Exhibit
10.10


Execution
Version


LOAN AND SECURITY AGREEMENT


 


 


by and among


 


POSTER FINANCIAL GROUP, INC.,

as Parent


 


 


and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO


 


 


as Borrowers,


 


 


THE LENDERS THAT ARE SIGNATORIES HERETO


 


as the Lenders,


 


WELLS FARGO FOOTHILL, INC.


 


as the Arranger, Administrative Agent and
Documentation Agent


 


and

Lehman Brothers Inc.,

as Syndication Agent


 


Dated as of January 23, 2004


 

















 


LOAN AND SECURITY AGREEMENT


 


THIS
LOAN AND SECURITY AGREEMENT (this “Agreement”), is entered
into as of January 23, 2004, by and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each
individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO
FOOTHILL, INC., a California corporation, as the arranger,
administrative agent and documentation agent for the Lenders (“Agent”),
and, on the other hand, POSTER FINANCIAL GROUP, INC., a Nevada corporation (“Parent”),
and each of Parent’s Subsidiaries identified on the signature pages hereof
(such Subsidiaries, together with Parent, are referred to hereinafter each
individually as a “Borrower,” and individually and collectively, jointly
and severally, as the “Borrowers”).


 


The parties agree as follows:


 


1.                                      DEFINITIONS AND CONSTRUCTION.


 


1.1                               Definitions.  As used in this Agreement, the following
terms shall have the following definitions:


 


“Account” means an account (as that term is
defined in the Code), and any and all supporting obligations in respect
thereof.


 


“Account Debtor” means any Person who is
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.


 


“ACH Transactions” means any cash management or
related services (including the Automated Clearing House processing of
electronic funds transfers through the direct Federal Reserve Fedline system)
provided by a Bank Product Provider for the account of Administrative Borrower
or its Subsidiaries.


 


“Acquisition” means the purchase and sale
transaction that is the subject of the Stock Purchase Agreement,


 


“Acquisition Agreements” means the Stock
Purchase Agreement, the Transitional Services Agreement, the Poster/Breitling
Guaranty, the Contribution Agreement and any other agreement, instrument, and
other document relating to the Acquisition.


 


“Additional Documents” has the meaning set
forth in Section 4.4(c).


 


“Administrative Borrower” has the meaning set
forth in Section 17.10.


 


“Advances” has the meaning set forth in Section
2.1(a).


 


“Affiliate” means, as applied to any Person,
any other Person who, 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” means the possession, directly or indirectly through one or more
intermediaries, of the power to direct the management


 

















 


and policies of a Person, whether through the
ownership of Stock, by contract, or otherwise; provided, however, that,
for purposes of Section 7.13 hereof: (a) any Person which owns
directly or indirectly 10% or more of the Stock having ordinary voting power
for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed an Affiliate of such Person.


 


“Agent” means WFF, in its capacity as arranger,
administrative agent, and documentation agent hereunder, and any successor
thereto.


 


“Agent Advances” has the meaning set forth in Section
2.3(e)(i).


 


“Agent-Related Persons” means Agent, together
with its Affiliates, officers, directors, employees, attorneys, and agents.


 


“Agent’s Account” means the Deposit Account of
Agent identified on Schedule A-1.


 


“Agent’s Liens” means the Liens granted by
Borrowers or their Subsidiaries to Agent under this Agreement or the other Loan
Documents.


 


“Agreement” has the meaning set forth in the
preamble to this Agreement.


 


“Applicable Prepayment Premium” means, as of
any date of determination, an amount equal to (a) during the period from
and after the date of the execution and delivery of this Agreement up to the
date that is the first anniversary of the Closing Date, 2% times the sum of
(i) the Maximum Revolver Amount, plus (ii) the outstanding principal
balance of the Term Loans on the date immediately prior to the date of
determination, (b) during the period from and including the date that is
the first anniversary of the Closing Date up to the date that is the second
anniversary of the Closing Date, 1% times the sum of (i) the Maximum
Revolver Amount, plus (ii) the outstanding principal balance of the Term
Loans on the date immediately prior to the date of determination, and
(c) thereafter, 0%.


 


“Applicable Tax Percentage” means the highest aggregate
effective marginal rate of federal, state and local income tax or, when
applicable, alternative minimum tax, to which any direct or indirect S
corporation Stock holder of PB Gaming subject to the highest marginal rate of
tax would be subject in the relevant year of determination (as certified to the
Agent in writing).


 


“Assignee” has the meaning set forth in Section
14.1(a).


 


“Assignment and Acceptance” means an Assignment
and Acceptance Agreement substantially in the form of Exhibit A-1.


 


“Authorized Person” means any officer or
employee of Administrative Borrower.


 


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“Availability” means, as of any date of
determination, the amount that Borrowers are entitled to borrow as Advances
hereunder (after giving effect to all then outstanding Obligations (other than
Bank Product Obligations) and all sublimits and reserves then applicable
hereunder).


 


 “Bank
Product” means any financial accommodation extended to Administrative
Borrower or its Subsidiaries by a Bank Product Provider (other than pursuant to
this Agreement) including: 
(a) credit cards, (b) credit card processing services,
(c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or
services, or (g) transactions under Hedge Agreements.


 


“Bank Product Agreements” means those
agreements entered into from time to time by Administrative Borrower or its
Subsidiaries with a Bank Product Provider in connection with the obtaining of
any of the Bank Products.


 


“Bank Product Obligations” means all
obligations, liabilities, contingent reimbursement obligations, fees, and
expenses owing by Administrative Borrower or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by the Bank Product Agreements and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, and including all such amounts that Administrative Borrower or its
Subsidiaries are obligated to reimburse to Agent or any member of the Lender
Group as a result of Agent or such member of the Lender Group purchasing
participations from, or executing indemnities or reimbursement obligations to,
a Bank Product Provider with respect to the Bank Products provided by such Bank
Product Provider to Administrative Borrower or its Subsidiaries.


 


“Bank Product Provider” means Wells Fargo or
any of its Affiliates.


 


“Bank Product Reserve” means, as of any date of
determination, the lesser of (a) $3,500,000, and (b) the amount of
reserves that Agent has established (based upon the Bank Product Providers’
reasonable determination of the credit exposure in respect of then extant Bank
Products) in respect of Bank Products then provided or outstanding.


 


“Bankruptcy Code” means title 11 of the United
States Code, as in effect from time to time.


 


“Base LIBOR Rate” means the rate per annum,
determined by Agent in accordance with its customary procedures, and utilizing
such electronic or other quotation sources as it considers appropriate (rounded
upwards, if necessary, to the next 1/100%), to be the rate at which Dollar
deposits (for delivery on the first day of the requested Interest Period) are
offered to major banks in the London interbank market 2 Business Days prior to
the commencement of the requested Interest Period, for a term and in an amount
comparable to the Interest Period and the amount of the LIBOR Rate Loan
requested (whether as an initial LIBOR Rate Loan or as a continuation of an
extant LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate
Loan) by Administrative Borrower in accordance with this Agreement, which
determination shall be conclusive in the absence of manifest error.


 


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“Base Rate” means, the rate of interest
announced, from time to time, within Wells Fargo at its principal office in San
Francisco as its “prime rate,” with the understanding that the “prime rate” is
one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto and is evidenced by the recording thereof
after its announcement in such internal publications as Wells Fargo may
designate.


 


“Base Rate Loan” means the portion of the
Advances or the Term Loans that bears interest at a rate determined by
reference to the Base Rate.


 


“Base Rate Margin” means 3 percentage points.


 


“Base Rate Term Loan Margin” means 3 percentage
points.


 


“Benefit Plan” means a “defined benefit plan”
(as defined in Section 3(35) of ERISA) for which any Borrower or
any Subsidiary or ERISA Affiliate of any Borrower has been an “employer” (as
defined in Section 3(5) of ERISA) within the past six years,
including any Multiemployer Plan.


 


“Board of Directors” means the board of
directors (or comparable managers) of Parent or any committee thereof duly
authorized to act on behalf of the board of directors (or comparable managers).


 


“Books” means all of Administrative Borrower’s
and its Subsidiaries’ now owned or hereafter acquired books and records
(including all of their Records indicating, summarizing, or evidencing their
assets (including the Collateral) or liabilities, all of Administrative
Borrower’s and its Subsidiaries’ Records relating to their business operations
or financial condition, and all of their goods or General Intangibles related
to such information).


 


“Borrower” and “Borrowers” have the
respective meanings set forth in the preamble to this Agreement.


 


“Borrower Collateral” means all of each
Borrower’s now owned or hereafter acquired right, title, and interest in and to
each of the following:


 


(a)                                  all
of its Accounts,


 


(b)                                 all
of its Books,


 


(c)                                  all
of its commercial tort claims,


 


(d)                                 all
of its Deposit Accounts,


 


(e)                                  all
of its Equipment,


 


(f)                                    all
of its General Intangibles,


 


(g)                                 all
of its Inventory,


 


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(h)                                 all
of its Investment Property (including all of its securities and Securities
Accounts),


 


(i)                                     all
of its Negotiable Collateral,


 


(j)                                     money
or other assets of such Borrower that now or hereafter come into the
possession, custody, or control of any member of the Lender Group, and


 


(k)                                  the
proceeds and products, whether tangible or intangible, of any of the foregoing,
including proceeds of insurance covering any or all of the foregoing, and any
and all Accounts, Books, Deposit Accounts, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, Real Property, money, or
other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion
thereof or interest therein, and the proceeds thereof.


 


The foregoing to the contrary notwithstanding,
“Borrower Collateral” shall not include the Excluded Assets.


 


“Borrowing” means a borrowing hereunder
consisting of Advances (or term loans, in the case of the Term Loans) made on
the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in
the case of a Swing Loan, or by Agent in the case of an Agent Advance, in each
case, to Administrative Borrower.


 


“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 California, 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 Dollar deposits in the
London interbank market.


 


“Capital Expenditures” means, with respect to
any Person for any period, the sum of (a) the aggregate of all
expenditures by such Person and its Subsidiaries during such period that are
capital expenditures as determined in accordance with GAAP, whether such
expenditures are paid in cash or financed, and (b) to the extent not
covered by clause (a), the aggregate of all expenditures by such Person and its
Subsidiaries during such period to acquire by purchase or otherwise the business
or capitalized assets of, or the Capital Stock of, any other Person.


 


“Capital Lease” means a lease that is required
to be capitalized for financial reporting purposes in accordance with GAAP.


 


“Capitalized Lease Obligation” means that
portion of the obligations under a Capital Lease that is required to be
capitalized in accordance with GAAP.


 


“Cash Equivalents” means (a) marketable
direct obligations issued or unconditionally guaranteed by the United States or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within 1 year from the date of acquisition
thereof, (b) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof maturing within


 


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1 year from the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors
Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270
days from the date of creation thereof and, at the time of acquisition, having
a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates
of deposit or bankers’ acceptances maturing within 1 year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States or any state thereof having at the date of acquisition thereof combined capital
and surplus of not less than $250,000,000, (e) demand Deposit Accounts
maintained with any bank organized under the laws of the United States or any
state thereof so long as the amount maintained with any individual bank is less
than or equal to $100,000 and is insured by the Federal Deposit Insurance
Corporation, and (f) Investments in money market funds substantially all
of whose assets are invested in the types of assets described in clauses
(a) through (e) above.


 


“Cash Management Account” has the meaning set
forth in Section 2.7(a).


 


“Cash Management Agreements” means those
certain cash management agreements, in form and substance reasonably
satisfactory to Agent, each of which is among Administrative Borrower or one of
its Subsidiaries, Agent, and one of the Cash Management Banks.


 


“Cash Management Bank” has the meaning set
forth in Section 2.7(a).


 


“Casino” means a gaming establishment owned by
any Borrower or any Guarantor and any hotel, building, restaurant, theater,
amusement park, other entertainment facility, parking facilities, retail shops,
land, equipment, and other properties and assets directly ancillary thereto and
used or to be used in connection therewith.


 


“Casino Bankroll”
means only the amount of cash or Cash Equivalents required by the provisions of
Section 6.150 of the Regulations of the NGC to satisfy the Casino minimum
bankroll requirements, mandatory game security reserves, allowances for
redemption of casino chips and tokens, or payment of winning wagers to gaming
patrons, or as otherwise may be required by the Gaming Laws or a directive of
the Chairman of the NGCB.


 


“CFC” means a controlled foreign corporation
(as that term is defined in the IRC).


 


“Change of Control” means that (a) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d) of the
Exchange Act), other than Permitted Holders, becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30%,
or more, of the Stock of PB Gaming having the right to vote for the election of
members of the Board of Directors, (b) Timothy Poster and Thomas Breitling
cease to own, directly or indirectly, and control a majority of the outstanding
Stock of PB Gaming, (c ) PB Gaming ceases to own, directly or indirectly,
and control 100% of Parent, (d) a majority of the members of the Board of
Directors do not constitute Continuing Directors, or (e)  any Borrower or
any Guarantor ceases to own, directly or indirectly, and control 100% of the
outstanding Stock of each of its Subsidiaries extant as of the Closing Date.


 


“Closing Date” means the date of the making of
the initial Advance (or other extension of credit) hereunder.


 


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“Closing Date Business Plan” means the set of
Projections of Borrowers for the 3 year period following the Closing Date (on a
year by year basis, and for the 1 year period following the Closing Date, on a
month by month basis), in form and substance (including as to scope and
underlying assumptions) satisfactory to Agent.


 


“Code” means the California Uniform Commercial
Code, as in effect from time to time.


 


“Collateral” means all assets and interests in
assets and proceeds thereof now owned or hereafter acquired by Administrative
Borrower or its Subsidiaries in or upon which a Lien is granted under any of
the Loan Documents.


 


“Collateral Access Agreement” means a landlord
waiver, bailee letter, or acknowledgement agreement of any lessor,
warehouseman, processor, consignee, or other Person in possession of, having a
Lien upon, or having rights or interests in Administrative Borrower’s or its
Subsidiaries’ Books, Equipment or, Inventory, in each case, in form and
substance satisfactory to Agent.


 


“Collateral Agent” means Wells Fargo Bank,
N.A., in its capacity as collateral agent under the Senior Note Documents.


 


“Collections” means all cash, checks, notes,
instruments, and other items of payment (including insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds).


 


“Commercial Tort Claim Assignments” has the
meaning set forth in Section 4.4(b).


 


“Commitment” means, with respect to each
Lender, its Revolver Commitment, its Term Loan A Commitment, its Term Loan B
Commitment or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments, their Term Loan A Commitments,
their Term Loan B Commitments or their Total Commitments, as the context
requires, in each case as such Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 or in the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.


 


“Compliance Certificate”  means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Parent
to Agent.


 


“Consolidated Net Income” means, for any
period, without duplication, net income (or loss) for the applicable period of
measurement of Parent and its Subsidiaries on a consolidated basis determined
in accordance with GAAP, but excluding: (a) non-cash gains from the sale,
exchange, transfer or other disposition of property or assets not in the
ordinary course of business of Parent and its Subsidiaries, and related tax
effects in accordance with GAAP; (b) any other extraordinary or non-recurring
non-cash gains of Parent or its Subsidiaries, and related tax effects in
accordance with GAAP, and (c) any effect of non-cash accounting adjustments
resulting from a change in the tax status of a pass through entity to a “C-corporation”
or other entity taxed similarly; provided that  (1) the net income of any Person that is not a Guarantor or that
is accounted for by the equity method of accounting shall be included only to
the extent of


 


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the amount of dividends of distributions paid in cash
to such Person or Subsidiary of such Person, excluding any distributions made
in the event PB Gaming becomes a corporation under subchapter C of the IRC, (2)
the net income of any Guarantor shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Guarantor
of that net income is not as of the date of determination permitted without any
prior Governmental Authority approval (that has not been obtained) or directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or regulation applicable to
such Person or its Stock holders; and (3) the cumulative effect of a change in
accounting principles shall be excluded.


 


“Continuing Director” means (a) any member
of the Board of Directors who was a director (or comparable manager) of Parent
on the Closing Date, and (b) any individual who becomes a member of the
Board of Directors after the Closing Date if such individual was appointed or
nominated for election to the Board of Directors by a majority of the
Continuing Directors, but excluding any such individual originally proposed for
election in opposition to the Board of Directors in office at the Closing Date
in an actual or threatened election contest relating to the election of the
directors (or comparable managers) of Parent and whose initial assumption of
office resulted from such contest or the settlement thereof.


 


“Contribution Agreement” means, collectively,
(a) the Contribution Agreements, dated as of January 23, 2004, by and between
Mirage Resorts, Incorporated and GNLV and (b) the Contribution Agreement dated
as of January 23, 2004, by and between Mirage Resorts, Incorporated and GNL.


 


“Control Agreement” means a control agreement,
in form and substance satisfactory to Agent, executed and delivered by the
Administrative Borrower or one of its Subsidiaries, Agent, and the applicable
securities intermediary (with respect to a Securities Account) or a bank (with
respect to a Deposit Account).


 


“Copyright Security
Agreement” means a copyright security agreement executed and delivered by
each Borrower and Agent, the form and substance of which is reasonably
satisfactory to Agent.


 


“Daily Balance” means, as of any date of
determination and with respect to any Obligation, the amount of such Obligation
owed at the end of such day.


 


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


 


“Defaulting Lender” means any Lender that fails
to make any Advance (or other extension of credit) that it is required to make
hereunder on the date that it is required to do so hereunder.


 


“Defaulting Lender Rate” means (a) for the
first 3 days from and after the date the relevant payment is due, the Base
Rate, and (b) thereafter, the interest rate then applicable to Advances
that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).


 


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“Deposit Account” means any deposit account (as
that term is defined in the Code).


 


“Designated Account” means the Deposit Account
of Administrative Borrower identified on Schedule D-1.


 


“Designated Account Bank” has the meaning
ascribed thereto on Schedule D-1.


 


“Destroyed Value” has the meaning set forth in Section
6.8(b).


 


“Disbursement Letter” means an instructional
letter executed and delivered by Borrowers to Agent regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
reasonably satisfactory to Agent.


 


“Disqualified Stock” means any capital Stock
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder of the capital Stock), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder of the capital Stock, in whole or in
part, on or prior to the date that is 91 days after the Maturity Date.


 


“Dollars” or “$” means United States
dollars.


 


“Due Diligence Letter” means the due diligence
letter sent by Agent’s counsel to Administrative Borrower, together with Administrative
Borrower’s completed responses to the inquiries set forth therein, the form and
substance of such responses to be satisfactory to Agent.


 


“EBITDA” means, with respect to any fiscal
period, Consolidated Net Income, minus extraordinary gains and interest
income, plus (a) interest expense, income taxes, and depreciation and
amortization for such period, as determined in accordance with GAAP and (b) for
fiscal year 2004 only,  signing bonuses
in an amount not to exceed $1,200,000.


 


“Eligible Transferee” means (a) a
commercial bank organized under the laws of the United States, or any state
thereof, and having total assets in excess of $250,000,000, (b) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country and which has total assets in excess of
$250,000,000, provided that such bank is acting through a branch or agency
located in the United States, (c) a finance company, insurance company, or
other financial institution or fund that is engaged in making, purchasing, or
otherwise investing in commercial loans in the ordinary course of its business
and having (together with its Affiliates) total assets in excess of $250,000,000,
(d) any Affiliate (other than individuals) of a Lender, (e) so long
as no Event of Default has occurred and is continuing, any other Person
approved by Agent and Administrative Borrower (which approval of Administrative
Borrower shall not be unreasonably, withheld, delayed, or conditioned), and
(f) during the continuation of an Event of Default, any other Person
approved by Agent.


 


“Environmental Actions” means any complaint,
summons, citation, notice, directive, order, claim, litigation, investigation,
judicial or administrative proceeding, judgment,


 


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letter, or other communication from any Governmental
Authority, or any third party involving violations of Environmental Laws or
releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials
generated by any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest.


 


“Environmental Law” means any applicable
federal, state, provincial, foreign or local statute, law, rule, regulation,
ordinance, code, binding and enforceable guideline, binding and enforceable
written policy or rule of common law now or hereafter in effect and in each
case as amended, or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on any Borrower or any Subsidiary of a Borrower, relating to
the environment, employee health and safety, or Hazardous Materials, including
CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC § 1251 et
seq.; the Toxic Substances Control Act, 15 USC § 2601 et  seq.;
the Clean Air Act, 42 USC § 7401 et  seq.; the Safe Drinking
Water Act, 42 USC § 3803 et  seq.; the Oil Pollution Act of
1990, 33 USC § 2701 et  seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 USC § 11001 et  seq.;
the Hazardous Material Transportation Act, 49 USC § 1801 et  seq.;
and the Occupational Safety and Health Act, 29 USC §651 et  seq.
(to the extent it regulates occupational exposure to Hazardous Materials); any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.


 


“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, or
consultants, and costs of investigation 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 any
Environmental Action.


 


“Environmental Lien” means any Lien in favor of
any Governmental Authority for Environmental Liabilities and Costs.


 


“Equipment” means equipment (as that term is
defined in the Code), and includes machinery, machine tools, motors, furniture,
furnishings, fixtures, vehicles (including motor vehicles), computer hardware,
tools, parts, and goods (other than consumer goods, farm products, or
Inventory), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing.


 


“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute thereto.


 


“ERISA Affiliate” means (a) any Person
subject to ERISA whose employees are treated as employed by the same employer
as the employees of a Borrower or a Subsidiary of a Borrower under IRC Section
414(b), (b) any trade or business subject to ERISA whose employees are
treated as employed by the same employer as the employees of a Borrower or a
Subsidiary of a Borrower under IRC Section 414(c), (c) solely for purposes
of Section 302 of ERISA and Section 412 of the IRC, any organization subject to
ERISA that is a member of an


 


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affiliated service group of which a Borrower or a
Subsidiary of a Borrower is a member under IRC Section 414(m), or
(d) solely for purposes of Section 302 of ERISA and Section 412 of the
IRC, any Person subject to ERISA that is a party to an arrangement with a
Borrower or a Subsidiary of a Borrower and whose employees are aggregated with
the employees of a Borrower or a Subsidiary of a Borrower under IRC Section
414(o).


 


“ERISA Event” means (a) a Reportable Event
with respect to any Benefit Plan or Multiemployer Plan, (b) the withdrawal
of Parent, any of its Subsidiaries or ERISA Affiliates from a Benefit Plan
during a plan year in which it was a “substantial employer” (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent
to terminate a Benefit Plan in a distress termination (as described in
Section 4041(c) of ERISA), (d) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan, (e) any
event or condition (i) that provides a basis under
Section 4042(a)(1), (2), or (3) of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan,
or (ii) that could reasonably be expected to result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and
4205 of ERISA, of Parent, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under
Section 401(a)(29) of the IRC by Parent or its Subsidiaries or any of their
ERISA Affiliates.


 


“Estimation Period” means the period for which a Stock holder
of Parent is required to estimate for federal income tax purposes its
allocation of taxable income from a Subchapter S corporation or any entity that
is treated as a pass-through entity for federal income tax purposes in
connection with determining its estimated federal income tax liability for such
period.


 


“Event of Default” has the meaning set forth in
Section 8.


 


“Excess Availability” means, as of any date of
determination, the amount equal to Availability minus the aggregate amount,
if any, of all trade payables of Borrowers and their Subsidiaries aged in
excess of their historical levels with respect thereto and all book overdrafts
of Borrowers and their Subsidiaries in excess of their historical practices
with respect thereto, in each case as determined by Agent in its Permitted
Discretion. “Exchange Act” means the Securities Exchange Act of 1934, as
in effect from time to time.


 


“Excluded Assets”  means (a) the Casino Bankroll, (b) the “participation”
slot machines listed on Schedule E-1, (c) any Investment Property
of any Borrower constituting Stock of such Borrower’s Subsidiaries that are
CFCs, solely to the extent that such Investment Property is in excess of 65% of
the voting power of the Stock of such CFC, (d) any agreements (including
that certain Starbucks Corporation Master Licensing Agreement, dated as of
January 21, 2004, between Starbucks Corporation and Parent and the
joinders thereto by GNL and GNLV dated as of January 21, 2004), permits,  or licenses (including Gaming Licenses)
solely in the event and to the extent that a grant of a Lien on such license,
contract, or agreement is prohibited by law or results in a breach or
termination of the terms of, or constitutes a default under, or termination of
any such license, contract, or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Section 9-406, 9-407, or 9-408
or 9-409 of the Uniform Commercial Code (or any successor provision or
provisions) of any relevant


 


11

















 


jurisdiction) and, in any event, immediately upon the
ineffectiveness, lapse or termination of any such terms or default under such
license, contract or agreement, the Excluded Assets shall not include, and the
applicable Borrower shall be deemed to have granted a security interest in, all
such licenses, contracts, or agreements as if such terms or defaults had never
been in effect; (e) the Government Treasury Strips, and (f)  the Stock of Parent’s Subsidiaries that are
licensed or registered under the Gaming Laws and are “Pledged Collateral”  pursuant to the Stock Pledge Agreement; provided,
however, that Excluded Assets shall
not include (and, accordingly, Borrower Collateral shall include) any and all
proceeds of any of such assets; and provided,
further, that, any agreement, permit, license, or the like qualifying as
an Excluded Asset under clauses (b) and
(d) above no longer shall constitute an Excluded Asset (and
instead shall constitute Borrower Collateral) from and after such time as the
lessor, licensor, or other party to such agreement, permit, license, or the
like consents to the grant of a Lien in favor of Agent in such agreement,
permit, license, or the like or the prohibition against granting a Lien therein
in favor of Agent shall cease to be effective.


 


“Family Member” means, with respect to any
individual, any other individual having a relationship by blood (to the second
degree of consanguinity), marriage, or adoption to such individual.


 


“Family Trusts” means, with respect to any
individual, trusts or other estate planning vehicles established for the
benefit of such individual or Family Members of such individual and in respect
of which such individual serves as trustee or in a similar capacity.


 


“Fee Letter” means that certain fee letter,
dated as of even date herewith, between Borrowers and Agent, in form and
substance reasonably satisfactory to Agent.


 


“FEIN” means Federal Employer Identification
Number.


 


“Fixed Charges” means with respect to Parent
and its Subsidiaries for any period, the sum, without duplication, of
(a) Interest Expense, (b) principal payments required to be paid
during such period in respect of Indebtedness, and (c) all federal, state,
and local income taxes accrued for such period.


 


“Fixed Charge Coverage Ratio” means, with
respect to Parent and its Subsidiaries for any period, the ratio of
(i) EBITDA for such period minus Capital Expenditures made (to the
extent not already incurred in a prior period) or incurred during such period,
to (ii) Fixed Charges for such period.


 


“Fremont Street Experience” means The Fremont
Street Experience Limited Liability Company, a Nevada limited liability
company.


 


“Funding Date” means the date on which a
Borrowing occurs.


 


“Funding Losses” has the meaning set forth in Section
2.13(b)(ii).


 


 “GAAP”
means generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.


 


12

















 


“Gaming Laws” means all applicable federal,
state and local laws, rules and regulations pursuant to which the Nevada Gaming
Authorities possess regulatory, licensing or permit authority over the
ownership or operation of gaming facilities within the State of Nevada,
including, the Nevada Gaming Control Act, as codified in Chapter 463 of the
Nevada Revised Statutes, as amended from time to time, and the regulations of
the NGC promulgated thereunder.


 


“Gaming License”
means any finding of suitability, registration, license, franchise or other
approval or authorization required to own, lease, operate or otherwise conduct
or manage riverboat, dockside or land-based gaming activities in any state or
jurisdiction in which any Borrower or any of their Subsidiaries conduct
business (including all such licenses granted by the Nevada Gaming Authorities
under Gaming Laws), and all Liquor Licenses.


 


“General Intangibles” means general intangibles
(as that term is defined in the Code), including payment intangibles, contract
rights, rights to payment, rights arising under common law, statutes, or
regulations, choses or things in action, goodwill, patents, trade names, trade
secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase
orders, customer lists, monies due or recoverable from pension funds, route
lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information contained on
computer disks or tapes, software, literature, reports, catalogs, insurance
premium rebates, tax refunds, and tax refund claims, and any and all supporting
obligations in respect thereof, and any other personal property other than
Accounts, Deposit Accounts, goods, Investment Property, and Negotiable
Collateral.


 


“GNELLC” means Golden Nugget Experience, LLC, a
Nevada limited liability company.


 


“GNL” means GNL, Corp., a Nevada corporation.


 


“GNLV” means GNLV, Corp., a Nevada corporation.


 


“Governing Documents” means, with respect to
any Person, the certificate or articles of incorporation or organization,
by-laws, operating agreements or other organizational documents of such Person.


 


“Government Treasury Strips” means those
certain United States Treasury securities in an amount not to exceed $3,089,752
maintained by Mirage Resorts, Incorporated in a restricted account for the
benefit of GNLV as a reserve in accordance with Nevada Gaming Commission
Regulation 5.115, pursuant to the order of the NGC dated August 27, 1993, and
to be maintained after the Closing Date in a restricted account of GNLV as a
reserve pursuant to Gaming Laws, securing periodic payments due to a
progressive slot machine jackpot winner at GNLV, which jackpot totaled
$3,089,752 payable in 20 equal annual installments of $154,488, without
interest, commencing September 24, 1988 and ending September 24, 2007.


 


“Governmental Authority” means any federal,
state, local, or other governmental, regulatory or administrative body,
instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body and includes the Nevada Gaming Authorities and Liquor
Authorities.


 


13

















 


“Guarantor”
means (a) GNELLC and (b) each other Person which guarantees, pursuant to Section 6.15  or otherwise, all or any part of the
Obligations.


 


“Guarantor Pledge Agreement” means one or more
pledge agreements executed and delivered by each Guarantor in favor of Agent,
in each case, in form and substance reasonably satisfactory to Agent.


 


“Guarantor Security Agreement” means one or
more security agreements executed and delivered by each Guarantor in favor of
Agent, in each case, in form and substance reasonably satisfactory to Agent.


 


“Guaranty” means that certain general
continuing guaranty executed and delivered by each Guarantor in favor of Agent,
for the benefit of the Lender Group and the Bank Product Providers, in form and
substance reasonably satisfactory to Agent.


 


“Hazardous Materials” means (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable laws or regulations as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or any other formulation
intended to define, list, or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or “EP toxicity,” (b) oil, petroleum, or petroleum
derived substances, natural gas, natural gas liquids, synthetic gas, drilling
fluids, produced waters, and other wastes associated with the exploration,
development, or production of crude oil, natural gas, or geothermal resources,
(c) any flammable substances or explosives or any radioactive materials,
and (d) asbestos in any form or electrical equipment that contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
50 parts per million.


 


“Hedge Agreement” means any and all agreements,
or documents now existing or hereafter entered into by Administrative Borrower
or its Subsidiaries that provide for an interest rate, credit, commodity or
equity swap, cap, floor, collar, forward foreign exchange transaction, currency
swap, cross currency rate swap, currency option, or any combination of, or
option with respect to, these or similar transactions, for the purpose of
hedging Administrative Borrower’s or its Subsidiaries’ exposure to fluctuations
in interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.


 


“Holdout Lender” has the meaning set forth in Section
15.2(a).


 


“Indebtedness” means, without duplication,
(a) all obligations for borrowed money, (b) all obligations evidenced
by bonds, debentures, notes, or other similar instruments and all reimbursement
or other obligations in respect of letters of credit, bankers acceptances,
interest rate swaps, or other financial products, (c) all obligations as a
lessee under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of a Person or its Subsidiaries, irrespective of
whether such obligation or liability is assumed, (e) all obligations to
pay the deferred purchase price of assets (other than trade payables incurred
in the ordinary course of business and repayable in accordance with customary
trade practices), (f) all obligations owing under Hedge Agreements, and
(g) any obligation guaranteeing or intended to guarantee (whether directly
or indirectly guaranteed, endorsed, co-made, discounted, or sold with


 


14

















 


recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (f) above.


 


“Indenture” means that certain Indenture dated
as of December 3, 2003 by and among the Indenture Trustee, Parent and its
Subsidiaries.


 


“Indenture Indebtedness” means the outstanding
principal amount of the Senior Notes


 


“Indenture Trustee” means HSBC Bank USA.


 


“Indemnified Liabilities” has the meaning set
forth in Section 11.3.


 


“Indemnified Person” has the meaning set forth
in Section 11.3.


