Exhibit 10.1
 
 
CREDIT AGREEMENT
among
FULL HOUSE RESORTS, INC.
as Borrower,
THE LENDERS NAMED HEREIN
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Collateral Agent, L/C Issuer and Swing Line Lender,
and
WELLS FARGO SECURITIES, LLC,
as Lead Arranger and Sole Bookrunner,
Dated as of October 29, 2010
 
 

 

 

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TABLE OF CONTENTS

                      Page     ARTICLE I. INTERPRETATION     1  
1.01.
  Definitions     1  
1.02.
  GAAP     30  
1.03.
  Headings     31  
1.04.
  Plural Terms     31  
1.05.
  Time     31  
1.06.
  Governing Law     31  
1.07.
  Construction     31  
1.08.
  Entire Agreement     31  
1.09.
  Calculation of Interest and Fees     32  
1.10.
  References     32  
1.11.
  Other Interpretive Provisions     32  
1.12.
  Rounding     32   ARTICLE II. CREDIT FACILITIES     33  
2.01.
  Loan Facilities     33  
2.02.
  Letters of Credit     41  
2.03.
  The Swing Line     50  
2.04.
  Amount Limitations, Commitment Reductions, Etc.     53  
2.05.
  Fees     55  
2.06.
  Prepayments     55  
2.07.
  Other Payment Terms     59  
2.08.
  Loan Accounts; Notes     60  
2.09.
  Loan Funding     61  
2.10.
  Pro Rata Treatment     62  
2.11.
  Change of Circumstances     64  
2.12.
  Taxes on Payments     66  
2.13.
  Funding Loss Indemnification     68  
2.14.
  Security     68  
2.15.
  Replacement of the Lenders     69   ARTICLE III. CONDITIONS PRECEDENT     70  
3.01.
  Conditions Precedent to Effectiveness     70  
3.02.
  Conditions Precedent to Initial Funding     70  

 

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TABLE OF CONTENTS
(continued)

                      Page    
3.03.
  Conditions Precedent to each Credit Event     70   ARTICLE IV. REPRESENTATIONS
AND WARRANTIES     71  
4.01.
  Representations and Warranties of the Borrower     71  
4.02.
  Reaffirmation of Borrower’s Representations and Warranties     79  
4.03.
  Representations and Warranties of each Lender     79   ARTICLE V. COVENANTS  
  79  
5.01.
  Affirmative Covenants     79  
5.02.
  Negative Covenants     85  
5.03.
  Financial Covenants     94   ARTICLE VI. EVENTS OF DEFAULT     95  
6.01.
  Events of Default     95  
6.02.
  Remedies     99  
ARTICLE VII. ADMINISTRATIVE AGENT, COLLATERAL AGENT, SECURITY TRUSTEE AND
RELATIONS AMONG LENDERS
    101  
7.01.
  Appointment, Powers and Immunities     101  
7.02.
  Reliance by the Administrative Agent, Collateral Agent, L/C Issuer and Swing
Line Lender     102  
7.03.
  Defaults     103  
7.04.
  Indemnification     103  
7.05.
  Non-Reliance     103  
7.06.
  Resignation of the Administrative Agent or Collateral Agent     104  
7.07.
  Collateral Matters     105  
7.08.
  Performance of Conditions     105  
7.09.
  The Administrative Agent, the Collateral Agent and the Security Trustee in
their Individual Capacities     106  
7.10.
  Collateral Matters/Lender Rate Contracts     106  
7.11.
  Administrative Agent May File Proofs of Claim     106  
7.12.
  Application of Gaming Laws     107   ARTICLE VIII. MISCELLANEOUS     108  
8.01.
  Notices     108  
8.02.
  Expenses     110  
8.03.
  Indemnification     110  
8.04.
  Waivers; Amendments     112  

 

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TABLE OF CONTENTS
(continued)

                      Page    
8.05.
  Successors and Assigns     115  
8.06.
  Setoff; Security Interest     120  
8.07.
  No Third Party Rights     120  
8.08.
  Partial Invalidity     120  
8.09.
  Jury Trial     120  
8.10.
  Confidentiality     121  
8.11.
  Counterparts     121  
8.12.
  Consent to Jurisdiction     121  
8.13.
  Relationship of Parties     122  
8.14.
  Time     122  
8.15.
  Waiver of Punitive Damages     122  
8.16.
  USA PATRIOT Act     123  
8.17.
  Clarification     123  
8.18.
  NO MANAGEMENT     123  
8.19.
  Gaming Law Limitations     123  

 

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An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.

 

 

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SCHEDULES

         
SCHEDULE I
  —   THE LENDERS
SCHEDULE 1.01(a)
  —   REAL PROPERTY SECURITY DOCUMENTS
SCHEDULE 3.01
  —   CONDITIONS PRECEDENT TO EFFECTIVENESS
SCHEDULE 3.02
      CONDITIONS PRECEDENT TO INITIAL CREDIT EVENT
SCHEDULE 4.01(e)(iv)
      GOVERNMENTAL AUTHORIZATIONS
SCHEDULE 4.01(g)
  —   LITIGATION
SCHEDULE 4.01(h)
  —   REAL PROPERTY
SCHEDULE 4.01(k)
  —   MULTIEMPLOYER PLANS
SCHEDULE 4.01(o)
  —   SUBSIDIARIES
SCHEDULE 4.01(v)
  —   AGREEMENTS WITH AFFILIATES, ETC.
SCHEDULE 5.02(a)
  —   EXISTING INDEBTEDNESS
SCHEDULE 5.02(b)
  —   EXISTING LIENS
SCHEDULE 5.02(e)
  —   EXISTING INVESTMENTS

EXHIBITS

     
EXHIBIT A
  NOTICE OF LOAN BORROWING
EXHIBIT B
  NOTICE OF CONVERSION
EXHIBIT C
  NOTICE OF INTEREST PERIOD SELECTION
EXHIBIT D
  NOTICE OF SWING LINE BORROWING
EXHIBIT E
  REVOLVING LOAN NOTE
EXHIBIT F
  TERM LOAN NOTE
EXHIBIT G
  SWING LINE NOTE
EXHIBIT H
  ASSIGNMENT AGREEMENT
EXHIBIT I
  COMPLIANCE CERTIFICATE
EXHIBIT J
  COLLATERAL CERTIFICATE
EXHIBIT K
  NON-BANK CERTIFICATE
EXHIBIT L
  FORM OF GUARANTY
EXHIBIT M
  FORM OF SECURITY AGREEMENT
EXHIBIT N
  GRAND VICTORIA EXCESS LAND

 

 

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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 29, 2010, is entered into by and
among: (1) FULL HOUSE RESORTS, INC., a Delaware corporation (the “Borrower”);
(2) each of the financial institutions from time to time listed in Schedule I
hereto, as amended, restated, supplemented or otherwise modified from time to
time (collectively, the “Lenders”); and (3) WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Wells Fargo”), as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”), as collateral agent for the Secured
Parties (as defined herein) (in such capacity, the “Collateral Agent”), as
security trustee for the Lenders (in such capacity, the “Security Trustee”), as
L/C Issuer and as Swing Line Lender. Wells Fargo Securities, LLC (“WFS”) has
been given the titles of sole lead arranger and sole bookrunner in connection
with this Agreement.
RECITALS
A. The Borrower has requested that the Lenders provide certain credit facilities
to the Borrower.
B. The Lenders are willing to provide such credit facilities upon the terms and
subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any other
Credit Document, each term set forth below, when used in this Agreement or any
other Credit Document, shall have the respective meaning given to that term
below or in the provision of this Agreement or other document, instrument or
agreement referenced below.
“Acquired Person” shall mean a Proposed Target that is the subject of a
Permitted Acquisition after the Effective Date.
“Acquired Portion” shall have the meaning given to that term in Section
2.01(h)(iv).
“Acquisition” shall mean the acquisition by the Borrower of the Purchased Assets
pursuant to the Acquisition Agreement.
“Acquisition Agreement” shall mean that certain Asset Purchase Agreement, dated
as of September 10, 2010, by and between Grand Victoria Casino & Resort, L.P.
and the Borrower.
“Acquisition Documents” shall mean, collectively, the Acquisition Agreement and
all documents executed in connection therewith and any other document(s)
evidencing the Acquisition.

 

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“Adjusted EBITDA” shall mean, for any period, (a) Net Income for such period,
plus (b) to the extent deducted in determining Net Income of the Loan Parties
for such period, the sum of the following for such period (without duplication):
(i) Interest Expense, (ii) provisions for income taxes, (iii) depreciation and
amortization expenses, (iv) extraordinary losses (including non-cash impairment
charges), (v) acquisition costs required to be expensed in accordance with GAAP
in any quarter in fiscal years 2010 and 2011 in an aggregate amount not to
exceed $800,000 during the term of this Agreement, (vi) rebranding costs in an
aggregate amount not to exceed $800,000 during the term of this Agreement and
(vii) costs incurred in connection with Grand Victoria Casino & Resort
compliance with the Sarbanes-Oxley Act of 2002 in an aggregate amount not to
exceed $100,000 during the term of this Agreement, minus (c) to the extent added
in determining Net Income of the Loan Parties for such period, extraordinary
gains, minus (d) the portion of Net Income for such period attributable to GEM,
GED or any other Non-Wholly-Owned Subsidiary relating to Equity Interests held
by Persons other than the Borrower; provided, that Adjusted EBITDA for any
period that includes any fiscal quarter ending prior to the Initial Funding Date
shall be deemed to include the Adjusted EBITDA of or attributable to the
Purchased Assets.
Pro forma credit shall be given for an Acquired Person’s Adjusted EBITDA as if
owned on the first day of the applicable period; companies (or identifiable
business units or divisions) sold, transferred or otherwise disposed of during
any period will be treated as if not owned during the entire applicable period.
“Administrative Agent” shall have the meaning given to that term in clause
(3) of the introductory paragraph hereof.
“Affiliate” shall mean, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of any class of Equity
Securities of such Person, (b) each Person that controls, is controlled by or is
under common control with such Person or any Affiliate of such Person or
(c) each of such Person’s officers, directors, managers, joint venturers and
partners; provided, however, that in no case shall the Administrative Agent or
any Lender be deemed to be an Affiliate of any Loan Party for purposes of this
Agreement. For the purpose of this definition, “control” of a Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
“Agreement” shall mean this Credit Agreement.
“Anti-Terrorism Law” shall mean each of: (a) the Executive Order; (b) the
Patriot Act; (c) the Money Laundering Control Act of 1986, 18 U.S.C. Sect. 1956;
and (d) any other Governmental Rule now or hereafter enacted to monitor, deter
or otherwise prevent terrorism or the funding or support of terrorism.
“Applicable Lending Office” shall mean, with respect to any Lender, (a) in the
case of its Base Rate Loans and Base Rate Portions, its Domestic Lending Office,
and (b) in the case of its LIBOR Loans and LIBOR Portions, its Euro-Dollar
Lending Office.

 

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“Applicable Margin” shall mean, with respect to each Loan and Portion (and with
respect to the calculation of Standby Letter of Credit fees pursuant to Section
2.02(i)(i)), the per annum margin which is determined pursuant to the Pricing
Grid. The Applicable Margin shall be determined as provided in the Pricing Grid
and may change as set forth in the definition of Pricing Grid.
“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.
“Assignee Lender” shall have the meaning given to that term in Section 8.05(c).
“Assignment” shall have the meaning given to that term in Section 8.05(c).
“Assignment Agreement” shall have the meaning given to that term in Section
8.05(c).
“Assignment Effective Date” shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
“Assignor Lender” shall have the meaning given to that term in Section 8.05(c).
“Base Rate” shall mean, on any day, the greatest of (a) the Prime Rate in effect
on such day, (b) the Federal Funds Rate in effect on the Business Day prior to
such day plus one and one-half percent (1.50%) and (c) the One Month LIBOR Rate
for such day (determined on a daily basis as set forth below) plus one and
one-half percent (1.50%). As used in this definition, “One Month LIBOR Rate”
shall mean, with respect to any interest rate calculation for a Loan, Portion or
other Obligation bearing interest at the Base Rate, a rate per annum equal to
the quotient (rounded upward if necessary to the nearest 1/16 of one percent) of
(i) the greater of (A) 1.50% and (B) rate per annum referred to as the BBA
(British Bankers Association) LIBOR RATE as reported on Reuters LIBOR page 1, or
if not reported by Reuters, as reported by any service selected by the
Administrative Agent, on the applicable day (provided that if such day is not a
Business Day for which a LIBOR Rate is quoted, the next preceding Business Day
for which a LIBOR Rate is quoted) at or about 11:00 a.m., London time (or as
soon thereafter as practicable), for Dollar deposits being delivered in the
London interbank eurodollar currency market for a term of one month commencing
on such date of determination, divided by (ii) one minus the Reserve Requirement
in effect on such day. If for any reason rates are not available as provided in
clause (i)(B) of the preceding sentence, the rate to be used in clause (i)(B)
shall be, at the Administrative Agent’s discretion (in each case, rounded upward
if necessary to the nearest 1/16 of one percent), (A) the rate per annum at
which Dollar deposits are offered to the Administrative Agent in the London
interbank eurodollar currency market or (B) the rate at which Dollar deposits
are offered to the Administrative Agent in, or by the Administrative Agent to
major banks in, any offshore interbank eurodollar market selected by the
Administrative Agent, in each case on the applicable day (provided that if such
day is not a Business Day for which Dollar deposits are offered to the
Administrative Agent in the London or such offshore interbank eurodollar
currency market, the next preceding Business Day for which Dollar deposits are
offered to the Administrative Agent in the London or such offshore interbank
eurodollar currency market) at or about 11:00 a.m., London time (or as soon
thereafter as practicable) (for delivery on such date of determination) for a
one month term.

 

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“Base Rate Loan” shall mean, at any time, a Revolving Loan which then bears
interest as provided in Section 2.01(d)(i).
“Base Rate Portion” shall mean, at any time, a Portion of a Term Loan Borrowing,
or a Term Loan, as the case may be, which then bears interest at a rate
specified in Section 2.01(d)(i).
“Borrower” shall have the meaning given to such term in clause (1) of the
introductory paragraph hereof.
“Borrower Parties” shall mean, collectively, the Borrower and its Subsidiaries.
“Borrowing” shall mean a Revolving Loan Borrowing, a Term Loan Borrowing or a
Swing Line Borrowing, as the context may require.
“Business Day” shall mean any day on which (a) commercial banks are not
authorized or required to close in San Francisco, California or New York, New
York and (b) if such Business Day is related to a LIBOR Loan or a LIBOR Portion,
dealings in Dollar deposits are carried out in the London interbank market.
“Capital Adequacy Requirement” shall have the meaning given to that term in
Section 2.11(d).
“Capital Asset” shall mean, with respect to any Person, any tangible fixed or
capital asset owned or leased (in the case of a Capital Lease) by such Person,
or any expense incurred by such Person that is required by GAAP to be reported
as a non-current asset on such Person’s balance sheet.
“Capital Expenditures” shall mean, with respect to any Person and any period,
all amounts expended by such Person during such period to acquire or to
construct Capital Assets (including renewals, improvements and replacements, but
excluding repairs in the ordinary course) computed in accordance with GAAP
(including all amounts paid or accrued on Capital Leases and other Indebtedness
incurred or assumed to acquire Capital Assets).
“Capital Leases” shall mean any and all lease obligations that, in accordance
with GAAP, are required to be capitalized on the books of a lessee.
“Cash Collateralize” shall mean to pledge and deposit with or deliver to the
Collateral Agent, for its own benefit and for the benefit of the L/C Issuer
and/or the Lenders, as applicable, as collateral subject to a first priority,
perfected security interest securing the Obligations or the obligations of a
Deteriorating Lender, as applicable, cash or deposit account balances in an
amount equal to the L/C Obligations, obligations in respect of Swing Line Loans
or obligations of a Deteriorating Lender, as applicable, pursuant to
documentation in form and substance satisfactory to the Collateral Agent and the
L/C Issuer or the Swing Line Lender, as applicable (which documents are hereby
consented to by the Lenders). Derivatives of such term shall have a
corresponding meaning.

 

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“Cash Equivalents” shall mean:
(a) Direct obligations of, or obligations the principal and interest on which
are unconditionally guaranteed by, the United States or obligations of any
agency of the United States to the extent such obligations are backed by the
full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;
(b) Certificates of deposit maturing within six months from the date of
acquisition thereof issued by a commercial bank or trust company organized under
the laws of the United States or a state thereof or that is a Lender; provided
that (i) such deposits are denominated in Dollars, (ii) such bank or trust
company has capital, surplus and undivided profits of not less than $500,000,000
and (iii) such bank or trust company has certificates of deposit or other debt
obligations rated at least A-1 (or its equivalent) by Standard and Poor’s
Ratings Services or P-1 (or its equivalent) by Moody’s Investors Service, Inc.;
(c) Open market commercial paper maturing within 270 days from the date of
acquisition thereof issued by a corporation organized under the laws of the
United States or a state thereof; provided such commercial paper is rated at
least A-1 (or its equivalent) by Standard and Poor’s Ratings Services or P-1 (or
its equivalent) by Moody’s Investors Service, Inc.; and
(d) Any repurchase agreement entered into with a commercial bank or trust
company organized under the laws of the United States or a state thereof or that
is a Lender; provided that (i) such bank or trust company has capital, surplus
and undivided profits of not less than $500,000,000, (ii) such bank or trust
company has certificates of deposit or other debt obligations rated at least A-1
(or its equivalent) by Standard and Poor’s Ratings Services or P-1 (or its
equivalent) by Moody’s Investors Service, Inc., (iii) the repurchase obligations
of such bank or trust company under such repurchase agreement are fully secured
by a perfected security interest in a security or instrument of the type
described in clause (a), (b) or (c) above and (iv) such security or instrument
so securing the repurchase obligations has a fair market value at the time such
repurchase agreement is entered into of not less than 100% of such repurchase
obligations. Notwithstanding the foregoing, in no event shall “Cash Equivalents”
include auction rate securities.
“Change of Control” shall mean the occurrence of any one or more of the
following:
(a) The Borrower shall cease to beneficially own and control, directly or
indirectly, (i) one hundred percent (100%) of the Equity Securities of each Loan
Party (other than the Borrower), (ii) fifty percent (50%) of the Equity
Securities of GEM or (iii) prior to August 1, 2011, fifty percent (50%) of the
Equity Securities of GED;
(b) The acquisition after the Effective Date of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Commission
thereunder as in effect on the date hereof), of Equity Securities representing
more than 15% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Securities of the Borrower or any such person or group
acquires control of the Borrower, or

 

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(c) The occupation after the Effective Date of a majority of the seats (other
than vacant seats) on the board of directors or other governing body of the
Borrower by persons who were neither (i) nominated by the board of directors or
other governing body of the Borrower nor (ii) appointed by directors or members
of such other or other governing body so nominated, or
(d) A “change of control” or “change in control” or any similar term as defined
in any document governing Indebtedness of any Borrower Party which gives the
holders of such Indebtedness the right to accelerate or otherwise require
payment of such Indebtedness prior to the maturity date thereof or the right to
require such Borrower Party to redeem, purchase or otherwise defease, or offer
to redeem, purchase or otherwise defease, all or any portion of such
Indebtedness.
For the purpose of this definition, “control” of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
“Change of Law” shall have the meaning given to that term in Section 2.11(b).
“Collateral” shall mean all Property in which the Collateral Agent, the
Administrative Agent, the Security Trustee or any Lender has a Lien to secure
the Obligations or the Guaranty.
“Collateral Agent” shall have the meaning given to that term in clause (3) of
the introductory paragraph hereof.
“Collateral Certificate” shall mean a Collateral Certificate in substantially
the form of Exhibit J, appropriately completed and duly executed by the
Borrower.
“Commercial Letter of Credit” shall mean any documentary letter of credit issued
by the L/C Issuer under this Agreement, either as originally issued or as the
same may be supplemented, modified, amended, extended, restated or supplanted.
“Commitment Fee Percentage” shall mean (a) prior to the Initial Funding Date,
0.50% and (b) from and after the Initial Funding Date, the per annum percentage
which is used to calculate Commitment Fees determined pursuant to the Pricing
Grid.
“Commitment Fees” shall have the meaning given to that term in Section 2.05(b).
“Commitments” shall mean, collectively, the Revolving Loan Commitments and the
Term Loan Commitments.
“Compliance Certificate” shall have the meaning given to that term in Section
5.01(a)(iii).

 

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“Confidential Information” shall mean information delivered to any Lender or the
Administrative Agent by or on behalf of any Loan Party pursuant to the Credit
Documents that is proprietary in nature and that is clearly marked or labeled as
being confidential information of such Loan Party; provided; however, that such
term does not include information that (a) was publicly known or otherwise known
to the receiving party prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by the receiving party or any
person acting on its behalf, (c) otherwise becomes known to the receiving party
other than through disclosure by any Loan Party or (d) constitutes financial
statements delivered to the Lenders and the Administrative Agent under
Section 5.01(a) that are otherwise publicly available.
“Contingent Obligation” shall mean, with respect to any Person, (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person (i) in respect of any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments, (ii) as a partner or
joint venturer in any partnership or joint venture, (iii) to purchase any
materials, supplies or other Property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other Property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other Property is ever made or tendered, or such services are ever
performed or tendered, or (iv) in respect to any Rate Contract that is not
entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of “Guaranty Obligation”) be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to item
(b)(iv) of this definition be marked to market on a current basis.
“Contractual Obligation” of any Person shall mean, any indenture, note, lease,
loan agreement, security, deed of trust, mortgage, security agreement, guaranty,
instrument, contract, agreement or other form of contractual obligation or
undertaking to which such Person is a party or by which such Person or any of
its Property is bound.
“Control Agreement” shall mean a control agreement among the Borrower or a
Guarantor, a depository bank, a securities intermediary or a commodity
intermediary, as the case may be, and the Collateral Agent, in form and
substance reasonably acceptable to the Collateral Agent.
“Credit Documents” shall mean and include this Agreement, the Notes, the
Guaranty, the Security Documents, each Letter of Credit Application, each Notice
of Borrowing, each Notice of Interest Period Selection, each Notice of
Conversion, all Lender Rate Contracts, the Collateral Certificate, the Fee
Letter, all other documents, instruments and agreements delivered to the
Administrative Agent, the Collateral Agent, the Security Trustee, the Lead
Arranger or any Lender pursuant to Sections 3.01 or 3.02 and all other
documents, instruments and agreements delivered by any Loan Party to the
Administrative Agent, the Collateral Agent, the Security Trustee or any Lender
in connection with this Agreement or any other Credit Document on or after the
date of this Agreement, including, without limitation, any amendments, consents
or waivers, as the same may be amended, restated, supplemented or modified from
time to time.
“Credit Event” shall mean the making of any Loan (including a Swing Line Loan)
or the making of an L/C Credit Extension.

 

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“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States, and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor
relief Governmental Rules from time to time in effect affecting the rights of
creditors generally.
“Decreasing Lender” shall have the meaning given to that term in Section
2.01(h)(iv).
“Default” shall mean an Event of Default or any event or circumstance not yet
constituting an Event of Default which, with the giving of any notice or the
lapse of any period of time or both, would become an Event of Default.
“Default Rate” shall have the meaning given to that term in Section 2.07(c).
“Defaulting Lender” shall mean a Lender which (a) has failed to fund its portion
of any Borrowing, any participations in Letters of Credit or participations in
Swing Line Loans required to be funded by it under this Agreement within three
(3) Business Days of the date when due, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one (1) Business Day of the date when due, unless
the subject of a good faith dispute, or (c) has been deemed insolvent or become
the subject of a receivership, bankruptcy or insolvency proceeding.
“Designated Person” shall mean any Person who (i) is named on the list of
Specially Designated Nationals or Blocked Persons maintained by the U.S.
Department of the Treasury’s Office of Foreign Assets Control and/or any other
similar lists maintained by the U.S. Department of the Treasury’s Office of
Foreign Assets Control pursuant to authorizing statute, executive order or
regulation, (ii) (A) is a Person whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of the Executive Order or
any related legislation or any other similar executive order(s) or (B) engages
in any dealings or transactions prohibited by Section 2 of the Executive Order
or is otherwise associated with any such Person in any manner violative of
Section 2 of the Executive Order or (iii)(X) is an agency of the government of a
country, (Y) an organization controlled by a country, or (Z) a Person resident
in a country that is subject to a sanctions program identified on the list
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Control, or as otherwise published from time to time, as such program may be
applicable to such agency, organization or Person.
“Deteriorating Lender” shall mean (a) a Defaulting Lender or (b) a Lender as to
which (i) the L/C Issuer or Swing Line Lender (as applicable) has been informed
that such Lender has defaulted in fulfilling its monetary or other material
obligations under one or more other syndicated credit facilities or (ii) an
entity that controls such Lender has been deemed insolvent or becomes subject to
a receivership, bankruptcy or other similar proceeding. For the purpose of this
definition, “control” of a Lender shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.

 

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“Disqualified Securities” shall mean any Equity Security 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 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
date that is one year following the date of payment and satisfaction in full by
the Loan Parties of the Obligations, (b) is convertible into or exchangeable for
(i) debt securities or (ii) any Equity Security referred to in (a) above, in
each case at any time on or prior to the date that is one year following the
date of payment and satisfaction in full by the Loan Parties of the Obligations,
or (c) is entitled to receive a cash Distribution (other than for taxes
attributable to the operations of the business) or a Distribution of
Disqualified Securities on or prior to the date that is one year following the
date of payment and satisfaction in full by the Loan Parties of the Obligations.
“Distributions” shall mean the declaration or (without duplication) payment of
any distributions or dividends (in cash, Property or obligations) on, or other
payments on account of, or the setting apart of money for a sinking or other
analogous fund for, or the purchase, repurchase, redemption, retirement or other
acquisition of, any Equity Securities of any Person or of any warrants, options
or other rights to acquire the same (or to make any payments to any Person, such
as “phantom membership” or “phantom stock” payments or similar payments, where
the amount is calculated with reference to the fair market or equity value of
any Person), but excluding distributions or dividends payable by a Person solely
in membership interests or shares of common stock of such Person.
“Dollars” and “$” shall mean the lawful currency of the United States and, in
relation to any payment under this Agreement, same day or immediately available
funds.
“Domestic Lending Office” shall mean, with respect to any Lender, (a) initially,
its office designated as such in Schedule I (or, in the case of any Lender which
becomes a Lender pursuant to Section 2.01(h) or by an assignment pursuant to
Section 8.05(c), its office designated as such in the applicable Assignment
Agreement) and (b) subsequently, such other office or offices as such Lender may
designate to the Administrative Agent as the office at which such Lender’s Base
Rate Loans and Base Rate Portions will thereafter be maintained and for the
account of which all payments of principal of, and interest on, such Lender’s
Base Rate Loans and Base Rate Portions will thereafter be made.
“Effective Amount” shall mean (i) with respect to Revolving Loans, Term Loans,
and Swing Line Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to (A) any borrowings and prepayments or repayments
of Revolving Loans, Term Loans, and Swing Line Loans and (B) with respect to
Swing Line Loans, any risk participation amongst the Lenders, as the case may
be, occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
or any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
“Effective Date” shall mean the time and Business Day on which the satisfaction
of all conditions precedent and the consummation of all of the transactions
contemplated in Schedule 3.01 occur.

 

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“Eligible Assignee” shall mean (a) any Lender, any Affiliate of any Lender and
any Approved Fund of any Lender; and (b) a Person that is (i) a commercial bank,
savings and loan association or savings bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000, (ii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development (the “OECD”), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000; provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD, (iii) a
finance company, insurance company or other financial institution that is
engaged in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$100,000,000, or (iv) a Person that is primarily engaged in the business of
commercial lending and that is (x) a Subsidiary of a Lender, (y) a Subsidiary of
a Person of which a Lender is a Subsidiary, or (z) a Person of which a Lender is
a Subsidiary; provided that notwithstanding the foregoing, “Eligible Assignee”
shall not include any Borrower Party or any Affiliate of a Borrower Party or any
natural person.
“Environmental Damages” shall mean all claims, judgments, damages, losses,
penalties, liabilities (including strict liability), costs and expenses
(including costs of investigation, remediation, defense, settlement and
reasonable attorneys’ fees and consultants’ fees and any diminution in the value
of the security afforded to the Lenders with respect to any real property owned
or used by any Borrower Party), that are incurred at any time (a) as a result of
the existence of any Hazardous Materials upon, about or beneath any real
property owned by or leased by any Borrower Party or migrating or threatening to
migrate to or from any such real property regardless of whether or not caused by
or within the control of any Borrower Party, (b) arising from any investigation,
proceeding or remediation of any location at which any Borrower Party or any
predecessors are alleged to have directly or indirectly disposed of Hazardous
Materials or (c) arising in any manner whatsoever out of any violation of
Environmental Laws by any Borrower Party or with respect to the Grand Victoria
Vessel or any real property owned or used by any Borrower Party or (d) as a
result of the existence of any Hazardous Material upon, about or released from
the Grand Victoria Vessel.
“Environmental Laws” shall mean the Clean Air Act, 42 U.S.C. Section 7401 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et
seq.; the Comprehensive Environment Response, Compensation and Liability Act of
1980 (including the Superfund Amendments and Reauthorization Act of 1986,
“CERCLA”), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
Section 651; the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, 30 U.S.C.
Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; and all other Governmental Rules relating to the protection of human
health and safety and the environment, including all Governmental Rules
pertaining to the reporting, licensing, permitting, transportation, storage,
disposal, investigation or remediation of emissions, discharges, releases, or
threatened releases of Hazardous Materials into the air, surface water,
groundwater, or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transportation or handling of Hazardous
Materials.

 

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“Equity Securities” of any Person shall mean (a) all common stock, preferred
stock, participations, shares, partnership interests, limited liability company
interests or other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting) and (b) all warrants,
options and other rights to acquire any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” shall mean any Person which is treated as a single employer
with any Borrower Party under Sections 414(b) and (c) of the IRC (and Sections
414(m) and (o) of the IRC for purposes of the provisions relating to Section 412
of the IRC).
“ERISA Event” shall mean (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by any Borrower Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
“substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA which could reasonably be expected to give rise to any
liability with respect to such withdrawal; (c) a complete or partial withdrawal
by a Borrower Party or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Pension Plan or Multiemployer
Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon a Borrower Party or any
ERISA Affiliate.
“Euro-Dollar Lending Office” shall mean, with respect to any Lender,
(a) initially, its office designated as such in Schedule I (or, in the case of
any Lender which becomes a Lender pursuant to Section 2.01(h) or by an
assignment pursuant to Section 8.05(c), its office designated as such in the
applicable Assignment Agreement) and (b) subsequently, such other office or
offices as such Lender may designate to the Administrative Agent as the office
at which such Lender’s LIBOR Loans and LIBOR Portions will thereafter be
maintained and for the account of which all payments of principal of, and
interest on, such Lender’s LIBOR Loans and LIBOR Portions will thereafter be
made.
“Event of Default” shall have the meaning given to that term in Section 6.01.
“Evergreen Letter of Credit” shall have the meaning given to that term in
Section 2.02(b)(iii).
“Executive Order” shall mean Executive Order No. 13224 on Terrorist Financings:
- Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten To Commit, or Support Terrorism issued on 23rd September, 2001.
“Exempted Equity Issuance” shall mean any of the following: (a) the issuance of
Equity Securities by any Loan Party to another Loan Party, (b) the contribution
of capital by any Loan Party to another Loan Party, or (c) the issuance by the
Borrower of its Equity Securities to any of its officers, directors or employees
pursuant to customary compensation arrangements.

 

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“FASB ASC” shall mean the Accounting Standards Codification of the Financial
Accounting Standards Board.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided,
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Wells Fargo on such day on such
transactions as determined by the Administrative Agent.
“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve
System.
“Fee Letter” shall mean the letter agreement dated as of September 10, 2010,
between the Borrower and the Wells Fargo Parties regarding certain fees payable
by the Borrower to the Wells Fargo Parties as expressly indicated therein.
“Financial Statements” shall mean, with respect to any accounting period for any
Person, statements of income and cash flows (and, in the case of financial
statements in respect of a fiscal year, statements of retained earnings, or
stockholders’ equity or members’ equity or partners’ capital) of such Person for
such period, and a balance sheet of such Person as of the end of such period,
setting forth in each case in comparative form figures for the corresponding
period in the preceding fiscal year if such period is less than a full fiscal
year or, if such period is a full fiscal year, corresponding figures from the
preceding annual audited financial statements and, in each case, corresponding
figures from the comparable budgeted and projected figures for such period, all
prepared in reasonable detail and in accordance with GAAP.
“FireKeepers Indenture” shall mean that certain indenture, dated as of May 6,
2008 among the FireKeepers Development Authority, the Nottawaseppi Tribe and
U.S. Bank National Association with respect to the 13.875% Senior Secured Notes
due 2015.
“FireKeepers Management Agreement” shall mean the management agreement entered
into by and among GEM, the Nottawaseppi Tribe and FireKeepers Development
Authority with respect to the FireKeepers Casino.
“Fixed Charge Coverage Ratio” shall mean, as at any date of determination, with
respect to the Borrower Parties for the period of four consecutive fiscal
quarters ending on or most recently ended prior to such date, (a)(i) Adjusted
EBITDA, minus (ii) the aggregate amount of Capital Expenditures made during such
period (excluding up to $2,000,000 in the aggregate spent to convert hotel rooms
at the Grand Victoria Casino & Resort to suites), minus (iii) the aggregate
amount of dividends made during such period, minus (iv) cash taxes required to
be paid during such period divided by (b) Fixed Charges for such period.

 

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“Fixed Charges” shall mean, for any four fiscal quarter period, the sum, for the
Borrower Parties (determined on a consolidated basis without duplication), of
the following items: (a) Interest Expense for such period, (b) payments of
principal on Indebtedness scheduled to be paid during such period, provided,
however, that for purposes of this clause (b), any optional prepayments that are
applied pursuant to Section 2.06(b) to payments on the Term Loans originally
scheduled to be made during such period shall be disregarded, and such
originally scheduled payments on the Term Loans during such period shall be
included in this clause (b) notwithstanding the prior application of such
prepayments to such scheduled payments, and (c) the portion of payments under
Capital Leases that should be treated as payment of principal in accordance with
GAAP scheduled to be paid during such period, provided, however, that for each
of the four fiscal quarter periods ending with the first full fiscal quarter
after the Initial Funding Date, the second full fiscal quarter after the Initial
Funding Date and the third full fiscal quarter after the Initial Funding Date,
Fixed Charges for each such four fiscal quarter period shall be deemed equal to
the sum of clauses (a) through (c) above for the full quarters after the Initial
Funding Date ending thereon multiplied by 4, by 2 and by 4/3rds, respectively.
“Foreign Plan” shall mean any employee benefit plan maintained or contributed to
by any Loan Party which is mandated or governed by any Governmental Rule of any
Governmental Authority other than the United States.
“Fund” shall mean any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
“GAAP” shall mean generally accepted accounting principles and practices as in
effect in the United States from time to time, consistently applied.
“Gaming Board” shall mean any Governmental Authority that holds licensing or
permit authority over gambling, gaming or casino activities conducted by any
Borrower Party within its jurisdiction.
“Gaming Laws” shall mean all Laws pursuant to which any Gaming Board possesses
licensing or permit authority over gambling, gaming, or casino activities
conducted by any Borrower Party within its jurisdiction.
“GED” shall mean Gaming Entertainment (Delaware), LLC.
“GEM” shall mean Gaming Entertainment (Michigan), LLC.
“Governmental Authority” shall mean any international, domestic, tribal or
foreign national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or any
other entity exercising executive, legislative, judicial, regulatory, tax or
administrative functions of or pertaining to government, including, without
limitation, the Federal Trade Commission, Federal Deposit Insurance Corporation,
the Federal Reserve Board, the Comptroller of the Currency, any central bank or
any comparable authority and any supra-national bodies such as the European
Union.

 

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“Governmental Authorization” shall mean any permit, license, registration,
approval, finding of suitability or licensing, authorization, plan, directive,
order, consent, exemption, waiver, consent order or consent decree of or from,
or notice to, action by or filing with, any Governmental Authority (including
any Gaming Board).
“Governmental Charges” shall mean, with respect to any Person, all levies,
assessments, fees, claims or other charges imposed by any Governmental Authority
upon such Person or any of its Property or otherwise payable by such Person.
“Governmental Rule” shall mean any law, rule, regulation, ordinance, order, code
interpretation, judgment, decree, directive, Governmental Authorization,
guidelines, policy or similar form of decision of any Governmental Authority.
“Grand Victoria EBITDA” shall mean, for any period, (a) net income of the
Purchased Assets for such period, plus (b) to the extent deducted in determining
such net income, the sum of the following for such period (without duplication):
(i) interest expense, (ii) provisions for income taxes and (iii) depreciation
and amortization expenses.
“Grand Victoria Vessel” shall mean the vessel known as the Grand Victoria II,
official number 1027644.
“Grand Victoria Vessel Security Document” shall mean the first preferred ship
mortgage on the Grand Victoria Vessel made or to be made by Gaming Entertainment
(Indiana), LLC in favor of the Security Trustee.
“Guarantor” shall mean each now existing or hereafter acquired or created direct
or indirect Subsidiary of the Borrower which becomes a party to the Guaranty.
“Guaranty” shall mean the Guaranty Agreement by each Guarantor from time to time
party thereto in favor of the Administrative Agent and the Lender Parties,
substantially in the form of Exhibit L.
“Guaranty Obligation” shall mean, with respect to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the “primary obligations”) of
another Person (the “primary obligor”), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any Property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge 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 or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) to purchase Property, securities or services
primarily for the purpose of assuring the beneficiary of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof, provided that the term
“Guaranty Obligation” shall not include endorsements for collection or deposit
in the ordinary course of business. The amount of any Guaranty Obligation shall
be deemed equal to the stated or determinable amount of the primary obligation
in respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum liability in respect thereof.

 

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“Hazardous Materials” shall mean all pollutants, contaminants and other
materials, substances and wastes which are hazardous, toxic or caustic to the
environment, including petroleum and petroleum products and byproducts,
radioactive materials, asbestos, polychlorinated biphenyls and all materials,
substances and wastes which are classified or regulated as “hazardous,” “toxic”
or similar descriptions under any Environmental Law.
“Honor Date” shall have the meaning given to that term in Section 2.02(c)(i).
“Increase Effective Date” shall have the meaning given to that term in Section
2.01(h)(iii).
“Insurance Disclosure Statement” shall have the meaning given to that term in
clause (g)(iv) of Schedule 3.02.
“IGRA” means the Federal Indian Gaming Regulatory Act of 1988, codified at 25
U.S.C. §2701, et seq., as amended.
“Indebtedness” of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments and all other obligations of such Person for borrowed
money (including obligations to repurchase receivables and other assets sold
with recourse);
(b) All obligations of such Person for the deferred purchase price of property
or services (including obligations under letters of credit and other credit
facilities which secure or finance such purchase price), except for (i) trade
accounts payable, provided that (A) such trade accounts payable arise in the
ordinary course of business and (B) no material part of any such account is more
than sixty (60) days past due and (ii) time-based licenses;
(c) All obligations of such Person under conditional sale or other title
retention agreements with respect to property acquired by such Person (to the
extent of the value of such property if the rights and remedies of the seller or
the lender under such agreement in the event of default are limited solely to
repossession or sale of such property);
(d) All obligations of such Person as lessee under or with respect to Capital
Leases and synthetic leases and all other off-balance sheet financing;
(e) All obligations of such Person, contingent or otherwise, under or with
respect to Surety Instruments;
(f) All Unfunded Pension Liabilities of such Person;
(g) All obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person;
(h) All Contingent Obligations of such Person;
(i) All Disqualified Securities of such Person;

 

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(j) With respect to any Rate Contracts, the Termination Value thereof;
(k) All obligations of such Person with respect to letters of credit, whether
drawn or undrawn, contingent or otherwise;
(l) All Guaranty Obligations of such Person with respect to the obligations of
other Persons of the types described in clauses (a) — (k) above; and
(m) All obligations of other Persons (“primary obligors”) of the types described
in clauses (a) — (l) above to the extent secured by (or for which any holder of
such obligations has an existing right, contingent or otherwise, to be secured
by) any Lien on any property (including accounts and contract rights) of such
Person, even though such Person has not assumed or become liable for the payment
of such obligations (and, for purposes of this clause (m), the amount of the
Indebtedness of such Person shall be deemed to be the lesser of (x) the amount
of all obligations of such primary obligors so secured by (or for which any
holder of such obligations has an existing right, contingent or otherwise, to be
secured by) the property of such Person and (y) the value of such property).
To the extent not included above, “Indebtedness” shall include all Obligations.
“Indemnifiable Taxes” shall have the meaning given to that term in Section
2.12(a).
“Initial Funding Date” shall mean the time and Business Day on which the
satisfaction of all conditions precedent and the consummation of all of the
transactions contemplated in Schedule 3.02 occur.
“Indemnitees” shall have the meaning given to that term in Section 8.03.
“Interest Expense” shall mean, for any period, the sum, for the Borrower Parties
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) all interest, fees, charges and related expenses
payable during such period to any Person in connection with Indebtedness or the
deferred purchase price of assets that are treated as interest in accordance
with GAAP, (b) the portion of rent actually paid during such period under
Capital Leases that should be treated as interest in accordance with GAAP and
(c) the net amounts payable (or minus the net amounts receivable) under Rate
Contracts accrued during such period (whether or not actually paid or received
during such period).
“Interest Period” shall mean, with respect to any LIBOR Loan or LIBOR Portion,
the time periods selected by the Borrower pursuant to Section 2.01(c) or Section
2.01(e) which commences on the first day of such Loan or Portion or the
effective date of any conversion and ends on the last day of such time period,
and thereafter, each subsequent time period selected by the Borrower pursuant to
Section 2.01(f) which commences on the last day of the immediately preceding
time period and ends on the last day of that time period.
“Investment” of any Person shall mean any loan or advance of funds by such
Person to any other Person (other than advances to employees of such Person for
moving and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business consistent with past practice), any purchase or
other acquisition of any Equity Securities or

 

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Indebtedness of any other Person, any capital contribution by such Person to or
any other investment by such Person in any other Person (including (x) any
Guaranty Obligations of such Person with respect to any obligations of any other
Person and (y) any payments made by such Person on account of obligations of any
other Person); provided, however, that Investments shall not include
(a) accounts receivable or other indebtedness owed by customers of such Person
(other than any Borrower Party) which are current assets and arose from sales or
rentals of inventory in the ordinary course of such Person’s business consistent
with past practice or (b) prepaid expenses of such Person incurred and prepaid
in the ordinary course of business consistent with past practice.
“IRC” shall mean the U.S. Internal Revenue Code of 1986.
“ISP” shall have the meaning given to that term in Section 2.02(h).
“Joint Venture” shall mean a joint venture, limited liability company,
corporation, partnership, other entity or other legal arrangement (whether
created pursuant to a contract or conducted through a separate legal entity)
formed by a Loan Party and one or more other Persons who are not Loan Parties.
“L/C Advance” shall mean, with respect to each Revolving Lender, such Revolving
Lender’s payment or participation in any L/C Borrowing in accordance with its
Revolving Proportionate Share.
“L/C Borrowing” shall mean an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Loan Borrowing.
“L/C Credit Extension” shall mean, with respect to any Letter of Credit, the
issuance thereof, the amendment thereof, the extension of the expiry date
thereof, or the renewal or increase of the amount thereof.
“L/C Issuer” shall mean Wells Fargo in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
“L/C Obligations” shall mean, as at any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.
“Lead Arranger” shall mean WFS in its capacity as lead arranger and sole
bookrunner with respect to this Agreement. Except as expressly set forth in
Sections 8.02 and 8.03, the capacity of the Lead Arranger is titular in nature,
and the Lead Arranger shall have no special rights or obligations over those of
a Lender by reason thereof.
“Lender Parties” shall mean, collectively, the Lenders and the Persons who are
counterparties to the Borrower under Lender Rate Contracts.

 

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“Lender Rate Contract(s)” shall mean one or more Rate Contracts with respect to
the Indebtedness evidenced by this Agreement between the Borrower and any Person
who, at the time it enters into such Rate Contract, is a Lender or an Affiliate
of a Lender (in each case, only so long as such Person remains a Lender or an
Affiliate of a Person that remains a Lender), on terms acceptable to the
Borrower and such Person. Each Lender Rate Contract shall be a Credit Document
and shall be secured by the Liens created by the Security Documents to the
extent set forth in Section 2.14(a).
“Lenders” shall have the meaning given to that term in clause (2) of the
introductory paragraph hereof and includes the L/C Issuer and the Swing Line
Lender (unless the context otherwise requires).
“Letter of Credit” shall mean any letter of credit issued hereunder. A Letter of
Credit may be a Commercial Letter of Credit or a Standby Letter of Credit.
“Letter of Credit Application” shall mean an application and agreement
(including any master letter of credit agreement) for the issuance or amendment
of a letter of credit in the form from time to time in use by the L/C Issuer.
“Letter of Credit Expiration Date” shall mean the day that is thirty days prior
to the Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).
“Letter of Credit Sublimit” shall mean an amount equal to the lesser of (a)
$2,500,000 and (b) the Total Revolving Loan Commitment. The Letter of Credit
Sublimit is part of, and not in addition to, the Total Revolving Loan
Commitment.
“LIBOR Loan” shall mean, at any time, a Revolving Loan which then bears interest
as provided in Section 2.01(d)(ii).
“LIBOR Portion” shall mean, at any time, a Portion of a Term Loan Borrowing, or
a Term Loan, as the case may be, which then bears interest at a rate specified
in Section 2.01(d)(ii).
“LIBOR Rate” shall mean, with respect to any Interest Period for the LIBOR Loans
in any Revolving Loan Borrowing consisting of LIBOR Loans or any LIBOR Portion
of a Term Loan Borrowing, a rate per annum equal to the quotient (rounded upward
if necessary to the nearest 1/16 of one percent) of (a) the greater of (1) 1.50%
and (2) the rate per annum referred to as the BBA (British Bankers Association)
LIBOR RATE as reported on Reuters LIBOR page 1, or if not reported by Reuters,
as reported by any service selected by the Administrative Agent, on the first
day of such Interest Period at or about 11:00 a.m., London time (or as soon
thereafter as practicable), for delivery on the second Business Day prior to the
first day of such Interest Period for a term comparable to such Interest Period,
divided by (b) one minus the Reserve Requirement for such Loans or Portion in
effect from time to time. If for any reason rates are not available as provided
in clause (a)(2) of the preceding sentence, the rate to be used in clause (a)(2)
shall be, at the Administrative Agent’s discretion (in each case, rounded upward
if necessary to the nearest 1/16 of one percent), (i) the rate per annum at
which Dollar deposits are offered to the Administrative Agent in the London
interbank eurodollar currency market or (ii) the rate at which Dollar deposits
are offered to the Administrative Agent in, or by the Administrative Agent to
major banks in, any offshore interbank eurodollar market selected by the
Administrative Agent, in each case on the second Business Day prior to the
commencement of such Interest

 

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Period at or about 10:00 a.m. (for delivery on the first day of such Interest
Period) for a term comparable to such Interest Period and in an amount
approximately equal to the amount of the Loan or Portion to be made or funded by
the Administrative Agent as part of such Borrowing. The LIBOR Rate shall be
adjusted automatically as to all LIBOR Loans and LIBOR Portions then outstanding
as of the effective date of any change in the Reserve Requirement.
“Lien” shall mean, with respect to any Property, any security interest,
mortgage, pledge, lien, charge or other encumbrance in, of, or on such Property
or the income therefrom, including the interest of a vendor or lessor under a
conditional sale agreement, Capital Lease or other title retention agreement, or
any agreement to provide any of the foregoing, and the filing of any financing
statement or similar instrument under the Uniform Commercial Code or comparable
law of any jurisdiction.
“Loan” shall mean a Revolving Loan, a Term Loan or a Swing Line Loan.
“Loan Account” shall have the meaning given to that term in Section 2.08(a).
“Loan Parties” shall mean, collectively, the Borrower and the Guarantors.
“Margin Stock” shall have the meaning given to that term in Regulation U issued
by the Federal Reserve Board but shall in any case include the treasury stock of
the Borrower.
“Material Adverse Effect” shall mean any event or circumstance that has or could
reasonably be expected to have a material adverse effect on (a) the business,
operations, condition (financial or otherwise), assets or liabilities (whether
actual or contingent) of the Borrower Parties taken as a whole, (b) the ability
of the Borrower to pay or perform the Obligations in accordance with the terms
of this Agreement and the other Credit Documents or the ability of the
Guarantors, collectively, to pay or perform any portion of their obligations in
accordance with the terms of the Guaranty and the other Credit Documents;
(c) the rights and remedies of the Administrative Agent, the Collateral Agent,
the Security Trustee or any Lender under this Agreement, the other Credit
Documents or any related document, instrument or agreement; (d) the value of the
Collateral, the Administrative Agent’s, the Collateral Agent’s, the Security
Trustee’s or any Lender’s security interest in the Collateral or the perfection
or priority of such security interests; or (e) the validity or enforceability of
any of the Credit Documents.
“Material Contract” shall mean the FireKeepers Management Agreement and any
other agreement or arrangement to which any Borrower Party is a party (other
than the Credit Documents) with respect to which breach, termination,
nonperformance or failure to renew could reasonably be expected to have a
Material Adverse Effect.
“Material Documents” shall mean (i) the Organizational Documents of the Loan
Parties, (ii) all Acquisition Documents and (iii) the Material Contracts.
“Maturity” or maturity” shall mean, with respect to any Loan, interest, fee or
other amount payable by the Borrower under this Agreement or the other Credit
Documents, the date such Loan, interest, fee or other amount becomes due,
whether upon the stated maturity or due date, upon acceleration or otherwise.

 

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“Maturity Date” shall mean the earlier of (i) June 30, 2016 and (ii) the fifth
anniversary of the Initial Funding Date.
“Multiemployer Plan” shall mean any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by any Loan Party or any
ERISA Affiliate.
“Negative Pledge” shall mean a Contractual Obligation which contains a covenant
binding on any Loan Party that prohibits Liens on any of its Property, other
than (a) any such covenant contained in a Contractual Obligation granting or
relating to a particular Permitted Lien which affects only the Property that is
the subject of such Permitted Lien and (b) any such covenant that does not apply
to Liens securing the Obligations.
“Net Condemnation Proceeds” shall mean an amount equal to: (a) any cash payments
or proceeds received by a Loan Party, the Administrative Agent, the Security
Trustee or the Collateral Agent as a result of any condemnation or other taking
or temporary or permanent requisition of any Property of a Loan Party, any
interest therein or right appurtenant thereto, or any change of grade affecting
such Property, as the result of the exercise of any right of condemnation or
eminent domain by a Governmental Authority (including a transfer to a
Governmental Authority in lieu or anticipation of a condemnation), minus (b)
(i) any actual and reasonable costs incurred by a Loan Party in connection with
any such condemnation or taking (including reasonable fees and expenses of
counsel), and (ii) provisions for all taxes payable as a result of such
condemnation, without regard to the consolidated results of operations of the
Loan Parties, taken as a whole.
“Net Income” shall mean with respect to any fiscal period, the net income of or
attributable to the Borrower Parties for such period determined on a
consolidated basis in accordance with GAAP, consistently applied; provided, that
Net Income for any period that includes any fiscal quarter ending prior to the
Initial Funding Date shall be deemed to include the Net Income of or
attributable to the Purchased Assets
“Net Insurance Proceeds” shall mean an amount equal to: (a) any cash payments or
proceeds received by a Loan Party, the Administrative Agent or the Collateral
Agent under any key man life insurance policy or any casualty policy in respect
of a covered loss thereunder with respect to any property, minus (b) (i) any
actual and reasonable costs incurred by a Loan Party in connection with the
adjustment or settlement of any claims of a Loan Party in respect thereof
(including reasonable fees and expenses of counsel), (ii) provisions for all
taxes payable as a result of such event without regard to the consolidated
results of operations of Loan Parties, taken as a whole, and (iii) with respect
to cash payments or proceeds from any key man life insurance policies,
reasonable and customary amounts paid by the applicable Loan Party to (A) an
executive recruiting firm related to hiring a replacement executive officer, and
(B) the replacement executive officer as a signing bonus and relocation
expenses.
“Net Proceeds” shall mean:

 

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(a) With respect to any sale of any asset or property by any Person, the
aggregate consideration received by such Person from such sale less the sum of
(i) the actual amount of the reasonable fees and commissions payable by such
Person other than to any of its Affiliates, (ii) the reasonable legal expenses
and other costs and expenses directly related to such sale that are to be paid
by such Person other than to any of its Affiliates (including, without
limitation, transfer, sale, use and other similar taxes payable in connection
with such sale), (iii) income taxes reasonably estimated to be payable by such
Person as a result of such sale, and (iv) the amount of any Indebtedness (other
than the Obligations) which is secured by such asset and is required to be
repaid or prepaid by such Person as a result of such sale; and
(b) With respect to any issuance or incurrence of any Indebtedness by any
Person, the aggregate consideration received by such Person from such issuance
or incurrence less the sum of (i) the actual amount of the reasonable fees and
commissions payable by such Person other than to any of its Affiliates and
(ii) the reasonable legal expenses and the other reasonable costs and expenses
directly related to such issuance or incurrence that are to be paid by such
Person other than to any of its Affiliates; and
(c) With respect to any issuance of Equity Securities by any Person, the
aggregate consideration received by such Person from such issuance less the sum
of (i) the actual amount of the reasonable fees and commissions payable by such
Person other than to any of its Affiliates and (ii) the reasonable legal
expenses and the other reasonable costs and expenses directly related to such
issuance that are to be paid by such Person other than to any of its Affiliates.
“New Lender” shall have the meaning given to that term in Section 2.01(h)(i)(G).
“Non-Bank Certificate” shall have the meaning given to that term in Section
2.12(e).
“Non-Bank Lender” shall have the meaning given to that term in Section 2.12(e).
“Non-Consenting Lender” shall have the meaning given to that term in Section
8.04.
“Nonrenewal Notice Date” shall have the meaning given to that term in Section
2.02(b)(iii).
“Non-Wholly-Owned Subsidiary” shall mean a direct or indirect Subsidiary of the
Borrower that is not a Wholly-Owned Subsidiary.
“Nottawaseppi Tribe” shall mean the Nottawaseppi Huron Band of Potawatomi.
“Note” shall mean a Revolving Loan Note, a Term Loan Note or a Swing Line Note.
“Notice of Borrowing” shall mean a Notice of Loan Borrowing or a Notice of Swing
Line Borrowing.
“Notice of Conversion” shall have the meaning given to that term in Section
2.01(e).
“Notice of Interest Period Selection” shall have the meaning given to that term
in Section 2.01(f)(ii).
“Notice of Loan Borrowing” shall have the meaning given to that term in Section
2.01(c).

 

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“Notice of Swing Line Borrowing” shall mean a notice of a Swing Line Borrowing
pursuant to Section 2.03(b), which, if in writing, shall be substantially in the
form of Exhibit D.
“Obligations” shall mean and include all loans, advances, debts, liabilities and
obligations, howsoever arising, owed or owing by the Borrower of every kind and
description (whether or not evidenced by any note or instrument and whether or
not for the payment of money), direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising pursuant to the terms of
this Agreement or any of the other Credit Documents, including without
limitation all interest (including interest that accrues after the commencement
of any bankruptcy or other insolvency proceeding by or against any the Borrower,
whether or not allowed or allowable), fees, charges, expenses, attorneys’ fees
and accountants’ fees chargeable to and payable by the Borrower hereunder and
thereunder.
“Organizational Documents” shall mean, with respect to any Person, collectively,
(a) such Person’s articles or certificate of incorporation, articles or
certificate of organization, certificate of limited partnership, certificate of
formation, or comparable documents filed or recorded with the applicable
Governmental Authority of such Person’s jurisdiction of formation and (b) such
Person’s, bylaws, limited liability company agreement, partnership agreement or
other comparable organizational or governing documents.
“Participant” shall have the meaning given to that term in Section 8.05(b).
“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56 (commonly known as the USA Patriot Act).
“PBGC” shall mean the Pension Benefit Guaranty Corporation.
“Pension Plan” shall mean any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan and a Foreign
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by a
Loan Party or any ERISA Affiliate or to which a Loan Party or any ERISA
Affiliate contributes or has an obligation to contribute.
“Permitted Acquisition” shall mean any acquisition permitted under Section
5.02(d)(iv).
“Permitted Indebtedness” shall have the meaning given to that term in Section
5.02(a).
“Permitted Liens” shall have the meaning given to that term in Section 5.02(b).
“Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, an unincorporated
association, a limited liability company, a joint venture, a trust or other
entity or a Governmental Authority.
“Pledged Intercompany Notes” shall have the meaning given to that term in
Schedule 3.01(a)(vi).

 

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“Portion” shall mean a portion of the principal amount of a Term Loan Borrowing
or a Term Loan, as applicable. A Term Loan Borrowing shall consist of one or
more Portions, and each Term Loan comprising a Term Loan Borrowing shall consist
of the same number of Portions, with each such Term Loan Portion corresponding
pro rata to a Term Loan Borrowing Portion. Any reference to a Portion of a Term
Loan Borrowing shall include the corresponding Portion of each Term Loan
comprising a Term Loan Borrowing.
“Pricing Grid” shall mean,
Pricing Grid

                                              Applicable Margin     Applicable
Margin     Commitment Fee   Tier   Total Leverage Ratio     for LIBOR Loans    
for Base Rate Loans     Percentage  
I
    ≥ 1.25       5.50 %     4.50 %     0.750 %
II
    ≥ 0.75 < 1.25       5.00 %     4.00 %     0.625 %
III
    < 0.75       4.50 %     3.50 %     0.500 %

Any increase or decrease in the Applicable Margin resulting from a change in the
Total Leverage Ratio shall become effective as of the fifth Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 5.01(a)(iii) with respect to any fiscal quarter; provided, however, that
if no Compliance Certificate is delivered when due in accordance with such
Section, then Tier I shall apply as of the date of the failure to deliver such
Compliance Certificate until such date as the Borrower delivers such Compliance
Certificate in form and substance reasonably acceptable to the Administrative
Agent and thereafter the Applicable Margin shall be based on the Total Leverage
Ratio indicated on such Compliance Certificate until such time as the Applicable
Margin is further adjusted as set forth in this definition. Notwithstanding
anything to the contrary herein, the Applicable Margin in effect as of the
Initial Funding Date shall be based on Tier I until adjusted in the manner set
forth in this definition following the date a Compliance Certificate is
delivered pursuant to Section 5.01(a)(iii) with respect to the first full fiscal
quarter following the Initial Funding Date. If the Total Leverage Ratio reported
in any Compliance Certificate shall be determined to have been incorrectly
reported and if correctly reported would have resulted in a higher Applicable
Margin, then the Applicable Margin shall be retroactively adjusted to reflect
the higher rate that would have been applicable had the Total Leverage Ratio
been correctly reported in such Compliance Certificate and the additional
amounts resulting therefrom shall be due and payable upon demand from the
Administrative Agent or any Lender (the Borrower’s obligations to pay such
additional amounts shall survive the payment and performance of all other
Obligations and the termination of this Agreement).
“Prime Rate” shall mean the per annum rate of interest most recently announced
within Wells Fargo at its principal office in San Francisco, California as its
Prime Rate, with the understanding that Wells Fargo’s Prime Rate is one of its
base rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Wells Fargo may designate. Any change in the Base Rate resulting
from a change in the Prime Rate shall become effective on the Business Day on
which each such change in the Prime Rate occurs.

 

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“Property” shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
“Proportionate Share” shall mean a Revolving Proportionate Share or a Term
Proportionate Share, as the context may require.
“Proposed Change” shall have the meaning given to that term in Section 8.04.
“Proposed Target” shall have the meaning given to that term in Section
5.02(d)(iv).
“Purchased Assets” shall have the meaning given to that term in the Acquisition
Agreement.
“Qualified Equity Securities” means Equity Securities of the Borrower other than
Disqualified Equity Securities.
“Rate Contract” shall mean any agreement with respect to any swap, cap, collar,
hedge, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions.
“Real Property Security Documents” shall mean (a) each document listed on
Schedule 1.01(a) and (b) each deed of trust or mortgage delivered from time to
time in accordance with Section 5.01(k) or otherwise in connection with the
Credit Documents.
“Receipt Date” shall have the meaning given to that term in Section
2.06(c)(vii).
“Reduction Amount” shall have the meaning given to that term in Section 2.04(b).
“Reduction Date” shall have the meaning given to that term in Section 2.04(b).
“Reduction Notice” shall have the meaning given to that term in Section 2.04(a).
“Register” shall have the meaning given to that term in Section 8.05(d).
“Relevant Sale” shall have the meaning given to that term in Section
2.06(c)(iv).
“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA and applicable regulations thereunder (other than events for which the
thirty (30) day notice period has been waived).
“Required Lenders” shall mean, at any time, the Lenders whose Proportionate
Shares then exceed fifty percent (50%) of the total Proportionate Shares of all
Lenders; provided that at any time any Lender is a Defaulting Lender, such
Defaulting Lender shall be excluded in determining “Required Lenders”, and
“Required Lenders” shall mean at such time non-

 

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Defaulting Lenders having total Proportionate Shares exceeding fifty percent
(50%) of the total Proportionate Shares of all non-Defaulting Lenders.
Notwithstanding the foregoing, in no event shall Required Lenders consist of
fewer than two non-Defaulting Lenders at any time at which there shall be at
least two non-Defaulting Lenders party to this Agreement, and for purposes of
the foregoing, Lenders that are Affiliates of one another shall be treated as a
single Lender.
“Requirement of Law” applicable to any Person shall mean (a) such Person’s
Organizational Documents, (b) any Governmental Rule applicable to such Person,
(c) any Governmental Authorization granted by or obtained from any Governmental
Authority or under any Governmental Rule for the benefit of such Person or
(d) any judgment, decision, award, decree, writ or determination of any
Governmental Authority or arbitrator, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject.
“Reserve Requirement” shall mean, with respect to any day in an Interest Period
for a LIBOR Loan or LIBOR Portion and for any calculation of the One Month LIBOR
Rate, the aggregate of the maximum of the reserve requirement rates (expressed
as a decimal) in effect on such day for eurocurrency funding (currently referred
to as “Eurocurrency liabilities” in Regulation D of the Federal Reserve Board)
maintained by a member bank of the Federal Reserve System. As used herein, the
term “reserve requirement” shall include, without limitation, any basic,
supplemental or emergency reserve requirements imposed on any Lender by any
Governmental Authority.
“Responsible Officer” shall mean, with respect to a Loan Party, the chief
executive officer, president, chief operating officer, chief financial officer,
vice president or treasurer of such Loan Party. Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party and any request or other
communication conveyed telephonically or otherwise by a Responsible Officer of a
Loan Party (or any Person reasonably believed by the Administrative Agent, the
Collateral Agent or the Security Trustee to be a Responsible Officer of a Loan
Party) shall be conclusively presumed to have been authorized by all necessary
corporate, company, partnership and/or other action on the part of such Loan
Party and such Responsible Officer (or such Person reasonably believed by the
Administrative Agent or the Security Trustee to be a Responsible Officer) shall
be conclusively presumed to have acted on behalf of such Loan Party.
“Revolving Lender” shall mean (a) on the Initial Funding Date, the Lenders
having Revolving Loan Commitments as specified on Part A of Schedule I hereto
and (b) thereafter, the Lenders from time to time holding Revolving Loans, L/C
Obligations and Swing Line Loans and Revolving Commitments after giving effect
to any assignments permitted by Section 8.05(c).
“Revolving Loan” shall have the meaning given to that term in Section 2.01(b).
“Revolving Loan Borrowing” shall mean a borrowing by the Borrower consisting of
the Revolving Loans made by each of the Revolving Lenders to the Borrower on the
same date and of the same Type pursuant to a single Notice of Loan Borrowing for
Revolving Loans.
“Revolving Loan Commitment” shall mean, with respect to each Lender, the Dollar
amount set forth under the caption “Revolving Loan Commitment” opposite such
Lender’s name on Part A of Schedule I, or, if changed, such Dollar amount as may
be set forth for such Lender in the Register.

 

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“Revolving Loan Note” shall have the meaning given to that term in Section
2.08(b).
“Revolving Proportionate Share” shall mean:
(a) With respect to any Lender so long as the Revolving Loan Commitments are in
effect, the ratio (expressed as a percentage rounded to the eighth digit to the
right of the decimal point) of (i) such Lender’s Revolving Loan Commitment at
such time to (ii) the Total Revolving Loan Commitment at such time; and
(b) With respect to any Lender at any other time, the ratio (expressed as a
percentage rounded to the eighth digit to the right of the decimal point) of
(i) the sum of (A) the aggregate Effective Amount of such Lender’s Revolving
Loans, (B) such Lender’s Proportionate Share of the Effective Amount of all L/C
Obligations, and (C) such Lender’s Proportionate Share of the aggregate
Effective Amount of all Swing Line Loans to (ii) the sum of (A) the aggregate
Effective Amount of all Revolving Loans and Swing Line Loans and (B) the
Effective Amount of all L/C Obligations.
The initial Revolving Proportionate Share of each Lender is set forth under the
caption “Revolving Proportionate Share” opposite such Lender’s name on
Schedule I.
“Sale and Leaseback” shall mean, with respect to any Person, the sale of
Property owned by such Person (the “Seller”) to another Person (the “Buyer”),
together with the substantially concurrent leasing of such Property by the Buyer
to the Seller.
“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, the Security Trustee and the Lender Parties.
“Security Agreement” shall mean that certain Security Agreement among the
Borrower, each Guarantor party thereto and the Collateral Agent, substantially
in the form of Exhibit M.
“Security Documents” shall mean and include the Security Agreement, the
Collateral Assignment of Leases, each Control Agreement, each Real Property
Security Document, the Grand Victoria Vessel Security Document, each other
pledge agreement or security agreement from time to time delivered in accordance
with Section 5.01(i), and all other instruments, agreements, certificates,
opinions and documents (including Uniform Commercial Code financing statements
and fixture filings) delivered to the Administrative Agent, the Collateral
Agent, the Security Trustee or any Lender in connection with any Collateral or
to secure the Obligations or the obligation of a Guarantor under the Credit
Documents.
“Security Trustee” shall have the meaning given to that term in clause (3) of
the introductory paragraph hereof.
“Senior Finance Officer” shall mean, with respect to a Loan Party, the Chief
Executive Officer, the Chief Financial Officer or the Vice President of Finance
of such Loan Party.

 

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“Ship Mortgage Act” means Chapter 313 of Title 46 of the United States Code.
“Solvent” shall mean, with respect to any Person on any date, that on such date
(a) the fair value of the Property of such Person is greater than the fair value
of the liabilities (including contingent, subordinated, matured and unliquidated
liabilities) of such Person, (b) the present fair saleable value of the assets
of such Person is greater than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in or about to engage in
business or transactions for which such Person’s Property would constitute an
unreasonably small capital.
“Standby Letter of Credit” shall mean any of the standby letters of credit
issued by the L/C Issuer under this Agreement, either as originally issued or as
the same may be supplemented, modified, amended, extended, restated or
supplanted.
“Subordinated Obligations” shall mean, as of any date of determination, any
Indebtedness of the Loan Parties on that date which has been subordinated in
right of payment to the Obligations in a manner reasonably satisfactory to the
Required Lenders and contains such other protective terms with respect to senior
debt (such as amount, maturity, amortization, interest rate, covenants,
defaults, remedies, payment blockage and terms of subordination) as the Required
Lenders may reasonably require.
“Subsidiary” of any Person shall mean (a) any corporation of which more than 50%
of the issued and outstanding Equity Securities having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person’s other Subsidiaries, (b) any partnership, joint venture,
limited liability company or other association of which more than 50% of the
Equity Securities having the power to vote, direct or control the management of
such partnership, joint venture or other association is at the time owned and
controlled by such Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person’s other Subsidiaries or (c) any
other Person included in the Financial Statements of such Person on a
consolidated basis. Unless otherwise indicated in this Agreement, “Subsidiary”
shall mean a Subsidiary of the Borrower. For the avoidance of doubt, the
Subsidiaries of the Borrower shall include GEM and exclude GED.
“Surety Instruments” shall mean all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
“Swing Line” shall mean the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.03.
“Swing Line Borrowing” shall mean a borrowing of a Swing Line Loan.
“Swing Line Lender” shall mean Wells Fargo in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

 

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“Swing Line Loan” shall mean the meaning specified in Section 2.03(a).
“Swing Line Note” shall have the meaning given to that term in Section 2.08(d).
“Swing Line Settlement Date” shall mean the fifteenth day of each month and the
last Business Day of each month.
“Swing Line Sublimit” shall mean an amount equal to the lesser of (a) $1,000,000
and (b) the Total Revolving Loan Commitment. The Swing Line Sublimit is part of,
and not in addition to, the Total Revolving Loan Commitment.
“Taxes” shall mean all taxes, assessments, charges, duties, fees, levies or
other governmental charges, including, without limitation, all U.S. federal,
state, local, foreign and other income, franchise, profits, gross receipts,
capital gains, capital stock, transfer, property, sales, use, value-added,
occupation, property, excise, severance, windfall profits, stamp, license,
payroll, social security, withholding and other taxes, assessments, charges,
duties, fees, levies or other governmental charges of any kind whatsoever
(whether payable directly or by withholding and whether or not requiring the
filing of a Tax Return), all estimated taxes, deficiency assessments, additions
to tax, penalties and interest and shall include any liability for such amounts
as a result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any person or other
entity.
“Tax Return” shall mean all tax returns, statements, forms and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) for Taxes.
“Term Lender” shall mean (a) prior to the Initial Funding Date, the Lenders
having Term Loan Commitments as specified on Part A of Schedule I and (b) from
and after the Initial Funding Date, the Lenders from time to time holding Term
Loans after giving effect to any assignments permitted by Section 8.05(c).
“Term Loan” shall mean each advance made by a Term Lender pursuant to Section
2.01(a).
“Term Loan Borrowing” shall mean the borrowing by the Borrower consisting of the
Term Loans made by the applicable Term Lenders to the Borrower.
“Term Loan Commitment” shall mean, with respect to each Lender, the Dollar
amount set forth under the caption “Term Loan Commitment” opposite such Lender’s
name on Part A of Schedule I, or, if changed, such Dollar amount as may be set
forth for such Lender in the Register.
“Term Loan Increase” shall have the meaning given to that term in Section
2.01(a)(ii).
“Term Loan Installment Date” shall mean the last Business Day in each March,
June, September and December of each year, commencing the last Business Day of
the first full fiscal quarter after the Initial Funding Date.
“Term Loan Note” shall have the meaning given to that term in Section 2.08(c).

