FINANCING AGREEMENT
 
Dated as of March 28, 2007
 
by and among
 
GAMETECH INTERNATIONAL, INC.
THE GUARANTORS IDENTIFIED HEREIN
 
______________________________________
 
THE LENDERS FROM TIME TO TIME PARTY HERETO,
 
___________________
 
ABLECO FINANCE LLC,
 
as Collateral Agent,
 
and
 
ABLECO FINANCE LLC,
 
as Administrative Agent
 

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TABLE OF CONTENTS
 

    Page      
ARTICLE I
DEFINITIONS; CERTAIN TERMS
1
     
Section 1.01
Definitions
1
     
Section 1.02
Terms Generally
26
     
Section 1.03
Accounting and Other Terms
27
     
Section 1.04
Time References
27
     
ARTICLE II
THE LOANS
27
     
Section 2.01
Commitments
27
     
Section 2.02
Making the Loans
28
     
Section 2.03
Repayment of Loans; Evidence of Debt
31
     
Section 2.04
Interest
33
     
Section 2.05
Reduction of Commitments; Prepayment of Loans
36
     
Section 2.06
Fees
40
     
Section 2.07
Securitization
40
     
Section 2.08
Taxes
41
     
ARTICLE III
[INTENTIONALLY OMITTED]
42
     
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
42
     
Section 4.01
Audit and Collateral Monitoring Fees
42
     
Section 4.02
Payments; Computations and Statements
43
     
Section 4.03
Sharing of Payments, Etc
44
     
Section 4.04
Apportionment of Payments
44
     
Section 4.05
Increased Costs and Reduced Return.
45
     
Section 4.06
Joint and Several Liability of the Borrower.
46
     
ARTICLE V
CONDITIONS TO LOANS
47
     
Section 5.01
Conditions Precedent
47
     
Section 5.02
Conditions Precedent to All Loans
52
     
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
53
     
Section 6.01
Representations and Warranties
53
     
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
62
     
Section 7.01
Affirmative Covenants
62
     
Section 7.02
Negative Covenants
71
     

 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
Section 7.03
Financial Covenants
76
     
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
77
     
Section 8.01
Collection of Accounts Receivable; Management of Collateral.
77
     
Section 8.02
Accounts Receivable Documentation
79
     
Section 8.03
Status of Accounts Receivable and Other Collateral
80
     
Section 8.04
Collateral Custodian
81
     
ARTICLE IX
EVENTS OF DEFAULT
81
     
Section 9.01
Events of Default
81
     
Section 9.02
Gaming Laws
85
     
ARTICLE X
AGENTS
86
     
Section 10.01
Appointment
86
     
Section 10.02
Nature of Duties
87
     
Section 10.03
Rights, Exculpation, Etc
87
     
Section 10.04
Reliance
88
     
Section 10.05
Indemnification
88
     
Section 10.06
Agents Individually
89
     
Section 10.07
Successor Agent
89
     
Section 10.08
Collateral Matters
89
     
Section 10.09
Agency for Perfection
91
     
ARTICLE XI
GUARANTY
91
     
Section 11.01
Guaranty
91
     
Section 11.02
Guaranty Absolute
91
     
Section 11.03
Waiver
92
     
Section 11.04
Continuing Guaranty; Assignments
93
     
Section 11.05
Subrogation
93
     
ARTICLE XII
MISCELLANEOUS
94
     
Section 12.01
Notices, Etc
94
     
Section 12.02
Amendments, Etc
95
     
Section 12.03
No Waiver; Remedies, Etc
95
     

 
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TABLE OF CONTENTS
(continued)
 

   
Page
     
Section 12.04
Expenses; Taxes; Attorneys Fees
96
     
Section 12.05
Right of Set-off
97
     
Section 12.06
Severability
97
     
Section 12.07
Assignments and Participations. 
97
     
Section 12.08
Counterparts
100
     
Section 12.09
GOVERNING LAW
100
     
Section 12.10
CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE
100
     
Section 12.11
WAIVER OF JURY TRIAL, ETC
101
     
Section 12.12
Consent by the Agents and Lenders
102
     
Section 12.13
No Party Deemed Drafter
102
     
Section 12.14
Reinstatement; Certain Payments
102
     
Section 12.15
Indemnification
102
     
Section 12.16
Records
103
     
Section 12.17
Binding Effect
103
     
Section 12.18
Interest
103
     
Section 12.19
Confidentiality
104
     
Section 12.20
Borrower as Gent for Borrower
105
     
Section 12.21
Section Headings
105
     
Section 12.22
Integration
105

 
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SCHEDULE AND EXHIBITS
 
Schedule B-1
Appeal Bond
Schedule C-1
Lenders and Lenders’ Commitments
Schedule 6.01(e)
Subsidiaries
Schedule 6.01(f)
Litigation; Commercial Tort Claims
Schedule 6.01(i)
ERISA
Schedule 6.01(l)
Nature of Business
Schedule 6.01(o)
Real Property
Schedule 6.01(q)
Operating Leases
Schedule 6.01(r)
Environmental Matters
Schedule 6.01(s)
Insurance
Schedule 6.01(v)
Bank Accounts
Schedule 6.01(w)
Intellectual Property
Schedule 6.01(x)
Material Contracts
Schedule 6.01(dd)
Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN
Schedule 6.01(ee)
Tradenames
Schedule 6.01(ff)
Collateral Locations
Schedule 6.01(kk)
Licenses and Permits
Schedule 7.02(a)
Existing Liens
Schedule 7.02(b)
Existing Indebtedness
Schedule 7.02(e)
Existing Investments
Schedule 7.02(h)
Chairman’s Compensation
Schedule 7.02(k)
Limitations on Dividends and Other Payment Restrictions
Schedule 8.01
Lockbox Banks and Lockbox Accounts
   
Exhibit A-1
Form of Assignment and Acceptance
Exhibit B-1
Form of Borrowing Base Certificate
Exhibit I-1
Form of Intercompany Subordination Agreement
Exhibit L-1
Form of LIBOR Notice
Exhibit 2.01(b)(ii)
Form of Notice of Borrowing
Exhibit 5.01(d)
Form of Opinion of Counsel

 
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Exhibit 10.1
 
[hastings.jpg]
 
FINANCING AGREEMENT
 
Financing Agreement, dated as of March 28, 2007, by and among GAMETECH
INTERNATIONAL, INC., a Delaware corporation (the “Borrower”), each subsidiary of
the Borrower listed as a “Guarantor” on the signature pages hereto (each a
“Guarantor” and collectively, jointly and severally, the “Guarantors”), the
lenders from time to time party hereto (each a “Lender” and collectively, the
“Lenders”), ABLECO FINANCE LLC, a Delaware limited liability company (“Ableco”),
as collateral agent for the Lenders (in such capacity, together with any
successor collateral agent, the “Collateral Agent”), and Ableco as
administrative agent for the Lenders (in such capacity, together with any
successor administrative agent, the “Administrative Agent” and together with the
Collateral Agent, each an “Agent” and collectively, the “Agents”).
 
RECITALS
 
The Borrower has asked the Lenders to extend a credit facility of $40,000,000
(the “Maximum Credit Facility Amount”) to the Borrower consisting of (a) a term
loan in the aggregate principal amount of $30,000,000 and (b) a revolving credit
facility in an aggregate principal amount not to exceed $10,000,000 at any time
outstanding. The proceeds of the term loan and the loans made under the
revolving credit facility shall be used to partially finance the Acquisition, to
refinance existing indebtedness of the Borrower and its Subsidiaries, for
general working capital and general corporate purposes of the Borrower and its
Subsidiaries, and to pay fees and expenses related to the Acquisition and this
Agreement. The Lenders are severally, and not jointly, willing to extend such
credit to the Borrower subject to the terms and conditions hereinafter set
forth.
 
In consideration of the premises and the covenants and agreements contained
herein, the parties hereto agree as follows:
 
ARTICLE I
 
DEFINITIONS; CERTAIN TERMS
 
Section 1.01 Definitions. As used in this Agreement, the following terms shall
have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:
 
“Ableco” has the meaning specified therefor in the preamble hereto.
 
“Account Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account Receivable, chattel paper, or a general
intangible.
 

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“Account Receivable” means, with respect to any Person, all of such Person’s now
owned or hereafter acquired right, title, and interest with respect to
“accounts” (as that term is defined in Article 9 of the Code), and any and all
“supporting obligations” (as that term is defined in the Code) in respect
thereof.
 
“Acquisition” means the acquisition by the Borrower of substantially all of the
assets of the Seller in accordance with the terms of the Acquisition Agreement.
 
“Acquisition Agreement” means that certain Asset Purchase Agreement, dated as of
August 30, 2006 by and between the Borrower and Seller.
 
“Acquisition Documents” means the Acquisition Agreement and all other documents
and agreements executed and delivered in connection therewith.
 
“Action” has the meaning specified therefor in Section 12.12.
 
“Additional amount” has the meaning specified therefor in Section 2.08(a)
 
“Administrative Agent” has the meaning specified therefor in the preamble
hereto.
 
“Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Borrower
shall make all payments to the Administrative Agent for the benefit of the
Agents and the Lenders under this Agreement and the other Loan Documents.
 
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to (i)
vote 10% or more of the Capital Stock having ordinary voting power for the
election of directors of such Person or (ii) direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.
Notwithstanding anything herein to the contrary, in no event shall any Agent or
any Lender be considered an “Affiliate” of any Loan Party.
 
“After Acquired Property” means any fee interest in real property acquired by
the Borrower or any of its Subsidiaries after the date hereof with a Current
Value in excess of $250,000.
 
“Agent” and “Agents” have the respective meanings specified therefor in the
preamble hereto.
 
“Agreement” means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
 
“Assignment and Acceptance” means an assignment and acceptance entered into by
an assigning Lender and an assignee, and accepted by the Collateral Agent, in
accordance with Section 12.07 and substantially in the form of Exhibit A-1
hereto or such other form acceptable to the Collateral Agent.
 
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“Authorized Officer” means, with respect to any Person, the chief executive
officer, chief financial officer, president, any vice president or the treasurer
of such Person.
 
“Availability” means, at any time, the difference between (i) the lesser of (A)
the Borrowing Base, and (B) the Total Revolving Credit Commitment, and (ii) the
sum of (A) the aggregate outstanding principal amount of all Revolving Loans,
and (B), the aggregate amount, if any, of all trade payables of the Borrower and
its Subsidiaries aged in excess of historical levels.
 
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101,
et seq.), as amended, and any successor statute.
 
“Base LIBOR Rate” means the greater of (a) 5.00 percent per annum, and (b) the
rate per annum, determined by Administrative Agent in accordance with its
customary procedures, and utilizing such electronic or other quotation sources
as it considers appropriate, on the basis of the rates at which Dollar deposits
are offered to major commercial banks in the London interbank market on or about
11:00 a.m. (New York time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by the Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
 
“Blocked Account” has the meaning specified therefore in Section 8.01(a).
 
“Blocked Account Bank” has the meaning specified therefore in Section 8.01(a).
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States.
 
“Borrower” has the meaning specified therefor in the preamble hereto.
 
“Borrowing Base” means, as of any date of determination, the result of the (a)
the lesser of (i) the then-applicable Leverage Ratio times TTM EBITDA as
reflected in the most recent financial statements delivered by the Borrower to
the Agents pursuant hereto, and (ii) the Collections Multiple times the amount
of Collections received by the Borrower during the immediately preceding 90 day
period, minus (b) such reserves as the Administrative Agent may deem appropriate
in the exercise of its business judgment based upon the lending practices of the
Administrative Agent.
 
“Borrowing Base Certificate” means a certificate signed by an Authorized Officer
of the Borrower and setting forth the calculation of the Borrowing Base in
compliance with Section 7.01(a)(vi), substantially in the form of Exhibit B-1.
 
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the State of New York, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term “Business Day” also shall exclude any day on which banks are closed for
dealings in U.S. Dollar deposits in the London interbank market.
 
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“Capital Expenditures” means, with respect to any Person for any period, the sum
of (i) the aggregate of all expenditures by such Person and its Subsidiaries
during such period that in accordance with GAAP are or should be included in
“property, plant and equipment” or in a similar fixed asset account on its
balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
excluding, however, the amount of any Capital Expenditures paid for with
proceeds of casualty insurance, and (ii) to the extent not covered by clause (i)
above, (A) the aggregate of all expenditures by such Person and its Subsidiaries
during such period to acquire by purchase or otherwise the business or fixed
assets of, or the Capital Stock of, any other Person other than in connection
with a Permitted Acquisition, and (B) the aggregate of all capitalized software
costs.
 
“Capital Guideline” means any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) (i) regarding capital adequacy, capital
ratios, capital requirements, the calculation of a bank’s capital or similar
matters, or (ii) affecting the amount of capital required to be obtained or
maintained by any Lender or any Person controlling any Lender or the manner in
which any Lender or any Person controlling any Lender, allocates capital to any
of its contingent liabilities, advances, acceptances, commitments, assets or
liabilities.
 
“Capitalized Lease” means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is (i) required under GAAP to
be capitalized on the balance sheet of such Person or (ii) a transaction of a
type commonly known as a “synthetic lease” (i.e. a lease transaction that is
treated as an operating lease for accounting purposes but with respect to which
payments of rent are intended to be treated as payments of principal and
interest on a loan for Federal income tax purposes).
 
“Capitalized Lease Obligations” means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Leases, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.
 
“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.
 
“Carry-Over Amount” has the meaning specified therefor in Section 7.03(d).
 
“Cash and Cash Equivalents” means all cash deposit or securities account
balances, certificates of deposit or other financial instruments properly
classified as cash or cash equivalents under GAAP.
 
“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).
 
“Change in Law” has the meaning specified therefor in Section 4.05(a).
 
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“Change of Control” means each occurrence of any of the following:
 
(a) the acquisition, directly or indirectly, by any person or group (within the
meaning of Section 13(d)(3) of the Exchange Act), of beneficial ownership of
more than 50% of the aggregate outstanding voting power of the Capital Stock of
the Borrower;
 
(b) the Borrower ceases to own and control, directly or indirectly, 100% of the
shares of the Capital Stock of its Subsidiaries, unless otherwise permitted
hereunder;
 
(c) at any time the majority of the members of the board of directors of
Borrower do not constitute Continuing Directors, or
 
(d) (i) the Borrower consolidates with or merges into another entity or conveys,
transfers or leases all or substantially all of its property and assets to any
Person, or (ii) any entity consolidates with or merges into the Borrower, which
in either event (i) or (ii) is pursuant to a transaction in which the
outstanding voting Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property.
 
“Closing Fee” has the meaning specified therefor in Section 2.06(a).
 
“Code” means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Collateral Agent’s Liens on any Collateral is governed
by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term “Code” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority, or
remedies.
 
“Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien
is granted or purported to be granted by such Person as security for all or any
part of the Obligations.
 
“Collateral Agent” has the meaning specified therefor in the preamble hereto.
 
“Collateral Agent Advances” has the meaning specified therefor in Section
10.08(a).
 
“Collection Account” and “Collection Accounts” have the meanings specified
therefor in Section 8.01(a).
 
“Collections Multiple”: means 2.25.
 
“Commitments” means, with respect to each Lender, such Lender’s Revolving Credit
Commitment and Term Loan Commitment.
 
“Consolidated EBITDA” means, with respect to any Person for any period, the
Consolidated Net Income of such Person and its Subsidiaries for such period,
plus, without duplication, the sum of the following amounts of such Person and
its Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person and its Subsidiaries for such period: (A)
Consolidated Net Interest Expense, (B) net income tax expense (including
reserves for deferred taxes not payable currently), (C) depreciation expense,
(D) amortization expense, (E) to the extent actually paid during such period,
fees and expenses related to the consummation of the transactions contemplated
to be closed on the Effective Date under this Agreement and the transactions
contemplated by the Acquisition Agreement, (F) the non-cash component of any
impairment or unusual item of loss or expense, (G) non-cash charges for the
early extinguishment of debt, and (H) non-cash compensations charges related to
or arising from the vesting of any employee, officer or director of Borrower or
its Subsidiaries in Capital Stock issued by the Borrower.
 
-5-

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“Consolidated Funded Indebtedness” means, with respect to any Person at any
date, all Indebtedness for borrowed money or letters of credit (including
Capitalized Lease Obligations) of such Person, determined on a consolidated
basis in accordance with GAAP, which by its terms matures more than one year
after the date of calculation, and any such Indebtedness maturing within one
year from such date which is renewable or extendable at the option of such
Person to a date more than one year from such date.
 
“Consolidated Net Income” means, with respect to any Person for any period, the
net income (loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis and in accordance with GAAP, but excluding
from the determination of Consolidated Net Income (without duplication) (a) any
non-cash extraordinary or non-recurring gains or losses or non-cash gains or
losses from Dispositions, (b) restructuring charges, (c) effects of discontinued
operations, (d) interest that is paid-in-kind, and (e) any tax refunds, net
operating losses or other net tax benefits received during such period on
account of any prior period.
 
“Consolidated Net Interest Expense” means, with respect to any Person for any
period, gross cash interest expense of such Person and its Subsidiaries for such
period determined on a consolidated basis and in accordance with GAAP (including
interest expense paid to Affiliates of such Person), less (i) the sum of
(A) interest income for such period and (B) gains for such period on Hedging
Agreements (to the extent not included in interest income above and to the
extent not deducted in the calculation of gross interest expense), plus (ii) the
sum of (A) losses for such period on Hedging Agreements (to the extent not
included in such gross interest expense) and (B) the upfront costs or fees for
such period associated with Hedging Agreements (to the extent not included in
such gross interest expense), in each case, determined on a consolidated basis
and in accordance with GAAP.
 
“Contingent Obligation” means, with respect to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including (i)
the direct or indirect guaranty, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of a primary
obligor, (ii) the obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement, (iii) any obligation of such Person, whether or not contingent, (A)
to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (B) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (C) to purchase property, assets, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (D) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include any product warranties extended
in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation with respect to which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability with respect thereto (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
 
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“Continuing Director” means (a) any member of the board of directors of the
Borrower who was a director (or comparable manager) of the Borrower on the
Effective Date, and (b) any individual who becomes a member of the board of the
directors of the Borrower after the Effective Date if such individual was
appointed or nominated for election to the board of the directors of Borrower by
a majority of the Continuing Directors then in office, but excluding any such
individual originally proposed for election in opposition to the board of
directors in office at the Effective Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
the Borrower and whose initial assumption of office resulted from such contest
or the settlement thereof.
 
“Control Agreement” means a control agreement, in form and substance
satisfactory to the Collateral Agent, executed and delivered by a Loan Party,
the Collateral Agent and the applicable securities intermediary with respect to
a securities account or a bank with respect to a deposit account.
 
“Current Value” has the meaning specified therefor in Section 7.01(o).
 
“Default” means an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.
 
“Disposition” means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person, in each case, whether or not the consideration
therefor consists of cash, securities or other assets owned by the acquiring
Person.
 
“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United
States of America.
 
“Domestic Subsidiary” means any Subsidiary of any Person that is not a CFC.
 
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“Earn Out Payment” means that certain payment, if any, specified in Section
4.2(a) of the Acquisition Agreement.
 
“Effective Date” means the date, on or before March 31, 2007, on which all of
the conditions precedent set forth in Section 5.01 are first satisfied or
waived.
 
“Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of any Loan Party or any of its ERISA Affiliates.
 
“Environmental Actions” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Governmental
Authority involving violations of Environmental Laws or Releases of Hazardous
Materials (i) from any assets, properties or businesses of any Loan Party or any
of its Subsidiaries or any predecessor in interest; or (ii) onto any facilities
which received Hazardous Materials generated by any Loan Party or any of its
Subsidiaries or any predecessor in interest.
 
“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Federal Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401
et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.) and the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, ordinance, rule, regulation,
order, judgment, decree, permit, license or other binding determination of any
Governmental Authority imposing liability or establishing standards of conduct
for protection of the environment or other government restrictions relating to
the protection of the environment or the release, emission, deposit, discharge,
leaching, migration or spill of any Hazardous Materials into the environment.
 
“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to the liability or potential
liability of any Loan Party with respect to any environmental condition or a
Release of Hazardous Materials from or onto (i) any property currently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any Real
Property which received Hazardous Materials generated by any Loan Party or any
of its Subsidiaries.
 
“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.
 
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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
 
“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a “controlled group” within the
meaning of Sections 414(b), (c), (m) and (o) of the IRC.
 
“Event of Default” means any of the events set forth in Section 9.01.
 
“Excess Cash Flow” means, with respect to any Person for any period,
(i) Consolidated Net Income of such Person and its Subsidiaries for such period,
plus (ii) all non-cash items of such Person and its Subsidiaries deducted in
determining Consolidated Net Income for such period, less (iii) the sum of
(A) all non-cash items of such Person and its Subsidiaries included in
determining Consolidated Net Income for such period, (B) all scheduled and
mandatory cash principal payments on the Loans made during such period (but, in
the case of the Revolving Loans, only to the extent that the Total Revolving
Credit Commitment is permanently reduced by the amount of such payments), and
all scheduled cash principal payments on other Indebtedness of such Person or
any of its Subsidiaries during such period to the extent such other Indebtedness
is permitted to be incurred, and such payments are permitted to be made, under
this Agreement, (C) the cash portion of Capital Expenditures (net of (y) any
proceeds reinvested in accordance with Section 2.05(d)(ii)), and (z) any
proceeds of related financings with respect to such expenditures) made by such
Person and its Subsidiaries during such period to the extent permitted to be
made under this Agreement, and (D) the excess, if any, of Working Investment at
the end of such period over Working Investment at the beginning of such period
(or, if the difference results in an amount less than zero, minus the excess, if
any, of Working Investment at the beginning of such period over Working
Investment at the end of such period).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Existing Credit Facility” means the Credit Agreement dated as of April 2, 2005,
between the Borrower and Wells Fargo Bank, National Association, as amended from
time to time.
 
“Existing Lenders” means the lenders party to the Existing Credit Facility.
 
“Extraordinary Receipts” means any cash received by the Borrower or any of its
Subsidiaries not in the ordinary course of business (and not consisting of
proceeds of Dispositions or Indebtedness), including (i) 50% of foreign, United
States, state or local tax refunds if the audited financial statements delivered
pursuant to Section 7.01(a)(ii) demonstrate that, for the applicable period, the
ratio of Consolidated Funded Indebtedness of the Borrower and Guarantors to
Consolidated EBITDA less Capital Expenditures is greater than or equal to 2.0 to
1.0, (ii) pension plan reversions, (iii) proceeds of insurance, (iv) judgments,
proceeds of settlements or other consideration of any kind in connection with
any cause of action (other than actual legal costs and attorneys’ fees for which
Borrower is being reimbursed), (v) condemnation awards (and payments in lieu
thereof), (vi) indemnity payments and (vii) any purchase price adjustment
received in connection with any purchase agreement and any amounts received from
escrow arrangements in connection with any purchase agreement.
 
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“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
 
“Field Survey and Audit” means a field survey and audit of the Loan Parties and
an appraisal of the Collateral performed by auditors, examiners or appraisers
selected by the Collateral Agent, at the sole cost and expense of the Borrower;
provided, however, that the preceding shall be limited to the sites of the
Borrower’s owned and leased real property.
 
“Filing Authorization Letter” means a letter duly executed by each Loan Party
authorizing the Collateral Agent to file financing statements in such office or
offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each
Security Agreement.
 
“Final Maturity Date” means March 28, 2012 or such earlier date on which (a) the
Total Revolving Credit Commitment is terminated for any reason or (b) all or any
portion of the Obligations shall become due and payable pursuant to the terms of
Section 9.01.
 
“Financial Statements” means (i) the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the Fiscal Year ended October 31, 2006, and
the related consolidated statement of operations, shareholders’ equity and cash
flows for the Fiscal Year then ended, and (ii) the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries for the 3 months ended
January 31, 2007, and the related consolidated statement of operations,
shareholder’s equity and cash flows for the 3 months then ended.
 
“Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries ending
on October 31st of each year.
 
“Fixed Charge Coverage Ratio” means, with respect to any Person for any period,
the ratio of (i) the Consolidated EBITDA of such Person and its Subsidiaries for
such period minus Capital Expenditures made by such Person and its Subsidiaries
during such period, to (ii) the sum of (A) all principal of Indebtedness of such
Person and its Subsidiaries scheduled to be paid or prepaid during such period,
plus (B) Consolidated Net Interest Expense of such Person and its Subsidiaries
for such period, plus (C) all income tax liabilities of such Person and its
Subsidiaries that accrued during such period, to the extent that the amount of
such liabilities is greater than zero, plus (D) cash dividends or distributions
paid by such Person and its Subsidiaries (other than, in the case of the
Borrower, dividends or distributions paid to the Borrower or its wholly-owned
Subsidiaries) during such period. In determining the Fixed Charge Coverage Ratio
for a particular period, the calculation of the income tax liabilities of such
Person and its Subsidiaries described in clause (ii)(C) of the immediately
preceding sentence shall be made without giving effect to any tax refunds, tax
receivables, net operating losses or other net tax benefits that were received
or receivable during such period on account of any prior periods.
 
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“Funding Losses” has the meaning specified therefor in Section 2.04(d)(ii)(B).
 
“Funds Flow Agreement” means that certain Funds Flow Agreement, dated of even
date herewith, by and among Administrative Agent, the Lenders, and each Loan
Party.
 
“GAAP” means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis, provided that for the
purpose of Section 7.03 and the definitions used therein, “GAAP” shall mean
generally accepted accounting principles in effect on the date hereof and
consistent with those used in the preparation of the Financial Statements,
provided, further, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03, the Collateral Agent and the Borrower shall negotiate
in good faith amendments to the provisions of this Agreement that relate to the
calculation of such covenant with the intent of having the respective positions
of the Lenders and the Borrower after such change in GAAP conform as nearly as
possible to their respective positions as of the date of this Agreement and,
until any such amendments have been agreed upon, the covenants in Section 7.03
shall be calculated as if no such change in GAAP had occurred.
 
“Gaming Authorities” means every state and local regulating agency that has
jurisdiction over the ownership or operation of gaming establishments or the
manufacture, sale or distribution of gaming equipment or associated gaming
equipment.
 
“Gaming Laws” means all applicable federal, state and local laws, rules and
regulations pursuant to which the Gaming Authorities possess regulatory,
licensing or permit authority over the ownership or operation of gaming
establishments or the manufacture, sale or distribution of gaming equipment in
any jurisdiction where the Borrower or its Subsidiaries do business.
 
“Gaming License” means any finding of suitability, registration, license,
franchise or other approval or authorization required to own or lease gaming
equipment or associated gaming equipment in any state or jurisdiction in which
the Borrower or any of its Subsidiaries conduct business.
 
“Governmental Authority” means any nation or government, any Federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.
 
“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.
 
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“Guarantor” and “Guarantors” (i) have the meanings specified therefor in the
preamble to this Agreement, and (ii) include each other Person which guarantees,
pursuant to Section 7.01(b) or otherwise, all or any part of the Obligations.
 
“Guaranty” means (i) the guaranty of each Guarantor party hereto contained in
Article XI hereof, and (ii) each other guaranty made by any other Guarantor in
favor of the Collateral Agent for the benefit of the Agents and the Lenders
pursuant to the requirements of Section 7.01(b) or otherwise.
 
