, assume or remain liable with respect to any Indebtedness or other
liability (including any material tax or ERISA liability) of the related seller
or the business, person or properties acquired, except (A) to the extent
permitted under Section 6.01 and (B) obligations not
constituting Indebtedness incurred in the ordinary course of business and
necessary or desirable to the continued operation of the underlying properties,
and any other such liabilities or obligations not permitted to be assumed or
otherwise supported by any Company hereunder shall be paid in full or released
as to the business, persons or properties being so acquired on or before the
consummation of such acquisition;

(iv) the person or business to be acquired shall be,
or shall be engaged in, a business of the type that Borrower and the Restricted
Subsidiaries are permitted to be engaged in under Section 6.15 and
the property acquired in connection with any such transaction shall be made
subject to the Lien of the Security Documents and shall be free and clear of
any Liens, other than Permitted Liens;

(v) the Board of Directors of the person to be
acquired shall not have indicated publicly its opposition to the consummation
of such acquisition (which opposition has not been publicly withdrawn);

(vi) all transactions in connection therewith shall
be consummated in accordance with all applicable Requirements of Law;

(vii) with respect to any transaction involving
Acquisition Consideration of more than $7.5 million, unless the Administrative Agent
shall otherwise agree, Borrower shall have provided the Administrative Agent
and the Lenders with (A) historical financial statements for the last
three fiscal years (or, if less, the number of years since formation) of the
person or business to be acquired (audited if available without undue cost or
delay) and unaudited financial statements thereof for the most recent interim period
which are available, (B) a reasonably detailed description of all material
information re-

 

 34
 

 

 

lating thereto and copies
of all material documentation pertaining to such transaction, and (C) all
such other information and data relating to such transaction or the person or
business to be acquired as may be reasonably requested by the Administrative
Agent or the Required Lenders;

(viii) at least 5 Business Days prior to the proposed
date of consummation of the transaction, Borrower shall have delivered to the
Agents and the Lenders an Officers’ Certificate certifying that (A) such
transaction complies with this definition (which shall have attached thereto
reasonably detailed backup data and calculations showing such compliance), and (B) such
transaction could not reasonably be expected to result in a Material Adverse
Effect;

(ix) the Acquisition Consideration for all Permitted
Acquisitions since the Closing Date shall not exceed $25.0 million, plus the amount of Net Cash Proceeds from Excluded Issuances
consummated after the Closing Date not used for Expansion Capital Expenditures
or to prepay Loans as described in the definition of “Excluded Issuances”; provided that such amount shall increase
on the D-E Completion Date by $25.0 million less up to $10.0 million to
the extent used to make Expansion Capital Expenditures pursuant to the first
proviso of Section 6.10(e)(iii); provided
further that such aggregate amount shall increase on the first
anniversary of the D-E Completion Date by an additional $25.0 million
less up to $10.0 million to the extent used to make Expansion Capital
Expenditures pursuant to the second proviso of Section 6.10(e)(iii);
and

(x) any Equity Interests constituting all or a
portion of such Acquisition Consideration shall be Qualified Capital Stock.

“Permitted Holders”
shall mean (a) Jeffrey P. Jacobs and his Controlled Investment Affiliates,
(b) Jacobs Family Economic Trust dated September 27, 2005, (c) Jacobs
Family Control Trust dated September 27, 2005, (d) Richard E. Jacobs
and his Controlled Investment Affiliates, (e) Richard E. Jacobs Revocable
Living Trust dated April 23, 1987, (f) Richard E. Jacobs Irrevocable
Trust dated September 27, 2005, (g) any parent, spouse, sibling or
lineal descendant of Jeffrey P. Jacobs or Richard E. Jacobs, (h) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or persons beneficially holding an 80% or more
controlling interest of which consist of any one or more persons described in
(a)-(g), (i) any Controlled Investment Affiliates of a person described in
(a)-(g) and (j) Related Parties of the persons described in (a)-(g).

“Permitted Liens”
shall have the meaning assigned to such term in Section 6.02.

“Permitted Tax
Distributions” shall mean, with respect to each Tax Period that
Borrower qualifies as a Flow Through Entity, the distribution by Borrower to
the holders of its Equity Interest of an amount, if any, equal to the aggregate
local, state and federal income tax liability such holders would have incurred
as a result of each holder’s ownership of its Equity Interest in Borrower,
calculated (1) using the Presumed Tax Rate, (2) as if accruals and
allocations from Borrower attributable to the Equity Interests of the Borrower
held by such holder were, for such quarter, the sole source of income and loss
for such holder; and (3) by taking into 

 35
 

 

 

account the carryover of items of loss, deduction and
expense previously allocated by Borrower to such holder. The amount
distributable as a Permitted Tax Distribution shall be adjusted to take into
account the effect of alternative minimum tax, tax adjustments and any
penalties and/or interest charged by any taxing authority that is the result of
an action or omission of Borrower. If at any time the sum of the Permitted Tax Distributions received by any
holder of the Equity Interests of the Borrower are greater than the actual taxes
paid by such holder for the Tax Period, then the excess amount, if any, shall
be deducted from the Permitted Tax Distributions starting in the next Tax
Period until such excess amount is
recouped.

“Permitted Truck Plaza
Acquisition” shall mean any transaction or series of related
transactions with Gameco for the direct or indirect (a) acquisition of all
or substantially all of the property of any subsidiary of Gameco, or of any
business or division of any subsidiary of Gameco, in each case, constituting a
video poker truck plaza; or (b) merger or consolidation or any other
combination with any person constituting a video poker truck plaza, if each of
the following conditions is met:

(i) no Default then exists or would result
therefrom;

(ii) after giving effect to such transaction on a
Pro Forma Basis, (A) Borrower shall be in compliance with all covenants
set forth in Sections 6.10(b), (c) and (e) as of the
most recent Test Period (assuming, for purposes of Section 6.10,
that such transaction, and all other Permitted Acquisitions consummated since
the first day of the relevant Test Period for each of the financial covenants
set forth in Section 6.10 ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test Period), (B) Borrower
shall be in compliance with the covenant set forth in Section 6.10(a)
as of the most recent Test Period (assuming, for purposes of Section 6.10(a),
that such transaction, and all other Permitted Truck Plaza Acquisitions
consummated since the first day of the relevant Test Period for the financial
covenant set forth in Section 6.10(a) ending on or prior to the
date of such transaction, had occurred on the first day of such relevant Test
Period) by at least 0.50:1.00 and (C) the Total Unused Revolving
Commitment shall be at least $10.0 million;

(iii) no Loan Party shall, in connection with any
such transaction, assume or remain liable with respect to any Indebtedness or
other liability (including any material tax or ERISA liability) of the related
seller or the business, person or properties acquired, except (A) to the
extent permitted under Section 6.01 and (B) obligations not
constituting Indebtedness incurred in the ordinary course of business and
necessary or desirable to the continued operation of the underlying properties,
and any other such liabilities or obligations not permitted to be assumed or
otherwise supported by any Company hereunder shall be paid in full or released
as to the business, persons or properties being so acquired on or before the
consummation of such acquisition;

(iv) property acquired in connection with any such
transaction shall be made subject to the Lien of the Security Documents and
shall be free and clear of any Liens, other than Permitted Liens;

 36
 

 

 

(v) all transactions in connection therewith shall
be consummated in accordance with all applicable Requirements of Law;

(vi) Borrower shall have provided the Administrative
Agent and the Lenders with (A) historical financial statements for the
last three fiscal years (or, if less, the number of years since formation) of
the person or business to be acquired (audited if available without undue cost
or delay) and unaudited financial statements thereof for the most recent
interim period which are available, (B) a reasonably detailed description
of all material information relating thereto and copies of all material
documentation pertaining to such transaction and (C) all such other
information and data relating to such transaction or the person or business to
be acquired as may be reasonably requested by the Administrative Agent or the
Required Lenders;

(vii) at least 5 Business Days prior to the proposed
date of consummation of the transaction, Borrower shall have delivered to the
Agents and the Lenders an Officers’ Certificate certifying that (A) such
transaction complies with this definition (which shall have attached thereto
reasonably detailed backup data and calculations showing such compliance), and (B) such
transaction could not reasonably be expected to result in a Material Adverse
Effect; and

(viii) the Acquisition Consideration for such
acquisition shall either (A) not exceed the lesser of (I) 7 multiplied by the Truck Plaza EBITDA of such truck stop
gaming plaza for the Test Period most recently then ended and (II) the
result of (x) the aggregate consideration paid by Gameco for such video
truck plaza plus (y) the Truck Plaza EBITDA of
such truck stop gaming plaza for the Test Period most recently then ended plus  or  minus, as the case may be, (z) an adjustment for working
capital as determined in good faith by Borrower (any such adjustment to be
reasonably supportable and quantifiable by the underlying accounting records of
such truck stop gaming plaza), or (B) be supported by an opinion as to the
fairness to the Lenders of such Permitted Truck Plaza Acquisition from a
financial point of view issued by an independent nationally recognized
accounting, appraisal or investment banking firm reasonably acceptable to the Administrative
Agent.

It is understood that a portion of the Acquisition
Consideration in connection with a Permitted Truck Plaza Acquisition may be
accounted for as a Dividend in accordance with GAAP so long as Borrower and
Gameco are under common control.

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

“Pinon Acquisition”
shall have the meaning assigned thereto in the recitals hereto.

“Pinon Plaza”
shall have the meaning assigned thereto in the recitals hereto.

“Plan” shall
mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Sec-

 37
 

 

 

tion 302 of ERISA which is maintained or
contributed to by any Company or its ERISA Affiliate or with respect to which
any Company could incur liability (including under Sections 4063 or 4069
of ERISA).

“Plans and
Specifications” means the final plans and specifications for the construction
of any Project, to be prepared by the General Contractor or such other person
that is reasonably acceptable to the Administrative Agent, and all amendments
and modifications thereof.

“Platform” shall
have the meaning assigned to such term in Section 10.01(d).

“Pledge Agreement”
shall have the meaning provided in the Security Agreement.

“Preferred Stock”
shall mean, with respect to any person, any and all preferred or preference
Equity Interests (however designated) of such person whether now outstanding or
issued after the Closing Date.

“Preferred Stock Issuance”
shall mean the issuance or sale by Borrower or any of its Subsidiaries of any
Preferred Stock after the Closing Date (other than as permitted by Section 6.01).

“Premises” shall
have the meaning assigned thereto in the applicable Mortgage.

“Pre-Opening Expenses” shall mean all costs of start-up
activities related to a Gaming Facility that are required to be expensed (and
are not capitalized) in accordance with SOP 98-5.

“Presumed Tax Rate” means (i) with respect to the excess,
if any, of ordinary income over ordinary loss (as determined for U.S. federal
income tax purposes and, for this purpose, including items taxable at the same
rate as ordinary income, such as net short-term capital gain) for such period,
the sum of the maximum marginal individual U.S. federal, state and local income
tax rates applicable to such income taking into account the deductibility of
state and local income taxes for U.S. federal income tax purposes, and (ii) with
respect to the net capital gain (as determined for U.S. federal income tax
purposes) for such period, the sum of the maximum marginal individual U.S.
federal, state and local income tax rates applicable to such income taking into
account the deductibility of state and local income taxes for U.S. federal
income tax purposes. For purposes of this definition of “Presumed Tax Rate,”
the maximum marginal individual U.S. federal, state or local income tax rate
for each holder of Equity Interests shall be the highest such marginal
individual U.S. federal, state or local income tax rate applicable to any
holder of Equity Interests.

“Pro Forma Basis”
shall mean on a basis in accordance with GAAP and Regulation S-X and otherwise
reasonably satisfactory to the Administrative Agent.

“Pro Rata Percentage”
of any Revolving Lender at any time shall mean the percentage of the total Revolving
Commitments of all Revolving Lenders represented by such Lender’s Revolving Commitment.

 38
 

 

 

“Project”
means (i) the Dakota Development and the Elko Development and (ii) any
and all other buildings, structures, fixtures, and other improvements to be constructed
or added to any Real Property (exclusive of any personal property) with respect
to which the cost of such construction or additions is at least equal to
$1,000,000.

“property” shall
mean any right, title or interest in or to property or assets of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible
and including Equity Interests or other ownership interests of any person and
whether now in existence or owned or hereafter entered into or acquired,
including all Real Property.

“Property Material Adverse
Effect” shall have the meaning assigned thereto in the Mortgage.

“Publicly Traded Securities”
shall mean any securities (other than securities issued by Borrower or any of
its Affiliates) that are dealt in, quoted or traded on securities exchanges or
securities markets located in the United States.

“Purchase Money Obligation”
shall mean, for any person, the obligations of such person in respect of
Indebtedness (including Capital Lease Obligations) incurred for the purpose of
financing all or any part of the purchase price of any property (including
Equity Interests of any person) or the cost of installation, construction or
improvement of any property and any refinancing thereof; provided, however, that (i) such Indebtedness is incurred within
one year after such acquisition, installation, construction or improvement of
such property by such person and (ii) the amount of such Indebtedness does
not exceed 100% of the cost of such acquisition, installation, construction or
improvement, as the case may be.

“PZR Report”
shall mean a report issued by The Planning and Zoning Resource Corporation.

“Qualified Capital Stock”
of any person shall mean any Equity Interests of such person that are not Disqualified
Capital Stock.

“Qualified Person”
shall mean, with respect to any Lender party to this Agreement on the Closing
Date or that becomes a Lender pursuant to Sections 10.04(b) or (c),
any person which shall not have been found unsuitable under the Gaming
Regulations of any, and which meets the requirements, if any, of all,
jurisdictions regulating Borrower and its Subsidiaries to the extent that
Borrower has so notified the Lenders of such requirements of such jurisdictions
pursuant to Section 10.04(h).

“Real Property”
shall mean, collectively, all right, title and interest (including any
leasehold, mineral or other estate) in and to any and all parcels of or
interests in real property owned, leased or operated by any person, whether by
lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.

 39
 

 

 

“Refinanced Term
Loans” shall have the meaning assigned to such term in Section 10.02(e).

“Refinancing”
shall mean the repayment in full (including accrued and unpaid interest but
excluding contingent and indemnification obligations) and the termination of
any commitment to make extensions of credit under all of the outstanding
indebtedness listed on Schedule 1.01(a) of Borrower or any of its
Restricted Subsidiaries.

“Register” shall
have the meaning assigned to such term in Section 10.04(c).

“Regulation D”
shall mean Regulation D of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Regulation S-X”
shall mean Regulation S-X promulgated under the Securities Act.

“Regulation T”
shall mean Regulation T of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Regulation U”
shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Regulation X”
shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

“Reimbursement Obligations”
shall mean Borrower’s obligations under Section 2.18(e) to reimburse
LC Disbursements.

“Related Parties”
shall mean, 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.

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

“Replacement Term
Loans” shall have the meaning assigned to such term in Section 10.02(e).

“Required Class Lenders”
shall mean (i) with respect to Tranche B Loans, Lenders having more than
50% of all Tranche B Loans outstanding and (ii) with respect to Revolving
Loans, Required Revolving Lenders.

“Required Delayed
Draw Tranche B Lenders” shall mean Lenders having more than 50% of
the sum of all Delayed Draw Tranche B Loans outstanding and unused Delayed Draw
Tranche B Commitments.

 40
 

 

 

“Required Lenders”
shall mean Lenders having more than 50% of the sum of all Loans outstanding, LC
Exposure and unused Revolving and Tranche B Commitments.

“Required Revolving Lenders”
shall mean Lenders having more than 50% of all Revolving Commitments or, after
the Revolving Commitments have terminated, more than 50% of all Revolving Exposure.

“Requirements of Law”
shall mean, collectively, any and all requirements of any Governmental
Authority (including Gaming Authorities) including any and all laws, judgments,
orders, decrees, ordinances, rules, regulations, statutes or case law.

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

“Responsible Officer”
of any person shall mean any executive officer or Financial Officer of such
person and any other officer or similar official thereof with responsibility
for the administration of the obligations of such person in respect of this
Agreement.

“Restricted
Subsidiary” means a Subsidiary of Borrower other than an Unrestricted
Subsidiary.

“Revolving Availability
Period” shall mean the period from and including the Closing Date to
but excluding the earlier of (i) the Business Day preceding the Revolving
Maturity Date and (ii) the date of termination of the Revolving
Commitments.

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

“Revolving Commitment”
shall mean, with respect to each Lender, the commitment, if any, of such Lender
to make Revolving Loans hereunder up to the amount set forth on Schedule I
to the Lender Addendum executed and delivered by such Lender or in the Assignment
and Assumption pursuant to which such Lender assumed its Revolving Commitment,
as applicable, as the same may be (a) reduced from time to time pursuant
to Section 2.07 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04.
The aggregate amount of the Lenders’ Revolving Commitments on the date hereof
is $40,000,000.

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

“Revolving Lender”
shall mean a Lender with a Revolving Commitment.

 41
 

 

 

“Revolving Loan”
shall mean a Loan made by the Lenders to Borrower pursuant to Section 2.01(b).
Each Revolving Loan shall either be an ABR Revolving Loan or a LIBOR Revolving
Loan.

“Revolving Maturity Date”
shall mean the date which is five years after the Closing Date or, if such
date is not a Business Day, the first Business Day thereafter.

“Sale and Leaseback
Transaction” has the meaning assigned to such term in Section 6.03.

“Sarbanes-Oxley Act”
shall mean the United States Sarbanes-Oxley Act of 2002, as amended, and all rules and
regulations promulgated thereunder.

“Secured Obligations”
shall mean (a) the Obligations, (b) the due and punctual payment and
performance of all obligations of Borrower and the other Loan Parties under
each Hedging Agreement entered into with any counterparty that is a Secured
Party and (c) the due and punctual payment and performance of all
obligations of Borrower and the other Loan Parties (including overdrafts and
related liabilities) under each Treasury Services Agreement entered into with
any counterparty that is a Secured Party.

“Secured Parties”
shall mean, collectively, the Administrative Agent, the Collateral Agent, each
other Agent, the Lenders and each counterparty to a Hedging Agreement or
Treasury Services Agreement if at the date of entering into such Hedging
Agreement or Treasury Services Agreement such person was a Lender or an
Affiliate of a Lender and such person executes and delivers to the
Administrative Agent a letter agreement in form and substance acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent under the applicable Loan Documents and (ii) agrees to
be bound by the provisions of Sections 10.03 and 10.09 as if
it were a Lender.

“Securities Act”
shall mean the Securities Act of 1933.

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

“Security Agreement”
shall mean a Security Agreement substantially in the form of Exhibit M
among the Loan Parties and Collateral Agent for the benefit of the Secured Parties.

“Security Agreement
Collateral” shall mean all property pledged or granted as collateral
pursuant to the Security Agreement (a) on the Closing Date or (b) thereafter
pursuant to Section 5.11.

“Security Documents”
shall mean the Security Agreement, each Pledge Agreement, the Mortgages and
each other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest
in any property as collateral for the Secured Obligations, and all UCC or other
financing statements or instruments of perfection required by this Agreement,
the Security Agreement, any Mortgage or any other such security document or
pledge agreement to be filed with respect to the security in-

 42
 

 

 

terests in property and fixtures created pursuant to
the Security Agreement or any Mortgage and any other document or instrument
utilized to pledge or grant or purport to pledge or grant a security interest
or lien on any property as collateral for the Secured Obligations.

“Seller” shall
have the meaning assigned to such term in the first recital hereto.

“Senior Note Agreement”
shall mean any indenture, note purchase agreement or other agreement pursuant
to which the Senior Notes are issued as in effect on the Closing Date and
thereafter amended from time to time subject to the requirements of this Agreement.

“Senior Note Documents”
shall mean the Senior Notes, the Senior Note Agreement, the Senior Note
Guarantees and all other documents executed and delivered with respect to the
Senior Notes or the Senior Note Agreement.

“Senior Note Guarantees”
shall mean the guarantees of the Guarantors pursuant to the Senior Note
Agreement.

“Senior Notes”
shall mean Borrower’s 9.75% Senior Notes due 2014 issued pursuant to the Senior
Note Agreement and any registered notes issued by Borrower in exchange for, and
as contemplated by, such notes with substantially identical terms as such
notes.

“Senior Secured Leverage
Ratio” shall mean, at any date of determination, the ratio of (i) the
aggregate amount of the Obligations of Borrower and its Restricted Subsidiaries
on a consolidated basis in accordance with GAAP minus the
aggregate amount of cash and Cash Equivalents that would appear on the
consolidated balance sheet of Borrower and its Restricted Subsidiaries in
excess of Casino Bankroll, in each case as of such date of determination to (ii) Consolidated
EBITDA for the Test Period then most recently ended.

“Standby Letter of Credit”
shall mean any standby letter of credit or similar instrument issued for the
purpose of supporting (a) workers’ compensation liabilities of Borrower or
any of its Restricted Subsidiaries, (b) the obligations of third-party
insurers of Borrower or any of its Restricted Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third-party insurers to obtain such
letters of credit, (c) performance, payment, deposit or surety obligations
of Borrower or any of its Restricted Subsidiaries if required by a Requirement
of Law or in accordance with custom and practice in the industry or (d) Indebtedness
of Borrower or any of its Restricted Subsidiaries permitted to be incurred
under Section 6.01.

“Statutory Reserves”
shall mean for any Interest Period for any LIBOR Borrowing, the average maximum
rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest Period under Regulation D
by member banks of the United States Federal Reserve System in New York City
with deposits exceeding one billion dollars against “Eurocurrency liabilities”
(as such term is used in Regulation D). LIBOR Borrowings shall be deemed
to constitute LIBOR liabilities and to be subject to such reserve requirements
without benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Lender under Regulation D.

 43
 

 

 

“Subordinated Indebtedness”
shall mean Indebtedness of Borrower or any Guarantor that is by its terms (i.e. contractually) subordinated in right of payment (on
terms reasonably satisfactory to the Administrative Agent) to the Obligations
of Borrower and such Guarantor, as applicable.

“Subsidiary”
shall mean, with respect to any person (the “parent”)
at any date, (i) any person the accounts of which would be consolidated
with those of the parent in the parent’s consolidated financial statements if
such financial statements were prepared in accordance with GAAP as of such
date, (ii) any other corporation, limited liability company, association
or other business entity of which securities or other ownership interests
representing more than 50% of the voting power of all Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election
of the Board of Directors thereof are, as of such date, owned, controlled or
held by the parent and/or one or more subsidiaries of the parent, (iii) any
partnership (a) the sole general partner or the managing general partner
of which is the parent and/or one or more subsidiaries of the parent or (b) the
only general partners of which are the parent and/or one or more subsidiaries
of the parent and (iv) any other person that is otherwise Controlled by
the parent and/or one or more subsidiaries of the parent. Unless the context
requires otherwise, “Subsidiary” refers to a Subsidiary of Borrower.

“Substantial Project”
shall mean each capital project for which the aggregate amount of Expansion
Capital Expenditures made after the Closing Date exceeds $5,000,000.

“Substitute Lender”
shall have the meaning assigned to such term in Section 10.04(h).

“Survey” shall
mean a survey of any Mortgaged Property (and all improvements thereon) which is
(a) (i) prepared by a surveyor or engineer licensed to perform
surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated
(or redated) not earlier than six months prior to the date of delivery thereof
unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Property or
any easement, right of way or other interest in the Mortgaged Property has been
granted or become effective through operation of law or otherwise with respect
to such Mortgaged Property which, in either case, can be depicted on a survey,
in which events, as applicable, such survey shall be dated (or redated) after
the completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to
such date of delivery, or after the grant or effectiveness of any such
easement, right of way or other interest in the Mortgaged Property, (iii) certified
by the surveyor (in a manner reasonably acceptable to the Administrative Agent)
to the Administrative Agent, the Collateral Agent and the Title Company, (iv) complying
in all respects with the minimum detail requirements of the American Land Title
Association as such requirements are in effect on the date of preparation of
such survey and (v) sufficient for the Title Company to remove all
standard survey exceptions from the title insurance policy (or commitment)
relating to such Mortgaged Property and issue the endorsements of the type
required by Section 4.01(o)(iii) or (b) otherwise reasonably
acceptable to the Collateral Agent.

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“Swingline Commitment”
shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.17,
as the same may be reduced from time to time pursuant to Section 2.07
or Section 2.17. The amount of the Swingline Commitment shall
initially be $5,000,000, but shall in no event exceed the Revolving Commitment.

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

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

“Swingline Loan”
shall mean any loan made by the Swingline Lender pursuant to Section 2.17.

“Syndication Agent”
shall have the meaning assigned to such term in the preamble hereto.

“Taxes” shall
mean 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.

“Tax Period”
shall mean a period with respect to which a holder of Equity Interest must pay
U.S. federal income taxes (including estimated taxes) whether quarterly,
annually or otherwise.

“Tax Return”
shall mean all returns, statements, filings, attachments and other documents or
certifications required to be filed in respect of Taxes.

“Tender Offer”
shall have the meaning assigned to such term in the recitals hereto.

“Term Borrowing”
shall mean a Borrowing comprised of Tranche B Loans.

“Test Period”
shall mean, at any time, the four consecutive fiscal quarters of Borrower then
last ended (in each case taken as one accounting period) for which financial
statements have been or are required to be delivered pursuant to Section 5.01(a)
or (b).

“Title Company”
shall mean any title insurance company as shall be retained by Borrower and
reasonably acceptable to the Administrative Agent.

“Title Policy”
shall have the meaning assigned to such term in Section 4.01(o)(iii).

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“Total Leverage Ratio”
shall mean, at any date of determination, the ratio of Consolidated Net Total
Debt on such date to Consolidated EBITDA for the Test Period then most recently
ended.

“Total Unused
Revolving Commitment” shall mean, at any time, an amount equal to (x) the
aggregate amount of outstanding Revolving Commitments less
(y) the sum of (i) the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus (ii) the aggregate LC Exposure
at such time.

“TPSH Acquisition”
shall have the meaning assigned to such term in the recitals hereto.

“TPSH Agreement”
shall have the meaning assigned to such term in the recitals hereto.

“Tranche B
Commitment” shall mean, at any time, the outstanding Initial Tranche
B Commitment and the outstanding Delayed Draw Tranche B Commitment.

“Tranche B Lender”
shall mean a Lender with a Tranche B Commitment or an outstanding Tranche B
Loan.

“Tranche B Loan”
shall mean the term loans made by the Lenders to Borrower pursuant to Section 2.01(a).
Each Tranche B Loan shall be either an ABR Term Loan or a LIBOR Term Loan.

“Tranche B Maturity Date”
shall mean the date which is six years after the Closing Date or, if such date
is not a Business Day, the first Business Day thereafter.

“Tranche B Repayment Date”
shall have the meaning assigned to such term in Section 2.09.

“Transaction Documents”
shall mean the Acquisition Documents, the Existing Notes Redemption Notice and
all other agreements furnished pursuant to or in connection with the
Refinancing, the Existing Notes Redemption, the Tender Offer, the Senior Note
Documents and the Loan Documents.

“Transactions”
shall mean, collectively, the transactions to occur on or prior to the Closing
Date pursuant to the Transaction Documents, including (a) the consummation
of the Acquisitions; (b) the execution, delivery and performance of the
Loan Documents and the initial borrowings hereunder; (c) the Refinancing
(including the consummation of the Tender Offer and the Existing Notes
Redemption); (d) the issuance of the Senior Notes; and (e) the
payment of all fees and expenses (including prepayment or call premium) to be
paid on or prior to the Closing Date and owing in connection with the foregoing.

“Treasury Services
Agreement” shall mean any agreement relating to treasury, depositary
and cash management services or automated clearinghouse transfer of funds.

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“Truck Plaza EBITDA”
shall mean, for any period, net income of a truck stop gaming plaza plus, in each case to the extent deducted in calculating
such net income and without duplication:

(a)           any
gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by such truck
stop gaming plaza upon any non-ordinary course Asset Sale by such truck stop
gaming plaza;

(b)           earnings
resulting from any reappraisal, revaluation or write-up of assets;

(c)           any
extraordinary gain (or extraordinary loss), together with any related
provisions for taxes on any such gain (or the tax effect of any such loss),
recorded or recognized during such period by such truck stop gaming plaza;

(d)           the
cumulative effect of any change in accounting principles;

(e)           interest
expense;

(f)            depreciation
and amortization expense;

(g)           tax
expense; and

(h)           the
aggregate amount of all other non-cash charges (including (x) goodwill
impairment charges under Statement of Financial Accounting Standards No. 142
and (y) non-cash management compensation expense) (other than any non-cash
charge that results in an accrual of a reserve for cash charges in any future
period) for such period;

minus (x) the aggregate amount
of all non-cash items increasing net income of such truck stop gaming plaza
(other than the accrual of revenue or recording of receivables in the ordinary
course of business) and (y) interest income, in each case for such period.

“Type,” when
used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBOR Rate or the Alternate Base Rate.

“UCC” shall mean
the Uniform Commercial Code as in effect from time to time (except as otherwise
specified) in any applicable state or jurisdiction.

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

“Unrestricted
Subsidiary” shall mean any Subsidiary of Borrower that, at or prior
to the time of determination, shall have been designated by Borrower’s Board of
Directors as an Unrestricted Subsidiary; provided
that such Subsidiary (w) does not hold any Indebtedness or Equity
Interests of, or any Lien on any asset of, Borrower or any Restricted Subsidiary,
(x) is not a party to any agreement, contract, arrangement or understanding
with Borrower or any Restricted Subsidiary unless the terms of any such
agreement, contract, arrangement or understand-

 47
 

 

 

ing are no less favorable to Borrower or such Restricted
Subsidiary than those that might be obtained at the time from persons who are
not Affiliates of Borrower, (y) is a person with respect to which neither
Borrower nor any of its Restricted Subsidiaries has any direct or indirect
obligation (i) to subscribe for additional Equity Interests or (ii) to
maintain or preserve such person’s financial condition or to cause such person
to achieve any specified levels of operating results and (z) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of Borrower or any of its Restricted Subsidiaries. If, at any
time, any Unrestricted Subsidiary of Borrower would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of
such date. Borrower’s Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under Section 6.01
and Section 6.10 hereof calculated on a Pro Forma Basis as if such
designation had occurred at the beginning of the four-quarter reference period
and (ii) no Default or Event of Default would be in existence following
such designation. Borrower shall be deemed to make an Investment in each of its
Subsidiaries designated as an Unrestricted Subsidiary immediately following
such designation in an amount equal to the Investment in such Subsidiary and
its Subsidiaries immediately prior to such designation. Any such designation by
Borrower’s Board of Directors shall be evidenced to the Administrative Agent by
filing with the Administrative Agent a certified copy of the resolution of
Borrower’s Board of Directors giving effect to such designation and an Officers’
Certificate certifying that such designation complies with the foregoing
conditions and is permitted hereunder.