 

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“Term Proportionate Share” shall mean:
(a) With respect to any Lender at any time prior to the Initial Funding Date,
the ratio (expressed as a percentage rounded to the eighth digit to the right of
the decimal point) of (i) such Lender’s Term Loan Commitment at such time to
(ii) the Total Term Loan Commitment at such time; and
(b) With respect to any Lender at any time after the Initial Funding Date, the
ratio (expressed as a percentage rounded to the eighth digit to the right of the
decimal point) of (i) the Effective Amount of such Lender’s Term Loan
outstanding at such time to (ii) the Effective Amount of all Term Loans
outstanding at such time.
The initial Term Proportionate Share of each Lender is set forth under the
caption “Term Proportionate Share” opposite such Lender’s name on Schedule I.
“Termination Value” shall mean, in respect of any one or more Rate Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Rate Contracts, (a) for any date on or after the date
such Rate Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a) the amount(s) determined as the mark-to-market
value(s) for such Rate Contracts, as determined by the Administrative Agent
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Rate Contracts which may include any Lender.
“Total Funded Debt” shall mean, as of any date of determination, all
Indebtedness of or attributable to the Borrower Parties on a consolidated basis
as of such date; provided that Total Funded Debt for any period that includes
any fiscal quarter ending prior to the Initial Funding Date shall be deemed to
include the Total Funded Debt of or attributable to the Purchased Assets.
“Total Leverage Ratio” shall mean, as of any date of determination, the ratio of
(a) Total Funded Debt as of such date to (b) Adjusted EBITDA for the four
consecutive fiscal quarter period most recently ended for which Financial
Statements are available.
“Total Revolving Loan Commitment” shall mean, at any time, Four Million Seven
Hundred Thirty Six Thousand Eight Hundred Forty Two Million Dollars and Eleven
Cents ($4,736,842.11) or, if such amount is reduced pursuant to Section 2.04(a)
or (b), the amount to which so reduced and in effect at such time, or, if such
amount is increased pursuant to Section 2.01(h), the amount to which so
increased and in effect at such time.
“Total Term Loan Commitment” shall mean, at any time, Thirty One Million Two
Hundred Sixty Three Thousand One Hundred Fifty Seven Dollars and Eighty Nine
Cents ($31,263,157.89) or, when such amount is reduced pursuant to
Section 2.04(b), the amount to which so reduced and in effect at such time or,
if such amount is increased pursuant to Section 2.01(h), the amount to which so
increased and in effect at such time.
“Transactions” shall mean, collectively (a) the transactions contemplated under
the Acquisition Agreement, including the Acquisition, (b) the initial Borrowings
of the Loans on the Initial Funding Date and (c) the payment of fees,
commissions and expenses in connection with the foregoing.

 

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“Type” shall mean, with respect to any Loan, Borrowing or Portion at any time,
the classification of such Loan, Borrowing or Portion by the type of interest
rate it then bears, whether an interest rate based upon the Base Rate or the
LIBOR Rate.
“UCP” shall have the meaning given to that term in Section 2.02(h)(ii).
“Unfunded Pension Liability” shall mean the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the IRC for the applicable
plan year.
“Unreimbursed Amount” has the meaning set forth in Section 2.02(c)(i).
“Unused Revolving Commitment” shall mean, at any time, the remainder of (a) the
Total Revolving Loan Commitment at such time minus (b) the sum of the Effective
Amount of all Revolving Loans and the Effective Amount of all L/C Obligations
outstanding at such time. For the avoidance of doubt, Swing Line Loans shall not
be counted as Revolving Loans for purposes of determining the amount of Unused
Revolving Commitment.
“United States” and “U.S.” shall mean the United States of America.
“Wells Fargo” shall have the meaning given to that term in clause (3) of the
introductory paragraph hereof.
“Wells Fargo Parties” shall mean, collectively, Wells Fargo and WFS.
“WFS” shall have the meaning given to that term in the introductory paragraph
hereof.
“Wholly-Owned Subsidiary” shall mean any Person in which 100% of the Equity
Securities of each class having ordinary voting power, and 100% of the Equity
Securities of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by the
Borrower, or by one or more Wholly-Owned Subsidiaries of the Borrower, or both.
1.02. GAAP. Unless otherwise indicated in this Agreement or any other Credit
Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP applied in a
consistent manner with the principles used in the preparation of the Financial
Statements of the Borrower Parties for the fiscal year ending December 31, 2009.
Notwithstanding the other provisions of this Section 1.02, for purposes of
determining compliance with any covenant, including any financial covenant,
Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried
at 100% of the outstanding principal amount thereof, and the effects of FASB ASC
825 (and FASB ASC 470-20, if applicable) on financial liabilities shall be
disregarded. If GAAP changes, as applicable, during the term of this Agreement
such that any covenants contained herein would then be calculated in

 

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a different manner or with different components, other than changes in GAAP that
require items to be included in the definition of Indebtedness that were not so
required before such change in GAAP, the Borrower, the Lenders and the
Administrative Agent agree to negotiate in good faith to amend this Agreement in
such respects as are necessary to conform those covenants as criteria for
evaluating the Loan Parties’ financial condition to substantially the same
criteria as were effective prior to such change in GAAP; provided, however,
that, until the Borrower, the Lenders and the Administrative Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP, as in
effect immediately prior to such change in GAAP.
1.03. Headings. The table of contents, captions and section headings appearing
in this Agreement are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
1.04. Plural Terms. All terms defined in this Agreement or any other Credit
Document in the singular form shall have comparable meanings when used in the
plural form and vice versa.
1.05. Time. All references in this Agreement and each of the other Credit
Documents to a time of day shall mean San Francisco, California time, unless
otherwise indicated.
1.06. Governing Law. This Agreement and, unless otherwise expressly provided in
any such Credit Document, each of the other Credit Documents shall be governed
by and construed in accordance with the laws of the State of New York without
reference to conflicts of law rules other than Section 5-1401 of the General
Obligations Law of the State of New York. The scope of the foregoing governing
law provision is intended to be all-encompassing of any and all disputes that
may be brought in any court or any mediation or arbitration proceeding and that
relate to the subject matter of the Credit Documents, including contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims.
1.07. Construction. This Agreement is the result of negotiations among, and has
been reviewed by, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Security Trustee and their respective counsel.
Accordingly, this Agreement shall be deemed to be the product of all parties
hereto, and no ambiguity shall be construed in favor of or against the Borrower,
any Lender, the Security Trustee, the Collateral Agent or the Administrative
Agent.
1.08. Entire Agreement. This Agreement and each of the other Credit Documents,
taken together, constitute and contain the entire agreement of the Borrower, the
Lenders, the Administrative Agent, the Security Trustee and the Collateral Agent
and supersede any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether written or oral,
respecting the subject matter hereof including, except to the extent expressly
set forth therein and in the last sentence of this Section 1.08, the commitment
letter dated as of September 10, 2010 between the Borrower and the Wells Fargo
Parties (the “Commitment Letter”), but excluding the Fee Letter. Notwithstanding
anything to the contrary herein or in any of the other Credit Documents,
Sections 1(c) and 2(b) of the Commitment Letter shall survive the Effective
Date, the payment of the Obligations and the termination of this Agreement.

 

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1.09. Calculation of Interest and Fees. All calculations of interest and fees
under this Agreement and the other Credit Documents for any period (a) shall
include the first day of such period and exclude the last day of such period;
provided that any Loan or Portion that is repaid on the same day on which it is
made shall bear interest for one day and (b) shall be calculated on the basis of
a year of 360 days for actual days elapsed, except that during any period any
Loan or Portion bears interest based upon the Base Rate, such interest shall be
calculated on the basis of a year of 365 or 366 days, as appropriate, for actual
days elapsed.
1.10. References.
(a) References in this Agreement to “Recitals,” “Sections,” “Paragraphs,”
“Exhibits” and “Schedules” are to recitals, sections, paragraphs, exhibits and
schedules herein and hereto unless otherwise indicated.
(b) References in this Agreement or any other Credit Document to any document,
instrument or agreement (i) shall include all exhibits, schedules and other
attachments hereto or thereto, (ii) shall include all documents, instruments or
agreements issued or executed in replacement thereof if such replacement is
permitted hereby or thereby, and (iii) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, restated, modified
and supplemented from time to time and in effect at any given time if such
amendment, restatement, modification or supplement is permitted hereby or
thereby.
(c) References in this Agreement or any other Credit Document to any
Governmental Rule (i) shall include any successor Governmental Rule, (ii) shall
include all rules and regulations promulgated under such Governmental Rule (or
any successor Governmental Rule), and (iii) shall mean such Governmental Rule
(or successor Governmental Rule) and such rules and regulations, as amended,
modified, codified or reenacted from time to time and in effect at any given
time.
(d) References in this Agreement or any other Credit Document to any Person in a
particular capacity (i) shall include any successors to and permitted assigns of
such Person in that capacity and (ii) shall exclude such Person individually or
in any other capacity.
1.11. Other Interpretive Provisions. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement or any other
Credit Document shall refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document, as the case may be. The words “include”
and “including” and words of similar import when used in this Agreement or any
other Credit Document shall not be construed to be limiting or exclusive. In the
event of any inconsistency between the terms of this Agreement and the terms of
any other Credit Document, the terms of this Agreement shall govern.
1.12. Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.

 

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ARTICLE II. CREDIT FACILITIES.
2.01. Loan Facilities.
(a) Term Loan Availability.
(i) On the Initial Funding Date. On the terms and subject to the conditions of
this Agreement, each Term Lender severally agrees to advance to the Borrower in
a single advance on the Initial Funding Date a loan in Dollars under this
Section 2.01(a)(i); provided, however, that (i) the principal amount of the Term
Loan made by such Term Lender shall not exceed such Term Lender’s Term Loan
Commitment on the Initial Funding Date and (ii) the aggregate principal amount
of all Term Loans made by all Term Lenders shall not exceed the Total Term Loan
Commitment on the Initial Funding Date. The Term Loans made on the Initial
Funding Date shall be made on a pro rata basis by the Term Lenders in accordance
with their respective Term Proportionate Shares, with the Term Loan Borrowing to
be comprised of a Term Loan by each Term Lender equal to such Term Lender’s Term
Proportionate Share of such Term Loan Borrowing.
(ii) After the Initial Funding Date. On the terms and subject to the conditions
of this Agreement, after the Initial Funding Date, if there is to be an increase
in the aggregate principal amount of the Term Loans pursuant to Section 2.01(h)
(the “Term Loan Increase”), the Term Lender that has agreed to advance the Term
Loan Increase pursuant to Section 2.01(h) hereby agrees to advance to the
Borrower in a single advance on the date specified for such Term Loan Increase
pursuant to Section 2.01(h) a loan in Dollars under this Section 2.01(a)(ii);
provided, however, that the principal amount of the Term Loan made by the such
Lender shall not exceed the amount such Lender has agreed to advance pursuant to
Section 2.01(h) with respect to such Term Loan Increase. The Term Loan Borrowing
made in respect of the Term Loan Increase shall be comprised of a Term Loan made
by such Lender in an amount equal to such Term Loan Increase.
(iii) The Borrower may not reborrow the principal amount of any Term Loan after
repayment or prepayment thereof.
(b) Revolving Loan Availability. On the terms and subject to the conditions of
this Agreement, each Revolving Lender severally agrees to advance to the
Borrower from time to time during the period beginning on the Initial Funding
Date up to, but not including the Maturity Date such loans in Dollars as the
Borrower may request under this Section 2.01(b) (individually, a “Revolving
Loan”); provided, however, that (i) the sum of (A) the Effective Amount of all
Revolving Loans made by such Revolving Lender at any time outstanding and
(B) such Revolving Lender’s Revolving Proportionate Share of the Effective
Amount of all L/C Obligations and all Swing Line Loans at any time outstanding
shall not exceed such Revolving Lender’s Revolving Loan Commitment at such time
and (ii) the sum of (A) the Effective Amount of all Revolving Loans made by all
the Revolving Lenders at any time outstanding and (B) the Effective Amount of
all L/C Obligations and Swing Line Loans at any time outstanding

 

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shall not exceed the Total Revolving Loan Commitment at such time. All Revolving
Loans shall be made on a pro rata basis by the Revolving Lenders in accordance
with their respective Revolving Proportionate Shares, with each Revolving Loan
Borrowing to be comprised of a Revolving Loan by each Revolving Lender equal to
such Revolving Lender’s Revolving Proportionate Share of such Revolving Loan
Borrowing. Except as otherwise provided herein, the Borrower may borrow, repay
and reborrow Revolving Loans until the Maturity Date.
(c) Notice of Loan Borrowing. The Borrower shall request each Revolving Loan
Borrowing and Term Loan Borrowing by delivering to the Administrative Agent an
irrevocable written notice substantially in the form of Exhibit A (a “Notice of
Loan Borrowing”), duly executed by a Responsible Officer of the Borrower and
appropriately completed which specifies, among other things:
(i) Whether the applicable Borrowing is a Revolving Loan Borrowing or Term Loan
Borrowing;
(ii) In the case of a Revolving Loan Borrowing, the principal amount of the
requested Revolving Loan Borrowing, which shall be in the amount of $500,000 or
an integral multiple of $100,000 in excess thereof, provided that if such
Revolving Loan Borrowing is (A) made in connection with Section 2.01(h) or
(B) of the remaining unfunded Total Revolving Loan Commitment, it shall not be
subject to any limitation under this clause (ii);
(iii) In the case of a Revolving Loan Borrowing, whether the requested Revolving
Loan Borrowing is to consist of Base Rate Loans or LIBOR Loans;
(iv) In the case of a Revolving Loan Borrowing, if the requested Revolving Loan
Borrowing is to consist of LIBOR Loans, the initial Interest Periods selected by
the Borrower for such LIBOR Loans in accordance with Section 2.01(f); and
(v) In the case of a Revolving Loan Borrowing, the date of the requested
Revolving Loan Borrowing, which shall be a Business Day.
The Borrower shall give (x) each Notice of Loan Borrowing for Revolving Loans to
the Administrative Agent not later than 11:00 a.m. at least three (3) Business
Days before the date of the requested Revolving Loan Borrowing in the case of a
Revolving Loan Borrowing consisting of LIBOR Loans and not later than 11:00 a.m.
at least one (1) Business Day before the date of the requested Revolving Loan
Borrowing in the case of a Revolving Loan Borrowing consisting of Base Rate
Loans and (y) the Notice of Loan Borrowing for the Term Loan Borrowing to the
Administrative Agent no later than 11:00 a.m. at least one (1) Business Day
before the date of the requested Term Loan Borrowing. The Term Loan Borrowing
made on the Initial Funding Date shall initially be made as a Base Rate Portion.
Each Notice of Loan Borrowing shall be delivered by first-class mail, facsimile
or e-mail containing a PDF of such signed and completed Notice of Loan
Borrowing) to the Administrative Agent at the office or to the facsimile number
or e-mail address and during the hours specified in Section 8.01; provided,
however, that the Borrower shall promptly deliver to the Administrative Agent
the original of any Notice of Loan Borrowing initially delivered by facsimile or
e-mail. The Administrative Agent shall promptly notify (x) each Revolving Lender
of the contents of each Notice of Loan Borrowing for

 

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Revolving Loans and of the amount and Type of (and, if applicable, the Interest
Period for) the Revolving Loan to be made by such Revolving Lender as part of
the requested Revolving Loan Borrowing and (y) each Term Lender of the contents
of the Notice of Loan Borrowing for the Term Loan Borrowing on the Initial
Funding Date and of the amount of the Term Loan to be made by such Term Lender
as part of the requested Term Loan Borrowing. Notwithstanding the foregoing, the
Revolving Loan Borrowing advanced on the Initial Funding Date (if any) shall
consist of Base Rate Loans.
(d) Interest Rates. The Borrower shall pay interest on the unpaid principal
amount of each Revolving Loan and each Term Loan from the date of such Revolving
Loan and such Term Loan until paid in full, at one of the following rates per
annum:
(i) During such periods as such Loan is a Base Rate Loan or Base Rate Portion,
at a rate per annum equal to the Base Rate plus the Applicable Margin therefor,
such rate to change from time to time as the Applicable Margin or Base Rate
shall change; and
(ii) During such periods as such Loan is a LIBOR Loan or LIBOR Portion, at a
rate per annum equal at all times during each Interest Period for such LIBOR
Loan or LIBOR Portion to the LIBOR Rate for such Interest Period plus the
Applicable Margin therefor, such rate to change from time to time during such
Interest Period as the Applicable Margin shall change.
All Revolving Loans in each Revolving Loan Borrowing shall, at any given time
prior to maturity, bear interest at one, and only one, of the above rates. Each
LIBOR Portion of a Term Loan Borrowing shall be in a minimum amount of $500,000
or an integral multiple of $100,000 in excess thereof (except to the extent that
any lesser Portion results from a mandatory prepayment of the Term Loans
pursuant to Section 2.06(c)). The number of Revolving Loan Borrowings consisting
of LIBOR Loans and LIBOR Portions of Term Loan Borrowings shall not exceed five
(5) in the aggregate at any time.
(e) Conversion of Loans. Subject to Section 2.13, the Borrower may convert any
Revolving Loan Borrowing or any Portion of the Term Loans from one Type of
Revolving Loan Borrowing or Portion of the Term Loans, respectively, to the
other Type; provided, however, that any such conversion shall be in a minimum
amount of $500,000 or an integral multiple of $100,000 in excess thereof;
provided, further, that no Base Rate Loan or Base Rate Portion may be converted
into a LIBOR Loan or LIBOR Portion, respectively, after the occurrence and
during the continuance of an Event of Default and provided, further, that any
conversion of a LIBOR Loan or LIBOR Portion on any day other than the last day
of the Interest Period therefor shall be subject to the payments required under
Section 2.13. The Borrower shall request such a conversion by delivering to the
Administrative Agent an irrevocable written notice to the Administrative Agent
substantially in the form of Exhibit B (a “Notice of Conversion”), duly executed
by a Responsible Officer of the Borrower and appropriately completed, which
specifies, among other things:
(i) The Revolving Loan Borrowing or the Portion of the Term Loans which is to be
converted, as applicable;

 

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(ii) The Type of Revolving Loan Borrowing into which such Revolving Loan
Borrowing is to be converted or the amount and Type of each Portion of Term
Loans into which it is to be converted, as applicable;
(iii) If such Revolving Loan Borrowing is to be converted into a Revolving Loan
Borrowing consisting of LIBOR Loans or if any Portion of Term Loans is to be
converted into a LIBOR Portion, the initial Interest Period selected by the
Borrower for such LIBOR Loans or LIBOR Portion in accordance with
Section 2.01(f), as applicable; and
(iv) The date of the requested conversion, which shall be a Business Day.
The Borrower shall give each Notice of Conversion to the Administrative Agent
not later than 11:00 a.m. at least three (3) Business Days before the date of
the requested conversion of a Base Rate Loan into a LIBOR Loan (or Base Rate
Portion into a LIBOR Portion) or at least one (1) Business Day before the date
of the requested conversion of a LIBOR Loan into a Base Rate Loan (or a LIBOR
Portion into a Base Rate Portion). Each Notice of Conversion shall be delivered
by first-class mail, facsimile or e-mail containing a PDF of such signed and
completed Notice of Conversion to the Administrative Agent at the office or to
the facsimile number or e-mail address and during the hours specified in
Section 8.01; provided, however, that the Borrower shall promptly deliver to the
Administrative Agent the original of any Notice of Conversion initially
delivered by facsimile or e-mail. The Administrative Agent shall promptly notify
(x) each Revolving Lender of the contents of each Notice of Conversion relating
to Revolving Loans and (y) each Term Lender of the contents of each Notice of
Conversion relating to Term Loans or Portions thereof. For the avoidance of
doubt, the provisions of this Section 2.01(e) relate to the conversion of the
type of interest rate (LIBOR or Base Rate) applicable to the applicable Loans or
Portions and do not permit the conversion of a Revolving Loan, Term Loan or
Portion into any other kind of Loan provided hereunder.
(f) LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest Period selected by the Borrower for
a Revolving Loan Borrowing consisting of LIBOR Loans, or a LIBOR Portion of a
Term Loan Borrowing, as applicable, shall be one (1), three (3) or six
(6) months; provided, however, that (A) any Interest Period which would
otherwise end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such next Business Day falls in another calendar
month, in which case such Interest Period shall end on the immediately preceding
Business Day; (B) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; (C) no Interest Period shall end after the
Maturity Date; (D) no LIBOR Loan or LIBOR Portion shall be made or continued for
an additional Interest Period after the occurrence and during the continuance of
an Event of Default; (E) no Interest Period for any LIBOR Portion of a Term Loan
Borrowing shall end after a Term Loan Installment Date unless, after giving
effect to such Interest Period, the aggregate principal amount of the Base Rate
Portion and all LIBOR Portions of a Term Loan Borrowing having Interest Periods
ending on or prior to such Term Loan Installment Date equals or exceeds the
principal payment on a Term Loan Borrowing due on such Term Loan Installment
Date and (F) no Interest Period for any LIBOR Loan shall end after a Reduction
Date unless, after giving effect to such Interest Period, the aggregate
principal amount of the Base Rate Loans and LIBOR Loans having Interest Periods
ending on or prior to such Reduction Date equals or exceeds the Reduction Amount
due on such Reduction Date.

 

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(ii) The Borrower shall notify the Administrative Agent of the Borrower’s
selection of a new Interest Period for a Revolving Loan Borrowing consisting of
LIBOR Loans or a LIBOR Portion of a Term Loan Borrowing, as applicable, by an
irrevocable written notice substantially in the form of Exhibit C (a “Notice of
Interest Period Selection”), duly executed by a Responsible Officer of the
Borrower and appropriately completed, not later than 11:00 a.m. at least three
(3) Business Days prior to the last day of each Interest Period for (x) a
Revolving Loan Borrowing consisting of LIBOR Loans or (y) a LIBOR Portion of a
Term Loan Borrowing, as applicable, of the Interest Period selected by the
Borrower for the next succeeding Interest Period for such LIBOR Loans or LIBOR
Portion; provided, however, that no LIBOR Loan or LIBOR Portion shall be
continued for an additional Interest Period after the occurrence and during the
continuance of an Event of Default. Each Notice of Interest Period Selection
shall be given by first-class mail or facsimile or by e-mail containing a PDF of
such signed and completed Notice of Interest Period Selection to the
Administrative Agent at the office or to the facsimile number or e-mail address
and during the hours specified in Section 8.01; provided, however, that the
Borrower shall promptly deliver to the Administrative Agent the original of any
Notice of Interest Period Selection initially delivered by facsimile or by
e-mail. If (A) the Borrower shall fail to notify the Administrative Agent of the
next Interest Period for a Revolving Loan Borrowing consisting of LIBOR Loans or
a LIBOR Portion of a Term Loan Borrowing, as applicable, in accordance with this
Section 2.01(f) or (B) an Event of Default has occurred and is continuing on the
last date of an Interest Period for any LIBOR Loan or LIBOR Portion, such LIBOR
Loan(s) and LIBOR Portion(s) shall automatically convert to Base Rate Loan(s)
and Base Rate Portion(s), as applicable, on the last day of the current Interest
Period therefor. The Administrative Agent shall promptly notify (x) each
Revolving Lender of the contents of each Notice of Interest Period Selection for
the Revolving Loans and (y) each Term Lender of the contents of each Notice of
Interest Period Selection for a Term Loan Borrowing and Portions thereof.
(g) Scheduled Payments.
(i) Interest — All Loan and Portions . The Borrower shall pay accrued interest
on the unpaid principal amount of each Revolving Loan Borrowing, Term Loan
Borrowing and each Portion thereof in arrears (i) in the case of a Base Rate
Loan or Base Rate Portion, on the last Business Day of each March, June,
September and December (commencing the last day of the first full fiscal quarter
after the Initial Funding Date), (ii) in the case of a LIBOR Loan or LIBOR
Portion, on the last day of each Interest Period thereof (and, if any such
Interest Period is longer than three (3) months, every three (3) months after
the first day of such Interest Period); and (iii) in the case of all Loans and
Portions, on the Maturity Date. All interest that is not paid when due shall be
due on demand.
(ii) Scheduled Principal Payments — Revolving Loans and Unreimbursed Amounts.
The Borrower shall repay the principal amount of the Revolving Loans and
Unreimbursed Amounts on the Maturity Date. The Borrower shall also make the
mandatory prepayments required by Section 2.06(c).

 

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(iii) Scheduled Principal Payments — Term Loans. On each Term Loan Installment
Date, the Borrower shall repay the principal amount of the Term Loans in equal
installments of $1,563,157.89 plus, from and after the date of any increase in
the Total Term Loan Commitment or principal amount of the Term Loans pursuant to
Section 2.01(h), $86,842.11; provided, that the Borrower shall pay all
outstanding principal on the Term Loans, together with all accrued and unpaid
interest thereon, on the Maturity Date.
The Borrower shall also make the mandatory prepayments required by
Section 2.06(c), which shall be applied to the Loans in the manner set forth in
Section 2.06(d).
(h) Optional Increases.
(i) On the terms and subject to the conditions set forth below, Borrower may,
(1) at any time before the Initial Funding Date, increase the Total Revolving
Loan Commitment and Total Term Loan Commitment or (2) at any time from the
Initial Funding Date until the Business Day immediately prior to the last
Business Day of the first full fiscal quarter after the Initial Funding Date,
increase the Total Revolving Loan Commitment and the principal amount of the
Term Loans; provided that:
(A) the amount of increase in the principal amount of the Term Loans or the
Total Term Loan Commitment, as applicable, shall be equal to $1,736,842.11 and
the amount of increase in the Total Revolving Loan Commitment shall be equal to
$263,157.89 (for a total amount of increases in the Total Revolving Loan
Commitment and Total Term Loan Commitment (or Term Loans, as applicable) of
$2,000,000);
(B) all required third party consents and approvals shall have been obtained;
(C) prior to the date of any proposed increases, the Total Revolving Loan
Commitment shall not have been decreased pursuant to Section 2.04(a);
(D) the Borrower may only exercise its option under this Section 2.01(h) once;
(E) no Default or Event of Default shall have occurred and be continuing or
shall occur as a result of such increases;
(F) all fees related to such increases shall have been paid by the Borrower
prior to or substantially concurrent with the effectiveness of such increases;
(G) such increases shall be provided by one new lender who qualifies as an
Eligible Assignee and is reasonably acceptable to the Administrative Agent (the
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(H) Each of Wells Fargo and Capital One, N.A. shall have assigned (or shall
concurrently assign on the Increase Effective Date) a portion of (i) its Term
Loan (or, to the extent such assignment is made prior to the Initial Funding
Date, its Term Loan Commitment) and (ii) its Revolving Loan Commitment, in an
aggregate amount for each of them equal to $1,500,000, to the New Lender in
accordance with Section 8.05(c); provided that either Wells Fargo or Capital
One, N.A. may waive the required assignment under this Section 2.01(h)(i)(H)
with respect to its own Loans and Commitments;
(I) the Loan Parties shall have executed and delivered such documents and
instruments and taken such other actions as may be reasonably requested by the
Administrative Agent and the New Lender in connection with such increases
(including new Notes, any related fee letters, a compliance certificate
evidencing compliance with financial covenants on a pro forma basis, any joinder
agreement related to the New Lender, reaffirmations of the Guaranty, and the
Loan Parties, copies of resolutions regarding the increase in the Total
Revolving Loan Commitment and Total Term Loan Commitment (or principal amount of
the Term Loans, as applicable) and related actions taken by Loan Parties,
certified as true and correct by a Responsible Officer, title insurance
endorsements, amendments and updates and legal opinions, in each case in form
and substance reasonably satisfactory to the Administrative Agent.
Any request under this Section 2.01(h) shall be submitted by the Borrower to the
Administrative Agent (which shall promptly forward copies to the Lenders),
specify the proposed effective date and amount of such increase and be
accompanied by a certificate of a Responsible Officer stating that no Default or
Event of Default exists or will occur as a result of such increase. The Borrower
may pay fees to the New Lender in connection with such increases. The Borrower
shall pay a fee to the Administrative Agent solely for the account of the
Administrative Agent in connection any such increases as set forth in the
Administrative Agent’s Fee Letter. No Lender shall be entitled to receive any
portion of the foregoing fees. No Lender shall have any obligation, express or
implied, to offer to increase the amount of its Revolving Loan Commitment and
Term Loan Commitment (or Term Loans, as applicable).
(ii) The New Lender shall become an additional party hereto concurrently with
the effectiveness of the proposed increases in the amount of the Total Revolving
Loan Commitment and Total Term Loan Commitment (or Term Loans, as applicable)
upon its execution of an instrument of joinder (which may contain such
modifications to this Agreement and terms and conditions relating thereto as may
be necessary to ensure that such Revolving Loan Commitment and Term Loan
Commitment (or Term Loans, as applicable) are treated as treated as a Revolving
Loan Commitment and Term Loan Commitment (or Term Loans, as applicable) for all
purposes under the Credit Documents), in each case prepared by the
Administrative Agent and otherwise in form and substance reasonably satisfactory
to the Administrative Agent. The New Lender shall provide the documentation
required by Section 2.12(e).
(iii) Subject to the foregoing, any increases in the Total Revolving Loan
Commitment and Total Term Loan Commitment (or Term Loans, as applicable)
requested by Borrower shall be effective as of the date proposed by Borrower
(the “Increase Effective Date”) and shall be in the principal amounts set forth
in Section 2.01(h)(i)(A) above.

 

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(iv) On or prior to the Increase Effective Date, with respect to any increase in
the Total Revolving Loan Commitment, the Administrative Agent shall notify each
Lender of the amount required to be paid by or to such Lender so that the
Revolving Loans held by the Lenders on the Increase Effective Date (before
giving effect to any new Revolving Loans made on such date) shall be held by
each Lender pro rata in accordance with the Revolving Loan Commitments of the
Lenders. Each Lender which is required to reduce the amount of Revolving Loans
held by it (each such Lender, a “Decreasing Lender”) shall irrevocably assign,
without recourse or warranty of any kind whatsoever (except that each Decreasing
Lender warrants that it is the legal and beneficial owner of the Revolving Loans
assigned by it under this Section 2.01(h)(iv) and that such Revolving Loans are
held by such Decreasing Lender free and clear of adverse claims), to the New
Lender participating in the applicable increase in the Total Revolving Loan
Commitment, and the New Lender shall irrevocably acquire from the Decreasing
Lenders, a portion of the principal amount of the Revolving Loans of each
Decreasing Lender (collectively, the “Acquired Portion”) outstanding on the
Increase Effective Date (before giving effect to any new Revolving Loans made on
such date) in an amount such that the principal amount of the Revolving Loans
held by the New Lender and Decreasing Lender as of the Increase Effective Date
shall be held in accordance with each such Lender’s Revolving Proportionate
Share (if any) as of such date. Such assignment and acquisition shall be
effective on the Increase Effective Date automatically and without any action
required on the part of any party other than the payment by the New Lender to
the Administrative Agent for the account of the Decreasing Lenders of an
aggregate amount equal to the Acquired Portion, which amount shall be allocated
and paid by the Administrative Agent at or before 12:00 p.m. on the Increase
Effective Date to the Decreasing Lenders pro rata based upon the respective
reductions in the principal amount of the Revolving Loans held by such Lenders
on the Increase Effective Date (before giving effect to any new Revolving Loans
made on such date). Each of the Administrative Agent and the Lenders shall
adjust its records accordingly to reflect the payment of the Acquired Portion.
The payments to be made in respect of the Acquired Portion shall be made by the
New Lender to the Administrative Agent in Dollars in immediately available funds
at or before 11:00 a.m. on the Increase Effective Date, such payments to be made
by the New Lender pro rata based upon the respective increases in the amount of
the Revolving Loan Commitments held by such Lenders on the Increase Effective
Date.
(v) To the extent any of the Revolving Loans acquired by the New Lender from the
Decreasing Lenders pursuant to Section 2.01(h)(iv) above are LIBOR Loans and the
Increase Effective Date is not the last day of an Interest Period for such LIBOR
Loans, the Decreasing Lenders shall be entitled to compensation from the
Borrower as provided in Section 2.13 (as if the Borrower had prepaid such
Revolving Loans in an amount equal to the Acquired Portion on the Increase
Effective Date).

 

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2.02. Letters of Credit.
(a) The Letter of Credit Commitment.
(i) On the terms and subject to the conditions set forth herein (including the
limitations set forth in Section 2.02(a)(ii) and the conditions set forth in
Section 3.01, 3.02 and 3.03), (A) the L/C Issuer (1) shall, in reliance upon the
agreements of the Revolving Lenders set forth in this Section 2.02, from time to
time on any Business Day during the period from the Initial Funding Date until
the Letter of Credit Expiration Date, issue Letters of Credit in Dollars for the
account of the Borrower in support of the obligations of the Borrower or any
other Loan Party, and amend or renew Letters of Credit previously issued by it,
in accordance with Section 2.02(b) below, and (2) shall honor drafts under the
Letters of Credit; and (B) the Revolving Lenders severally agree to participate
in Letters of Credit issued for the account of the Borrower in support of the
obligations of the Borrower or any other Loan Party; provided that the L/C
Issuer shall not be obligated to make any L/C Credit Extension with respect to
any Letter of Credit, and no Revolving Lender shall be obligated to participate
in, any Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Effective Amount of all Revolving Loans, Swing Line Loans and L/C Obligations
would exceed the Total Revolving Loan Commitment at such time, (y) the aggregate
Effective Amount of the Revolving Loans of any Revolving Lender, plus such
Revolving Lender’s Revolving Proportionate Share of the Effective Amount of all
L/C Obligations, plus such Revolving Lender’s Revolving Proportionate Share of
the Effective Amount of all Swing Line Loans would exceed such Revolving
Lender’s Revolving Loan Commitment, or (z) the Effective Amount of the L/C
Obligations would exceed the Letter of Credit Sublimit. Each Letter of Credit
shall be in a form acceptable to the L/C Issuer. Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower’s ability to obtain
Letters of Credit shall be fully revolving, and accordingly the Borrower may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit
if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Requirement of Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Effective Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Effective
Date and which the L/C Issuer in good faith deems material to it;
(B) subject to Section 2.02(b)(iii), (1) in the case of any Standby Letter of
Credit, the expiry date of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last renewal or (2) in the case of
any Commercial Letter of Credit, the expiry date of such requested Letter of
Credit would occur more than 180 days after the date of issuance or last
renewal, in either case unless the Required Lenders have approved such expiry
date;
(C) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Revolving Lenders have approved
such expiry date;

 

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(D) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer or the terms and conditions of the applicable Letter of Credit
Application;
(E) such Letter of Credit is in a face amount less than $25,000, in the case of
a Commercial Letter of Credit, or $50,000, in the case of any other type of
Letter of Credit, or denominated in a currency other than Dollars;
(F) such Letter of Credit is in violation of the ISP, the UCP or other
applicable Governmental Rule;
(G) a default of any Lender’s obligations to fund under Section 2.02(c) exists
or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into arrangements satisfactory to the L/C Issuer with the
Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such
Lender; or
(H) any Lender is at such time a Deteriorating Lender, unless the Administrative
Agent has received (as set forth below) Cash Collateral or similar security
satisfactory to the L/C Issuer (in its sole discretion) from either the Borrower
or such Deteriorating Lender in respect of such Deteriorating Lender’s
obligation to fund under Section 2.02(c).
(iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen
Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m., at least four (4) Business Days
(or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which date shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (G) the account
party thereunder, and (H) such other matters as the L/C Issuer may require. In
the case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which date shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.

 

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(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from
the Administrative Agent that the requested issuance or amendment is permitted
in accordance with the terms hereof, then, subject to the terms and conditions
hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit
for the account of the applicable Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. Immediately upon the issuance of each
Letter of Credit, each Revolving Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a
participation in such Letter of Credit in an amount equal to the product of such
Revolving Lender’s Revolving Proportionate Share times the amount of such Letter
of Credit. The Administrative Agent shall promptly notify each Revolving Lender
upon the issuance of a Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may agree to issue a Letter of Credit that has
automatic renewal provisions (each, an “Evergreen Letter of Credit”); provided
that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent
any such renewal at least once in each twelve-month period (commencing with the
date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each
such twelve-month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such renewal. Once
an Evergreen Letter of Credit has been issued, the Revolving Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
renewal of such Letter of Credit at any time to a date not later than the Letter
of Credit Expiration Date; provided, however, that the L/C Issuer shall not
permit any such renewal if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its renewed form under the terms hereof,
or (B) it has received notice (which may be by telephone or in writing) on or
before the Business Day immediately preceding the Nonrenewal Notice Date
(1) from the Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from the Administrative Agent, any Revolving Lender
or the Borrower that one or more of the applicable conditions specified in
Section 3.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, the L/C Issuer shall notify the
Borrower and the Administrative Agent of the amount to be paid by the L/C Issuer
as a result of such drawing and the date on which payment is to be made by the
L/C Issuer to the beneficiary of such Letter of Credit in respect of such
drawing. Not later than 11:00 a.m. on the

 

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date of any payment by the L/C Issuer under a Letter of Credit (each such date
of payment, an “Honor Date”), the Borrower shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing, which may be effected through the debiting of one or more deposit
accounts maintained with the Administrative Agent. If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Revolving Lender of the Honor Date, the amount of the unreimbursed
drawing (the “Unreimbursed Amount”), and such Revolving Lender’s Revolving
Proportionate Share thereof. In such event, the Borrower shall be deemed to have
requested a Revolving Loan Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.01 for the principal amount of Base
Rate Loans, but subject to the amount of the unutilized portion of the Total
Revolving Loan Commitment and the conditions set forth in Section 3.02 (other
than the delivery of a Notice of Loan Borrowing for Revolving Loans). Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.02(c)(i) may be given by telephone if immediately confirmed in
writing; provided, that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Lender (including the Revolving Lender acting as L/C Issuer)
shall upon any notice pursuant to Section 2.02(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Revolving Proportionate Share of the
Unreimbursed Amount not later than 11:00 a.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions of
Section 2.02(c)(iii), each Revolving Lender that so makes funds available shall
be deemed to have made a Base Rate Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Loan Borrowing because the conditions set forth in Section 3.02 cannot
be satisfied or for any other reason, the Borrower shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the rate
applicable to Revolving Loans upon the occurrence and during the continuance of
an Event of Default. In such event, each Revolving Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.02(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Revolving
Lender in satisfaction of its participation obligation under this Section 2.02.
(iv) Until each Revolving Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.02(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Revolving Lender’s
Revolving Proportionate Share of such amount shall be solely for the account of
the L/C Issuer. For the avoidance of doubt, interest shall accrue beginning on
the Honor Date for any such draw under a Letter of Credit.

 

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(v) Each Revolving Lender’s obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for, or participate in, amounts drawn under Letters
of Credit, as contemplated by this Section 2.02(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Revolving
Lender may have against the L/C Issuer, the Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default or Event of
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.
(vi) If any Revolving Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.02(c) by
the time specified in Section 2.02(c)(ii), the L/C Issuer shall be entitled to
recover from such Revolving Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the daily Federal Funds Rate from
time to time in effect. A certificate of the L/C Issuer submitted to any
Revolving Lender (through the Administrative Agent) with respect to any amounts
owing under this Section 2.02(c)(vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Revolving Lender such Revolving Lender’s L/C
Advance in respect of such payment in accordance with Section 2.02(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), or any payment of interest thereon, the Administrative
Agent will distribute to such Revolving Lender its Revolving Proportionate Share
thereof in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.02(c)(i) is required to be returned, each
Revolving Lender shall pay to the Administrative Agent for the account of the
L/C Issuer its Revolving Proportionate Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Revolving Lender, at a rate per annum equal
to the daily Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing and each drawing under a Letter of Credit that is refinanced by a
Borrowing of Revolving Loans, shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement and
the other Credit Documents under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

 

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(ii) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of the Borrower in respect of any Letter of
Credit or any other amendment or waiver of, or any consent to departure from,
all or any of the Credit Documents;
(iii) the existence of any claim, counterclaim, set-off, defense or other right
that the Borrower or any other Loan Party may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;
(v) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;
(vi) the existence, character, quality, quantity, condition, packing, value or
delivery of any Property purported to be represented by documents presented in
connection with any Letter of Credit or any difference between any such Property
and the character, quality, quantity, condition, or value of such Property as
described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of
Property as described in documents presented in connection with any Letter of
Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any
documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any Property;
(x) any error in the transmission of any message relating to a Letter of Credit
not caused by the L/C Issuer, or any delay or interruption in any such message;
(xi) any error, neglect or default of any correspondent of the L/C Issuer in
connection with a Letter of Credit;

 

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(xii) any consequence arising from acts of God, war, insurrection, civil unrest,
disturbances, labor disputes, emergency conditions or other causes beyond the
control of the L/C Issuer;
(xiii) the form, accuracy, genuineness or legal effect of any contract or
document referred to in any document submitted to the L/C Issuer in connection
with a Letter of Credit; and
(xiv) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly notify the L/C Issuer. The Borrower shall be conclusively
deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each of the Borrower and the Revolving Lenders agrees
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. Neither the
Administrative Agent nor the L/C Issuer nor any of their respective affiliates,
directors, officers, employees, agents or advisors nor any of the
correspondents, participants or assignees of the L/C Issuer shall be liable to
any Revolving Lender for (i) any action taken or omitted in connection herewith
at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower from pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other
agreement. Neither the Administrative Agent nor the L/C Issuer nor any of their
respective affiliates, directors, officers, employees, agents or advisors nor
any of the correspondents, participants or assignees of the L/C Issuer shall be
liable or responsible for any of the matters described in Sections 2.02(e)(i) —
(xiv); provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which are determined by a final, non-appealable judgment of a court of
competent jurisdiction to have arisen from the L/C Issuer’s willful misconduct
or gross negligence or the L/C Issuer’s willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in substantial compliance
with the terms of a Letter of Credit, without responsibility for further
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any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) Cash Collateral.
(i) Upon the request of the Administrative Agent, (A) if the L/C Issuer has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an L/C Borrowing or (B) if, as of the Letter of Credit
Expiration Date, any Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, the Borrower shall immediately Cash Collateralize
the Obligations in an amount equal to 105% of the then Effective Amount of the
L/C Obligations. The Borrower hereby grants the Collateral Agent, for the
benefit of the L/C Issuer and the Revolving Lenders, a Lien on all such cash and
deposit account balances described in the definition of “Cash Collateralize” as
security for the Obligations. The Lien held by the Collateral Agent in such cash
collateral to secure the Obligations shall be released upon the satisfaction of
each of the following conditions: (1) no Letters of Credit shall be outstanding,
(2) all L/C Obligations shall have been repaid in full and (3) no Default shall
have occurred and be continuing.
(ii) In addition to the provisions set forth in Section 2.02(a)(ii)(H), if at
any time during which one or more Letters of Credit are outstanding, any Lender
is at such time a Deteriorating Lender, then no later than five (5) Business
Days of written demand thereof from the L/C Issuer the Borrower and/or the
Deteriorating Lender (or just the Borrower to the extent the Deteriorating
Lender fails to do so) shall provide the Collateral Agent with Cash Collateral
or similar security satisfactory to the L/C Issuer (in its sole discretion) in
respect of such Deteriorating Lender’s obligation to fund under Section 2.02(c)
in an amount not less than the aggregate amount of such obligations. The
Borrower and/or such Deteriorating Lender hereby grants to the Collateral Agent,
for the benefit of the L/C Issuer, a security interest in all such Cash
Collateral (and the Cash Collateral described in Section 2.02(a)(ii)(H)) and all
proceeds of the foregoing. If at any time the Collateral Agent determines that
any funds held as Cash Collateral are subject to any right or claim of any
Person other than the Collateral Agent or that the total amount of such funds is
less than the aggregate L/C Obligations in respect of such Deteriorating Lender,
the Borrower will, promptly upon demand by the Administrative Agent or the
Collateral Agent, pay to the Collateral Agent, as additional funds to be
deposited as Cash Collateral, an amount equal to the excess of (x) such
aggregate L/C Obligations over (y) the total amount of funds, if any, then held
as Cash Collateral that the Collateral Agent determines to be free and clear of
any such right and claim. Upon the drawing of any for which funds are on deposit
as Cash Collateral, such funds shall be applied, to the extent permitted under
applicable Governmental Rules, to reimburse the L/C Issuer. The Lien held by the
Collateral Agent in such Cash Collateral to secure the Obligations shall be
released upon the earlier of (a) the date such Deteriorating Lender is replaced
with a replacement Lender pursuant to Section 2.15 and (b) the date each of the
following conditions is satisfied: (i) no Letters of Credit shall be
outstanding, (ii) all L/C Obligations shall have been repaid in full and
(iii) no Default shall have occurred and be continuing.

 

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(iii) Cash Collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Wells Fargo and may be invested in Cash Equivalents
reasonably acceptable to the Administrative Agent. Such accounts must be subject
to control agreements pursuant to which the Administrative Agent has “control,”
as such term is used in the Uniform Commercial Code, sufficient to perfect on a
first priority basis a security interest in such cash collateral.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued, (i) the rules of the
“International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) (the “ISP”) shall apply to each Letter of Credit
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce at the time
of issuance (the “UCP”), shall apply to each Commercial Letter of Credit.
(i) Letter of Credit Fees.
(i) The Borrower shall pay, to the Administrative Agent for the account of each
Revolving Lender in accordance with its Revolving Proportionate Share, a Standby
Letter of Credit fee for each such Standby Letter of Credit for the period from
the date of issuance of such Standby Letter of Credit until the expiry thereof,
at a per annum rate equal to the Applicable Margin for LIBOR Loans (plus four
percent (4.00%) during such time that the Default Rate is in effect with respect
to the Obligations pursuant to Section 2.07(c)) applicable from time to time
during such period multiplied by the actual daily maximum amount available to be
drawn under such Standby Letter of Credit. Such fee for each Standby Letter of
Credit shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December, commencing with the first such date to
occur after the issuance of such Standby Letter of Credit and on the Letter of
Credit Expiration Date. Each such fee, when due, shall be fully earned and when
paid, shall be non-refundable. If there is any change in the Applicable Margin
for LIBOR Loans during any quarter, the Applicable Margin used for the
calculation of the Standby Letter of Credit fee shall be the Applicable Margin
for LIBOR Loans on each day during such quarter.
(ii) The Borrower shall pay, to the Administrative Agent for the account of each
Revolving Lender in accordance with its Revolving Proportionate Share, directly
a Commercial Letter of Credit fee for each such Commercial Letter of Credit in
an amount equal to the greater of (i) $500 and (ii) 1/4 of 1% per annum of the
amount of such Commercial Letter of Credit, due and payable on the last Business
Day of each March, June, September and December, commencing with the first such
date to occur after the issuance of such Commercial Letter of Credit and on the
Letter of Credit Expiration Date; provided, that in the case of an increase in
the amount of a Commercial Letter of Credit after the issuance thereof, such
Commercial Letter of Credit fee shall be payable only on the increased amount
thereof.

 

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(j) Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall
pay directly to the L/C Issuer for its own account the customary issuance,
transfer, negotiation, fronting, presentation, amendment, documentation and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such fees and
charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any conflict
between the terms hereof and the terms of any Letter of Credit Application, the
terms hereof shall control.
2.03. The Swing Line.
(a) The Swing Line. On the terms and subject to the conditions set forth herein,
the Swing Line Lender may in its sole and absolute discretion make loans (each
such loan, a “Swing Line Loan”) in Dollars to the Borrower from time to time on
any Business Day during the period from the Initial Funding Date up to but not
including the Maturity Date in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Effective Amount of Revolving
Loans of the Swing Line Lender in its capacity as a Revolving Lender of
Revolving Loans, may exceed the amount of such Revolving Lender’s Revolving Loan
Commitment; provided, however, that after giving effect to any Swing Line Loan,
(i) the aggregate Effective Amount of all Revolving Loans, Swing Line Loans and
L/C Obligations shall not exceed the Total Revolving Loan Commitment at such
time, and (ii) the aggregate Effective Amount of the Revolving Loans of any
Revolving Lender (other than the Swing Line Lender), plus such Revolving
Lender’s Revolving Proportionate Share of the Effective Amount of all L/C
Obligations, plus such Revolving Lender’s Revolving Proportionate Share of the
Effective Amount of all Swing Line Loans shall not exceed such Revolving
Lender’s Revolving Loan Commitment, and provided, further, that the Swing Line
Lender shall not make any Swing Line Loan to refinance an outstanding Swing Line
Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.03, prepay under
Section 2.06, and reborrow under this Section 2.03. Each Swing Line Loan shall
be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in such
Swing Line Loan in an amount equal to the product of such Revolving Lender’s
Revolving Proportionate Share times the amount of such Swing Line Loan.
Furthermore, before making any Swing Line Loans (if at such time any Lender is a
Deteriorating Lender), the Swing Line Lender may condition the provision of such
Swing Line Loans on its receipt of Cash Collateral or similar security
satisfactory to the Swing Line Lender (in its sole discretion) from either the
Borrower or such Deteriorating Lender in respect of such Deteriorating Lender’s
risk participation in such Swing Line Loans as set forth below. The Borrower
and/or such Deteriorating Lender hereby grants to the Collateral Agent, for the
benefit of the Swing Line Lender, a security interest in all such Cash
Collateral and all proceeds of the foregoing. Cash Collateral shall be
maintained in blocked, deposit accounts at Wells Fargo and may be invested in
Cash Equivalents reasonably acceptable to the Administrative Agent. Such
accounts must be subject to control agreements pursuant to which the Collateral
Agent has “control,” as such term is used in the Uniform Commercial Code,
sufficient to perfect on a first priority basis a security interest in such cash
collateral. If at any time the Collateral Agent determines that any funds held
as Cash Collateral are subject to any right or claim of any Person other than
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funds is less than the aggregate risk participation of such Deteriorating Lender
in the relevant Swing Line Loan, the Borrower and/or such Deteriorating Lender
will, promptly upon demand by the Administrative Agent or the Collateral Agent,
pay to the Collateral Agent, as additional funds to be deposited as Cash
Collateral, an amount equal to the excess of (x) such aggregate risk
participation over (y) the total amount of funds, if any, then held as Cash
Collateral that the Collateral Agent determines to be free and clear of any such
right and claim. At such times there are Swing Ling Loans outstanding for which
funds are on deposit as Cash Collateral, such funds shall be applied as and when
determined by the Swing Line Lender, to the extent permitted under applicable
Governmental Rules, to reimburse and otherwise pay the applicable obligations
owing to the Swing Line Lender. The Lien held by the Collateral Agent in such
Cash Collateral to secure the Obligations shall be released upon the earlier of
(a) the date such Deteriorating Lender is replaced with a replacement Lender
pursuant to Section 2.15 and (b) the date each of the following conditions is
satisfied: (i) no Swing Line Loans shall be outstanding, (ii) all Swing Line
Loan obligations shall have been repaid in full and (iii) no Default shall have
occurred and be continuing.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be requested pursuant
to the Borrower’s irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m., on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which amount shall be a minimum amount of $500,000 or an integral
multiple of $100,000 in excess thereof, and (ii) the requested borrowing date,
which shall be a Business Day. Each such telephonic notice must be confirmed
promptly by the delivery to the Swing Line Lender and the Administrative Agent
of a written Notice of Swing Line Borrowing, appropriately completed and signed
by a Responsible Officer of the Borrower, which notice may be delivered by
facsimile. Promptly after receipt by the Swing Line Lender of any telephonic
Notice of Swing Line Borrowing, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Notice of Swing Line Borrowing and, if not, the Swing
Line Lender will notify the Administrative Agent (by telephone or in writing) of
the contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Revolving Lender) prior to 2:00 p.m., on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the first proviso to the first
sentence of Section 2.03(a), or (B) that one or more of the applicable
conditions specified in Section 3.02 is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will, not later than 4:00
p.m., on the borrowing date specified in such Notice of Swing Line Borrowing,
make the amount of its Swing Line Loan available to the Borrower at its office
by crediting the account of the Borrower on the books of the Swing Line Lender
in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably requests the Swing
Line Lender to act on its behalf), that each Revolving Lender make a Base Rate
Loan in an amount equal to such Revolving Lender’s Revolving Proportionate Share
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Swing Line Loans then outstanding. Such request shall be made in accordance with
the requirements of Section 2.01, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Total Revolving Loan Commitment and the conditions
set forth in Section 3.02. The Swing Line Lender shall furnish the Borrower with
a copy of the applicable Notice of Loan Borrowing for Revolving Loans promptly
after delivering such notice to the Administrative Agent. Each Revolving Lender
shall make an amount equal to its Revolving Proportionate Share of the amount
specified in such Notice of Loan Borrowing for Revolving Loans available to the
Administrative Agent in immediately available funds for the account of the Swing
Line Lender at the Administrative Agent’s Office not later than 12:00 noon, on
the day specified in such Notice of Loan Borrowing for Revolving Loans,
whereupon, subject to Section 2.03(c)(ii), each Revolving Lender that so makes
funds available shall be deemed to have made a Base Rate Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so received to the
Swing Line Lender.
(ii) If for any reason any Revolving Loan Borrowing cannot be requested in
accordance with Section 2.03(c)(i) or any Swing Line Loan cannot be refinanced
by such a Revolving Loan Borrowing, the Notice of Loan Borrowing for Revolving
Loans submitted by the Swing Line Lender shall be deemed to be a request by the
Swing Line Lender that each of the Revolving Lenders fund its participation in
the relevant Swing Line Loan and each Revolving Lender’s payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.03(c)(i) shall be deemed payment in respect of such participation.
(iii) If any Revolving Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Revolving Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(i), the Swing Line
Lender shall be entitled to recover from such Revolving Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the daily Federal Funds Rate from time to time in effect. A certificate of the
Swing Line Lender submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this Section 2.03(c)(iii) shall
be conclusive absent manifest error.
(iv) Each Revolving Lender’s obligation to make Revolving Loans or to purchase
and fund participations in Swing Line Loans pursuant to this Section 2.03(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against the Swing Line Lender,
the Borrower or any other Person for any reason whatsoever, (B) the occurrence
or continuance of a Default or Event of Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing. Any such
purchase of participations shall not relieve or otherwise impair the obligation
of the Borrower to repay Swing Line Loans, together with interest as provided
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(d) Repayment of Participations.
(i) At any time after any Revolving Lender has purchased and funded a
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender its Revolving Proportionate Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Lender’s participation was
outstanding and funded) in the same funds as those received by the Swing Line
Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender, each Revolving Lender shall pay to the Swing Line Lender its Revolving
Proportionate Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the daily Federal Funds Rate from time to time in
effect. The Administrative Agent will make such demand upon the request of the
Swing Line Lender.
(e) Interest for Account of Swing Line Lender. Subject to Section 2.07(c), each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Margin for Base Rate Loans. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Revolving Lender funds its Base Rate Loan or participation pursuant
to this Section 2.03 to refinance such Revolving Lender’s Revolving
Proportionate Share of any Swing Line Loan, interest in respect of such
Revolving Proportionate Share shall be solely for the account of the Swing Line
Lender. The Borrower shall pay accrued interest on the unpaid principal amount
of each Swing Line Loan on the last Business Day of each March, June, September
and December (commencing the last day of the first full fiscal quarter after the
Initial Funding Date) and at maturity.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.
2.04. Amount Limitations, Commitment Reductions, Etc.
(a) Optional Reduction or Cancellation of Commitments. The Borrower may, upon
three (3) Business Days written notice to the Administrative Agent (each a
“Reduction Notice”), permanently reduce the Total Revolving Loan Commitment by
the amount of $1,000,000 or an integral multiple of $500,000 in excess thereof
or cancel the Total Revolving Loan Commitment in its entirety; provided,
however, that:
(i) The Borrower may not reduce the Total Revolving Loan Commitment prior to the
Maturity Date, if, after giving effect to such reduction, the Effective Amount
of all Revolving Loans, L/C Obligations and Swing Line Loans then outstanding
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(ii) The Borrower may not cancel the Total Revolving Loan Commitment prior to
the Maturity Date, if, after giving effect to such cancellation, any Revolving
Loan would then remain outstanding.
Any Reduction Notice shall be irrevocable; provided that any Reduction Notice
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by written
notice to the Administrative Agent on or prior to the specified effective date
previously provided in the applicable Reduction Notice) if such condition is not
satisfied.
(b) Mandatory and Scheduled Reduction of Commitments.
(i) The Total Revolving Loan Commitment shall be automatically and permanently
reduced by an amount equal to the maximum amount that would be required to be
applied as a mandatory prepayment of the Revolving Loans pursuant to
Section 2.06(c)(iii), (iv), (v), (vi) or (vii) or Section 2.06(d) if the
Effective Amount of the Revolving Loans was then equal to the amount of the
Total Revolving Loan Commitment (but without regard to the actual usage of the
Total Revolving Loan Commitment), such reduction to be effective on the date of
the required prepayment.
(ii) The Total Revolving Loan Commitment shall be automatically and permanently
reduced by $236,842.10 (the “Reduction Amount”) on the last Business Day of each
March, June, September and December commencing the last Business Day of the
first full fiscal quarter after the Initial Funding Date (each, a “Reduction
Date”); provided that if the Borrower exercises its option to increase the Total
Revolving Loan Commitment pursuant to Section 2.01(h), the Reduction Amount for
each Reduction Date from such exercise date onwards shall be increased by
$13,157.90. In the case of any reduction in the amount of the Total Revolving
Loan Commitment pursuant to Section 2.04(a) or Section 2.04(b)(i), the amount of
reduction in the Total Revolving Loan Commitment determined by reference to this
Section 2.04(b)(ii) shall not be affected and shall be in addition to any
reduction in the amount of the Total Revolving Loan Commitment pursuant to
Section 2.04(a) or Section 2.04(b)(i).
(iii) The Total Revolving Loan Commitment shall be automatically and permanently
reduced to zero on the Maturity Date.
(iv) The Total Term Loan Commitment shall be automatically and permanently
reduced to zero at the close of business on the Initial Funding Date. Any
agreement made pursuant to Section 2.01(h) to advance additional Term Loans
after the Initial Funding Date shall terminate immediately after such Term Loans
are advanced.
(c) Effect of Revolving Loan Commitment Adjustments. From the effective date of
any reduction or increase of the Total Revolving Loan Commitment, the Commitment
Fees payable pursuant to Section 2.05(b) shall be computed on the basis of the
Total Revolving Loan Commitment as so reduced or increased. Once reduced or
cancelled, the Total Revolving Loan Commitment may not be increased or
reinstated without the prior written consent of all Revolving Lenders (except as
permitted under Section 2.01(h)). Any reduction of the Total Revolving Loan
Commitment pursuant to Section 2.04(a) shall be applied ratably to reduce each
Lender’s Revolving Loan Commitment in accordance with Section 2.10(a)(i).

 

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2.05. Fees.
(a) Wells Fargo Parties’ Fee; Other Fees. The Borrower shall pay to the Wells
Fargo Parties, for their own account, agent’s fees and other compensation in the
amounts and at the times set forth in the Fee Letter (including any fees set
forth in any fee letter or agreement executed in connection with any increase in
Section 2.01(h))
(b) Commitment Fees. The Borrower shall pay to the Administrative Agent, for the
ratable benefit of the Lenders (other than any Defaulting Lender with respect to
the period during which it is a Defaulting Lender) as provided in
Sections 2.10(a)(v) and 2.10(a)(vi), commitment fees (collectively, the
“Commitment Fees”) equal to the Commitment Fee Percentage of the sum of (i) the
daily average Unused Revolving Commitment and (ii) prior to the Initial Funding
Date only, the Total Term Loan Commitment, for the period beginning on the date
of this Agreement and ending on the Maturity Date. The Borrower shall pay the
Commitment Fees in arrears on the last Business Day of each March, June,
September and December (commencing on the first such Day after the Effective
Date), on the Initial Funding Date and on the Maturity Date (or if the Total
Revolving Commitment is cancelled on a date prior to the Maturity Date, on such
prior date).
2.06. Prepayments.
(a) Terms of All Prepayments. Upon the prepayment of any Loan (whether such
prepayment is an optional prepayment under Section 2.06(b), a mandatory
prepayment required by Section 2.06(c) or a mandatory prepayment required by any
other provision of this Agreement or the other Credit Documents, including a
prepayment upon acceleration), the Borrower shall pay (i) if a LIBOR Loan or
LIBOR Portion is being prepaid under Section 2.06(b) or Section 2.06(c), to the
Administrative Agent for the account of the Lender that made such LIBOR Loan or
LIBOR Portion all accrued interest to the date of such prepayment on the amount
prepaid, (ii) if a prepayment is made upon acceleration, to the Administrative
Agent for the account of the Lender that made such Loan all accrued interest and
fees to the date of such prepayment on the amount prepaid and (iii) to such
Lender if such prepayment is the prepayment of a LIBOR Loan or of a LIBOR
Portion on a day other than the last day of an Interest Period for such LIBOR
Loan or such LIBOR Portion, all amounts payable to such Lender pursuant to
Section 2.13.
(b) Optional Prepayments.
(i) At their option, the Borrower may, without premium or penalty but subject to
Section 2.13 in the case of LIBOR Loans and LIBOR Portions, upon one
(1) Business Day’s notice from the Borrower to the Administrative Agent in the
case of Base Rate Loans or Base Rate Portions or three (3) Business Days’ notice
from the Borrower to the Administrative Agent in the case of LIBOR Loans or
LIBOR Portions, prepay the Loans or Portions in any Borrowing and all accrued
but unpaid interest thereon in part, in a minimum principal amount of $500,000
or an integral multiple of $100,000 in excess thereof, or in whole. Each such
notice

 

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shall specify the date and amount of such prepayment; provided that if such
prepayment is on any day other than on the last day of the Interest Period
applicable to such LIBOR Loan or LIBOR Portion, the Borrower shall be subject to
the payments required by Section 2.13. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Unless an Event
of Default has occurred and is continuing, all prepayments under this
Section 2.06(b) which are applied to reduce the principal amount of the Loans
shall be applied, as between Revolving Loans and Term Loans, in the manner
directed by the Borrower. The principal amount of any prepayment directed by the
Borrower to be applied to the Term Loans pursuant to the preceding sentence
shall be applied to prepay the remaining installments of principal on the Term
Loans as directed by the Borrower. If the Borrower fails to direct the
application of any such prepayments, or if an Event of Default has occurred and
is continuing, prepayments under this Section 2.06(b) shall be applied to prepay
the principal amount of the outstanding Loans and L/C Borrowings and to Cash
Collateralize the remaining L/C Obligations on a pro rata basis in accordance
with the then outstanding principal amount of the Loans and L/C Obligations
(with (x) the portion allocated to the Revolving Loans, Swing Line Loans and L/C
Obligations to be applied first to prepay the Swing Line Loans in full, second
to prepay the Revolving Loans in full and then to Cash Collateralize the
Obligations in an amount equal to the then Effective Amount of all L/C
Obligations and (y) the portion allocated to the Term Loans to be applied to
prepay the remaining installments of principal on the Term Loans (including the
final installment) on a pro rata basis).
(ii) At their option, the Borrower may, upon notice by the Borrower to the Swing
Line Lender (with a copy to the Administrative Agent), at any time or from time
to time, voluntarily prepay Swing Line Loans in whole or in part without premium
or penalty; provided, that (A) such notice must be received by the Swing Line
Lender and the Administrative Agent not later than 1:00 p.m. on the date of the
prepayment, and (B) any such prepayment shall be in a minimum principal amount
of $500,000 or an integral multiple of $100,000 in excess thereof. Each such
notice shall specify the date and amount of such prepayment. If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.
(c) Mandatory Prepayments. The Borrower shall prepay (or Cash Collateralize, as
applicable) the Obligations as follows:
(i) If, at any time, the Effective Amount of all Revolving Loans, Swing Line
Loans and L/C Obligations then outstanding exceeds the Total Revolving Loan
Commitment at such time, the Borrower shall immediately (A) prepay the Swing
Line Loans to the extent Swing Line Loans in a sufficient amount are then
outstanding, (B) then prepay the Revolving Loans to the extent Revolving Loans
in a sufficient amount are then outstanding and (C) otherwise, Cash
Collateralize the Obligations in an amount equal to the then Effective Amount of
the L/C Obligations, in an aggregate principal amount equal to such excess.
(ii) The Borrower shall repay each Swing Line Loan on the earlier to occur of
(A) the second Swing Line Settlement Date occurring after such Swing Line Loan
is made and (B) the Maturity Date.

 

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(iii) If, at any time after the Initial Funding Date, GEM receives any buy-out,
termination fee or similar payment in respect of the FireKeepers Management
Agreement, the Borrower shall, immediately after receipt by GEM of such payment,
prepay (or Cash Collateralize, as applicable) the outstanding Loans and other
Obligations in the matter set forth in Section 2.06(d) in an aggregate principal
amount equal to such payment.
(iv) If, at any time after the Initial Funding Date, any Loan Party sells or
otherwise disposes of any assets (other than sales permitted under
Section 5.02(c) (excluding clauses (vi) and (vii) thereof)) in any single
transaction or series of related transactions and the Net Proceeds of such sale
or other disposition exceed $100,000, the Borrower shall, not later than five
(5) Business Days after the completion of each such sale or other disposition,
prepay (or Cash Collateralize, as applicable) the outstanding Loans and other
Obligations in the manner set forth in Section 2.06(d), in each case, in an
aggregate principal amount equal to one hundred percent (100%) of the Net
Proceeds from any such sale or disposition. Notwithstanding the foregoing, the
Borrower shall not be required to make a prepayment pursuant to this
Section 2.06(c)(iv) with respect to any sale or other disposition (a “Relevant
Sale”) if the Borrower advises the Administrative Agent in writing within four
(4) Business Days after the time the Net Proceeds from such Relevant Sale are
received that the applicable Loan Party intends to reinvest all or any portion
of such Net Proceeds in replacement assets to the extent the acquisition of such
replacement assets occurs within 180 days from the date of such Relevant Sale.
If, at any time after the occurrence of a Relevant Sale and prior to the
acquisition of the related replacement assets, the 180-day period provided in
the preceding sentence shall elapse or an Event of Default shall occur, then the
Borrower shall immediately prepay (or Cash Collateralize, as applicable), the
outstanding Loans and other Obligations in the amount and in the manner
described in the first sentence of this Section 2.06(c)(iv).
(v) If, at any time after the Initial Funding Date, any Loan Party issues or
incurs any Indebtedness for borrowed money, including Indebtedness evidenced by
notes, bonds, debentures or other similar instruments but excluding Permitted
Indebtedness, the Borrower shall, immediately after such issuance or incurrence,
prepay (or Cash Collateralize, as applicable) the outstanding Loans and other
Obligations in the manner set forth in Section 2.06(d), in each case, in an
aggregate principal amount equal to one hundred percent (100%) of the Net
Proceeds of such Indebtedness.
(vi) If, at any time after the Initial Funding Date, any Loan Party issues or
sells any Equity Securities or receives any capital contribution from any other
Person (other than through an Exempted Equity Issuance), the Borrower shall,
immediately after such issuance or sale, prepay (or Cash Collateralize, as
applicable) the outstanding Loans and other Obligations in the manner set forth
in Section 2.06(d), in each case, in an aggregate principal amount equal to
fifty percent (50%) of the Net Proceeds of such Equity Securities.
(vii) Not later than five (5) Business Days after the date (the “Receipt Date”)
of receipt by a Loan Party (or the Collateral Agent) of any Net Insurance
Proceeds or Net Condemnation Proceeds which exceed $250,000, the Borrower shall
prepay (or Cash Collateralize, as applicable) the outstanding Loans and other
Obligations in the manner set forth in Section 2.06(d) in an amount equal to
such Net Insurance Proceeds or Net Condemnation Proceeds. Notwithstanding the
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prepayment pursuant to this Section 2.06(c)(vii) with respect to any particular
Net Insurance Proceeds or Net Condemnation Proceeds if (A) the Borrower advises
the Administrative Agent in writing within four (4) Business Days after the
related Receipt Date that it or another Loan Party intends to repair, restore or
replace the assets from which such Net Insurance Proceeds or Net Condemnation
Proceeds were derived to the extent such repair, restoration or replacement is
completed within 180 days after the related Receipt Date and (B) the Net
Insurance Proceeds or Net Condemnation Proceeds are sufficient to defray the
entire cost of such repair, restoration or replacement or if not, the Borrower
has deposited with the Collateral Agent good funds equal to the difference
between the cost of such repair, restoration or replacement and the amount of
Net Insurance Proceeds or Net Condemnation Proceeds deposited with the
Administrative Agent, and such funds and proceeds will be held by the
Administrative Agent and disbursed under procedures established by the
Administrative Agent in good faith. If, at any time after the occurrence of a
Receipt Date and prior to the completion of the corresponding repair,
restoration or replacement, the applicable 180-day period provided in the
preceding sentence shall elapse without the completion of the related repair,
restoration or replacement, or the Borrower shall fail to provide and deposit
the funds and proceeds required under clause (B) above, or an Event of Default
shall occur, then the Borrower shall immediately prepay (or Cash Collateralize,
as applicable) the outstanding Loans and other Obligations in the amount and in
the manner described in the first sentence of this Section 2.06(c)(vii). If the
Borrower has provided the written notice contemplated by the prior sentence,
then until such Net Insurance Proceeds or Net Condemnation Proceeds are needed
to pay for the related repair, restoration or replacement such proceeds shall be
held by the Collateral Agent as Collateral. No right to apply proceeds to
repair, restoration or replacement shall exist if any such repair, restoration
or replacement cannot reasonably be completed prior to 180 days before the
Maturity Date.
(viii) The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section 2.06(c), (A) a certificate signed by
a Senior Finance Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (B) to the extent practicable,
at least three days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date and the Type and principal amount
of each Loan (or portion thereof) to be prepaid. In the event that the Borrower
shall subsequently determine that the actual amount was greater than the amount
set forth in such certificate, the Borrower shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving Loan Commitments
shall be permanently reduced) in an amount equal to the amount of such excess,
and the Borrower shall concurrently therewith deliver to the Administrative
Agent a certificate signed by the chief financial officer of the Borrower
demonstrating the derivation of the additional amount resulting in such excess.
(d) Application of Loan Prepayments. All prepayments required under Sections
2.06(c)(iii)-(vii) shall be applied: (A) first, to prepay the remaining
installments of principal on the Term Loans in inverse order of maturity,
(B) then to prepay the Swing Line Loans to the extent Swing Line Loans are then
outstanding, (C) then to prepay the Revolving Loans to the extent Revolving
Loans are then outstanding and (D) otherwise, to Cash Collateralize the
Obligations in an amount equal to the then Effective Amount of the L/C
Obligations. Without modifying the order of application of prepayments set forth
in the preceding sentence, all such prepayments shall, to the extent possible,
be first applied to prepay Base Rate Loans and Base Rate Portions and then if
any funds remain, to prepay LIBOR Loans and LIBOR Portions.