“Hazardous Materials” means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, or at some future time, harm to or
have an adverse effect on, the environment or risk to human health or safety,
including any pollutant, contaminant, waste, hazardous waste, toxic substance or
dangerous good which is defined or identified in any Environmental Law and which
is present in the environment in such quantity or state that it contravenes any
Environmental Law; (b) petroleum and its refined products; (c) polychlorinated
biphenyls; (d) any substance exhibiting a hazardous waste characteristic,
including corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components (including asbestos-containing materials) and manufactured products
containing hazardous substances listed or classified as such under Environmental
Laws.
 
“Hedging Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including any option with respect to any
of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such
agreement or arrangement.
 
“Highest Lawful Rate” means, with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
 
“HSR” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as in
effect as of the Effective Date.
 
“Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables or other accounts payable incurred in the ordinary course of such
Person’s business and not outstanding for more than 120 days after the invoice
date or, if not invoiced, the date such payable was created); (iii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments or upon which interest payments are customarily made;
(iv) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used or acquired by such Person, even though
the rights and remedies of the lessor, seller or lender thereunder may be
limited to repossession or sale of such property; (v) all Capitalized Lease
Obligations of such Person; (vi) all obligations and liabilities, contingent or
otherwise, of such Person, in respect of letters of credit, acceptances and
similar facilities; (vii) all obligations and liabilities, calculated on a basis
satisfactory to the Collateral Agent and in accordance with accepted practice,
of such Person under Hedging Agreements; (viii) all Contingent Obligations;
(ix) liabilities incurred under Title IV of ERISA with respect to any plan
(other than a Multiemployer Plan) covered by Title IV of ERISA and maintained
for employees of such Person or any of its ERISA Affiliates; (x) withdrawal
liability incurred under ERISA by such Person or any of its ERISA Affiliates
with respect to any Multiemployer Plan; (xi) all monetary obligations under any
receivables factoring, receivable sales or similar transactions and all monetary
obligations under any synthetic lease, tax ownership/operating lease,
off-balance sheet financing or similar financing; and (xii) all obligations
referred to in clauses (i) through (xi) of this definition of another Person
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent such Person is liable
therefor.
 
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“Indemnified Matters” has the meaning specified therefor in Section 12.15.
 
“Indemnitees” has the meaning specified therefor in Section 12.15.
 
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.
 
“Intercompany Subordination Agreement” means the Intercompany Subordination
Agreement, dated as of the Effective Date, duly executed by each of the Loan
Parties, substantially in the form of Exhibit I-1.
 
“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan and ending 1, 2, or
3 months thereafter; provided, however, that (a) if any Interest Period would
end on a day that is not a Business Day, such Interest Period shall be extended
(subject to clauses (c)-(e) below) to the next succeeding Business Day, (b)
interest shall accrue at the applicable rate based upon the LIBOR Rate from and
including the first day of each Interest Period to, but excluding, the day on
which any Interest Period expires, (c) any Interest Period that would end on a
day that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day, (d) with respect
to an Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period), the Interest Period shall end on the
last Business Day of the calendar month that is 1, 2, or 3 months after the date
on which the Interest Period began, as applicable, and (e) Borrower may not
elect an Interest Period which will end after the Final Maturity Date.
 
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“Inventory” means, with respect to any Person, all of each of such Person’s now
owned or hereafter acquired right, title, and interest with respect to inventory
as defined in the Code.
 
“IRC” means the Internal Revenue Code of 1986, as amended (or any successor
statute thereto) and the regulations thereunder.
 
“Lease” means any lease of real property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.
 
“Lender” and “Lenders” have the meanings specified therefor in the preamble
hereto.
 
“Leverage Ratio” means, as of any date of determination and as to any Person,
the ratio of Consolidated Funded Indebtedness of such Person as of the date of
determination to TTM EBITDA of such Person for the most recently ended 12 month
period as to which financial statements have been delivered to the Agents
pursuant hereto.
 
“Liabilities” has the meaning specified therefor in Section 2.07.
 
“LIBOR Deadline” has the meaning set forth in Section 2.04(g)(ii)(A).
 
“LIBOR Notice” means a written notice in the form of Exhibit L-1.
 
“LIBOR Option” has the meaning specified therefor in Section 2.04(g)(i).
 
“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate
per annum determined by Administrative Agent by dividing (a) the Base LIBOR Rate
for such Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR
Rate shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.
 
“LIBOR Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the LIBOR Rate.
 
“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential
arrangement of any nature, including any conditional sale or title retention
arrangement, any Capitalized Lease and any assignment, deposit arrangement or
financing lease intended as, or having the effect of, security.
 
“Loan” means the Term Loan or any Revolving Loan made by an Agent or a Lender to
the Borrower pursuant to Article II hereof.
 
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“Loan Account” means an account maintained hereunder by the Administrative Agent
on its books of account at the Payment Office, and with respect to the Borrower,
in which the Borrower will be charged with all Loans made to, and all other
Obligations incurred by, the Borrower.
 
“Loan Document” means this Agreement, the Funds Flow Agreement, the Intercompany
Subordination Agreement, any Guaranty, any Security Agreement, any Filing
Authorization Letter, and any other agreement, instrument, and other document
executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing any Loan or any other Obligation.
 
“Loan Party” means any Borrower or any Guarantor.
 
“Loan Servicing Fee” has the meaning specified therefor in Section 2.06(d).
 
“Material Adverse Effect” means a material adverse effect on (i) the operations,
business, assets, properties, condition (financial or otherwise) or prospects of
any Loan Party or the Loan Parties taken as a whole, (ii) the ability of any
Loan Party to perform any of its obligations under any Loan Document to which it
is a party, (iii) the legality, validity or enforceability of this Agreement or
any other Loan Document, (iv) the rights and remedies of any Agent or any Lender
under any Loan Document, or (v) the validity, perfection or priority of a Lien
in favor of the Collateral Agent for the benefit of the Agents and the Lenders
on any of the Collateral; provided, however, that the preceding shall not
include the winding down and dissolution of GameTech Arizona Corporation, a
Subsidiary of Borrower that was incorporated in Arizona, as soon as possible
after the completion of litigation and the passing of any right of appeal
regarding that certain lawsuit Fortunet, Inc. v. GameTech International, Inc.
and GameTech Arizona Corporation (U.S. District Court, District of Nevada).
 
“Material Contract” means, with respect to the Borrower or any of its
Subsidiaries, each contract or agreement to which the Borrower or any of its
Subsidiaries is a party involving aggregate consideration payable to or by the
Borrower or such Subsidiary of five percent (5%) or more of the Borrower’s or
such Subsidiary’s annual consolidated revenues during any fiscal year (other
than purchase orders in the ordinary course of the business of the Borrower or
such Subsidiary and other than contracts that by their terms may be terminated
by the Borrower or such Subsidiary in the ordinary course of its business upon
less than 60 days notice without penalty or premium).
 
“Maximum Credit Facility Amount” has the meaning specified therefor in the
recitals hereto.
 
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
 
“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years.
 
“Net Cash Proceeds” means, (i) with respect to any Disposition by any Person or
any of its Subsidiaries, the amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person or such
Subsidiary, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than Indebtedness assumed by the purchaser of such asset) which is required to
be, and is, repaid in connection with such Disposition (other than Indebtedness
under this Agreement), (B) reasonable expenses related thereto incurred by such
Person or such Subsidiary in connection therewith, (C) transfer taxes paid to
any taxing authorities by such Person or such Subsidiary in connection
therewith, and (D) net income taxes to be paid in connection with such
Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements) and (ii) with respect to the issuance or incurrence of any
Indebtedness by any Person or any of its Subsidiaries, or the sale or issuance
by any Person or any of its Subsidiaries of any shares of its Capital Stock, the
aggregate amount of cash received (directly or indirectly) from time to time
(whether as initial consideration or through the payment or disposition of
deferred consideration) by or on behalf of such Person or such Subsidiary in
connection therewith, after deducting therefrom only (A) reasonable expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, (B) transfer taxes paid by such Person or such Subsidiary in
connection therewith and (C) net income taxes to be paid in connection therewith
(after taking into account any tax credits or deductions and any tax sharing
arrangements); in each case of clause (i) and (ii) to the extent, but only to
the extent, that the amounts so deducted are (x) actually paid to a Person that,
except in the case of reasonable out-of-pocket expenses, is not an Affiliate of
such Person or any of its Subsidiaries and (y) properly attributable to such
transaction or to the asset that is the subject thereof.
 
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“New Lending Office” has the meaning specified therefor in Section 2.08(d).
 
“New Subsidiary” has the meaning specified therefor in Section 7.02(b).
 
“Non-U.S. Lender” has the meaning specified therefor in Section 2.08(d).
 
“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).
 
“Obligations” means all present and future indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders, or any of them,
under the Loan Documents, whether or not the right of payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation (irrespective of whether a claim therefor is allowed in any
Insolvency Proceeding) to pay principal, interest, charges, expenses, fees,
attorneys fees and disbursements, indemnities and other amounts payable by such
Person under the Loan Documents, and (b) the obligation of such Person to
reimburse any amount in respect of any of the foregoing that any Agent or any
Lender (in its sole discretion) may elect to pay or advance on behalf of such
Person.
 
“Operating Lease Obligations” means all obligations for the payment of rent for
any real or personal property under leases or agreements to lease, other than
Capitalized Lease Obligations.
 
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“Other Taxes” has the meaning specified therefor in Section 2.08(b).
 
“Borrower” has the meaning specified therefor in the preamble hereto.
 
“Participant Register” has the meaning specified therefor in Section 12.07(g).
 
“Payment Office” means the Administrative Agent’s office located at 299 Park
Avenue, 23rd Floor, New York, New York or at such other office or offices of the
Administrative Agent as may be designated in writing from time to time by the
Administrative Agent to the Collateral Agent and the Borrower.
 
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
 
“Permitted Dispositions” means (a) sales, leases or other dispositions of assets
to buyers or lessees in the ordinary course of business, (b) sales or other
dispositions of obsolete or worn-out equipment in the ordinary course of
business, (c) sales or other dispositions of other property or assets for cash
in an aggregate amount not less than the fair market value of such property or
assets, provided that the Net Cash Proceeds of such Dispositions in the case of
clauses (b) and (c) do not exceed $1,000,000 in the aggregate in any
twelve-month period, (d) the use or transfer of Cash and Cash Equivalents by the
Borrower and its Subsidiaries in a manner that is not prohibited by the terms of
this Agreement or the other Loan Documents, (e) the licensing by the Borrower
and its Subsidiaries, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business, (f) the granting of leases or subleases of personal and real property
to other Persons not materially interfering with the conduct of business of any
of the Loan Parties, and (g) transfers, collectively not exceeding $7,000,000
annually, to all of Borrower’s CFCs.
 
“Permitted Indebtedness” means:
 
(a) any Indebtedness owing to any Agent and any Lender under this Agreement and
the other Loan Documents;
 
(b) Indebtedness listed on Schedule 7.02(b), and the extension of maturity,
refinancing or modification of the terms thereof; provided, however, that (i)
such extension, refinancing or modification is pursuant to terms that are not
less favorable to the Loan Parties and the Lenders than the terms of the
Indebtedness being extended, refinanced or modified and (ii) immediately after
giving effect to such extension, refinancing or modification, the amount of such
Indebtedness is not greater than the amount of Indebtedness outstanding
immediately prior to such extension, refinancing or modification plus accrued
interest thereon and the fees incurred in connection with the extension,
refinancing, or modification;
 
(c) Indebtedness evidenced by Capitalized Lease Obligations entered into in
order to finance Capital Expenditures made by the Loan Parties in accordance
with the provisions of Section 7.02(g), which Indebtedness, when aggregated with
the principal amount of all Indebtedness incurred under this clause (c) and
clause (d) of this definition, does not exceed $1,000,000 at any time
outstanding;
 
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(d) purchase money Indebtedness incurred to enable a Loan Party to acquire
equipment in the ordinary course of its business, which Indebtedness, when
aggregated with the principal amount of all Indebtedness incurred under this
clause (d) and clause (c) of this definition, does not exceed $1,000,000 at any
time outstanding;
 
(e) Indebtedness permitted under Section 7.02(e);
 
(f) Indebtedness of the Parent or any of its Subsidiaries under any Hedging
Agreement so long as such Hedging Agreements are used solely as a part of its
normal business operations as a risk management strategy or hedge against
changes resulting from market operations and not as a means to speculate for
investment purposes on trends and shifts in financial or commodities markets;  
 
(g) Indebtedness owed by one Loan Party or a Loan Party’s Subsidiary to another
Loan Party or Loan Party’s Subsidiary so long as the making of the Investment by
the Loan Party or Loan Party’s Subsidiary, as applicable, that is acting as the
lender or guarantor is permitted hereunder;
 
(h) Subordinated Debt;
 
(i) unsecured Indebtedness of the Borrower or any Subsidiary in respect of
performance bonds, worker’s compensation claims, surety or appeal bonds and
payment obligations in connection with self insurance or similar obligations
that collectively total up to $1,000,000 above the amount set forth on Schedule
B-1 for the appeal bond described therein;
 
(j) any Indebtedness associated with one or more letters of credit; and
 
(k) any Indebtedness (including inter-company account payables or indebtedness),
collectively not to exceed $500,000 annually, between Loan Parties and any of
their respective CFCs.
 
“Permitted Investments” means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency or instrumentality thereof and backed by the full faith and credit of the
United States, in each case, maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody’s or A-1 by Standard & Poor’s;
(iii) certificates of deposit maturing not more than 270 days after the date of
issue, issued by commercial banking institutions and money market or demand
deposit accounts maintained at commercial banking institutions, each of which is
a member of the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $500,000,000; (iv) repurchase agreements
having maturities of not more than 90 days from the date of acquisition which
are entered into with banks included in the commercial banking institutions
described in clause (iii) above and which are secured by readily marketable
direct obligations of the United States Government or any agency thereof;
(v) money market accounts maintained with mutual funds having assets in excess
of $2,500,000,000; and (vi) tax exempt securities rated A or better by Moody’s
or A+ or better by Standard & Poor’s.
 
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“Permitted Liens” means:
 
(a) Liens securing the Obligations;
 
(b) Liens for taxes, assessments, levies, and governmental charges the payment
of which is not required under Section 7.01(c);
 
(c) [intentionally omitted]
 
(d) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar Liens arising in the ordinary course of business
and securing obligations (other than Indebtedness for borrowed money) that are
not overdue by more than 30 days or are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
 
(e) Liens described on Schedule 7.02(a), but not the extension of coverage
thereof to other property or assets;
 
(f) Liens arising under Capitalized Leases or securing purchase money
Indebtedness permitted under the definition of Permitted Indebtedness; provided,
however, that (A) no such Lien shall extend to or cover any other property of
any Loan Party or any of its Subsidiaries, and (B) the principal amount of the
Indebtedness secured by any such Lien shall not exceed the cost of the property
so held or acquired;
 
(g) deposits and pledges of cash, Cash and Cash Equivalents and certificates of
deposit securing (i) obligations incurred in respect of workers’ compensation,
unemployment insurance or other forms of governmental insurance or benefits,
(ii) the performance of bids, tenders, leases, contracts (other than for the
payment of money) and statutory obligations or (iii) obligations on surety or
appeal bonds;
 
(h) easements, zoning restrictions and similar encumbrances on real property and
minor irregularities in the title thereto that do not (i) secure obligations for
the payment of money or (ii) materially impair the value of such property or its
use by any Loan Party or any of its Subsidiaries in the normal conduct of such
Person’s business;
 
(i) leases or subleases granted to other Persons not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;
 
(j) precautionary financing statement filings regarding operating leases;
 
(k) Liens arising out of the existence of judgments or awards not giving rise to
an Event of Default;
 
(l) statutory and common law landlords’ liens under leases to which the Borrower
or any of its Subsidiaries is a party; and
 
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(m) Liens securing refinancing Indebtedness permitted to be incurred hereunder;
provided, that such Liens do not extend to any property or assets other than the
property or assets that served as collateral for the refinanced Indebtedness.
 
“Permitted Preferred Stock” means and refers to any Preferred Stock issued by
the Borrower (and not by one or more of its Subsidiaries) that is not Prohibited
Preferred Stock.
 
“Person” means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
 
“Post-Default Rate” means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 2.0 percentage points, or, if a rate of interest is not otherwise
in effect, interest at the highest rate specified herein for any Loan prior to
the Event of Default plus 2.0 percentage points.
 
“Preferred Stock” means, as applied to the Capital Stock of any Person, the
Capital Stock of any class or classes (however designated) that is preferred
with respect to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
 
“Prohibited Preferred Stock” means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any
obligation to pay dividends, other than dividends of shares of Preferred Stock
of the same class and series payable in kind or dividends of shares of common
stock) on or before a date that is less than 1 year after the Final Maturity
Date, or, on or before the date that is less than 1 year after the Final
Maturity Date, is redeemable at the option of the holder thereof for cash or
assets or securities (other than distributions in kind of shares of Preferred
Stock of the same class and series or of shares of common stock).
 
“property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.
 
“Pro Rata Share” means:
 
(a) with respect to a Lender’s obligation to make Revolving Loans and right to
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender’s Revolving Credit Commitment,
by (ii) the Total Revolving Credit Commitment, provided, that, if the Total
Revolving Credit Commitment has been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender’s Revolving Loans (including
Collateral Agent Advances) and the denominator shall be the aggregate unpaid
principal amount of all Revolving Loans (including Collateral Agent Advances),
 
(b) with respect to a Lender’s obligation to make the Term Loan and right to
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender’s Term Loan Commitment, by
(ii) the Total Term Loan Commitment, provided that if the Total Term Loan
Commitment has been reduced to zero, the numerator shall be the aggregate unpaid
principal amount of such Lender’s portion of the Term Loan and the denominator
shall be the aggregate unpaid principal amount of the Term Loan, and
 
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(c) with respect to all other matters (including the indemnification obligations
arising under Section 10.05) regarding a Lender, the percentage obtained by
dividing (i) the sum of such Lender’s Revolving Credit Commitment and the unpaid
principal amount of such Lender’s portion of the Term Loan, by (ii) the sum of
the Total Revolving Credit Commitment and the aggregate unpaid principal amount
of the Term Loan, provided, that, if such Lender’s Revolving Credit Commitment
shall have been reduced to zero, such Lender’s Revolving Credit Commitment shall
be deemed to be the aggregate unpaid principal amount of such Lender’s Revolving
Loans (including Collateral Agent Advances) and if the Total Revolving Credit
Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment shall be deemed to be the aggregate unpaid principal amount of all
Revolving Loans (including Collateral Agent Advances).
 
“Purchase Price” means, with respect to the Acquisition, an amount equal to a
cash payment of $38,945,270 with an “earn out” payment of $800,000 based on
fiscal year 2006 financial performance.
 
“Qualified Cash” means, as of any date of determination, the amount of
unrestricted Cash and Cash Equivalents and, without duplication, unrestricted
Permitted Investments, that are subject to a perfected first-priority Lien in
favor of Lenders, of the Borrower and its Subsidiaries that are subject to a
control agreement in favor of Collateral Agent and that are on deposit with
banks, or in securities accounts with securities intermediaries, or any
combination thereof.
 
“Rating Agencies” has the meaning specified therefor in Section 2.07.
 
“Reference Bank” means JPMorgan Chase Bank, N.A., its successors or any other
commercial bank designated by the Administrative Agent to the Borrower from time
to time.
 
“Reference Rate” means the greater of (a) 8.00 percent per annum, and (b) the
rate of interest publicly announced by the Reference Bank in New York, New York
from time to time as its reference rate, base rate or prime rate. The reference
rate, base rate or prime rate is determined from time to time by the Reference
Bank as a means of pricing some loans to its borrowers and neither is tied to
any external rate of interest or index nor necessarily reflects the lowest rate
of interest actually charged by the Reference Bank to any particular class or
category of customers. Each change in the Reference Rate shall be effective from
and including the date such change is publicly announced as being effective.
 
“Reference Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the Reference Rate.
 
“Register” has the meaning specified therefor in Section 12.07(d).
 
“Registered Loan” has the meaning specified therefor in Section 12.07(d).
 
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“Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
 
“Reinvestment Eligible Funds” means (a) Net Cash Proceeds which, but for the
application of Section 2.05(d)(ii), would be required to be used to prepay the
Loans pursuant to Section 2.05(c)(v) or (b) insurance or condemnation proceeds
paid as the result of loss, destruction, casualty, condemnation or expropriation
which, but for the application of Section 2.05(d)(ii), would be required to be
used to prepay the Loans pursuant to Section 2.05(c)(vii).
 
“Reinvestment Notice” has the meaning specified therefor in Section 2.05(d).
 
“Related Fund” means a fund, money market account, investment account or other
account managed by a Lender or an Affiliate of such Lender or its investment
manager.
 
“Related Party Assignment” has the meaning specified therefor in Section
12.07(b).
 
“Related Party Register” has the meaning specified therefor in Section 12.07(d).
 
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including the movement of
Hazardous Materials through or in the ambient air, soil, surface or ground
water, or property.
 
“Remedial Action” means all actions taken to (i) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (ii) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (iii) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (iv) any other actions
authorized by 42 U.S.C. § 9601.
 
“Reportable Event” means an event described in Section 4043 of ERISA (other than
an event not subject to the provision for 30-day notice to the PBGC under the
regulations promulgated under such Section).
 
“Required Lenders” means Lenders whose Pro Rata Shares (calculated under clause
(b) of the definition thereof) aggregate more than 50%.
 
“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board (or any successor Governmental Authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect to
eurocurrency funding (currently referred to as “eurocurrency liabilities”) of
that Lender, but so long as such Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.
 
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“Revolving Credit Commitment” means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrower in the amount set forth
opposite such Lender’s name in Schedule C-1 hereto, as such amount may be
terminated or reduced from time to time in accordance with the terms of this
Agreement.
 
“Revolving Loan” and “Revolving Loans” have the meaning specified therefor in
Section 2.01(a)(i).
 
“Revolving Loan Lender” means a Lender with a Revolving Credit Commitment.
 
“Revolving Loan Obligations” means any Obligations with respect to the Revolving
Loans (including the principal thereof, the interest thereon, and the fees and
expenses specifically related thereto).
 
“SEC” means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.
 
“Securities Act” means the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.
 
“Securitization” has the meaning specified therefor in Section 2.07.
 
“Securitization Parties” has the meaning specified therefor in Section 2.07.
 
“Security Agreement” means a Security Agreement, in form and substance
reasonably satisfactory to Collateral Agent, made by a Loan Party in favor of
the Collateral Agent for the benefit of the Agents and the Lenders, securing the
Obligations and delivered to the Collateral Agent.
 
“Seller” means Summit Amusement & Distributing, Ltd., a Texas limited
partnership.
 
“Settlement Period” has the meaning specified therefor in Section 2.02(d)(i).
 
“Solvent” means, with respect to any Person on a particular date, that on such
date (i) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) 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 (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.
 
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“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc. and any successor thereto.
 
“Subordinated Debt” means Indebtedness of the Borrower and/or the Guarantors
that is on terms and conditions (including payment terms, interest rates,
covenants, remedies, defaults and other material terms) satisfactory to the
Collateral Agent and the Required Lenders and which has been expressly
subordinated in right of payment to all Indebtedness of the Borrower and/or the
Guarantors under the Loan Documents by the execution and delivery of a
subordination agreement, in form and substance satisfactory to the Collateral
Agent and the Required Lenders.
 
“Subsidiary” means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (i) the accounts of which
would be consolidated with those of such Person in such Person’s consolidated
financial statements if such financial statements were prepared in accordance
with GAAP or (ii) of which more than 50% of (A) the outstanding Capital Stock
having (in the absence of contingencies) ordinary voting power to elect a
majority of the board of directors or other managing body of such Person, (B) in
the case of a partnership or limited liability company, the interest in the
capital or profits of such partnership or limited liability company or (C) in
the case of a trust, estate, association, joint venture or other entity, the
beneficial interest in such trust, estate, association or other entity business
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such Person; provided, however, that on
and prior to the Effective Date and prior to the consummation of the
Acquisition, all references herein or in any other Loan Document to Borrower and
its Subsidiaries or Borrower and its Subsidiaries shall be deemed to include a
reference to the Seller as if it were owned by Borrower and its Subsidiaries.
 
“Taxes” has the meaning specified therefor in Section 2.08(a).
 
“Term Loan” has the meaning specified therefor in Section 2.01(a)(ii).
 
“Term Loan Commitment” means, with respect to each Lender, the commitment of
such Lender to make its portion of the Term Loan to the Borrower in the amount
set forth in Schedule C-1 hereto, as the same may be terminated or reduced from
time to time in accordance with the terms of this Agreement.
 
“Term Loan Lender” means a Lender with a Term Loan Commitment.
 
“Term Loan Obligations” means any Obligations with respect to the Term Loan
(including the principal thereof, the interest thereon, and the fees and
expenses specifically related thereto).
 
“Termination Event” means (i) a Reportable Event with respect to any Employee
Plan, (ii) any event that causes any Loan Party or any of its ERISA Affiliates
to incur liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the IRC, (iii) the
filing of a notice of intent to terminate an Employee Plan or the treatment of
an Employee Plan amendment as a termination under Section 4041 of ERISA,
(iv) the institution of proceedings by the PBGC to terminate an Employee Plan,
or (v) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Employee Plan.
 
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“Total Commitment” means the sum of the Total Revolving Credit Commitment and
the Total Term Loan Commitment.
 
“Total Revolving Credit Commitment” means the sum of the amounts of the Lenders’
Revolving Credit Commitments, which amount is $10,000,000 as of the Effective
Date.
 
“Total Term Loan Commitment” means the sum of the amounts of the Lenders’ Term
Loan Commitments, which amount is $30,000,000 as of the Effective Date.
 
“Transferee” has the meaning specified therefor in Section 2.08(a).
 
“TTM EBITDA” means, as of any date of determination and with respect to a
Person, the Consolidated EBITDA of such Person and its Subsidiaries for the
period of 12 consecutive months most recently ended.
 
“Unused Line Fee” has the meaning specified therefor in Section 2.06(c).
 
“WARN” has the meaning specified therefor in Section 6.01(z).
 
“Working Investment” means, at any date of determination thereof, (i) the sum,
for any Person and its Subsidiaries, of (A) the unpaid face amount of all
Accounts Receivable of such Person and its Subsidiaries as at such date of
determination, plus (B) the aggregate amount of prepaid expenses of such Person
and its Subsidiaries as at such date of determination, minus (ii) the sum, for
such Person and its Subsidiaries, of (A) the unpaid amount of all accounts
payable of such Person and its Subsidiaries as at such date of determination,
plus (B) the aggregate amount of all accrued expenses of such Person and its
Subsidiaries as at such date of determination (but, excluding from accounts
payable and accrued expenses, the current portion of long-term debt and all
accrued interest and taxes).
 
Section 1.02 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation,” whether or not so
expressly stated in each such instance and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The word “will” shall be construed to have the same meaning and effect as the
word “shall.” Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. References in this Agreement to “determination” by any Agent
include estimates honestly made by such Agent (in the case of quantitative
determinations) and beliefs honestly held by such Agent (in the case of
qualitative determinations).
 
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Section 1.03 Accounting and Other Terms. Unless otherwise expressly provided
herein, each accounting term used herein shall have the meaning given it under
GAAP. All terms used in this Agreement which are defined in Article 8 or Article
9 of the Code and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
 
Section 1.04 Time References. Unless otherwise indicated herein, all references
to time of day refer to Eastern Standard Time or Eastern daylight saving time,
as in effect in New York City on such day. For purposes of the computation of a
period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each means “to but
excluding”; provided, however, that with respect to a computation of fees or
interest payable to any Agent or any Lender , such period shall in any event
consist of at least one full day.
 