“Voting Stock”
shall mean, with respect to any person, any class or classes of Equity
Interests pursuant to which the holders thereof (together) have the general
voting power under ordinary circumstances to elect at least a majority of the
Board of Directors of such person.

“Wholly Owned Restricted
Subsidiary” shall mean, as to any person, (a) any corporation
100% of whose capital stock (other than directors’ qualifying shares) is at the
time owned by such person and/or one or more Wholly Owned Restricted
Subsidiaries of such person and (b) any partnership, association, joint
venture, limited liability company or other entity in which such person and/or
one or more Wholly Owned Restricted Subsidiaries of such person have a 100%
equity interest at such time.

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

“Withdrawal Period”
shall have the meaning assigned to such term in Section 10.04(i).

SECTION 1.02              Classification of Loans and Borrowings.
For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type
(e.g., a “LIBOR Loan”) or 

 48
 

 

 

by Class and Type (e.g.,
a “LIBOR Revolving Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Revolving Borrowing,” “Borrowing
of Tranche A Loans”) or by Type (e.g., a “LIBOR
Borrowing”) or by Class and Type (e.g., a “LIBOR
Revolving Borrowing”).

SECTION 1.03              Terms Generally. 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 (a) any
definition of or reference to any Loan Document, agreement, instrument or other
document herein 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), (b) any reference herein to any person
shall be construed to include such person’s successors and assigns, (c) the
words “herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, (e) any reference to any
law or regulation herein shall refer to such law or regulation as amended,
modified or supplemented from time to time, (f) 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, (g) “on,” when used with respect to the Mortgaged
Property or any property adjacent to the Mortgaged Property, means “on, in,
under, above or about” and (h) references to “the date hereof” shall mean
the date first set forth above.

SECTION 1.04              Accounting Terms; GAAP.
Except as otherwise expressly provided herein, all financial statements to be delivered
pursuant to this Agreement shall be prepared in accordance with GAAP as in
effect from time to time and all terms of an accounting or financial nature
shall be construed and interpreted in accordance with GAAP as in effect on the
date hereof, unless otherwise agreed to by Borrower and the Required Lenders. In
the event that any “Accounting Change” (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then Borrower and the Administrative
Agent agree to enter into negotiations in good faith in order to amend such
provisions of this Agreement so as to reflect equitably such Accounting Change
with the desired result that the criteria for evaluating Borrower’s financial
condition shall be the same after such Accounting Change as if such Accounting
Change had not occurred. Until such time as such amendment shall have been executed
and delivered by Borrower and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. “Accounting Change” refers to any change in
accounting principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or, if applicable, the Securities and
Exchange Commission (or successors thereto or agencies with similar functions).

 49
 

 

 

SECTION 1.05              Resolution of Drafting Ambiguities.
Borrower acknowledges and agrees that it and each other Loan Party was represented
by counsel in connection with the execution and delivery of the Loan Documents
to which it is a party, that it and its counsel reviewed and participated in
the preparation and negotiation hereof and thereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation hereof or thereof.

ARTICLE
II

THE
CREDITS

SECTION 2.01              Commitments. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, each Lender agrees, severally and not jointly:

(a)           (i) to
make a Tranche B Loan to Borrower on the Closing Date in the principal
amount not to exceed its Initial Tranche B Commitment and (ii) to
make a Delayed Draw Tranche B Loan to Borrower at any time or from time to
time after the Closing Date and prior to December 31, 2006, in an amount
equal to the portion of such Lender’s Delayed Draw Tranche B Commitment as
requested by Borrower to be made on such day (subject to a maximum of two
drawings total) in the aggregate principal amount not to exceed such Lender’s
Delayed Draw Tranche B Commitment at any time outstanding; and

(b)           to
make Revolving Loans to Borrower, at any time and from time to time on or after
the Closing Date until the earlier of the Revolving Maturity Date and the termination
of the Revolving Commitment of such Lender in accordance with the terms hereof,
in an aggregate principal amount at any time outstanding that will not result
in such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment.

Amounts paid or prepaid in respect of Tranche B Loans
may not be reborrowed. Within the limits set forth in clause (b) above
and subject to the terms, conditions and limitations set forth herein, Borrower
may borrow, pay or prepay and reborrow Revolving Loans.

SECTION 2.02              Loans.

(a)           Each
Loan (other than Swingline Loans) shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided that
the failure of any Lender to make its Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). Except for Loans deemed
made pursuant to Section 2.18(e)(ii), (x) ABR Loans (other
than Swingline Loans) comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $250,000 and not less than
$500,000 or (ii) equal to the remaining available balance of the
applicable Commitments and (y) the LIBOR Loans comprising any Borrowing
shall be in an aggregate principal amount that is (i) an integral 

 50
 

 

 

multiple of $250,000 and not less than $500,000 or (ii) equal
to the remaining available balance of the applicable Commitments; provided that any Delayed Draw Tranche B
Loan shall be in an aggregate principal amount that is not less than $5.0
million.

(b)           Subject
to Sections 2.11 and 2.12, each Borrowing shall be comprised
entirely of ABR Loans or LIBOR Loans as Borrower may request pursuant to Section 2.03.
Each Lender may at its option make any LIBOR Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligation of Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided that Borrower shall not be
entitled to request any Borrowing that, if made, would result in more than
eight LIBOR Borrowings outstanding hereunder at any one time. For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Borrowings.

(c)           Except
with respect to Loans deemed made pursuant to Section 2.18(e)(ii),
each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds to such account in
New York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account as directed by Borrower in the applicable
Borrowing Request maintained with the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders.

(d)           Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent
may, in reliance upon such assumption, make available to Borrower on such date
a corresponding amount. If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is repaid
to the Administrative Agent at (i) in the case of Borrower, the interest
rate applicable at the time to the Loans comprising such Borrowing and (ii) in
the case of such Lender, the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement,
and Borrower’s obligation to repay the Administrative Agent such corresponding
amount pursuant to this Section 2.02(d) shall cease.

(e)           Notwithstanding
any other provision of this Agreement, Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest Period

 51
 

 

 

requested with respect thereto would end after the
Revolving Maturity Date or Tranche B Maturity Date, as applicable.

SECTION 2.03              Borrowing Procedure. To
request a Revolving Borrowing or Term Borrowing, Borrower shall deliver, by
hand delivery or telecopier (or telephonic notice promptly confirmed in
writing), an irrevocable duly completed and executed Borrowing Request to the
Administrative Agent (i) in the case of a LIBOR Borrowing, not later than
12:00 noon, New York City time, three Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than
12:00 noon, New York City time, on the date of the proposed Borrowing. Each
Borrowing Request shall be irrevocable and shall specify the following
information in compliance with Section 2.02:

(a)           whether
the requested Borrowing is to be a Borrowing of Revolving Loans or Tranche B
Loans (and if a Tranche B Loan, whether such Tranche B Loan constitutes a Delayed
Draw Tranche B Loan);

(b)           the
aggregate amount of such Borrowing;

(c)           the
date of such Borrowing, which shall be a Business Day;

(d)           whether
such Borrowing is to be an ABR Borrowing or a LIBOR Borrowing;

(e)           in
the case of a LIBOR Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term “Interest
Period”;

(f)            the
location and number of Borrower’s account to which funds are to be disbursed,
which shall comply with the requirements of Section 2.02(c); and

(g)           that
the conditions set forth in Sections 4.02(b)-(d) have been
satisfied as of the date of the notice.

If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested LIBOR Borrowing,
then Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

SECTION 2.04              Evidence of Debt; Repayment of Loans.

(a)           Promise
to Repay. Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Tranche B Lender, the principal
amount of each Tranche B Loan of such Tranche B Lender as provided in Section 2.09,
(ii) to the Administrative Agent for the account of each Revolving Lender,
the then unpaid principal amount of each Revolving Loan of such Revolving
Lender on the Revolving Maturity Date and (iii) to the 

 52
 

 

 

Swingline Lender, the then unpaid principal amount of
each Swingline Loan on the earlier of (x) the Revolving Maturity Date and (y) the
first date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least two Business Days after such Swingline Loan is
made; provided that on each date that a
Revolving Borrowing is made, Borrower shall repay all Swingline Loans that were
outstanding on the date such Borrowing was requested.

(b)           Lender
and Administrative Agent Records. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
Borrower to such Lender resulting from each Loan made by such Lender from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement. The Administrative Agent
shall maintain accounts in which it will record (i) the amount of each
Loan made hereunder, the Type and Class thereof and the Interest Period
applicable thereto; (ii) the amount of any principal or interest due and
payable or to become due and payable from Borrower to each Lender hereunder;
and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof. The
entries made in the accounts maintained pursuant to this paragraph shall
be prima facie evidence of the existence
and amounts of the obligations therein recorded; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
Borrower to repay the Loans in accordance with their terms.

(c)           Promissory
Notes. Any Lender by written notice to Borrower may request that Loans of
any Class made by it be evidenced by a promissory note. In such event,
Borrower shall prepare, execute and deliver to such Lender a promissory note payable
to the order of such Lender (or, if requested by such Lender, to such Lender
and its registered assigns) in the form of Exhibit K-1 or K-2,
as the case may be. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to Section 10.04)
be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).

SECTION 2.05              Fees.

(a)           Commitment
Fee. Borrower agrees to pay to the Administrative Agent for the account of
each  Lender a commitment fee (a “Commitment Fee”) equal to the Applicable
Fee per annum on the average daily unused amount of each Revolving Commitment
and Delayed Draw Tranche B Commitment of such Lender during the period from and
including the date hereof to but excluding the date on which such Commitment
terminates. Accrued Commitment Fees shall be payable in arrears (A) on the
last Business Day of March, June, September and December of each
year, commencing on September 29, 2006, and (B) on the date on which
such Commitment terminates. Commitment Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day); provided that the
Defaulting Lenders shall not be entitled to receive any Commitment Fee accrued
during a Default Period. For purposes of computing Commitment Fees with respect
to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to
be 

 53
 

 

 

used to the extent of the outstanding Revolving Loans
and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall
be disregarded for such purpose).

(b)           Administrative
Agent Fees. Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees payable in the amounts and at the times separately
agreed upon between Borrower and the Administrative Agent (the “Administrative Agent Fees”).

(c)           LC
and Fronting Fees. Borrower agrees to pay (i) to the Administrative
Agent for the account of each Revolving Lender a participation fee (“LC Participation Fee”) with respect to its
participations in Letters of Credit, which shall accrue at a rate equal to the
Applicable Margin from time to time used to determine the interest rate on
LIBOR Revolving Loans pursuant to Section 2.06 on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to Reimbursement Obligations) during the period from and including the Closing
Date to but excluding the later of the date on which such Lender’s Revolving
Commitment terminates and the date on which such Lender ceases to have any LC Exposure,
and (ii) to the Issuing Bank a fronting fee (“Fronting Fee”), which shall accrue at the rate of 0.25% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to Reimbursement Obligations) during the period from and
including the Closing Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank’s customary fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Accrued LC Participation Fees and Fronting
Fees shall be payable in arrears (i) on the last Business Day of March,
June, September and December of each year, commencing on September 29,
2006, and (ii) on the date on which the Revolving Commitments terminate. Any
such fees accruing after the date on which the Revolving Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank pursuant
to this paragraph shall be payable within 10 days after demand therefor. All
LC Participation Fees and Fronting Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

(d)           All
Fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, among the Lenders
(other than Defaulting Lenders during a Default Period with respect thereto),
except that Borrower shall pay the Fronting Fees directly to the Issuing Bank. Once
paid, none of the Fees shall be refundable under any circumstances.

SECTION 2.06              Interest on Loans.

(a)           ABR
Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each ABR Borrowing, including each Swingline Loan, shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin in effect from time to time.

(b)           LIBOR
Loans. Subject to the provisions of Section 2.06(c), the Loans comprising
each LIBOR Borrowing shall bear interest at a rate per annum equal to the Adjusted

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LIBOR Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin in effect from time to time.

(c)           Default
Rate. Notwithstanding the foregoing, during the continuance of a payment
Event of Default, the amount of overdue principal or interest shall, to the
extent permitted by applicable law, bear interest, after as well as before
judgment, at a per annum rate equal to 2% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section 2.06 (the “Default
Rate”).

(d)           Interest
Payment Dates. Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; provided that (i) interest
accrued pursuant to Section 2.06(c) shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment
of an ABR Revolving Loan or a Swingline Loan without a permanent reduction in
Revolving Commitments), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any LIBOR Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

(e)           Interest
Calculation. All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the
Alternate Base Rate shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate or Adjusted LIBOR Rate shall be
determined by the Administrative Agent in accordance with the provisions of
this Agreement and such determination shall be conclusive absent manifest
error.

SECTION 2.07              Termination and Reduction of Commitments.

(a)           Termination
of Commitments. The Initial Tranche B Commitments shall automatically
terminate at 5:00 p.m., New York City time, on the Closing Date. The
Delayed Draw Tranche B Commitments shall be automatically and permanently
reduced upon the making of a Delayed Draw Tranche B Loan by the aggregate
principal amount of such Loan and, to the extent any Delayed Draw Tranche B
Commitments remain outstanding at 5:00 p.m., New York City time, on December 31,
2006, such remaining Delayed Draw Tranche B Commitments shall automatically terminate
at such time. The Revolving Commitments, the Swingline Commitment and the LC
Commitment shall automatically terminate on the Revolving Maturity Date. Notwithstanding
the foregoing, all the Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on June 30, 2006, if the initial Credit Extension
shall not have occurred by such time.

(b)           Optional
Terminations and Reductions. At its option, Borrower may, at any time after
the date hereof, terminate, or from time to time permanently reduce, the Commitments
of any Class; provided that (i) each
reduction of the Commitments of any Class shall be in an amount that is an
integral multiple of $250,000 and not less than $500,000 and (ii) the Revolving
Commitments shall not be terminated or reduced if, after giving effect to any
concurrent 

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prepayment of the Revolving Loans in accordance with Section 2.10,
the aggregate amount of Revolving Exposures would exceed the aggregate amount
of Revolving Commitments.

(c)           Borrower
Notice. Borrower shall notify the Administrative Agent in writing of any
election to terminate or reduce the Commitments under Section 2.07(b)
at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by Borrower pursuant to
this Section shall be irrevocable; provided that a
notice of termination of the Commitments delivered by Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities,
in which case such notice may be revoked by Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class shall
be made ratably among the Lenders in accordance with their respective Commitments
of such Class.

SECTION 2.08              Interest Elections.

(a)           Generally.
Each Revolving Borrowing and Term Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter,
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a LIBOR Borrowing, may elect Interest
Periods therefor, all as provided in this Section. Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. Notwithstanding anything to the contrary,
Borrower shall not be entitled to request any conversion or continuation that,
if made, would result in more than eight LIBOR Borrowings outstanding hereunder
at any one time. This Section shall not apply to Swingline Loans, which
may not be converted or continued.

(b)           Interest
Election Notice. To make an election pursuant to this Section, Borrower
shall deliver, by hand delivery or telecopier (or telephonic notice promptly
confirmed in writing), a duly completed and executed Interest Election Request
to the Administrative Agent not later than the time that a Borrowing Request
would be required under Section 2.03 if Borrower were requesting a
Revolving Borrowing or Term Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each Interest Election Request
shall be irrevocable. Each Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i)      the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, or if outstanding Borrowings are being
combined, allocation to each resulting Borrowing (in which case the information
to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

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(ii)     the effective date of the election made
pursuant to such Interest Election Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be an
ABR Borrowing or a LIBOR Borrowing; and

(iv)    if the resulting Borrowing is a LIBOR
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term “Interest Period.”

If any such Interest Election Request requests a LIBOR
Borrowing but does not specify an Interest Period, then Borrower shall be
deemed to have selected an Interest Period of one month’s duration.

Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.

(c)           Automatic
Conversion to ABR Borrowing. If an Interest Election Request with respect
to a LIBOR Borrowing is not timely delivered prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing, the Administrative Agent or the
Required Lenders may require, by notice to Borrower, that (i) no
outstanding Borrowing may be converted to or continued as a LIBOR Borrowing and
(ii) unless repaid, each LIBOR Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09              Amortization of Term Borrowings.
Borrower shall pay to the Administrative Agent, for the account of the Tranche
B Lenders, (i) on September 29, 2006, $100,000, and (ii) on the
dates set forth on Annex I, or if any such date is not a Business
Day, on the immediately preceding Business Day (each such date, a “Tranche B Repayment Date”), a principal
amount of the Tranche B Loans (x) as is set forth on Annex I opposite
such date under the heading “Initial Tranche B Loan Amount” if no Delayed Draw
Tranche B Loans have been made on or before December 31, 2006 or (y) as
set forth on Annex I under the heading “Total Amount” if any Delayed
Draw Tranche B Loans have been made as of such date (in the case of clauses (x) and
(y) as adjusted from time to time pursuant to Section 2.10(h) and
in the case of clause (y) as may be further adjusted as provided on Annex I),
together in each case with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of such payment. To the extent not
previously paid, all Tranche B Loans shall be due and payable on the Tranche B
Maturity Date.

SECTION 2.10              Optional and Mandatory Prepayments of Loans.

(a)           Optional
Prepayments. Borrower shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, subject to the requirements
of this Section 2.10; provided that
each partial prepayment shall be in an amount that is an integral mul-

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tiple of $250,000 and not less than $500,000 or, if
less or if not such a multiple, the outstanding principal amount of such Borrowing.

(b)           Revolving
Loan Prepayments.

(i)      In
the event of the termination of all the Revolving Commitments, Borrower shall,
on the date of such termination, repay or prepay all its outstanding Revolving
Loans and all outstanding Swingline Loans and replace all outstanding Letters
of Credit or cash collateralize all outstanding Letters of Credit in accordance
with the procedures set forth in Section 2.18(i).

(ii)     In
the event of any partial reduction of the Revolving Commitments, then (x) at
or prior to the effective date of such reduction, the Administrative Agent
shall notify Borrower and the Revolving Lenders of the sum of all Lenders’
Revolving Exposures after giving effect thereto and (y) if the sum of all
Lenders’ Revolving Exposures would exceed the aggregate amount of Revolving
Commitments after giving effect to such reduction, then Borrower shall, on the
date of such reduction, first, repay or
prepay Swingline Loans, second, repay
or prepay the outstanding Revolving Loans and third,
replace outstanding Letters of Credit or cash collateralize outstanding Letters
of Credit in accordance with the procedures set forth in Section 2.18(i),
in an aggregate amount sufficient to eliminate such excess.

(iii)    In
the event that the sum of all Lenders’ Revolving Exposures exceeds the Revolving
Commitments then in effect, Borrower shall, without notice or demand, immediately
first, repay or prepay Swingline Loans, second, repay or prepay the outstanding Revolving Loans and third, replace outstanding Letters of Credit or cash collateralize
outstanding Letters of Credit in accordance with the procedures set forth in Section 2.18(i),
in an aggregate amount sufficient to eliminate such excess.

(iv)    In
the event that the aggregate LC Exposure exceeds the LC Commitment then in
effect, Borrower shall, without notice or demand, immediately replace
outstanding Letters of Credit or cash collateralize outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.18(i),
in an aggregate amount sufficient to eliminate such excess.

(c)           Asset
Sales. Not later than one Business Day following the receipt of any Net
Cash Proceeds of any Asset Sale by Borrower or any of its Restricted
Subsidiaries on or after the Closing Date, Borrower, shall make prepayments in
accordance with Sections 2.10(h) and (i) in an aggregate
amount equal to 100% of such Net Cash Proceeds; provided
that:

(i)      no such prepayment shall be required under
this Section 2.10(c)(i) with respect to (A) any Asset Sale
permitted by Section 6.06(a), (B) the disposition of property
which constitutes a Casualty Event, or (C) Asset Sales for fair market
value resulting in no more than $500,000 in Net Cash Proceeds per Asset Sale
(or series of related Asset Sales) and less than $3,000,000 in Net Cash
Proceeds in any fiscal year; provided that
clause (C) shall not apply in the case of any Asset Sale described in
clause (b) of the definition thereof; and

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(ii)     so long as no Default shall then exist or
would arise therefrom and the aggregate of such Net Cash Proceeds of Asset
Sales shall not exceed $5,000,000 in any fiscal year of Borrower, such proceeds
shall not be required to be so applied on such date to the extent that Borrower
shall have delivered an Officers’ Certificate to the Administrative Agent on or
prior to such date stating that such Net Cash Proceeds are expected to be
reinvested in fixed or capital assets within 270 days following the date
of such Asset Sale (which Officers’ Certificate shall set forth the estimates
of the proceeds to be so expended); provided that
if all or any portion of such Net Cash Proceeds is not so reinvested within
such 270-day period, such unused portion shall be applied on the last day
of such period as a mandatory prepayment as provided in this Section 2.10(c);
provided, further,
that if the property subject to such Asset Sale constituted Collateral, then
all property purchased with the Net Cash Proceeds thereof pursuant to this
subsection shall be made subject to the Lien of the applicable Security
Documents in favor of the Collateral Agent, for its benefit and for the benefit
of the other Secured Parties in accordance with Sections 5.11 and 5.12;

provided, further, that clauses (c)(i) and (ii) shall
not apply to any Net Cash Proceeds from Asset Sales pursuant to Section 6.06(g).

(d)           Debt
Issuance. Not later than one Business Day following the receipt of any Net
Cash Proceeds of any Debt Issuance by Borrower or any of its Restricted
Subsidiaries on or after the Closing Date, Borrower shall make prepayments in accordance
with Sections 2.10(h) and (i) in an aggregate amount equal
to 100% of such Net Cash Proceeds.

(e)           Special
Redemption. If the Pinon Acquisition has not been consummated on or prior
to September 29, 2006, Borrower shall make prepayments in accordance with Sections
2.10(h) and (i) in an aggregate amount equal to $14.5 million. If
the Texas Pelican portion of the TPSH Acquisition has not been consummated on
or prior to August 15, 2006, Borrower shall make prepayments in accordance
with Sections 2.10(h) and (i) in an aggregate amount equal to
$2.35 million. If the St. Helena portion of the TPSH Acquisition has not
been consummated on or prior to August 15, 2006, Borrower shall make
prepayments in accordance with Sections 2.10(h) and (i) in an
aggregate amount equal to $3.45 million.

(f)            Casualty
Events. Not later than one Business Day following the receipt of any Net
Cash Proceeds from a Casualty Event by Borrower or any of its Restricted Subsidiaries
on or after the Closing Date, Borrower shall make prepayments in accordance
with Sections 2.10(h) and (i) in an aggregate amount equal
to 100% of such Net Cash Proceeds; provided that:

(i)      so long as no Default shall then exist or
arise therefrom, such Net Cash Proceeds shall not be required to be so applied
on such date to the extent that (A) in the event such Net Cash Proceeds
shall not exceed $5.0 million, Borrower shall have delivered an Officers’
Certificate to the Administrative Agent on or prior to such date stating that
such Net Cash Proceeds are expected to be used, or (B) in the event that
such Net Cash Proceeds exceed $5.0 million, the Administrative Agent has
elected by notice to Borrower on or prior to such date to require such Net Cash
Proceeds to be used, in each 

 59
 

 

 

case, to
repair, replace or restore any property in respect of which such Net Cash Proceeds
were paid or to reinvest in other fixed or capital assets, no later than 270
days following the date of receipt of such Net Cash Proceeds; provided that if the property subject to such Casualty Event
constituted Collateral under the Security Documents, then all property
purchased with the Net Cash Proceeds thereof pursuant to this subsection shall
be made subject to the Lien of the applicable Security Documents in favor of
the Collateral Agent, for its benefit and for the benefit of the other Secured
Parties in accordance with Sections 5.11 and 5.12; and

(ii)     if any portion of such Net Cash Proceeds
shall not be so applied within such 270 day period, such unused portion shall
be applied on the last day of such period as a mandatory prepayment as provided
in this Section 2.10(f).

(g)           Excess
Cash Flow. No later than the earlier of (i) 90 days after the end
of each Excess Cash Flow Period and (ii) the date on which the financial
statements with respect to the fiscal year in which such Excess Cash Flow
Period occurs are delivered pursuant to Section 5.01(a), Borrower
shall make prepayments in accordance with Sections 2.10(h) and (i)
in an aggregate amount equal to 50% of Excess Cash Flow for the Excess Cash
Flow Period then ended.

(h)           Application
of Prepayments. Prior to any optional or mandatory prepayment hereunder,
Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to Section 2.10(i),
subject to the provisions of this Section 2.10(h). Any prepayments
of Tranche B Loans pursuant to Section 2.10(c), (d), (f)
or (g) shall be applied to reduce scheduled repayments required under Section 2.09
in inverse order of maturity. Any prepayments of Tranche B Loans pursuant to Section 2.10(a)
shall be applied to reduce scheduled repayments as Borrower shall direct. Any
prepayments of Tranche B Loans pursuant to Section 2.10(e) shall be
applied to reduce scheduled  repayments
required under Section 2.09 on a pro rata basis. Any prepayments
pursuant to Section 2.10(c), (d), (f) or (g) shall
be applied first to prepay Tranche B Loans. After application of mandatory
prepayments of Tranche B Loans described above in this Section 2.10(h)
and to the extent there are mandatory prepayment amounts remaining after such
application, the Revolving Commitments shall be permanently reduced ratably
among the Revolving Lenders in accordance with their applicable Revolving
Commitments in an aggregate amount equal to such excess, and Borrower shall comply
with Section 2.10(b).

Amounts to be applied
pursuant to this Section 2.10 to the prepayment of Tranche B Loans
and Revolving Loans shall be applied, as applicable, first to reduce outstanding
ABR Term Loans and ABR Revolving Loans, respectively. Any amounts remaining
after each such application shall be applied to prepay LIBOR Term Loans or
LIBOR Revolving Loans, as applicable. Notwithstanding the foregoing, if the
amount of any prepayment of Loans required under this Section 2.10
shall be in excess of the amount of the ABR Loans at the time outstanding (an “Excess Amount”), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the Excess Amount shall
be either (A) deposited in an escrow account on terms satisfactory to the
Collateral Agent and applied to the prepayment of LIBOR Loans on the last day
of the then 

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next-expiring Interest
Period for LIBOR Loans; provided that (i) interest
in respect of such Excess Amount shall continue to accrue thereon at the rate
provided hereunder for the Loans which such Excess Amount is intended to repay
until such Excess Amount shall have been used in full to repay such Loans and (ii) at
any time while a Default has occurred and is continuing, the Administrative
Agent may, and upon written direction from the Required Lenders shall, apply
any or all proceeds then on deposit to the payment of such Loans in an amount
equal to such Excess Amount or (B) prepaid immediately, together with any
amounts owing to the Lenders under Section 2.13.

(i)            Notice
of Prepayment. Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by written notice
of any prepayment hereunder (i) in the case of prepayment of a LIBOR
Borrowing, not later than 11:00 a.m., New York City time, three Business
Days before the date of prepayment, (ii) in the case of prepayment of an
ABR Borrowing (other than as provided in clause (iii)), not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment and (iii) in
the case of prepayment of a Swingline Loan, not later than 11:00 a.m., New
York City time, on the date of prepayment. Each such notice shall be
irrevocable; provided that, (x) if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.07,
then such notice of prepayment may be revoked if such termination is revoked in
accordance with Section 2.07 and (y) if a notice of prepayment
is given in connection with a prepayment under Section 2.10 (e),
such notice may be revoked if the Pinon Acquisition is consummated on or prior
to September 29, 2006. Each such notice shall specify the prepayment date,
the principal amount of each Borrowing or portion thereof to be prepaid and, in
the case of a mandatory prepayment, a reasonably detailed calculation of the
amount of such prepayment. Promptly following receipt of any such notice (other
than a notice relating solely to Swingline Loans), the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of
any Borrowing shall be in an amount that would be permitted in the case of a Credit
Extension of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing and otherwise in accordance with this Section 2.10.
Prepayments shall be accompanied by accrued interest to the extent required by Section 2.06.

SECTION 2.11              Alternate Rate of Interest.
If prior to the commencement of any Interest Period for a LIBOR Borrowing:

(a)           the
Administrative Agent determines (which determination shall be final and
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Rate for such Interest Period; or

(b)           the
Administrative Agent is advised in writing by the Required Lenders that the
Adjusted LIBOR Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;

 

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then the Administrative Agent shall give written
notice thereof to Borrower and the Lenders as promptly as practicable
thereafter and, until the Administrative Agent notifies Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective and (ii) if
any Borrowing Request requests a LIBOR Borrowing, such Borrowing shall be made
as an ABR Borrowing.

SECTION 2.12              Yield Protection.

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

(i)      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 any Lender (except any reserve requirement
reflected in the Adjusted LIBOR Rate) or the Issuing Bank;

(ii)     subject any Lender or the Issuing Bank 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 LIBOR Loan made by it,
or change the basis of taxation of payments to such Lender or the Issuing Bank
in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.15
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender or the Issuing Bank); or

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

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any LIBOR Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender, the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company, if any, 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
such Lender or the Issuing Bank hereunder (whether of principal, interest or
any other amount), then, upon request of such Lender or the Issuing Bank, Borrower
will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.

(b)           Capital
Requirements. If any Lender or the Issuing Bank determines (in good faith,
but in its sole absolute discretion) that any Change in Law affecting such
Lender or the Issuing Bank or any lending office of such Lender or such Lender’s
or the Issuing Bank’s holding company, if any, regarding capital requirements
has or would have the effect of reducing the rate of return on such Lender’s or
the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing
Bank’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which 

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such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s or the Issuing Bank’s policies and
the policies of such Lender’s or the Issuing Bank’s holding company with
respect to capital adequacy), then from time to time Borrower will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

(c)           Certificates
for Reimbursement. A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section 2.12 and
delivered to Borrower shall be conclusive absent manifest error. Borrower shall
pay such Lender or the Issuing Bank, 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 Issuing Bank
to demand compensation pursuant to this Section 2.12 shall not
constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation; provided that Borrower shall not
be required to compensate a Lender or the Issuing Bank pursuant to this Section for
any increased costs incurred or reductions suffered more than nine months prior
to the date that such Lender or the Issuing Bank, as the case may be, notifies
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’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) .