 

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2.07. Other Payment Terms.
(a) Place and Manner. All payments to be made by the Borrower under this
Agreement or any other Credit Document shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. The Borrower
shall make all payments due to each Lender or the Administrative Agent under
this Agreement or any other Credit Document by payments to the Administrative
Agent at the Administrative Agent’s office located at the address specified in
Section 8.01, with each payment due to a Lender to be for the account of such
Lender and such Lender’s Applicable Lending Office. The Borrower shall make all
payments under this Agreement or any other Credit Document in lawful money of
the United States and in same day or immediately available funds not later than
12:00 noon on the date due. The Administrative Agent shall promptly disburse to
each Lender each payment received by the Administrative Agent for the account of
such Lender.
(b) Date. Whenever any payment due hereunder shall fall due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall be included in the computation of interest or
fees, as the case may be.
(c) Default Rate. Upon the occurrence and during the continuation of any Event
of Default other than an Event of Default described in Section 6.01(a), (f) or
(g), at the option of the Required Lenders, from and after the date of such
Event of Default until the time when such Event of Default shall have been cured
or waived in writing by the Required Lenders or all the Lenders (as may be
required by this Agreement), the Borrower shall pay interest on the aggregate,
outstanding amount of all Obligations hereunder at a per annum rate equal to the
otherwise applicable interest rate plus four percent (4.00%) or, if no such per
annum rate is applicable to any such Obligations, at a per annum rate equal to
the Base Rate, plus the Applicable Margin for Base Rate Loans, plus four percent
(4.00%) (the “Default Rate”) payable on demand. Upon the occurrence and during
the continuation of an Event of Default described in Section 6.01(a), (f) or (g)
until the time when such Event of Default shall have been cured or waived in
writing by the Required Lenders or all the Lenders (as may be required by this
Agreement), the Borrower shall pay interest on the aggregate, outstanding amount
of all Obligations hereunder at a per annum rate equal to the Default Rate (such
Default Rate becoming effective on such date of occurrence of such Event of
Default without notice and shall be immediately due and payable without notice
or demand). Overdue interest shall itself bear interest at the Default Rate, and
shall be compounded with the principal Obligations daily, to the fullest extent
permitted by applicable Governmental Rules.
(d) Application of Payments. All payments hereunder shall be applied first to
unpaid fees, costs and expenses then due and payable under this Agreement or the
other Credit Documents, second to accrued interest then due and payable under
this Agreement or the other Credit Documents and finally to reduce the principal
amount of outstanding Loans and L/C Borrowings.

 

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(e) Failure to Pay the Administrative Agent. Unless the Administrative Agent
shall have received notice from the Borrower at least one (1) Business Day prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Administrative Agent shall be
entitled to assume that the Borrower has made or will make such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be paid to the Lenders on such due date
an amount equal to the amount then due such Lenders. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at a per annum
rate equal to the daily Federal Funds Rate from time to time in effect. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amount owing by such Lender under this Section 2.07(e) shall be conclusive
absent manifest error.
2.08. Loan Accounts; Notes.
(a) Loan Accounts. The obligation of the Borrower to repay the Loans made to it
by each Lender and to pay interest thereon at the rates provided herein shall be
evidenced by an account or accounts maintained by such Lender on its books
(individually, a “Loan Account”), except that any Lender may request that its
Loans be evidenced by a note or notes pursuant to Section 2.08(b),
Section 2.08(c), and Section 2.08(d). Each Lender shall record in its Loan
Accounts (i) the date and amount of each Loan made by such Lender, (ii) the
interest rates applicable to each such Loan and each Portion thereof and the
effective dates of all changes thereto, (iii) the Interest Period for each LIBOR
Loan and LIBOR Portion, (iv) the date and amount of each principal and interest
payment on each Loan and Portion and (v) such other information as such Lender
may determine is necessary for the computation of principal and interest payable
to it by the Borrower hereunder; provided, however, that any failure by a Lender
to make, or any error by any Lender in making, any such notation shall not
affect the Borrower’s Obligations. In addition to the Loan Accounts, each Lender
and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control.
(b) Revolving Loan Notes. Each Revolving Lender’s Revolving Loans shall be
evidenced by a promissory note in the form of Exhibit E (individually, a
“Revolving Loan Note”) which note shall be (i) payable to the order of such
Revolving Lender, (ii) in the amount of such Revolving Lender’s Revolving Loan
Commitment and (iii) otherwise appropriately completed. The Borrower authorizes
each Revolving Lender to record on the schedule annexed to such Revolving
Lender’s Revolving Loan Note the date and amount of each Revolving Loan made by
such Revolving Lender and of each payment or prepayment of principal thereon
made by the Borrower. The Borrower further authorizes each Revolving Lender to
attach to and make a part of such Revolving Lender’s Revolving Loan Note
continuations of the schedule attached thereto as necessary. If, because any
Revolving Lender designates separate Applicable Lending Offices for Base Rate
Loans and LIBOR Loans, such Revolving Lender requests that separate

 

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promissory notes be executed to evidence separately such Revolving Loans, then
each such note shall be in the form of Exhibit E, mutatis mutandis to reflect
such division, and shall be (x) payable to the order of such Revolving Lender,
(y) in the amount of such Revolving Lender’s Revolving Loan Commitment and
(z) otherwise appropriately completed. Such notes shall, collectively,
constitute a Revolving Loan Note.
(c) Term Loan Notes. Each Term Lender’s Term Loan shall be evidenced by a
promissory note in the form of Exhibit F (individually, a “Term Loan Note”)
which note shall be (i) payable to the order of such Term Lender, (ii) in the
amount of such Term Lender’s Term Loan and (iii) otherwise appropriately
completed. If, because any Term Lender designates separate Applicable Lending
Offices for Base Rate Portions and LIBOR Portions, such Term Lender requests
that separate promissory notes be executed to evidence separately such Portions,
then each such note shall be in the form of Exhibit F, mutatis mutandis to
reflect such division, and shall be (x) payable to the order of such Term
Lender, (y) in the amount of such Term Lender’s Term Loan and (z) otherwise
appropriately completed. Such notes shall, collectively, constitute a Term Loan
Note.
(d) Swing Line Notes. The Swing Line Lender’s Swing Line Loans shall be
evidenced by a promissory note in the form of Exhibit G (individually, a “Swing
Line Note”) which note shall be (i) payable to the order of the Swing Line
Lender, (ii) in the amount of the Swing Line Lender’s Swing Line Loans,
(iii) dated the Initial Funding Date and (iv) otherwise appropriately completed.
2.09. Loan Funding.
(a) Lender Funding and Disbursement to the Borrower. Each Lender shall, before
11:00 a.m. on the date of each Borrowing, make available to the Administrative
Agent at the Administrative Agent’s office specified in Section 8.01, in same
day or immediately available funds, such Lender’s Revolving Proportionate Share
or Term Proportionate Share, as the case may be, of such Borrowing. After the
Administrative Agent’s receipt of such funds and upon satisfaction of the
applicable conditions set forth in Section 3.03 (and, if such Borrowing is the
initial Loan or Letter of Credit, Section 3.02), the Administrative Agent shall,
subject to Section 5.01(f), promptly make all funds so received available to the
Borrower in like funds as received by the Administrative Agent by crediting the
account of the Borrower maintained by the Borrower on the books of Wells Fargo
with the amount of such funds in accordance with instructions provided to the
Administrative Agent by the Borrower; provided, however, that if, on the date of
the Borrowing there are Swing Line Loans and/or L/C Borrowings outstanding, then
the proceeds of such Borrowing shall be applied, first, to the payment in full
of any such L/C Borrowings, second, to the payment in full of any such Swing
Line Loans, and third, to the Borrower as provided above.
(b) Lender Failure to Fund. 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 Revolving
Proportionate Share or Term Proportionate Share, as the case may be, of such
Borrowing, the Administrative Agent shall be entitled to assume that such Lender
has made or will make such portion available to the Administrative Agent on the
date of such Borrowing in accordance with Section 2.09(a), and the

 

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Administrative Agent may on such date, in reliance upon such assumption,
disburse or otherwise credit to the Borrower a corresponding amount. If any
Lender does not make the amount of such Lender’s Revolving Proportionate Share
or Term Proportionate Share, as the case may be, of any Borrowing available to
the Administrative Agent on or prior to the date of such Borrowing, such Lender
shall pay to the Administrative Agent, on demand, interest which shall accrue on
such amount from the date of such Borrowing until such amount is paid to the
Administrative Agent at per annum rates equal to the daily Federal Funds Rate
from time to time in effect. A certificate of the Administrative Agent submitted
to any Lender with respect to any amount owing by such Lender under this
Section 2.09(b) shall be conclusive absent manifest error with respect to such
amount. If the amount of any Lender’s Revolving Proportionate Share or Term
Proportionate Share, as the case may be, of any Borrowing is not paid to the
Administrative Agent by such Lender within three (3) Business Days after the
date of such Borrowing, the Borrower shall repay such amount to the
Administrative Agent, on demand, together with interest thereon, for each day
from the date such amount was disbursed to the Borrower until the date such
amount is repaid to the Administrative Agent, at the interest rate applicable at
the time to the Loans comprising such Borrowing.
(c) Lenders’ Obligations Several. The failure of any Lender to make the Loan to
be made by it as part of any Borrowing or to fund participations in Letters of
Credit and Swing Line Loans to be funded by it shall not relieve any other
Lender of its obligation hereunder to make its Loan as part of such Borrowing or
fund its participations in Letters of Credit and Swing Line Loans, but no Lender
shall be obligated in any way to make any Loan or fund any participation in
Letters of Credit or Swing Line Loans which another Lender has failed or refused
to make or otherwise be in any way responsible for the failure or refusal of any
other Lender to make any Loan required to be made by such other Lender on the
date of any Borrowing or to fund any participation required to be funded by such
other Lender.
2.10. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as otherwise provided herein:
(i) Each Revolving Borrowing and reduction of the Total Revolving Loan
Commitment shall be made or shared among the Lenders pro rata according to their
respective Revolving Proportionate Shares;
(ii) The Term Loan Borrowing on the Initial Funding Date shall be made or shared
among the Lenders pro rata according to their respective Term Proportionate
Shares;
(iii) Each payment of principal on Term Loans shall be shared among the Term
Lenders which made or funded such Loans pro rata according to the respective
unpaid principal amount of such Loans then owed to such Lenders;
(iv) Each payment of principal on the Revolving Loans shall be shared among the
Lenders which made or funded such Loans pro rata according to the respective
unpaid principal amounts of such Loans then owed to such Lenders;

 

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(v) Each payment of interest on Loans in any Borrowing shall be shared among the
Lenders which made or funded the Loans in such Borrowing pro rata according to
(A) the respective unpaid principal amounts of such Loans so made or funded by
such Lenders and (B) the dates on which such Lenders so made or funded such
Loans;
(vi) Prior to the Initial Funding Date, each payment of Commitment Fees shall be
shared among all of the Lenders pro rata according to their Proportionate
Shares;
(vii) From and after the Initial Funding Date, each payment of Commitment Fees
and Letter of Credit fees payable under Section 2.02(i) shall be shared among
the Revolving Lenders (except for Defaulting Lenders) pro rata according to
(A) their respective Revolving Proportionate Shares and (B) in the case of each
Lender which becomes a Revolving Lender hereunder after the date hereof, the
date upon which such Lender so became a Revolving Lender;
(viii) Each payment of interest (other than interest on Loans) shall be shared
among the Lenders and the Administrative Agent owed the amount upon which such
interest accrues pro rata according to (A) the respective amounts so owed such
Lenders and the Administrative Agent and (B) the dates on which such amounts
became owing to such Lenders and the Administrative Agent; and
(ix) All other payments under this Agreement and the other Credit Documents
(including, without limitation, fees paid in connection with any amendment,
consent, waiver or the like) shall be for the benefit of the Person or Persons
specified.
(b) Sharing of Payments, Etc. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Loans made by it, or the participations in L/C
Obligations or in Swing Line Loans held by it, in excess of its ratable share of
payments on account of the Loans and the L/C Obligations obtained by all Lenders
entitled to such payments, such Lender shall forthwith purchase from the other
Lenders such participations in the Loans and/or participations in L/C
Obligations or in Swing Line Loans as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase shall be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such other Lender’s ratable share (according to the proportion of (i) the amount
of such other Lender’s required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.10(b) may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

 

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For the avoidance of doubt, the provisions of this Section 2.10(b) shall not be
construed to apply to (x) any payment made by the 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 L/C Obligations or in Swing Line Loans to
any assignee or participant, other than to any Loan Party or any Affiliate of a
Loan Party (as to which the provisions of this Section 2.10(b) shall apply).
2.11. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first day of any Interest
Period for any LIBOR Loan or LIBOR Portion, (i) any Lender shall advise the
Administrative Agent that the LIBOR Rate for such Interest Period cannot be
adequately and reasonably determined due to the unavailability of funds in or
other circumstances affecting the London interbank market or (ii) any Lender
shall advise the Administrative Agent that the rate of interest for such Loan or
Portion, as the case may be, does not adequately and fairly reflect the cost to
such Lender of making or maintaining such LIBOR Loan or LIBOR Portion, the
Administrative Agent shall immediately give notice of such condition to the
Borrower and the other Lenders. After the giving of any such notice and until
the Administrative Agent shall otherwise notify the Borrower that the
circumstances giving rise to such condition no longer exist, the Borrower’s
right to request the making of, conversion to or a new Interest Period for LIBOR
Loans or LIBOR Portions shall be suspended. Any LIBOR Loans or LIBOR Portions
outstanding at the commencement of any such suspension shall be converted at the
end of the then current Interest Period for such LIBOR Loans or LIBOR Portions
into Base Rate Loans or Base Rate Portions, as the case may be, unless such
suspension has then ended.
(b) Illegality. If, after the date of this Agreement, the adoption of any
Governmental Rule, any change in any Governmental Rule or the application or
requirements thereof (whether such change occurs in accordance with the terms of
such Governmental Rule as enacted, as a result of amendment or otherwise), any
change in the interpretation or administration of any Governmental Rule by any
Governmental Authority, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any Governmental Authority
(a “Change of Law”) shall make it unlawful or impossible for any Lender to make
or maintain any LIBOR Loan or LIBOR Portion, such Lender shall immediately
notify the Administrative Agent and the Borrower in writing of such Change of
Law. Upon receipt of such notice, (i) the Borrower’s right to request the making
of, conversion to or a new Interest Period for LIBOR Loans or LIBOR Portions
with respect to such Lender shall be terminated, and (ii) the Borrower shall, at
the request of such Lender, either (A) pursuant to Section 2.01(e), as the case
may be, convert any such then outstanding LIBOR Loans or LIBOR Portions of such
Lender into Base Rate Loans or Base Rate Portions, as the case may be, at the
end of the current Interest Period for such LIBOR Loans or LIBOR Portions or
(B) immediately repay or convert any such LIBOR Loans or LIBOR Portions of such
Lender if such Lender shall notify the Borrower that such Lender may not
lawfully continue to fund and maintain such LIBOR Loans or LIBOR Portions. Any
conversion or prepayment of LIBOR Loans or LIBOR Portions made pursuant to the
preceding sentence prior to the last day of an Interest Period for such LIBOR
Loans or LIBOR Portions shall be deemed a prepayment thereof for purposes of
Section 2.13. After any Lender notifies the Administrative Agent and the
Borrower of such a Change of Law and until such Lender notifies the
Administrative Agent and the Borrower that it is no longer unlawful or
impossible for such Lender to make or maintain a LIBOR Loan or LIBOR Portion,
all Revolving Loans and all Portions of the Term Loan of such Lender shall be
Base Rate Loans and Base Rate Portions, respectively.

 

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(c) Increased Costs. If, after the date of this Agreement, any Change of Law:
(i) Shall subject any Lender to any tax, duty or other charge with respect to
any Loan or Letter of Credit, or shall change the basis of taxation of payments
by the Borrower to any Lender under this Agreement (except for changes in the
rate of taxation on the overall net income of any Lender imposed by its
jurisdiction of incorporation or the jurisdiction in which its principal
executive office is located); or
(ii) Shall impose, modify or hold applicable any reserve (excluding any Reserve
Requirement or other reserve to the extent included in the calculation of the
LIBOR Rate for any Loans or Portions), special deposit or similar requirement
against assets held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any Lender for any
LIBOR Loan or LIBOR Portion; or
(iii) Shall impose on any Lender any other condition related to any LIBOR Loan
or LIBOR Portion or such Lender’s Commitments;
and the effect of any of the foregoing is to increase the cost to such Lender of
making, renewing, or maintaining any such LIBOR Loan or LIBOR Portion or its
Commitments or to reduce any amount receivable by such Lender hereunder; then
the Borrower shall from time to time, within five (5) Business Days after demand
by such Lender, pay to such Lender additional amounts sufficient to reimburse
such Lender for such increased costs or to compensate such Lender for such
reduced amounts. A certificate setting forth in reasonable detail the amount of
such increased costs or reduced amounts, submitted by such Lender to the
Borrower shall be conclusive absent manifest error. The obligations of the
Borrower under this Section 2.11(c) shall survive the payment and performance of
the Obligations and the termination of this Agreement.
(d) Capital Requirements. If, after the date of this Agreement, any Lender
determines that (i) any Change of Law affects the amount of capital required or
expected to be maintained by such Lender or any Person controlling such Lender
(a “Capital Adequacy Requirement”) and (ii) the amount of capital maintained by
such Lender or such Person which is attributable to or based upon the Loans, the
Letters of Credit, the Commitments or this Agreement must be increased as a
result of such Capital Adequacy Requirement (taking into account such Lender’s
or such Person’s policies with respect to capital adequacy), the Borrower shall
pay to such Lender or such Person, within five (5) Business Days after demand of
such Lender, such amounts as such Lender or such Person shall determine are
necessary to compensate such Lender or such Person for the increased costs to
such Lender or such Person of such increased capital. A certificate setting
forth in reasonable detail the amount of such increased costs, submitted by any
Lender to the Borrower shall be conclusive absent manifest error. The
obligations of the Borrower under this Section 2.11(d) shall survive the payment
and performance of the Obligations and the termination of this Agreement.

 

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2.12. Taxes on Payments.
(a) Except as otherwise expressly provided in this Section 2.12, all payments by
the Borrower under this Agreement or any other Credit Document shall be made
free and clear of, and without deduction for, any and all present or future
federal, state, local and foreign taxes, levies, imposts, duties, deductions,
fees, assessments, withholdings, or other charges of whatever nature and all
interest, penalties and other liabilities with respect thereto, including
withholding taxes imposed by any jurisdiction or any political subdivision
thereof, but excluding (except as provided in the second succeeding sentence)
taxes imposed on a Lender’s overall net income and franchise taxes imposed on
such Lender, in each case, by the jurisdiction of such Lender’s Applicable
Lending Office or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, duties, deductions, fees, assessments, withholdings, or other
charges of whatever nature and all interest, penalties and other liabilities
being referred to herein as “Indemnifiable Taxes”). If Indemnifiable Taxes are
imposed in respect of any sum payable hereunder to any Lender, then (i) subject
to the penultimate sentence of Section 2.12(e), the sum payable shall be
increased by the amount necessary so that after making all required deductions
such Lender shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make all required
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law. In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any excise, transfer, sales and use, value added
or property taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Credit Document (hereinafter referred to
as “Other Taxes”).
(b) Subject to the penultimate sentence of Section 2.12(e), the Borrower agrees
to indemnify the Administrative Agent and each Lender for the full amount of all
Indemnifiable Taxes and Other Taxes (including any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.12) paid by such
Lender, and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Such indemnification shall be made within 30 days
following the date the Administrative Agent or such Lender makes written demand
therefor.
(c) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld hereunder (and, with respect to any Taxes or Other Taxes not so
withheld, to the extent available), the Borrower will furnish to the
Administrative Agent, at the Administrative Agent’s Office, the original or a
certified copy of a receipt evidencing payment thereof.
(d) Without prejudice to the survival of any other agreement contained herein,
the agreements and obligations contained in this Section 2.12 shall survive the
payment in full of principal, interest and all other Obligations hereunder.
(e) On or prior to the date of the initial Loans or, if such date does not occur
within thirty (30) days after the date of this Agreement, by the end of such
30-day period, each Lender which is not organized under the laws of the United
States or a state thereof shall deliver to the Borrower and the Administrative
Agent (A) two duly completed copies of United States Internal Revenue Service
Form W-8BEN or W-8ECI (or successor applicable form), as the case may be,
certifying in each case that such Lender is entitled to receive payments of
interest under this Agreement without deduction or withholding of any United
States federal income taxes, or (B) if the Lender is not a “bank” within the
meaning of Section 881(c)(3)(A) of the IRC and

 

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cannot deliver either United States Internal Revenue Service Form W-8BEN or Form
W-8ECI (with respect to a complete exemption under an income tax treaty)
pursuant to clause (A) above (any such lender, a “Non-Bank Lender”), (x) a
certificate substantially in the form of Exhibit K (any such certificate, a
“Non-Bank Certificate”) and (y) two accurate and complete original signed copies
of United States Internal Revenue Service Form W-8BEN (with respect to the
portfolio interest exemption) (or successor form) certifying to such Lender’s
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement. Each such Lender further agrees (i) promptly to notify the Borrower
and the Administrative Agent of any change of circumstances which would prevent
such Lender from receiving payments hereunder without any deduction or
withholding of Indemnifiable Taxes and (ii) if such Lender has not so notified
the Borrower and the Administrative Agent of any change of circumstances which
would prevent such Lender from receiving payments hereunder without any
deduction or withholding of Indemnifiable Taxes, then on or before the date that
any certificate or other form delivered by such Lender under this
Section 2.12(e) expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent such certificate or form previously
delivered by such Lender, to deliver to the Borrower and the Administrative
Agent a new certificate or form, certifying that such Lender is entitled to
receive payments under this Agreement without deduction of Indemnifiable Taxes,
but only if and to the extent such Lender is legally entitled to do so. If a
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.15) fails to provide to the Borrower or the Administrative Agent
pursuant to the first sentence of this Section 2.12(e) (or, in the case of an
Assignee Lender, Section 8.05(c)) any certificates or other evidence required by
such provision to establish that such Lender is, at the time it becomes a Lender
hereunder, entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, such Lender shall not
be entitled to any indemnification under Section 2.12(a) for any such Taxes
imposed on such Lender primarily as a result of such failure, except to the
extent that such Lender (or its assignor, if any) was entitled, at the time such
Lender became a Lender hereunder, to receive additional amounts from the
Borrower with respect to such Tax pursuant to Section 2.12(a). Notwithstanding
anything to the contrary contained in this Section 2.12, the Borrower agrees to
pay additional amounts and to indemnify each Lender in the manner set forth in
Section 2.12(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
(f) Any Lender claiming any additional amounts in respect of Indemnifiable Taxes
payable pursuant to this Section 2.12 shall use reasonable efforts (consistent
with legal and regulatory restrictions and such Lender’s internal policies) to
file any certificate or document reasonably requested by the Borrower, if the
making of such a filing would avoid the need for or reduce the amount of any
such Indemnifiable Taxes attributable to the Loans and would not, in the sole
determination of such Lender, result in any unreimbursed loss, cost or expense
or otherwise be disadvantageous to such Lender.

 

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(g) Nothing contained in this Section 2.12 shall require the Administrative
Agent or any Lender to make available any of its Tax Returns or any other
information that it deems to be confidential or proprietary.
2.13. Funding Loss Indemnification. If the Borrower shall (a) repay, prepay or
convert any LIBOR Loan or LIBOR Portion on any day other than the last day of an
Interest Period therefor (whether a scheduled payment, an optional prepayment or
conversion, a mandatory prepayment or conversion, a payment upon acceleration or
otherwise), (b) fail to borrow any LIBOR Loan or LIBOR Portion for which a
Notice of Loan Borrowing has been delivered to the Administrative Agent (whether
as a result of the failure to satisfy any applicable conditions or otherwise),
(c) fail to convert any Revolving Loans into LIBOR Loans or any Portion of a
Term Loan Borrowing into a LIBOR Portion in accordance with a Notice of
Conversion delivered to the Administrative Agent, or (d) fail to continue LIBOR
Loan or LIBOR Portion for which a Notice of Interest Period Selection has been
delivered to the Administrative Agent, the Borrower shall pay to the appropriate
Lender within five (5) Business Days after demand a prepayment fee, failure to
borrow fee, failure to convert fee or fail to continue fee, as the case may be
(determined as though 100% of the LIBOR Loan or LIBOR Portion had been funded in
the London interbank eurodollar currency market), equal to the sum of:
(a) $250; plus
(b) the amount, if any, by which (i) the additional interest would have accrued
on the amount prepaid or not borrowed at the LIBOR Rate plus the Applicable
Margin for LIBOR Loans and LIBOR Portions if that amount had remained or been
outstanding through the last day of the applicable Interest Period exceeds
(ii) the interest that such Lender could recover by placing such amount on
deposit in the London interbank eurodollar currency market for a period
beginning on the date of the prepayment or failure to borrow and ending on the
last day of the applicable Interest Period (or, if no deposit rate quotation is
available for such period, for the most comparable period for which a deposit
rate quotation may be obtained); plus
(c) all out-of-pocket expenses incurred by such Lender reasonably attributable
to such payment, prepayment or failure to borrow.
Each Lender’s determination of the amount of any prepayment fee payable under
this Section 2.13 shall be conclusive in the absence of manifest error. The
obligations of the Borrower under this Section 2.13 shall survive the payment
and performance of the Obligations and the termination of this Agreement.
2.14. Security.
(a) Security Documents. The Loans, together with all other Obligations, shall be
secured by the Liens granted by the Borrower under the Security Documents (or,
in the case of any Real Property Security Document, the Obligations described in
such Real Property Security Document and subject to any limitation specifically
set forth therein). All obligations of a Guarantor under the Credit Documents
shall be secured by the Liens granted by such Guarantor under the Security
Documents. So long as the terms thereof are in compliance with this Agreement,
each Lender Rate Contract shall be secured by the Lien of the Security Documents
with the priority relative to the other Obligations as set forth in
Section 6.02.

 

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(b) Further Assurances. The Borrower shall deliver, and shall cause each
Guarantor to deliver, to the Administrative Agent such mortgages, deeds of
trust, security agreements, pledge agreements, lessor consents and estoppels
(containing appropriate mortgagee and lender protection language), control
agreements, and other instruments, agreements, certificates, opinions and
documents (including Uniform Commercial Code financing statements and fixture
filings) as the Administrative Agent, the Collateral Agent or the Security
Trustee may reasonably request to:
(i) grant, perfect, maintain, protect and evidence security interests in favor
of the Collateral Agent or the Security Trustee, for the benefit of the Secured
Parties, in any or all present and future property of the Borrower and the
Guarantors prior to the Liens or other interests of any Person, except for
Permitted Liens; and
(ii) otherwise establish, maintain, protect and evidence the rights provided to
the Collateral Agent or the Security Trustee, for the benefit of the Secured
Parties, pursuant to the Security Documents.
The Borrower shall fully cooperate with the Administrative Agent, the Collateral
Agent, the Security Trustee and the Lenders and perform all additional acts
reasonably requested by the Administrative Agent, the Security Trustee, the
Collateral Agent or any Lender to effect the purposes of this Section 2.14.
2.15. Replacement of the Lenders. If (a) any Lender shall become a Deteriorating
Lender, (b) any Lender shall suspend its obligation to make or maintain LIBOR
Loans or LIBOR Portions pursuant to Section 2.11(b) for a reason which is not
applicable to any other Lender, or (c) any Lender shall demand any payment under
Section 2.11(c), 2.11(d) or 2.12(a) for a reason which is not applicable to any
other Lender, then the Administrative Agent may (or upon the written request of
the Borrower if the Borrower has located or identified a replacement Lender that
is an Eligible Assignee and is reasonably acceptable to the Administrative Agent
as contemplated below, shall use commercially reasonable efforts to) replace
such Lender (the “affected Lender”), or cause such affected Lender to be
replaced, with another lender (the “replacement Lender”) satisfying the
requirements of an Assignee Lender under Section 8.05(c), by having the affected
Lender sell and assign all of its rights and obligations under this Agreement
and the other Credit Documents (including for purposes of this Section 2.15,
participations in L/C Obligations and in Swing Line Loans) to the replacement
Lender pursuant to Section 8.05(c); provided, however, that if the Borrower
seeks to exercise such right, it must do so within sixty (60) days after it
first knows or should have known of the occurrence of the event or events giving
rise to such right, and neither the Administrative Agent nor any Lender shall
have any obligation to identify or locate a replacement Lender for the Borrower
(it being expressly agreed that in such circumstances it is the Borrower’s
obligation to identify or locate a replacement Lender that is an Eligible
Assignee and is acceptable to the Administrative Agent). Upon receipt by any
affected Lender of a written notice from the Administrative Agent stating that
the Administrative Agent is exercising the replacement right set forth in this
Section 2.15, such affected Lender shall sell and assign all of its rights and
obligations under this Agreement

 

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and the other Credit Documents (including for purposes of this Section 2.15,
participations in L/C Obligations and in Swing Line Loans) to the replacement
Lender pursuant to an Assignment Agreement and Section 8.05(c) for a purchase
price equal to the sum of the principal amount of the affected Lender’s Loans so
sold and assigned or such other amount is agreed to by such affected Lender and
such replacement Lender), all accrued and unpaid interest thereon and its
ratable share of all fees to which it is entitled.
ARTICLE III. CONDITIONS PRECEDENT.
3.01. Conditions Precedent to Effectiveness. The effectiveness of this Agreement
is subject to the satisfaction or waiver of the conditions set forth on
Schedule 3.01.
3.02. Conditions Precedent to Initial Funding. The obligations of the Lenders to
make the Loans comprising the initial Borrowings are subject to the satisfaction
or waiver of the conditions set forth on Schedule 3.02.
3.03. Conditions Precedent to each Credit Event. The occurrence of each Credit
Event (including the initial Borrowings occurring on the Initial Funding Date)
is subject to the further conditions that:
(a) The Borrower shall have delivered to the Administrative Agent and, if
applicable, the L/C Issuer or the Swing Line Lender, the Notice of Borrowing or
Letter of Credit Application, as the case may be, for such Credit Event in
accordance with this Agreement; and
(b) On the date such Credit Event is to occur and after giving effect to such
Credit Event, the following shall be true and correct:
(i) The representations and warranties of the Loan Parties set forth in
Article IV and in the other Credit Documents are true and correct in all
material respects (except to the extent that such representation and warranty is
qualified by materiality, in which case such representation and warranty must be
true in all respects) as if made on such date (except for representations and
warranties expressly made as of a specified date, which shall be true and
correct in all material respects (except to the extent that such representation
and warranty is qualified by materiality, in which case such representation and
warranty must be true in all respects) as of such date);
(ii) No Default has occurred and is continuing or will result from such Credit
Event; and
(iii) No material adverse change in the business, operations, condition
(financial or otherwise), assets or liabilities (whether actual or contingent)
of the Borrower Parties taken as a whole (including the Purchased Assets as if
they were owned on December 31, 2009 and for the twelve months prior thereto),
having occurred since December 31, 2009.
The submission by the Borrower to the Administrative Agent of each Notice of
Borrowing and each Letter of Credit Application shall be deemed to be a
representation and warranty by the Borrower that each of the statements set
forth above in this Section 3.02(b) is true and correct as of the date of such
notice.

 

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ARTICLE IV. REPRESENTATIONS AND WARRANTIES.
4.01. Representations and Warranties of the Borrower. In order to induce the
Administrative Agent, the Collateral Agent, the Security Trustee and the Lenders
to enter into this Agreement, the Borrower hereby represents and warrants to the
Administrative Agent, the Collateral Agent, the Security Trustee and the Lenders
for itself and each of the other Loan Parties as set forth in this Article IV
and agrees that each of such representations and warranties shall be deemed to
survive until full payment of the Obligations and shall apply anew to each
Borrowing hereunder.
(a) Due Incorporation, Qualification, etc. Each Borrower Party (i) is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or formation; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and (iii) is
duly qualified, licensed to do business and in good standing as a foreign
corporation, partnership or limited liability company, as applicable, in each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification or license and where the failure to
be so qualified or licensed, individually or in the aggregate could have a
Material Adverse Effect.
(b) Authority. The execution, delivery and performance by each Loan Party of
each Credit Document executed, or to be executed, by such Loan Party and the
consummation of the transactions contemplated thereby (i) are within the power
of such Loan Party and (ii) have been duly authorized by all necessary actions
on the part of such Loan Party.
(c) Enforceability. Each Credit Document executed, or to be executed, by each
Loan Party has been, or will be, duly executed and delivered by such Loan Party
and constitutes, or will constitute, a legal, valid and binding obligation of
such Loan Party, enforceable against such Loan Party in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and general principles of equity.
(d) Non-Contravention. The execution and delivery by each Loan Party of the
Credit Documents executed by such Loan Party and the performance and
consummation of the transactions (including the use of Loan and Letter of Credit
proceeds) contemplated thereby do not (i) violate any Requirement of Law
applicable to such Loan Party; (ii) violate any provision of, or result in the
breach or the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any Contractual
Obligation of such Loan Party; (iii) result in the creation or imposition of any
Lien (or the obligation to create or impose any Lien) upon any Property, asset
or revenue of such Loan Party (except such Liens as may be created in favor of
the Collateral Agent or the Security Trustee for the benefit of the Secured
Parties pursuant to the Security Documents) or (iv) violate any provision of any
existing law, rule, regulation, order, writ, injunction or decree of any court
or Governmental Authority to which it is subject.

 

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(e) Approvals.
(i) Except as provided in Nevada Gaming Commission Regulation 8.130 with respect
to Stockman’s Casino, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person (including, without limitation, the equity holders of any Person) is
required in connection with the borrowing of the Loans, the granting of Liens
under the Credit Documents, the execution and delivery of the Credit Documents
executed by any Loan Party or the performance or consummation of the
transactions contemplated thereby, except for those which have been made or
obtained and are in full force and effect.
(ii) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authority or other Person
(including, without limitation, the equity holders of any Person) is required in
connection with the execution and delivery of the Acquisition Documents executed
by any Loan Party or the performance or consummation of the transactions
contemplated thereby (including the Acquisition), except for those which have
been made or obtained and are in full force and effect.
(iii) All Governmental Authorizations required for the activities and operations
of the Borrower Parties (including gaming, video lottery and horse racing
operations, as applicable) and the ownership of all property owned, operated or
leased by the Borrower Parties and, from and after the Initial Funding Date, the
operation of the Grand Victoria Vessel, have been duly obtained and are in full
force and effect without any known conflict with the rights of others and free
from any unduly burdensome restrictions, except where any such failure to obtain
such Governmental Authorizations or any such conflict or restriction could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. No Borrower Party has received any written notice or
other written communications from any Governmental Authority regarding (A) any
revocation, withdrawal, suspension, termination or modification of, or the
imposition of any material conditions with respect to, any Governmental
Authorization, or (B) any other limitations on the conduct of business by any
Loan Party, except where any such revocation, withdrawal, suspension,
termination, modification, imposition or limitation could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
(iv) Except as set forth on Schedule 4.01(e)(iv), no Governmental Authorization
is required for either (x) the pledge or grant by any Loan Party as applicable
of the Liens purported to be created in favor of the Collateral Agent or the
Security Trustee under the Security Documents or (y) the exercise by the
Collateral Agent or the Security Trustee of any rights or remedies in respect of
any Collateral (whether specifically granted or created pursuant to any of the
Security Documents or created or provided for by any Governmental Rule), except
for (1) such Governmental Authorizations that have been obtained and are in full
force and effect and fully disclosed to Administrative Agent in writing, and
(2) filings or recordings contemplated in connection with this Agreement or any
Security Document.

 

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(f) No Violation or Default. No Borrower Party is in violation of or in default
with respect to (i) any Requirement of Law applicable to such Person (including,
as applicable, IGRA, any Gaming Laws or tribal, horse racing or video lottery
laws) or (ii) any Contractual Obligation of such Person, where, in each case,
such violation or default could reasonably be expected to have a Material
Adverse Effect (nor is there any waiver in effect which, if not in effect, could
reasonably be expected to result in such a violation or default). No Default has
occurred and is continuing.
(g) Litigation. Except as set forth in Schedule 4.01(g), no actions (including
derivative actions), suits, proceedings (including arbitration proceedings or
mediation proceedings) or, to the Borrower’s knowledge, investigations are
pending or overtly threatened against any Borrower Party at law or in equity in
any court, arbitration proceeding or before any other Governmental Authority
which (i) could reasonably be expected to (alone or in the aggregate) have a
Material Adverse Effect or (ii) seek to enjoin, either directly or indirectly,
the execution, delivery or performance by any Loan Party of the Credit
Documents, the Acquisition Documents or the transactions contemplated thereby
(including the Transactions) or any documents executed in connection therewith.
(h) Real Property, Grand Victoria Vessel, Etc.
(i) All real property owned or leased by the Borrower Parties is described
(including, as to real property owned, a legal description) in Schedule 4.01(h)
(as supplemented from time to time by the Borrower in a notice delivered
pursuant to Section 5.01(a)(xiii)). As of the Initial Funding Date, the Grand
Victoria Vessel is the only vessel owned by any Borrower Party and has been duly
documented under the laws of the United States of America in the name of Gaming
Entertainment (Indiana), LLC as the owner thereof, and no other action is
necessary to establish and perfect Gaming Entertainment (Indiana), LLC’s title
to and interest in the Grand Victoria Vessel. The Borrower Parties own and have
good and marketable title, or a valid leasehold interest in, all their
respective properties and assets as reflected in the most recent Financial
Statements delivered to the Administrative Agent (except those assets and
properties disposed of in the ordinary course of business or otherwise in
compliance with this Agreement since the date of such Financial Statements) and
all respective assets and properties acquired by the Borrower Parties since such
date (except those disposed of in the ordinary course of business or otherwise
in compliance with this Agreement), except, in each case, such defects in title
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Such assets and properties are subject to no Lien, except for
Permitted Liens. Each of the Borrower Parties has complied in all material
respects with all material obligations under all material leases to which it is
a party and enjoys peaceful and undisturbed possession under such leases. The
real properties owned by the Borrower Parties are taxed separately and do not
include any other property, and for all purposes the real properties may be
mortgaged, conveyed and otherwise dealt with as a separate legal parcel.
(ii) No Borrower Party (A) has violated any Environmental Laws, (B) has any
liability under any Environmental Laws or (C) has received notice or other
communication of an investigation or, to the Borrower’s knowledge, is under
investigation by any Governmental Authority having authority to enforce
Environmental Laws, where such violation, liability or investigation could have,
individually or in the aggregate, a Material Adverse Effect. Each Borrower
Party’s use and operation of its business properties are in compliance with all
applicable Governmental Rules, including all applicable land use and zoning
laws, except to the extent that non-compliance could not reasonably be expected
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Material Adverse Effect. The Borrower Parties are in compliance with the
Maritime Transportation Security Act of 2002, as amended (including having
vessel and waterfront facility security plans submitted to and approved by the
United States Coast Guard), except to the extent that non-compliance could not
reasonably be expected to have a Material Adverse Effect.
(i) Financial Statements. The Financial Statements of the Borrower Parties which
have been delivered to the Administrative Agent, (i) are in accordance with the
books and records of the Borrower Parties, which have been maintained in
accordance with good business practice; (ii) except as indicated in the
accountant’s report, have been prepared in conformity with GAAP; and (iii)
fairly present in all material respects the financial conditions and results of
operations of the Borrower Parties as of the date thereof and for the period
covered thereby. No Borrower Party has any Contingent Obligations, liability for
taxes or other outstanding obligations which, in any such case, are material in
the aggregate, except as disclosed in the Financial Statements of the Borrower
Parties and those relating to the Purchased Assets furnished to the
Administrative Agent and the Lenders pursuant to item (d)(i) of Schedule 3.01,
or in the Financial Statements delivered to the Administrative Agent pursuant to
Section 5.01(a)(i) or (ii).
(j) Creation, Perfection and Priority of Liens; Equity Interests.
(i) The execution and delivery of the Security Documents by the Loan Parties
party thereto, together with the filing of any Uniform Commercial Code financing
statements and the recording of the U.S. Patent and Trademark Office filings and
U.S. Copyright Office filings delivered to the Collateral Agent for filing and
recording, and as of the date delivered, the recording of any mortgages or deeds
of trust delivered to the Collateral Agent or the Security Trustee for recording
(but not yet recorded), are effective to create in favor of the Collateral Agent
or the Security Trustee, for the benefit of the Secured Parties, as security for
the Obligations, a valid and perfected first priority Lien on all of the
Collateral existing as of the date of such execution and delivery (subject only
to Permitted Liens). All outstanding Equity Securities of the Loan Parties are
duly authorized, validly issued, fully paid and non-assessable. There are no
outstanding subscriptions, options, conversion rights, warrants or other
agreements or commitments of any nature whatsoever (firm or conditional)
obligating the Loan Parties or to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional Equity Securities of the Loan Parties, or
obligating the Loan Parties to grant, extend or enter into any such agreement or
commitment. All Equity Securities of the Loan Parties have been offered and sold
in compliance with all federal and state securities laws and all other
Requirements of Law, except where any failure to comply could not reasonably be
expected to have a Material Adverse Effect.
(ii) Upon execution and delivery of the Real Property Security Documents, the
Real Property Security Documents shall create in favor of the Collateral Agent,
for the benefit of the Secured Parties, a legal, valid, binding and enforceable
Lien on, and security interest in, the respective Loan Party’s right, title and
interest in and to the real property subject thereto and proceeds thereof, and,
each such Real Property Security Document shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the grantors
thereof in such real property and proceeds thereof, as security for the
Obligations, in each case prior and superior in right to any other Person
(except with respect to Permitted Liens).

 

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(iii) Upon execution and delivery by Gaming Entertainment (Indiana), LLC of the
Grand Victoria Vessel Security Document, the Grand Victoria Vessel Security
Document will be a first “preferred mortgage” within the meaning of the Ship
Mortgage Act and will qualify for the benefits accorded a “preferred mortgage”
thereunder and no other filing or recording or refiling or rerecording or any
other act is necessary or advisable to create or perfect such security interest
under the Grand Victoria Vessel Security Document or in the mortgaged property
described therein.
(k) Employee Benefit Plans. Except as set forth on Schedule 4.01(k):
(i) Based upon the actuarial assumptions specified for funding purposes in the
latest valuation of each Pension Plan that any Borrower Party or any ERISA
Affiliate maintains or contributes to, or has any obligation under, the
aggregate benefit liabilities of such Pension Plan within the meaning of
Section 4001 of ERISA did not exceed the aggregate value of the assets of such
Pension Plan. Neither any Borrower Party nor any ERISA Affiliate has any
liability with respect to any post-retirement benefit under any employee welfare
plan (as defined in Section 3(1) of ERISA), other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of ERISA, which
liability for health plan continuation coverage could not have a Material
Adverse Effect.
(ii) Each Pension Plan complies, in both form and operation, in all material
respects, with its terms, ERISA and the IRC, and no condition exists or event
has occurred with respect to any such Pension Plan which would result in the
incurrence by any Borrower Party or any ERISA Affiliate of any material
liability, fine or penalty. Each Pension Plan, related trust agreement,
arrangement and commitment of any Borrower Party or any ERISA Affiliate is
legally valid and binding and in full force and effect. No Pension Plan is being
audited or investigated by any government agency or is subject to any pending or
threatened claim or suit. No Borrower Party or ERISA Affiliate has engaged in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the IRC
with respect to any Pension Plan which would result in the incurrence by any
Borrower Party or ERISA Affiliate of any material liability.
(iii) No Borrower Party or ERISA Affiliate contributes to or has any material
contingent obligations to any Multiemployer Plan. No Borrower Party or ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of
assets described in Section 4204 of ERISA. No Borrower Party or ERISA Affiliate
has been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
(iv) No Borrower Party has (A) engaged in any transaction prohibited by any
Governmental Rule applicable to any Foreign Plan; (B) failed to make full
payment when due of all amounts due as contributions to any Foreign Plan; or
(C) otherwise failed to comply with the requirements of any Governmental Rule
applicable to any Foreign Plan, where singly or cumulatively, the above could
have a Material Adverse Effect.

 

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(l) Margin Stock; Other Regulations. No Loan Party owns any Margin Stock which,
in the aggregate, would constitute a substantial part of the assets of the
Borrower or the Loan Parties (taken as a whole), and not more than 25% of the
value (as determined by any reasonable method) of the assets of any Loan Party
is represented by Margin Stock, and no proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, to purchase, acquire or
carry any Margin Stock or to extend credit, directly or indirectly, to any
Person for the purpose of purchasing or carrying any Margin Stock. No Loan Party
is subject to regulation under the Investment Company Act of 1940, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code or to
any other Governmental Rule limiting its ability to incur indebtedness.
(m) Trademarks, Patents, Copyrights and Licenses. The Borrower Parties each
possess and either own, or have the right to use to the extent required, all
necessary trademarks, trade names, copyrights, patents, patent rights and
licenses which are material to the conduct of their respective businesses as now
operated. The Borrower Parties each conduct their respective businesses without
infringement or claim of infringement of any trademark, trade name, trade
secret, service mark, patent, copyright, license or other intellectual property
rights of any other Person (which is not a Borrower Party), except where such
infringement or claim of infringement could not reasonably be expected to have a
Material Adverse Effect. There is no infringement or, to the Borrower’s
knowledge, claim of infringement by others of any trademark, trade name, trade
secret, service mark, patent, copyright, license or other intellectual property
right of the Borrower or any of the other Borrower Parties, except when such
infringement or claim of infringement by others could not reasonably be expected
to have a Material Adverse Effect. Each of the patents, trademarks, trade names,
service marks and copyrights owned by the Borrower or any Guarantor which is
registered with any Governmental Authority is set forth on the schedules to the
Security Agreement.
(n) Governmental Charges. The Borrower Parties have timely filed or caused to be
timely filed with the appropriate taxing authorities all Tax Returns which are
required to be filed by them. Subject to any adjustment in an amount less than
$500,000 in connection with the audit being undertaken by the Internal Revenue
Service on the date hereof, the Tax Returns accurately reflected all liability
for Taxes of the Borrower Parties for the periods covered thereby and the
Borrower Parties have paid, or made provision for the payment of, all Taxes and
other Governmental Charges which have or may have become due pursuant to said
returns or otherwise and all other indebtedness, except such Governmental
Charges or indebtedness, if any, which are being contested in good faith by
appropriate proceedings and as to which adequate reserves (determined in
accordance with GAAP) have been established. All Taxes which the Borrower
Parties were required by law to withhold or collect in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party have been duly withheld or collected, and have been timely
paid over to the proper authorities to the extent due and payable. No Borrower
Party has executed or filed with the Internal Revenue Service or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any taxes or
Governmental Charges.

 

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(o) Subsidiaries, Etc. Schedule 4.01(o) (as supplemented by the Borrower in a
notice delivered pursuant to Section 5.01(a)(vii)) sets forth each of the
Subsidiaries of each Loan Party, its jurisdiction of organization, the classes
of its Equity Securities, the number of Equity Securities of each such class
issued and outstanding, the percentages of Equity Securities of each such class
owned directly or indirectly by each Loan Party and whether such Loan Party owns
such Equity Securities directly or, if not, the Subsidiary of such Loan Party
that owns such Equity Securities and the number of Equity Securities and
percentages of Equity Securities of each such class owned directly or indirectly
by such Loan Party. Except as set forth on Schedule 4.01(o) (as supplemented as
set forth above), none of the Loan Parties currently has any Subsidiaries. All
of the outstanding Equity Securities of each such Subsidiary indicated on
Schedule 4.01(o) as owned by each Loan Party are owned beneficially and of
record by such Loan Party free and clear of all adverse claims. Each of the
Subsidiaries of each Loan Party is organized under the laws of the United States
or any state thereof.
(p) Solvency, Etc. Each of the Borrower Parties is Solvent and, after the
execution and delivery of the Credit Documents and the consummation of the
Transactions, will be Solvent.
(q) Labor Matters. There are no disputes presently subject to grievance
procedure, arbitration or litigation under any of the collective bargaining
agreements, employment contracts or employee welfare or incentive plans to which
any Borrower Party is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the knowledge of the Borrower, jurisdictional
disputes or organizing activities occurring or threatened which alone or in the
aggregate could have a Material Adverse Effect.
(r) No Material Adverse Effect. Since December 31, 2009, no event has occurred
and no condition exists which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(s) Accuracy of Information Furnished; Material Documents.
(i) The Credit Documents and the other certificates, statements and information
(excluding projections) furnished by the Loan Parties to the Administrative
Agent, the Security Trustee and the Lenders in connection with the Credit
Documents and the transactions contemplated thereby, taken as a whole, do not
contain any untrue statement of a material fact and do not omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All projections
furnished by the Loan Parties to the Administrative Agent and the Lenders in
connection with the Credit Documents and the transactions contemplated thereby
have been prepared on a basis consistent with the historical Financial
Statements described above, except as described therein, have been based upon
reasonable assumptions and represent, as of their respective dates of
presentations, the Loan Parties’ good faith and reasonable estimates of the
future performance of the Loan Parties, and the Borrower has no reason to
believe that such estimates and assumptions are not reasonable.
(ii) The copies of the Material Documents which have been delivered to the
Administrative Agent in accordance with Section 3.01 and Section 3.02 are true,
correct and complete copies of the respective originals thereof, as in effect on
the Effective Date or the Initial Funding Date, as applicable, and no amendments
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Material Documents, except as set forth by documents delivered to the
Administrative Agent in accordance with Section 3.01 or Section 3.02 or
otherwise as permitted by Section 5.02(m). None of the Material Documents has
been terminated and each of the Material Documents is in full force and effect.
No Borrower Party is in default in the observance or performance of any of its
material obligations under the Material Documents and each Loan Party has taken
all action required to be taken to keep unimpaired its rights thereunder (other
than possible defaults which may be the subject of any litigation referred to in
Schedule 4.01(g)). No event has occurred (a “GEM Termination Event”) that gives
the Nottawaseppi Tribe the ability (after the giving of notice and/or the
expiration of any applicable time period) to terminate the FireKeepers
Management Agreement pursuant to the terms thereof.
(t) Brokerage Commissions. No person is entitled to receive any brokerage
commission, finder’s fee or similar fee or payment in connection with the
extensions of credit contemplated by this Agreement as a result of any agreement
entered into by any Loan Party (except for fees payable to Regal Capital
Advisors of approximately $360,000, which fees will be paid on or prior to the
Initial Funding Date from the Borrower’s own funds). No brokerage or other fee,
commission or compensation is to be paid by the Lenders with respect to the
extensions of credit contemplated hereby as a result of any agreement entered
into by any Loan Party, and the Borrower agrees to indemnify the Administrative
Agent, the Security Trustee and the Lenders against any such claims for
brokerage fees or commissions and to pay all expenses including, without
limitation, reasonable attorney’s fees incurred by the Administrative Agent, the
Security Trustee and the Lenders in connection with the defense of any action or
proceeding brought to collect any such brokerage fees or commissions. No person
is entitled to receive any brokerage commission, finder’s fee or similar fee or
payment in connection with the Acquisition Documents except any such fee that is
being paid in full on the Initial Funding Date.
(u) Policies of Insurance. The properties of the Borrower Parties are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower Parties, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower Parties operate. The
Insurance Disclosure Statement sets forth a true and complete listing of all
insurance maintained by the Borrower Parties as of the Initial Funding Date.
Such insurance has not been terminated and is in full force and effect, and each
of the Borrower Parties has taken all action required to be taken as of the date
of this Agreement to keep unimpaired its rights thereunder.
(v) Agreements with Affiliates and Other Agreements. Except as disclosed on
Schedule 4.01(v), no Borrower Party has entered into and, as of the date of the
applicable Credit Event does not contemplate entering into, any material
agreement or contract with any Affiliate of any Borrower Party, except upon
terms at least as favorable to such Borrower Party as an arms-length transaction
with unaffiliated Persons, based on the totality of the circumstances. No
Borrower Party is a party to or is bound by any Contractual Obligation or is
subject to any restriction under its respective charter or formation documents,
which could not reasonably be expected to have a Material Adverse Effect.

 

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(w) Foreign Assets Control, Etc.
(i) No Borrower Party (i) is, or is controlled by, a Designated Person; (ii) has
received funds or other property from a Designated Person; or (iii) is in breach
of or is the subject of any action or investigation under any Anti-Terrorism
Law. No Borrower Party engages or will engage in any dealings or transactions,
or is or will be otherwise associated, with any Designated Person. Each Borrower
Party is in compliance, in all material respects, with the Patriot Act. Each
Borrower Party has taken reasonable measures to ensure compliance with the
Anti-Terrorism Laws including the requirement that (i) no Person who owns any
direct or indirect interest in any Borrower Party is a Designated Person,
(ii) funds invested directly or indirectly in any Borrower Party by are derived
from legal sources.
(ii) No portion of the proceeds of any Loan, L/C Credit Extension or other
credit made hereunder has been or will be used, directly or indirectly for, and
no fee, commission, rebate or other value has been or will be paid to, or for
the benefit of, any governmental official, political party, official of a
political party or any other Person acting in an official capacity in violation
of any applicable Governmental Rules, including the U.S. Foreign Corrupt
Practices Act of 1977, as amended.
(x) Acquisition. The Acquisition has been and will be conducted in compliance
with all Requirements of Law.
(y) Gaming. The lands on which the FireKeepers Casino is located are “Indian
lands” as defined in the IGRA.
4.02. Reaffirmation of Borrower’s Representations and Warranties. The Borrower
shall be deemed to have reaffirmed, for the benefit of the Lenders, the
Administrative Agent and the Security Trustee, each representation and warranty
contained in Article IV on and as of the date of each Credit Event (including
the initial Borrowings occurring on the Initial Funding Date), except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date.
4.03. Representations and Warranties of each Lender. Each Lender, as to itself
only, represents and warrants to each other party hereto that it is not a
“public-side” Lender (i.e. a Lender that does not wish to receive non-public
information with respect to the Borrower Parties or their securities) (each, a
“Public Lender”) unless it has delivered a written notice (a “Public Lender
Notice”) to the Administrative Agent and the Borrower indicating it is a Public
Lender.
ARTICLE V. COVENANTS.
5.01. Affirmative Covenants. So long as any Loan or L/C Obligation remains
unpaid, or any other Obligation remains unpaid, or any portion of any Commitment
remains in force, the Borrower will comply, and will cause compliance by the
other Loan Parties with the affirmative covenants set forth in this
Section 5.01, unless the Required Lenders shall otherwise consent in writing.
(a) Financial Statements, Reports, etc. The Borrower shall furnish to the
Administrative Agent and each Lender the following, each in such form and such
detail as the Administrative Agent or the Required Lenders shall reasonably
request:

 

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(i) As soon as available and in no event later than forty-five (45) days after
the last day of each fiscal quarter, a copy of the Financial Statements of the
Borrower Parties (prepared on a consolidated and consolidating basis) for such
fiscal quarter (beginning with the fiscal quarter ending December 31, 2010 and
thereafter) and for the fiscal year to date, certified by a Senior Finance
Officer of the Borrower to present fairly in all material respects the financial
condition, results of operations and other information reflected therein and to
have been prepared in accordance with GAAP (subject to normal year-end audit
adjustments and the absence of footnotes);
(ii) As soon as available and in no event later than ninety (90) days after the
close of each fiscal year (beginning with the fiscal year ending December 31,
2010), copies of the consolidated and consolidating Financial Statements of the
Borrower Parties for such year, audited (as to the consolidated Financial
Statements) by an independent certified public accountants of recognized
national standing or otherwise reasonably acceptable to Administrative Agent,
which Financial Statements shall be accompanied by a narrative from management
of the Borrower which discusses results and copies of the unqualified opinion of
such accountants and, to the extent delivered to the Borrower, management
letters delivered by such accountants in connection with such Financial
Statements;
(iii) Contemporaneously with the Financial Statements for each fiscal quarter
and each fiscal year required by the foregoing clauses (i)and (ii), a compliance
certificate of a Senior Finance Officer of the Borrower in substantially the
form of Exhibit I (a “Compliance Certificate”);
(iv) As soon as possible and in no event later than five (5) Business Days after
the Borrower knows of the occurrence or existence of (A) any ERISA Event,
(B) any actual or threatened litigation, suits, claims, disputes or
investigations against any Borrower Party involving potential monetary damages
payable by any Borrower Party of $250,000 or more (alone or in the aggregate) or
in which injunctive relief or similar relief is sought, which relief, if
granted, could have a Material Adverse Effect, (C) the occurrence of any GEM
Termination Event, (D) any other event or condition which, either individually
or in the aggregate, could have a Material Adverse Effect, including (I) breach
or non-performance of, or any default under, a Contractual Obligation of a
Borrower Party; (II) any dispute, litigation, investigation, proceeding or
suspension between a Borrower Party and any Governmental Authority; or (III) the
commencement of, or any material development in, any litigation or proceeding
affecting a Borrower Party, including pursuant to any applicable Environmental
Laws; or (E) any Default or any default under any Subordinated Obligations, the
statement of a Responsible Officer of the Borrower setting forth details of such
event, condition, Default or default and the action which the Borrower proposes
to take with respect thereto. Each notice pursuant to this Section 5.01(a)(iv)
shall describe with particularity any and all provisions of this Agreement or
other Credit Document that have been breached;
(v) As soon as available, and in any event not later than thirty (30) days after
the commencement of each fiscal year, the budget and projected financial
statements of the Borrower Parties for such fiscal year (detailed on a quarterly
basis), including, in each case, projected balance sheets, statements of income
and retained earnings and statements of cash flow of the Borrower Parties, all
in reasonable detail and in any event to include projected Capital Expenditures
and quarterly projections of the Borrower Parties’ compliance with each of the
covenants set forth in Section 5.03 of this Agreement;

 

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(vi) As soon as possible and in no event later than five (5) Business Days prior
to the occurrence of any event or circumstance that would require a prepayment
pursuant to Section 2.06(c), the statement of a Responsible Officer of the
Borrower setting forth the details thereof;
(vii) As soon as possible and in no event later than ten (10) days prior
thereto, written notice of the establishment or acquisition by a Loan Party of
any new Subsidiary or the issuance of any new Equity Securities of the Borrower
or any Subsidiary;
(viii) As soon as possible and in no event later than five (5) Business Days
after the receipt thereof by the Borrower, a copy of any notice, summons,
citations or other written communications concerning any actual, alleged,
suspected or threatened violation of any Environmental Law, or any liability of
a Loan Party for Environmental Damages;
(ix) As soon as possible and in no event later than five (5) days after the
sending or filing thereof, copies of any proxy statements, financial statements
or reports that the Borrower has made generally available to its shareholders;
copies of any regular, periodic and special reports or registration statements
or prospectuses that the Borrower files with the United States Securities and
Exchange Commission;
(x) During the period commencing on the Effective Date and ending on the Initial
Funding Date, as soon as available and in no event later than forty-five
(45) days after the last day of each fiscal quarter, a copy of the Financial
Statements of the Purchased Assets (prepared on a consolidated and consolidating
basis) for such fiscal quarter and for the fiscal year to date;
(xi) During the period commencing on the Effective Date and ending on the
Initial Funding Date, as soon as available and in no event later than ninety
(90) days after the close of each fiscal year, copies of the consolidated and
consolidating Financial Statements of the Purchased Assets for such year,
audited (as to the consolidated Financial Statements) by an independent
certified public accountants of recognized national standing;
(xii) During the period commencing on the Effective Date and ending on the
Initial Funding Date, as soon as available and in no event later than thirty
(30) days after the last day of each fiscal month, a copy of the consolidated
and consolidating Financial Statements of the Purchased Assets for such month
and for the fiscal year to date;
(xiii) As soon as possible and in no event later than ten (10) days prior to the
acquisition by any Borrower Party of any leasehold or ownership interest in real
property, a written supplement to Schedule 4.01(h);
(xiv) Without derogation of the Borrower’s obligation under Section 5.02(k), as
soon as possible and in no event later than five (5) Business Days after the
effectiveness thereof, any material change in accounting policies of or
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(xv) Such other instruments, agreements, certificates, opinions, statements,
documents and information relating to the Properties, operations or condition
(financial or otherwise) of the Loan Parties, and compliance by the Borrower
with the terms of this Agreement and the other Credit Documents as the
Administrative Agent, the Security Trustee or any Lender may from time to time
reasonably request.
The Borrower hereby acknowledges that the Administrative Agent will make
available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of the Borrower hereunder (the “Borrower Materials”) by
posting the Borrower Materials on one or more Platforms. From and after the date
of receipt of any Public Lender Notice, the Borrower agrees that (w) all
Borrower Material that may be made available to Public Lenders shall be clearly
and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof, (x) by marking
Borrower Materials “PUBLIC” the Borrower shall be deemed to have authorized the
Administrative Agent, the L/C Issuer and the Lenders to treat such Borrower
Materials as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to the Borrower
Parties or their securities for purposes of United States Federal and state
security laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Investor”.
(b) Books and Records. The Loan Parties shall at all times keep proper books of
record and account in which full, true and correct entries will be made of their
transactions in accordance with GAAP.
(c) Inspections. Except as limited by Nevada Gaming Commission Regulation 6.130
or the Borrower’s approved system of internal controls governing mandatory count
procedures and the persons who may participate therein, the Loan Parties shall
permit the Administrative Agent, the Security Trustee and each Lender, or any
agent or representative thereof, upon reasonable notice and during normal
business hours so long as no Event of Default shall have occurred and be
continuing and otherwise at any time as the Administrative Agent, the Security
Trustee and any Lender may determine with or without prior notice to the
Borrower, to visit and inspect any of the properties and offices of the Loan
Parties, to conduct audits of any or all of the Collateral, to examine the books
and records of the Loan Parties and make copies thereof, and to discuss the
affairs, finances and business of the Loan Parties with, and to be advised as to
the same by, their officers, auditors and accountants, all at such times and
intervals as the Administrative Agent, the Security Trustee or any Lender may
request, all at the Borrower’s expense.
(d) Insurance. The Loan Parties shall:
(i) Carry and maintain (A) insurance during the term of this Agreement of the
types and in the amounts customarily carried from time to time by others engaged
in substantially the same business as such Person and operating in the same
geographic area as such Person, including, but not limited to, business
interruption, fire, liability, property damage and worker’s compensation, (B) if
requested by the Administrative Agent, flood

 

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insurance with respect to real property Collateral in amounts and subject to
deductibles and other terms as may be reasonably acceptable to the
Administrative Agent, (C) insurance required by any Real Property Security
Documents or the Grand Victoria Vessel Security Document, (D) fire and usual
marine risks (including hull and machinery and excess risks), (E) protection and
indemnity risks and (F) any other risks against which the Administrative Agent
considers, having regards to practices and other circumstances prevailing at the
relevant time, it would in the reasonable opinion of the Administrative Agent be
reasonable for the Borrower Parties to insure and which are specified by the
Administrative Agent by notice to the Borrower;
(ii) Furnish to any Lender, upon written request, full information as to the
insurance carried;
(iii) Carry and maintain each policy for such insurance with (A) a company which
is rated A or better by A.M. Best and Company at the time such policy is placed
and at the time of each annual renewal thereof or (B) any other insurer which is
satisfactory to the Administrative Agent; and
(iv) Obtain and maintain endorsements acceptable to the Administrative Agent for
such insurance (including form CF1218) naming the Collateral Agent, the
Administrative Agent, the Security Trustee and the Lenders as additional
insureds and the Collateral Agent as mortgagee and lender’s loss payee and
including mortgagee’s and lender’s loss payable endorsements;
provided, however, that if any Loan Party shall fail to maintain insurance in
accordance with this Section 5.01(d), or if any Loan Party shall fail to provide
the required endorsements with respect thereto, the Administrative Agent shall
have the right (but shall be under no obligation) to procure such insurance and
the Borrower agrees to reimburse the Administrative Agent for all costs and
expenses of procuring such insurance.
(e) Governmental Charges and Other Indebtedness. Each Loan Party shall promptly
pay and discharge when due (i) all Taxes and other Governmental Charges,
(ii) all Indebtedness which, if unpaid, could become a Lien upon the property of
such Loan Party and (iii) subject to any subordination provisions applicable
thereto, all other Indebtedness which in each case, if unpaid, could be
reasonably likely to have a Material Adverse Effect, except such Taxes,
Governmental Charges and Indebtedness as may in good faith be contested or
disputed, or for which arrangements for deferred payment have been made;
provided that in each such case appropriate reserves are maintained in
accordance with GAAP and no material property of any Loan Party is at impending
risk of being seized, levied upon or forfeited.
(f) Use of Proceeds. The Borrower shall use the proceeds of the Loans (i) to
provide a portion of the financing for the Acquisition, (ii) to refinance
certain existing Indebtedness of the Loan Parties, (iii) to pay fees and
expenses incurred in connection with the Transactions and (iv) to provide for
the ongoing working capital and other general corporate purposes of the Loan
Parties.

 

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(g) General Business Operations. Each of the Loan Parties shall (i) preserve,
renew and maintain in full force its corporate, partnership or limited liability
company existence and good standing under the Governmental Rules of the
jurisdiction of its organization and all of its rights, licenses and permits
(including all tribal, gaming, horse racing and video lottery licenses and
permits), leases, qualifications, privileges franchises and other authority
reasonably necessary to the conduct of its business, (ii) conduct its business
activities in compliance with all Requirements of Law (including all Gaming Laws
and tribal, horse racing and video lottery laws) and Contractual Obligations
applicable to such Person except, in each case, where any failure, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (iii) keep all property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted
and from time to time make, or cause to be made, all necessary and proper
repairs, except, in each case, where any failure, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(iv) subject to the Borrower’s commercially reasonable judgment, maintain,
preserve and protect all of its rights to enjoy and use material trademarks,
trade names, service marks, patents, copyrights, licenses, leases, franchise
agreements and franchise registrations and (v) conduct its business in an
orderly manner without voluntary interruption except where any failure could not
reasonably be expected to have a Material Adverse Effect. No Loan Party shall
change its jurisdiction of formation.
(h) Compliance with Laws. Each Loan Party shall comply with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
(including, without limitation, all Environmental Laws), noncompliance with
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and the inventory of each Loan Party shall comply with
the Fair Labor Standards Act.
(i) New Subsidiaries. The Borrower shall, at its own expense promptly, and in
any event within ten (10) Business Days, after the formation of or as of the
date of the acquisition of any Subsidiary (A) notify the Administrative Agent of
such event in writing (to the extent notice has not already been provided in
accordance with Section 5.01(a)(vii)), (B) cause such Subsidiary to become a
party to the Guaranty, the Security Agreement and each other applicable Security
Document in accordance with the terms thereof, (C) deliver (or cause the
appropriate Person to deliver) to the Collateral Agent all stock certificates
and other instruments constituting Collateral thereunder free and clear of all
adverse claims, accompanied by undated stock powers or other instruments of
transfer executed in blank (and take such other steps as may be requested by the
Collateral Agent or the Administrative Agent to perfect the Collateral Agent’s
first priority Lien in such Collateral consisting of Equity Securities in
compliance with any applicable laws of jurisdictions outside of the United
States), (D) cause each document (including each Uniform Commercial Code
financing statement and each filing with respect to intellectual property owned
by each new Subsidiary) required by law or requested by the Collateral Agent or
the Administrative Agent to be filed, registered or recorded in order to create
in favor of the Collateral Agent, for the benefit of the Secured Parties, a
valid, legal and perfected first-priority security interest in and lien on the
Collateral subject to the Security Documents to be so filed, registered or
recorded and evidence thereof delivered to the Collateral Agent, (E) deliver (or
cause the appropriate Person to deliver) the Organizational Documents,
certificates, resolutions and other documents that would have been required of
such Subsidiary under clause (b) of Schedule 3.01 if such Subsidiary had been
the Borrower on the Effective Date and (F) deliver an opinion of counsel in form
and substance reasonably satisfactory to the Administrative Agent with respect
to each new Guarantor, the pledge of the Equity Securities of each Subsidiary,
and the other matters set forth in this Section 5.01(i).

