Exhibit 10.1


 


EXECUTION
COPY


 


 




 





LOAN
AGREEMENT



between



SENECA GAMING CORPORATION



as the Borrower,



and



KEYBANK NATIONAL ASSOCIATION



as Lender



Dated as of June 19, 2008




 





 

















 


Table of Contents


 


	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
  1

  
	
  Section 1.1
  Defined Terms

  	
   

  	
  1

  
	
  Section 1.2
  GAAP

  	
   

  	
  20

  
	
  Section 1.3
  Headings

  	
   

  	
  20

  
	
  Section 1.4
  Plural Terms

  	
   

  	
  20

  
	
  Section 1.5
  Time

  	
   

  	
  20

  
	
  Section 1.6
  Construction

  	
   

  	
  20

  
	
  Section 1.7
  Calculation of Interest and Fees

  	
   

  	
  20

  
	
  Section 1.8
  References

  	
   

  	
  21

  
	
  Section 1.9
  Other Interpretive Provisions

  	
   

  	
  21

  
	
  Section 1.10
  Rounding

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE II CREDIT FACILITY

  	
   

  	
  22

  
	
  Section 2.1
  Revolving Loan Availability

  	
   

  	
  22

  
	
  Section 2.2
  Funding Requests

  	
   

  	
  22

  
	
  Section 2.3
  Interest and Interest Rates

  	
   

  	
  22

  
	
  Section 2.4
  Principal Payments

  	
   

  	
  24

  
	
  Section 2.5
  Other Payment Terms

  	
   

  	
  25

  
	
  Section 2.6
  Letters of Credit

  	
   

  	
  25

  
	
  Section 2.7
  Evidence of Obligation to Pay Advances

  	
   

  	
  30

  
	
  Section 2.8
  Change of Circumstances

  	
   

  	
  30

  
	
  Section 2.9
  Taxes on Payments

  	
   

  	
  32

  
	
  Section 2.10
  Funding Loss Indemnification

  	
   

  	
  33

  
	
  Section 2.11
  Security

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES

  	
   

  	
  34

  
	
  Section 3.1
  Existence and Qualification; Power; Compliance With Laws

  	
   

  	
  34

  
	
  Section 3.2
  Authority; Compliance with Other Agreements and Instruments and Government
  Regulations

  	
   

  	
  35

  
	
  Section 3.3
  Gaming Laws and Permits

  	
   

  	
  36

  
	
  Section 3.4
  No Violation of Gaming Ordinance or Revenue Allocation Plan

  	
   

  	
  36

  
	
  Section 3.5
  No Licensure Required

  	
   

  	
  37

  
	
  Section 3.6
  Legal Agreements

  	
   

  	
  37

  
	
  Section 3.7
  Subsidiaries

  	
   

  	
  37

  
	
  Section 3.8
  Financial Condition; No Adverse Change

  	
   

  	
  37

  
	
  Section 3.9
  Litigation

  	
   

  	
  37

  
	
  Section 3.10
  Regulation U

  	
   

  	
  38

  
	
  Section 3.11
  Taxes

  	
   

  	
  38

  
	
  Section 3.12
  Titles and Liens

  	
   

  	
  38

  
	
  Section 3.13
  ERISA

  	
   

  	
  38

  
	
  Section 3.14
  Default

  	
   

  	
  38

  
	
  Section 3.15
  Environmental Matters

  	
   

  	
  38

  



 

















 


	
  Section 3.16
  Submissions to Lender

  	
   

  	
  39

  
	
  Section 3.17
  Rights to Payment

  	
   

  	
  39

  
	
  Section 3.18
  Gaming Accounts

  	
   

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV AFFIRMATIVE
  COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

  	
   

  	
  40

  
	
  Section 4.1
  Payment of Taxes and Other Potential Liens

  	
   

  	
  40

  
	
  Section 4.2
  Maintenance of Properties

  	
   

  	
  40

  
	
  Section 4.3
  Maintenance of Insurance

  	
   

  	
  40

  
	
  Section 4.4
  Compliance With Laws

  	
   

  	
  41

  
	
  Section 4.5
  Preservation of Permits

  	
   

  	
  41

  
	
  Section 4.6
  Inspection Rights

  	
   

  	
  42

  
	
  Section 4.7
  Keeping of Records and Books of Account

  	
   

  	
  42

  
	
  Section 4.8
  Compliance With Agreements

  	
   

  	
  42

  
	
  Section 4.9
  Use of Proceeds

  	
   

  	
  42

  
	
  Section 4.10
  Environmental Laws

  	
   

  	
  42

  
	
  Section 4.11
  Compliance with Bank Secrecy Act and USA Patriot Act

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE V NEGATIVE
  COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

  	
   

  	
  43

  
	
  Section 5.1
  Disposition of Property; Sale of Assets

  	
   

  	
  43

  
	
  Section 5.2
  Investments

  	
   

  	
  43

  
	
  Section 5.3
  Distributions

  	
   

  	
  43

  
	
  Section 5.4
  Business of the Borrower

  	
   

  	
  44

  
	
  Section 5.5
  Permitted Liens

  	
   

  	
  44

  
	
  Section 5.6
  Indebtedness

  	
   

  	
  44

  
	
  Section 5.7
  Transactions with Affiliates

  	
   

  	
  44

  
	
  Section 5.8
  Expenditures

  	
   

  	
  44

  
	
  Section 5.9
  Leverage Ratio

  	
   

  	
  45

  
	
  Section 5.10
  Senior Secured Leverage Ratio

  	
   

  	
  45

  
	
  Section 5.11
  Fixed Charge Coverage Ratio

  	
   

  	
  45

  
	
  Section 5.12
  Minimum EBITDA

  	
   

  	
  45

  
	
  Section 5.13
  Creation of Subsidiaries

  	
   

  	
  45

  
	
  Section 5.14
  Gaming Accounts

  	
   

  	
  45

  
	
  Section 5.15
  Sovereign Immunity; Jurisdiction and Venue

  	
   

  	
  45

  
	
  Section 5.16
  Daily Cash Deposits

  	
   

  	
  45

  
	
  Section 5.17
  Segregation of Gaming Assets

  	
   

  	
  45

  
	
  Section 5.18
  Accounting Changes

  	
   

  	
  46

  
	
  Section 5.19
  Joint Ventures

  	
   

  	
  46

  
	
  Section 5.20
  Ownership of the Gaming Assets; Conduct of Gaming Business

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI INFORMATION AND
  REPORTING REQUIREMENTS

  	
   

  	
  46

  
	
  Section 6.1
  Financial and Business Information

  	
   

  	
  46

  
	
  Section 6.2
  Compliance Certificates

  	
   

  	
  48

  



 

















 


	
  ARTICLE VII CONDITIONS TO LENDING

  	
   

  	
  48

  
	
  Section 7.1
  Initial Conditions Precedent

  	
   

  	
  48

  
	
  Section 7.2
  Conditions Precedent to each Advance

  	
   

  	
  50

  
	
  Section 7.3
  Conditions Precedent to the Issuance of each Letter of Credit

  	
   

  	
  51

  
	
  Section 7.4
  Covenant to Deliver

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES UPON
  EVENT OF DEFAULT

  	
   

  	
  51

  
	
  Section 8.1
  Events of Default

  	
   

  	
  51

  
	
  Section 8.2
  Remedies Upon Event of Default

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX GOVERNING LAW; ARBITRATION; LIMITED
  WAIVER OF SOVEREIGN IMMUNITY; JURISDICTION

  	
   

  	
  56

  
	
  Section 9.1
  Governing Law

  	
   

  	
  56

  
	
  Section 9.2
  Limited Waiver of Sovereign Immunity

  	
   

  	
  56

  
	
  Section 9.3
  Dispute Resolution

  	
   

  	
  59

  
	
  Section 9.4
  Waiver of Jury Trial

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  	
  61

  
	
  Section 10.1
  Cumulative Remedies; No Waiver

  	
   

  	
  61

  
	
  Section 10.2
  Amendments; Consents

  	
   

  	
  62

  
	
  Section 10.3
  No Waiver

  	
   

  	
  62

  
	
  Section 10.4
  Costs, Expenses and Taxes

  	
   

  	
  62

  
	
  Section 10.5
  Survival of Representations and Warranties

  	
   

  	
  62

  
	
  Section 10.6
  Notices

  	
   

  	
  62

  
	
  Section 10.7
  Execution of Loan Documents

  	
   

  	
  63

  
	
  Section 10.8
  Binding Effect; Assignments and Participations

  	
   

  	
  63

  
	
  Section 10.9
  Lien on Deposits and Property in Possession of the Lender

  	
   

  	
  65

  
	
  Section 10.10
  Indemnity by the Borrower

  	
   

  	
  65

  
	
  Section 10.11
  No Liability of Lender

  	
   

  	
  66

  
	
  Section 10.12
  No Third Parties Benefited

  	
   

  	
  66

  
	
  Section 10.13
  Confidentiality

  	
   

  	
  67

  
	
  Section 10.14
  Hazardous Substances Indemnity

  	
   

  	
  67

  
	
  Section 10.15
  Further Assurances

  	
   

  	
  68

  
	
  Section 10.16
  Integration

  	
   

  	
  68

  
	
  Section 10.17
  Severability of Provisions

  	
   

  	
  68

  
	
  Section 10.18
  Time of the Essence

  	
   

  	
  68

  
	
  Section 10.19
  PURPORTED ORAL AMENDMENTS

  	
   

  	
  68

  
	
  Section 10.20
  LIMITATIONS

  	
   

  	
  69

  
	
  Section 10.21
  25 U.S.C. § 81

  	
   

  	
  69

  
	
  Section 10.22
  Usury Laws; Governmental Approvals

  	
   

  	
  69

  
	
  Section 10.23
  Limitation on Damages

  	
   

  	
  69

  
	
  Section 10.24
  Recourse Limited

  	
   

  	
  69

  



 

















 


LOAN
AGREEMENT


 


Dated as of June 19,
2008


 


This LOAN AGREEMENT is
entered into by and among the SENECA GAMING CORPORATION (together with its
successors and assigns, the “Borrower”), a corporation formed under the
laws of and wholly owned by the Seneca Nation of Indians (the “Nation”),
a federally recognized Indian tribe, and KEYBANK NATIONAL ASSOCIATION (the “Lender”).