 


“Insolvency Proceeding” means any proceeding
commenced by or against any Person under any provision of the Bankruptcy Code
or under any other state or federal bankruptcy or insolvency law, assignments
for the benefit of creditors, formal or informal moratoria, compositions,
extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.


 


“Insurance Proceeds Reserve” means, as of any
date of determination, the amount of monies that have been paid to Agent
pursuant to Section 6.8(b) and that remain available to be disbursed to
Borrowers for the repair, replacement, renovation or restoration of the asset
that was damaged, destroyed, or condemned. 
For clarity, it is understood that the amount of the Insurance Proceeds
Reserve reduces as monies are disbursed to Borrowers for the repair,
replacement, or restoration of the asset that was damaged, destroyed or
condemned.


 


“Intangible Assets” means, with respect to any
Person, that portion of the book value of all of such Person’s assets that
would be treated as intangibles under GAAP.


 


“Intercompany Advances” means (a) loans or
advances (in cash) (i) from a Borrower to another Borrower, (ii) from a
Guarantor to a Borrower, (iii) from a Guarantor to another Guarantor, or (iv)
from a Borrower to a Guarantor in an amount not to exceed $1,000,000 and (b)
transfers or personal property with a fair market value of no more than
$2,000,000 during the term of this Agreement among Borrowers and Guarantors.


 


“Intercompany Subordination Agreement” means a
subordination agreement executed and delivered by Borrowers and each of their
Subsidiaries and Agent, the form and substance of which is reasonably
satisfactory to Agent.


 


“Intercreditor Agreement” means that certain
Intercreditor Agreement between Agent and the Collateral Agent, the form and
substance of which is satisfactory to Agent.


 


“Interest Expense” means, for any period, the
aggregate of the interest expense of Parent and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.


 


15

















 


“Interest Period” means, with respect to each
LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR
Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base
Rate Loan to a LIBOR Rate Loan) and ending 1, 2, 3 or 6 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, 3 or 6 months after the date on which the Interest Period began,
as applicable, and (e) Borrowers (or Administrative Borrower on behalf
thereof) may not elect an Interest Period which will end after the Maturity
Date.


 


“Inventory” means inventory (as that term is
defined in the Code).


 


“Investment” means, with respect to any Person,
any investment by such Person in any other Person (including Affiliates) in the
form of loans, guarantees, advances, or capital contributions (excluding
(a) commission, travel, relocation and similar advances to officers and
employees of such Person made in the ordinary course of business, and (b) bona fide
Accounts arising in the ordinary course of business consistent with past
practice), purchases or other acquisitions of Indebtedness, Stock, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.


 


“Investment Property” means investment property
(as that term is defined in the Code), and any and all supporting obligations
in respect thereof.


 


“IRC” means the Internal Revenue Code of 1986,
as in effect from time to time and any successor statute.


 


“Issuing Lender” means WFF or any other Lender
that, at the request of Administrative Borrower and with the consent of Agent,
agrees, in such Lender’s sole discretion (which consent will not be
unreasonably withheld or delayed), to become an Issuing Lender for the purpose
of issuing L/Cs or L/C Undertakings pursuant to Section 2.12.


 


“L/C” has the meaning set forth in Section
2.12(a).


 


“L/C Disbursement” means a payment made by the
Issuing Lender pursuant to a Letter of Credit.


 


“L/C Undertaking” has the meaning set forth in Section
2.12(a).


 


16

















 


“Lender” and “Lenders” have the
respective meanings set forth in the preamble to this Agreement, and shall
include any other Person made a party to this Agreement in accordance with the
provisions of Section 14.1.


 


“Lender Group” means, individually and
collectively, each of the Lenders (including the Issuing Lender) and Agent.


 


“Lender Group Expenses” means all
(a) costs or expenses (including taxes, and insurance premiums) required
to be paid by a Borrower or its Subsidiaries under any of the Loan Documents
that are paid, advanced, or incurred by the Lender Group, (b) fees or
charges paid or incurred by Agent in connection with the Lender Group’s
transactions with Borrowers or their Subsidiaries, including, fees or charges
for photocopying, notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, litigation, and UCC searches and
including searches with the patent and trademark office, the copyright office,
or the department of motor vehicles), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement, real estate surveys, real estate title policies and
endorsements, and environmental audits, (c)  costs and expenses incurred
by Agent in the disbursement of funds to or for the account of Borrowers or
other members of the Lender Group (by wire transfer or otherwise),
(d) actual out-of-pocket charges paid or incurred by Agent resulting from
the dishonor of checks, (e) reasonable costs and expenses paid or incurred
by the Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit
examinations of the Books to the extent of the fees and charges (and up to the
amount of any limitation) contained in this Agreement, (g) reasonable
costs and expenses of third party claims or any other suit paid or incurred by
the Lender Group in enforcing or defending the Loan Documents or in connection
with the transactions contemplated by the Loan Documents or the Lender Group’s
relationship with any Borrower or any Subsidiary of a Borrower, (h) Agent’s and
each Lender’s reasonable costs and expenses (including attorneys fees) incurred
in advising, structuring, drafting, reviewing, administering, syndicating, or
amending the Loan Documents, and (i) Agent’s and each Lender’s reasonable
costs and expenses (including attorneys, accountants, consultants, and other
advisors fees and expenses) incurred in terminating, enforcing (including
attorneys, accountants, consultants, and other advisors fees and expenses
incurred in connection with a “workout,” a “restructuring,” or an Insolvency
Proceeding concerning any Borrower or any Subsidiary of a Borrower or in
exercising rights or remedies under the Loan Documents), or defending the Loan
Documents, irrespective of whether suit is brought, or in taking any Remedial
Action concerning the Collateral.


 


“Lender-Related Person” means, with respect to
any Lender, such Lender, together with such Lender’s Affiliates, officers,
directors, employees, attorneys, and agents.


 


“Letter of Credit” means an L/C or an L/C
Undertaking, as the context requires.


 


“Letter of Credit Usage” means, as of any date
of determination, the aggregate undrawn amount of all outstanding Letters of
Credit.


 


17

















 


“LIBOR Deadline” has the meaning set forth in Section
2.13(b)(i).


 


“LIBOR Notice” means a written notice in the
form of Exhibit L-1.


 


“LIBOR Option” has the meaning set forth in Section
2.13(a).


 


“LIBOR Rate” means, for each Interest Period
for each LIBOR Rate Loan, the rate per annum determined by Agent (rounded
upwards, if necessary, to the next 1/100%) 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 an
Advance or the Term Loans that bears interest at a rate determined by reference
to the LIBOR Rate.


 


“LIBOR Rate Margin” means 4 percentage points.


 


“LIBOR Rate Term Loan Margin” means 4
percentage points.


 


“Lien” means any interest in an asset securing
an obligation owed to, or a claim by, any Person other than the owner of the
asset, irrespective of whether (a) such interest is based on the common
law, statute, or contract, (b) such interest is recorded or perfected, and
(c) such interest is contingent upon the occurrence of some future event
or events or the existence of some future circumstance or circumstances.  Without limiting the generality of the
foregoing, the term “Lien” includes the lien or security interest arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, conditional sale or trust receipt, or
from a lease, consignment, or bailment for security purposes and also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Real Property.


 


“Liquor Authorities” means the Clark County
Liquor and Gaming Licensing Board, the City of Las Vegas, the Department of the
Treasury Bureau of Alcohol, Tobacco and Firearms, and any agency, authority,
board, bureau, commission, department, office or instrumentality or any nature
whatsoever of the United States or foreign government, any state, province or
any city or other political subdivision, whether now or hereafter existing, or
any officer or official thereof, including any other agency with authority to
regulate the sale or distribution of alcoholic beverages.


 


“Liquor Laws” means the statutes and ordinances
regarding the sale and distribution of alcoholic beverages enforced by the
Liquor Authorities and the rules and regulations of the Liquor Authorities.


 


“Liquor License” means any license, permit,
registration, qualification or other approval required to sell, dispense or
distribute alcoholic beverages under the Liquor Laws.


 


“Loan Account” has the meaning set forth in Section
2.10.


 


18

















 


“Loan Documents” means this Agreement, the Bank
Product Agreements, the Cash Management Agreements, the Control Agreements, the
Copyright Security Agreement, the Due Diligence Letter, the Fee Letter, the
Guarantor Pledge Agreement, the Guarantor Security Agreement, the Guaranty, the
Intercompany Subordination Agreement, the Intercreditor Agreement,  the Letters of Credit, the Mortgages, the
Officers’ Certificate, the Stock Pledge Agreement, the Trademark Security
Agreement, any note or notes executed by a Borrower in connection with this
Agreement and payable to a member of the Lender Group, and any other agreement
entered into, now or in the future, by a Borrower and the Lender Group in
connection with this Agreement.


 


“Material Adverse Change” means (a) a
material adverse change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of
Borrowers and their Subsidiaries, taken as a whole, (b) a material impairment
of any Borrower’s or any Guarantor’s (other than GNELLC’s) ability to perform
its obligations under the Loan Documents to which it is a party or of the
Lender Group’s ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority
of the Agent’s Liens with respect to the Collateral as a result of an action or
failure to act on the part of a Borrower or a Subsidiary of a Borrower.


 


“Maturity Date” has the meaning set forth in Section
3.4.


 


“Maximum Revolver Amount” means $15,000,000.


 


“Mortgage Policies” has the meaning set forth
in Section 3.1(v).


 


“Mortgages” means, individually and
collectively, one or more mortgages, deeds of trust, or deeds to secure debt,
executed and delivered by a Borrower or a Subsidiary of Borrower in favor of
Agent, in form and substance satisfactory to Agent, that encumber the Real
Property Collateral and the related improvements thereto.


 


“Multiemployer Plan” means a multiemployer plan
as defined in Section 3(37) or Section 4001(a)(3) of ERISA or Section 414(f) of
the IRC contributed to by any Borrower or any of its Subsidiaries or is ERISA
Affiliates and each such plan for the three year period immediately following
the latest date on which any Borrower or its Subsidiary maintained, contributed
to, or had an obligation to maintain or contribute to such plan.


 


“Negotiable Collateral” means letters of
credit, letter of credit rights, instruments, promissory notes, drafts,
documents, and chattel paper (including electronic chattel paper and tangible
chattel paper), and any and all supporting obligations in respect thereof.


 


“Net Cash Proceeds” means, with respect to any
sale or disposition by any Person or any Subsidiary thereof of property or
assets, the amount of Collections received (directly or indirectly) from time
to time (whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or such Subsidiary, in connection
therewith after deducting therefrom only (i) the amount of any
Indebtedness secured by any Permitted Lien on any asset (other than (A)
Indebtedness owing to Agent or any Lender under this Agreement or the other
Loan Documents and (B) Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such disposition,
(ii) reasonable expenses


 


19

















 


related thereto incurred by such Person or such
Subsidiary in connection therewith, and (iii) taxes paid or payable to any
taxing authorities or to PB Gaming in connection with a Permitted Quarterly Tax
Distribution (or other distributions permitted under clause (a) of the
definition of Permitted Distributions) by such Person or such Subsidiary in
connection therewith, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
or payable to a Person that is not an Affiliate (except for Permitted Quarterly
Tax Distributions or other distributions permitted under clause (a) of
the definition of Permitted Distributions paid to PB Gaming) and are properly
attributable to such transaction.


 


“Nevada Gaming Authorities” means the NGC and
the NGCB.


 


“NGC” means the Nevada Gaming Commission.


 


“NGCB” means the Nevada State Gaming Control
Board.


 


“Obligations” means (a) all loans
(including the Term Loans), Advances, debts, principal, interest (including any
interest that, but for the commencement of an Insolvency Proceeding, would have
accrued), contingent reimbursement obligations with respect to outstanding
Letters of Credit, premiums, liabilities (including all amounts charged to
Borrowers’ Loan Account pursuant hereto), obligations (including
indemnification obligations), fees (including the fees provided for in the Fee
Letter), charges, costs, Lender Group Expenses (including any fees or expenses
that, but for the commencement of an Insolvency Proceeding, would have
accrued), lease payments, guaranties, covenants, and duties of any kind and
description owing by Borrowers to the Lender Group pursuant to or evidenced by
the Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all Lender Group Expenses that Borrowers are required to pay or reimburse by
the Loan Documents, by law, or otherwise, and (b) all Bank Product
Obligations.  Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.


 


“Officers’ Certificate” means the
representations and warranties of officers form submitted by Agent to
Administrative Borrower, together with Borrowers’ completed responses to the
inquiries set forth therein, the form and substance of such responses to be
reasonably satisfactory to Agent.


 


“Originating Lender” has the meaning set forth
in Section 14.1(e).


 


“Overadvance” has the meaning set forth in Section
2.5.


 


“Parent” has the meaning set forth in the
preamble to this Agreement.


 


“Participant” has the meaning set forth in Section
14.1(e).


 


“PB Gaming” means PB Gaming, Inc., a Nevada
corporation.


 


20

















 


“PBGC” means the Pension Benefit Guaranty
Corporation as defined in Title IV of ERISA, or any successor thereto.


 


“Permitted Discretion” means a determination
made in good faith and in the exercise of reasonable (from the perspective of a
secured asset-based lender) business judgment.


 


“Permitted Dispositions” means (a) sales
or other dispositions of Equipment that is substantially worn, damaged, or
obsolete in the ordinary course of business, (b) sales of Inventory to
buyers in the ordinary course of business, (c) the use or transfer of
money or Cash Equivalents in a manner that is not prohibited by the terms of
this Agreement or the other Loan Documents, (d) the licensing, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business, (e) immaterial
transfers of Real Property for dedication or public use or easements,
restrictions, covenants, reservations and rights of way granted in the ordinary
course of business, (f) the leasing of any portion of the Casino or Real
Property to third-party tenants for retail (including sales of time-shares and
travel related services) or restaurant purposes only in the ordinary course of
business, so long as (i) such leases do not demise space in excess of 12,500
net rentable square feet in the aggregate of the Casino or Real Property, (ii)
the term of such lease does not exceed 60 months, plus up to one (1) 30-month
option term (or equivalent combination of renewals), (iii) the rental rate
under any such lease is at least equal to the then prevailing market rate for
the entire term of such lease (except for the option periods as set forth in
the preceding clause (iv), (v) any such lease provides that the premises
demised thereby cannot be used for any of the following uses:  any pornographic or obscene purposes, any
commercial sex establishment, any pornographic, obscene, nude or semi-nude
performances, modeling, materials, activities or sexual conduct or any other
use that has or could reasonably be expected to have a Material Adverse Effect,
(v) the proposed tenant is not an Affiliate of any Borrower or Guarantor, and
(vi) no Event of Default has occurred and is continuing or would result
therefrom, and (g) the sale of the Stock or substantially all of the
assets of GNL so long as (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, and (ii) the Net
Cash Proceeds of such sale are either applied to the Term Loans or invested in
GNLV in accordance with Section 2.2.


 


“Permitted Distributions” means:


 


(a)                                  Permitted
Quarterly Tax Distributions; provided that in the event that PB Gaming
becomes taxable as a corporation under Subchapter C of the IRC and either (i)
PB Gaming files consolidated, combined or unitary tax returns with Parent or
(ii) Parent is a pass-through entity for federal income tax purposes (as
evidenced by an officers’ certificate of Parent to the Administrative Agent),
then, so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Parent may pay dividends to PB Gaming in
an amount sufficient to pay the cash tax liabilities of PB Gaming, including
federal, state and local income taxes, which taxes are directly attributable to
Parent and its Subsidiaries, except that (x) the amount of, and the time for
making, of any dividend pursuant to this proviso to pay the tax liabilities
described above shall be determined under the principles and methods applicable
to the determination and payment of Permitted Quarterly Tax Distributions and
(y) in the event that Parent makes distributions to PB Gaming pursuant to this
proviso to pay taxes attributable to its interest in Parent, then no Permitted
Quarterly Tax Distributions shall be made with respect to the same taxable
income of Parent;


 


21

















 


(b)                                 payment,
in cash, of dividends by Borrowers to PB Gaming so long as (i) no Default
or Event of Default has occurred and is continuing or would result therefrom,
(ii) at the time of and after giving effect to such dividend Excess
Availability is at least $5,000,000, and (iii) such dividend, together with the
aggregate amount of all other distributions made by the Borrowers and their
Subsidiaries (other than those permitted under clause (a)) above do not
exceed the sum of (x) 50% of Consolidated Net Income for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the Closing Date to the end of Parent’s most recently ended
fiscal quarter for which financial statements are available at the time of such
payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit) minus the amount paid or to be paid in respect of such
period pursuant to clause (a) above to Stockholders other than the
Parent plus (y) 100% of the
aggregate Net Cash Proceeds received by the Parent as a contribution to its
capital Stock or from the issue or sale of Stock of Parent (excluding
Disqualified Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of the
Company that have been converted into or exchanged for such Stock (other than
Stock or Disqualified Stock or debt securities sold to a Subsidiary of the
Company);


 


(c)                                  payment
in cash of dividends in an aggregate amount not to exceed $500,000 in any
fiscal year from Borrowers to PB Gaming to enable PB Gaming, and PB Gaming
shall pay, ordinary and necessary general and administrative expenses incurred
by PB Gaming so long as (i) no Default or Event of Default has occurred and is
continuing or would result therefrom and 
(ii) Excess Availability is at least $1,500,000 after giving effect to
such payment; and


 


(d)                                 payment
in cash of dividends from GNL and GNLV to Parent or from GNELLC to GNLV.


 


“Permitted Holder” means Thomas Breitling,
Timothy Poster, Andre K. Agassi, Richard N. Barton, Charles Mathewson, their
Family Members, and their Family Trusts.


 


“Permitted Intercompany Advances” means
Intercompany Advances so long as no Default or Event of Default has occurred
and is continuing at the time of the making of the Intercompany Advance or
would result therefrom after giving effect to the Intercompany Advance.


 


“Permitted Investments” means
(a) Investments in cash and Cash Equivalents, (b) Investments in
negotiable instruments for collection, (c) advances made in connection
with purchases of goods or services in the ordinary course of business, (d) Investments
received in settlement of amounts due to a Borrower or any Subsidiary of a
Borrower effected in the ordinary course of business or owing to a Borrower or
any Subsidiary of a Borrower as a result of Insolvency Proceedings involving an
Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a
Borrower or any Subsidiary of a Borrower, (e) Investments existing on the
Closing Date and listed on Schedule P-2, (f) without duplication,
Investments permitted as Indebtedness pursuant to Section 7.1(g),
(g) Investments consisting of or evidencing the extension of credit to
customers of Borrowers and Guarantors in the ordinary course of business, (h)
Investments made in Fremont Street Experience not to exceed $1,000,000 per
annum so long as no Event has occurred and is continuing or would result
therefrom, (i) Permitted Intercompany Advances (j) Investments in a joint
venture that is engaged in a Related Business


 


22

















 


in an amount not to exceed $7,500,000 during the term
of this Agreement, so long as (i) the applicable Borrower provides to Agent a
pledge agreement and appropriate certificates and power or UCC-1 financing
statements hypothecating all direct or beneficial ownership interest in the
Investment in form and substance satisfactory to Agent together with any
opinions of counsel satisfactory to Agent, (ii) at the time of and after giving
effect to such Investment, Excess Availability is at least $7,500,000, and
(iii) no Event of Default has occurred and is continuing or would result
therefrom, and (k) other Investments in an amount not to exceed $1,000,000
during the term of this Agreement so long as no Event of Default has occurred
and is continuing or would result therefrom.


 


“Permitted Liens” means (a) Liens held by
Agent, (b) Liens for unpaid taxes and other governmental impositions that
either (i) are not yet delinquent, or (ii) do not constitute an Event
of Default hereunder and are the subject of Permitted Protests, (c) Liens set
forth on Schedule P-1, (d) the interests of lessors under operating
leases, (e) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by
operation of law in favor of warehousemen, landlords, carriers, mechanics,
materialmen, laborers, or suppliers, incurred in the ordinary course of Borrowers’
business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject
of Permitted Protests, (g) Liens arising from deposits made in connection
with obtaining worker’s compensation or other unemployment insurance,
(h) Liens or deposits to secure performance of bids, tenders, or leases
incurred in the ordinary course of business and not in connection with the
borrowing of money, (i) Liens granted as security for surety or appeal
bonds in connection with obtaining such bonds in the ordinary course of
business, (j) with respect to any Real Property, easements, rights of way, and
zoning restrictions that do not materially interfere with or impair the use or
operation thereof; (k) Liens in favor of the Indenture Trustee relative to
the Senior Note Documents so long as and to the extent such Liens remain the
subject of the Intercreditor Agreement, (l) Liens in favor of customs and
revenue authorities arising as a matter of law or pursuant to a bond to secure
payment of customs duties in connection with the importation of goods,
(m) customary rights of setoff upon deposits of cash in favor of banks or
other depository institutions in which such cash is maintained in the ordinary
course of business, (n) Liens arising out of judgments or awards that do
not constitute an Event of Default under Section 8.8 and in respect
of which the Borrowers or any of their Subsidiaries subject thereto shall be
prosecuting an appeal or proceedings for review in good faith and shall be
maintaining appropriate reserves with respect to any such judgment or award,
(o) Liens on Cash and Cash Equivalents to secure Hedge Agreements,
(p) any Lien existing on any property of any Person at the time such Person
becomes a Subsidiary of a Borrower and not created in contemplation of such
event; provided that no such Lien shall extend to or cover other property, and
(q) any Lien existing on any property prior to the acquisition thereof by a
Borrower or a Subsidiary thereof and not created in contemplation of such
acquisition; provided that no such Lien shall extend to or cover other
property, and  (r) all Liens
disclosed in the Mortgage Policies.


 


“Permitted Protest” means the right of
Administrative Borrower or any of its Subsidiaries to protest any Lien (other
than any Lien that secures the Obligations), taxes or rental payment, provided
that (a) a reserve with respect to such obligation is established on the
Books in such amount as is required under GAAP, (b) any such protest is
instituted promptly and


 


23

















 


prosecuted diligently by Administrative Borrower or
any of its Subsidiaries, as applicable, in good faith, and (c) Agent is
reasonably satisfied that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of the Agent’s
Liens.


 


“Permitted Purchase Money Indebtedness” means,
as of any date of determination, Purchase Money Indebtedness incurred after the
Closing Date in an aggregate amount outstanding at any one time not in excess
of $10,000,000.


 


“Permitted Quarterly Tax Distributions” means, so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, quarterly distributions of Tax Amounts made on the Quarterly
Payment Date determined on the basis of the estimated taxable income of the
Parent (including any such taxable income attributable to the Parent’s
ownership of an interest in any other pass-through entity for federal income
tax purposes) for the related Estimation Period, as set forth in a statement
filed with the Indenture Trustee; provided, however, that (1) prior to
any distributions of Tax Amounts, the Parent shall deliver to Agent certificate
to the effect that the Parent qualifies as a qualified Subchapter S Subsidiary
under the IRC or a substantially similarly treated pass-through entity for
federal income tax purposes and (2) at the time of such distributions, the
most recent audited financial statements of the Parent reflect that the Parent
was treated as a qualified Subchapter S subsidiary under the IRC or a
substantially similarly treated pass-through entity for federal income tax
purposes; provided
further, however, that for an Estimation Period that includes a
True-Up Determination Date, (1) if the True-Up Amount is due to the Stock
holders, the Permitted Quarterly Tax Distribution payable by the Parent for the
Estimation Period shall be increased by such True-Up Amount, and (2) if
the True-Up Amount is due to the Parent, the Permitted Quarterly Tax
Distribution payable by the Parent for the Estimation Period shall be reduced
by such True-Up Amount and the excess, if any, of the True-Up Amount over such
Permitted Quarterly Tax Distribution shall be applied to reduce the immediately
following Permitted Quarterly Tax Distribution(s) until such True-Up Amount is
entirely offset.  The amount of
Permitted Quarterly Tax Distributions relating to an Estimation Period including
a True-Up Determination Date shall be determined by a Tax Amounts CPA, and the
amount of Permitted Quarterly Tax Distributions relating to all other
Estimation Periods shall be determined in good faith by the Parent. If
any portion of a Permitted Quarterly Tax Distribution is not distributed on the
corresponding Quarterly Payment Date, the Permitted Quarterly Tax Distribution
payable on the immediately following Quarterly Payment Date shall be increased
by such undistributed portion.


 


“Person” means natural persons, corporations,
limited liability companies, limited partnerships, general partnerships,
limited liability partnerships, joint ventures, trusts, land trusts, business
trusts, or other organizations, irrespective of whether they are legal
entities, and governments and agencies and political subdivisions thereof.


 


“Plan” means an
“employee benefit plan,” as defined in Section 3(3) of ERISA, including a
Multiemployer Plan, that any Borrower or its Subsidiaries, or ERISA Affiliates
maintain, contribute to or have an obligation to contribute to.


 


“Poster/Breitling Guaranty” means the guaranty,
dated as of June 24, 2003, by Timothy Poster and Thomas Breitling, as
guarantors, in favor of Mirage Resorts, Incorporated.


 


24

















 


“Projections” means Parent’s forecasted
(a) balance sheets, (b) profit and loss statements, and (c) cash
flow statements, all prepared on a consistent basis with Parent’s historical
financial statements, together with appropriate supporting details and a statement
of underlying assumptions (it being understood that such Projections are
subject to uncertainties and contingencies, many of which are beyond the
control of Borrowers and no assurance can be given that the Projections will be
realized).


 


“Pro Rata Share” means, as of any date of
determination:


 


(a)                                  with
respect to a Lender’s obligation to make Advances and receive payments of
principal, interest, fees, costs, and expenses with respect thereto,
(i) prior to the Revolver Commitments being terminated or reduced to zero,
the percentage obtained by dividing (y) such Lender’s Revolver Commitment,
by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been
terminated or reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender’s Advances by
(z) the aggregate outstanding principal amount of all Advances,


 


(b)                                 with
respect to a Lender’s obligation to participate in Letters of Credit, to
reimburse the Issuing Lender, and to receive payments of fees with respect
thereto, (i) prior to the Revolver Commitments being terminated or reduced
to zero, the percentage obtained by dividing (y) such Lender’s Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been
terminated or reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender’s Advances by (z) the
aggregate outstanding principal amount of all Advances,


 


(c)                                  with
respect to a Lender’s obligation to make the Term Loan A and receive payments
of interest, fees, and principal with respect thereto, (i) prior to the making
of the Term Loan A, the percentage obtained by dividing (y) such Lender’s Term
Loan A Commitment, by (z) the aggregate amount of all Lenders’ Term Loan A
Commitments, and (ii) from and after the making of the Term Loan A, the
percentage obtained by dividing (y) the principal amount of such Lender’s portion
of the Term Loan A, by (z) the principal amount of the Term Loan A,


 


(d)                                 with
respect to a Lender’s obligation to make the Term Loan B and receive payments
of interest, fees, and principal with respect thereto, (i) prior to the making
of the Term Loan B, the percentage obtained by dividing (y) such Lender’s Term
Loan B Commitment, by (z) the aggregate amount of all Lenders’ Term Loan B
Commitments, and (ii) from and after the making of the Term Loan B, the
percentage obtained by dividing (y) the principal amount of such Lender’s
portion of the Term Loan B, by (z) the principal amount of the Term Loan B, and


 


(e)                                  with
respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 16.7), the percentage
obtained by dividing (i) such Lender’s Revolver Commitment plus the
outstanding principal amount of such Lender’s portion of the Term Loans, by
(ii) the aggregate amount of Revolver Commitments of all


 


25

















 


Lenders plus the
outstanding principal amount of the Term Loans; provided, however,
that in the event the Revolver Commitments have been terminated or reduced to
zero, Pro Rata Share under this clause shall be the percentage obtained by
dividing (A) the outstanding principal amount of such Lender’s Advances plus
such Lender’s ratable portion of the Risk Participation Liability with respect
to outstanding Letters of Credit plus the outstanding principal amount of such
Lender’s Term Loan A plus the outstanding principal amount of such Lender’s
Term Loan B, by (B) the outstanding principal amount of all Advances plus the
aggregate amount of the Risk Participation Liability with respect to
outstanding Letters of Credit plus the outstanding principal amount of the Term
Loan A plus the outstanding principal amount of the Term Loan B.


 


“Purchase Money Indebtedness” means
Indebtedness (other than the Obligations, but including Capitalized Lease
Obligations), incurred at the time of, or within 120 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of
the acquisition cost thereof.


 


“Qualified Cash” means, as of any date of
determination, the amount of unrestricted cash and Cash Equivalents of
Borrowers and their Subsidiaries that is in Deposit Accounts or in Securities
Accounts, or any combination thereof, and which such Deposit Account or
Securities Account is the subject of a Control Agreement and is maintained by a
branch office of the bank or securities intermediary located within the United
States.


 


“Quarterly Payment Date” means the tenth day of
each month in which federal estimated tax payments are due; provided,
however, that payments in respect of estimated state income taxes due in
January may instead, at the option of Parent, be paid during the last five days
of the immediately preceding December.


 


“Real Property” means any estates or interests
in real property now owned or hereafter acquired by any Borrower or a
Subsidiary of any Borrower and the improvements thereto.


 


“Real Property Collateral” means the parcel or
parcels of Real Property identified on Schedule R-1 and any Real
Property hereafter acquired by a Borrower or any Subsidiary of a Borrower.


 


“Record” means information that is inscribed on
a tangible medium or which is stored in an electronic or other medium and is
retrievable in perceivable form.


 


“Related Business” means the gaming and hotel
businesses conducted by the Borrowers as of the Closing Date and any and all
businesses that in the good faith judgment of the Board Directors of Parent are
materially related thereto.


 


“Remedial Action” means all actions taken to
(a) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate, or in any way address Hazardous Materials in the indoor or outdoor
environment, (b) 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, (c) perform
any pre-remedial studies, investigations, or post-remedial operation and
maintenance activities, or (d) conduct any other actions authorized by 42
USC § 9601.


 


26

















 


“Replaced Value” has the meaning set forth in Section
6.8(b).


 


“Replacement Lender” has the meaning set forth
in Section 15.2(a).


 


“Report” has the meaning set forth in Section
16.17.


 


“Reportable Event” means a “reportable event”
within the meaning of Section 4043(c) of ERISA with respect to which
neither any thirty day notice requirement nor any advance notice requirement
has been waived.


 


“Required Availability” means that the sum of
(a) Excess Availability, plus (b) Cash and Cash Equivalents exceeds
$25,000,000.


 


“Required Lenders” means, at any time, Lenders
whose aggregate Pro Rata Shares (calculated under clause (d) of the
definition of Pro Rata Shares) equal or exceed 50.1%.


 


“Reserve Percentage” means, on any day, for any
Lender, the maximum percentage prescribed by the Board of Governors of the
Federal Reserve System (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.


 


“Revolver Commitment” means, with respect to
each Lender, its Revolver Commitment, and, with respect to all Lenders, their
Revolver Commitments, in each case as such Dollar amounts are set forth beside
such Lender’s name under the applicable heading on Schedule C-1 or in
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.


 


“Revolver Usage” means, as of any date of
determination, the sum of (a) the then extant amount of outstanding
Advances,  plus (b) the then
extant amount of the Letter of Credit Usage.


 


“Risk Participation Liability” means, as to
each Letter of Credit, all reimbursement obligations of Borrowers to the
Issuing Lender with respect to an L/C Undertaking, consisting of (a) the
amount available to be drawn or which may become available to be drawn,
(b) all amounts that have been paid by the Issuing Lender to the
Underlying Issuer to the extent not reimbursed by Borrowers, whether by the
making of an Advance or otherwise, and (c) all accrued and unpaid
interest, fees, and expenses payable with respect thereto.


 


“SEC” means the United States Securities and
Exchange Commission and any successor thereto.


 


“Securities Account” means a “securities
account” as that term is defined in the Code.


 


27

















 


“Senior Debt” means the sum of (a) the
amount of the Revolver Usage, (b) the outstanding principal amount of the
Term Loans, and (c) the Indenture Indebtedness.


 


“Senior Debt to EBITDA Ratio” means, with
respect to Parent and its Subsidiaries for any period, the ratio of
(a) the aggregate amount of Senior Debt of Parent and its Subsidiaries as
of the last day of such period, to (b) the TTM EBITDA for such period.


 


“Senior Notes” means the Senior Secured Notes
due 2011 issued by Parent pursuant to the Indenture.


 


“Senior Note Documents” means, collectively,
the Indenture, the Senior Notes and the Collateral Documents (as such term is
defined in the Indenture).