 

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(j) Appraisals. During the existence of an Event of Default or upon the written
request of the Administrative Agent (for itself or upon request of any Lender,
without duplication) acting pursuant to any Requirement of Law, the Borrower
agrees that the Administrative Agent may, at the expense of the Borrower,
commission an appraisal of any property (i) to which any Loan Party holds legal
title and (ii) which is encumbered by any Security Document.
(k) Additional Collateral. If at any time from and after the Effective Date, the
Borrower or any Subsidiary acquires any fee or leasehold interest in real
property, the Borrower or such Subsidiary shall promptly deliver to the
Administrative Agent, at its own expense, all documentation and information in
form and substance reasonably satisfactory to the Collateral Agent (including
any appraisals, surveys and environmental reports) to assist the Collateral
Agent in obtaining deeds of trust or mortgages on such additional real property
and ALTA policies of title insurance, with such endorsements as the Collateral
Agent may reasonably require, issued by a company and in form and substance
satisfactory to the Administrative Agent, in an amount equal to the principal
amount of the Total Revolving Loan Commitment on the Initial Funding Date plus
the then outstanding aggregate principal amount of the Terms Loans, insuring the
Collateral Agent’s Lien on such additional real property Collateral to be of
first priority, subject only to such exceptions as the Collateral Agent shall
approve in its reasonable discretion, with all costs thereof to be paid by the
Borrower or such Subsidiary. If at any time from and after the Effective Date,
the Borrower or any Subsidiary acquires any vessel (including the Grand Victoria
Vessel), the Borrower or such Subsidiary shall execute, deliver and record, at
its own expense, as soon as possible all documentation and information necessary
or appropriate, as determined by the Security Trustee, in form and substance
reasonably satisfactory to the Collateral Agent to provide the Security Trustee
a first preferred mortgage on such vessel, subject only to such exceptions as
the Administrative Agent shall approve in its reasonable discretion, with all
costs thereof to be paid by the Borrower or such Subsidiary.
(l) Rate Contracts. No later than 90 days after the Initial Funding Date, the
Borrower shall enter into, and shall maintain in full force and effect, one or
more Lender Rate Contracts with respect to the Indebtedness evidenced by this
Agreement reasonably satisfactory to the Administrative Agent, which agreements
shall provide coverage in a notional amount equal to at least 50% of the
Effective Amount of the Term Loans (as the same may be reduced from time to time
pursuant to repayments under Section 2.01(g)(iii) and prepayments under Section
2.06).
(m) Acquisition. The Loan Parties shall use commercially reasonable efforts to
consummate the Acquisition as soon as possible, and, in any event, the Loan
Parties shall cause the Acquisition to be consummated no later than June 30,
2011.
5.02. Negative Covenants. So long as any Loan or L/C Obligation remains unpaid,
or any other Obligation remains unpaid or unperformed, or any portion of any
Commitment remains in force, the Borrower will comply, and will cause compliance
by the other Loan Parties, with the negative covenants set forth in this
Section 5.02, unless the Required Lenders shall otherwise consent in writing.

 

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(a) Indebtedness. None of the Loan Parties shall create, incur, assume or permit
to exist any Indebtedness or engage in any off-balance sheet finance transaction
or other similar transaction except for the following (“Permitted
Indebtedness”):
(i) Indebtedness of the Loan Parties under the Credit Documents;
(ii) Indebtedness of the Loan Parties listed in Schedule 5.02(a) and existing on
the date of this Agreement and any Indebtedness of the Loan Parties under
initial or successive refinancings of any Indebtedness permitted by this
Section 5.02(a)(ii); provided that (A) the principal amount of any such
refinancing does not exceed the principal amount of the Indebtedness being
refinanced and (B) the material terms and provisions of any such refinancing
(including maturity, redemption, prepayment, default and subordination
provisions) are no less favorable to the applicable Loan Party and the Lenders
than the Indebtedness being refinanced;
(iii) Indebtedness of the Loan Parties under Rate Contracts permitted by Section
5.02(l);
(iv) Indebtedness of the Loan Parties with respect to surety, appeal, indemnity,
performance or other similar bonds in the ordinary course of business (including
surety or similar bonds issued in connection with the stay of a proceeding of
the type described in Section 6.01(h));
(v) Guaranty Obligations of any Loan Party in respect of Permitted Indebtedness
of any other Loan Party;
(vi) Indebtedness owing to any other Loan Parties; provided that the Investment
constituting such Indebtedness is permitted by Section 5.02(e)(iii);
(vii) purchase money Indebtedness and Capital Lease obligations in an aggregate
principal amount not to exceed $750,000 at any one time outstanding;
(viii) During the period commencing on the Effective Date and ending on the
earlier of (A) June 30, 2011 and (B) two Business Days prior to Initial Funding
Date, Indebtedness in an aggregate amount not to exceed $7,900,000 owing by any
Loan Party to Nevada State Bank; and
(ix) Subordinated Obligations incurred after the Effective Date; provided that
such Subordinated Obligations and the documentation for such Subordinated
Obligations are reasonably satisfactory to the Required Lenders (but in any
event, the maturity of such Subordinated Obligations shall be no earlier than a
date that is six (6) months after the Maturity Date and such Indebtedness shall
have no principal payments prior to a date that is six (6) months after the
Maturity Date).

 

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(b) Liens. No Loan Party shall create, incur, assume or permit to exist any Lien
or Negative Pledge on or with respect to any of its Property, whether now owned
or hereafter acquired, except for the following (“Permitted Liens”):
(i) Liens in favor of the Collateral Agent, the Administrative Agent, the
Security Trustee or any Lender securing the Obligations and Negative Pledges
under the Credit Documents;
(ii) Liens listed in Schedule 5.02(b) and existing on the date of this Agreement
and any replacement Liens (covering the same or a lesser scope of Property) in
respect of replacement Indebtedness permitted under Section 5.02(a)(ii);
(iii) Liens for Taxes or other Governmental Charges not at the time delinquent
or thereafter payable without penalty or being contested in good faith by
appropriate proceedings and have not proceeded to judgment; provided that
adequate reserves for the payment thereof have been established in accordance
with GAAP and no Property of any Loan Party is subject to impending risk of loss
or forfeiture by reason of nonpayment of the obligations secured by such Liens;
(iv) statutory Liens, possessory liens of carriers and warehousemen, materialmen
Liens, mechanic’s Liens and landlord Liens, in each case arising in the ordinary
course of business with respect to obligations which are not delinquent or are
being contested in good faith by appropriate proceedings, provided that, if
delinquent, adequate reserves have been set aside with respect thereto in
accordance with GAAP and, by reason of nonpayment, no Property of any Loan Party
is subject to a material impending risk of loss or forfeiture;
(v) Deposits under workers’ compensation, unemployment insurance and social
security laws or to secure the performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or to secure statutory
obligations of surety, appeal or customs bonds or to secure indemnity,
performance or other similar bonds in the ordinary course of business; and
(vi) Purchase money Liens and associated Negative Pledges incurred with respect
to property acquired using the proceeds of Indebtedness and Capital Leases
permitted under Section 5.02(a)(vii);
(vii) Liens incurred in connection with the extension, renewal or refinancing of
the Indebtedness secured by the Liens described in Section 5.02(b)(ii) or (vi)
above; provided that any extension, renewal or replacement Lien (A) is limited
to the Property covered by the existing Lien and (B) secures Indebtedness which
is no greater in amount and has material terms no less favorable to the Lenders
than the Indebtedness secured by the existing Lien;
(viii) leases or subleases granted to others (in the ordinary course of business
consistent with past practices) not interfering in any material respect with the
ordinary conduct of the business or operations of any Loan Party;

 

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(ix) easements, rights-of-way, restrictions, minor defects, encroachments or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of
any Loan Party;
(x) deposits in the ordinary course of business to secure liabilities to
insurance carriers, lessor, utilities and other service providers;
(xi) Liens on the real property subject to any of the Real Property Security
Documents identified in the ALTA title policy received by the Administrative
Agent (in form and substance reasonably satisfactory to the Administrative
Agent) relating to such real property;
(xii) Liens in favor of Nevada State Bank in connection with Indebtedness
permitted by Section 5.02(a)(viii);
(xiii) bankers liens and rights of setoff with respect to customary depository
arrangements entered into in the ordinary course of business; and
(xiv) Liens arising by reason of security for surety or appeal bonds in the
ordinary course of business of any Loan Party;
provided, however, that the foregoing exceptions shall not permit any Lien on
any Equity Securities issued by any Loan Party, except for Liens in favor of the
Collateral Agent securing the Obligations (or any guaranty thereof).
(c) Asset Dispositions. No Loan Party shall, directly or indirectly, sell,
lease, convey, transfer or otherwise dispose (including, without limitation, via
any sale and leaseback transaction) of any of its Property, whether now owned or
hereafter acquired, except for the following:
(i) Sales by the Loan Parties of inventory in the ordinary course of their
businesses (excluding sales of inventory by any Loan Party, directly or
indirectly, to another Loan Party);
(ii) Sales or disposals by the Loan Parties of damaged, worn-out or obsolete
equipment in the ordinary course of their businesses for not less than fair
market value, if any;
(iii) Sales or other dispositions by any Loan Party of Investments permitted by
Section 5.02(e)(ii) for not less than fair market value; provided that no Event
of Default shall have occurred and be continuing and the proceeds of such sale
or other disposition are retained as working capital with such Loan Party;
(iv) Sales or other dispositions of assets and property (A) by the Borrower to
any Guarantor or any other Borrower and (B) by any Guarantor to the Borrower or
any other Guarantor;

 

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(v) Transfers permitted by Section 5.02(b), Section 5.02(d), Section 5.02(e) and
Section 5.02(f);
(vi) Sales or other dispositions the Net Proceeds of which (x) do not exceed
$500,000 in the aggregate in any fiscal year and (y) are applied to the
prepayment of the Obligations or otherwise utilized to the extent required by
Section 2.06(c)(iv); and
(vii) Sale or condemnation by City of the Rising Sun of approximately
twenty-five (25) acres of land of the Grand Victoria Casino & Resort delineated
as “24-Acres Excess Land” in the map attached as Exhibit N, the Net Proceeds of
which are applied to the prepayment of the Obligations or otherwise utilized to
the extent required by Section 2.06(c)(iv) or Section 2.06(c)(vii);
provided that nothing herein shall be construed to permit the sale, conveyance,
transfer or other disposition of (x) any Equity Securities of any of the
Borrower’s Subsidiaries (other than in the creation of the Lien thereon in favor
of the Collateral Agent pursuant to the Security Documents).
(d) Mergers, Acquisitions, Etc. No Loan Party shall reorganize, recapitalize or
consolidate with or merge into any other Person or permit any other Person to
merge into it, acquire any Person as a new Subsidiary or acquire all or
substantially all of the assets, or any identifiable business unit or division,
of any other Person, except for the following:
(i) the Borrower and the other Loan Parties may merge with each other; provided
that (A) no Event of Default shall have occurred and be continuing or would
result after giving effect to any such merger and (B) in any such merger
involving the Borrower and another Loan Party, the Borrower is the surviving
Person;
(ii) a merger or consolidation of a Person into the Borrower or into a Guarantor
which constitutes an acquisition permitted by Section 5.02(d)(iv); provided that
no Default shall have occurred and be continuing or would result after giving
effect to any such merger;
(iii) the Acquisition; and
(iv) Acquisitions by the Borrower or a Guarantor of any Person or the assets of
a Person as a new Subsidiary or of all or substantially all of the assets of any
other Person or identifiable business unit or division of any other Person (in
each case, the “Proposed Target”); provided that:
(A) No Default has occurred and is continuing on the date of, or will result
after giving effect to, any such acquisition (actually and on a pro forma
basis);
(B) The Proposed Target is in the same or similar line of business as the
Borrower;
(C) The acquisition of the Proposed Target shall be completed as a result of an
arm’s length negotiation (i.e. on a non-hostile basis);

 

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(D) The acquisition of the Proposed Target shall be consummated, in all material
respects, in accordance with all applicable Governmental Rules;
(E) The Proposed Target’s earnings before interest, taxes, depreciation and
amortization (calculated in the same manner as Adjusted EBITDA) for the last
twelve months ending as of closing of such acquisition is not less than zero;
(F) The Borrower has delivered to the Administrative Agent, (1) financial
statements of the subject of such acquisition (or, in the case of assets
constituting less than all of the assets of a Person, the equivalent of
financial statements with respect to such assets) to the extent available, but
in no event for less than the immediately preceding twelve months (or such other
period of time agreed to by the Administrative Agent in its sole discretion),
and (2) pro forma financial statements reflecting the combined projected
performance of the Borrower Parties during the 12 months immediately following
consummation of such transaction, certified to the Administrative Agent and the
Lenders as being the good faith projections of the Borrower, in form and detail
reasonably acceptable to the Administrative Agent, which projections shall show
that such acquisition will not result in any Default hereunder;
(G) No Proposed Target shall be organized or domiciled under the law of any
jurisdiction outside the United States, and no Proposed Target shall have more
than 15% of its assets or annual revenues based in or from outside of the United
States or Canada (as determined from the most recently available financial
information for the Proposed Target);
(H) The Collateral Agent and the Security Trustee (as applicable) shall hold a
perfected, first priority security interest in and lien on all of the assets
directly or indirectly acquired by the Borrower or a Guarantor in such
transaction (including but not limited to the assets of the Proposed Target and,
if the Proposed Target survives such transaction as a separate Subsidiary, any
Equity Securities in the Proposed Target) to the extent required by
Section 5.01(i);
(I) If such Proposed Target remains a separate Subsidiary, all action required
of such Subsidiary and of Loan Parties under Section 5.01(i) shall be completed
substantially concurrently with the consummation of such Acquisition; and
(J) The consideration paid or payable in cash (including any earn-out or similar
contingent consideration) in connection with such acquisition, when taken
together with each other Permitted Acquisition consummated after the Effective
Date shall not exceed $2,500,000 in the aggregate.
(e) Investments. None of the Loan Parties shall make any Investment except for
Investments in the following:
(i) Investments by the Loan Parties in cash and Cash Equivalents;
(ii) Investments listed in Schedule 5.02(e) existing on the date of this
Agreement;

 

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(iii) Investments by the Loan Parties in each other; provided that any
Investments by the Borrower or a Subsidiary constituting Indebtedness of another
Loan Party shall be evidenced by one or more Pledged Intercompany Notes subject
to a first perfected security interest in favor of the Administrative Agent and
in the Administrative Agent’s possession; and
(iv) Investments consisting of loans to employees, officers and directors in the
ordinary course of business in an aggregate amount not exceeding $100,000 at any
one time outstanding;
(v) Investments permitted by Section 5.02(d);
(vi) Deposit accounts; provided that such Investments are subject to a Control
Agreement;
(vii) Extensions of trade credit in the ordinary course of business to customers
of the Loan Parties;
(viii) Investments received in connection with the settlement of a bona fide
dispute with another Person after making reasonable efforts to collect cash in
respect thereof; and
(ix) Investments not exceeding $2,500,000 in the aggregate during the term of
this Agreement in connection with entities formed by any Loan Party for purposes
of entering into any management agreement for gaming facilities.
(f) Dividends, Redemptions, Etc. No Loan Party shall make any Distributions or
set apart any sum for any such purpose except as follows:
(i) Any Subsidiary of the Borrower may pay dividends on its Equity Securities to
the Borrower or any intervening Subsidiary;
(ii) The Borrower may declare and pay dividends or make other Distributions with
respect to its Equity Securities payable solely in shares of Qualified Equity
Securities;
(iii) The Borrower may purchase fractional shares of its capital stock arising
out of stock dividends, splits or combinations or mergers, consolidations or
other acquisitions and pay cash in lieu of fractional shares upon the exercise
of warrants, options or other securities convertible into or exercisable for
capital stock of the Borrower;
(iv) The Borrower may make any Distribution made in connection with the
withholding of Equity Securities of the Borrower or other withholdings to allow
any future, present or former employee, director or consultant of the Loan
Parties to meet his or her tax withholding obligations that arise in connection
with an award pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement; and

 

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(v) The Borrower may repurchase Equity Securities or Indebtedness of any
Borrower Party to the extent required by a Gaming Board for not more than the
fair market value thereof in order to avoid the suspension, revocation or denial
by a Gaming Board of a gaming license or other authorization necessary to the
ownership, construction, maintenance, lease, financing or operation of a gaming
business by a Borrower Party.
(g) Change in Business. No Loan Party shall engage, either directly or
indirectly through Affiliates, in any business different from the business of
the Borrower as of the Effective Date.
(h) Payments of Indebtedness, Etc. No Loan Party shall:
(i) prepay, redeem, purchase, defease, acquire or otherwise satisfy (or offer to
redeem, purchase, acquire or otherwise satisfy) in any manner prior to the
scheduled payment thereof any Indebtedness (including any Subordinated
Obligations) or lease obligations of any Loan Party (other than the
Obligations); or make any payment or deposit any monies, securities or other
property with any trustee or other Person that has the effect of providing for
the satisfaction (or assurance of any satisfaction) of any Indebtedness
(including any Subordinated Obligations) of any Loan Party prior to the date
when due or otherwise to provide for the defeasance of any such Indebtedness;
(ii) pay or prepay any principal, premium, interest or any other amount
(including sinking fund payments) with respect to any Subordinated Obligation
(except in each case payments expressly permitted by the subordination
provisions approved by the Administrative Agent and the Required Lenders
pursuant to Section 5.02(a)(ix) and payments expressly approved in writing by
the Required Lenders), or redeem purchase, defease, acquire or otherwise satisfy
(or offer to redeem, purchase, acquire or otherwise satisfy) any Subordinated
Obligations (except in each case payments expressly permitted by the
subordination provisions approved by the Administrative Agent and the Required
Lenders pursuant to Section 5.02(a)(ix) and payments expressly approved in
writing by the Required Lenders); or make any payment or deposit any monies,
securities or other property with any trustee or other Person that has the
effect of providing for the satisfaction (or assurance of any satisfaction) of
any Subordinated Obligations prior to the date when due or otherwise to provide
for the defeasance of any Subordinated Obligations; or
(iii) Supplement, amend, modify or otherwise change the terms of any document,
instrument or agreement evidencing or governing any Subordinated Obligations.
(i) ERISA.
(i) No Loan Party or any ERISA Affiliate shall (A) adopt or institute any
Pension Plan; (B) take any action which will result in the partial or complete
withdrawal, within the meanings of Sections 4203 and 4205 of ERISA, from a
Multiemployer Plan; (C) engage or permit any Person to engage in any transaction
prohibited by Section 406 of ERISA or Section 4975 of the IRC involving any
Pension Plan or Multiemployer Plan which would subject a Loan Party or any ERISA
Affiliate to any tax, penalty or other liability including a liability to
indemnify; (D) incur or allow to exist any accumulated funding deficiency
(within

 

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the meaning of Section 412 of the IRC or Section 302 of ERISA); (E) fail to make
full payment when due of all amounts due as contributions to any Pension Plan or
Multiemployer Plan; (F) fail to comply with the requirements of Section 4980B of
the IRC or Part 6 of Title I(B) of ERISA; or (G) adopt any amendment to any
Pension Plan which would require the posting of security pursuant to Section
401(a)(29) of the IRC, where singly or cumulatively, the above could have a
Material Adverse Effect; provided, that the Borrower may terminate some or all
of the existing employee benefit plans in respect of the Grand Victoria Casino &
Resort and may reinstitute similar benefit plans for employees of the Grand
Victoria Casino & Resort or modify its existing benefit plans to include such
employees.
(ii) No Loan Party shall (A) engage in any transaction prohibited by any
Governmental Rule applicable to any Foreign Plan; (B) fail to make full payment
when due of all amounts due as contributions to any Foreign Plan; or
(C) otherwise fail to comply with the requirements of any Governmental Rule
applicable to any Foreign Plan, where singly or cumulatively, the above could
have a Material Adverse Effect.
(j) Transactions With Affiliates. No Loan Party shall enter into or permit to
exist any Contractual Obligation with any Affiliate (other than any other
Borrower Party) or engage in any other transaction with any Affiliate (other
than any other Borrower Party) except:
(i) upon terms at least as favorable to such Loan Party as an arms-length
transaction with unaffiliated Persons;
(ii) any Distribution permitted by Section 5.02(f) hereof; and
(iii) the payment of reasonable fees to directors of the Loan Parties who are
not employees of the Loan Parties.
(k) Accounting Changes. No Loan Party shall change (i) its fiscal year
(currently January 1 through December 31) or (ii) its accounting practices or
principles except as required by GAAP.
(l) Rate Contracts. No Loan Party shall enter into any Rate Contract, except
(i) Rate Contracts entered into to hedge or mitigate risks to which such Loan
Party has actual exposure (other than those in respect of Equity Securities of
any Loan Party), and (ii) Rate Contracts entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of a Loan Party.
(m) Amendment of Material Documents. No Loan Party shall agree to amend, modify,
supplement or replace any Material Document or any document executed and
delivered in connection therewith, in each case in a manner which could
reasonably be expected to adversely affect the interests of the Administrative
Agent, the Security Trustee and the Lenders.
(n) Restrictive Agreements. No Loan Party shall agree to any restriction or
limitation (other than as set forth in this Agreement or the other Credit
Documents) on the making of Distributions or the transferring of assets from any
Loan Party to another Loan Party.

 

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(o) Joint Ventures; Non-Wholly-Owned Subsidiaries. No Loan Party shall enter
into any Joint Venture or own any Non-Wholly Owned Subsidiaries (other than GEM
and GED).
(p) Sales and Leaseback; Off-Balance Sheet Financing. No Loan Party shall engage
in (i) any Sale and Leaseback transaction with respect to any of its Property of
any character, whether now owned or hereafter acquired or (ii) any off-balance
sheet financing or similar transaction.
(q) Capital Expenditures. No Loan Party shall permit the aggregate amount of
Capital Expenditures made by the Loan Parties in any fiscal year to (i) exceed
5% of total revenues for the immediately preceding fiscal year or (ii) be less
than 1.5% of the total revenues of the immediately preceding fiscal year;
provided that up to $2,000,000 spent to convert hotel rooms at the Grand
Victoria Casino & Resort to suites shall not be included in the calculation of
Capital Expenditures under this Section 5.02(q).
(r) Designated Senior Debt. The Borrower shall not fail to designate the
obligations as senior indebtedness or any equivalent designation pursuant to the
documentation for any Subordinated Obligations.
(s) Subsidiaries. No Loan Party shall form or acquire any Subsidiary or take any
other action that would result in the Borrower or any of its Subsidiaries being
organized or domiciled under the law of any jurisdiction outside the United
States.
5.03. Financial Covenants. So long as any Loan or L/C Obligation remains unpaid,
or any other Obligation remains unpaid, or any portion of any Commitment remains
in force, the Borrower will comply, and will cause compliance, with the
following financial covenants, unless the Required Lenders shall otherwise
consent in writing:
(a) Total Leverage Ratio. The Borrower shall not permit the Total Leverage Ratio
at any time from and after the Initial Funding Date to be greater than the ratio
set forth opposite the applicable period below:

              Maximum Total   Period   Leverage Ratio  
Initial Funding Date through and including December 31, 2011
    2.00:1.00  
January 1, 2012 through and including December 31, 2012
    1.75:1.00  
January 1, 2013 and thereafter
    1.50:1.00  

 

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(b) Fixed Charge Coverage Ratio. The Borrower shall not permit the Fixed Charge
Coverage Ratio as of the last day of any fiscal quarter, commencing with the
first full fiscal quarter after the Initial Funding Date, to be less than the
ratio set opposite the applicable fiscal quarter below:

              Minimum Fixed   Any Fiscal Quarter Ending   Charge Coverage Ratio
 
Initial Funding Date through and including December 31, 2013
    1.10:1.00  
March 31, 2014 and thereafter
    1.20:1.00  

(c) Minimum Adjusted EBITDA. The Borrower shall not permit, as of the last day
of any fiscal quarter, commencing with the first full fiscal quarter after the
Initial Funding Date, Adjusted EBITDA for the two (2) consecutive fiscal quarter
period ending thereon, to be less than the amount set opposite the applicable
fiscal quarter below:

          Any Fiscal Quarter Ending   Adjusted EBITDA  
Initial Funding Date through and including June 30, 2012
  $ 7,500,000  
September 30, 2012 and thereafter
  $ 9,000,000  

ARTICLE VI. EVENTS OF DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or more of the
following events set forth in this Section 6.01 shall constitute an “Event of
Default” hereunder.
(a) Non-Payment. Any Loan Party shall (i) fail to pay when due any principal of
any Loan or any L/C Obligation (including any amount due in respect thereof
under the Guaranty) or (ii) fail to pay within three (3) days after the same
becomes due, any interest, fees or other amounts payable under the terms of this
Agreement or any of the other Credit Documents (including any amount due under
any Lender Rate Contract and, to the extent not included in clause (i), the
Guaranty); or
(b) Specific Defaults. Any Loan Party shall fail to observe or perform any
covenant, obligation, condition or agreement set forth in Section 5.01(a),
Section 5.01(f), Section 5.01(g), Section 5.01(h), Section 5.01(i),
Section 5.01(k), Section 5.01(l), Section 5.01(m), Section 5.02 or Section 5.03;
or
(c) Other Defaults.

 

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(i) Any default shall occur under the Guaranty or any Security Document and such
default shall continue beyond any period of grace provided with respect thereto;
or
(ii) any Loan Party shall fail to observe or perform any other covenant,
obligation, condition or agreement contained in this Agreement or any other
Credit Document and such failure shall continue for thirty (30) days after the
date of such failure; provided that if such Loan Party shall have commenced and
is diligently pursuing efforts to cure such failure within thirty (30) days
after the date of such failure, such failure shall not constitute an Event of
Default until the earlier of (x) the date such Loan Party is no longer
diligently pursuing efforts to cure such failure and (y) the date sixty
(60) days after the date of such failure; or
(d) Representations and Warranties. Any representation, warranty, certificate,
information or other statement (financial or otherwise) made or furnished by or
on behalf of any Loan Party to the Administrative Agent, the Security Trustee or
any Lender in or in connection with this Agreement or any of the other Credit
Documents, or as an inducement to the Administrative Agent, the Security Trustee
or any Lender to enter into this Agreement, shall be false, incorrect,
incomplete or misleading in any material respect (or if such representation,
warranty, certificate, information or other statement (financial or otherwise)
is qualified by materiality, in any respect) when made or furnished; or
(e) Cross-Default. (i) Any Borrower Party shall fail to make any payment on
account of any Indebtedness or Contingent Obligation of such Person (other than
the Obligations) when due (whether at scheduled maturity, by required
prepayment, upon acceleration or otherwise) and such failure shall continue
beyond any period of grace provided with respect thereto, if the amount of such
Indebtedness or Contingent Obligation exceeds $750,000 or the effect of such
failure is to cause, or permit the holder or holders thereof to cause,
Indebtedness and/or Contingent Obligations of any Borrower Party (other than the
Obligations) in an aggregate amount exceeding $750,000 to become redeemable,
due, liquidated or otherwise payable (whether at scheduled maturity, by required
prepayment, upon acceleration or otherwise) and/or to be secured by cash
collateral or (ii) any Borrower Party shall otherwise fail to observe or perform
any agreement, term or condition contained in any agreement or instrument
relating to any Indebtedness or Contingent Obligation of such Person (other than
the Obligations), or any other event shall occur or condition shall exist, if
the effect of such failure, event or condition is to cause, or permit the holder
or holders thereof to cause, Indebtedness and/or Contingent Obligations of any
Borrower Party (other than the Obligations) in an aggregate amount exceeding
$750,000 to become redeemable, due, liquidated or otherwise payable (whether at
scheduled maturity, by required prepayment, upon acceleration or otherwise)
and/or to be secured by cash collateral; or
(f) Insolvency; Voluntary Proceedings. Any Borrower Party shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or custodian of
itself or of all or a substantial part of its property (other than the
appointment of a supervisor pursuant to Chapter 463B of the Nevada Revised
Statutes), (ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment for the benefit of its
or any of its creditors, (iv) be dissolved or liquidated in full or in part,
(v) become insolvent (as such term may be defined or interpreted under any
applicable statute), or (vi) commence a voluntary

 

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case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or, in each case, any
analogous procedure or step is taken in any jurisdiction; or
(g) Involuntary Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of any Borrower Party or of all or a
substantial part of the property thereof (other than the appointment of a
supervisor pursuant to Chapter 463B of the Nevada Revised Statutes), or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to any Borrower Party or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced and an order for relief entered or such proceeding shall not be
dismissed or discharged within sixty (60) days of commencement, or, in each
case, any analogous procedure or step is taken in any jurisdiction; or
(h) Judgments. (i) One or more judgments, orders, decrees or arbitration awards
requiring any Borrower Party to pay an aggregate amount of $1,000,000 or more
(exclusive of amounts covered by insurance issued by an insurer not an Affiliate
of the Borrower and otherwise satisfying the requirements set forth in
Section 5.01(d)) shall be rendered against any Borrower Party in connection with
any single or related series of transactions, incidents or circumstances and the
same shall not be satisfied, vacated or stayed for a period of twenty
(20) consecutive days; provided that if one or more judgments, orders, decrees
or arbitration awards requiring any Borrower Party to pay an aggregate amount of
$2,000,000 or more (exclusive of amounts covered by insurance issued by an
insurer not an Affiliate of the Borrower and otherwise satisfying the
requirements set forth in Section 5.01(d)) shall be rendered against any
Borrower Party in connection with any single or related series of transactions,
incidents or circumstances such circumstance shall be an Event of Default
whether or not the same has been satisfied, vacated or stayed; (ii) any
judgment, writ, assessment, warrant of attachment, Tax lien or execution or
similar process shall be issued or levied against a part of the property of any
Borrower Party with an aggregate value in excess of $1,000,000 and the same
shall not be released, stayed, vacated or otherwise dismissed within sixty
(60) days after issue or levy; or (iii) any other judgments, orders, decrees,
arbitration awards, writs, assessments, warrants of attachment, tax liens,
executions or similar processes which, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect are rendered, issued or
levied; or
(i) Credit Documents. Any of this Agreement, the Notes, the Guaranty, the Fee
Letter, the Security Documents or any other material Credit Document, or any
material term thereof shall cease to be, or be asserted by any Loan Party not to
be, a legal, valid and binding obligation of such Loan Party enforceable in
accordance with its terms or shall otherwise cease to be in full force and
effect; or
(j) Security Documents. Any Lien intended to be created by any Security Document
on any asset (other than immaterial assets) shall at any time be invalidated,
subordinated or otherwise cease to be in full force and effect, for whatever
reason, or any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by any Loan Party not to be, a
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provided in this Agreement or such Security Document) perfected Lien in the
Collateral covered thereby, or any Loan Party shall issue, create or permit to
be outstanding any Equity Securities which shall not be subject to a first
priority perfected Lien under the Security Documents (other than Equity
Securities not required to be pledged under the Credit Documents); or
(k) ERISA. Any Reportable Event which the Administrative Agent reasonably
believes in good faith constitutes grounds for the termination of any Pension
Plan by the PBGC or for the appointment of a trustee by the PBGC to administer
any Pension Plan shall occur and be continuing for a period of thirty (30) days
or more after notice thereof is provided to the Borrower by the Administrative
Agent, or any Pension Plan shall be terminated within the meaning of Title IV of
ERISA or a trustee shall be appointed by the PBGC to administer any Pension
Plan; or
(l) Change of Control. Any Change of Control shall occur; or
(m) Involuntary Dissolution or Split Up. Any order, judgment or decree shall be
entered against any Borrower Party decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of ninety (90) days; or
(n) Other Default. The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Credit Document) under any other
Credit Document; or
(o) Guarantors. Any Guarantor shall repudiate or purport to revoke the Guaranty;
or
(p) Designated Person. Any Borrower Party shall become a Designated Person; or
(q) Subordinated Obligations. Any trustee for, or any holder of, any of the
Subordinated Obligations asserts in writing that any such Subordinated
Obligations (or any portion thereof) is not subordinated to the Obligations in
accordance with its terms or the applicable subordination agreement (in the case
of such other Subordinated Obligations); or any event occurs which gives the
holder or holders of any such Subordinated Obligations (or an agent or trustee
on its or their behalf) the right to declare such Subordinated Obligations due
before the date on which it otherwise would become due, or the right to require
the issuer thereof, to redeem, purchase or otherwise defease, or offer to
redeem, purchase or otherwise defease, all or any portion of any Subordinated
Obligations, or a final judgment is entered by a court of competent jurisdiction
that any such Subordinated Obligations (or any portion thereof) is not
subordinated in accordance with its terms or the applicable subordination
agreement (in the case of such other Subordinated Obligations) to the
Obligations; or
(r) Uninsured Loss. The occurrence of any uninsured loss with respect to any
property of any Borrower Party in excess of $1,000,000; or
(s) Unfunded Pension Liabilities. The aggregate amount of Unfunded Pension
Liabilities of the Borrower Parties shall exceed $1,000,000; or

 

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(t) FireKeepers Indenture. The occurrence of any “Default” or “Event of Default”
under the FireKeepers Indenture (as such terms are defined therein); or
(u) Indian Lands. A court of competent jurisdiction shall hold that the real
property on which the FireKeepers Casino is situated is not “Indian lands” as
defined in the IGRA; or
(v) Gaming Operations. The loss of or failure to obtain any operating licenses
or other material licenses or permits or the occurrence of any event or
circumstance which in any such case results in the failure to have any material
portion of Stockman’s Casino, Grand Victoria Casino & Resort or FireKeeper’s
Casino open to conduct gaming activities for any reason for more than five
(5) consecutive days or which results in the prohibition of the conduct gaming
activities at any of Stockman’s Casino, Grand Victoria Casino & Resort or
FireKeeper’s Casino for a period in excess of five (5) consecutive days; or
(w) Material Contracts. The occurrence of any default under or material breach
(subject to applicable notice and cure provisions) of any Material Contract or
the termination of any Material Contract.
6.02. Remedies. At any time after the occurrence and during the continuance of
any Event of Default (other than an Event of Default referred to in
Section 6.01(f) or 6.01(g)), the Administrative Agent may or shall, upon
instructions from the Required Lenders, by written notice to the Borrower,
(a) terminate the Commitments, any obligation of the L/C Issuer to make L/C
Credit Extensions and the obligations of the Lenders to make Loans, (b) declare
all or a portion of the outstanding Obligations (other than in connection with
Lender Rate Contracts) payable by the Borrower to be immediately due and payable
and/or (c) require that the Borrower Cash Collateralize the Obligations in an
amount equal to 105% of the then Effective Amount of the L/C Obligations, in
each case, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the
Notes to the contrary notwithstanding. Upon the occurrence or existence of any
Event of Default described in Section 6.01(f) or 6.01(g), immediately and
without notice, (1) the Commitments, any obligation of the L/C Issuer to make
L/C Credit Extensions and the obligations of the Lenders to make Loans shall
automatically terminate, (2) the obligation of the Borrower to Cash
Collateralize the Obligations in an amount equal to 105% of the then Effective
Amount of the L/C Obligations shall automatically become effective, which
amounts shall be immediately pledged and delivered to the Administrative Agent
as security for the Obligations and (3) all outstanding Obligations payable by
the Borrower hereunder shall, to the extent permitted by applicable law,
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, to the extent permitted by applicable law, anything contained herein or
in the Notes to the contrary notwithstanding. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, the
Administrative Agent, the Security Trustee and the Collateral Agent may exercise
any other right, power or remedy available to it under any of the Credit
Documents or otherwise by law. Notwithstanding anything to the contrary in the
Credit Documents, all Cash Collateral pledged by the Borrower as contemplated by
the last sentence of Section 2.02(a)(ii)(H), shall first be applied to reimburse
the L/C Issuer in respect of any amounts that a Lender has failed to fund under
Section 2.02(c), then to the remaining L/C Obligations and then to the remaining
Obligations in the manner set forth below:

 

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The proceeds of any sale, disposition or other realization upon all or any part
of the Collateral shall be distributed by the Collateral Agent in the following
order of priorities:
First, to the Administrative Agent and the Collateral Agent, pari passu and
ratably, in an amount sufficient to pay in full the costs and expenses of the
Administrative Agent and the Collateral Agent in connection with such sale,
disposition or other realization, including all fees, costs, expenses,
liabilities and advances incurred or made by the Administrative Agent and the
Collateral Agent in connection therewith, including, without limitation,
attorneys’ fees and costs;
Second, to the Lenders in an amount equal to accrued interest then due and
payable under this Agreement and the other Credit Documents (except for Lender
Rate Contracts);
Third, pari passu and ratably, to (i) the Lenders in an amount equal to the
principal amount of the outstanding Loans and L/C Borrowings and to Cash
Collateralize the remaining L/C Obligations on a pro rata basis in accordance
with the then outstanding principal amount of the Loans and L/C Obligations
(with the portion allocated to the Revolving Loans, Swing Line Loans and L/C
Obligations to be applied first to repay the Swing Line Loans in full, second to
repay the Revolving Loans in full and then to Cash Collateralize the Obligations
in an amount equal to the then Effective Amount of all L/C Obligations) and
(ii) to the Lender(s) or their Affiliates to whom obligations are owed in
connection with any Lender Rate Contracts to the extent of the associated
Termination Values of such Lender Rate Contracts and any interest owing thereon;
Fourth, to the Lenders in an amount equal to any other Obligations (other than
the Obligations related to Lender Rate Contracts not paid under clause Third
above) which are then unpaid;
Fifth, to the Lender Parties in an amount equal to any other Obligations related
to Lender Rate Contracts the terms of which comply with the Credit Agreement,
which are then unpaid; and
Finally, upon payment in full of all of the Obligations, to the Person(s)
legally entitled thereto.
No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Credit
Documents, or prevent the exercise, or continued exercise, of rights or remedies
of the Administrative Agent, the Collateral Agent and the Lenders hereunder or
thereunder or at law or in equity.

 

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ARTICLE VII. ADMINISTRATIVE AGENT, COLLATERAL AGENT, SECURITY
TRUSTEE AND RELATIONS AMONG LENDERS.
7.01. Appointment, Powers and Immunities.
(a) Each Lender (on its own behalf or on behalf of any Affiliate of such Lender
that is party to a Lender Rate Contract) hereby appoints and authorizes Wells
Fargo Bank, National Association, as the Administrative Agent, the Collateral
Agent and the Security Trustee to act as its agent hereunder and under the other
Credit Documents and as security trustee under the Grand Victoria Vessel
Security Document with such powers as are expressly delegated to the
Administrative Agent, the Collateral Agent and the Security Trustee by the terms
of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto, and Wells Fargo Bank, National
Association hereby accepts such appointment as Administrative Agent, as
Collateral Agent and as Security Trustee. Each Lender (on its own behalf and on
behalf of any Affiliate of such Lender that is party to a Lender Rate Contract)
hereby authorizes the Administrative Agent, the Collateral Agent and the
Security Trustee to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are reasonably
incidental thereto. The Lead Arranger shall not have any duties or
responsibilities or any liabilities under this Agreement or any other Credit
Documents and any amendments, consents, waivers or any other actions taken in
connection with this Agreement or the other Credit Documents shall not require,
except to the extent expressly set forth in Section 8.04(f), the consent of the
Lead Arranger, in such capacity. Neither the Administrative Agent, the
Collateral Agent nor the Security Trustee shall have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender (or any Affiliate of such
Lender that is party to a Lender Rate Contract) or have any fiduciary duty to
any Lender (or any Affiliate of such Lender that is party to a Lender Rate
Contract). Notwithstanding anything to the contrary contained herein, neither
the Administrative Agent, the Collateral Agent nor the Security Trustee shall be
required to take any action which is contrary to this Agreement or any other
Credit Document or any applicable Governmental Rules. None of the Administrative
Agent, the Collateral Agent, the Security Trustee or any Lender shall be
responsible to any other Lender for any recitals, statements, representations or
warranties made by any Loan Party contained in this Agreement or in any other
Credit Document, for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Credit Document or
for any failure by any Loan Party to perform its obligations hereunder or
thereunder. The Administrative Agent, the Collateral Agent and the Security
Trustee may employ agents and attorneys-in-fact and shall not be responsible to
any Lender for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the
Administrative Agent, the Collateral Agent nor the Security Trustee nor any of
their respective directors, officers, employees, agents or advisors shall be
responsible to any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, except to the extent determined by a final, non-appealable judgment
of a court of competent jurisdiction to have arisen from its or their own gross
negligence or willful misconduct. Except as otherwise provided under this
Agreement, the Administrative Agent, the Collateral Agent and the Security
Trustee shall take such action with respect to the Credit Documents as shall be
directed by the Required Lenders or in the absence of such direction, such
action as the Administrative Agent, the Collateral Agent or the Security Trustee
in good faith deems advisable under the circumstances.

 

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(b) The Collateral Agent, the Security Trustee and any co-agents, co-trustees,
sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant
to Section 7.01(a) for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Security Documents, or for
exercising any rights and remedies thereunder and hereunder at the direction of
the Collateral Agent or the Security Trustee, shall be entitled to the benefits
of all provisions of this Article VII, Section 8.02 and Section 8.03 as if set
forth in full herein with respect thereto.
(c) The L/C Issuer shall act on behalf of the Revolving Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the L/C Issuer with respect thereto;
provided, however, that the L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article VII with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Administrative Agent” as used in this
Article VII included the L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the L/C Issuer.
(d) The Security Trustee shall act on behalf of the Lenders with respect to the
Grand Victoria Vessel and Grand Victoria Vessel Security Document; provided,
however, that the Security Trustee shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Article VII with respect to any
acts taken or omissions suffered by the Security Trustee as fully as if the term
“Administrative Agent” as used in this Article VII included the Security Trustee
with respect to such acts or omissions, and (ii) as additionally provided herein
with respect to the Security Trustee.
7.02. Reliance by the Administrative Agent, Collateral Agent, L/C Issuer and
Swing Line Lender. The Administrative Agent, the Collateral Agent, the Security
Trustee, the L/C Issuer and the Swing Line Lender shall be entitled to rely upon
any certificate, notice or other document (including any cable, telegram,
facsimile, e-mail or telex) believed by it in good faith to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons (including any certificate, notice or other document from a Loan Party
that a sale, transfer, or other disposition of Collateral is permitted by
Section 5.02(c)), and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent, the
Collateral Agent and the Security Trustee with reasonable care. As to any other
matters not expressly provided for by this Agreement, the Administrative Agent,
the Collateral Agent and the Security Trustee shall not be required to take any
action or exercise any discretion, but shall be required to act or to refrain
from acting upon instructions of the Required Lenders and shall in all cases be
fully protected by the Lenders in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders (or all Lenders if required by Section 8.04), and such
instructions of the Required Lenders (or all the Lenders as the case may be) and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders.

 

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7.03. Defaults. Neither the Administrative Agent, the Collateral Agent nor the
Security Trustee shall be deemed to have knowledge or notice of the occurrence
of any Default unless the Administrative Agent, the Collateral Agent or the
Security Trustee has received a written notice from a Lender or the Borrower,
referring to this Agreement, describing such Default and stating that such
notice is a “Notice of Default”. If the Administrative Agent, the Collateral
Agent or the Security Trustee receives such a notice of the occurrence of a
Default, the Administrative Agent, the Collateral Agent or the Security Trustee,
as the case may be, shall give prompt notice thereof to the Lenders. The
Administrative Agent, the Collateral Agent and the Security Trustee shall take
such action with respect to such Default as shall be reasonably directed by the
Required Lenders; provided, however, that until the Administrative Agent, the
Collateral Agent or the Security Trustee shall have received such directions,
the Administrative Agent, the Collateral Agent and the Security Trustee may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interest of
the Lenders. Notwithstanding anything in the contrary contained herein, the
order and manner in which the Lenders’ rights and remedies are to be exercised
(including, without limitation, the enforcement by any Lender of its Note) shall
be determined by the Required Lenders in their sole discretion.
7.04. Indemnification. Without limiting the Obligations of the Borrower
hereunder, each Lender agrees to indemnify the Administrative Agent, the
Collateral Agent and the Security Trustee, ratably in accordance with its
Proportionate Share of all Obligations and Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against the Administrative
Agent, the Collateral Agent or the Security Trustee in any way relating to or
arising out of this Agreement or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or the
enforcement of any of the terms hereof or thereof; provided, however, that no
Lender shall be liable for any of the foregoing to the extent determined by a
final, non-appealable judgment of a court of competent jurisdiction to have
arisen from the Administrative Agent’s, the Collateral Agent’s or the Security
Trustee’s gross negligence or willful misconduct. The Administrative Agent, the
Collateral Agent and the Security Trustee shall be fully justified in refusing
to take or in continuing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The obligations of each Lender under this Section 7.04 shall
survive the payment and performance of the Obligations, the termination of this
Agreement and any Lender ceasing to be a party to this Agreement (with respect
to events which occurred prior to the time such Lender ceased to be a Lender
hereunder).
7.05. Non-Reliance. Each Lender represents that it has, independently and
without reliance on the Administrative Agent, the Collateral Agent, the Security
Trustee or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of the business, prospects,
management, financial condition and affairs of the Borrower Parties and its own
decision to enter into this Agreement and agrees that it will, independently and
without reliance upon the Administrative Agent, the Collateral Agent, the
Security Trustee or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement.
Neither the Administrative Agent, the Collateral Agent nor

 

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the Security Trustee, nor any of their respective Affiliates, directors,
officers, employees, agents or advisors shall (a) be required to keep any Lender
informed as to the performance or observance by any Loan Party of the
obligations under this Agreement or any other document referred to or provided
for herein or to make inquiry of, or to inspect the properties or books of any
Loan Party; (b) have any duty or responsibility to disclose to or otherwise
provide any Lender, and shall not be liable for the failure to disclose or
otherwise provide any Lender, with any credit or other information concerning
any Loan Party which may come into the possession of the Administrative Agent,
the Collateral Agent or the Security Trustee or that is communicated to or
obtained by the bank serving as Administrative Agent, Collateral Agent or
Security Trustee or any of their respective Affiliates in any capacity, except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by the Administrative Agent, the Collateral Agent or
the Security Trustee hereunder or the other Credit Documents; or (c) be
responsible to any Lender for (i) any recital, statement, representation or
warranty made by any Loan Party or any officer, employee or agent of any Loan
Party in this Agreement or in any of the other Credit Documents, (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any Credit Document, (iii) the value or sufficiency of the
Collateral or the validity or perfection of any of the liens or security
interests intended to be created by the Credit Documents, or (iv) any failure by
any Loan Party to perform its obligations under this Agreement or any other
Credit Document.
7.06. Resignation of the Administrative Agent or Collateral Agent. Each of the
Administrative Agent, the Collateral Agent and the Security Trustee may resign
at any time by giving thirty (30) days prior written notice thereof to the
Borrower and the Lenders. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent, Collateral Agent or
Security Trustee, as applicable, which successor Administrative Agent or
Collateral Agent, if not a Lender, shall be reasonably acceptable to the
Borrower; provided, however, that the Borrower shall have no right to approve a
successor Administrative Agent, Collateral Agent or Security Trustee if an Event
of Default has occurred and is continuing. Upon the acceptance of any
appointment as the Administrative Agent, the Collateral Agent or the Security
Trustee hereunder by a successor Administrative Agent, Collateral Agent or
Security Trustee, as applicable, such successor Administrative Agent, Collateral
Agent or Security Trustee shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Administrative Agent,
Collateral Agent or Security Trustee, as applicable, and the retiring
Administrative Agent, Collateral Agent or Security Trustee shall be discharged
from the duties and obligations thereafter arising hereunder; provided that the
retiring Administrative Agent, Collateral Agent or Security Trustee shall be
discharged from the duties and obligations arising hereunder from and after the
end of such thirty (30) day period even if no successor has been appointed. If
no such successor has been appointed, the Required Lenders shall act as the
Administrative Agent, Collateral Agent or Security Trustee, as applicable,
hereunder and under the other Credit Documents. After any retiring
Administrative Agent’s, Collateral Agent’s or Security Trustee’s resignation
hereunder as the Administrative Agent, the Collateral Agent or the Security
Trustee, as applicable, the provisions of this Article VII shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent, the Collateral Agent or the
Security Trustee, as applicable. In the case of the replacement of the
Administrative Agent, the successor Administrative Agent (or if there is no
successor, one of the Lenders appointed by the Required Lenders that accepts
such appointment) shall also simultaneously replace the then existing
Administrative Agent and the then existing Administrative Agent shall be fully
released as “L/C Issuer” and “Swing Line Lender” hereunder pursuant to
documentation in form and substance reasonably satisfactory to the then existing
Administrative Agent.

 

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7.07. Collateral Matters.
(a) The Collateral Agent and the Security Trustee are hereby authorized by each
Lender, without the necessity of any notice to or further consent from any
Lender, and without the obligation to take any such action, to take any action
with respect to any Collateral or any Security Document which may from time to
time be necessary to perfect and maintain perfected the Liens of the Security
Documents.
(b) The Lenders irrevocably authorize each of the Collateral Agent and the
Security Trustee, at its option and in its discretion, to release (and to
execute and deliver such documents, instruments and agreements as the Collateral
Agent may deem necessary to release) any Lien granted to or held by the
Collateral Agent or the Security Trustee upon any Collateral (i) upon
termination of the Commitments and the full Cash Collateralization of the then
outstanding L/C Obligations and the payment in full of all Loans and all other
Obligations payable under this Agreement and under the other Credit Documents
(other than contingent indemnification obligations and Obligations in respect of
Lender Rate Contracts); (ii) constituting property of the Loan Parties which is
sold, transferred or otherwise disposed of in connection with any transaction
not prohibited by this Agreement or the Credit Documents; (iii) constituting
property leased to the Loan Parties under an operating lease which has expired
or been terminated in a transaction not prohibited by this Agreement or the
Credit Documents or which will concurrently expire and which has not been and is
not intended by the Loan Parties to be, renewed or extended; (iv) consisting of
an instrument, if the Indebtedness evidenced thereby has been paid in full; or
(v) if approved or consented to by those of the Lenders required by
Section 8.04. Upon request by the Collateral Agent or the Security Trustee, the
Lenders will confirm in writing the Collateral Agent’s or the Security Trustee’s
authority to release particular types or items of Collateral pursuant to this
Section 7.07.
(c) Unless all the Lenders otherwise consent in writing, any and all cash
collateral for the Obligations shall be released to the Borrower, to the extent
not applied to the Obligations, only if (i) the Commitments have been terminated
(ii) all Obligations (other than contingent indemnification obligations and
Obligations in respect of Lender Rate Contracts) have been paid in full and are
no longer outstanding, including, without limitation, any L/C Obligations or any
other contingent obligations.
7.08. Performance of Conditions. For the purpose of determining fulfillment by
the Borrower and the other Loan Parties of conditions precedent specified in
Sections 3.01 and 3.02 only, each Lender shall be deemed to have consented to,
and approved or accepted, or to be satisfied with each document or other matter
sent by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required under Article III to be consented to, or
approved by or acceptable or satisfactory to, that Lender, unless an officer of
the Administrative Agent who is responsible for the transactions contemplated by
the Credit Documents shall have received written notice from that Lender prior
to the making of the requested Loan or the issuance of the requested Letter of
Credit specifying its objection thereto and either (i) such objection shall not
have been withdrawn by written notice to the Administrative Agent or (ii) in the
case of any condition to the making of a Loan, that Lender shall not have made
available to the Administrative Agent that Lender’s Proportionate Share of such
Loan or Letter of Credit.

 

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7.09. The Administrative Agent, the Collateral Agent and the Security Trustee in
their Individual Capacities. Each of the Administrative Agent, the Collateral
Agent and the Security Trustee and their respective Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from and
generally engage in any kind of banking or other business with any Loan Party
and its Affiliates as though the Administrative Agent were not the
Administrative Agent, L/C Issuer or Swing Line Lender hereunder and as though
the Collateral Agent were not the Collateral Agent hereunder and as though the
Security Trustee were not the Security Trustee hereunder. With respect to Loans,
if any, made by the Administrative Agent, the Collateral Agent or the Security
Trustee in its capacity as a Lender, the Administrative Agent, the Collateral
Agent or the Security Trustee, as applicable, in its capacity as a Lender shall
have the same rights and powers under this Agreement and the other Credit
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent, L/C Issuer or Swing Line Lender or the Collateral
Agent, as applicable, and the terms “Lender” or “Lenders” shall include the
Administrative Agent, the Collateral Agent or the Security Trustee, as
applicable, in its capacity as a Lender. Neither the Administrative Agent, the
Collateral Agent nor the Security Trustee shall be deemed to hold a fiduciary,
trust or other special relationship with any Lender and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Administrative Agent, the
Collateral Agent or the Security Trustee.
7.10. Collateral Matters/Lender Rate Contracts. Each Lender on its own behalf on
behalf of its Affiliates understands and agrees that (a) counterparties to
Lender Rate Contracts will have the benefits of the Collateral as set forth in
the Credit Documents and (b) if the Obligations are repaid as described in
Section 7.07, the Collateral will be released as described in Section 7.07 and
such Lender and its Affiliates will no longer have the benefits of the
Collateral.
7.11. Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to the Borrower, the Administrative Agent (irrespective of whether the
principal of any Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders,
the L/C Issuer and the Administrative Agent under Sections 2.02(i), 2.02(j),
2.05, 8.02 and 8.03) allowed in such judicial proceeding; and

 

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(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.05, 8.02 and 8.03.
7.12. Application of Gaming Laws.
(a) This Agreement, the Security Agreement and the other Credit Documents are
subject to Gaming Laws and approval, if so required, of the applicable Gaming
Board. Without limiting the foregoing, each of the Collateral Agent, the
Administrative Agent and the Lender Parties acknowledges that (i) it is subject
to being called forward by the Gaming Board in their discretion, for licensing
or a finding of suitability or to file or provide other information, and
(ii) all rights, remedies and powers in or under this Agreement and the other
Credit Documents, including with respect to the Collateral (including Equity
Securities), may be exercised only to the extent that the exercise thereof does
not violate any applicable provisions of the Gaming Laws and only to the extent
that required approvals are obtained from the requisite Gaming Boards.
(b) Each of the Administrative Agent, the Collateral Agent and the Lender
Parties agrees to cooperate with all Gaming Boards in connection with the
provision of such documents or other information as may be requested by such
Gaming Boards relating to the Borrower Parties or to the Credit Documents. The
Borrower hereby consents to any such disclosure by the Collateral Agent, the
Administrative Agent and the Lender Parties to any Gaming Board and releases
such parties from any liability for any such disclosure.
(c) If during the existence of an Event of Default hereunder or under any of the
other Credit Documents it shall become necessary, or in the opinion of the
Required Lenders advisable, for an agent, supervisor, receiver or other
representative of the Administrative Agent, the Collateral Agent and the Lender
Parties to become licensed under any Governmental Rule as a condition to
receiving the benefit of any Collateral encumbered by the Security Documents or
other Credit Documents or to otherwise enforce the rights of the Administrative
Agent and the Lenders under the Credit Documents, the Borrower hereby agrees to
assist the Collateral Agent and the Lender Parties and any such agent,
supervisor, receiver or other representative obtain licenses and to execute such
further documents as may be required in connection therewith.

 

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ARTICLE VIII. MISCELLANEOUS.
8.01. Notices.
(a) Except as otherwise provided herein, all notices, requests, demands,
consents, instructions or other communications to or upon the Borrower, any
Lender or the Administrative Agent or the Collateral Agent under this Agreement
or the other Credit Documents shall be in writing and faxed, mailed, e-mailed or
delivered, if to the Borrower or to the Administrative Agent, the Collateral
Agent, the L/C Issuer or the Swing Line Lender, at its respective facsimile
number or address set forth below or, if to any Lender, at the address or
facsimile number specified for such Lender in Part B of Schedule I (or to such
other facsimile number or address for any party as indicated in any notice given
by that party to the other parties). All such notices and communications shall
be effective (i) when sent by an overnight courier service of recognized
standing, on the second Business Day following the deposit with such service;
(ii) when mailed, first-class postage prepaid and addressed as aforesaid through
the United States Postal Service, upon receipt; (iii) when delivered by hand,
upon delivery; and (iv) when sent by facsimile transmission or e-mail, upon
confirmation of receipt; provided, however, that any notice delivered to the
Administrative Agent, the L/C Issuer or the Swing Line Lender under Article II
shall not be effective until actually received by such Person.

     
The Administrative Agent, the Collateral Agent, the Security Trustee, the L/C
Issuer and the Swing Line Lender
  For Notices of Borrowing, Notices of Conversion and Notices of Interest Period
Selection:
 
   
 
  Wells Fargo Bank, National Association
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, California 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com

 
   
 
  For all other notices:
 
   
 
  Wells Fargo Bank, National Association
5340 Kietzke Lane
Reno, Nevada 89511
Attention: Erna Stuckey
Tel. No. 775-689-6018
Fax No. 775-689-6026
E-mail: Erna.F.Stuckey@wellsfargo.com

 

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The Borrower:
  Full House Resorts, Inc.
4670 S. Fort Apache Road
Suite 190
Las Vegas, NV 89147
Attention: Mark Miller

Chief Financial Officer/Chief Operating Officer

Tel. No. (702) 221-7800
Fax No. (702) 221-8101
E-mail: mmiller@fullhouseresorts.com
 
   
With a Copy to:
  Greenberg Traurig, LLP
2375 East Camelback Road, Suite 700
Phoenix, AZ 85016
Attention: Jeffrey H. Verbin
Tel. No. (602) 445-8202
Fax No. (602) 445-8630
E-mail: VerbinJ@GTLaw.com

Each Notice of Borrowing, Notice of Conversion and Notice of Interest Period
Selection shall be given by the Borrower to the Administrative Agent’s office
located at the address referred to above during the Administrative Agent’s
normal business hours; provided, however, that any such notice received by the
Administrative Agent after 11:00 a.m. on any Business Day shall be deemed
received by the Administrative Agent on the next Business Day. In any case where
this Agreement authorizes notices, requests, demands or other communications by
the Borrower to the Administrative Agent, the Collateral Agent, the Security
Trustee or any Lender to be made by telephone or facsimile, the Administrative
Agent, the Collateral Agent, the Security Trustee or any Lender may conclusively
presume that anyone purporting to be a person designated in any incumbency
certificate or other similar document received by the Administrative Agent, the
Collateral Agent, the Security Trustee or a Lender is such a person.
(b) The Borrower agrees that the Administrative Agent, the Security Trustee and
the Collateral Agent may make any material delivered by the Borrower to the
Administrative Agent, the Security Trustee or the Collateral Agent, as well as
any amendments, waivers, consents, and other written information, documents,
instruments and other materials relating to the Borrower or any of its
Subsidiaries, or any other materials or matters relating to this Agreement, the
other Credit Documents or any of the transactions contemplated hereby
(collectively, the “Communications”) available to the Lenders by posting such
notices on an electronic delivery system (which may be provided by the
Administrative Agent, the Security Trustee, the Collateral Agent, an Affiliate
of the Administrative Agent, the Security Trustee or the Collateral Agent, or
any Person that is not an Affiliate of the Administrative Agent, the Security
Trustee or the Collateral Agent), such as IntraLinks, The Debt Exchange, Inc,
DXSyndicate. or a substantially similar electronic system (the “Platform”). The
Borrower acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution, (ii) the Platform is provided
“as is” and “as available” and (iii) none of the Administrative Agent, the
Security Trustee or the Collateral Agent nor any of their respective Affiliates
warrants the

 

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accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. The Administrative Agent, the Security
Trustee and the Collateral Agent and their respective Affiliates expressly
disclaim with respect to the Platform any liability for errors in transmission,
incorrect or incomplete downloading, delays in posting or delivery, or problems
accessing the Communications posted on the Platform and any liability for any
losses, costs, expenses or liabilities that may be suffered or incurred in
connection with the Platform except for liability determined by a final,
non-appealable judgment of a court of competent jurisdiction to be due to the
Administrative Agent’s, the Security Trustee’s or the Collateral Agent’s gross
negligence or willful misconduct. 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 the Administrative Agent,
the Security Trustee, the Collateral Agent or any of their respective Affiliates
in connection with the Platform. Each Lender agrees that notice to it (as
provided in the next sentence) (a “Notice”) specifying that any Communication
has been posted to the Platform shall for purposes of this Agreement constitute
effective delivery to such Lender of such information, documents or other
materials comprising such Communication. Each Lender agrees (i) to notify, on or
before the date such Lender becomes a party to this Agreement, the
Administrative Agent, the Security Trustee and the Collateral Agent in writing
of such Lender’s e-mail address to which a Notice may be sent (and from time to
time thereafter to ensure that the Administrative Agent, the Security Trustee
and the Collateral Agent has on record an effective e-mail address for such
Lender) and (ii) that any Notice may be sent to such e-mail address.
8.02. Expenses. The Borrower shall pay on demand, whether or not any Credit
Event occurs hereunder, (a) all reasonable fees and expenses, including
syndication expenses, travel expenses, attorneys’, consultants’ and experts’
fees and expenses incurred by the Administrative Agent, the Collateral Agent,
the Security Trustee and the Lead Arranger in connection with the syndication of
the facilities provided hereunder, due diligence, the preparation, negotiation,
execution and delivery of, and the exercise of its duties under, this Agreement
and the other Credit Documents, and the preparation, negotiation, execution and
delivery of amendments, waivers, consents, modifications and supplements related
to the Credit Documents, (b) all reasonable fees and expenses of the
Administrative Agent, the Collateral Agent, the Security Trustee and the Lead
Arranger in connection with the use of any Platform and (c) all fees and
expenses, including attorneys’ fees and expenses, incurred by the Administrative
Agent, the Collateral Agent, the Security Trustee and the Lenders in the
enforcement or attempted enforcement of any of the Obligations or in preserving
any of the Administrative Agent’s, the Collateral Agent’s, the Security
Trustee’s or the Lenders’ rights and remedies (including, without limitation,
all such fees and expenses incurred in connection with any “workout” or
restructuring affecting the Credit Documents or the Obligations or any
bankruptcy or similar proceeding involving any Borrower Party). The obligations
of the Borrower under this Section 8.02 shall survive the payment of the
Obligations and the termination of this Agreement.
8.03. Indemnification. To the fullest extent permitted by law, and in addition
to any other indemnity set forth in the Credit Documents, the Borrower agrees to
(a) protect, indemnify, defend and hold harmless the Administrative Agent, the
Collateral Agent, the Security Trustee, the L/C Issuer, the Lead Arranger, the
Swing Line Lender, the Lenders and their Affiliates and their respective
directors, officers, employees, attorneys, agents, trustees and advisors
(collectively, “Indemnitees”) from and against any and all liabilities,
obligations, losses,

 

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damages, penalties, judgments, costs, disbursements, or expenses of any kind or
nature and from any suits, claims or demands (including in respect of or for
reasonable attorneys’ fees and other expenses) arising on account of or in
connection with any matter or thing or action or failure to act by Indemnitees,
or any of them, arising out of or relating to (i) the Credit Documents or any
transaction contemplated thereby or related thereto, including the making of any
Loans, the funding of any Unreimbursed Amounts and any use by the Borrower of
any proceeds of the Loans or the Letters of Credit, (ii) any Environmental
Damages, (iii) the Acquisition Documents or any transaction contemplated thereby
or related thereto, including the Acquisition, (iv) any claims for brokerage
fees or commissions in connection with the Credit Documents or the Acquisition
Documents or any transaction contemplated thereby or in connection with the
Borrower’s failure to conclude any other financing, and to reimburse each
Indemnitee on demand for all legal and other expenses incurred in connection
with investigating or defending any of the foregoing, (v) the use of any
Platform or (vi) any and all excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Security Documents,
including any penalties, claims or other losses resulting from any delay in
paying such excise, sales or other similar taxes and (b) reimburse each
Indemnitee for all reasonable legal fees and other expenses in connection with
such Indemnitee’s investigation or defense of any of the foregoing; provided,
however, that nothing contained in this Section 8.03 shall obligate the Borrower
to protect, indemnify, defend or hold harmless any Indemnitee against any
liabilities, obligations, losses, damages, penalties, judgments, costs,
disbursements, or expenses to the extent arising out of the gross negligence or
willful or reckless misconduct of such Indemnitee as determined by a final,
non-appealable judgment of a court of competent jurisdiction. In the case of any
investigation, litigation or proceeding to which the indemnity set forth in this
Section 8.03 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, the holders
of the Borrower’s Equity Securities, any creditor of the Borrower or an
Indemnitee and whether not an Indemnitee is otherwise a party thereto. Upon
receiving knowledge of any suit, claim or demand asserted by a third party that
the Administrative Agent, the Collateral Agent, the Security Trustee, the Lead
Arranger or any Lender believes is covered by this indemnity, the Administrative
Agent, the Collateral Agent, the Security Trustee, the Lead Arranger or such
Lender, as applicable, shall give the Borrower notice of the matter with
reasonable promptness; provided, however, that the failure of the Administrative
Agent, the Collateral Agent, the Security Trustee, the Lead Arranger or such
Lender to so notify the Borrower shall not relieve the Borrower from its
obligations under this Section 8.03 or result in any liability of the
Administrative Agent, Collateral Agent, the Security Trustee, the Lead Arranger
or the Lenders. In connection with any such suit, claim or demand, the
Administrative Agent, the Collateral Agent, the Security Trustee, the Lead
Arranger or such Lender may select its own counsel or request that the Borrower
defend such suit, claim or demand, with legal counsel reasonably satisfactory to
the Administrative Agent, the Collateral Agent, the Security Trustee, the Lead
Arranger or such Lender as the case may be, at the Borrower’s sole cost and
expense; provided, however, that the Administrative Agent, the Collateral Agent,
the Security Trustee, the Lead Arranger or such Lender shall have the right to
defend, at the Borrower’s sole cost and expense, any such matter that is in
connection with a formal proceeding instituted by any Governmental Authority
having authority to regulate or oversee any aspect of the Administrative
Agent’s, the Collateral Agent’s, the Security Trustee’s, the Lead Arranger’s or
such Lender’s business or that of its Affiliates. The Administrative

 

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Agent, the Collateral Agent, the Security Trustee, the Lead Arranger or such
Lender may also require the Borrower to defend the matter. In the event an
Indemnitee (or any of its officers, directors or employees) appears as a witness
in any action or proceeding brought against the Borrower in which an Indemnitee
is not named as a defendant, the Borrower agrees to reimburse such Indemnitee
for all out-of-pocket expenses incurred by it (including reasonable fees and
expenses of counsel) in connection with its appearing as a witness. Any failure
or delay of the Administrative Agent, the Collateral Agent, the Security
Trustee, the Lead Arranger or any Lender to notify the Borrower of any such
suit, claim or demand shall not relieve the Borrower of its obligations under
this Section 8.03. No Indemnitee referred to above shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful or reckless misconduct of
such Indemnitee. The Borrower shall not, without the prior written consent of
each Indemnitee affected thereby (which consent will not be unreasonably
withheld), settle any threatened or pending claim or action that would give rise
to the right of any Indemnitee to claim indemnification hereunder unless such
settlement (x) includes a full and unconditional release of all liabilities
arising out of such claim or action against such Indemnitee and (y) does not
include any statement as to or an admission of fault, culpability or failure to
act by or on behalf of any Indemnitee. The Borrower shall not be liable for any
settlement of any claim against any of the Indemnitees made without the
Borrower’s prior written consent, which consent shall not be unreasonably
withheld or delayed. The obligations of the Borrower under this Section 8.03
shall survive the payment of the Obligations and the termination of this
Agreement. The obligations of the Loan Parties with respect to Environmental
Damages are (1) separate and distinct from the Obligations described within the
Real Property Security Documents and the Liens and security interests created in
the Real Property Security Documents, and (2) may be enforced against the Loan
Parties without regard to the existence of the Real Property Security Documents
and independently of any action with respect to the Real Property Security
Documents.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition of this
Agreement or any other Credit Document may be amended or waived, and any consent
under this Agreement or any other Credit Document may be given, if such
amendment, waiver or consent is in writing and is signed by the Borrower and the
Required Lenders (or the Administrative Agent or the Collateral Agent, in each
case on behalf of the Required Lenders with the written approval of the Required
Lenders); provided, however, that:
(a) Any amendment, waiver or consent which would (i) amend the definition of
“Required Lenders”, or modify in any other manner the number or percentage of
the Lenders required to make any determinations or to waive any rights under, or
to modify any provision of, this Agreement, (ii) amend this Section 8.04,
(iii) release all or substantially all of the Collateral, (iv) increase the
dollar amounts in Section 2.01(h) or (v) release any Guarantor must be in
writing and signed or approved in writing by all of the Lenders (provided that
any Guarantor may be released without any Lender approval in connection with a
sale or other disposition of the Equity Securities of such Guarantor that is
permitted under Section 5.02(c) or (d) or is consented to by the Required
Lenders in writing);

 

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(b) Any amendment, waiver or consent which would (i) reduce the principal of or
interest on any Loans or L/C Borrowings or any fees or other amounts payable for
the account of the Lenders hereunder, (ii) extend any date (including the
Maturity Date) fixed for any payment of the principal of or interest on any
Loans or any fees or other amounts payable for the account of a Lender
(excluding mandatory prepayments required by Sections 2.06(c)(iii) — (vii)),
(iii) increase the Total Revolving Loan Commitment or the Total Term Loan
Commitment (except in each case as contemplated by Section 2.01(h)) or
(iv) amend Section 2.10, must be in writing and signed or approved in writing by
each Lender directly adversely affected thereby;
(c) Any amendment, waiver or consent which increases the Proportionate Share of
any Lender must be in writing and signed by such Lender;
(d) Any amendment, waiver or consent which affects the rights or duties of the
Swing Line Lender under this Agreement must be in writing and signed by the
Swing Line Lender;
(e) Any amendment, waiver or consent which affects the rights of any Lead
Arranger under Section 8.02 or Section 8.03 must be in writing and signed by
such Lead Arranger;
(f) Any amendment, waiver or consent which affects the rights or duties of the
L/C Issuer under this Agreement or any Letter of Credit Application relating to
any Letter of Credit issued or to be issued by it must be in writing and signed
by the L/C Issuer;
(g) Any amendment, waiver or consent which affects the rights or obligations of
the Security Trustee must be in writing and signed by the Security Trustee;
(h) Any amendment, waiver or consent which affects the rights or obligations of
the Administrative Agent must be in writing and signed by the Administrative
Agent; and
(i) Any amendment, waiver or consent which affects the rights or obligations of
the Collateral Agent must be in writing and signed by the Collateral Agent.
For the avoidance of doubt, the application of the provisions of Section 2.01(b)
of the Guaranty or any similar provisions in any other Credit Document: (1) is
automatic to the extent applicable, (2) is not an amendment or modification of
the Guaranty or any other Credit Document and (3) does not require the consent
or approval of any Person.
No failure or delay by the Administrative Agent, the Collateral Agent, the
Security Trustee or any Lender in exercising any right under this Agreement or
any other Credit Document shall operate as a waiver thereof or of any other
right hereunder or thereunder nor shall any single or partial exercise of any
such right preclude any other further exercise thereof or of any other right
hereunder or thereunder. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given. The Lenders may condition
the giving or making of any amendment, waiver or consent of any term, covenant,
agreement or condition of this Agreement or any other Credit Document on payment
of a fee by the Borrower (which may be payable only to the Lenders that consent
to such matters within specified periods).