 


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


 


ARTICLE I


 


DEFINITIONS AND ACCOUNTING TERMS


 


Section 1.1  Defined
Terms. As used in this Agreement, the following terms shall have the
meanings set forth below:


 


“Acquisition” means, as to any Person, any transaction, or any
series of related transactions, by which such Person directly or indirectly (i) acquires
all or substantially all of the assets of any firm, partnership, joint venture
or corporation, or any other business entity, whether through purchase of
assets, merger or otherwise, (ii) acquires (in one transaction or as the
most recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the Securities of a corporation which have
ordinary voting power for the election of directors, or (iii) acquires (in
one transaction or as the most recent transaction in a series of transactions)
control of at least a majority ownership interest (entitling such Person to
direct or cause the direction of management and policies) in any partnership,
joint venture or other business entity.


 


“Advance”
means an advance of funds by the Lender to the Borrower pursuant to Section 2.1.


 


“Affiliate” means, as to any Person, (a) each other Person
that, directly or indirectly, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5%) or more of any class of
Securities of such Person, (b) each other Person that controls, is
controlled by or is under common control with such Person, and (c) each of
such Person’s officers, directors, governing body members, joint venturers,
partners, or limited liability company members. For the purpose of this definition,
“control” of a Person means the possession, directly or indirectly, of the
power to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.


 


“Agreement” means this Loan Agreement.


 


1

















 


“Approvals” means, collectively, (a) the resolutions
adopted on June 5, 2008 by Borrower and each Guarantor (other than
Lewiston Golf Course Corporation), (b) the resolutions adopted on June 11,
2008 by Lewiston Golf Course Corporation, and (c) Resolution No. R-06-14-08-14,
adopted by the Council of the Nation on June 14, 2008, which approved the
Loan Documents to which such Person is a party and the consummation of the
transactions contemplated therein or, in the case of the Nation, matters
related to the Loan Documents.


 


“Audited Financial Statements” has the meaning given in Section 6.1.


 


“Base Rate” means, as of any date of
determination, the Prime Rate plus one quarter percent (0.25%).


 


“Base Rate
Funding” has the meaning given in Section 2.3(b).


 


“Board of Directors” means, with respect to the Borrower or a
Gurantor, the “Board of Directors” referred to in the Charter of the Borrower
or such Guarantor.


 


“Borrower” has the meaning given in the first paragraph of this
Agreement.


 


“Business Day” means any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized or required to close in New
York, New York, and, if such day relates to any LIBOR Rate Funding, means any
such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank market.


 


“Capital Expenditure” means any expenditure that is considered a
capital expenditure under GAAP, consistently applied, including any amount that
is required to be treated as a fixed asset subject to a Capital Lease.


 


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


 


“Cash” means all cash or currency of the United States of
America that is legal tender for all public and private debts.


 


“Cash Equivalents” means, when used in connection with any
Person, that Person’s Investments in:


 


(a)           Government Securities due within one year after the date
of the making of the Investment;


 


(b)           readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such State given
on the date of such 


 


2

















 


investment
a credit rating of at least AA by Moody’s Investors Service, Inc. or AA by
Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
in each case due within one year after the date of the making of the
Investment;


 


(c)           certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers’ acceptances of, and reverse repurchase
agreements covering Government Securities executed by, the Lender or any other
bank, savings and loan or savings bank doing business in and incorporated under
the Laws of the United States of America or any State thereof and having on the
date of such Investment combined capital, surplus and undivided profits of at
least $100,000,000, in each case due within one year after the date of the making
of the Investment;


 


(d)           certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers’ acceptances of, and reverse repurchase
agreements covering Government Securities executed by, any branch or office
located in the United States of America of a bank incorporated under the Laws
of any jurisdiction outside the United States of America having on the date of
such Investment combined capital, surplus and undivided profits of at least
$100,000,000, in each case due within one year after the date of the making of
the Investment;


 


(e)           commercial paper maturing no more than 270 days from the
date of creation thereof and having as at any date of determination a rating of
A-1 or better from Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc., and P-1 or better from Moody’s Investors Service, Inc.;
and


 


(f)            money market accounts or readily redeemable money market
mutual funds which invest substantially all their assets in instruments of the
types described in clauses (a), (b), (c), (d) and (e) above.


 


“Casualty Event” means, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person receives insurance proceeds or proceeds of a
condemnation award or other compensation.


 


“Change in Control” means the occurrence of any one or more of
the following:


 


(a)           any Class III Gaming operations are conducted on the
Nation’s Indian Lands by any Person other than the Borrower or a Guarantor, or
the Borrower and the Guarantors otherwise cease to have the exclusive authority
to operate the Gaming Business; or


 


(b)           the Borrower or one or more Guarantors sell, assign, lease
or otherwise dispose of all or substantially all of the Gaming Assets to any
Person or all or substantially all of the Gaming Assets are transferred without
any action on the part of the Borrower or the Guarantors.


 


“Change of Law” shall have the meaning given to that term in Section 2.8(b).


 


3

















 


“Charter” means with respect to (a) the Borrower, the Fifth
Amended and Restated Charter of the Seneca Gaming Corporation, effective as of December 20,
2004, (b) the Seneca Niagara Falls Gaming Corporation, the Third Amended
and Restated Charter of the Seneca Niagara Falls Gaming Corporation, effective
as of December 20, 2004, (c) the Seneca Territory Gaming Corporation,
the Second Amended and Restated Charter of the Seneca Territory Gaming
Corporation, effective as of December 20, 2004, (d) the Seneca Erie Gaming
Corporation, the Second Amended and Restated Charter of the Seneca Erie Gaming
Corporation, effective as of December 20, 2004, (e) the Lewiston Golf
Course Corporation, the Charter of the Lewiston Golf Course Corporation,
effective as of June 28, 2007, and (f) any other Person which becomes
a Guarantor, the charter or other governing document of such Person, in each
case as amended, supplemented, replaced or modified from time to time.


 


“Claim” means any claim,
demand, dispute, action or cause of action related or incidental to this
Agreement or any other Loan Document, whether now existing or hereafter
arising, and whether sounding in tort, contract or otherwise and whether
arising as a matter of law or in equity, and including any action commenced under
the Indian Civil Rights Act (25
U.S.C. §1301 et. seq.), the Constitution
or any other Laws of the Nation.


 


“Class III Gaming” means class III gaming within the
meaning of IGRA.


 


“Closing Date” means the first Business Day on which all of the
conditions contained in Section 7.1 have been satisfied.


 


“Collateral” has the meaning given in the Security Agreement.


 


“Compact” means (a) the Nation-State Compact between the
State and the Nation, for which approval on behalf of the Secretary of the
Interior was published in the Federal Register on December 9, 2002, and (b) all
valid amendments, supplements, restatements and replacements thereof.


 


“Compliance Certificate” means a certificate substantially in
the form of Exhibit C, properly completed and signed by a Senior
Officer.


 


“Consolidated Net Income” means, with respect to any fiscal
period, the consolidated net income after tax and before extraordinary or
non-recurring items of the Borrower and the Guarantors, determined in
accordance with GAAP, consistently applied.


 


“Constituent Documents” means (a) with the repect to the
Nation, the Constitution, and (b) with respect to the Borrower or a
Guarantor, the Charter and by-laws of the Borrower or such Guarantor.


 


“Constitution” means the Constitution of the Seneca Nation of
Indians of 1848, as amended.


 


4

















 


“Contingent Obligation” means, as to any Person, (a) any
Guaranty Obligation of that Person; (b) any direct or indirect obligation
or liability, contingent or otherwise, of that Person (i) in respect of
any Surety Instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments, (ii) as
a partner or joint venturer in any partnership or joint venture or (iii) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered; (c) contractual assurance (not
arising solely by operation of Law) given to an obligee with respect to the
performance of an obligation by, or the financial condition of, any other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item to such other Person, or any other
arrangement of whatever nature having the effect of assuring or holding
harmless any obligee against loss with respect to any obligation of such other
Person including any “keep-well”, “take-or-pay” or “through put” agreement or
arrangement or (d) any other Contractual Obligations which, in economic
effect, are substantially equivalent to a guarantee of Indebtedness. As of each
date of determination, the amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the related primary
obligation (unless the Contingent Obligation is limited by its terms to a
lesser amount, in which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the Person in good faith.


 


“Contractual Obligation” of any Person means, any indenture,
note, lease, loan agreement, deed of trust, mortgage, security agreement,
guaranty, instrument, contract, agreement or other form of contractual
obligation or undertaking to which such Person is a party or by which such
Person or any of its property is bound.


 


“Control Agreement” means an agreement among the Borrower or a
Guarantor, the Lender and the depository or securities intermediary for each
Gaming Account in form and substance reasonably acceptable to the Lender.


 


“Covenant
Calculation Date” means the last day of each fiscal quarter of the
Borrower.


 


“Covenant
Calculation Period” means, for each Covenant Calculation Date, the period
of twelve fiscal months of the Borrower ending on such date.


 


“Council” means the legislative governing body of the Nation
referred to in the Constitution.


 


5

















 


“Debt Service” means for any Indebtedness, the sum of the
following items (without duplication): (a) Interest Expense and (b) payments
of principal, other than optional payments of principal.


 


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


 


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


 


“Default Rate” has the meaning set forth in Section 2.3(e).


 


“Distribution Agreement” means the Distribution Agreement dated
as of April 27, 2007, among the Nation, the Seneca Nation of Indians
Capital Improvements Authority, the Borrower and Wells Fargo Bank, National
Association, as trustee.


 


“Disposition” means the sale, transfer or other disposition in
any single transaction or series of related transactions of any individual
asset, or group of related assets (other than among any two or more of the
Borrower and the Guarantors); provided, however, that a sale of
Gaming Assets shall not be deemed a Disposition if such Gaming Assets are
concurrently replaced by new Gaming Assets of like kind and similar value.


 


“Disputed State Regulatory Obligations” means, with respect to
any Person on any date of determination, the aggregate amount, as determined by
the State, of any accrued and unpaid obligations to the State under the Compact
for regulatory costs or expenses, to the extent such obligations would be
accounted for under GAAP as a liability of such Person if determined to be
valid and binding obligations under the Compact.


 


“Distribution” means
any of the following:


 


(a)           any payment, assignment, or transfer
of any Gaming Assets (so as to be no longer accounted for under GAAP as a
Gaming Asset) to or for the account of the Nation, or any Affiliate or member
of the Nation (other than to the Borrower or a Guarantor, or any of their
respective officers, directors or employees), including payments of dividends,
fees, assessments, taxes, principal, interest or other amounts; and


 


(b)           any Investment (whether by means of
loans, advances or otherwise) using Gaming Assets or proceeds thereof in or to
the Nation or any of its Affiliates (except Investments accounted for under
GAAP as Investments in the Gaming Business and Investments among any two or
more of the Borrower and the Guarantors).


 


6
















 


Distribution as defined herein expressly excludes Excluded
Distributions.