 


“Settlement” has the meaning set forth in Section
2.3(f)(i).


 


“Settlement Date” has the meaning set forth in Section
2.3(f)(i).


 


“Solvent” means, with respect to any Person on
a particular date, that, at fair valuations, the sum of such Person’s assets is
greater than all of such Person’s debts.


 


“Stock” means all shares, options, warrants,
limited liability, membership or other interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).


 


“Stock Pledge Agreement” means a stock pledge
agreement, in form and substance reasonably satisfactory to Agent, executed and
delivered by each Borrower that owns Stock of a Subsidiary of Parent.


 


“Stock Purchase Agreement” means the Stock
Purchase Agreement, dated as of June 24, 2003, by and among MGM Mirage and
Mirage Resorts, Incorporated, as sellers, and GNLV, GNL, GNELLC, and Parent, as
purchaser, as amended by Amendment No. 1, dated as of December 15, 2003.


 


“Subsidiary” of a Person means a corporation,
partnership, limited liability company, or other entity in which that Person
directly or indirectly owns or controls the shares of Stock having ordinary
voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability
company, or other entity.


 


“Swing Lender” means WFF or any other Lender
that, at the request of Administrative Borrower and with the consent of Agent
agrees, in such Lender’s discretion, to become the Swing Lender under Section
2.3(d).


 


“Swing Loan” has the meaning set forth in Section
2.3(d)(i).


 


28

















 


“Syndication Agent” means Lehman Brothers, Inc.
in its capacity as syndication agent hereunder, and any successor thereto.


 


“Tax Amount” means, with respect to an Estimation Period or a
taxable year, as the case may be, an amount equal to (1) the product of (a) the
taxable income (including all separately stated items of income) of the Parent
(including any taxable income attributable to Parent’s interest in any other
entity for federal income tax purposes) that is taxable income to the direct
holders of the capital Stock of PB Gaming (or if such direct holder of capital
Stock of PB Gaming is not subject to tax, then any indirect holder as is
subject to tax) for such Estimation Period or taxable year, as the case may be,
and (b) the Applicable Tax Percentage, reduced by (2) to the extent not
previously taken into account, any income tax benefit attributable to Parent
which could be utilized by the Stock holders of PB Gaming in the current or any
prior taxable year, or portion thereof to offset taxable income attributable to
Parent, from and after the date of this Indenture (including any tax losses or
tax credits), computed at the Applicable Tax Percentage of the year that such
benefit is taken into account for purposes of this computation; provided,
however, that the computation of the Tax Amount shall also take into
account (a) the deductibility of state and local taxes for federal income tax
purposes and (b) any difference in the Applicable Tax Percentage resulting from
the nature of taxable income (such as long-term capital gain as opposed to
ordinary income).


 


“Tax Amounts CPA” means a nationally recognized certified
public accounting firm.


 


“Taxes” has the meaning set forth in Section
16.11.


 


“Term Loan” means, individually, the Term Loan
A or the Term Loan B, as the context requires, and “Term Loans” means,
collectively, the Term Loan A and the Term Loan B.


 


“Term Loan A” has the meaning set forth in Section
2.2(a).


 


“Term Loan A Amount” means $12,500,000.


 


“Term Loan A Commitment” means, with respect to
each Lender, its Term Loan A Commitment, and, with respect to all Lenders,
their Term Loan A Commitments, in each case as such Dollar amounts are set
forth beside such Lender’s name under the applicable heading on Schedule C-1
or in the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.


 


“Term Loan B” has the meaning set forth in Section
2.2(b).


 


“Term Loan B Amount” means $7,500,000.


 


“Term Loan B Commitment” means, with respect to
each Lender, its Term Loan B Commitment, and, with respect to all Lenders,
their Term Loan B Commitments, in each case as such Dollar amounts are set
forth beside such Lender’s name under the applicable heading on Schedule C-1
or in the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.


 


29

















 


“Termination Event” means (i) a Reportable
Event with respect to any Benefit Plan, (ii) any event that causes any Borrower
or any of its Subsidiaries or ERISA Affiliates to incur material liability
under Section 502(i), 4201, 4204 or 4212 of ERISA or Section 4975 of
the IRC, (iii) any event that causes any Borrower or any of its
Subsidiaries or ERISA Affiliates to incur liability under Section 409,
502(l), 515, 4062, 4063, 4064 or 4069 of ERISA or Section 4971 of the IRC,
(iv) the filing of a notice of intent to terminate a Benefit Plan or the
treatment of a Benefit Plan amendment as a termination under Section 4041
of ERISA, (v) the institution of proceedings by the PBGC to terminate a
Benefit Plan, or (vi) 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 Benefit Plan.


 


“Total Commitment” means, with respect to each
Lender, its Total Commitment, and, with respect to all Lenders, their Total
Commitments, in each case as such Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 attached
hereto or on the signature page of the Assignment and Acceptance pursuant to
which such Lender became a Lender hereunder in accordance with the provisions
of Section 14.1.


 


“Trademark Security Agreement” means a
trademark security agreement executed and delivered by each Borrower and Agent,
the form and substance of which is reasonably satisfactory to Agent.


 


“Transitional Services Agreement” means the
Transitional Services Agreement, dated as of October 24, 2003, by and
among MGM Mirage and Parent, as amended by that certain amendment dated as of
December 15, 2003.


 


“True-Up
Amount” means, in respect of a particular taxable year, an amount
determined by the Tax Amounts CPA equal to the difference between (1) the
aggregate Permitted Quarterly Tax Distributions actually distributed in respect
of such taxable year, without taking into account any adjustment to such
Permitted Quarterly Tax Distributions made with respect to any other taxable
year (including any adjustment to take into account a True-Up Amount for the
immediately preceding taxable year) and (2) the Tax Amount permitted to be
distributed in respect of such year as determined by reference to Internal
Revenue Service Form 1120-S or other applicable forms of Parent’s direct or
indirect parent entity as applicable filed for such year; provided, however, that if
there is an audit or other adjustment with respect to a return filed by the
Parent or PB Gaming (including a filing of an amended return), upon a final
determination or resolution of such audit or other adjustment, the Tax Amounts
CPA shall redetermine the True-Up Amount for the relevant taxable year.  The amount equal to the excess, if any, of
the amount described in clause (1) above over the amount described in clause
(2) above shall be referred to as the “True-Up Amount due to the Parent,” and
the excess, if any, of the amount described in clause (2) above over the amount
described in clause (1) above shall be referred to as the “True-Up Amount due
to the Stock holders.”


 


“True-Up
Determination Date” means the date on which the Tax Amounts CPA
delivers a statement to the Agent indicating the True-Up Amount; provided,
however, that the True-Up Determination Date shall not be later than
30 days after the occurrence of an event requiring the determination of the
True-Up Amount (including the filing of the federal and state


 


30

















 


tax returns or the final determination or resolution
of an audit or other adjustment, as the case may be).


 


“TTM EBITDA” means, as of any date of
determination, the EBITDA of Parent and its Subsidiaries for the 12 month
period ended as of such date of determination.


 


“Underlying Issuer” means a third Person which
is the beneficiary of an L/C Undertaking and which has issued a letter of
credit at the request of the Issuing Lender for the benefit of Borrowers.


 


“Underlying Letter of Credit” means a letter of
credit that has been issued by an Underlying Issuer.


 


“United States” means the United States of
America.


 


“Voidable Transfer” has the meaning set forth
in Section 17.7.


 


“Wells Fargo” means Wells Fargo Bank, National
Association, a national banking association.


 


“WFF” means Wells Fargo Foothill, Inc., a
California corporation.


 


1.2                               Accounting Terms.  All accounting terms
not specifically defined herein shall be construed in accordance with
GAAP.  When used herein, the term
“financial statements” shall include the notes and schedules thereto.  Whenever the term “Borrowers” or the term
“Parent” is used in respect of a financial covenant or a related definition, it
shall be understood to mean Parent and its Subsidiaries on a consolidated basis
unless the context clearly requires otherwise.


 


1.3                               Code.  Any terms used in this Agreement that are
defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein.


 


1.4                               Construction.  Unless the context
of this Agreement or any other Loan Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the term “including” is not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement
or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and exhibit references
herein are to this Agreement unless otherwise specified.  Any reference in this Agreement or in the
other Loan Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). 
Any reference herein to the repayment in full of the Obligations shall
mean the repayment in full in cash of all Obligations other than contingent
indemnification Obligations and other than any Bank Product Obligations that,
at such time, are allowed by the applicable Bank Product Provider to remain
outstanding and are not required to


 


31

















 


be repaid or cash
collateralized pursuant to the provisions of this Agreement.  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.  Any requirement of a writing contained
herein or in the other Loan Documents shall be satisfied by the transmission of
a Record and any Record transmitted shall constitute a representation and
warranty as to the accuracy and completeness of the information contained
therein.


 


1.5                               Schedules and Exhibits. 
All of the schedules and exhibits attached to this Agreement shall be
deemed incorporated herein by reference.


 


1.6                               Indenture.  Any terms defined in the Indenture that are
incorporated herein by reference shall be construed and defined as set forth in
the Indenture as in effect on the Closing Date.


 


2.                                      LOAN AND TERMS OF PAYMENT.


 


2.1                               Revolver Advances.  Subject to the terms
and conditions of this Agreement, and during the term of this Agreement, each
Lender with a Revolver Commitment agrees (severally, not jointly or jointly and
severally) to make advances (“Advances”) to Borrowers in an amount at
any one time outstanding not to exceed such Lender’s Pro Rata Share of an
amount equal to the Maximum Revolver Amount less the Letter of Credit Usage less
the amount of any reserves (including, the Bank Product Reserve).


 


(a)                                  Anything
to the contrary in this Section 2.1 notwithstanding, Agent shall have
the right to establish reserves in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, including reserves with respect to (i) sums that Borrowers
are required to pay (such as taxes, assessments, insurance premiums, or, in the
case of leased assets, rents or other amounts payable under such leases) and
has failed to pay under any Section of this Agreement or any other Loan
Document, and (ii) amounts owing by Borrowers or their Subsidiaries to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than any existing Permitted Lien set forth on Schedule P-1 which
is specifically identified thereon as entitled to have priority over the
Agent’s Liens), which Lien or trust, in the Permitted Discretion of Agent
likely would have a priority superior to the Agent’s Liens (such as Liens or
trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen,
laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales,
or other taxes where given priority under applicable law) in and to such item
of the Collateral.


 


(b)                                 The
Lenders with Revolver Commitments shall have no obligation to make additional
Advances hereunder to the extent such additional Advances would cause the
Revolver Usage to exceed the Maximum Revolver Amount.


 


(c)                                  Amounts
borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms
and conditions of this Agreement, reborrowed at any time during the term of
this Agreement.


 


2.2                               Term Loan.


 


(a)                                  Term Loan
A.  Subject to the terms and
conditions of this Agreement, on the Closing Date each Lender with a Term Loan
A Commitment agrees (severally, not jointly or


 


32

















 


jointly and severally) to
make term loans (collectively, the “Term Loan A”) to Borrowers in
an amount equal to such Lender’s Pro Rata Share of the Term Loan A Amount.  The Term Loan A shall be repaid on the
following dates and in the following amounts:


 


	
  Date

  	
   

  	
  Installment Amount

  	
   

  
	
  July 1, 2004

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  October 1, 2004

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  January 1, 2005

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  April 1, 2005

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  July 1, 2005

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  October 1, 2005

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  January 1, 2006

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  April 1, 2006

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  July 1, 2006

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  October 1, 2006

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  January 1, 2007

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  April 1, 2007

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  July 1, 2007

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  October 1, 2007

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  January 1, 2008

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  April 1, 2008

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  
	
  July 1, 2008

  	
   

  	
   

  	
  $

  	
  700,000

  	
   

  



 


The outstanding unpaid principal balance and all
accrued and unpaid interest under the Term Loan A shall be due and payable on
the date of termination of this Agreement, whether by its terms, by prepayment,
or by acceleration.  All amounts
outstanding under the Term Loan A shall constitute Obligations.


 


(b)                                 Term Loan
B.  Subject to the terms and
conditions of this Agreement, on the Closing Date each Lender with a Term Loan
B Commitment agrees (severally, not jointly or jointly and severally) to make
term loans (collectively, the “Term Loan B”) to Borrowers in an
amount equal to such Lender’s Pro Rata Share of the Term Loan B Amount.  The Term Loan B shall be due and payable on
the date of the termination of this Agreement, whether by its terms, by
prepayment or by acceleration.  All
amounts outstanding under the Term Loan B shall constitute Obligations.


 


33

















 


(c)                                  Mandatory
Prepayments.


 


(i)                                     Immediately
upon any sale or disposition by Parent or any of its Subsidiaries of property
or assets (other than the dispositions described in clauses (a)—(f) of
Permitted Dispositions and dispositions in an aggregate amount not to exceed
$250,000 per annum) the Borrowers shall prepay the outstanding principal
balance of the Term Loans in an amount equal to 100% of the Net Cash Proceeds
received by such Person in connection with the sales or dispositions; provided,
however, so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, up until the 364th day
following the sale or disposition of all of the Stock of GNL or all of the
assets of GNL, Borrowers may invest the Net Cash Proceeds received by such
Person from such sale in Capital Expenditures for GNLV as agreed to by Agent in
writing and in its Permitted Discretion, and to the extent the Net Cash
Proceeds have not been reinvested within such 364 day period, on the 365th
day, Borrowers shall pay the Net Cash Proceeds to Agent to be applied to the
outstanding principal balance of the term Loans.  Nothing contained in this subclause (ii) shall permit
Parent and any of its Subsidiaries to sell or otherwise dispose of any property
or assets other than in accordance with Section 7.4.


 


(ii)                                  Upon
the issuance or incurrence by Parent or any of its Subsidiaries of any
Indebtedness (other than the Indebtedness referred to in clause (f) of
Section 7.1) or the sale or issuance by Parent or any of its
Subsidiaries of any shares of Stock (other than the issuance of Stock by Parent
to PB Gaming in exchange for additional equity contributions so long as the
Stock of PB Gaming is held by the Permitted Holders) the Borrowers shall prepay
the Term Loans in an amount equal to 100% of the Net Cash Proceeds received by
such Person in connection therewith. 
The provisions of this subclause (iii) 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.


 


(iii)                               Each
prepayment pursuant to subclauses (i) and (ii) above shall be applied be
applied, first, to the outstanding principal amount of the Term Loan A, until
paid in full, and second, to the outstanding principal amount of the Term Loan
B, until paid in full.  Each such
prepayment of the Term Loans shall be applied against the remaining
installments of principal of the applicable Term Loan in the inverse order of
maturity.


 


2.3                               Borrowing Procedures and
Settlements.


 


(a)                                  Procedure
for Borrowing.  Each
Borrowing shall be made by an irrevocable written request by an Authorized
Person delivered to Agent (which notice must be received by Agent no later than
10:00 a.m. (California time) on the Business Day prior to the date that is the
requested Funding Date specifying (i) the amount of such Borrowing, and
(ii) the requested Funding Date, which shall be a Business Day; provided,
however, that in the case of a request for Swing Loan in an amount of
$5,000,000, or less, such notice will be timely received if it is received by
Agent no later than 10:00 a.m. (California time) on the Business Day that is
the requested Funding Date).  At Agent’s
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time.  In such circumstances,
Borrowers agree that any such telephonic notice will be


 


34

















 


confirmed in writing
within 24 hours of the giving of such notice and the failure to provide such
written confirmation shall not affect the validity of the request.


 


(b)                                 Agent’s
Election.  Promptly after receipt of a request for a
Borrowing pursuant to Section 2.3(a), Agent shall elect, in its
discretion, (i) to have the terms of Section 2.3(c) apply to such
requested Borrowing, or (ii) if the Borrowing is for an Advance, to
request Swing Lender to make a Swing Loan pursuant to the terms of Section
2.3(d) in the amount of the requested Borrowing; provided, however,
that if Swing Lender declines in its sole discretion to make a Swing Loan
pursuant to Section 2.3(d), Agent shall elect to have the terms of Section
2.3(c) apply to such requested Borrowing.


 


(c)                                  Making of Loans.


 


(i)                                     In
the event that Agent shall elect to have the terms of this Section 2.3(c)
apply to a requested Borrowing as described in Section 2.3(b), then
promptly after receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m. (California
time) on the Business Day immediately preceding the Funding Date applicable
thereto, by telecopy, telephone, or other similar form of transmission, of the
requested Borrowing.  Each Lender shall
make the amount of such Lender’s Pro Rata Share of the requested Borrowing
available to Agent in immediately available funds, to Agent’s Account, not
later than 10:00 a.m. (California time) on the Funding Date applicable
thereto.  After Agent’s receipt of the
proceeds of such Advances (or the Term Loans, as applicable), Agent shall make
the proceeds thereof available to Administrative Borrower on the applicable
Funding Date by transferring immediately available funds equal to such proceeds
received by Agent to Administrative Borrower’s Designated Account; provided,
however, that, subject to the provisions of Section 2.3(i), Agent
shall not request any Lender to make, and no Lender shall have the obligation
to make, any Advance (or its portion of the Term Loans) if Agent shall have
actual knowledge that (1) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the requested
Funding Date for the applicable Borrowing unless such condition has been
waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.


 


(ii)                                  Unless
Agent receives notice from a Lender on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, prior to 9:00 a.m. (California
time) on the date of such Borrowing, that such Lender will not make available
as and when required hereunder to Agent for the account of Borrowers the amount
of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each
Lender has made or will make such amount available to Agent in immediately
available funds on the Funding Date and Agent may (but shall not be so
required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount.  If
and to the extent any Lender shall not have made its full amount available to
Agent in immediately available funds and Agent in such circumstances has made
available to Borrowers such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to Agent, together with
interest at the Defaulting Lender Rate for each day during such period.  A notice submitted by Agent to any Lender
with respect to amounts owing under this subsection shall be conclusive, absent
manifest error.  If such amount is so
made available, such payment to Agent shall constitute such Lender’s Advance
(or portion of the Term Loans, as applicable) on the date of Borrowing for all
purposes


 


35

















 


of this Agreement.  If such amount is not made available to
Agent on the Business Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon demand by Agent,
Borrowers shall pay such amount to Agent for Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the
Advances (or portion of the Term Loans, as applicable) composing such
Borrowing.  The failure of any Lender to
make any Advance (or portion of the Term Loans, as applicable) on any Funding
Date shall not relieve any other Lender of any obligation hereunder to make an
Advance (or portion of the Term Loans, as applicable) on such Funding Date, but
no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on any Funding Date.


 


(iii)                               Agent
shall not be obligated to transfer to a Defaulting Lender any payments made by
Borrowers to Agent for the Defaulting Lender’s benefit, and, in the absence of
such transfer to the Defaulting Lender, Agent shall transfer any such payments
to each other non-Defaulting Lender member of the Lender Group ratably in
accordance with their Commitments (but only to the extent that such Defaulting
Lender’s Advance was funded by the other members of the Lender Group) or, if so
directed by Administrative Borrower and if no Default or Event of Default had
occurred and is continuing (and to the extent such Defaulting Lender’s Advance
was not funded by the Lender Group), retain same to be re-advanced to Borrowers
as if such Defaulting Lender had made Advances to Borrowers.  Subject to the foregoing, Agent may hold
and, in its Permitted Discretion, re-lend to Borrowers for the account of such
Defaulting Lender the amount of all such payments received and retained by
Agent for the account of such Defaulting Lender.  Solely for the purposes of voting or consenting to matters with
respect to the Loan Documents, such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero.  This Section shall remain effective with
respect to such Lender until (x) the Obligations under this Agreement
shall have been declared or shall have become immediately due and payable, (y) the
non-Defaulting Lenders, Agent, and Administrative Borrower shall have waived
such Defaulting Lender’s default in writing, or (z) the Defaulting Lender
makes its Pro Rata Share of the applicable Advance and pays to Agent all
amounts owing by Defaulting Lender in respect thereof.  The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. 
Any such failure to fund by any Defaulting Lender shall constitute a
material breach by such Defaulting Lender of this Agreement and shall entitle
Administrative Borrower at its option, upon written notice to Agent, to arrange
for a substitute Lender to assume the Commitment of such Defaulting Lender,
such substitute Lender to be acceptable to Agent.  In connection with the arrangement of such a substitute Lender,
the Defaulting Lender shall have no right to refuse to be replaced hereunder,
and agrees to execute and deliver a completed form of Assignment and Acceptance
in favor of the substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) subject only to
being repaid its share of the outstanding Obligations (other than Bank Product
Obligations, but including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever;
provided  however, that any such assumption of the Commitment of
such Defaulting Lender shall not be deemed to constitute a waiver of any of the


 


36

















 


Lender Groups’ or
Borrowers’ rights or remedies against any such Defaulting Lender arising out of
or in relation to such failure to fund.


 


(d)                                 Making of Swing Loans.


 


(i)                                     In
the event Agent shall elect, with the consent of Swing Lender, as a Lender, to
have the terms of this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall make such
Advance in the amount of such Borrowing (any such Advance made solely by Swing
Lender as a Lender pursuant to this Section 2.3(d) being referred to as
a “Swing Loan” and such Advances being referred to collectively as “Swing
Loans”) available to Borrowers on the Funding Date applicable thereto by
transferring immediately available funds to Administrative Borrower’s
Designated Account.  Each Swing Loan
shall be deemed to be an Advance hereunder and shall be subject to all the
terms and conditions applicable to other Advances, except that no such Swing
Loan shall be eligible to be a LIBOR Rate Loan and all payments on any Swing
Loan shall be payable to Swing Lender as a Lender solely for its own account
(and for the account of the holder of any participation interest with respect
to such Swing Loan).  Subject to the
provisions of Section 2.3(i), Agent shall not request Swing Lender as a
Lender to make, and Swing Lender as a Lender shall not make, any Swing Loan if
Agent has actual knowledge that (i) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such condition has
been waived, or (ii) the requested Borrowing would exceed the Availability
on such Funding Date.  Swing Lender as a
Lender shall not otherwise be required to determine whether the applicable conditions
precedent set forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion, any Swing Loan.


 


(ii)                                  The
Swing Loans shall be secured by the Agent’s Liens, constitute Obligations
hereunder, and bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans.


 


(e)                                  Agent Advances.


 


(i)                                     Agent
hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s
sole discretion, (1) after the occurrence and during the continuance of a
Default or an Event of Default, or (2) at any time that any of the other
applicable conditions precedent set forth in Section 3 have not been
satisfied, to make Advances to Borrowers on behalf of the Lenders that Agent,
in its Permitted Discretion deems necessary or desirable (A) to preserve or
protect the Collateral, or any portion thereof, (B) to enhance the likelihood
of repayment of the Obligations (other than the Bank Product Obligations), or
(C) to pay any other amount chargeable to Borrowers pursuant to the terms of
this Agreement, including Lender Group Expenses and the costs, fees, and
expenses described in Section 10 (any of the Advances described in this Section
2.3(e) shall be referred to as “Agent Advances”).  Each Agent Advance shall be deemed to be an
Advance hereunder, except that no such Agent Advance shall be eligible to be a
LIBOR Rate Loan and all payments thereon shall be payable to Agent solely for
its own account.


 


37

















 


(ii)                                  The
Agent Advances shall be repayable on demand, secured by the Agent’s Liens
granted to Agent under the Loan Documents, constitute Obligations hereunder,
and bear interest at the rate applicable from time to time to Advances that are
Base Rate Loans.


 


(f)                                    Settlement.  It is agreed that each Lender’s funded
portion of the Advances is intended by the Lenders to equal, at all times, such
Lender’s Pro Rata Share of the outstanding Advances.  Such agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of or enforceable
by Borrowers) that in order to facilitate the administration of this Agreement
and the other Loan Documents, settlement among them as to the Advances, the
Swing Loans, and the Agent Advances shall take place on a periodic basis in
accordance with the following provisions:


 


(i)                                     Agent
shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent, (1) on
behalf of Swing Lender, with respect to each outstanding Swing Loan,
(2) for itself, with respect to each Agent Advance, and (3) with
respect to Borrowers’ or their Subsidiaries’ Collections received, as to each
by notifying the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m. (California
time) on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the “Settlement Date”).  Such notice of a Settlement Date shall
include a summary statement of the amount of outstanding Advances, Swing Loans,
and Agent Advances for the period since the prior Settlement Date.  Subject to the terms and conditions
contained herein (including Section 2.3(c)(iii)):  (y) if a Lender’s balance of the
Advances (including Swing Loans and Agent Advances) exceeds such Lender’s Pro
Rata Share of the Advances (including Swing Loans and Agent Advances) as of a
Settlement Date, then Agent shall, by no later than 12:00 p.m. (California
time) on the Settlement Date, transfer in immediately available funds to a
Deposit Account of such Lender (as such Lender may designate), an amount such
that each such Lender shall, upon receipt of such amount, have as of the Settlement
Date, its Pro Rata Share of the Advances (including Swing Loans and Agent
Advances), and (z) if a Lender’s balance of the Advances (including Swing
Loans and Agent Advances) is less than such Lender’s Pro Rata Share of the
Advances (including Swing Loans and Agent Advances) as of a Settlement Date,
such Lender shall no later than 12:00 p.m. (California time) on the Settlement
Date transfer in immediately available funds to the Agent’s Account, an amount
such that each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances (including Swing Loans and
Agent Advances).  Such amounts made
available to Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable Swing Loans or Agent
Advances and, together with the portion of such Swing Loans or Agent Advances
representing Swing Lender’s Pro Rata Share thereof, shall constitute Advances
of such Lenders.  If any such amount is
not made available to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.


 


(ii)                                  In
determining whether a Lender’s balance of the Advances, Swing Loans, and Agent
Advances is less than, equal to, or greater than such Lender’s Pro Rata Share
of the Advances, Swing Loans, and Agent Advances as of a Settlement Date, Agent
shall, as part of the relevant Settlement, apply to such balance the portion of
payments actually received in


 


38

















 


good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. 
To the extent that a net amount is owed to any such Lender after such
application, such net amount shall be distributed by Agent to that Lender as
part of such next Settlement.


 


(iii)                               Between
Settlement Dates, Agent, to the extent no Agent Advances or Swing Loans are
outstanding, may pay over to Swing Lender any payments received by Agent, that
in accordance with the terms of this Agreement would be applied to the
reduction of the Advances, for application to Swing Lender’s Pro Rata Share of
the Advances.  If, as of any Settlement
Date, Collections of Borrowers or their Subsidiaries received since the then
immediately preceding Settlement Date have been applied to Swing Lender’s Pro
Rata Share of the Advances other than to Swing Loans, as provided for in the
previous sentence, Swing Lender shall pay to Agent for the accounts of the
Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt
of such amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances.  During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect
to Agent Advances, and each Lender (subject to the effect of letter agreements
between Agent and individual Lenders) with respect to the Advances other than
Swing Loans and Agent Advances, shall be entitled to interest at the applicable
rate or rates payable under this Agreement on the daily amount of funds
employed by Swing Lender, Agent, or the Lenders, as applicable.


 


(g)                                 Notation.  Agent shall record on its books the
principal amount of the Advances (or portion of the Term Loans, as applicable)
owing to each Lender, including the Swing Loans owing to Swing Lender, and
Agent Advances owing to Agent, and the interests therein of each Lender, from
time to time and such records shall, absent manifest error, conclusively be
presumed to be correct and accurate.  In
addition, each Lender is authorized, at such Lender’s option, to note the date
and amount of each payment or prepayment of principal of such Lender’s Advances
in its books and records, including computer records.


 


(h)                                 Lenders’
Failure to Perform.  All
Advances (other than Swing Loans and Agent Advances) shall be made by the
Lenders contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and
(ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.


 


(i)                                     Optional
Overadvances.  Any contrary
provision of this Agreement notwithstanding, the Lenders hereby authorize Agent
or Swing Lender, as applicable, and Agent or Swing Lender, as applicable, may,
but is not obligated to, knowingly and intentionally, continue to make Advances
(including Swing Loans) to Borrowers notwithstanding that an Overadvance exists
or thereby would be created, so long as (i) after giving effect to such Advances,
the outstanding Revolver Usage (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Revolver Amount, and (ii) at the time of the making of any such
Advance, Agent does not


 


39

















 


believe, in good faith,
that the Overadvance created by such Advance will be outstanding for more than
90 days.  The foregoing provisions are
for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not
intended to benefit Borrowers in any way. 
The Advances and Swing Loans, as applicable, that are made pursuant to
this Section 2.3(i) shall be subject to the same terms and conditions as
any other Advance or Swing Loan, as applicable, except that they shall not be
eligible for the LIBOR Option and the rate of interest applicable thereto shall
be the rate applicable to Advances that are Base Rate Loans under Section 2.6(c)
hereof without regard to the presence or absence of a Default or Event of
Default.


 


A.                                   In
the event Agent obtains actual knowledge that the Revolver Usage exceeds the
amounts permitted by the preceding paragraph, regardless of the amount of, or
reason for, such excess, Agent shall notify the Lenders as soon as practicable
(and prior to making any (or any additional) intentional Overadvances (except
for and excluding amounts charged to the Loan Account for interest, fees, or
Lender Group Expenses) unless Agent determines that prior notice would result
in imminent harm to the Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms
of arrangements that shall be implemented with Borrowers intended to reduce,
within a reasonable time, the outstanding principal amount of the Advances to
Borrowers to an amount permitted by the preceding paragraph.  In the event Agent or any Lender disagrees
over the terms of reduction or repayment of any Overadvance, the terms of reduction
or repayment thereof shall be implemented according to the determination of the
Required Lenders.


 


B.                                     Each
Lender with a Revolver Commitment shall be obligated to settle with Agent as
provided in Section 2.3(f) for the amount of such Lender’s Pro Rata
Share of any unintentional Overadvances by Agent reported to such Lender, any
intentional Overadvances made as permitted under this Section 2.3(i),
and any Overadvances resulting from the charging to the Loan Account of
interest, fees, or Lender Group Expenses.


 


2.4                               Payments.


 


(a)                                  Payments by Borrowers.


 


(i)                                     Except
as otherwise expressly provided herein, all payments by Borrowers shall be made
to Agent’s Account for the account of the Lender Group and shall be made in
immediately available funds, no later than 11:00 a.m. (California time) on the
date specified herein.  Any payment
received by Agent later than 11:00 a.m. (California time), shall be deemed to
have been received on the following Business Day and any applicable interest or
fee shall continue to accrue until such following Business Day.


 


(ii)                                  Unless
Agent receives notice from Administrative Borrower prior to the date on which
any payment is due to the Lenders that Borrowers will not make such payment in
full as and when required, Agent may assume that Borrowers have made (or will
make) such payment in full to Agent on such date in immediately available funds
and Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender.  If and to the extent
Borrowers do not make such payment in full to Agent on the date when due, each
Lender severally shall repay to Agent on demand such amount distributed to such
Lender, together with


 


40

















 


interest thereon at the
Defaulting Lender Rate for each day from the date such amount is distributed to
such Lender until the date repaid.


 


(b)                                 Apportionment and Application.