SECTION 2.13              Breakage Payments. In
the event of (a) the payment or prepayment, whether optional or mandatory,
of any principal of any LIBOR Loan earlier than the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b) the
conversion of any LIBOR Loan earlier than the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay
any Revolving Loan or Tranche B Loan on the date specified in any notice
delivered pursuant hereto or (d) the assignment of any LIBOR Loan earlier
than the last day of the Interest Period applicable thereto as a result of a
request by Borrower pursuant to Section 2.16(b), then, in any such
event, Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred, at
the Adjusted LIBOR Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the LIBOR market. A certificate of any Lender
setting forth in reasonable detail any amount or amounts that such Lender is
entitled to receive pursuant to this Section 2.13 shall be delivered
to Borrower 

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and shall be conclusive and binding absent manifest
error. Borrower shall pay such Lender the amount shown as due on any such
certificate within 5 days after receipt thereof.

SECTION 2.14              Payments Generally; Pro Rata Treatment; Sharing of
Setoffs.

(a)           Payments
Generally. Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or Reimbursement Obligations, or of amounts payable under Section 2.12,
2.13, 2.15 or 10.03, or otherwise) on or before the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 2:00 p.m., New York
City time), on the date when due, in immediately available funds, without
setoff, deduction or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
offices at Eleven Madison Avenue, New York, New York 10010, except payments to
be made directly to the Issuing Bank or Swingline Lender as expressly provided
herein and except that payments pursuant to Sections 2.12, 2.13,
2.15 and 10.03 shall be made directly to the persons entitled
thereto and payments pursuant to other Loan Documents shall be made to the persons
specified therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other person to the appropriate recipient
promptly following receipt thereof. If any payment under any Loan Document
shall be due on a day that is not a Business Day, unless specified otherwise,
the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments under each Loan Document
shall be made in dollars, except as expressly specified otherwise.

(b)           Pro
Rata Treatment.

(i)      Each
payment by Borrower of interest in respect of the Loans shall be applied to the
amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.

(ii)     Each
payment on account of principal of the Tranche B Loans shall be allocated among
the Tranche B Lenders pro rata based
on the principal amount of the Tranche B Loans held by the Tranche B Lenders. Each
payment by Borrower on account of principal of the Revolving Borrowings shall
be made pro rata according to the respective outstanding
principal amounts of the Revolving Loans then held by the Revolving Lenders.

(c)           Insufficient
Funds. If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, Reimbursement Obligations,
interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal and Reimbursement
Obligations then due hereunder, ratably among the 

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parties entitled thereto in accordance with the
amounts of principal and Reimbursement Obligations then due to such parties.

(d)           Sharing
of Setoff. If any Lender (and/or the Issuing Bank, which shall be deemed a “Lender”
for purposes of this Section 2.14(d)) shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or other Obligations resulting in
such Lender’s receiving payment of a proportion of the aggregate amount of its
Loans and accrued interest thereon or other Obligations greater than its pro  rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase
(for cash at face value) participations in the Loans and such other obligations
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 are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest; and

(ii)     the provisions of this paragraph 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 participations in LC Disbursements to
any assignee or participant, other than to Borrower or any Restricted
Subsidiary thereof (as to which the provisions of this paragraph shall apply).

Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable Requirements of Law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against any 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. If under applicable bankruptcy,
insolvency or any similar law any Secured Party receives a secured claim in
lieu of a setoff or counterclaim to which this Section 2.14(d) applies,
such Secured Party shall to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights to which a Lender
is entitled under this Section 2.14(d) to share in the benefits of
the recovery of setoff or counterclaim.

(e)           Borrower
Default. 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 Issuing Bank 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 Issuing Bank,
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 Issuing Bank, 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 Issuing Bank 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 Administra-

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tive Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

(f)            Lender
Default. If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.02(c), 2.14(e), 2.17(d), 2.18(d),
2.18(e) or 10.03(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

SECTION 2.15              Taxes.

(a)           Payments
Free of Taxes. Any and all payments by or on account of any obligation of
the Loan Parties 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 the Loan Parties
shall be required by applicable Requirements of 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 Issuing Bank, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the applicable Loan Party shall make such deductions and (iii) the
applicable Loan Party shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Requirements of Law.

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

(c)           Indemnification
by Borrower. Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 Business 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
Issuing Bank, 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 Issuing Bank (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender or the Issuing Bank, shall be final, conclusive and
binding on all parties 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.

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(e)           Status
of Lenders. Any Foreign Lender shall, to the extent it may lawfully do
so,  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 of America 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, in substantially the form of Exhibit Q,
or any other form approved by the Administrative Agent, 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
Requirements of 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 Requirements of
Law to permit Borrower to determine the withholding or deduction required to be
made.

(f)            Treatment
of Certain Refunds. If the Administrative Agent, a Lender or the Issuing
Bank determines, in its sole discretion, that it has received a refund of any
Indemnified 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, within 30 days from the date making such
determination, 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 Indemnified Taxes or Other Taxes
giving rise to such refund), net of all reasonable out-of-pocket expenses of
the Administrative Agent, such Lender or the Issuing Bank, 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
Issuing Bank, agrees to repay the amount paid over to Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the Issuing Bank in the
event the Administrative Agent, such Lender or the Issuing Bank is required to
repay such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent, any Lender or the Issuing Bank
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to Borrower or any other person. Notwithstanding
anything to the contrary, in no event will any Lender be required to pay any
amount to Borrower 

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the payment of which would place such Lender in a less
favorable net after-tax position than such Lender would have been in if the
additional amounts giving rise to such refund of any Indemnified Taxes or Other
Taxes had never been paid.

SECTION 2.16              Mitigation Obligations; Replacement of Lenders.

(a)           Designation
of a Different Lending Office. If any Lender requests compensation under Section 2.12
or requires Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such 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 such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.12 or 2.15,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment. A
certificate setting forth such costs and expenses submitted by such Lender to
Borrower shall be conclusive absent manifest error.

(b)           Replacement
of Lenders. If any Lender requests compensation under Section 2.12,
or is incurring or is reasonably expected to incur costs which are or would be
material in amount and are associated with a Gaming Authority’s investigation
of whether or not such Lender is a Qualified Person, 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 2.15, or if any
Lender defaults in its obligation to fund Loans hereunder, or if Borrower
exercises its replacement rights under Section 10.02(d), 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 10.04), all of its interests, rights
and obligations under this Agreement and the other Loan Documents to an
Eligible Assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided
that:

(i)      Borrower shall have paid to the
Administrative Agent the processing and recordation fee specified in Section 10.04(b);

(ii)     such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 2.13), assuming for
this purpose (in the case of a Lender being replaced pursuant to Section 10.02(d))
that the Loans of such Lender were being prepaid from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or Borrower (in
the case of all other amounts);

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(iii)    in the case of any such assignment resulting
from a claim for compensation under Section 2.12 or payments
required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments thereafter; and

(iv)    such assignment does not conflict with
applicable Requirements of Law.

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.

(c)           Defaulting
Lenders. Anything contained herein to the contrary notwithstanding, in the
event that any Revolving Lender or Lender with a Delayed Draw Tranche B
Commitment (“Defaulting Lender”)
defaults (a “Funding Default”) in
its obligation to fund any Revolving Loan or Delayed Draw Tranche B Loan, as
the case may be (a “Defaulted Loan”),
in accordance with Section 2.02, then after the occurrence and during
any Funding Default (a “Default
Period”) with respect to such Defaulting Lender, (i) upon the
Administrative Agent providing written consent (not to be unreasonably
withheld) (x) in the case of a Revolving Lender, such Defaulting Lender’s
Revolving Commitment and outstanding Revolving Loans and such Defaulting Lender’s
pro rata share of the LC Disbursements and (y) in the case of a Lender
with a Delayed Draw Tranche B Commitment, such Defaulting Lender’s Delayed Draw
Tranche B Commitment, in each case shall be excluded for purposes of
calculating the Commitment Fee in respect of any day during any Default Period
with respect to such Defaulting Lender, and upon the Administrative Agent
providing written consent (not to be unreasonably withheld), such Defaulting
Lender shall not be entitled to receive any Commitment Fee with respect to such
Defaulting Lender’s Revolving Commitment or Delayed Draw Tranche B Commitment
in respect of any Defaulted Loan with respect to such Defaulting Lender and (ii) any
portion of the Commitment Fee allocated to the Defaulting Lender shall be held
by Administrative Agent for the benefit of the Defaulting Lender and as
security (along with earnings, if any) for its obligations owed under this
Agreement to the Agents and the Lenders and when all such obligations
(contingent and otherwise) have been satisfied, any remainder shall be paid to
Borrower.

SECTION 2.17              Swingline Loans.

(a)           Swingline
Commitment. Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans to Borrower from time to time
during the Revolving Availability Period, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal
amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the sum
of the total Revolving Exposures exceeding the total Revolving Commitments; provided that the Swingline Lender shall not be required to
make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein,
Borrower may borrow, repay and reborrow Swingline Loans.

(b)           Swingline
Loans. To request a Swingline Loan, Borrower shall deliver, by hand
delivery or telecopier or facsimile, a duly completed and executed Borrowing
Request to the Administrative Agent and the Swingline Lender, not later than
2:00 p.m., New York City 

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time, on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which shall
be a Business Day) and the amount of the requested Swingline Loan. Each
Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower to an account as directed by Borrower in
the applicable Borrowing Request maintained with the Administrative Agent (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.18(e), by remittance to the
Issuing Bank) by 4:00 p.m., New York City time, on the requested date of
such Swingline Loan. Borrower shall not request a Swingline Loan if at the time
of or immediately after giving effect to the Credit Extension contemplated by
such request a Default has occurred and is continuing or would result therefrom.
Swingline Loans shall be made in minimum amounts of $100,000 and integral multiples
of $100,000 above such amount.

(c)           Prepayment.
Borrower shall have the right at any time and from time to time to repay any
Swingline Loan, in whole or in part, upon giving written notice to the
Swingline Lender and the Administrative Agent before 12:00 (noon), New York
City time, on the proposed date of repayment.

(d)           Participations.
The Swingline Lender may at any time in its discretion by written notice given
to the Administrative Agent (provided such
notice requirement shall not apply if the Swingline Lender and the
Administrative Agent are the same entity) not later than 11:00 a.m., New
York City time, on the next succeeding Business Day following such notice require
the Revolving Lenders to acquire participations on such Business Day in all or
a portion of the Swingline Loans then outstanding. Such notice shall specify
the aggregate amount of Swingline Loans in which Revolving Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender’s Pro Rata Percentage of such Swingline Loan or
Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever (so long as
such payment shall not cause such Lender’s Revolving Exposure to exceed such
Lender’s Revolving Commitment). Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.02(c) with
respect to Loans made by such Lender (and Section 2.02 shall apply,
mutatis mutandis, to the payment obligations
of the Revolving Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify Borrower of any participations in any
Swingline Loan acquired by the Revolving Lenders pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from Borrower (or another party on behalf of Borrower) in
respect of a Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent. Any such amounts received by 

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the Administrative Agent shall be promptly remitted by
the Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve Borrower of any default in the payment thereof.

SECTION 2.18              Letters of Credit.

(a)           General.
Subject to the terms and conditions set forth herein, Borrower may request the
Issuing Bank, and the Issuing Bank agrees, to issue Letters of Credit for its
own account or the account of a Restricted Subsidiary in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time from the Closing Date until 30 days prior to the Revolving
Maturity Date (provided that Borrower shall be a
co-applicant, and be jointly and severally liable, with respect to each Letter
of Credit issued for the account of a Restricted Subsidiary). The Issuing Bank
shall have no obligation to issue, and Borrower shall not request the issuance
of, any Letter of Credit at any time if after giving effect to such issuance,
the LC Exposure would exceed the LC Commitment or the total Revolving Exposure
would exceed the total Revolving Commitments. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by Borrower
to, or entered into by Borrower with, the Issuing Bank relating to any Letter
of Credit, the terms and conditions of this Agreement shall control.

(b)           Request
for Issuance, Amendment, Renewal, Extension; Certain Conditions and Notices.
To request the issuance of a Letter of Credit or the amendment, renewal or
extension of an outstanding Letter of Credit, Borrower shall deliver, by hand
or telecopier (or transmit by electronic communication, if arrangements for
doing so have been approved by the Issuing Bank on a case-by-case basis), an LC
Request to the Issuing Bank and the Administrative Agent not later than 11:00 a.m.
(New York City time) on the third Business Day preceding the requested date of
issuance, amendment, renewal or extension (or such later date and time as is
acceptable to the Issuing Bank).

A request for an initial issuance of a Letter of
Credit shall specify in form and detail satisfactory to the Issuing Bank:

(i)      the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day);

(ii)     the amount thereof;

(iii)    the expiry date thereof (which shall not be
later than the close of business on the Letter of Credit Expiration Date);

(iv)    the name and address of the beneficiary
thereof;

(v)     whether the Letter of Credit is to be
issued for its own account or for the account of one of its Restricted Subsidiaries
(provided that Borrower shall be a co-

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applicant, and
therefore jointly and severally liable, with respect to each Letter of Credit
issued for the account of a Restricted Subsidiary);

(vi)    the documents to be presented by such
beneficiary in connection with any drawing thereunder;

(vii)   the full text of any certificate to be
presented by such beneficiary in connection with any drawing thereunder; and

(viii)  such other matters as the Issuing Bank may require.

A request for an amendment, renewal or extension of
any outstanding Letter of Credit shall specify in form and detail satisfactory
to the Issuing Bank:

(i)      the Letter of Credit to be amended,
renewed or extended;

(ii)     the proposed date of amendment, renewal or
extension thereof (which shall be a Business Day);

(iii)    the nature of the proposed amendment,
renewal or extension; and

(iv)    such other matters as the Issuing Bank may require.

If requested by the Issuing Bank, Borrower also shall
submit a letter of credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and, upon issuance, amendment,
renewal or extension of each Letter of Credit, Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension, (i) the LC Exposure shall not exceed the LC Commitment, (ii) the
total Revolving Exposures shall not exceed the total Revolving Commitments and (iii) the
conditions set forth in Article IV in respect of such issuance,
amendment, renewal or extension shall have been satisfied. Unless the Issuing
Bank shall agree otherwise, no Letter of Credit shall be in an initial amount
less than $100,000, in the case of a Commercial Letter of Credit, or $250,000,
in the case of a Standby Letter of Credit.

Upon the issuance of any Letter of Credit or
amendment, renewal, extension or modification to a Letter of Credit, the
Issuing Bank shall promptly notify the Administrative Agent, who shall promptly
notify each Revolving Lender, thereof, and of the amount of such Lender’s
respective participation in such Letter of Credit pursuant to Section 2.18(d).
On the first Business Day of each calendar month, the Issuing Bank shall
provide to the Administrative Agent a report listing all outstanding Letters of
Credit and the amounts and beneficiaries thereof. The Administrative Agent
shall promptly notify each Revolving Lender on the last Business Day of each
quarter of the current quarter’s Letter of Credit amount.

(c)           Expiration
Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) in the case of a Standby Letter of Credit, (x) the
date which is one year after the date of the issuance of such Standby Letter of
Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (y) the Letter of Credit Expi-

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ration Date and (ii) in the case of a Commercial
Letter of Credit, (x) the date that is 180 days after the date of
issuance of such Commercial Letter of Credit (or, in the case of any renewal or
extension thereof, 180 days after such renewal or extension) and (y) the
Letter of Credit Expiration Date; provided that
notwithstanding the foregoing, Letters of Credit may expire later than the
Letter of Credit Expiration Date (but no later than the Revolving Maturity
Date) provided that Borrower has collateralized such Letters of Credit in an
amount equal to 102% of the aggregate amount available to be drawn under such
Letters of Credit by the date that is sixteen (16) days prior to the Revolving
Maturity Date on terms and conditions reasonably satisfactory to the Issuing
Bank, it being understood that no Lender shall be released from any of its
obligations to purchase participations or make Loans in respect of such Letters
of Credit until such Letters of Credit shall have expired or been terminated.

(d)           Participations.
By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) and without any further action on the part of the Issuing
Bank or the Lenders, the Issuing Bank hereby irrevocably grants to each Revolving
Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Revolving Lender’s Pro
Rata Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Revolving
Lender’s Pro Rata Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by Borrower on the date due as provided in Section 2.18(e),
or of any reimbursement payment required to be refunded to Borrower for any
reason. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, or expiration, termination or cash collateralization
of any Letter of Credit and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.

(e)           Reimbursement.

(i)      If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit,
Borrower shall reimburse such LC Disbursement by paying to the Issuing Bank an
amount equal to such LC Disbursement not later
than 3:00 p.m., New York City time, on the date that such LC Disbursement
is made if Borrower shall have received notice of such LC Disbursement prior to
11:00 a.m., New York City time, on such date, or, if such notice has not
been received by Borrower prior to such time on such date, then not later than
3:00 p.m., New York City time, on the Business Day immediately following
the day that Borrower receives such notice; provided that
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 that such payment be financed with
ABR Revolving Loans or Swingline Loans in an equivalent amount and, to the
extent so financed, Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Loans or Swingline
Loans.

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(ii)     If
Borrower fails to make such payment when due, the Issuing Bank shall notify the
Administrative Agent and the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from Borrower in
respect thereof and such Revolving Lender’s Pro Rata Percentage thereof. Each
Revolving Lender shall pay by wire transfer of immediately available funds to
the Administrative Agent not later than 2:00 p.m., New York City time, on
such date (or, if such Revolving Lender shall have received such notice later
than 12:00 noon, New York City time, on any day, not later than 11:00 a.m.,
New York City time, on the immediately following Business Day), an amount equal
to such Revolving Lender’s Pro Rata Percentage of the unreimbursed LC
Disbursement in the same manner as provided in Section 2.02(c) with
respect to Revolving Loans made by such Revolving Lender, and the Administrative
Agent will promptly pay to the Issuing Bank the amounts so received by it from
the Revolving Lenders. The Administrative Agent will promptly pay to the
Issuing Bank any amounts received by it from Borrower pursuant to the above
paragraph prior to the time that any Revolving Lender makes any payment
pursuant to the preceding sentence and any such amounts received by the
Administrative Agent from Borrower thereafter will be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made such
payments and to the Issuing Bank, as appropriate.

(iii)    If
any Revolving Lender shall not have made its Pro Rata Percentage of such LC
Disbursement available to the Administrative Agent as provided above, each of
such Revolving Lender and Borrower severally agrees to pay interest on such
amount, for each day from and including the date such amount is required to be
paid in accordance with the foregoing to but excluding the date such amount is
paid, to the Administrative Agent for the account of the Issuing Bank at (i) in
the case of Borrower, the rate per annum set forth in Section 2.18(h)
and (ii) in the case of such Lender, at a rate determined by the Administrative
Agent in accordance with banking industry rules or practices on interbank
compensation.

(f)            Obligations
Absolute. To the maximum extent permitted by applicable law, the
Reimbursement Obligation of Borrower as provided in Section 2.18(e)
shall be absolute, unconditional and irrevocable, and shall be paid and
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity
or enforceability of any Letter of Credit or this Agreement, or any term or
provision therein; (ii) any draft or other document presented under a
Letter of Credit being proved to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iii) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that fails to comply with the
terms of such Letter of Credit; (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.18, constitute a legal or
equitable discharge of, or provide a right of setoff against, the obligations
of Borrower hereunder; (v) the fact that a Default shall have occurred and
be continuing; or (vi) any material adverse change in the business,
property, results of operations, prospects or condition, financial or
otherwise, of Borrower and its Restricted Subsidiaries. To the maximum extent
permitted by applicable law, none of the Agents, the Lenders, the Issuing Bank
or any of their Affiliates shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit or
any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or 

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delay in transmission or delivery of any draft, notice
or other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by Borrower to the extent permitted by applicable
Requirements of Law) suffered by Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(g)           Disbursement
Procedures. The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit. The Issuing Bank shall promptly give written notice to the
Administrative Agent and Borrower of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve Borrower of its Reimbursement Obligation to the Issuing
Bank and the Revolving Lenders with respect to any such LC Disbursement (other
than with respect to the timing of such Reimbursement Obligation set forth in Section 2.18(e)).

(h)           Interim
Interest. If the Issuing Bank shall make any LC Disbursement, then, unless
Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest payable on demand, for
each day from and including the date such LC Disbursement is made to but excluding
the date that Borrower reimburses such LC Disbursement, at the rate per annum
determined pursuant to Section 2.06(c). Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to Section 2.18(e) to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.

(i)            Cash
Collateralization. If any Event of Default shall occur and be continuing,
on the Business Day that Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Lenders with LC Exposure representing greater than 50% of the total
LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, Borrower shall deposit on terms and in accounts satisfactory to the
Collateral Agent, in the name of the Collateral Agent and for the benefit of
the Revolving Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall be-

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come effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to Borrower described
in Section 8.01(g) or (h). Funds so deposited shall be
applied by the Collateral Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of outstanding Reimbursement
Obligations or, if the maturity of the Loans has been accelerated (but subject
to the consent of Revolving Lenders with LC Exposure representing greater than
50% of the total LC Exposure), be applied to satisfy other Obligations of
Borrower under this Agreement. If Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount plus any accrued interest or realized
profits with respect to such amounts (to the extent not applied as aforesaid)
shall be returned to Borrower within three Business Days after all Events of Default
have been cured or waived.

(j)            Additional
Issuing Banks. Borrower may, at any time and from time to time, designate
one or more additional Revolving Lenders to act as an issuing bank under the
terms of this Agreement, with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld), the Issuing Bank and such
Revolving Lender(s). Any Lender designated as an issuing bank pursuant to this
paragraph (j) shall be deemed (in addition to being a Revolving
Lender) to be the Issuing Bank with respect to Letters of Credit issued or to
be issued by such Revolving Lender, and all references herein and in the other
Loan Documents to the term “Issuing Bank” shall, with respect to such Letters
of Credit, be deemed to refer to such Revolving Lender in its capacity as
Issuing Bank, as the context shall require.

(k)           Resignation
or Removal of the Issuing Bank. The Issuing Bank may resign as Issuing Bank
hereunder at any time upon at least 30 days’ prior notice to the Lenders,
the Administrative Agent and Borrower. The Issuing Bank may be replaced at any
time by written agreement among Borrower, each Agent, the replaced Issuing Bank
and the successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank or any such additional
Issuing Bank. At the time any such resignation or replacement shall become
effective, Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.05(c). From and after
the effective date of any such resignation or replacement or addition, as
applicable, (i) the successor or additional Issuing Bank shall have all
the rights and obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit to be issued by it thereafter and (ii) references
herein to the term “Issuing Bank” shall be deemed to refer to such successor or
such addition or to any previous Issuing Bank, or to such successor or such
addition and all previous Issuing Banks, as the context shall require. After
the resignation or replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such resignation or replacement, but
shall not be required to issue additional Letters of Credit. If at any time
there is more than one Issuing Bank hereunder, Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Letter of Credit.

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(l)            Other.
The Issuing Bank shall be under no obligation to issue any Letter of Credit if

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

(ii)     the issuance of such Letter of Credit would
violate one or more policies of the Issuing Bank.

The Issuing Bank shall be under no obligation to amend
any Letter of Credit if (A) the Issuing Bank 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.

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES

Borrower represents and warrants to the Administrative
Agent, the Collateral Agent, the Issuing Bank and each of the Lenders (with
references to the Companies as of the Closing Date being references thereto
after giving effect to the Gameco Acquisition unless otherwise expressly
stated) on the date hereof (it being understood that the Transactions and the
Additional Transactions shall not be consummated until on or after the Closing
Date) and, except as otherwise stated to be as of a different date, as of the
date of each Credit Extension (including the Closing Date) that:

SECTION 3.01              Organization; Powers. Each
of Borrower and the Restricted Subsidiaries (a) is duly organized and validly
existing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to carry on its business as now conducted and
to own and lease its property and (c) is qualified and in good standing
(to the extent such concept is applicable in the applicable jurisdiction) to do
business in every jurisdiction where such qualification is required, except in
such jurisdictions where the failure to so qualify or be in good standing,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. There is no existing default under any
Organizational Document of Borrower or any of its Restricted Subsidiaries or
any event which, with the giving of notice or passage of time or both, would
constitute a default by any party thereunder.

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SECTION 3.02              Authorization; Enforceability.
The Transactions and the Additional Transactions to be entered into by each
Loan Party are within such Loan Party’s powers and have been duly authorized by
all necessary action on the part of such Loan Party. Each Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03              No Conflicts. Except as
set forth on Schedule 3.03, the Transactions and the Additional
Transactions (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority (including
Gaming Authorities), except (i) such as have been obtained or made and are
in full force and effect, (ii) filings necessary to perfect Liens created
by the Loan Documents and (iii) consents, approvals, registrations,
filings, permits or actions the failure to obtain or perform which could not
reasonably be expected to result in a Material Adverse Effect, (b) will
not violate the Organizational Documents of Borrower or any of its Restricted
Subsidiaries, (c) will not violate any Requirement of Law, (d) will
not violate or result in a default or require any consent or approval under any
indenture, agreement or other instrument binding upon Borrower or any of its
Restricted Subsidiaries or its property, or give rise to a right thereunder to
require any payment to be made by Borrower or any of its Restricted Subsidiaries,
except for violations, defaults or the creation of such rights that could not
reasonably be expected to result in a Material Adverse Effect, and (e) will
not result in the creation or imposition of any Lien on any property of any
Loan Party, except Liens created by the Loan Documents and Permitted Liens.

SECTION 3.04              Financial Statements; Projections.

(a)           Historical
Financial Statements. Borrower has delivered to the Lenders the
consolidated balance sheets and related statements of operations, stockholders’
equity and cash flows of Borrower (i) as of and for the fiscal years ended
December 31, 2005, 2004 and 2003, audited by and accompanied by the
unqualified opinion of Deloitte & Touche LLP, independent registered
public accountants, and (ii) as of and for the three-month period ended March 31,
2006 and for the comparable period of the preceding fiscal year, in each case,
certified by the chief financial officer of Borrower. Such financial statements
and all financial statements delivered pursuant to Sections 5.01(a),
(b) and (c) have been prepared in accordance with GAAP and
present fairly and accurately in all material respects the financial condition
and results of operations and cash flows of Borrower as of the dates and for
the periods to which they relate.

(b)           No
Liabilities. Except as set forth in the financial statements referred to in
Section 3.04(a), there are no liabilities of any Company of any
kind, whether accrued, contingent, absolute, determined, determinable or
otherwise, which could reasonably be expected to result in a Material Adverse
Effect, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than
liabilities under the Loan Documents and the Senior Note Documents. Since December 31,
2005, there has been no event, change, circumstance or occurrence that, individually
or in the aggregate, has had or could reasonably be expected to result in a
Material Adverse Effect (other than any such 

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event, change, circumstance or occurrence that the
Required Revolving Lenders or the Required Delayed Draw Tranche B Lenders, as
applicable have duly waived).

(c)           Pro
Forma Financial Statements. Borrower has delivered to the Lenders Borrower’s
unaudited pro forma consolidated balance sheet and
statements of operations and cash flows and pro forma
EBITDA, for the fiscal year ended December 31, 2005, and as of and for the
three-month period ended March 31, 2006, in each case after giving effect
to the Transactions and the Additional Transactions as if they had occurred on
such date in the case of the balance sheet and as of the beginning of all
periods presented in the case of the statements of operations and cash flows. Such
pro forma financial statements have been
prepared in good faith by the Loan Parties, based on the assumptions stated
therein (which assumptions are believed by the Loan Parties on the date hereof
and on the Closing Date to be reasonable), are based on the best information
available to the Loan Parties as of the date of delivery thereof, accurately
reflect all adjustments required to be made to give effect to the Transactions
and the Additional Transactions, and in accordance with Regulation S-X, and
present fairly in all material respects the pro forma
consolidated financial position and results of operations of Borrower as of
such date and for such periods, assuming that the Transactions and the
Additional Transactions had occurred at such dates.

(d)           Forecasts.
The forecasts of financial performance of Borrower and its subsidiaries
furnished to the Lenders have been prepared in good faith by Borrower and based
on assumptions believed by Borrower to be reasonable.

SECTION 3.05              Properties.

(a)           Generally.
Each Company has good title to, or valid leasehold interests in, all its
property material to its business, free and clear of all Liens except for, in
the case of Collateral, Permitted Liens and, in the case of all other material
property, Permitted Liens and minor irregularities or deficiencies in title
that, in the aggregate, do not interfere with its ability to conduct its
business as currently conducted or to utilize such property for its intended
purpose. The property of the Companies, taken as a whole, (i) is in good
operating order, condition and repair (ordinary wear and tear and casualty and
condemnation excepted with respect to which the Administrative Agent has been
made aware) and (ii) constitutes all the property which is required for
the business and operations of the Companies as presently conducted.

(b)           Real
Property. Schedules 8(a) and 8(b) to the Perfection Certificate
dated the Closing Date contain a true and complete list of each interest in
Real Property (i) owned by any Company as of the Closing Date and
describes the type of interest therein held by such Company and whether such
owned Real Property is leased and if leased whether the underlying Lease
contains any option to purchase all or any portion of such Real Property or any
interest therein or contains any right of first refusal relating to any sale of
such Real Property or any portion thereof or interest therein and (ii) leased,
subleased or otherwise occupied or utilized by any Company, as lessee,
sublessee, franchisee or licensee, as of the Closing Date and describes the
type of interest therein held by such Company and, in each of the cases described
in clauses (i) and (ii) of this Section 3.05(b), whether
any Lease requires the consent of the landlord or tenant thereunder, or other
party thereto, to the Transactions. Schedule 8(b) to the Perfection
Certifi-

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cate also lists each unexercised option to purchase
Real Property which option is owned by any Company.

(c)           No
Casualty Event. No Company has received any notice of, nor has any actual
or constructive knowledge of, the occurrence or pendency or contemplation of
any Casualty Event affecting all or any portion of its property. No mortgage
encumbers improved Real Property that is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards within the meaning of the National Flood Insurance Act of
1968 unless flood insurance available under such Act has been obtained in accordance
with Section 5.04.

(d)           Collateral.
Each Loan Party owns or has rights to use all of the Collateral and all rights
with respect to any of the foregoing used in, necessary for or material to such
Loan Party’s business as currently conducted. The use by such Loan Party of
such Collateral and all such rights with respect to the foregoing do not
infringe on the rights of any person other than such infringement which could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. To the actual or constructive knowledge of the Loan
Parties, no claim has been made and remains outstanding that any Loan Parties’
use of any Collateral does or may violate the rights of any third party that
could, individually or in the aggregate with other such claims, reasonably be
expected to result in a Material Adverse Effect.

SECTION 3.06              Intellectual Property.