ARTICLE II
 
THE LOANS
 
Section 2.01 Commitments. (a) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth:
 
(i) each Revolving Loan Lender severally agrees to make loans (each, a
“Revolving Loan” and, collectively, the “Revolving Loans”) to the Borrower at
any time and from time to time from the Effective Date to the Final Maturity
Date, or until the earlier reduction of its Revolving Credit Commitment to zero
in accordance with the terms hereof, in an aggregate principal amount of
Revolving Loans at any time outstanding not to exceed the lesser of (A) the
amount of such Lender’s Revolving Credit Commitment, and (B) the amount of such
Lender’s Pro Rata Share of the then extant Borrowing Base; and
 
(ii) each Term Loan Lender severally agrees to make a term loan (collectively,
the “Term Loan”) to the Borrower on the Effective Date, in an aggregate
principal amount equal to the amount of such Lender’s Term Loan Commitment.
 
(b) Notwithstanding the foregoing:
 
(i) The aggregate principal amount of Revolving Loans outstanding at any time to
the Borrower shall not exceed the lower of (A) the Total Revolving Credit
Commitment and (B) the current Borrowing Base. The Revolving Credit Commitment
of each Lender shall automatically and permanently be reduced to zero on the
Final Maturity Date. Within the foregoing limits, the Borrower may borrow, repay
and reborrow the Revolving Loans, on or after the Effective Date and prior to
the Final Maturity Date, subject to the terms, provisions and limitations set
forth herein.
 
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(ii) The maximum amount of Revolving Loans that may be borrowed hereunder on the
Effective Date is $9,000,000.
 
(iii) The aggregate principal amount of the Term Loan made on the Effective Date
shall not exceed the Total Term Loan Commitment. Any principal amount of the
Term Loan that is repaid or prepaid may not be reborrowed.
 
Section 2.02 Making the Loans.
 
(a) The Borrower shall give the Administrative Agent prior telephonic notice
(immediately confirmed in writing, in substantially the form of
Exhibit 2.01(b)(ii) hereto (a “Notice of Borrowing”), not later than 12:00 noon
(New York City time) on the date which is 3 Business Days prior to the date of
the proposed Loan (or such shorter period as the Administrative Agent is
willing, in its sole discretion, to accommodate from time to time). Such Notice
of Borrowing shall be irrevocable and shall specify (i) the principal amount of
the proposed Loan, (ii) the proposed borrowing date, which must be a Business
Day, and, with respect to the Term Loan, must be the Effective Date, (iii)
whether the proposed Loan is to be a Reference Rate Loan or a LIBOR Rate Loan,
and (iv) in the case of a LIBOR Rate Loan, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”. If no election as to the type of Loan is specified,
then the requested Loan shall be a Reference Rate Loan. If no Interest Period is
specified with respect to any requested LIBOR Rate Loan, then the Borrower shall
be deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent and the Lenders may act without liability upon the basis of
written, telecopied or telephonic notice believed by the Administrative Agent in
good faith to be from the Borrower (or from any Authorized Officer thereof
designated in writing purportedly from the Borrower to the Administrative
Agent). The Borrower hereby waives the right to dispute the Administrative
Agent’s record of the terms of any such telephonic Notice of Borrowing. The
Administrative Agent and each Lender shall be entitled to rely conclusively on
any Authorized Officer’s authority to request a Loan on behalf of the Borrower
until the Administrative Agent receives written notice to the contrary. The
Administrative Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing.
 
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable
and the Borrower shall be bound to make a borrowing in accordance therewith.
Each Revolving Loan shall be made in a minimum amount of $500,000 and shall be
in integral multiples of $100,000 in excess thereof.
 
(c) (i) Except as otherwise provided in this Section 2.02(c), all Loans under
this Agreement shall be made by the Lenders simultaneously and proportionately
to their Pro Rata Shares of the Total Revolving Credit Commitment and the Total
Term Loan Commitment, as the case may be, it being understood that no Lender
shall be responsible for any default by any other Lender in that other Lender’s
obligations to make a Loan requested hereunder, nor shall the Commitment of any
Lender be increased or decreased as a result of the default by any other Lender
in that other Lender’s obligation to make a Loan requested hereunder, and each
Lender shall be obligated to make the Loans required to be made by it by the
terms of this Agreement regardless of the failure by any other Lender.
 
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(ii) Notwithstanding any other provision of this Agreement, and in order to
reduce the number of fund transfers among the Borrower, the Agents and the
Lenders, the Borrower, the Agents and the Lenders agree that the Administrative
Agent may (but shall not be obligated to), and the Borrower and the Lenders
hereby irrevocably authorize the Administrative Agent to, fund, on behalf of the
Lenders with a Revolving Credit Commitment, Revolving Loans pursuant to
Section 2.01, subject to the procedures for settlement set forth in Section
2.02(d); provided, however, that (a) the Administrative Agent shall in no event
fund any such Revolving Loans if the Administrative Agent shall have received
written notice from the Collateral Agent or the Required Lenders prior to the
time of the proposed Revolving Loan that one or more of the conditions precedent
contained in Section 5.02 will not be satisfied at the time of the proposed
Revolving Loan, and (b) the Administrative Agent shall not otherwise be required
to determine that, or take notice whether, the conditions precedent in
Section 5.02 have been satisfied. If the Borrower gives a Notice of Borrowing
requesting a Revolving Loan and the Administrative Agent elects not to fund such
Revolving Loan on behalf of the Revolving Loan Lenders, then promptly after
receipt of the Notice of Borrowing requesting such Revolving Loan, the
Administrative Agent shall notify each Revolving Loan Lender of the specifics of
the requested Revolving Loan and that it will not fund the requested Revolving
Loan on behalf of the Revolving Loan Lenders. If the Administrative Agent
notifies the Revolving Loan Lenders that it will not fund a requested Revolving
Loan on behalf of such Revolving Loan Lenders, each Revolving Loan Lender shall
make its Pro Rata Share of the Revolving Loan available to the
Administrative Agent, in immediately available funds, at the Payment Office no
later than 3:00 p.m. (New York City time) (provided that the
Administrative Agent requests payment from such Revolving Loan Lender not later
than 1:00 p.m. (New York City time)) on the date of the proposed Revolving Loan.
The Administrative Agent will make the proceeds of such Revolving Loans
available to the Borrower on the day of the proposed Revolving Loan by causing
an amount, in immediately available funds, equal to the proceeds of all such
Revolving Loans received by the Administrative Agent at the Payment Office or
the amount funded by the Administrative Agent on behalf of the Revolving Loan
Lenders to be deposited in an account designated by the Borrower.
 
(iii) If the Administrative Agent has notified the Revolving Loan Lenders that
the Administrative Agent, on behalf of such Revolving Loan Lenders, will fund a
particular Revolving Loan pursuant to Section 2.02(c)(ii), the
Administrative Agent may assume that each such Revolving Loan Lender has made
such amount available to the Administrative Agent on such day and the
Administrative Agent, in its sole discretion, may, but shall not be obligated
to, cause a corresponding amount to be made available to the Borrower on such
day. If the Administrative Agent makes such corresponding amount available to
the Borrower and such corresponding amount is not in fact made available to the
Administrative Agent by any such Revolving Loan Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for 3 Business Days and
thereafter at the Reference Rate. During the period in which such Revolving Loan
Lender has not paid such corresponding amount to the Administrative Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the amount so advanced by the Administrative Agent to the
Borrower shall, for all purposes hereof, be a Revolving Loan made by the
Administrative Agent for its own account. Upon any such failure by a Revolving
Loan Lender to pay the Administrative Agent, the Administrative Agent shall
promptly thereafter notify the Borrower of such failure and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent for its
own account.
 
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(iv) Nothing in this Section 2.02(c) shall be deemed to relieve any Revolving
Loan Lender from its obligations to fulfill its Revolving Credit Commitment
hereunder or to prejudice any rights that the Administrative Agent or the
Borrower may have against any Revolving Loan Lender as a result of any default
by such Revolving Loan Lender hereunder.
 
(d) (i) With respect to all periods for which the Administrative Agent has
funded Revolving Loans pursuant to Section 2.02(c), on Friday of each week, or
if the applicable Friday is not a Business Day, then on the following Business
Day, or such shorter period as the Administrative Agent may from time to time
select (any such week or shorter period being herein called a “Settlement
Period”), the Administrative Agent shall notify each Revolving Loan Lender of
the unpaid principal amount of the Revolving Loans outstanding as of the last
day of each such Settlement Period. In the event that such amount is greater
than the unpaid principal amount of the Revolving Loans outstanding on the last
day of the Settlement Period immediately preceding such Settlement Period (or,
if there has been no preceding Settlement Period, the amount of the Revolving
Loans made on the date of such Revolving Loan Lender’s initial funding), each
Revolving Loan Lender shall promptly (and in any event not later than 2:00 p.m.
(New York City time) if the Administrative Agent requests payment from such
Lender not later than 12:00 noon (New York City time) on such day) make
available to the Administrative Agent its Pro Rata Share of the difference in
immediately available funds. In the event that such amount is less than such
unpaid principal amount, the Administrative Agent shall promptly pay over to
each Revolving Loan Lender its Pro Rata Share of the difference in immediately
available funds. In addition, if the Administrative Agent shall so request at
any time when a Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Administrative Agent shall determine that it is desirable to present claims
against the Borrower for repayment, each Revolving Loan Lender shall promptly
remit to the Administrative Agent or, as the case may be, the Administrative
Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to
adjust the interests of the Revolving Loan Lenders in the then outstanding
Revolving Loans to such an extent that, immediately after giving effect to such
adjustment, each such Revolving Loan Lender’s interest in the then outstanding
Revolving Loans will be equal to its Pro Rata Share thereof. The obligations of
the Administrative Agent and each Revolving Loan Lender under this Section
2.02(d) shall be absolute and unconditional. Each Revolving Loan Lender shall
only be entitled to receive interest on its Pro Rata Share of the Revolving
Loans which have been funded by such Revolving Loan Lender.
 
(ii) In the event that any Revolving Loan Lender fails to make any payment
required to be made by it pursuant to Section 2.02(d)(i), the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Revolving Loan Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for 3 Business Days and thereafter at the
Reference Rate. During the period in which such Revolving Loan Lender has not
paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
the amount so advanced by the Administrative Agent to the Borrower shall, for
all purposes hereof, be a Revolving Loan made by the Administrative Agent for
its own account. Upon any such failure by a Revolving Loan Lender to pay the
Administrative Agent, the Administrative Agent shall promptly thereafter notify
the Borrower of such failure and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent for its own account. Nothing in
this Section 2.02(d)(ii) shall be deemed to relieve any Revolving Loan Lender
from its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Administrative Agent or the Borrower may have
against any Revolving Loan Lender as a result of any default by such Revolving
Loan Lender hereunder.
 
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Section 2.03 Repayment of Loans; Evidence of Debt. ii) The outstanding principal
of all Revolving Loans shall be due and payable on the Final Maturity Date.
 
(b) The outstanding principal of the Term Loan shall be repayable in consecutive
quarterly installments, on the first day of each January, April, July, and
October commencing on January 1, 2008 and ending on the Final Maturity Date, as
follows:
 
Payment Date
Amount
January 1, 2008
$1,100,000
April, 1, 2008
$1,100,000
July 1, 2008
$1,100,000
October 1, 2008
$1,100,000
January 1, 2009
$1,100,000
April, 1, 2009
$1,100,000
July 1, 2009
$1,100,000
October 1, 2009
$1,100,000
January 1, 2010
$1,100,000
April, 1, 2010
$1,100,000
July 1, 2010
$1,100,000
October 1, 2010
$1,100,000
January 1, 2011
$1,100,000
April, 1, 2011
$1,100,000
July 1, 2011
$1,100,000
October 1, 2011
$1,100,000
January 1, 2012
$1,100,000
Final Maturity Date
All Remaining Obligations

 
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; provided, however, that the last such installment shall be in the amount
necessary to repay in full the unpaid principal amount of the Term Loan. The
outstanding principal of the Term Loan shall be repaid in full on the earlier of
(i) the termination of the Total Revolving Credit Commitment and (ii) the Final
Maturity Date.
 
(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
 
(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.
 
(e) The entries made in the accounts maintained pursuant to paragraphs (c) or
(d) of this Section 2.03 shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
 
(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) in a form furnished by the
Collateral Agent and reasonably satisfactory to the Borrower. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 12.07) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
 
Section 2.04 Interest.
 
(a) Revolving Loans. Each Revolving Loan shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the making of
such Loan until the date on which such principal amount is repaid in accordance
herewith, as follows: (i) if the relevant Revolving Loan is a LIBOR Rate Loan,
at a rate per annum equal to the LIBOR Rate plus 3.50 percentage points, and
(ii) otherwise, at a rate per annum equal to the Reference Rate plus 0.50
percentage points.
 
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(b) Term Loan. The Term Loan shall bear interest on the principal amount thereof
from time to time outstanding, from the date of the making of the Term Loan
until the date on which such principal amount is repaid in accordance herewith,
as follows: (i) if the relevant portion of the Term Loan is a LIBOR Rate Loan,
at a rate per annum equal to the LIBOR Rate plus 4.75 percentage points, and
(ii) otherwise, at a rate per annum equal to the Reference Rate plus 1.75
percentage points.
 
(c) Default Interest. To the extent permitted by law, upon the occurrence and
during the continuance of an Event of Default, the principal of, and all accrued
and unpaid interest on, all Loans, fees, indemnities, or any other Obligations
of the Loan Parties under this Agreement and the other Loan Documents, shall
bear interest, from the date such Event of Default occurred until the date such
Event of Default is cured or waived in writing in accordance herewith, at a rate
per annum equal at all times to the Post-Default Rate. All interest at the
Post-Default Rate shall be payable on demand.
 
(d) [intentionally omitted]
 
(e) LIBOR Option.
 
(i) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Reference Rate, the Borrower shall have the option (the
“LIBOR Option”) to have interest on all or a portion of the Loans be charged at
a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable on the earliest of (A) the last day of the Interest Period applicable
thereto, (B) the occurrence of an Event of Default in consequence of which the
Required Lenders or Collateral Agent on behalf thereof elect to accelerate the
maturity of all or any portion of the Obligations, or (C) termination of this
Agreement pursuant to the terms hereof. On the last day of each applicable
Interest Period, unless the Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the rate of interest then applicable to Reference
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, the Borrower no longer shall have the option to
request that Loans bear interest at the LIBOR Rate and Administrative Agent
shall have the right to convert the interest rate on all outstanding LIBOR Rate
Loans to the rate then applicable to Reference Rate Loans hereunder.
 
(ii) LIBOR Election.
 
(A) The Borrower may, at any time and from time to time, so long as no Event of
Default has occurred and is continuing, elect to exercise the LIBOR Option by
notifying Administrative Agent prior to 11:00 a.m. (New York time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of the Borrower’s election of the LIBOR Option for a
permitted portion of the Loans and an Interest Period pursuant to this Section
shall be made by delivery to Administrative Agent of a LIBOR Notice received by
Administrative Agent before the LIBOR Deadline. Promptly upon its receipt of
each such LIBOR Notice, Administrative Agent shall provide a copy thereof to
each of the Lenders having a Commitment of the type to which such LIBOR Notice
relates.
 
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(B) Each LIBOR Notice shall be irrevocable and binding on the Borrower. In
connection with each LIBOR Rate Loan, the Borrower shall indemnify, defend, and
hold Administrative Agent and the Lenders harmless against any loss, cost, or
expense incurred by Administrative Agent or any Lender as a result of (1) the
payment of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (2) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (3) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses,
collectively, “Funding Losses”). Funding Losses shall, with respect to
Administrative Agent or any Lender, be deemed to equal the amount determined by
Administrative Agent or such Lender to be the excess, if any, of (x) the amount
of interest that would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period therefor), minus (y) the amount of interest that would accrue on such
principal amount for such period at the interest rate which Administrative Agent
or such Lender would be offered were it to be offered, at the commencement of
such period, Dollar deposits of a comparable amount and period in the London
interbank market. A certificate of Administrative Agent or a Lender delivered to
the Borrower setting forth any amount or amounts that Administrative Agent or
such Lender is entitled to receive pursuant to this Section shall be conclusive
absent manifest error.
 
(C) The Borrower shall have not more than 3 LIBOR Rate Loans in effect at any
given time. The Borrower only may exercise the LIBOR Option for LIBOR Rate Loans
of at least $1,000,000 and integral multiples of $100,000 in excess thereof.
 
(iii) Conversion. The Borrower may convert LIBOR Rate Loans to Reference Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are converted or prepaid on any date that is not the last day of the Interest
Period applicable thereto, including as a result of any automatic prepayment
through the required application by Administrative Agent of proceeds of
Collateral in accordance with Section 4.04 or for any other reason, including
early termination of the term of this Agreement or acceleration of all or any
portion of the Obligations pursuant to the terms hereof, the Borrower shall
indemnify, defend, and hold Administrative Agent and the Lenders and their
participants harmless against any and all Funding Losses in accordance with
subsection (ii) above.
 
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(iv) Special Provisions Applicable to LIBOR Rate.
 
(A) The LIBOR Rate may be adjusted by Administrative Agent with respect to any
Lender on a prospective basis to take into account any additional or increased
costs to such Lender of maintaining or obtaining any eurodollar deposits or
increased costs due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including changes in tax
laws (except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding loans
bearing interest at the LIBOR Rate. In any such event, the affected Lender shall
give the Borrower and Administrative Agent notice of such a determination and
adjustment and Administrative Agent promptly shall transmit the notice to each
other Lender and, upon its receipt of the notice from the affected Lender, the
Borrower may, by notice to such affected Lender (1) require such Lender to
furnish to the Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such adjustment, or (2)
repay the LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under subsection (ii)(B) above).
 
(B) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Administrative Agent and the Borrower
and Administrative Agent promptly shall transmit the notice to each other Lender
and (1) in the case of any LIBOR Rate Loans of such Lender that are outstanding,
the date specified in such Lender’s notice shall be deemed to be the last day of
the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate
Loans of such Lender thereafter shall accrue interest at the rate then
applicable to Reference Rate Loans, and (2) the Borrower shall not be entitled
to elect the LIBOR Option until such Lender determines that it would no longer
be unlawful or impractical to do so.
 
(v) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Administrative Agent, nor any Lender, nor any of their
participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
 
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(f) Interest Payment in respect of Reference Rate Loans. Interest on each
Reference Rate Loan shall be payable monthly, in arrears, on the first day of
each month, commencing on the first day of the month following the month in
which such Loan is made and at maturity (whether upon demand, by acceleration or
otherwise). The Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, from time to time, charge the Loan Account pursuant to
Section 4.02 with the amount of any interest payment due hereunder.
 
(g) General. All interest shall be computed on the basis of a year of 360 days
for the actual number of days, including the first day but excluding the last
day, elapsed.
 
Section 2.05 Reduction of Commitments; Prepayment of Loans.
 
(a) Reduction of Commitments.
 
(i) Revolving Credit Commitments. The Total Revolving Credit Commitment shall
terminate on the Final Maturity Date. The Borrower may, subject to the terms of
Section 2.05(b)(iii), reduce the Total Revolving Credit Commitment to an amount
(which may be zero) not less than the sum of (A) the aggregate unpaid principal
amount of all Revolving Loans then outstanding, and (B) the aggregate principal
amount of all Revolving Loans not yet made as to which a Notice of Borrowing has
been given by the Borrower under Section 2.02. Each such reduction shall be in
an amount which is an integral multiple of $1,000,000 (unless the Total
Revolving Credit Commitment in effect immediately prior to such reduction is
less than $1,000,000), shall be made by providing not less than 5 Business Days
prior written notice to the Administrative Agent and shall be irrevocable. Once
reduced, the Total Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving Credit Commitment shall reduce the Revolving
Credit Commitment of each Lender proportionately in accordance with its Pro Rata
Share thereof.
 
(ii) Term Loan. The Total Term Loan Commitment shall terminate upon the making
of the Term Loan on the Effective Date.
 
(b) Optional Prepayment.
 
(i) Revolving Loans. Subject to the terms of subsection (iii) below, the
Borrower may prepay the principal of any Revolving Loan, in whole or in part.
 
(ii) Term Loan. Subject to the terms of subsection (iii) below, the Borrower
may, upon at least 5 Business Days prior written notice to the Administrative
Agent, prepay the principal of the Term Loan, in whole or in part. Each
prepayment made pursuant to this Section 2.05(b)(ii) shall be accompanied by the
payment of accrued interest to the date of such payment on the amount prepaid.
Each such prepayment shall be applied against the remaining installments of
principal due on the Term Loan in the inverse order of maturity.
 
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(iii) Prepayment Premium. In the event of (A) repayment in full of the
Obligations and termination of the Total Revolving Credit Commitment, or (B)
repayment in part of the Obligations or reduction of the Total Revolving Credit
Commitment, in each case at any time prior to March 28, 2009 for any reason (any
such repayment and reduction, a “Designated Repayment”), including, without
limitation, any such actions resulting from (1) any mandatory reduction
(provided, that, with respect to mandatory prepayments pursuant to Section
2.05(c) of the Financing Agreement, only in connection with any mandatory
prepayment pursuant to Section 2.05(c)(ii), Section 2.05(c)(v) (solely with
respect to the proceeds of any Disposition of all or substantially all of the
assets of the Loan Parties), Section 2.05(c)(vi), or Section 2.05(c)(vii) of the
Financing Agreement) or voluntary reduction of the Total Revolving Credit
Commitment, (2) the acceleration of the Obligations after the occurrence and
during the continuation of an Event of Default (including, without limitation,
an Event of Default resulting from an Insolvency Proceeding), (3) any sale of
Collateral (including, without limitation, any such sale by foreclosure or in an
Insolvency Proceeding), or (4) the restructure, reorganization, or compromise of
the Obligations by the confirmation of a plan of reorganization or any other
plan of compromise, restructure, or arrangement in any Insolvency Proceeding,
then, in view of the impracticability and extreme difficulty of ascertaining the
actual amount of damages to the Agents and the Lenders or profits lost by the
Agents and the Lenders as a result of such Designated Repayment, and by mutual
agreement of the parties as to a reasonable estimation and calculation of the
lost profits or damages of the Agents and the Lenders, a prepayment premium,
measured as of the date of such Designated Repayment, equal to (x) with respect
to any Designated Repayment from and including the Effective Date up to, but not
including, the first anniversary of the Effective Date, 1.0% times the sum of
(i) the amount of the Term Loan that is repaid plus (ii) the amount that the
Total Revolving Credit Commitment is reduced on such date, (y) with respect to
any Designated Repayment from and including the first anniversary of the
Effective Date up to, but not including, the second anniversary of the Effective
Date, 0.5% times the sum of (i) the amount of the Term Loan that is repaid plus
(ii) the amount that the Total Revolving Credit Commitment is reduced on such
date, and (z) from and after the date that is the second anniversary of the
Effective Date, zero; provided, however, that the proceeding prepayment premium
shall not apply to partial repayment of the Obligations or partial reduction of
the Total Revolving Credit Commitment from excess cash generated by the Borrower
solely and exclusively in the Borrower’s ordinary course of business.
 
(c) Mandatory Prepayment.
 
(i) The Borrower will immediately prepay the Revolving Loans at any time when
the aggregate principal amount of all Revolving Loans exceeds the lesser of (A)
the Total Revolving Credit Commitment, and (B) the Borrowing Base, to the full
extent of any such excess. On each day that any Revolving Loans are outstanding,
the Borrower shall hereby be deemed to represent and warrant to the Agents and
the Lenders that the Borrowing Base in effect on such day equals or exceeds the
aggregate principal amount of all Revolving Loans then outstanding.
 
(ii) The Borrower will immediately prepay the outstanding principal amount of
the Term Loan in the event that the Total Revolving Credit Commitment is
terminated for any reason.
 
(iii) [intentionally omitted]
 
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(iv) Within 10 days of delivery to the Agents and the Lenders of audited annual
financial statements pursuant to Section 7.01(a)(ii), commencing with the
delivery to the Agents and the Lenders of the financial statements for the
Fiscal Year ended October 31, 2007 or, if such financial statements are not
delivered to the Agents and the Lenders on the date such statements are required
to be delivered pursuant to Section 7.01(a)(ii), 10 days after the date such
statements are required to be delivered to the Agents and the Lenders pursuant
to Section 7.01(a)(ii), the Borrower shall, if such financial statements
demonstrate that, for the applicable period, the ratio of Consolidated Funded
Indebtedness of the Borrower and Guarantors to Consolidated EBITDA less Capital
Expenditures is greater than or equal to 2.0 to 1.0, prepay the outstanding
principal amount of the Loans in an amount equal to 50.0% of the Excess Cash
Flow of the Borrower and Guarantors for such Fiscal Year.
 
(v) Within 10 days of receipt of any proceeds of any Disposition by any Loan
Party or its Subsidiaries (other than a Permitted Disposition of the type
described in clauses (a), (d), (e), (f) and (g) of the definition of Permitted
Dispositions), the Borrower shall prepay the outstanding principal amount of the
Loans in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection with such Disposition to the extent that the aggregate
amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries
(and not paid to the Administrative Agent as a prepayment of the Loans) shall
exceed $250,000 for all such Dispositions in any fiscal year. Nothing contained
in this subsection (v) shall permit any Loan Party or any of its Subsidiaries to
make a Disposition of any property other than a Permitted Disposition.
 
(vi) Upon the issuance or incurrence by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness referred to in
clauses (a), (b), (c), (d), (e), (f), and (g) of the definition of Permitted
Indebtedness), or the public or private offering by any Loan Party or any of its
Subsidiaries of any shares of its Capital Stock, the Borrower shall prepay the
Loans in an amount equal to 100% of the Net Cash Proceeds received by such
Person in connection therewith. The provisions of this subsection (vi) shall not
be deemed to be implied consent to any such issuance, incurrence or sale
otherwise prohibited by the terms and conditions of this Agreement.
 
(vii) Upon the receipt by any Loan Party or any of its Subsidiaries of any
Extraordinary Receipts, the Borrower shall prepay the outstanding principal of
the Loans in an amount equal to 100% of such Extraordinary Receipts, net of any
reasonable expenses incurred in collecting such Extraordinary Receipts.
 
(d) Application of Payments.
 
(i) Each prepayment made pursuant to subsections (c)(iv), (c)(v), (c)(vi), and
(c)(vii) above shall be applied, first, to the Term Loan, and second, to the
Revolving Loans. Each such prepayment of the Term Loan shall be applied against
the remaining installments of principal of the Term Loan in the inverse order of
their maturity. Each prepayment of the Revolving Loans pursuant to the foregoing
application of payments provision shall also reduce the Total Revolving Credit
Commitment by an equivalent amount and a reserve shall be imposed against the
Borrowing Base in an equivalent amount.
 