 

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In connection with any such proposed amendment, modification, waiver or
termination requiring the consent of all Lenders (such proposed amendment,
modification, waiver or termination, a “Proposed Change”), if the consent of the
Required Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described in this Section 8.04 being referred to as a “Non-Consenting Lender”),
then, so long as the Lender that is acting as the Administrative Agent is not a
Non-Consenting Lender, at the Borrower’s request, the Lender that is acting as
the Administrative Agent or an Eligible Assignee that is acceptable to the
Administrative Agent shall have the right with the Administrative Agent’s
consent and in the Administrative Agent’s sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting
Lender agrees that it shall, upon the Administrative Agent’s request, sell and
assign to the Lender that is acting as the Administrative Agent or such Eligible
Assignee, all of its rights and obligations under this Agreement and the other
Credit Documents (including for purposes of this paragraph, the Revolving Loan
Commitments, the Revolving Loans, the Term Loan Commitments, the Term Loans, L/C
Advances and participations in Swing Line Loans) for an amount equal to the
principal balance of all Revolving Loans, Term Loans and L/C Advances, and
aggregate amounts funded under Section 2.03(c)(ii) in respect of Swing Line
Loans, by the Non-Consenting Lender and all accrued interest and fees with
respect thereto through the date of sale (or such other amounts as may be agreed
upon by the Non-Consenting Lender and the assignee). In such event, such
Non-Consenting Lender agrees to execute an Assignment Agreement to reflect such
purchase and sale, but regardless of whether such Assignment Agreement is
executed, such Non-Consenting Lender’s rights hereunder, except rights under
Section 8.03 with respect to actions prior to such date, shall cease from and
after the date of tender by the purchaser of the amount of the purchase price.
In addition, notwithstanding the foregoing, (x) the Fee Letter may only be
amended, modified or changed, or rights or privileges thereunder waived, only by
the parties thereto in accordance with the respective provisions thereof and
(y) each Lender Rate Contract may only be amended, modified or changed, or
rights or privileges thereunder waived, only by the parties thereto in
accordance with the respective provisions thereof.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 8.04 shall apply equally to, and shall be binding upon, each of
the Administrative Agent, the Collateral Agent, the Security Trustee and the
Lenders. Notwithstanding anything to the contrary herein, any Defaulting Lender
shall not have any right to approve or disapprove any amendment, waiver or
consent hereunder, except that the Proportionate Share of such Defaulting Lender
may not be increased without the consent of such Defaulting Lender.
Notwithstanding anything to the contrary contained herein or in any other Credit
Document, the authority to enforce rights and remedies hereunder and under the
other Credit Documents against the Borrower or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent, the Security Trustee and the Collateral Agent in
accordance with Section 6.02 for the benefit of all the Lenders; provided,
however, that the foregoing shall not prohibit (a) the Administrative Agent, the
Security Trustee or the Collateral Agent from exercising on its own behalf the
rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent, the Security Trustee or the Collateral Agent, as
applicable) hereunder and

 

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under the other Credit Documents, (b) the L/C Issuer from exercising the rights
and remedies that inure to its benefit (solely in its capacity as L/C Issuer)
hereunder and under the other Credit Documents or (c) any Lender from exercising
setoff rights in accordance with Section 8.06 (subject to the terms of
Section 2.10); and provided, further, that if at any time there is no Person
acting as Administrative Agent, the Security Trustee or the Collateral Agent
hereunder and under the other Credit Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent, the
Security Trustee or the Collateral Agent pursuant to Section 6.02 and (ii) in
addition to the matters set forth in clauses (b) and (c) of the preceding
proviso and subject to Section 2.10, any Lender may, with the consent of the
Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.
8.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Credit Documents shall be
binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent, the Collateral Agent, the Security Trustee, all future
holders of the Notes and their respective successors and permitted assigns,
except that no Loan Party may assign or transfer any of its rights or
obligations under any Credit Document (except in connection with a merger or
consolidation permitted by Section 5.02(d)) without the prior written consent of
the Administrative Agent, the Collateral Agent, the Security Trustee and each
Lender. Any purported assignment or transfer by a Loan Party in violation of the
foregoing shall be null and void.
(b) Participations. Any Lender may, without notice to or consent of the
Borrower, at any time sell to one or more banks or other financial institutions
(“Participants”) participating interests in all or a portion of any Loan owing
to such Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under this Agreement and the other Credit
Documents (including for purposes of this Section 8.05(b), participations in L/C
Obligations and in Swing Line Loans). In the event of any such sale by a Lender
of participating interests, such Lender’s obligations under this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of its Notes for all
purposes under this Agreement and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any agreement
pursuant to which any such sale is effected may require the selling Lender to
obtain the consent of the Participant in order for such Lender to agree in
writing to any amendment, waiver or consent of a type specified in
Section 8.04(a)(i), (iv) or (v) or Section 8.04(b)(i) or (ii) but may not
otherwise require the selling Lender to obtain the consent of such Participant
to any other amendment, waiver or consent hereunder. The Borrower agrees that if
amounts outstanding under this Agreement and the other Credit Documents are not
paid when due (whether upon acceleration or otherwise), each Participant shall,
to the fullest extent permitted by law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement and
any other Credit Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or any other Credit Documents; provided, however, that (i) no
Participant shall exercise any rights under this sentence without the consent of
the Administrative Agent, (ii) no Participant shall

 

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have any rights under this sentence which are greater than those of the selling
Lender and (iii) such rights of setoff shall be subject to the obligation of
such Participant to share the payment so obtained with all of the Lenders as
provided in Section 2.10(b). The Borrower also agrees that any Lender which has
transferred any participating interest in its Commitment or Loans shall,
notwithstanding any such transfer, be entitled to the full benefits accorded
such Lender under Sections 2.11, 2.12 and 2.13, as if such Lender had not made
such transfer.
(c) Assignments. Any Lender may, at any time, sell and assign to any Lender or
any Eligible Assignee (individually, an “Assignee Lender”) all or a portion of
its rights and obligations under this Agreement and the other Credit Documents
(including for purposes of this Section 8.05(c), participations in L/C
Obligations and in Swing Line Loans) (such a sale and assignment to be referred
to herein as an “Assignment”) pursuant to an assignment agreement in
substantially the form of Exhibit H (an “Assignment Agreement”), executed by
each Assignee Lender and such assignor Lender (an “Assignor Lender”) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided, however, that:
(i) Each Assignee Lender that is a Revolving Lender shall provide appropriate
assurances and indemnities (which may include letters of credit) to the L/C
Issuer and the Swing Line Lender as each may require with respect to any
continuing obligation to purchase participation interests in any L/C Obligations
or any Swing Line Loans then outstanding;
(ii) Without the written consent of the Administrative Agent and, if no Event of
Default has occurred and is continuing, the Borrower (which consent of the
Administrative Agent and the Borrower shall not be unreasonably withheld), no
Lender may make any Assignment (x) of Term Loans to any Assignee Lender which is
not, immediately prior to such Assignment, a Lender hereunder or an Affiliate
thereof or Approved Fund as to such Lender or (y) of Revolving Loan Commitments,
Revolving Loans, L/C Advances and Swing Line Loans to any Assignee Lender which
is not, immediately prior to such Assignment, a Revolving Lender hereunder; and
(iii) Without the written consent of (1) the Administrative Agent, (2) if such
Assignment would result in the Assignee Lender becoming a Revolving Lender, the
L/C Issuer, and (3) if no Event of Default has occurred and is continuing, the
Borrower (which consent shall not be unreasonably withheld or delayed), no
Lender may make any Assignment to any Assignee Lender (I) with respect to any
Assignment of a Term Loan (or, to the extent such Assignment is made prior to
the Initial Funding Date, a Term Loan Commitment) and Revolving Loan Commitment,
that is less than One Million Five Hundred Thousand Dollars ($1,500,000) in the
aggregate or (II) if, after giving effect to such Assignment, the Term Loan (or,
to the extent such Assignment is made prior to the Initial Funding Date, the
Term Loan Commitment) and Revolving Loan Commitment of such Lender or such
Assignee Lender would be less than One Million Five Hundred Thousand Dollars
($1,500,000) in the aggregate (except that, in each case, a Lender may make an
Assignment which reduces its Revolving Loan Commitment or Term Loan (or, to the
extent such Assignment is made prior to the Initial Funding Date, Term Loan
Commitment) to zero without the written consent of the Borrower and the
Administrative Agent except to the extent such written consent is required by
Section 8.05(c)(ii) above.

 

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Upon such execution, delivery, acceptance and recording of each Assignment
Agreement, from and after the Assignment Effective Date determined pursuant to
such Assignment Agreement, (A) each Assignee Lender thereunder shall be a Lender
hereunder with a Revolving Loan Commitment and Loans as set forth on Attachment
1 to such Assignment Agreement and shall have the rights, duties and obligations
of such a Lender under this Agreement and the other Credit Documents, and
(B) the Assignor Lender thereunder shall be a Lender with a Revolving Loan
Commitment and Loans as set forth on Attachment 1 to such Assignment Agreement
or, if the Revolving Loan Commitment and Loans of the Assignor Lender have been
reduced to $0, the Assignor Lender shall cease to be a Lender and to have any
obligation to make any Loan; provided, however, that any such Assignor Lender
which ceases to be a Lender shall continue to be entitled to the benefits of any
provision of this Agreement which by its terms survives the termination of this
Agreement. Each Assignment Agreement shall be deemed to amend Schedule I to the
extent, and only to the extent, necessary to reflect the addition of each
Assignee Lender, the deletion of each Assignor Lender which reduces its
Revolving Loan Commitment and Loans to $0 and the resulting adjustment of
Revolving Loan Commitment and Loans arising from the purchase by each Assignee
Lender of all or a portion of the rights and obligations of an Assignor Lender
under this Agreement and the other Credit Documents. On or prior to the
Assignment Effective Date determined pursuant to each Assignment Agreement, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Revolving Loan Note or Term Loan Note, if
any, of the Assignor Lender thereunder, a new Revolving Loan Note or Term Loan
Note to the order of each Assignee Lender thereunder that requests such a note
(with each new Revolving Loan Note to be in an amount equal to the Revolving
Loan Commitment assumed by such Assignee Lender and each new Term Loan Note to
be in the original principal amount of the Term Loan then held by such Assignee
Lender) and, if the Assignor Lender is continuing as a Lender hereunder, a new
Revolving Loan Note or Term Loan Note to the order of the Assignor Lender if so
requested by such Assignor Lender (with the new Revolving Loan Note to be in an
amount equal to the Revolving Loan Commitment retained by it and the new Term
Loan Note to be in the original principal amount of the Term Loan retained by
it. Each such new Revolving Loan Note and Term Loan Note shall be dated the
Initial Funding Date, and each such new Note shall otherwise be in the form of
the Note replaced thereby. The Notes surrendered by the Assignor Lender shall be
returned by the Administrative Agent to the Borrower marked “Replaced”. Each
Assignee Lender which was not previously a Lender hereunder and which is not
organized under the laws of the United States or a state thereof shall, within
three (3) Business Days of becoming a Lender, deliver to the Borrower and the
Administrative Agent (A) two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI (or successor applicable form), as the
case may be, certifying in each case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes or (B) in the case of a Lender that is a Non-Bank
Lender, (i) a Non-Bank Certificate and (ii) two accurate and complete original
signed copies of United States Internal Revenue Service Form W-8BEN (with
respect to the portfolio interest exemption) (or successor form) certifying to
such Lender’s entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement, but only if and to the extent such Lender is legally entitled to
do so and if such Lender is unable to, such Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.15) shall not be entitled
to indemnification for such Taxes under Section 2.12 greater than that to which
its assignor was entitled immediately preceding such Assignment.

 

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Notwithstanding anything to the contrary contained herein, if at any time Wells
Fargo assigns all of its Commitments and Loans pursuant to Section 8.05(c)
above, Wells Fargo may, (i) upon 30 days’ notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon five Business Days’ notice to the
Borrower, terminate the Swing Line. In the event of any such resignation as L/C
Issuer or termination of the Swing Line, the Borrower shall be entitled to
appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Wells Fargo as L/C Issuer or the
termination of the Swing Line, as the case may be. Wells Fargo shall retain all
the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Loans or fund participations in
Unreimbursed Amounts pursuant to Section 2.02(c)). If Wells Fargo terminates the
Swing Line, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such termination, including the right to require the Lenders
to make Base Rate Loans or fund participations in outstanding Swing Line Loans
pursuant to Section 2.03(c).
(d) Register. The Borrower hereby designates the Administrative Agent (the
“Agent”), and the Agent agrees, to serve as the Borrower’s agent, solely for
purposes of this Section 8.05(d), to maintain a register at its address referred
to in Section 8.01 (the “Register”) on which it will record the Commitments from
time to time of each of the Lenders, the Loans made by, and Letters of Credit
of, each of the Lenders and each repayment in respect of the principal amount of
the Loans and Letters of Credit of each Lender. Failure to make any such
recordation, or any error in such recordation shall not affect the Borrower’s
obligations in respect of such Loans or Letters of Credit. With respect to any
Lender, the transfer of the Commitment of such Lender and the rights to the
principal of, and interest on, any Loan or Letter of Credit made pursuant to
such Commitment shall not be effective until such transfer is recorded on the
Register maintained by the Agent. The ownership of such Commitment, Loans and
Letters of Credit prior to such recordation and all amounts owing to the
transferor with respect to such Commitment, Loans and Letters of Credit shall
remain owing to the transferor. The registration of an assignment or transfer of
all or part of any Commitment, Loan or Letter of Credit shall be recorded by the
Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment Agreement pursuant to Section 8.05(c).
Coincident with the delivery of such an Assignment Agreement to the Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to assigning or transferor
Lender. The Borrower agrees to indemnify the Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Agent in performing its duties
under this Section 8.05(d), except to the extent caused by the gross negligence
or willful misconduct of the Agent.

 

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(e) Registration. Upon its receipt of an Assignment Agreement executed by an
Assignor Lender and an Assignee Lender (and, to the extent required by
Section 8.05(c), by the Borrower and the Administrative Agent) together with
payment to the Administrative Agent by Assignor Lender of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment Agreement and (ii) on the Assignment Effective Date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
The Administrative Agent may, from time to time at its election, prepare and
deliver to the Lenders and the Borrower a revised Schedule I reflecting the
names, addresses and respective Commitments or Loans of all Lenders then parties
hereto (and in any event Schedule I shall be deemed amended to reflect any
assignment consummated pursuant to the terms of this Agreement or upon any
Lender becoming a party to this Agreement by any other means (including pursuant
to a joinder as contemplated by Section 2.01(h)).
(f) Confidentiality. Subject to Section 8.10, the Administrative Agent and the
Lenders may disclose the Credit Documents and any financial or other information
relating to the Loan Parties to each other or to any potential Participant or
Assignee Lender.
(g) Pledges to Federal Reserve Banks; Other Pledges of Notes. Notwithstanding
any other provision of this Agreement, any Lender may at any time assign all or
a portion of its rights under this Agreement and the other Credit Documents to a
Federal Reserve Bank. No such assignment shall relieve the assigning Lender from
its obligations under this Agreement and the other Credit Documents. In the case
of any Lender that is a Fund, such Lender may (i) assign or pledge all or any
portion of the Loans held by it (and Notes evidencing such Loans) to the trustee
under any indenture to which such Lender is a party in support of its
obligations to the trustee for the benefit of the applicable trust
beneficiaries, or (ii) pledge all or any portion of the Loans held by it (and
Notes evidencing such Loans) to its lenders for collateral security purpose;
provided, however, no such pledgee under clause (i) or (ii) shall become a
Lender hereunder (by foreclosure, transfer in lieu of foreclosure or otherwise)
unless and until it complies with the assignment provisions of this Agreement to
become a Lender hereunder and has received all consents required hereunder.
(h) True Sale. All participations in the Obligations or any portion thereof,
whether pursuant to provisions hereof or otherwise, are intended to be “true
sales” for purposes of financial reporting in accordance with Statement of
Financial Accounting Standards No. 140. Accordingly, the L/C Issuer or any
Lender that sells or is deemed to have sold a participation in the Obligations
(including any participations in Letters of Credit and/or Loans, any
participations described in Section 8.05(b) above and any participations under
Section 2.10(b)) (each a “Participation Seller”) hereby agrees that if such
Participation Seller receives any payment in respect of the Obligations to which
such participation relates through the exercise of setoff by such Participation
Seller against the Borrower or any other obligor, then such Participation Seller
agrees to promptly pay to the participating party in such participation such
participant’s pro rata share of such setoff (after giving effect to any sharing
with the Lenders under Section 2.10(b) hereof).
(i) Additional Forms. If required by applicable Governmental Rules or otherwise
deemed prudent by the Administrative Agent, the Borrower and each Lender shall
prepare, execute and deliver a completed Form U-1 (or Form G-3, as applicable)
for each Lender (and, if applicable, for each Participant, in which case the
applicable Lender shall cause its Participant to satisfy the requirements of
this Section).

 

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8.06. Setoff; Security Interest.
(a) Setoffs By Lenders. In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, with the prior consent of the
Administrative Agent but without prior notice to or consent of the Borrower, any
such notice and consent being expressly waived by the Borrower to the extent
permitted by applicable Governmental Rules, upon the occurrence and during the
continuance of an Event of Default, to set-off and apply against the Obligations
any amount owing from such Lender to the Borrower. The aforesaid right of
set-off may be exercised by such Lender against the Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of the
Borrower or against anyone else claiming through or against the Borrower or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off may not have been exercised
by such Lender at any prior time. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender; provided,
that the failure to give such notice shall not affect the validity of such
set-off and application.
(b) Security Interest. As security for the Obligations, the Borrower hereby
grants to the Administrative Agent and each Lender, for the benefit of the
Administrative Agent and the Lenders, a continuing security interest in any and
all deposit accounts or moneys of the Borrower now or hereafter maintained with
such Lender. Each Lender shall have all of the rights of a secured party with
respect to such security interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied from this
Agreement is intended to give, or shall be construed to give, any Person, other
than the parties hereto and their permitted successors and assigns hereunder,
any benefit or legal or equitable right, remedy or claim under or by virtue of
this Agreement or under or by virtue of any provision herein.
8.08. Partial Invalidity. If at any time any provision of this Agreement is or
becomes illegal, invalid or unenforceable in any respect under the law or any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Agreement nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction shall in any way be
affected or impaired thereby.
8.09. Jury Trial. EACH OF THE BORROWER, THE LENDERS, THE ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT AND THE SECURITY TRUSTEE TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE GOVERNMENTAL RULES, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT.

 

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8.10. Confidentiality. None of the Administrative Agent, the Lead Arranger, the
Collateral Agent, the Security Trustee or any Lender shall disclose to any
Person any Confidential Information, except that the Administrative Agent, the
Lead Arranger, the Collateral Agent, the Security Trustee and any Lender may
disclose any such information (a) to its own directors, officers, employees,
auditors, counsel and other advisors and to its Affiliates; (b) to the
Administrative Agent, the Lead Arranger, the Collateral Agent, the Security
Trustee or any other Lender; (c) which is otherwise known or available to the
public or which is otherwise known to the receiving party prior to the time such
Confidential Information was delivered to the Administrative Agent, the Lead
Arranger, the Collateral Agent, the Security Trustee or any Lender; (d) if
required or appropriate in any report, statement or testimony submitted to any
Governmental Authority having or claiming to have jurisdiction over the
Administrative Agent, the Lead Arranger, the Collateral Agent, the Security
Trustee or such Lender; (e) if required in response to any summons or subpoena;
(f) in connection with any enforcement by the Administrative Agent, the Lead
Arranger, the Collateral Agent, the Security Trustee or the Lenders of their
rights under this Agreement or the other Credit Documents or any litigation
among the parties relating to the Credit Documents or the transactions
contemplated thereby; (g) to comply with any Requirement of Law applicable to
the Administrative Agent, the Lead Arranger, the Collateral Agent, the Security
Trustee or such Lender; (h) to any Assignee Lender or Participant or any
prospective Assignee Lender or Participant; provided that such Assignee Lender
or Participant or prospective Assignee Lender or Participant agrees to be bound
by the provisions of (or provisions substantially similar to) this Section 8.10;
or (i) otherwise with the prior consent of such Loan Party; provided, however,
that any disclosure made in violation of this Agreement shall not affect the
obligations of the Loan Parties under this Agreement and the other Credit
Documents. Nothing in this Section 8.10 shall limit the use of any Platform as
described in Section 8.01(b).
8.11. Counterparts. This Agreement may be executed in any number of identical
counterparts, any set of which signed by all the parties hereto shall be deemed
to constitute a complete, executed original for all purposes. Transmission by
facsimile, “pdf” or similar electronic copy of an executed counterpart of this
Agreement shall be deemed to constitute due and sufficient delivery of such
counterpart. Any party hereto may request an original counterpart of any party
delivering such electronic counterpart.
8.12. Consent to Jurisdiction. Each of the parties to this Agreement irrevocably
submits to the non-exclusive jurisdiction of the courts of the State of New York
and the courts of the United States located in New York, New York and agrees
that any legal action, suit or proceeding arising out of or relating to this
Agreement or any of the other Credit Documents may be brought against such party
in any such courts. In addition, the Borrower irrevocably submits to the
non-exclusive jurisdiction of the courts of any State (each a “Real Property
State”) where any real property described in any Real Property Security
Agreement is located and the courts of the United States located in any such
Real Property State and agrees that any legal action, suit or proceeding arising
out of or relating to any Real Property Security Agreement related to real
property located in a Real Property State may be brought against such party in
any such courts in such Real Property State. Final judgment against any party in
any such action, suit or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment, a certified or exemplified copy
of which shall be conclusive evidence of the judgment, or in any other manner
provided by law. Nothing in this Section 8.12 shall affect the right of any
party to

 

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commence legal proceedings or otherwise sue any other party in any other
appropriate jurisdiction, or concurrently in more than one jurisdiction, or to
serve process, pleadings and other papers upon any other party in any manner
authorized by the laws of any such jurisdiction. The Borrower agrees that
process served either personally or by registered mail shall, to the extent
permitted by law, constitutes adequate service of process in any such suit. Each
of the parties to this Agreement irrevocably waives to the fullest extent
permitted by applicable Governmental Rules (a) any objection which it may have
now or in the future to the laying of the venue of any such action, suit or
proceeding in any court referred to in the first sentence above; (b) any claim
that any such action, suit or proceeding has been brought in an inconvenient
forum; (c) its right of removal of any matter commenced by any other party in
the courts of the State of New York or any Real Property State or to any court
of the United States; (d) any immunity which it or its assets may have in
respect of its obligations under this Agreement or any other Credit Document
from any suit, execution, attachment (whether provisional or final, in aid of
execution, before judgment or otherwise) or other legal process; and (e) any
right it may have to require the moving party in any suit, action or proceeding
brought in any of the courts referred to above arising out of or in connection
with this Agreement or any other Credit Document to post security for the costs
of any party or to post a bond or to take similar action.
8.13. Relationship of Parties. The relationship between the Borrower, on the one
hand, and the Lenders, the Collateral Agent, the Security Trustee and the
Administrative Agent, on the other, is, and at all times shall remain, solely
that of borrower and lenders. None of the Lenders, the Security Trustee, the
Collateral Agent or the Administrative Agent shall under any circumstances be
construed to be partners or joint venturers of the Borrower or any of its
Affiliates; nor shall the Lenders, the Collateral Agent, the Administrative
Agent nor the Security Trustee under any circumstances be deemed to be in a
relationship of confidence or trust or a fiduciary relationship with the
Borrower or any of its Affiliates, or to owe any fiduciary duty to the Borrower
or any of its Affiliates. The Lenders, the Administrative Agent, the Security
Trustee and the Collateral Agent do not undertake or assume any responsibility
or duty to the Borrower or any of its Affiliates to select, review, inspect,
supervise, pass judgment upon or otherwise inform the Borrower or any of its
Affiliates of any matter in connection with its or their property, any security
held by the Administrative Agent, the Collateral Agent, the Security Trustee or
any Lender or the operations of the Borrower or any of its Affiliates. The
Borrower and each of its Affiliates shall rely entirely on their own judgment
with respect to such matters, and any review, inspection, supervision, exercise
of judgment or supply of information undertaken or assumed by any Lender, the
Administrative Agent, the Security Trustee or the Collateral Agent in connection
with such matters is solely for the protection of the Lenders, the
Administrative Agent, the Security Trustee and the Collateral Agent and neither
the Borrower nor any of its Affiliates is entitled to rely thereon.
8.14. Time. Time is of the essence as to each term or provision of this
Agreement and each of the other Credit Documents.
8.15. Waiver of Punitive Damages. Notwithstanding anything to the contrary
contained in this Agreement, each party to this Agreement hereby agrees that it
shall not seek from any other party to this Agreement or from the Lead Arranger
any punitive, exemplary or consequential damages under any theory of liability.

 

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8.16. USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Patriot Act.
8.17. Clarification. Notwithstanding anything to the contrary, the parties
hereto understand and agree that Wells Fargo is acting in various capacities
under this Agreement and the other Credit Documents and therefore shall be
permitted to fulfill its roles and manage its various duties hereunder in such
manner as Wells Fargo sees fit and, for the avoidance of doubt, in lieu of
sending notices to itself when acting in different capacities Wells Fargo may
keep internal records regarding all such communications, notices and actions
related to this Agreement and the other Credit Documents in accordance with its
past practice.
8.18. NO MANAGEMENT. NOTWITHSTANDING ANY OTHER POSSIBLE CONSTRUCTION OF ANY
PROVISION(S) CONTAINED IN THIS AGREEMENT OR IN ANY OTHER CREDIT DOCUMENT, IT IS
AGREED THAT WITHIN THE MEANING OF IGRA: (A) THE CREDIT DOCUMENTS, INDIVIDUALLY
AND COLLECTIVELY, DO NOT AND SHALL NOT PROVIDE FOR THE MANAGEMENT OF ALL OR ANY
PART OF THE GAMING OPERATIONS OF THE NOTTAWASEPPI TRIBE BY ANY PERSON OTHER THAN
THE NOTTAWASEPPI TRIBE OR DEPRIVE THE NOTTAWASEPPI TRIBE OF THE SOLE PROPRIETARY
INTEREST AND RESPONSIBILITY FOR THE CONDUCT OF ITS GAMING OPERATIONS; AND (B) NO
LENDER PARTY (NOR ANY SUCCESSOR, ASSIGN OR AGENT OF ANY LENDER PARTY) WILL
EXERCISE ANY REMEDY OR OTHERWISE TAKE ANY ACTION UNDER OR IN CONNECTION WITH ANY
CREDIT DOCUMENTS IN A MANNER THAT WOULD CONSTITUTE MANAGEMENT OF ALL OR ANY PART
OF THE GAMING OPERATIONS OF THE NOTTAWASEPPI TRIBE OR THAT WOULD DEPRIVE THE
NOTTAWASEPPI TRIBE OF THE SOLE PROPRIETARY INTEREST AND RESPONSIBILITY FOR THE
CONDUCT OF ITS GAMING OPERATIONS.
8.19. Gaming Law Limitations. Notwithstanding any provision in any Credit
Document, none of the Lender Parties shall engage in any of the following:
planning, organizing, directing, coordinating, or controlling all or any portion
of the Nottawaseppi Tribe’s gaming operations (collectively, “Management
Activities”), including, but not limited to:
(i) the training, supervision, direction, hiring, firing, retention,
compensation (including benefits) of any employee (whether or not a management
employee) or contractor;
(ii) any employment policies or practices;
(iii) the hours or days of operation;
(iv) any accounting systems or procedures;
(v) any advertising, promotions or other marketing activities;

 

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(vi) the purchase, lease, or substitution of any gaming device or related
equipment or software, including player tracking equipment;
(vii) the vendor, type, theme, percentage of pay-out, display or placement of
any gaming device or equipment; or
(viii) budgeting, allocating, or conditioning payments of the Nottawaseppi
Tribe’s operating expenses; provided, however, that upon the occurrence of a
default, a Lender Party will not be in violation of the foregoing restriction
solely because a Lender Party:
(A) enforces compliance with any term in any Credit Document that does not
require the gaming operation to be subject to any third-party decision-making as
to any Management Activities; or
(B) requires that all or any portion of the revenues securing the Loans and
other Obligations be applied to satisfy valid terms of the Credit Documents; or
(C) otherwise forecloses on all or any portion of the property securing the
Loans and other Obligations.
[The first signature page follows.]

 

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IN WITNESS WHEREOF, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the L/C Issuer and the Swing Line Lender have caused this
Agreement to be executed as of the day and year first above written.

            BORROWER:

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:   /s/ Mark Miller      Name:         Title:        

Signature Page to Credit Agreement — Full House

 

 

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            ADMINISTRATIVE AGENT, COLLATERAL
AGENT, L/C ISSUER AND SWING LINE
LENDER:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent,
Collateral Agent, Security Trustee, L/C Issuer
and Swing Line Lender
      By:   /s/ Erna Stuckey       Name:   Erna Stuckey      Title:   Vice
President        THE LENDERS:

WELLS FARGO BANK, NATIONAL
ASSOCIATION
      By:   /s/ Erna Stuckey       Name:   Erna Stuckey      Title:   Vice
President     

Signature Page to Credit Agreement — Full House

 

 

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            CAPITAL ONE, N.A.
      By:   /s/ Ross Wales       Name:   Ross Wales      Title:   Sr. Vice
President        NEVADA STATE BANK
      By:         Name:        Title:        

Signature Page to Credit Agreement — Full House

 

 

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            CAPITAL ONE, N.A.
      By:         Name:       Title:         NEVADA STATE BANK
      By:   /s/ Rick Thomas       Name:   Rick Thomas      Title:   V.P.     

Signature Page to Credit Agreement — Full House

 

 

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SCHEDULE I
THE LENDERS
Part A

                                              Revolving             Term      
Revolving Loan     Proportionate     Term Loan     Proportionate   Name of
Lender   Commitment     Share     Commitment     Share  
Wells Fargo Bank, National Association
  $ 2,171,052.63       45.83333333 %   $ 14,328,947.37       45.83333333 %
Capital One, N.A.
  $ 1,907,894.74       40.27777778 %   $ 12,592,105.26       40.27777778 %
Nevada State Bank
  $ 657,894.74       13.88888889 %   $ 4,342,105.26       13.88888889 %
 
                       
Total
  $ 4,736,842.11       100.00 %   $ 31,263,157,89       100.00 %
 
                       

 

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Part B
WELLS FARGO BANK, NATIONAL ASSOCIATION
as a Lender
Notices:
Wells Fargo Bank, National Association
5340 Kietzke Lane
Reno, Nevada 89511
Attention: Erna Stuckey
Tel. No. (775) 689-6018
Fax No. (775) 689-6026
E-mail: Erna.F.Stuckey@wellsfargo.com
Domestic and Euro-Dollar Lending Office:
Wells Fargo Bank, National Association
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, California 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com
CAPITAL ONE, N.A.
as a Lender
Notices:
Capital One, N.A.
201 St. Charles Ave, 29th Floor
New Orleans, LA 70130
Attention: Ross S. Wales
Telephone: (504) 533-5719
Facsimile: (504) 533-2060
E-mail: ross.wales@capitalonebank.com

 

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Domestic and Euro-Dollar Lending Office:
Capital One, N.A.
201 St. Charles Ave, 29th Floor
New Orleans, LA 70130
Attention: Lorie Ferguson
Telephone: (504) 533-5718
Facsimile: (504) 533-2060
E-mail: lorie.ferguson@capitalonebank.com
NEVADA STATE BANK
as a Lender
Notices:
Nevada State Bank
One West Liberty St.
Reno, NV 89501
Attention: Rick Thomas
Telephone: (775) 688-6959
Facsimile: (775) 688-6960
E-mail: richard.thomas@nsbank.com

Domestic and Euro-Dollar Lending Office:
Nevada State Bank
600 White Drive 1st 71
Las Vegas, NV 89119
Attention: Aimee Blutt
Telephone: (702) 642-7421
Facsimile: (702) 657-3534
E-mail: aimee.blutt@nsbank.com

 

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SCHEDULE 1.01(a)
Real Property Security Documents
Deed of Trust on real property of Stockman’s Casino in Fallon, Nevada
Mortgage on real property of Gaming Entertainment (Indiana) LLC in Rising Sun,
Indiana

 

 

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SCHEDULE 3.01
Conditions Precedent to Effectiveness
The effectiveness of this Credit Agreement is subject to: (i) in the case of all
conditions listed below which can be satisfied by the delivery of documentation
or other items by the Borrower, receipt by the Administrative Agent of such
documentation or other items, each in form and substance reasonably satisfactory
to the Administrative Agent (and, where expressly indicated, the Collateral
Agent) and each Lender and with sufficient copies for the Administrative Agent
and each Lender, and (ii) in the case of all other conditions listed below, the
Administrative Agent’s (and, where expressly indicated, the Collateral Agent’s)
reasonable determination that such conditions have been satisfied.
(a) Credit Agreement. This Agreement, duly executed by the Borrower, each
Lender, the Administrative Agent, the Collateral Agent and the Security Trustee;
(b) Borrower’s Organizational Documents. A certificate of the Secretary or an
Assistant Secretary of the Borrower, dated the Effective Date, certifying
(A) that attached thereto is a true and correct copy of the certificate or
articles of incorporation and bylaws of the Borrower as in effect on the
Effective Date; (B) that attached thereto are true and correct copies of
resolutions duly adopted by the board of directors of the Borrower and
continuing in effect, which authorize the execution, delivery and performance by
the Borrower of this Agreement and the other Credit Documents executed or to be
executed by the Borrower and the consummation of the transactions contemplated
hereby and thereby; (C) that there are no proceedings for the dissolution or
liquidation of the Borrower; and (D) the incumbency, signatures and authority of
the officers of the Borrower authorized to execute, deliver and perform this
Agreement, the other Credit Documents and all other documents, instruments or
agreements related thereto executed or to be executed by the Borrower;
(c) Guarantor Organizational Documents. A certificate of the Secretary or an
Assistant Secretary (or comparable officer) of each Guarantor, dated the
Effective Date, certifying (A) that attached thereto is a true and correct copy
of the Organizational Documents of such Person as in effect on the Effective
Date; (B) that attached thereto are true and correct copies of resolutions duly
adopted by the board of directors or other governing body of such Person and
continuing in effect, which authorize the execution, delivery and performance by
such Person each Credit Document executed or to be executed by such Person and
the consummation of the transactions contemplated thereby; (C) that there are no
proceedings for the dissolution or liquidation of such Person; and (D) the
incumbency, signatures and authority of the officers of such Person authorized
to execute, deliver and perform the Credit Documents to be executed by such
Person.
(d) Financial Statements, Financial Condition, Etc.
(i) A copy of the (A) audited consolidated Financial Statements of each of
(1) the Borrower Parties and (2) Grand Victoria Casino & Resort for the fiscal
years ending December 31, 2007, December 31, 2008 and December 31, 2009 and
(B) unaudited consolidated and consolidating Financial Statements of (1) the
Borrower Parties and (2) Grand Victoria Casino & Resort for the fiscal quarters
ending March 31, 2010 and June 30, 2010.

 

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(e) Opinion. Favorable written opinion that the real property underlying the
FireKeepers Casino constitutes “Indian lands” as defined in IGRA, dated the
Effective Date and in form and substance satisfactory to the Administrative
Agent, from Greenberg Traurig, LLP, special counsel for the Borrower and the
Guarantors.
(f) Other Items.
(i) A copy of the Acquisition Agreement and each other Acquisition Document
(including all exhibits, appendices, schedules, annexes and attachments thereto
and amendments thereof), duly executed by each party thereto, and a copy of each
agreement, certificate, opinion of counsel (with a letter from the Person
delivering such opinions of counsel authorizing reliance thereon by the
Administrative Agent and the Lenders) and other material writing delivered by or
on behalf of each party to such documents in connection therewith;
(ii) Since December 31, 2009, no event or circumstance shall have occurred that
has resulted or could result in a material adverse change in the business,
operations, condition (financial or otherwise), assets or liabilities (whether
actual or contingent) of the Borrower Parties taken as a whole;
(iii) There shall not exist any pending or overtly threatened action, suit,
investigation or proceeding, which, if adversely determined, could materially
and adversely affect the Borrower Parties, any transaction contemplated hereby
(including the Transactions) or the ability of any Loan Party to perform its
obligations under the Credit Documents or the ability of the Lenders to exercise
their rights thereunder;
(iv) The Administrative Agent, shall not have become aware of any material
information or other matter that is inconsistent in a material and adverse
manner with any previous due diligence, information or matter (including any
financial statements and projections previously delivered to the Administrative
Agent;
(v) On the Effective Date:
(A) the representations and warranties set forth in Sections 4.01(a), (b), (c),
(d), (e) (other than (e)(ii) and (e)(iv)), (f), (i), (l), (m), (n), (p), (q),
(r), (s), (w) and (x) of this Agreement shall be true and correct in all
material respects (except to the extent that such representation and warranty is
qualified by materiality, in which case such representation and warranty must be
true in all respects) as if made on the Effective Date (except for
representations and warranties expressly made as of a specified date, which
shall be true and correct as of such date); and
(B) No Default shall have occurred and be continuing.
(vi) A certificate of a Senior Finance Officer of the Borrower certifying, on
behalf of the Borrower, as to the matters set forth in clause (v);

 

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(vii) To the extent not included in clause (b), clause (c) or clause (f)(i)
above, a copy of each of the Material Documents (including all exhibits,
appendices, schedules, annexes and attachments thereto and amendments and
assignments thereof), duly executed by each party thereto;
(viii) The Borrower and the Guarantors shall have provided such documentation
and other information requested by the Administrative Agent (on behalf of itself
and any Lender) that is required by regulatory authorities under applicable
“know your customer” and anti-money-laundering rules and regulations, including,
without limitation, the Patriot Act;
(ix) The Borrower shall have provided to the Administrative Agent excerpts from
the Federal Register for November 13, 2007 “Proclaiming Certain Lands as
Reservation for the Nottawaseppi Huron Bank of Potawatomi Indians of Michigan”,
Federal Register for November 24, 2009 “Proclaiming Certain Lands as a
Reservation for the Nottawaseppi Huron Band of Potawatomi Indians of Michigan”,
which corrects the legal description in the Proclamation and the Opinion of the
Office of the Solicitor, dated December 13, 2000, advising the Regional
Director, Midwest Regional Office, Bureau of Indian Affairs of the Trust
Acquisition for the Huron Potawatomi, Inc, as evidence that the real property
underlying the FireKeepers Casino constitutes “Indian lands”;
(x) All fees and expenses payable to the Wells Fargo Parties (including
reasonable fees and expenses of counsel to the Wells Fargo Parties invoiced
through the Effective Date) and the Lenders on or prior to the Effective Date
(including all fees payable to the Wells Fargo Parties pursuant to the Fee
Letter); and
(xi) Such other evidence as the Administrative Agent may reasonably request to
establish the accuracy and completeness of the representations and warranties
and the compliance with the terms and conditions contained in this Agreement and
the other Credit Documents.

 

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SCHEDULE 3.02
Conditions Precedent to Initial Credit Events
The occurrence of the initial Credit Events under the Credit Agreement, in
addition to the conditions set forth on Schedule 3.01 and in Section 3.03, is
subject to: (i) in the case of all conditions listed below which can be
satisfied by the delivery of documentation or other items by the Borrower,
receipt by the Administrative Agent of such documentation or other items, each
in form and substance reasonably satisfactory to the Administrative Agent (and,
where expressly indicated, the Collateral Agent) and each Lender and with
sufficient copies for the Administrative Agent and each Lender, and (ii) in the
case of all other conditions listed below, the Administrative Agent’s (and,
where expressly indicated, the Collateral Agent’s) reasonable determination that
such conditions have been satisfied.
(a) Principal Credit Documents.
(i) A Revolving Loan Note payable to each Revolving Lender, each duly executed
by the Borrower;
(ii) A Term Loan Note payable to each Term Lender, each duly executed by the
Borrower;
(iii) A Swing Line Note payable to the Swing Line Lender in the principal amount
of the Swing Line Sublimit, duly executed by the Borrower;
(iv) The Guaranty, in substantially the form of Exhibit L, duly executed by the
Guarantors;
(v) The Security Agreement, in substantially the form of Exhibit M, duly
executed by the Borrower and the Guarantors, together with (A) original demand
promissory evidencing intercompany advances pledged to the Collateral Agent
pursuant to the Security Agreement (collectively, the “Pledged Intercompany
Notes”), together with accompanying allonges or indorsements in blank and
attached thereto, (B) the original certificates (if any) representing all of the
outstanding Equity Securities of each Subsidiary that are pledged to the
Collateral Agent pursuant to the Security Agreement (or any other Security
Document), together with undated stock powers duly executed by the appropriate
Loan Party, as applicable, in blank and attached thereto; and (C) all other
collateral listed on Schedule I of the Security Agreement;
(vi) Each Real Property Security Document listed on Schedule 1.01(a), duly
executed by the applicable Loan Party and notarized and in form suitable for
recording in the appropriate jurisdictions; and
(vii) The completed Collateral Certificate, duly executed by the Borrower; and

 

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(viii) The Grand Victoria Vessel Security Document duly executed by the parties
thereto.
(b) Borrower’s Organizational Documents.
(i) The certificate of incorporation, articles of incorporation or comparable
document of the Borrower, certified as of a recent date prior to the Initial
Funding Date by the Secretary of State (or comparable public official) of the
Borrower’s jurisdiction of incorporation or formation;
(ii) Certificates of good standing (or comparable certificates) for the
Borrower, certified as of a recent date prior to the Initial Funding Date by the
Secretaries of State (or comparable official) of the Borrower’s jurisdiction of
incorporation and each jurisdiction in which the Borrower is qualified to do
business; and
(iii) Certificates of the Franchise Tax Board, Secretary of State or comparable
official of the same jurisdictions referenced in clause (ii) above for the
Borrower (to the extent that such Governmental Authority customarily makes
available such certificates with respect to entities of the same type as the
Borrower), certified as of a recent date prior to the Effective Date, stating
that the Borrower is in good tax standing under the laws of such jurisdiction.
(iv) A certificate of the Secretary or an Assistant Secretary of the Borrower,
dated the Initial Funding Date, certifying that (A) there have been no
amendments or modifications to the certificate or articles of incorporation and
bylaws of the Borrower delivered on the Effective Date (or if there have been,
they are attached thereto), (B) the resolutions duly adopted by the board of
directors of the Borrower delivered on the Effective Date are continuing in
effect and have not been modified or revoked and (C) there are no proceedings
for the dissolution or liquidation of the Borrower;
(c) Guarantor Organizational Documents.
(i) A certificate of good standing (or comparable certificate) for each
Guarantor, certified as of a recent date prior to the Initial Funding Date by
the Secretary of State (or comparable public official) of such Person’s
jurisdiction of incorporation or formation and jurisdiction in which the
Guarantor is qualified to do business;
(ii) The certificate of incorporation, articles of incorporation, certificate of
limited partnership, articles of organization or comparable document of each
Guarantor, certified as of a recent date prior to the Initial Funding Date by
the Secretary of State (or comparable public official) of such Person’s
jurisdiction of incorporation or formation;
(iii) Certificates of the Franchise Tax Board, Secretary of State or comparable
official of the jurisdiction of incorporation or formation of each Guarantor (to
the extent that such Governmental Authority customarily makes available such
certificates with respect to entities of the same type as such Guarantor) and
each state in which such Guarantor is qualified to do business, dated as of a
date close to the Initial Funding Date, stating that such Person is in good tax
standing under the laws of such jurisdiction.

 

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(iv) A certificate of the Secretary or an Assistant Secretary of each Guarantor,
dated the Initial Funding Date, certifying that (A) there have been no
amendments or modifications to Organizational Documents of such Guarantor
delivered on the Effective Date (or if there have been, they are attached
thereto), (B) the resolutions duly adopted by the board of directors or other
governing body of such Guarantor delivered on the Effective Date are continuing
in effect and have not been modified or revoked and (C) there are no proceedings
for the dissolution or liquidation of such Guarantor;
(d) Financial Statements, Financial Condition, Etc.
(i) A copy of (A) the Financial Statements required to be delivered by Sections
5.01(a)(i), (ii), (x), (xi) and (xii) for the period commencing on the Effective
Date and ending on the Initial Funding Date and (B) the pro forma balance sheet
of the Borrower Parties based on the most recent balance sheet provided to the
Administrative Agent and the Lenders and giving effect to the transactions
occurring as of the Initial Funding Date (including the Transactions);
(ii) A certificate of a Senior Finance Officer of the Borrower certifying that
as of the Initial Funding Date (and after giving pro forma effect to the
Transactions), (A) the Total Leverage Ratio is less than or equal to 2.00:1.00
and (B) the aggregate management fees of GEM for the twelve month period ended
as of the most recent month end prior to the Initial Funding Date for which
financial statements are available is greater than or equal to $20,000,000, and
attaching calculations demonstrating the same to the reasonable satisfaction of
the Administrative Agent;
(iii) A certificate of the Borrower and each Guarantor as to the financial
condition and solvency of such Person(s) on a pro forma basis after giving
effect to the Transactions, in form and substance satisfactory to the
Administrative Agent certified by a Senior Finance Officer of each such
Person(s); and
(iv) A copy of (and the Administrative Agent’s and Required Lenders’
satisfactory review of) the projected financial statements of the Borrower
Parties for each of the fiscal years through the Maturity Date (on a year by
year basis) together with narrative assumptions, including, in each case,
projected balance sheets, statements of income and retained earnings and
statements of cash flow of the Loan Parties, all in reasonable detail and in any
event to include quarterly projections for the first year after the Initial
Funding Date reflecting the Borrower’s compliance with each of the covenants set
forth in Section 5.03 of this Agreement; and
(v) Such other financial, business and other information regarding the Borrower
or any of its Subsidiaries or the Purchased Assets as the Administrative Agent
may reasonably request.
(e) Collateral Documents.
(i) A Control Agreement with each bank with which any Borrower or any Guarantor
maintains a deposit account, each appropriately completed and duly executed by
such Loan Party, the Collateral Agent and such bank;

 

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(ii) A Control Agreement with each securities intermediary with which any
Borrower or any Guarantor maintains a securities account, each appropriately
completed and duly executed by such Loan Party, the Collateral Agent and such
securities intermediary;
(iii) A Control Agreement with each commodity intermediary with which any
Borrower or any Guarantor maintains a commodity account, each appropriately
completed and duly executed by such Loan Party, the Collateral Agent and such
commodity intermediary;
(iv) Appropriate documents for filing with the United States Patent and
Trademark Office, the United States Copyright Office and all other filings
necessary to perfect the security interests granted to the Collateral Agent by
the Security Documents, all appropriately completed and duly executed by the
applicable Loan Party and, where appropriate, notarized; and
(v) A Power of Attorney in the form of attached to the Security Agreement, dated
the Effective Date and otherwise appropriately completed, duly executed by the
Borrower and the Guarantors and notarized.
(vi) Evidence that upon the filing of appropriate Uniform Commercial Code
financing statements the Collateral Agent will have a valid, perfected first
priority Lien on all Collateral in which a Lien may be perfected by the filing
of such Uniform Commercial Code financing statements, subject only to Permitted
Liens;
(vii) Based on available information as of closing (which shall include
representations, warranties and disclosures from the Borrower), the Collateral
Agent shall be satisfied that (A) upon the filing and recording of the Grand
Victoria Vessel Security Document the Security Trustee will have a valid,
perfected first priority Lien on the Grand Victoria Vessel and (B) the Grand
Victoria Vessel Security Document will qualify for the benefits accorded a
“preferred mortgage” under the Ship Mortgage Act;
(viii) Evidence that all existing Indebtedness of the Loan Parties has been or
concurrently with the Initial Funding Date is being repaid in full and a
satisfactory arrangement concerning the termination of the Liens securing such
Indebtedness (including payoff letter(s), as applicable);
(ix) Uniform Commercial Code search certificates from the jurisdictions in which
Uniform Commercial Code financing statements are to be filed pursuant to
subsection (e)(vi) above reflecting no other financing statements or filings
which evidence Liens of other Persons in the Collateral which are prior to the
Liens granted to the Collateral Agent in this Agreement, the Security Documents
and the other Credit Documents, except for any such prior Liens (a) which are
expressly permitted by this Agreement to be prior or (b) for which the
Administrative Agent has received a termination statement or and has made a
satisfactory arrangement concerning the termination of the Liens securing such
Indebtedness pursuant to subsection (e)(viii) above;

 

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(x) Additional documents for filing with the United States Patent and Trademark
Office, the United States Copyright Office and all other filings necessary to
perfect the security interests granted to the Collateral Agent by the Security
Documents, as necessary, all appropriately completed and duly executed by the
applicable Loan Party and, where appropriate, notarized;
(xi) An ALTA extended coverage lender’s policy of title insurance (or a
commitment therefor) insuring the validity and priority of the Grand Victoria
Vessel Security Document (subject only to such exceptions as the Collateral
Agent may approve), in such amounts and with such endorsements as the Collateral
Agent may require, issued by a title insurer acceptable to the Collateral Agent,
together with such policies of co-insurance or re-insurance (or commitments
therefor) as the Collateral Agent may require;
(xii) A marine insurance brokers opinion satisfactory to it opining as to the
adequacy of the insurance on the Grand Victoria Vessel;
(xiii) a Certificate of Ownership (CG-1330) issued by the National Vessel
Documentation Center no earlier than seven days prior to the Initial Funding
Date showing Grand Victoria Casino & Resort, L.P. to be the sole owner of the
Grand Victoria Vessel, that the Grand Victoria Vessel is free and clear of all
Liens of record and that the Grand Victoria Vessel is currently documented;
(xiv) a certified Abstract of Title issued by the National Vessel Documentation
Center no earlier than three days prior to the Initial Funding Date showing
Grand Victoria Casino & Resort, L.P. to be the sole owner of the Grand Victoria
Vessel and that the Grand Victoria Vessel is free and clear of all Liens of
record;
(xv) a copy of the current certificate of inspection issued by the United States
Coast Guard for the Grand Victoria Vessel, reflecting no outstanding conditions
affecting operation of the Grand Victoria Vessel;
(xvi) a Confirmation of Class certificate for the Grand Victoria Vessel issued
by the American Bureau of Shipping, reflecting that the Grand Victoria Vessel
has the highest classification for vessels of its type, free from
recommendations affecting class;
(xvii) an Assignment of Entitlements and Certificate and Indemnification for
Hazardous Substances with respect to the real property subject to each Real
Property Security Document; and
(xviii) Such other evidence as the Collateral Agent may reasonably request to
establish that the Liens granted to the Collateral Agent and the Security
Trustee for the benefit of the Secured Parties under the Security Documents and
the other Credit Documents are or upon the proper filings shall be perfected and
prior to the Liens of other Persons in the Collateral, except for any such Liens
which are expressly permitted by this Agreement to be prior to the Liens granted
to the Collateral Agent and the Security Trustee.

 

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(f) Opinions.
(i) Favorable written opinions, dated the Initial Funding Date and covering such
legal matters as the Administrative Agent may reasonably request and otherwise
in form and substance reasonably satisfactory to the Administrative Agent, from
Greenberg Traurig, LLP, special counsel for the Borrower and the Guarantors,
including an opinion that none of the Credit Documents constitutes a “management
contract” as defined in IGRA and that the real property underlying the
FireKeepers Casino constitutes “Indian lands” as defined in IGRA.; and
(ii) Vessel Opinion with respect to the Grand Victoria Vessel Security Document.
(g) Other Items.
(i) A duly completed and timely delivered Notice of Loan Borrowing for Revolving
Loans, to the extent any Revolving Loans are requested to be made to the
Borrower on the Initial Funding Date;
(ii) A duly completed and timely delivered Notice of Loan Borrowing for the Term
Loans;
(iii) A funds flow statement detailing the disbursement of the Borrowings to
occur on the Initial Funding Date, in form and substance reasonably acceptable
to the Administrative Agent;
(iv) Certificates of insurance and endorsements (including a lender’s loss
payable endorsement) naming the Collateral Agent as mortgagee and loss payee and
the Collateral Agent, the Security Trustee, the Administrative Agent and the
Lenders as additional insureds, as required by Section 5.01(d) of this Agreement
and an insurance analysis and review from a consultant acceptable to the
Administrative Agent; along with an a disclosure statement in form and substance
reasonably acceptable to the Administrative Agent setting forth a true and
complete listing of all insurance maintained by the Borrowers as of the Initial
Funding Date (the “Insurance Disclosure Statement”);
(v) The Borrower shall not have entered into any amendment, supplement or other
modification to, or any consent or waiver with respect to, the Acquisition
Agreement or any other Acquisition Document that materially adversely affects
the interests of the Lenders (as reasonably determined by the Administrative
Agent) or increases the Purchase Price (as defined in the Acquisition
Agreement), unless such amendment, supplement, modification or waiver shall have
been consented to in writing by the Administrative Agent (such consent not to be
unreasonably withheld);
(vi) Evidence that the Borrower has available cash of no less than $19,000,000
as of the Initial Funding Date;
(vii) Evidence that the directors of the Borrower (and any necessary third party
and governmental approvers) have approved the Transactions by the Borrower at a
purchase price not to exceed (after giving effect to expected post-closing
adjustments and fees and expenses) $55,000,000;

 

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(viii) The absence of any material adverse change or material disruption in the
loan syndication, financial, banking or capital markets that, in the reasonable
judgment of the Administrative Agent, (A) has materially impaired the
syndication of any component of the credit facilities provided hereunder or
(B) could reasonably be expected to materially impair the syndication of any
component of the credit facilities provided hereunder for a period extending
beyond the then proposed Initial Funding Date (as such Initial Funding Date may
be extended in accordance with the terms hereof);
(ix) Since December 31, 2009, no event or circumstance shall have occurred that
has resulted or could result in a material adverse change in the business,
operations, condition (financial or otherwise), assets or liabilities (whether
actual or contingent) of the Borrower Parties taken as a whole;
(x) There shall not exist any pending or threatened action, suit, investigation
or proceeding, which, if adversely determined, could reasonably be expected to
materially and adversely affect the Borrower Parties, any transaction
contemplated hereby (including the Transactions) or the ability of any Loan
Party to perform its obligations under the Credit Documents or the ability of
the Lenders to exercise their rights thereunder;
(xi) The Administrative Agent shall not have become aware of any material
information or other matter that is inconsistent in a material and adverse
manner with any previous due diligence, information or matter (including any
financial statements and projections previously delivered to the Administrative
Agent;
(xii) No Material Adverse Effect (as defined in the Acquisition Agreement) shall
have occurred since December 31, 2009;
(xiii) There shall not exist (A) any order, decree, judgment, ruling or
injunction which restrains the consummation of the Transactions in the manner
contemplated by the Transaction Documents; or (B) any litigation that shall be
pending or threatened against any Borrower Party as of the Initial Funding Date
which could reasonably be expected to have a Material Adverse Effect;
(xiv) On the Initial Funding Date, after giving effect to such initial
Borrowings:
(A) The Borrower shall have obtained all Governmental Authorizations (including
all applicable tribal, gaming, horse racing and video lottery licenses and
permits) and all consents of other Persons in each case that are necessary to
have been obtained prior to the Initial Funding Date in connection with the
Transactions and the continued operation of the business conducted by the
Borrower Parties in substantially the same manner as conducted prior to the
Initial Funding Date. Each such Governmental Authorization or consent shall be
in full force and effect, except in a case where the failure to obtain or
maintain a Governmental Authorization or consent, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
and

 

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(B) No temporary restraining order, preliminary or permanent injunction or other
order preventing the Borrower and the Guarantors, the Administrative Agent or
any Lender Party from entering into this Agreement or the other Credit Documents
or consummating the transactions contemplated hereby or thereby shall have been
issued by any court of competent jurisdiction or other Governmental Authority
having authority over any such Person and remains in effect, and no applicable
Governmental Rules shall be enacted or deemed applicable to the Credit Documents
by a Governmental Authority having authority over any such Person that makes the
closing of the Credit Documents or any extensions of credit thereunder illegal;
(xv) A certificate of a Senior Finance Officer of the Borrower, on behalf of the
Borrower, certifying as to the matters set forth in clause (xiv);
(xvi) To the extent not included in clause (b), clause (c), or clause (g)(v)
above and not previously delivered pursuant to Section 3.01, a copy of each of
the Material Documents (including all exhibits, appendices, schedules, annexes
and attachments thereto and amendments and assignments thereof), duly executed
by each party thereto;
(xvii) A “declination” letter from the NIGC as to whether or not any of the
Credit Documents is a “management agreement” within the meaning of IGRA;
(xviii) The Administrative Agent shall have certified to the Lenders that either
(i) prior to the Initial Funding Date, the Borrower obtained and provided the
Administrative Agent with written evidence of flood insurance coverage meeting
the minimum requirements of the National Flood Insurance Program (the “NFIP”)
for all improved real estate and any personal property therein that constitutes
Collateral that is located within a Special Flood Hazard Area (“SFHA”) in a
community that participates in the Program; or (ii) the determination(s) using
the Special Flood Hazard Determination Form indicate that no improved real
estate that constitutes Collateral is located in a SFHA in a community that
participates in the Program;
(xix) All fees and expenses payable to the Wells Fargo Parties (including
reasonable fees and expenses of counsel to the Wells Fargo Parties invoiced
through the Initial Funding Date) and the Lenders on or prior to the Initial
Funding Date (including all fees payable to the Wells Fargo Parties pursuant to
the Fee Letter); and
(xx) Such other evidence as the Administrative Agent or any Lender may
reasonably request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and conditions
contained in this Agreement and the other Credit Documents.

 

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SCHEDULE 4.01(e)(iv)
Governmental Authorizations
1. Pledge of Securities of Stockman’s Casino to be obtained prior to
effectiveness of Pledge.
2. Pledge of Securities of Rising Sun.
3. Administrative Agent will be required to obtain gaming approvals prior to
exercise of remedies in gaming collateral following an event of default.

 

 

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SCHEDULE 4.01(g)
Litigation
None

 

 

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SCHEDULE 4.01(h)
Real Property
1. Owned Real Property.
The land situated in the State of Nevada, County of CHURCHILL, described as
follows:
Parcels 1 and 2 of the Parcel Map for James R. Peters, as trustee under the
James R. Peters Family
Trust Agreement recorded March 1, 2005, under Document No. 368694, Official
Records, Churchill County, Nevada
2. Property to be Owned Upon Closing of Acquisition With Grand Victoria Casino &
Resort, L.P.
The land situated in the State of Indiana, County of Ohio, described as follows:
Tract I
Being part of the South One-half of Section 35, Township 4 North, Range I West
of the First Principal Meridian located in the City of Rising Sun, Ohio County,
Indiana, described as follows: Commencing at the Southwest corner of Section 35,
T4N, RIW; thence South 89 degrees 35 minutes 45 seconds East, 1679 feet (Deed)
to a P.K. nail in the center of S.R. 56; thence North 00 degrees 28 minutes 51
seconds East along the centerline of said S.R. 56, 525.02 feet to the point of
beginning; thence continuing along the centerline of said road the following
five courses; thence North 00 degrees 30 minutes 25 seconds East, 25.03 feet to
a P.K. nail;
thence North 01 degrees 50 minutes 05 seconds East, 80.47 feet to a P.K. nail;
thence North 06 degrees 37 minutes 21 seconds East, 71.69 feet to a PK. nail;
thence North 11 degrees 58 minutes 14 seconds East, 87.16 feet to a P.K. nail;
thence North 15 degrees 01 minutes 26 seconds East, 35.65 feet; thence South 89
degrees 25 minutes 33 seconds East, 415.33 feet to a re-bar; thence South 00
degrees 34 minutes 27 seconds West, 296.73 feet to a re-bar; thence North 89
degrees 25 minutes 33 seconds West, 450.74 feet to the point of beginning.
Tract II
Being part of the South One-half of Section 35, Township 4 North, Range 1 West
of the First Principal Meridian located in the City of Rising Sun, Ohio County;
Indiana, described as follows: Commencing at the Southwest corner of Section 35,
Township 4 North, Range 1 West; thence South 89 degrees 35 minutes 45 seconds
East, 1679 feet (Deed) to a P.K. nail in the center of S.R. 56 and the point of
beginning; thence North 00 degrees 28 minutes 51 seconds East along the
centerline of said S.R. 56, 525.02 feet to the Southwest corner of a 3.000 acre
tract of land; thence along the boundary of said 3.000 acre tract of land the
following three courses; thence South 89 degrees 25 minutes 33 seconds East,
450.74 feet to a re-bar; thence North 00 degrees 34 minutes 27 seconds East,
296.73 feet to a re-bar; thence North 89 degrees 25 minutes 33 seconds West,
415.33 feet to the center of said S.R. 56; thence along the centerline of said
S.R. 56 the following three courses; thence North 15 degrees 01 minutes 26
seconds East, 216.13 feet; thence North 11 degrees 46 minutes 07 seconds East,
92.47 feet; thence North 10 degrees

 

 

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12 minutes 32 seconds East, 919 feet to the South right-of way line of 40 feet
wide McConnel Lane (relocated); thence South 89 degrees 26 minutes 48 seconds
East along said right-of-way line, 180.43 feet to a re-bar; thence along the
boundary of a tract of land owned by the City of Rising Sun (D.R. 17. P. 171)
following three courses; thence South 10 degrees 12 minutes 32 seconds West,
110.00 feet to a re-bar; thence South 89 degrees 26 minutes 48 seconds East,
200.00 feet to a rebar; thence North 10 degrees 12 minutes 32 seconds East,
99.86 feet to a re-bar in the South right-of-way line of 50 feet wide McConnel
Lane (relocated); thence South 89 degrees 26 minutes 48 seconds East along the
South right-of-way line of said 50 foot wide McConnel Lane (relocated), 1450.93
feet to a re-bar; thence North 02 degrees 17 minutes 32 seconds East along the
East right-of way line of said McConnel Lane, 278.70 feet to a re-bar marking
the Southwest corner of a 4.938 acre tract of land; thence along the boundary of
said 4.938 acre tract of land the following two courses; thence South 89 degrees
26 minutes 48 seconds East, 416.15 feet to a re-bar; thence North 00 degrees 33
minutes 12 seconds East 637.20 feet to a re-bar; thence South 89 degrees 26
minutes 48 seconds East along the South right-of-way line of original 30 feet
wide McConnel Lane, 100.00 feet to a re-bar marking the Northwest corner of
6.762 acre tract of land; thence along the boundary of said 6.762 acre tract of
land the following five courses: thence South 00 degrees 33 minutes 12 seconds
West, 637.20 feet to a re-bar; thence South 89 degrees 26 minutes 48 seconds
East, 561.86 feet to a re-bar; thence North 00 degrees 28 minutes 29 seconds
West, 107.61 feet to a re-bar; thence North 07 degrees 13 minutes 39 seconds
East, 330.81 feet to a rebar; thence North 89 degrees 26 minutes 48 seconds
West, 147.39 feet to the Southeast corner of a 1.044 acre tract of 1aid; thence
North 03 degrees 03 minutes 51 seconds West along the East line of said lot,
2011.44 feet to a re-bar in the South right-of-way line of said original
McConnel Lane; thence South 89 degrees 26 minutes 48 seconds East along the
South right-of-way line of said original lane, 323.12 feet to a rebar in the
West bank of a drainage ditch; thence along the West bank of said drainage ditch
the following six courses; thence South 00 degrees 20 minutes 03 seconds East,
128.24 feet to a re-bar; thence South 02 degrees 25 minutes 41 seconds West,
132.64 feet to a re-bar; thence South 04 degrees 23 minutes 32 seconds West,
307.98 feet to a re-bar; thence South 05 degrees 05 minutes 58 seconds West,
547.73 feet to a re-bar; thence South 06 degrees 53 minutes 48 seconds West,
472.38 feet to a re-bar; thence South 06 degrees 42 minutes 25 seconds West,
448.27 feet to a re-bar; thence North 89 degrees 35 minutes 45 seconds West
along the South line of said Section 35,3057.55 feet to the point of beginning.
EXCEPTING THEREFROM: The following described tract: Being part of the south
one-half of Section 35, Township 4 North, Range I West of the First Principal
Meridian located in the City of Rising Sun, Ohio County, Indiana, described as
follows: Commencing at the southwest corner of Section 35, T4N, RI W; thence 5
89 Degrees 35’ 45” E, 1679 feet (Deed) to a p.k. nail in the center of S.R. 56;
thence N 00 degrees 28’ 51” E along the centerline of said S.R. 56, 525.02 feet
to the southwest corner of a 3.000 acre tract of land; thence continuing along
the centerline of said road and along the boundary of said 3.000 acre tract of
land the following five courses: thence N 00 degrees 30’ 25” e, 25.03 feet to a
p.k nail; thence N 01 degrees 50’ 05” E, 80.47 feet to a p.k. nail; thence N 05
degrees 37’ 21” E, 71.69 feet to a p.k. nail; thence N 11 degrees 58’ 14” E,
87.16 feet to a p.k. nail; thence N 15 degrees 01’ 25” E, 35.65 feet to the
northwest corner of said 3.000 acre tract of land; thence continuing along the
centerline of said road the following four courses: thence N 15 degrees 01’ 16”
E, 216.13 feet; thence N 11 degrees 46 07” E, 92.12 feet to the point of
beginning; thence continuing N 11 degrees 46’ 07” E, 0.26 feet; thence N 10

 

 

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degrees 12’ 32” E, 9.89 feet; thence 5 89 degrees 26’ 48” E along the south
right-of-way line of an Easement for Ingress and Egress (D.R. 17, p. 171), also
the Southline of 40’ relocated McConnell Lane, 180.43 feet to a re-bar; thence 5
10 degrees 12’ 32” W 10.14 feet; thence N 89 degrees 26’ 48” W, 180.44 feet to
the point of beginning.
ALSO EXCEPTING THEREFROM: A part of the Southwest Quarter of Section 35 Township
4 North Range I West of the First Principal Meridian, Randolph Township, Ohio
County, Indiana, more particularly described as follows:
Commencing at the Southwest corner of the Southwest Quarter of said Section 35
thence South 89 degrees 35 minutes 4 seconds East along the South Line of said
Southwest Quarter 1 679 (deed) to a point on the centerline of State Route 56;
thence the following eight (8) courses along the centerline of State Route 56
(1) North 00 degrees 28 minutes 51 seconds East 252.02 feet (2) North 00 degrees
30 minutes 25 seconds East 25.03 feet (3) North 01 degrees 50 minutes 05 seconds
East 80.47 feet (4) North 06 degrees 37 minutes 21 seconds East 71.69 feet
(5) North Ii degrees 58 minutes 14 seconds East 87.16 feet (6) North 15 degrees
01 minutes 26 seconds East 251.78 feet (7) North II degrees 46 minutes 07
seconds East 92.47 feet (8) North 10 degrees 12 minutes 32 seconds East 9.89
feet to a point on the South Line of an Easement for Ingress & Egress recorded
in Deed Record 17, p 171; thence South 89 degrees 26 minutes 48 seconds East
along the South Line of said Deed Record 180.43 feet to the Northwest corner of
a parcel of ground recorded in Deed Record 17 page 171 thence the following
three (3) courses along the West, South, and East boundary of said parcel
(1) South 10 degrees 12 minutes 32 seconds West 110.00 feet (2) South 89 degrees
26 minutes 48 seconds East 200.00 feet to the Point of Beginning (3) North 10
degrees 12 minutes 32 seconds East 99.86 to a point on the South Line of said
Easement for Ingress and Egress; thence South 89 degrees 26 minutes 48 seconds
East 200.00 feet along the said South Line; thence South 10 degrees. 12 minutes
32 seconds West 99.86 feet thence North 89 degrees 26 minutes 48 seconds West
200.00 feet to the Point of Beginning containing 0.45 acres more or less subject
to public rights of ways and easements of record.
ALSO EXCEPTING THEREFROM: A part of the Southwest Quarter of Section 35 Township
4 North Range 1 West of the First Principal Meridian Randolph Township, Ohio
County, Indiana, more particularly described as follows:
Commencing at the Southwest corner of the Southwest Quarter of said Section 35
thence South 89 degrees 35 minutes 45 seconds East along the South Line of said
Southwest Quarter 1679’ (deed) to a point on the centerline of State Route 56;
thence the following eight (8) courses along the centerline of State Route 56
(1) North 00 degrees 28 minutes 51 seconds East 252.02 feet (2) North 00 degrees
30 minutes 25 seconds East 25.03 feet (3) North 01 degrees 50 minutes 05 seconds
East 80.47 feet (4) North 06 degrees 37 minutes 21 seconds East 71.69 feet
(5) North 11 degrees 58 minutes 14 seconds East 87.16 feet (6) North 15 degrees
01 minutes 26 seconds East 251.78 feet (7) North 11 degrees 46 minutes 07
seconds East 92.47 feet(8) North 10 degrees 12 minutes 32 seconds East 9.89 feet
to a point on the South Line of an Easement for Ingress & Egress recorded in
Deed Record 17, p 171; thence South 89 degrees 26 minutes 48 seconds East along
the South Line of said Deed Record 180.43 feet to the Northwest corner of a
parcel of ground recorded in Deed Record 17 page 171; thence South 10 degrees 12
minutes 32 seconds

 

 