 


“Distribution Agreement” means the Distribution Agreement
among the Nation, the Seneca Nation of Indians Capital Improvements Authority,
Borrower and Wells Fargo Bank, National Association, as Trustee, dated April 27,
2007.


 


“EBITDA” on any Covenant Calculation Date means the sum of the
following, each determined for the Borrower and the Guarantors on a
consolidated basis for the related
Covenant Calculation Period: (a) Consolidated Net Income after tax, plus
(b) Interest Expense (to the extent deducted in arriving at Consolidated
Net Income), plus (c) the aggregate amount, if any, of any federal
or state taxes on or measured by income of the Gaming Business (whether or not
payable during that Covenant Calculation Period, and to the extent deducted in
arriving at Consolidated Net Income), plus (d) depreciation and
amortization (to the extent deducted in arriving at Consolidated Net Income), plus
(e) any other non-cash charges and extraordinary losses of the Borrower
and the Guarantors (to the extent deducted in arriving at Consolidated Net
Income), minus (f) non-cash gains and extraordinary gains (to the
extent added in arriving at Consolidated Net Income), in each case as
determined in accordance with GAAP.


 


“Effective Amount” shall mean with respect to Advances on any
date, the aggregate outstanding principal amount thereof after giving effect to
any borrowings and prepayments or repayments occurring on such date.


 


“Eligible Assignee” means (a) an Affiliate of the Lender;
and (b) any other Person (other than a natural Person) approved by the
Lender and the Borrower (each such approval not to be unreasonably withheld or
delayed).


 


“Employee Benefit Plan” means any employee benefit plan within
the meaning of section 3(3) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.


 


“Environmental
Law” means any federal, state, local or other governmental statute,
regulation, law or ordinance dealing with the protection of human health and
the environment.


 


“ERISA” means the Employee Retirement Income Security Act of
1974, and any regulations issued pursuant thereto, as in effect from time to
time.


 


“ERISA Affiliate” means, with respect to any Person, any Person
(or any trade or business, whether or not incorporated) that is under common
control with that Person within the meaning of Section 414 of the Internal
Revenue Code.


 


“Event of Default” has the meaning provided in Section 8.1.


 


“Excluded Distributions” has the meaning provided in Section 5.3.


 


7

















 


“Facilities” means, collectively, the facilities presently
designated Seneca Niagara Casino & Hotel, Seneca Allegany Casino and
Hotel and Seneca Buffalo Creek Casino and, upon completion and commencement of
operations, the facilities described as the second hotel tower at Seneca
Allegany Casino and Hotel, the permanent Buffalo Creek Casino and Hotel, and
the Seneca Hickory Stick Golf Course.


 


“Financial Statements” means, with respect to any accounting
period for any Person, statements of income, retained earnings, shareholders’
equity or partners’ capital and cash flows of such Person for such period, and
a balance sheet of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding period in the
preceding fiscal year if such period is less than a full fiscal year or, if
such period is a full fiscal year, corresponding figures from the preceding
annual audited financial statements, all prepared in reasonable detail and in
accordance with GAAP.


 


“Fiscal Quarter” means a period of three full consecutive
calendar months ending on March 31, June 30, September 30 or December 31.


 


“Fiscal Year” means the fiscal year of the Borrower.


 


“Fixed Charge Coverage Ratio” as of each Covenant Calculation
Date means the ratio of (a) EBITDA, minus Distributions (to the
extent not subtracted from Consolidated Net Income in computing EBITDA or
constituting a Capital Expenditure for the Gaming Business), minus Maintenance
Capital Expenditures and minus federal income taxes required to be paid with
respect to the Gaming Business, if any, to (b) Debt Service on Total
Funded Debt, in each case for the related
Covenant Calculation Period.


 


“Foreign Lender” means any Lender that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Internal Revenue
Code.


 


“Funding Request” means a request in the form of Exhibit B,
duly completed and signed by the Borrower, or such other form as the Borrower
and the Lender shall agree to use to request Advances, which may be sent by
mail, overnight delivery, electronic transmission or by such other means of
communication as may agreed to by the Lender.


 


“GAAP” means, as of any date of determination, accounting
principles set forth as generally accepted in the United States of America in
currently effective opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and in statements of the Financial
Accounting Standards Board or the Governmental Accounting Standards Board, as
applicable, together with interpretive rulings and bulletins issued in
connection therewith. The term “consistently applied,” as used in connection
therewith, means that the accounting 


 


8

















 


principles
applied are consistent in all material respects to those applied at prior dates
or for prior periods.


 


“Gaming
Accounts” means all deposit accounts and securities accounts of the
Borrower or any Guarantor to which Gaming Revenues or investment proceeds
thereof are credited; provided, however, that Gaming Accounts expressly exclude
Merrill Lynch securities account XXX-XXXXX, Royal Bank of Canada deposit account
XXXXXXX, Banc of America securities account XXX-XXXXXX, and all flexible
medical deposit accounts.  For the
avoidance of doubt, zero balance accounts do not constitute deposit accounts.


 


“Gaming Agency” means, collectively, (a) the NIGC, (b) the
Seneca Gaming Authority, (c) the State Gaming Officials and (d) any
other Governmental Authority that holds or exercises licensing or permit
authority over gambling, gaming or casino activities conducted within the
Nation’s jurisdiction.


 


“Gaming Assets”
means, collectively: (a) all personal property (other than Gaming
Revenues) of the Borrower or any Guarantor now or hereafter located at the
Facilities and used in the Gaming Business, (b) all personal tangible and
intangible property (other than Gaming Revenues), including intellectual
property, of the Borrower or any Guarantor, that is (i) used in or is
primarily related and reasonably beneficial to, the Gaming Business, or is
derived from the Gaming Business, or (ii) required under GAAP to be
reflected on the consolidated balance sheet of the Borrower and the Guarantors
as it relates to the Gaming Business, (c) all books and records of the
Borrower or any Guarantor relating to the Gaming Business and the Gaming
Assets, (d) Gaming Revenues, (e) Gaming Accounts, and (f) Proceeds
(as defined in the Security Agreement) of the foregoing; but excluding
all (i) real property including all improvements, fixtures and accessions
thereto and leasehold or other interests in any of the foregoing; (ii) Non-Core
Assets; (iii) Participating Gaming Devices; (iv) all Gaming Licenses
and (v) all personal property (including, without limitation, Gaming
Revenues) that has been the subject of a distribution, payment or other
disposition by the Borrower or any Guarantor to any Person, unless prohibited
by this Agreement.


 


“Gaming
Business” means, collectively, the Class III Gaming conducted by or on
behalf of the Borrower and the Guarantors at the Facilities, together with all
entertainment, lodging, hospitality, transportation, recreation, golf, or other
trade, business or commercial activities of the Borrower and the Guarantors
designed to promote, market, support, develop, construct or enhance the casino
gaming and resort business operated by Borrower and the Guarantors.


 


“Gaming Business Real Estate” means the land and improvements
thereto on which any Gaming Business is conducted.


 


“Gaming Laws” means IGRA, the Compact, the Gaming Ordinance and
all other Laws pursuant to which any Gaming Agency holds or exercises licensing
or 


 


9

















 


permit
authority over gambling, gaming, or casino activities conducted within the
Nation’s jurisdiction.


 


“Gaming License”
means every license, permit, franchise or other authorization from any Gaming
Agency required on the date hereof or at any time thereafter to own, lease,
operate or otherwise conduct the Class III Gaming activities of the
Borrower and the Guarantors, including all licenses granted under applicable
federal, tribal, state, foreign or local laws.


 


“Gaming Ordinance” means the gaming ordinance of the Nation
required to be approved on behalf of Chairman of the NIGC pursuant to 25 U.S.C.
§ 2710(e), as amended.


 


“Gaming
Revenues” means all revenues, receipts, and income of any nature of the
Borrower and Guarantors arising from the Gaming Business or the use or
ownership of Gaming Assets by or on behalf of the Borrower, or of any of the
Guarantors, whether the same consists of money, instruments, or otherwise;
provided, however, that Gaming Revenues shall not include such cash amounts as
are required to pay the Excluded Distributions (which cash amounts shall not be
required to be deposited into a Gaming Account or to be subject to a Control
Agreement).


 


“Government Securities” means readily marketable direct full
faith and credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.


 


“Governmental Authority” means (a) any international,
foreign, federal, tribal, state, county or municipal government, or political
subdivision thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality or public
body, (c) any court, administrative tribunal or public utility, or (d) any
arbitration tribunal or other non-governmental authority to whose jurisdiction
a Person has consented.


 


“Governmental Charges” means, with respect to any Person, all
levies, assessments, fees, claims or other charges imposed by any Governmental
Authority upon such Person or any of its property or otherwise payable by such
Person.


 


“Guarantor” means Seneca Niagara Falls Gaming Corporation,
Seneca Territory Gaming Corporation, Seneca Erie Gaming Corporation, and
Lewiston Golf Course Corporation or any future Subsidiary of the Borrower that
owns or operates any part of the Gaming Business.


 


“Guarantor Obligations” has the meaning given in the Security
Agreement.


 


“Guaranty” means the guaranty dated the date hereof executed by
each of the Guarantors in favor of the Lender.


 


10

















 


“Guaranty Obligation” means, with respect to any Person, any
direct or indirect guarantee of that Person with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the “primary obligations”)
of another Person (the “primary obligor”), including any obligation of that
Person, whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligations or any property constituting direct
or indirect security therefor, or (b) to advance or provide funds (i) for
the payment or discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level of
income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the
beneficiary of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (d) otherwise to
assure or hold harmless the holder of any such primary obligation against loss
in respect thereof.


 


“Hazardous
Substances” means pollutants, contaminants, hazardous substances, hazardous
wastes, petroleum and fractions thereof, and all other chemicals, wastes,
substances and materials listed in, regulated by or identified in any
Environmental Law.


 


“IGRA” means the federal Indian Gaming Regulatory Act of 1988,
codified at 25 U.S.C. § 2701, et seq.


 


“Indebtedness” means, as to any Person on any date of
determination, without duplication, (a) all indebtedness of such Person
for borrowed money, (b) that portion of the obligations of such Person
under Capital Leases which should properly be recorded as a liability on a
balance sheet of that Person prepared in accordance with GAAP, (c) any
obligation of such Person that is evidenced by a promissory note or other
instrument representing an extension of credit to such Person, whether or not
for borrowed money, (d) any obligation of such Person for the deferred
purchase price of Property or services (other than trade accounts payable in
the ordinary course of business in accordance with customary terms), (e) any
obligation of such Person that is secured by a Lien on assets of such Person,
whether or not that Person has assumed such obligation or whether or not such
obligation is nonrecourse to the credit of such Person, (f) obligations of
such Person arising under acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (g) obligations of such
Person for unreimbursed draws under letters of credit issued for the account of
such Person, (h) any Contingent Obligation of such Person, (i) any Unfunded
Pension Liability of such Person, and (j) any Disputed State Regulatory
Obligations of such person.