 


(i)                                     Except
as otherwise provided with respect to Defaulting Lenders and except as otherwise
provided in the Loan Documents (including letter agreements between Agent and
individual Lenders), aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal
balance of the Obligations to which such payments relate held by each Lender)
and payments of fees and expenses (other than fees or expenses that are for
Agent’s separate account, after giving effect to any letter agreements between
Agent and individual Lenders) shall be apportioned ratably among the Lenders
having a Pro Rata Share of the type of Commitment or Obligation to which a
particular fee relates.  All payments
shall be remitted to Agent and all such payments, and all proceeds of Collateral
received by Agent, shall be applied as follows:


 


A.                                   first,
to pay any Lender Group Expenses then due to Agent under the Loan Documents,
until paid in full,


 


B.                                     second,
to pay any Lender Group Expenses then due to the Lenders under the Loan
Documents, on a ratable basis, until paid in full,


 


C.                                     third,
to pay any fees then due to Agent (for its separate accounts, after giving
effect to any letter agreements between Agent and the individual Lenders) under
the Loan Documents until paid in full,


 


D.                                    fourth,
to pay any fees then due to any or all of the Lenders (after giving effect to
any letter agreements between Agent and individual Lenders) under the Loan
Documents, on a ratable basis, until paid in full,


 


E.                                      fifth,
to pay interest due in respect of all Agent Advances, until paid in full,


 


F.                                      sixth,
ratably to pay interest due in respect of the Advances (other than Agent
Advances), the Swing Loans, and the Term Loans until paid in full,


 


G.                                     seventh,
to pay the principal of all Agent Advances until paid in full,


 


H.                                    eighth,
ratably to pay all principal amounts then due and payable (other than as a
result of an acceleration thereof) with respect to the Term Loan A until paid
in full,


 


I.                                         ninth,
to pay the principal of all Swing Loans until paid in full,


 


J.                                        tenth,
so long as no Event of Default has occurred and is continuing, and at Agent’s
election (which election Agent agrees will not be made if an


 


41

















 


Overadvance would be
created thereby), to pay amounts then due and owing by Administrative Borrower
or its Subsidiaries in respect of Bank Products, until paid in full,


 


K.                                    eleventh,
so long as no Event of Default has occurred and is continuing, to pay the
principal of all Advances until paid in full,


 


L.                                      twelfth,
if an Event of Default has occurred and is continuing, ratably (i) to pay
the principal of all Advances until paid in full, (ii) to Agent, to be
held by Agent, for the ratable benefit of Issuing Lender and those Lenders
having a Revolver Commitment, as cash collateral in an amount up to 105% of the
then extant Letter of Credit Usage until paid in full, and (iii) to Agent,
to be held by Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount of the Bank Product Reserve
established prior to the occurrence of, and not in contemplation of, the
subject Event of Default until Administrative Borrower’s and its Subsidiaries’
obligations in respect of the then extant Bank Products have been paid in full
or the cash collateral amount has been exhausted,


 


M.                                 thirteenth,
if an Event of Default has occurred and is continuing, to pay the outstanding
principal balance of the Term Loans (ratably) until the Term Loans are paid in
full,


 


N.                                    fourteenth,
if an Event of Default has occurred and is continuing, to pay any other
Obligations (including the provision of amounts to Agent, to be held by Agent,
for the benefit of the Bank Product Providers, as cash collateral in an amount
up to the amount determined by Agent in its Permitted Discretion as the amount
necessary to secure Administrative Borrower’s and its Subsidiaries’ obligations
in respect of the then extant Bank Products), and


 


O.                                    fifteenth,
to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.


 


(ii)                                  Agent
promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in Section
2.3(f).


 


(iii)                               In
each instance, so long as no Event of Default has occurred and is continuing,
this Section 2.4(b) shall not be deemed to apply to any payment by
Borrowers specified by Borrowers to be for the payment of specific Obligations
then due and payable (or prepayable) under any provision of this Agreement.


 


(iv)                              For
purposes of the foregoing, “paid in full” means payment of all amounts owing
under the Loan Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest (and specifically including interest
accrued after the commencement of any Insolvency Proceeding), default interest,
interest on interest, and expense reimbursements, whether or not any of the
foregoing would be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.


 


(v)                                 In
the event of a direct conflict between the priority provisions of this Section
2.4 and other provisions contained in any other Loan Document, it is the
intention of


 


42

















 


the parties hereto that
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 2.4 shall control and govern.


 


2.5                               Overadvances.  If, at any time or
for any reason, the amount of Obligations (other than Bank Product Obligations)
owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section
2.12 is greater than either the Dollar limitations set forth in Section
2.1 or Section 2.12, as applicable (an “Overadvance”), Borrowers
immediately shall pay to Agent, in cash, the amount of such excess, which
amount shall be used by Agent to reduce the Obligations in accordance with the
priorities set forth in Section 2.4(b). 
In addition, Borrowers hereby promise to pay the Obligations (including
principal, interest, fees, costs, and expenses) in Dollars in full as and when
due and payable under the terms of this Agreement and the other Loan Documents.


 


2.6                               Interest Rates and Letter of Credit
Fee:  Rates, Payments, and Calculations.


 


(a)                                  Interest
Rates.  Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows
(i) if the relevant Obligation is an Advance that is a LIBOR Rate Loan, at
a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin,
(ii) if the relevant Obligation is a portion of the Term Loan that is a
LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR
Rate Term Loan Margin, (iii) if the relevant Obligation is a portion of
the Term Loan that is a Base Rate Loan, at a per annum rate equal to the Base
Rate plus the Base Rate Term Loan Margin, and (iv) otherwise, at a per
annum rate equal to the Base Rate plus the Base Rate Margin.


 


(b)                                 Letter of
Credit Fee.  Borrowers shall pay Agent (for the ratable
benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section 2.12(e))
which shall accrue at a rate equal to 3% per annum times the Daily Balance of
the undrawn amount of all outstanding Letters of Credit.


 


(c)                                  Default Rate.  Upon the occurrence and during the continuation of an Event of
Default (and at the election of Agent or the Required Lenders),


 


(i)                                     all
Obligations (except for undrawn Letters of Credit and except for Bank Product
Obligations) that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to 2 percentage points above the per annum rate otherwise applicable
hereunder, and


 


(ii)                                  the
Letter of Credit fee provided for above shall be increased to 2 percentage
points above the per annum rate otherwise applicable hereunder.


 


(d)                                 Payment.  Except as provided to the contrary in Section 2.12(a), interest,
Letter of Credit fees, and all other fees payable hereunder shall be due and
payable, in arrears, on the first day of each quarter any time that Obligations
or Commitments are outstanding.


 


43

















 


Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to
charge such interest and fees, all Lender Group Expenses (as and when
incurred), the charges, commissions, fees, and costs provided for in Section
2.12(e) (as and when accrued or incurred), the fees and costs provided for
in Section 2.11 (as and when accrued or incurred), and all other
payments as and when due and payable under any Loan Document (including the
amounts due and payable with respect to the Term Loans and including any
amounts due and payable to the Bank Product Providers in respect of Bank
Products up to the amount of the then extant Bank Product Reserve) to
Borrowers’ Loan Account, which amounts thereafter shall constitute Advances
hereunder and shall accrue interest at the rate then applicable to Advances
hereunder.  Any interest not paid when
due shall be compounded by being charged to Borrowers’ Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances that are Base Rate Loans hereunder.


 


(e)                                  Computation.  All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days
elapsed.  In the event the Base Rate is
changed from time to time hereafter, the rates of interest hereunder based upon
the Base Rate automatically and immediately shall be increased or decreased by
an amount equal to such change in the Base Rate.


 


(f)                                    Intent to
Limit Charges to Maximum Lawful Rate.  In no event shall the interest rate or rates
payable under this Agreement, plus any other amounts paid in connection
herewith, exceed the highest rate permissible under any law that a court of
competent jurisdiction shall, in a final determination, deem applicable.  Borrowers and the Lender Group, in executing
and delivering this Agreement, intend legally to agree upon the rate or rates
of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate
or rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement,
Borrowers are and shall be liable only for the payment of such maximum as
allowed by law, and payment received from Borrowers in excess of such legal
maximum, whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.


 


2.7                               Cash Management.


 


(a)                                  Borrowers
shall and shall cause each of their Subsidiaries to (i) establish and
maintain cash management services of a type and on terms reasonably
satisfactory to Agent at one or more of the banks set forth on Schedule
2.7(a) (each a “Cash Management Bank”), and shall request in writing
and otherwise take such reasonable steps to ensure that all of their and their
Subsidiaries’ Account Debtors forward payment of the amounts owed by them
directly to such Cash Management Bank, and (ii) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all of their Collections (including those sent
directly by their Account Debtors to a Cash Management Bank) into a bank
account in Agent’s name (a “Cash Management Account”) at one of the Cash
Management Banks.


 


(b)                                 Each
Cash Management Bank shall establish and maintain Cash Management Agreements
with Agent and Borrowers, in form and substance reasonably acceptable to
Agent.  Each such Cash Management
Agreement shall provide, among other


 


44

















 


things, that (i) all
items of payment deposited in such Cash Management Account and proceeds thereof
are held by such Cash Management Bank agent or bailee-in-possession for Agent,
(ii) the Cash Management Bank has no rights of setoff or recoupment or any
other claim against the applicable Cash Management Account, other than for
payment of its service fees and other charges directly related to the
administration of such Cash Management Account and for returned checks or other
items of payment, and (iii) it immediately will forward by daily sweep all
amounts in the applicable Cash Management Account to the Agent’s Account.  Anything contained herein to the contrary
notwithstanding, Agent agrees that it shall not provide the above-described
notice to the Cash Management Banks unless and until an Event of Default has
occurred and is continuing.  Once an
Event of Default has occurred and during the continuance thereof, Agent shall
be free to exercise its right to issue such notice and the subsequent
elimination of the subject Event of Default shall not eliminate the
effectiveness of any notice that has been given during the continuance of an
Event of Default.


 


(c)                                  So
long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a
Cash Management Account Bank or Cash Management Account; provided, however,
that (i) such prospective Cash Management Bank shall be reasonably
satisfactory to Agent and Agent shall have consented in writing in advance to
the opening of such Cash Management Account with the prospective Cash
Management Bank, and (ii) prior to the time of the opening of such Cash
Management Account, a Borrower or a Subsidiary of a Borrower, as applicable,
and such prospective Cash Management Bank shall have executed and delivered to
Agent a Cash Management Agreement.  A
Borrowers or a Subsidiary of a Borrower, as applicable shall close any of their
Cash Management Accounts (and establish replacement cash management accounts in
accordance with the foregoing sentence) promptly and in any event within 30
days of notice from Agent that the creditworthiness of any Cash Management Bank
is no longer acceptable in Agent’s reasonable judgment, or as promptly as
practicable and in any event within 60 days of notice from Agent that the
operating performance, funds transfer, or availability procedures or performance
of the Cash Management Bank with respect to Cash Management Accounts or Agent’s
liability under any Cash Management Agreement with such Cash Management Bank is
no longer acceptable in Agent’s reasonable judgment.


 


(d)                                 The
Cash Management Accounts shall be cash collateral accounts, with all cash,
checks and similar items of payment in such accounts securing payment of the
Obligations, and in which Borrowers are hereby grants a Lien to Agent.


 


2.8                               Crediting Payments.  The receipt of any
payment item by Agent (whether from transfers to Agent by the Cash Management
Banks pursuant to the Cash Management Agreements or otherwise) shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent’s Account or unless and
until such payment item is honored when presented for payment.  Should any payment item not be honored when
presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly.  Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Agent only if it is received into the
Agent’s Account on a Business Day on or before 11:00 a.m. (California
time).  If any payment item is received
into the Agent’s Account on a non-Business


 


45

















 


Day or after 11:00 a.m.
(California time) on a Business Day, it shall be deemed to have been received
by Agent as of the opening of business on the immediately following Business
Day.


 


2.9                               Designated Account.  Agent is authorized
to make the Advances and the Term Loans, and Issuing Lender is authorized to
issue the Letters of Credit, under this Agreement based upon telephonic or
other instructions received from anyone purporting to be an Authorized Person,
or without instructions if pursuant to Section 2.6(d).  Administrative Borrower agrees to establish
and maintain the Designated Account with the Designated Account Bank for the
purpose of receiving the proceeds of the Advances requested by Borrowers and
made by Agent or the Lenders hereunder. 
Unless otherwise agreed by Agent and Administrative Borrower, any
Advance, Agent Advance, or Swing Loan requested by Borrowers and made by Agent
or the Lenders hereunder shall be made to the Designated Account.


 


2.10                        Maintenance of Loan Account;
Statements of Obligations.  Agent shall maintain an account on its books
in the name of Borrowers (the “Loan Account”) on which Borrowers will be
charged with the Term Loans, all Advances (including Agent Advances and Swing
Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for
Borrowers’ account, the Letters of Credit issued by Issuing Lender for
Borrowers’ account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including,
accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.8, the
Loan Account will be credited with all payments received by Agent from
Borrowers or for Borrowers’ account, including all amounts received in the
Agent’s Account from any Cash Management Bank. 
Agent shall render statements regarding the Loan Account to
Administrative Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated between
Borrowers and the Lender Group unless, within 30 days after receipt thereof by
Administrative Borrower, Administrative Borrower shall deliver to Agent written
objection thereto describing the error or errors contained in any such
statements.


 


2.11                        Fees.  Borrowers shall pay to Agent the following
fees and charges, which fees and charges shall be non-refundable when paid
(irrespective of whether this Agreement is terminated thereafter) and shall be
apportioned among the Lenders in accordance with the terms of letter agreements
between Agent and individual Lenders:


 


(a)                                  Unused Line
Fee. On the first day
of each quarter during the term of this Agreement, an unused line fee in the
amount equal to .50% per annum times the result of (i) the Maximum
Revolver Amount, less (ii) the sum of (A) the average Daily Balance of
Advances that were outstanding during the immediately preceding quarter, plus
(B) the average Daily Balance of the Letter of Credit Usage during the
immediately preceding quarter,


 


(b)                                 Fee Letter
Fees.  As and when due and payable under the terms
of the Fee Letter, the fees set forth in the Fee Letter, and


 


(c)                                  Audit,
Appraisal, and Valuation Charges.
Audit, appraisal, and valuation fees and charges as follows (i) a fee of
$850 per day, per auditor, plus out-of-pocket expenses for each financial audit
of Borrower performed by personnel employed by Agent, and


 


46

















 


(ii) the actual
charges paid or incurred by Agent if it elects to employ the services of one or
more third Persons to perform financial audits of Borrowers or their
Subsidiaries, to appraise the Collateral, or any portion thereof, or to assess
Borrowers’ and their Subsidiaries’ business valuation.


 


2.12                        Letters of Credit.


 


(a)                                  Subject
to the terms and conditions of this Agreement, the Issuing Lender agrees to
issue letters of credit for the account of Borrowers (each, an “L/C”) or
to purchase participations or execute indemnities or reimbursement obligations
(each such undertaking, an “L/C Undertaking”) with respect to letters of
credit issued by an Underlying Issuer (as of the Closing Date, the prospective
Underlying Issuer is to be Wells Fargo) for the account of Borrowers.  To request the issuance of an L/C or an L/C
Undertaking (or the amendment, renewal, or extension of an outstanding L/C or
L/C Undertaking), Administrative Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Lender) to the Issuing Lender and Agent (reasonably in
advance of the requested date of issuance, amendment, renewal, or extension) a
notice requesting the issuance of an L/C or L/C Undertaking, or identifying the
L/C or L/C Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address
of the beneficiary thereof (or of the Underlying Letter of Credit, as
applicable), and such other information as shall be necessary to prepare,
amend, renew, or extend such L/C or L/C Undertaking.  If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking.  The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the
requested Letter of Credit:


 


(i)                                     the
Letter of Credit Usage would exceed $5,000,000, or


 


(ii)                                  the
Letter of Credit Usage would exceed the Maximum Revolver Amount less
the then extant amount of outstanding Advances.


 


Borrowers and the Lender Group acknowledge and agree
that certain Underlying Letters of Credit may be issued to support letters of
credit that already are outstanding as of the Closing Date.  Each Letter of Credit (and corresponding
Underlying Letter of Credit) shall be in form and substance acceptable to the
Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in
Dollars.  If Issuing Lender is obligated
to advance funds under a Letter of Credit, Borrowers immediately shall
reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount
equal to such L/C Disbursement not later than 11:00 a.m., California time, on
the date that such L/C Disbursement is made, if Administrative Borrower shall
have received written or telephonic notice of such L/C Disbursement prior to
10:00 a.m., California time, on such date, or, if such notice has not been
received by Administrative Borrower prior to such time on such date, then not
later than 11:00 a.m., California time, on (i) the Business Day that
Administrative Borrower receives such notice, if such notice is received prior
to 10:00 a.m., California time, on the date of receipt, and, in the absence of
such reimbursement, the L/C Disbursement immediately and automatically shall be
deemed to be an Advance hereunder and, thereafter, shall bear interest at


 


47

















 


the rate then applicable to Advances that are Base
Rate Loans under Section 2.6.  To
the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers’
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance.  Promptly
following receipt by Agent of any payment from Borrowers pursuant to this
paragraph, Agent shall distribute such payment to the Issuing Lender or, to the
extent that Lenders have made payments pursuant to Section 2.12(c) to
reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as
their interest may appear.


 


(b)                                 Promptly
following receipt of a notice of L/C Disbursement pursuant to Section
2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata
Share of any Advance deemed made pursuant to the foregoing subsection on the
same terms and conditions as if Borrowers had requested such Advance and Agent
shall promptly pay to Issuing Lender the amounts so received by it from the
Lenders.  By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof)
and without any further action on the part of the Issuing Lender or the Lenders
with Revolver Commitment, the Issuing Lender shall be deemed to have granted to
each Lender with a Revolver Commitment, and each Lender with a Revolver
Commitment shall be deemed to have purchased, a participation in each Letter of
Credit, in an amount equal to its Pro Rata Share of the Risk Participation
Liability of such Letter of Credit, and each such Lender agrees to pay to
Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of
any payments made by the Issuing Lender under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing
Lender and not reimbursed by Borrowers on the date due as provided in clause
(a) of this Section, or of any reimbursement payment required to be
refunded to Borrowers for any reason. 
Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an
amount equal to its respective Pro Rata Share of each L/C Disbursement made by
the Issuing Lender pursuant to this Section 2.12(b) shall be absolute
and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 3 hereof.  If any such Lender fails to make available
to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement
made by the Issuing Lender in respect of such Letter of Credit as provided in
this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of the Issuing Lender) shall be entitled to recover such
amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.


 


(c)                                  Each
Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group
harmless from any loss, cost, expense, or liability, and reasonable attorneys
fees incurred by the Lender Group arising out of or in connection with any
Letter of Credit; provided, however, that no Borrower shall be
obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the Issuing Lender or any other member of the Lender Group.  Each Borrower agrees to be bound by the
Underlying Issuer’s regulations and interpretations of any Underlying Letter of
Credit or by Issuing Lender’s interpretations of any L/C issued by Issuing
Lender to or for such Borrower’s account, even though this interpretation may
be different from such Borrower’s own, and each Borrower understands and agrees
that the Lender Group shall not be liable for any error,


 


48

















 


negligence, or mistake,
whether of omission or commission, in following Borrowers’ instructions or
those contained in the Letter of Credit or any modifications, amendments, or
supplements thereto.  Each Borrower
understands that the L/C Undertakings may require Issuing Lender to indemnify
the Underlying Issuer for certain costs or liabilities arising out of claims by
Borrowers against such Underlying Issuer.  Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless with respect to any loss, cost, expense (including
reasonable attorneys fees), or liability incurred by the Lender Group under any
L/C Undertaking as a result of the Lender Group’s indemnification of any
Underlying Issuer; provided, however, that no Borrower shall be
obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the Issuing Lender or any other member of the Lender Group.


 


(d)                                 Each
Borrower hereby authorizes and directs any Underlying Issuer to deliver to the
Issuing Lender all instruments, documents, and other writings and property
received by such Underlying Issuer pursuant to such Underlying Letter of Credit
and to accept and rely upon the Issuing Lender’s instructions with respect to
all matters arising in connection with such Underlying Letter of Credit and the
related application.


 


(e)                                  Any
and all out-of-pocket charges, commissions, fees, and costs incurred by the
Issuing Lender relating to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable
by Borrowers to Agent for the account of the Issuing Lender; it being
acknowledged and agreed by each Borrower that, as of the Closing Date, the
usage charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.


 


(f)                                    If
by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):


 


(i)                                     any
reserve, deposit, or similar requirement is or shall be imposed or modified in
respect of any Letter of Credit issued hereunder, or


 


(ii)                                  there
shall be imposed on the Underlying Issuer or the Lender Group any other
condition regarding any Underlying Letter of Credit or any Letter of Credit
issued pursuant hereto;


 


and the result of the foregoing is to increase,
directly or indirectly, the cost to the Lender Group of issuing, making,
guaranteeing, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof by the Lender Group, then, and in any such case,
Agent may, at any time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify Administrative Borrower, and
Borrowers shall pay on demand such amounts as Agent may specify to be necessary
to compensate the Lender Group for such additional cost or


 


49

















 


reduced receipt, together with interest on such amount
from the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. 
The determination by Agent of any amount due pursuant to this Section,
as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.


 


2.13                        LIBOR Option.


 


(a)                                  Interest and
Interest Payment Dates.  In
lieu of having interest charged at the rate based upon the Base Rate, Borrowers
shall have the option (the “LIBOR Option”) to have interest on all or a
portion of the Advances or the Term 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 (i) for Interest
Periods of 1, 2 or 3 months, the last day of the Interest Period applicable
thereto and for Interest Period of 6 months, the 90th day of such
Interest Period and the last day of the Interest Period applicable thereto,
(ii) the occurrence of an Event of Default in consequence of which the
Required Lenders or Agent on behalf thereof have elected to accelerate the
maturity of all or any portion of the Obligations, or (iii) termination of
this Agreement pursuant to the terms hereof. 
On the last day of each applicable Interest Period, unless
Administrative 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 Base Rate Loans of the
same type hereunder.  At any time that
an Event of Default has occurred and is continuing, Borrowers no longer shall
have the option to request that Advances or the Term Loans bear interest at the
LIBOR Rate and Agent shall have the right to convert the interest rate on all
outstanding LIBOR Rate Loans to the rate then applicable to Base Rate Loans
hereunder.


 


(b)                                 LIBOR
Election.


 


(i)                                     Administrative
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
Agent prior to 11:00 a.m. (California time) at least 3 Business Days prior to
the commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of Administrative Borrower’s election
of the LIBOR Option for a permitted portion of the Advances or the Term Loans
and an Interest Period pursuant to this Section shall be made by delivery to
Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be confirmed
by delivery to Agent of a LIBOR Notice received by Agent prior to
5:00 p.m. (California time) on the same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall
provide a copy thereof to each of the Lenders having a Revolver Commitment.


 


(ii)                                  Each
LIBOR Notice shall be irrevocable and binding on Borrowers.  In connection with each LIBOR Rate Loan,
each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless
against any loss, cost, or expense incurred by Agent or any Lender as a result
of (a) 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), (b) the conversion of any LIBOR Rate Loan other than
on the last day of the Interest Period applicable thereto, or (c) the
failure to borrow, convert, continue or prepay any LIBOR Rate


 


50

















 


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 Agent or any Lender, be
deemed to equal the amount determined by Agent or such Lender to be the excess,
if any, of (i) 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 (ii) the amount
of interest that would accrue on such principal amount for such period at the
interest rate which 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 Agent or a Lender delivered to Administrative
Borrower setting forth any amount or amounts that Agent or such Lender is
entitled to receive pursuant to this Section 2.13 shall be conclusive absent
manifest error.


 


(iii)                               Borrowers
shall have not more than 5 LIBOR Rate Loans in effect at any given time.  Borrowers only may exercise the LIBOR Option
for LIBOR Rate Loans of at least $1,000,000 and integral multiples of $500,000
in excess thereof.


 


(c)                                  Prepayments.  Borrowers may prepay LIBOR Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans
are 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 Agent of proceeds of Borrowers’ and their
Subsidiaries’ Collections in accordance with Section 2.4(b) 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, each Borrower shall indemnify, defend, and hold Agent and the Lenders
and their Participants harmless against any and all Funding Losses in
accordance with clause (b) above.


 


(d)                                 Special Provisions Applicable to LIBOR Rate.


 


(i)                                     The
LIBOR Rate may be adjusted by 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 relevant 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 Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
Administrative Borrower may, by notice to such affected Lender (y) require
such Lender to furnish to Administrative Borrower a statement setting forth the
basis for adjusting such LIBOR Rate and the method for determining the amount
of such adjustment, or (z) repay the LIBOR Rate Loans with respect to
which such adjustment is made (together with any amounts due under clause
(b)(ii) above).  Such statement shall be
in reasonable detail and shall certify that the claim for additional


 


51

















 


amounts referred to
therein is generally consistent with such Lender’s treatment of similarly
situated customers of such Lender whose transactions with such Lender are
similarly affected by the change in circumstances giving rise to such
payment.  In no event will any such
Lender be required to disclose any confidential or proprietary information in
connection with such statement.


 


(ii)                                  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 Agent and Administrative Borrower and Agent promptly
shall transmit the notice to each other Lender and (y) 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 Base Rate
Loans, and (z) Borrowers 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.


 


(iii)                               Failure
or delay on the part of any Lender to demand compensation pursuant to clauses
(d)(i) or (d)(ii) or of this Section 2.13 shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that the Borrowers shall
not be required to compensate a Lender pursuant to such paragraphs for any
increased costs incurred more than 90 days prior to the date that such Lender
notifies the Borrowers of the change giving rise to such increased costs and of
such Lender’s intention to claim compensation therefor; provided, further that,
if the change giving rise to such increased costs is retroactive, then the
90 day period referred to above shall be extended to include the period of
retroactive effect thereof; and provided further, however, that before making
any such demand, each Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different applicable lending office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.  If a Lender demands
compensation under clauses (d)(i) or (d)(ii) of this Section 2.13 with respect
to LIBOR Rate Loans, the Borrowers may, upon at least three Business Days’
notice to the Lender (with a copy of such notice to the Administrative Agent),
elect that, until the circumstances causing such demand for compensation no
longer apply to such Lender, all LIBOR Rate Loans that would otherwise be made
by such Lender as part of any Borrowing shall be made instead as Base Rate
Loans and all payments of principal of and interest on such Base Rate Loans
shall be made at the same time as payments on the LIBOR Rate Loans otherwise
constituting part of such Borrowing. 
Each Lender will use all reasonable efforts to give prompt notice to the
Borrowers of the event giving rise to any such demand for compensation.


 


(e)                                  No
Requirement of Matched Funding. 
Anything to the contrary contained herein notwithstanding, neither
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


 


52

















 


at the LIBOR Rate by
acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.


 


2.14                        Capital Requirements.  If, after the date
hereof, any Lender determines that (i) the adoption of or change in any
law, rule, regulation or guideline regarding capital requirements for banks or
bank holding companies, or any change in the interpretation or application
thereof by any Governmental Authority charged with the administration thereof,
or (ii) compliance by such Lender or its parent bank holding company with
any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing
the return on such Lender’s or such holding company’s capital as a consequence
of such Lender’s Commitments hereunder to a level below that which such Lender
or such holding company could have achieved but for such adoption, change, or
compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify Administrative Borrower and Agent thereof.  Following receipt of such notice, Borrowers
agree to promptly pay such Lender the amount of such reduction of return of
capital as and when such reduction is determined, payable within 90 days after
presentation by such Lender of a statement in the amount and setting forth in
reasonable detail such Lender’s calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error); provided, that before making any such
demand, each Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
applicable lending office if the making of such a designation would avoid the
circumstances permitting such demand and would not, in the discretion of such
Lender, be otherwise disadvantageous to such Lender; and provided further that
if a Lender makes such a demand, the Borrowers may, upon at least three
Business Days’ notice to such Lender (with a copy of such notice to the
Administrative Agent), elect that, until the circumstances causing such demand
no longer apply to such Lender, all LIBOR Rate Loans that would otherwise be
made by such Lender as part of any Borrowing shall be made instead as Base Rate
Loans and all payments of principal of and interest on such Base Rate Loans
shall be made at the same time as payments on the LIBOR Loans otherwise
constituting part of such Borrowing and in
the event that payments to any Lender are required to be made hereunder as a
result of such additional costs, Borrowers shall be entitled to substitute for
such Lender any other bank or financial institution reasonably acceptable to
the Agent and the Required Lenders.  Such
statement shall certify that the claim for additional amounts referred to
therein is generally consistent with such Lender’s treatment of similarly
situated customers of such Lender whose transactions with such Lender are
similarly affected by the change in circumstances giving rise to such payment,
but such Lender shall not be required to disclose any confidential or
proprietary information therein.  In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.


 


2.15                        Joint and Several Liability of
Borrowers.


 


(a)                                  Each
Borrower is accepting joint and several liability hereunder and under the other
Loan Documents in consideration of the financial accommodations to be provided
by the Agent and the Lenders under this Agreement, for the mutual benefit,
directly and indirectly,


 


53

















 


of each Borrower and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.


 


(b)                                 Each
Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including any Obligations arising under this Section
2.15), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Person composing
Borrowers without preferences or distinction among them.


 


(c)                                  If
and to the extent that any of Borrowers shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Persons composing Borrowers will make such payment with respect to, or
perform, such Obligation.


 


(d)                                 The
Obligations of each Person composing Borrowers under the provisions of this Section
2.15 constitute the absolute and unconditional, full recourse Obligations
of each Person composing Borrowers enforceable against each such Borrower to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstances
whatsoever.


 


(e)                                  Except
as otherwise expressly provided in this Agreement, each Person composing
Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Advances or Letters of Credit issued under or pursuant
to this Agreement, notice of the occurrence of any Default, Event of Default,
or of any demand for any payment under this Agreement, notice of any action at
any time taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). 
Each Person composing Borrowers hereby assents to, and waives notice of,
any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Agent or Lenders at any time or times in respect of any
default by any Person composing Borrowers in the performance or satisfaction of
any term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the
Obligations, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of any Person composing
Borrowers.  Without limiting the generality
of the foregoing, each Borrower assents to any other action or delay in acting
or failure to act on the part of any Agent or Lender with respect to the
failure by any Person composing Borrowers to comply with any of its respective
Obligations, including any failure strictly or diligently to assert any right
or to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 2.15
afford grounds for terminating, discharging or relieving any Person composing
Borrowers, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each Person composing Borrowers that, so
long as any of the Obligations hereunder remain unsatisfied, the Obligations of
such Person composing Borrowers under this Section 2.15 shall


 


54

















 


not be discharged except
by performance and then only to the extent of such performance.  The Obligations of each Person composing Borrowers
under this Section 2.15 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Person composing
Borrowers or any Agent or Lender.  The
joint and several liability of the Persons composing Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, constitution or place
of formation of any of the Persons composing Borrowers or any Agent or Lender.


 


(f)                                    Each
Person composing Borrowers represents and warrants to Agent and Lenders that
such Borrower is currently informed of the financial condition of Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations.  Each Person composing Borrowers further represents and warrants
to Agent and Lenders that such Borrower has read and understands the terms and
conditions of the Loan Documents.  Each
Person composing Borrowers hereby covenants that such Borrower will continue to
keep informed of Borrowers’ financial condition, the financial condition of
other guarantors, if any, and of all other circumstances which bear upon the risk
of nonpayment or nonperformance of the Obligations.


 


(g)                                 Each
of the Persons composing Borrowers waives all rights and defenses arising out
of an election of remedies by the Agent or any Lender, even though that
election of remedies, such as a nonjudicial foreclosure with respect to
security for a guaranteed obligation, has destroyed the Agent’s or such
Lender’s rights of subrogation and reimbursement against such Borrower by the
operation of Section 580(d) of the California Code of Civil Procedure or otherwise:


 


(h)                                 Each
of the Persons composing Borrowers waives all rights and defenses that such
Borrower may have because the Obligations are secured by Real Property.  This means, among other things:


 


(i)                                     Agent
and Lenders may collect from such Borrower without first foreclosing on any
Real or Personal Property Collateral pledged by Borrowers.


 


(ii)                                  If
Agent or any Lender forecloses on any Real Property Collateral pledged by
Borrowers:


 


A.                                   The
amount of the Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price.


 


B.                                     Agent
and Lenders may collect from such Borrower even if Agent or Lenders, by
foreclosing on the Real Property Collateral, has destroyed any right such
Borrower may have to collect from the other Borrowers.


 


This is an unconditional and irrevocable waiver of any
rights and defenses such Borrower may have because the Obligations are secured
by Real Property.  These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.


 


55

















 


(i)                                     The
provisions of this Section 2.15 are made for the benefit of the Agent,
the Lenders and their respective successors and assigns, and may be enforced by
it or them from time to time against any or all of the Persons composing
Borrowers as often as occasion therefor may arise and without requirement on
the part of any such Agent, Lender, successor or assign first to marshal any of
its or their claims or to exercise any of its or their rights against any of
the other Persons composing Borrowers or to exhaust any remedies available to
it or them against any of the other Persons composing Borrowers or to resort to
any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. 
The provisions of this Section 2.15 shall remain in effect until
all of the Obligations shall have been paid in full or otherwise fully
satisfied.  If at any time, any payment,
or any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by any Agent or Lender upon the
insolvency, bankruptcy or reorganization of any of the Persons composing
Borrowers, or otherwise, the provisions of this Section 2.15 will
forthwith be reinstated in effect, as though such payment had not been made.