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(ii) The foregoing to the contrary notwithstanding, Borrower shall not be
required to make a prepayment otherwise required pursuant to Section 2.05(c)(v)
or Section 2.05(c)(vii) with Reinvestment Eligible Funds so long as: (A) no
Default or Event of Default has occurred and is continuing on the date such
Person receives such Reinvestment Eligible Funds or on the date such amounts are
to be released to Borrower pursuant to this Section 2.05(d)(ii), (B) in the case
of Reinvestment Eligible Funds constituting proceeds of condemnation or casualty
insurance, the Borrower delivers a notice (a “Reinvestment Notice”) within 10
days from the date that the applicable Person receives the monies constituting
such Reinvestment Eligible Funds notifying the Agents of the intent of the
applicable Person to use such Reinvestment Eligible Funds (1) to repair,
restore, or replace the assets that were the subject of the Disposition,
casualty or condemnation giving rise to such amounts with assets of equal or
greater fair market value which will be useful in the conduct of their business
in accordance with past practice, (2) within the period specified in such
notice, which period shall not exceed the earlier of (x) 180 days after the
receipt of such Reinvestment Eligible Funds by the applicable Loan Party or its
Subsidiary and (y) the Final Maturity Date, and (C) pending the reinvestment
described in clause (B)(1) above, such Reinvestment Eligible Amounts are
deposited in a cash collateral account over which Collateral Agent (on behalf of
the Lenders) has a perfected first-priority Lien. If all or any portion of such
Reinvestment Eligible Funds are not used in accordance with the preceding
sentence within the period specified in the Reinvestment Notice, the remaining
portion shall be applied to the Loans in accordance with Section 2.05(d) on the
last day of such specified period.
 
(e) Interest and Fees. Any prepayment made pursuant to this Section 2.05 (other
than prepayments made pursuant to subsections (c)(i), (c)(iii), and (c)(iv) of
this Section 2.05) shall be accompanied by the payment of accrued interest on
the principal amount being prepaid to the date of prepayment, and if such
prepayment would reduce the amount of the outstanding Loans to zero at a time
when the Total Revolving Credit Commitment has been terminated, such prepayment
shall be accompanied by the payment of all fees accrued to such date pursuant to
Section 2.06.
 
(f) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 2.05, payments with respect to any subsection of this Section 2.05 are
in addition to payments made or required to be made under any other subsection
of this Section 2.05.
 
Section 2.06 Fees.
 
(a) Closing Fee. On the date this Agreement is executed and delivered by the
Borrower (the “Execution and Delivery Date”), the Borrower shall pay to the
Administrative Agent for the account of the Lenders, in accordance with their
Pro Rata Shares, a non-refundable closing fee (the “Closing Fee”) equal to
$700,000. Any portion of the Closing Fee paid prior to the Execution and Deliver
Date shall be credited to the Borrower and reduce the amount owed by the
Borrower under the Closing Fee.
 
(b) Unused Line Fee. From and after the Effective Date and up to the Final
Maturity Date, the Borrower shall pay to the Administrative Agent for the
account of the Revolving Loan Lenders, in accordance with their Pro Rata Shares,
an unused line fee (the “Unused Line Fee”), which shall accrue at the rate per
annum of 0.375% on the excess, if any, of the Total Revolving Credit Commitment
over the sum of the average principal amount of all Revolving Loans outstanding
from time to time and shall be due and payable monthly in arrears on the first
day of each month commencing April 1, 2007.
 
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(c) Loan Servicing Fee. From and after the Effective Date and until the later of
(i) the Final Maturity Date and (ii) the date on which all Obligations are paid
in full, the Borrower shall pay to the Administrative Agent for the account of
the Collateral Agent, a non-refundable loan servicing fee (the “Loan Servicing
Fee”) equal to $7,500 each quarter, which shall be due and payable on the
Effective Date (payable ratably based on the number of days remaining in the
calendar quarter in which the Effective Date occurs) and quarterly in advance
thereafter on the first day of each calendar quarter commencing on April 1,
2007.
 
Section 2.07 Securitization. The Borrower hereby acknowledges that the Lenders
and their Affiliates may sell or securitize the Loans (a “Securitization”)
through the pledge of the Loans as collateral security for loans to the Lenders
or their Affiliates or through the sale of the Loans or the issuance of direct
or indirect interests in the Loans, which loans to the Lenders or their
Affiliates or direct or indirect interests will be rated by Moody’s, Standard &
Poor’s or one or more other rating agencies (the “Rating Agencies”). The
Borrower shall cooperate with the Lenders and their Affiliates to effect the
Securitization including by (a) amending this Agreement and the other Loan
Documents, and executing such additional documents, as reasonably requested by
the Lenders in connection with the Securitization, provided that (i) any such
amendment or additional documentation does not impose material additional costs
on the Borrower and (ii) any such amendment or additional documentation does not
materially adversely affect the rights, or materially increase the obligations,
of the Borrower under the Loan Documents or change or affect in a manner adverse
to the Borrower the financial terms of the Loans, (b) providing such information
as may be reasonably requested by the Lenders in connection with the rating of
the Loans or the Securitization, and (c) providing in connection with any rating
of the Loans a certificate (i) agreeing to indemnify the Lenders and their
Affiliates, any of the Rating Agencies, or any party providing credit support or
otherwise participating in the Securitization (collectively, the “Securitization
Parties”) for any losses, claims, damages or liabilities (the “Liabilities”) to
which the Lenders, their Affiliates or such Securitization Parties may become
subject insofar as the Liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any Loan
Document or in any writing delivered by or on behalf of any Loan Party to any
Agent or Lender in connection with any Loan Document or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and such indemnity shall survive any transfer by the Lenders or
their successors or assigns of the Loans and (ii) agreeing to reimburse the
Agents, the Lenders and their Affiliates for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities.
 
Section 2.08 Taxes.
 
(a) Any and all payments by any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net
income of any Agent or any Lender (or any transferee or assignee thereof,
including a participation holder (any such entity, a “Transferee”)) by the
jurisdiction in which such Person is organized or has its principal lending
office (all such nonexcluded taxes, levies, imposts, deductions, charges
withholdings and liabilities, collectively or individually, “Taxes”). If any
Loan Party shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to any Agent or any Lender (or any Transferee), (i) the sum
payable shall be increased by the amount (an “additional amount”) necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08) such Agent or such Lender (or
such Transferee) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
 
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(b) In addition, each Loan Party agrees to pay to the relevant Governmental
Authority in accordance with applicable law any present or future stamp or
documentary taxes or any other excise 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 Loan Document (“Other Taxes”). Each Loan Party shall deliver to each Agent
and each Lender official receipts in respect of any Taxes or Other Taxes payable
hereunder promptly after payment of such Taxes or Other Taxes.
 
(c) The Loan Parties hereby jointly and severally indemnify and agree to hold
each Agent and each Lender harmless from and against Taxes and Other Taxes
(including Taxes and Other Taxes imposed on any amounts payable under this
Section 2.08) paid by such Person, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Such indemnification shall be paid within 10 days
from the date on which any such Person makes written demand therefore specifying
in reasonable detail the nature and amount of such Taxes or Other Taxes.
 
(d) Each Lender that is organized under the laws of a jurisdiction outside the
United States (a “Non-U.S. Lender”) agrees that it shall, no later than the
Effective Date (or, in the case of a Lender which becomes a party hereto
pursuant to Section 12.07 after the Effective Date, promptly after the date upon
which such Lender becomes a party hereto) deliver to the Agents (or, in the case
of a participant, to the Lender granting the participation only) a properly
completed and duly executed copy of either U.S. Internal Revenue Service Form
W-8BEN, W-8ECI or W-8IMY or any subsequent versions thereof or successors
thereto, in each case claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax and payments of interest hereunder. In addition, in the
case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the IRC, such Non-U.S. Lender hereby
represents to the Agents and the Borrower that such Non-U.S. Lender is not a
bank for purposes of Section 881(c) of the IRC, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the IRC) of the Borrower and is
not a CFC related to the Borrower (within the meaning of Section 864(d)(4) of
the IRC), and such Non-U.S. Lender agrees that it shall promptly notify the
Agents in the event any such representation is no longer accurate. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement and on or before the date, if any, such Non-U.S. Lender
changes its applicable lending office by designating a different lending office
(a “New Lending Office”). In addition, such Non-U.S. Lender shall deliver such
forms within 20 days after receipt of a written request therefor from any Agent,
the assigning Lender or the Lender granting a participation, as applicable.
Notwithstanding any other provision of this Section 2.08, a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.08(d) that
such Non-U.S. Lender is not legally able to deliver.
 
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(e) The Loan Parties shall not be required to indemnify any Non-U.S. Lender, or
pay any additional amounts to any Non-U.S. Lender, in respect of United States
Federal withholding tax pursuant to this Section 2.08 to the extent that (i) the
obligation to withhold amounts with respect to United States Federal withholding
tax existed on the date such Non-U.S. Lender became a party to this Agreement
(or, in the case of a Transferee that is a participation holder, on the date
such participation holder became a Transferee hereunder) or, with respect to
payments to a New Lending Office, the date such Non-U.S. Lender designated such
New Lending Office with respect to a Loan; provided, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee, or Lender (or Transferee) through a New Lending Office, would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation, or
(ii) the obligation to pay such additional amounts would not have arisen but for
a failure by such Non-U.S. Lender to comply with the provisions of clause (d)
above.
 
(f) The obligations of the Loan Parties under this Section 2.08 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
 
ARTICLE III
 
[INTENTIONALLY OMITTED]
 
ARTICLE IV
 
FEES, PAYMENTS AND OTHER COMPENSATION
 
Section 4.01 Audit and Collateral Monitoring Fees. The Borrower acknowledges
that pursuant to Section 7.01(f), representatives of the Agents may visit any
Loan Party or conduct audits, inspections or field examinations of any Loan
Party and valuations or appraisals of any or all of the Collateral or business
or enterprise valuations of the Loan Parties at any time and from time to time
in a manner so as to not unduly disrupt the business of such Loan Party;
provided, however, that the preceding shall be limited to the Borrower’s
headquarters sites and any owned or leased real property where material books
and records of the Borrower or its Subsidiaries are retained. The Borrower
agrees to pay (i) $1,750 per day per examiner plus the examiner’s out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
audits, inspections, valuations, and field examinations and (ii) the cost of
such audits, appraisals and business valuations (including enterprise valuation
appraisals) conducted by third party auditors or appraisers on behalf of the
Agents; provided, however, that so long as no Event of Default has occurred and
is continuing, the Borrower shall be obligated to pay the costs for the
obligations specified in clauses (i) and (ii) hereof only one time per year.
 
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Section 4.02 Payments; Computations and Statements.
 
(a) The Borrower will make each payment under this Agreement not later than
12:00 noon (New York City time) on the day when due, in lawful money of the
United States of America and in immediately available funds, to the
Administrative Agent’s Account. All payments received by the Administrative
Agent after 12:00 noon (New York City time) on any Business Day will be credited
to the Loan Account on the next succeeding Business Day. All payments shall be
made by the Borrower without set-off, counterclaim, deduction or other defense
to the Agents and the Lenders. Except as provided in Section 2.02, after
receipt, the Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal ratably to the
Lenders in accordance with their Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement, provided that the
Administrative Agent will cause to be distributed all interest and fees received
from or for the account of the Borrower not less than once each month and in any
event promptly after receipt thereof. The Lenders and the Borrower hereby
authorize the Administrative Agent to, and the Administrative Agent shall, from
time to time, charge the Loan Account of the Borrower with any amount due and
payable by the Borrower under any Loan Document. Each of the Lenders and the
Borrower agrees that the Administrative Agent shall have the right to make such
charges whether or not any Default or Event of Default shall have occurred and
be continuing or whether any of the conditions precedent in Section 5.02 have
been satisfied. Any amount charged to the Loan Account of the Borrower shall be
deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the
Borrower, funded by the Administrative Agent on behalf of the Revolving Loan
Lenders and subject to Section 2.02 of this Agreement. The Lenders and the
Borrower confirm that any charges which the Administrative Agent may so make to
the Loan Account of the Borrower as herein provided will be made as an
accommodation to the Borrower and solely at the Administrative Agent’s
discretion, provided that the Administrative Agent shall from time to time upon
the request of the Collateral Agent, charge the Loan Account of the Borrower
with any amount due and payable under any Loan Document. Whenever any payment to
be made under any such Loan Document shall be stated to be 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 in such case be included in the computation
of interest or fees, as the case may be. All computations of fees shall be made
by the Administrative Agent on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such fees are payable. Each determination by the
Administrative Agent of an interest rate or fees hereunder shall be conclusive
and binding for all purposes in the absence of manifest error.
 
(b) The Administrative Agent shall provide the Borrower, promptly after the end
of each calendar month, a summary statement (in the form from time to time used
by the Administrative Agent) of the opening and closing daily balances in the
Loan Account of the Borrower during such month, the amounts and dates of all
Loans made to the Borrower during such month, the amounts and dates of all
payments on account of the Loans to the Borrower during such month and the Loans
to which such payments were applied, the amount of interest accrued on the Loans
to the Borrower during such month, the amount of charges to the Loan Account,
and the amount and nature of any charges to the Loan Account made during such
month on account of fees, commissions, expenses and other Obligations. All
entries on any such statement shall be presumed to be correct and, 30 days after
the same is sent, shall be final and conclusive absent manifest error.
 
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Section 4.03 Sharing of Payments, Etc. Except as provided in Section 2.02, if
any Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of any Obligation in
excess of its ratable share of payments on account of similar obligations
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in such similar obligations held by them 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 from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender’s ratable share (according to the proportion of (i) the
amount of such Lender’s required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid 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 4.03 may, to the fullest extent permitted by law,
exercise all of its rights (including the Lender’s right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
 
Section 4.04 Apportionment of Payments. Subject to Section 2.02 and to any
written agreement among the Agents or the Lenders:
 
(a) all payments of principal and interest in respect of outstanding Loans, all
payments of fees (other than the audit and collateral monitoring fees provided
for in Section 4.01) and all other payments in respect of any other Obligations,
shall be allocated by the Administrative Agent among such of the Lenders as are
entitled thereto, in proportion to their respective Pro Rata Shares or otherwise
as provided herein or, in respect of payments not made on account of Loans as
designated by the Person making payment when the payment is made.
 
(b) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and upon the direction of the Required Lenders shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement, (i) first, ratably to
pay the Obligations in respect of any fees, expense reimbursements, indemnities
and other amounts then due to the Agents until paid in full; (ii) second, to pay
interest due in respect of the Collateral Agent Advances until paid in full;
(iii) third, to pay principal of the Collateral Agent Advances until paid in
full; (iv) fourth, ratably to pay any fees and indemnities then due to the
Revolving Loan Lenders until paid in full; (v) fifth, ratably to pay interest
due in respect of the Revolving Loans until paid in full; (vi) sixth, ratably to
pay principal of the Revolving Loans until paid in full; (vi) seventh, ratably
to pay any fees and indemnities then due to the Term Loan Lenders until paid in
full; (viii) eighth, ratably to pay interest due in respect of the Term Loan
until paid in full; (ix) ninth, ratably to pay principal of the Term Loan until
paid in full, and (x) tenth, to the ratable payment of all other Obligations
then due and payable until paid in full.
 
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(c) In each instance, so long as no Event of Default has occurred and is
continuing, Section 4.04(b) shall not be deemed to apply to any payment by the
Borrower specified by the Borrower to the Administrative Agent to be for the
payment of Term Loan Obligations then due and payable under any provision of
this Agreement or the prepayment of all or part of the principal of the Term
Loan in accordance with the terms and conditions of Section 2.05.
 
(d) For purposes of Section 4.04(b), (other than clause (x) thereof) “paid in
full” means with respect to any Obligations, payment of all amounts owing under
the Loan Documents in respect of such Obligations, including fees, interest,
default interest, interest on interest, expense reimbursements and indemnities,
specifically including in each case any of the foregoing which would accrue
after the commencement of any Insolvency Proceeding irrespective of whether a
claim is allowable in such Insolvency Proceeding, except to the extent that
default or overdue interest (but not any other interest) and fees, each arising
from or related to a default, are disallowed in any Insolvency Proceeding;
provided, however, that for purposes of such clause (x), “paid in full” means
with respect to any Obligations, payment of all amounts owing under the Loan
Documents in respect of such Obligations, including fees, interest, default
interest, interest on interest, expense reimbursements and indemnities,
specifically including in each case any of the foregoing which would accrue
after the commencement of any Insolvency Proceeding irrespective of whether a
claim is allowable in such Insolvency Proceeding.
 
(e) In the event of a direct conflict between the priority provisions of this
Section 4.04 and other provisions contained in any other Loan Document, it is
the intention of the parties hereto that both such priority provisions in such
documents shall be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section 4.04 shall control and govern.
 
Section 4.05 Increased Costs and Reduced Return.  
 
(a)  If any Lender or any Agent shall have determined that the adoption or
implementation after the Effective Date, or any change after the Effective Date
in, any law, rule, treaty or regulation, or any policy, guideline or directive
of, or any change after the Effective Date in, the interpretation or
administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by any Lender or any Agent or any Person
controlling any such Lender or any such Agent with any directive of, or
guideline from, any central bank or other Governmental Authority or the
introduction of, or change in, any accounting principles applicable to any
Lender, any Agent or any Person controlling any such Lender, any such Agent (in
each case, whether or not having the force of law) (each, a “Change in Law”),
shall (i) subject any Lender, any Agent or any Person controlling any such
Lender or any such Agent to any tax, duty or other charge with respect to this
Agreement or any Loan made by such Lender or such Agent or change the basis of
taxation of payments to any Lender, any Agent or any Person controlling any such
Lender or any such Agent of any amounts payable hereunder (except for taxes on
the overall net income of any Lender, any Agent or any Person controlling any
such Lender or any such Agent), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any Loan, or against
assets of or held by, or deposits with or for the account of, or credit extended
by, any Lender, any Agent or any Person controlling any such Lender or any such
Agent or (iii) impose on any Lender, any Agent or any Person controlling any
such Lender or any such Agent any other condition regarding this Agreement or
any Loan, and the result of any event referred to in clauses (i), (ii) or (iii)
above shall be to increase the cost to any Lender or any Agent of making any
Loan, or agreeing to make any Loan or to reduce any amount received or
receivable by any Lender or any Agent hereunder, then, upon demand by any such
Lender or any such Agent, the Borrower shall pay to such Lender or such Agent
such additional amounts as will compensate such Lender, or such Agent for such
increased costs or reductions in amount.
 
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(b) If any Lender or any Agent shall have determined that any Change in Law
either (i) affects or would affect the amount of capital required or expected to
be maintained by any Lender, any Agent or any Person controlling such Lender or
such Agent and any Lender or any Agent determines that the amount of such
capital is increased as a direct or indirect consequence of any Loans made or
maintained, any Lender’s, any Agent’s or any such other controlling Person’s
other obligations hereunder, or (ii) has or would have the effect of reducing
the rate of return on any Lender’s or any Agent’s any such other controlling
Person’s capital to a level below that which such Lender, such Agent or such
controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, or any agreement to make Loans, or
such Lender’s, such Agent’s or such other controlling Person’s other obligations
hereunder (in each case, taking into consideration, such Lender’s, or such
Agent’s or such other controlling Person’s policies with respect to capital
adequacy), then, upon demand by any Lender or any Agent, the Borrower shall pay
to such Lender or such Agent from time to time such additional amounts as will
compensate such Lender or such Agent for such cost of maintaining such increased
capital or such reduction in the rate of return on such Lender’s or such Agent’s
or such other controlling Person’s capital.
 
(c) All amounts payable under this Section 4.05 shall bear interest from the
date that is 10 days after the date of demand by any Lender or any Agent until
payment in full to such Lender or such Agent at the Reference Rate. A
certificate of such Lender or such Agent claiming compensation under this
Section 4.05, specifying the event herein above described and the nature of such
event shall be submitted by such Lender or such Agent to the Borrower, setting
forth the additional amount due and an explanation of the calculation thereof,
and such Lender’s or such Agent’s reasons for invoking the provisions of this
Section 4.05, and shall be final and conclusive absent manifest error.
 
ARTICLE V
 
CONDITIONS TO LOANS
 
Section 5.01 Conditions Precedent. The obligation of any Lender to make the
initial Loans, is subject to the fulfillment, to the satisfaction of each Lender
(the making of such initial extension of credit by any Lender being conclusively
deemed to be its satisfaction or waiver of the following), of each of the
conditions precedent set forth below:
 
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(a) Payment of Fees; Amount of Requested Financing.
 
(i) Fees. The Borrower shall have paid all fees, costs, expenses and taxes then
payable pursuant to Sections 2.06 or 12.04.
 
(ii) Requested Financing Amount. On the Effective Date, the aggregate
outstanding Loans shall not be greater than (A) 1.65 times the pro forma TTM
EBITDA of the Borrower, and (B) 3.30 times the pro forma TTM EBITDA of the
Borrower less their trailing twelve months’ pro forma Capital Expenditures
(including capitalized software costs). In the event that the Borrower’s
financial performance does not meet the requirements of both clause (A) and
clause (B) of this subsection, then the Lenders shall not have any obligation to
make any Loans hereunder.
 
(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in Article VI and in each other Loan Document, certificate or other
writing delivered to any Agent or any Lender pursuant hereto or thereto on or
prior to the Effective Date are true and correct in all material respects
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) on and as of the Effective Date as though made
on and as of such date (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified date)
and (ii) no Default or Event of Default shall have occurred and be continuing on
the Effective Date or would result from this Agreement or the other Loan
Documents becoming effective in accordance with its or their respective terms.
 
(c) Legality. The making of the initial Loans shall not contravene any law, rule
or regulation applicable to any Agent or any Lender.
 
(d) Delivery of Documents. The Collateral Agent shall have received on or before
the Effective Date the following, each in form and substance satisfactory to the
Collateral Agent and, unless indicated otherwise, dated the Effective Date:
 
(i) a Security Agreement, duly executed by each Loan Party, together with the
original stock certificates representing all of the stock of such Loan Party’s
Subsidiaries and all intercompany promissory notes of such Loan Parties,
accompanied by undated stock powers executed in blank and other proper
instruments of transfer;
 
(ii) the Funds Flow Agreement, duly executed by each Loan Party,
 
(iii) the Intercompany Subordination Agreement, duly executed by each Loan
Party;
 
(iv) a Filing Authorization Letter, duly executed by each Loan Party, together
with appropriate financing statements duly filed in such office or offices as
may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by each Security
Agreement;
 
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(v) certified copies of all effective financing statements which name as debtor
any Loan Party and which are filed in the offices referred to in clause (iv)
above, together with copies of such financing statements, none of which, except
as otherwise agreed in writing by the Collateral Agent, shall cover any of the
Collateral and the results of searches for any tax Lien and judgment Lien filed
against such Person or its property, which results, except as otherwise agreed
to in writing by the Collateral Agent, shall not show any such Liens;
 
(vi) a copy of the resolutions of each Loan Party, certified as of the Effective
Date by an Authorized Officer thereof, authorizing (A) the transactions
contemplated by the Loan Documents to which such Loan Party is or will be a
party, and (B) the execution, delivery and performance by such Loan Party of
each Loan Document to which such Loan Party is or will be a party and the
execution and delivery of the other documents to be delivered by such Person in
connection herewith and therewith;
 
(vii) a certificate of an Authorized Officer of each Loan Party, certifying the
names and true signatures of the representatives of such Loan Party authorized
to sign each Loan Document to which such Loan Party is or will be a party and
the other documents to be executed and delivered by such Loan Party in
connection herewith and therewith, together with evidence of the incumbency of
such authorized officers;
 
(viii) a certificate of the appropriate official(s) of the state of organization
and each state of foreign qualification of each Loan Party certifying as to the
subsistence in good standing of, and the payment of taxes by, such Loan Party in
such states;
 
(ix) a true and complete copy of the charter, certificate of formation,
certificate of limited partnership or other publicly filed organizational
document of each Loan Party certified as of a recent date not more than 30 days
prior to the Effective Date by an appropriate official of the state of
organization of such Loan Party which shall set forth the same complete name of
such Loan Party as is set forth herein and the organizational number of such
Loan Party, if an organized number is issued in such jurisdiction;
 
(x) a copy of the charter and by-laws, limited liability company agreement,
operating agreement, agreement of limited partnership or other organizational
document of each Loan Party, together with all amendments thereto, certified as
of the Effective Date by an Authorized Officer of such Loan Party;
 
(xi) an opinion of Jones, Walker, Waechter, Poitevent, Carrère & Denègre,
L.L.P., counsel to the Loan Parties, substantially in the form of Exhibit
5.01(d) and as to such other matters as the Collateral Agent may reasonably
request;
 
(xii) a certificate of an Authorized Officer of each Loan Party, certifying as
to the matters set forth in Section 5.01(b);
 
(xiii) a copy of the Financial Statements, together with a certificate of an
Authorized Officer of the Borrower setting forth all existing Indebtedness,
pending or threatened litigation or claims and other contingent liabilities of
the Borrower and its Subsidiaries;
 
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(xiv) a copy of the financial projections described in Section 6.01(g)(ii),
which projections shall be satisfactory in form and substance to the Agents;
 
(xv) a certificate of an Authorized Officer of the Borrower, setting forth in
reasonable detail the calculations required to establish compliance, on a pro
forma basis immediately after giving effect to the consummation of the
Acquisition, with each of the financial covenants contained in Section 7.03;
 
(xvi) a certificate of an Authorized Officer of each Loan Party, certifying as
to the solvency of such Loan Party, which certificate shall be satisfactory in
form and substance to the Collateral Agent;
 
(xvii) evidence of the insurance coverage required by Section 7.01 and the terms
of each Security Agreement, with such endorsements adding the Collateral Agent
as a named insured or loss payee thereunder as the Collateral Agent may request
and providing that such policy may be terminated or canceled (by the insurer or
the insured thereunder) only upon 30 days prior written notice to the Collateral
Agent and each such named insured or loss payee;
 
(xviii) a certificate of an Authorized Officer of the Borrower, certifying the
names and true signatures of the persons that are authorized to provide Notices
of Borrowing, and all other notices under this Agreement and the other Loan
Documents;
 
(xix) a collateral access agreement, in form and substance satisfactory to the
Collateral Agent, limited to the Borrower’s headquarters sites and any owned or
leased real property where material books and records of the Borrower or its
Subsidiaries are retained;
 
(xx) copies of (a) the Acquisition Documents, and (b) the other Material
Contracts as in effect on the Effective Date, certified as true and correct
copies thereof by an Authorized Officer of the Borrower, together with a
certificate of an Authorized Officer of the Borrower stating that such
agreements remain in full force and effect and that none of the Loan Parties has
breached or defaulted in any of its obligations under such agreements;
 
(xxi) the Borrower shall have received all material licenses, approvals or
evidence of other actions required by any Governmental Authority (including
under HSR if applicable) in connection with the execution and delivery by the
Borrower of the Acquisition Documents and with the consummation of the
transactions contemplated thereby;
 
(xxii) a termination and release agreement with respect to the Existing Credit
Facility and all related documents, duly executed by the Loan Parties and the
Existing Lender, together with a satisfaction of mortgage for each mortgage
filed by the Existing Lender and termination statements for all financing
statements filed by the Existing Lender and covering any portion of the
Collateral;
 
(xxiii) such depository account, blocked account, lockbox account and similar
agreements and other documents, each in form and substance satisfactory to the
Agents, as the Agents may request with respect to the Borrower’s cash management
system; and
 
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(xxiv) a certificate of an Authorized Officer of the Borrower, certifying that
attached thereto are complete and correct copies of the Acquisition Agreement;
 
(xxv) such other agreements, instruments, approvals, opinions and other
documents, each satisfactory to the Collateral Agent in form and substance, as
the Collateral Agent may reasonably request.
 
(e) Material Adverse Effect. The Collateral Agent shall have determined, in its
sole judgment, that no event or development shall have occurred since October
31, 2005 which could reasonably be expected to result in a Material Adverse
Effect.
 