 


“Indian Lands” means Indian lands within the meaning of IGRA on
which Class III Gaming may be conducted.


 


“Interest Expense” means, with respect to any fiscal period, the
sum (determined on a consolidated basis without duplication in accordance with
GAAP), 


 


11

















 


of
the following: (a) all interest, fees, charges and related expenses
payable during such period to a lender in connection with borrowed money or the
deferred purchase price of assets that is treated as interest in accordance
with GAAP, and (b) the portion of rent actually paid during such fiscal
period under Capital Leases that should be treated as interest in accordance
with GAAP.


 


“Interest
Period” means, with respect to any LIBOR Rate Funding, a period of one,
three or six months beginning on a Business Day.


 


“Internal Revenue Code” means the Internal Revenue Code of 1986,
Title 26, U.S.C.


 


“Investment” means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by
means of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other Person, including any
partnership and joint venture interests of such Person in any other Person. The
amount of any Investment shall be the amount actually invested, without
adjustment for increases or decreases in the value of such Investment.


 


“Issuer” means KeyBank National Association or an Affiliate
thereof, as issuer of a Letter of Credit.


 


“Joint Venture” means a single-purpose corporation, partnership,
joint venture or other legal arrangement (whether created pursuant to contract
or conducted through a separate legal entity) now or hereafter formed by the
Borrower with another Person in order to conduct a common venture with such
Person.


 


“Laws” means, collectively, all international, foreign, federal,
tribal, applicable state and local constitutions, statutes, treaties, rules,
regulations, ordinances, codes and administrative or judicial precedents.


 


“LC Collateral Account” has the meaning given in Section 2.6(i).


 


“Lender” shall have the meaning given to that term in the first
paragraph of this Agreement.


 


“Letter of Credit Documents” means such applications,
reimbursement agreements and other documents as the Issuer may require as a
condition to issuance of a Letter of Credit.


 


“Letter of Credit Fee” has the meaning given in Section 2.6(c).


 


“Letter of
Credit Sublimit” means $25,000,000.


 


12

















 


“Letter of
Credit” means any of the letters of credit issued by the Issuer under the
Revolving Commitment pursuant to Section 2.6 and each letter of credit
described in Schedule 2.6, either as originally issued or as the same may be
supplemented, modified, amended, renewed, extended or supplemented.


 


“Leverage Ratio” means, as of each Covenant Calculation Date the
ratio of (a) Total Funded Debt as of such date, to (b) EBITDA for the
related Covenant Calculation Period.


 


“LIBOR Rate”
means the annual rate equal to the sum of (i) the rate obtained by
dividing (a) the rate (rounded up to the nearest 1/16 of 1%) determined by
the Lender to be the average rate at
which U.S. dollar deposits are offered to the Lender
by major banks in the London interbank market for funds to be made
available on the first day of an Interest Period in an amount approximately
equal to the amount for which a LIBOR Rate has been requested and maturing at
the end of such Interest Period, by (b) a percentage equal to 100% minus
the Reserve Requirement (expressed as a percentage) applicable to such
deposits, and (ii) the Margin.


 


“LIBOR Rate
Funding” has the meaning given in Section 2.3(c).


 


“Lien” means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
any conditional sale or other title retention agreement, and any lease in the
nature of a security interest.


 


“Loan Documents” means, collectively, this Agreement, the Note,
the Security Documents, and any other agreements of any type or nature
heretofore or hereafter executed and delivered by the Borrower or any Guarantor
to the Lender in any way relating to or in furtherance of this Agreement.


 


“Maintenance
Capital Expenditures” means Capital
Expenditures for the maintenance, repairs, restoration or refurbishment of
tangible property (real and personal), but excluding any Capital Expenditures
that expand property.


 


“Margin”
means the margin amount set forth in Section 2.3(d).


 


“Material Adverse Effect” means any circumstance or event or any
set of circumstances or events which (a) has or may reasonably be expected
to have any material adverse effect whatsoever upon the validity or enforceability
of any material provision of any Loan Document, (b) is or may reasonably
be expected to be material and adverse to the business operations, Properties,
condition (financial or otherwise) or the prospects of Borrower and Guarantors,
as a whole, (c) materially impairs or may reasonably be expected to
materially impair the ability of the Borrower or any Guarantor to perform its
Obligations under the Loan Documents to which it is a party, or (d) materially
impairs or may reasonably be expected to materially impair the ability of the
Lender to enforce the principal benefits intended to be created and 


 


13

















 


conveyed
by the Loan Documents, including the Liens created by the Security Documents.


 


“Material Documents” means, collectively, the Constitution, the
Compact, the Gaming Ordinance, the Approvals and the Senior Notes Indenture.


 


“Maturity Date”
means June 19, 2009, unless extended for up to an additional six months at
the option of Borrower exercisable at any time after the six-month anniversary
of the Closing Date and prior to June 19, 2009, provided that no Default
or Event of Default exists at the time of such exercise.


 


“Multiemployer Plan” means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.


 


“Nation” has the meaning given such term in the first
paragraph of this Agreement.


 


 “Negative Pledge” means
any covenant binding on the Borrower or any Guarantor that prohibits the
creation of Liens on any Gaming Assets.


 


“Net Proceeds” means, (A) with respect to any Disposition
of any Property by Borrower or any Guarantor, the aggregate consideration
received by such Person from such Disposition less the sum of (i) the
amount of liabilities for taxes incurred by such Person in connection with such
sale (after taking into account available deductions, credits, carry-backs,
carry-forwards or similar items relating to the Property sold) based upon the
overall effective tax rate payable by such Person for the tax year in question,
(ii) the sum of the actual amount of the reasonable fees and commissions
payable to Persons other than such Person or any Affiliate of such Person, the
reasonable legal expenses and other costs and expenses directly related to such
sale that are to be paid by such Person, and (iii) the amount of any
indebtedness (other than the Obligations) which is secured by such asset and is
required to be repaid or prepaid by such Person as a result of such sale; and (B) with
respect to any Casualty Event, the aggregate amount of proceeds of insurance,
condemnation awards and other compensation received in respect of such Casualty
Event less the sum of any expenses incurred by Borrower to obtain such
proceeds, award or other compensation.


 


“NIGC” means the National Indian Gaming Commission, or any
successor agency.


 


“Non-Core
Assets” means obsolete equipment constituting Gaming Assets (whether or not
replaced), and other business assets not located on or adjacent to a Facility,
the disposition of which is not reasonably expected to materially affect the
operations, condition (financial or otherwise) or prospects of the Borrower and
Guarantors as a whole.


 


14

















 


“Non-Gaming Assets” means each Property that does not constitute
a Gaming Asset.


 


“Note” means the promissory note substantially in the form of Exhibit A,
issued to Lender pursuant to Section 2.7.


 


“Obligations” means all debts, liabilities, obligations,
covenants and duties of the Borrower arising under each Loan Document to which
it is a party, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, including the Advances, interest
on the Advances (including interest that accrues after the commencement of any
proceeding under any Debtor Relief Laws by or against the Borrower),
reimbursement obligations with respect to Letters of Credit and all other
monetary obligations, including fees, costs, expenses and indemnities arising
under any Loan Document and all renewals, extensions, or refundings of any of
the foregoing.


 


“Participant” shall have the meaning given in Section 10.8.


 


“Participating Gaming Device” means any equipment directly used
in a game of chance (a) which is not owned by the Borrower or any
Guarantor and (b) in which the only interest of the Borrower or any
Guarantor is a portion of the revenues derived therefrom, as established by
contract with the owner or lessee of such equipment.


 


“PBGC” means the Pension Benefit Guaranty Corporation or any
successor thereof established under ERISA.


 


“Pension Plan” means any “employee pension benefit plan” that is
subject to Title IV of ERISA and which is maintained for employees of the
Borrower or any of their ERISA Affiliates, other than a Multiemployer Plan.


 


“Permits” means any and all actions, approvals, certificates,
consents, waivers, exemptions, variances, franchises, orders, permits,
authorizations, rights, registrations or licenses of or from any Governmental
Authority (including any Gaming Agency).


 


“Permitted
Indebtedness” means:


 


(a)           the Indebtedness (as defined the
Senior Notes Indenture) permitted to be incurred under Section 4.10 of the
Senior Notes Indenture, including, without limitation, all “Permitted
Indebtedness” as defined in the Senior Notes Indenture;;


 


(b)           the Obligations and the Guarantor
Obligations; and


 


(c)           Indebtedness under the Senior Notes.


 


“Permitted
Liens” means (a) all Liens (as defined in the Senior Notes
Indenture)  referred to in the definition
of “Permitted Liens” in the Senior Notes 


 


15

















 


Indenture, other than
those Liens set forth in clauses (2), (3), and (4) of such Permitted Liens
definition (and clause (25) to the extent referring to a “refinancing” (as
defined in the Senior Notes Indenture) of any Indebtedness secured by Liens
referred to in clauses (2), (3) or (4)); provided, however, that the
foregoing limitation with respect to Liens set forth in clause (2) of such
Permitted Liens definition (and clause (25) to the extent referring to a
refinancing of Indebtedness secured by Liens referred to in clause (2)) shall
not apply to Liens securing Indebtedness under any Credit Facility permitted
pursuant to Section 4.10(a) of the Senior Notes Indenture or clauses (3) (not
to exceed $15,000,000 in aggregate principal amount at any time outstanding
except in the case of Permitted Indebtedness under such clause (3) incurred
to finance the purchase of up to 2,000 slot machines for Seneca Buffalo Creek
Casino, as to which such limitation shall not apply); provided, however, that
if the principal amount of the Obligations shall be deemed or classified as
Permitted Indebtedness under clause (3) of the Senior Notes Indenture,
then the foregoing reference to $15,000,000 shall be deemed to refer to
$65,000,000), (7) or (14) (but only to the extent Permitted Indebtedness
under such clause (14) is incurred to finance the purchase of up to 2,000 slot
machines for Seneca Buffalo Creek Casino) of Section 4.10(b) of the
Senior Notes Indenture if such “Credit Facility” provides solely for a “FF&E
Financing” and/or a “Capital Lease Obligation” (as each of the forgoing terms
are defined in the Senior Notes Indenture), in each case secured solely by the
assets being financed.  Lender shall
release its Lien, if any, on all assets financed pursuant to any such Capital
Lease or FF&E financing provided, that, such financing is secured by the
assets financed; and (b) all Liens securing the Obligations and the
Guarantor Obligations.