 


(j)                                     Each
of the Persons composing Borrowers hereby agrees that it will not enforce any
of its rights of contribution or subrogation against the other Persons
composing Borrowers with respect to any liability incurred by it hereunder or
under any of the other Loan Documents, any payments made by it to the Agent or
the Lenders with respect to any of the Obligations or any collateral security
therefor until such time as all of the Obligations have been paid in full in
cash.  Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.


 


(k)                                  Each
of the Persons composing Borrowers hereby agrees that, after the occurrence and
during the continuance of any Default or Event of Default, the payment of any
amounts due with respect to the indebtedness owing by any Borrower to any other
Borrower is hereby subordinated to the prior payment in full in cash of the
Obligations.  Each Borrower hereby
agrees that after the occurrence and during the continuance of any Default or
Event of Default, such Borrower will not demand, sue for or otherwise attempt
to collect any indebtedness of any other Borrower owing to such Borrower until
the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for the Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.4(b).


 


3.                                      CONDITIONS; TERM OF AGREEMENT.


 


3.1                               Conditions Precedent to the Initial
Extension of Credit.  The obligation of the Lender Group (or any
member thereof) to make the initial Advance (or otherwise to extend any


 


56

















 


credit provided for
hereunder), is subject to the fulfillment or waiver, to the satisfaction of
Agent, of each of the conditions precedent set forth below:


 


(a)                                  the
Closing Date shall occur on or before January 23, 2004;


 


(b)                                 [Intentionally
omitted];


 


(c)                                  Agent
shall have received each of the following documents, duly executed, and each
such document shall be in full force and effect:


 


(i)                                     the
Cash Management Agreements,


 


(ii)                                  the
Control Agreements,


 


(iii)                               the
Copyright Security Agreement,


 


(iv)                              the
Disbursement Letter,


 


(v)                                 the
Due Diligence Letter,


 


(vi)                              the
Fee Letter,


 


(vii)                           the
Guarantor Pledge Agreement,


 


(viii)                        the
Guarantor Security Agreement,


 


(ix)                                the
Guaranty,


 


(x)                                   the
Intercompany Subordination Agreement,


 


(xi)                                the
Intercreditor Agreement,


 


(xii)                             the
Mortgages,


 


(xiii)                          the
Officers’ Certificate,


 


(xiv)                         UCC
termination statements and other documentation evidencing the termination of
Liens in and to the properties and assets of Borrowers and their Subsidiaries
and the release of any guarantees by Borrowers and their Subsidiaries, all in
form and substance satisfactory to Agent,


 


(xv)                            the
Stock Pledge Agreement, together with all certificates representing the shares
of Stock pledged thereunder, as well as Stock powers with respect thereto
endorsed in blank, and


 


(xvi)                         the
Trademark Security Agreement.


 


(d)                                 Agent
shall have received a certificate from the Secretary of each Borrower attesting
to the resolutions of such Borrower’s Board of Directors authorizing its


 


57

















 


execution, delivery, and
performance of this Agreement and the other Loan Documents to which such
Borrower is a party and authorizing specific officers of such Borrower to
execute the same;


 


(e)                                  Agent
shall have received copies of each Borrower’s Governing Documents, as amended,
modified, or supplemented to the Closing Date, certified by the Secretary of
such Borrower;


 


(f)                                    Agent
shall have received a certificate of status with respect to each Borrower,
dated within 15 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of such Borrower, which
certificate shall indicate that such Borrower is in good standing in such
jurisdiction;


 


(g)                                 Agent
shall have received certificates of status with respect to each Borrower, each
dated within 30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of
organization of such Borrower) in which its failure to be duly qualified or
licensed would constitute a Material Adverse Change, which certificates shall
indicate that such Borrower is in good standing in such jurisdictions;


 


(h)                                 Agent
shall have received a certificate from the Secretary of each Guarantor
attesting to the resolutions of such Guarantor’s Board of Directors authorizing
its execution, delivery, and performance of the Loan Documents to which such
Guarantor is a party and authorizing specific officers of such Guarantor to
execute the same;


 


(i)                                     Agent
shall have received copies of each Guarantor’s Governing Documents, as amended,
modified, or supplemented to the Closing Date, certified by the Secretary of
such Guarantor;


 


(j)                                     Agent
shall have received a certificate of status with respect to each Guarantor,
dated within 15 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of such Guarantor,
which certificate shall indicate that such Guarantor is in good standing in
such jurisdiction;


 


(k)                                  Agent
shall have received certificates of status with respect to each Guarantor, each
dated within 30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of
organization of such Guarantor) in which its failure to be duly qualified or
licensed would constitute a Material Adverse Change, which certificates shall
indicate that such Guarantor is in good standing in such jurisdictions;


 


(l)                                     Agent
shall have received a certificate of insurance, together with the endorsements
thereto, as are required by Section 6.8, the form and substance of which
shall be reasonably satisfactory to Agent;


 


(m)                               [Intentionally
Omitted];


 


58

















 


(n)                                 Agent
shall have received opinions from Skadden, Arps, Slate, Meagher & Flom
LLP, Schreck Brignone and Fennemore Craig, each in form and substance
reasonably satisfactory to Agent;


 


(o)                                 
Agent shall have received satisfactory evidence (including a certificate of the
chief financial officer of Parent) that all material tax returns required to be
filed by Borrowers and their Subsidiaries have been timely filed and all taxes
upon Borrowers and their Subsidiaries or their properties, assets, income, and
franchises (including Real Property taxes, sales taxes, and payroll taxes) have
been paid prior to delinquency, except such taxes that are the subject of a
Permitted Protest;


 


(p)                                 Agent
shall have received evidence reasonably satisfactory to it that (i) the
Acquisition has been consummated in accordance with the terms and provisions of
the Acquisition Agreements and all laws applicable thereto, (ii) Borrowers and
their Subsidiaries have obtained all Gaming Licenses and Liquor Licenses, and
(iii) the Nevada Gaming Authorities have found Timothy Poster, Thomas Breitling
and PB Gaming to be suitable;


 


(q)                                 Agent
shall have received completed reference checks with respect to Borrowers’
senior management, the results of which are satisfactory to Agent in its sole
discretion;


 


(r)                                    Agent
shall have received evidence satisfactory to it that Parent shall have received
at least $50,000,000  as an equity
contribution from PB Gaming on terms and conditions reasonably satisfactory to
Agent;


 


(s)                                  Agent
shall have received Borrowers’ Closing Date Business Plan;


 


(t)                                    Borrowers
shall have paid all Lender Group Expenses incurred in connection with the
transactions evidenced by this Agreement;


 


(u)                                 Agent
shall have received mortgagee title insurance policies (or marked commitments
to issue the same) for the Real Property Collateral owned as of the Closing
Date issued by a title insurance company satisfactory to Agent (each a “Mortgage
Policy” and, collectively, the “Mortgage Policies”) in amounts
satisfactory to Agent assuring Agent that the Mortgages on such Real Property
Collateral are valid and enforceable first priority mortgage Liens on such Real
Property Collateral free and clear of all defects and encumbrances except
Permitted Liens, and the Mortgage Policies otherwise shall be in form and
substance reasonably satisfactory to Agent;


 


(v)                                 Agent
shall have received copies of each of the Senior Note Documents and the
Acquisition Agreements, together with a certificate of the Secretary of the
applicable Borrower certifying each such document as being a true, correct, and
complete copy thereof and the terms and condition of such documents shall be
reasonably satisfactory to Agent;


 


(w)                               PB
Gaming, Borrowers and their Subsidiaries shall have received all licenses
(including all Gaming Licenses), approvals or evidence of other actions
required by any Governmental Authority in connection with the execution and
delivery by Borrowers or their


 


59

















 


Subsidiaries of the Loan
Document or with the consummation of the transactions contemplated thereby;


 


(x)                                   Agent
shall have received evidence reasonably satisfactory to it that (i) the
offering of the Senior Notes issued pursuant to the Indenture has closed, and
(ii) the gross cash proceeds from such offering are at least $155,000,000
and such proceeds have been released from that certain escrow account
maintained with HSBC Bank USA to Parent;


 


(y)                                 Agent
shall have (i) received audited financial statements for GNL and GNLV for
fiscal year 2002, (ii) a report from PriceWaterhouseCoopers with respect
to its review of the audited financial statements for GNL and GNLV, and
(iii) unaudited consolidated balance sheets, income statements, and
statement of cash flows for GNL and GNLV for the quarter ended
September 30, 2003, the results of all which shall be reasonably satisfactory
to Agent;


 


(z)                                   the
TTM EBITDA (without taking into account any retention bonus reserve)  shall be at least $34,000,000 as of
September 30, 2003;


 


(aa)                            Borrowers
shall have the Required Availability after giving effect to the initial
extensions of credit hereunder and the payment of all fees and expenses
required to be paid by Borrowers on the Closing Date under this Agreement or
the other Loan Documents; and


 


(bb)                          all
other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance reasonably satisfactory to Agent.


 


3.2                               Conditions Subsequent to the Initial
Extension of Credit.  The obligation of the Lender Group (or any
member thereof) to continue to make Advances (or otherwise extend credit
hereunder) is subject to the fulfillment, on or before the date applicable
thereto, of each of the conditions subsequent set forth below (the failure by
Borrowers to so perform or cause to be performed constituting an Event of
Default):


 


(a)                                  within
60 days of the Closing Date, deliver to Agent certified copies of the policies
of insurance, together with the endorsements thereto, as are required by Section
6.8, the form and substance of which shall be reasonably satisfactory to
Agent and its counsel; and


 


(b)                                 within
30 days of the Closing Date, deliver to Agent a Collateral Access Agreement
with respect to the location at 3100 Sirius Ave.


 


3.3                               Conditions Precedent to all
Extensions of Credit.  The obligation of the Lender Group (or any
member thereof) to make any Advances hereunder at any time (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:


 


(a)                                  the
representations and warranties contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of the
date of such extension of credit, as though made on and as of such date (except
to the extent that such representations and warranties relate solely to an earlier
date);


 


60

















 


(b)                                 no
Default or Event of Default shall have occurred and be continuing on the date
of such extension of credit, nor shall either result from the making thereof;


 


(c)                                  no
injunction, writ, restraining order, or other order of any nature restricting
or prohibiting, directly or indirectly, the extending of such credit shall have
been issued and remain in force by any Governmental Authority against any
Borrower, Agent, any Lender, or any of their Affiliates; and


 


(d)                                 no
Material Adverse Change shall have occurred.


 


3.4                               Term.  This Agreement shall continue in full force
and effect for a term ending on January 23, 2009 (the “Maturity Date”).  The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.


 


3.5                               Effect of Termination. 
On the date of termination of this Agreement, all Obligations (including
contingent reimbursement obligations of Borrowers with respect to any
outstanding Letters of Credit and including all Bank Products Obligations)
immediately shall become due and payable without notice or demand (including
(a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the then extant Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing
cash collateral (in an amount determined by Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of
the Bank Product Providers with respect to the then extant Bank Products
Obligations).  No termination of this
Agreement, however, shall relieve or discharge Borrowers or their Subsidiaries
of their duties, Obligations, or covenants hereunder and the Agent’s Liens in
the Collateral shall remain in effect until all Obligations have been paid in
full and the Lender Group’s obligations to provide additional credit hereunder
have been terminated.  When this
Agreement has been terminated and all of the Obligations have been paid in full
and the Lender Group’s obligations to provide additional credit under the Loan
Documents have been terminated irrevocably, Agent will, at Borrowers’ sole
expense, execute and deliver any UCC termination statements, lien releases,
mortgage releases, re-assignments of trademarks, discharges of security
interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the Agent’s Liens and all notices of security interests and liens previously
filed by Agent with respect to the Obligations.


 


3.6                               Early Termination by Borrowers. 
Borrowers have the option, at any time upon 90 days prior written notice
by Administrative Borrower to Agent, to terminate this Agreement by paying to
Agent, in cash, the Obligations (including (a) either (i) providing
cash collateral to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the then extant Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product Providers
with respect to the then extant Bank Products Obligations), in full, together
with the Applicable Prepayment Premium (to be allocated


 


61

















 


based upon letter
agreements between Agent and individual Lenders).  If Administrative Borrower has sent a notice of termination
pursuant to the provisions of this Section, then the Commitments shall
terminate and Borrowers shall be obligated to repay the Obligations (including
(a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the then extant Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing
cash collateral (in an amount determined by Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of
the Bank Product Providers with respect to the then extant Bank Products
Obligations), in full, together with the Applicable Prepayment Premium, on the
date set forth as the date of termination of this Agreement in such
notice.  In the event of the termination
of this Agreement and repayment of the Obligations at any time prior to the
Maturity Date, for any other reason, including (a) termination upon the
election of the Required Lenders to terminate after the occurrence and during
the continuation of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or
(d) 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 Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent
(to be allocated based upon letter agreements between Agent and individual
Lenders), measured as of the date of such termination. The foregoing to the contrary
notwithstanding, in the event that Borrowers repay the Obligations in full and
terminate this Agreement pursuant to the first sentence of this
Section 3.6 and if such repayment occurs with the proceeds of a
refinancing provided by Wells Fargo or one or more of its Affiliates, then the
Applicable Prepayment Premium shall equal zero.


 


4.                                      CREATION OF SECURITY INTEREST.


 


4.1                               Grant of Security Interest. 
Each Borrower hereby pledges, grants, transfers and assigns to Agent,
for the benefit of the Lender Group and the Bank Product Providers, a security
interest in, and a continuing Lien on, all of its right, title, and interest in
all currently existing and hereafter acquired or arising Borrower Collateral in
order to secure prompt repayment of any and all of the Obligations in
accordance with the terms and conditions of the Loan Documents and in order to
secure prompt performance by Borrowers of each of their covenants and duties
under the Loan Documents.  The Agent’s Liens
in and to the Borrower Collateral shall attach to all Borrower Collateral
without further act on the part of Agent or Borrowers.  Anything contained in this Agreement or any
other Loan Document to the contrary notwithstanding, except for Permitted Dispositions,
Borrowers and their Subsidiaries have no authority, express or implied, to
dispose of any item or portion of the Collateral.


 


4.2                               Negotiable Collateral. 
In the event that any Borrower Collateral, including proceeds, is
evidenced by or consists of Negotiable Collateral, and if and to the extent
that Agent determines that perfection or priority of Agent’s security interest
is dependent on or enhanced by possession, the applicable Borrower, promptly
upon the request of Agent, shall endorse and deliver physical possession of
such Negotiable Collateral to Agent.


 


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4.3                               Collection of Accounts, General
Intangibles, and Negotiable Collateral.  At any time after
the occurrence and during the continuation of an Event of Default, Agent or
Agent’s designee may (a) notify Account Debtors of Borrowers that the
Borrowers’ Accounts, chattel paper, or General Intangibles have been assigned
to Agent or that Agent has a security interest therein, or (b) collect the
Borrowers’ Accounts, chattel paper, or General Intangibles directly and charge
the collection costs and expenses to the Loan Account.  Each Borrower agrees that it will hold in
trust for the Lender Group, as the Lender Group’s trustee, any of its or its Subsidiaries’
Collections that it receives and immediately will deliver such Collections to
Agent or a Cash Management Bank in their original form as received by such
Borrower or its Subsidiaries.


 


4.4                               Filing of Financing Statements;
Commercial Tort Claims; Delivery of Additional Documentation Required.


 


(a)                                  Borrowers
authorize Agent to file any financing statement necessary or desirable to
effectuate the transactions contemplated by the Loan Documents, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of Borrowers where permitted by applicable
law and describing the Borrower Collateral in the same manner as described
herein or in any other manner as Agent may determine is necessary, advisable or
prudent, including, without limitation, describing such property as “all
assets” or “all personal property whether now owned or hereafter
acquired.”  Borrowers hereby ratify the
filing of any financing statement filed without the signature of Borrowers
prior to the date hereof.


 


(b)                                 If
Borrowers or their Subsidiaries acquire any commercial tort claims after the
date hereof, Borrowers shall promptly (but in any event within 5 Business Days
after such acquisition) deliver to Agent a written description of such
commercial tort claim and, upon the request of Agent, shall deliver a written
agreement, in form and substance reasonably satisfactory to Agent, pursuant to
which the applicable Borrower or its Subsidiary shall pledge and collaterally
assign all of its right, title and interest in and to such commercial tort
claim to Agent, as security for the Obligations (a “Commercial Tort Claim
Assignment”).


 


(c)                                  At
any time upon the request of Agent, Borrowers shall execute or deliver to Agent
and shall cause their Subsidiaries to execute or deliver to Agent any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
Commercial Tort Claim Assignments, endorsements of certificates of title, and
all other documents (collectively, the “Additional Documents”) that
Agent may request in its Permitted Discretion, in form and substance reasonably
satisfactory to Agent, to create, perfect, and continue perfected or to better
perfect the Agent’s Liens in the assets of Borrowers and their Subsidiaries
(whether now owned or hereafter arising or acquired, tangible or intangible,
real or personal), to create and perfect Liens in favor of Agent in any Real
Property acquired after the Closing Date, and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan
Documents.  To the maximum extent
permitted by applicable law, each Borrower authorizes Agent to execute any such
Additional Documents in the applicable Borrower’s name and authorizes Agent to
file such executed Additional Documents in any appropriate filing office.  In addition, on such periodic basis as Agent
shall require, Borrowers shall (i) provide Agent with a report of all new
material patentable,


 


63

















 


copyrightable, or
trademarkable materials acquired or generated by any Borrower or its
Subsidiaries during the prior period, (ii) cause all material patents,
copyrights, and trademarks acquired or generated by Borrowers or their
Subsidiaries that are not already the subject of a registration with the
appropriate filing office (or an application therefor diligently prosecuted) to
be registered with such appropriate filing office in a manner sufficient to
impart constructive notice of a Borrower’s or a Subsidiary of a Borrower’s
ownership thereof, and (iii) cause to be prepared, executed, and delivered
to Agent supplemental schedules to the applicable Loan Documents to identify
such patents, copyrights, and trademarks as being subject to the security
interests created thereunder.


 


4.5                               Power of Attorney.  Subject to
applicable Gaming Laws, each Borrower hereby irrevocably appoints Agent
(and any of Agent’s officers, employees, or agents designated by Agent) as
such Borrower’s attorney-in-fact, with power to (a) if such Borrower
refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of such Borrower on any of the
documents described in Section 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower’s name on any
invoice or bill of lading relating to the Borrower Collateral, drafts against
Account Debtors, or notices to Account Debtors, (c) send requests for
verification of Borrowers’ or their Subsidiaries’ Accounts, (d) endorse
such Borrower’s name on any of its payment items (including all of its
Collections) that may come into the Lender Group’s possession, (e) at any
time that an Event of Default has occurred and is continuing, make, settle, and
adjust all claims under such Borrower’s policies of insurance and make all
determinations and decisions with respect to such policies of insurance (other
than workers’ compensation), and (f) at any time that an Event of Default
has occurred and is continuing, settle and adjust disputes and claims
respecting Borrowers’ or their Subsidiaries’ Accounts, chattel paper, or
General Intangibles directly with Account Debtors, for amounts and upon terms
that Agent determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases that Agent determines to be
necessary.  The appointment of Agent as
each Borrower’s attorney, and each and every one of its rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations
have been fully and finally repaid and performed and the Lender Group’s
obligations to extend credit hereunder are terminated.  In accordance with Section 9-207(a) of the
Code, Agent shall use reasonable care in the custody and preservation of the
Collateral in its possession.


 


4.6                               Right to Inspect.  Agent and each
Lender (through any of their respective officers, employees, or agents) shall
have the right, from time to time hereafter to inspect during regular business
hours the Books and make copies or abstracts thereof and to check, test, and
appraise the Collateral, or any portion thereof, in order to verify Borrowers’
and their Subsidiaries’ financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.


 


4.7                               Control Agreements.  Borrowers agree that
they will not, and will not permit their Subsidiaries to, transfer assets out
of any of their Deposit Accounts or Securities Accounts; provided, however,
that so long as no Event of Default has occurred and is continuing or would
result therefrom, Borrowers and their Subsidiaries may use such assets (and the
proceeds thereof) to the extent not prohibited by this Agreement or the other
Loan Documents and, if the transfer is to another bank or securities
intermediary, so long as the applicable Borrower or Subsidiary, Agent, and the
substitute bank or securities intermediary have entered into a Control
Agreement.


 


64

















 


Borrowers agree that they
will and will cause their Subsidiaries to take any or all reasonable steps that
Agent requests in order for Agent to obtain control in accordance with Sections
9-104, 9-105, 9-106, and 9-107 of the Code with respect to any of its or their
Securities Accounts, Deposit Accounts, electronic chattel paper, Investment
Property, and letter-of-credit rights. 
No arrangement contemplated hereby or by any Control Agreement in
respect of any Securities Accounts or other Investment Property shall be
modified by Borrowers without the prior written consent of Agent.  Upon the occurrence and during the
continuance of a Default or Event of Default, Agent may notify any bank or
securities intermediary to liquidate the applicable Deposit Account or
Securities Account or any related Investment Property maintained or held
thereby and remit the proceeds thereof to the Agent’s Account.


 


5.                                      REPRESENTATIONS AND WARRANTIES.


 


In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter,
as though made on and as of the date of such Advance (or other extension
of credit) (except to the extent that such representations and warranties
relate solely to an earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:


 


5.1                               No Encumbrances.  Each Borrower and
its Subsidiaries has good and indefeasible title to their personal property
assets and good and marketable title to their owned Real Property, in each
case, free and clear of Liens except for Permitted Liens.


 


5.2                               [Intentionally Omitted].


 


5.3                               [Intentionally Omitted].


 


5.4                               Equipment.  All of the material Equipment of Borrowers
and their Subsidiaries is used or held for use in their business and is fit for
such purposes.


 


5.5                               Location of Inventory and Equipment. 
Except as set forth on Schedule 5.5, the Inventory and Equipment
of Borrowers and their Subsidiaries are not stored with a bailee, warehouseman,
or similar party and are located only at, or in-transit between, the locations
identified on Schedule 5.5 (as such Schedule may be updated pursuant to Section
6.9).


 


5.6                               [Intentionally Omitted].


 


5.7                               State of Incorporation; Location of
Chief Executive Office; FEIN; Organizational ID Number; Commercial Tort Claims.


 


(a)                                  The
jurisdiction of organization of each Borrower and each of its Subsidiaries is
set forth on Schedule 5.7(a).


 


65

















 


(b)                                 The
chief executive office of each Borrower and each of its Subsidiaries is located
at the address indicated on Schedule 5.7(b) (as such Schedule may be
updated pursuant to Section 6.9).


 


(c)                                  Each
Borrower’s and each of its Subsidiaries’ FEIN and organizational identification
number, if any, are identified on Schedule 5.7(c).


 


(d)                                 As
of the Closing Date, Borrowers and their Subsidiaries do not hold any
commercial tort claims, except as set forth on Schedule 5.7(d).


 


5.8                               Due Organization and Qualification;
Subsidiaries.


 


(a)                                  Each
Borrower is duly organized and existing and in good standing under the laws of
the jurisdiction of its organization and qualified to do business in any state
where the failure to be so qualified reasonably could be expected to have a
Material Adverse Change.


 


(b)                                 Set
forth on Schedule 5.8(b), is a complete and accurate description of the
authorized capital Stock of each Borrower, by class, and, as of the Closing
Date, a description of the number of shares of each such class that are issued
and outstanding.  Other than as
described on Schedule 5.8(b), there are no subscriptions, options,
warrants, or calls relating to any shares of each Borrower’s capital Stock,
including any right of conversion or exchange under any outstanding security or
other instrument.  No Borrower is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital Stock or any security convertible
into or exchangeable for any of its capital Stock.


 


(c)                                  Set
forth on Schedule 5.8(c), is a complete and accurate list of each
Borrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction
of their organization; (ii) the number of shares of each class of common
and preferred Stock authorized for each of such Subsidiaries; and
(iii) the number and the percentage of the outstanding shares of each such
class owned directly or indirectly by the applicable Borrower.  All of the outstanding capital Stock of each
such Subsidiary has been validly issued and is fully paid and non-assessable.


 


(d)                                 Except
as set forth on Schedule 5.8(c), there are no subscriptions, options,
warrants, or calls relating to any shares of any Borrower’s Subsidiaries’
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. 
No Borrower or any of its respective Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of any Borrower’s Subsidiaries’ capital Stock or any security
convertible into or exchangeable for any such capital Stock.


 


5.9                               Due Authorization; No Conflict.


 


(a)                                  As
to each Borrower, the execution, delivery, and performance by such Borrower of
this Agreement and the other Loan Documents to which it is a party have been
duly authorized by all necessary action on the part of such Borrower.


 


(b)                                 As
to each Borrower, the execution, delivery, and performance by such Borrower of
this Agreement and the other Loan Documents to which it is a party do not and
will


 


66

















 


not (i) violate any
provision of federal, state, or local law or regulation applicable to any
Borrower, the Governing Documents of any Borrower, or any order, judgment, or
decree of any court or other Governmental Authority binding on any Borrower,
(ii) conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under any material contractual obligation
of any Borrower, (iii) result in or require the creation or imposition of
any Lien of any nature whatsoever upon any properties or assets of Borrower,
other than Permitted Liens, or (iv) require any approval of any Borrower’s
interestholders or any approval or consent of any Person under any material
contractual obligation of any Borrower, other than consents or approvals that
have been obtained and that are still in force and effect.


 


(c)                                  Other
than the filing of financing statements, and the recordation of the Mortgages,
the execution, delivery, and performance by each Borrower of this Agreement and
the other Loan Documents to which such Borrower is a party 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 force and effect.


 


(d)                                 As
to each Borrower, this Agreement and the other Loan Documents to which such
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Borrower will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally.


 


(e)                                  Upon
the filing of financing statements with the appropriate filing office of the
jurisdiction of organization for each Borrower and Guarantor, the recordation
of the Mortgages, and the filing of appropriate recordations in the U.S. Patent
and Trademark Office and the U.S. Copyright Office with respect to copyrights
and trademarks to the extent required by federal law, the Agent’s Liens will be
validly created, perfected, and first priority Liens, subject only to Permitted
Liens.


 


(f)                                    The
execution, delivery, and performance by each Guarantor of the Loan Documents to
which it is a party have been duly authorized by all necessary action on the
part of such Guarantor.


 


(g)                                 The
execution, delivery, and performance by each Guarantor of the Loan Documents to
which it is a party do not and will not (i) violate any provision of
federal, state, or local law or regulation applicable to such Guarantor, the
Governing Documents of such Guarantor, or any order, judgment, or decree of any
court or other Governmental Authority binding on such Guarantor,
(ii) conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under any material contractual obligation
of such Guarantor, (iii) result in or require the creation or imposition
of any Lien of any nature whatsoever upon any properties or assets of such
Guarantor, other than Permitted Liens, or (iv) require any approval of
such Guarantor’s interestholders or any approval or consent of any Person under
any material contractual obligation of such Guarantor, other than consents or
approvals that have been obtained and that are still in force and effect.


 


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(h)                                 Other
than the filing of financing statements and the recordation of the Mortgages,
the execution, delivery, and performance by each Guarantor of the Loan
Documents to which such Guarantor is a party 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 force and effect.


 


(i)                                     The
Loan Documents to which each Guarantor is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Guarantor
will be the legally valid and binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.


 


5.10                        Litigation.  Other than those matters disclosed on Schedule
5.10, there are no actions, suits, or proceedings pending or, to the best
knowledge of Borrowers, threatened against Borrowers, or any of their
Subsidiaries, as applicable, except for (a) matters that are fully covered
by insurance (subject to customary deductibles), and (b) matters arising
after the Closing Date that, if decided adversely to Borrowers, or any of their
Subsidiaries, as applicable, reasonably could not be expected to result in a
Material Adverse Change.


 


5.11                        No Material Adverse Change. 
All financial statements relating to Borrowers and their Subsidiaries or
Guarantors that have been delivered by Borrowers to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Borrowers’ and their
Subsidiaries’ (or Guarantors’, as applicable) financial condition as of the
date thereof and results of operations for the period then ended.  There has not been a Material Adverse Change
with respect to Borrowers and their Subsidiaries (or Guarantors, as applicable)
since the date of the latest financial statements submitted to the Lender Group
on or before the Closing Date.


 


5.12                        Fraudulent Transfer.


 


(a)                                  Each
Borrower and each Subsidiary of a Borrower is Solvent.


 


(b)                                 No
transfer of property is being made by any Borrower or any Subsidiary of a
Borrower and no obligation is being incurred by any Borrower or any Subsidiary
of a Borrower in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of Borrowers or their Subsidiaries.


 


5.13                        Employee Benefits.


 


(a)                                  Except
as set forth in Schedule 5.13, none of Borrowers, any of their
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan or Multiemployer Plan. 
Each Benefit Plan set forth on Schedule 5.13 is a Multiemployer
Plan.


 


(b)                                 None
of Borrowers, their Subsidiaries, or any of their ERISA Affiliates maintains or
contributes to any Benefit Plan, other than those listed on Schedule 5.13.  No


 


68

















 


ERISA Event has occurred
nor has any other event occurred that could reasonably be expected to result in
an ERISA Event, in either case, that reasonably could be expected to result in
a Material Adverse Change.  No facts
exist with respect to a Multiemployer Plan that could reasonably be expected to
result in a Lien being imposed on any Borrower’s, or any Subsidiary’s or any
ERISA Affiliate’s assets.


 


5.14                        Environmental Condition. 
Except as set forth on Schedule 5.14, (a) to Borrowers’
knowledge, none of Borrowers’ or their Subsidiaries’ properties or assets has
ever been used by Borrowers, their Subsidiaries, or by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such production, storage, handling,
treatment, release or transport was in violation, in any material respect, of
applicable Environmental Law, (b) to Borrowers’ knowledge, none of
Borrowers’ nor their Subsidiaries’ properties or assets has ever been
designated or identified in any manner pursuant to any environmental protection
statute as a Hazardous Materials disposal site, (c) none of Borrowers nor
any of their Subsidiaries have received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any Real Property owned or
operated by Borrowers or their Subsidiaries, and (d) none of Borrowers nor
any of their Subsidiaries have received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by any Borrower or
any Subsidiary of a Borrower resulting in the releasing or disposing of
Hazardous Materials into the environment, which in the case of subclauses
(a) —(d) above would result in a liability of $250,000 or more.


 


5.15                        Brokerage Fees.  Borrowers and their
Subsidiaries have not utilized the services of any broker or finder in
connection with obtaining financing from the Lender Group under this Agreement
and no brokerage commission or finders fee is payable by Borrowers or their
Subsidiaries in connection herewith.


 


5.16                        Intellectual Property. 
Each Borrower and each Subsidiary of a Borrower owns, or holds licenses
to use all trademarks, trade names, copyrights, patents and patent rights that
are necessary to the conduct of its business as currently conducted. Attached
hereto as Schedule 5.16 (as updated from time to time) is a
true, correct, and complete listing of all material patents, patent
applications, trademark registrations, trademark applications, copyright
applications, and copyright registrations as to which each Borrower or one of
its Subsidiaries is the owner or is an exclusive licensee.


 


5.17                        Leases.  Borrowers and their Subsidiaries enjoy
peaceful and undisturbed possession under all leases material to their business
and to which they are parties or under which they are operating.  All of such leases are valid and subsisting
and no material default by Borrowers or their Subsidiaries exists under any of
them.


 


5.18                        Deposit Accounts and Securities
Accounts.  Set forth on Schedule 5.18 are all of
Borrowers’ and their Subsidiaries’ Deposit Accounts and Securities Accounts,
including, with respect to each bank or securities intermediary (i) the
name and address of such Person, and (ii) the account numbers of the
Deposit Accounts or Securities Accounts maintained with such Person.


 


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5.19                        Disclosure.  To the best of Borrowers’ knowledge all
factual information (taken as a whole) prepared by or on behalf of Borrowers or
their Subsidiaries and furnished by or on behalf of Borrowers or their
Subsidiaries in writing to Agent or any Lender (including all information
contained in the Schedules hereto or in the other Loan Documents) for purposes
of or in connection with this Agreement, the other Loan Documents or any
transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter prepared by or on behalf of Borrowers
or their Subsidiaries and furnished by or on behalf of Borrowers or their
Subsidiaries in writing to the Agent or any Lender will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information (taken as
a whole) was provided.  On the Closing
Date, the Closing Date Projections represent, and as of the date on which any
other Projections are delivered to Agent, such additional Projections represent
Borrowers’ good faith estimate of their and their Subsidiaries’ future
performance for the periods covered thereby.