(f) Consummation of Acquisition. The Collateral Agent shall have received (i)
evidence reasonably satisfactory to it that the Acquisition shall have been
consummated pursuant to the Acquisition Agreement (no provision of which shall
have been amended or otherwise modified or waived in any material respect
without the prior written consent of the Collateral Agent) (ii) a certificate of
an Authorized Officer of the Borrower certifying (A) that all conditions
precedent to the consummation of the Acquisition shall have been satisfied
(other than the payment of the Purchase Price), and (B) that all material
consents, approvals, authorizations (including any required by HSR), licenses,
permits, entitlements and accreditations required in connection with the
Acquisition Documents shall have been obtained.
 
(g) [intentionally omitted]
 
(h) Proceedings; Receipt of Documents. All proceedings in connection with the
making of the initial Loans and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be satisfactory to the Collateral Agent and its counsel, and the
Collateral Agent and such counsel shall have received all such information and
such counterpart originals or certified or other copies of such documents as the
Collateral Agent or such counsel may reasonably request.
 
(i) Management Reference Checks. The Collateral Agent shall have received
satisfactory reference checks for key management of each Loan Party.
 
(j) Due Diligence. The Agents shall have completed their business and legal due
diligence with respect to each Loan Party and the results thereof shall be
acceptable to the Agents, in their sole and absolute discretion.
 
(k) Consents. The Borrower shall have obtained all necessary or appropriate
consents or approvals of the Gaming Authorities to the Acquisition, this
Agreement and the transactions evidenced thereby or hereby. All such consents
and approvals of the Gaming Authorities shall be provided to the Agents and be
in form and substance satisfactory to the Agents.
 
(l) Availability. After giving effect to all Loans to be made on the Effective
Date, the Availability plus Qualified Cash shall not be less than $5,000,000.
The Borrower shall deliver to the Collateral Agent a certificate of the chief
financial officer of the Borrower certifying as to the calculation of
Availability.
 
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Section 5.02 Conditions Precedent to All Loans. The obligation of any Agent or
any Lender to make any Loan is subject to the fulfillment of each of the
following conditions precedent:
 
(a) Payment of Fees, Etc. The Borrower shall have paid all fees, costs, expenses
and taxes then payable by the Borrower pursuant to this Agreement and the other
Loan Documents, including Sections 2.06 and 12.04.
 
(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct, and the submission by the Borrower to the
Administrative Agent of a Notice of Borrowing with respect to each such Loan,
and the Borrower’s acceptance of the proceeds of such Loan, shall each be deemed
to be a representation and warranty by each Loan Party on the date of such Loan
that: (i) the representations and warranties contained in Article VI and in each
other Loan Document, certificate or other writing delivered any Agent or any
Lender pursuant hereto or thereto on or prior to the date of such Loan are true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of such date
as though made on and as of such date, and (ii) at the time of and immediately
after giving effect to the making of such Loan and the application of the
proceeds thereof, no Default or Event of Default has occurred and is continuing
or would result from the making of the Loan to be made.
 
(c) Legality. The making of such Loan shall not contravene any law, rule or
regulation applicable to any Agent or any Lender; provided, however, that the
Borrower shall have the right to replace any Lender to prevent the contravention
of any law, rule or regulation applicable to such Lender. Any such replacement
Lender must be reasonably acceptable to the Agents.
 
(d) Notices. The Administrative Agent shall have received a Notice of Borrowing
pursuant to Section 2.02.
 
ARTICLE VI
 
REPRESENTATIONS AND WARRANTIES
 
Section 6.01 Representations and Warranties. Each Loan Party hereby represents
and warrants to the Agents and the Lenders as follows:
 
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the state or jurisdiction of its
organization, (ii) has all requisite power and authority to conduct its business
as now conducted and as currently contemplated and, in the case of the Borrower,
to make the borrowings hereunder, and to execute and deliver each Loan Document
to which it is a party, and to consummate the transactions contemplated thereby,
and (iii) except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect, is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary.
 
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(b) Authorization, Etc. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is or will be a party, (i) have been
duly authorized by all necessary action, (ii) do not and will not contravene its
charter or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (iv) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.
 
(c) Governmental Approvals. Except as set forth on Schedule 6.01(c), no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority is required in connection with the due execution,
delivery and performance by any Loan Party of any Loan Document to which it is
or will be a party.
 
(d) Enforceability of Loan Documents. This Agreement is, and each other Loan
Document to which any Loan Party is or will be a party, when delivered
hereunder, will be, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
 
(e) Subsidiaries. Schedule 6.01(e) is a complete and correct description of the
name, jurisdiction of incorporation and ownership of the outstanding Capital
Stock of each Subsidiary of the Borrower. All of the issued and outstanding
shares of Capital Stock of such Subsidiaries have been validly issued and are
fully paid and non-assessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. Except as indicated on such
Schedule, all such Capital Stock is owned by the Borrower or one or more of its
wholly-owned Subsidiaries, free and clear of all Liens. There are no outstanding
debt or equity securities of the Borrower or any of its Subsidiaries and no
outstanding obligations of the Borrower or any of its Subsidiaries convertible
into or exchangeable for, or warrants, options or other rights for the purchase
or acquisition from the Borrower or any of its Subsidiaries, or other
obligations of any Subsidiary to issue, directly or indirectly, any shares of
Capital Stock of any Subsidiary of the Borrower.
 
(f) Litigation; Commercial Tort Claims. Except as set forth in Schedule 6.01(f),
(i) there is no pending or, to the knowledge of any Loan Party, threatened
action, suit or proceeding affecting any Loan Party before any court or other
Governmental Authority or any arbitrator that (A) as to which there is both a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect
or (B) relates to this Agreement or any other Loan Document or any transaction
contemplated hereby or thereby and (ii) as of the Effective Date, none of the
Loan Parties holds any commercial tort claims in respect of which a claim has
been filed in a court of law or a written notice by an attorney has been given
to a potential defendant.
 
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(g) Financial Condition.
 
(i) The Financial Statements, copies of which have been delivered to each Agent
and each Lender, fairly present, in all material respects, the consolidated
financial condition of the Borrower and its Subsidiaries as at the respective
dates thereof and the consolidated results of operations of the Borrower and its
Subsidiaries for the fiscal periods ended on such respective dates, all in
accordance with GAAP, and since October 31, 2005 no event or development has
occurred that has had or could reasonably be expected to result in a Material
Adverse Effect.
 
(ii) The Borrower has heretofore furnished to each Agent and each Lender
(A) projected monthly balance sheets, income statements and statements of cash
flows of the Borrower and its Subsidiaries for the period from November 2006,
through October 2007, and (B) projected annual balance sheets, income statements
and statements of cash flows of the Borrower and its Subsidiaries for the Fiscal
Years ending in 2007 through 2010, which projected financial statements shall be
updated from time to time pursuant to Section 7.01(a)(vii). Such projections, as
so updated, are believed by the Borrower at the time furnished to be reasonable,
have been prepared on a reasonable basis and in good faith by the Borrower, and
have been based on assumptions believed by the Borrower to be reasonable at the
time made and upon the best information then reasonably available to the
Borrower, and the Borrower is not aware of any facts or information that would
lead it to believe that such projections, as so updated, are incorrect or
misleading in any material respect.
 
(h) Compliance with Law, Etc. No Loan Party is in violation of its
organizational documents, any law, rule, regulation, judgment or order of any
Governmental Authority or Gaming Authority applicable to it or any of its
property or assets, or any material term of any agreement or instrument
(including any Material Contract) binding on or otherwise affecting it or any of
its properties, and except for those violations that could not reasonably be
expected to result in a Material Adverse Effect, no Default or Event of Default
has occurred and is continuing.
 
(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee Plan is in
substantial compliance with ERISA and the IRC, (ii) no Termination Event has
occurred nor is reasonably expected to occur with respect to any Employee Plan,
(iii) the most recent annual report (Form 5500 Series) with respect to each
Employee Plan, including any required Schedule B (Actuarial Information)
thereto, copies of which have been filed with the Internal Revenue Service and
delivered to the Agents, is complete and correct and fairly presents the funding
status of such Employee Plan, and since the date of such report there has been
no material adverse change in such funding status, (iv) copies of each agreement
entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue
Service with respect to any Employee Plan have been delivered to the Agents,
(v) no Employee Plan had an accumulated or waived funding deficiency or
permitted decrease which would create a deficiency in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the IRC at any time during the previous 60 months, and
(vi) no Lien imposed under the IRC or ERISA exists or is likely to arise on
account of any Employee Plan within the meaning of Section 412 of the IRC.
Except as set forth on Schedule 6.01(i), no Loan Party or any of its ERISA
Affiliates has incurred any withdrawal liability under ERISA with respect to any
Multiemployer Plan, or is aware of any facts indicating that it or any of its
ERISA Affiliates may in the future incur any such withdrawal liability. No Loan
Party or any of its ERISA Affiliates nor any fiduciary of any Employee Plan has
(A) engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the IRC, (B) failed to pay any required installment or other
payment required under Section 412 of the IRC on or before the due date for such
required installment or payment, (C) engaged in a transaction within the meaning
of Section 4069 of ERISA or (D) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid. There are no pending or, to the
knowledge of any Loan Party, threatened claims, actions, proceedings or lawsuits
(other than claims for benefits in the normal course) asserted or instituted
against (1) any Employee Plan or its assets, (2) any fiduciary with respect to
any Employee Plan, or (3) any Loan Party or any of its ERISA Affiliates with
respect to any Employee Plan. Except as required by Section 4980B of the
Internal Revenue Code, no Loan Party or any of its ERISA Affiliates maintains an
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of any Loan Party or any of its
ERISA Affiliates or coverage after a participant’s termination of employment.
 
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(j) Taxes, Etc. All Federal, state and local tax returns and other reports
required by applicable law to be filed by any Loan Party have been filed, or
extensions have been obtained, and all taxes, assessments and other governmental
charges imposed upon any Loan Party or any property of any Loan Party and which
have become due and payable have been paid, except to the extent the failure to
pay could not reasonably be expected to have a Material Adverse Effect or to the
extent contested in good faith by proper proceedings which stay the imposition
of any penalty, fine or Lien resulting from the non-payment thereof and, in each
case, with respect to which adequate reserves have been set aside for the
payment thereof in accordance with GAAP.
 
(k) Regulations T, U and X. No Loan Party is or will be engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation T, U or X), and no proceeds of any Loan will
be used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock.
 
(l) Nature of Business. No Loan Party is engaged in any business other than as
set forth on Schedule 6.01(l).
 
(m) Adverse Agreements, Etc. No Loan Party is a party to any agreement or
instrument, or subject to any charter, limited liability company agreement,
partnership agreement or other corporate, partnership or limited liability
company restriction or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority, which has, or could
reasonably be expected to result in, a Material Adverse Effect.
 
(n) [intentionally omitted]
 
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(o) Properties.  
 
(i) Each Loan Party has good and marketable title to, valid leasehold interests
in, or valid licenses to use, all property and assets material to its business,
free and clear of all Liens, except Permitted Liens. All such properties and
assets are in good working order and condition, ordinary wear and tear excepted.
 
(ii) Schedule 6.01(o) sets forth a complete and accurate list, as of the
Effective Date, of the location, by state and street address, of all real
property owned or leased by each Loan Party. As of the Effective Date, each Loan
Party has valid leasehold interests in the Leases described on Schedule 6.01(o)
to which it is a party. Schedule 6.01(o) sets forth with respect to each such
Lease, the commencement date, termination date, renewal options (if any) and
annual base rents. Each such Lease is valid and enforceable in accordance with
its terms in all material respects and is in full force and effect. No consent
or approval of any landlord or other third party in connection with any such
Lease is necessary for any Loan Party to enter into and execute the Loan
Documents to which it is a party, except as set forth on Schedule 6.01(o). To
the knowledge of any Loan Party, no other party to any such Lease is in default
of its obligations thereunder, and no Loan Party (or any other party to any such
Lease) has at any time delivered or received any notice of default which remains
uncured under any such Lease and, as of the Effective Date, no event has
occurred which, with the giving of notice or the passage of time or both, would
constitute a default under any such Lease.
 
(p) Full Disclosure. Each Loan Party has disclosed to the Agents all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Agents in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which it was made, not misleading; provided that,
with respect to projected financial information, each Loan Party represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time. There is no contingent liability or fact known to
a Loan Party that could reasonably be expected to result in a Material Adverse
Effect which has not been set forth in a footnote included in the Financial
Statements or a Schedule hereto.
 
(q) Operating Lease Obligations. On the Effective Date, none of the Loan Parties
has any Operating Lease Obligations other than the Operating Lease Obligations
set forth on Schedule 6.01(q).
 
(r) Environmental Matters. Except as set forth on Schedule 6.01(r), (i) the
operations of each Loan Party are in compliance in all material aspects with all
Environmental Laws; (ii) there has been no Release at any of the properties
owned or operated by any Loan Party, or to its knowledge, at any disposal or
treatment facility which received Hazardous Materials generated by any Loan
Party which could reasonably be expected to result in a Material Adverse Effect;
(iii) no Environmental Action has been asserted against any Loan Party nor does
any Loan Party have knowledge or notice of any threatened or pending
Environmental Action against any Loan Party which could reasonably be expected
to result in a Material Adverse Effect; (iv) to its knowledge, no Environmental
Actions have been asserted against any facilities that may have received
Hazardous Materials generated by any Loan Party which could reasonably be
expected to result in a Material Adverse Effect; (v) no property now or formerly
owned or occupied by a Loan Party has been used as a treatment or disposal site
for any Hazardous Material by such Loan Party in violation of the Environmental
Law where such violation could reasonably be expected to have a Material Adverse
Effect; (vi) no Loan Party has failed to report to the proper Governmental
Authority the occurrence of any Release which is required to be so reported by
such Loan Party under any Environmental Laws which could reasonably be expected
to result in a Material Adverse Effect; (vii) each Loan Party holds all
licenses, permits and approvals required under any Environmental Laws in
connection with the operation of the business carried on by it, except for such
licenses, permits and approvals as to which a Loan Party’s failure to maintain
or comply with could not reasonably be expected to result in a Material Adverse
Effect; and (viii) no Loan Party has received any notification pursuant to any
Environmental Laws that (A) any work, repairs, construction or Capital
Expenditures are required to be made in respect of any of its properties as a
condition of continued compliance with any Environmental Laws, or any license,
permit or approval issued pursuant thereto or (B) any license, permit or
approval referred to above is about to be reviewed, made subject to limitations
or conditions, revoked, withdrawn or terminated, in each case, except as could
not reasonably be expected to result in a Material Adverse Effect.
 
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(s) Insurance. Each Loan Party keeps its property adequately insured and
maintains (i) insurance to such extent and against such risks, including fire,
as is customary with companies in the same or similar businesses, (ii) worker’s
compensation insurance in the amount required by applicable law, (iii) public
liability insurance, which shall include product liability insurance, in the
amount customary with companies in the same or similar business against claims
for personal injury or death on properties owned, occupied or controlled by it,
and (iv) such other insurance as may be required by law or as may be reasonably
required by the Collateral Agent (including against larceny, embezzlement or
other criminal misappropriation). Schedule 6.01(s) sets forth a list of all
insurance maintained by each Loan Party on the Effective Date.
 
(t) Use of Proceeds. The proceeds of the Loans shall be used for general
corporate purposes and any lawful purpose not prohibited by this Agreement
including to (i) finance the payment of a portion of the consideration payable
to complete the Acquisition, (ii) refinance certain indebtedness owing to Wells
Fargo Bank, National Association, (iii) pay fees and expenses in connection with
the Acquisition and transactions contemplated hereby, (iv) fund the Earn Out
Payment and (v) fund working capital of the Borrower.
 
(u) Solvency. After giving effect to the transactions contemplated by this
Agreement and before and immediately after giving effect to each Loan, each Loan
Party is, and the Loan Parties on a consolidated basis are, Solvent.
 
(v) Location of Bank Accounts. Schedule 6.01(v) sets forth a complete and
accurate list as of the Effective Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Loan Party, together with a
description thereof (i.e., the bank or broker dealer at which such deposit or
other account is maintained and the account number and the purpose thereof).
 
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(w) Intellectual Property. Except as set forth on Schedule 6.01(w), each Loan
Party owns or licenses or otherwise has the right to use all licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations,
non-governmental licenses and permits and other intellectual property rights
that are necessary for the operation of its business, without infringement upon
or conflict with the rights of any other Person with respect thereto, except for
such infringements and conflicts which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect. Set forth on
Schedule 6.01(w) is a complete and accurate list as of the Effective Date of all
such material licenses, permits, patents, patent applications, trademarks,
trademark applications, service marks, tradenames, copyrights, copyright
applications, franchises, authorizations, non-governmental licenses and permits
and other intellectual property rights of each Loan Party. No slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party infringes
upon or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened, except for
such infringements and conflicts which could not reasonably be expected to
result in, individually or in the aggregate, a Material Adverse Effect. To the
knowledge of each Loan Party, no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed, which, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
 
(x) Material Contracts. As of the Effective Date, the Borrower has no Material
Contracts.
 
(y) Investment Company Act. None of the Loan Parties is an “investment company”
or an “affiliated person” or “promoter” of, or “principal underwriter” of or
for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended.
 
(z) Employee and Labor Matters. There is (i) no unfair labor practice complaint
pending or, to the knowledge of any Loan Party, threatened against any Loan
Party before any Governmental Authority and no grievance or arbitration
proceeding pending or threatened against any Loan Party which arises out of or
under any collective bargaining agreement, (ii) no strike, labor dispute,
slowdown, stoppage or similar action or grievance pending or, to its knowledge,
threatened against any Loan Party or (iii) to the knowledge of any Loan Party,
no union representation question existing with respect to the employees of any
Loan Party and no union organizing activity taking place with respect to any of
the employees of any Loan Party. No Loan Party or any of its ERISA Affiliates
has incurred any liability or obligation under the Worker Adjustment and
Retraining Notification Act (“WARN”) or similar state law, which remains unpaid
or unsatisfied. The hours worked and payments made to employees of any Loan
Party have not been in violation of the Fair Labor Standards Act or any other
applicable legal requirements, except to the extent such violations could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. All material payments due from any Loan Party on account of
wages and employee health and welfare insurance and other benefits have been
paid or accrued as a liability on the books of such Loan Party, except where the
failure to do so could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
 
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(aa) Customers and Suppliers. Other than in the ordinary course of business,
there exists no actual or threatened termination, cancellation or material
limitation of the business relationship between (i) any Loan Party, on the one
hand, and any customer or any group thereof, on the other hand, whose agreements
with any Loan Party are individually or in the aggregate material to the
business or operations of such Loan Party, or (ii) any Loan Party, on the one
hand, and any material supplier thereof, on the other hand.
 
(bb) No Bankruptcy Filing. No Loan Party is contemplating either the filing of a
petition by it under any state, federal or foreign bankruptcy or insolvency laws
or the liquidation of all or a major portion of such Loan Party’s assets or
property, and no Loan Party has any knowledge of any Person contemplating the
filing of any such petition against it.
 
(cc) Separate Existence.
 
(i) All customary formalities regarding the separate existence of each Loan
Party have been at all times since its formation observed.
 
(ii) Each Loan Party has at all times since its formation accurately maintained
its financial statements, accounting records and other organizational documents
separate from those of any Affiliate of such Loan Party and any other Person. No
Loan Party has at any time since its formation commingled its assets with those
of any of its Affiliates or any other Person. Each Loan Party has at all times
since its formation accurately maintained its own bank accounts and separate
books of account.
 
(iii) Each Loan Party has at all times since its formation paid its own
liabilities from its own separate assets.
 
(iv) Each Loan Party has at all times since its formation identified itself in
all dealings with the public, under its own name and as a separate and distinct
Person. No Loan Party has at any time since its formation identified itself as
being a division or a part of any other Person.
 
(dd) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 6.01(dd) sets forth a
complete and accurate list as of the date hereof of (i) the exact legal name of
each Loan Party, (ii) the jurisdiction of organization of each Loan Party,
(iii) the organizational identification number of each Loan Party (or indicates
that such Loan Party has no organizational identification number), (iv) each
place of business of each Loan Party, (v) the chief executive office of each
Loan Party and (vi) the federal employer identification number of each Loan
Party.
 
(ee) Tradenames. Schedule 6.01(ee) hereto sets forth a complete and accurate
list as of the Effective Date of all tradenames used by each Loan Party.
 
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(ff) Locations of Collateral. As of the Effective Date, there is no location at
which any Loan Party has any Collateral (except for Inventory in transit) other
than those locations listed on Schedule 6.01(ff). Additionally,
Schedule 6.01(ff) hereto contains a true, correct and complete list, as of the
Effective Date, of the legal names and addresses of each warehouse at which
Collateral of each Loan Party is stored. None of the receipts received by any
Loan Party from any warehouse states that the goods covered thereby are to be
delivered to bearer or to the order of a named Person or to a named Person and
such named Person’s assigns.
 
(gg) Security Interests. Each Security Agreement creates in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, a legal, valid
and enforceable security interest in the Collateral covered thereby. Upon the
filing of the financing statements described in Section 5.01(d)(iv), such
security interests in and Liens on the Collateral granted thereby shall be
perfected, first priority security interests (subject to Permitted Liens), and
no further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens.
 
(hh) Schedules. All of the information which is required to be scheduled to this
Agreement is set forth on the Schedules attached hereto, is correct and accurate
in all material respects and does not omit to state any information material
thereto.
 
(ii) Representations and Warranties in Documents; No Default. All
representations and warranties set forth in this Agreement and the other Loan
Documents are true and correct in all respects at the time as of which such
representations were made and on the Effective Date. No Event of Default has
occurred and is continuing and no condition exists which constitutes a Default
or an Event of Default.
 
(jj) Acquisition Documents. As of the Effective Date, the Borrower have
delivered to the Agents a complete and correct copy of the material Acquisition
Documents (including all schedules, exhibits, amendments, supplements,
modifications, and assignments). No Loan Party that is a party thereto is in
default in the performance or compliance with any provisions thereof. The
Acquisition Documents comply in all material respects with, and the Acquisition
has been consummated in accordance with, in all material respects, all
applicable laws (including HSR). The Acquisition Documents are in full force and
effect as of the Effective Date and have not been terminated, rescinded or
withdrawn as of such date. The execution, delivery and performance of the
Acquisition Documents do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than consents or approvals that have been obtained
and that are still in full force and effect. To the best of the Loan Parties’
knowledge, none of the representations or warranties of any other Person in any
Acquisition Document contains any untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading.
 
(kk) Licenses and Permits.
 
(i) (A) All material licenses (including all Gaming Licenses), permits, consents
and similar rights required from any Governmental Authority (including all
Gaming Authorities) for the ownership, use or operation of the businesses or
properties now owned or operated by the Borrower or any of its Subsidiaries are
in full force and effect except for such licenses, permits, consents and similar
rights the failure to obtain, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; (B) each of the
Borrower and its Subsidiaries is in compliance, in all material respects, with
all such licenses, permits, consents and similar rights; and (C) none of such
licenses, permits, consents or similar rights is the subject of any pending or,
to the best of Borrower’s knowledge, threatened litigation or other proceeding
of any kind. As of the Effective Date (and as of each subsequent date on which
the Borrower delivers to the Administrative Agent an updated schedule pursuant
hereto), set forth on Schedule 6.01(kk) is a complete and accurate list of all
such material licenses (including all Gaming Licenses), permits, consents and
similar rights that are necessary and appropriate for the operation of the
Borrower’s and its Subsidiaries’ businesses, and such schedule identifies the
date by which an application for the renewal of such license, permit, consent or
similar right must be filed and describes the status of each such pending
application.
 
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(ii) The Borrower and its Subsidiaries have obtained all necessary approvals of
the Gaming Authorities for (A) the execution and delivery of the Acquisition
Agreement and the consummation of the Acquisition and all transactions related
thereto, and (B) the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement and all other
Loan Documents.
 