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West along the West line of said parcel 10.14 feet; thence South 89 degrees 26
minutes 48 seconds East 433.60 feet to the Point of Beginning; thence continuing
South 89 degrees 26 minutes 48 seconds East 100.42 feet; thence South 00 degrees
00 minutes 00 seconds East 111.09 feet; thence North 90 degrees 00 minutes 00
seconds West 100.42; thence North 00 degrees 00 minutes 00 seconds East 112.06
feet to the Point of Beginning containing 0.26 acres more or less subject to
public rights of ways and easements of record.
ALSO: Being part of the South One-half of Section 35, Township 4 North, Range 1
West of the First Principal Meridian located in the City of Rising Sun, Ohio
County, Indiana, described as follows:
Commencing at the Southwest corner of Section 35, T4N, RI W, thence South 89
degrees 35 minutes 45 seconds East, 1679 feet (Deed) to a P.K. nail in the
center of S.R. 56; thence North 00 degrees 28 minutes 51 seconds East along the
centerline of said SR. 56, 525.02 feet to the Southwest corner of a 3.000 acre
tract of land; thence along the boundary of said 3.000 acre tract of land the
following three courses; thence South 89 degrees 25 minutes 33 seconds East,
450.74 feet to a re-bar; thence North 00 degrees 34 minutes 27 seconds East,
296.73 feet to a rebar; thence North 89 degrees 25 minutes 33 seconds West,
415.33 feet to the center of said S.R. 56; thence along the centerline of said
S.R. 56 the following three courses; thence North 15 degrees 01 minutes 26
seconds East, 216.13 feet; thence North 11 degrees 46 minutes 07 seconds East,
92.47 feet; thence North 10 degrees 12 minutes 32 seconds East, 9.89 feet to the
South right-of-way line of 40 feet wide McConnel Lane (relocated); thence South
89 degrees 26 minutes 48 seconds East along said right-of-way line, 180.43 feet
to a re-bar; thence along the boundary of a tract of land owned by the City of
Rising Sun (DR. 17, P 171) following three courses: thence South 10 degrees 12
minutes 32 seconds West, 110.00 feet to a rebar; thence South 89 degrees 26
minutes 48 seconds East, 200.00 feet to a re-bar; thence North 10 degrees 12
minutes 32 seconds East, 9986 feet to a re-bar in the South right-of-way line of
50 feet wide McConnel Lane (relocated); thence South 89 degrees 26 minutes 48
seconds East along the South right-of-way line of said 50 foot wide McConnel
Lane (relocated), 1450.93 feet to a re-bar; thence North 02 degrees 17 minutes
32 seconds East along the East right-of-way line of said McConnel Lane, 278.70
feet to a re-bar and the point of beginning; thence continuing North 02 degrees
17 minutes 32 seconds East, 637.49 feet to a rebar; thence South 89 degrees 26
minutes 48 seconds East along the South right-of-way line of original 30 feet
wide McConnel Lane, 43.33 feet to a re-bar marking the Northwest corner of a
1.007 acre tract of land; thence along the boundary of said 1 .007 acre tract of
land the following three courses; thence South 00 degrees 33 minutes 12 seconds
West 325.00 feet to a re-bar; thence South 89 degrees 26 minutes 48 seconds
East, 135.00 feet to a re-bar; thence North 00 degrees 33 minutes 12 seconds
East, 325.00 feet to a re-bar; thence South 89 degrees 26 minutes 48 seconds
East along the South line of said 30 feet wide McConnel lane, 218.48 feet to a
re-bar; thence South 00 degrees 33 minutes 12 seconds West, 637.20 feet to a
re-bar; thence North 89 degrees 26 minutes 48 seconds West, 416.15 feet to the
point of beginning.
ALSO: Being part of the South One-half of Section 35, Township 4 North, Range 1
West, of the First Principal Meridian located in the City of Rising Sun, Ohio
County, Indiana, described as follows:

 

 

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Commencing at the Southwest corner of Section 35, T4N, RI W; thence South 89
degrees 35 minutes 45 seconds East, 1679 feet (Deed) to a P.K. nail in the
center of S.R. 56; thence North 00 degrees 28 minutes 51 seconds East along the
centerline of said S.R. 56, 52502 feet to the Southwest corner of a 3.000 acre
tract of land; thence along the boundary of said 3.000 acre tract of land the
following three courses; thence South 89 degrees 25 minutes 33 seconds East,
450.74 feet to a re-bar; thence North 00 degrees 34 minutes 27 seconds East,
296.73 feet to a re-bar; thence North 89 degrees 25 minutes 33 seconds West,
41533 feet to the center of said S.R. 56; thence along the centerline of said
S.R. 56 the following three courses; thence North 15 degrees 01 minutes 26
seconds East, 216.13 feet; thence North 11 degrees 46 minutes 07 seconds East,
92.47 feet; thence North 10 degrees 12 minutes 32 seconds East, 9.89 feet to the
South right-of way line of 40 feet wide McConnel Lane (relocated); thence South
89 degrees 26 minutes 48 seconds East along said right-of-way line, 180.43 feet
to a re-bar; thencc along the boundary of a tract of land owned by the City of
Rising Sun (D.R. 17, p.l7l) following three courses; thence South 10 dcgrees 12
minutes 32 seconds West, 110.00 feet to a re-bar; thence South 89 degrees 26
minutes 48 seconds East, 200.00 feet to a rebar; thence North 10 degrees 12
minutes 32 seconds East, 99.86 feet to a re-bar in the South right-of-way line
of 50 feet wide McConnel Lane (relocated); thence South 89 degrees 26 minutes 48
seconds East along the South right-of-way line of said 50 feet wide McConnel
Lane (relocated), 1450.93 feet to a re-bar; thence North 02 degrees 17 minutes
32 seconds East along the East right-of-way line of said McConnel Lane, 278.70
feet to a re-bar marking the Southwest corner of a 4.938 acre tract of land;
thence along the boundary of said 4.938 acre iract of land the following two
courses; thence South 89 degrees 26 minutes 48 seconds East, 416.1 5 feet to a
re-bar; thence North 00 degrees 33 minutes 12 seconds East, 637.20 feet to a
re-bar; thence South 89 degrees 26 minutes 48 seconds East along the South
right-of-way line of original 30 feet wide McConnel Lane, 100.00 feet to a
re-bar and the point of beginning; thence continuing South 89 degrees 26 minutes
48 seconds East along the South right-of-way line of said original McConnel
Lane, 218.48 feet to a rebar marking the Northwest corner of a 1.044 acre tract
of land; thence along the boundary of said 1.044 acre tract of land the
following two courses: thence South 00 degrees 33 minutes 12 seconds West,
201.04 feet; thence South 89 degrees 26 minutes 48 seconds East, 379.90 feet to
a rebar; thence South 07 degrees 13 minutes 39 seconds West, 330.81 feet to a
re-bar; thence South 00 degrees 28 minutes 29 seconds East, 107.61 feet to a
re-bar; thence North 89 degrees 26 minutes 48 seconds West, 561.86 feet to a
re-bar; thence North 00 degrees 33 minutes 12 seconds East, 637.20 feet to the
point of beginning.
ALSO: Being part of the North One-half of Section 2 AND part of the Northwest
Quarter of Section 1, Township 3 North, Range 1 West of the First Principal
Meridian located in the City of Rising Sun, Ohio County, Indiana, described as
follows:
Commencing at the Northwest corner of Section 2, T3N, R1 W; thence South 89
degrees 35 minutes 45 seconds East along the North line of said Section 2, 1679
+1- feet (Deed) to the center of S.R. 56 and the point of beginning; thence
continuing South 89 degrees 35 minutes 45 seconds East along said Section line
4830.42 feet to the Indiana Kentucky border in the Ohio River; thence along said
Indiana- Kentucky border the following twelve courses:
South 33 degrees 52 minutes 05 seconds West, 275.89 feet;
South 40 degrees 00 minutes 00 seconds West, 457.19 feet;
South 45 degrees 32 minutes 47 seconds West, 493.77 feet;
South SO degrees 00 minutes 09 seconds West, 188.26 feet;

 

 

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South 45 degrees 01 minutes 33 seconds West, 210.94 feet;
South 47 degrees 32 minutes 14 seconds West, 226.52 feet;
South 51 degrees 55 minutes 30 seconds West, 241.36 feet;
South 52 degrees 34 minutes 03 seconds West, 212.45 feet;
South 56 degrees 55 minutes 05 seconds West, 177.71 feet;
South 48 degrees 21 minutes 24 seconds West, 131.52 feet;
South 32 degrees 36 minutes 56 seconds West, 94.74 feet;
South 28 degrees 00 minutes 21 seconds West, 67.59 feet to the most
Southeasterly corner lands owned by Gregory H. Anderson and Barbara A. Anderson
(D. R. 24, p. 195); thence along said Andersons’ boundary the following five
courses:
North 48 degrees 02 minutes 03 seconds West, 492.80 feet to a re-bar;
North 20 degrees 18 minutes 57 seconds East, 353.90 feet to a re-bar;
North 68 degrees 46 minutes 03 seconds West, 34.53 feet to a re-bar;
North 16 degrees 05 minutes 27 seconds East, 237.36 feet to a re-bar;
North 19 degrees 07 minutes 17 seconds East, 265.01 feet to a re-bar marking the
most Southeasterly corner of lands of David H. Hamilton and Delberta A. Hamilton
(D.R. 18, p. 59); thence along said Hamiltons’ boundary the following three
courses:
North 20 degrees 04 minutes 27 seconds East, 380.42 feet to a re-bar;
North 89 degrees 51 minutes 1 3 seconds West, 373.43 feet to a re-bar;
South 20 degrees 04 minutes 27 seconds West, 380.42 feet to an iron pipe marking
said Hamiltons’ most Southwesterly corner; thence continuing along said
Andersons’ boundary the following two courses: North 89 degrees 51 minutes 14
seconds West, 299.09 feet to a re-bar; South 02 degrees 08 minutes 02 seconds
West, 838.95 feet to a re-bar; thence North 89 degrees 56 minutes 53 seconds
West along the boundary of lands of the Detmer Family Limited Partnership and
the centerline of formerly Rabb’s Lane 1350.69 feet to a re-bar; thence North 00
degrees 28 minutes 40 seconds East, 847.33 feet to the Southerly boundary of a 1
.15 acre tract of land (D.R. 19, p. 598) and the South right of way line of
Industrial Drive; thence South 89 degrees 40 minutes 20 seconds East along said
1.15 acre tract of land and the extended right-of-way line 280.00 feet to a
re-bar; thence North 00 degrees 1 9 minutes 40 seconds East, 50.00 feet to the
Northeasterly corner of said 1.15 acre tract; thence North 89 degrees 40 minutes
20 seconds West along the Northerly line of said 1.15 acre tract and the
extended right-of-way line of said Industrial Drive 730.00 feet to a re-bar;
thence North 00 degrees 19 minutes 40 seconds East, 150.00 feet to a re-bar;
thence North 89 degrees 40 minutes 20 seconds West, 269.05 feet to a P.K. nail
in the center of said S.R. 56; thence along the centerline of said road North 00
degrees 41 minutes 30 seconds East, 615.73 feet to the point of beginning.
Tract III
Being part of Section 2, Township 3 North, Range I West of the First Principal
Meridian located in the City of Rising Sun, Ohio County, Indiana, described as
follows:
Commencing at an iron pin in the Southerly right-of-way line of Sixth Street
marking the most Northerly corner of Pinkney James Addition to the City of
Rising Sun; thence North 36 degrees 12 minutes 52 seconds East along the
Westerly line of said Pinkney James Addition 82.50 feet to a railroad spike in
the Northerly right-of way line of said Sixth Street and the point of beginning;
thence South 53 degrees 47 minutes 08 seconds East along said right-of-way line
459.26 feet to a re-bar; thence along the boundary of a 0.466 + acre tract of
land owned by John Richards (DR.

 

 

--------------------------------------------------------------------------------

 

18, P. 460) the following nine courses; thence North 41 degrees 14 minutes 03
seconds East, 106.67 feet to a re-bar; thence South 55 degrees 33 minutes 57
seconds East, 1 13.00 feet to an iron pin; thence South 35 degrees 41 minutes 02
seconds West, 32.45 feet to a re-bar; thence North 55 degrees 46 minutes 17
seconds West, 44.55 feet to a re-bar; thence South 34 degrees 13 minutes 43
seconds West, 35.00 feet to a re-bar; thence South 55 degrees 46 minutes 17
seconds East, 44.55 feet to a re-bar; thence South 34 degrees 13 minutes 43
seconds West, 19.95 feet to a rebar; thence South 49 degrees 09 minutes 17
seconds East, 32.80 feet to a re-bar; thence South 40 degrees 50 minutes 43
seconds West, 19.82 feet to a re-bar in said Northerly right-of-way of Sixth
Street; thence South 53 degrees 47 minutes 08 seconds East along said right-of
way line 581 .42 feet to a re-bar; thence along the boundary of a 0.920 acre
tract of land owned by John D. and Janet C. Mitchell (D.R. 25, P. 312) the
following two courses; thence North 36 degrees 12 minutes 52 seconds East,
120.00 feet to a re-bar; thence South 53 degrees 47 minutes 08 seconds East,
359.14 feet to a rebar at the edge of the Ohio River; thence along the edge of
said river the following four courses; thence North 59 degrees 00 minutes 00
seconds East, 154.19 feet; thence North 53 degrees 29 minutes 16 seconds East,
458.01 feet; thence North 47 degrees 06 minutes 00 seconds East, 362.74 feet;
thence North 48 degrees 48 minutes 00 East, 896.54 feet; thence leaving said
river North 50 degrees 51 minutes 37 seconds West along the boundary of a 10.21
acre tract of land owned by Gregory H. Anderson and Barbara Anderson (D. R. 24,
P. 195-196), 395.74 feet to a re-bar; thence North 89 degrees 56 minutes 53
seconds West along a line formerly known as the center of Rabb’s Lane, 1801.12
feet to a re-bar; thence North 89 degrees 39 minutes 00 seconds West along the
extended Southerly line of a 0.42 acre tract of land, 285.87 feet to the center
of S.R. 56; thence along the centerline of said S.R. 56 the following three
courses; thence South 22 degrees 02 minutes 46 seconds West, 5608 feet to a P.K.
nail; thence South 32 degrees 15 minutes 46 seconds West, 1 12.99 feet to a P.K.
nail; thence South 35 degrees 51 minutes 08 seconds West, 553.55 feet to the
intersection of said centerline with the extended Northerly right-of-way of said
Sixth Street; thence South 53 degrees 47 minutes 08 seconds East along said
right-of-way line, 41 .04 feet to the point of beginning.
EXCEPTING THEREFROM: Being a part of Section 2, Township 3 North, Range 1 West
of the First Principal Meridian located in the City of Rising Sun, Ohio County,
Indiana, described as follows:
Commencing at an iron pin in the southerly right-of-way line of Sixth Street
marking the most northerly corner of Pinkney James Addition to the City of
Rising Sun; thence north 36 degrees 12 minutes 52 seconds east along the
westerly line of said Pinkney James Addition 8250 feet to the northerly
right-of-way line of said Sixth Street, thence south 53 degrees 47 minutes 08
seconds east along said right-of-way line and along the boundary of a 57.820
acre tract of land 329.26 feet to a re-bar and the point of beginning; thence
north 34 degrees 47 minutes 10 seconds east 108.10 feet to a re-bar; thence
south 55 degrees 33 minutes 55 seconds east 191.79 feet to a re-bar; thence
south 36 degrees, 12 minutes 52 seconds west 114.02 feet to a re-bar in the
northerly right-of-way line of said Sixth Street; thence north 53 degrees 47
minutes 08 seconds west along said right of-way 189.00 feet to the point of
beginning. Containing 0.485 acres.
ALSO: Being part of Section 2, Township 3 North, Range 1 West of the First
Principal Meridian located in the City of Rising Sun, Ohio County, Indiana,
described as follows:

 

 

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Commencing at an iron pin in the Southerly right-of-way line of Sixth Street
marking the most Northerly corner of Pinkney James Addition to the City of
Rising Sun; thence North 36 degrees 12 minutes 52 seconds East along the
Westerly line of said Pinkney James Addition 82.50 feet to a railroad spike in
the Northerly right-of-way line of said Sixth Street; 553.55 feet to a P.K.
nail; thence North 32 degrees 15 minutes 46 seconds East, 112.99 feet to a P. K.
nail; thence North 22 degrees 02 minutes 46 seconds East, 56.08 feet to a P.K. a
nail; thence leaving said road South 89 degrees 3, minutes 00 seconds East along
the extended Southerly line of a 0.42 acre tract of land 285.87 feet to a
re-bar; thence South 89 degrees 56 minutes 53 seconds East along a line formerly
known as the center of Rabb’s Lane, also being the extended Southerly line of a
128.249 acre tract of land 1801 .1 2 feet to a re-bar; thence South 50 degrees
51 minutes 37 seconds East along the boundary of a 10.2! +1- acre tract of land
owned by Gregory H. Anderson and Barbara Anderson (D.R. 24, P. 195-196), 395.74
feet to the edge of the Ohio River and the point of beginning; thence continuing
South 50 degrees 51 minutes 37 seconds East, 490.67 feet to the Indiana-Kentucky
border in the Ohio River; thence along said Indiana-Kentucky border the
following seven courses; thence South 35 degrees 39 minutes 30 seconds West,
178.10 feet; thence South 41 degrees 57 minutes 54 seconds West, 267.61 feet;
thence South 45 degrees 39 minutes 22 seconds West, 236.12 feet; thence South 52
degrees 10 minutes 43 seconds West, 58.09 feet; thence South 43 degrees 14
minutes 30 seconds West, 76.63 feet; thence South 49 degrees 29 minutes 45
seconds West, 241.34 feet; thence South 54 degrees 20 minutes 17 seconds West,
780.32 feet; thence leaving said state border North 53 degrees 47 minutes 08
seconds West, 562.26 feet to a re-bar at the edge of said Ohio River marking the
most Easterly corner of lands owned by John D. Mitchell and Janet C. Mitchell
(D.R. 25, P. 312); thence along the edge of said river and the boundary of a
57.820 acre tract of land the following four courses: thence North 59 degrees 00
minutes 00 seconds East, 154.19 feet; thence North 53 degrees 29 minutes 16
seconds East, 458.01 feet; thence North 47 degrees 06 minutes 00 seconds East,
362.74 feet; thence North 48 degrees 48 minutes 00 seconds East, 896.54 feet to
the point of beginning.
Tract IV
A part of the Northeast Quarter of Fractional Section 2, Township 3 North, Range
I West, more fully described as follows: Commencing at an iron pin 233.15 feet S
56“OO’ East of the intersection of Walnut Street and Sixth Street in said Town:
Thence N 56” 00’ West along the centerline of Sixth Street 50.00 feet to a P.K.
nail, which is the true point of beginning; Thence continuing along the
centerline of Sixth Street N 56” 00’ West 156.65 feet to a P.K. nail, thence N
34” 15’ East 153.65 feet to a stake; thence S 62“33’ East, 113.00 feet to a
stake, thence S 27’23’ West 32.45 feet, thence N 62“37’ West 44.55 feet, thence
S 27“33’ West 35.00 feet, Thence S 62“37’ East 44.55 feet, thence S 27“23’ West
19.95 feet; thence 5 56” 00’ East 32.80 feet, thence S 34“00’ West 78.50 feet to
the true point of beginning.
EXCEPTING THEREFROM: Being a part of Section 2, Township 3 North, Range I West
of the First Principal Meridian located in the City of Rising Sun, Ohio County,
Indiana, described as follows:

 

 

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Commencing at an iron pin in the southerly right-of-way line of Sixth Street
marking the most northerly corner of Pinkney James Addition to the City of
Rising Sun; thence north 36 degrees 12 minutes 52 seconds east along the
westerly line of said Pinkney James Addition 82.50 feet to the northerly
right-of-way line of said Sixth Street thence south 53 degrees 47 minutes 08
seconds east along said right-of-way line and along the boundary of a 57.820
acre tract of land 529.26 feet to a re-bar and the point of beginning; thence
north 34 degrees 47 minutes 10 seconds east 108.10 feet to a re-bar; thence
south 55 degrees 33 minutes 55 seconds east 19 1.79 feet to a re-bar; thence
south 36 degrees, 12 minutes 52 seconds west 114.02 feet to a re-bar in the
northerly right-of-way line of said Sixth Street; thence north 53 degrees 47
minutes 08 seconds west along said right-of-way 189.00 feet to the point of
beginning. Containing 0.485 acres.
2, Leased Real Property.
Office Lease located at 4670 South Fort Apache, Suite 190, Las Vegas, Nevada
89147.

 

 

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SCHEDULE 4.01(k)
Multiemployer Plans
None.

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.01(o)
Subsidiaries

                                  Jurisdiction       Number of     Percentage  
        of   Class of   Securities     owned by       Name   Organization  
Security   issued     Loan Party     Ownership
Full House Resorts
  Delaware   Common Stock     18,001,681       0     n/a
Full House Subsidiary, Inc
  Delaware   Common Stock     1,000       100 %   Wholly owned by Full House
Resorts
Full House Subsidiary II, Inc.
  Nevada   Common Stock     1,000       100 %   Wholly owned by Full House
Resorts
Gaming Entertainment (Montana) LLC
  Nevada   Membership     N/A       100 %   Wholly owned by Full House Resorts
Gaming Entertainment (Santa Fe) LLC
  Nevada   Membership     N/A       100 %   Wholly owned by Full House Resorts
Gaming Entertainment (Indiana) LLC
  Nevada   Membership     N/A       100 %   Wholly owned by Full House Resorts
Stockman’s Casino
  Nevada   Common Stock     2,000       100 %   Wholly owned by Full House
Resorts
Gaming Entertainment (Michigan) LLC
  Delaware   Membership     N/A       50 %   49% directly owned by Full House
Resorts, 1% owned by Full House Subsidiary, Inc, 50% owned by third-party
Gaming Entertainment (Delaware) LLC
  Delaware   Membership     N/A       50 %   50% owned by Full House Subsidiary,
Inc.

 

 

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SCHEDULE 4.01(v)
Agreements With Affiliates
1. Investor Agreement by and between Full House Resorts, Inc. and RAM
Entertainment, LLC, dated February 15, 2002.
2. Amendment to Investor Agreement by and between Full House Resorts, Inc. and
RAM Entertainment, LLC, dated May 31, 2005.
3. 2006 Incentive Compensation.
4. Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc.
and Andre Hilliou.
5. Employment Agreement, dated July 17, 2007, between Full House Resorts, Inc.
and Mark J. Miller.
6. Employment Agreement, dated April 10, 2007, between Full House Resorts, Inc.
and Wes Elam.
7. Employment Agreement, dated April 10, 2007, between Full House Resorts, Inc.
and Barth F. Aaron

 

 

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SCHEDULE 5.02(a)
Existing Indebtedness
None

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 5.02(b)
Existing Liens
The purchase money security interests in gaming equipment and systems created by
the following agreements:
1. Aristocrat Corporate Purchase Agreement dated January 19, 2010
2. Bally Sales and Security Agreement dated September 7, 2007
3. Bally Sales and Security Agreement dated February 28, 2008
4. Bally Sales and Security Agreement dated January 19, 2009
5. Bally Sales and Security Agreement dated September 11, 2009
6. IGT Equipment Sales and Software License Agreement dated October 19, 2010

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 5.02(e)
EXISTING INVESTMENTS
1. Amended and Restated Class III Management Agreement dated November 18, 1996
between Nottawaseppi Huron Band of Potawatomi and Gaming Entertainment
(Michigan) LLC.
2. Management Agreement by and between Gaming Entertainment (Delaware), LLC and
Harrington Raceway, Inc. dated January 31,1996.
3. Amendment to Management Agreement by and between Gaming Entertainment
(Delaware), LLC and Harrington Raceway, Inc. dated March 18, 1998.
4. Amendment to Management Agreement by and between Gaming Entertainment
(Delaware), LLC and Harrington Raceway, Inc. dated July 1, 1999.
5. Amendment to Management Agreement by and between Gaming Entertainment
(Delaware), LLC and Harrington Raceway, Inc. dated February 4, 2002.
6. Economic Development Agreement between Full House Resorts, Inc. and Northern
Cheyenne Tribe dated May 24, 2005.
7. Development Agreement by and among Pueblo of Nambé, Nambé Pueblo Gaming
Enterprise Board and Gaming Entertainment (Santa Fe), LLC dated as of
September 20, 2005,
8. Security and Reimbursement Agreement by and among the Nambé Pueblo Gaming
Enterprise Board, Gaming Entertainment (Santa Fe), LLC and the Pueblo of Nambé
dated as of September 20, 2005.
9. Class III Gaming Management Agreement between the Northern Cheyenne Tribe and
Gaming Entertainment (Montana), LLC dated January 20, 2006.
10. Development Agreement by and between the Northern Cheyenne Tribe and Full
House Resorts, Inc. dated May 24, 2005.
11. Security and Reimbursement Agreement by and between the Northern Cheyenne
Tribe and Full House Resorts, Inc. dated August 23, 2005.
12. Management Agreement between Nottawaseppi Huron Band of Potawatomi and
Gaming Entertainment (Michigan), LLC dated June 12, 2006.
13. Management Reorganization Agreement, dated June 18, 2007 by Gaming
Entertainment (Delaware), LLC and Harrington Raceway, Inc.
14. Management Reorganization Agreement, dated June 18, 2007 by Gaming
Entertainment (Delaware), LLC and Harrington Raceway, Inc.

 

 

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EXHIBIT A
NOTICE OF LOAN BORROWING
[Date]
Wells Fargo Bank, National Association
   as the Administrative Agent
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, CA 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com
1. Reference is made to that certain Credit Agreement, dated as of October 29,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among: (1) FULL HOUSE RESORTS, INC., a Delaware
corporation (“Borrower”); (2) each of the financial institutions from time to
time listed in Schedule I to the Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time (collectively, the
“Lenders”); and (3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer and as Swing
Line Lender. Unless otherwise indicated, all terms defined in the Credit
Agreement have the same respective meanings when used herein.
2. Pursuant to Section 2.01(c) of the Credit Agreement, the Borrower hereby
irrevocably requests a
Revolving Loan Borrowing
Term Loan Borrowing
upon the following terms1:
(a) The principal amount of the requested Borrowing is to be $_____;
(b) The requested Revolving Loan Borrowing is to consist of [“Base Rate”]
[“LIBOR”] Loans;
(c) If the requested Revolving Loan Borrowing is to consist of LIBOR Loans, the
initial Interest Period for such Loans will be __________ month[s]; and
 

      1   Paragraphs 2(b) and 2(c) below need only be completed in the case of a
Notice of Loan Borrowing for a Revolving Loan Borrowing. Per Section 2.01(c) of
the Credit Agreement, the Term Loan Borrowing shall be initially made as a Base
Rate Portion.

 

A-1

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(d) The date of the requested Borrowing is to be _______, ______.
3. The Borrower hereby certifies to the Administrative Agent and the Lenders
that, on the date listed in Section 2(d) above and after giving effect to the
requested Borrowing:
(a) The representations and warranties of the Loan Parties set forth in
Article IV of the Credit Agreement and in the other Credit Documents are true
and correct in all material respects (except to the extent that such
representation and warranty is qualified by materiality, in which case such
representation and warranty must be true in all respects) as if made on such
date (except for representations and warranties expressly made as of a specified
date, which shall be true and correct in all material respects (except to the
extent that such representation and warranty is qualified by materiality, in
which case such representation and warranty must be true in all respects) as of
such date);
(b) No Default has occurred and is continuing or will result from the requested
Borrowing; and
(c) No material adverse change in the business, operations, condition (financial
or otherwise), assets or liabilities (whether actual or contingent) of the
Borrower Parties taken as a whole (including the Purchased Assets as if they
were owned on December 31, 2009 and for the twelve months prior thereto), having
occurred since December 31, 2009.
4. Please disburse the proceeds of the requested Borrowing to:

 

A-2

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IN WITNESS WHEREOF, the Borrower has executed this Notice of Loan Borrowing on
the date set forth above.

           

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

A-3

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EXHIBIT B
NOTICE OF CONVERSION
[Date]
Wells Fargo Bank, National Association
   as the Administrative Agent
201 Third Street, 11th Floor
MAC Mail A0187-110
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com
1. Reference is made to that certain Credit Agreement, dated as of October 29,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among: (1) FULL HOUSE RESORTS, INC., a Delaware
corporation (“Borrower”); (2) each of the financial institutions from time to
time listed in Schedule I to the Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time (collectively, the
“Lenders”); and (3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer and as Swing
Line Lender. Unless otherwise indicated, all terms defined in the Credit
Agreement have the same respective meanings when used herein.
2. Pursuant to Section 2.01(e) of the Credit Agreement, the Borrower hereby
irrevocably requests to convert a
Revolving Loan Borrowing
Term Loan Borrowing
as follows:
(a) The Revolving Loan Borrowing to be converted consists of [“Base Rate”]
[“LIBOR”] Loans in the aggregate principal amount of $_________ which were
initially advanced to the Borrower on _______, _______;
(a) The Portion of the Term Loan Borrowing to be converted is the [“Base Rate”]
[“LIBOR”] Portion in the aggregate principal amount of $_________ [which has a
current Interest Period of [one (1)] [three (3)] [six (6)] month[s] expiring on
_______, ________];
(b) Such Borrowing is to be converted into a Borrowing consisting of the
following type(s), amount(s) and, for each LIBOR Loan or Portion, Interest
Period:

          Type   Amount   Interest Period

 

B-1

--------------------------------------------------------------------------------

 

The Loans or Portions of the Borrowing are to be converted into [“Base Rate”]
[“LIBOR”] Loans or Portions, as applicable;
(c) If such Loans or Portions are to be converted into LIBOR Loans or Portions,
the initial Interest Period for such Loans or Portions commencing upon
conversion will be _______ months; and
(d) The date of the requested conversion is to be _______, _______.
3. For each conversion of a Borrowing consisting of Base Rate Loans to LIBOR
Loans, the Borrower hereby certifies to the Administrative Agent and the Lenders
that, on the date of this Notice of Conversion, and after giving effect to the
requested conversion, no Event of Default has occurred and is continuing.
[This Space Intentionally Left Blank]

 

B-2

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IN WITNESS WHEREOF, the Borrower has executed this Notice of Conversion on the
date set forth above.

           

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

B-3

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EXHIBIT C
NOTICE OF INTEREST PERIOD SELECTION
[Date]
Wells Fargo Bank, National Association
   as the Administrative Agent
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, CA 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com:
1. Reference is made to that certain Credit Agreement, dated as of October 29,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among: (1) FULL HOUSE RESORTS, INC., a Delaware
corporation (the “Borrower”); (2) each of the financial institutions from time
to time listed in Schedule I to the Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time (collectively, the
“Lenders”); and (3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer and as Swing
Line Lender. Unless otherwise indicated, all terms defined in the Credit
Agreement have the same respective meanings when used herein.
2. Pursuant to Section 2.01(f) of the Credit Agreement, the Borrower hereby
irrevocably selects a new Interest Period for a
Revolving Loan Borrowing
Term Loan Borrowing
as follows:
(a) The Revolving Loan Borrowing for which a new Interest Period is to be
selected consists of LIBOR Loans in the aggregate principal amount of $_______
which were initially advanced to the Borrower on _______, _______;
(a) The Portion of the Term Loan Borrowing for which a new Interest Period is to
be selected consists of LIBOR Portions in the aggregate principal amount of
$________ which were initially [advanced to] [converted by] the Borrower on
____________, ________;
(b) The last day of the current Interest Period for such Loans or Portion(s) is
_____, ________; and

 

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(c) The next Interest Period for such Loans or Portion(s) commencing upon the
last day of the current Interest Period is to be [one (1)] [three (3)] [six (6)]
month[s].
3. The Borrower hereby certifies to the Administrative Agent and the Lenders
that on the date of this Notice of Interest Period Selection, after giving
effect to the requested selection, no Event of Default has occurred and is
continuing.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower has executed this Notice of Interest Period
Selection on the date set forth above.

           

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

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EXHIBIT D
NOTICE OF SWING LINE BORROWING
[Date]
Wells Fargo Bank, National Association
   as the Administrative Agent
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, CA 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com
1. Reference is made to that certain Credit Agreement, dated as of October 29,
2010 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among: (1) FULL HOUSE RESORTS, INC., a Delaware
corporation (the “Borrower”); (2) each of the financial institutions from time
to time listed in Schedule I to the Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time (collectively, the
“Lenders”); and (3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer and as Swing
Line Lender. Unless otherwise indicated, all terms defined in the Credit
Agreement have the same respective meanings when used herein.
2. Pursuant to Section 2.03(b) of the Credit Agreement, the Borrower hereby
irrevocably requests the Swing Line Borrowing upon the following terms:
(a) The principal amount of the Swing Line Borrowing is to be $_______; and
(b) The date of the Swing Line Borrowing is to be ________, _________.
3. The Borrower hereby certifies to the Administrative Agent and the Lenders
that, on the date listed in Section 2(b) above and after giving effect to the
requested Swing Line Borrowing:
(a) The representations and warranties of the Loan Parties set forth in
Article IV of the Credit Agreement and in the other Credit Documents are true
and correct in all material respects (except to the extent that such
representation and warranty is qualified by materiality, in which case such
representation and warranty must be true in all respects) as if made on such
date (except for representations and warranties expressly made as of a specified
date, which shall be true and correct in all material respects (except to the
extent that such representation and warranty is qualified by materiality, in
which case such representation and warranty must be true in all respects) as of
such date);

 

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(b) No Default has occurred and is continuing or will result from the Borrowing;
and
(c) No material adverse change in the business, operations, condition (financial
or otherwise), assets, liabilities (whether actual or contingent) or prospects
of the Borrower Parties taken as a whole (including the Purchased Assets as if
they were owned on December 31, 2009 and for the twelve months prior thereto),
having occurred since December 31, 2009.
4. Please disburse the proceeds of the Swing Line Borrowing to:
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower has executed this Notice of Swing Line
Borrowing on the date set forth above.

           
FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

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EXHIBIT E
REVOLVING LOAN NOTE

      $________   _________________________, _____

FOR VALUE RECEIVED, FULL HOUSE RESORTS, INC., a Delaware corporation (the
“Borrower”) hereby promise to pay to the order of ________, a _________ (the
“Lender”), the principal sum of ________ DOLLARS ($___________) or such lesser
amount as shall equal the aggregate outstanding principal balance of the
Revolving Loans made by the Lender to the Borrower pursuant to that certain
Credit Agreement, dated as of October 29, 2010, among the Borrower, the
financial institutions listed in Schedule I thereto, Wells Fargo Bank, National
Association, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer
and as Swing Line Lender (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), on or before the Maturity
Date specified in the Credit Agreement; and to pay interest on said sum, or such
lesser amount, at the rates and on the dates provided in the Credit Agreement.
The Borrower shall make all payments hereunder, for the account of the Lender’s
Applicable Lending Office, to the Administrative Agent as indicated in the
Credit Agreement, in lawful money of the United States and in same day or
immediately available funds.
The Borrower hereby authorizes the Lender to record on the schedule(s) annexed
to this Note the date and amount of each Revolving Loan and of each payment or
prepayment of principal made by the Borrower; provided, however, that the
failure of the Lender to make, or any error in making, any such notation shall
not affect the Borrower’s obligations hereunder.
This Note is one of the Revolving Loan Notes referred to in the Credit
Agreement. This Note is subject to the terms of the Credit Agreement, including
the rights of prepayment and the rights of acceleration of maturity set forth
therein, and is secured by the Security Documents. Terms used herein have the
meanings assigned to those terms in the Credit Agreement, unless otherwise
defined herein.
The transfer, sale or assignment of any rights under or interest in this Note is
subject to certain restrictions contained in the Credit Agreement, including
Section 8.05 thereof.

 

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The Borrower shall pay all fees and expenses, including attorneys’ fees,
incurred by the Lender in the enforcement or attempt to enforce any of the
Borrower’s obligations hereunder not performed when due. Except as otherwise
provided in the Credit Documents, the Borrower hereby waives notice of
presentment, demand, protest or notice of any kind.
This Note shall be governed by and construed in accordance with the laws of the
State of New York without reference to conflicts of law rules other than
Section 5-1401 of the General Obligations Law of the State of New York.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower has executed this Revolving Loan Note on the
date set forth above.

            FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

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LOANS AND PAYMENTS OF PRINCIPAL

                                                                  Interest
Period                                       Amount of     Unpaid              
  Type of     Amount of     Principal Paid or     Principal     Notation   Date
    Loan     Loan     Prepaid     Balance     Made By  

 

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EXHIBIT F
TERM LOAN NOTE

      $_______   _________________________, _____

FOR VALUE RECEIVED, FULL HOUSE RESORTS, INC., a Delaware corporation (the
“Borrower”) hereby promise to pay to the order of ________, a ________ (the
“Lender”), the principal sum of ________ DOLLARS ($________) in the amounts and
on such dates provided in the Credit Agreement (referred to below); and to pay
interest on the outstanding balance of said sum at the rates and on the dates
provided in that certain Credit Agreement, dated as of October 29, 2010, among
the Borrower, the financial institutions listed in Schedule I thereto, Wells
Fargo Bank, National Association, as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”), as Collateral Agent, as Security
Trustee, as L/C Issuer and as Swing Line Lender (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);
provided, however, that all principal and accrued interest remaining unpaid
shall be payable in full on the Maturity Date.
The Borrower shall make all payments hereunder, for the account of the Lender’s
Applicable Lending Office, to the Administrative Agent as indicated in the
Credit Agreement, in lawful money of the United States and in same day or
immediately available funds.
This Note is one of the Term Loan Notes referred to in the Credit Agreement.
This Note is subject to the terms of the Credit Agreement, including the rights
of prepayment and the rights of acceleration of maturity set forth therein, and
is secured by the Security Documents. Terms used herein have the meanings
assigned to those terms in the Credit Agreement, unless otherwise defined
herein.
The transfer, sale or assignment of any rights under or interest in this Note is
subject to certain restrictions contained in the Credit Agreement, including
Section 8.05 thereof.
The Borrower shall pay all fees and expenses, including attorneys’ fees,
incurred by the Lender in the enforcement or attempt to enforce any of the
Borrower’s obligations hereunder not performed when due. The Borrower hereby
waives notice of presentment, demand, protest or notice of any kind.
This Note shall be governed by and construed in accordance with the laws of the
State of New York without reference to conflicts of law rules other than
Section 5-1401 of the General Obligations Law of the State of New York.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower has executed this Term Loan Note on the date
set forth above.

            FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:      

 

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EXHIBIT G
SWING LINE NOTE

      $1,000,0000   _________________________, _____

FOR VALUE RECEIVED, FULL HOUSE RESORTS, INC., a Delaware corporation (the
“Borrower”), hereby promise to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (the “Lender”), the principal sum of ONE MILLION DOLLARS AND 00/100
($1,000,000) or such lesser amount as shall equal the aggregate outstanding
principal balance of the Swing Line Loans made by the Lender to the Borrower
pursuant to that certain Credit Agreement, dated as of October 29, 2010, among
the Borrower, the financial institutions listed in Schedule I thereto, Wells
Fargo Bank, National Association, as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”), as Collateral Agent, as Security
Trustee, as L/C Issuer and as Swing Line Lender (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
on or before the Maturity Date specified in the Credit Agreement; and to pay
interest on said sum, or such lesser amount, at the rates and on the dates
provided in the Credit Agreement.
The Borrower shall make all payments hereunder, for the account of the Lender’s
Applicable Lending Office, to the Administrative Agent as indicated in the
Credit Agreement, in lawful money of the United States and in same day or
immediately available funds.
The Borrower hereby authorizes the Lender to record on the schedule(s) annexed
to this Note the date and amount of each Swing Line Loan and of each payment or
prepayment of principal made by the Borrower; provided, however, that the
failure of the Lender to make, or any error in making, any such notation shall
not affect the Borrower’s obligations hereunder.
This Note is one of the Swing Line Notes referred to in the Credit Agreement.
This Note is subject to the terms of the Credit Agreement, including the rights
of prepayment and the rights of acceleration of maturity set forth therein, and
is secured by the Security Documents. Terms used herein have the meanings
assigned to those terms in the Credit Agreement, unless otherwise defined
herein.
The transfer, sale or assignment of any rights under or interest in this Note is
subject to certain restrictions contained in the Credit Agreement, including
Section 8.05 thereof.
The Borrower shall pay all fees and expenses, including attorneys’ fees,
incurred by the Lender in the enforcement or attempt to enforce any of the
Borrower’s obligations hereunder not performed when due. Except as otherwise
provided in the Credit Documents, the Borrower hereby waives notice of
presentment, demand, protest or notice of any other kind.

 

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This Note shall be governed by and construed in accordance with the laws of the
State of New York without reference to conflicts of law rules other than
Section 5-1401 of the General Obligations Law of the State of New York.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower has executed this Swing Line Note on the date
set forth above.

            FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:        

 

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EXHIBIT H
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:
(1) The financial institution designated under item A of Attachment 1 hereto as
the Assignor Lender (“Assignor Lender”); and
(2) The financial institution designated under item B of Attachment 1 hereto as
the Assignee Lender (“Assignee Lender”).
RECITALS
A. Assignor Lender is one of the Lenders which is a party to the Credit
Agreement, dated as of October 29, 2010 (as amended, supplemented or otherwise
modified in accordance with its terms from time to time, the “Credit
Agreement”), by and among FULL HOUSE RESORTS, INC., a Delaware corporation (the
“Borrower”), the financial institutions listed in Schedule I to the Credit
Agreement (the “Lenders”), Wells Fargo Bank, National Association, as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”), as Collateral Agent, as Security Trustee, as L/C Issuer and as Swing
Line Lender.
B. Assignor Lender wishes to sell, and Assignee Lender wishes to purchase, all
or a portion of Assignor Lender’s rights under the Credit Agreement pursuant to
Section 8.05(c) of the Credit Agreement.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment Agreement, all
capitalized terms used herein and defined in the Credit Agreement have the
respective meanings given to those terms in the Credit Agreement.
2. Sale and Assignment. On the terms and subject to the conditions of this
Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate
to Assignee Lender and Assignee Lender hereby agrees to purchase, accept and
assume the rights, obligations and duties of a Lender under the Credit Agreement
and the other Credit Documents having a Revolving Loan Commitment, Term Loan and
corresponding Proportionate Shares as set forth under Column 1 opposite Assignee
Lender’s name on Attachment 1 hereto. Such sale, assignment and delegation shall
become effective on the date designated in Attachment 1 hereto (the “Assignment
Effective Date”), which date shall be, unless the Administrative Agent shall
otherwise consent, at least five (5) Business Days after the date following the
date counterparts of this Assignment Agreement are delivered to the
Administrative Agent in accordance with Section 3 hereof.

 

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3. Assignment Effective Notice. Upon (a) receipt by the Administrative Agent of
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Lender and
Assignee Lender (and, to the extent required by Section 8.05(c) of the Credit
Agreement, by the Borrower and the Administrative Agent) and (b) payment to the
Administrative Agent of the registration and processing fee specified in
Section 8.05(e) of the Credit Agreement by Assignor Lender, the Administrative
Agent will transmit to the Borrower, Assignor Lender and Assignee Lender an
Assignment Effective Notice substantially in the form of Attachment 2 hereto,
fully completed (an “Assignment Effective Notice”).
4. Assignment Effective Date. At or before 12:00 noon (local time of Assignor
Lender) on the Assignment Effective Date, Assignee Lender shall pay to Assignor
Lender, in immediately available or same day funds, an amount equal to the
purchase price, as agreed between Assignor Lender and Assignee Lender (the
“Purchase Price”), for the Revolving Loan Commitment (and related Loans and
participations in L/C Obligations), Term Loan and corresponding Proportionate
Shares purchased by Assignee Lender hereunder. Effective upon receipt by
Assignor Lender of the Purchase Price payable by Assignee Lender, the sale,
assignment and delegation to Assignee Lender of such Revolving Loan Commitment
(and related Loans and participations in L/C Obligations), Term Loan and
corresponding Proportionate Shares as described in Section 2 hereof shall become
effective.
5. Payments After the Assignment Effective Date. Assignor Lender and Assignee
Lender hereby agree that the Administrative Agent shall, and hereby authorize
and direct the Administrative Agent to, allocate amounts payable under the
Credit Agreement and the other Credit Documents as follows:
(a) All principal payments made after the Assignment Effective Date with respect
to each Revolving Loan Commitment, Term Loan and corresponding Proportionate
Shares assigned to Assignee Lender pursuant to this Assignment Agreement shall
be payable to Assignee Lender.
(b) All interest, fees and other amounts accrued after the Assignment Effective
Date with respect to the Revolving Loan Commitment, Term Loan and corresponding
Proportionate Shares assigned to Assignee Lender pursuant to this Assignment
Agreement shall be payable to Assignee Lender.
Assignor Lender and Assignee Lender shall make any separate arrangements between
themselves which they deem appropriate with respect to payments between them of
amounts paid under the Credit Documents on account of the Revolving Loan
Commitment, Term Loan and corresponding Proportionate Shares assigned to
Assignee Lender, and neither the Administrative Agent nor the Borrower shall
have any responsibility to effect or carry out such separate arrangements.
6. Delivery of Notes. On or prior to the Assignment Effective Date, Assignor
Lender will deliver to the Administrative Agent the Notes (if any) payable to
Assignor Lender. On or prior to the Assignment Effective Date, if requested, the
Borrower will deliver to the Administrative Agent new Notes for Assignee Lender
and Assignor Lender, in each case in

 

H-2

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principal amounts reflecting, in accordance with the Credit Agreement, their
respective Revolving Loan Commitments and Term Proportionate Share of the Term
Loan (as adjusted pursuant to this Assignment Agreement). As provided in
Section 8.05(c) of the Credit Agreement, each such new Note shall be dated the
Initial Funding Date or such other date as may be agreed to by the Assignee
Lender. Promptly after the Assignment Effective Date, if new Notes are requested
the Administrative Agent will send to each of Assignor Lender and Assignee
Lender, as applicable, its new Notes and, if applicable, will send to the
Borrower the superseded Notes payable to Assignor Lender, marked “Replaced.”
7. Delivery of Copies of Credit Documents. Concurrently with the execution and
delivery hereof, Assignor Lender will provide to Assignee Lender (if it is not
already a Lender party to the Credit Agreement) conformed copies of all
documents delivered to Assignor Lender on or prior to the Initial Funding Date
in satisfaction of the conditions precedent set forth in the Credit Agreement.
8. Further Assurances. Each of the parties to this Assignment Agreement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Assignment Agreement.
9. Further Representations, Warranties and Covenants. Assignor Lender and
Assignee Lender further represent and warrant to and covenant with each other,
the Administrative Agent and the Lenders as follows:
(a) Other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned hereby free and clear of any
adverse claim, Assignor Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the other Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or the other Credit Documents furnished or the
Collateral or any security interest therein.
(b) Assignor Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
the Guarantors or any of their obligations under the Credit Agreement or any
other Credit Documents.
(c) Assignee Lender confirms that it has received a copy of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement.
(d) Assignee Lender will, independently and without reliance upon the
Administrative Agent, Assignor Lender or any other Lender and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement and the other Credit Documents.

 

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(e) Assignee Lender appoints and authorizes the Administrative Agent to take
such action as the Administrative Agent on its behalf and to exercise such
powers under the Credit Agreement and the other Credit Documents as the
Administrative Agent is authorized to exercise by the terms thereof, together
with such powers as are reasonably incidental thereto, all in accordance with
Article VII of the Credit Agreement.
(f) Assignee Lender agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(g) Attachment 1 hereto sets forth administrative information with respect to
Assignee Lender.
10. Effect of this Assignment Agreement. On and after the Assignment Effective
Date, (a) Assignee Lender shall be a Lender with a Revolving Loan Commitment,
Term Loan and corresponding Proportionate Shares equal to that set forth under
Column 2 opposite Assignee Lender’s name on Attachment 1 hereto and shall have
the rights, duties and obligations of such a Lender under the Credit Agreement
and the other Credit Documents and (b) Assignor Lender shall be a Lender with a
Revolving Loan Commitment, Term Loan and corresponding Proportionate Shares
equal to that set forth under Column 2 opposite Assignor Lender’s name on
Attachment 1 hereto, and shall have the rights, duties and obligations of such a
Lender under the Credit Agreement and the other Credit Documents or, if the
Revolving Loan Commitment or any Term Loan of Assignor Lender has been reduced
to $0, Assignor Lender shall cease to be a Lender and shall have no further
obligation to make any Loans.
11. Miscellaneous. This Assignment Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without reference to
conflicts of law rules other than Section 5-1401 of the General Obligations Law
of the State of New York. Section headings in this Assignment Agreement are for
convenience of reference only and are not part of the substance hereof.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to
be executed by their respective duly authorized officers as of the date set
forth in Attachment 1 hereto.

           

                                                                             ,
as
Assignor Lender

      By:         Name:         Title:        

           
                                                                               ,
as
Assignee Lender

      By:         Name:         Title:      

 

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          CONSENTED TO AND ACKNOWLEDGED BY:

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:         Name:         Title:        

 

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          CONSENTED TO, ACKNOWLEDGED BY,
AND ACCEPTED FOR RECORDATION
IN REGISTER:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as the Administrative Agent
      By:         Name:         Title:        

 

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ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
NAMES, ADDRESSES, REVOLVING LOAN COMMITMENTS, TERM LOANS AND
PROPORTIONATE SHARES OF ASSIGNOR LENDER AND ASSIGNEE LENDER
AND ASSIGNMENT EFFECTIVE DATE
                    , 20     

                                      Column 1     Column 2              
Revolving Loan     Revolving Loan               Commitment,     Commitment,    
          Term Loan     Term Loan               Principal and     Principal and
              Proportionate     Proportionate               Shares     Shares
After   A.   ASSIGNOR LENDER     Transferred1, 2     Assignment1  
 
          $       $    
 
                 
 
              %       %
 
                 
 
                       
 
  Applicable Lending Office:                
 
                     
 
                     
 
                     
 
                       
 
  Address for Notices:                
 
                     
 
                     
 
                     
 
                     
 
  Telephone No.:                
 
 
 
             
 
  Telecopier No.:                
 
 
 
             
 
                       
 
  Wiring Instructions:                
 
                     
 
                     

 

      1   To be expressed by a percentage rounded to the eighth digit to the
right of the decimal point.   2   Proportionate Share of Total Revolving Loan
Commitment and/or aggregate Effective Amount of all Term Loans outstanding, in
each case as contemplated to be sold by Assignor Lender and purchased by
Assignee Lender pursuant to this Assignment Agreement.

 

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                                      Column 1     Column 2              
Revolving Loan     Revolving Loan               Commitment,     Commitment,    
          Term Loan     Term Loan               Principal and     Principal and
              Proportionate     Proportionate               Shares     Shares
After   B.   ASSIGNEE LENDER     Transferred1, 2     Assignment1  
 
          $       $    
 
                 
 
              %       %
 
                 
 
                       
 
  Applicable Lending Office:                
 
                 
 
                 
 
                 
 
                 
 
                       
 
  Address for Notices:                
 
                 
 
                 
 
                 
 
                 
 
  Telephone No.:                
 
 
 
             
 
  Telecopier No.:                
 
 
 
             
 
                       
 
  Wiring Instructions:                
 
                 
 
                 
 
              %       %
 
                 
 
                       
 
  Applicable Lending Office:                
 
                 
 
                 
 
                 
 
                 

 

      1   To be expressed by a percentage rounded to the eighth digit to the
right of the decimal point.   2   Proportionate Share of Total Revolving Loan
Commitment and/or aggregate Effective Amount of all Term Loans outstanding, in
each case as contemplated to be sold by Assignor Lender and purchased by
Assignee Lender pursuant to this Assignment Agreement.

 

H-9

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  Address for Notices:                
 
                     
 
                     
 
                     
 
                     
 
                 
 
  Telephone No.:                
 
 
 
             
 
  Telecopier No.:                
 
 
 
             
 
                       
 
  Wiring Instructions:                
 
                     
 
                     
 
                       
C.
  ASSIGNMENT EFFECTIVE DATE:                
 
                                            , 20                       

 

H-10

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ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to that certain Credit Agreement, dated as of October 29, 2010
(as amended, supplemented or otherwise modified in accordance with its terms
from time to time, the “Credit Agreement”), by and among FULL HOUSE RESORTS,
INC., a Delaware corporation (the “Borrower”), the financial institutions listed
in Schedule I to the Credit Agreement (the “Lenders”), Wells Fargo Bank,
National Association, as administrative agent for the Lenders (in such capacity,
the “Administrative Agent”), as Collateral Agent, as Security Trustee, as L/C
Issuer and as Swing Line Lender. The Administrative Agent hereby acknowledges
receipt of five executed counterparts of a completed Assignment Agreement, a
copy of which is attached hereto. Terms defined in such Assignment Agreement are
used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the Assignment
Effective Date will be                     .
2. Pursuant to such Assignment Agreement, Assignor Lender is required to deliver
to the Administrative Agent on or before the Assignment Effective Date the Note,
if any, payable to Assignor Lender.
3. Pursuant to such Assignment Agreement and the Credit Agreement, the Borrower
is required to deliver to the Administrative Agent on or before the Assignment
Effective Date the following Notes, each dated                      [Insert
appropriate date]:
[Describe each new Note for Assignor Lender and Assignee Lender as to principal
amount, to the extent that each such Note is requested by Assignor Lender and/or
Assignee Lender.]
4. Pursuant to such Assignment Agreement, Assignee Lender is required to pay its
Purchase Price to Assignor Lender at or before 12:00 noon (local time of
Assignor Lender) on the Assignment Effective Date in immediately available
funds.

            Very truly yours,
WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent
      By:         Name:         Title:      

 

H-11

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EXHIBIT I
COMPLIANCE CERTIFICATE
(See attached)

 

 

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EXHIBIT I
COMPLIANCE CERTIFICATE
___________________ ___, 20__
Wells Fargo Bank, National Association,
as Administrative Agent
201 Third Street, 11th Floor
MAC Mail A0187-110
San Francisco, California 94103
Attention: Deal Administrator
Tel. No. (415) 477-5314
Fax No. (415) 546-6353
E-mail: agentsf@wellsfargo.com
This Compliance Certificate is delivered pursuant to Section 5.01(a)(iii) of
that certain Credit Agreement, dated as of October 29, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among (1) FULL HOUSE RESORTS, INC., a Delaware corporation
(the “Borrower”); (2) each of the financial institutions from time to time
listed in Schedule I to the Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time (collectively, the “Lenders”); and
(3) WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”), as
Collateral Agent, as Security Trustee, as L/C Issuer and as Swing Line Lender.
Terms defined in the Credit Agreement and not otherwise defined in this
Compliance Certificate (this “Certificate”) shall have the meanings defined for
them in the Credit Agreement. Section references herein relate to the Credit
Agreement unless stated otherwise. In the event of any conflict between the
calculations set forth in this Compliance Certificate and the manner of
calculation required by the Credit Agreement, the terms of the Credit Agreement
shall govern and control.
This Compliance Certificate is delivered in accordance with Section 5.01(a)(iii)
of the Credit Agreement by the undersigned Senior Finance Officer of the
Borrower, on behalf of the Borrower. This Compliance Certificate is delivered
for the fiscal [quarter/year] ended  ____________,  ____ (the “Test Date”).
Computations indicating compliance with respect to the covenants in
Sections 5.01(i), 5.02(a), 5.02(c), 5.02(d), 5.02(q) and 5.03 of the Credit
Agreement are set forth below:
1. Section 5.01(i) — Updated Schedules for New Subsidiaries.
During the fiscal quarter ended on the Test Date, no Loan Party has reorganized,
recapitalized or consolidated with or merged into any other Person or permitted
any other Person to merge into it, acquired any Person as a new Subsidiary or
acquired all or substantially all of the assets of any other Person, except as
previously disclosed to the Administrative Agent in accordance with the Credit
Agreement.

 

1

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2. Section 5.02(a) — Indebtedness.
(a) Section 5.02(a)(vii). The aggregate principal amount of purchase money
Indebtedness and Capital Lease obligations is $___________. The aggregate
principal amount of such Indebtedness shall not exceed and since the Effective
Date has never exceeded $750,000 at any one time outstanding.
(b) Section 5.02(a)(viii). The aggregate principal amount of Indebtedness owing
by the Loan Parties to Nevada State Bank contemplated by Section 5.02(a)(viii)
is $________. The aggregate principal amount of such Indebtedness shall not
exceed (i) $7,900,000 during the period commencing on the Effective Date and
ending on the earlier of (x) June 30, 2011 and (y) two Business Days prior to
the Initial Funding Date and (ii) zero dollars ($0) thereafter.
3. Section 5.02(c) — Asset Dispositions.
(a) Section 5.02(c)(vi). The aggregate principal amount of all sales or other
dispositions not contemplated by Sections 5.02(c)(i) — (v) and (vii) to date for
fiscal year [20  __ ] is $________. The aggregate Net Proceeds of all such
dispositions shall not exceed $500,000 in any fiscal year and in any event have
all been applied to the prepayment of Obligations or otherwise utilized to the
extent required by Section 2.06(c)(iv).
(b) Section 5.02(c)(vii). The aggregate principal amount of Net Proceeds of any
sale or condemnation by the City of the Rising Sun of approximately twenty-five
(25) acres of land of the Grand Victoria Casino & Resort as contemplated by
Section 5.02(c)(vii) is $________. Such Net Proceeds have been applied to the
prepayment of the Obligations or otherwise utilized to the extent required by
Section 2.06(c)(iv) or Section 2.06(c)(vii).
4. Section 5.02(d) — Mergers, Acquisitions, etc.
As of the Test Date, the Borrower has delivered to the Administrative Agent all
information required to be delivered pursuant to Section 5.02(d) and all
acquisitions by the Loan Parties were consummated in accordance with
Section 5.02(d), including, but not limited to the following: the consideration
paid or payable in cash (including any earn-out or similar contingent
consideration) in connection with any such acquisition, when taken together with
each other Permitted Acquisition consummated after the Effective Date does not
exceed $2,500,000 in the aggregate.

 

2

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5. Section 5.02(e) — Investments.
(a) Section 5.02(e)(iv). The aggregate amount of Investments consisting of loans
to the employees, officers and directors in the ordinary course of business is
$_________________. The aggregate amount of such Investments shall not exceed
and since the Effective Date has never exceeded $100,000 at any one time
outstanding.
(b) Section 5.02(e)(ix). The aggregate amount of Investments in connection with
entities formed by any Loan Party for purposes of entering into any management
agreement for gaming facilities is $___________. The aggregate amount of such
Investments shall not exceed $2,500,000 in the aggregate during the term of this
Agreement..
6. Section 5.02(f) — Dividends.
As of the Test Date, the Borrower has delivered to the Administrative Agent all
information required to be delivered pursuant to Section 5.02(f) of the Credit
Agreement and all Distributions by the Loan Parties were consummated in
accordance with Section 5.02(f) of the Credit Agreement.
7. Section 5.02(q) — Maximum Capital Expenditures. As of the Test Date, the
aggregate amount of Capital Expenditures made by the Loan Parties for the fiscal
year to date is $________. The aggregate amount of Capital Expenditures made by
the Loan Parties to convert hotel rooms at the Grand Victoria Casino & Resort to
suites for the fiscal year to date is $________. The aggregate amount of Capital
Expenditures made by the Loan Parties to convert hotel rooms at the Grand
Victoria Casino & Resort to suites is $_________. The aggregate amount of
Capital Expenditures made by the Loan Parties (excluding up to $2,000,000 in the
aggregate spent to convert hotel rooms at the Grand Victoria Casino & Resort to
suites) for the fiscal year to date is $________ (the “Net Capital
Expenditures”).
The aggregate amount of Net Capital Expenditures shall not (i) exceed 5% of
total revenues for the immediately preceding fiscal year or (ii) be less than
1.5% of the total revenues of the immediately preceding fiscal year.
Maximum permitted Net Capital Expenditures and minimum required Net Capital
Expenditures were computed as follows:

         
(a) Total revenues for fiscal year 20__1
  $    
 
     
(b) Maximum permitted Net Capital Expenditures for fiscal year [20__]2 — equals
       
[(a) * 5%]
  $    
 
     
In compliance:
  [YES][NO]  
 
     
(c) Minimum required Net Capital Expenditures for fiscal year [20__]3 — equals
       
[(a) * 1.5%]
  $    
 
     
In compliance:
  [YES][NO]  
 
     

 

      1   Insert fiscal year immediately preceding the Test Date   2   Insert
fiscal year in which Test Date occurs   3   Insert fiscal year in which Test
Date occurs

 

3

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8. Section 5.03(a) — Total Leverage Ratio.

         
The Total Leverage Ratio as of the Test Date was computed as follows:
       
 
       
(a) Total Funded Debt of or attributed to the Borrower Parties on a consolidated
basis as of the Test Date4
       
(i) all obligations evidenced by notes, bonds, debentures or other similar
instruments and all other obligations for borrowed money (including obligations
to repurchase receivables and other assets sold with recourse)
  $    
 
     
(ii) all obligations for the deferred purchase price of property or services
(including obligations under letters of credit and other credit facilities which
secure or finance such purchase price), except for (i) trade accounts payable,
provided that (A) such trade accounts payable arise in the ordinary course of
business and (B) no material part of any such account is more than sixty
(60) days past due and (ii) time-based licenses
  $    
 
     
(iii) all obligations under conditional sale or other title retention agreements
with respect to acquired property acquired (to the extent of the value of such
property if the rights and remedies of the seller or the lender under such
agreement in the event of default are limited solely to repossession or sale of
such property)
  $    
 
     
(iv) all obligations arising as lessee under or with respect to Capital Leases
and synthetic leases and all other off-balance sheet financing
  $    
 
     
(v) all obligations, contingent or otherwise, under or with respect to Surety
Instruments
  $    
 
     
(vi) all Unfunded Pension Liabilities
  $    
 
     
(vii) all obligations arising under acceptance facilities or under facilities
for the discount of accounts receivable
  $    
 
     

 

      4   Total Funded Debt for any period that includes any fiscal quarter
ending prior to the Initial Funding Date shall be deemed to include the Total
Funded Debt of or attributable to the Purchased Assets.

 

4

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(viii) all Contingent Obligations of such Person
  $    
 
     
(ix) all Disqualified Securities of such Person
  $    
 
     
(x) with respect to any Rate Contracts, the Termination Value thereof
  $    
 
     
(xi) all obligations with respect to letters of credit, whether drawn or
undrawn, contingent or otherwise
  $    
 
     
(xii) all Guaranty Obligations with respect to the obligations of other Persons
of the types described in clauses (i) — (xi) above
  $    
 
     
(xiii) all obligations of other Persons (“primary obligors”) of the types
described in clauses (i) — (xii) above to the extent secured by (or for which
any holder of such obligations has an existing right, contingent or otherwise,
to be secured by) any Lien on any property (including accounts and contract
rights), even though such Person has not assumed or become liable for the
payment of such obligations (and, for purposes of this clause (xiii), the amount
of the Indebtedness shall be deemed to be the lesser of (1) the amount of all
obligations of such primary obligors so secured by (or for which any holder of
such obligations has an existing right, contingent or otherwise, to be secured
by) such property and (2) the value of such property)
  $    
 
     
(a) — Total Funded Debt — equals
       
[(i)+(ii)+(iii)+(iv)+(v)+(vi)+(vii)+(viii)+(ix)+(x)+(xi)+(xii)+(xiii)]
  $    
 
     
(b) Adjusted EBITDA for the four consecutive fiscal quarter period ending on the
Test Date
       
(i) Net Income
  $    
 
     
(ii) Interest Expenses
+ $    
 
     
(iii) provisions for income taxes
+ $    
 
     
(iv) depreciation and amortization expenses
+ $    
 
     
(v) the aggregate amount of extraordinary losses (including non-cash impairment
charges)
+ $    
 
     
(vi) acquisition costs required to be expensed in accordance with GAAP in any
quarter in fiscal years 2010 and 2011 in an aggregate amount not to exceed
$800,000
+ $    
 
     
(vii) rebranding costs in an aggregate amount not to exceed $800,000
+ $    
 
     

 

5

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(viii) costs incurred in connection with Grand Victoria Casino & Resort
compliance with the Sarbanes-Oxley Act of 2002 in an aggregate amount not to
exceed $100,000
+ $    
 
     
(ix) the aggregate amount of extraordinary gains
- $    
 
     
(x) the portion of Net Income for such period attributable to GEM, GED or any
other Non-Wholly-Owned Subsidiary relating to Equity Interests held by Persons
other than the Borrower
- $    
 
     
Items (ii) through (viii) are included to the extent deducted in determining
such Net Income for such period (without duplication).
       
Items (ix) through (x) are included to the extent added in determining such Net
Income for such period (without duplication).
       
 
       
(b) — Adjusted EBITDA — equals
       
[(i)+(ii)+(iii)+(iv)+(v)+(vi)+(vii)+(viii)-(ix)-(x)]
  $    
 
     
Total Leverage Ratio equals [(a)¸(b)]
    ________:1.00  
The maximum permitted Total Leverage Ratio as of the Test Date is:
    ________:1.00  
In compliance:
  [YES][NO]  
 
     
 
       
9. Section 5.03(b) — Minimum Fixed Charge Coverage Ratio.
       
 
       
The Fixed Charge Coverage Ratio was computed as follows:
       
 
       
(a) (i) Adjusted EBITDA for the four consecutive fiscal quarter period ending on
the Test Date (as calculated in paragraph 8(b) above)
  $    
 
     
Minus
       
(ii) the aggregate amount of Capital Expenditures made during such period
(excluding up to $2,000,000 in the aggregate spent to convert hotel rooms at the
Grand Victoria Casino & Resort to suites)
  $    
 
     
Minus
       
(iii) the aggregate amount of dividends made during such period
  $    
 
     

 

6

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Minus
       
(iv) cash taxes required to be paid during such period
  $    
 
     
(a) — equals
       
[(i)-(ii)-(iii)-(iv)]
  $    
 
     
 
       
Divided by
       
(b) Fixed Charges for the Borrower Parties (determined on a consolidated basis
without duplication) for the four consecutive fiscal quarter period ending on
the Test Date
       
(i) Interest Expense paid in cash during such period
  $    
 
     
(ii) payments of principal on Indebtedness scheduled to be paid during such
period; provided, however, that for purposes of this clause (ii), any optional
prepayments made during such period that are applied pursuant to Section 2.06(b)
of the Credit Agreement to payments on the Term Loans scheduled to be made
during such period shall be disregarded, and such scheduled payments on the Term
Loans during such period shall be included in this clause (ii) notwithstanding
the prior application of such prepayments to such scheduled payments
  $    
 
     
(iii) the portion of payments under Capital Leases that should be treated as
payment of principal in accordance with GAAP required to be paid during such
period
  $    
 
     
(b) Fixed Charges — equal
       
[(i)+(ii)+(iii)]5
  $    
 
     
 
       
Fixed Charge Ratio — equals
       
[a¸b]
    ________:1.00  
The Minimum Fixed Charge Ratio is:
    ________:1.00  
In compliance
  [YES][NO]  
 
     

 

      5   With respect to calculation of the Fixed Charges: for each of the four
fiscal quarter periods ending with the first full fiscal quarter after the
Initial Funding Date, the second full fiscal quarter after the Initial Funding
Date and the third full fiscal quarter after the Initial Funding Date, Fixed
Charges for each such four fiscal quarter period shall be deemed equal to the
sum of clauses (i) through (iii) for the full quarters after the Initial Funding
Date ending thereon multiplied by 4, by 2 and by 4/3rds, respectively.

 

7

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10. Section 5.03(c) — Minimum Adjusted EBITDA.
       
 
       
Adjusted EBITDA was computed as follows:
       
 
       
(a) Adjusted EBITDA for the two consecutive fiscal quarter period ending on the
Test Date 6
       
(i) Net Income
  $    
 
     
(ii) Interest Expenses
+ $    
 
     
(iii) provisions for income taxes
+ $    
 
     
(iv) depreciation and amortization expenses
+ $    
 
     
(v) the aggregate amount of extraordinary losses (including non-cash impairment
charges)
+ $    
 
     
(vi) acquisition costs required to be expensed in accordance with GAAP in any
quarter in fiscal years 2010 and 2011 in an aggregate amount not to exceed
$800,000
+ $    
 
     
(vii) rebranding costs in an aggregate amount not to exceed $800,000
+ $    
 
     
(viii) costs incurred in connection with Grand Victoria Casino & Resort
compliance with the Sarbanes-Oxley Act of 2002 in an aggregate amount not to
exceed $100,000
+ $    
 
     
(ix) the aggregate amount of extraordinary gains
- $    
 
     
(x) the portion of Net Income for such period attributable to GEM, GED or any
other Non-Wholly-Owned Subsidiary relating to Equity Interests held by Persons
other than the Borrower
- $    
 
     

 

      6   Adjusted EBITDA for any period that includes any fiscal quarter ending
prior to the Initial Funding Date shall be deemed to include the Total Funded
Debt of or attributable to the Purchased Assets.   Pro forma credit shall be
given for an Acquired Person’s Adjusted EBITDA as if owned on the first day of
the applicable period; companies (or identifiable business units or divisions)
sold, transferred or otherwise disposed of during any period will be treated as
if not owned during the entire applicable period.

 

8

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Items (ii) through (viii) are included to the extent deducted in determining
such Net Income for such period (without duplication).
       
Items (ix) through (x) are included to the extent added in determining such Net
Income for such period (without duplication).
       
 
       
(a) — Adjusted EBITDA — equals
       
[(i)+(ii)+(iii)+(iv)+(v)+(vi)+(vii)+(viii)-(ix)-(x)]
  $    
 
     
The Minimum Adjusted EBITDA is:
  $    
 
     
In compliance
  [YES][NO]  
 
     

11. No Default. During the fiscal quarter ending on the Test Date, no Default
has occurred and is continuing, with the exceptions set forth below in response
to which the Borrower has taken (or caused to be taken) or propose to take (or
cause to be taken) the following actions (if none, so state).
[This Space Intentionally Left Blank]

 

9

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The undersigned Senior Finance Officer, on behalf of the Borrower certifies that
the calculations made and the information contained herein are derived from the
books and records of the Borrower and that each and every matter contained
herein correctly reflects those books and records.