 


5.20                        Indebtedness.  Set forth on Schedule
5.20 is a true and complete list of all Indebtedness of each Borrower and
each Subsidiary of a Borrower outstanding immediately prior to the Closing Date
that is to remain outstanding after the Closing Date and such Schedule
accurately reflects the aggregate principal amount of such Indebtedness and the
principal terms thereof.


 


5.21                        Licenses and Permits.


 


(a)                                  (i) All
material licenses (including all necessary Gaming Licenses and Liquor
Licenses), permits, and consents and similar rights required from any
Governmental Authority, for the ownership, use, or operation of the businesses
or properties now owned or operated by any Borrower or any of their
Subsidiaries, are in full force and effect; (ii) each Borrower and their
Subsidiaries is in compliance, in all material respects, with all of the
provisions thereof applicable to it; and (iii) none of such licenses,
permits, or consents is the subject of any pending or, to the best of any
Borrower’s, knowledge, threatened proceeding for the revocation, cancellation,
suspension, or non-renewal thereof.  As
of the Closing Date (and as of each subsequent date on which any Borrower
delivers to Agent an updated schedule pursuant to Section 6 below), set
forth on Schedule 5.21 is a complete and accurate list of all such
material licenses, permits, and consents that are necessary and appropriate for
the operation of such Borrower’s businesses, and the businesses of its
Subsidiaries, and such schedule identifies the date by which an application for
the renewal of such license, permit, or consent must be filed and describes the
status of each such pending application.


 


(b)                                 Each
Borrower, and their Subsidiaries, have obtained (i) all material licenses,
permits, and consents necessary or appropriate to conduct their businesses and
operations and (ii) as of the Closing Date, all required approvals from
the Nevada Gaming Authorities and Liquor Authorities of the transactions
contemplated hereby and by the other Loan Documents.


 


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6.                                      AFFIRMATIVE COVENANTS.


 


Each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
Borrowers shall and shall cause each of their respective Subsidiaries to do all
of the following:


 


6.1                               Accounting System.  Maintain a system of
accounting that enables Borrowers to produce financial statements in accordance
with GAAP and maintain records pertaining to the Collateral that contain
information as from time to time reasonably may be requested by Agent.  Borrowers also shall keep an inventory
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to their and their Subsidiaries’ Inventory.


 


6.2                               Collateral Reporting.  Provide Agent (and
if so requested by Agent, with copies for each Lender) with the following
documents at the following times in form reasonably satisfactory to Agent:


 


	
  Within 5 Business Days of any issuance or filing

  	
   

  	
  (a)           copies
  of each report in respect of Borrowers’, and their respective Subsidiaries’
  businesses issued by a Nevada Gaming Authority or made by Borrower or any of
  their Subsidiaries, to a Nevada Gaming Authority,

  
	
   

  	
   

  	
   

  
	
  Monthly (not later than the 10th day of each month)

  	
   

  	
  (b)           a
  summary aging, by vendor, of Borrowers’ and their Subsidiaries’ accounts
  payable and any book overdraft,

  
	
   

  	
   

  
	
   

  	
   

  	
  (c)           a
  detailed report regarding Borrowers’ and their Subsidiaries’ cash and Cash
  Equivalents including an indication of which amounts constitute Qualified
  Cash,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)           a
  detailed report regarding the leasing of any portion of the Casino or Real
  Property including the amount of space leased, the rental rate, the lease
  term and the proposed use for the space,

  
	
   

  	
   

  	
   

  
	
  Quarterly

  	
   

  	
  (e)           a
  report regarding Borrowers’ and their Subsidiaries’ accrued, but unpaid, ad valorem
  taxes;

  
	
   

  	
   

  	
   

  
	
  Concurrently with the delivery to any third party
  but no less frequently than annually to Agent

  	
   

  	
  (f)            copies
  of all operating and capital budgets, bankrolls, and all other budgets,
  summaries of sources and uses of funds, projections, and financial
  information prepared by or on behalf of any Borrower (including in respect of
  any Casino operated by any Borrower or its Subsidiaries), or any of its
  Subsidiaries, promptly upon the preparation and delivery thereof by the chief
  financial officer of any Borrower or any of its Subsidiaries, and

  
	
   

  	
   

  	
   

  
	
  Upon request by Agent

  	
   

  	
  (g)           such
  other reports as to the Collateral or the financial condition of Borrowers
  and their Subsidiaries, as Agent may request.

  



 


6.3                               Financial Statements, Reports,
Certificates.  Deliver to Agent,
with copies to each Lender:


 


71

















 


(a)                                  as
soon as available, but in any event within 30 days (45 days in the case of a
month that is the end of one of Parent’s fiscal quarters) after the end of each
month during each of Parent’s fiscal years,


 


(i)                                     a
company prepared consolidated balance sheet, income statement, and statement of
cash flow covering Parent’s and its Subsidiaries’ operations during such
period,


 


(ii)                                  a
certificate signed by the chief financial officer of Parent to the effect that:


 


A.                                   the
financial statements delivered hereunder have been prepared in accordance with
GAAP (except for the lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects the financial
condition of Parent and its Subsidiaries,


 


B.                                     the
representations and warranties of Borrowers contained in this Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date), and


 


C.                                     there
does not exist any condition or event that constitutes a Default or Event of
Default (or, to the extent of any non-compliance, describing such
non-compliance as to which he or she may have knowledge and what action
Borrowers have taken, are taking, or propose to take with respect thereto), and


 


(iii)                               for
each month that is the date on which a financial covenant in Section 7.18
is to be tested, a Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable financial covenants
contained in Section 7.18,


 


(b)                                 as
soon as available, but in any event within 90 days after the end of each of
Parent’s fiscal years,


 


(i)                                     financial
statements of Parent and its Subsidiaries for each such fiscal year, audited by
independent certified public accountants reasonably acceptable to Agent and
certified, without any qualifications, by such accountants to have been
prepared in accordance with GAAP (such audited financial statements to include
a balance sheet, income statement, and statement of cash flow and, if prepared,
such accountants’ letter to management), and


 


(ii)                                  a
certificate of such accountants addressed to Agent and the Lenders stating that
such accountants do not have knowledge of the existence of any Default or Event
of Default under Section 7.18,


 


(c)                                  as
soon as available, but in any event within 30 days prior to the start of each
of Parent’s fiscal years, copies of Borrowers’ Projections, in form and
substance (including as to scope and underlying assumptions) reasonably
satisfactory to Agent, in its sole discretion, for the forthcoming 3 years,
year by year, and for the forthcoming fiscal year, month by month,


 


72

















 


certified by the chief
financial officer of Parent as being such officer’s good faith best estimate of
the financial performance of Parent and its Subsidiaries during the period
covered thereby,


 


(d)                                 if
and when filed by any Borrower,


 


(i)                                     10-Q
quarterly reports, Form 10-K annual reports, and Form 8-K current reports,


 


(ii)                                  any
other filings made by any Borrower with the SEC,


 


(iii)                               copies
of Borrowers’ federal income tax returns, and any amendments thereto, filed
with the Internal Revenue Service, and


 


(iv)                              any
other information that is provided by Parent to its shareholders generally,


 


(e)                                  if
and when filed by any Borrower or any Subsidiary of a Borrower and as
reasonably requested by Agent, reasonably satisfactory evidence of payment of
material applicable excise taxes in each jurisdiction in which any Borrower or
any Subsidiary of a Borrower conducts business or is required to pay any such
excise tax,


 


(f)                                    as
soon as a Borrower has knowledge of any event or condition that constitutes a
Default or an Event of Default, notice thereof and a statement of the curative
action that Borrowers propose to take with respect thereto,


 


(g)                                 promptly
after the commencement thereof, but in any event within 5 Business Days after
the service of process with respect thereto on any Borrower or any Subsidiary
of a Borrower, notice of all actions, suits, or proceedings brought by or
against any Borrower or any Subsidiary of a Borrower before any Governmental
Authority which, if determined adversely to such Borrower or such Subsidiary,
reasonably could be expected to result in a Material Adverse Change, and


 


(h)                                 upon
the request of Agent, any other report reasonably requested relating to the
financial condition of Borrowers or their Subsidiaries.


 


In addition to the financial statements referred to
above, Borrowers agree to deliver financial statements prepared on both a
consolidated and consolidating basis and agree that no Subsidiary of Parent
will have a fiscal year different from that of Parent.  Borrowers agree to cooperate with Agent to
allow Agent to consult with their independent certified public accountants if
Agent reasonably requests the right to do so and that, in such connection,
their independent certified public accountants are authorized to communicate
with Agent and to release to Agent whatever financial information concerning
Borrowers or their Subsidiaries that Agent reasonably may request.


 


6.4                               Guarantor Reports.  Cause each Guarantor
to deliver its annual financial statements at the time when Parent provides its
audited financial statements to Agent, but only to the extent such Guarantor’s
financial statements are not consolidated with Parent’s financial statements,
and, if the Guarantor is required to file federal income tax returns, copies of
all


 


73

















 


federal income tax
returns as soon as the same are available and in any event no later than 30
days after the same are required to be filed by law.


 


6.5                               [Intentionally Omitted].


 


6.6                               Maintenance of Properties. 
Maintain and preserve all of their properties which are necessary or
useful in the proper conduct to their business in good working order and
condition, ordinary wear and tear excepted, and comply in all material respects
at all times with the provisions of all leases to which it is a party as
lessee, so as to prevent any loss or forfeiture thereof or thereunder.


 


6.7                               Taxes.  Cause all assessments and taxes (other than
immaterial assessments and taxes), whether real, personal, or otherwise, due or
payable by, or imposed, levied, or assessed against Borrowers, their
Subsidiaries, or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest.  Borrowers will and
will cause their Subsidiaries to make timely payment or deposit of all tax
payments and withholding taxes (other than immaterial tax payments and
withholding taxes) required of them by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Agent with proof satisfactory to
Agent indicating that the applicable Borrower or Subsidiary of a Borrower has
made such payments or deposits.


 


6.8                               Insurance.


 


(a)                                  At
Borrowers’ expense, maintain insurance respecting their and their Subsidiaries’
assets wherever located, covering loss or damage by fire, theft, explosion, and
all other hazards and risks as ordinarily are insured against by other Persons
engaged in the same or similar businesses. 
Borrowers also shall maintain business interruption, public liability,
and product liability insurance, as well as insurance against larceny,
embezzlement, and criminal misappropriation. 
All such policies of insurance shall be in such amounts and with such
insurance companies as are customary for businesses such as the businesses of
Borrowers and their Subsidiaries and as are customary for Borrowers’ and their
Subsidiaries’ industry.  Borrowers shall
deliver copies of all such policies to Agent with a satisfactory lender’s loss
payable endorsement naming Agent as loss payee or additional insured, as
appropriate, as its interest may appear. 
Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 30 days prior written notice to Agent in the
event of cancellation of the policy for any reason whatsoever.


 


(b)                                 Administrative
Borrower shall give Agent prompt notice of any loss covered by such insurance
in excess of $250,000.  Agent shall have
the exclusive right to adjust any losses claimed under any such insurance
policies in excess of $1,500,000 (or in any amount after the occurrence and
during the continuation of an Event of Default), without any liability to
Borrowers whatsoever in respect of such adjustments. If, as of the date of
receipt thereof, there are Obligations outstanding hereunder, Borrowers shall
pay to Agent any monies received as payment for any loss in excess of
$1,500,000 under any insurance policy mentioned above (other than liability
insurance policies) or as payment of any award or compensation for condemnation


 


74

















 


or taking by eminent
domain in excess of $1,500,000, to be applied to the prepayment of the
Obligations without premium and without causing a reduction in the
Commitments.  The foregoing
notwithstanding, Borrowers may, at or within 45 days of the date of the receipt
of any such payment by Agent, request that Agent establish an Insurance
Proceeds Reserve and, thereafter, disburse to Administrative Borrower such
monies from the Insurance Proceeds Reserve. 
Agent agrees to disburse such monies (notwithstanding any lack of
Availability caused solely by the creation or maintenance of the Insurance
Proceeds Reserve) solely for the repair, replacement, renovation or restoration
of the asset that has been damaged, destroyed or condemned, if all of the
following conditions are satisfied: (i) no Default or Event of Default is
continuing or would result therefrom, (ii) Borrower has cash, Cash Equivalents,
Availability under Section 2.1 and/or business interruption insurance
proceeds in amounts sufficient, in the reasonable judgment of Agent, to ensure
that each Borrower will be able to make payment as and when due of each of its
Obligations that will be payable during the period of such repair, replacement,
or restoration, (iii) Agent is reasonably satisfied that the amount of such
cash, Cash Equivalents, borrowing availability, insurance proceeds, and/or
Insurance Proceeds Reserve will be sufficient fully to repair, replace,
renovate or restore the affected assets in all material respects, (iv)
construction, completion of the repair, replacement, or restoration of the
affected assets is to be completed in accordance with plans, specifications,
and drawings submitted to and approved by Agent, which approval shall not be
unreasonably withheld or delayed, (v) all construction and completion of the
repair, replacement, or restoration shall be effected with reasonable
promptness and shall be of a value (the “Replaced Value”) that is (A) at
least equal to the replacement value (the “Destroyed Value”) of the
assets destroyed or condemned prior to such destruction or condemnation, or (B)
of a value less than the Destroyed Value so long as the difference between the
Destroyed Value and the Replaced Value is applied to the prepayment of the
Obligations without premium, in such order or manner as Agent may elect, and
(vi) all monies paid by Borrowers to Agent may be commingled with other funds
of Agent and will not bear interest pending disbursement hereunder.  In the event Agent fails to receive timely
such written designation or the conditions set forth in the following sentence
are not satisfied, the payment shall be applied in the manner set forth in the
immediately preceding sentence.


 


(c)                                  Borrowers
shall not, and shall not suffer or permit their Subsidiaries to, take out
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.8, unless Agent is
included thereon as named insured with the loss payable to Agent under a
lender’s loss payable endorsement or its equivalent.  Administrative Borrower immediately shall notify Agent whenever
such separate insurance is taken out, specifying the insurer thereunder and
full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Agent.


 


6.9                               Location of Inventory and
Equipment.  Keep Borrowers’ and their Subsidiaries’
Inventory and Equipment only at the locations identified on Schedule 5.5
and their chief executive offices only at the locations identified on Schedule
5.7(b); provided, however, that Administrative Borrower may amend
Schedule 5.5 and Schedule 5.7 so long as such amendment occurs by
written notice to Agent not less than 30 days prior to the date on which such
Inventory or Equipment is moved to such new location or such chief executive
office is relocated, so long as such new location is within the continental
United States, and so long as, at the time of such written notification, the
applicable Borrower provides Agent a Collateral Access Agreement with respect
thereto.


 


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6.10                        Compliance with Laws.  Comply with the
requirements of all applicable laws, rules, regulations, and orders of any
Governmental Authority, including the Fair Labor Standards Act and the
Americans With Disabilities Act, other than laws, rules, regulations, and
orders the non-compliance with which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Change.


 


6.11                        Leases.  Pay when due all rents and other amounts
payable under any leases to which any Borrower or any Subsidiary of a Borrower
is a party or by which any Borrower’s or any Subsidiary of a Borrower’s
properties and assets are bound, unless such payments are the subject of a
Permitted Protest.


 


6.12                        Existence.  At all times preserve and keep in
full force and effect each Borrower’s and each Subsidiary of a Borrower’s valid
existence and good standing and any rights and franchises material to their
businesses.


 


6.13                        Environmental.


 


(a)                                  Keep
any property either owned or operated by any Borrower or any Subsidiary of a
Borrower free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with
Environmental Laws and provide to Agent documentation of such compliance which
Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material of any reportable quantity from or onto property owned or
operated by any Borrower or any Subsidiary of a Borrower and take any Remedial
Actions required to abate said release or otherwise to come into compliance
with applicable Environmental Law, and (d) promptly, but in any event
within 5 Business Days of its receipt thereof, provide Agent with written
notice of any of the following: 
(i) notice that an Environmental Lien has been filed against any of
the real or personal property of any Borrower or any Subsidiary of a Borrower,
(ii) commencement of any Environmental Action or notice that an
Environmental Action will be filed against any Borrower or any Subsidiary of a
Borrower, and (iii) notice of a violation, citation, or other
administrative order which in the case of (a)—(d) reasonably could be expected
to result in a Material Adverse Change.


 


6.14                        Disclosure Updates.  Promptly and in no
event later than 5 Business Days after obtaining knowledge thereof, notify
Agent if any written information, exhibit, or report furnished to the Lender
Group contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. 
The foregoing to the contrary notwithstanding, any notification pursuant
to the foregoing provision will not cure or remedy the effect of the prior
untrue statement of a material fact or omission of any material fact nor shall
any such notification have the affect of amending or modifying this Agreement
or any of the Schedules hereto.


 


6.15                        Formation of Subsidiaries. 
At the time that any Borrower or any Guarantor forms any direct or
indirect Subsidiary or acquires any direct or indirect Subsidiary after the
Closing Date, such Borrower or such Guarantor shall (a)  cause such new
Subsidiary to provide to Agent a joinder to this Agreement or the Guaranty and
the Guarantor Security Agreement, together with such other security documents (including
Mortgages with respect to any Real


 


76

















 


Property of such new
Subsidiary), as well as appropriate UCC-1 financing statements (and with
respect to all property subject to a Mortgage, fixture filings), all in form
and substance satisfactory to Agent (including being sufficient to grant Agent
a first priority Lien (subject to Permitted Liens) in and to the assets of such
newly formed or acquired Subsidiary), (b) provide to Agent a pledge
agreement and appropriate certificates and powers or UCC-1 financing
statements, hypothecating all of the direct or beneficial ownership interest in
such new Subsidiary (unless such Subsidiary is a CFC in which case the pledge
of such ownership interest will be limited to 65% of the Stock of the CFC), in
form and substance satisfactory to Agent, and (c) provide to Agent all
other documentation, including one or more opinions of counsel satisfactory to
Agent, which in its opinion is appropriate with respect to the execution and delivery
of the applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage).  Any document, agreement, or
instrument executed or issued pursuant to this Section 6.15 shall be a Loan
Document.


 


6.16                        Governmental Authorization.  As
soon as practicable, and in any event within 5 Business Days after the receipt
by any Borrower or its Subsidiaries, from any Nevada Gaming Authority or other
Governmental Authority having jurisdiction over the operations of such Borrower
or its Subsidiaries, or filing or receipt thereof by such Borrower or its
Subsidiaries (i) copies of any order or notice of such Nevada Gaming
Authority or such other Governmental Authority or court which designates any
Gaming License or other material franchise, permit, or other governmental
operating authorization of such Borrower or its Subsidiaries, or any
application therefor, for a hearing or which refuses renewal or extension of,
or revokes or suspends the authority of such Borrower or its Subsidiaries, to
construct, own, manage, or operate its businesses (or portion thereof), and
(ii) a copy of any citation, notice of violation, or order to show cause
issued by any Nevada Gaming Authority, any Liquor Authority or other
Governmental Authority or any complaint filed by any Nevada Gaming Authority or
other Governmental Authority which is applicable to such Borrower, or to its
Subsidiaries.


 


6.17                        License Renewals. On the date twelve months following the Closing Date and
continuing every twelve months thereafter, each Borrower shall deliver, and
shall cause its respective Subsidiaries to deliver, to Agent an updated Schedule
5.21 reflecting thereon, as of the date of such delivery, the information
described in Section 5.21.


 


6.18                        Licenses and Permits.  (a) Ensure that
all material licenses (including all necessary Gaming Licenses and Liquor
Licenses), permits, and consents and similar rights required from any federal,
state, or local governmental body (including the Gaming Authorities and Liquor
Authorities) for the ownership, use, or operation of the businesses or
properties now owned or operated by each Borrower and its Subsidiaries are in
full force and effect, and (b) comply, in all material respects, with all
of the provisions thereof applicable to it.


 


6.19                        ERISA Matters.  As soon as possible
and, in any event, within 10 days after the Borrowers or any of their
Subsidiaries or any of their ERISA Affiliates knows or has reason to know of
the occurrence of an ERISA Event or Termination Event, the Administrative
Borrower will deliver to Agent a certificate signed by its chief executive
officer setting forth the full details as to such occurrence and the action, if
any, that such Borrower, such Subsidiary or ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be


 


77

















 


given or filed by such
Borrower, such Subsidiary, the plan administrator or such ERISA Affiliate to or
with the PBGC or any other government agency, or a Multiemployer Plan
participant and any notices received by such Borrower, such Subsidiary or ERISA
Affiliate from the PBGC or any other government agency, or a Multiemployer Plan
participant with respect thereto that a Reportable Event has occurred.  As soon as possible and, in any event,
within 10 days after the Borrowers or any of their Subsidiaries or any of their
ERISA Affiliates knows or has reason to know of the requirement of any
collective bargaining agreement that requires Borrowers or any of their
Subsidiaries or any of their ERISA Affiliates to (a) adopt, maintain,
contribute to or become obligated to contribute to any Plan that provides for
retiree health benefits or retiree life insurance or death benefits other than
as required by Section 601 of ERISA and Section 4980B of the IRC and
(b) adopt any amendment to a Benefit Plan that would materially raise the
amount of benefits payable after termination of employment.


 


7.                                      NEGATIVE COVENANTS.


 


Each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
Borrowers will not and will not permit any of their respective Subsidiaries to
do any of the following:


 


7.1                               Indebtedness.  Create, incur,
assume, suffer to exist, guarantee, or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness, except:


 


(a)                                  Indebtedness
evidenced by this Agreement and the other Loan Documents, together with
Indebtedness owed to Underlying Issuers with respect to Underlying Letters of
Credit;


 


(b)                                 Indebtedness
set forth on Schedule 5.20;


 


(c)                                  Permitted
Purchase Money Indebtedness;


 


(d)                                 refinancings,
renewals, or extensions of Indebtedness permitted under clauses (b) and
(c) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not, in Agent’s
Permitted Discretion, materially impair the prospects of repayment of the
Obligations by Borrowers or materially impair Borrowers’ creditworthiness,
(ii) such refinancings, renewals, or extensions do not result in an
increase in the then extant principal amount of, or interest rate with respect
to, the Indebtedness so refinanced, renewed, or extended or add one or more
Borrowers as liable with respect thereto if such additional Borrowers were not
liable with respect to the original Indebtedness, (iii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions, that, taken as a whole, are materially more burdensome
or restrictive to the applicable Borrower, (iv) if the Indebtedness that
is refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must be include subordination terms and conditions that
are at least as favorable to the Lender Group as those that were applicable to
the refinanced, renewed, or extended Indebtedness, and (v) the
Indebtedness that is refinanced, renewed, or extended is not recourse to any
Person that is liable


 


78

















 


on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended;


 


(e)                                  endorsement
of instruments or other payment items for deposit;


 


(f)                                    Indebtedness
evidenced by the Senior Notes in an aggregate principal amount not to exceed
$155,000,000;


 


(g)                                 Indebtedness
composing Permitted Investments;


 


(h)                                 Indebtedness
in respect of Hedge Agreements entered into in the ordinary course of business
and for non-speculative purposes;


 


(i)                                     Indebtedness
of the Fremont Street Experience in an amount not to exceed $1,000,000 per
annum; and


 


(j)                                     unsecured
Indebtedness in an amount not to exceed $5,000,000 at any one time outstanding.


 


7.2                               Liens.  Create, incur, assume, or suffer to exist,
directly or indirectly, any Lien on or with respect to any of its assets, of
any kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is refinanced,
renewed, or extended under Section 7.1(d) and so long as the replacement
Liens only encumber those assets that secured the refinanced, renewed, or
extended Indebtedness).


 


7.3                               Restrictions on Fundamental Changes.


 


(a)                                  Enter
into any merger, consolidation, reorganization, or recapitalization, or
reclassify its Stock.


 


(b)                                 Liquidate,
wind up, or dissolve itself (or suffer any liquidation or dissolution).


 


(c)                                  Convey,
sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets.


 


7.4                               Disposal of Assets.  Other than Permitted
Dispositions, convey, sell, lease, license, assign, transfer, or otherwise
dispose of any of the assets of any Borrower or any Subsidiary of a Borrower.


 


7.5                               Change Name.  Change any Borrower’s or any Subsidiary of a
Borrower’s name, FEIN, organizational identification number, state of
organization, or organizational identity; provided, however, that
a Borrower or a Subsidiary of a Borrower may change its name upon at least 30
days prior written notice by Administrative Borrower to Agent of such change
and so long as, at the time of such written notification, such Borrower or such
Subsidiary provides any financing statements necessary to perfect and continue
perfected Agent’s Liens.


 


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7.6                               Nature of Business.  Make any change in
the principal nature of their business.


 


7.7                               Prepayments and Amendments. 
Except in connection with a refinancing permitted by Section 7.1(d),


 


(a)                                  prepay,
redeem, defease, purchase, or otherwise acquire any Indebtedness of any
Borrower or any Subsidiary of a Borrower, other than the Obligations in accordance
with this Agreement, or


 


(b)                                 directly
or indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of (i) the Senior Note Documents; provided that the Indenture
Trustee may amend the Senior Note Documents to cure any ambiguity, defect,
omission, mistake or inconsistency and (ii) any agreement, instrument,
document, indenture, or other writing evidencing or concerning Indebtedness
permitted under Section 7.1(b) or (c), or


 


(c)                                  directly
or indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of the Acquisition Agreements unless the effect of such amendment,
modification, alteration, or change would not (i) materially increase the
obligations of Borrowers or their Subsidiaries or (ii) adversely affect the
Agent and Lenders.


 


7.8                               Change of Control.  Cause, permit, or
suffer, directly or indirectly, any Change of Control.


 


7.9                               [Intentionally Omitted].


 


7.10                        Distributions.  Other than Permitted
Distributions, make any distribution or declare or pay any dividends (in cash
or other property, other than common Stock) on, or purchase, acquire, redeem,
or retire any of any Borrower’s Stock, of any class, whether now or hereafter
outstanding.


 


7.11                        Accounting Methods.  Modify or change
their fiscal year or their method of accounting (other than as may be required
to conform to GAAP or required by applicable law) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrowers’ or their Subsidiaries’ accounting records without said
accounting firm or service bureau agreeing to provide Agent information
regarding Borrowers’ and their Subsidiaries’ financial condition.


 


7.12                        Investments.  Except for Permitted Investments, directly
or indirectly, make or acquire any Investment, or incur any liabilities
(including contingent obligations) for or in connection with any Investment; provided,
however, that Administrative Borrower and its Subsidiaries shall not
have Permitted Investments (other than in the Cash Management Accounts and
Casino Bankroll) in Deposit Accounts or Securities Accounts in an aggregate
amount in excess of $500,000 outstanding at any one time unless Administrative
Borrower or its Subsidiary, as applicable, and the applicable securities
intermediary or bank have entered into Control Agreements or similar
arrangements governing such Permitted Investments in order to perfect (and
further establish) the Agent’s Liens in such Permitted Investments.  Subject to the foregoing proviso, Borrowers
shall not, and shall not permit their Subsidiaries to, establish or


 


80

















 


maintain any Deposit
Account or Securities Account unless Agent shall have received a Control
Agreement in respect of such Deposit Account or Securities Account.


 


7.13                        Transactions with Affiliates. 
Except as set forth in Schedule 7.13, directly or indirectly
enter into or permit to exist any transaction with any Affiliate of any
Borrower except for transactions that are in the ordinary course of Borrowers’
business, upon fair and reasonable terms, and that are no less favorable to
Borrowers than would be obtained in an arm’s length transaction with a non-Affiliate.


 


7.14                        Suspension.  Suspend or go out of a substantial portion
of their business.


 


7.15                        [Intentionally omitted].


 


7.16                        Use of Proceeds.  Use the proceeds of
the Advances and the Term Loans for any purpose other than (a) on the
Closing Date, (i) to fund a portion of the purchase price for the
Acquisition, and (ii) to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted purposes.


 


7.17                        Inventory and Equipment with Bailees. 
Store the Inventory or Equipment of Borrowers or their Subsidiaries at
any time now or hereafter with a bailee, warehouseman, or similar party without
Agent’s prior written consent.


 


7.18                        Financial Covenants.


 


(a)                                  Fail to maintain or achieve:


 


(i)                                     Minimum TTM EBITDA. 
TTM EBITDA, measured on a quarter-end basis, of at least
$28,000,000.


 


(ii)                                  Fixed Charge Coverage Ratio.  A Fixed Charge Coverage Ratio, measured on a
quarter-end basis, of greater than 1.0:1.0.


 


(iii)                               Maximum Senior Debt to EBITDA Ratio.  A Senior Debt to EBITDA Ratio,
measured on a quarter-end basis of less than 5.25:1.0.


 


(b)                                 Make:


 


(i)                                     Capital Expenditures. 
Capital Expenditures in any fiscal year in excess of the
amount set forth in the following table for the applicable period:


 


	
  Fiscal Year 2004

  	
   

  	
  Fiscal
  Year 2005

  	
   

  	
  Fiscal
  Year 2006

  	
   

  	
  Fiscal
  Year 2007

  	
   

  	
  Fiscal
  Year 2008

  	
   

  
	
  $

  	
  10,500,000

  	
   

  	
  $

  	
  10,500,000

  	
   

  	
  $

  	
  10,500,000

  	
   

  	
  $

  	
  24,000,000

  	
   

  	
  $

  	
  10,500,000

  	
   

  
															



 


(ii)                        provided,
however, that the maximum Capital Expenditures amount for any fiscal
year shall be increased by an amount equal to the lesser of
(y) $2,500,000, and (z) 50% of the portion, if any, of the maximum
Capital Expenditures amount set forth above


 


81

















 


for the previous fiscal
year that was not actually utilized for Capital Expenditures during such fiscal
year.


 


7.19                        ERISA Matters.


 


(a)                                  Cause
or permit to occur an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA;


 


(b)                                 Except
as may be required pursuant to the terms of any collective bargaining
agreement, adopt, maintain, contribute to or become obligated to contribute to
any Plan not disclosed on Schedule 5.13 that provides for retiree health
benefits or retiree life insurance or death benefits, other than as required by
Section 601 of ERISA and Section 4980B of the IRC;


 


(c)                                  Except
as may be required pursuant to the terms of any collective bargaining
agreement, adopt any amendment to a Benefit Plan that would materially raise
the amount of benefits payable after termination of employment; or


 


(d)                                 Directly
or indirectly cause to occur any event that would reasonably be expected to
result in a material liability with respect to a Plan which would result in a
Material Adverse Change.