(a)           Ownership/No
Claims. Each Loan Party owns, or is licensed to use, all patents, patent
applications, trademarks, trade names, service marks, copyrights, technology,
trade secrets, proprietary information, domain names, know-how and processes
necessary for the conduct of its business as currently conducted (the “Intellectual Property”), except for those
the failure to own or license which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect. To the
actual or constructive knowledge of the Loan Parties, no claim has been
asserted and is pending by any person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does Borrower know of any valid basis for any such claim. The use
of such Intellectual Property by each Loan Party does not infringe the rights
of any person, except for such claims and infringements that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

(b)           Registrations.
Except pursuant to licenses and other user agreements entered into by each Loan
Party in the ordinary course of business that are listed in Schedule 12(a)
or 12(b) to the Perfection Certificate, on and as of the Closing Date (i) each
Loan Party owns and possesses the right to use, and has done nothing to
authorize or enable any other person to use, any copyright, patent or trademark
(as such terms are defined in the Security Agreement) listed in Schedule 12(a)
or 12(b) to the Perfection Certificate and (ii) all registrations
listed in Schedule 12(a) or 12(b) to the Perfection Certificate
are valid and in full force and effect.

(c)           No
Violations or Proceedings. To Borrower’s knowledge, on and as of the
Closing Date, there is no material violation by others of any right of any Loan
Party with respect 

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to any copyright, patent or trademark listed in Schedule
12(a) or 12(b) to the Perfection Certificate pledged by it under the
name of any Loan Party.

SECTION 3.07              Equity Interests and Subsidiaries.

(a)           Equity
Interests. Schedules 1(a) and 10(a) to the Perfection
Certificate dated the Closing Date set forth a list of (i) all the
Subsidiaries of Borrower and their jurisdictions of organization as of the
Closing Date and (ii) the number of each class of its Equity Interests
authorized, and the number outstanding, on the Closing Date and the number of
shares covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the Closing Date. All Equity Interests of each
Company are duly and validly issued and are fully paid and non-assessable, and,
other than the Equity Interests of Borrower, are owned by Borrower, directly or
indirectly through Wholly Owned Restricted Subsidiaries. Each Loan Party is the
record and beneficial owner of, and has good and marketable title to, the
Equity Interests pledged by it under the Security Agreement, free of any and
all Liens, rights or claims of other persons, except the security interest
created by the Security Agreement and Permitted Liens, and there are no
outstanding warrants, options or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or property
that is convertible into, or that requires the issuance or sale of, any such
Equity Interests.

(b)           No
Consent of Third Parties Required. Except as set forth on Schedule
3.07(b), no consent of any person including any other general or limited
partner, any other member of a limited liability company, any other shareholder
or any other trust beneficiary is necessary or reasonably desirable (from the
perspective of a secured party) in connection with the creation, perfection or
first priority status of the security interest of the Collateral Agent in any
Equity Interests pledged to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement or the exercise by the Collateral Agent of
the voting or other rights provided for in the Security Agreement or the exercise
of remedies in respect thereof.

(c)           Organizational
Chart. An accurate organizational chart, showing the ownership structure of
Borrower and each Subsidiary on the Closing Date, and after giving effect to
the Transactions, is set forth on Schedule 10(a) to the Perfection Certificate
dated the Closing Date.

SECTION 3.08              Litigation; Compliance with Laws.
There are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority now pending or, to the knowledge of any Loan Party,
threatened against or affecting any Company or any business, property or rights
of any Company (i) that involve any Loan Document or any of the Transactions
or Additional Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, in the aggregate, to result in a Material Adverse
Effect. Except for matters covered by Section 3.18, no Company or
any of its property is in violation of, nor will the continued operation of its
property as currently conducted violate, any Requirements of Law (including any
zoning or building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting any Company’s Real Property or
is in default with respect to any Requirement of Law, 

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where such violation or default, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.09              Agreements. No Company
is in default in any manner under any provision of any indenture or other
agreement or instrument evidencing Indebtedness, or any other agreement or
instrument to which it is a party or by which it or any of its property is or
may be bound, where such default could reasonably be expected to result in a
Material Adverse Effect, and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute such a default. Schedule 3.09
accurately and completely lists all agreements that are material to Borrower
and its Subsidiaries taken as a whole (other than leases of Real Property set
forth on Schedule 8(a) or 8(b) to the Perfection Certificate
dated the Closing Date and documents related to the Existing Notes) to which
any Company is a party which are in effect on the Closing Date in connection
with the operation of the business conducted thereby and as of the Closing
Date, Borrower has delivered to the Administrative Agent complete and correct
copies of all such material agreements, including any amendments, supplements
or modifications with respect thereto, and all such agreements are in full
force and effect.

SECTION 3.10              Federal Reserve Regulations.
No Company is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying Margin
Stock. No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X. The pledge of the Securities Collateral pursuant to the
Security Agreement does not violate such regulations.

SECTION 3.11              Investment Company Act.
No Company is an “investment company” or a company “controlled” by an “investment
company,” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended.

SECTION 3.12              Use of Proceeds. Borrower
will use the proceeds of (a) the Initial Tranche B Loans and the net cash
proceeds from the Senior Notes to finance the Transactions and the Additional
Transactions and pay related premiums, fees and expenses, (b) the
Revolving Loans and Swingline Loans after the Closing Date for general
corporate purposes (including working capital, Capital Expenditures,
Investments and to effect Permitted Acquisitions) and (c) the Delayed Draw
Tranche B Loans to make Expansion Capital Expenditures.

SECTION 3.13              Taxes. Each Company has
(a) timely filed or caused to be timely filed all federal Tax Returns and
all material state, local and foreign Tax Returns or materials required to have
been filed by it and all such Tax Returns are true and correct in all material
respects and (b) duly and timely paid, collected or remitted or caused to
be duly and timely paid, collected or remitted all Taxes (whether or not shown
on any Tax Return) due and payable, collectible or remittable by it and all
assessments received by it, except Taxes (i) that are being contested in
good faith by appropriate proceedings and for which such Company has set aside
on its books adequate reserves in accordance with GAAP and (ii) the
nonpayment of which could not, in the aggregate, have a Material Adverse Effect.
Each Company has made adequate provision in accordance with GAAP for all Taxes
not yet due and payable. Each Company is unaware of 

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any proposed or pending tax assessments, deficiencies
or audits that could be reasonably expected to, in the aggregate, result in a
Material Adverse Effect. No Loan Party has ever “participated” in an undisclosed
“reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4,
except as could not be reasonably expected to, individually or in the
aggregate, result in a Material Adverse Effect.

SECTION 3.14              No Material Misstatements.
No information, report, financial statement, certificate, Borrowing Request, LC
Request, exhibit or schedule furnished by any Company to the Administrative
Agent or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto, taken as a whole, or the Confidential
Information Memorandum contained or contains any material misstatement of fact
or omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were or are made,
not misleading as of the date such information is dated or certified; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, Borrower represents only that it acted in
good faith and utilized reasonable assumptions it believed to be reasonable at
the time of the preparation of such information, report, financial statement,
exhibit or schedule, and that the actual results during the period or periods
covered by such forecast or projection may differ from the projected or forecasted
results.

SECTION 3.15              Labor Matters. As of
the Closing Date, there are no strikes, lockouts or slowdowns against any
Company pending or, to the knowledge of any Company, threatened. The hours
worked by and payments made to employees of any Company have not been in
violation of the Fair Labor Standards Act of 1938, as amended, or any other
applicable federal, state, local or foreign law dealing with such matters in
any manner which could reasonably be expected to result in a Material Adverse
Effect. All payments due from any Company, or for which any claim may be made
against any Company, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Company except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. The consummation of the
Transactions will not give rise to any right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which any
Company is bound.

SECTION 3.16              Solvency. Immediately
after the consummation of the Transactions and the Additional Transactions to
occur on the Closing Date and immediately following the making of each Loan and
after giving effect to the application of the proceeds of each Loan, (a) the
fair value of the properties of each Loan Party (individually and on a
consolidated basis with its Subsidiaries after giving effect to all rights of
contribution) will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of each
Loan Party (individually and on a consolidated basis with its Subsidiaries
after giving effect to all rights of contribution) will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party
(individually and on a consolidated basis with its Subsidiaries after giving
effect to all rights of contribution) will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party
(individually and on a consolidated basis with its Subsidiaries after giving
effect to all rights of contribution)

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will not have unreasonably small capital with which to
conduct its business in which it is engaged as such business is conducted at
such time and is proposed to be conducted following such time.

SECTION 3.17              Employee Benefit Plans.
Each Company and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan.
No ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events, could reasonably be expected to
result in material liability of any Company or any of its ERISA Affiliates or
the imposition of a Lien on any of the property of any Company. The present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $1,000,000 the fair
market value of the property of all such underfunded Plans. Using actuarial assumptions
and computation methods consistent with subpart I of subtitle E of Title IV of
ERISA, the aggregate liabilities of each Company or its ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan, could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.18              Environmental Matters.

(a)           Except
as, individually or in the aggregate, could not reasonably be expected to
result in loss, liability or expense to any Loan Party in excess of $5,000,000:

(i)      The Companies and their businesses,
operations and Real Property are in compliance with, and the Companies have no
liability under, any applicable Environmental Law; and under the currently
effective business plan of the Companies, no expenditures (other than
expenditures for ongoing registration, tank testing, waste water permits and
related testing, tank permits and environmental monitoring associated with routine
business operations at all Company locations) or operational adjustments will
be required in order to comply with applicable Environmental Laws during the
next five years;

(ii)     The Companies have obtained all
Environmental Permits required for the conduct of their businesses and operations,
and the ownership, operation and use of their property, under Environmental
Law, all such Environmental Permits are valid and in good standing and, under
the currently effective business plan of the Companies, no expenditures (other
than expenditures for ongoing registration, tank testing, waste water permits
and related testing, tank permits and environmental monitoring associated with
routine business operations at all Company locations) or operational
adjustments will be required in order to renew or modify such Environmental
Permits during the next five years;

(iii)    There has been no Release or threatened
Release of Hazardous Material on, at, under or from any Real Property or
facility presently or formerly owned, leased or 

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operated by the Companies or their predecessors in interest that is
likely to result in liability to the Companies under any applicable
Environmental Law;

(iv)    There is no Environmental Claim pending or,
to the knowledge of the Companies, threatened against the Companies, or
relating to the Real Property currently or formerly owned, leased or operated
by the Companies or their predecessors in interest or relating to the
operations of the Companies, and to the knowledge of the Loan Parties, there
are no actions, activities, circumstances, conditions, events or incidents that
could form the basis of such an Environmental Claim; and

(v)     No person with an indemnity or contribution
obligation to the Companies relating to compliance with or liability under
Environmental Law is in default with respect to such obligation.

(b)           (i)            No
Company is obligated to perform any action or otherwise incur any material
expense under Environmental Law pursuant to any order, decree, judgment or
agreement by which it is bound or which it has assumed by contract, agreement
or operation of law, and no Company is conducting or financing any material
Response pursuant to any Environmental Law with respect to any Real Property or
any other location;

(ii)     No Real Property or facility owned, operated
or leased by the Companies and, to the knowledge of the Companies, no Real
Property or facility formerly owned, operated or leased by the Companies or any
of their predecessors in interest is (i) listed or proposed for listing on
the National Priorities List promulgated pursuant to CERCLA or (ii) listed
on the Comprehensive Environmental Response, Compensation and Liability
Information System promulgated pursuant to CERCLA or (iii) to the
knowledge of the Loan Parties, included on any similar list maintained by any
Governmental Authority including any such list relating to petroleum, in each
case which is likely to result in material liability to the Companies under
Environmental Law;

(iii)    No Lien has been recorded or, to the
knowledge of any Company, threatened under any Environmental Law with respect
to any Real Property or other assets of the Companies;

(iv)    The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
will not require any notification, registration, filing, reporting, disclosure,
investigation, remediation or cleanup pursuant to any Governmental Real
Property Disclosure Requirements or any other applicable Environmental Law; and

(v)     The Companies have made available to the
Lenders all material records and files in the possession, custody or control
of, or otherwise reasonably available to, the Companies concerning compliance
with or liability under Environmental Law, including those concerning the
actual or suspected existence of Hazardous Material at Real Property or
facilities currently or formerly owned, operated, leased or used by the Companies.

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SECTION 3.19              Insurance. Schedule 3.19
sets forth a true, complete and correct description of all insurance maintained
by each Company as of the Closing Date. All insurance maintained by the Companies
is in full force and effect, all premiums that are due and payable have been
duly paid, no Company has received notice of violation or cancellation thereof,
the Premises, and the use, occupancy and operation thereof, comply in all
material respects with all Insurance Requirements, and there exists no default
under any Insurance Requirement. Each Company has insurance in such amounts and
covering such risks and liabilities as are customary for companies of a similar
size engaged in similar businesses in similar locations.

SECTION 3.20              Security Documents.

(a)           Security
Agreement. The Security Agreement, when executed and delivered by the
parties thereto on the Closing Date, will be effective to create in favor of
the Collateral Agent for the benefit of the Secured Parties, legal, valid and
enforceable Liens on, and security interests in, the Security Agreement
Collateral and, when (i) financing statements and other filings in
appropriate form are filed in the offices specified on Schedule 7
to the Perfection Certificate and (ii) upon the taking of possession or
control by the Collateral Agent of the Security Agreement Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right,
title and interest of the grantors in the Security Agreement Collateral (other
than such Security Agreement Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant
jurisdiction), in each case subject to no Liens other than Permitted Liens.

(b)           Mortgages.
Each Mortgage, upon execution and delivery by the parties thereto on the
Closing Date, will be effective to create, in favor of the Collateral Agent,
for its benefit and the benefit of the Secured Parties, legal, valid and
enforceable Liens on, and security interests in, all of the Loan Parties’
right, title and interest in and to the Mortgaged Properties thereunder and the
proceeds thereof, subject only to Permitted Liens or other Liens acceptable to
the Collateral Agent. When the Mortgages are filed in the offices specified on Schedule 8(a)
to the Perfection Certificate dated the Closing Date (or, in the case of any
Mortgage executed and delivered after the date thereof in accordance with the
provisions of Sections 5.11 and 5.12, when such Mortgage is
filed in the offices specified in the local counsel opinion delivered with
respect thereto in accordance with the provisions of Sections 5.11
and 5.12), the Mortgages shall constitute fully perfected first priority
Liens on, and security interests in, all right, title and interest of the Loan
Parties in the Mortgaged Properties and the proceeds thereof, in each case
prior and superior in right to Liens of any other person, other than Liens
permitted by such Mortgage.

(c)           Pledge
Agreements. Each Pledge Agreement, when executed and delivered by the Loan
Parties party thereto, will be effective to create, in favor of the Collateral
Agent for the benefit of the Secured Parties, legal, valid and enforceable
Liens on, and security interests in, all of the Equity Interests and other
Collateral pledged thereby and, when (i) financing statements and other
filings in appropriate form are filed in the offices specified on Schedule 7
to the Perfection Certificate and (ii) upon the taking of possession by
the Collateral Agent of the Equity 

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Interests pledged thereby, the Liens created
by the Pledge Agreement shall constitute fully perfected Liens on, and security
interests in, all right, title and interest of the grantors in the applicable
Collateral (other than such Collateral in which a security interest cannot be
perfected under the UCC as in effect at the relevant time in the relevant jurisdiction),
in each case subject to no Liens other than Permitted Liens.

(d)           Valid
Liens. Each Security Document delivered pursuant to Sections 5.11
and 5.12 will, upon execution and delivery thereof, be effective to
create in favor of the Collateral Agent, for the benefit of the Secured
Parties, legal, valid and enforceable Liens on, and security interests in, all
of the Loan Parties’ right, title and interest in and to the Collateral
thereunder, and (i) when all appropriate filings or recordings are made in
the appropriate offices as may be required under applicable law and (ii) upon
the taking of possession or control by the Collateral Agent of such Collateral
with respect to which a security interest may be perfected only by possession
or control (which possession or control shall be given to the Collateral Agent
to the extent required by any Security Document), the Liens created by such
Security Document will constitute fully perfected Liens on, and security
interests in, all right, title and interest of the Loan Parties in such
Collateral, in each case subject to no Liens other than the applicable Permitted
Liens.

SECTION 3.21              Acquisition Documents; Representations and
Warranties in Acquisition Agreements. The Lenders
have been furnished true and complete copies of each Acquisition Agreement to
the extent executed and delivered on or prior to the Closing Date. All
representations and warranties of each Loan Party set forth in such Acquisition
Agreements were true and correct in all material respects as of the time such
representations and warranties were made and shall be true and correct in all
material respects as of the Closing Date as if such representations and warranties
were made on and as of such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.

SECTION 3.22              Anti-Terrorism Law.

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

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

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

 

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

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

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

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

(c)           No
Loan Party and, to the knowledge of Borrower, no broker or other agent of any
Loan Party acting in any capacity in connection with the Loans (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any person described in paragraph (b) above,
(ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

SECTION 3.23              Licenses and Permits.

(a)           (i) All
material licenses (including all necessary Gaming Licenses), permits and
consents and similar rights required from any federal, state or local
governmental body (including the Gaming Authorities and Liquor Authorities) for
the ownership, use or operation of the businesses or properties now owned or
operated by Borrower or any of its Restricted Subsidiaries have been validly
issued and are in full force and effect; (ii) Borrower and each of its
Restricted Subsidiaries is in compliance, in all material respects, with all of
the provisions thereof applicable to it; and (iii) none of such licenses,
permits or consents is the subject of any pending or, to Borrower’s knowledge,
threatened proceeding for the revocation, cancellation, suspension or
non-renewal thereof. As of the Closing Date (and as of each subsequent date on
which Borrower delivers to the Administrative Agent an updated schedule
pursuant to Section 5.16), set forth on Schedule 3.23 is a
complete and accurate list of all such material licenses, permits and consents
that are necessary and appropriate for the operation of Borrower’s businesses
and the businesses of its Restricted Subsidiaries, and such schedule identifies
the date by which an application for the renewal of such license, permit or
consent must be filed and describes the status of each such pending application.

(b)           Borrower
and its Restricted Subsidiaries have obtained as of the Closing Date all
required approvals from the Gaming Authorities and Liquor Authorities of the
transactions contemplated hereby and by the other Loan Documents.

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SECTION 3.24              Projects; Construction Contracts.
Schedule 3.24 hereto is a true and complete description of each Project
affecting any Real Property owned, leased, subleased or otherwise occupied or
utilized by any Company as of the Closing Date. Schedule 3.24 hereto is
a true and complete list of each Construction Contract as of the Closing Date
and, as of the Closing Date, Borrower has delivered to Administrative Agent
complete and correct copies of all such Construction Contracts (together with
all Plans and Specifications relating thereto), including all amendments,
supplements or modifications with respect thereto, and all such Construction
Contracts are in full force and effect.

ARTICLE
IV

CONDITIONS
TO CREDIT EXTENSIONS

SECTION 4.01              Conditions to Initial Credit Extension.
The obligation of each Lender and, if applicable, each Issuing Bank to fund the
initial Credit Extension requested to be made by it shall be subject to the
prior or concurrent satisfaction of each of the conditions precedent set forth
in this Section 4.01.

(a)           Loan
Documents. All legal matters incident to this Agreement, the Credit
Extensions hereunder and the other Loan Documents shall be satisfactory to the
Lenders, to the Issuing Bank and to the Administrative Agent and there shall
have been delivered to the Administrative Agent an executed counterpart of each
of the Loan Documents and the Perfection Certificate.

(b)           Corporate
Documents. The Administrative Agent shall have received:

(i)      a certificate of the secretary or
assistant secretary of each Loan Party dated the Closing Date, certifying (A) that
attached thereto is a true and complete copy of each Organizational Document of
such Loan Party certified (to the extent applicable) as of a recent date by the
Secretary of State of the state of its organization, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such person is a party and, in the case of Borrower,
the borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect and (C) as to the
incumbency and specimen signature of each officer executing any Loan Document
or any other document delivered in connection herewith on behalf of such Loan
Party (together with a certificate of another officer as to the incumbency and
specimen signature of the secretary or assistant secretary executing the
certificate in this clause (i));

(ii)     a certificate as to the good standing of
each Loan Party (in so-called “long-form” if available) as of a recent date,
from such Secretary of State (or other applicable Governmental Authority); and

(iii)    such other documents as the Lenders, the
Issuing Bank or the Administrative Agent may reasonably request.

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(c)           Officers’
Certificate. The Administrative Agent shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of Borrower, confirming compliance with the conditions
precedent set forth in this Section 4.01 and Sections 4.02(b),
(c) and (d).

(d)           Financings
and Other Transactions, etc.

(i)      The
Transactions shall have been consummated or shall be consummated simultaneously
on the Closing Date, in each case in all material respects in accordance with
the terms hereof and the terms of the Transaction Documents, without the waiver
or amendment of any such terms not approved by the Administrative Agent and the
Arrangers other than any waiver or amendment thereof that is not materially
adverse to the interests of the Lenders; provided that (x) with respect to
the Existing Notes Redemption, only the delivery of the Existing Notes
Redemption Notice and the deposit of funds with the trustee under and pursuant
to the terms of the indenture governing the Existing Notes is required on the
Closing Date and (y) the Pinon Acquisition and the TPSH Acquisition may be
consummated after the Closing Date.

(ii)     Borrower
shall have received not less than $210,000,000 in gross proceeds of the Senior
Notes, and the Senior Note Agreement shall be in form and substance reasonably
satisfactory to the Lenders.

(iii)    The
Additional Transactions shall have been consummated on the Closing Date.

(iv)    The
Lenders shall be satisfied with the management, the capitalization, the terms
and conditions of any equity arrangements and the corporate or other
organizational structure of the Companies (after giving effect to the
Transactions and the Additional Transactions) and any indemnities, employment
and other arrangements entered into in connection with the Transactions.

(v)     The
Refinancing shall have been consummated in full (other that with respect to
Existing Notes for which the Existing Notes Redemption Notice has been validly
delivered and for which funds have been deposited with the trustee under, and
pursuant to the terms of, the indenture governing the Existing Notes) to the
satisfaction of the Lenders with all liens in favor of the existing lenders
being unconditionally released; the Administrative Agent shall have received
evidence reasonably satisfactory to the Administrative Agent with respect to
all debt being refinanced in the Refinancing; and the Administrative Agent
shall have received from any person holding any Lien securing any such debt,
such UCC termination statements, mortgage releases, releases of assignments of
leases and rents, releases of security interests in Intellectual Property and
other instruments, in each case in proper form for recording, as the Administrative
Agent shall have reasonably requested to release and terminate of record the
Liens securing such debt.

(e)           Financial
Statements; Pro Forma Balance Sheet; Projections. The Lenders shall have
received and shall be satisfied with the form and substance of the financial
statements 

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described in Section 3.04 and
with the forecasts of the financial performance of Borrower and its
Subsidiaries.

(f)            Indebtedness
and Minority Interests. After giving effect to the Transactions and the
other transactions contemplated hereby, no Company shall have outstanding any
Indebtedness or preferred stock other than (i) the Loans and Credit
Extensions hereunder, (ii) the Senior Notes, (iii) the Indebtedness
listed on Schedule 6.01(b) and (iv) Indebtedness owed to
Borrower or any Guarantor.

(g)           Opinions
of Counsel. On the Closing Date, the Administrative Agent shall have
received (i) from Baker & Hostetler LLP, special counsel to
the Loan Parties, an opinion addressed to the Administrative Agent, the Agents,
the Issuing Bank and each of the Lenders and dated the Closing Date covering
the matters set forth in Exhibit N, (ii) from local counsel
listed on Schedule 4.01(g), opinions each of which shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders
and shall cover the perfection of the security interests granted pursuant to
the Security Documents and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request, and (iii) from
local gaming counsel reasonably satisfactory to the Administrative Agent,
opinions each of which shall be in form and substance reasonably satisfactory
to the Administrative Agent and the Lenders and shall cover Colorado,
Louisiana, Nevada and Virginia Gaming Laws and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
request.

(h)           Solvency
Certificate. The Administrative Agent shall have received a solvency
certificate in the form of Exhibit O, dated the Closing Date and
signed by the chief financial officer of Borrower.

(i)            Requirements
of Law. The Lenders shall be satisfied that Borrower, its Subsidiaries, the
Transactions and the Additional Transactions shall be in full compliance with
all material Requirements of Law, including Regulations T, U and X of the
Board, and shall have received satisfactory evidence of such compliance
reasonably requested by them.

(j)            Consents.
The Lenders shall be satisfied that all requisite Governmental Authorities (including
Gaming Authorities) and third parties shall have approved or consented to the
Transactions to be consummated on the Closing Date, and there shall be no
governmental or judicial action, actual or threatened, that has or would have,
singly or in the aggregate, a reasonable likelihood of restraining, preventing
or imposing burdensome conditions on the Transactions to be consummated on the
Closing Date or the other transactions contemplated hereby.

(k)           Litigation.
There shall be no litigation, public or private, or administrative proceedings,
governmental investigation or other legal or regulatory developments, actual or
threatened, that, singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or could materially and adversely affect
the ability of the Loan Parties to fully and timely perform their respective
obligations under the Transaction Documents, or the ability of the parties
hereto  to consummate the financings
contemplated hereby or the other Transactions or the Additional Transactions.

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(l)            Sources
and Uses. The sources and uses of the Loans shall be as set forth in Section 3.12.

(m)          Fees.
The Arrangers and Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses (including
half of the legal fees and expenses of Cahill Gordon & Reindel LLP, special counsel to the Agents, and
all of the fees and expenses of any local counsel, foreign counsel, appraisers,
consultants and other advisors) required to be reimbursed or paid by Borrower
hereunder or under any other Loan Document (it being understood that only 50%
of any legal fees and expenses of Cahill Gordon & Reindel LLP that relate to both this Agreement
and the Senior Notes offering shall be due and payable hereunder in accordance
with this Clause (m)).

(n)           Personal
Property Requirements. Except as required by Section 5.10 and
solely with respect to the items expressly referenced therein, the Collateral
Agent shall have received:

(i)      all certificates, agreements or
instruments representing or evidencing the 
certificated Securities Collateral and the Equity Interests pledged
under any Security Agreement accompanied by instruments of transfer and stock
powers undated and endorsed in blank have been delivered to the Collateral
Agent;

(ii)     the Intercompany Note executed by and among
Borrower and each of its Restricted Subsidiaries, accompanied by instruments of
transfer undated and endorsed in blank have been delivered to the Collateral
Agent;

(iii)    all other certificates, agreements,
including Control Agreements, or instruments necessary to perfect the
Collateral Agent’s security interest in all Chattel Paper, all Instruments, all
Deposit Accounts and all Investment Property of each Loan Party (as each such
term is defined in the Security Agreement and to the extent required by the Security
Agreement) have been delivered to the Collateral Agent;

(iv)    UCC financing statements in appropriate form
for filing under the UCC, filings with the United States Patent and Trademark
Office and United States Copyright Office and such other documents under
applicable Requirements of Law in each jurisdiction as may be necessary or appropriate
or, in the opinion of the Collateral Agent, desirable to perfect the Liens
created, or purported to be created, by the Security Documents and, with
respect to all UCC financing statements required to be filed pursuant to the
Loan Documents, evidence satisfactory to the Administrative Agent that Borrower
has retained, at its sole cost and expense, a service provider acceptable to
the Administrative Agent for the tracking of all such financing statements and
notification to the Administrative Agent, of, among other things, the upcoming
lapse or expiration thereof;

(v)     certified copies of UCC, United States
Patent and Trademark Office and United States Copyright Office, tax and
judgment lien searches, bankruptcy and pending lawsuit searches or equivalent
reports or searches, each of a recent date listing all effec-

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tive financing statements, lien notices or comparable
documents that name any Loan Party as debtor and that are filed in those state
and county jurisdictions in which any property of any Loan Party is located and
the state and county jurisdictions in which any Loan Party is organized or
maintains its principal place of business and such other searches that the
Collateral Agent deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Security Documents (other
than Permitted Liens or any other Liens acceptable to the Collateral Agent);

(vi)    with respect to each location set forth on Schedule 4.01(n)(vi),
a Landlord Access Agreement; provided that
no such Landlord Access Agreement shall be required with respect to any Real
Property that could not be obtained after the Loan Party that is the lessee of
such Real Property or owner of the inventory or other personal property Collateral
stored with the bailee thereof, as applicable, shall have used all commercially
reasonable efforts to do so; and

(vii)   evidence reasonably acceptable to the
Collateral Agent of payment or arrangements for payment by the Loan Parties of
all applicable recording taxes, fees, charges, costs and expenses required for
the recording of the Security Documents.