 


 “Person” means any
entity, whether an individual, trustee, corporation, general partnership,
limited partnership, limited liability company, limited liability partnership,
joint stock company, trust, estate, unincorporated organization, business
association, tribe, instrumentality, firm, joint venture, Governmental
Authority, or otherwise.


 


“Policies of Insurance” means the insurance to be obtained and
maintained by the Borrower throughout the term of this Agreement as provided in
Section 4.3.


 


“Prime Rate”
means at any time the rate of interest most recently reported in the “Money
Rates” section (or any successor section) of The Wall
Street Journal as the “National Average Prime Rate,” or if such rate
is no longer published, the “prime rate” of the Lender, with the understanding
that such interest rate is one of its base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as the Lender may
designate. Each change in the Prime Rate will be effective on the day the
change is announced by the Lender.


 


“Projections” has the meaning given in Section 6.1(c).


 


16

















 


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


 


“Purchase-Money
Obligation” means, a purchase-money obligation within the meaning of the
Uniform Commercial Code as enacted in the State.


 


“Recourse”
means that a creditor may, as a matter of law, have recourse to specified
assets of the Borrower or any Guarantor in satisfaction of a claim, either
before or after a judgment is obtained against
the Borrower or Guarantor, because the Borrower or the Guarantor has
waived its sovereign immunity with respect to such Claim and with respect to
such specified assets, or granted a Lien as against such assets.


 


“Request for
Letter of Credit” means an application for a Letter of Credit, in form and
substance satisfactory to the Issuer.


 


“Requirement of Law” means, as to any Person, the constitution,
the articles or certificate of incorporation and bylaws, the partnership
agreement, the operating agreement and any related certificate of partnership,
or other organizational or governing documents of such Person, and any Law, or
judgment, order, award, decree, writ or determination of a Governmental
Authority, in each case applicable to or binding upon such Person or any of its
Property or to which such Person or any of its Property is subject.


 


“Reserve Requirement” means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to eight
decimal places) in effect on such day, whether or not applicable to the Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”). The LIBOR Rate for each outstanding LIBOR Rate Funding shall be
adjusted automatically as of the effective date of any change in the Reserve
Requirement.


 


“Revolving
Commitment” means $50,000,000, or such lesser sum to which the Revolving
Commitment may be reduced.


 


“Securities” means any capital stock, share, voting trust
certificate, bonds, debentures, notes or other evidences of indebtedness,
limited partnership interests, ownership interests in any Person (however
denominated) or any warrant, option or other right to purchase or acquire any
of the foregoing.


 


“Security Agreement” means the Security Agreement dated the date
hereof executed by the Borrower and the Guarantors in favor of the Lender.


 


“Security Documents” means, collectively, the Security
Agreement, the Guaranty and each Control Agreement, and any other pledge
agreement, security 


 


17

















 


agreement,
control agreement, or other similar instrument or agreement executed by
Borrower or any Guarantor and delivered to the Lender to secure the Obligations
and/or the Guarantor Obligations.


 


“Security Interest” means the Lien and security interest in the
Collateral granted by the Borrower and the Guarantors to the Lender in the
Security Agreement.


 


“Seneca Gaming Authority” means the Seneca Gaming Authority
established by and referred to in the Gaming Ordinance.


 


“Senior Notes” means the senior notes issued under the Senior
Notes Indenture.


 


“Senior Notes Indenture” means the Indenture dated as of May 5,
2004, among the Borrower, the Seneca Niagara Falls Gaming Corporation, the
guarantors named therein and Wells Fargo Bank, National Association, as
trustee, as supplemented and in effect on the Closing Date.


 


“Senior Officer” means the President and CEO and Chief Operating
Officer of the Borrower and each Guarantor or any other individual specifically
authorized in a resolution adopted by the Board of Directors of the Borrower or
a Guarantor to act on behalf of the Borrower or such Guarantor in connection
with the Loan Documents; provided, that with respect to anyone so
authorized, the Lender receives (i) an incumbency certificate which
identifies such individual(s) and (ii) a copy of such
resolution(s).  Each Senior Officer shall
be conclusively presumed to be authorized to act on behalf of the Borrower or a
Guarantor with respect to the transactions contemplated by the Loan Documents.


 


“Senior Secured Leverage Ratio” means, as of each Covenant
Calculation Date, the ratio of (a) Total Senior Secured Funded Debt as of
such date, to (b) EBITDA for the related Covenant Calculation Period.


 


“State” means the State of New York.


 


“State Gaming Officials” has the meaning ascribed thereto in the
Compact.


 


“Subsidiary” means, as of any date of determination and with
respect to any Person, any other corporation, limited liability company,
general partnership, limited partnership, limited liability partnership, joint
stock company, trust, unincorporated organization, business association,
instrumentality, firm, joint venture, or other business entity (whether or not,
in either case, characterized as such), whether now existing or hereafter
organized, formed, created or acquired: (a) in the case of a corporation,
of which a majority of the securities having ordinary voting power for the
election of directors or other governing body (other than securities having
such power only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a limited liability company, general
partnership, limited partnership, limited 


 


18

















 


liability
partnership, joint stock company, trust, unincorporated organization, business
association, instrumentality, firm, joint venture, or other business entity, of
which a majority of the membership, partnership or other ownership interests
are at the time beneficially owned by such Person and/or one or more of its
Subsidiaries or the management of which is otherwise controlled, directly or
indirectly, through one or more of such Persons.


 


“Taxes” shall have the meaning set forth in Section 2.9(a).


 


“Termination Event” means (a) a “reportable event” as
defined in Section 4043 of ERISA (other than a reportable event that is
not subject to the provision for 30 day notice to the PBGC), (b) the
withdrawal of the Borrower or any of its ERISA Affiliates from a Pension Plan
during any plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate a Pension Plan or
the treatment of an amendment to a Pension Plan as a termination thereof
pursuant to Section 4041 of ERISA, (d) the institution of proceedings
to terminate a Pension Plan by the PBGC or (e) any other event or
condition which might reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan.


 


“to the best knowledge of” means, when modifying a
representation, warranty or other statement of any Person, that the fact or
situation described therein is known by the Person (or, in the case of a Person
other than a natural Person, known by a Senior Officer of that Person) making
the representation, warranty or other statement, or with the exercise of
reasonable due diligence under the circumstances (in accordance with the
standard of what a reasonable Person in similar circumstances would have done)
should have been known by the Person (or, in the case of a Person other than a
natural Person, should have been known by a Senior Officer of that Person).


 


“Total Funded Debt” as of any date means the sum of (a) the
then outstanding principal balance of the Advances, and (b) all
obligations for borrowed money (regardless of priority or security),
obligations under Capital Leases, obligations in respect of letters of credit
or similar instruments, obligations in respect of amounts available for drawing
under letters of credit and other similar instruments, and the aggregate amount
drawn under letters of credit and such other instruments not then reimbursed,
and Contingent Obligations, whether the foregoing are obligations of the
Borrower or any Guarantor, but, as to all of the foregoing, only so long as the
creditor or obligee thereof has Recourse to Gaming Assets; inclusive in each
case of any direct or indirect liability or obligation (whether as the primary
obligor or as a surety, and irrespective of whether the Borrower or any
Guarantor is the nominal obligor with respect thereto).  For the avoidance of doubt, the Borrower’s
distribution obligations under the Distribution Agreement and the Excluded Distributions
shall not be deemed Recourse to the Gaming Assets.


 


19
















 


“Total Senior
Secured Funded Debt” means Total Funded Debt that is secured by a security
interest in any assets of the Borrower or any Guarantor not contractually
subordinated to the Security Interest.


 


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


 


Section 1.2  GAAP.
Unless otherwise indicated in this Agreement or any other Loan Document, all
accounting terms used in this Agreement or any other Loan Document shall be
construed, and all accounting and financial computations hereunder or
thereunder shall be computed, in accordance with GAAP. If GAAP changes during
the term of this Agreement such that any covenants contained herein would then
be calculated in a different manner or with different components, the Borrower
and the Lender agree to negotiate in good faith to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
the Borrower’s consolidated financial condition to substantially the same
criteria as were effective prior to such change in GAAP; provided, however,
that, until the Borrower and the Lender so amend this Agreement, all such
covenants shall be calculated in accordance with GAAP as in effect immediately
prior to such change.


 


Section 1.3  Headings.
Headings in this Agreement and each of the other Loan Documents are for
convenience of reference only and are not part of the substance hereof or
thereof.


 


Section 1.4  Plural
Terms. All terms defined in this Agreement or any other Loan Document in
the singular form shall have comparable meanings when used in the plural form
and vice versa.


 


Section 1.5  Time.
All references in this Agreement and each of the other Loan Documents to a time
of day means New York, New York time, unless otherwise indicated.


 


Section 1.6  Construction.
This Agreement is the result of negotiations among, and has been reviewed by,
the Borrower and the Lender and their respective counsel. Accordingly, this
Agreement shall be deemed to be the product of all parties hereto, and no
ambiguity shall be construed in favor of or against the Borrower or the Lender.


 


Section 1.7  Calculation
of Interest and Fees. All calculations of interest and fees under this
Agreement and the other Loan Documents for any period (a) shall include
the first day of such period and exclude the last day of such period and (b) shall
be calculated on the basis of a year of 360 days for actual days elapsed.


 


20

















 


Section 1.8  References.


 


(a)                                  References in this Agreement to “Recitals,” “Sections,”
“Exhibits” and “Schedules” are to recitals, sections, exhibits and schedules
herein and hereto unless otherwise indicated.


 


(b)                                 References in this Agreement or any other Loan
Document to any document, instrument or agreement (i) shall include all
exhibits, schedules and other attachments thereto, (ii) shall include all
documents, instruments or agreements issued or executed in replacement thereof
if such replacement is permitted hereby, and (iii) means such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
restated, modified, extended and supplemented from time to time and in effect
at any given time if such amendment, restatement, modification, extension or
supplement is permitted hereby.


 


(c)                                  References in this Agreement or any other Loan
Document to any Law (i) shall include any successor Law, (ii) shall
include all rules and regulations promulgated under such Law (or any
successor Law), and (iii) means such Law (or successor Law) and such rules and
regulations, as amended, modified, codified or reenacted from time to time and
in effect at any given time.


 


(d)                                 References in this Agreement or any other Loan
Document to any Person in a particular capacity (i) shall include any
successors to and permitted assigns of such Person in that capacity and (ii) shall
exclude such Person individually or in any other capacity.