 


8.                                      EVENTS OF DEFAULT.


 


Any one or more of the following events shall
constitute an event of default (each, an “Event of Default”) under this
Agreement:


 


8.1                               If
Borrowers fail to pay when due and payable or when declared due and payable,
all or any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code, would
have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);


 


8.2                               If
Borrowers:


 


(a)                                  fail
to perform, keep, or observe any term, provision, covenant, or agreement
contained in Sections 2.7, 3.2, 4.2, 4.4, 4.5,
4.6, 6.8, 6.12, 6.15, 6.16, 6.17, 6.18
, 6.19 and 7.1 through 7.19 of this Agreement;


 


(b)                                 fail
or neglect to perform, keep, or observe any term, provision, covenant, or
agreement contained in Sections 6.2, 6.3, 6.5, 6.6,
6.7, 6.9, 6.10, 6.11, and 6.14 of this
Agreement and such failure continues for a period of 5 days; or


 


(c)                                  fail
or neglect to perform, keep, or observe any other term, provision, covenant, or
agreement contained in this Agreement, or in any of the other Loan Documents
(giving effect to any grace periods, cure periods, or required notices, if any,
expressly provided for in such Loan Documents); in each case, other than any
such term, provision, covenant, or


 


82

















 


agreement that is the
subject of another provision of this Section 8 (in which event such
other provision of this Section 8 shall govern), and such failure
continues for a period of 10 days;


 


provided
that, during any period of time that any such failure or neglect referred to in
this paragraph exists, even if such failure or neglect is not yet an Event of
Default, the Lender Group shall be relieved of its obligation to extend credit
hereunder;


 


8.3                               If
any material portion of any Borrower’s or any Subsidiary of a Borrower’s assets
is attached, seized, subjected to a writ or distress warrant, levied upon, or
comes into the possession of any third Person;


 


8.4                               If
an Insolvency Proceeding is commenced by any Borrower or any Subsidiary of a
Borrower;


 


8.5                               If
an Insolvency Proceeding is commenced against any Borrower or any Subsidiary of
a Borrower, and any of the following events occur: (a) the applicable
Borrower or Subsidiary consents to the institution of the Insolvency Proceeding
against it, (b) the petition commencing the Insolvency Proceeding is not
timely controverted; provided, however, that, during the pendency of such
period, each member of the Lender Group shall be relieved of its obligations to
extend credit hereunder, (c) the petition commencing the Insolvency
Proceeding is not dismissed or vacated within 60 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such
period, each member of the Lender Group shall be relieved of its obligation to
extend credit hereunder, (d) an interim trustee is appointed to take
possession of all or any substantial portion of the properties or assets of, or
to operate all or any substantial portion of the business of, any Borrower or
any Subsidiary of a Borrower, or (e) an order for relief shall have been
entered therein;


 


8.6                               If
any Borrower or any Subsidiary of a Borrower is enjoined, restrained, or in any
way prevented by court order from continuing to conduct all or any material
part of its business affairs;


 


8.7                               (a)                                  If
a notice of Lien is filed of record with respect to a Borrower’s or any of its
Subsidiaries’ assets by the United States or any department, agency, or
instrumentality thereof (a “Federal Lien”), or by any state, county,
municipal, or governmental agency and such state, county, municipal, or
governmental agency Lien has priority over the Liens of Lender in and to the
Collateral or any portion thereof (a “Non-Federal Priority Lien”); or


 


(b)                                 If
a notice of Lien is filed of record with respect to a Borrowers’ assets or any
of its Subsidiaries’ assets by any state, county, municipal, or governmental
agency that is not a Non-Federal Priority Lien (a “Non-Federal Non-Priority
Lien”); provided, however, that, if the aggregate amount
claimed with respect to any such Non-Federal Non-Priority Liens, or combination
thereof, is less than $250,000, an Event of Default shall not occur under this
subsection if the claims that are the subject of such Liens are the subject of
Permitted Protests and if the Liens are released, discharged, or bonded against
within 30 days of each such Lien first being filed of record or, if earlier, at
least 5 days prior to the date on which assets that are subject to such Liens
are subject to being sold or forfeited and, in any such case, Lender shall have
the absolute right to establish and maintain a reserve against the Maximum
Revolver


 


83

















 


Amount in an amount equal
to the aggregate amount of the underlying claims (determined by Lender, in its
Permitted Discretion, and irrespective of any Permitted Protests with respect
thereto and including any penalties or interest that are estimated by Lender,
in its Permitted Discretion, to arise in connection therewith);


 


8.8                               If
a judgment or other claim becomes a Lien or encumbrance upon any material
portion of any Borrower’s or any Subsidiary of a Borrower’s properties or
assets;


 


8.9                               (a)                                  If
there is a default in any material agreement to which any Borrower or any
Subsidiary of a Borrower is a party with one or more third Persons relative to
a Borrower’s Indebtedness involving an aggregate amount of $1,000,000 or more,
and such default (a) occurs at the final maturity of the obligations
thereunder, or (b) results in a right by the other party thereto,
irrespective of whether exercised, to accelerate the maturity of the applicable
Borrower’s or Subsidiary’s obligations thereunder, or to terminate such
agreement; or


 


(b)                                 If
there is a default in any other material agreement to which Borrower is a party
with one or more third Persons and such default results in a right by such
third Person(s), irrespective of whether exercised, to terminate such
agreement;


 


8.10                        If
any Borrower or any Subsidiary of a Borrower makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to
the payment of the Obligations, except to the extent such payment is permitted
by the terms of the subordination provisions applicable to such Indebtedness;


 


8.11                        If
any material misstatement or misrepresentation exists now or hereafter in any
warranty, representation, statement, or Record made to the Lender Group by any
Borrower, any Subsidiary of a Borrower, or any officer, employee, agent, or
director of any Borrower or any Subsidiary of a Borrower or if any such
warranty or representation is withdrawn;


 


8.12                        If
the obligation of any Guarantor under the Guaranty is limited or terminated by
operation of law or by such Guarantor thereunder;


 


8.13                        If
this Agreement or any other Loan Document that purports to create a Lien,
shall, for any reason following the filing of financing statements, the
recordation of Mortgages or the filing or recording or other filings or
documents necessary to perfect Agent’s Liens in the Collateral fail or cease to
create a valid and perfected and, except to the extent permitted by the terms
hereof or thereof, first priority Lien on or security interest in the
applicable Collateral covered hereby or thereby;


 


8.14                        Any
provision of any Loan Document shall at any time for any reason be declared to
be null and void, or the validity or enforceability thereof shall be contested
by any Borrower or any Subsidiary of a Borrower, or a proceeding shall be
commenced by any Borrower or any Subsidiary of a Borrower, or by any
Governmental Authority having jurisdiction over any Borrower or any Subsidiary
of a Borrower, seeking to establish the invalidity or unenforceability thereof,
or any Borrower or any Subsidiary of a Borrower shall deny that it has any
liability or obligation purported to be created under any Loan Document;


 


8.15                        If
there is an “Event of Default” under, and as defined in, the Indenture;


 


84

















 


8.16                        If
PB Gaming, any Guarantor or any Borrower, or any of their Subsidiaries, fails
to keep in full force and effect, suffers the termination, revocation,
forfeiture, nonrenewal or suspension of, or suffers a material adverse
amendment, condition or limitation to, any Gaming License, franchise,
registration, qualification, finding of suitability or other approval or
authorization required to enable PB Gaming or such Guarantor, Borrower or
Subsidiary, to own, operate, or otherwise conduct or manage their businesses,
including any gaming activities or any Casino and any other location where PB
Gaming, Guarantors and Borrowers conduct such business;


 


8.17                        If
any Governmental Authority terminates, suspends, revokes, repeals, fails to
issue or fails to renew any Gaming License held by Thomas Breitling or Timothy
Poster or finding of suitability or other approval or authorization required to
enable Thomas Breitling or Timothy Poster to own the Stock of PB Gaming or to
own, operate, participate or associate in the businesses of Borrowers and its
Subsidiaries;


 


8.18                        If
any Governmental Authority terminates, suspends, amends, revokes, repeals or
fails to renew any law, license, franchise, registration, qualification,
finding of suitability or other approval or authorization required to enable PB
Gaming, any Guarantor or any Borrower, or any of their Subsidiaries, to own,
operate, or otherwise conduct or manage their businesses, including any gaming
activities or any Casino and any other location where PB Gaming, Guarantors and
Borrowers conduct such business;


 


8.19                        If
a complete or partial withdrawal from any Multiemployer Plan by any Borrower or
any of its Subsidiaries or its ERISA Affiliates (including any transaction
described in, and meeting the requirements of, Section 4204 of ERISA) and , as
a result of such complete or partial withdrawal, such Borrower or its
Subsidiary incurs a withdrawal liability which would result in a Material
Adverse Change or any Multiemployer Plan shall reorganize or become insolvent
under and within the meaning of Section 4241 or 4245 of ERISA, and as a result
thereof, such Borrower or Subsidiary or such ERISA Affiliate’s annual
contribution requirement with respect to such Multiemployer Plan increases in
an annual amount which would result in a Material Adverse Change or any
Multiemployer Plan shall terminate or be terminated under Section 4041A of
ERISA; or


 


8.20                        Any
Termination Event with respect to any Benefit Plan shall have occurred, and, 30
days thereafter, (i) such Termination Event (if correctable) shall not have
been corrected, and (ii) such Termination Event results in a Material Adverse
Change.


 


9.                                      THE LENDER GROUP’S RIGHTS AND REMEDIES.


 


9.1                               Rights and Remedies.  Upon the occurrence,
and during the continuation, of an Event of Default, the Required Lenders (at
their election but without notice of their election and without demand) may
authorize and instruct Agent to do any one or more of the following on behalf
of the Lender Group (and Agent, acting upon the instructions of the Required
Lenders, shall do the same on behalf of the Lender Group), all of which are
authorized by Borrowers:


 


(a)                                  Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable;


 


85

















 


(b)                                 Cease
advancing money or extending credit to or for the benefit of Borrowers under
this Agreement, under any of the Loan Documents, or under any other agreement
between Borrowers and the Lender Group;


 


(c)                                  Terminate
this Agreement and any of the other Loan Documents as to any future liability
or obligation of the Lender Group, but without affecting any of the Agent’s
Liens in the Collateral and without affecting the Obligations;


 


(d)                                 Settle
or adjust disputes and claims directly with Borrowers’ Account Debtors for amounts
and upon terms which Agent considers advisable, and in such cases, Agent will
credit the Loan Account with only the net amounts received by Agent in payment
of such disputed Accounts after deducting all Lender Group Expenses incurred or
expended in connection therewith;


 


(e)                                  Cause
Borrowers to hold all of their returned Inventory in trust for the Lender Group
and segregate all such Inventory from all other assets of Borrowers or in
Borrowers’ possession;


 


(f)                                    Without
notice to or demand upon any Borrower, make such payments and do such acts as
Agent considers necessary or reasonable to protect its security interests in
the Collateral.  Each Borrower agrees to
assemble the Collateral if Agent so requires, and to make the Collateral
available to Agent at a place that Agent may designate which is reasonably
convenient to both parties.  Each
Borrower authorizes Agent to enter the premises where the Collateral is
located, to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any Lien that in Agent’s
determination appears to conflict with the Agent’s Liens in and to the
Collateral and to pay all expenses incurred in connection therewith and to
charge Borrowers’ Loan Account therefor. 
With respect to any of Borrowers’ owned or leased premises, each
Borrower hereby grants Agent a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of
the Lender Group’s rights or remedies provided herein, at law, in equity, or
otherwise;


 


(g)                                 Without
notice to any Borrower (such notice being expressly waived), and without
constituting an acceptance of any collateral in full or partial satisfaction of
an obligation (within the meaning of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of any Borrower held by
the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or
the account of any Borrower held by the Lender Group;


 


(h)                                 Hold,
as cash collateral, any and all balances and deposits of any Borrower held by
the Lender Group, and any amounts received in the Cash Management Accounts, to
secure the full and final repayment of all of the Obligations;


 


(i)                                     Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Borrower
Collateral.  Each Borrower hereby grants
to Agent a license or other right to use, without charge, such Borrower’s
labels, patents, copyrights, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Borrower Collateral, in


 


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advertising for sale or
selling any Borrower Collateral and such Borrower’s rights under all licenses
and all franchise agreements shall inure to the Lender Group’s benefit. Solely
to the extent necessary to avoid the invalidation of a Borrower’s material
rights and interests in any trademarks that have material economic value and
solely in connection with the Agent’s advertising or sale of goods on which
such trademarks are affixed, Agent agrees to maintain quality control standards
with respect to such goods reasonably similar to those in effect immediately
prior to the exercise of remedies with respect to such goods;


 


(j)                                     Sell
the Borrower Collateral at either a public or private sale, or both, by way of
one or more contracts or transactions, for cash or on terms, in such manner and
at such places (including Borrowers’ premises) as Agent determines is
commercially reasonable.  It is not
necessary that the Borrower Collateral be present at any such sale;


 


(k)                                  Agent
shall give notice of the disposition of the Borrower Collateral as follows:


 


(i)                                     Agent
shall give Administrative Borrower (for the benefit of the applicable Borrower)
a notice in writing of the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public sale is to be made
of the Borrower Collateral, the time on or after which the private sale or
other disposition is to be made; and


 


(ii)                                  The
notice shall be personally delivered or mailed, postage prepaid, to
Administrative Borrower as provided in Section 12, at least 10 days
before the earliest time of disposition set forth in the notice; no notice
needs to be given prior to the disposition of any portion of the Borrower
Collateral that is perishable or threatens to decline speedily in value or that
is of a type customarily sold on a recognized market;


 


(l)                                     Agent,
on behalf of the Lender Group may credit bid and purchase at any public sale;


 


(m)                               Agent
may seek the appointment of a receiver or keeper to take possession of all or
any portion of the Borrower Collateral or to operate same and, to the maximum
extent permitted by law, may seek the appointment of such a receiver without
the requirement of prior notice or a hearing;


 


(n)                                 The
Lender Group shall have all other rights and remedies available to it at law or
in equity pursuant to any other Loan Documents; provided, however,
that upon the occurrence of any Event of Default described in Section 8.4
or Section 8.5, in addition to the remedies set forth above, without any
notice to Borrowers or any other Person or any act by the Lender Group, the
Commitments shall automatically terminate and the Obligations then outstanding,
together with all accrued and unpaid interest thereon, and all fees and all
other amounts due under this Agreement and the other Loan Documents, shall
automatically and immediately become due and payable, without presentment,
demand, protest, or notice of any kind, all of which are expressly waived by
Borrowers;


 


(o)                                 Borrowers,
and each of their Subsidiaries, agree that, upon the occurrence of and during
the continuance of an Event of Default and at Agent’s request, Borrowers will,
and will cause each of their Subsidiaries to (and, by its execution and
delivery of a Guaranty or a


 


87

















 


joinder thereto, each of
Borrowers’ Subsidiaries agrees to), immediately file such applications for
approval and shall use commercially reasonable efforts to take all other and
further actions required by Agent to obtain such approvals or consents of the
Nevada Gaming Authorities and any other Governmental Authorities with
jurisdiction as are necessary for the Agent, to continue operation of the
Casinos under the Gaming Licenses held by it, or its interest in any Person
holding any such Gaming License pursuant to the Gaming Laws.  To enforce the provisions of this Section 9.1(o), Agent 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 Nevada Gaming Authority and any other
Governmental Authorities with jurisdiction authorization pursuant to the Gaming
Laws to continue operation of the Casinos under all necessary Gaming Licenses
for the purpose of seeking a bona fide purchaser of the Casinos.  Borrowers hereby agree to authorize, and to
cause each of their Subsidiaries to authorize (and, by its execution and
delivery of a Guaranty or a joinder thereto, each Subsidiary of Borrowers
agrees to authorize) such an authorization pursuant to the Gaming Laws to
continue the operation of the Casinos upon the request of the receiver so
appointed and, if Borrowers 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, Borrowers shall further use, and shall cause their
Subsidiaries to use, commercially reasonable efforts to assist in obtaining
approval of the applicable Nevada 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 Nevada 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 Casinos 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.  Borrowers acknowledge that the authorization
pursuant to the Gaming Laws for the receiver to continue the operation of the
Casinos under the Gaming Licenses or for a transfer of control is integral to
Agent’s realization of the value of the Collateral, that there is no adequate
remedy at law for failure by Borrowers to comply with the provisions of this Section 9.1(o) and that such failure
would not be adequately compensable in damages, and therefore agree that the
agreements contained in this Section 9.1(o)
may be specifically enforced; and


 


(p)                                 All
rights, remedies, and powers provided in this Agreement may be exercised only
to the extent that the exercise thereof does not violate any applicable mandatory
provision of the Gaming Laws or the Liquor Laws and all provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
the Gaming Laws and Liquor Laws and to be limited solely to the extent
necessary to not render the provisions of this Agreement invalid or
unenforceable, in whole or in part. 
Agent will timely apply for and receive all required approvals of the
applicable Nevada 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 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) and of the Liquor Authorities under
Liquor Laws for the sale of liquor and other alcoholic beverages.


 


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9.2                               Remedies Cumulative.  The rights and
remedies of the Lender Group under this Agreement, the other Loan Documents,
and all other agreements shall be cumulative. 
The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right
or remedy shall be deemed an election, and no waiver by the Lender Group of any
Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election,
or acquiescence by it.


 


10.                               TAXES AND EXPENSES.


 


If any Borrower fails to pay any monies (whether
taxes, assessments, insurance premiums, or, in the case of leased properties or
assets, rents or other amounts payable under such leases) due to third Persons,
or fails to make any deposits or furnish any required proof of payment or
deposit, all as required under the terms of this Agreement, then, Agent, in its
sole discretion and without prior notice to any Borrower, may do any or all of
the following:  (a) make payment of
the same or any part thereof, (b) set up such reserves in Borrowers’ Loan
Account as Agent deems necessary to protect the Lender Group from the exposure
created by such failure, or (c) in the case of the failure to comply with Section
6.8 hereof, obtain and maintain insurance policies of the type described in
Section 6.8 and take any action with respect to such policies as Agent
deems prudent.  Any such amounts paid by
Agent shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement.  Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing; provided, however,
if a Borrower is contesting a tax claim in good faith with appropriate
provision therefor on its financial statements, Agent shall not cause such
claim to be paid or interfere with such contest.


 


11.                               WAIVERS; INDEMNIFICATION.


 


11.1                        Demand; Protest; etc.  Each Borrower waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of documents, instruments, chattel paper, and
guarantees at any time held by the Lender Group on which any such Borrower may
in any way be liable.


 


11.2                        The Lender Group’s Liability for
Borrower Collateral.  Each Borrower hereby agrees that:  (a) so long as the Lender Group
complies with its obligations under the Code, Agent shall not in any way or
manner be liable or responsible for: 
(i) the safekeeping of the Borrower Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default
of any carrier, warehouseman, bailee, forwarding agency, or other Person, and
(b) all risk of loss, damage, or destruction of the Borrower Collateral
shall be borne by Borrowers.


 


11.3                        Indemnification.  Each Borrower shall
pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related
Persons, and each Participant (each, an “Indemnified Person”) harmless
(to the fullest extent permitted by law) from and against any and all claims,


 


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demands, suits, actions,
investigations, proceedings, and damages other than lawsuits between lenders,
and all reasonable attorneys fees and disbursements and other costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with
or as a result of or related to the execution, delivery, enforcement,
performance, or administration (including any restructuring or workout with
respect hereto) of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby or the monitoring of Borrowers’ and
their Subsidiaries’ compliance with the terms of the Loan Documents, and
(b) with respect to any investigation, litigation, or proceeding related
to this Agreement, any other Loan Document, or the use of the proceeds of the
credit provided hereunder (irrespective of whether any Indemnified Person is a
party thereto), or any act, omission, event, or circumstance in any manner
related thereto (all the foregoing, collectively, the “Indemnified
Liabilities”).  The foregoing to the
contrary notwithstanding, Borrowers shall have no obligation to any Indemnified
Person under this Section 11.3 with respect to any Indemnified Liability
that a court of competent jurisdiction finally determines to have resulted from
the gross negligence or willful misconduct of such Indemnified Person.  This provision shall survive the termination
of this Agreement and the repayment of the Obligations.  If any Indemnified Person makes any payment
to any other Indemnified Person with respect to an Indemnified Liability as to
which Borrowers were required to indemnify the Indemnified Person receiving
such payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto.


 


12.                               NOTICES.


 


Unless otherwise provided in this Agreement, all
notices or demands by Borrowers or Agent to the other relating to this
Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as Administrative
Borrower or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to Borrowers in care of Administrative Borrower or
to Agent, as the case may be, at its address set forth below:


 


	
  If to Administrative
  Borrower:

  	
   

  	
  POSTER FINANCIAL GROUP, INC.

  
	
   

  	
   

  	
  129 East Fremont Street

  
	
   

  	
   

  	
  Las Vegas, Nevada 89101

  
	
   

  	
   

  	
  Attn:Timothy
  Poster

  
	
   

  	
   

  	
  Fax
  No. (702) 382-9092

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  SKADDEN, ARPS, SLATE, MEAGHER

  
	
   

  	
   

  	
  & FLOM LLP

  
	
   

  	
   

  	
  Four Times Square

  
	
   

  	
   

  	
  Attn:  Peter Neckles, Esq.

  
	
   

  	
   

  	
  Fax
  No. (212) 735-2000

  



 


90

















 


	
  If to Agent:

  	
   

  	
  WELLS FARGO FOOTHILL, INC.

  
	
   

  	
   

  	
  2450 Colorado Avenue

  
	
   

  	
   

  	
  Suite 3000 West

  
	
   

  	
   

  	
  Santa Monica,
  California  90404

  
	
   

  	
   

  	
  Attn: Specialty
  Finance Division Manager

  
	
   

  	
   

  	
  Fax
  No. (310) 453-7442

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  PAUL,
  HASTINGS, JANOFSKY & WALKER LLP

  
	
   

  	
   

  	
  515 South Flower
  Street, 25th Floor

  
	
   

  	
   

  	
  Los Angeles, California
  90071

  
	
   

  	
   

  	
  Attn:  John Francis Hilson, Esq.

  
	
   

  	
   

  	
  Fax
  No. (213) 627-0705

  



 


Agent and Borrowers may change the address at which
they are to receive notices hereunder, by notice in writing in the foregoing
manner given to the other party.  All
notices or demands sent in accordance with this Section 12, other than
notices by Agent in connection with enforcement rights against the Borrower
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail.  Each Borrower
acknowledges and agrees that notices sent by the Lender Group in connection
with the exercise of enforcement rights against Borrower Collateral under the
provisions of the Code shall be deemed sent when deposited in the mail or
personally delivered, or, where permitted by law, transmitted by telefacsimile
or any other method set forth above.


 


13.                               CHOICE OF LAW AND VENUE; JURY TRIAL
WAIVER.


 


(a)                                  THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT
IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.


 


(b)                                 THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH BORROWER COLLATERAL OR OTHER PROPERTY
MAY BE FOUND.  BORROWERS AND THE LENDER
GROUP WAIVE, TO THE EXTENT PERMITTED


 


91

















 


UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT
IN ACCORDANCE WITH THIS SECTION 13(b).


 


BORROWERS
AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  BORROWERS AND THE
LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.


 


14.                               ASSIGNMENTS AND PARTICIPATIONS;
SUCCESSORS.


 


14.1                        Assignments and Participations.


 


(a)                                  Any
Lender may assign and delegate to one or more assignees (each an “Assignee”)
that are Eligible Transferees all, or any ratable part of all, of the
Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of $5,000,000
and so long as no Event of Default shall have occurred or is continuing with
the prior consent of Administrative Borrower for those Eligible Transferees
described in clauses (a) — (c) of the definition of Eligible Transferee (which
such consent shall not be unreasonably withheld, delayed or conditioned); provided,
however, that Borrowers and Agent may continue to deal solely and
directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and
(iii) the assignor Lender or Assignee has paid to Agent for Agent’s
separate account a processing fee in the amount of $5,000.  Anything contained herein to the contrary
notwithstanding, the payment of any fees shall not be required, the Assignee
need not be an Eligible Transferee and the Administrative Borrower’s consent
shall not be required if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of the assigning Lender.


 


(b)                                 From
and after the date that Agent notifies the assignor Lender (with a copy to
Administrative Borrower) that it has received an executed Assignment and Acceptance
and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights
and obligations


 


92

















 


hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 11.3
hereof) and be released from any future 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
and the other Loan Documents, such Lender shall cease to be a party hereto and
thereto), and such assignment shall effect a novation between Borrowers and the
Assignee; provided, however, that nothing contained herein shall
release any assigning Lender from obligations that survive the termination of
this Agreement, including such assigning Lender’s obligations under Article
16 and Section 17.8 of this Agreement.


 


(c)                                  By
executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the Assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: 
(1) other than as provided in such Assignment and Acceptance, such
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 the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document furnished pursuant hereto, (2) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers or the performance or
observance by Borrowers of any of their obligations under this Agreement or any
other Loan Document furnished pursuant hereto, (3) such Assignee confirms
that it has received a copy of this Agreement, together with such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance,
(4) such Assignee will, independently and without reliance upon Agent,
such assigning Lender or any other 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,
(5) such Assignee appoints and authorizes Agent to take such actions and
to exercise such powers under this Agreement as are delegated to Agent, by the
terms hereof, together with such powers as are reasonably incidental thereto,
and (6) such Assignee agrees that it will perform all of the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender.


 


(d)                                 Immediately
upon Agent’s receipt of the required processing fee payment and the fully
executed Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom.  The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning
Lender pro
tanto.


 


(e)                                  Any
Lender may at any time, with the written consent of Agent, sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of
such Lender (a “Participant”) participating interests in its
Obligations, the Commitment, and the other rights and interests of that Lender
(the “Originating Lender”) hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); provided, however, that (i) the Originating
Lender shall remain a “Lender” for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the


 


93

















 


Originating Lender’s
obligations under this Agreement shall remain unchanged, (ii) the
Originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend
the final maturity date of the Obligations hereunder in which such Participant
is participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or
substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums; and (v) all
amounts payable by Borrowers hereunder shall be determined as if such Lender
had not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement.  The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, the Collections of Borrowers or their Subsidiaries,
the Collateral, or otherwise in respect of the Obligations.  No Participant shall have the right to
participate directly in the making of decisions by the Lenders among
themselves.


 


(f)                                    In
connection with any such assignment or participation or proposed assignment or
participation, a Lender may, subject to the provisions of Section 17.8,
disclose all documents and information which it now or hereafter may have
relating to Borrowers and their Subsidiaries and their respective businesses.


 


(g)                                 Any
other provision in this Agreement notwithstanding, any Lender may at any time
create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR § 203.24, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.


 


14.2                        Successors.  This Agreement shall bind and inure to the
benefit of the respective successors and assigns of each of the parties; provided,
however, that Borrowers may not assign this Agreement or any rights or
duties hereunder without the Lenders’ prior written consent and any prohibited
assignment shall be absolutely void ab initio.  No consent to assignment by the Lenders shall release any
Borrower from its Obligations.  A Lender
may assign this Agreement and the other Loan Documents and its rights and
duties hereunder and thereunder pursuant to


 


94

















 


Section 14.1
hereof and, except as expressly required pursuant to Section 14.1
hereof, no consent or approval by any Borrower is required in connection with
any such assignment.


 


15.                               AMENDMENTS; WAIVERS.


 


15.1                        Amendments and Waivers. 
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by Borrowers
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and Administrative Borrower (on behalf of all Borrowers) and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no
such waiver, amendment, or consent shall, unless in writing and signed by all
of the Lenders affected thereby and Administrative Borrower (on behalf of all
Borrowers) and acknowledged by Agent, do any of the following:


 


(a)                                  increase
or extend any Commitment of any Lender,


 


(b)                                 postpone
or delay any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees, or other amounts due hereunder or under
any other Loan Document,


 


(c)                                  reduce
the principal of, or the rate of interest on, any loan or other extension of
credit hereunder, or reduce any fees or other amounts payable hereunder or
under any other Loan Document,


 


(d)                                 change
the percentage of the Commitments that is required to take any action
hereunder,


 


(e)                                  amend
or modify this Section or any provision of the Agreement providing for consent
or other action by all Lenders,


 


(f)                                    release
Collateral other than as permitted by Section 16.12,


 


(g)                                 change
the definition of “Required Lenders” or “Pro Rata Share,”


 


(h)                                 contractually
subordinate any of the Agent’s Liens,


 


(i)                                     release
any Borrower or Guarantor from any obligation for the payment of money, or


 


(j)                                     change
the definitions of Maximum Revolver Amount or Term Loan A Amount,  or Term Loan B Amount or change Section
2.1(b); or


 


(k)                                  amend
any of the provisions of Section 16.


 


and, provided further, however, that no
amendment, waiver or consent shall, unless in writing and signed by Agent,
Issuing Lender, or Swing Lender, affect the rights or duties of Agent, Issuing
Lender, or Swing Lender, as applicable, under this Agreement or any other Loan


 


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Document.  The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of Borrowers.


 


15.2                        Replacement of Holdout Lender.  If any action to be taken by the Lender
Group or Agent hereunder requires the unanimous consent, authorization, or
agreement of all Lenders, and a Lender (“Holdout Lender”) fails to give
its consent, authorization, or agreement, then Agent, upon at least 5 Business
Days prior irrevocable notice to the Holdout Lender, may permanently replace
the Holdout Lender with one or more substitute Lenders and so long as no
Default or Event of Default shall have occurred, reasonably acceptable to
Administrative Borrower (each, a “Replacement Lender”), and the Holdout
Lender shall have not right to refuse to be replaced hereunder.  Such notice to replace the Holdout Lender
shall specify an effective date for such replacement, which date shall not be
later than 15 Business Days after the date such notice is given.


 


Prior to the effective date of such replacement, the
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to the Holdout Lender being
repaid its share of the outstanding Obligations (including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever.  If the
Holdout Lender shall refuse or fail to execute and deliver any such Assignment
and Acceptance prior to the effective date of such replacement, the Holdout
Lender shall be deemed to have executed and delivered such Assignment and
Acceptance.  The replacement of any
Holdout Lender shall be made in accordance with the terms of Section 14.1.  Until such time as the Replacement Lenders
shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan
Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender’s Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.


 


15.3                        No Waivers; Cumulative Remedies. 
No failure by Agent or any Lender to exercise any right, remedy, or
option under this Agreement or, any other Loan Document, or delay by Agent or
any Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated.  No waiver by Agent or any
Lender on any occasion shall affect or diminish Agent’s and each Lender’s
rights thereafter to require strict performance by Borrowers of any provision
of this Agreement.  Agent’s and each
Lender’s rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.


 


16.                               AGENT; THE LENDER GROUP.


 


16.1                        Appointment and Authorization of
Agent.  Each Lender hereby designates and appoints
WFF as its representative under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes Agent to execute and deliver each of
the other Loan


 


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Documents on its behalf
and to take such other action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to Agent by the terms of this Agreement
or any other Loan Document, together with such powers as are reasonably
incidental thereto.  Agent agrees to act
as such on the express conditions contained in this Section 16.  The provisions of this Section 16
(other than the proviso to Section 16.11(d)) are solely for the benefit
of Agent, and the Lenders, and Borrowers and their Subsidiaries shall have no
rights as a third party beneficiary of any of the provisions contained
herein.  Any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent; it being
expressly understood and agreed that the use of the word “Agent” is for
convenience only, that WFF is merely the representative of the Lenders, and
only has the contractual duties set forth herein.  Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining
from taking any actions that Agent expressly is entitled to take or assert
under or pursuant to this Agreement and the other Loan Documents.  Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to Agent, Lenders agree that Agent shall have the right to exercise
the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its
customary business practices, ledgers and records reflecting the status of the
Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, and related matters, (b) 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 the Loan Documents, (c) make Advances, for itself or on
behalf of Lenders as provided in the Loan Documents, (d) exclusively
receive, apply, and distribute the Collections of Borrowers and their
Subsidiaries as provided in the Loan Documents, (e) open and maintain such
bank accounts and cash management accounts as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of Borrowers and their
Subsidiaries, (f) perform, exercise, and enforce any and all other rights
and remedies of the Lender Group with respect to Borrowers, the Obligations,
the Collateral, the Collections of Borrowers and their Subsidiaries, or
otherwise related to any of same as provided in the Loan Documents, and
(g) incur and pay such Lender Group Expenses as Agent may deem necessary
or appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.


 


16.2                        Delegation of Duties.  Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.


 


16.3                        Liability of Agent.  None of the
Agent-Related Persons shall (i) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby (except for its own
gross


 


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negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by any Borrower or
any Subsidiary or Affiliate of any Borrower, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of any Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrowers or the books or
records or properties of any of Borrowers’ Subsidiaries or Affiliates.


 


16.4                        Reliance by Agent.  Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent, or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to Borrowers or counsel to any Lender),
independent accountants and other experts selected by Agent.  Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or concurrence of the Lenders as
it deems appropriate and until such instructions are received, Agent shall act,
or refrain from acting, as it deems advisable. 
If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action.  Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
requisite Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.


 


16.5                        Notice of Default or Event of Default. 
Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest, fees, and expenses required to be paid to Agent
for the account of the Lenders and, except with respect to Events of Default of
which Agent has actual knowledge, unless Agent shall have received written
notice from a Lender or Administrative Borrower referring to this Agreement,
describing such Default or Event of Default, and stating that such notice is a
“notice of default.”  Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. 
If any Lender obtains actual knowledge of any Event of Default, such
Lender promptly shall notify the other Lenders and Agent of such Event of
Default.  Each Lender shall be solely
responsible for giving any notices to its Participants, if any.  Subject to Section 16.4, Agent shall
take such action with respect to such Default or Event of Default as may be
requested by the Required Lenders in accordance with Section 9; provided,
however, that unless and until Agent has received any such request,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable.


 


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16.6                        Credit Decision.  Each Lender
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by Agent hereinafter taken, including any
review of the affairs of Borrowers and their Subsidiaries or Affiliates, shall
be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lender.  Each Lender represents
to Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers.  Each
Lender also represents that it will, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrowers and any other
Person party to a Loan Document.  Except
for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Borrowers and any other Person party to a Loan
Document that may come into the possession of any of the Agent-Related Persons.