            Dated:                     , 20__

BORROWER:

Full House Resorts, Inc.
      By:         Name:         Title:        

 

10

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EXHIBIT J
COLLATERAL CERTIFICATE
(See attached)

 

J-1

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PLEASE COMPLETE AND RETURN
AS SOON AS POSSIBLE TO:
David Lin, Esq.
Orrick, Herrington & Sutcliffe, LLP
777 S. Figueroa Street, Suite 3200
Los Angeles, CA 90017
Tele: 213-612-2343
Fax: 213-612-2499
dlin@orrick.com
COLLATERAL CERTIFICATE
The undersigned,                                          (the “COMPANY”),
hereby represents and warrants to Wells Fargo Bank, National Association, as
administrative agent and a lender (“AGENT”) that the following information is
true, accurate and complete:
1. NAMES OF THE COMPANY.
(a) The exact legal name of the COMPANY as it appears in its Articles or
Certificate of Incorporation, including any amendments thereto, is as follows:
.
(b) The federal employer identification number of the COMPANY is as follows:
.
(c) The COMPANY was formed on                     ,           , under the laws
of                          and is in good standing under those laws.
(d) The following is a list of all other names (including fictitious names,
d/b/a’s, trade names or similar appellations) used by the COMPANY or any of its
divisions or other unincorporated business units during the past five (5) years:
.

 

 

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(e) The following are the names of all entities which have been merged into the
COMPANY during the past five (5) years:
.
(f) The following are the names and addresses of all entities from whom the
COMPANY has acquired any personal property in a transaction not in the ordinary
course of business during the past five (5) years, together with the date of
such acquisition and the type of personal property acquired (e.g., equipment,
inventory, etc.):

                                              Street and     Date of            
Name     Mailing Address     Acquisition     Type of Property  
 
                               
(i)
                              .
 
                       
(ii)
                              .
 
                       
(iii)
                              .
 
                       
(iv)
                              .
 
                       

2. NAMES OF SUBSIDIARIES OF THE COMPANY. Complete this section for any
subsidiary of the COMPANY now existing.
(a) The exact legal name of each subsidiary of the COMPANY as it appears in its
Articles or Certificate of Incorporation (or comparable formation document),
including any amendments thereto and the percentage interest of each such
subsidiary owned by the COMPANY, is as follows:

         
(i)
    (     %).  
 
     
(ii)
    (     %).  
 
     
(iii)
    (     %).  
 
     
(iv)
    (     %).  
 
     

 

-2-

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(b) The federal employer identification number of each subsidiary of the COMPANY
is as follows:

                      Name     Number  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

(c) The following is a list of the jurisdiction and date of incorporation of
each subsidiary of the COMPANY:

                                              Date of       Name    
Jurisdiction     Incorporation  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 
(iv)
                      .
 
                 

(d) The following is a list of all other names (including fictitious names,
d/b/a’s, trade names or similar appellations) used by each subsidiary of the
COMPANY during the past five (5) years:

                      Name     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

 

-3-

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(e) The following are the names of all entities which have been merged into a
subsidiary of the COMPANY during the past five (5) years:

                      Name     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

(f) The following are the names and addresses of all entities from whom each
subsidiary of the COMPANY has acquired any personal property in a transaction
not in the ordinary course of business during the past five (5) years, together
with the date of such acquisition and the type of personal property acquired
(e.g., equipment, inventory, etc.):

                                              Name     Mailing Address     Date
of Acquisition     Type of Property     Subsidiary  
(i)
                                      .
 
                             
(ii)
                                      .
 
                             
(iii)
                                      .
 
                             
(iv)
                                      .
 
                             

3. LOCATIONS OF COMPANY AND ITS SUBSIDIARIES.
(a) The chief executive offices of the COMPANY and its subsidiaries are located
at the following addresses:

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

 

-4-

--------------------------------------------------------------------------------

 

(b) During the past five (5) years, the COMPANY’s chief executive office and the
chief executive offices of its subsidiaries have been located at the following
additional addresses:

                              Complete Street and Mailing Address,     Dates    
COMPANY/       including County and Zip Code     Used     Subsidiary  
(i)
                     .  
 
                 
(ii)
                     .  
 
                 
(iii)
                     .  
 
                 
(iv)
                     .  
 
                 

(c) The following are all the locations in the United States of America where
the COMPANY and its subsidiaries maintain any books or records relating to any
of their accounts receivable (attach legal descriptions for all locations noted
below):

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(d) The following are all of the locations in the United States of America where
the COMPANY and its subsidiaries maintain any equipment, fixtures or inventory
(attach legal descriptions for all locations noted below):

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

 

-5-

--------------------------------------------------------------------------------

 

Record Owners of above:

         
(i)
      .
 
     
(ii)
      .
 
     
(iii)
      .
 
     
(iv)
      .
 
     

(e) The following are all of the locations outside of the United States of
America where the COMPANY and its subsidiaries maintain any equipment, fixtures
or inventory (attach legal descriptions for all locations noted below):

                      Complete Street and Mailing Address,     COMPANY/      
including County and Postal Code     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

Record Owners of above:

         
(v)
      .
 
     
(vi)
      .
 
     
(vii)
      .
 
     

(f) The following are all the locations in the United States of America where
the COMPANY and its subsidiaries own, lease, or occupy any real property (attach
legal descriptions for all locations noted below):

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

 

-6-

--------------------------------------------------------------------------------

 

Record Owners of above:

         
(v)
      .
 
     
(vi)
      .
 
     
(vii)
      .
 
     
(viii)
      .
 
     
(ix)
      .
 
     

(g) The following are all the locations outside of the United States of America
where the COMPANY and its subsidiaries own, lease, or occupy any real property:

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

Record Owners of above:

         
(v)
      .
 
     
(vi)
      .
 
     
(vii)
      .
 
     

(h) The following are the names and addresses of all consignees of the COMPANY
and its subsidiaries:

                                      Street and Mailing Address,     COMPANY/  
    Names     including County and Zip Code     Subsidiary  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 
(iv)
                      .
 
                 

 

-7-

--------------------------------------------------------------------------------

 

(i) The following are the names and addresses of all warehousemen or bailees who
have possession of any of the COMPANY’s inventory and the inventory of its
subsidiaries:

                                      Street and Mailing Address,     COMPANY/  
    Names     including County and Zip Code     Subsidiary  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 
(iv)
                      .
 
                 

Are Documents of Title Issued?

If So, Are They Negotiable?

         
(v)
      .
 
     
(vi)
      .
 
     
(vii)
      .
 
     
(viii)
      .
 
     

(j) The following are the names and addresses of all customs brokers or similar
persons who act as agent for the COMPANY or any of COMPANY’s subsidiaries for
the purpose of receiving bills of lading and other documents of title for goods
or inventory and for receiving goods or inventory for which such bills of lading
or documents of title have been issued:

                                      Street and Mailing Address,     COMPANY/  
    Names     including County and Zip Code     Subsidiary  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 

(k) The following are any locations in the United States of America at which the
COMPANY and its subsidiaries do business in addition to locations listed above:

 

-8-

--------------------------------------------------------------------------------

 

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(l) The following are any locations outside of the United States of America at
which the COMPANY and its subsidiaries do business in addition to locations
listed above:

                      Complete Street and Mailing Address,     COMPANY/      
including County and Zip Code     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(m) The following are the States of the United States of America in which the
COMPANY and its subsidiaries transact business:

                              COMPANY/       State     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(n) The following are the States of the United States of America in which the
COMPANY and its subsidiaries are duly qualified and in good standing to transact
business as a foreign corporation:

 

-9-

--------------------------------------------------------------------------------

 

                              COMPANY/       State     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(o) The following are countries or territories outside of the United States of
America in which the COMPANY and its subsidiaries are duly qualified and in good
standing to transact business as a foreign corporation:

                              COMPANY/       Country/Territory     Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           

4. ORGANIZATIONAL DOCUMENTS
(a) The COMPANY’s and its subsidiaries’ Articles or Certificate of
Incorporation, By-Laws (or comparable organization documents) and minutes (or
comparable records) are available and complete at the following address(es):
 
 
 
(b) There is no provision in the Articles or Certificates of Incorporation or By
Laws (or comparable organizational documents) of the COMPANY or its
subsidiaries, or in the laws of the state of its organization, requiring any
vote or consent of shareholders to borrow money, obtain financial accommodations
or mortgage, pledge, or create a security interest in any asset of the COMPANY
or any subsidiary. Such power is vested exclusively in its officers and
directors:
YES                      NO                     
5. SPECIAL TYPES OF COLLATERAL.
(a) The following are all of the trademarks or trademark applications of the
COMPANY and its subsidiaries (including any service marks, collective marks and
certification marks), together with the trademark numbers and dates of
registration with the U.S. Patent and Trademark Office or similar foreign
office, if applicable:

 

-10-

--------------------------------------------------------------------------------

 

                                                                      If Foreign
Trademark,     COMPANY/       Trademark     Number     Date     What Country?  
  Subsidiary  
(i)
                                     .  
 
                             
(ii)
                                     .  
 
                             
(iii)
                                     .  
 
                             
(iv)
                                     .  
 
                             

(b) The following are all of the patents or patent applications of the COMPANY
and its subsidiaries, together with the patent numbers, names of inventors and
dates of registration with the U.S. Patent and Trademark Office or similar
foreign office, if applicable:

                                                                               
      If Foreign Patent,     COMPANY/       Patent Name     Number     Date    
Inventor     What Country?     Subsidiary  
(i)
                                             .  
 
                                   
(ii)
                                             .  
 
                                   
(iii)
                                             .  
 
                                   
(iv)
                                             .  
 
                                   

(c) The following are all of the copyrights or copyright applications of the
COMPANY and its subsidiaries, together with the copyright numbers and dates of
registration with the U.S. Copyright Office or similar foreign office, if
applicable:

                                                                      If Foreign
                                    Copyright,     COMPANY/       Copyright    
Number     Date     What Country?     Subsidiary  
(i)
                                     .  
 
                             
(ii)
                                     .  
 
                             
(iii)
                                     .  
 
                             
(iv)
                                     .  
 
                             

(d) The following are all licenses or similar agreements to use trademarks
(including any service marks, collective marks and certification marks),
patents, and copyrights of others of the COMPANY and its subsidiaries:

 

-11-

--------------------------------------------------------------------------------

 

                              COMPANY/       Description of License Agreement  
  Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(e) The following are all governmental permits and/or licenses held by the
COMPANY and/or its subsidiaries:

                              COMPANY/       Description of License    
Subsidiary  
(i)
             .  
 
           
(ii)
             .  
 
           
(iii)
             .  
 
           
(iv)
             .  
 
           

(f) Attached hereto as Schedule F is list of all deposit accounts, brokerage
accounts, commodity accounts and similar accounts including account numbers,
where the accounts are maintained and how title in such accounts is held.
[Company to provide Schedule F].
(g) The COMPANY and its subsidiaries own the following kinds of assets, and
attached hereto is a schedule describing each such asset owned by the COMPANY or
its subsidiaries and identifying by which party such asset is owned:

                 
Franchises, marketing agreements or similar agreements:
  Yes         No      
Stocks, Bonds or other securities:
  Yes         No      
Promissory notes, or other instruments or evidence of indebtedness in favor of
such person:
  Yes         No      
Leases of equipment, security agreements naming such person as secured party, or
other chattel paper:
  Yes         No      
Aircraft:
  Yes         No      
Vessels, Boats or Ships:
  Yes         No      
Railroad Rolling Stock:
  Yes         No      

 

-12-

--------------------------------------------------------------------------------

 

(h) The following are all letters of credit issued for the benefit of the
COMPANY and its subsidiaries, together with the name of the issuer, the face
amount of each letter of credit, the expiration date of each letter of credit
and the account party for each letter of credit:

                                                                             
COMPANY/       Name of Issuer     Face Amount     Expiration Date     Account
Party     Subsidiary  
(i)
                                      .
 
                             
(ii)
                                      .
 
                             
(iii)
                                      .
 
                             

(i) The following is a list of all commercial tort claims in which COMPANY or
its domestic subsidiaries are a plaintiff:
(i)                       vs.                      Court of                     
[Docket No.            ] filed                     , 200_
(ii)                      vs.                      Court of                     
[Docket No.           ] filed                     , 200_.
6. OFFICERS AND/OR DIRECTORS OF THE COMPANY AND ITS SUBSIDIARIES.
(a) The following are the respective titles and signatures of the officers and
directors of the COMPANY and its Subsidiaries (indicate if also a director):

                                                  Office     Name of Officer or
                    % of Ownership     Title     Director     COMPANY/Subsidiary
    Signature     Interest Held
(i)
                                          .
 
                               
(ii)
                                          .
 
                               
(iii)
                                          .
 
                               
(iv)
                                          .
 
                               

 

-13-

--------------------------------------------------------------------------------

 

(b) Each of the officers and directors set forth in Paragraph 6.a. above have
signatory powers as to all of AGENT’s transactions individually unless the
COMPANY limits the signatory powers to the following officers or directors:

                              Name     Title     Signature  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 
(iv)
                      .
 
                 

(c) In addition to the above named officers directors, the following individuals
or entities own 10% or more of the voting stock of the COMPANY:

                      NAME/ADDRESS     % of Ownership Interest Held  
(i)
              .
 
           
(ii)
              .
 
           
(iii)
              .
 
           
(iv)
              .
 
           

(d) With respect to the officers and directors noted above, such officers and
directors are affiliated with, or have ownership in the following closely held
entities:

                                      % OF OWNERSHIP         NAME/ADDRESS   TYPE
OF OPERATION     INTEREST HELD     RELATIONSHIP  
 
                       
 
                 
 
                       
 
                 
 
                       
 
                 

 

-14-

--------------------------------------------------------------------------------

 

(e) The following are the shareholders of the COMPANY:

                              Name     Title     Address  
(i)
                      .
 
                 
(ii)
                      .
 
                 
(iii)
                      .
 
                 

7. OTHER
(a) Attached hereto are copies of the front page (or if the name of the Company
or its subsidiaries is not on the front page, the first page where each such
name appears) of the federal income tax returns filed by the Company and its
Subsidiaries in the United States for the last THREE tax years.
(b) The COMPANY has never been involved in a bankruptcy, reorganization or
Assignment for the Benefit of Creditors except (explain):
 
 
 
(c) At the present time, there are not delinquent taxes owed by the COMPANY
(including, but not limited to, all payroll taxes, real estate or income taxes)
except as follows:
 
 
 
(d) There are no tax liens, judgments or lawsuits pending against the COMPANY,
its subsidiaries and/or affiliates or any of its officers or directors except as
follows:
 
 
 
(e)

  i.   The COMPANY participates in, maintains or provides a deferred
compensation plan for the benefit of the COMPANY’s employees or a multi-employer
plan as described in Section 4001(2)3 of the Employee Retirement Income Security
Act (“ERISA”) of 1974 as amended. Yes                      No
                    

 

-15-

--------------------------------------------------------------------------------

 

  ii.   A determination as to qualifications of this plan has been issued. Yes
                     No                          iii.   Funding is current and
in compliance with established requirements. Yes                      No
                    

(f) The Insurance Broker/Agent for the COMPANY is as follows:
Name of the Firm:                                                             
                           
Address:
                                                                                             
             
Broker/Agent Relationship:
                                                                           
[This Space Intentionally Left Blank]

 

-16-

--------------------------------------------------------------------------------

 

The undersigned undertakes to advise the AGENT of any change or modification
whatsoever with respect to any of the foregoing matters. Until such notice is
received by the AGENT, the AGENT shall be entitled to rely upon all of the
foregoing and presume they are correct and accurate in all respects.
DATED:                           , 2010.

            Company:                                                            
                    

    By:           Name:           Title:                 By:           Name:    
      Title:      

 

-17-

--------------------------------------------------------------------------------

 

         

EXHIBIT K
NON-BANK CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of October 29, 2010
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among: (1) Full House Resorts, Inc., a Delaware
corporation (the “Borrower”); (2) each of the financial institutions from time
to time listed in Schedule I to the Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time (collectively, the
“Lenders”); and (3) Wells Fargo Bank, National Association (“Wells Fargo”), as
administrative agent for the Lenders, as Collateral Agent, as Security Trustee,
as L/C Issuer and as Swing Line Lender. Pursuant to the provisions of
Section 2.12(e) and Section 8.05(c) of the Credit Agreement, the undersigned
hereby certifies that it is not a “bank” as such term is used in
Section 881(c)(3)(A) of the United States Internal Revenue Code of 1986, as
amended. The undersigned shall promptly notify the Borrower and the
Administrative Agent if any of the representations and warranties made herein
are no longer true and correct.

            [NAME OF FINANCIAL INSTITUTION]
      By:         Name:         Title:      

 

K-1

--------------------------------------------------------------------------------

 

         

EXHIBIT L
FORM OF GUARANTEE
(See attached)

 

L-1

--------------------------------------------------------------------------------

 

GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this “Guaranty”), dated as of [                    ],
20__ , is made by FULL HOUSE SUBSIDIARY, INC., a Delaware corporation, FULL
HOUSE SUBSIDIARY II, INC., a Nevada corporation, GAMING ENTERTAINMENT (INDIANA),
LLC, a Nevada limited liability company, GAMING ENTERTAINMENT (SANTA FE), LLC, a
Nevada limited liability company, GAMING ENTERTAINMENT (MONTANA), LLC, a Nevada
limited liability company, STOCKMAN’S CASINO, a Nevada corporation, and each of
the other entities which becomes a party hereto pursuant to Section 4.15 hereof
(each a “Guarantor” and collectively, the “Guarantors”) in favor of WELLS FARGO
BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders as defined
in the Credit Agreement referred to below (in such capacity, together with its
successors in such capacity, the “Administrative Agent”) and as collateral agent
for the other Lender Parties (as defined in the Credit Agreement).
A. Each of the Guarantors is a direct or indirect subsidiary of Full House
Resorts, Inc., a Delaware corporation (the “Borrower”).
B. The Borrower has entered into that certain Credit Agreement, dated of the
date hereof (as the same from time to time hereafter may be amended, modified,
supplemented or restated, the “Credit Agreement”), by and among the Borrower,
the financial institutions party thereto from time to time, the Administrative
Agent and the Collateral Agent, pursuant to which the Lenders have agreed to
extend loans and other financial accommodations to the Borrower for the
purposes, and on the terms and subject to the conditions, set forth in the
Credit Agreement. In addition, certain of the Lender Parties may, from time to
time, enter into Lender Rate Contracts with the Borrower.
C. The Lender Parties are willing to make and maintain loans and other financial
accommodations to the Borrower on and after the date of the Credit Agreement,
but only upon the condition, among others, that the Guarantors shall have
executed and delivered this Guaranty to the Administrative Agent.
D. To induce the Administrative Agent and the Lender Parties to enter into, and
to extend credit under, the Credit Agreement and the other Credit Documents, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, each Guarantor has agreed to guarantee the Guaranteed
Obligations upon the terms and conditions of this Guaranty.
E. Each Guarantor expects to realize direct and indirect benefits as the result
of the availability of the aforementioned credit facilities to the Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

 

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SECTION 1. DEFINITIONS.
1.01. Definitions. Unless otherwise defined herein, all capitalized terms used
in this Guaranty that are defined in the Credit Agreement (including those terms
incorporated by reference) shall have the respective meanings assigned to them
in the Credit Agreement. In addition, the following terms shall have the
following meanings under this Guaranty:
“Bankruptcy Code” shall mean Title 11 of the United States Code.
“Collateral Agent” shall mean Wells Fargo, in its capacity as the collateral
agent for and on behalf of the Administrative Agent and the Lender Parties under
the Security Documents (together with its successors and assigns in such
capacity as the collateral agent under the Security Documents).
“Guaranteed Obligations” shall mean (a) any and all Obligations of the Borrower,
(b) any and all other obligations of the Borrower for the performance of its
agreements, covenants and undertakings under or in respect of the Credit
Documents, and (c) any and all other obligations of the Borrower for the payment
of all amounts, liabilities and indebtedness (whether for principal, interest,
reimbursement, fees, charges, indemnification or otherwise) now or in the future
owed to the Collateral Agent, the Administrative Agent, any Lender Party or any
such Person individually, and for the performance by the Borrower of its
agreements, covenants and undertakings, in each case under or in respect of any
and all of the Credit Documents and the Lender Rate Contracts, it being
acknowledged by each Guarantor that such other obligations may arise or be
created, incurred or assumed at any time and from time to time and in such
manner and such circumstances and with such terms and provisions as the
Borrower, the Collateral Agent, the Administrative Agent, any Lender Party or
any such Person individually may agree without notice or demand of any kind or
nature whatsoever to the Guarantors. The Guaranteed Obligations shall include
interest accruing at the then applicable rate provided in the Credit Agreement
or in the other Credit Documents after the maturity thereof and interest
accruing at the then applicable rate provided in the Credit Agreement or in the
other Credit Documents after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Loan Party thereunder or any Obligor whether or not a claim for post-filing
or post-petition interest is allowed or allowable in such proceeding. Each
Guarantor acknowledges that some extensions of credit under the Credit Agreement
and the other Credit Documents may be available on a revolving basis.
“Obligor” shall mean any additional or separate guarantor, surety or other
Person that is directly or indirectly liable for all or a portion of the
Guaranteed Obligations or who has provided security for the Guaranteed
Obligations.
1.02. Interpretation. The rules of interpretation set forth in Article I of the
Credit Agreement shall, to the extent not inconsistent with the terms of this
Guaranty, apply to this Guaranty and are hereby incorporated by reference.
SECTION 2. THE GUARANTEE.
2.01. Guarantee Provisions.

 

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(a) Guarantee. Each Guarantor hereby absolutely, irrevocably and unconditionally
guarantees to the Administrative Agent and each Lender Party the timely payment
in full when due (whether at stated maturity, by acceleration or otherwise) and
performance of the Guaranteed Obligations in each case in accordance with their
terms. Each Guarantor hereby further agrees that if the Borrower shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
all or any part of the Guaranteed Obligations, such Guarantor will immediately
pay the same, without any demand or notice whatsoever, and that in the case of
any extension of time of payment or renewal of all or any part of the Guaranteed
Obligations, the same will be timely paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the terms of such
extension or renewal. This Guaranty is absolute, irrevocable and unconditional
in nature and is made with respect to any and all Guaranteed Obligations now
existing or in the future arising. Each Guarantor’s liability under this
Guaranty shall continue until payment in cash of all Guaranteed Obligations.
This Guaranty is a guarantee of due and punctual payment and performance and not
of collectibility.
(b) Savings Clause. As to any Guarantor, if under any applicable law (including
without limitation state and Federal fraudulent transfer laws) the obligations
of such Guarantor under Section 2.01(a) would otherwise be held or determined to
be void, invalid or unenforceable or if the claims of the Lender Parties in
respect of such obligations would be subordinated to the claims of any other
creditors on account of such Guarantor’s liability under Section 2.01(a), then,
notwithstanding any other provision of this Guaranty to the contrary, the amount
of the liability of such Guarantor shall, without any further action by the
Guarantors, any Lender Party, the Collateral Agent, the Administrative Agent or
any other Person, be automatically limited and reduced to the highest amount
which is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding. In addition, all
Guarantors expect to realize direct and indirect benefits as the result of the
availability of the aforementioned credit facilities to the Borrower, as the
result of financial or business support which will be provided to the Guarantors
by the Borrower.
(c) Joint and Several Obligations. The obligations and liability of the
Guarantors under this Guaranty are joint and several. Except as expressly set
forth in Section 2.01(b), the liability of the Guarantors is not limited in any
respect.
2.02. Acknowledgments, Agreements; Waivers and Consents. Each Guarantor
acknowledges that the obligations undertaken by it under this Guaranty involve
the guarantee of obligations of Persons other than such Guarantor and that such
obligations of each Guarantor are absolute, irrevocable and unconditional under
any and all circumstances. In full recognition and in furtherance of the
foregoing, each Guarantor agrees that:
(a) Without affecting the enforceability or effectiveness of this Guaranty in
accordance with its terms and without affecting, limiting, reducing, discharging
or terminating the liability of such Guarantor, or the rights, remedies, powers
and privileges of the Administrative Agent and the Lender Parties under this
Guaranty, the Collateral Agent, the Administrative Agent and the Lender Parties
may, at any time and from time to time and without notice or demand of any kind
or nature whatsoever:

 

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(i) amend, supplement, modify, extend, renew, waive, accelerate or otherwise
change the time for payment or performance of, or the terms of, all or any part
of the Guaranteed Obligations (including any increase or decrease in the
principal portion of, or rate or rates of interest on, all or any part of the
Guaranteed Obligations);
(ii) amend, supplement, modify, extend, renew, waive or otherwise change, or
enter into or give, any Credit Document or any agreement, security document,
guarantee, approval, consent or other instrument with respect to all or any part
of the Guaranteed Obligations, any Credit Document or any such other instrument
or any term or provision of the foregoing;
(iii) accept or enter into new or additional agreements, security documents,
guarantees (including letters of credit) or other instruments in addition to, in
exchange for or relative to any Credit Document, all or any part of the
Guaranteed Obligations or any collateral now or in the future serving as
security for the Guaranteed Obligations;
(iv) accept or receive (including from any Obligor) partial payments or
performance on the Guaranteed Obligations (whether as a result of the exercise
of any right, remedy, power or privilege or otherwise);
(v) accept, receive and hold any additional collateral for all or any part of
the Guaranteed Obligations (including from any Obligor);
(vi) release, reconvey, terminate, waive, abandon, allow to lapse or expire,
fail to perfect, subordinate, exchange, substitute, transfer, foreclose upon or
enforce any collateral, security documents or guarantees (including letters of
credit or the obligations of any Obligor) for or relative to all or any part of
the Guaranteed Obligations;
(vii) apply any collateral or the proceeds of any collateral or guarantee
(including any letter of credit or the obligations of any Obligor) to all or any
part of the Guaranteed Obligations in such manner and extent as the
Administrative Agent or any Lender Party may in its sole discretion determine;
(viii) release any Person (including any Obligor or other Guarantor) from any
liability with respect to all or any part of the Guaranteed Obligations;
(ix) settle, compromise, release, waive, liquidate or enforce upon such terms
and in such manner as the Collateral Agent, the Administrative Agent or any
Lender Party may determine or as applicable law may dictate all or any part of
the Guaranteed Obligations or any collateral on or guarantee of (including any
letter of credit issued with respect to) all or any part of the Guaranteed
Obligations (including with any Obligor);
(x) consent to the merger or consolidation of, the sale of substantial assets
by, or other restructuring or termination of the existence of the Borrower, any
Loan Party or any other Person (including any Obligor);

 

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(xi) proceed against the Borrower, such Guarantor, any other Guarantor or any
Obligor of (including any issuer of any letter of credit issued with respect to)
all or any part of the Guaranteed Obligations or any collateral provided by any
Person and exercise the rights, remedies, powers and privileges of the
Collateral Agent, the Administrative Agent and the Lender Parties under the
Credit Documents or otherwise in such order and such manner as the Collateral
Agent, the Administrative Agent or any Lender Party may, in its discretion,
determine, without any necessity to proceed upon or against or exhaust any
collateral, right, remedy, power or privilege before proceeding to call upon or
otherwise enforce this Guaranty as to such Guarantor;
(xii) foreclose upon any deed of trust, mortgage or other instrument creating or
granting liens on any interest in real property by judicial or nonjudicial sale
or by deed in lieu of foreclosure, bid any amount or make no bid in any
foreclosure sale or make any other election of remedies with respect to such
liens or exercise any right of set-off;
(xiii) obtain the appointment of a receiver with respect to any collateral for
all or any part of the Guaranteed Obligations and apply the proceeds of such
receivership as the Administrative Agent or any Lender Party may in its
discretion determine (it being agreed that nothing in this clause (xiii) shall
be deemed to make the Collateral Agent, the Administrative Agent or any Lender
Party a party in possession in contemplation of law, except at its option);
(xiv) enter into such other transactions or business dealings with the Borrower,
any other Loan Party, any Obligor or Affiliate thereof of all or any part of the
Guaranteed Obligations as the Collateral Agent, the Administrative Agent or any
Lender Party may desire; and
(xv) do all or any combination of the actions set forth in this Section 2.02(a).
(b) The enforceability and effectiveness of this Guaranty and the liability of
such Guarantor, and the rights, remedies, powers and privileges of the
Collateral Agent, the Administrative Agent and the Lender Parties, under this
Guaranty shall not be affected, limited, reduced, discharged or terminated, and
each Guarantor hereby expressly waives any defense now or in the future arising
(other than a defense that the Guaranteed Obligations have been paid in full in
cash), by reason of:
(i) the illegality, invalidity or unenforceability of all or any part of the
Guaranteed Obligations, any Credit Document or any agreement, security document,
guarantee or other instrument relative to all or any part of the Guaranteed
Obligations;
(ii) any disability or other defense with respect to all or any part of the
Guaranteed Obligations of the Borrower, or any Obligor with respect to all or
any part of the Guaranteed Obligations (including any issuer of any letters of
credit), including the effect of any statute of limitations that may bar the
enforcement of all or any part of the Guaranteed Obligations or the obligations
of any such Obligor;
(iii) the illegality, invalidity or unenforceability of any security or
guarantee (including any letter of credit) for all or any part of the Guaranteed
Obligations or the lack of perfection or continuing perfection or failure of the
priority of any lien on any collateral for all or any part of the Guaranteed
Obligations;

 

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(iv) the cessation, for any cause whatsoever (including, without limitation,
release, expiration, termination or the unenforceability of the underlying
documentation), of the liability of the Borrower, any other Loan Party or any
Obligor of all or any part of the Guaranteed Obligations (other than, subject to
Section 2.05, by reason of the full payment and performance of all Guaranteed
Obligations);
(v) any failure of the Collateral Agent, the Administrative Agent or any Lender
Party to marshal assets in favor of the Borrower or any other Person (including
any Obligor), to exhaust any collateral for all or any part of the Guaranteed
Obligations, to pursue or exhaust any right, remedy, power or privilege it may
have against the Borrower, any other Loan Party, any Obligor with respect to all
or any part of the Guaranteed Obligations (including any issuer of any letter of
credit) or any other Person or to take any action whatsoever to mitigate or
reduce such or any other liability of such Guarantor under this Guaranty, none
of the Collateral Agent, the Administrative Agent or any Lender Party being
under any obligation to take any such action notwithstanding the fact that all
or any part of the Guaranteed Obligations may be due and payable and that the
Borrower may be in default of its obligations under any Credit Document;
(vi) any failure of the Collateral Agent, the Administrative Agent or any Lender
Party to give notice of sale or other disposition of any collateral (including
any notice of any judicial or nonjudicial foreclosure or sale of any interest in
real property serving as collateral for all or any part of the Guaranteed
Obligations) for all or any part of the Guaranteed Obligations to the Borrower,
such Guarantor or any other Person (including any Obligor) or any defect in, or
any failure by such Guarantor or any other Person to receive, any notice that
may be given in connection with any sale or disposition of any collateral;
(vii) any failure of the Collateral Agent, the Administrative Agent or any
Lender Party to comply with applicable laws in connection with the sale or other
disposition of any collateral for all or any part of the Guaranteed Obligations;
(viii) any judicial or nonjudicial foreclosure or sale of, or other election of
remedies with respect to, any interest in real property or other collateral
serving as security for all or any part of the Guaranteed Obligations, even
though such foreclosure, sale or election of remedies may impair the subrogation
rights of such Guarantor or may preclude such Guarantor from obtaining
reimbursement, contribution, indemnification or other recovery from the
Borrower, any Obligor or any other Person and even though the Borrower may not,
as a result of such foreclosure, sale or election of remedies, be liable for any
deficiency;
(ix) any act or omission of the Collateral Agent, the Administrative Agent, any
Lender Party or any other Person that directly or indirectly results in or aids
the discharge or release of the Borrower, any Loan Party or any Obligor of all
or any part of the Guaranteed Obligations or any security or guarantee for all
or any part of the Guaranteed Obligations by operation of law or otherwise;
(x) any law which provides that the obligation of a surety or guarantor must
neither be larger in amount nor in other respects more burdensome than that of
the principal or which reduces a surety’s or guarantor’s obligation in
proportion to the principal obligation;

 

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(xi) the possibility that the obligations of the Borrower to the Administrative
Agent and the Lender Parties may at any time and from time to time exceed the
aggregate liability of such Guarantor under this Guaranty;
(xii) any counterclaim, set-off or other claim which the Borrower, any Loan
Party, any Obligor or any other Person has or alleges to have with respect to
all or any part of the Guaranteed Obligations;
(xiii) any failure of the Collateral Agent, the Administrative Agent or any
Lender Party to file or enforce a claim in any bankruptcy or other proceeding
with respect to any Person;
(xiv) the election by the Collateral Agent, the Administrative Agent or any
Lender Party in any bankruptcy proceeding of any Person, of the application or
nonapplication of Section 1111(b)(2) of the Bankruptcy Code;
(xv) any extension of credit or the grant of any Lien under Section 364 of the
Bankruptcy Code;
(xvi) any use of cash collateral under Section 363 of the Bankruptcy Code;
(xvii) any agreement or stipulation with respect to the provision of adequate
protection in any bankruptcy proceeding of any Person;
(xviii) the avoidance of any Lien in favor of the Collateral Agent, the
Administrative Agent or any Lender Party for any reason;
(xix) any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, liquidation or dissolution proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any part
of the Guaranteed Obligations (or any interest on all or any part of the
Guaranteed Obligations) in or as a result of any such proceeding;
(xx) any change in the corporate existence, structure or ownership of the
Borrower, any other Loan Party or any Obligor;
(xxi) any action taken by the Collateral Agent, the Administrative Agent or any
Lender Party, whether similar or dissimilar to any of the foregoing, that is
authorized by this Section 2.02 or otherwise in this Guaranty or by any other
provision of any Credit Document or any omission to take any such action; or
(xxii) any other circumstance whatsoever, whether similar or dissimilar to any
of the foregoing, that might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor (other than, subject to Section 2.05, by
reason of the full payment and performance of all Guaranteed Obligations).

 

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(c) Each Guarantor hereby waives (i) any right of redemption with respect to the
collateral or security for the Guaranteed Obligations or for this Guaranty after
the sale thereof, and all rights, if any, of marshalling of the collateral or
security for the Guaranteed Obligations or for this Guaranty, (ii) any right
(except as shall be required by applicable statute and cannot be waived) to
require the Collateral Agent, the Administrative Agent or any Lender Party to
pursue any remedy in the Collateral Agent’s, the Administrative Agent’s or any
Lender Party’s power whatsoever, (iii) presentment, demand, notice of dishonor,
protest, notice of protest and all other notices whatsoever with respect to the
payment or performance of the Guaranteed Obligations or the amount thereof or
any payment or performance by any Guarantor hereunder and (iv) all rights to
revoke this Guaranty at any time, and all rights to revoke any agreement
executed by such Guarantor at any time to secure the payment and performance of
such Guarantor’s obligations under this Guaranty.
(d) Each Guarantor waives all rights and defenses arising out of an election of
remedies by the Collateral Agent, the Administrative Agent and the Lender
Parties, even though that election of remedies, such as a nonjudicial
foreclosure with respect to collateral or security for the Guaranteed
Obligations, has destroyed such Guarantor’s rights of subrogation and
reimbursement against the principal.
(e) Each Guarantor expressly waives, for the benefit of the Collateral Agent,
the Administrative Agent and the Lender Parties, all set-offs and counterclaims
and all presentments, demands for payment or performance, notices of nonpayment
or nonperformance, protests, notices of protest, notices of dishonor and all
other notices or demands of any kind or nature whatsoever with respect to the
Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation, incurring or assumption of new or additional Guaranteed
Obligations. Each Guarantor further expressly waives the benefit of any and all
statutes of limitation and any and all laws providing for the exemption of
property from execution or for valuation and appraisal upon foreclosure, to the
maximum extent not prohibited by applicable law.
(f) Each Guarantor represents and warrants to the Collateral Agent, the
Administrative Agent and the Lender Parties that it has established adequate
means of obtaining financial and other information pertaining to the business,
operations and condition (financial and otherwise) of the Borrower and its
properties on a continuing basis and that such Guarantor is now and will in the
future remain fully familiar with the business, operations and condition
(financial and otherwise) of the Borrower and its properties. Each Guarantor
further represents and warrants that it has reviewed and approved each of the
Credit Documents and is fully familiar with the transaction contemplated by the
Credit Documents and that it will in the future remain fully familiar with such
transaction and with any new Credit Documents and the transactions contemplated
by such Credit Documents. Each Guarantor hereby expressly waives and
relinquishes any duty on the part of the Administrative Agent or the Lender
Parties (should any such duty exist) to disclose to the such Guarantor or any
other Obligor any matter of fact or other information related to the business,
operations or condition (financial or otherwise) of the Borrower or its
properties or to any Credit Document or the transactions undertaken pursuant to,
or contemplated by, any such Credit Document, whether now or in the future known
by the Administrative Agent or any Lender Party.

 

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(g) Each Guarantor acknowledges and agrees that there may be additional guaranty
or security agreements or similar documents executed by other Obligors in
respect of all or a portion of the Guaranteed Obligations and the existence of
any such guaranty or security agreement or similar document shall not in any way
impair, reduce or limit such Guarantor’s obligations hereunder.
(h) Without limiting the generality of any other provision hereof, each
Guarantor agrees that, in the event of the dissolution or insolvency of the
Borrower, any Guarantor or any Obligor or the inability of the Borrower, any
Guarantor or any Obligor to pay its debts as they mature, or an assignment by
the Borrower, any Guarantor or any Obligor for the benefit of creditors, or the
institution of any proceeding by or against the Borrower, any Guarantor or any
Obligor alleging that the Borrower, any Guarantor or any Obligor is insolvent or
unable to pay its debts as they mature (including any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding), or
the appointment of a receiver for, or the attachment, restraint of or making or
levying of any order of court or legal process affecting, the property of the
Borrower, any Guarantor or any Obligor, each Guarantor will pay to the
Administrative Agent for the benefit of itself and the Lender Parties forthwith
the full amount which would be payable hereunder by such Guarantor if all of the
Guaranteed Obligations were then due and payable, whether or not such event
occurs at a time when any of the Guaranteed Obligations are otherwise due and
payable.
2.03. Understanding With Respect to Waivers and Consents. Each Guarantor
represents, warrants and agrees that each of the waivers and consents set forth
in this Guaranty is made voluntarily and unconditionally after consultation with
outside legal counsel and with full knowledge of its significance and
consequences, with the understanding that events giving rise to any defense or
right waived may diminish, destroy or otherwise adversely affect rights which
such Guarantor or any other Obligor otherwise may have against the Borrower, the
Collateral Agent, the Administrative Agent, any Lender Party or any other Person
or against any collateral. If, notwithstanding the intent of the parties that
the terms of this Guaranty shall control in any and all circumstances, any such
waivers or consents are determined to be unenforceable under applicable law,
such waivers and consents shall be effective to the maximum extent not
prohibited by law.
2.04. Subrogation. Each Guarantor hereby agrees that, until the payment in cash
and satisfaction in full of all of the Guaranteed Obligations and the expiration
and termination of the commitments of the Lenders under the Credit Documents, it
shall not exercise any right, remedy, power or privilege, such as any right of
subrogation, contribution or indemnity or related remedy, power or privilege,
arising (whether by contract or operation of law, including under the Bankruptcy
Code) against the Borrower, any other Guarantor or any Obligor of all or any
part of the Guaranteed Obligations or any collateral or security for all or any
part of the Guaranteed Obligations by reason of any payment or other performance
pursuant to the provisions of this Guaranty and, if any amount shall be paid to
such Guarantor on account of such rights, remedies, powers or privileges, it
shall hold such amount in trust for the benefit of, and pay the same over to,
the Administrative Agent (for the benefit of the Lender Parties) on account of
the Guaranteed Obligations. Each Guarantor understands that the exercise by the
Collateral Agent, the Administrative Agent or any Lender Party of any right,
remedy, power or privilege that it may have under the Credit Documents, any
agreement, collateral or security

 

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document, guarantee or other instrument relative to all or any part of the
Guaranteed Obligations or otherwise may affect or eliminate such Guarantor’s or
any Obligor’s right of subrogation or similar recovery against the Borrower, any
other Guarantor, any Obligor or any collateral or security and that such
Guarantor may therefore incur partially or totally nonreimbursable liability
under this Guaranty. Nevertheless, each Guarantor hereby authorizes and empowers
the Collateral Agent, the Administrative Agent and the Lender Parties to
exercise, in its or their sole discretion, any combination of such rights,
remedies, powers and privileges. Notwithstanding anything to the contrary
contained in this Guaranty or any other Credit Document, no Guarantor shall
exercise any rights of subrogation, contribution, indemnity, reimbursement or
other similar rights against, and no Guarantor shall proceed or seek recourse
against or with respect to any property or asset of, the Borrower or any other
Guarantor or Obligor (including after payment in full of the Guaranteed
Obligations), and each Guarantor shall be deemed to have waived all such rights
and remedies if all or any portion of the Obligations have been satisfied in
connection with an exercise of remedies in respect of the Equity Securities of
the Borrower or such other Guarantor or Obligor whether pursuant to the Security
Documents or otherwise.
2.05. Reinstatement. The obligations of each Guarantor under this Guaranty shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower, any other Guarantor, any Obligor or any other
Person or any other application of funds (including the proceeds of any
collateral for all or any part of the Guaranteed Obligations) in respect of all
or any part of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of such Guaranteed Obligations, whether as a result of
any proceedings in bankruptcy, reorganization or otherwise and each Guarantor
agrees that it will indemnify the Collateral Agent, the Administrative Agent and
each Lender Party on demand for all costs and expenses (including reasonable
fees and expenses of counsel) incurred by the Collateral Agent, the
Administrative Agent or such Lender Party in connection with such rescission or
restoration.
2.06. Remedies. Each Guarantor hereby agrees that, between it on the one hand
and the Collateral Agent, the Administrative Agent and the Lender Parties on the
other, the obligations of the Borrower under the Credit Agreement and the other
Credit Documents may be declared to be forthwith (or may become automatically)
due and payable as provided in the Credit Agreement for purposes of Section 2.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations becoming due and payable as against the
Borrower) and that, in the event of such declaration (or such obligation being
deemed due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable for purposes of Section 2.01.
2.07. Separate Action. The Collateral Agent and the Administrative Agent may
bring and prosecute a separate action or actions against each Guarantor (or any
one or more of them) whether or not the Borrower, any other Guarantor, any Loan
Party, any other Obligor or any other Person is joined in any such action or a
separate action or actions are brought against the Borrower, any other
Guarantor, any Loan Party, any other Obligor, any other Person, or any
collateral or security for all or any part of the Guaranteed Obligations. The
obligations of each Guarantor under, and the effectiveness of, this Guaranty are
not conditioned upon the existence or continuation of any other guarantee
(including any letter of credit) of or collateral or security for all or any
part of the Guaranteed Obligations.

 

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2.08. Subordination.
(a) Each Guarantor agrees that the payment by the Borrower, any other Loan Party
or any Obligor of any indebtedness in favor of such Guarantor (the “Subordinated
Lender”) shall be subordinated and subject to the prior payment in cash in full
of all amounts payable by the Borrower, such other Loan Party or such Obligor
under the Credit Agreement or this Guaranty, as the case may be, and any other
Credit Document to which the Borrower, such other Loan Party or such Obligor is
a party (“Senior Debt”) upon the terms of this Section.
(b) Upon any distribution of assets of the Borrower, a Loan Party or an Obligor
to creditors upon a liquidation or dissolution of the Borrower, such Loan Party
or such Obligor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Borrower, such Loan Party or such Obligor or
its property, (i) the Administrative Agent and the Lender Parties shall be
entitled to receive payment in full of all Senior Debt before the Subordinated
Lender shall be entitled to receive any payment of principal of or interest on
or any other amounts in respect of Indebtedness of the Borrower, such Loan Party
or such Obligor in favor of the Subordinated Lender (the “Subordinated Debt”);
and (ii) until payment in cash in full of the Senior Debt and the Commitments
under the Credit Documents shall have terminated, any distribution of assets of
any kind or character to which the Subordinated Lender would otherwise be
entitled shall be paid by the Borrower, such Loan Party or such Obligor or by
any receiver, trustee in bankruptcy, liquidating trustee, agents or other person
making such payment or distribution to, or if received by the Borrower, such
Loan Party or such Obligor, shall be held for the benefit of and shall be
forthwith paid or delivered to, the Administrative Agent for distribution to the
Administrative Agent and the Lender Parties, as applicable.
(c) If the Subordinated Lender does not file proper claims or proofs of claim in
the form required in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Borrower, a Loan Party or an Obligor or its
property prior to 45 days before the expiration of the time to file such claims,
then (a) upon the request of the Administrative Agent, the Subordinated Lender
shall file such claims and proofs of claim in respect of this instrument and
execute and deliver such powers of attorney, assignments and other instruments
as are required to enable the Administrative Agent and the Lender Parties to
enforce any and all claims upon or in respect of the Subordinated Debt and to
collect and receive any and all payments or distributions which may be payable
or deliverable at any time upon or in respect of Subordinated Debt, and (b)
whether or not the Subordinated Lender shall take the action described in the
preceding clause (a) the Administrative Agent and the Lender Parties shall
nevertheless be deemed to have such powers of attorney as may be necessary for
them to file appropriate claims and proofs of claim and otherwise exercise the
powers described above.
(d) No right of the Administrative Agent or any Lender Party to enforce the
terms of this Section shall be impaired by any act or failure to act by the
Borrower, a Loan Party or an Obligor. Neither the terms of this Section nor the
rights of the Administrative Agent and the Lender Parties hereunder shall be
affected by any extension, renewal or modification of the terms of, or the
granting of any security in respect of, any Senior Debt or any exercise or
nonexercise of any right, power or remedy with respect thereto.

 

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(e) Until the Senior Debt is paid in full and the Commitments under the Credit
Documents shall have terminated, the Subordinated Lender shall not exercise any
right of subrogation that it may have now or hereafter as a result of its
performance of this Guaranty.
(f) Nothing in this Section shall (i) impair, as between the Borrower, such Loan
Party or such Obligor and the Subordinated Lender, the obligation of the
Borrower, or such Loan Party or such Obligor, which is absolute and
unconditional, to pay the principal of and interest on Subordinated Debt in
accordance with its terms; (ii) affect the relative rights of the Subordinated
Lender and creditors of the Borrower, or such Loan Party or such Obligor other
than the Administrative Agent and the Lender Parties; or (iii) prevent the
Subordinated Lender from exercising its available remedies upon an event of
default under the Subordinated Debt, subject to the rights of the Administrative
Agent and the Lender Parties to receive cash, property or other assets otherwise
payable to the Subordinated Lender to the extent set forth in this Section.
2.09. Right to Offset Balances. Each Guarantor agrees that, in addition to (and
without any limitation of) any right of set-off, banker’s lien or counterclaim
any Lender Party may otherwise have, each Lender Party shall be entitled, at its
option but only with the prior written consent of the Administrative Agent, to
offset balances held by it for the account of such Guarantor at any of its
offices, in Dollars or in any other currency, against any Guaranteed Obligations
to such Lender Party upon the occurrence and during the continuance of an Event
of Default (regardless of whether such balances are then due to such Guarantor).
Any Lender Party so entitled shall promptly notify the applicable Guarantor and
the Administrative Agent of any offset effected by it; provided that such Lender
Party’s failure to give such notice shall not affect the validity of such offset
or the obligations of any Guarantor hereunder or under any other Credit
Document.
2.10. Payment of Guaranteed Obligations. Any amounts received by the
Administrative Agent under this Guaranty from whatever source on accounts of the
Guaranteed Obligations shall be transferred to the Collateral Agent and applied
by the Collateral Agent in the manner set forth in Section 6.02 of the Credit
Agreement for the application of proceeds of any sale, disposition or other
realization upon all or any part of the Collateral.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GUARANTORS. As of
the date hereof and as of the date of each Credit Event, each Guarantor
represents to the Administrative Agent and the Lender Parties that each of the
representations and warranties applicable to it under the Credit Agreement are
true and correct as if made by such Guarantor. Each Guarantor agrees to comply
with and be bound by each of the covenants, agreements and conditions in the
Credit Agreement applicable to it as if such Guarantor were a party to the
Credit Agreement.
SECTION 4. MISCELLANEOUS PROVISIONS.
4.01. No Waiver. No failure or delay by the Collateral Agent, Administrative
Agent or any Lender Party in exercising any remedy, right, power or privilege
under this Guaranty or any other Credit Document shall operate as a waiver of
such remedy, right, power or privilege, nor shall any single or partial exercise
of such remedy, right, power or privilege

 

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preclude any other or further exercise of such remedy, right, power or privilege
or the exercise of any other remedy, right, power or privilege. The remedies,
rights, powers and privileges provided by this Guaranty are, to the extent not
prohibited by law, cumulative and not exclusive of any remedies, rights, powers
or privileges provided by the other Credit Documents or by law.
4.02. Notices. All notices, requests, demands, consents, instructions or other
communications to or upon the Guarantors or any one of them or the
Administrative Agent under this Guaranty shall be in writing and faxed, mailed,
e-mailed or delivered, if to the Guarantors or any one of them or to the
Administrative Agent, at its respective facsimile number or address set forth
below (or to such other facsimile number or address for any party as indicated
in any notice given by that party to the other parties). All such notices and
communications shall be effective (a) when sent by an overnight courier service
of recognized standing, on the second Business Day following the deposit with
such service; (b) when mailed, first-class postage prepaid and addressed as
aforesaid through the United States Postal Service, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when sent by facsimile transmission or
e-mail, upon confirmation of receipt.

     
The Administrative Agent:
  Wells Fargo Bank, National Association
5340 Kietzke Lane
Reno, Nevada 89511
Attention: Erna Stuckey
Tel. No. 775-689-6018
Fax No.  775-689-6026
E-mail: Erna.F.Stuckey@wellsfargo.com

 

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The Guarantors:
  c/o Full House Resorts, Inc.
4670 S. Fort Apache Road
Suite 190
Las Vegas, NV 89147
Attention: Mark Miller
                  Chief Financial Officer/Chief Operating Officer
Tel. No. (702) 221-7800
Fax No.  (702) 221-8101
E-mail: mmiller@fullhouseresorts.com
 
   
With a Copy to:
  Greenberg Traurig, LLP
2375 East Camelback Road, Suite 700
Phoenix, AZ 85016
Attention: Jeffrey H. Verbin
Tel. No. (602) 445-8202
Fax No.  (602) 445-8630
E-mail: VerbinJ@GTLaw.com

4.03. Expenses, Etc. Each Guarantor agrees to pay or to reimburse the
Administrative Agent and the Lenders for all costs and expenses (including fees
and expenses of counsel) that may be incurred by the Administrative Agent or the
Lenders in any effort to enforce any of the obligations of the Guarantors under
this Guaranty, whether or not any lawsuit is filed, including all such costs and
expenses (and attorneys’ fees and expenses) incurred by the Administrative Agent
and the Lenders in any bankruptcy, reorganization, workout or similar
proceeding. All amounts due under this Guaranty (including under Section 2.01)
and not paid when due shall bear interest until paid at a per annum rate equal
to the Base Rate plus the highest Applicable Margin for Base Rate Loans plus
four percent (4.00%).
4.04. Amendments, Etc. The Administrative Agent and each Guarantor hereby
acknowledge and agree that the waiver, amendment and other provisions in
Section 8.04 of the Credit Agreement apply to this Guaranty as to the Guarantors
and are incorporated herein as though set forth in full.
4.05. Successors and Assigns. This Guaranty is in favor of the Collateral Agent
and the Administrative Agent for the benefit of itself and the Lender Parties
and their respective successors and assigns and, in the event of an assignment
of the Loans, Commitments or other amounts payable under the Credit Agreement or
the other Credit Documents, the rights hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty shall be binding upon the Guarantors and their respective successors
and assigns and inure to the benefit of the Collateral Agent, the Administrative
Agent and the Lender Parties and their respective successors and assigns. No
Guarantor may assign or transfer its rights or obligations under this Guaranty
without the prior written consent of the Administrative Agent. Any attempted
assignment or transfer in violation of this Section shall be null and void.

 

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4.06. Survival. All representations and warranties made in this Guaranty or in
any certificate or other document delivered pursuant to or in connection with
this Guaranty shall survive the execution and delivery of this Guaranty or such
certificate or other document (as the case may be) or any deemed repetition of
any such representation or warranty.
4.07. ENTIRE AGREEMENT. THIS GUARANTY AND THE OTHER CREDIT DOCUMENTS REPRESENT
THE COMPLETE AND FINAL AGREEMENT AMONG THE GUARANTORS, THE ADMINISTRATIVE AGENT
AND THE LENDER PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS, WRITTEN OR ORAL, ON
THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE GUARANTORS, THE ADMINISTRATIVE
AGENT AND THE LENDER PARTIES.
4.08. Partial Invalidity. If at any time any one or more of the provisions
contained in this Guaranty should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, but
the validity, legality and enforceability of the remaining provisions contained
in this Guaranty shall not in any way be affected or impaired. The parties
hereto shall endeavor in good faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
4.09. Captions. The table of contents, captions and section headings appearing
in this Guaranty are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Guaranty.
4.10. Counterparts. This Guaranty may be executed in any number of identical
counterparts, any set of which signed by all the parties hereto shall be deemed
to constitute a complete, executed original for all purposes. Transmission by
facsimile, “pdf” or similar electronic copy of an executed counterpart of this
Guaranty shall be deemed to constitute due and sufficient delivery of such
counterpart. Any party hereto may request an original counterpart of any party
delivering such electronic counterpart.
4.11. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
CONFLICTS OF LAW RULES OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK.
4.12. SUBMISSION TO JURISDICTION. Each of the parties to this Guaranty
irrevocably submits to the non-exclusive jurisdiction of the courts of the State
of New York and the courts of the United States of America located in New York,
New York and agrees that any legal action, suit or proceeding arising out of or
relating to this Guaranty or any of the other Credit Documents (including,
without limitation, any Security Documents) may be brought against such party in
any such courts. Final judgment against any party in any such action, suit or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the

 

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judgment, a certified or exemplified copy of which shall be conclusive evidence
of the judgment, or in any other manner provided by law. Nothing in this Section
shall affect the right of any party to commence legal proceedings or otherwise
sue any other party in any other appropriate jurisdiction, or concurrently in
more than one jurisdiction, or to serve process, pleadings and other papers upon
any other party in any manner authorized by the laws of any such jurisdiction.
The Guarantors agree that process served either personally or by registered mail
shall, to the extent permitted by law, constitutes adequate service of process
in any such suit. Each of the parties to this Guaranty irrevocably waives to the
fullest extent permitted by applicable law (a) any objection which it may have
now or in the future to the laying of the venue of any such action, suit or
proceeding in any court referred to in the first sentence above; (b) any claim
that any such action, suit or proceeding has been brought in an inconvenient
forum; (c) its right of removal of any matter commenced by any other party in
the courts of the State of New York to any court of the United States of
America; (d) any immunity which it or its assets may have in respect of its
obligations under this Guaranty or any other Credit Document from any suit,
execution, attachment (whether provisional or final, in aid of execution, before
judgment or otherwise) or other legal process; and (e) any right it may have to
require the moving party in any suit, action or proceeding brought in any of the
courts referred to above arising out of or in connection with this Guaranty or
any other Credit Document to post security for the costs of any party or to post
a bond or to take similar action.
4.13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY, ANY OTHER CREDIT DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY
SECURITY DOCUMENTS) OR THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY
OTHER CREDIT DOCUMENTS.
4.14. Power of Attorney. Each Guarantor hereunder hereby grants to the Borrower
an irrevocable power of attorney to act as its attorney-in-fact with regard to
matters relating to this Guaranty and each other Credit Document, including
execution and delivery of any amendments, supplements, waivers or other
modifications hereto or thereto, receipt of any notices hereunder or thereunder
and receipt of service of process in connection herewith or therewith. Each
Guarantor hereby explicitly acknowledges that the Administrative Agent has
executed and delivered this Guaranty and each other Credit Document to which it
is a party, and has performed its obligations under this Guaranty and each other
Credit Document to which it is a party, in reliance upon the irrevocable grant
of such power of attorney pursuant to this Section.
4.15. Additional Guarantors. If, pursuant to the terms and conditions of the
Credit Agreement, the Borrower shall be required to cause any Person that is not
a Guarantor to become a Guarantor hereunder, such Person shall execute and
deliver to the Administrative Agent a Joinder Agreement in the form of Annex I
and shall thereafter for all purposes be a party hereto and have the same
rights, benefits and obligations as a Guarantor party hereto with the same force
and effect as if originally named as a Guarantor herein.

 

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4.16. No Individual Lender Party Enforcement. By its entry into any Credit
Document, each Lender Party agrees that this Guaranty may be enforced only by
action of the Administrative Agent upon the instructions of the Required Lenders
and that no Lender Party shall have any right individually to seek to enforce or
to enforce this Guaranty.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of the date
first above written.

            GUARANTOR(S):

FULL HOUSE SUBSIDIARY, INC.,
a Delaware corporation
      BY:         NAME:        TITLE:          FULL HOUSE SUBSIDIARY II, INC.,
a Nevada corporation

  BY:         NAME:        TITLE:          GAMING ENTERTAINMENT (INDIANA), LLC,
a Nevada limited liability company

  BY:         NAME:        TITLE:          GAMING ENTERTAINMENT (SANTA FE), LLC,
a Nevada limited liability company

  BY:         NAME:        TITLE:       

 

 

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            GAMING ENTERTAINMENT (MONTANA), LLC,
a Nevada limited liability company

  BY:         NAME:        TITLE:          STOCKMAN’S CASINO,
a Nevada corporation

  BY:         NAME:        TITLE:       

 

 

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ANNEX I
JOINDER AGREEMENT
(Guaranty Agreement)
This Joinder Agreement (Guaranty Agreement), dated as of  _____,  _____, is
delivered pursuant to Section 4.15 of the Guaranty Agreement dated as of [
_______ ], 20__, among FULL HOUSE SUBSIDIARY, INC., a Delaware corporation, FULL
HOUSE SUBSIDIARY II, INC., a Nevada corporation, GAMING ENTERTAINMENT (INDIANA),
LLC, a Nevada limited liability company, GAMING ENTERTAINMENT (SANTA FE), LLC, a
Nevada limited liability company, GAMING ENTERTAINMENT (MONTANA), LLC, a Nevada
limited liability company, STOCKMAN’S CASINO, a Nevada corporation and the other
entities from time to time party thereto as Guarantors in favor of Wells Fargo
Bank, National Association, as administrative agent for the Lenders referred to
therein (as amended, restated, supplemented or modified from time to time, the
“Guaranty Agreement”). Capitalized terms used herein but not defined herein are
used herein with the meaning given them in the Guaranty Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as provided
in Section 4.15 of the Guaranty Agreement, hereby becomes a party to the
Guaranty Agreement as a Guarantor thereunder with the same force and effect as
if originally named as a Guarantor therein.
The undersigned expects to realize direct and indirect benefits as the result of
the availability of the aforementioned credit facilities to the Borrower.
The undersigned hereby represents and warrants that each of the representations
and warranties contained in or incorporated into the Guaranty Agreement
applicable to it is true and correct in all material respects on and as the date
hereof as if made on and as of such date. This Joinder Agreement shall be
governed by, construed and enforced in accordance with, the internal law of the
State of New York without reference to conflicts of law rules other than
Section 5-1401 of the General Obligations Law of the State of New York except
that matters concerning the validity and perfection of a security interest shall
be governed by the conflict of law rules set forth in the UCC. The undersigned
hereby consents to the application of New York civil law to the construction,
interpretation and enforcement of this Joinder Agreement, and to the application
of New York civil law to the procedural aspects of any suit, action or
proceeding relating thereto, including, but not limited to, legal process,
execution of judgments and other legal remedies.
This Joinder Agreement may be executed in any number of identical counterparts,
any set of which signed by all the parties hereto shall be deemed to constitute
a complete, executed original for all purposes. Transmission by facsimile, “PDF”
or similar electronic format of an executed counterpart of this Joinder
Agreement shall be deemed to constitute due and sufficient delivery of such
counterpart

 

 

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In witness whereof, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

            [Additional Guarantor]
      By:         Name:         Title:        

ACKNOWLEDGED AND AGREED
as of the date of this Joinder Agreement
first above written.

          Wells Fargo Bank, National Association, as Administrative Agent
      By:               Name:

    Title:          

 

2.

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EXHIBIT M
FORM OF SECURITY AGREEMENT
(see attached)

 

M-1

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SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of [                    ], 20__, is entered
into by and among FULL HOUSE RESORTS, INC., a Delaware corporation (“Borrower”),
FULL HOUSE SUBSIDIARY, INC., a Delaware corporation (“Subsidiary”), FULL HOUSE
SUBSIDIARY II, INC., a Nevada corporation (“Subsidiary II”), GAMING
ENTERTAINMENT (INDIANA), LLC, a Nevada limited liability company (“Gaming
Indiana”), GAMING ENTERTAINMENT (SANTA FE), LLC, a Nevada limited liability
company (“Gaming Santa Fe”), GAMING ENTERTAINMENT (MONTANA), LLC, a Nevada
limited liability company (“Gaming Montana”), STOCKMAN’S CASINO, a Nevada
corporation (“Stockman’s”) and each of the other entities which becomes a party
hereto pursuant to Section 10.15 below (each of the foregoing, including the
Borrower, Subsidiary, Subsidiary II, Gaming Indiana, Gaming Santa Fe, Gaming
Montana and Stockman’s, each a “Grantor” and collectively, the “Grantors”) and
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as collateral agent for
the Secured Parties (as defined in the below-described Credit Agreement) (in
such capacity, together with any successors and assigns in such capacity, the
“Collateral Agent”).
RECITALS
A. Each of the Grantors (other than the Borrower) is a direct or indirect
subsidiary of the Borrower.
B. The Borrower entered into a Credit Agreement, dated as of October 29, 2010(as
the same from time to time hereafter may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the lenders from time to time party thereto (the “Lenders”) and Wells
Fargo, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”), Collateral Agent, L/C Issuer and Swing Line Lender,
pursuant to which the Administrative Agent and the Lenders agreed to extend
loans and other financial accommodations to the Borrower upon the terms and
subject to the conditions set forth therein. In addition, certain of the Lender
Parties may, from time to time, enter into Lender Rate Contracts with the
Borrower.
C. The Lender Parties’ obligations to extend loans and other financial
accommodations to the Borrower under the Credit Agreement and the other Credit
Documents are subject, among other conditions, to receipt by the Collateral
Agent of this Security Agreement duly executed by the Grantors.
D. Each Grantor (other than the Borrower) is or shall become a party to that
certain Guaranty Agreement dated as of even date herewith in connection with the
Credit Agreement. Each Grantor (other than the Borrower) expects to realize
direct and indirect benefits as the result of the availability of the
aforementioned credit facilities to the Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each of the Grantors hereby agrees with the Collateral Agent, for
itself and for the benefit of the Secured Parties, as follows:

 

 

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SECTION 1. Definitions and Interpretation. When used in this Security Agreement,
the following terms shall have the following respective meanings:
“Account” means any “account,” as such term is defined in Section 9-102(a)(2) of
the UCC (or any other then applicable provision of the UCC) and, in any event,
shall include, without limitation, all accounts receivable, book debts and other
forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Grantor (including, without limitation, under any
trade name, style or division thereof) whether arising out of goods sold or
services rendered by such Grantor or from any other transaction, whether or not
the same involves the sale of goods or services by such Grantor (including,
without limitation, any such obligation which may be characterized as an account
or contract right under the UCC) and all of any Grantor’s rights in, to and
under all purchase orders or receipts now owned or hereafter acquired by it for
goods or services, and all of any Grantor’s rights to any goods represented by
any of the foregoing (including, without limitation, unpaid seller’s rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), and all monies due or to become due
to any Grantor under all purchase orders and contracts for the sale of goods or
the performance of services or both by any Grantor (whether or not yet earned by
performance on the part of such Grantor or in connection with any other
transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts, and all collateral security and guarantees of any kind given by any
Person with respect to any of the foregoing.
“Account Debtor” means any “account debtor,” as such term is defined in Section
9-102(a)(3) of the UCC (or any other then applicable provision of the UCC).
“Casino Bankroll” means only the amount of cash or Cash Equivalents required by
the Gaming Laws to satisfy casino minimum bankroll requirements, mandatory game
security reserves, allowances for redemption of casino chips and tokens, or
payment of winning wagers to gaming patrons, or as otherwise may be required by
the Gaming Laws or a directive of the Gaming Board.
“Chattel Paper” means any “chattel paper,” as such term is defined in Section
9-102(a)(11) of the UCC (or any other then applicable provision of the UCC),
including, without limitation, electronic chattel paper and tangible chattel
paper, in each case, now owned or hereafter acquired by any Grantor or in which
any Grantor now holds or hereafter acquires any interest.
“Collateral” shall have the meaning assigned to such term in Section 2 below.
“Commercial Tort Claim” means any “commercial tort claim,” as such term is
defined in Section 9-102(a)(13) of the UCC (or any other then applicable
provision of the UCC).
“Commodity Account” means any “commodity account,” as such term is defined in
Section 9-102(a)(14) of the UCC (or any other then applicable provision of the
UCC).

 

2 

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“Commodity Contract” means any “commodity contract,” as such term is defined in
Section 9-102(a)(15) of the UCC (or any other then applicable provision of the
UCC).
“Contracts” means all contracts, undertakings, franchise agreements, license
agreements or other agreements (but excluding rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Grantor may now or hereafter
have any right, title or interest, including, without limitation, with respect
to an Account, any agreement relating to the terms of payment or the terms of
performance thereof.
“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest:
(i) all copyrights, whether registered or unregistered, held pursuant to the
laws of the United States, any State thereof or of any other country;
(ii) registrations, applications and recordings in the United States Copyright
Office or in any similar office or agency of the United States, any state
thereof or any other country; (iii) any continuations, renewals or extensions
thereof; and (iv) any registrations to be issued in any pending applications.
“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration now owned or hereafter acquired by any
Grantor.
“Deposit Account” means any “deposit account” as such term is defined in Section
9-102(a)(29) of the UCC (or any other then applicable provision of the UCC), and
should include, without limitation, any demand, time, savings passbook or like
account, now or hereafter maintained by or for the benefit of any Grantor, or in
which any Grantor now holds or hereafter acquires any interest, with a bank,
savings and loan association, credit union or like organization (including the
Collateral Agent) and all funds and amounts therein, whether or not restricted
or designated for a particular purpose.
“Documents” means any “documents,” as such term is defined in
Section 9-102(a)(30) of the UCC (or any other then applicable provision of the
UCC), now owned or hereafter acquired by any Grantor or in which any Grantor now
holds or hereafter acquires any interest.
“Electronic Chattel Paper” means any “electronic chattel paper” as such term is
defined in Section 9-102(a)(31) of the UCC (or any other then applicable
provision of the UCC).
“Equipment” means any “equipment,” as such term is defined in
Section 9-102(a)(33) of the UCC (or any other then applicable provision of the
UCC), now or hereafter owned or acquired by any Grantor or in which any Grantor
now holds or hereafter acquires any interest and, in any event, shall include,
without limitation, all machinery, equipment, fixtures, gaming machines, casino
chips, signage, change banks, change bins, slot machine bases furniture,
furnishings, trade fixtures, vehicles, trucks, vessels, boilers, engines, masts,
spars, rigging, boats, pumps, anchors, cables, chains, tackle, apparel,
fittings, mainframe, personal and other computers, terminals and printers and
related components and accessories, all copiers, telephonic, video, electronic
data-processing, data storage equipment and other equipment of any nature
whatsoever, and any and all additions, substitutions and replacements of any of
the foregoing, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto.

 

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“Excluded Assets” means:
(a) any Equity Securities in [GEM]1 or GED;
(b) any lease, license, contract, property rights or agreement to which any
Grantor is a party, any of its rights or interests thereunder to the extent that
any applicable term therein prohibits the creation of a security interest
thereon (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including any Debtor Relief Laws) or principles of equity);
(c) any “intent to use” Trademark applications for which a statement of use has
not been filed (but only until such statement is filed);
(d) casino markers to the extent there is an enforceable legal prohibition in
granting a lien on any such marker after giving effect to the UCC of any
relevant jurisdiction or any other applicable law; and
(e) any gaming license to the extent a security interest therein cannot be
granted without prior written consent of any Gaming Board;
provided, however, “Excluded Assets” shall not include (i) the right to receive
distributions, dividends, cash and other property in respect of the Equity
Securities of [GEM] or GED and (ii) any proceeds, products, substitutions or
replacements of Excluded Assets (unless such proceeds, products, substitutions
or replacements would otherwise constitute Excluded Assets).
“General Intangible” means any “general intangible,” as such term is defined in
Section 9-102(a)(42) of the UCC (or any other then applicable provision of the
UCC) and, in any event, shall include, without limitation, all right, title and
interest which any Grantor may now or hereafter have in or under any Contract,
all customer lists, Copyrights, Trademarks, Patents and other Intellectual
Property of any kind or nature, including, without limitation, any rights to
Intellectual Property, including, without limitation, under or pursuant to any
License, all proprietary or confidential information, inventions (whether or not
patented or patentable), interests in partnerships, joint ventures and other
business associations, permits, books and records, goodwill (including, without
limitation, the goodwill associated with any Trademark, Trademark registration
or Trademark licensed under any Trademark License), claims in or under insurance
policies, including unearned premiums, Payment Intangibles, Software,
uncertificated securities, cash and other forms of money or currency, rights to
sue for past, present and future infringement of Copyrights, Trademarks and
Patents, rights to receive tax refunds, all agreements, obligations and
liabilities owing to any Grantor and all collateral securing such agreements,
obligations and liabilities, and other payments and rights of indemnification.
 