 


Section 1.9  Other
Interpretive Provisions. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement or any other Loan Document
shall 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. The words “include” and “including” and
words of similar import when used in this Agreement or any other Loan Document
shall not be construed to be limiting or exclusive. In the computation of
periods of time from a specified date to a later specified date in this
Agreement or any other Loan Document, the word “from” means “from and including”;
the words “to” and “until” each mean “to but excluding”; and the word “through”
means “to and including”.  In the event
of any inconsistency between the terms of this Agreement and the terms of any
other Loan Document, as between the Lender and the Borrower, the terms of this
Agreement shall govern.


 


Section 1.10  Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of
places by which such ratio is expressed in this Agreement and rounding the
result up or down to the nearest number (with a roundup if there is no nearest
number) to the number of places by which such ratio is expressed in this
Agreement.


 


21

















 


ARTICLE II


 


CREDIT FACILITY


 


Section 2.1  Revolving
Loan Availability. On the terms and subject to the conditions set forth in
this Agreement, the Lender agrees to make such revolving Advances to the
Borrower from time to time during the period beginning on the Closing Date and
ending on the Maturity Date as the Borrower may request under Section 2.2; provided, however, that
the sum of (i) the Effective Amount plus (ii) the
aggregate amount available for drawing under the outstanding Letters of Credit plus
(iii) the aggregate amount of all unreimbursed draws with respect to all
Letters of Credit, shall not exceed the then applicable Revolving
Commitment.  Subject to the limitations
set forth herein, Borrower may borrow, repay and reborrow under this Agreement
without premium or penalty.


 


Section 2.2  Funding
Requests.


 


(a)                                  Time of Request. To request an
Advance, the Borrower shall complete and submit to the Lender a Funding Request
by not later than 11:00, a.m. at least two Business Days before the date
on which an Advance is to be made. No more than two Advances may be requested
in any month (excluding any Advances made pursuant to Sections 2.6(d) or (i) or
Sections 2.8(a) or (b)).


 


(b)                                 Minimum Amount. Each Advance shall
be $100,000 or an integral multiple of
$100,000 in excess thereof or such different amount requested in a
Funding Request as may be consented to by the Lender.


 


(c)                                  No Revocation. Unless the Lender
otherwise consents, no Funding Request may be revoked by the Borrower. If the
Lender consents to the revocation of any Funding Request, the Borrower agrees
that it shall reimburse the Lender for any loss, cost, damage or expense
associated with any redeployment of funds caused by such revocation.


 


Section 2.3  Interest
and Interest Rates.


 


(a)                                  Accrual. Interest shall accrue on
the outstanding principal balance of the Advances at the rates set forth herein
before and after Default, before and after maturity, before and after judgment,
and before and after the commencement of any proceeding under any Debtor Relief
Law.  Upon the occurrence and during the
continuance of an Event of Default, past due interest shall itself bear
interest at the Default Rate, and shall be compounded with accrued and unpaid
interest on other past due amounts quarterly, to the fullest extent permitted
by applicable Laws.


 


(b)                                 Base Rate Fundings. The outstanding
principal balance of the Advances described in Sections 2.6(d) and (i) and
Sections 2.8(a) and (b) when first funded shall bear interest at the
Base Rate (each such Advance or portion of the outstanding principal balance of
the Advances bearing interest at the Base Rate being a “Base Rate Funding”).


 


22

















 


(c)                                  LIBOR Rate Fundings. If no Default
or Event of Default exists, a new Advance shall bear interest at a LIBOR Rate
(each such Advance or portion of the outstanding principal balance of the Advances
bearing interest at a LIBOR Rate being a “LIBOR Rate Funding”), a Base
Rate Funding shall be converted to a LIBOR Rate Funding, or a LIBOR Rate
Funding shall be converted at the end of the applicable Interest Period to
another LIBOR Rate Funding, subject to the following conditions:


 


(i)                                     The
Borrower shall submit a Funding Request to the Lender not later than 11:00 a.m.
on a Business Day which is at least two Business Days prior to the date of the
requested Advance or conversion.


 


(ii)                                  Each
Funding Request shall specify the date and amount of such LIBOR Rate Funding or
the amount of Base Rate Fundings to be converted to LIBOR Rate Fundings, and
the applicable Interest Period(s).


 


(iii)                               Each
Interest Period shall begin on a Business Day. No more than ten LIBOR Rate
Fundings may be outstanding at any one time.


 


(iv)                              The
amount of each LIBOR Rate Funding shall be equal to an integral multiple of
$100,000 or such different amount requested in a Funding Request as may be
consented to by the Lender.


 


(v)                                 The
Lender shall determine the LIBOR Rate for each Interest Period between the
opening of business and 11:00 am  on the second
Business Day before the beginning of such Interest Period, whereupon the Lender
shall give notice thereof (which may be by telephone) to the Borrower. Each
such determination of the applicable LIBOR Rate shall be conclusive and binding
upon the parties hereto, in the absence of demonstrable error. The Lender, upon written request of the Borrower, shall deliver to the Borrower a
statement showing the computations used by the Lender
in determining the applicable LIBOR Rate hereunder.


 


(vi)                              Unless
the Borrower requests a new LIBOR Rate Funding in accordance with
the procedures set forth above, or prepays the principal of an outstanding LIBOR
Rate Funding at the expiration of an Interest Period, the Lender shall automatically and without request of the Borrower convert each LIBOR Rate Funding on
the last day of the relevant Interest Period to a LIBOR Rate Funding with an
Interest Period of one month as though requested by the Borrower on the second
Business Day prior to the last day of the relevant Interest Period.


 


(d)                                 Margin Applicable to LIBOR Rate Fundings. The Margin shall be one and one
quarter percent (1.25%).


 


(e)                                  Default Rate. At any time while an
Event of Default exists, upon notice to the Borrower from the Lender, the
outstanding principal balance of the Advances shall bear interest at a rate per
annum which is 2% per annum in excess of the 


 


23

















 


otherwise applicable
interest rate (the “Default Rate”), to the fullest extent permitted by
applicable Laws. The Lender’s election to charge the Default Rate shall be in
its sole discretion and shall not be a waiver of any of its other rights and
remedies.


 


(f)                                    Usury. In no contingency or event
whatsoever shall the rate or amount of interest paid by the Borrower under this
Agreement, the Note or any of the other Loan Documents exceed the maximum rate
or amount permissible under the applicable Law. If a court determines that the
Borrower has paid interest to the Lender hereunder, under the Note or under any
other Loan Document in excess of the maximum amount permitted by such Law, (i) the
Lender shall apply such excess to any unpaid principal owed by the Borrower to
the Lender or, if the amount of such excess exceeds the unpaid balance of such
principal, the Lender shall promptly refund such excess interest to the
Borrower and (ii) the provisions hereof shall be deemed amended to provide
for the foregoing. All sums paid, or agreed to be paid, by the Borrower which
are, or hereafter may be construed to be, compensation for the use, forbearance
or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, spread and allocated throughout the full term of all such
indebtedness until the indebtedness is paid in full.


 


(g)                                 When Due and Payable. Interest
accruing on the outstanding principal balance of the Advances each month shall
be due and payable in arrears on the first day of the following month, provided
that interest on any LIBOR Rate Funding shall be due and payable on the last
day of the applicable Interest Period or, if such Interest Period is longer
than three months, on the last day of each three-month period during such
Interest Period and on the last day of such Interest Period.


 


Section 2.4  Principal
Payments.


 


(a)                                  Scheduled Payment. Any outstanding
principal balance shall be paid in full on the Maturity Date.


 


(b)                                 Mandatory Prepayments. In addition
to any other payments required under this Agreement, the Borrower shall prepay
the outstanding principal balance of the Advances by an amount equal to 100% of
the Net Proceeds from each Disposition of Gaming Assets, other than Gaming
Revenues, to the extent such Net Proceeds exceed $2,500,000.  Concurrently with any prepayment made under
this Subsection (b), the Revolving Commitment shall be permanently
reduced in an amount equal to the amount of such prepayment.


 


(c)                                  Casualty Events. Upon the receipt by
the Borrower or the Lender of the proceeds of insurance, condemnation award or
other compensation in respect of any Casualty Event affecting any Gaming
Assets, then (i) if an Event of Default exists, the Advances shall be
prepaid in an aggregate amount equal to such Net Proceeds relating to the
affected Gaming Assets and (ii) if no Event of Default exists, then the
Borrower, at its option, may apply such Net Proceeds to the repair or
replacement of the affected Gaming Assets or apply such Net Proceeds to the
prepayment of the 


 


24

















 


Advances. Any prepayment
required by this Section shall be in addition to any other prepayments
required or permitted under this Agreement, and the Revolving Commitment shall
be permanently reduced in an amount equal to the amount of such prepayment.


 


(d)                                 Voluntary Prepayments. The Borrower
may prepay any Base Rate Funding without premium or penalty on one Business Day’s
advance notice to the Lender. The Borrower may prepay all or any part of any LIBOR
Rate Funding without premium or penalty (but after making any payment required
under Section 2.10)
during an Interest Period on three Business Days’ advance notice. Partial
prepayments under this Subsection (d) will be at least $100,000 and
in integral multiples of $100,000, and will include interest accrued to the
prepayment date.  All such payments shall
be applied first to interest and second to principal, except that, to the
extent practicable, payments shall be applied first to interest and then principal
on Base Rate Fundings and then to interest and then principal on LIBOR Rate
Fundings.


 


Section 2.5  Other Payment Terms.


 


(a)                                  Place and Manner.
All payments to be made by the Borrower under this Agreement or any other Loan
Document shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  The
Borrower shall make all payments under this Agreement or any other Loan
Document in lawful money of the United States and in same day or immediately
available funds not later than 11:00 a.m. on the date due.


 


(b)                                 Date.
Whenever any payment due hereunder shall fall due on a day other than a
Business Day, such payment shall be made on the immediately following Business
Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be.


 


(c)                                  Application of Payments.
Except as otherwise expressly provided in the Security Documents, all payments
hereunder shall be applied first to unpaid costs and expenses then due
and payable under this Agreement or the other Loan Documents, and second,
in the same order in which voluntary prepayments are to be applied, as required
by Section 2.4.


 


Section 2.6  Letters
of Credit.