(o)           Real
Property Requirements. Except as required by Section 5.10 and
solely with respect to the items for the properties expressly referenced
therein, the Collateral Agent shall have received:

(i)      a Mortgage encumbering each Mortgaged
Property in favor of the Collateral Agent, for the benefit of the Secured
Parties, duly executed and acknowledged by each Loan Party that is the owner of
or holder of any interest in such Mortgaged Property, and otherwise in form for
recording in the recording office of each applicable political subdivision
where each such Mortgaged Property is situated, together with such certificates,
affidavits, questionnaires or returns as shall be required in connection with
the recording or filing thereof to create a lien under applicable Requirements
of Law, and such financing statements and any other instruments necessary to
grant a first priority mortgage lien under the laws of any applicable jurisdiction,
all of which shall be in form and substance reasonably satisfactory to
Collateral Agent;

(ii)     with respect to each Mortgaged Property,
such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as necessary to consummate the
Transactions or as shall reasonably be deemed necessary by the Collateral Agent
in order for the owner or holder of the fee or leasehold interest constituting
such Mortgaged Property to grant the Lien contemplated by the Mortgage with
respect to such Mortgaged Property;

(iii)    with respect to each Mortgage, a policy of
title insurance (or marked up title insurance commitment having the effect of a
policy of title insurance) insuring the Lien of such Mortgage as a valid first
mortgage Lien on the Mortgaged Property and fixtures described therein in the
amount equal to not less than 115% of the fair market value of such Mortgaged
Property and fixtures, which fair market value is set forth on Schedule 

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4.01(o)(iii)(A),
which policy (or such marked-up commitment) (each, a “Title Policy”) shall (A) be issued by
the Title Company, (B) to the extent necessary, include such reinsurance
arrangements (with provisions for direct access, if necessary) as shall be reasonably
acceptable to the Collateral Agent, (C) contain a “tie-in” or “cluster”
endorsement, if available under applicable law (i.e.,
policies which insure against losses regardless of location or allocated value
of the insured property up to a stated maximum coverage amount), (D) have
been supplemented by such endorsements (or where such endorsements are not
available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Collateral Agent) as shall be reasonably requested
by the Collateral Agent (including endorsements on matters relating to usury,
first loss, last dollar, zoning (other than as provided in Schedule
4.01(o)(iii)(B) with respect to which the Loan Parties shall have delivered
a PZR Report in form and substance reasonably acceptable to the Collateral
Agent), contiguity, revolving credit, doing business, non-imputation, public
road access, survey, variable rate, environmental lien, subdivision, mortgage
recording tax, separate tax lot and so-called comprehensive coverage over
covenants and restrictions), and (E) contain no exceptions to title other
than exceptions reasonably acceptable to the Collateral Agent;

(iv)    with respect to each Mortgaged Property,
such affidavits, certificates, information (including financial data) and
instruments of indemnification (including a so-called “gap” indemnification) as
shall be required to induce the Title Company to issue the Title Policy/ies and
endorsements contemplated above;

(v)     evidence reasonably acceptable to the
Collateral Agent of payment by Borrower of all Title Policy premiums, search
and examination charges, escrow charges and related charges, mortgage recording
taxes, fees, charges, costs and expenses required for the recording of the Mortgages
and issuance of the Title Policies referred to above;

(vi)    with respect to each Real Property or
Mortgaged Property, copies of all Leases in which Borrower or any Restricted
Subsidiary holds the lessor’s interest or other agreements relating to
possessory interests, if any. To the extent any of the foregoing affect any
Mortgaged Property, such agreement shall be subordinate to the Lien of the
Mortgage to be recorded against such Mortgaged Property, either expressly by
its terms or pursuant to a subordination, non-disturbance and attornment
agreement, and shall otherwise be reasonably acceptable to the Collateral
Agent;

(vii)   with respect to each Mortgaged Property, each
Loan Party shall have made all notifications, registrations and filings, to the
extent required by, and in accordance with, all Governmental Real Property
Disclosure Requirements applicable to such Mortgaged Property;

(viii)  Surveys with respect to each Mortgaged
Property;

(ix)    a completed Federal Emergency Management
Agency Standard Flood Hazard Determination with respect to each Mortgaged
Property;

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(x)     with respect to each Real Property that has
an existing Construction Contract, true and correct copies of each Construction
Contract and a complete set of the Plans and Specifications relating thereto;
together with copies of all permits and government approvals relating to the construction
and use of the Project;

(xi)    assignment of contract for each of the
Construction Contracts and the Plans and Specifications, duly executed by each
Loan Party that is party thereto and pursuant to which each such Loan Party
shall have assigned to the Collateral Agent, for the benefit of the Secured
Parties, all of such Loan Party’s right, title and interest in and to each such
Construction Contract, and which assignment shall have been consented to and
certified in writing by the other party(ies) to each such Construction Contract;

(xii)   lien waivers from each contractor and
subcontractor employed in connection with the construction of each Project, in
each case in form and substance reasonably acceptable to the Collateral Agent;

(xiii)  with respect to each Real Property that has an
existing Construction Contract, an agreement with an Inspecting Engineer of
recognized standing and reasonably acceptable to the Collateral Agent, by which
agreement such Inspecting Engineer agrees to assist the Collateral Agent in its
inspection of any Project during construction and provide such additional
services as the Collateral Agent may reasonably require at sole expense of
Borrower; and

(xiv)  with respect to each Real Property that has an
existing Construction Contract, evidence that Borrower or applicable Loan
Parties have caused a bonding company to issue a Construction Completion Bond.

(p)           Insurance.
The Administrative Agent shall have received a copy of, or a certificate as to
coverage under, the insurance policies required by Section 5.04 and
the applicable provisions of the Security Documents, each of which shall be
endorsed or otherwise amended to include a “standard” or “New York” lender’s
loss payable or mortgagee endorsement (as applicable) and shall name the
Collateral Agent, on behalf of the Secured Parties, as additional insured, in
form and substance reasonably satisfactory to the Administrative Agent.

(q)           USA
PATRIOT Act. The Lenders shall have received, sufficiently in advance of
the date hereof, all documentation and other information that may be required
by the Lenders in order to enable compliance with applicable “know your
customer” and anti-money laundering rules and regulations, including the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) including the information described in Section 10.13.

SECTION 4.02              Conditions to All Credit Extensions.
The obligation of each Lender and each Issuing Bank to make any Credit Extension
(including the initial Credit Extension) shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.

(a)           Notice.
The Administrative Agent shall have received a Borrowing Request as required by
Section 2.03 (or such notice shall have been deemed given in
accordance 

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with Section 2.03) if Loans are
being requested or, in the case of the issuance, amendment, extension or
renewal of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received an LC Request as required by Section 2.18(b) or,
in the case of the Borrowing of a Swingline Loan, the Swingline Lender and the
Administrative Agent shall have received a Borrowing Request as required by Section 2.17(b).

(b)           No
Default. Borrower and each other Loan Party shall be in compliance in all
material respects with all the terms and provisions set forth herein and in
each other Loan Document on its part to be observed or performed, and, at the
time of and immediately after giving effect to such Credit Extension and the
application of the proceeds thereof, no Default shall have occurred and be continuing
on such date.

(c)           Representations
and Warranties. Each of the representations and warranties made by Borrower
set forth in Article III hereof or by any Loan Party in any other
Loan Document shall be true and correct in all material respects (except that
any representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects) on and as of the
date of such Credit Extension with the same effect as though made on and as of
such date, except to the extent such representations and warranties expressly
relate to an earlier date.

(d)           No
Legal Bar. No order, judgment or decree of any Governmental Authority shall
purport to restrain any Lender from making any Loans to be made by it. No injunction
or other restraining order shall have been issued or shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.

Each of the delivery of a Borrowing Request or an LC
Request and the acceptance by Borrower of the proceeds of such Credit Extension
shall constitute a representation and warranty by Borrower that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the conditions
contained in Sections 4.02(b)-(d) have been satisfied. Borrower
shall provide such information (including calculations in reasonable detail of
the covenants in Section 6.10) as the Administrative Agent may
reasonably request to confirm that the conditions in Sections 4.02(b)-(d)
have been satisfied.

ARTICLE V

AFFIRMATIVE
COVENANTS

Borrower warrants, covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit have been canceled
or have expired and all amounts drawn thereunder have been reimbursed in full,
unless the Required 

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Lenders shall otherwise consent in writing,
Borrower will, and will cause each other Loan Party and their respective
Restricted Subsidiaries to:

SECTION 5.01              Financial Statements, Reports, etc.
Furnish to the Administrative Agent and each Lender:

(a)           Annual
Reports. As soon as available and in any event within 90 days (or such
earlier date on which Borrower is required to file a Form 10-K under
the Exchange Act) after the end of each fiscal year, beginning with the fiscal
year ending December 31, 2006, (i) the consolidated balance sheet of
Borrower as of the end of such fiscal year and related consolidated statements
of income, cash flows and stockholders’ equity for such fiscal year, in comparative
form with such financial statements as of the end of, and for, the preceding
fiscal year, and notes thereto (including a note with a consolidating balance
sheet and statements of income and cash flows separating out Borrower and the
Guarantors in the event that any Subsidiaries are not Loan Parties), all
prepared in accordance with Regulation S-X and accompanied by an opinion of
Deloitte & Touche LLP or other independent public accountants of
recognized national standing reasonably satisfactory to the Administrative
Agent (which opinion shall not be qualified as to scope or contain any going
concern or other qualification), stating that such financial statements fairly
present, in all material respects, the consolidated financial condition,
results of operations and cash flows of Borrower as of the dates and for the
periods specified in accordance with GAAP, (ii) a management report in a
form reasonably satisfactory to the Administrative Agent setting forth (A) statement
of income items and Consolidated EBITDA of Borrower for such fiscal year,
showing variance, by dollar amount and percentage, from amounts for the
previous fiscal year and budgeted amounts and (B) key operational information
and statistics for such fiscal year consistent with internal and industry-wide
reporting standards, and (iii) a narrative report and management’s
discussion and analysis, in a form reasonably satisfactory to the
Administrative Agent, of the financial condition and results of operations of
Borrower for such fiscal year, as compared to amounts for the previous fiscal
year and budgeted amounts (it being understood that the information required by
clause (i) may be furnished in the form of a Form 10-K);

(b)           Quarterly
Reports. As soon as available and in any event within 45 days (or such
earlier date on which Borrower is required to file a Form 10-Q under
the Exchange Act) after the end of each of the first three fiscal quarters of
each fiscal year, beginning with the fiscal quarter ending June 30, 2006, (i) the
consolidated balance sheet of Borrower as of the end of such fiscal quarter and
related consolidated statements of income and cash flows for such fiscal
quarter and for the then elapsed portion of the fiscal year, in comparative
form with the consolidated statements of income and cash flows for the
comparable periods in the previous fiscal year, and notes thereto (including a
note with a consolidating balance sheet and statements of income and cash flows
separating out Borrower and the Guarantors in the event that any Subsidiaries
are not Loan Parties), all prepared in accordance with Regulation S-X under the
Securities Act and accompanied by a certificate of a Financial Officer stating
that such financial statements fairly present, in all material respects, the
consolidated financial condition, results of operations and cash flows of
Borrower as of the date and for the periods specified in accordance 

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with GAAP consistently applied, and on a
basis consistent with audited financial statements referred to in clause (a) of
this Section, subject to normal year-end audit adjustments, (ii) a
management report in a form reasonably satisfactory to the Administrative Agent
setting forth (A) statement of income items and Consolidated EBITDA of Borrower
for such fiscal quarter and for the then elapsed portion of the fiscal year,
showing variance, by dollar amount and percentage, from amounts for the
comparable periods in the previous fiscal year and budgeted amounts and (B) key
operational information and statistics for such fiscal quarter and for the then
elapsed portion of the fiscal year consistent with internal and industry-wide
reporting standards, and (iii) a narrative report and management’s
discussion and analysis, in a form reasonably satisfactory to the Administrative
Agent, of the financial condition and results of operations for such fiscal
quarter and the then elapsed portion of the fiscal year, as compared to the
comparable periods in the previous fiscal year and budgeted amounts (it being
understood that the information required by clause (i) may be furnished in
the form of a Form 10-Q);

(c)           Monthly
Reports. Within 30 days after the end of each of the first two months
of each fiscal quarter, (i) the consolidated balance sheet of Borrower as
of the end of each such month and the related consolidated statements of income
and cash flows of Borrower for such month and for the then elapsed portion of
the fiscal year, in comparative form with the consolidated statements of income
and cash flows for the comparable periods in the previous fiscal year,
accompanied by a certificate of a Financial Officer stating that such financial
statements fairly present, in all material respects, the consolidated results
of operations and cash flows of Borrower as of the date and for the periods
specified in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments, (ii) a management report in a form reasonably
satisfactory to the Administrative Agent setting forth (A) statement of
income items and Consolidated EBITDA of Borrower for such month and for the
then elapsed portion of the fiscal year, showing variance, by dollar amount and
percentage, from amounts for the comparable periods in the previous fiscal year
and budgeted amounts and (B) key operational information and statistics
for such month and for the then elapsed portion of the fiscal year consistent
with internal and industry-wide reporting standards and (iii) a narrative
report and management’s discussion and analysis, in a form reasonably
satisfactory to the Administrative Agent, of the financial condition and
results of operations for such month and the then elapsed portion of the fiscal
year, as compared to the comparable periods in the previous fiscal year and
budgeted amounts;

(d)           Financial
Officer’s Certificate. (i) Concurrently with any delivery of financial
statements under Section 5.01(a) or (b), a Compliance
Certificate (A) certifying that no Default has occurred or, if such a
Default has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto, (B) beginning
with the fiscal quarter ending June 30, 2006, setting forth computations
in reasonable detail satisfactory to the Administrative Agent demonstrating compliance
with the covenants contained in Sections 6.07(f) and 6.10
(including the aggregate amount of net cash proceeds from Excluded Issuances
for such period and the uses therefor) and, concurrently with any delivery of
financial statements under Section 5.01(a) above, setting forth
Borrower’s calculation of Excess Cash Flow and 

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(C) showing a reconciliation of
Consolidated EBITDA to the net income set forth on the statement of income; and
(ii) concurrently with any delivery of financial statements under Section 5.01(a)
above, beginning with the fiscal year ending December 31, 2006, a report
of the accounting firm opining on or certifying such financial statements
stating that in the course of its regular audit of the financial statements of
Borrower and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge that any Default insofar as it relates to financial or accounting
matters has occurred or, if in the opinion of such accounting firm such a
Default has occurred, specifying the nature and extent thereof;

(e)           Financial
Officer’s Certificate Regarding Collateral. Concurrently with any delivery
of financial statements under Section 5.01(a), a certificate of a
Financial Officer setting forth the information required pursuant to the
Perfection Certificate Supplement or confirming that there has been no change
in such information since the date of the Perfection Certificate or latest
Perfection Certificate Supplement;

(f)            Public
Reports. Promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Loan Party with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed to holders of its Indebtedness
pursuant to the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor), as the case may be;

(g)           Management
Letters. Promptly after the receipt thereof by any Loan Party, a copy of
any “management letter” received by any such person from its certified public
accountants and within 30 days after the receipt of such management letter, a
copy of the management’s responses thereto;

(h)           Budgets.
Within 90 days after the beginning of each fiscal year, a budget for
Borrower in form reasonably satisfactory to the Administrative Agent, but to
include balance sheets, statements of income and sources and uses of cash, for (i) each
month of such fiscal year prepared in detail and (ii) each fiscal year
thereafter, through and including the fiscal year in which the Final Maturity
Date occurs, prepared in summary form, in each case, with appropriate presentation
and discussion of the principal assumptions upon which such budgets are based,
accompanied by the statement of a Financial Officer of Borrower to the effect
that the budget of Borrower is a reasonable estimate for the periods covered
thereby and, promptly when available, any significant revisions of such budget;

(i)            Organization.
Concurrently with any delivery of financial statements under Section 5.01(a),
an accurate organizational chart as required by Section 3.07(c), or
confirmation that there are no changes to Schedule 10(a) to the
Perfection Certificate;

(j)            Organizational
Documents. Promptly provide copies of any Organizational Documents that
have been amended or modified in accordance with the terms 

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hereof and deliver a copy of any notice of
default given or received by any Company under any Organizational Document
within 15 days after such Company gives or receives such notice;

(k)           Governmental
Authorization. Borrower shall deliver, and shall cause its Restricted
Subsidiaries to deliver, to the Administrative Agent, as soon as practicable,
and in any event within 5 days after the receipt thereof by Borrower or its
Restricted Subsidiaries from any Gaming Authority or other Governmental
Authority having jurisdiction over the operations of Borrower or its Restricted
Subsidiaries, or filing or receipt thereof by Borrower or its Restricted
Subsidiaries, (i) copies of any order or notice of such Gaming Authority
or such other Governmental Authority or court of competent jurisdiction which
designates any Gaming License or other material franchise, permit or other governmental
operating authorization of Borrower or its Restricted Subsidiaries, or any
application therefor, for a hearing or which refuses renewal or extension of,
or revokes or suspends the authority of, Borrower or its Restricted
Subsidiaries to construct, own, manage or operate its businesses (or any
portion thereof), and (ii) a copy of any competing application filed with
respect to any such Gaming License or other authorization, or application
therefor, of Borrower or any of its Restricted Subsidiaries, or any citation, notice
of violation or order to show cause issued by any Gaming Authority, any Liquor
Authority or other Governmental Authority or any complaint filed by any Gaming Authority
or other Governmental Authority which is applicable to Borrower or to its Restricted
Subsidiaries;

(l)            Completion
Date. Promptly following each Completion Date (including the D-E Completion
Date), Borrower shall or shall cause the applicable Loan Party to deliver
notice to Collateral Agent of the occurrence of such Completion Date, together
with a copy of a Completion Certificate, if any, relating thereto; and

(m)          Other
Information. Promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of any Company, or
compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender may reasonably request.

SECTION 5.02              Litigation and Other Notices.
Furnish to the Administrative Agent and each Lender written notice of the following
promptly (and, in any event, within three Business Days of Borrower obtaining
actual or constructive knowledge of the occurrence thereof):

(a)           any
Default, specifying the nature and extent thereof and the corrective action (if
any) taken or proposed to be taken with respect thereto;

(b)           the
filing or commencement of, or any threat or notice of intention of any person
to file or commence, any action, suit, litigation or proceeding, whether at law
or in equity by or before any Governmental Authority, (i) against any
Company or any Affiliate thereof that could reasonably be expected to result in
a Material Adverse Effect or (ii) with respect to any Loan Document;

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(c)           any
development that has resulted in, or could reasonably be expected to result in
a Material Adverse Effect;

(d)           the
occurrence of a material Casualty Event; and

(e)           (i) the
incurrence of any material Lien (other than Permitted Liens) on, or material
claim asserted against, any of the Collateral or (ii) the occurrence of
any other event which could materially adversely affect the value of the Collateral.

SECTION 5.03              Existence; Businesses and Properties.

(a)           Do
or cause to be done all things necessary to preserve, renew and maintain in
full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05 or Section 6.06 or, in the
case of any Subsidiary, where the failure to perform such obligations,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(b)           Do
or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, privileges,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated;
comply with all applicable Requirements of Law (including any zoning, building
and Environmental Law, ordinance, code or approval or any building permits or
any restrictions of record or agreements affecting Real Property) and decrees
and orders of any Governmental Authority, whether now in effect or hereafter
enacted, except where the failure to comply, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; pay
and perform its obligations under all Leases and Transaction Documents; and at
all times maintain, preserve and protect all property material to the conduct
of such business and keep such property in good repair, working order and
condition (other than wear and tear occurring in the ordinary course of
business) and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto necessary
in order that the business carried on in connection therewith may be properly
conducted at all times; provided that
nothing in this Section 5.03(b) shall prevent (i) sales of
property, consolidations or mergers by or involving any Company in accordance
with Section 6.05 or Section 6.06; (ii) the
withdrawal by any Company of its qualification as a foreign corporation in any
jurisdiction where such withdrawal, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; or (iii) the
abandonment by any Company of any rights, franchises, licenses, trademarks,
trade names, copyrights or patents that such person reasonably determines are
not useful to its business or no longer commercially desirable.

SECTION 5.04              Insurance.

(a)           Generally.
Keep its insurable property adequately insured at all times by financially
sound and reputable insurers; maintain such other insurance, to such extent and
against such risks as is customary with companies in the same or similar
businesses operating in the same or similar locations, including insurance with
respect to Mortgaged Properties and other 

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properties material to the business of the
Companies against such casualties and contingencies and of such types and in
such amounts with such deductibles as is customary in the case of similar
businesses operating in the same or similar locations, including (i) physical
hazard insurance on an “all risk” basis, (ii) commercial general liability
insurance against claims for bodily injury, death or property damage covering
any and all insurable claims, (iii) explosion insurance in respect of any
boilers, machinery or similar apparatus constituting Collateral, (iv) business
interruption insurance, (v) worker’s compensation insurance and such other
insurance as may be required by any Requirement of Law and (vi) such other
insurance against risks as the Administrative Agent may from time to time
reasonably require (such policies to be in such form and amounts and having
such coverage as may be reasonably satisfactory to the Administrative Agent and
the Collateral Agent); provided that
with respect to physical hazard insurance, neither the Collateral Agent nor the
applicable Company shall agree to the adjustment of any claim thereunder
without the consent of the other (such consent not to be unreasonably withheld
or delayed); provided, further,
that no consent of any Company shall be required during an Event of Default.

(b)           Requirements
of Insurance. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof, (ii) name the Collateral Agent
as mortgagee (in the case of property insurance) or additional insured on
behalf of the Secured Parties (in the case of liability insurance) or loss
payee (in the case of property insurance), as applicable, (iii) if reasonably
requested by the Collateral Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Collateral Agent.

(c)           Notice
to Agents. Notify the Administrative Agent and the Collateral Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.04
is taken out by any Company; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.

(d)           Flood
Insurance. With respect to each Mortgaged Property, obtain flood insurance
in such total amount as the Administrative Agent or the Required Lenders may
from time to time reasonably require, if at any time the area in which any
improvements are located on any Mortgaged Property is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.

(e)           Broker’s
Report. Deliver to the Administrative Agent and the Collateral Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance and such supplemental reports with respect thereto as the
Administrative Agent or the Collateral Agent may from time to time reasonably request.

(f)            Mortgaged
Properties. No Loan Party that is an owner of Mortgaged Property shall take
any action that is reasonably likely to be the basis for termination, revocation

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or denial of any insurance coverage required
to be maintained under such Loan Party’s respective Mortgage or that could be
the basis for a defense to any claim under any Insurance Policy maintained in
respect of the Premises, and each Loan Party shall otherwise comply in all
material respects with all Insurance Requirements in respect of the Premises; provided, however, that
each Loan Party may, at its own expense and after written notice to the
Administrative Agent, (i) contest the applicability or enforceability of
any such Insurance Requirements by appropriate legal proceedings, the
prosecution of which does not constitute a basis for cancellation or revocation
of any insurance coverage required under this Section 5.04 or (ii) cause
the Insurance Policy containing any such Insurance Requirement to be replaced
by a new policy complying with the provisions of this Section 5.04.

SECTION 5.05              Obligations and Taxes.

(a)           Payment
of Obligations. Pay its Indebtedness and other obligations promptly and in
accordance with their terms and pay and discharge promptly when due all Taxes,
assessments and governmental charges or levies imposed upon it or upon its income
or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, services,
materials and supplies or otherwise that, if unpaid, might give rise to a Lien
other than a Permitted Lien upon such properties or any part thereof; provided that such payment and discharge shall not be
required with respect to any such Tax, assessment, charge, levy or claim so
long as (x)(i) the validity or amount thereof shall be contested in good
faith by appropriate proceedings timely instituted and diligently conducted and
the applicable Company shall have set aside on its books adequate reserves or
other appropriate provisions with respect thereto in accordance with GAAP, (ii) such
contest operates to suspend collection of the contested obligation, Tax,
assessment or charge and enforcement of a Lien other than a Permitted Lien and (iii) in
the case of Collateral, the applicable Company shall have otherwise complied
with the Contested Collateral Lien Conditions and (y) the failure to pay
could not reasonably be expected to result in a Material Adverse Effect.

(b)           Filing
of Returns. Timely (subject to any extensions granted by the applicable
Governmental Authority) and correctly file all material Tax Returns required to
be filed by it. Withhold, collect and remit all Taxes that it is required to
collect, withhold or remit.

(c)           Tax
Shelter Reporting. Borrower does not intend to treat the Loans as being a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4.
In the event Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof.

SECTION 5.06              Employee Benefits.
(a) Comply in all material respects with the applicable provisions of
ERISA and the Code with respect to any Employee Benefit Plan and (b) furnish
to the Administrative Agent (x) as soon as possible after, and in any
event within 5 days after any Responsible Officer of any Company or any
ERISA Affiliates of any Company knows or has reason to know that, any ERISA
Event has occurred that, alone or together with any other ERISA Event could
reasonably be expected to result in liability of the Companies or any of their
ERISA Affiliates in an aggregate amount exceeding $500,000 or the imposition of
a Lien, a statement of a Financial Officer of Borrower setting forth details as
to such ERISA Event 

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and the action, if any, that the Companies
propose to take with respect thereto, and (y) upon request by the Administrative
Agent, copies of (i) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by any Company or any ERISA
Affiliate with the Internal Revenue Service with respect to each Plan; (ii) the
most recent actuarial valuation report for each Plan; (iii) all notices
received by any Company or any ERISA Affiliate from a Multiemployer Plan
sponsor or any governmental agency concerning an ERISA Event; and (iv) such
other documents or governmental reports or filings relating to any Plan (or
employee benefit plan sponsored or contributed to by any Company) as the
Administrative Agent shall reasonably request.

SECTION 5.07              Maintaining Records; Access to
Properties and Inspections; Annual Meetings.

(a)           Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law are made of all dealings and
transactions in relation to its business and activities. Each of Borrower and
its Restricted Subsidiaries will permit any representatives designated by the
Administrative Agent or any Lender to visit and inspect the financial records
and the property of Borrower or such Restricted Subsidiary at reasonable times
upon reasonable advance notice and to make extracts from and copies of such
financial records; provided that,
so long as no Event of Default then exists, such inspection or visit shall be
limited to one (1) per fiscal year of Borrower, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances, accounts and condition of Borrower or any Restricted
Subsidiary with its officers and, in the presence of such officers, other
employees thereof and advisors therefor (including independent accountants).

(b)           Within
150 days after the end of each fiscal year of the Companies, at the
request of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location, venue and time or, at the option of the
Administrative Agent, by conference call, the costs of such venue or call to be
paid by Borrower) with all Lenders who choose to attend such meeting, at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of the Companies and the budgets presented for the current
fiscal year of the Companies.

SECTION 5.08              Use of Proceeds. Use
the proceeds of the Loans only for the purposes set forth in Section 3.12
and request the issuance of Letters of Credit only for the purposes set forth
in the definition of Commercial Letter of Credit or Standby Letter of Credit,
as the case may be.

SECTION 5.09              Compliance with Environmental
Laws; Environmental Reports.

(a)           Comply,
and use commercially reasonable efforts to cause all lessees and other persons
occupying Real Property owned, operated or leased by any Company to comply, in
all material respects with all Environmental Laws and Environmental Permits
applicable to the operations of the applicable Loan Party, Restricted
Subsidiary, lessees or other persons, as the 

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case may be, and Real Property; obtain and
renew all material Environmental Permits applicable to its operations and Real
Property; and conduct all Responses required by, and in accordance with,
Environmental Laws; provided that
no Company shall be required to undertake any Response to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.

(b)           If
a Default caused by reason of a breach of Section 3.18 or Section 5.09(a)
shall have occurred and be continuing for more than 30 days after Borrower
obtains actual or constructive knowledge of the Default, without the Companies
commencing activities reasonably likely to cure such Default in accordance with
Environmental Laws, at the written request of the Administrative Agent or the
Required Lenders through the Administrative Agent, provide to the Lenders
within 30 days after such request, at the expense of Borrower, an environmental
assessment report regarding the matters which are the subject of such Default,
including, where appropriate, soil and/or groundwater sampling, prepared by an
environmental consulting firm and, in form and substance, reasonably acceptable
to the Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or Response to address them.

SECTION 5.10              Post-Closing Matters. Borrower
shall deliver or cause to be delivered and complete the tasks described in this
Section 5.10:

(a)           endorsements
to Borrower’s and the Loan Parties’ flood insurance policies, which
endorsements (i) shall be reasonably satisfactory to the Collateral Agent,
(ii) shall be delivered within 45 days of the Closing Date to the Collateral
Agent, (iii) shall state that they are naming Credit Suisse, Cayman
Islands Branch, as Collateral Agent and Administrative Agent, as an additional
insured, loss payee and mortgagee to such flood insurance policies and (iv) shall
provide evidence that Wells Fargo Bank Minnesota, National Association, as
trustee (to the extent so named), has been removed as an additional insured,
loss payee and mortgagee from such flood insurance policies; such endorsements
shall cover the properties located at:  (A) (i) 108
N. Highway 397, Lake Charles, Louisiana, (ii) 1829 Highway 90 West, Morgan
City, Louisiana and (iii) 11825 Highway 308, LaRose, Louisiana, in each
case, evidenced by the insurance certificates dated June 9, 2006 and the
Flood Insurance General Charge Endorsements that were issued on June 9,
2006 by ICT Insurance Agency, Inc., and (B) (i) 1869 Mills
Highway, Breaux Bridge, Louisiana and (ii) 52396 LA Highway 16, Denham
Springs, Louisiana, in each case, evidenced by the insurance certificates dated
June 2, 2006 and the Flood Insurance General Charge Endorsements that were
issued on June 16, 2006 by ICT Insurance Agency, Inc., all of which
certificates and Commercial Policy Change Requests were delivered to the
Collateral Agent pursuant to Section 4.01(p) hereof;

(b)           endorsements
to the Borrower’s and the Loan Parties’ flood insurance policies evidenced by
the insurance certificate dated June 13, 2006 and the Flood Insurance General
Charge Endorsements that were issued on June 12, 2006 by Flood &
Peterson Insurance, Inc. and delivered to the Collateral Agent pursuant to
Section 4.01(p) hereof  relating to those properties located at
111 - 121 Main Street, Black Hawk, Colorado and 240 Main Street, Black Hawk,
Colorado (covering both the lodge and parking garage), which such
endorsements (i) 

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shall be in form and substance satisfactory
to the Collateral Agent, (ii) shall be delivered within 45 Business Days
of the Closing Date to the Collateral Agent, (iii) shall state that they
are naming Credit Suisse, Cayman Islands Branch, as Collateral Agent and
Administrative Agent, as an additional insured, loss payee and mortgagee to
such flood insurance policies and (iv) shall provide evidence that Wells
Fargo Bank Minnesota, National Association, as trustee (to the extent so
named), has been removed as an additional insured, loss payee and mortgagee
from such flood insurance policies;

(c)           Borrower
shall deliver or cause to be delivered to the Collateral Agent within ten (10) days
after the Closing Date (which time period may be extended at the sole discretion
of the Collateral Agent) all certificates representing or evidencing the
outstanding Equity Interests of Colonial Holdings, Inc., a Virginia
corporation, and Maryland-Virginia Racing Circuit, Inc., a Virginia
corporation, each accompanied by a stock power with respect thereto, undated
and endorsed in blank; and

(d)           within
thirty (30) days after the Closing Date, unless waived or extended by the
Collateral Agent in its sole discretion, the applicable Loan Parties shall
deliver to the Collateral Agent, Surveys with respect to the following
Mortgaged Properties:

(i)         3747 Highway 90,
Eunice, Louisiana;

(ii)        1869 Mills
Highway, Breaux Bridge, Louisiana;

(iii)       1050A Baker Hughes
Drive, Broussard, Louisiana;

(iv)       1829 Highway 90 West,
Bayou Vista, Louisiana;

(v)        1541 Grand Caillou
Road, Houma, Louisiana;

(vi)       213 and 233 West Park
Avenue, Thibodaux, Louisiana;

(vii)      108 N. Highway 397,
Lake Charles, Louisiana;

(viii)     2267 Old Highway 90,
Vinton, Louisiana;

(ix)       2334 Highway 109 South,
Vinton, Louisiana;

(x)        2654 Highway 108,
Sulphur, Louisiana;

(xi)       7340 Westbank
Expressway, Suite 200, Marrero, Louisiana;

(xii)      11825 Highway 308,
Lockport, Louisiana;

(xiii)     109 S. Service Road and
105 St. Peter Road, Raceland, Louisiana; and

(xiv)     52396 Highway 16, Denham
Springs, Louisiana.

 

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SECTION 5.11              Additional Collateral; Additional Guarantors.