ARTICLE VII
 
COVENANTS OF THE LOAN PARTIES
 
Section 7.01 Affirmative Covenants. So long as any principal of or interest on
any Loan, or any other Obligation (other than unasserted contingent
indemnification Obligations) shall remain unpaid or any Lender shall have any
Commitment hereunder, each Loan Party will and will cause each of its
Subsidiaries to:
 
(a) Reporting Requirements. Furnish to each Agent and each Lender (provided,
that, with respect to consolidating reports, then in such case, only if such
consolidating reports are prepared or otherwise required to be prepared):
 
(i) as soon as available and in any event within 45 days after the end of each
of the first three fiscal quarters of the Borrower, consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Borrower and its Subsidiaries as at the end of the first
three fiscal quarters, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the corresponding
date or period of the immediately preceding Fiscal Year, all in reasonable
detail and certified by an Authorized Officer of the Borrower as fairly
presenting, in all material respects, the financial position of the Borrower and
its Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Borrower and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Borrower and its Subsidiaries furnished to the
Agents and the Lenders, subject to normal year-end audit adjustments and the
absence of footnotes;
 
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(ii) as soon as available, and in any event within 120 days after the end of
each Fiscal Year of the Borrower and its Subsidiaries, consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Borrower and its Subsidiaries as at the end of such Fiscal
Year, setting forth in each case in comparative form the corresponding figures
for the immediately preceding Fiscal Year, all in reasonable detail and prepared
in accordance with GAAP, and accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of recognized standing selected by the
Borrower and satisfactory to the Agents (which opinion shall be without (A) a
“going concern” or like qualification or exception, (B) any qualification or
exception as to the scope of such audit, or (C) any qualification which relates
to the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause any noncompliance with the provisions
of Section 7.03, together with a written statement of such accountants (which
statement may be limited to the extent required by accounting rules or
guidelines) (1) to the effect that, in making the examination necessary for
their audit of such financial statements, they have not obtained any knowledge
of the existence of an Event of Default or a Default under Section 7.03 and
(2) if such accountants shall have obtained any knowledge of the existence of an
Event of Default or such Default under Section 7.03, describing the nature
thereof;
 
(iii) as soon as available, and in any event within 30 days after the end of
each fiscal month of the Borrower and its Subsidiaries, internally prepared
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and
consolidating statements of cash flows as at the end of such fiscal month, and
for the period commencing at the end of the immediately preceding Fiscal Year
and ending with the end of such fiscal month, in each case, all in reasonable
detail and certified by an Authorized Officer of the Borrower as fairly
presenting, in all material respects, the financial position of the Borrower and
its Subsidiaries as at the end of such fiscal month and the results of
operations, retained earnings and cash flows of the Borrower and its
Subsidiaries for such fiscal month, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements furnished
to the Agents and the Lenders, subject to normal year-end audit adjustments and
the absence of footnotes;
 
(iv) simultaneously with the delivery of the financial statements of the
Borrower and its Subsidiaries required by clauses (i), (ii) and (iii) of this
Section 7.01(a), a certificate of an Authorized Officer of the Borrower (A)
stating that such Authorized Officer has reviewed the provisions of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision a review of the condition and operations of the Borrower
and its Subsidiaries during the period covered by such financial statements with
a view to determining whether the Borrower and its Subsidiaries were in
compliance with all of the provisions of this Agreement and such Loan Documents
at the times such compliance is required hereby and thereby, and that such
review has not disclosed, and such Authorized Officer has no knowledge of, the
existence during such period of an Event of Default or Default or, if an Event
of Default or Default existed, describing the nature and period of existence
thereof and the action which the Borrower and its Subsidiaries propose to take
or have taken with respect thereto and (B) attaching a schedule showing the
calculation of the financial covenants specified in Section 7.03;
 
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(v) as soon as available and in any event within 30 days after the end of each
fiscal month of the Borrower and its Subsidiaries, reports in form and detail
satisfactory to the Agents and certified by an Authorized Officer of the
Borrower as being accurate and complete (A) listing all Accounts Receivable of
the Borrower as of such day, which shall include the amount and age of each
Account Receivable, showing separately those which are more than 30, 60, 90 and
120 days old and a description of all Liens, set-offs, defenses and
counterclaims with respect thereto, together with a reconciliation of such
schedule with the schedule delivered to the Agents pursuant to this
clause (v)(A) for the immediately preceding fiscal month, the name and mailing
address of each Account Debtor with respect to each such Account Receivable and
such other information as any Agent may request, (B) listing all accounts
payable of the Borrower as of each such day which shall include the amount and
age of each account payable, the name and mailing address of each account
creditor and such other information as any Agent may request, and (C) listing
all Inventory of the Borrower, in excess of $100,000 in value, as of each such
day, and containing a breakdown of such Inventory by type and amount, the cost
and the current market value thereof (by location), the date of acquisition, the
warehouse and production facility location and such other information as any
Agent may request, all in detail and in form satisfactory to the Agents;
 
(vi) as soon as available and in any event within 30 Business Days after the end
of each month commencing with the first month ending after the Effective Date, a
Borrowing Base Certificate, supported by schedules showing the derivation
thereof and containing such detail and other information as any Agent may
request from time to time, provided that (A) the Borrowing Base set forth in the
Borrowing Base Certificate shall be effective from and including the date such
Borrowing Base Certificate is duly received by the Agents but not including the
date on which a subsequent Borrowing Base Certificate is received by the Agents,
unless any Agent disputes the eligibility of any property included in the
calculation of the Borrowing Base or the valuation thereof by notice of such
dispute to the Borrower and (B) in the event of any dispute about the
calculation or composition of the Borrowing Base, such Agent’s good faith
judgment shall control;
 
(vii) no later than 45 days after the commencement of each Fiscal Year,
financial projections, supplementing and superseding the financial projections
for the period referred to in Section 6.01(g)(ii)(A), displayed on a month by
month basis and otherwise in form and substance reasonably satisfactory to the
Agents for such Fiscal Year for the Borrower and its Subsidiaries, all such
financial projections to be prepared on a reasonable basis and in good faith,
and to be based on assumptions believed by the Borrower to be reasonable at the
time made and from the best information then available to the Borrower;
 
(viii) promptly after submission to any Governmental Authority, all documents
and information furnished to such Governmental Authority in connection with any
material or formal investigation of any Loan Party other than routine inquiries
by such Governmental Authority;
 
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(ix) as soon as possible, and in any event within 3 Business Days of an
Authorized Officer’s knowledge of an Event of Default or Default or the
occurrence of any event or development that could reasonably be expected to
result in a Material Adverse Effect, the written statement of an Authorized
Officer of the Borrower setting forth the details of such Event of Default or
Default or other event or development having a Material Adverse Effect and the
action which the affected Loan Party proposes to take with respect thereto;
 
(x) (A) as soon as possible and in any event within 10 days after any Loan Party
or any ERISA Affiliate thereof knows or has reason to know that (1) any
Reportable Event with respect to any Employee Plan has occurred, (2) any other
Termination Event with respect to any Employee Plan has occurred, or (3) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the IRC with respect to an Employee
Plan, a statement of an Authorized Officer of the Borrower setting forth the
details of such occurrence and the action, if any, which such Loan Party or such
ERISA Affiliate proposes to take with respect thereto, (B) promptly and in any
event within 3 days after receipt thereof by any Loan Party or any ERISA
Affiliate thereof from the PBGC, copies of each notice received by any Loan
Party or any ERISA Affiliate thereof of the PBGC’s intention to terminate any
Plan or to have a trustee appointed to administer any Plan, (C) promptly and in
any event within 10 days after the filing thereof with the Internal Revenue
Service if requested by any Agent, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each
Employee Plan and Multiemployer Plan, (D) promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate thereof knows or has reason to
know that a required installment within the meaning of Section 412 of the IRC
has not been made when due with respect to an Employee Plan, (E) promptly and in
any event within 3 days after receipt thereof by any Loan Party or any ERISA
Affiliate thereof from a sponsor of a Multiemployer Plan or from the PBGC, a
copy of each notice received by any Loan Party or any ERISA Affiliate thereof
concerning the imposition or amount of withdrawal liability under Section 4202
of ERISA or indicating that such Multiemployer Plan may enter reorganization
status under Section 4241 of ERISA, and (F) promptly and in any event within 10
days after any Loan Party or any ERISA Affiliate thereof sends notice of a plant
closing or mass layoff (as defined in WARN) to employees, copies of each such
notice sent by such Loan Party or such ERISA Affiliate thereof;
 
(xi) promptly after the commencement thereof but in any event not later than 5
Business Days after service of process with respect thereto on, or the obtaining
of knowledge thereof by, any Loan Party, notice of each action, suit or
proceeding before any court or other Governmental Authority or other regulatory
body or any arbitrator which, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
 
(xii) as soon as possible and in any event within 5 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with any Material Contract;
 
(xiii) promptly after the sending or filing thereof, copies of all statements,
reports and other information any Loan Party sends to any holders of its
Indebtedness or its securities or files with the SEC or any national (domestic
or foreign) securities exchange;
 
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(xiv) promptly upon receipt thereof, copies of all material, non-routine
financial reports (including management letters), if any, submitted to any Loan
Party by its auditors in connection with any annual or interim audit of the
books thereof; and
 
(xv) as soon as possible and in any event within 5 Business Days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party executes or receives in connection with the sale or other Disposition
of the Capital Stock of, or all or substantially all of the assets of, any Loan
Party; and
 
(xvi) promptly upon request, such other information concerning the condition or
operations, financial or otherwise, of any Loan Party as any Agent may from time
to time may reasonably request.
 
(b) Additional Guaranties and Collateral Security. Cause:
 
(i) each Subsidiary of any Loan Party (the “New Subsidiary”) to execute and
deliver to the Collateral Agent promptly and in any event within 3 Business Days
after the formation or acquisition thereof (A) a Guaranty guaranteeing the
Obligations, (B) a Security Agreement, together with (x) if such New Subsidiary
has any Domestic Subsidiaries, (I) certificates (if any) evidencing all of the
Capital Stock of such Subsidiary owned by such New Subsidiary, (II) undated
stock powers executed in blank, and (III) such opinions of counsel and such
approving certificate of such Subsidiary as either Agent may reasonably request
in respect of complying with any legend on any such certificate or any other
matter relating to such shares, and (y) if such New Subsidiary has any
first-tier Subsidiaries that are CFCs, (I) certificates (if any) evidencing all
(or, 65% of the outstanding voting Capital Stock of such Subsidiary if pledging
or hypothecating more than 65% of the total outstanding voting Capital Stock of
such Subsidiary reasonably could be expected to result in material adverse tax
consequences to the Loan Parties) of the outstanding voting Capital Stock of
such Subsidiary, (II) undated stock powers executed in blank with signature
guaranteed, and (III) such opinions of counsel and such approving certificate of
such Subsidiary as either Agent may reasonably request in respect of complying
with any legend on any such certificate or any other matter relating to such
shares, (C) if such New Subsidiary has a fee interest in any real property that
would constitute After Acquired Property if it were acquired by a Loan Party,
one or more mortgages creating on such real property a perfected, first priority
Lien on such real property, and, if requested by the Collateral Agent, a title
insurance policy covering such real property, a current ALTA survey of such real
property and a surveyor’s certificate, a Phase I Environmental Site Assessment
with respect to such real property, certified to the Collateral Agent by a
company reasonably satisfactory to the Collateral Agent, each in form and
substance reasonably satisfactory to the Agents, together with such other
agreements, instruments and documents as either Agent may reasonably require
whether comparable to the documents required under Section 7.01(o) or otherwise,
and (D) such other agreements, instruments, approvals, legal opinions, or other
documents reasonably requested by either Agent in order to create, perfect,
establish the first priority of or otherwise protect any Lien purported to be
covered by any such Security Agreement or mortgage, or otherwise to effect the
intent that such New Subsidiary shall become bound by all of the terms,
covenants and agreements contained in the Loan Documents and that all property
and assets of such New Subsidiary shall become Collateral for the Obligations;
provided that the foregoing Guaranty and Security Agreement shall not be
required to be provided to the Collateral Agent with respect to any New
Subsidiary of a Loan Party that is a CFC if providing such documents would
result in material adverse tax consequences to the Loan Parties; and
 
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(ii) each Loan Party that is the owner of the Capital Stock of such New
Subsidiary to execute and deliver promptly and in any event within 3 Business
Days after the formation or acquisition of such New Subsidiary a joinder to the
Security Agreement (if it is not already a party thereto), together with (A) if
such New Subsidiary is not a CFC or is a CFC and the pledge of 100% of the
voting Capital Stock of such CFC would not result in material adverse tax
consequences to the Loan Parties, (w) certificates (if any) evidencing all of
the Capital Stock of such New Subsidiary, (x) undated stock powers or other
appropriate instruments or assignment executed in blank with signature
guaranteed, (y) such opinions of counsel and such approving certificate of such
New Subsidiary as the Agents may reasonably request in respect of complying with
any legend on any such certificate or any other matter relating to such shares,
and (z) such other agreements, instruments, approvals, legal opinions, or other
documents, or (B) if such New Subsidiary is a CFC and the granting of a pledge
of more than 65% of the voting Capital Stock of such CFC would result in
material adverse tax consequences to the Loan Parties, (w) certificates (if any)
evidencing 65% of the outstanding voting Capital Stock of such New Subsidiary,
(x) undated stock powers or other appropriate instruments or assignment executed
in blank with signature guarantee, (y) such opinions of counsel and such
approving certificate of such New Subsidiary as the Agents may reasonably
request in respect of complying with any legend on any such certificate or any
other matter relating to such shares, and (z) such other agreements,
instruments, approvals, legal opinions, or other documents reasonably requested
by either Agent.
 
(c) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects with all applicable laws, rules, regulations,
orders (including, without limitation, all Environmental Laws and Gaming Laws),
judgments and awards (including any settlement of any claim that, if breached,
could give rise to any of the foregoing), such compliance to include (i) paying
before the same become delinquent all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any of
its properties except to the extent failure to pay could not reasonably be
expected to have a Material Adverse Effect or (ii) paying all other lawful
claims which if unpaid might become a Lien or charge upon any of its properties,
except, in the case of both clauses (i) and (ii), to the extent contested in
good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof in accordance with
GAAP, and (iii) filing a report with the appropriate Gaming Authorities with
respect to the Acquisition, this Agreement and all transactions contemplated
thereby or hereby.
 
(d) Preservation of Existence, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, its existence, rights and privileges, and
become or remain, and cause each of its Subsidiaries to become or remain, duly
qualified and in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary; provided, however, that the preceding shall
not apply to GameTech Arizona Corporation, a Subsidiary of Borrower that was
incorporated in Arizona and is expected to be wound down and subsequently
dissolved as soon as possible after the completion of litigation and the passing
of any right of appeal regarding that certain lawsuit Fortunet, Inc. v. GameTech
International, Inc. and GameTech Arizona Corporation (U.S. District Court,
District of Nevada).
 
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(e) Keeping of Records and Books of Account. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, with complete
entries made to permit the preparation of financial statements in accordance
with GAAP.
 
(f) Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the
agents and representatives of any Agent at any time and from time to time during
normal business hours, at the expense of the Borrower, to examine and make
copies of and abstracts from its records and books of account, to visit and
inspect its properties, to verify leases, notes, accounts receivable, deposit
accounts and its other assets, to conduct audits, physical counts, valuations,
appraisals, Phase I Environmental Site Assessments (and, if requested by the
Collateral Agent based upon the results of any such Phase I Environmental Site
Assessment, a Phase II Environmental Site Assessment) or examinations and to
discuss its affairs, finances and accounts with any of its directors, officers,
managerial employees, independent accountants or any of its other
representatives.
 
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties which are necessary
or useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted, and comply, and cause each of its
Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent
any loss or forfeiture thereof or thereunder that would reasonably be expected
to have a Material Adverse Effect.
 
(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations (including comprehensive general liability, hazard, rent and
business interruption insurance) with respect to its properties (including all
real properties leased or owned by it) and business, in such amounts and
covering such risks as is required by any Governmental Authority having
jurisdiction with respect thereto or as is carried generally in accordance with
sound business practice by companies in similar businesses similarly situated
and in any event in amount, adequacy and scope reasonably satisfactory to the
Collateral Agent. All policies covering the Collateral are to be made payable to
the Collateral Agent for the benefit of the Agents and the Lenders, as its
interests may appear, in case of loss, under a standard non-contributory
“lender” or “secured party” clause and are to contain such other provisions as
the Collateral Agent may require to fully protect the Lenders’ interest in the
Collateral and to any payments to be made under such policies. All certificates
of insurance are to be delivered to the Collateral Agent and the policies are to
be premium prepaid, with the loss payable and additional insured endorsement in
favor of the Collateral Agent and such other Persons as the Collateral Agent may
designate from time to time, and shall provide for not less than 30 days prior
written notice to the Collateral Agent of the exercise of any right of
cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, the Collateral Agent may arrange for such insurance, but at the
Borrower’s expense and without any responsibility on the Collateral Agent’s part
for obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. Upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall have
the sole right, in the name of the Lenders, any Loan Party and its Subsidiaries,
to file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.
 
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(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of
its Subsidiaries to obtain, maintain and preserve, and take all necessary action
to timely renew, all permits, licenses, authorizations, approvals, entitlements
and accreditations which are necessary or useful in the proper conduct of its
business.
 
(j) Environmental. (i)  Keep any property either owned or operated by it or any
of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each
of its Subsidiaries to comply, in all material respects with Environmental Laws
and provide to the Collateral Agent any documentation of such compliance which
the Collateral Agent may reasonably request; (iii) provide the Agents written
notice within 5 days of any Release of a Hazardous Material in excess of any
reportable quantity from or onto property owned or operated by it or any of its
Subsidiaries and take any Remedial Actions required to abate said Release;
(iv) promptly provide the Agents with written notice within 10 days of the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any property of any Loan Party or any of its Subsidiaries;
(B) commencement of any Environmental Action or notice that an Environmental
Action will be filed against any Loan Party or any of its Subsidiaries; and
(C) notice of a violation, citation or other administrative order which could
reasonably be expected to result in a Material Adverse Effect and (v) defend,
indemnify and hold harmless the Agents and the Lenders and their transferees,
and their respective employees, agents, officers and directors, from and against
any claims, demands, penalties, fines, liabilities, settlements, damages, costs
or expenses (including attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) arising out of (A) the
presence, disposal, release or threatened release of any Hazardous Materials on
any property at any time owned or occupied by any Loan Party or any of its
Subsidiaries (or its predecessors in interest or title), (B) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (C) any investigation, lawsuit brought
or threatened, settlement reached or government order relating to such Hazardous
Materials, (D) any violation of any Environmental Law or (E) any Environmental
Action filed against any Agent or any Lender.
 
(k) Further Assurances. Take such action and execute, acknowledge and deliver,
and cause each of its Subsidiaries to take such action and execute, acknowledge
and deliver, at its sole cost and expense, such agreements, instruments or other
documents as any Agent may reasonably require from time to time in order (i) to
carry out more effectively the purposes of this Agreement and the other Loan
Documents, (ii) to subject to valid and perfected first priority Liens (subject
to Permitted Liens) any of the Collateral or any other property of any Loan
Party and its Subsidiaries, (iii) to establish and maintain the validity and
effectiveness of any of the Loan Documents and the validity, perfection and
priority of the Liens intended to be created thereby, and (iv) to better assure,
convey, grant, assign, transfer and confirm unto each Agent and each Lender the
rights now or hereafter intended to be granted to it under this Agreement or any
other Loan Document. In furtherance of the foregoing, to the maximum extent
permitted by applicable law, each Loan Party (A) authorizes each Agent to
execute any such agreements, instruments or other documents in such Loan Party’s
name and to file such agreements, instruments or other documents in any
appropriate filing office, (B) authorizes each Agent to file any financing
statement required hereunder or under any other Loan Document, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Loan Party, and (C) ratifies the
filing of any financing statement, and any continuation statement or amendment
with respect thereto, filed without the signature of such Loan Party prior to
the date hereof.
 
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(l) Change in Collateral; Collateral Records. (i) Regarding Collateral that
collectively totals $250,000 in value, give the Collateral Agent not less than
15 days subsequent written notice of any change in the location of such
Collateral, other than to (or in-transit between) locations set forth on
Schedule 6.01(ff) and with respect to which the Collateral Agent has filed
financing statements and otherwise fully perfected its Liens thereon,
(ii) advise the Collateral Agent promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of such Collateral or
the Lien granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of
the Agents and the Lenders from time to time, solely for the Collateral Agent’s
convenience in maintaining a record of such Collateral, such written statements
and schedules as the Collateral Agent may reasonably require, designating,
identifying or describing the Collateral.
 
(m) Collateral Access Agreements. Use reasonable commercial efforts to obtain
written access agreements, limited to sites on real property owned or leased by
the Borrower, in form and substance satisfactory to the Collateral Agent,
providing access to Collateral on such properties in order to remove Collateral
from the properties during an Event of Default.
 
(n) Subordination. Cause all Indebtedness and other obligations now or hereafter
owed by it to any of its Affiliates, to be subordinated in right of payment and
security to the Indebtedness and other Obligations owing to the Agents and the
Lenders in accordance with a subordination agreement in form and substance
satisfactory to the Agents.
 
(o) After Acquired Property. Upon the acquisition by it or any of its
Subsidiaries of any After Acquired Property, immediately so notify the
Collateral Agent, setting forth with specificity a description of the interest
acquired, the location of the real property, any structures or improvements
thereon and either an appraisal or such Loan Party’s good-faith estimate of the
current value of such real property (for purposes of this Section, the “Current
Value”). The Collateral Agent shall notify such Loan Party whether it intends to
require a mortgage and the other documents referred to below. Upon receipt of
such notice requesting a mortgage, the Person which has acquired such After
Acquired Property shall immediately furnish to the Collateral Agent the
following, each in form and substance satisfactory to the Collateral Agent:
(i) a mortgage with respect to such real property and related assets located at
the After Acquired Property, each duly executed by such Person and in recordable
form; (ii) evidence of the recording of the mortgage referred to in clause (i)
above in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to create and perfect a valid and enforceable first
priority lien on the property purported to be covered thereby or to otherwise
protect the rights of the Agents and the Lenders thereunder, (iii) to the extent
requested by the Collateral Agent, one or more of the following (A) a title
insurance policy, (B) a survey of such real property, certified to the
Collateral Agent and to the issuer of the title insurance policy by a licensed
professional surveyor reasonably satisfactory to the Collateral Agent, (C) Phase
I Environmental Site Assessments with respect to such real property, certified
to the Collateral Agent by a company reasonably satisfactory to the Collateral
Agent, and (D) such other documents or instruments (including opinions of
counsel) as the Collateral Agent may reasonably require. The Borrower shall pay
all fees and expenses, including reasonable attorneys fees and expenses, and all
title insurance charges and premiums, in connection with each Loan Party’s
obligations under this Section 7.01(o).
 
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(p) Fiscal Year. Cause the Fiscal Year of the Borrower and its Subsidiaries to
end on October 31st of each calendar year unless the Agents consent to a change
in such fiscal year of Borrower and its Subsidiaries (and appropriate related
changes to this Agreement).
 
(q) Borrowing Base. Maintain all Revolving Loans in compliance with the then
current Borrowing Base.
 
(r) [intentionally omitted]
 
(s) Licenses and Permits. (i) Ensure that all material licenses (including all
Gaming Licenses), permits, consents and similar rights required from any
Governmental Authority (including all Gaming Authorities) for the ownership, use
or operation of the businesses or properties now owned or operated by the
Borrower or any of its Subsidiaries remain in full force and effect except for
such licenses, permits, consents and similar rights the failure to obtain,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect; and (ii) comply, in all material respects, with all
such licenses, permits, consents and similar rights or any other requirements of
the
 
Gaming Authorities or any other Governmental Authority.
 
Section 7.02 Negative Covenants. So long as any principal of or interest on any
Loan, or any other Obligation (other than unasserted contingent indemnification
Obligations) shall remain unpaid or any Lender shall have any Commitment
hereunder, each Loan Party shall not and shall not permit any of its
Subsidiaries to:
 
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file
or suffer to exist under the Uniform Commercial Code or any similar law or
statute of any jurisdiction, a financing statement (or the equivalent thereof)
that names it or any of its Subsidiaries as debtor; sign or suffer to exist any
security agreement authorizing any secured party thereunder to file such
financing statement (or the equivalent thereof); sell any of its property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable) with
recourse to it or any of its Subsidiaries or assign or otherwise transfer, or
permit any of its Subsidiaries to assign or otherwise transfer, any account or
other right to receive income; other than, as to all of the above, Permitted
Liens; provided, that, no Liens shall be permitted on any assets included in the
Borrowing Base other than the Liens of the Collateral Agent for the benefit of
the Agents and the Lenders.
 
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(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness.
 
(c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or merge,
consolidate or amalgamate with any Person, or convey, sell, lease or sublease,
transfer or otherwise dispose of, whether in one transaction or a series of
related transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired (or agree to do any of the foregoing),
or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or
any division thereof) (or agree to do any of the foregoing), or permit any of
its Subsidiaries to do any of the foregoing; provided, however, that
 
(i) any wholly-owned Subsidiary of any Loan Party (other than the Borrower) may
be merged into such Loan Party or another wholly-owned Subsidiary of such Loan
Party, or may consolidate with another wholly-owned Subsidiary of such Loan
Party, so long as (A) no other provision of this Agreement would be violated
thereby, (B) such Loan Party gives the Agents at least 30 days prior written
notice of such merger or consolidation, (C) no Default or Event of Default shall
have occurred and be continuing either before or immediately after giving effect
to such transaction, (D) the Lenders’ rights in any Collateral, including the
existence, perfection and priority of any Lien thereon, are not adversely
affected by such merger or consolidation and (E) the surviving Subsidiary, if
any, is joined as a Loan Party hereunder and is a party to a Guaranty and a
Security Agreement and the Capital Stock of which Subsidiary is the subject of a
Security Agreement, in each case, which is in full force and effect on the date
of and immediately after giving effect to such merger or consolidation;
 
(ii) any Loan Party and its Subsidiaries may make Permitted Dispositions; and
 
(iii) Borrower may wind down and subsequently dissolve GameTech Arizona
Corporation, a Subsidiary of Borrower that was incorporated in Arizona, as soon
as possible after the completion of litigation and the passing of any right of
appeal regarding that certain lawsuit Fortunet, Inc. v. GameTech International,
Inc. and GameTech Arizona Corporation (U.S. District Court, District of Nevada).
 
(d) Change in Nature of Business; Change in Independent Certified Public
Accountant. Make, or permit any of its Subsidiaries to make, any material change
in the nature of its business as described in Section 6.01(l) or acquire any
properties or assets that are not reasonably related to the conduct of such
business activities. Make any change in its independent certified public
accountant without the prior written consent of the Agents, which may not be
unreasonably withheld or delayed.
 
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(e) Loans, Advances, Investments, Etc. Make or commit or agree to make any loan,
advance guarantee of obligations, other extension of credit or capital
contributions to, or hold or invest in or commit or agree to hold or invest in,
or purchase or otherwise acquire or commit or agree to purchase or otherwise
acquire any shares of the Capital Stock, bonds, notes, debentures or other
securities of, or make or commit or agree to make any other investment in, any
other Person, or purchase or own any futures contract or otherwise become liable
for the purchase or sale of currency or other commodities at a future date in
the nature of a futures contract, or purchase all or substantially all of the
assets of any other Person, or permit any of its Subsidiaries to do any of the
foregoing, except for: (i) investments existing on the date hereof, as set forth
on Schedule 7.02(e) hereto, but not any increase in the amount thereof as set
forth in such Schedule or any other modification of the terms thereof,
(ii) loans, advances and investments by a Loan Party to or in another Loan
Party, made in the ordinary course of business and not exceeding in the
aggregate for all such loans and advances by all of the Loan Parties at any one
time outstanding $100,000, (iii) Permitted Investments and (iv) equity
contributions collectively totaling no more than $50,000 in Borrower’s
Subsidiaries.
 
(f) Lease Obligations. Create, incur or suffer to exist, or permit any of its
Subsidiaries to create, incur or suffer to exist, any obligations as lessee
(i) for the payment of rent for any real or personal property in connection with
any sale and leaseback transaction, or (ii) for the payment of rent for any real
or personal property under leases or agreements to lease other than (A)
Capitalized Lease Obligations which would not cause the aggregate amount of all
obligations under Capitalized Leases entered into after the Effective Date owing
by all Loan Parties and their Subsidiaries in any Fiscal Year to exceed the
amounts set forth in Section 7.03(d), and (B) Operating Lease Obligations which
would not cause the aggregate amount of all Operating Lease Obligations owing by
all Loan Parties and their Subsidiaries in any Fiscal Year to exceed $2,000,000.
 
(g) [intentionally omitted]
 
(h) Restricted Payments.  (i)  Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan
Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make any
repurchase, redemption, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Capital
Stock of any Loan Party or any direct or indirect parent of any Loan Party, now
or hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the purchase
or acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, or (iv) pay any management fees or any other fees or
expenses (including the reimbursement thereof by any Loan Party or any of its
Subsidiaries) pursuant to any management, consulting or other services agreement
to any of the shareholders or other equityholders of any Loan Party or any of
its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
of any Loan Party; provided, however, that the preceding shall not include (i)
amounts collectively totaling $500,000 that are used to purchase or buy back
Common Stock and/or options for Common Stock from former or current employees
and directors of Borrower, (ii) the amount of compensation and expense
reimbursement paid to Borrower’s chairman as set forth on Schedule 7.02(h), or
(iii) the Earn Out Payment. The payments specified in clauses (i), (ii), and
(iii) of the immediately preceding sentence may be made only on the condition
that no Event of Default either is in effect at the time such payment is to be
made or would result from the making of such payment.
 
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(i) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan
under this Agreement to be used for any purpose that would cause such Loan to be
a margin loan under the provisions of Regulation T, U or X of the Board.
 
(j) Transactions with Affiliates. Enter into, renew, extend or be a party to, or
permit any of its Subsidiaries to enter into, renew, extend or be a party to,
any transaction or series of related transactions (including the purchase, sale,
lease, transfer or exchange of property or assets of any kind or the rendering
of services of any kind) with any Affiliate, except (i) in the ordinary course
of business in a manner and to an extent consistent with past practice and
necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it or its Subsidiaries than
would be obtainable in a comparable arm’s length transaction with a Person that
is not an Affiliate thereof, (ii) transactions with another Loan Party and (iii)
transactions permitted by Section 7.02(e) or (h).
 
(k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:
 
(A) this Agreement and the other Loan Documents;
 
(B) any agreements in effect on the date of this Agreement and described on
Schedule 7.02(k);
 
(C) any applicable law, rule or regulation (including applicable currency
control laws and applicable state corporate statutes restricting the payment of
dividends in certain circumstances);
 
(D) in the case of clause (iv), any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset
that is leased or licensed; or
 
(E) in the case of clause (iv), any agreement, instrument or other document
evidencing a Permitted Lien that restricts, on customary terms, the transfer of
any property or assets subject thereto.
 
(l) Limitation on Issuance of Capital Stock. Except for the issuance or sale of
common stock or Permitted Preferred Stock by the Borrower, issue or sell or
enter into any agreement or arrangement for the issuance and sale of, or permit
any of its Subsidiaries to issue or sell or enter into any agreement or
arrangement for the issuance and sale of, any shares of its Capital Stock, any
securities convertible into or exchangeable for its Capital Stock or any
warrants.
 