 


16.7                        Costs and Expenses; Indemnification. 
Agent may incur and pay Lender Group Expenses to the extent Agent
reasonably deems necessary or appropriate for the performance and fulfillment
of its functions, powers, and obligations pursuant to the Loan Documents,
including court costs, attorneys fees and expenses, fees and expenses of
financial accountants, advisors, consultants, and appraisers, costs of
collection by outside collection agencies, auctioneer fees and expenses, and
costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not Borrowers are obligated to reimburse Agent or Lenders for such
expenses pursuant to the Loan Agreement or otherwise.  Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Borrowers and their Subsidiaries received by
Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. 
In the event Agent is not reimbursed for such costs and expenses from
the Collections of Borrowers and their Subsidiaries received by Agent, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender’s Pro Rata Share thereof.  Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of
Borrowers and without limiting the obligation of Borrowers to do so), according
to their Pro Rata Shares, from and against any and all Indemnified Liabilities;
provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person’s gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder.  Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand for such Lender’s Pro Rata Share of
any costs or out-of-pocket expenses (including attorneys, accountants,
advisors, and consultants fees and expenses) incurred by Agent in connection
with


 


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the preparation,
execution, delivery, administration, modification, amendment, or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to
the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers.  The undertaking in this
Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.


 


16.8                        Agent in Individual Capacity. 
WFF and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Borrowers and their Subsidiaries and
Affiliates and any other Person party to any Loan Documents as though WFF were
not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group.  The
other members of the Lender Group acknowledge that, pursuant to such
activities, WFF or its Affiliates may receive information regarding Borrowers
or their Affiliates and any other Person party to any Loan Documents that is subject
to confidentiality obligations in favor of Borrowers or such other Person and
that prohibit the disclosure of such information to the Lenders, and the
Lenders acknowledge that, in such circumstances (and in the absence of a waiver
of such confidentiality obligations, which waiver Agent will use its reasonable
best efforts to obtain), Agent shall not be under any obligation to provide
such information to them.  The terms
“Lender” and “Lenders” include WFF in its individual capacity.


 


16.9                        Successor Agent.  Agent may resign as
Agent upon 45 days written notice to the Lenders.  If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. 
If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Lenders, a
successor Agent.  If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders.  In any such event, upon the acceptance of
its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the
term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated.  After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Section 16 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.  If no successor
Agent has accepted appointment as Agent by the date which is 45 days following
a retiring Agent’s notice of resignation, the retiring Agent’s resignation
shall nevertheless thereupon become effective and the Lenders shall perform all
of the duties of Agent hereunder until such time, if any, as the Lenders
appoint a successor Agent as provided for above.


 


16.10                 Lender in Individual Capacity. 
Any Lender and its respective Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with Borrowers and their Subsidiaries
and Affiliates and any other Person (other than the Lender Group) party to any
Loan Documents as though such Lender were not a Lender hereunder without notice
to or consent of the other members of the Lender Group.  The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender


 


100

















 


and its respective
Affiliates may receive information regarding Borrowers or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge
that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender not shall be under any obligation to
provide such information to them.  With
respect to the Swing Loans and Agent Advances, Swing Lender shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the sub-agent of the Agent.


 


16.11                 Withholding Taxes.


 


(a)                                  Before
the first payment under this Agreement and at any other time or times
reasonably requested by the Agent, each Lender shall deliver to the
Administrative Borrower and Agent properly completed and executed documentation
as required by law or reasonably requested by Administrative Borrower or Agent
to permit payments under this Agreement to be made without United States
withholding.  Each Lender that is a
United States person, as defined in section 7701(a)(30) of the IRC shall
deliver a properly completed and duly executed IRS Form W-9 or any successor
form, certifying that such Lender is exempt from United States withholding with
respect to payments under this Agreement. 
Each Lender that is not a U.S. person and claims exemption from, U.S.
withholding tax agrees with and in favor of Agent and Borrowers, to deliver to
Agent and Administrative Borrower:


 


(i)                                     if
such Lender claims an exemption from withholding tax pursuant to its portfolio
interest exception, (A) a statement of the Lender, signed under penalty of
perjury, that it is not a (I) a “bank” for purposes of Section 881(c)(3)(A) of
the IRC, (II) a 10% shareholder of a Borrower (within the meaning of Section
871(h)(3)(B) of the IRC), or (III) a CFC related to a Borrower within the
meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and
executed IRS Form W-8BEN;


 


(ii)                                  if
such Lender claims an exemption from withholding tax under a United States tax
treaty, properly completed and executed IRS Form W-8BEN;


 


(iii)                               if
such Lender claims that interest paid under this Agreement is exempt from
United States withholding tax because it is effectively connected with a United
States trade or business of such Lender, two properly completed and executed
copies of IRS Form W-8ECI; and


 


(iv)                              such
other form or forms as may be required under the IRC or other laws of the
United States as a condition to exemption from, United States withholding tax.


 


Such Lender agrees promptly to notify Agent and
Administrative Borrower of any change in circumstances which would modify or
render invalid any claimed exemption. In addition, such Lender shall use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different applicable lending office if
the making of such a designation or assignment would avoid the need for, or
reduce the amount of, increased costs of the


 


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Borrowers attributable to taxes pursuant to this
Agreement and would not, in the discretion of Lender, be otherwise disadvantageous
to such Lender.


 


(b)                                 If
any Lender claims exemption from withholding tax and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of Borrowers, such Lender agrees to notify Agent of the percentage
amount of Obligations of Borrowers that were transferred.


 


(c)                                  If
the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that any Borrower or Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Borrower or Agent of a change in
circumstances which rendered the exemption from, withholding tax ineffective,
or for any other reason) such Lender shall indemnify and hold each Borrower and
Agent harmless for all amounts paid, directly or indirectly, by any Borrower or
Agent as tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Agent under this Section,
together with all costs and expenses (including attorneys fees and
expenses).  The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of Agent.


 


(d)                                 All
payments made by Borrowers hereunder or under any note or other Loan Document
will be made without setoff, counterclaim, or other defense, except as required
by applicable law other than for Taxes (as defined below).  All such payments will be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction (other than the United
States) or by any political subdivision or taxing authority thereof or therein
(other than of the United States) with respect to such payments (but excluding,
any tax imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein (i) measured by or based on the net income or
net profits of a Lender, (ii) in the nature of branch profits or similar taxes
or (iii) to the extent that such tax results from a change in the
circumstances of the Lender, including a change in the residence, place of
organization, or principal place of business of the Lender, or a change in the
branch or lending office of the Lender participating in the transactions set
forth herein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, each
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any note, including any amount paid pursuant to this Section 16.11(d)
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein; provided, however, that
Borrowers shall not be required to increase any such amounts payable to Agent
or any Lender (i) that is not organized under the laws of the United
States, if such Person fails to comply with the other requirements of this Section
16.11, or (ii) if the increase in such amount payable results from
Agent’s or such Lender’s own willful misconduct or gross negligence.  Borrowers will furnish to Agent as promptly
as possible after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Borrowers.


 


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(e)                                  Each
Lender agrees (i) that as between it and any Borrower or Agent, it shall be the
Person to deduct and withhold taxes on amounts that such Lender may remit to
other Persons by reason of an undisclosed transfer or assignment of an interest
in this Agreement and (ii) to indemnify the Borrowers and Agent and their
officers, employees and agents, and hold them harmless from any tax, interest,
penalties, fees or other charges arising from any claim relating to a failure
to withhold taxes in respect of amounts described in (i).


 


(f)                                    Any
documentary taxes, assessments or charges imposed by reason of the execution
and delivery of this Agreement and related documents shall be paid by the party
on which such amounts are assessed.


 


(g)                                 If
the Agent or any Lender determines that it is entitled to a refund of Taxes paid
or withheld by any Borrower or with respect to which any Borrower has paid
additional amounts, it shall pay over such refund to the Borrower.


 


(h)                                 The
obligations of a Lender under this Section 16.11 shall apply to any Assignee,
Replacement Lender or other successor pursuant to this Agreement.


 


16.12                 Collateral Matters.


 


(a)                                  The
Lenders hereby irrevocably authorize Agent, at its option and in its sole
discretion, to release any Lien on any Collateral (i) upon the termination
of the Commitments and payment and satisfaction in full by Borrowers of all
Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under Section
7.4 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Borrower or its Subsidiaries owned
any interest at the time the Agent’s Lien was granted nor at any time
thereafter, or (iv) constituting property leased to a Borrower or its
Subsidiaries under a lease that has expired or is terminated in a transaction
permitted under this Agreement.  Except
as provided above, Agent will not execute and deliver a release of any Lien on
any Collateral without the prior written authorization of (y) if the
release is of all or substantially all of the Collateral, all of the Lenders,
or (z) otherwise, the Required Lenders except that without Required
Lenders consent the Agent may release Collateral having an aggregate book value
of less than 15% of the total book value of the Collateral.  Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent’s authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 16.12; provided, however, that
(1) Agent shall not be required to execute any document necessary to
evidence such release on terms that, in Agent’s opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and
(2) such release shall not in any manner discharge, affect, or impair the
Obligations or any Liens (other than those expressly being released) upon (or
obligations of Borrowers in respect of) all interests retained by Borrowers,
including, the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.


 


(b)                                 Agent
shall have no obligation whatsoever to any of the Lenders to assure that the
Collateral exists or is owned by Borrowers or is cared for, protected, or
insured or has


 


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been encumbered, or that
the Agent’s Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are 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 Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the
terms and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the
Collateral in its capacity as one of the Lenders and that Agent shall have no
other duty or liability whatsoever to any Lender as to any of the foregoing,
except as otherwise provided herein.


 


16.13                 Restrictions on Actions by Lenders;
Sharing of Payments.


 


(a)                                  Each
of the Lenders agrees that it shall not, without the express written consent of
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the written request of Agent, set off against the Obligations, any amounts
owing by such Lender to Borrowers or any deposit accounts of Borrowers 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 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 (in cash or otherwise) of Collateral or any
payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender’s ratable
portion of all such distributions by Agent, such Lender promptly shall
(1) turn the same over to Agent, in kind, and with such endorsements as
may be required to negotiate the same to 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.


 


16.14                 Agency for Perfection. 
Agent hereby appoints each other Lender as its agent (and each Lender
hereby accepts such appointment) for the purpose of perfecting the Agent’s
Liens in assets which, in accordance with Article 9 of the Code can be
perfected only by possession or control. 
Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor
shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.


 


104

















 


16.15                 Payments by Agent to the Lenders. 
All payments to be made by Agent to the Lenders shall be made by bank
wire transfer of immediately available funds pursuant to such wire transfer
instructions as each party may designate for itself by written notice to
Agent.  Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest of the Obligations.


 


16.16                 Concerning the Collateral and
Related Loan Documents.  Each member of the Lender Group authorizes
and directs Agent to enter into this Agreement and the other Loan
Documents.  Each member of the Lender
Group agrees that any action taken by Agent in accordance with the terms of
this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders.


 


16.17                 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information.  By becoming a party to this Agreement, each
Lender:


 


(a)                                  is
deemed to have requested that Agent furnish such Lender, promptly after it
becomes available, a copy of each field audit or examination report (each a “Report”
and collectively, “Reports”) prepared by Agent, and Agent shall so
furnish each Lender with such Reports,


 


(b)                                 expressly
agrees and acknowledges that Agent does not (i) make any representation or
warranty as to the accuracy of any Report, and (ii) shall not be liable
for any information contained in any Report,


 


(c)                                  expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Agent or other party performing any audit or examination
will inspect only specific information regarding Borrowers and will rely
significantly upon the Books, as well as on representations of Borrowers’
personnel,


 


(d)                                 agrees
to keep all Reports and other material, non-public information regarding
Borrowers and their Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner in accordance with Section
17.8, and


 


(e)                                  without
limiting the generality of any other indemnification provision contained in
this Agreement, agrees:  (i) to
hold Agent and any such other Lender preparing a Report harmless from any
action the indemnifying Lender may take or fail to take or any conclusion the
indemnifying Lender may reach or draw from any Report in connection with any
loans or other credit accommodations that the indemnifying Lender has made or
may make to Borrowers, or the indemnifying Lender’s participation in, or the
indemnifying Lender’s purchase of, a loan or loans of Borrowers; and
(ii) to pay and protect, and indemnify, defend and hold Agent, and any
such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts (including,
attorneys fees and costs) incurred by Agent and any such other Lender preparing
a Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.


 


105

















 


In addition to the foregoing:  (x) any Lender may from time to time
request of Agent in writing that Agent provide to such Lender a copy of any
report or document provided by Borrowers to Agent that has not been
contemporaneously provided by Borrowers to such Lender, and, upon receipt of
such request, Agent shall provide a copy of same to such Lender, (y) to
the extent that Agent is entitled, under any provision of the Loan Documents,
to request additional reports or information from Borrowers, any Lender may,
from time to time, reasonably request Agent to exercise such right as specified
in such Lender’s notice to Agent, whereupon Agent promptly shall request of
Administrative Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to Administrative Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.


 


16.18                 Several Obligations; No Liability. 
Notwithstanding that certain of the Loan Documents now or hereafter may
have been or will be executed only by or in favor of Agent in its capacity as
such, and not by or in favor of the Lenders, any and all obligations on the
part of Agent (if any) to make any credit available hereunder shall constitute
the several (and not joint) obligations of the respective Lenders on a ratable
basis, according to their respective Commitments, to make an amount of such
credit not to exceed, in principal amount, at any one time outstanding, the
amount of their respective Commitments. 
Nothing contained herein shall confer upon any Lender any interest in,
or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender.  Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent any such notice may be required, and no Lender shall have any
obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 16.7,
no member of the Lender Group shall have any liability for the acts or any
other member of the Lender Group.  No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for it or on its behalf in connection with its Commitment, nor
to take any other action on its behalf hereunder or in connection with the
financing contemplated herein.


 


16.19                 Legal Representation of Agent.  In
connection with the negotiation, drafting, and execution of this Agreement and
the other Loan Documents, or in connection with future legal representation
relating to loan administration, amendments, modifications, waivers, or
enforcement of remedies, Paul, Hastings, Janofsky & Walker LLP (“Paul
Hastings”) only has represented and only shall represent WFF in its capacity as
Agent and as a Lender.  Each other
Lender hereby acknowledges that Paul Hastings does not represent it in
connection with any such matters.


 


16.20                 Syndication Agent.  Lehman Brothers,
Inc. is hereby designated the Syndication Agent.  The Syndication Agent shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement.


 


106

















 


17.                               GENERAL PROVISIONS.


 


17.1                        Effectiveness.  This Agreement shall
be binding and deemed effective when executed by Borrowers, Agent, and each
Lender whose signature is provided for on the signature pages hereof.


 


17.2                        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.


 


17.3                        Interpretation.  Neither this
Agreement nor any uncertainty or ambiguity herein shall be construed or resolved
against the Lender Group or Borrowers, whether under any rule of construction
or otherwise.  On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.


 


17.4                        Severability of Provisions. 
Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal enforceability
of any specific provision.


 


17.5                        Amendments in Writing. 
This Agreement only can be amended by a writing in accordance with Section
15.1.


 


17.6                        Counterparts; Telefacsimile
Execution.  This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but 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.


 


17.7                        Revival and Reinstatement of
Obligations.  If the incurrence or payment of the
Obligations by any Borrower or Guarantor or the transfer to the Lender Group of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a “Voidable Transfer”), and if the Lender Group
is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then,
as to any such Voidable Transfer, or the amount thereof that the Lender Group
is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.


 


107

















 


17.8                        Confidentiality.  The Agent and the
Lenders each individually (and not jointly or jointly and severally) agree that
material, non-public information regarding Borrowers and their Subsidiaries,
their operations, assets, and existing and contemplated business plans shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except:  (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group, (b) to Subsidiaries and Affiliates of any
member of the Lender Group (including the Bank Product Providers), provided
that any such Subsidiary or Affiliate shall have agreed to receive such
information hereunder subject to the terms of this Section 17.8,
(c) as may be required by statute, decision, or judicial or administrative
order, rule, or regulation, (d) as may be agreed to in advance by
Administrative Borrower or its Subsidiaries or as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process,
(e) as to any such information that is or becomes generally available to
the public (other than as a result of prohibited disclosure by Agent or the
Lenders), (f) in connection with any assignment, prospective assignment,
sale, prospective sale, participation or prospective participations, or pledge
or prospective pledge of any Lender’s interest under this Agreement, provided
that any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall
have agreed in writing to receive such information hereunder subject to the
terms of this Section, and (g) in connection with any litigation or other
adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents.  The provisions of this Section 17.8
shall survive for 2 years after the payment in full of the Obligations.  Anything contained herein or in any other
Loan Document to the contrary notwithstanding, the obligations of
confidentiality contained herein and therein, as they relate to the
transactions contemplated hereby, shall not apply to the federal tax structure
or federal tax treatment of such transactions, and each party hereto (and any
employee, representative, or agent of any party hereto) may disclose to any and
all Persons, without limitation of any kind, the federal tax structure and
federal tax treatment of such transactions (including all written materials
related to such tax structure and tax treatment).  The preceding sentence is intended to cause the transactions
contemplated hereby to not be treated as having been offered under conditions
of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
IRC, and shall be construed in a manner consistent with such purpose.  In addition, each party hereto acknowledges
that it has no proprietary or exclusive rights to the tax structure of the
transactions contemplated hereby or any tax matter or tax idea related thereto.


 


17.9                        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, qualified or
modified by any other agreement or undertaking, oral or written, before the
date hereof.


 


17.10                 Parent as Agent for Borrowers.  Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the “Administrative Borrower”) which appointment shall remain in full
force and effect unless and until Agent shall have received prior written
notice signed by each Borrower that such appointment has been revoked and that
another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints
and authorizes the Administrative Borrower (i) to provide


 


108

















 


Agent with all notices
with respect to Advances and Letters of Credit obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and
(ii) to take such action as the Administrative Borrower deems appropriate
on its behalf to obtain Advances and Letters of Credit and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement.  It is understood that the
handling of the Loan Account and Collateral of Borrowers in a combined fashion,
as more fully set forth herein, is done solely as an accommodation to Borrowers
in order to utilize the collective borrowing powers of Borrowers in the most
efficient and economical manner and at their request, and that Lender Group
shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit,
directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group.  To induce the Lender Group to do
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of
the Loan Account and Collateral of Borrowers as herein provided, (b) the
Lender Group’s relying on any instructions of the Administrative Borrower, or
(c) any other action taken by the Lender Group hereunder or under the
other Loan Documents, except that Borrowers will have no liability to the
relevant Agent-Related Person or Lender-Related Person under this Section
17.9 with respect to any liability that has been finally determined by a
court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Agent-Related Person or Lender-Related
Person, as the case may be.


 


[Signature page to follow.]


 


109

















 


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


 


	
   

  	
  POSTER FINANCIAL GROUP, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Breitling

  	
   

  
	
   

  	
  Name:

  	
  Thomas Breitling

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNL, CORP.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Breitling

  	
   

  
	
   

  	
  Name:

  	
  Thomas Breitling

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GNLV, CORP.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Breitling

  	
   

  
	
   

  	
  Name:

  	
  Thomas Breitling

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.

  
	
   

  	
  a California
  corporation, as Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rhonda Noell

  	
   

  
	
   

  	
  Name:

  	
  Rhonda Noell

  
	
   

  	
  Title:

  	
  Senior VP

  



 


110

















 


	
  1.

  	
  DEFINITIONS AND CONSTRUCTION

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Accounting Terms

  	
   

  
	
   

  	
  1.3

  	
  Code

  	
   

  
	
   

  	
  1.4

  	
  Construction

  	
   

  
	
   

  	
  1.5

  	
  Schedules and Exhibits

  	
   

  
	
   

  	
  1.6

  	
  Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  LOAN AND TERMS OF PAYMENT

  	
   

  
	
   

  	
  2.1

  	
  Revolver Advances

  	
   

  
	
   

  	
  2.2

  	
  Term
  Loan

  	
   

  
	
   

  	
  2.3

  	
  Borrowing
  Procedures and Settlements

  	
   

  
	
   

  	
  2.4

  	
  Payments

  	
   

  
	
   

  	
  2.5

  	
  Overadvances

  	
   

  
	
   

  	
  2.6

  	
  Interest Rates and Letter of
  Credit Fee:  Rates, Payments, and
  Calculations

  	
   

  
	
   

  	
  2.7

  	
  Cash Management

  	
   

  
	
   

  	
  2.8

  	
  Crediting Payments

  	
   

  
	
   

  	
  2.9

  	
  Designated Account

  	
   

  
	
   

  	
  2.10

  	
  Maintenance
  of Loan Account; Statements of Obligations

  	
   

  
	
   

  	
  2.11

  	
  Fees

  	
   

  
	
   

  	
  2.12

  	
  Letters of Credit

  	
   

  
	
   

  	
  2.13

  	
  LIBOR Option

  	
   

  
	
   

  	
  2.14

  	
  Capital Requirements

  	
   

  
	
   

  	
  2.15

  	
  Joint and
  Several Liability of Borrowers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CONDITIONS; TERM OF
  AGREEMENT

  	
   

  
	
   

  	
  3.1

  	
  Conditions Precedent to the
  Initial Extension of Credit

  	
   

  
	
   

  	
  3.2

  	
  Conditions
  Subsequent to the Initial Extension of Credit

  	
   

  
	
   

  	
  3.3

  	
  Conditions
  Precedent to all Extensions of Credit

  	
   

  
	
   

  	
  3.4

  	
  Term

  	
   

  
	
   

  	
  3.5

  	
  Effect of Termination

  	
   

  
	
   

  	
  3.6

  	
  Early Termination by
  Borrowers

  	
   

  



 

















 


	
  4.

  	
  CREATION OF SECURITY
  INTEREST

  	
   

  
	
   

  	
  4.1

  	
  Grant of Security Interest

  	
   

  
	
   

  	
  4.2

  	
  Negotiable Collateral

  	
   

  
	
   

  	
  4.3

  	
  Collection of Accounts, General
  Intangibles, and Negotiable Collateral

  	
   

  
	
   

  	
  4.4

  	
  Filing of Financing
  Statements; Commercial Tort Claims; Delivery of Additional Documentation
  Required

  	
   

  
	
   

  	
  4.5

  	
  Power of Attorney

  	
   

  
	
   

  	
  4.6

  	
  Right to Inspect

  	
   

  
	
   

  	
  4.7

  	
  Control Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  5.1

  	
  No Encumbrances

  	
   

  
	
   

  	
  5.2

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  5.3

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  5.4

  	
  Equipment

  	
   

  
	
   

  	
  5.5

  	
  Location of
  Inventory and Equipment

  	
   

  
	
   

  	
  5.6

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  5.7

  	
  State of
  Incorporation; Location of Chief Executive Office; FEIN; Organizational ID
  Number; Commercial Tort Claims

  	
   

  
	
   

  	
  5.8

  	
  Due
  Organization and Qualification; Subsidiaries

  	
   

  
	
   

  	
  5.9

  	
  Due Authorization; No
  Conflict

  	
   

  
	
   

  	
  5.10

  	
  Litigation

  	
   

  
	
   

  	
  5.11

  	
  No Material Adverse Change

  	
   

  
	
   

  	
  5.12

  	
  Fraudulent Transfer

  	
   

  
	
   

  	
  5.13

  	
  Employee Benefits

  	
   

  
	
   

  	
  5.14

  	
  Environmental Condition

  	
   

  
	
   

  	
  5.15

  	
  Brokerage Fees

  	
   

  
	
   

  	
  5.16

  	
  Intellectual Property

  	
   

  
	
   

  	
  5.17

  	
  Leases

  	
   

  
	
   

  	
  5.18

  	
  Deposit
  Accounts and Securities Accounts

  	
   

  
	
   

  	
  5.19

  	
  Disclosure

  	
   

  
	
   

  	
  5.20

  	
  Indebtedness

  	
   

  
	
   

  	
  5.21

  	
  Licenses and Permits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  AFFIRMATIVE COVENANTS

  	
   

  



 


ii

















 


	
   

  	
  6.1

  	
  Accounting System

  	
   

  
	
   

  	
  6.2

  	
  Collateral Reporting

  	
   

  
	
   

  	
  6.3

  	
  Financial Statements, Reports,
  Certificates

  	
   

  
	
   

  	
  6.4

  	
  Guarantor Reports

  	
   

  
	
   

  	
  6.5

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  6.6

  	
  Maintenance of Properties

  	
   

  
	
   

  	
  6.7

  	
  Taxes

  	
   

  
	
   

  	
  6.8

  	
  Insurance

  	
   

  
	
   

  	
  6.9

  	
  Location of
  Inventory and Equipment

  	
   

  
	
   

  	
  6.10

  	
  Compliance with Laws

  	
   

  
	
   

  	
  6.11

  	
  Leases

  	
   

  
	
   

  	
  6.12

  	
  Existence

  	
   

  
	
   

  	
  6.13

  	
  Environmental

  	
   

  
	
   

  	
  6.14

  	
  Disclosure Updates

  	
   

  
	
   

  	
  6.15

  	
  Formation of Subsidiaries

  	
   

  
	
   

  	
  6.16

  	
  Governmental Authorization

  	
   

  
	
   

  	
  6.17

  	
  License Renewals

  	
   

  
	
   

  	
  6.18

  	
  Licenses and Permits

  	
   

  
	
   

  	
  6.19

  	
  ERISA Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
  7.1

  	
  Indebtedness

  	
   

  
	
   

  	
  7.2

  	
  Liens

  	
   

  
	
   

  	
  7.3

  	
  Restrictions on
  Fundamental Changes

  	
   

  
	
   

  	
  7.4

  	
  Disposal of Assets

  	
   

  
	
   

  	
  7.5

  	
  Change Name

  	
   

  
	
   

  	
  7.6

  	
  Nature of Business

  	
   

  
	
   

  	
  7.7

  	
  Prepayments and Amendments

  	
   

  
	
   

  	
  7.8

  	
  Change of Control

  	
   

  
	
   

  	
  7.9

  	
  [Intentionally Omitted]

  	
   

  
	
   

  	
  7.10

  	
  Distributions

  	
   

  
	
   

  	
  7.11

  	
  Accounting Methods

  	
   

  
	
   

  	
  7.12

  	
  Investments

  	
   

  
	
   

  	
  7.13

  	
  Transactions with
  Affiliates

  	
   

  



 


iii

















 


	
   

  	
  7.14

  	
  Suspension

  	
   

  
	
   

  	
  7.15

  	
  [Intentionally omitted]

  	
   

  
	
   

  	
  7.16

  	
  Use of Proceeds

  	
   

  
	
   

  	
  7.17

  	
  Inventory and
  Equipment with Bailees

  	
   

  
	
   

  	
  7.18

  	
  Financial Covenants

  	
   

  
	
   

  	
  7.19

  	
  ERISA Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  THE LENDER
  GROUP’S RIGHTS AND REMEDIES

  	
   

  
	
   

  	
  9.1

  	
  Rights and Remedies

  	
   

  
	
   

  	
  9.2

  	
  Remedies Cumulative

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  TAXES AND EXPENSES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  WAIVERS; INDEMNIFICATION

  	
   

  
	
   

  	
  11.1

  	
  Demand; Protest; etc

  	
   

  
	
   

  	
  11.2

  	
  The
  Lender Group’s Liability for Borrower Collateral

  	
   

  
	
   

  	
  11.3

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  CHOICE OF
  LAW AND VENUE; JURY TRIAL WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS; SUCCESSORS

  	
   

  
	
   

  	
  14.1

  	
  Assignments and
  Participations

  	
   

  
	
   

  	
  14.2

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  AMENDMENTS; WAIVERS

  	
   

  
	
   

  	
  15.1

  	
  Amendments and Waivers

  	
   

  
	
   

  	
  15.2

  	
  Replacement of Holdout
  Lender

  	
   

  
	
   

  	
  15.3

  	
  No Waivers; Cumulative
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  AGENT; THE LENDER GROUP

  	
   

  
	
   

  	
  16.1

  	
  Appointment and
  Authorization of Agent

  	
   

  
	
   

  	
  16.2

  	
  Delegation of Duties

  	
   

  
	
   

  	
  16.3

  	
  Liability of Agent

  	
   

  
	
   

  	
  16.4

  	
  Reliance by Agent

  	
   

  
	
   

  	
  16.5

  	
  Notice of Default
  or Event of Default

  	
   

  
	
   

  	
  16.6

  	
  Credit Decision

  	
   

  
	
   

  	
  16.7

  	
  Costs and Expenses;
  Indemnification

  	
   

  
	
   

  	
  16.8

  	
  Agent in Individual
  Capacity

  	
   

  



 


iv

















 


	
   

  	
  16.9

  	
  Successor Agent

  	
   

  
	
   

  	
  16.10

  	
  Lender in Individual
  Capacity

  	
   

  
	
   

  	
  16.11

  	
  Withholding Taxes

  	
   

  
	
   

  	
  16.12

  	
  Collateral Matters

  	
   

  
	
   

  	
  16.13

  	
  Restrictions
  on Actions by Lenders; Sharing of Payments

  	
   

  
	
   

  	
  16.14

  	
  Agency for Perfection

  	
   

  
	
   

  	
  16.15

  	
  Payments by Agent to
  the Lenders

  	
   

  
	
   

  	
  16.16

  	
  Concerning
  the Collateral and Related Loan Documents

  	
   

  
	
   

  	
  16.17

  	
  Field Audits and
  Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports
  and Information

  	
   

  
	
   

  	
  16.18

  	
  Several Obligations;
  No Liability

  	
   

  
	
   

  	
  16.19

  	
  Legal Representation of
  Agent

  	
   

  
	
   

  	
  16.20

  	
  Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
  17.1

  	
  Effectiveness

  	
   

  
	
   

  	
  17.2

  	
  Section Headings

  	
   

  
	
   

  	
  17.3

  	
  Interpretation

  	
   

  
	
   

  	
  17.4

  	
  Severability of Provisions

  	
   

  
	
   

  	
  17.5

  	
  Amendments in Writing

  	
   

  
	
   

  	
  17.6

  	
  Counterparts;
  Telefacsimile Execution

  	
   

  
	
   

  	
  17.7

  	
  Revival and
  Reinstatement of Obligations

  	
   

  
	
   

  	
  17.8

  	
  Confidentiality

  	
   

  
	
   

  	
  17.9

  	
  Integration

  	
   

  
	
   

  	
  17.10

  	
  Parent as Agent for
  Borrowers

  	
   

  



 


v

















 


EXHIBITS AND
SCHEDULES


 


	
  Exhibit A-1

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit C-1

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit L-1

  	
   

  	
  Form of LIBOR Notice

  
	
  Schedule A-1

  	
   

  	
  Agent’s Account

  
	
  Schedule C-1

  	
   

  	
  Commitments

  
	
  Schedule D-1

  	
   

  	
  Designated Account

  
	
  Schedule E-1

  	
   

  	
  Participation Slot Machine and Manufacturers

  
	
  Schedule P-1

  	
   

  	
  Permitted Liens

  
	
  Schedule P-2

  	
   

  	
  Permitted Investments

  
	
  Schedule R-1

  	
   

  	
  Real Property Collateral

  
	
  Schedule 2.7(a)

  	
   

  	
  Cash Management Banks

  
	
  Schedule 5.5

  	
   

  	
  Locations of Inventory and Equipment

  
	
  Schedule 5.7(a)

  	
   

  	
  States of Organization

  
	
  Schedule 5.7(b)

  	
   

  	
  Chief Executive Offices

  
	
  Schedule 5.7(c)

  	
   

  	
  FEINS

  
	
  Schedule 5.7(d)

  	
   

  	
  Commercial Tort Claims

  
	
  Schedule 5.8(b)

  	
   

  	
  Capitalization of Borrowers

  
	
  Schedule 5.8(c)

  	
   

  	
  Capitalization of Borrowers’ Subsidiaries

  
	
  Schedule 5.10

  	
   

  	
  Litigation

  
	
  Schedule 5.13

  	
   

  	
  Employee Benefits

  
	
  Schedule 5.14

  	
   

  	
  Environmental Matters

  
	
  Schedule 5.16

  	
   

  	
  Intellectual Property

  
	
  Schedule 5.18

  	
   

  	
  Deposit Accounts and Securities Accounts

  
	
  Schedule 5.20

  	
   

  	
  Permitted Indebtedness

  
	
  Schedule 5.21

  	
   

  	
  Licenses and Permits

  
	
  Schedule 7.13

  	
   

  	
  Affiliate Transactions

  



 


vi