(a)           Subject
to this Section 5.11, with respect to any property acquired after
the Closing Date by any Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject, promptly (and
in any event within 30 days (45 days in the case of property acquired in
connection with the acquisition of a truck stop video gaming facility) after
the acquisition thereof) (i) execute and deliver to the Administrative
Agent and the Collateral Agent such amendments or supplements to the relevant
Security Documents or such other documents as the Administrative Agent or the
Collateral Agent shall reasonably deem necessary or advisable to grant to the
Collateral Agent, for its benefit and for the benefit of the other Secured
Parties, a Lien on such property subject to no Liens other than Permitted
Liens, and (ii) take all actions reasonably necessary to cause such Lien
to be duly perfected to the extent required by such Security Document in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by
the Administrative Agent. Borrower shall otherwise take such actions and
execute and/or deliver to the Collateral Agent such documents as the
Administrative Agent or the Collateral Agent shall reasonably require to
confirm the validity, perfection and priority of the Lien of the Security
Documents on such after-acquired properties.

(b)           With
respect to any person that is or becomes a Subsidiary of Borrower or one of its
Restricted Subsidiaries after the Closing Date and subject to any applicable Gaming
Laws, promptly (and in any event within 30 days (45 days in the case of a
Subsidiary that owns or operates a truck stop video gaming facility) after such
person becomes a Subsidiary) (i) deliver to the Collateral Agent the
certificates, if any, representing all of the Equity Interests of such
Subsidiary, together with undated stock powers or other appropriate instruments
of transfer executed and delivered in blank by a duly authorized officer of the
holder(s) of such Equity Interests, and all intercompany notes owing from
such Subsidiary to any Loan Party together with instruments of transfer
executed and delivered in blank by a duly authorized officer of such Loan Party
and (ii) cause such new Subsidiary (unless it shall be designated an
Unrestricted Subsidiary pursuant to this Agreement) (A) to execute a
Joinder Agreement or such comparable documentation to become a Guarantor and a
joinder agreement to the applicable Security Document (including, in the case
of any Restricted Subsidiary subject to regulation under the Gaming Laws of Nevada,
a Pledge Agreement), substantially in the form annexed thereto or, in the case
of a Foreign Subsidiary, execute a security agreement compatible with the laws
of such Foreign Subsidiary’s jurisdiction in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions
reasonably necessary or advisable in the opinion of the Administrative Agent or
the Collateral Agent to cause the Lien created by the applicable Security Agreement
to be duly perfected to the extent required by such agreement in accordance
with all applicable Requirements of Law, including the filing of financing
statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent. Notwithstanding the foregoing, (1) the
Equity Interests required to be delivered to the Collateral Agent pursuant to
clause (i) of this Section 5.11(b) shall not include any
Equity Interests of a Foreign Subsidiary created or acquired after the Closing
Date and (2) no Foreign Subsidiary shall be required to take the actions
specified in clause (ii) of this Section 5.11(b), if, in
the case of either clause (1) or (2), doing so would constitute an
investment of earnings in United States property under Section 956 (or a
successor provision) of the Code, which investment would or could 

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reasonably be expected to trigger a material
increase in the net income of a United States shareholder of such Subsidiary
pursuant to Section 951 (or a successor provision) of the Code, as reasonably
determined by the Administrative Agent; provided that
this exception shall not apply to (A) Voting Stock of any Subsidiary which
is a first-tier controlled foreign corporation (as defined in Section 957(a) of
the Code) representing 66% of the total voting power of all outstanding Voting
Stock of such Subsidiary and (B) 100% of the Equity Interests not
constituting Voting Stock of any such Subsidiary, except that any such Equity
Interests constituting “stock entitled to vote” within the meaning of Treasury
Regulation Section 1.956-2(c)(2) shall be treated as Voting
Stock for purposes of this Section 5.11(b).

(c)           Promptly
grant to the Collateral Agent, within 30 days (45 days in the case of
Material Real Property acquired in connection with the acquisition of a truck
stop video gaming facility) of the acquisition thereof (or if not a Material
Real Property at the time of acquisition, within 30 days of becoming a Material
Real Property), a security interest in and Mortgage on (i) each Material
Real Property owned in fee by such Loan Party as is acquired by such Loan Party
after the Closing Date and (ii) unless the Collateral Agent otherwise
consents, each leased Material Real Property of such Loan Party, in each case,
as additional security for the Secured Obligations (unless the subject property
is already mortgaged to a third party to the extent permitted by Section 6.02).
Such Mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and the Collateral
Agent and shall constitute valid and enforceable perfected Liens subject only
to Permitted Liens or other Liens acceptable to the Collateral Agent. The
Mortgages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Mortgages and all taxes, fees and other charges payable
in connection therewith shall be paid in full. Borrower shall or shall cause
the applicable Loan Party to otherwise take such actions and execute and/or
deliver to the Collateral Agent such documents as the Administrative Agent or
the Collateral Agent shall reasonably require to confirm the validity,
perfection and priority of the Lien of any existing Mortgage or new Mortgage
against such after-acquired Real Property (including a Title Policy, a Survey
and local counsel opinion (in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent) in respect of such Mortgage).

(d)           Notwithstanding
anything to the contrary in clauses (a) and (b) of this Section 5.11,
if the pledge of Equity Interests of any Subsidiary acquired or created after
the Closing Date requires approval under the applicable Gaming Laws, Borrower
shall be required to pledge such stock only if the requisite approvals are
obtained after the exercise of its commercially reasonable efforts to obtain
such approvals (and Borrower agrees to use its commercially reasonable efforts
to obtain such approvals).

SECTION 5.12              Security Interests; Further Assurances.
Promptly, upon the reasonable request of the Administrative Agent or the Collateral
Agent, at Borrower’s expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Guarantee Agreement or Security Documents or otherwise deemed by the
Administrative Agent or the Collateral Agent reasonably necessary or desirable
for the continued validity, perfection and 

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priority of the Liens on the Collateral
covered thereby subject to no other Liens except as permitted by the applicable
Security Document, or obtain any consents or waivers as may be necessary or
appropriate in connection therewith. Deliver or cause to be delivered to the
Administrative Agent and the Collateral Agent from time to time such other
documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent as the Administrative Agent and the Collateral Agent shall reasonably
deem necessary to perfect or maintain the Liens on the Collateral pursuant to
the Security Documents. Upon the exercise by the Administrative Agent, the
Collateral Agent or any Lender of any power, right, privilege or remedy
pursuant to any Loan Document which requires any consent, approval,
registration, qualification or authorization of any Governmental Authority
execute and deliver all applications, certifications, instruments and other
documents and papers that the Administrative Agent, the Collateral Agent or
such Lender may require. If the Administrative Agent, the Collateral Agent or
the Required Lenders determine that they are required by a Requirement of Law
to have appraisals prepared in respect of the Real Property of any Loan Party
constituting Collateral, Borrower shall provide to the Administrative Agent
appraisals that satisfy the applicable requirements of the Real Estate Appraisal
Reform Amendments of FIRREA and are otherwise in form and substance
satisfactory to the Administrative Agent and the Collateral Agent.

SECTION 5.13              Information Regarding Collateral.
Not effect any change (i) in any Loan Party’s legal name, (ii) in the
location of any Loan Party’s chief executive office, (iii) in any Loan
Party’s identity or organizational structure, (iv) in any Loan Party’s
Federal Taxpayer Identification Number or organizational identification number,
if any, or (v) in any Loan Party’s jurisdiction of organization (in each
case, including by merging with or into any other entity, reorganizing,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction),
until (A) it shall have given the Collateral Agent and the Administrative
Agent not less than 30 days’ prior written notice (in the form of an
Officers’ Certificate), or such lesser notice period agreed to by the
Collateral Agent, of its intention so to do, clearly describing such change and
providing such other information in connection therewith as the Collateral
Agent or the Administrative Agent may reasonably request and (B) it shall have
taken all action reasonably satisfactory to the Collateral Agent to maintain
the perfection and priority of the security interest of the Collateral Agent
for the benefit of the Secured Parties in the Collateral, if applicable. Borrower
agrees to promptly provide the Collateral Agent with certified Organizational
Documents reflecting any of the changes described in the preceding sentence. Borrower
also agrees to promptly notify the Collateral Agent of any change in the location
of any office in which it maintains books or records relating to Collateral
owned by it or any office or facility at which Collateral is located (including
the establishment of any such new office or facility), other than changes in
location to a Mortgaged Property or a leased property subject to a Landlord
Access Agreement.

SECTION 5.14               [Reserved].

SECTION 5.15              Affirmative Covenants with Respect to Leases.
With respect to each Lease, Borrower shall or shall cause the applicable Loan
Party to perform all the obligations imposed upon the landlord under such Lease
and enforce all of the tenant’s obligations 

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thereunder, except where the failure to so
perform or enforce could not reasonably be expected to result in a Property Material
Adverse Effect.

SECTION 5.16              License Renewals. Commencing
on the date twelve months following the Closing Date and continuing every
twelve months thereafter, Borrower shall deliver, and shall cause its
Restricted Subsidiaries to deliver, to the Administrative Agent an updated Schedule
3.23 reflecting thereon, as of the date of such delivery, the information
described in Section 3.23.

SECTION 5.17              Licenses and Permits.
(a) Ensure that all material licenses (including all necessary Gaming
Licenses), permits and consents and similar rights required from any federal,
state or local governmental body (including the Gaming Authorities and Liquor
Authorities) for the ownership, use or operation of the businesses or
properties now owned or operated by Borrower have been validly issued and are
in full force and effect, and (b) comply, in all material respects, with
all of the provisions thereof applicable to it.

SECTION 5.18              Construction of Project.
In connection with the construction of each Substantial Project, Borrower shall
or shall cause the applicable Loan Party to:

(i)      diligently proceed with construction of
such Project in accordance with the Plans and Specifications relating thereto
and in accordance with all applicable laws and ordinances and will complete
such Project on or before the Completion Date thereof;

(ii)     use its commercially reasonable efforts to
require the Contractor(s) to comply with all rules, regulations, ordinances
and laws relating to work on such Project;

(iii)    comply in all material respects with and
keep in effect all necessary permits and approvals obtained from any
Governmental Authority relating to the lawful construction of such Project. Borrower
will and shall cause each applicable Loan Party to comply in all material
respects with all applicable existing and future laws, regulations, order, and
requirements of any Governmental Authority having jurisdiction over the Real
Property or Project, and with all recorded restrictions affecting the
applicable Real Property;

(iv)    upon completion of the building foundation
of such Project, deliver to the Collateral Agent (A) an “as-built” survey
of the applicable Real Property which: (a) sets forth the location and
exterior lines and egress and other improvements completed on such Real
Property and demonstrates compliance with all applicable setback requirements; (b) demonstrates
that such Project is entirely within the exterior boundaries of such Real
Property and any building restriction lines and does not encroach upon any
easements or rights-of-way; and (c) contains such other information as the
Collateral Agent may reasonably request;

(v)     within 60 days after Completion Date
relating to such Project, Borrower shall or shall cause the applicable Loan
Party to deliver to the Collateral Agent a title insurance bring down and
endorsements to the title insurance policy insuring the Mortgaged Property upon
which such Project was constructed (1) increasing the policy 

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amount to an
amount not less than 115% of the fair market value of such Mortgaged Property
and fixtures thereon taking into consideration the improvements constructed
thereon in connection with such Project and (2) otherwise amending such
title insurance policy so that the requirements of Section 4.01(o)(iii) are
met; it being understood that (A) such policy shall be free and clear of all
mechanics, materialmen or other similar liens and (B) subject to (vi) below,
Borrower shall or shall cause the applicable Loan Party to deliver all lien
waivers from the contractors and subcontractors relating to such Project as
shall be reasonably requested by the Collateral Agent or the title insurance
company to release any such liens;

(vi)    pay and discharge all claims and liens for
labor done and materials and services furnished in connection with the
construction of such Project. Borrower or the applicable Loan Party will have
the right to contest in good faith any claim or lien, provided that it does so
diligently and without prejudice to the Collateral Agent or the ability to
obtain title insurance in the manner required by this Agreement. Upon the
Collateral Agent’s reasonable request, Borrower will promptly provide a bond,
cash deposit, or other security reasonably satisfactory to the Collateral Agent
to protect the Collateral Agent’s interest and security should the contest be
unsuccessful;

(vii)   not purchase any materials, equipment,
fixtures, or articles of personal property placed in such Project prior to the
Completion Date under any security agreement or other agreement where the
seller reserves or purports to reserve title or the right of removal or
repossession, or the right to consider them personal property after their incorporation
in the work of construction, unless authorized by the Administrative Agent in
writing;

(viii)  within 30 days after the Completion Date,
obtain and deliver to the Administrative Agent copies of all necessary
occupancy certificates relating to such Project; and

(ix)    cause a bonding company to issue a
Construction Completion Bond.

ARTICLE
VI

NEGATIVE
COVENANTS

Borrower warrants, covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document have been paid in full and all Letters of Credit have been canceled or
have expired and all amounts drawn thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, no Loan Party
will, nor will they cause or permit any Restricted Subsidiaries to:

SECTION 6.01              Indebtedness. Incur,
create, assume or permit to exist, directly or indirectly, any Indebtedness,
except

 

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(a)           Indebtedness
incurred under this Agreement and the other Loan Documents;

(b)           (i) Indebtedness
outstanding on the Closing Date and listed on Schedule 6.01(b), (ii) refinancings
or renewals thereof; provided that (A) any
such refinancing Indebtedness is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being renewed or
refinanced, plus the amount of any premiums required
to be paid thereon and reasonable fees and expenses associated therewith and (B) such
refinancing Indebtedness has a later or equal final maturity and longer or
equal weighted average life than the Indebtedness being renewed or refinanced
and (C) the covenants, events of default, subordination and other
provisions thereof (including any guarantees thereof) shall be, in the
aggregate, no less favorable to the Lenders than those contained in the
Indebtedness being renewed or refinanced and (iii) the Senior Notes and
Senior Note Guarantees (including any notes and guarantees issued in exchange
therefor in accordance with the registration rights document entered into in connection
with the issuance of the Senior Notes and Senior Note Guarantees);

(c)           Indebtedness
under Hedging Obligations with respect to interest rates, foreign currency
exchange rates or commodity prices, in each case not entered into for
speculative purposes; provided that
if such Hedging Obligations relate to interest rates, (i) such Hedging
Obligations relate to payment obligations on Indebtedness otherwise permitted
to be incurred by the Loan Documents and (ii) the notional principal
amount of such Hedging Obligations at the time incurred does not exceed the
principal amount of the Indebtedness to which such Hedging Obligations relate;

(d)           Indebtedness
permitted by Section 6.04(f);

(e)           Indebtedness
in respect of Purchase Money Obligations and Capital Lease Obligations, and
refinancings or renewals thereof, in an aggregate amount not to exceed $9.0
million at any one time outstanding;

(f)            Indebtedness
incurred by any Loan Party in an aggregate principal amount not to exceed 200%
of the aggregate Net Cash Proceeds received by Borrower from any issuance of
Borrower’s Qualified Capital Stock (other than issuances to a Subsidiary of
Borrower) or capital contribution to Borrower after the Closing Date to the
extent such Net Cash Proceeds have not been applied to make Expansion Capital
Expenditures or Investments permitted by Section 6.04  (e), (i),
(k), (l) or  (m) or to pay Dividends pursuant to Section 6.08(b);

(g)           Indebtedness
in respect of bid, performance or surety bonds, workers’ compensation claims,
self-insurance obligations and bankers acceptances issued for the account of
any Company in the ordinary course of business, including guarantees or obligations
of any Company with respect to letters of credit supporting such bid, performance
or surety bonds, workers’ compensation claims, self-insurance obligations and
bankers acceptances (in each case other than for an obligation for money
borrowed), in an aggregate amount not to exceed $1,500,000 at any time outstanding;

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(h)           Contingent
Obligations of any Loan Party in respect of Indebtedness otherwise permitted
under this Section 6.01;

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

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

(k)           other
Subordinated Indebtedness of any Loan Party in an aggregate amount not to
exceed $25,000,000 at any time outstanding;

(l)            other
Indebtedness of any Loan Party in an aggregate amount not to exceed $5,000,000
at any time outstanding;

(m)          Indebtedness
of subsidiaries of Gameco that are acquired by a Loan Party or merged into a
Loan Party in connection with the Permitted Truck Plaza Acquisitions in an
aggregate principal amount not to exceed $7.5 million at any time outstanding; provided that such Indebtedness (x) is not secured by a
Lien and (y) does not require any payment of principal prior to the Final
Maturity Date;

(n)           Indebtedness
in favor of a Loan Party permitted by Section 6.04; and

(o)           Existing
Notes not tendered pursuant to the Tender Offer that have been irrevocably
called pursuant to the Existing Notes Redemption.

SECTION 6.02              Liens. Create, incur,
assume or permit to exist, directly or indirectly, any Lien on any property now
owned or hereafter acquired by it or on any income or revenues or rights in
respect of any thereof, except the following (collectively, the “Permitted Liens”):

(a)           inchoate
Liens for taxes, assessments or governmental or quasi-governmental charges or
levies not yet due and payable or delinquent (including inchoate Liens in
connection with the bond obligations described on Schedule 6.01(b)) and Liens
for taxes, assessments or governmental charges or levies, which (i) are
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings (or
orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property subject to any such Lien, and
(ii) in the case of any such charge or levy which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions;

(b)           Liens
in respect of property of Borrower or any Restricted Subsidiary imposed by
Requirements of Law, which were incurred in the ordinary course of business and
do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s,

 113
 

 

 

materialmen’s, landlords’, workmen’s,
suppliers’, repairmen’s and mechanics’ Liens and other similar Liens arising in
the ordinary course of business, and (i) which do not in the aggregate
materially detract from the value of the property of Borrower or any Restricted
Subsidiary, taken as a whole, and do not materially impair the use thereof in
the operation of the business of Borrower and its Restricted Subsidiaries,
taken as a whole, (ii) which, if they secure obligations that are then due
and unpaid, are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such
Lien, and (iii) in the case of any such Lien which has or may become a
Lien against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions;

(c)           any
Lien in existence on the Closing Date and set forth on Schedule 6.02(c)
and any Lien granted as a replacement or substitute therefor (other than Liens
where Schedule 6.02(c) indicates that release and termination are
being sought); provided that any such
replacement or substitute Lien (i) except as permitted by Section 6.01(b)(ii)(A),
does not secure an aggregate amount of Indebtedness, if any, greater than that
secured on the Closing Date and (ii) does not encumber any property other
than the property subject thereto on the Closing Date (any such Lien, an “Existing Lien”);

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

(e)           Liens
arising out of judgments, attachments or awards not resulting in a Default and
in respect of which such Company shall in good faith be prosecuting an appeal
or proceedings for review in respect of which there shall be secured a subsisting
stay of execution pending such appeal or proceedings and, in the case of any
such Lien which has or may become a Lien against any of the Collateral, such
Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;

(f)            Liens
(other than any Lien imposed by ERISA) (x) imposed by Requirements of Law
or arising by virtue of deposits made in connection therewith in the ordinary
course of business in connection with workers’ compensation, unemployment insurance
and other types of social security legislation, (y) incurred in the
ordinary course of business to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds, statutory
bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) or (z) arising by virtue of deposits
made in the ordinary course of business to secure liability for premiums to
insurance carriers; provided that (i) with
respect to clauses (x), (y) and (z) of this para-

 114
 

 

 

graph (f), such Liens are for amounts
not yet due and payable or delinquent or, to the extent such amounts are so due
and payable, such amounts are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP, which proceedings for orders entered in connection with such proceedings
have the effect of preventing the forfeiture or sale of the property subject to
any such Lien, (ii) to the extent such Liens are not imposed by
Requirements of Law, such Liens shall in no event encumber any property other
than cash and Cash Equivalents, (iii) in the case of any such Lien against
any of the Collateral, such Lien and the contest thereof shall satisfy the
Contested Collateral Lien Conditions and (iv) the aggregate amount of deposits
at any time pursuant to clause (x) and clause (z) of this
paragraph (f) shall not exceed $500,000 in the aggregate;

(g)           Leases
of the properties of any Company, in each case entered into in the ordinary
course of such Company’s business so long as such Leases are subordinate in all
respects to the Liens granted and evidenced by the Security Documents and do
not, individually or in the aggregate, (i) interfere in any material
respect with the ordinary conduct of the business of any Company or (ii) materially
impair the use (for its intended purposes) or materially affect the value of
the property subject thereto; provided,
however, in the case of Mortgaged
Property, each Lease shall comply with provisions of the Mortgage affecting
such Mortgaged Property;

(h)           Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by any Company in the ordinary
course of business in accordance with the past practices of such Company;

(i)            Liens
securing Indebtedness incurred pursuant to Section 6.01(e); provided that any such Liens attach only to the property
being financed pursuant to such Indebtedness and do not encumber any other property
of any Company;

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

(k)           Liens
on property of a person existing at the time such person is acquired or merged
with or into or consolidated with any Company to the extent permitted hereunder
(and not created in anticipation or contemplation thereof); provided that such Liens do not extend to property not
subject to such Liens at the time of acquisition (other than improvements
thereon) and are no more favorable to the lienholders than such existing Lien;

 115
 

 

 

(l)            Liens
granted pursuant to the Security Documents to secure the Secured Obligations;

(m)          licenses
of Intellectual Property granted by any Company in the ordinary course of
business and not interfering in any material respect with the ordinary conduct
of business of the Companies;

(n)           the
filing of UCC financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods;

(o)           Liens
securing Indebtedness incurred pursuant to Section 6.01(l);

(p)           the
existence of the “equal and ratable” clause in the Senior Note Documents (but
not any security interests granted pursuant thereto);

(q)           Liens
incurred in the ordinary course of business of any Company with respect to
obligations that do not in the aggregate exceed $3,000,000 at any time outstanding,
so long as such Liens, to the extent covering any Collateral, are junior to the
Liens granted pursuant to the Security Documents;

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

(s)           Liens
created solely by the deposit of, and solely on, cash and Permitted Investments
deposited to consummate the Existing Notes Redemption or the Tender Offer in
favor of the trustee under the Existing Notes Indenture or the holders of the
Existing Notes;

provided, however,
(i) that no consensual Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral, other than Liens granted pursuant to
the Security Documents, or on any options to purchase Real Property listed on Schedule
8(b) to the Perfection Certificate and (ii) in the case of any Real
Property, Permitted Liens shall mean those Liens set forth in clauses (a), (b),
(d), (e), (g), (i) and (l) and those liens, encumbrances and other
matters affecting title to any Real Property listed in the title insurance
policies delivered to the Collateral Agent in accordance with the terms hereof,
reasonably acceptable to the Administrative Agent.

SECTION 6.03              Sale and Leaseback Transactions.
Enter into any arrangement, directly or indirectly, with any person whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred (a “Sale and Leaseback Transaction”) unless (i) the
sale of such property is permitted by Section 6.06 and (ii) any
Liens arising in connection with its use of such property are permitted by Section 6.02.

SECTION 6.04              Investment, Loan and Advances.
Directly or indirectly, lend money or credit (by way of guarantee or otherwise)
or make advances to any person, or purchase or acquire any stock, bonds, notes,
debentures or other obligations or securities of, or any other 

 116
 

 

 

interest in, or make any capital contribution
to, any other person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following
shall be permitted:

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

(b)           Investments
outstanding on the Closing Date and identified on Schedule 6.04(b);

(c)           Borrower
and its Restricted Subsidiaries may (i) acquire and hold accounts
receivables owing to any of them if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary terms, (ii) invest
in, acquire and hold cash and Cash Equivalents, (iii) endorse negotiable
instruments held for collection in the ordinary course of business or (iv) make
lease, utility and other similar deposits in the ordinary course of business;

(d)           Hedging
Obligations incurred pursuant to Section 6.01(c);

(e)           loans
and advances to directors, employees and officers of Borrower and the
Restricted Subsidiaries for bona fide
business purposes and to purchase Equity Interests of Borrower, in aggregate
amount not to exceed $2.0 million at any time outstanding; provided
that no loans in violation of Section 402 of the Sarbanes-Oxley Act shall
be permitted hereunder;

(f)            Investments
(i) by any Company in Borrower or any Guarantor and (ii) by a
Restricted Subsidiary that is not a Guarantor in any other Restricted
Subsidiary that is not a Guarantor; provided that
any Investment in the form of a loan or advance shall be evidenced by the
Intercompany Note and, in the case of a loan or advance by a Loan Party,
pledged by such Loan Party as Collateral pursuant to the Security Documents;

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

(h)           Investments
made by Borrower or any Restricted Subsidiary as a result of consideration
received in connection with an Asset Sale made in compliance with Section 6.06;

(i)            Investments
made by Borrower or any Guarantor in Publicly Traded Securities in an aggregate
amount not to exceed $3.0 million in any fiscal year; provided that on a Pro Forma Basis for the
applicable Investment, the Total Leverage Ratio would be less than or equal to
5.00:1.00; provided, further, that (x) if the aggregate amount of Investments made in
any fiscal year shall be less than the maximum amount of Investments permitted
under this Section 6.04(i) for such fiscal year (before giving
effect to any 

 117
 

 

 

carryover), then an amount of such shortfall
may be added to the amount of Investments permitted under this Section 6.04(i)
for the immediately succeeding (but not any other) fiscal year and (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to
such fiscal year (before giving effect to any carryover);

(j)            credit
extensions or other advances to gaming customers in the ordinary course of
business and consistent with industry practice;

(k)           other
Investments in an aggregate amount not to exceed $5,000,000 at any time outstanding;

(l)            Investments
consisting of redemptions or repurchases of Equity Interests or Indebtedness of
Borrower or any of its Subsidiaries to the extent required by any Gaming
Authority or, if determined in the good faith judgment of the Board of
Directors of Borrower, to prevent the loss, or to secure the grant or
establishment, of any Gaming License or other right to conduct lawful gaming
operations; and

(m)          Permitted
Acquisitions pursuant to Section 6.07.

An Investment shall be deemed to be outstanding to the
extent not returned in the same form as the original Investment to Borrower or
any Guarantor.

SECTION 6.05              Mergers and Consolidations.
Wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation (or agree to do any of the foregoing at any future time
unless any such agreement is expressly conditioned on the repayment in full of
all obligations and the termination of all Commitments hereunder), except that
the following shall be permitted:

(a)           the
Transactions as contemplated by the Transaction Documents;

(b)           Asset
Sales in compliance with Section 6.06;

(c)           acquisitions
in compliance with Section 6.07;

(d)           any
Company may merge or consolidate with or into Borrower or any Guarantor (as
long as Borrower is the surviving person in the case of any merger or consolidation
involving Borrower and a Guarantor is the surviving person and remains a Wholly
Owned Restricted Subsidiary of Borrower in any other case); provided that the Lien on and security interest in such
property granted or to be granted in favor of the Collateral Agent under the
Security Documents shall be maintained or created in accordance with the
provisions of Section 5.11 or Section 5.12, as
applicable; provided, further, that the transaction would not
result in the loss, suspension or material impairment of any Gaming License
unless a comparable replacement Gaming License is effective prior to or
simultaneously with the loss, suspension or material impairment or require any
Lender to obtain a Gaming License or be qualified or found suitable under the
law of any applicable gaming jurisdiction; provided that
such Lender would not have been required to obtain a 

 118
 

 

 

Gaming License or be qualified or found
suitable under the laws of any applicable gaming jurisdiction in the absence of
such transaction; and

(e)           any
Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided that such dissolution, liquidation or winding up,
as applicable, could not reasonably be expected to have a Material Adverse
Effect.

To the extent the Required Lenders or all the Lenders,
as applicable, waive the provisions of this Section 6.05 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 6.05, such Collateral (unless sold to a Loan Party)
shall be sold free and clear of the Liens created by the Security Documents,
and, so long as Borrower shall have provided the Agents such certifications or
documents as any Agent shall reasonably request in order to demonstrate
compliance with this Section 6.05, the Agents shall take all
actions they deem appropriate or reasonably requested by Borrower in order to
effect the foregoing.

SECTION 6.06              Asset Sales. Effect any
Asset Sale, or agree to effect any Asset Sale, except that the following shall
be permitted:

(a)           disposition
of used, worn out, obsolete or surplus property by Borrower or any Restricted
Subsidiary in the ordinary course of business and the abandonment or other
disposition of Intellectual Property that is, in the reasonable judgment of Borrower,
no longer economically practicable to maintain or useful in the conduct of the
business of Borrower and its Restricted Subsidiaries taken as a whole;

(b)           Asset
Sales; provided that the aggregate consideration
received in respect of all Asset Sales pursuant to this clause (b) shall
not exceed $3,000,000 in any fiscal year of Borrower, but, in any event, shall
not exceed $500,000 with respect to any single Asset Sale;

(c)           leases
of real or personal property in the ordinary course of business and in
accordance with Section 6.02(g) and the applicable Security
Documents;

(d)           the
Transactions as contemplated by the Transaction Documents;

(e)           mergers
and consolidations in compliance with Section 6.05;

(f)            Investments
in compliance with Section 6.04; and

(g)           any
Colonial Downs Sale; provided
that the Net Cash Proceeds with respect to any first such sale (or series of
contemporaneous sales) shall not be less than the sum of (x) $20,000,000 plus (y) the aggregate amount of Expansion Capital
Expenditures made by the Loan Parties with respect to the Colonial Downs
Business on or after the Closing Date.

To the extent the Required Lenders or all the Lenders,
as applicable, waive the provisions of this Section 6.06 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 6.06, such Collateral (unless sold to a Loan Party)
shall be sold free 

 119
 

 

 

and clear of the Liens created by the
Security Documents, and, so long as Borrower shall have provided the Agents
such certifications or documents as any Agent shall reasonably request in order
to demonstrate compliance with this Section 6.06, the Agents shall
take all actions they deem appropriate or reasonably requested by Borrower in
order to effect the foregoing.

SECTION 6.07              Acquisitions. Purchase
or otherwise acquire (in one or a series of related transactions) any part of
the property (whether tangible or intangible) of any person (or agree to do any
of the foregoing at any future time), except that the following shall be permitted:

(a)           Capital
Expenditures by Borrower and the Restricted Subsidiaries shall be permitted to
the extent permitted by Sections 6.10(d) and (e);

(b)           purchases
and other acquisitions of inventory, materials, equipment and intangible property
in the ordinary course of business;

(c)           Investments
in compliance with Section 6.04;

(d)           leases
of real or personal property in the ordinary course of business and in
accordance with Section 6.02(g) and the applicable Security
Documents;

(e)           the
Transactions as contemplated by the Transaction Documents;

(f)            Permitted
Acquisitions and Permitted Truck Plaza Acquisitions; and

(g)           mergers
and consolidations in compliance with Section 6.05;

provided that the Lien on and
security interest in such property granted or to be granted in favor of the
Collateral Agent under the Security Documents shall be maintained or created in
accordance with the provisions of Section 5.11 or Section 5.12,
as applicable.