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(m) Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements; Etc. (i) Amend, modify or otherwise change (or permit the amendment,
modification or other change in any manner of) any of the provisions of any of
its or its Subsidiaries’ Indebtedness or of any instrument or agreement
(including any purchase agreement, indenture, loan agreement or security
agreement) relating to any such Indebtedness if such amendment, modification or
change would shorten the final maturity or average life to maturity of, or
require any payment to be made earlier than the date originally scheduled on,
such Indebtedness, would increase the interest rate applicable to such
Indebtedness, would change the subordination provisions, if any, of such
Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such
Indebtedness in any respect, (ii) except for the Obligations, make any voluntary
or optional payment, prepayment, redemption, defeasance, sinking fund payment or
other acquisition for value of any of its or its Subsidiaries’ Indebtedness
(including by way of depositing money or securities with the trustee therefor
before the date required for the purpose of paying any portion of such
Indebtedness when due), or refund, refinance, replace or exchange any other
Indebtedness for any such Indebtedness (except to the extent such Indebtedness
is otherwise expressly permitted by the definition of “Permitted Indebtedness”),
or make any payment, prepayment, redemption, defeasance, sinking fund payment or
repurchase of any outstanding Indebtedness as a result of any asset sale, change
of control, issuance and sale of debt or equity securities or similar event, or
give any notice with respect to any of the foregoing, (iii) except as permitted
by Section 7.02(c), amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN, or (iv) amend,
modify or otherwise change its certificate of incorporation or bylaws (or other
similar organizational documents), including by the filing or modification of
any certificate of designation, or any agreement or arrangement entered into by
it, with respect to any of its Capital Stock (including any shareholders’
agreement), or enter into any new agreement with respect to any of its Capital
Stock, except any such amendments, modifications or changes or any such new
agreements or arrangements pursuant to this clause (iv) that either individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
 
(n) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of its
Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an “investment
company” or a company “controlled” by an “investment company” not entitled to an
exemption within the meaning of such Act.
 
(o) CFC Debt. Allow or permit any CFC of any Loan Party (or any of its
Subsidiaries) to directly or indirectly incur any debt other than that owing to
such CFC’s parent.
 
(p) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any
transaction described in Section 4069 of ERISA; (ii) engage, or permit any ERISA
Affiliate to engage, in any prohibited transaction described in Section 406 of
ERISA or 4975 of the IRC for which a statutory or class exemption is not
available or a private exemption has not previously been obtained from the U.S.
Department of Labor; (iii) adopt or permit any ERISA Affiliate to adopt any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA or applicable law; (iv) fail to make any
contribution or payment to any Multiemployer Plan which it or any ERISA
Affiliate may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit any
ERISA Affiliate to fail, to pay any required installment or any other payment
required under Section 412 of the IRC on or before the due date for such
installment or other payment.
 
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(q) Environmental. Permit the use, handling, generation, storage, treatment,
release or disposal of Hazardous Materials at any property owned or leased by it
or any of its Subsidiaries, except in compliance with Environmental Laws in a
manner that such handling, generation, storage, treatment, release or disposal
of Hazardous Materials could not reasonably be expected to result in a Material
Adverse Effect.
 
(r) Certain Agreements. Agree to any material amendment or other material change
to or material waiver of any of its rights under any Material Contract.
 
Section 7.03 Financial Covenants. So long as any principal of or interest on any
Loan, or any other Obligation (other than unasserted contingent indemnification
Obligations) shall remain unpaid or any Lender shall have any Commitment
hereunder, each Loan Party shall not:
 
(a) Leverage Ratio. Permit the ratio of Consolidated Funded Indebtedness of
Borrower and its Subsidiaries as of the last day of each fiscal quarter set
forth below to TTM EBITDA of the Borrower and its Subsidiaries for the period
ended as of the last day of such fiscal quarter to be greater than the
applicable ratio set forth below:
 
Fiscal Quarter End
Leverage Ratio
   
April 30, 2007
2.00
July 31, 2007
2.00
October 31, 2007
2.00
   
January 31, 2008
1.75
April 30, 2008
1.75
July 31, 2008
1.75
October 31, 2008
1.75
   
January 31, 2009
1.50
April 30, 2009
1.50
July 31, 2009
1.50
October 31, 2009
1.50
   
January 31, 2010
1.50
April 30, 2010
1.50
July 31, 2010
1.50
October 31, 2010
1.50

 
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January 31, 2011
1.50
April 30, 2011
1.50
July 31, 2011
1.50
October 31, 2011
1.50
   
January 31, 2012
1.50

 
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio of the
Borrower and its Subsidiaries for the period of 4 consecutive fiscal quarters
ended as of the last day of each fiscal quarter set forth below to be less than
the applicable ratio set forth opposite such date:
 
Fiscal Quarter End
Fixed Charge Coverage Ratio
   
April 30, 2007
1.05
July 31, 2007
1.05
October 31, 2007
1.05
   
January 31, 2008
1.05
April 30, 2008
1.05
July 31, 2008
1.05
October 31, 2008
1.05
   
January 31, 2009
1.10
April 30, 2009
1.10
July 31, 2009
1.10
October 31, 2009
1.10
   
January 31, 2010
1.15
April 30, 2010
1.15
July 31, 2010
1.15
October 31, 2010
1.15
   
January 31, 2011
1.25
April 30, 2011
1.25
July 31, 2011
1.25
October 31, 2011
1.25
   
January 31, 2012
1.25

(c) TTM EBITDA. Permit TTM EBITDA of the Borrower and its Subsidiaries for the
period ended as of the last day of each fiscal quarter set forth below to be
less than the applicable amount set forth opposite such date:
 
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Fiscal Quarter End
TTM EBITDA
   
April 30, 2007
$21,000,000
July 31, 2007
$21,000,000
October 31, 2007
$21,000,000
   
January 31, 2008
$22,000,000
April 30, 2008
$22,000,000
July 31, 2008
$22,000,000
October 31, 2008
$22,000,000
   
January 31, 2009
$23,000,000
April 30, 2009
$23,000,000
July 31, 2009
$23,000,000
October 31, 2009
$23,000,000
   
January 31, 2010
$24,000,000
April 30, 2010
$24,000,000
July 31, 2010
$24,000,000
October 31, 2010
$24,000,000
   
January 31, 2011
$25,000,000
April 30, 2011
$25,000,000
July 31, 2011
$25,000,000
October 31, 2011
$25,000,000
   
January 31, 2012
$25,000,000

(d) Capital Expenditures. Make Capital Expenditures in any Fiscal Year in excess
of the amount set forth in the following table for the applicable period (the
“Base Fiscal Year”) plus the unexpended portion of the amount of the Capital
Expenditures set forth in the following table for the Fiscal Year immediately
prior to the Base Fiscal Year, beginning with the fiscal year ending October 31,
2007:
 
Fiscal Year 2007
$14,000,000
Fiscal Year 2008
$14,000,000
Fiscal Year 2009
$14,000,000
Fiscal Year 2010
$14,000,000
Fiscal Year 2011
$14,000,000
Fiscal Year 2012
$14,000,000

 
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(e) Qualified Cash. Permit the amount of Qualified Cash at any time to be less
than $4,000,000.
 
ARTICLE VIII
 
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
 
Section 8.01 Collection of Accounts Receivable; Management of Collateral.  
 
(a) On or prior to the Effective Date, the Borrower shall assist the
Administrative Agent in establishing, and, during the term of this Agreement,
maintaining blocked accounts (the “Blocked Accounts”) with respect to the
Borrower’s principal concentration accounts with the financial institution set
forth on Schedule 8.01 hereto (the “Blocked Account Bank”), and entering into a
control agreement relating to the Blocked Account with the Borrower, Collateral
Agent, and the Blocked Account Bank. After the occurrence and during the
continuation of an Event of Default, each of the Borrower and each of its
Subsidiaries shall irrevocably instruct its Account Debtors, with respect to its
Accounts Receivable, to remit all payments to be made by them, whether by means
of checks or other drafts or by wire transfer or by Automated Clearing House,
Inc. payment, to a Blocked Account and shall instruct the Blocked Account Bank
to deposit all amounts received by it to a Blocked Account at such Blocked
Account Bank on the day received or, if such day is not a Business Day, on the
next succeeding Business Day; provided, however, that Borrower and each of its
Subsidiaries, with respect to payments of Accounts Receivable it receives
directly, shall collect, receive, and deposit all payments, whether by means of
checks or other drafts or by wire transfer or by Automated Clearing House, Inc.
payment, in accordance with Borrower’s or Borrower’s Subsidiary’s then current
payment processing practices, as applicable, provided that all such payments, as
applicable, shall be deposited by Borrower at Wells Fargo-AZ, 5340 Kietzke Lane,
Suite 201, Reno, Nevada, account number 4159539352, routing number 121000248, as
soon as reasonably possible, but in any event within 3 Business Days of receipt.
Each of the Borrower and each Subsidiary will enforce, collect and receive all
amounts owing on their Accounts Receivable for the Agents’ benefit and on the
Administrative Agent’s behalf, but at the Borrower’s or such Subsidiary’s
expense; such privilege shall terminate, at the election of any Agent, after the
occurrence and during the continuation of an Event of Default. After the
occurrence and during the continuation of an Event of Default, all checks,
drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received directly by the Borrower or any of its Subsidiaries from
any Account Debtor, as proceeds from their Accounts Receivable, or as proceeds
of any other Collateral, shall be held by the Borrower or such Subsidiaries in
trust for the Agents and the Lenders and upon receipt be deposited by the
Borrower or such Subsidiaries in original form and no later than the next
Business Day after receipt thereof into a Blocked Account. The Borrower and such
Subsidiaries shall not commingle such collections with their own funds or with
the proceeds of any assets not included in the Collateral. All funds received in
the Blocked Accounts after the occurrence and during the continuance of an Event
of Default, upon request by Collateral Agent, shall be sent by wire transfer or
Automated Clearing House, Inc. payment to the Payment Office to be credited to
the Administrative Agent’s Account for application at the end of each Business
Day when such funds are received in Administrative Agent’s Account to reduce the
then principal balance of the Loans, conditional upon final payment to the
Administrative Agent, and at all other times, may be transferred to an operating
account of the Borrower or one of its Subsidiaries. No checks, drafts or other
instruments received by the Administrative Agent shall constitute final payment
to the Administrative Agent unless and until such checks, drafts or instruments
have actually been collected.
 
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(b) After the occurrence and during the continuance of an Event of Default, the
Collateral Agent may send a notice of assignment or notice of the Lenders’
security interest to any and all Account Debtors and, thereafter, the Collateral
Agent shall have the sole right to collect the Accounts Receivable and payment
intangibles of the Borrower and its Subsidiaries or take possession of the
Collateral and the books and records relating thereto. After the occurrence and
during the continuation of an Event of Default, the Borrower and its
Subsidiaries shall not, without prior written consent of the Collateral Agent,
grant any extension of time of payment of any Account Receivable or payment
intangible, compromise or settle any Account Receivable or payment intangible
for less than the full amount thereof, release, in whole or in part, any Person
or property liable for the payment thereof, or allow any credit or discount
whatsoever thereon.
 
(c) The Borrower hereby appoints each Agent or its designee on behalf of such
Agent as the Borrower’s attorney-in-fact with power exercisable during the
continuance of an Event of Default to (i) endorse the Borrower’s name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Accounts Receivable or payment intangibles of the Borrower, (ii)
sign the Borrower’s name on any invoice or bill of lading relating to any of the
Accounts Receivable or payment intangibles of the Borrower, drafts against
Account Debtors with respect to Accounts Receivable or payment intangibles of
the Borrower, assignments and verifications of Accounts Receivable or payment
intangibles and notices to Account Debtors with respect to Accounts Receivable
or payment intangibles of the Borrower, (iii) send verification of Accounts
Receivable of the Borrower, and (iv) notify the Postal Service authorities to
change the address for delivery of mail addressed to the Borrower to such
address as such Agent may designate and to do all other acts and things
necessary to carry out this Agreement. All acts of said attorney or designee are
hereby ratified and approved, and said attorney or designee shall not be liable
for any acts of omission or commission (other than acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction), or for any error of
judgment or mistake of fact or law; this power being coupled with an interest is
irrevocable until all of the Loans and other Obligations under the Loan
Documents are paid in full and all of the Commitments are terminated.
 
(d) Nothing herein contained shall be construed to constitute any Agent as agent
of the Borrower for any purpose whatsoever, and the Agents shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (other than from acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agents shall not, under any circumstance
or in any event whatsoever, have any liability for any error or omission or
delay of any kind occurring in the settlement, collection or payment of any of
the Accounts Receivable of the Borrower or any instrument received in payment
thereof or for any damage resulting therefrom (other than acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction). The Agents, by anything
herein or in any assignment or otherwise, do not assume any of the obligations
under any contract or agreement assigned to any Agent and shall not be
responsible in any way for the performance by the Borrower of any of the terms
and conditions thereof.
 
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(e) If any Account Receivable of the Borrower includes a charge for any tax
payable to any Governmental Authority, each Agent is hereby authorized (but in
no event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Borrower’s account and to charge the Borrower therefor.
The Borrower shall notify the Agents if any Account Receivable of the Borrower
includes any taxes due to any such Governmental Authority and, in the absence of
such notice, the Agents shall have the right to retain the full proceeds of such
Account Receivable and shall not be liable for any taxes that may be due by
reason of the sale and delivery creating such Account Receivable.
 
(f) Notwithstanding any other terms set forth in the Loan Documents, the rights
and remedies of the Agents and the Lenders herein provided, and the obligations
of the Loan Parties set forth herein, are cumulative of, may be exercised singly
or concurrently with, and are not exclusive of, any other rights, remedies or
obligations set forth in any other Loan Document or as provided by law.
 
Section 8.02 [intentionally omitted]
 
Section 8.03 [intentionally omitted]
 
Section 8.04 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may at any time and
from time to time employ and maintain on the premises of any Loan Party a
custodian selected by the Collateral Agent who shall have full authority to do
all acts necessary to protect the Agents’ and the Lenders’ interests. Each Loan
Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any
such custodian and to do whatever the Collateral Agent may reasonably request to
preserve the Collateral. All costs and expenses incurred by the Collateral Agent
by reason of the employment of the custodian shall be the responsibility of the
Borrower and charged to the Loan Account.
 
ARTICLE IX
 
EVENTS OF DEFAULT
 
Section 9.01 Events of Default. If any of the following events shall occur:
 
(a) the Borrower shall fail to pay any principal of or interest on any Loan, any
Collateral Agent Advance, or any fee, indemnity or other amount payable under
this Agreement or any other Loan Document when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise);
 
(b) any representation or warranty made or deemed made by or on behalf of any
Loan Party or by any officer of the foregoing under or in connection with any
Loan Document or under or in connection with any report, certificate, or other
document delivered to any Agent, any Lender pursuant to any Loan Document shall
have been incorrect in any material respect when made or deemed made;
 
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(c) any Loan Party shall fail to perform or comply with any covenant or
agreement contained in Article VII or Article VIII, or any Loan Party shall fail
to perform or comply with any covenant or agreement contained in any Security
Agreement to which it is a party or any mortgage to which it is a party, and
such failure shall remain unremedied for 10 Business Days after the earlier of
an Authorized Officer becoming aware of such failure and the date written notice
of such default shall have been given by any Agent or Lender to such Loan Party;
 
(d) any Loan Party shall fail to perform or comply with any other term, covenant
or agreement contained in any Loan Document to be performed or observed by it
and, except as set forth in subsections (a), (b) and (c) of this Section 9.01,
such failure, if capable of being remedied, shall remain unremedied for 15 days
after the earlier of an Authorized Officer becoming aware of such failure and
the date written notice of such default shall have been given by any Agent to
such Loan Party;
 
(e) any Borrower or any of its Subsidiaries shall fail to pay any principal of
or interest or premium on any of its Indebtedness (excluding the Obligations) to
the extent that the aggregate principal amount of all such Indebtedness exceeds
$1,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness, or any other default under any agreement or
instrument relating to any such Indebtedness, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to the stated
maturity thereof;
 
(f) any Borrower or any of its Subsidiaries (i) shall institute any proceeding
or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any such Person or for any substantial
part of its property, (ii) shall be generally not paying its debts as such debts
become due or shall admit in writing its inability to pay its debts generally,
(iii) shall make a general assignment for the benefit of creditors, or (iv)
shall take any action to authorize or effect any of the actions set forth above
in this subsection (f);
 
(g) any proceeding shall be instituted against any Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other similar official for
any such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 30 days or any
of the actions sought in such proceeding (including the entry of an order for
relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property) shall occur;
 
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(h) any provision of any Loan Document shall at any time for any reason (other
than pursuant to the express terms thereof) cease in any material respect to be
valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;
 
(i) any Security Agreement, any mortgage or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien in favor of the Collateral Agent for the benefit of
the Agents and the Lenders on any Collateral purported to be covered thereby;
 
(j) any bank at which any deposit account, blocked account, or lockbox account
of any Loan Party is maintained shall fail to comply in any material respect
with any of the terms of any deposit account, blocked account, lockbox account
or similar agreement to which such bank is a party or any securities
intermediary, commodity intermediary or other financial institution at any time
in custody, control or possession of any investment property of any Loan Party
shall fail to comply in any material respect with any of the terms of any
investment property control agreement to which such Person is a party;
 
(k) one or more judgments, awards, or orders (or any settlement of any claim
that, if breached, could result in a judgment, order, or award) for the payment
of money exceeding $1,000,000 in the aggregate shall be rendered against
Borrower or any of its Subsidiaries and remain unsatisfied, or any Borrower or
any of its Subsidiaries shall agree to the settlement of any one or more pending
or threatened actions, suits, or proceedings affecting any Loan Party before any
court or other Governmental Authority or any arbitrator or mediator, providing
for the payment of money exceeding $1,000,000 in the aggregate, and in the case
of any such judgment or order either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgment, order, award or settlement, or
(ii) there shall be a period of 10 consecutive days after entry thereof during
which a stay of enforcement of any such judgment, order, award or settlement, by
reason of a pending appeal or otherwise, shall not be in effect; provided,
however, that any such judgment, order, award or settlement shall not give rise
to an Event of Default under this subsection if and for so long as (A) the
amount of such judgment, order, award or settlement is covered by a valid and
binding policy of insurance between the defendant and the insurer covering full
payment thereof and (B) such insurer has been notified, and has not disputed the
claim made for payment, of the amount of such judgment, order, award or
settlement;
 
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(l) any Borrower or any of its Subsidiaries is enjoined, restrained or in any
way prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than 15 days;
 
(m) any material damage to, or loss, theft or destruction of, any Collateral,
whether or not insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty which causes, for
more than 15 days, the cessation or substantial curtailment of revenue producing
activities at any facility of any Loan Party, if any such event or circumstance
could reasonably be expected to result in a Material Adverse Effect;
 
(n) any cessation of a substantial part of the business of any Loan Party for a
period which materially and adversely affects the ability of such Loan Party to
continue its business on a profitable basis;
 
(o) the indictment, or the reasonably credible threatened indictment of any
Borrower or any of its Subsidiaries under any criminal statute, or commencement
or threatened commencement of criminal or civil proceedings against any Loan
Party, pursuant to which statute or proceedings the penalties or remedies sought
or available include forfeiture to any Governmental Authority of any material
portion of the property of such Person;
 
(p) any Loan Party or any of its ERISA Affiliates shall have made a complete or
partial withdrawal from a Multiemployer Plan, and, as a result of such complete
or partial withdrawal, any Loan Party or any of its ERISA Affiliates incurs a
withdrawal liability in an annual amount exceeding $1,000,000; or a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof any Loan Party’s or any of its ERISA Affiliates’ annual
contribution requirements with respect to such Multiemployer Plan increases in
an annual amount exceeding $1,000,000;
 
(q) any Termination Event with respect to any Employee Plan shall have occurred,
and, 30 days after notice thereof shall have been given to any Loan Party by any
Agent, (i) such Termination Event (if correctable) shall not have been
corrected, and (ii) the then current value of such Employee Plan’s vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $1,000,000 (or, in the case of a Termination
Event involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the IRC, the
liability is in excess of such amount);
 
(r) any Borrower or any of its Subsidiaries shall be liable for any
Environmental Liabilities and Costs the payment of which could reasonably be
expected to result in a Material Adverse Effect;
 
(s) a Change of Control shall have occurred; or
 
(t) an event or development occurs which could reasonably be expected to result
in a Material Adverse Effect;
 
then, and in any such event, the Collateral Agent may, and shall at the request
of the Required Lenders, by notice to the Borrower, (i) terminate all
Commitments, whereupon all Commitments shall immediately be so terminated, (ii)
declare all or any portion of the Loans then outstanding to be due and payable,
whereupon all or such portion of the aggregate principal of all Loans, all
accrued and unpaid interest thereon, all fees and all other amounts payable
under this Agreement and the other Loan Documents shall become due and payable
immediately, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each Loan Party and (iii) exercise
any and all of its other rights and remedies under applicable law, hereunder and
under the other Loan Documents; provided, however, that upon the occurrence of
any Event of Default described in subsection (f) or (g) of this Section 9.01,
without any notice to any Loan Party or any other Person or any act by any Agent
or any Lender, all Commitments shall automatically terminate and all Loans then
outstanding, together with all accrued and unpaid interest thereon, all fees and
all other amounts due under this Agreement and the other Loan Documents shall
become due and payable automatically and immediately, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by each
Loan Party.
 
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Section 9.02 Gaming Laws.
 
(a) Each Loan Party agrees that, upon the occurrence of and during the
continuance of an Event of Default and at Collateral Agent’s request, it will,
and will cause each of its Subsidiaries to, cooperate with the Collateral Agent
and the Required Lenders with respect to the filing of their applications for
approval of, and shall use commercially reasonable efforts to take all other and
further actions required by Collateral Agent or Required Lenders to assist the
Collateral Agent and the Required Lenders with obtaining, such Gaming Licenses
and other such approvals or consents of the Gaming Authorities and any other
Governmental Authorities with jurisdiction as are necessary for the Collateral
Agent to operate the businesses of the Borrower or its Subsidiaries or to
acquire an interest in any Person holding any such Gaming License pursuant to
the Gaming Laws. To enforce the provisions of this Section 9.02, where permitted
by relevant Gaming Laws, Collateral Agent (subject to applicable instructions,
if any, from the Required Lenders) is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the applicable Gaming Authority and any other
Governmental Authorities with jurisdiction authorization pursuant to the Gaming
Laws to continue operation of the businesses of Borrower and its Subsidiaries
under all necessary Gaming Licenses for the purpose of seeking a bona fide
purchaser of the businesses of the Borrower and its Subsidiaries. Each Loan
Party hereby agrees to authorize, and to cause each of its Subsidiaries to
authorize, such an authorization pursuant to the Gaming Laws to continue the
operation of the businesses of the Borrower and its Subsidiaries upon the
request of the receiver so appointed and, if such Loan Party, or any such
Subsidiary shall refuse to authorize the transfer, its approval may be required
by the court. Upon the occurrence and continuance of an Event of Default, each
Loan Party shall further use, and shall cause its Subsidiaries to use,
commercially reasonable efforts to assist in obtaining approval of the
applicable Gaming Authority and any other Governmental Authorities with
jurisdiction, if required, for any action or transactions contemplated by this
Agreement or the Loan Documents, including, preparation, execution, and filing
with the applicable Gaming Authority and any other Governmental Authorities with
jurisdiction of any application or applications for authorization pursuant to
the Gaming Laws for the receiver to continue the operation of the businesses of
the Borrower and the Borrower and its Subsidiaries under any Gaming License or
transfer of control necessary or appropriate under the applicable Gaming Laws
for approval of the transfer or assignment of any portion of the Collateral.
Each Loan Party acknowledges that the authorization pursuant to the Gaming Laws
for the receiver to continue the operation of the businesses of the Borrower and
its Subsidiaries under the Gaming Licenses or for a transfer of control is
integral to Collateral Agent’s realization of the value of the Collateral, that
there is no adequate remedy at law for failure by such Loan Party to comply with
the provisions of this Section 9.02 and that such failure would not be
adequately compensable in damages, and therefore agree that the agreements
contained in this Section 9.02 may be specifically enforced; and
 
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(b) All rights, remedies, and powers provided in this Agreement and the other
Loan Documents may be exercised only to the extent that the exercise thereof
does not violate any applicable mandatory provision of the Gaming Laws and all
provisions of this Agreement and the other Loan Documents are intended to be
subject to all applicable mandatory provisions of the Gaming Laws and to be
limited solely to the extent necessary to not render the provisions of this
Agreement or the other Loan Documents invalid or unenforceable, in whole or in
part. Collateral Agent will timely apply for and receive all required approvals
of the applicable Gaming Authority for the sale or other disposition of gaming
equipment regulated by the Gaming Laws (including any such sale or disposition
of gaming equipment and associated gaming equipment consisting of slot machines,
gaming tables, cards, dice, gaming chips, player tracking systems, and all other
“gaming devices” (as such term or words of like import referring thereto are
defined in the Gaming Laws), and “associated equipment” (as such term or words
of like import referring thereto are defined in the Gaming Laws).
 
ARTICLE X
 
AGENTS
 
Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by
its making thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement including: (i) to receive on behalf of each
Lender any payment of principal of or interest on the Loans outstanding
hereunder and all other amounts accrued hereunder for the account of the Lenders
and paid to such Agent, and, subject to Section 2.02 of this Agreement, to
distribute promptly to each Lender its Pro Rata Share of all payments so
received; (ii) to distribute to each Lender copies of all material notices and
agreements received by such Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, provided that the Agents shall
not have any liability to the Lenders for any Agent’s inadvertent failure to
distribute any such notices or agreements to the Lenders; (iii) to maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Obligations, the Loans, and related matters and to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (iv) to execute or
file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or
on behalf of the applicable Lenders as provided in this Agreement or any other
Loan Document; (vi) to perform, exercise, and enforce any and all other rights
and remedies of the Lenders with respect to the Loan Parties, the Obligations,
or otherwise related to any of same to the extent reasonably incidental to the
exercise by such Agent of the rights and remedies specifically authorized to be
exercised by such Agent by the terms of this Agreement or any other Loan
Document; (vii)  to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 10.03 of
this Agreement, to take such action as such Agent deems appropriate on its
behalf to administer the Loans and the Loan Documents and to exercise such other
powers delegated to such Agent by the terms hereof or the other Loan Documents
(including the power to give or to refuse to give notices, waivers, consents,
approvals and instructions and the power to make or to refuse to make
determinations and calculations) together with such powers as are reasonably
incidental thereto to carry out the purposes hereof and thereof. As to any
matters not expressly provided for by this Agreement and the other Loan
Documents (including enforcement or collection of the Loans), the Agents shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions of the Required Lenders shall be binding upon all Lenders
and all makers of Loans.
 
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Section 10.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any time
that the Required Lenders have instructed such Agent to act or refrain from
acting pursuant hereto.
 
Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents
(i) may treat the payee of any Loan as the owner thereof until the Collateral
Agent receives written notice of the assignment or transfer thereof, pursuant to
Section 12.07, signed by such payee and in form satisfactory to the Collateral
Agent; (ii) may consult with legal counsel (including counsel to any Agent or
counsel to the Loan Parties), independent public accountants, and other experts
selected by any of them and shall not be liable for any action taken or omitted
to be taken in good faith by any of them in accordance with the advice of such
counsel or experts; (iii) make no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including the books and records)
of any Person; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made
any representation or warranty regarding the existence, value or collectability
of the Collateral, the existence, priority or perfection of the Collateral
Agent’s Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agents be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The provisions of this Section 10.03 are subject to, and shall not limit in any
respect, the provisions of Section 12.07. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to
Section 4.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any payment
in excess of the amount which they are determined to be entitled. The Agents may
at any time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders.
 
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Section 10.04 Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
 
Section 10.05 Indemnification. To the extent that any Agent is not reimbursed
and indemnified by any Loan Party, the Lenders will reimburse and indemnify such
Agent from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of this
Agreement or any of the other Loan Documents or any action taken or omitted by
such Agent under this Agreement or any of the other Loan Documents, in
proportion to each Lender’s Pro Rata Share, including advances and disbursements
made pursuant to Section 10.08; provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
for which there has been a final judicial determination that such liability
resulted from such Agent’s gross negligence or willful misconduct. The
obligations of the Lenders under this Section 10.05 shall survive the payment in
full of the Loans and the termination of this Agreement.
 
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Section 10.06 Agents Individually. With respect to its Pro Rata Share of the
Total Commitment hereunder and the Loans made by it, each Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any
similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower as if it were not acting as an Agent pursuant hereto without any duty
to account to the other Lenders.
 
Section 10.07 Successor Agent.
 
(a) Each Agent may resign from the performance of all its functions and duties
hereunder and under the other Loan Documents at any time by giving at least 30
Business Days prior written notice to the Borrower and each Lender. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clauses (b) and (c) below or as otherwise provided
below.
 
(b) Upon any such notice of resignation, the Required Lenders may appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After any Agent’s resignation
hereunder as an Agent, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement and the other Loan Documents.
 
(c) If a successor Agent shall not have been so appointed within said thirty
(30) Business Day period, the retiring Agent, with the consent of the other
Agent shall then appoint a successor Agent who shall serve as an Agent until
such time, if any, as the Required Lenders, with the consent of the other Agent,
appoint a successor Agent as provided above.
 
Section 10.08 Collateral Matters.
 
(a) The Collateral Agent may from time to time make such disbursements and
advances (“Collateral Agent Advances”) which the Collateral Agent, in its sole
discretion, deems necessary or desirable to preserve, protect, prepare for sale
or lease or dispose of the Collateral or any portion thereof, to enhance the
likelihood or maximize the amount of repayment by the Borrower of the Loans, and
other Obligations or to pay any other amount chargeable to the Borrower pursuant
to the terms of this Agreement, including costs, fees and expenses as described
in Section 12.04. The Collateral Agent Advances shall be repayable on demand and
be secured by the Collateral. The Collateral Agent Advances shall constitute
Obligations hereunder which may be charged to the Loan Account in accordance
with Section 4.02. The Collateral Agent shall notify each Lender and the
Borrower in writing of each such Collateral Agent Advance, which notice shall
include a description of the purpose of such Collateral Agent Advance. Without
limitation to its obligations pursuant to Section 10.05, each Lender agrees that
it shall make available to the Collateral Agent, upon the Collateral Agent’s
demand, in Dollars in immediately available funds, the amount equal to such
Lender’s Pro Rata Share of each such Collateral Agent Advance. If such funds are
not made available to the Collateral Agent by such Lender, the Collateral Agent
shall be entitled to recover such funds on demand from such Lender, together
with interest thereon for each day from the date such payment was due until the
date such amount is paid to the Collateral Agent, at the Federal Funds Rate for
3 Business Days and thereafter at the Reference Rate.
 
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(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option
and in its discretion, to release any Lien granted to or held by the Collateral
Agent upon any Collateral upon termination of the Total Commitment and payment
in full in cash of all Obligations (other than unasserted contingent
indemnification Obligations); or constituting property being sold or disposed of
in compliance with the terms of this Agreement and the other Loan Documents; or
constituting property in which the Loan Parties owned no interest at the time
the Lien was granted or at any time thereafter; or if approved, authorized or
ratified in writing by the Lenders. Upon request by the Collateral Agent at any
time, the Lenders will confirm in writing the Collateral Agent’s authority to
release particular types or items of Collateral pursuant to this
Section 10.08(b).
 
(c) Without in any manner limiting the Collateral Agent’s authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral
Agent of confirmation from the Lenders of its authority to release any
particular item or types of Collateral, and upon prior written request by any
Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Agents and the Lenders upon such Collateral; provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s opinion, would expose the Collateral Agent to
liability or create any obligations or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Lien upon
(or obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
 
(d) The Collateral Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Collateral Agent pursuant to this Agreement or any other Loan Document has been
properly or sufficiently or lawfully created, perfected, protected or enforced
or is entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 10.08 or in any other Loan
Document, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Collateral Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Collateral
Agent’s own interest in the Collateral as one of the Lenders and that the
Collateral Agent shall have no duty or liability whatsoever to any other Lender,
except as otherwise provided herein.
 
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Section 10.09 Agency for Perfection. Each Lender hereby appoints each Agent and
each other Lender as agent and bailee for the purpose of perfecting the security
interests in and liens upon the Collateral in assets which, in accordance with
Article 9 of the Code, can be perfected only by possession or control (or where
the security interest of a secured party with possession or control has priority
over the security interest of another secured party) and each Agent and each
Lender hereby acknowledges that it holds possession or control of any such
Collateral for the benefit of the Collateral Agent as secured party. Should any
Lender obtain possession or control of any such Collateral, such Lender shall
notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s
request therefor shall deliver possession or control of such Collateral to the
Collateral Agent or in accordance with the Collateral Agent’s instructions. Each
Loan Party by its execution and delivery of this Agreement hereby consents to
the foregoing.
 
ARTICLE XI
 
GUARANTY
 
Section 11.01 Guaranty. Each Guarantor hereby jointly and severally
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrower now or hereafter existing under any Loan Document, whether for
principal, interest (including all interest that accrues after the commencement
of any Insolvency Proceeding irrespective of whether a claim therefor is allowed
in such case or proceeding), fees, expenses or otherwise (such obligations, to
the extent not paid by the Borrower, being the “Guaranteed Obligations”), and
agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agents or the Lenders (or any of them) in enforcing
any rights under the guaranty set forth in this Article. Without limiting the
generality of the foregoing, each Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
the Borrower to the Agents or the Lenders under any Loan Document but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Loan Party.
 
Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally guarantees
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agents, the Lenders with respect thereto. Each Guarantor agrees
that this Article constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made by any Agent
or any Lender to any Collateral. The obligations of each Guarantor under this
Article are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against any Loan
Party or whether any Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Article shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now or hereafter have in any way relating to, any or all of
the following:
 
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(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver
of or any consent to departure from any Loan Document, including any increase in
the Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or otherwise;
 
(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
 
(d) the existence of any claim, set-off, defense or other right that any
Guarantor may have at any time against any Person, including, without
limitation, any Agent or any Lender;
 
(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Loan Party; or
 
(f) any other circumstance (including any statute of limitations) or any
existence of or reliance on any representation by the Agents, the Lenders that
might otherwise constitute a defense available to, or a discharge of, any Loan
Party or any other guarantor or surety.
 
This Article shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders, or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made.
 
Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and diligence,
(ii) notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Article and any requirement that the Agents or
the Lenders exhaust any right or take any action against any Loan Party or any
other Person or any Collateral, (iii) any right to compel or direct any Agent or
any Lender to seek payment or recovery of any amounts owed under this Article
from any one particular fund or source or to exhaust any right or take any
action against any other Loan Party, any other Person or any Collateral, (iv)
any requirement that any Agent or any Lender protect, secure, perfect or insure
any security interest or Lien on any property subject thereto or exhaust any
right to take any action against any Loan Party, any other Person or any
Collateral, and (v) any other defense available to any Guarantor. Each Guarantor
agrees that the Agents and the Lenders shall have no obligation to marshal any
assets in favor of any Guarantor or against, or in payment of, any or all of the
Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 11.03 is knowingly made in contemplation of
such benefits. Each Guarantor hereby waives any right to revoke this Article,
and acknowledges that this Article is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
 
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Section 11.04 Continuing Guaranty; Assignments. This Article is a continuing
guaranty and shall (a) remain in full force and effect until the later of (i)
the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article and (ii) the Final Maturity Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents and the Lenders and their
successors, pledgees, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may pledge, assign or otherwise transfer
all or any portion of its rights and obligations under this Agreement (including
all or any portion of its Commitments or its Loans) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted such Lender herein or otherwise, in each case as provided in
Section 12.07.
 
Section 11.05 Subrogation. No Guarantor will exercise any rights that it may now
or hereafter acquire against any Loan Party or any other guarantor that arise
from the existence, payment, performance or enforcement of such Guarantor’s
obligations under this Article, including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agents and the Lenders against any
Loan Party or any other guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including the right to take or receive from any Loan Party or any other
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts
payable under this Article shall have been paid in full in cash and the Final
Maturity Date shall have occurred. If any amount shall be paid to any Guarantor
in violation of the immediately preceding sentence at any time prior to the
later of the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Article and the Final Maturity Date, such amount
shall be held in trust for the benefit of the Agents and the Lenders and shall
forthwith be paid to the Agents and the Lenders to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this Article,
whether matured or unmatured, in accordance with the terms of this Agreement, or
to be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Article thereafter arising. If (i) any Guarantor shall make payment
to the Agents and the Lenders of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under this
Article shall be paid in full in cash and (iii) all Commitments have been
terminated, the Agents and the Lenders will, at such Guarantor’s request and
expense, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
 
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ARTICLE XII
 
MISCELLANEOUS
 
Section 12.01 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, telecopied or delivered, if
to any Loan Party, at the following address:
 

 
GAMETECH INTERNATIONAL, INC.
900 Sandhill Road
Reno, Nevada 89521
Attention: Chief Financial Officer
Telephone: 775-850-6110
Telecopier: 775-850-6090
 
with a copy to:
 
Jones, Walker, Waechter, Poitevent, Carrere & Denegre L.L.P.
201 St. Charles Ave., Floor 50
New Orleans, LA 70170
Attention: Thomas Y. Roberson
Telephone: 504-582-8382
Telecopier: 504-589-8382
 
if to the Administrative Agent, to it at the following address:

ABLECO FINANCE LLC
299 Park Avenue, 23rd Floor
New York, New York 10171
Attention: Kevin Genda
Telephone: (212) 891-2117
Telecopier: (212) 891-1541
 
with a copy to:
 
CERBERUS CALIFORNIA, INC.
11812 San Vicente Boulevard, Suite 300
Los Angeles, CA 90049
Attention: Michael Grenier and Christopher Hebble
Telephone: (310) 903-5010 and (310) 903-5016
Telecopier: (310) 826-9203
 
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if to the Collateral Agent, to it at the following address:
 
ABLECO FINANCE LLC
299 Park Avenue, 23rd Floor
New York, New York 10171
Attention: Kevin Genda
Telephone: (212) 891-2117
Telecopier: (212) 891-1541
 
with a copy to:
 
CERBERUS CALIFORNIA, INC.
11812 San Vicente Boulevard, Suite 300
Los Angeles, CA 90049
Attention: Michael Grenier and Christoper Hebble
Telephone: (310) 903-5010 and (310) 903-5016
Telecopier: (310) 826-9203
 
in each case, with a copy to:
 
PAUL, HASTINGS, JANOFSKY & WALKER LLP
515 South Flower Street
Los Angeles, CA 90071
Attention: John Francis Hilson, Esq.
Telephone: 213-683-6300
Telecopier: 213-996-3300
 
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed, when received or 3 days after deposited in the mails,
whichever occurs first, (ii) if telecopied, when transmitted and confirmation
received, or (iii) if delivered, upon delivery, except that notices to any Agent
pursuant to Articles II and III shall not be effective until received by such
Agent , as the case may be.
 
Section 12.02 Amendments, Etc. iii) No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders or by the Collateral Agent with
the consent of the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall
(i) increase the Commitment of any Lender, reduce the principal of, or interest
on, the Loans payable to any Lender, reduce the amount of any fee payable for
the account of any Lender, or postpone or extend any date fixed for any payment
of principal of, or interest or fees on, the Loans payable to any Lender, in
each case without the written consent of any Lender affected thereby,
(ii) increase the Total Commitment without the written consent of each Lender,
(iii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that is required for the Lenders or any of them to
take any action hereunder, (iv) amend the definition of “Required Lenders” or
“Pro Rata Share”, (v) release all or a substantial portion of the Collateral
(except as otherwise provided in this Agreement and the other Loan Documents),
subordinate any Lien granted in favor of the Collateral Agent for the benefit of
the Agents and the Lenders (except as otherwise provided in this Agreement and
the other Loan Documents), or release the Borrower or any Guarantor, (vi) amend,
modify or waive Section 4.04 or this Section 12.02 of this Agreement, or (vii)
amend the definition of “Borrowing Base” without the written consent of each
Lender. Notwithstanding the foregoing, no amendment, waiver or consent shall,
unless in writing and signed by an Agent, affect the rights or duties of such
Agent (but not in its capacity as a Lender) under this Agreement or the other
Loan Documents.
 
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Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.
 
Section 12.04 Expenses; Taxes; Attorneys Fees. The Borrower will pay on demand,
all costs and expenses incurred by or on behalf of each Agent (and, in the case
of clauses (b) through (m) below, each Lender), regardless of whether the
transactions contemplated hereby are consummated, including reasonable fees,
costs, client charges and expenses of counsel for each Agent (and, in the case
of clauses (b) through (m) below, each Lender), accounting, due diligence,
periodic field audits, physical counts, valuations, investigations, searches and
filings, monitoring of assets, appraisals of Collateral, title searches and
reviewing environmental assessments, miscellaneous disbursements, examination,
travel, lodging and meals, arising from or relating to: (a) the negotiation,
preparation, execution, delivery, performance and administration of this
Agreement and the other Loan Documents (including the preparation of any
additional Loan Documents pursuant to Section 7.01(b) or the review of any of
the agreements, instruments and documents referred to in Section 7.01(f)),
(b) any requested amendments, waivers or consents to this Agreement or the other
Loan Documents whether or not such documents become effective or are given,
(c) the preservation and protection of any of the Lenders’ rights under this
Agreement or the other Loan Documents, (d) the defense of any claim or action
asserted or brought against any Agent or any Lender by any Person that arises
from or relates to this Agreement, any other Loan Document, the Agents’ or the
Lenders’ claims against any Loan Party, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court
proceeding arising from or related to this Agreement or any other Loan Document,
(f) the filing of any petition, complaint, answer, motion or other pleading by
any Agent or any Lender, or the taking of any action in respect of the
Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities and Costs incurred in connection with the
investigation, removal, cleanup or remediation of any Hazardous Materials
present or arising out of the operations of any facility owned or operated by
any Loan Party, (l) any Environmental Liabilities and Costs incurred in
connection with any Environmental Lien, or (m) the receipt by any Agent or any
Lender of any advice from professionals with respect to any of the foregoing.
Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrower agrees to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by any
Agent or any Lender to be payable in connection with this Agreement or any other
Loan Document, and the Borrower agrees to save each Agent and each Lender
harmless from and against any and all present or future claims, liabilities or
losses with respect to or resulting from any omission to pay or delay in paying
any such taxes, fees or impositions, (y) the Borrower agrees to pay all broker
fees that may become due in connection with the transactions contemplated by
this Agreement and the other Loan Documents, and (z) if the Borrower fails to
perform any covenant or agreement contained herein or in any other Loan
Document, any Agent may itself perform or cause performance of such covenant or
agreement, and the expenses of such Agent incurred in connection therewith shall
be reimbursed on demand by the Borrower.
 
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Section 12.05 Right of Set-off.
 
(a) Each of the Lenders agrees that it shall not, without the express written
consent of the Collateral Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of the Collateral Agent, set off
against the Obligations, any amounts owing by such Lender to Borrower or any
deposit accounts of Borrower now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by the Collateral Agent, take or cause to be taken any
action, including, the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
 
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Administrative Agent pursuant to the terms of this
Agreement, or (ii) payments from Administrative Agent in excess of such Lender’s
ratable portion of all such distributions by Administrative Agent, such Lender
promptly shall (1) turn the same over to Administrative Agent, in kind, and with
such endorsements as may be required to negotiate the same to Administrative
Agent, or in immediately available funds, as applicable, for the account of all
of the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to the
other Lenders so that such excess payment received shall be applied ratably as
among the Lenders in accordance with their Pro Rata Shares; provided, however,
that to the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
 
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Section 12.06 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
 
Section 12.07 Assignments and Participations.   
 
(a) This Agreement and the other Loan Documents shall be binding upon and inure
to the benefit of each Loan Party and each Agent and each Lender and their
respective successors and assigns; provided, however, that none of the Loan
Parties may assign or transfer any of its rights hereunder or under the other
Loan Documents without the prior written consent of each Lender and any such
assignment without the Lenders’ prior written consent shall be null and void.
 
(b) Each Lender may with the written consent of the Collateral Agent, assign to
one or more other lenders or other entities all or a portion of its rights and
obligations under this Agreement with respect to all or a portion of its
Commitment and Loans made by it; provided, however, that (i) such assignment is
in an amount which is at least $5,000,000 or a multiple of $1,000,000 in excess
thereof (or the remainder of such Lender’s Commitment) (except such minimum
amount shall not apply to an assignment by a Lender to (x) a Lender, an
Affiliate of such Lender or a Related Fund of such Lender or (y) a group of new
Lenders, each of whom is an Affiliate or Related Fund of each other of each
other to the extent the aggregate amount to be assigned to all such new Lenders
is at least $5,000,000 or a multiple of $1,000,000 in excess thereof), and (ii)
the parties to each such assignment shall execute and deliver to the Collateral
Agent, for its acceptance, an Assignment and Acceptance, together with any
promissory note subject to such assignment and such parties shall deliver to the
Collateral Agent, for the benefit of the Collateral Agent, a processing and
recordation fee of $5,000 (except the payment of such fee shall not be required
(y) in connection with an assignment by a Lender to a Lender, an Affiliate of
such Lender or to a Related Fund of such Lender or (z) if Collateral Agent, in
its sole discretion, waives payment of such fee). Upon such execution, delivery
and acceptance, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least 3 Business Days after the
delivery thereof to the Collateral Agent (or such shorter period as shall be
agreed to by the Collateral Agent and the parties to such assignment), (A) the
assignee thereunder shall become a “Lender” hereunder and, in addition to the
rights and obligations hereunder held by it immediately prior to such effective
date, have the rights and obligations hereunder that have been assigned to it
pursuant to such Assignment and Acceptance and (B) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
 
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(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (ii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Loan Party or any of its Subsidiaries or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the assigning
Lender, any Agent or any Lender and based on 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 this Agreement and the other Loan
Documents; (v) such assignee appoints and authorizes the Agents to take such
action as agents on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agents by the terms hereof
and thereof, together with such powers as are reasonably incidental hereto and
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Lender.
 
(d) The Collateral Agent shall, acting solely for this purpose as a
non-fiduciary agent of the Borrower, maintain, or cause to be maintained at the
Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) (the “Registered Loans”). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agents and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
 
(e) Upon receipt by the Collateral Agent of an Assignment and Acceptance, and
subject to any consent required from the Collateral Agent pursuant to Section
12.07(b) (which consent of the Collateral Agent must be evidenced by the
Collateral Agent’s execution of an acceptance to such Assignment and
Acceptance), the Collateral Agent shall accept the Assignment and Acceptance and
record the information contained therein in the Register.
 
(f) A Registered Loan (and the registered note, if any, evidencing the same) may
be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register (and each registered note shall expressly so provide).
Any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), the Agents shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon, notwithstanding notice to the contrary.
 
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(g) In the event that any Lender sells participations in a Registered Loan, such
Lender shall maintain a register for this purpose as a non-fiduciary agent of
the Borrower on which it enters the name of all participants in the Registered
Loans held by it and the principal amount (and stated interest thereon) of the
portion of the Registered Loan that is the subject of the participation (the
“Participant Register”). A Registered Loan (and the registered note, if any,
evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register. Any such Participant Register shall be available for inspection by the
Borrower, any Agent and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
 
(h) Any Non-U.S. Lender who is assigned an interest in any portion of such
Registered Loan pursuant to an Assignment and Acceptance shall comply with
Section 2.08(d).
 
(i) Each Lender may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, all or a portion of its Commitments or the
Loans made by it); provided, that (i) such Lender’s obligations under this
Agreement (including without limitation, its Commitments hereunder) and the
other Loan Documents shall remain unchanged; (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and the Borrower, the Agents and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and the other Loan Documents; and
(iii) a participant shall not be entitled to require such Lender to take or omit
to take any action hereunder except (A) action directly effecting an extension
of the maturity dates or decrease in the principal amount of the Loans,
(B) action directly effecting an extension of the due dates or a decrease in the
rate of interest payable on the Loans or the fees payable under this Agreement,
or (C) actions directly effecting a release of all or a substantial portion of
the Collateral or any Loan Party (except as set forth in Section 10.08 of this
Agreement or any other Loan Document). The Loan Parties agree that each
participant shall be entitled to the benefits of Section 2.08 and Section 4.05
of this Agreement with respect to its participation in any portion of the
Commitments and the Loans as if it was a Lender.
 
Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.
 
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Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN
THE STATE OF NEW YORK.
 
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. EACH OF THE
PARTIES HERETO AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT COLLATERAL AGENT’S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE COLLATERAL AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH LOAN PARTY
HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES, AND DOCUMENTS IN ANY SUIT, ACTION, OR PROCEEDING BROUGHT IN
THE UNITED STATES OF AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS BY THE MAILING (BY REGISTERED MAIL OR
CERTIFIED MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH PROCESS TO SUCH
LOAN PARTY, C/O THE BORROWER, AT THE BORROWER’S ADDRESS FOR NOTICES AS SET FORTH
IN SECTION 12.01. THE LOAN PARTIES AGREE THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH LOAN PARTY HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
 
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Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
 
Section 12.12 Consent by the Agents and Lenders. Except as otherwise expressly
set forth herein to the contrary, if the consent, approval, satisfaction,
determination, judgment, acceptance or similar action (an “Action”) of any Agent
or any Lender shall be permitted or required pursuant to any provision hereof or
any provision of any other agreement to which any Loan Party is a party and to
which any Agent or any Lender has succeeded thereto, such Action shall be
required to be in writing and may be withheld or denied by such Agent or such
Lender, in its sole discretion, with or without any reason, and without being
subject to question or challenge on the grounds that such Action was not taken
in good faith.
 
Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.
 
Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon
any Agent or any Lender for repayment or recovery of any amount or amounts
received by such Agent or such Lender in payment or on account of any of the
Obligations, such Agent or such Lender shall give prompt notice of such claim to
each other Agent and Lender and the Borrower, and if such Agent or such Lender
repays all or part of such amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over such Agent or such
Lender or any of its property, or (ii) any good faith settlement or compromise
of any such claim effected by such Agent, such Lender with any such claimant,
then and in such event each Loan Party agrees that (A) any such judgment,
decree, order, settlement or compromise shall be binding upon it notwithstanding
the cancellation of any Indebtedness hereunder or under the other Loan Documents
or the termination of this Agreement or the other Loan Documents, and (B) it
shall be and remain liable to such Agent or such Lender hereunder for the amount
so repaid or recovered to the same extent as if such amount had never originally
been received by such Agent or such Lender.
 
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Section 12.15 Indemnification. In addition to each Loan Party’s other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent, each Lender
and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the “Indemnitees”) from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including reasonable attorneys fees, costs and
expenses) incurred by such Indemnitees, whether prior to or from and after the
Effective Date, whether direct, indirect or consequential, as a result of or
arising from or relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any other Loan Document or of any other document executed in
connection with the transactions contemplated by this Agreement, (ii) any
Agent’s or any Lender’s furnishing of funds to the Borrower under this Agreement
or the other Loan Documents, including the management of any such Loans,
(iii) any matter relating to the financing transactions contemplated by this
Agreement or the other Loan Documents or by any document executed in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, or (iv) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnitee is a party thereto
(collectively, the “Indemnified Matters”); provided, however, that the Loan
Parties shall not have any obligation to any Indemnitee under this Section 12.15
for any Indemnified Matter caused by the gross negligence or willful misconduct
of such Indemnitee, as determined by a final judgment of a court of competent
jurisdiction. Such indemnification for all of the foregoing losses, damages,
fees, costs and expenses of the Indemnitees are chargeable against the Loan
Account. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section 12.15 may be unenforceable because it is violative of
any law or public policy, each Loan Party shall, jointly and severally,
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. This Indemnity shall survive the repayment of the
Obligations and the discharge of the Liens granted under the Loan Documents.
 
Section 12.16 Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06, including the Closing Fee, the Loan Servicing
Fee, the Anniversary Fee, the Unused Line Fee, the Commitment Fee, shall at all
times be ascertained from the records of the Agents, which shall be conclusive
and binding absent manifest error.
 
Section 12.17 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and
thereafter shall be binding upon and inure to the benefit of each Loan Party,
each Agent and each Lender, and their respective successors and assigns, except
that the Loan Parties shall not have the right to assign their rights hereunder
or any interest herein without the prior written consent of each Lender, and any
assignment by any Lender shall be governed by Section 12.07.
 
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Section 12.18 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent or such Lender, as applicable,
to the Borrower); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Agent or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by such Agent or such
Lender to the Borrower). All sums paid or agreed to be paid to any Agent or any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.18 and
(ii) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.18.
 
For purposes of this Section 12.18, the term “applicable law” shall mean that
law in effect from time to time and applicable to the loan transaction between
the Borrower, on the one hand, and the Agents and the Lenders, on the other,
that lawfully permits the charging and collection of the highest permissible,
lawful non-usurious rate of interest on such loan transaction and this
Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
 
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The right to accelerate the maturity of the Obligations does not include the
right to accelerate any interest that has not accrued as of the date of
acceleration.
 
Section 12.19 Confidentiality. Each Agent and each Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
companies, any material non-public information supplied to it by the Loan
Parties pursuant to this Agreement or the other Loan Documents (and which at the
time is not, and does not thereafter become, publicly available or available to
such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any Agent or any Lender, (iii) to examiners, auditors, accountants
or Securitization Parties, (iv) in connection with any litigation to which any
Agent or any Lender is a party or (v) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first agrees, in writing, to be bound by
confidentiality provisions similar in substance to this Section 12.19. Each
Agent and each Lender agrees that, upon receipt of a request or identification
of the requirement for disclosure pursuant to clause (iv) hereof, it will make
reasonable efforts to keep the Loan Parties informed of such request or
identification; provided that each Loan Party acknowledges that each Agent and
each Lender may make disclosure as required or requested by any Governmental
Authority or representative thereof and that each Agent and each Lender may be
subject to review by Securitization Parties or other regulatory agencies and may
be required to provide to, or otherwise make available for review by, the
representatives of such parties or agencies any such non-public information.
 
Section 12.20 Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
 
Section 12.21 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
 

       
“BORROWER”
      GAMETECH INTERNATIONAL, INC.  
   
   
    By:      

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Name:
  Title: 

 
 

       
“GUARANTORS”
     
   
   
    By:      

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Name:
  Title: 

 
 

       
“COLLATERAL AGENT AND LENDER”
      ABLECO FINANCE LLC  
   
   
    By:      

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Name:
  Title: 

 
 

     
“ADMINISTRATIVE AGENT AND LENDER”
      ABLECO FINANCE LLC  
   
   
    By:      

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Name:
  Title: 

 
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