 


(a)                                  Subject
to the terms and conditions hereof, at any time and from time to time from the
Closing Date to and including the 25th day prior to the Maturity
Date, the Issuer shall issue such Letters of Credit under the Revolving
Commitment as Borrower may request by a Request for Letter of Credit; provided
that after giving effect to all such Letters of Credit, the sum of (i) the
Effective Amount plus (ii) the aggregate amount available for
drawing under the outstanding Letters of Credit plus (iii) the
aggregate amount of all unreimbursed draws with respect to all Letters of Credit,
shall not exceed (i) the Letter of Credit Sublimit or (ii) the then
applicable 


 


25

















 


Revolving
Commitment.  Each Letter of Credit shall
be in a form reasonably acceptable to the Issuer.  Unless otherwise approved by the Lender and
the Issuer, (such approval not to be unreasonably withheld if the Borrower
complies with Section 2.6(i)), no Letter of Credit shall have an initial
or any renewal term of more than one year or a term (including renewals
thereof) extending beyond the Maturity Date. 
The Borrower and the Lender agree that each Letter of Credit described
on Schedule 2.6 shall be a Letter of Credit issued under the Revolving
Commitment as of the Closing Date.


 


(b)                                 Each
Request for Letter of Credit shall be submitted to the Issuer at least five
Business Days prior to the date upon which the related Letter of Credit is
proposed to be issued. Each Letter of Credit will be issued under and pursuant
to the terms and conditions of such Letter of Credit Documents as the Issuer
may reasonably require. If any of the terms of any Letter of Credit Document
are inconsistent with the terms and provisions of this Agreement, the terms and
provisions of this Agreement shall govern. The Issuer shall not be obligated to
issue a Letter of Credit unless on the date of issuance all of the conditions
precedent specified in Section 7.2 shall have been satisfied as fully as
if the issuance of such Letter of Credit were an Advance.


 


(c)                                  Fees.


 


(i)                                     The
Borrower will pay to the Issuer a commission with respect to each Letter of
Credit (herein, the “Letter of Credit Fee”). For each standby Letter of
Credit, the Borrower agrees to pay the Letter of Credit Fee equal to an amount
calculated on the face amount of such standby Letter of Credit outstanding from
time to time at an annual rate equal to 0.90%, payable in arrears due and
payable on the first day of each month and on the Maturity Date, or if any such
day is not a Business Day, on the next succeeding Business Day; provided, however,
that while any Event of Default exists or following the Maturity Date, the rate
at which the Letter of Credit Fee is calculated with respect to each standby
Letter of Credit shall be equal 2.90%.


 


(ii)                                  In
addition, the Borrower shall pay to the Lender, on demand, any and all of the
Lender’s customary fees in connection with the negotiation and administration
of, and any drawings or acceptances under, any Letter of Credit.


 


(d)                                 Whenever
a draft submitted under a Letter of Credit is paid by the Issuer, the Issuer
shall request immediate reimbursement from the Borrower for the amount of the
draft. If sufficient funds are not immediately paid to the Issuer by the
Borrower, the Borrower shall be deemed to have requested an Advance and shall
fund such request for an Advance for purposes of reimbursing the Lender for the
amount of such draft so paid by the Issuer (less any amounts realized by the
Issuer pursuant to the first sentence of this Section 2.6(d)). Such
Advances shall initially bear interest at the Base Rate. Such Advances may be
converted to LIBOR Rate Fundings in accordance with Section 2.3(c) of
this Agreement. If due to the occurrence and 


 


26

















 


continuance of a Default
or an Event of Default, or the failure to satisfy any of the conditions set
forth in Section 7.2 the Lender does not make such Advance as contemplated
above and the Borrower does not otherwise reimburse the Issuer for the amount
of the draft so paid by the Issuer, the Borrower shall nonetheless be obligated
to reimburse the amount of the draft to the Issuer, with interest upon such
amount at the Default Rate from and after the date such draft is paid by the
Issuer until the amount thereof is repaid to the Issuer in full.


 


(e)                                  The
Borrower agrees that, in paying any drawing under a Letter of Credit, the
Issuer shall not have any responsibility to obtain any document (other than any
sight draft and certificates expressly required by such Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.


 


(f)                                    The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary
or transferee with respect to its use of any Letter of Credit; provided that
this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. The Issuer shall not be liable
or responsible for any of the matters described in clauses (i) through
(xiv) of subsection (h) below. In furtherance and not in limitation of the
foregoing: (i) the Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary; and (ii) the Issuer shall not
be responsible for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason.


 


(g)                                 The
issuance of any supplement, modification, amendment, renewal, or extension to
or of any Letter of Credit shall be treated in all respects the same as the
issuance of a new Letter of Credit.


 


(h)                                 The
obligation of Borrower to pay to the Issuer the amount of any payment made by
the Issuer under any Letter of Credit shall be absolute, unconditional, and
irrevocable.  Without limiting the
foregoing, Borrower’s obligations shall not be affected by any of the following
circumstances:


 


(i)                                     any
lack of validity or enforceability of the Letter of Credit, this Agreement, or
any other agreement or instrument relating thereto;


 


(ii)                                  any
amendment or waiver of or any consent to departure from the Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;


 


(iii)                               the
existence of any claim, setoff, defense, or other rights which Borrower may have
at any time against the Issuer or the Lender, any 


 


27

















 


beneficiary of the Letter
of Credit or any other Person, whether in connection with the Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto, or any
unrelated transactions;


 


(iv)                              any
demand, statement, or any other document presented under the Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect whatsoever;


 


(v)                                 payment
by the Issuer in good faith under the Letter of Credit against presentation of
a draft or any accompanying document which does not strictly comply with the
terms of the Letter of Credit;


 


(vi)                              the
existence, character, quality, quantity, condition, packing, value or delivery
of any property purported to be represented by documents presented in
connection with any Letter of Credit or for any difference between any such
property and the character, quality, quantity, condition, or value of such
property as described in such documents;


 


(vii)                           the
time, place, manner, order or contents of shipments or deliveries of property
as described in documents presented in connection with any Letter of Credit or
the existence, nature and extent of any insurance relative thereto;


 


(viii)                        the
solvency or financial responsibility of any party issuing any documents in
connection with a Letter of Credit;


 


(ix)                                any
failure or delay in notice of shipments or arrival of any property;


 


(x)                                   any
error in the transmission of any message relating to a Letter of Credit not
caused by the Issuer, or any delay or interruption in any such message;


 


(xi)                                any
error, neglect or default of any correspondent of  the Issuer in connection with a Letter of
Credit;


 


(xii)                             any
consequence arising from acts of God, war, insurrection, civil unrest,
disturbances, labor disputes, emergency conditions or other causes beyond the
control of the Issuer;


 


(xiii)                          so
long as the Issuer in good faith determines that the contract or document
appears to comply with the terms of the Letter of Credit, the form, accuracy,
genuineness or legal effect of any contract or document referred to in any
document submitted to the Issuer in connection with a Letter of Credit; and


 


28

















 


(xiv)                         where
the Issuer has acted in good faith and observed general banking usage, customs
or practices, any other circumstances whatsoever.


 


(i)                                     If
the Borrower requests that the term(s) of one or more Letters of Credit
extend beyond the Maturity Date and the Lender and the Issuer so approve
pursuant to Section 2.6(a), the Borrower agrees that it will establish
under a new letter of credit reimbursement facility to be entered into on the
Maturity Date (such facility to be evidenced by documentation comparable in all material respects to the
documentation evidencing the letter of credit reimbursement facility(ies)
terminated the date hereof), and thereafter maintain so long as any Letter of
Credit remains outstanding or any amount is payable to the Issuer or the Lender
in respect of any such Letters of Credit, a special collateral account pursuant
to arrangements satisfactory to the Lender (the “LC Collateral Account”)
in the name of the Borrower but under the sole dominion and control of the
Lender, for the benefit of the Issuer and the Lender, and shall cause funds to
be maintained in the LC Collateral Account in an amount sufficient to pay all
obligations of the Borrower with respect to such outstanding Letters of
Credit.  The Borrower shall pledge, and
grant to the Lender, for the benefit of the Lender and the Issuer, a security
interest in all of the Borrower’s right, title and interest in and to all funds
which may from time to time be on deposit in the LC Collateral Account, to
secure the prompt and complete payment and performance of the obligations with
respect to the outstanding Letters of Credit. 
The Lender will invest any funds on deposit from time to time in any LC
Collateral Account in certificates of deposit having a maturity not exceeding
30 days.  The Lender shall release from
the LC Collateral Account to the Borrower, upon the expiration or termination
of, or any reduction in the amount available under, any applicable Letter of
Credit, an amount equal to the excess (if any) of all funds in such LC
Collateral Account over the amount of the obligations of the Borrower with
respect to the outstanding Letters of Credit. 
For the avoidance of doubt, the “obligations” referenced in this Section 2.6(i) shall
not be “Obligations” under this Agreement.


 


(j)                                     If
(a) Letters of Credit will remain outstanding beyond the Maturity Date
(and the new letter of credit reimbursement facility agreement referenced above
is not effective prior to or as of the Maturity Date), (b) the Revolving
Commitment shall terminate prior to the Maturity Date, or (c) the
reimbursement Obligations with respect to all outstanding Letters of Credit
shall be accelerated prior to the Maturity Date, then the LC Collateral Account
will be established under this Agreement and, to the extent insufficient funds
(to cover the maximum amount that may be drawn by beneficiaries under all
outstanding Letters of Credit) shall have been credited to such account on the
Maturity Date, Revolving Commitment termination date, or date of acceleration
of reimbursement Obligations, as applicable, funded by Lender as an Advance
under this Agreement.  Such Advance shall
be payable on demand by Borrower and shall initially bear interest at the Base
Rate.


 


(k)                                  Effective
on the Closing Date, all outstanding letters of credit under all outstanding
letter of credit reimbursement facilities between Lender and Borrower or 


 


29

















 


any Guarantor, as amended
(the “L/C Agreements”) shall be assumed as Letters of Credit under this
Agreement, all obligations under the L/C Agreements and related security
documents shall be deemed satisfied in full, all collateral securing any of the
foregoing shall be immediately released to the applicable debtor, and the L/C
Agreements and related documents shall be deemed terminated and of no further
force or effect.


 


Section 2.7  Evidence
of Obligation to Pay Advances. The Borrower’s obligation to pay the
Advances shall be evidenced by this Agreement and the Note and may also be
evidenced by one or more loan accounts or records maintained by the
Lender.  The Lender may attach schedules
to the Note and endorse thereon the date, amount and maturity of its Advances
and payments with respect thereto.  Such
loan accounts, records or Schedules shall be conclusive absent manifest error
of the amount of such Advances and payments thereon.  Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower to pay any amount owing with respect to the Advances.


 


Section 2.8  Change of Circumstances.