SECTION 6.08              Dividends. Authorize,
declare or pay, directly or indirectly, any Dividends with respect to Borrower
or any Restricted Subsidiary, except that the following shall be permitted:

(a)           Dividends
by any Company to Borrower or any Guarantor that is a Wholly Owned Restricted
Subsidiary of Borrower;

(b)           if
no Default or Event of Default then exists, payments to Borrower to permit
Borrower, and the subsequent use of such payments by Borrower, to repurchase or
redeem Qualified Capital Stock of Borrower held by officers, directors or employees
or former officers, directors or employees (or their transferees, estates or
beneficiaries under their estates) of any Company, upon their death,
disability, retirement, severance or termination of employment or service in
each case pursuant to a plan previously approved by Borrower’s Board of
Directors; provided that the aggregate cash
consideration paid for all such redemptions and payments shall not exceed, in
any fiscal year, the sum of (x) $3,000,000, plus
(y) the amount of any Net Cash Proceeds received by or contributed 

 120
 

 

 

to Borrower from the issuance and sale since
the issue date of Qualified Capital Stock of Borrower to officers, directors or
employees of any Company that have not been used to make any repurchases,
redemptions or payments under this clause (b);

(c)           Permitted
Tax Distributions by Borrower;

(d)           the
Additional Transactions and Dividends deemed to have been paid solely for
accounting purposes as part of the consideration in the Gameco Acquisition, any
Permitted Truck Plaza Acquisition or the exercise of the Nautica Options;

(e)           Dividends
(solely in the form of Qualified Capital Stock) in connection with the
conversion of shares pursuant to the Organizational Documents;

(f)            Dividends
(solely in the form of Qualified Capital Stock) in connection with the exercise
of warrants and stock options held by employees or directors of the Loan Parties;
and

(g)           if
no Default or Event of Default then exists, Dividends other than any Dividends
permitted by clauses (a)-(f) of this Section 6.8, in an aggregate
amount not to exceed in any fiscal year the greater of (x) $1,000,000 and (y) 50%
of Consolidated Net Income for the immediately prior fiscal year.

SECTION 6.09              Transactions with Affiliates.
Enter into, directly or indirectly, any transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of any
Company (other than between or among Borrower and one or more Guarantors),
other than on terms and conditions at least as favorable to such Company as
would reasonably be obtained by such Company at that time in a comparable arm’s-length
transaction with a person other than an Affiliate, except that the following
shall be permitted:

(a)           Dividends
permitted by Section 6.08;

(b)           Investments
permitted by Sections 6.04(e) and (f);

(c)           reasonable
and customary director, officer and employee compensation (including bonuses)
and other benefits (including retirement, health, stock option and other
benefit plans) and indemnification arrangements, in each case approved by the
Board of Directors of Borrower;

(d)           transactions
with customers, clients, suppliers, joint venture partners or purchasers or
sellers of goods and services, in each case in the ordinary course of business
and otherwise not prohibited by the Loan Documents;

(e)           so
long as (i) no Default exists and (ii) after giving effect to such
transaction on a Pro Forma Basis, Borrower shall be in compliance with the
covenant set forth in Section 6.10(c) as of the most recent Test
Period, the payment of fees to Jacobs Investments Management Company for the
provision of Gaming Facility development advisory services rendered to Borrower
and its Restricted Subsidiaries in the amounts and at the 

 121
 

 

 

times specified in the Consulting Agreement,
as in effect on the Closing Date or as thereafter amended or replaced in any
manner, that, taken as a whole, is not more adverse to the interests of the
Lenders in any material respect than such agreement as it was in effect on the
Closing Date; provided that
payments under this clause (e) shall in any event not exceed (i) $1,250,000
in any 12-month period plus (ii) an amount equal to the documented
out-of-pocket expenses of Jacobs Investments Management Company incurred in
connection with rendering such services plus
(iii) a development fee not to exceed 2.5% of the aggregate cost of any
Gaming Facility development for which Jacobs Investments Management Company
provides advisory services;

(f)            the
existence of, and the performance by any Loan Party of its obligations under
the terms of, any limited liability company, limited partnership or other
Organizational Document or securityholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party on the Closing Date and which is described in the Confidential
Information Memorandum, as in effect on the Closing Date, and similar
agreements that it may enter into thereafter; provided, however, that the existence of, or the performance by any
Loan Party of obligations under, any amendment to any such existing agreement
or any such similar agreement entered into after the Closing Date shall only be
permitted by this Section 6.09(f) to the extent not more adverse to
the interest of the Lenders in any material respect, when taken as a whole,
than any of such documents and agreements as in effect on the Closing Date;

(g)           sales
or other issuances of Qualified Capital Stock of Borrower to Affiliates of
Borrower not otherwise prohibited by the Loan Documents and the granting of registration
and other customary rights in connection therewith;

(h)           any
transaction with an Affiliate where the only consideration paid by any Loan
Party is Qualified Capital Stock of Borrower;

(i)            the
Transactions as contemplated by the Transaction Documents;

(j)            the
payment of truck stop gaming plaza management fees to Borrower or a Guarantor
by any of their respective Affiliates; and

(k)           acquisitions
to the extent otherwise permitted by Section 6.07.

SECTION 6.10              Financial Covenants.

(a)           Maximum
Total Leverage Ratio. Permit the Total Leverage Ratio, at the last day of
any Test Period during any period set forth in the table below, to exceed the
ratio set forth opposite such period in the table below:

	
  Test Period

  	
   

  	
  Leverage Ratio

  	
   

  
	
  July 1,
  2006 - December 31, 2006

  	
   

  	
  6.50 to 1.0

  	
   

  
	
  January 1,
  2007 - March 31, 2007

  	
   

  	
  6.25 to 1.0

  	
   

  

 

 122
 

 

 

	
  April 1,
  2007 - June 30, 2007

  	
   

  	
  6.00 to 1.0

  	
   

  
	
  July 1,
  2007 - September 30, 2007

  	
   

  	
  5.75 to 1.0

  	
   

  
	
  October 1,
  2007 - December 31, 2007

  	
   

  	
  5.50 to 1.0

  	
   

  
	
  January 1,
  2008 - December 31, 2008

  	
   

  	
  5.25 to 1.0

  	
   

  
	
  January 1,
  2009 - December 31, 2009

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  January 1,
  2010 - December 31, 2010

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  January 1, 2011
  and thereafter

  	
   

  	
  4.50 to 1.0

  	
   

  

 

(b)           Maximum
Senior Secured Leverage Ratio. Permit the Senior Secured Leverage Ratio, at
the last day of any Test Period during any period set forth in the table below,
to exceed the ratio set forth opposite such period in the table below:

	
  Test Period

  	
   

  	
  Senior

  Leverage Ratio

  	
   

  
	
  July 1,
  2006 - March 31, 2007

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  April 1,
  2007 - December 31, 2007

  	
   

  	
  1.25 to 1.0

  	
   

  
	
  January 1, 2008
  and thereafter

  	
   

  	
  1.00 to 1.0

  	
   

  

 

(c)           Minimum
Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio,
for any Test Period ending during any period set forth in the table below, to
be less than the ratio set forth opposite such period in the table below:

	
  Test Period

  	
   

  	
  Interest

  Coverage Ratio

  	
   

  
	
  July 1,
  2006 - December 31, 2006

  	
   

  	
  1.75 to 1.0

  	
   

  
	
  January 1,
  2007 - December 31, 2008

  	
   

  	
  2.00 to 1.0

  	
   

  
	
  January 1, 2009
  and thereafter

  	
   

  	
  2.25 to 1.0

  	
   

  

 

(d)           Limitation
on Maintenance Capital Expenditures. Permit the aggregate amount of
Maintenance Capital Expenditures made in any fiscal year to exceed the sum of (i) $15,000,000
plus (ii) 4.0% of gross revenues from the prior fiscal year attributable
to Permitted Acquisitions or the commencement of operations of any Substantial
Project (other than the Elko Development and the Dakota Development and the
truck stop gaming plazas purchased as part of the Gameco Acquisition or the
TPSH Acquisition after the Closing Date); provided, however,
that (x) if the aggregate amount of Maintenance Capital Expenditures made
in any fiscal year shall be less than the maximum amount of Maintenance Capital
Expenditures permitted under this Section 6.10(d) for such fiscal
year (before giving effect to any carryover), then an amount of such shortfall
not exceeding $2,500,000 may be added to the amount of Maintenance 

 123
 

 

 

Capital Expenditures permitted under this Section 6.10(d)
for the immediately succeeding (but not any other) fiscal year and (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to
such fiscal year (before giving effect to any carryover).

(e)           Limitation
on Expansion Capital Expenditures. Permit Expansion Capital Expenditures to
be made except:

(i)      Expansion Capital Expenditures in an
aggregate amount not to exceed $46,500,000 in respect of the Dakota
Development, the Elko Development and the development and improvement of Pinon
Plaza; provided that the
aggregate amount of such Expansion Capital Expenditures made pursuant to this
clause (i) in respect of the Dakota Development, the Elko Development and
Pinon Plaza shall not exceed $22,000,000, $24,000,000 and $7,500,000,
respectively; provided, further, that no Expansion Capital
Expenditures shall be permitted under this clause (i) in respect of the
Dakota Development or the Elko Development after the D-E Completion Date;

(ii)     Expansion Capital Expenditures to acquire
and install new tote devices at the Colonial Downs track facility in New Kent,
Virginia and the Loan Parties’ satellite wagering facilities within the
Commonwealth of Virginia to facilitate wagering on new pari-mutuel pools,
solely to the extent wagering on such new pari-mutuel pools is authorized in Virginia,
in an aggregate amount not to exceed $10,000,000;

(iii)    Expansion Capital Expenditures not otherwise
permitted hereunder in an aggregate amount not to exceed $15,000,000; plus
the amount of Net Cash Proceeds from Excluded Issuances consummated after the
Closing Date not used for Permitted Acquisitions or to prepay Loans as
described in the definition of “Excluded Issuances”; provided that after the D-E Completion Date, such amount may
be increased by up to $10,000,000 to the extent not applied to make Permitted
Acquisitions; provided, further, that after the first anniversary
of the D-E Completion Date, such amount may be increased by up to an additional
$10,000,000 to the extent not applied to make Permitted Acquisitions; and

(iv)    the purchase of the assets subject to the
Nautica Options.

SECTION 6.11              Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc. Directly
or indirectly:

(a)           make
(or give any notice in respect thereof) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event
of, any Indebtedness outstanding under the Senior Notes or any other
Subordinated Indebtedness, except as otherwise permitted by this Agreement;

(b)           amend
or modify, or permit the amendment or modification of, any provision of any
Transaction Document or any document governing any Material Indebtedness in any
manner that is adverse in any material respect to the interests of the Lenders;

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(c)           terminate,
amend or modify any of its Organizational Documents (including (x) by the
filing or modification of any certificate of designation and (y) any
election to treat any Pledged Securities (as defined in the Security Agreement)
as a “security” under Section 8-103 of the UCC other than
concurrently with the delivery of certificates representing such Pledged
Securities to the Collateral Agent) or any agreement to which it is a party
with respect to its Equity Interests (including any stockholders’ agreement),
or enter into any new agreement with respect to its Equity Interests, other than
any such amendments or modifications or such new agreements which are not
adverse in any material respect to the interests of the Lenders; provided that Borrower may issue such Equity Interests, so
long as such issuance is not prohibited by Section 6.13 or any
other provision of this Agreement, and may amend or modify its Organizational
Documents to authorize any such Equity Interests; or

(d)           cause
or permit any other obligation (other than the Secured Obligations and the
Guaranteed Obligations) to constitute Designated Senior Debt (as defined in the
Senior Note Documents).

SECTION 6.12              Limitation on Certain Restrictions on Restricted
Subsidiaries. Directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends
or make any other distributions on its capital stock or any other interest or
participation in its profits owned by Borrower or any Restricted Subsidiary, or
pay any Indebtedness owed to Borrower or a Restricted Subsidiary, (b) make
loans or advances to Borrower or any Restricted Subsidiary or (c) transfer
any of its properties to Borrower or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) applicable
Requirements of Law; (ii) this Agreement and the other Loan Documents; (iii) the
Senior Note Documents; (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of a Restricted Subsidiary;
(v) customary provisions restricting assignment of any agreement entered
into by a Restricted Subsidiary in the ordinary course of business; (vi) any
holder of a Lien permitted by Section 6.02 restricting the transfer
of the property subject thereto; (vii) customary restrictions and
conditions contained in any agreement relating to the sale of any property
permitted under Section 6.06 pending the consummation of such sale;
(viii) any agreement in effect at the time such Restricted Subsidiary becomes
a Restricted Subsidiary of Borrower, so long as such agreement was not entered
into in connection with or in contemplation of such person becoming a Restricted
Subsidiary of Borrower; (ix) without affecting Borrower’s obligations
under Section 5.11, customary provisions in partnership agreements,
limited liability company organizational governance documents, asset sale and
stock sale agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer of ownership interests in such
partnership, limited liability company or similar person; (x) restrictions
on cash or other deposits or net worth imposed by suppliers or landlords under
contracts entered into in the ordinary course of business; (xi) any instrument
governing Indebtedness assumed in connection with any Permitted Acquisition,
which encumbrance or restriction is not applicable to any person, or the properties
or assets of any person, other than the person or the properties or assets of
the person so acquired; (xii) in the case of any joint venture which is
not a Loan Party in respect of any matters referred to in clauses (b) and
(c) above, restrictions in such person’s Organizational Documents or
pursuant to any joint venture agreement or stockholders

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agreements solely to the extent of the Equity
Interests of or property held in the subject joint venture or other entity; or
(xiii) any encumbrances or restrictions imposed by any amendments or
refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clauses (iii), (viii) or
(xi) above; provided that such amendments or refinancings
are no more materially restrictive with respect to such encumbrances and
restrictions than those prior to such amendment or refinancing.

SECTION 6.13              Limitation on Issuance of Capital Stock.

(a)           With
respect to Borrower, issue any Equity Interest that is not Qualified Capital
Stock.

(b)           With
respect to Borrower or any Restricted Subsidiary, issue any Equity Interest (including
by way of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, any Equity Interest, except (i) for stock
splits, stock dividends and additional issuances of Equity Interests in a
Restricted Subsidiary which do not decrease the percentage ownership of
Borrower or any Restricted Subsidiaries in any class of the Equity Interest of
such Restricted Subsidiary; (ii) Restricted Subsidiaries of Borrower
formed after the Closing Date in accordance with Section 6.14 may
issue Equity Interests to Borrower or the Restricted Subsidiary of Borrower
which is to own such Equity Interests and (iii) Borrower may issue common
stock that is Qualified Capital Stock. All Equity Interests issued in
accordance with this Section 6.13(b) shall, to the extent required
by Sections 5.11 and 5.12 or any Security Agreement, be
delivered to the Collateral Agent for pledge pursuant to the applicable Security
Agreement.

SECTION 6.14              Limitation on Creation of Subsidiaries.
Establish, create or acquire any additional Subsidiaries without the prior
written consent of the Required Lenders; provided
that, without such consent, Borrower may (i) establish or create one or
more Wholly Owned Restricted Subsidiaries of Borrower, (ii) establish,
create or acquire one or more Restricted Subsidiaries in connection with an Investment
made pursuant to Section 6.04(f) or (iii) acquire one or more
Restricted Subsidiaries in connection with a Permitted Acquisition, so long as,
in each case, Section 5.11(b) shall be complied with.

SECTION 6.15              Business. With respect
to Borrower and the Restricted Subsidiaries, engage (directly or indirectly) in
any type of business other than (i) those types of businesses in which
Borrower and its Restricted Subsidiaries are engaged on the Closing Date as
described in the Confidential Information Memorandum (or, in the good faith
judgment of the Board of Directors, which are substantially related thereto or
are reasonable extensions thereof), (ii) those types of businesses as
otherwise contemplated in the Confidential Information Memorandum or (iii) other
gaming business and the properties or assets ancillary thereto or used in
connection therewith, including, without limitation, casinos, hotels, resorts,
race tracks, theaters, parking facilities, recreational vehicle parks,
timeshare operations, condominiums, retail shops, restaurants, other buildings,
land, golf courses and other recreation and entertainment facilities, marinas,
vessels, barges, ships and related equipment.

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SECTION 6.16              Limitation on Accounting Changes.
Make or permit any change in accounting policies or reporting practices, without
the consent of the Required Lenders, which consent shall not be unreasonably
withheld, except changes that are required by GAAP.

SECTION 6.17              Fiscal Year. Change its
fiscal year-end to a date other than December 31.

SECTION 6.18              Excluded Subsidiaries. Borrower
will not permit any Excluded Subsidiary to (x) engage in any business, (y) own
any (i) Gaming Licenses or (ii) assets (including, without limitation,
cash and Cash Equivalents) other than assets with a book value not exceeding (I) $1,000,000
or (II) when combined with the aggregate book value of all assets owned by
each other Excluded Subsidiary, 5% of the aggregate book value of all assets
owned by Borrower and its Subsidiaries on a consolidated basis at any time, or (z) have
any liabilities; provided that
any Excluded Subsidiary may engage in those activities that are incidental to (x) the
maintenance or termination of its corporate existence in compliance with
applicable law and (y) legal, tax and accounting matters in connection
with any of the foregoing activities.

SECTION 6.19              No Further Negative Pledge.
Enter into any agreement, instrument, deed or lease which prohibits or limits
the ability of any Loan Party to create, incur, assume or suffer to exist any
Lien upon any of their respective properties or revenues, whether now owned or
hereafter acquired, or which requires the grant of any security for an
obligation if security is granted for another obligation, except the
following:  (1) this Agreement and
the other Loan Documents; (2) covenants in documents creating Liens
permitted by Section 6.02 prohibiting further Liens on the
properties encumbered thereby; (3) the Senior Note Documents as in effect
on the Closing Date; (4) any other agreement that does not restrict in any
manner (directly or indirectly) Liens created pursuant to the Loan Documents on
any Collateral securing the Secured Obligations and does not require the direct
or indirect granting of any Lien securing any Indebtedness or other obligation
by virtue of the granting of Liens on or pledge of property of any Loan Party
to secure the Secured Obligations; and (5) any prohibition or limitation
that (a) exists pursuant to applicable Requirements of Law, (b) consists
of customary restrictions and conditions contained in any agreement relating to
the sale of any property permitted under Section 6.06 pending the
consummation of such sale, (c) restricts subletting or assignment of any
lease governing a leasehold interest of Borrower or a Restricted Subsidiary, (d) exists
in any agreement in effect at the time such Restricted Subsidiary becomes a Restricted
Subsidiary of Borrower, so long as such agreement was not entered into in
contemplation of such person becoming a Restricted Subsidiary or (e) is
imposed by any amendments or refinancings that are otherwise permitted by the
Loan Documents of the contracts, instruments or obligations referred to in
clause (3) or (5)(d); provided
that such amendments and refinancings are no more materially restrictive with
respect to such prohibitions and limitations than those prior to such amendment
or refinancing.

SECTION 6.20              Anti-Terrorism Law; Anti-Money
Laundering.

(a)           Directly
or indirectly, (i) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of
any per-

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son described in Section 3.22, (ii) knowingly
deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law (and Borrower shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable
discretion, confirming the Loan Parties’ compliance with this Section 6.20).

(b)           Cause
or permit any of the funds of such Loan Party that are used to repay the Loans
to be derived from any unlawful activity with the result that the making of the
Loans would be in violation of any Requirement of Law.

SECTION 6.21              Embargoed Person. Cause
or permit (a) any of the funds or properties of the Loan Parties that are
used to repay the Loans to constitute property of, or be beneficially owned
directly or indirectly by, any person subject to sanctions or trade restrictions
under United States law (“Embargoed Person”
or “Embargoed Persons”) that is
identified on (1) the “List of Specially Designated Nationals and Blocked
Persons” maintained by OFAC and/or on any other similar list maintained by OFAC
pursuant to any authorizing statute including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any
Executive Order or Requirement of Law promulgated thereunder, with the result
that the investment in the Loan Parties (whether directly or indirectly) is
prohibited by a Requirement of Law, or the Loans made by the Lenders would be
in violation of a Requirement of Law, or (2) the Executive Order, any
related enabling legislation or any other similar Executive Orders or (b) any
Embargoed Person to have any direct or indirect interest, of any nature
whatsoever in the Loan Parties, with the result that the investment in the Loan
Parties (whether directly or indirectly) is prohibited by a Requirement of Law
or the Loans are in violation of a Requirement of Law.

ARTICLE
VII

[RESERVED]

ARTICLE
VIII

EVENTS OF
DEFAULT

SECTION 8.01              Events of Default. Upon
the occurrence and during the continuance of the following events (“Events of Default”):

(a)           default
shall be made in the payment of any principal of any Loan or any Reimbursement
Obligation when and as the same shall become due and payable, whether at the
due date thereof (including a Tranche B Repayment Date) or at a date fixed for
prepayment (whether voluntary or mandatory) thereof or by acceleration thereof
or otherwise;

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(b)           default
shall be made in the payment of any interest on any Loan or any Fee or any
other amount (other than an amount referred to in paragraph (a) above)
due under any Loan Document, when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days;

(c)           any
representation or warranty made or deemed made in or in connection with any
Loan Document or the borrowings or issuances of Letters of Credit hereunder, or
any representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;

(d)           default
shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in Section 5.02, 5.03(a)
or 5.08 or in Article VI;

(e)           default
shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in any Loan Document (other than
those specified in paragraphs (a), (b) or (d) immediately above)
and such default shall continue unremedied or shall not be waived for a period
of 30 days after written notice thereof from the Administrative Agent or
any Lender to Borrower;

(f)            Borrower
or any Restricted Subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness (other than
the Obligations), when and as the same shall become due and payable beyond any
applicable grace period, or (ii) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder
or holders of such Indebtedness or a trustee or other representative on its or
their behalf (with or without the giving of notice, the lapse of time or both)
to cause, such Indebtedness to become due prior to its stated maturity or
become subject to a mandatory offer purchase by the obligor; provided that it shall not constitute an Event of Default
pursuant to this paragraph (f) unless the aggregate amount of all such
Indebtedness referred to in clauses (i) and (ii) exceeds
$5,000,000 at any one time (provided that,
in the case of Hedging Obligations, the amount counted for this purpose shall
be the amount payable by Borrower and its Restricted Subsidiaries together if
such Hedging Obligations were terminated at such time);

(g)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect
of any Company, or of a substantial part of the property of any Company, under
Title 11 of the U.S. Code, as now constituted or hereafter amended, or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Company or for a substantial part of the property of
any Company; or (iii) the winding-up or liquidation of 

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any Company; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;

(h)           any
Company shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law; (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in clause (g) above;
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Company or for
a substantial part of the property of any Company; (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors; (vi) become
unable, admit in writing its inability or fail generally to pay its debts as
they become due; (vii) take any action for the purpose of effecting any of
the foregoing; or (viii) wind up or liquidate;

(i)            one
or more judgments, orders or decrees for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against one or more Companies
and the same shall remain undischarged, unvacated or unbonded for a period of
60 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to levy upon
properties of any Company to enforce any such judgment;

(j)            one
or more ERISA Events shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in liability of any Company and its ERISA Affiliates in
an aggregate amount exceeding $1,000,000 or in the imposition of a Lien on any
properties of a Company;

(k)           any
security interest and Lien purported to be created by any Security Document
shall cease to be in full force and effect, or shall cease to give the
Collateral Agent, for the benefit of the Secured Parties, the Liens, rights,
powers and privileges purported to be created and granted under such Security
Document (including a perfected first priority security interest in and Lien on
all of the Collateral thereunder (except as otherwise expressly provided in
this Agreement or such Security Document)) in favor of the Collateral Agent, or
shall be asserted by Borrower or any other Loan Party not to be a valid,
perfected, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in or Lien on the
Collateral covered thereby;

(l)            any
Loan Document or any material provisions thereof shall at any time and for any
reason be declared by a court of competent jurisdiction to be null and void, or
a proceeding shall be commenced by any Loan Party or any other person, or by
any Governmental Authority, seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any Loan Party shall repudiate or deny any portion of
its liability or obligation for the Obligations;

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(m)          there
shall have occurred a Change in Control;

(n)           the
Guarantee Agreement shall cease to be, or shall have been asserted not to be,
in full force and effect;

(o)           any
Company shall be prohibited or otherwise restrained from conducting the
business theretofore conducted by it in any manner that has or could reasonably
be expected to result in a Material Adverse Effect by virtue of any
determination, ruling, decision, decree or order of any court or Governmental
Authority of competent jurisdiction; or

(p)           there
shall have occurred any License Revocation; provided that
to the extent such License Revocation relates to a truck stop video gaming facility
or pari-mutuel wagering facility, such License Revocation shall not constitute
an Event of Default unless individually or in the aggregate, it represents in
excess of 5% of Borrower’s consolidated net revenues for the most recently
completed Test Period for which internal financial statements are then
available.

then, and in every such event (other than an event
with respect to Borrower described in paragraph (g) or (h) above),
and at any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to Borrower,
take either or both of the following actions, at the same or different
times:  (i) terminate forthwith the
Commitments and (ii) declare the Loans and Reimbursement Obligations then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans and Reimbursement Obligations so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other Obligations of Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower, anything contained herein or in any other Loan Document to
the contrary notwithstanding; and in any event with respect to Borrower
described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans and Reimbursement
Obligations then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other Obligations of Borrower accrued hereunder and
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by Borrower, anything contained herein or in
any other Loan Document to the contrary notwithstanding.

SECTION 8.02              Rescission. If at any
time after termination of the Commitments or acceleration of the maturity of
the Loans, Borrower shall pay all arrears of interest and all payments on
account of principal of the Loans and Reimbursement Obligations owing by it
that shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified herein) and all Defaults (other than non-payment of principal of and
accrued interest on the Loans due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 10.02, then upon
the written consent of the Required Lenders and written notice to Borrower, the
termination of the Commitments or the acceleration and its consequences may be
rescinded and annulled; but such action shall not affect any subsequent Default
or impair any right or remedy consequent 

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thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders and the Issuing Bank to a decision
that may be made at the election of the Required Lenders, and such provisions
are not intended to benefit Borrower and do not give Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.

SECTION 8.03              Application of Proceeds.
The proceeds received by the Collateral Agent in respect of any sale of, collection
from or other realization upon all or any part of the Collateral pursuant to
the exercise by the Collateral Agent of its remedies shall be applied, in full
or in part, together with any other sums then held by the Collateral Agent pursuant
to this Agreement, promptly by the Collateral Agent as follows:

(a)           First, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other realization
including compensation to the Collateral Agent and its agents and counsel, and
all expenses, liabilities and advances made or incurred by the Collateral Agent
in connection therewith and all amounts for which the Collateral Agent is
entitled to indemnification pursuant to the provisions of any Loan Document,
together with interest on each such amount at the highest rate then in effect
under this Agreement from and after the date such amount is due, owing or
unpaid until paid in full;

(b)           Second, to the payment of all other reasonable costs and
expenses of such sale, collection or other realization including compensation
to the other Secured Parties and their agents and counsel and all costs,
liabilities and advances made or incurred by the other Secured Parties in
connection therewith, together with interest on each such amount at the highest
rate then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;

(c)           Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the indefeasible payment in full
in cash, pro rata, of interest and other amounts
constituting Obligations (including Reimbursement Obligations) (other than
principal and obligations to cash collateralize Letters of Credit) and any
fees, premiums and scheduled periodic payments due under Hedging Agreements or
Treasury Services Agreements constituting Secured Obligations and any interest
accrued thereon, in each case equally and ratably in accordance with the
respective amounts thereof then due and owing;

(d)           Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount of the Obligations and any
premium thereon (including obligations to cash collateralize Letters of Credit)
and any breakage, termination or other payments under Hedging Agreements and
Treasury Services Agreements constituting Secured Obligations and any interest
accrued thereon; and

(e)           Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns) or
as a court of competent jurisdiction may direct.

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In the event that any such proceeds are insufficient
to pay in full the items described in clauses (a) through (e) of
this Section 8.03, the Loan Parties shall remain liable, in accordance
with the terms of the Loan Documents, for any deficiency.

ARTICLE
IX

THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

SECTION 9.01              Appointment and Authority.
Each of the Lenders and the Issuing Bank hereby irrevocably appoints Credit
Suisse, Cayman Islands Branch, to act on its behalf as the Administrative Agent
and the Collateral Agent hereunder and under the other Loan Documents and
authorizes such Agents to take such actions on its behalf and to exercise such
powers as are delegated to such Agents 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 Collateral Agent, the Lenders and the Issuing Bank, and neither
Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.

SECTION 9.02              Rights as a Lender. Each
person serving as an 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 an Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
each person serving as an 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 an Agent hereunder and without any duty to account
therefor to the Lenders.

SECTION 9.03              Exculpatory Provisions.
No Agent shall have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. Without limiting the generality of the
foregoing, no Agent:

(i)      shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing;

(ii)     shall 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 such Agent is required to exercise as directed in writing by the Required
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 such Agent shall not be required to take any
action that, in its judgment or the judgment of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable
Requirements of Law; and

(iii)    shall, 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 in-

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formation
relating to Borrower or any of its Affiliates that is communicated to or obtained
by the person serving as such Agent or any of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not
taken by it (x) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as
such Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Section 10.02) or (y) in the absence of its own
gross negligence or willful misconduct. No Agent shall be deemed to have
knowledge of any Default unless and until notice describing such Default is
given to such Agent by Borrower, a Lender or the Issuing Bank.

No Agent shall 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 such Agent. Without limiting the generality of the foregoing, the
use of the term “agent” in this Agreement with reference to the Administrative
Agent or the Collateral Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
law. Instead, such term is used merely as a matter of market custom and is
intended to create or reflect only an administrative relationship between independent
contracting parties.

SECTION 9.04              Reliance by Agent. Each
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. Each
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 Issuing
Bank, the Administrative Agent may presume that such condition is satisfactory
to such Lender or the Issuing Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Bank prior to the making
of such Loan or the issuance of such Letter of Credit. Each 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.

SECTION 9.05              Delegation of Duties. Each
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, or delegate any and
all such rights and powers to, any one or more sub-agents appointed by
such Agent. Each 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 excul-

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patory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of each 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 Agent.