      1   Equity Securities of GEM to be included in Excluded Assets only to the
extent the NIGC will not issue a declination letter with respect to the Credit
Documents if such Equity Securities are included in the Collateral

 

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“Instruments” means any “instrument,” as such term is defined in
Section 9-102(a)(47) of the UCC (or any other then applicable provision of the
UCC), now owned or hereafter acquired by any Grantor or in which any Grantor now
holds or hereafter acquires any interest, including, without limitation, all
notes and all other evidences of indebtedness, other than instruments that
constitute, or are a part of a group of writings that constitute, Chattel Paper.
“Intellectual Property” means all intellectual property of any kind or nature,
including, without limitation, all Copyrights, Copyright Licenses, Trademarks,
Trademark Licenses, Patents, Patent Licenses, trade secrets, mask works, source
codes, customer lists, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
recipes, experience, processes, models, drawings, materials and records.
“Inventory” means any “inventory,” as such term is defined in
Section 9-102(a)(48) of the UCC (or any other then applicable provision of the
UCC), wherever located, now or hereafter owned or acquired by any Grantor or in
which any Grantor now holds or hereafter acquires any interest, and, in any
event, shall include, without limitation, all inventory, goods and other
personal property which are held by or on behalf of any Grantor for sale or
lease or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or consumed or
to be used or consumed in any Grantor’s business, or the processing, packaging,
promotion, delivery or shipping of the same, and all finished goods whether or
not such inventory is listed on any schedules, assignments or reports furnished
to the Collateral Agent from time to time and whether or not the same is in
transit or in the constructive, actual or exclusive occupancy or possession of
any Grantor or is held by any Grantor or by others for any Grantor’s account,
including, without limitation, all goods covered by purchase orders and
contracts with suppliers and all goods billed and held by suppliers and all
inventory of any Grantor which may be located on the premises of any Grantor or
of any carriers, forwarding agents, truckers, warehousemen, vendors, selling
agents or other persons.
“Investment Property” means any “investment property,” as such term is defined
in Section 9-102(a)(49) of the UCC (or any other then applicable provision of
the UCC), now owned or hereafter acquired by any Grantor or in which any Grantor
now holds or hereafter acquires any interest, and shall include, without
limitation, all Securities Accounts, Commodity Accounts and Commodity Contracts
and all certificated securities (including, without limitation, those listed on
Schedule I), uncertificated securities and security entitlements, as each such
term is defined in the UCC.
“Letter-of-Credit Right” means “letter-of-credit right,” as such term is defined
in Section 9-102(a)(51) of the UCC (or any other then applicable provision of
the UCC).
“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by or in
which any Grantor now holds or hereafter acquires any interest and any renewals
or extensions thereof.
“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence now owned or hereafter acquired
by any Grantor.

 

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“Patents” means all of the following now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest:
(a) letters patent of, or rights corresponding thereto in, the United States or
any other country, all registrations and recordings thereof, and all
applications for letters patent of, or rights corresponding thereto in, the
United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country; (b) all reissues, continuations,
continuations-in-part or extensions thereof; (c) all petty patents, divisionals,
and patents of addition; and (d) all patents to issue in any such applications.
“Payment Intangible” means “payment intangible,” as such term is defined in
Section 9-102(a)(61) of the UCC (or any other then applicable provision of the
UCC).
“Pledged Collateral” means, collectively, the notes, the stock, partnership
interests, limited liability company interests, and all other Equity Securities
of any Grantor (excluding however, any Equity Securities issued by the
Borrower), all certificates or other instruments representing any of the
foregoing, all security entitlements of any Grantor in respect of any of the
foregoing, all dividends, interest distributions, cash, warrants, rights,
instruments and other property or Proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing.
“Proceeds” means “proceeds,” as such term is defined in Section 9-102(a)(64) of
the UCC (or any other then applicable provision of the UCC), and, in any event,
shall include, without limitation, (a) any and all Accounts, Chattel Paper,
Instruments, cash or other forms of money or currency or other proceeds payable
to any Grantor from time to time in respect of the Collateral, (b) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to any
Grantor from time to time with respect to any of the Collateral, (c) any and all
payments (in any form whatsoever) made or due and payable to any Grantor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any governmental
authority (or any Person acting under color of governmental authority), (d) any
claim of any Grantor against third parties (i) for past, present or future
infringement of any Copyright, Patent, Copyright License or Patent License or
(ii) for past, present or future infringement or dilution of any Trademark or
Trademark License or for injury to the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License,
(e) all certificates, dividends, cash, Instruments and other property received
or distributed in respect of or in exchange for any Investment Property, and
(f) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
“Secured Obligations” shall mean and include (a) in the case of the Borrower,
the Obligations (as defined in the Credit Agreement) and (b) in the case of each
other Grantor, all liabilities and obligations, howsoever arising, owed by such
Grantor to the Collateral Agent, the Administrative Agent or any other Secured
Party of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
in each case, pursuant to the terms of the Guaranty or any of the other Credit
Documents to which such Grantor is a party, including without limitation all
interest (including interest that accrues after the commencement of any
bankruptcy or other insolvency proceeding by or against such Grantor, whether or
not allowed or allowable), fees, charges, expenses, attorneys’ fees and
accountants’ fees chargeable to and payable by such Grantor hereunder and
thereunder.

 

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“Securities Account” means “securities account,” as such term is defined in
Section 8-501(a) of the UCC (or any other then applicable provision of the UCC).
“Security Agreement” means this Security Agreement and all exhibits and
schedules hereto, as the same may from time to time be amended, modified,
supplemented or restated.
“Software” means “software,” as such term is defined in Section 9-102(a)(75) of
the UCC (or any other then applicable provision of the UCC).
“Supporting Obligation” means “supporting obligation,” as such term is defined
in Section 9-102(a)(77) of the UCC (or any other then applicable provision of
the UCC).
“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration now owned or hereafter acquired by any
Grantor.
“Trademarks” means any of the following now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest:
(a) any and all trademarks, trade names, corporate names, business names, trade
dress, service marks, logos, designs, and other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof and (b) any reissues, extensions or
renewals thereof.
“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, however, in the event that, by
reason of mandatory provisions of law, any or all of the creation or attachment,
perfection or priority of the Collateral Agent’s or any Lender’s security
interest in any collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such creation or attachment,
perfection of priority and for purposes of definitions related to such
provisions.
Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC. The rules of
interpretation set forth in Article I of the Credit Agreement shall, to the
extent not inconsistent with the terms of this Security Agreement, apply to this
Security Agreement and are hereby incorporated by reference.

 

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SECTION 2. Grant of Security Interest. Each Grantor hereby assigns, conveys,
mortgages, pledges, grants, hypothecates and transfers to the Collateral Agent,
for the benefit of the Secured Parties, as security for the full, prompt,
complete and final payment when due (whether at stated maturity, by acceleration
or otherwise) and prompt performance and observance of all of the Secured
Obligations of such Grantor, and in order to induce the Administrative Agent and
the other Secured Parties to enter into the Credit Agreement and the other
Credit Documents and to make loans and other financial accommodations available
to and for the benefit of the Borrower upon the terms and subject to the
conditions thereof, a security interest in and to all of such Grantor’s right,
title and interest in, to and under each of the following, whether now owned or
hereafter acquired by such Grantor or in which such Grantor now holds or
hereafter acquires any interest (all of which being hereinafter collectively
called the “Collateral”):
(a) All Accounts;
(b) All Chattel Paper;
(c) All Commercial Tort Claims;
(d) All Contracts;
(e) All Deposit Accounts;
(f) All Documents;
(g) All Equipment;
(h) All General Intangibles;
(i) All Instruments;
(j) All Inventory;
(k) All Investment Property;
(l) All Pledged Collateral;
(m) All Letter-of-Credit Rights;
(n) All Supporting Obligations;
(o) All property of such Grantor held by the Collateral Agent, the
Administrative Agent or any Lender Party, or any other party for whom the
Collateral Agent, the Administrative Agent or any Lender Party is acting as
agent hereunder, including, without limitation, all property of every
description now or hereafter in the possession or custody of or in transit to
the Collateral Agent, the Administrative Agent, any Lender Party or such other
party, for any purpose, including, without limitation, safekeeping, collection
or pledge, for the account of such Grantor, or as to which such Grantor may have
any right or power;

 

8

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(p) All distributions, dividends, cash and other property received or
distributed in respect of any Equity Securities in [GEM]2 and GED;
(q) All other goods and personal property of such Grantor whether tangible or
intangible and whether now or hereafter owned or existing, leased, consigned by
or to, or acquired by, such Grantor and wherever located; and
(r) To the extent not otherwise included, all Proceeds of each of the foregoing
and all accessions to, substitutions and replacements for, and rents, profits
and products of each of the foregoing;
provided, however, notwithstanding the foregoing, the Collateral shall not
include any Excluded Assets.
SECTION 3. Rights of the Collateral Agent; Collection of Accounts.
(a) The Collateral Agent shall not have any obligation or liability under any
Contract by reason of or arising out of this Security Agreement or the granting
to the Collateral Agent of a security interest therein or the receipt by the
Collateral Agent of any payment relating to any Contract pursuant hereto, nor
shall the Collateral Agent be required or obligated in any manner to perform or
fulfill any of the obligations of any Grantor under or pursuant to any Contract,
or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any performance
by any party under any Contract, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
(b) The Collateral Agent authorizes each Grantor to collect the respective
Accounts of such Grantor, provided, that the Collateral Agent may, upon the
occurrence and during the continuation of any Event of Default and without
notice, limit or terminate said authority at any time. If required by the
Collateral Agent at any time after the occurrence and during the continuation of
any Event of Default, any Proceeds, when first collected by a Grantor, received
in payment of such Account or in payment for any of its Inventory or on account
of any of its Contracts shall be promptly deposited by such Grantor in precisely
the form received (with all necessary endorsements) in a special bank account
maintained by the Collateral Agent subject to withdrawal by the Collateral Agent
only, as hereinafter provided, and until so turned over shall be deemed to be
held in trust by such Grantor for and as the Collateral Agent’s property, and
shall not be commingled with such Grantor’s other funds or properties. Such
Proceeds, when deposited, shall continue to be collateral security for all of
the Secured Obligations and shall not constitute payment thereof until applied
as hereinafter provided. Upon the occurrence and during the continuation of any
Event of Default, the Collateral Agent may, in its sole discretion, apply all or
a part of the funds on deposit in said special account to the principal of or
interest on or both in respect of any of the Secured Obligations in accordance
with the provisions of Section 7(g), below, and any part of such funds which the
Collateral Agent elects not to so apply and deems not required to be held by the
 

      2   See Footnote 1

 

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Collateral Agent as collateral security for the Secured Obligations shall be
paid over from time to time by the Collateral Agent to the Grantors. If an Event
of Default has occurred and is continuing, at the request of the Collateral
Agent, each Grantor shall deliver to the Collateral Agent all original and other
documents evidencing, and relating to, the sale and delivery of such Inventory
and each Grantor shall deliver all original and other documents evidencing and
relating to, the performance of labor or service which created such Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
(c) The Collateral Agent may at any time, upon the occurrence and during the
continuation of any Event of Default, without notice to or consent from any
Grantor, notify Account Debtors of any Grantor, parties to the Contracts of any
Grantor, obligors in respect of Instruments of any Grantor and obligors in
respect of Chattel Paper of any Grantor that the Accounts and the right, title
and interest of any Grantor in and under such Contracts, Instruments, and
Chattel Paper have been assigned to the Collateral Agent, and that payments
shall be made directly to the Collateral Agent. Upon the request of the
Collateral Agent, each Grantor shall so notify such Account Debtors, parties to
such Contracts, obligors in respect of such Instruments and obligors in respect
of such Chattel Paper. Upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent may, in its name, or in the name of
others communicate with such Account Debtors, parties to such Contracts,
obligors in respect of such Instruments and obligors in respect of such Chattel
Paper to verify with such parties, to the Collateral Agent’s satisfaction, the
existence, amount and terms of any such Accounts, Contracts, Instruments or
Chattel Paper.
SECTION 4. Representations and Warranties. Each Grantor hereby represents and
warrants to the Collateral Agent, the Administrative Agent and the Lender
Parties that:
(a) Such Grantor is the sole legal and equitable owner of each item of the
Collateral in which it purports to grant a security interest hereunder, having
good and merchantable title or rights thereto free and clear of any and all
Liens, except for Permitted Liens.
(b) No effective security agreement, financing statement, equivalent security or
lien instrument or continuation statement covering all or any part of the
Collateral exists, except such as may have been filed by such Grantor in favor
of the Collateral Agent pursuant to this Security Agreement or such as relate to
other Permitted Liens.
(c) The execution and delivery of this Security Agreement creates a legal and
valid security interest on and in all of the Collateral in which such Grantor
now has rights and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. Accordingly,
the Collateral Agent has a fully perfected first priority security interest in
all of the Collateral in which such Grantor now has rights subject only to
Permitted Liens. This Security Agreement will create a legal and valid and fully
perfected first priority security interest in the Collateral in which such
Grantor later acquires rights, when such Grantor acquires those rights, subject
only to Permitted Liens.

 

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(d) Each Grantor’s exact legal name is set forth on Schedule VI attached hereto
or as otherwise set forth in a written notice given to the Collateral Agent
pursuant to Section 5.11 below. Each Grantor was formed under the laws of
jurisdiction of its formation as set forth on Schedule VI attached hereto or as
otherwise set forth in a written notice given to the Collateral Agent pursuant
to Section 5.11 below. Each Grantor’s chief executive office, principal place of
business, and the place where each Grantor maintains records concerning the
Collateral are set forth on Schedule VI attached hereto or at such other
location(s) set forth in a written notice given to the Collateral Agent pursuant
to this subsection (d). The Collateral, other than Deposit Accounts, Investment
Property held in Securities Accounts or Commodity Accounts and Collateral in the
Collateral Agent’s possession, is presently located at the location(s) set forth
on Schedule VI attached hereto or at such other location(s) set forth in a
written notice given to the Collateral Agent pursuant to this subsection (d). No
Grantor shall change such chief executive office or principal place of business
or remove or cause to be removed, except in the ordinary course of such
Grantor’s business and in connection with sales, transfers and dispositions
permitted under Section 5.02(c) of the Credit Agreement, the Collateral or the
records concerning the Collateral from those premises without prior written
notice to the Collateral Agent.
(e) Schedule I (as supplemented from time to time by the Grantors in a
supplement delivered pursuant to this subsection (e)) sets forth, as of the
Closing Date and as of each date by which this subsection (e) requires any
supplement to be delivered by the Grantors, all Collateral with respect to which
a security interest may be perfected by the secured party’s taking possession
thereof, including, without limitation, all Chattel Paper, Instruments and
certificated securities. As of the Closing Date and as of each date by which
this subsection (e) requires any supplement to Schedule I to be delivered by the
Grantors, all action necessary to protect and perfect such security interest in
each item set forth on Schedule I (as supplemented from time to time by the
Grantors in a supplement delivered pursuant to this subsection (e)), including,
without limitation, the delivery to the Collateral Agent of all originals of all
Chattel Paper, Instruments and certificated securities and all necessary stock
powers, endorsements, assignments and other instruments of transfer, has been
taken. Schedule II (as supplemented from time to time by the Grantors in a
supplement delivered pursuant to this subsection (e)) sets forth, as of the
Closing Date and as of each date by which this subsection (e) requires any
supplement to be delivered by the Grantors, all Letter-of-Credit Rights and
Commercial Torts Claims of each Grantor. The security interest of the Collateral
Agent in the Collateral is prior in right and interest to all other liens, other
than Permitted Liens, and is enforceable as such against creditors of and
purchasers from such Grantor. Each Grantor shall supplement Schedule I and
Schedule II from time to time within twenty (20) Business Days after obtaining
any additional Chattel Paper, Instruments, certificated securities,
Letter-of-Credit Rights or Commercial Tort Claims, as applicable.
(f) Schedule III (as supplemented from time to time by the Grantors in a
supplement delivered pursuant to this subsection (f)) sets forth, as of the
Closing Date and as of each date by which this subsection (f) requires any
supplement to be delivered by the Grantors, the names and addresses of all
financial institutions at which each Grantor maintains its Deposit Accounts and
the account numbers and account names of such Deposit Accounts. Each Grantor
shall supplement Schedule III from time to time within twenty (20) Business Days
after opening any additional Deposit Account or closing or changing the account
number or account name on any existing Deposit Account.

 

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(g) Schedule IV (as supplemented from time to time by the Grantors in a
supplement delivered pursuant to this subsection (g)) sets forth, as of the
Closing Date and as of each date by which this subsection (g) requires any
supplement to be delivered by the Grantors, the names and addresses of all
institutions at which each Grantor maintains its Securities Accounts and the
account numbers and account names of such Securities Accounts. Each Grantor
shall supplement Schedule IV from time to time within twenty (20) Business Days
after opening any additional Securities Account or closing or changing the
account number or account name on any existing Securities Account.
(h) Schedule V (as supplemented from time to time by the Grantors in a
supplement delivered pursuant to this subsection (h)) sets forth, as of the
Closing Date and as of each date by which this subsection (h) requires any
supplement to be delivered by the Grantors, the names and addresses of all
institutions at which each Grantor maintains its Commodity Accounts and the
account numbers and account names of such Commodity Accounts. Each Grantor shall
supplement Schedule V from time to time within twenty (20) Business Days after
opening any additional Commodity Account or closing or changing the account
number or account name on any existing Commodity Account.
(i) All material Copyright Licenses, Patent Licenses and Trademark Licenses and
all registered Copyrights, Patents and Trademarks which constitute Collateral,
and applications and registrations for Copyrights, Patents and Trademarks owned,
held or in which the Grantors otherwise have any rights which constitute
Collateral are listed on Schedule VII. No later than the last day of each fiscal
quarter, beginning with the fiscal quarter ending [                    ], 20__,
(i) the Grantors shall amend Schedule VII to reflect any additions to or
deletions of Patents (including applications and registrations), Trademarks
(including applications and registrations) or Copyrights (including applications
and registrations) (whether filed by Grantor or acquired) from this list and
(ii) the Grantors shall execute and deliver to the Collateral Agent additional
short form documentation in form and substance reasonably satisfactory to the
Collateral Agent to be filed in the United States Copyright Office or the United
States Patent and Trademark Office as the Collateral Agent may reasonably
require from time to time.
(j) No Copyrights, Patents or Trademarks listed on Schedule VII which are of
material value or utility to the Grantors have been adjudged invalid or
enforceable or have been canceled, in whole or in part, or are not presently
subsisting.
(k) None of the Patents, Trademarks or Copyrights has been licensed to any third
party, except for Licenses issued in the ordinary course of the Grantors’
business to enable the Grantors to conduct their business.
(l) As of the Closing Date and as of each date by which Section 4(e) requires
any supplement to Schedule I to be delivered by the Grantors, such Grantor has
delivered to Collateral Agent all of the Equity Securities pledged to the
Collateral Agent by such Grantor under Section 2 above free and clear of any
adverse claim, as defined in Section 8-102(a)(1) of the UCC (or any other then
applicable provision of the UCC), except for the Lien created in favor of the
Collateral Agent by this Security Agreement and the other Credit Documents.

 

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(m) No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or any other Person is required for the
exercise by the Collateral Agent of the voting or other rights provided for in
this Security Agreement, except (i) as may be required by Gaming Laws or (ii) in
connection with a disposition of the Investment Property as may be required by
governmental rules affecting the offering and sale of securities generally.
(n) Each Grantor has delivered to the Collateral Agent, together with all
necessary stock powers, endorsements, assignments and other necessary
instruments of transfer, the originals of all stock certificates, instruments,
notes, other certificated securities, other Collateral and all certificates,
instruments and other writings evidencing the same, in each case relating to
Equity Securities and Instruments required to be pledged hereunder.
(o) All shares of the pledged Equity Securities set forth on Schedule I (as
supplemented from time to time by the Grantors in a supplement delivered
pursuant to subsection (e) above) are duly authorized and validly issued, fully
paid, and non-assessable. Schedule I (as supplemented from time to time by the
Grantors in a supplement delivered pursuant to subsection (e) above) sets forth,
as of the Closing Date and as of each date by which such subsection (e) requires
any supplement to be delivered by the Grantors, sets forth a true, complete and
accurate list of all shares of stock issued by each Grantor’s Subsidiaries and
all other securities owned by such Grantor.
SECTION 5. Covenants. Each Grantor covenants and agrees with the Collateral
Agent that from and after the date of this Security Agreement and until the
Secured Obligations have been completely and finally paid in full (other than
contingent indemnification obligations and Obligations in respect of Lender Rate
Contracts):
5.1 Further Assurances; Pledge of Instruments. At any time and from time to
time, upon the written request of the Collateral Agent, and at the sole expense
of the Grantors, each Grantor shall promptly and duly execute and deliver any
and all such further instruments and documents and take such further action as
the Collateral Agent may reasonably deem desirable to obtain the full benefits
of this Security Agreement and of the rights and powers herein granted,
including, without limitation, (a) using its commercially reasonable efforts to
secure all consents and approvals necessary or appropriate for the grant of a
security interest to the Collateral Agent in any Contract held by any Grantor or
in which any Grantor has any rights not heretofore assigned, (b) filing any
financing statements, amendments or continuation statements under the UCC with
respect to the security interests granted hereby, (c) filing or cooperating with
the Collateral Agent in filing any forms or other documents required to be filed
with the United States Patent and Trademark Office, the United States Copyright
Office or any filings in any foreign jurisdiction or under any international
treaty, required to secure or protect the Collateral Agent’s interest in the
Collateral, (d) transferring Collateral to the Collateral Agent’s possession (if
a security interest in such Collateral can be perfected and free from an adverse
claim only by possession), (e) filing financing statements as consignor pursuant
to Section 9-505 of the UCC (or any other then applicable provision of the UCC)
in such jurisdictions as any Grantor maintains Inventory on consignment,
(f) placing the interest of the Collateral Agent as lienholder on the
certificate of title (or other evidence of ownership ) of any vehicle that
constitutes Collateral owned by any Grantor or in or with respect to which any

 

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Grantor holds a beneficial interest, (g) using its commercially reasonable
efforts to obtain waivers of liens from landlords and mortgagees as required
pursuant to the Credit Agreement, (h) obtaining written acknowledgements from
consignees, warehouse and other bailees of the prior lien of the Collateral
Agent in and to the Collateral and that such third party is holding possession
of the Collateral for the benefit of the Collateral Agent to the extent provided
in such written acknowledgement, (i) executing supplements to this Security
Agreement in form and substance reasonably satisfactory to the Collateral Agent
necessary to identify and grant to the Collateral Agent a security interest in
any Commercial Tort Claims acquired by such Grantor, and (j) assisting the
Collateral Agent in obtaining control under the UCC with respect to any
Collateral consisting of Deposit Accounts, Investment Property, Letter-of-Credit
Rights and Electronic Chattel Paper. Each Grantor also hereby authorizes the
Collateral Agent, to the extent not prohibited by applicable law, to file any
such financing statement, amendment or continuation statement (including
consignment filings) without the signatures of such Grantor. If any amount
payable under or in connection with any of the Collateral is or shall become
evidenced by any Instrument, such Instrument, other than checks and notes
received in the ordinary course of any Grantor’s business, shall be duly
endorsed in a manner satisfactory to the Collateral Agent and delivered to the
Collateral Agent promptly upon any Grantor’s receipt thereof.
5.2 Maintenance of Records. Each Grantor shall keep and maintain at such
Grantor’s own cost and expense accurate and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Collateral and all other dealings with the
Collateral. Each Grantor shall mark its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. If requested by the Collateral Agent, all Chattel Paper shall be
marked with the following legend: “This writing and the obligations evidenced or
secured hereby are subject to the security interest of Wells Fargo Bank,
National Association, as Collateral Agent, created by that certain Security
Agreement, dated as of [                    ], 20 __ , in favor of Wells Fargo
Bank, National Association, as Collateral Agent, as the same may thereafter from
time to time be amended, modified, supplemented or restated.”
5.3 Indemnification. In any suit, proceeding or action brought by or against the
Collateral Agent or any Lender relating to any Collateral, including, without
limitation, any Account, Chattel Paper, Contract, General Intangible, Instrument
or Document for any sum owing thereunder, or to enforce any provision of any
Account, Chattel Paper, Contract, General Intangible, Instrument or Document,
each Grantor shall jointly and severally save, indemnify and keep the Collateral
Agent harmless from and against all expense, loss or damage suffered by reason
of any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder arising out of a breach by any Grantor of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, or in favor of, such obligor or its successors
from any Grantor, except to the extent determined by a final, non-appealable
judgment of a court of competent jurisdiction to have been caused by the gross
negligence, bad faith or willful misconduct of the Collateral Agent, and all
such obligations of the Grantors shall be and remain enforceable against and
only against the Grantors and shall not be enforceable against the Collateral
Agent.

 

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5.4 Compliance With Terms of Accounts, Etc. In all material respects, each
Grantor shall perform and comply with all obligations in respect of Accounts,
Chattel Paper, Contracts, Documents, Instruments and Licenses and all other
agreements to which it is a party or by which it is bound; provided, however,
that each Grantor may suspend its performance thereunder in the event of a
material breach of any such obligations by third parties.
5.5 Limitation on Liens on Collateral. No Grantor shall create, permit or suffer
to exist, and shall defend the Collateral against and take such other action as
is necessary to remove, any lien on the Collateral, except the Permitted Liens.
Each Grantor shall, jointly and severally, further defend the right, title and
interest of the Collateral Agent in and to any of any Grantor’s rights under the
Chattel Paper, Contracts, Documents, General Intangibles, Instruments and
Investment Property and to the Equipment and Inventory and in and to the
Proceeds thereof against the claims and demands of all Persons whomsoever.
5.6 Limitations on Modifications of Accounts, Etc. Upon the occurrence and
during the continuation of any Event of Default, no Grantor shall, without the
Collateral Agent’s prior written consent, grant any extension of the time of
payment of any of the Accounts, Chattel Paper, Instruments or amounts due under
any Contract or Document, compromise, compound or settle the same for less than
the full amount thereof, release, wholly or partly, any Person liable for the
payment thereof, or allow any credit or discount whatsoever thereon other than
trade discounts and rebates granted in the ordinary course of such Grantor’s
business..
5.7 Maintenance of Insurance. Each Grantor shall maintain, with financially
sound and reputable companies, the insurance policies with coverage provisions
as set forth in Section 5.01(d) of the Credit Agreement.
5.8 Taxes, Assessments, Etc. Each Grantor shall pay promptly prior to
delinquency all property and other taxes, assessments and government charges or
levies imposed upon, and all claims (including, without limitation, claims for
labor, materials and supplies) against, the Equipment or Inventory, except to
the extent the validity thereof is being contested in good faith and adequate
reserves are being maintained in connection therewith.
5.9 Limitations on Disposition. Each Grantor shall keep the Collateral separate
and identifiable from other property located on the same premises as the
Collateral and no Grantor shall sell, lease, license outside the ordinary course
of its business, transfer or otherwise dispose of any of the Collateral, or
attempt or contract to do so, except as permitted by Section 5.02(c) of the
Credit Agreement.
5.10 Further Identification of Collateral. Each Grantor shall, if so requested
by the Collateral Agent, furnish to the Collateral Agent, as often as the
Collateral Agent shall reasonably request, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.

 

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5.11 Notices. Each Grantor shall advise the Collateral Agent promptly, in
reasonable detail, of (a) any material Lien, other than Permitted Liens,
attaching to or asserted against any of the Collateral, (b) any material change
in the composition of the Collateral and (c) the occurrence of any other event
which could reasonably be expected to result in a Material Adverse Effect with
respect to the Collateral or on the security interest created hereunder.
5.12 Right of Inspection and Audit. Each Grantor shall permit the Collateral
Agent such rights of inspection and audit as provided in the Credit Agreement,
subject to applicable Gaming Laws. In addition, upon reasonable notice to a
Grantor (unless an Event of Default has occurred and is continuing, in which
case no notice is necessary), the Collateral Agent and its agents and
representatives shall also have the right during such Grantor’s ordinary
business hours, to enter into and upon any premises of such Grantor where any of
the Equipment or Inventory is located for the purpose of conducting audits and
making physical verifications of such Equipment and Inventory and test
verifications of the Accounts in any manner and through any medium that it
considers advisable, and each Grantor agrees to furnish all such assistance and
information as the Collateral Agent may require in connection therewith.
5.13 Maintenance of Facilities. Each Grantor shall maintain and protect its
properties, assets and facilities, including, without limitation, its Equipment
in good order and working repair and condition (taking into consideration
ordinary wear and tear) and from time to time make or cause to be made all
needful and proper repairs, renewals and replacements thereto and shall
competently manage and care for its property in accordance with prudent industry
practices, provided that each Grantor shall be permitted to dispose of damaged,
worn-out or obsolete equipment in the ordinary course of its business for not
less than fair market value, if any.
5.14 Continuous Perfection. No Grantor shall change its name, identity or
corporate structure in any manner unless such Grantor shall have given the
Collateral Agent at least thirty (30) days’ prior written notice thereof and
shall have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take such
action in advance) necessary or reasonably requested by the Collateral Agent to
amend such financing statement or continuation statement so that it is not
seriously misleading.
5.15 Intellectual Property.
(a) The Grantors shall notify the Collateral Agent promptly and not later than
by the next calendar quarter if the Grantors know or have reason to know that
any application or registration relating to any Copyright, Patent or Trademark
may become abandoned, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office, or any court) regarding the Grantors’ ownership or
license of any Copyright, Patent or Trademark or the right of the Grantors to
register or keep and maintain the same.
(b) The Grantors shall take all commercially reasonable steps to prevent any
misuse, infringement, invalidation, misappropriation, unauthorized use or
abandonment of its Copyrights, Patents, Trademarks or other Intellectual
Property, whether owned or licensed. The Grantors’ efforts pursuant to this
Section 5.15 shall include, but not be

 

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limited to: (i) establishing prudent security measures and procedures governing
access to, and use of, property protected by such Copyrights, Trademarks or
Patents or of Intellectual Property owned or licensed by the Grantors or
developed by any Person on behalf of the Grantors; (ii) establishing and
maintaining in force any agreements with employees and consultants or any
written terms of employment, as are customarily used in the Grantors’ industry
for the protection of similar intellectual property; and (iii) reasonable
enforcement of the Grantors’ rights in any Intellectual Property.
(c) If any Grantor shall (a) obtain rights to any new patentable inventions, any
registered Copyrights or any Patents or Trademarks or (b) become entitled to the
benefit of any registered Copyrights or any Patents or Trademarks or any
improvement on any Patent, the provisions of this Security Agreement shall
automatically apply thereto. To the extent commercially reasonable and material
to the operations of the business of the Grantors, each Grantor shall have the
duty (i) to prosecute diligently any patent, trademark or service mark
applications pending with respect to such Grantor as of the date hereof or
hereafter, (ii) to make application on unpatented but patentable inventions and
on trademarks, copyrights and service marks, as appropriate, (iii) to preserve
and maintain all rights in the Copyrights, Patents and Trademarks and (iv) to
ensure that the Copyrights, Patents and Trademarks are and remain enforceable,
subject to the limitations of applicable law. To the extent commercially
reasonable and material to the operations of the business of the Grantors, each
Grantor shall have the duty (w) to prosecute diligently any patent pending with
respect to such Grantor as of the date hereof or hereafter, (x) to make
application on unpatented but patentable inventions and on Copyrights, as
appropriate, (y) to preserve and maintain all rights in the Copyrights and
Patents and (z) to ensure that the Copyrights and Patents are and remain
enforceable, subject to the limitations of applicable law except for where the
failure to do so could not be expected to result in a Material Adverse Effect.
In no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for the registration of any Patent or
Trademark with the United States Patent and Trademark Office, any Copyright with
the United States Copyright Office, or any similar office or agency in any other
country or any political subdivision thereof unless it promptly informs the
Collateral Agent no later than the next calendar quarter and, upon request of
the Collateral Agent, executes and delivers any and all agreements, instruments,
documents, and papers as the Collateral Agent may request to evidence the
Collateral Agent’s security interest in such Copyright, Patent or Trademark,
including, without limitation, with respect to Trademarks, the goodwill of such
Grantor, relating thereto or represented thereby. Any expenses incurred in
connection with the Grantors’ obligations under this Section 5.15 shall be borne
by the Grantors. To the extent commercially reasonable and material to the
operations of the business of the Grantors, no Grantor shall abandon any right
to file a patent, trademark or service mark application, or abandon any pending
patent, application or any other Copyright, Patent or Trademark, without the
written consent of the Collateral Agent, which consent shall not be unreasonably
withheld.
(d) To the extent commercially reasonable, the Grantors shall (i) promptly make
application to register any copyrightable or patentable property or trade name
or trademark of the Grantors, including the most recent version of the Grantors’
existing Copyrights, if not so already registered; and (ii) take all necessary
action to maintain and pursue each such application (and to obtain the relevant
registration) and to maintain the registration of each of such Copyrights,
Patents and Trademarks, including, without limitation, the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings.

 

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(e) In the event that any Copyright, Patent or Trademark is infringed,
misappropriated or diluted by a third party, the Grantors shall notify the
Collateral Agent promptly after the Grantors learn thereof but not later than
the next calendar quarter and shall, unless the Grantors shall reasonably
determine that such Copyright, Patent or Trademark is not material or that the
costs of any pursuit of action are reasonably likely to outweigh the benefits
obtained, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution
and take such actions as the Grantors shall reasonably deem appropriate under
the circumstances to protect such Copyright, Patent or Trademark.
5.16 Authorizations with Respect to Financing Statements, etc. Each Grantor
hereby irrevocably authorizes the Collateral Agent at any time and from time to
time to file in any filing office in any UCC jurisdiction any initial financing
statements and amendments thereto that (i) indicate the Collateral (A) as “all
assets” of such Grantor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the UCC of such jurisdiction, or (B) as being of an equal or lesser scope or
with greater detail, and (ii) contain any other information required by part 5
of Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including, without limitation, (A) whether
such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and (B) in the case of a financing
statement filed as a fixture filing or indicating any Collateral as as-extracted
collateral or timber to be cut, a sufficient description of the real property to
which such Collateral relates. Each Grantor agrees to promptly furnish any such
information that the Collateral Agent may reasonably request. Each Grantor also
ratifies its authorization for the Collateral Agent to have filed in any UCC
jurisdiction any initial financing statements or amendments thereto if filed
prior to the date hereof.
5.17 No Reincorporation. No Grantor shall reincorporate or reorganize itself
under the laws of any jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof without the prior written
consent of the Collateral Agent.
5.18 Terminations and Amendments Not Authorized. Each Grantor acknowledges that
it is not authorized to file any amendment or termination statement with respect
to any financing statement relating to any security interest granted hereunder
without the prior written consent of the Collateral Agent and agrees that it
will not do so without the prior written consent of the Collateral Agent,
subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.
5.19 Pledged Collateral.
(a) Each Grantor shall deliver to the Collateral Agent all certificates or
Instruments representing or evidencing any Pledged Collateral, whether now
existing or hereafter acquired, in suitable form for transfer by delivery or, as
applicable, accompanied by such Grantor’s endorsement, where necessary, or duly
executed instruments of transfer or assignment

 

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in blank, all in form and substance reasonably satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, subject to applicable Gaming
Laws, at any time in its discretion and after the occurrence and during the
continuation of an Event of Default without prior notice to any Grantor, to
transfer to or to register in its name or in the name of its nominees any or all
of the Pledged Collateral. The Collateral Agent shall have the right at any time
to exchange certificates or instruments representing or evidencing any of the
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
(b) Except as provided in Section 7, each Grantor shall be entitled to receive
all cash dividends and cash distributions paid in respect of the Pledged
Collateral to the extent permitted to be paid by the Credit Agreement (other
than liquidating or distributing dividends or distributions) with respect to the
Pledged Collateral. Any sums paid upon or in respect of any of the Pledged
Collateral upon the liquidation or dissolution of any issuer of any of the
Pledged Collateral, any distribution of capital made on or in respect of any of
the Pledged Collateral or any property distributed upon or with respect to any
of the Pledged Collateral pursuant to the recapitalization or reclassification
of the capital of any issuer of Pledged Collateral or pursuant to the
reorganization thereof shall, unless otherwise subject to a perfected security
interest in favor of the Collateral Agent, be delivered to the Collateral Agent
to be held by it hereunder as additional collateral security for the Secured
Obligations of such Grantor. If any sums of money or property so paid or
distributed pursuant to the immediately preceding sentence in respect of any of
the Pledged Collateral shall be received by such Grantor, such Grantor shall,
until such money or property is paid or delivered to the Collateral Agent, hold
such money or property in trust for the Collateral Agent, segregated from other
funds of such Grantor, as additional security for the Secured Obligations of
such Grantor. In the case of each Grantor which is an issuer of Pledged
Collateral, such Grantor agrees (i) to direct all distributions made in respect
of such Pledged Collateral to the Collateral Agent upon the written direction of
the Collateral Agent sent after the occurrence and during the continuance of an
Event of Default and (ii) to comply with instructions originated by the
Collateral Agent with respect to such Pledged Collateral after the occurrence
and during the continuance of an Event of Default.
(c) Except as provided in Section 7 and subject to applicable Gaming Laws, such
Grantor will be entitled to exercise all voting, consent and corporate rights
with respect to the Pledged Collateral; provided, however, that no vote shall be
cast, consent given or right exercised or other action taken by such Grantor
which would (i) be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Security Agreement, any other Credit Document or
would adversely affect the Collateral Agent’s Lien on such Pledged Collateral or
its remedies with respect thereto or (ii) without prior notice to the Collateral
Agent, permit any issuer of Pledged Collateral to issue any stock or other
equity securities of any nature or to issue any other securities convertible
into or granting the right to purchase or exchange for any stock or other equity
securities of any nature of any issuer of Pledged Collateral.
(d) No Grantor shall grant “control” (within the meaning of such term under
Article 9-106 of the UCC) over any Investment Property to any Person other than
the Collateral Agent.

 

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(e) In the case of each Grantor which is an issuer of Pledged Collateral, such
Grantor agrees to be bound by the terms of this Security Agreement relating to
the Pledged Collateral issued by it and will comply with such terms insofar as
such terms are applicable to it and consents to such pledge of such Pledged
Collateral. In the case of each Grantor which is a partner in a partnership,
such Grantor hereby consents to the extent required by the applicable
partnership agreement (i) to the pledge by each other Grantor, pursuant to the
terms hereof, of the pledged partnership interests in such partnership and
(ii) to the transfer of such pledged partnership interests to the Collateral
Agent or its nominee and to the substitution of the Collateral Agent or its
nominee as a substituted partner in such partnership with all the rights, powers
and duties of a general partner or a limited partner, as the case may be. In the
case of each Grantor which is a member of a limited liability company, such
Grantor hereby consents to the extent required by the applicable limited
liability company agreement (i) to the pledge by each other Grantor, pursuant to
the terms hereof, of the pledged limited liability company interests in such
limited liability company and (ii) to the transfer of such pledged limited
liability company interests to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a substituted member of
the limited liability company with all the rights, powers and duties of a member
of the limited liability company in question.
(f) No Grantor shall agree to any provision in, or amendment of, a limited
liability company agreement or partnership agreement that adversely affects the
perfection of the security interest of the Collateral Agent in any pledged
partnership interests or pledged limited liability company interests pledged by
such Grantor hereunder, including electing to treat the membership interest or
partnership interest of such Grantor as a security under Section 8-103 of the
UCC.
SECTION 6. The Collateral Agent’s Appointment as Attorney-in-Fact.
(a) Subject to Section 6(b) below, each Grantor hereby irrevocably constitutes
and appoints the Collateral Agent, and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, from time to time at the Collateral
Agent’s discretion, for the purpose of carrying out the terms of this Security
Agreement, subject to applicable Gaming Laws, to take all appropriate action and
to execute and deliver any and all documents and instruments which may be
necessary or reasonably desirable to accomplish the purposes of this Security
Agreement and, without limiting the generality of the foregoing, hereby gives
the Collateral Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor to do the following:
(i) subject to applicable Gaming Laws, to ask, demand, collect, receive and give
acquittances and receipts for any and all monies due or to become due under any
Collateral and, in the name of such Grantor, in its own name or otherwise to
take possession of, endorse and collect any checks, drafts, notes, acceptances
or other Instruments for the payment of monies due under any Collateral and to
file any claim or to take or commence any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Collateral Agent
for the purpose of collecting any and all such monies due under any Collateral
whenever payable;

 

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(ii) to pay or discharge any liens, including, without limitation, any tax lien,
levied or placed on or threatened against the Collateral, to effect any repairs
or any insurance called for by the terms of this Security Agreement and to pay
all or any part of the premiums therefor and the costs thereof, which actions
shall be for the benefit of the Collateral Agent and not any Grantor;
(iii) subject to applicable Gaming Laws, to (1) direct any person liable for any
payment under or in respect of any of the Collateral to make payment of any and
all monies due or to become due thereunder directly to the Collateral Agent or
as the Collateral Agent shall direct, (2) receive payment of any and all monies,
claims and other amounts due or to become due at any time arising out of or in
respect of any Collateral, (3) sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against Grantors,
assignments, verifications and notices in connection with Accounts and other
Instruments and Documents constituting or relating to the Collateral,
(4) commence and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any Collateral, (5) defend
any suit, action or proceeding brought against any Grantor with respect to any
Collateral, (6) settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, give such discharges or releases
as the Collateral Agent may deem appropriate, (7) license or, to the extent
permitted by an applicable license, sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any Patent or
Trademark throughout the world for such term or terms, on such conditions and in
such manner as the Collateral Agent shall in its discretion determine and
(8) sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and to do, at the
Collateral Agent’s option and the Grantors’ expense, at any time, or from time
to time, all acts and things which the Collateral Agent may reasonably deem
necessary to protect, preserve or realize upon the Collateral and the Collateral
Agent’s security interest therein in order to effect the intent of this Security
Agreement, all as fully and effectively as Grantors might do; and
(iv) to execute and deliver any and all such further instruments and documents
and take such further action that are required of such Grantor by Section 5.1
above.
(b) The Collateral Agent agrees that, except upon the occurrence and during the
continuation of an Event of Default, it shall not exercise the power of attorney
or any rights granted to the Collateral Agent pursuant to this Section 6. Each
Grantor hereby ratifies, to the extent not prohibited by applicable law, all
that said attorney shall lawfully do or cause to be done by virtue hereof. The
power of attorney granted pursuant to this Section 6 is a power coupled with an
interest and shall be irrevocable until the Secured Obligations are completely
paid in full or this Security Agreement is terminated and the security interests
created hereby are released.
(c) The powers conferred on the Collateral Agent hereunder are solely to protect
the Collateral Agent’s interests in the Collateral and shall not impose any duty
upon the Collateral Agent to exercise any such powers. The Collateral Agent
shall have no duty as to any Collateral, including any responsibility for
(i) taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral or (ii) ascertaining or taking

 

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action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Investment Property, whether or not the Collateral
Agent has or is deemed to have knowledge of such matters. Without limiting the
generality of the preceding sentence, the Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any of the
Collateral if it takes such action for that purpose as any Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default. Failure of the Collateral Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care. The Collateral Agent shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers and
neither it nor any of its officers, directors, employees, agents or
representatives shall be responsible to the Grantors for any act or failure to
act, except for its own gross negligence or willful misconduct as determined by
a final, non-appealable judgment of a court of competent jurisdiction.
(d) Subject to applicable Gaming Laws, each Grantor also authorizes the
Collateral Agent, at any time and from time to time upon the occurrence and
during the continuation of any Event of Default, to (i) communicate in its own
name with any party to any Contract with regard to the assignment of the right,
title and interest of any Grantor in and under the Contracts hereunder and other
matters relating thereto and (ii) execute, in connection with the sale of
Collateral provided for in Section 7, below, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral.
(e) If any Grantor fails to perform or comply with any of its agreements
contained herein and the Collateral Agent, as provided for by the terms of this
Security Agreement, shall perform or comply, or otherwise cause performance or
compliance, with such agreement, the costs and expenses, including, without
limitation, reasonable attorneys’ fees and costs, of the Collateral Agent
incurred in connection with such performance or compliance, together with
interest thereon at a per annum rate equal to the Default Rate shall be payable
by the Grantors to the Collateral Agent promptly following demand and shall
constitute Secured Obligations secured hereby.
Each Grantor hereby ratifies all that the Collateral Agent as its
attorney-in-fact shall do or cause to be done by virtue of this Security
Agreement. In furtherance of the powers granted in this Section 6, each Grantor
shall execute and deliver to Collateral Agent a Special Power of Attorney in the
form of Attachment 1 hereto.
SECTION 7. Rights and Remedies Upon Default.
(a) If any Event of Default shall occur and be continuing, the Collateral Agent
may exercise, but only in accordance with applicable Gaming Laws, in addition to
all other rights and remedies granted to it under this Security Agreement, the
Credit Agreement, the other Credit Documents and under any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under applicable law, including, without
limitation, the UCC. Without limiting the generality of the foregoing, each
Grantor expressly agrees that in any such event the Collateral Agent, without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private sale)
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person (all and each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent not prohibited by the UCC and other
applicable law), shall have the right to collect the Proceeds from all
Collateral (including, without limitation, dividends or distributions on Pledged
Collateral) and may (i) reclaim, take possession, recover, store, maintain,
finish, repair, prepare for sale or lease, ship, advertise for sale or lease and
sell or lease (in the manner provided for herein) the Collateral, and in
connection with liquidation of the Collateral and collection of the accounts
receivable pledged as Collateral, use any trademark, trade name, trade style,
copyright, or process used or owned by any Grantor; (ii) forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof, and
may forthwith sell, lease, assign, give an option or options to purchase or sell
or otherwise dispose of and deliver said Collateral (or contract to do so), or
any part thereof, in one or more parcels at public or private sale or sales, at
any exchange or broker’s board or at any of the Collateral Agent’s offices or
elsewhere at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk and (iii) exercise (A) all
voting, consent, corporate and other rights pertaining to the Pledged Collateral
at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or issuers of Pledged Collateral or otherwise and (B) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any
and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of securities pledged hereunder, the right to deposit
and deliver any and all of the Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Collateral Agent may determine), all without liability
except to account for property actually received by it, but the Collateral Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing. The Secured Parties acknowledge that to the extent the Collateral Agent
exercises any rights and remedies in respect of any casino of any Grantor, if
the Secured Parties desire for such Grantor to continue gaming operations at
such casino, the Secured Parties will need to permit such Grantor to maintain
the Casino Bankroll applicable to such casino. Each Grantor authorizes the
Collateral Agent, on the terms set forth in this Section 7, to enter the
premises where the Collateral is located, to take possession of the Collateral,
or any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which, in the reasonable opinion of the Collateral Agent,
appears to be prior or superior to its security interest. The Collateral Agent
shall have the right upon any such public sale or sales, and, to the extent not
prohibited by applicable law, upon any such private sale or sales, to purchase
the whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption each Grantor hereby releases. The
Collateral Agent may sell the Collateral without giving any warranties as to the
Collateral and may specifically disclaim any warranties of title, which
procedures shall not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. Each Grantor further agrees, at
the Collateral Agent’s request, to assemble the Collateral and make it available
to the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at any Grantor’s premises or elsewhere. The Collateral Agent
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale as provided in Section 7(g), below, and
Grantors shall remain liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and after the
payment by the

 

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Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-608(a)(1)(C) of the UCC (or any other
then applicable provision of the UCC), need the Collateral Agent account for the
surplus, if any, to the Grantors. To the maximum extent not prohibited by
applicable law, each Grantor waives all claims, damages, and demands against the
Collateral Agent arising out of the repossession, retention or sale of the
Collateral except such as are determined by a final, non-appealable judgment of
a court of competent jurisdiction to arise out of the gross negligence or
willful misconduct of the Collateral Agent. Each Grantor agrees that the
Collateral Agent need not give more than ten (10) days’ prior written notice
(which notification shall be deemed given in accordance with the Credit
Agreement) of the time and place of any public sale or of the time after which a
private sale may take place and that such notice is reasonable notification of
such matters. Grantors shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral are insufficient to pay all amounts to
which the Collateral Agent and the Secured Parties are entitled, and Grantors
shall also be liable for attorneys’ fees or costs of any attorneys employed by
the Collateral Agent to collect such deficiency.
(b) As to any Collateral constituting certificated securities or uncertificated
securities, if, at any time when the Collateral Agent shall determine, subject
to applicable Gaming Laws, to exercise its right to sell the whole or any part
of such Collateral, such Collateral or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under Securities Act of
1933, as amended (as so amended the “Act”), the Collateral Agent may, in its
discretion (subject only to applicable requirements of law), sell such
Collateral or part thereof by private sale in such manner and under such
circumstances as the Collateral Agent may deem necessary or advisable, but
subject to the other requirements of this Section 7(b), and shall not be
required to effect such registration or cause the same to be effected. Without
limiting the generality of the foregoing, in any such event the Collateral Agent
may, in its sole discretion, (i) in accordance with applicable securities laws,
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Collateral or part thereof could be or shall
have been filed under the Act; (ii) approach and negotiate with a single
possible purchaser to effect such sale; and (iii) restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Collateral or part thereof. In addition to a private sale as provided above
in this Section 7(b), if any of such Collateral shall not be freely
distributable to the public without registration under the Act at the time of
any proposed sale hereunder, then the Collateral Agent shall not be required to
effect such registration or cause the same to be effected but may, in its sole
discretion (subject only to applicable requirements of law), require that any
sale hereunder (including, without limitation, a sale at auction) be conducted
subject to such restrictions as the Collateral Agent may, in its sole
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws. In order to permit
the Collateral Agent to exercise the voting and other consensual rights which it
may be entitled to exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive hereunder, (i) each
Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to the Collateral Agent all such proxies, dividend payment orders and
other instruments as the Collateral Agent may from time to time reasonably
request and (ii) without limiting the effect of clause (i) above, such Grantor
hereby grants to the Collateral Agent

 

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an irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof) after the occurrence and during the continuance of an Event of Default
and which proxy shall terminate upon the earlier of the payment in full of the
Secured Obligations or the cure of the Event of Default. Each Grantor hereby
expressly authorizes and instructs each issuer of any Pledged Collateral pledged
hereunder by such Grantor to (i) comply with any instruction received by it from
the Collateral Agent in writing that (A) states that an Event of Default has
occurred and is continuing and (B) is otherwise in accordance with the terms of
this Security Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that such issuer shall be fully protected in so
complying and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Collateral directly to
the Collateral Agent in compliance with any such instructions.
(c) Each Grantor agrees that in any sale of any of such Collateral, whether at a
foreclosure sale or otherwise, the Collateral Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications and restrict such
prospective bidders and purchasers to persons who will represent and agree that
they are purchasing for their own account for investment and not with a view to
the distribution or resale of such Collateral), or in order to obtain any
required approval of the sale or of the purchaser by any governmental authority,
and each Grantor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Agent be liable nor accountable to
any Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
(d) Each Grantor also agrees to pay all fees, costs and expenses of the
Collateral Agent, including, without limitation, attorneys’ fees and costs,
incurred in connection with the enforcement of any of its rights and remedies
hereunder.
(e) Except as otherwise provided in the Credit Documents, each Grantor hereby
waives presentment, demand, protest or any notice (to the maximum extent not
prohibited by applicable law) of any kind in connection with this Security
Agreement or any Collateral.
(f) Each Grantor agrees that a breach of any covenants contained in this
Section 7 will cause irreparable injury to the Collateral Agent, that in such
event the Collateral Agent and would have no adequate remedy at law in respect
of such breach and, as a consequence, agrees that in such event each and every
covenant contained in this Section 7 shall be specifically enforceable against
the Grantors, and each Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that the Secured Obligations are not then due and payable.

 

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(g) The proceeds of any sale, disposition or other realization upon all or any
part of the Collateral shall be distributed by the Collateral Agent as set forth
in Section 6.02 of the Credit Agreement.
(h) For the purpose of enabling the Collateral Agent to exercise rights and
remedies under this Section 7 at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Collateral Agent a nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors during the existence of
an Event of Default) to use, license or sublicense any of the Collateral (as
defined herein) and the “Collateral” (as such term is defined in the
Intellectual Property Security Agreement) now owned or hereafter acquired by
such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof, except to the extent that such license may not
be granted as a result of an exclusive license arrangement. The use of such
license by the Collateral Agent shall be exercised, at the option of the
Collateral Agent, after the occurrence and during the continuation of an Event
of Default; provided that any license or sublicense entered into by the
Collateral Agent with a Person other than a Secured Party in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of an
Event of Default.
SECTION 8. Limitation on the Collateral Agent’s Duty in Respect of Collateral.
The Collateral Agent shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it complies with the
obligations of a secured party under Section 9-207 of the UCC (or any other then
applicable provision of the UCC).
SECTION 9. Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any
Grantor’s property and assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Secured Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
SECTION 10. Miscellaneous.
10.1 Notices. Except as otherwise specified herein, all notices, requests,
demands, consents, instructions or other communications to or upon the Grantors
(which shall be sent care of the Borrower) or the Collateral Agent (which shall
be sent care of the Administrative Agent) under this Security Agreement shall be
given as provided in Section 8.01 of the Credit Agreement.

 

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10.2 Partial Invalidity. If at any time any provision of this Security Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Security Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
10.3 Headings. The section headings and captions appearing in this Security
Agreement are included solely for convenience of reference and are not intended
to affect the interpretation of any provision of this Security Agreement.
10.4 No Waiver; Cumulative Remedies.
(a) The Collateral Agent shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder or under the
Credit Agreement or the other Credit Documents, nor shall any single or partial
exercise of any right or remedy hereunder or thereunder on any one or more
occasions preclude the further exercise thereof or the exercise of any other
right or remedy under any of the Credit Documents.
(b) The rights and remedies hereunder provided or provided under the Credit
Agreement or the other Credit Documents are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law or by any of the other Credit Documents.
(c) None of the terms or provisions of this Security Agreement may be waived,
altered, modified or amended except by an instrument in writing, duly executed
by each Grantor and the Collateral Agent. Unless otherwise specified in any such
waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.
10.5 Time is of the Essence. Time is of the essence for the performance of each
of the terms and provisions of this Security Agreement.
10.6 Termination of this Security Agreement. Subject to Section 9, above, this
Security Agreement shall terminate upon the full, complete and final payment of
the Secured Obligations and the termination of the lending commitments under the
Credit Documents (except in each case other than contingent indemnification
obligations and Obligations in respect of Lender Rate Contracts).
10.7 Successors and Assigns. This Security Agreement and all obligations of the
Grantors hereunder shall be binding upon the successors and assigns of the
Grantors, and shall, together with the rights and remedies of the Collateral
Agent hereunder, inure to the benefit of the Collateral Agent and the other
Secured Parties and their respective successors and assigns, except that no
Grantor may assign or transfer any of its rights or obligations hereunder unless
expressly permitted by the Credit Agreement. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement governing
or instrument evidencing the Secured Obligations or any portion thereof or
interest therein shall in any manner affect the security interest created herein
and granted to the Collateral Agent hereunder. Any assignment or transfer in
violation of the foregoing shall be null and void.

 

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10.8 Further Indemnification. Each Grantor, jointly and severally, agrees to
pay, and to save the Collateral Agent harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all excise,
sales or other similar taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Security Agreement.
10.9 Amendments, Etc. The Collateral Agent and each Grantor hereby acknowledge
and agree that the waiver, amendment and other provisions in Section 8.04 of the
Credit Agreement apply to this Security Agreement as to the Grantors and are
incorporated herein as though set forth in full.
10.10 ENTIRE AGREEMENT. THIS SECURITY AGREEMENT AND THE OTHER CREDIT DOCUMENTS
REPRESENT THE COMPLETE AND FINAL AGREEMENT AMONG THE GRANTORS, THE COLLATERAL
AGENT, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES AND SUPERSEDE ALL PRIOR
AGREEMENTS, WRITTEN OR ORAL, ON THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR
AMONG THE GRANTORS, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT AND THE
LENDER PARTIES.
10.11 Governing Law. This Security Agreement shall be governed by, construed and
enforced in accordance with, the internal law of the State of New York without
reference to conflicts of law rules other than Section 5-1401 of the General
Obligations Law of the State of New York except that matters concerning the
validity and perfection of a security interest shall be governed by the conflict
of law rules set forth in the UCC. Each Grantor hereby consents to the
application of New York civil law to the construction, interpretation and
enforcement of this Security Agreement, and to the application of New York civil
law to the procedural aspects of any suit, action or proceeding relating
thereto, including, but not limited to, legal process, execution of judgments
and other legal remedies.
10.12 Counterparts. This Security Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
Transmission by facsimile, “PDF” or similar electronic format of an executed
counterpart of this Security Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart.
10.13 Payments Free of Taxes, Etc. All payments made by the Grantors under this
Security Agreement shall be made by the Grantors free and clear of and without
deduction for any and all present and future taxes, levies, charges, deductions
and withholdings (except as otherwise provided in the Credit Agreement). In
addition, the Grantors shall pay upon demand any stamp or other taxes, levies or
charges of any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Security Agreement. Upon
request

 

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by the Collateral Agent, the Grantors shall furnish evidence reasonably
satisfactory to the Collateral Agent that all requisite authorizations and
approvals by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite taxes,
levies and charges have been paid.
10.14 The Grantors’ Continuing Liability. Notwithstanding any provision of this
Security Agreement or any other Credit Document or any exercise by the
Collateral Agent of any of its rights hereunder or thereunder (including,
without limitation, any right to collect or enforce any Collateral), (i) each
Grantor shall remain liable to perform its obligations and duties in connection
with the Collateral and (ii) none of the Secured Parties shall assume or be
considered to have assumed any liability to perform such obligations and duties
or to enforce any of the Grantors’ rights in connection with the Collateral.
10.15 Additional Grantors. If, after the date hereof, pursuant to the terms and
conditions of the Credit Agreement, any Grantor shall be required to cause any
Subsidiary, or other Person to become a party hereto, such Grantor shall cause
such Person to execute and deliver to the Collateral Agent a Joinder Agreement
in the form of Annex I and such Person shall thereafter for all purposes be a
party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Closing Date and shall be deemed to have assigned, conveyed,
mortgaged, pledged, granted, hypothecated and transferred to the Collateral
Agent, for the benefit of the Secured Parties, the security interest described
in such Joinder Agreement and Section 2 hereof.
10.16 Additional Provisions. The Collateral Agent and the Borrower hereby
acknowledges and agrees that the jury trial waiver, consent to jurisdiction and
other provisions in Sections 8.09 and 8.12 of the Credit Agreement apply to this
Security Agreement as to such Borrower and are incorporated herein as though set
forth in full. The Collateral Agent and each Grantor that is a Guarantor hereby
acknowledges and agrees that the jury trial waiver, consent to jurisdiction and
other provisions in Sections 4.12 and 4.13 of the Guaranty apply to this
Security Agreement as to the Guarantors and are incorporated herein as though
set forth in full.
10.17 Application of Gaming Laws. The parties hereto confirm that Section 7.12
of the Credit Agreement is applicable to the Security Agreement and the other
Credit Documents.
[This Space Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Grantors and the Collateral Agent have caused this
Security Agreement to be executed as of the day and year first above written.

            GRANTORS:

FULL HOUSE RESORTS, INC.,
a Delaware corporation
      By:           Name:           Title:           FULL HOUSE SUBSIDIARY,
INC.,
a Delaware corporation
      By:           Name:           Title:           FULL HOUSE SUBSIDIARY II,
INC.,
a Nevada corporation
      By:           Name:           Title:           GAMING ENTERTAINMENT
(INDIANA), LLC,
a Nevada limited liability company
      By:           Name:           Title:        

[Signature Page to Security Agreement-Full House]

 

 

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            GAMING ENTERTAINMENT (SANTA FE),
LLC,
a Nevada limited liability company
      By:           Name:           Title:           GAMING ENTERTAINMENT
(MONTANA),
LLC,
a Nevada limited liability company
      By:           Name:           Title:           STOCKMAN’S CASINO,
a Nevada corporation
      By:           Name:           Title:        

[Signature Page to Security Agreement-Full House]

 

 

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            COLLATERAL AGENT:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent
      By:           Name:           Title:        

[Signature Page to Security Agreement-Full House]

 

 

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SCHEDULE I
COLLATERAL FOR PERFECTION BY POSSESSION
1. [INTERCOMPANY NOTES]
2. [NOTE(S) EVIDENCING ANY OTHER LOAN(S)]
[TO COME]
SCHEDULE I

 

 

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SCHEDULE II
LETTER-OF-CREDIT RIGHTS AND COMMERCIAL TORT CLAIMS
LETTER-OF-CREDIT RIGHTS
[Borrower to provide]
COMMERCIAL TORT CLAIMS
[Borrower to provide]
SCHEDULE II

 

 

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SCHEDULE III
DEPOSIT ACCOUNTS

                          Depository Bank   Type of Account     Account Number  
  Bank Address  
 
                       

SCHEDULE III

 

 

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SCHEDULE IV
SECURITIES ACCOUNTS

                                              Securities   Securities          
        Intermediary   Intermediary   Type of Account     Account Number    
Address  
 
                       

SCHEDULE IV

 

 

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SCHEDULE V
COMMODITY ACCOUNTS

                                              Commodity   Commodity            
      Intermediary   Intermediary   Type of Account     Account Number    
Address  
 
                       

SCHEDULE V

 

 

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SCHEDULE VI
LEGAL NAME; JURISDICTION OF FORMATION; BOOKS AND RECORDS;
LOCATION OF COLLATERAL

                                      Chief Executive                    
Office; Principal                     Place of Business;            
Jurisdiction of     Location of Books     Other Collateral   Legal Name  
Formation     and Records     Locations  
 
                       

SCHEDULE VI

 

 

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SCHEDULE VII
INTELLECTUAL PROPERTY
SCHEDULE VII

 

 

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ANNEX I
JOINDER AGREEMENT
This Joinder Agreement, dated as of                     ,           , is
delivered pursuant to Section 10.15 of the Security Agreement, dated as of
[                    ] (as amended, restated, supplemented or otherwise modified
from time to time, the “Security Agreement”), by and among FULL HOUSE RESORTS,
INC., a Delaware corporation (“Borrower” or “Full House”), FULL HOUSE
SUBSIDIARY, INC., a Delaware corporation (“Subsidiary”), FULL HOUSE SUBSIDIARY
II, INC., a Nevada corporation (“Subsidiary II”), GAMING ENTERTAINMENT
(INDIANA), LLC, a Nevada limited liability company (“Gaming Indiana”), GAMING
ENTERTAINMENT (SANTA FE), LLC, a Nevada limited liability company (“Gaming Santa
Fe”), GAMING ENTERTAINMENT (MONTANA), LLC, a Nevada limited liability company
(“Gaming Montana”), STOCKMAN’S CASINO INC., a Nevada corporation (“Stockman’s”),
each of the other entities which becomes a party to the Security Agreement
pursuant to Section 10.15 of the Security Agreement (each of the foregoing,
including the Borrower, Subsidiary, Subsidiary II, Gaming Indiana, Gaming Santa
Fe, Gaming Montana and Stockman’s, each a “Grantor” and collectively, the
“Grantors”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as
collateral agent for the Secured Parties (as defined in the Credit Agreement)
(in such capacity, together with any successors and assigns in such capacity,
the “Collateral Agent”). Capitalized terms used herein but not defined herein
are used herein with the meaning given them in the Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned hereby
becomes a party to the Security Agreement as a Grantor thereunder with the same
force and effect as if originally named as a Grantor therein and, without
limiting the generality of the foregoing, as security for the full, prompt,
complete and final payment when due (whether at stated maturity, by acceleration
or otherwise) and prompt performance and observance of all the Secured
Obligations of the undersigned, the undersigned hereby assigns, conveys,
mortgages, pledges, grants, hypothecates and transfers to the Collateral Agent,
for itself and for the benefit of the Secured Parties, a security interest in
and to all of the undersigned’s right, title and interest in, to and under the
Collateral, whether now owned or hereafter acquired by the undersigned or in
which the undersigned now holds or hereafter acquires any interest and expressly
assumes all obligations and liabilities of a Grantor thereunder. From and after
the date hereof, the undersigned shall for all purposes be a party to the
Security Agreement and shall have the same rights, benefits and obligations as a
Grantor party thereto.
The information set forth in Annex I-A is hereby added to the information set
forth in Schedules I through VI to the Security Agreement.
The undersigned hereby represents and warrants that each of the representations
and warranties contained in the Security Agreement applicable to it is true and
correct on and as the date hereof as if made on and as of such date, except to
the extent that such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date;
provided that, if a representation and warranty is qualified as to materiality,
the materiality qualifier shall be disregarded with respect to such
representation and warranty.

 

ANNEX I-1

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This Joinder Agreement shall be governed by, construed and enforced in
accordance with, the internal law of the State of New York without reference to
conflicts of law rules other than Section 5-1401 of the General Obligations Law
of the State of New York except that matters concerning the validity and
perfection of a security interest shall be governed by the conflict of law rules
set forth in the UCC. The undersigned hereby consents to the application of New
York civil law to the construction, interpretation and enforcement of this
Joinder Agreement, and to the application of New York civil law to the
procedural aspects of any suit, action or proceeding relating thereto,
including, but not limited to, legal process, execution of judgments and other
legal remedies.
This Joinder Agreement may be executed in any number of identical counterparts,
any set of which signed by all the parties hereto shall be deemed to constitute
a complete, executed original for all purposes. Transmission by facsimile, “PDF”
or similar electronic format of an executed counterpart of this Joinder
Agreement shall be deemed to constitute due and sufficient delivery of such
counterpart.
[This Space Intentionally Left Blank]

 

ANNEX I-2

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In witness whereof, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

            [Additional Grantor]
      By:           Name:           Title:        

          ACKNOWLEDGED AND AGREED
as of the date of this Joinder Agreement
first above written.

Wells Fargo Bank, National Association, as Collateral Agent
    By:           Name:           Title:        

 

ANNEX I-3

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ANNEX I-A
[New Grantor to complete as appropriate]

 

ANNEX I-4

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ATTACHMENT 1
TO SECURITY AGREEMENT
SPECIAL POWER OF ATTORNEY
Dated as of                          , 200     
STATE OF                         )
                                             )
COUNTY OF                      )
KNOW ALL PERSONS BY THESE PRESENTS, THAT
                                        , a                            (the
“Grantor”), pursuant to a Security Agreement, dated as of
[                    ], (as amended, supplemented or otherwise modified from
time to time, the “Security Agreement”), among the Grantor, other entities party
thereto from time to time and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
collateral agent (in such capacity, the “Collateral Agent”) for the Secured
Parties (as defined in the Credit Agreement referred to below) in connection
with that certain Credit Agreement, dated as of October 29, 2010 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among FULL HOUSE RESORTS, INC., the lenders party thereto from time to time and
Wells Fargo Bank, National Association, as Administrative Agent, as Collateral
Agent, as Security Trustee, as L/C Issuer and as Swing Line Lender, hereby
appoints and constitutes the Collateral Agent its true and lawful attorney in
fact, with full power of substitution, and with full power and authority to
perform the following acts on behalf of the Grantor:
(1) For the purpose of assigning, selling, licensing or otherwise disposing of
all right, title and interest of the Grantor in and to any letters patent of the
United States, and all registrations, recordings, reissues, continuations,
continuations-in-part and extensions thereof, and all pending applications
therefor, and for the purpose of the recording, registering and filing of, or
accomplishing any other formality with respect to, the foregoing, to execute and
deliver any and all agreements, documents, instruments of assignment or other
papers necessary or reasonably advisable to effect such purpose;
(2) For the purpose of assigning, selling, licensing or otherwise disposing of
all right, title and interest of the Grantor in and to any trademarks, trade
names, trade styles and service marks and all related goodwill, and all
registrations, recordings, reissues, extensions and renewals thereof, and all
pending applications therefor, and for the purpose of the recording, registering
and filing of, or accomplishing any other formality with respect to, the
foregoing, to execute and deliver any and all agreements, documents, instruments
of assignment or other papers necessary or reasonably advisable to effect such
purpose;
(3) For the purpose of assigning, selling, licensing or otherwise disposing of
all right, title and interest of the Grantor in and to any copyrights, and all
registrations, recordings, reissues, extensions and renewals thereof, and all
pending applications therefor, and for the purpose of the recording, registering
and filing of, or accomplishing any other formality with respect to, the
foregoing, to execute and deliver any and all agreements, documents, instruments
of assignment or other papers necessary or reasonably advisable to effect such
purpose;

 

 

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(4) For the purpose of assigning, selling, licensing or otherwise disposing of
all right, title and interest of the Grantor in and to any mask works, and all
registrations, recordings, reissues, extensions and renewals thereof, and all
pending applications therefor, and for the purpose of the recording, registering
and filing of, or accomplishing any other formality with respect to, the
foregoing, to execute and deliver any and all agreements, documents, instruments
of assignment or other papers necessary or reasonably advisable to effect such
purpose;
(5) For the purpose of evidencing and perfecting the Collateral Agent’s interest
in any patent, trademark, copyright or mask work not previously assigned to the
Collateral Agent as security, or in any patent, trademark, copyright or mask
work, which the Grantor may acquire from a third party, and for the purpose of
the recording, registering and filing of, or accomplishing any other formality
with respect to, the foregoing, to execute and deliver any and all agreements,
documents, instruments of assignment or other papers necessary or reasonably
advisable to effect such purpose.
(6) To execute any and all documents, statements, certificates or other papers
necessary or advisable in order to obtain the purposes described above as the
Collateral Agent may in its sole discretion determine.
[This Space Intentionally Left Blank]

 

 

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This power of attorney is made pursuant to the Security Agreement and takes
effect solely for the purposes thereof and is subject to the terms and
conditions thereof and may not be revoked until termination of the Security
Agreement as provided therein.

            [Name of Grantor]
      By:         Name:         Title:      

 

 

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[ATTACH APPROPRIATE NOTARIAL ACKNOWLEDGMENT]

 

 

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EXHIBIT N
MAP OF GRAND VICTORIA EXCESS LANDS
(see attached)

 

N-1

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(MAP) [c07630c0763001.gif]

 

24