SECTION 9.06              Resignation of Agent. Each
Agent may at any time give notice of its resignation to the Lenders, the
Issuing Bank and Borrower. Upon receipt of any such notice of resignation, the
Required 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 Affiliate of any such bank with an office in the United States, and shall
be a Qualified Person. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may on behalf of the Lenders and the Issuing Bank, appoint a successor
Agent meeting the qualifications set forth above provided that if the 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 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 Collateral Agent on
behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the
retiring Collateral Agent shall continue to hold such collateral security as
nominee until such time as a successor Collateral Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or through
an Agent shall instead be made by or to each Lender and the Issuing Bank
directly, until such time as the Required Lenders appoint a successor Agent as
provided for above in this paragraph. Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or retired) Agent, and the retiring 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 paragraph). The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor. After
the retiring Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article IX and Section 10.03
shall continue in effect for the benefit of such retiring 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 Agent was acting as Agent.

SECTION 9.07              Non-Reliance on Agent and Other Lenders.
Each Lender and the Issuing Bank acknowledges that it has, independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender further represents and
warrants that it has reviewed the Confidential Information Memorandum and each
other document made available to it on the Platform in connection with this
Agreement and has acknowledged and accepted the terms and conditions applicable
to the recipients thereof. Each Lender and the Issuing Bank also acknowledges
that it will, independently and without reliance upon any Agent or any other
Lender 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 based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

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SECTION 9.08              No Other Duties, etc. Anything
herein to the contrary notwithstanding, none of Arrangers or Agents 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, the Collateral Agent, a
Lender or the Issuing Bank hereunder.

ARTICLE X

MISCELLANEOUS

SECTION 10.01            Notices.

(a)           Generally.
Except in the case of notices and other communications expressly permitted to
be given by telephone (and except as provided in paragraph (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:

(i)      if to any Loan Party, to Borrower at:

Jacobs Entertainment, Inc.

17301 W. Colfax Avenue Suite 250

Golden, CO  80401

Attention:  Stephen R. Roark

Telephone No:  303-215-5201

Telecopier No.:  303-215-5219

Email:  sroark@bhwk.com

with a copy to:

Baker & Hostetler LLP

3200 National City Center

1900 East Ninth Street

Cleveland, OH  44114

Attention:  Phillip M. Callesen

Telephone No.:  216-861-7884

Telecopier No.:  216-696-0740

Email:  pcallesen@bakerlaw.com

(ii)     if to the Administrative Agent, the
Collateral Agent or Issuing Bank, to it at:

Credit Suisse, Cayman Islands Branch

11 Madison Avenue

New York, NY  10010

Attention:  Thomas Lynch, Agency Group
Manager

Telecopier No.:  (212) 325-8304

 

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(iii)    if to the Swingline Lender, to it at:

Wells Fargo Bank, National Association

Debby Moore

201 3rd Street 8th Floor

San Francisco, CA  94103

Telephone No.:  (415) 479-5379

Telecopier No.:  (415) 546-6353

Email :  mooredj@wellsfargo.com

(iv)    if to a Lender, to it at its address (or
telecopier number) set forth 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 paragraph (b) below, shall
be effective as provided in said paragraph (b).

(b)           Electronic
Communications. Notices and other communications to the Lenders and the
Issuing Bank hereunder may (subject to Section 10.01(d)) 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 Issuing Bank
pursuant to Article II if such Lender or the Issuing Bank, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The
Administrative Agent, the Collateral 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 (including as set forth in
Section 10.01(d)); 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 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.

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(c)           Change
of Address, etc. Any party hereto may change its address or telecopier
number for notices and other communications hereunder by notice to the other parties
hereto.

(d)           Posting.
Borrower hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to this Agreement and any other Loan
Document, including all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) relates to a request for a new, or a conversion
of an existing, Borrowing or other extension of credit (including any election
of an interest rate or interest period relating thereto), (ii) relates to
the payment of any principal or other amount due under this Agreement prior to
the scheduled date therefor, (iii) provides notice of any Default under
this Agreement or (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or any borrowing
or other extension of credit hereunder (all such non-excluded communications,
collectively, the “Communications”),
by transmitting the Communications in an electronic/soft medium in a format
reasonably acceptable to the Administrative Agent at such e-mail address(es)
provided to Borrower from time to time or in such other form, including hard
copy delivery thereof, as the Administrative Agent shall require. In addition,
Borrower agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in this Agreement or any other Loan Document or
in such other form, including hard copy delivery thereof, as the Administrative
Agent shall require. Nothing in this Section 10.01 shall prejudice
the right of the Agents, any Lender or any Loan Party to give any notice or
other communication pursuant to this Agreement or any other Loan Document in
any other manner specified in this Agreement or any other Loan Document or as
any such Agent shall require.

To the extent consented to by the Administrative Agent
in writing from time to time, Administrative Agent agrees that receipt of the
Communications by the Administrative Agent at its e-mail address(es) set forth
above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents; provided
that Borrower shall also deliver to the Administrative Agent an executed
original of each Compliance Certificate required to be delivered hereunder.

Borrower further agrees that Administrative Agent may
make the Communications available to the Lenders by posting the Communications
on Intralinks or a substantially similar electronic transmission system (the “Platform”). The Platform is provided “as is” and “as
available.”  The Agents do not warrant
the accuracy or completeness of the Communications, or the adequacy of the
Platform and expressly disclaim liability for errors or omissions in the
communications. No warranty of any kind, express, implied or statutory, including,
without limitation, any warranty of merchantability, fitness for a particular
purpose, non-infringement of third party rights or freedom from viruses or
other code defects, is made by any Agent in connection with the Communications
or the Platform. In no event shall the Administrative Agent or any of its
Related Parties have any liability to the Loan Parties, any Lender or any other
person for damages of any kind, including direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of any Loan Party’s or the Administrative
Agent’s transmission of communications through the Internet, except to 

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the extent the liability of such person is
found in a final non-appealable judgment by a court of competent jurisdiction
to have resulted from such person’s gross negligence or willful misconduct.

SECTION 10.02            Waivers; Amendment.

(a)           Generally.
No failure or delay by any Agent, the Issuing Bank or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of each Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by this Section 10.02, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time. No notice or demand
on Borrower in any case shall entitle Borrower to any other or further notice
or demand in similar or other circumstances.

(b)           Required
Consents. Subject to Section 10.02(c), (d) and (e),
neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended, supplemented or modified except, in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by Borrower and the Required Lenders or, in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the Collateral Agent (in the case of any Security
Document) and the Loan Party or Loan Parties that are party thereto, in each
case with the written consent of the Required Lenders; provided
that, prior to the Closing Date, no waiver, amendment, supplement or
modification of this Agreement shall be permitted without the prior written
consent of the Arrangers; provided,
further, that no such agreement
shall be effective if the effect thereof would:

(i)      increase the Commitment of any Lender
without the written consent of such Lender (it being understood that no
amendment, modification, termination, waiver or consent with respect to any
condition precedent, covenant or Default shall constitute an increase in the
Commitment of any Lender);

(ii)     reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon (other than interest
pursuant to Section 2.06(c)), or reduce any Fees payable hereunder,
or change the form or currency of payment of any Obligation, without the
written consent of each Lender directly affected thereby (it being understood
that any amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in the rate of interest for purposes
of this clause (ii));

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(iii)    (A) change the scheduled final maturity
of any Loan, or any scheduled date of payment of or the installment otherwise
due on the principal amount of any Tranche B Loan under Section 2.09,
(B) postpone the date for payment of any Reimbursement Obligation or any
interest or fees payable hereunder, (C) change the amount of, waive or
excuse any such payment (other than waiver of any increase in the interest rate
pursuant to Section 2.06(c)), or (D) postpone the scheduled
date of expiration of any Commitment or any Letter of Credit beyond the
Revolving Maturity Date, in any case, without the written consent of each
Lender directly affected thereby;

(iv)    increase the maximum duration of Interest
Periods hereunder, without the written consent of each Lender directly affected
thereby;

(v)     permit the assignment or delegation by
Borrower of any of its rights or obligations under any Loan Document, without
the written consent of each Lender;

(vi)    release all or substantially all of the
Guarantors from their Guarantee under the Guarantee Agreement (except as
expressly provided in the Guarantee Agreement), or limit their liability in
respect of such Guarantee, without the written consent of each Lender;

(vii)   release all or a substantial portion of the
Collateral from the Liens of the Security Documents or alter the relative
priorities of the Secured Obligations entitled to the Liens of the Security
Documents, in each case without the written consent of each Lender;

(viii)  change Section 2.14(b), (c)
or (d) in a manner that would alter the pro rata
sharing of payments or setoffs required thereby or any other provision in a manner
that would alter the pro rata
allocation among the Lenders of Loan disbursements, including the requirements
of Sections 2.02(a), 2.17(d) and 2.18(d), without the
written consent of each Lender directly affected thereby;

(ix)    change any provision of this Section 10.02(b)
or Section 10.02(c) or (d), without the written consent of
each Lender directly affected thereby;

(x)     change the percentage set forth in the
definition of “Required Lenders,” “Required Class Lenders,” “Required
Revolving Lenders” or any other provision of any Loan Document (including this
Section) specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), other than to
increase such percentage or number or to give any additional Lender or group of
Lenders such right to waive, amend or modify or make any such determination or
grant any such consent;

(xi)    change the application of prepayments as
among or between Classes under Section 2.10(h), without the written
consent of the Required Class Lenders of each Class that is being
allocated a lesser prepayment as a result thereof (it being understood that the

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Required
Lenders may waive, in whole or in part, any mandatory prepayment so long as the
application, as between Classes, of any portion of such prepayment that is
still required to be made is not changed);

(xii)   change or waive the application of
prepayments of Tranche B Loans set forth in Section 2.10(h) to the
remaining scheduled amortization payments to be made thereon under Section 2.09,
without the written consent of the Required Class Lenders of such Class;

(xiii)  change or waive any provision of Article X
as the same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without the written
consent of such Agent;

(xiv)  change or waive any obligation of the Lenders
relating to the issuance of or purchase of participations in Letters of Credit,
without the written consent of the Administrative Agent and the Issuing Bank;

(xv)   change or waive any provision hereof relating
to Swingline Loans (including the definition of “Swingline Commitment”),
without the written consent of the Swingline Lender;

(xvi)  expressly change or waive any condition
precedent in Section 4.02 to any Revolving Borrowing without the
written consent of the Required Revolving Lenders; or

(xvii) expressly change or waive any condition
precedent in Section 4.02 to any Delayed Draw Tranche B Loan
without the written consent of the Required Delayed Draw Tranche B Lenders.

(c)           Collateral.
Without the consent of any other person, the applicable Loan Party or Parties
and the Administrative Agent and/or Collateral Agent may (in its or their respective
sole discretion, or shall, to the extent required by any Loan Document) enter
into any amendment or waiver of any Loan Document, or enter into any new
agreement or instrument, to effect the granting, perfection, protection,
expansion or enhancement of any security interest in any Collateral or
additional property to become Collateral for the benefit of the Secured Parties,
or as required by local law to give effect to or protect any security interest
for the benefit of the Secured Parties in any property or so that the security
interests therein comply with applicable Requirements of Law.

(d)           Dissenting
Lenders. If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by Section 10.02(b),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then Borrower
shall have the right to replace all, but not less than all, of such
non-consenting Lender or Lenders (so long as all non-consenting Lenders are so
replaced) with one or more persons pursuant to Section 2.16 so long
as at the time of such replacement each such new Lender consents to the
proposed change, waiver, discharge or termination. Each Lender agrees that, if
Borrower elects to replace such Lender in accordance with this Section, it
shall promptly execute and deliver to the Administra-

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tive Agent an Assignment and Assumption to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Note (if Notes have been issued in respect of such Lender’s Loans) subject
to such Assignment and Assumption; provided
that the failure of any such non-consenting Lender to execute an Assignment and
Assumption shall not render such sale and purchase (and the corresponding
assignment) invalid and such assignment shall be recorded in the Register.

(e)           Refinanced
Tranche B Loans. In addition, notwithstanding the foregoing, this Agreement
may be amended with the written consent of the Administrative Agent, Borrower
and the Lenders providing the relevant Replacement Term Loans (as defined
below) to permit the refinancing of all outstanding Tranche B Loans (“Refinanced Term Loans”) with a replacement “B”
term loan tranche hereunder which shall constitute Tranche B Loans hereunder (“Replacement Term Loans”); provided that (a) the aggregate principal amount of
Replacement Term Loans shall not exceed the aggregate principal amount of Refinanced
Term Loans, (b) the Applicable Margin for Replacement Term Loans shall not
be higher than the Applicable Margin for Refinanced Term Loans, (c) the
weighted average life to maturity of Replacement Term Loans shall not be
shorter than the weighted average life to maturity of Refinanced Term Loans at
the time of such refinancing and (d) all other terms applicable to Replacement
Term Loans shall be substantially identical to, or less favorable to the
Lenders providing Replacement Term Loans than, those applicable to Refinanced
Term Loans immediately prior to such refinancing, except to the extent necessary
to provide for covenants and other terms applicable to any period after the
Final Maturity Date.

SECTION 10.03            Expenses; Indemnity; Damage Waiver.

(a)           Costs
and Expenses. Borrower shall pay (i) all amounts required to be paid
in the Engagement Letter and (ii) reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent and their
respective Affiliates (including half of the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and/or the Collateral
Agent) in connection with the syndication of the credit facilities provided for
herein (including the obtaining and maintaining of CUSIP numbers for the Loans)
and the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents. Borrower shall pay (i) reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent and their respective Affiliates (including all of the reasonable fees,
charges and disbursements of counsel for the Administrative Agent and/or
Collateral Agent) in connection with any amendment, amendment and restatement,
modification or waiver of the provisions hereof or of the other Loan Documents
(whether or not the transactions contemplated hereby or thereby shall be
consummated), including in connection with post-closing searches to confirm
that security filings and recordations have been properly made, (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, any Lender
or the Issuing Bank (including all of the fees, charges and disbursements of
any counsel for the Administrative Agent, the Collateral Agent, any Lender or
the Issuing Bank) in connection with the enforcement or protection of its
rights and remedies (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section 10.03, or (B) in

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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, and (iv) all documentary and similar taxes and
charges in respect of the Loan Documents.

(b)           Indemnification
by Borrower. Borrower shall indemnify the Administrative Agent (and any
sub-agent thereof), the Collateral Agent (and any sub-agent thereof) each
Lender and the Issuing Bank, 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) 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
amendment, amendment and restatement, modification or waiver of the provisions
hereof or thereof, 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 Issuing
Bank 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
or threatened Release of Hazardous Materials on, at, under or from any property
owned, leased or operated by any Company at any time, or any Environmental
Claim related in any way to any Company, 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 paragraph (a) or (b) of this Section 10.03
to be paid by it to the Administrative Agent (or any sub-agent thereof), the
Collateral Agent, the Issuing Bank, the Swingline Lender 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 Collateral Agent (or any
sub-agent thereof), the Issuing Bank, the Swingline Lender or such Related
Party, as the case may be, such Lender’s pro  rata share (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), the
Collateral Agent (or any sub-agent thereof), the Swingline Lender or the
Issuing Bank in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administra-

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tive Agent (or any such sub-agent), the
Collateral Agent (or any sub-agent thereof), the Swingline Lender or Issuing
Bank in connection with such capacity. The obligations of the Lenders under
this paragraph (c) are subject to the provisions of Section 2.14.
For purposes hereof, a Lender’s “pro  rata share” shall be determined based upon its share of the
sum of the total Revolving Exposure, outstanding Tranche B Loans and unused Commitments
at the time.

(d)           Waiver
of Consequential Damages, Etc. To the fullest extent permitted by applicable
Requirements of Law, Borrower shall not and shall cause each Loan Party not to
assert, and Borrower hereby waives and shall cause each other Loan Party to
waive, 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. To the fullest extent permitted by
applicable Requirements of Law, no Indemnitee referred to in paragraph (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 3
Business Days after demand therefor.

SECTION 10.04            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 Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Lender,
the Swingline Lender 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 paragraph (b) of this Section 10.04,
(ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section 10.04 or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
paragraph (f) of this Section (and any other attempted
assignment or transfer by Borrower or any Lender 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 paragraph (d) of
this Section and, to the extent expressly contemplated hereby, the other
Indemnitees) 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 Commitment and the Loans at the time owing
to it); provided that

(i)      except in the case of (x) any
assignment made in connection with the primary syndication of the Commitment
and Loans by the Arrangers, (y) an assignment of 

 144
 

 

 

the entire
remaining amount of the assigning Lender’s Commitment and the Loans at the time
owing to it or (z) 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 Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is 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 $2.5 million, in the case of any
assignment in respect of Revolving Loans and/or Revolving Commitments, or $1.0
million, in the case of any assignment in respect of Tranche B Loans and/or
Tranche B Loan Commitments, unless each of the Administrative Agent and, so
long as no Default has occurred and is continuing, Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed);

(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 Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender
from assigning all or a portion of its rights and obligations among separate
tranches on a non-pro rata basis; and

(iii)    the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption via an
electronic settlement system acceptable to the Administrative Agent (or, if
previously agreed with the Administrative Agent, manually), shall pay to the
Administrative Agent a processing and recordation fee of $3,500 (which fee may
be waived or reduced in the sole discretion of the Administrative Agent) and
deliver appropriate tax forms.

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section 10.04,
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 2.12, 2.13, 2.15 and 10.03
with respect to facts and circumstances occurring prior to the effective date
of such assignment. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph 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 paragraph (d) of
this Section 10.04.

(c)           Register.
The Administrative Agent, acting solely for this purpose as an agent of
Borrower, shall maintain at its office in New York, New York a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and ad-

 145
 

 

 

dresses of the Lenders, and the Commitments
of, and principal amounts of the Loans and LC Disbursements 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, the Issuing Bank
and the Lenders shall 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 Borrower, the Issuing Bank, the Collateral Agent,
the Swingline Lender and any Lender (with respect to its own interest only), at
any reasonable time and from time to time upon reasonable prior notice.

(d)           Participations.
Any Lender may at any time, without the consent of, or notice to, Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender 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 such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) Borrower, the Administrative Agent and the
Lenders and Issuing Bank shall continue to deal solely and directly with such
Lender in connection with such 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 the Loan Documents and to approve any amendment, modification
or waiver of any  provision of the Loan
Documents; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in clause (i), (ii) or
(iii) of the first proviso to Section 10.02(b) that affects
such Participant. Subject to paragraph (e) of this Section, Borrower
agrees that each Participant shall be entitled to the benefits of Sections
2.12, 2.13 and 2.15 (subject to the requirements of those
Sections) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (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 2.14 as though it were
a Lender.

(e)           Limitations
on Participant Rights. A Participant shall not be entitled to receive any
greater payment under Sections 2.12, 2.13 and 2.15 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.

(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 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. In the case of any Lender that is a fund that invests in bank loans,
such Lender may, without the consent of Borrower or the Administrative Agent,
collaterally assign or pledge all or any portion of its rights under this
Agreement, including the Loans and Notes or any other instrument evidenc-

 146
 

 

 

ing its rights as a Lender under this
Agreement, to any holder of, trustee for, or any other representative of
holders of, obligations owed or securities issued, by such fund, as security
for such obligations or securities.

(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
Requirement of 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)           If
any Gaming Authority shall determine that any Lender is not a Qualified Person
(in any such case, a “Former Lender”),
the Administrative Agent and each Issuing Lender or Borrower shall have the
right (but not the duty) to designate a lender or lenders (in each case, a “Substitute Lender,” which may be any Lender or Lenders that
agree to become a Substitute Lender and, if not an existing Lender, with the
consent of the Administrative Agent and Borrower to the extent provided in Section 10.04(b))
that have agreed to assume the rights and obligations of the Former Lender,
subject to receipt by the Administrative Agent of evidence satisfactory to the
Administrative Agent that such Substitute Lender is a Qualified Person, or has
a reasonable basis for a belief that the Substitute Lender is eligible to be a
Qualified Person, and compliance with Gaming Laws. The Substitute Lender shall
assume the rights and obligations of the Former Lender under this Agreement
pursuant to an Assignment and Assumption, which assumption shall be required to
comply with, and shall become effective in accordance with, the provisions of Section 10.04(b);
provided that the purchase price
to be paid by the Substitute Lender to the Administrative Agent for the account
of the Former Lender for such assumption shall equal the sum of (i) the
unpaid principal amount of any Notes held or Loans made by the Former Lender
plus accrued interest thereon, plus (ii) the Former Lender’s pro rata share of the aggregate amount of
Reimbursement Obligations that have not been reimbursed by Borrower, plus accrued
interest thereon, plus (iii) such Former Lender’s pro rata share of accrued Fees to the date
of the assumption; and provided, further, Borrower shall pay all obligations
owing to the Former Lender under the Loan Documents. Each Lender agrees that if
it becomes a Former Lender, upon payment to it by Borrower of all such amounts,
if any, owing to it under the Loan Documents, it will execute and deliver an
Assignment and Assumption upon payment of such purchase price.

(i)            Notwithstanding
the provisions of subsection (h) of this Section 10.04, but
subject to applicable Gaming Laws, if any Lender becomes a Former Lender, and
if the Administrative Agent or Borrower fails to find a Substitute Lender
pursuant to subsection (h) of this Section within any time period
specified by the appropriate Gaming Authority for the withdrawal of a Former
Lender (the “Withdrawal Period”),
Borrower shall immediately (i) prepay in full the outstanding principal
amount of each Note held or Loan made by such Former Lender, together with
accrued interest thereon to the later of (x) the date of payment or (y) the
last day of any Withdrawal Period, and (ii) at the option of Borrower
either (A) place an amount equal to such Former Lender’s LC Exposure in a
separate cash collateral account with the Administrative 

 147
 

 

 

Agent for each outstanding Letter of Credit,
which amount will be applied by the Administrative Agent to satisfy Borrower’s
Reimbursement Obligations to the respective Issuing Lender under the applicable
Letter of Credit, or (B) if no Default or Event of Default then exists,
terminate the Revolving Loan Commitment of such Former Lender, at which time
the other Lenders’ Revolving Loan percentages will be automatically adjusted as
a result thereof; provided that
the option specified in this clause (B) may only be exercised if,
immediately after giving effect thereto, no Lender’s outstanding Revolving
Loans, when added to the product of (a) such Lender’s Revolving Loan
Percentage and (b) the sum of (I) the aggregate amount of all Letter
of Credit Outstandings at such time and (II) the aggregate amount of all
Swingline Loans then outstanding, would exceed such Lender’s Revolving Loan
Commitment at such time.

(j)            Subject
to the last sentence of this Section 10.04(j), each Lender agrees
that all participations and assignments made hereunder shall be subject to, and
made in compliance with, all Gaming Laws applicable to lenders. Each Lender
agrees further that it will not grant participations or assignments (other than
to funds that invest in bank loans and are managed by the same investment
advisor of such assigning Lender) prior to receiving notice from the
Administrative Agent that it has completed the primary syndication of this
facility. The Administrative Agent shall provide such notice to the Lenders and
Borrower promptly after completing such primary syndication. Borrower hereby
acknowledges that unless Borrower has provided the Lenders with a written
opinion of counsel as to the suitability standards applicable to lenders of any
relevant Gaming Authority, no Lender shall have the responsibility of
determining whether or not a potential assignee of such Lender would be a
Qualified Person under the Gaming Laws of any such jurisdiction (provided that any relevant Gaming
Authority may nonetheless determine such assignee not to be a Qualified Person).

SECTION 10.05            Survival of Agreement. All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall survive
the execution and delivery of the Loan Documents and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Agents, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of Sections 2.12,
2.14, 2.15 and Article X (other than Section 10.12)
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
payment of the Reimbursement Obligations, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.

SECTION 10.06            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, and any separate letter agreements 

 148
 

 

 

with respect to fees payable to the
Administrative Agent, 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
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

SECTION 10.07            Severability. Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.

SECTION 10.08            Right of Setoff. If an
Event of Default shall have occurred and be continuing, each Lender, the
Issuing Bank, and each of their respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by applicable
Requirements of 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 Issuing Bank or any such Affiliate to or for the credit or the
account of Borrower against any and all of the obligations of Borrower now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the Issuing Bank, irrespective of whether or not such Lender or the
Issuing Bank shall have made any demand under this Agreement or any other Loan
Document and although such obligations of Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender or the Issuing Bank
different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Lender, the Issuing Bank and their respective Affiliates
under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Lender, the Issuing Bank or their respective
Affiliates may have. Each Lender and the Issuing Bank 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.

SECTION 10.09            Governing Law; Jurisdiction; Consent to Service of
Process.

(a)           Governing
Law. This Agreement shall be construed in accordance with and governed by
the law of the State of New York, without regard to conflicts of law principles
that would require the application of the laws of another jurisdiction.

(b)           Submission
to Jurisdiction. Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of 

 149
 

 

 

any judgment, and each of the parties hereto
hereby 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 any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Loan Party or its properties in the courts of any jurisdiction.

(c)           Waiver
of Venue. Borrower hereby irrevocably and unconditionally waives, to the
fullest extent permitted by applicable Requirements of Law, any objection which
it may now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in Section 10.09(b). Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by applicable
Requirements of Law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

(d)           Service
of Process. Each party hereto irrevocably consents to service of process in
any action or proceeding arising out of or relating to any Loan Document, in
the manner provided for notices (other than telecopier or electronic
communications) in Section 10.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party hereto to serve process
in any other manner permitted by applicable Requirements of Law.

SECTION 10.10            Waiver of Jury Trial. Borrower
hereby waives, to the fullest extent permitted by applicable Requirements of
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, any other Loan
Document or the transactions contemplated hereby (whether based on contract,
tort or any other theory). Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section.

SECTION 10.11            Headings. Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.12            Treatment of Certain Information; Confidentiality.
Each of the Administrative Agent, the Lenders and the Issuing Bank 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 other 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 Governmental Authority or regulatory authority
(including any self-regulatory authority, such as the National Association of 

 150
 

 

 

Insurance Commissioners), (c) to the
extent required by applicable Requirements of Law 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 10.12,
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, (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to Borrower and its obligations or (iii) any rating
agency for the purpose of obtaining a credit rating applicable to any Lender, (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 Issuing Bank 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 of its Subsidiaries
relating to Borrower or any of its Subsidiaries or any of their respective
businesses, other than any such information that is available to the Administrative
Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure
by Borrower or any of its Subsidiaries; provided that,
in the case of information received from Borrower or any of its Subsidiaries
after the date hereof, such information is clearly identified at the time of
delivery as confidential. 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.

SECTION 10.13            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, address and tax identification number of Borrower and other information
regarding Borrower that will allow such Lender or the Administrative Agent, as
applicable, to identify Borrower in accordance with the Act. This notice is
given in accordance with the requirements of the Act and is effective as to the
Lenders and the Administrative Agent.

SECTION 10.14            Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable Requirements of Law
(collectively, the “Charges”),
shall exceed the maximum lawful rate (the “Maximum
Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable Requirements
of Law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result of
the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) 

 151
 

 

 

until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.

SECTION 10.15            Lender Addendum. Each
Lender to become a party to this Agreement on the date hereof shall do so by
delivering to the Administrative Agent a Lender Addendum duly executed by such
Lender, Borrower and the Administrative Agent.

SECTION 10.16            Obligations Absolute. To
the fullest extent permitted by applicable Requirements of Law, all obligations
of Borrower hereunder shall be absolute and unconditional irrespective of:

(a)           any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Loan Party;

(b)           any
lack of validity or enforceability of any Loan Document or any other agreement
or instrument relating thereto against any Loan Party;

(c)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent
to any departure from any Loan Document or any other agreement or instrument relating
thereto;

(d)           any
exchange, release or non-perfection of any Collateral, or any release or
amendment or waiver of or consent to any departure from any guarantee, for all
or any of the Obligations;

(e)           any
exercise or non-exercise, or any waiver of any right, remedy, power or
privilege under or in respect hereof or any Loan Document; or

(f)            any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, the Loan Parties.

[Signature Pages Follow]

 152

 

 

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

	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Name: Jeffrey P.
  Jacobs

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  

 

 S-1
 

 

 

	
  

  	
  CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Issuing
  Bank, Administrative Agent and Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill O’Daly

  
	
   

  	
   

  	
  Name: Bill
  O’Daly

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cassandra Droogan

  
	
   

  	
   

  	
  Name: Cassandra
  Droogan

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

 S-2
 

 

 

	
   

  	
  CIBC WORLD MARKETS CORP., as Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Leonardo R. Fernandez, Jr.

  
	
   

  	
   

  	
  Name: Leonardo
  R. Fernandez, Jr.

  
	
   

  	
   

  	
  Title: Executive
  Director

  

 

 S-3
 

 

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION, as
  Documentation Agent and Swingline Lender 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greg A. Rossiter

  
	
   

  	
   

  	
  Name: Greg A.
  Rossiter

  
	
   

  	
   

  	
  Title: AVP

  

 

 S-4
 

 

 

	
   

  	
  CIT LENDING SERVICES CORPORATION, as Documentation
  Agent 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony Holland 

  
	
   

  	
   

  	
  Name: Anthony
  Holland

  
	
   

  	
   

  	
  Title: Vice
  President

  

 S-5

 

 

Annex
I

Amortization Table

	
  Date

  	
   

  	
  Initial Tranche B

  Loan Amount

  	
   

  	
  Total Amount**

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2007

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  June 30,
  2007

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2008

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  June 30,
  2008

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2009

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  June 30,
  2009

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2010

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  June 30,
  2010

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2011

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  June 30,
  2011

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  September 30,
  2011

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  December 31,
  2011

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  March 31,
  2012

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Tranche B Maturity Date

  	
   

  	
  $

  	
  37,700,000

  	
   

  	
  $

  	
  56,600,000

  	
   

  

**          In the event that Delayed Draw Tranche B Loans have been made on or
before December 31, 2006 but the aggregate principal amount of such
Delayed Draw Tranche B Loans that were made are less than the aggregate Delayed
Draw Tranche B Commitments in effect on the date hereof, then the amount in the
“Total Amount” column for each applicable Tranche B Repayment Date shall be reduced
on a pro rata basis to give effect to the lower Delayed Draw Tranche B Loans
actually made. For example, if on or before December 31, 2006 only
$10,000,000 in aggregate principal amount of Delayed Draw Tranche B Loans have
actually been made, then the amount in the “Total Amount” column for each date,
other than the Tranche B Maturity Date, shall be $125,000, and the amount in
such column for the Tranche B Maturity Date would be $47,150,000.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]