 


(a)                                  Inability to Determine Rates.
If, on or before the first day of any Interest Period for any LIBOR Rate
Funding, (i) the Lender shall determine that the LIBOR Rate for such
Interest Period cannot be adequately and reasonably determined due to the
unavailability of funds in or other circumstances affecting the London
interbank market or (ii) the Lender shall determine that the applicable
LIBOR Rate does not adequately and fairly reflect the cost to the Lender of
making or maintaining such LIBOR Rate Funding, the Lender shall immediately
give notice of such condition to the Borrower. After the giving of any such
notice and until the Lender shall otherwise notify the Borrower that the
circumstances giving rise to such condition no longer exist, the Borrower’s
right to request the making of, or electing a new Interest Period for, LIBOR
Rate Fundings shall be suspended. Any LIBOR Rate Fundings outstanding at the
commencement of any such suspension shall be converted at the end of the then
current Interest Period for such LIBOR Rate Fundings into Base Rate Fundings,
and all new Advances shall be Base Rate Fundings, unless such suspension has
then ended.


 


(b)                                 Illegality.
If, after the date of this Agreement, the adoption of any Law, any change in
any Law or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Law as enacted, as a result of amendment
or otherwise), any change in the interpretation or administration of any Law by
any Governmental Authority, or compliance by the Lender with any request or
directive (whether or not having the force of law) of any Governmental
Authority (a “Change of Law”) shall make it unlawful or impossible for
the Lender to make or maintain any LIBOR Rate Funding, the Lender shall
immediately notify the Borrower of such Change of Law. Upon receipt of such
notice, the Borrower shall, at the request of the Lender, either (a) convert
any such then outstanding LIBOR Rate Fundings into Base Rate Fundings at the
end of the current Interest Period for such 


 


30

















 


LIBOR
Rate Fundings or (b) immediately repay or convert any such LIBOR Rate Fundings
if the Lender shall notify the Borrower that such Lender may not lawfully
continue to fund and maintain such LIBOR Rate Fundings. Any conversion or
prepayment of LIBOR Rate Fundings made pursuant to the preceding sentence prior
to the last day of an Interest Period for such LIBOR Rate Fundings shall be
deemed a prepayment thereof for purposes of Section 2.10. After the
Lender notifies the Borrower of such a Change of Law and until such Lender
notifies the Borrower that it is no longer unlawful or impossible for the
Lender to make or maintain a LIBOR Rate Funding, all Advances shall be Base
Rate Fundings.


 


(c)                                  Increased Costs.
If, after the date of this Agreement, any Change of Law:


 


(i)                                     Shall subject the Lender to any tax, duty or
other charge with respect to any LIBOR Rate Funding, or shall change the basis
of taxation of payments by the Borrower to the Lender on such a LIBOR Rate
Funding or in respect to such a LIBOR Rate Funding under this Agreement (except
for changes in the rate of taxation on the overall net income of the Lender
imposed by its jurisdiction of incorporation or the jurisdiction in which its
principal executive office is located); or


 


(ii)                                  Shall impose, modify or hold applicable any
reserve (excluding any Reserve Requirement or other reserve to the extent
included in the calculation of the LIBOR Rate), special deposit or similar
requirement against assets held by, deposits or other liabilities in or for the
account of, advances or loans by, or any other acquisition of funds by the Lender
for any LIBOR Rate Funding; or


 


(iii)                               Shall impose on the Lender any other condition
related to any LIBOR Rate Funding;


 


and
the effect of any of the foregoing is to increase the cost to the Lender of
making, renewing, or maintaining any such LIBOR Rate Funding or to reduce any
amount receivable by the Lender hereunder; then the Borrower shall from time to
time, within five Business Days after demand by the Lender, pay to the Lender
additional amounts sufficient to reimburse the Lender for such increased costs
or to compensate the Lender for such reduced amounts. A certificate submitted
by the Lender to the Borrower setting forth in reasonable detail the amount of
such increased costs or reduced amounts shall be conclusive absent manifest
error. The obligations of the Borrower under this Section 2.8(c) shall
survive for one year following the date on which all Advances hereunder are
fully paid and the Revolving Commitment is terminated; provided, however, that
such obligations shall not, from and after the date on which all Advances
hereunder are fully paid and the Revolving Commitment is terminated, be deemed
Obligations for any purpose under the Loan Documents.


 


31
















 


(d)                                 Capital Requirements.
If, after the date of this Agreement, the Lender determines that (i) any
Change of Law affects the amount of capital required or expected to be
maintained by the Lender or any Person controlling the Lender (a “Capital
Adequacy Requirement”) and (ii) the amount of capital maintained by
the Lender or such Person which is attributable to or based upon the Advances
made by the Lender or such Person must be increased as a result of such Capital
Adequacy Requirement (taking into account the Lender’s or such Person’s
policies with respect to capital adequacy), the Borrower shall pay to the
Lender or such Person, within five Business Days after demand of the Lender,
such amounts as the Lender or such Person shall determine are necessary to
compensate the Lender or such Person for the increased costs to the Lender or
such Person of such increased capital.  A
certificate setting forth in reasonable detail the amount of such increased
costs, submitted by the Lender to the Borrower shall be conclusive absent
manifest error. The obligations of the Borrower under this Section 2.8(d) shall
survive for one year following the date on which all Advances hereunder are
fully paid and the Revolving Commitment is terminated; provided, however, that
such obligations shall not, from and after the date on which all Advances
hereunder are fully paid and the Revolving Commitment is terminated, be deemed
Obligations for any purpose under the Loan Documents.


 


(e)                                  Notice.
If the Lender becomes aware of (i) any Change of Law which will make it
unlawful or impossible for the Lender to make or maintain any LIBOR Rate
Funding or (ii) any Change of Law or other event or condition which will
obligate the Borrower to pay any amount pursuant to Section 2.8(c) or
Section 2.8(d), the Lender shall notify the Borrower thereof as
promptly as practical. If the Lender has given notice of any such Change of Law
or other event or condition and thereafter becomes aware that such Change of
Law or other event or condition has ceased to exist, the Lender shall notify
the Borrower thereof as promptly as practical.


 


Section 2.9  Taxes on Payments.


 


(a)                                  Payments Free of Taxes.
Any and all payments by or for the account of the Borrower hereunder, or in
respect of the Note or any other Loan Document, shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto, excluding net income taxes or other taxes imposed on the Lender’s
revenues as a result of a present or former connection between the Lender and
the jurisdiction imposing such tax levy, impost or withholding or any political
subdivision or taxing authority thereof or therein, other than any such
connection arising solely from the Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, the Note or
other Loan Documents (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes or any other Loan Document being hereinafter referred to as “Taxes”).
If the Borrower shall be required by law to deduct or withhold any Taxes from
or in respect of any sum payable hereunder or under the Note or other Loan
Documents to the Lender, (i) the sum payable by the Borrower shall be
increased as may be necessary so that after the Borrower and the Lender, as 


 


32

















 


the
case may be, have made all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this Section 2.9)
the Lender receives an amount equal to the sum it would have received had no
such deductions or withholdings been made, (ii) the Borrower shall make
all such deductions or withholdings and (iii) the Borrower shall pay the
full amount deducted or withheld to the relevant taxation authority or other
authority in accordance with applicable Law.


 


(b)                                 Other Taxes.
In addition, the Borrower shall pay to the relevant taxing authority in
accordance with applicable Law, and indemnify and hold the Lender harmless
from, any present or future stamp, documentary, excise, property or similar
taxes, charges or levies that arise from the delivery or registration of,
performance under, or otherwise with respect to, this Agreement, the Note or
any other Loan Documents (hereinafter referred to as “Other Taxes”).


 


(c)                                  Indemnification.
The Borrower shall indemnify the Lender for and hold it harmless against the
full amount of Taxes and Other Taxes, and for the full amount of taxes of any
kind imposed by any jurisdiction on amounts payable under this Section 2.9,
imposed on or paid by the Lender and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within thirty days from the date
the Lender makes written demand therefor.


 


(d)                                 Receipt For Payment.
Within thirty days after the date of any payment of Taxes or Other Taxes
pursuant to Section 2.9(a), (b) or (c), the
Borrower shall furnish to the Lender, at its address referred to in Section 10.6, the original or a certified copy of a receipt
evidencing such payment, to the extent that such receipt is issued therefor or
such other written proof of payment thereof that is reasonably satisfactory to
the Lender.


 


(e)                                  Lender Tax Returns.
Nothing contained in this Section 2.9 shall require the Lender to
make available any of its tax returns (or any other information relating to its
taxes which it deems to be confidential or proprietary). Nothing herein
contained shall interfere with the rights of the Lender to arrange its tax
affairs in whatever manner it thinks fit and, in particular, the Lender shall
be under no obligation to claim credit, relief, remission or repayment from or
against its corporate profits or similar tax liability in respect of the amount
of such deduction or withholding in priority to any other claims, reliefs,
credits or deductions available to it or to disclose any information relating
to its tax affairs.


 


Section 2.10  Funding Loss Indemnification.


 


(a)                                  If the Borrower shall repay, prepay or convert
any LIBOR Rate Funding (including any deemed conversion resulting from the
imposition of the Default Rate) on any day other than the last day of an
Interest Period therefor (whether as a scheduled payment, an optional
prepayment or conversion, a mandatory 


 


33

















 


prepayment
or conversion, a payment upon acceleration or otherwise) or fail to borrow any
LIBOR Rate Funding for which a Funding Request has been delivered to the Lender
(whether as a result of the failure to satisfy any applicable conditions or
otherwise) the Borrower shall pay to the Lender within five Business Days after
demand a prepayment fee or failure to borrow fee, as the case may be
(determined as though 100% of the LIBOR Rate Funding had been funded in the
London interbank eurodollar currency market), equal to the sum of:


 


(i)                                     the amount, if any, by which (A) the
additional interest would have accrued on the amount prepaid or not borrowed at
the LIBOR Rate if that amount had remained or been outstanding through the last
day of the applicable Interest Period exceeds (B) the interest that the
Lender could recover by placing such amount on deposit in the London interbank
eurodollar currency market for a period beginning on the date of the prepayment
or failure to borrow and ending on the last day of the applicable Interest
Period (or, if no deposit rate quotation is available for such period, for the
most comparable period for which a deposit rate quotation may be obtained); plus


 


(ii)                                  all out-of-pocket expenses incurred by the
Lender reasonably attributable to such payment, prepayment or failure to
borrow.


 


(b)                                 When the Lender demands payment under this Section 2.10,
it shall deliver to the Borrower a certificate setting forth the amount of
costs and losses for which demand is made. Such a certificate so delivered to
the Borrower shall be conclusive absent manifest error. The obligations of the
Borrower under this Section 2.10 shall survive the payment and
performance of the Obligations and the termination of this Agreement.


 


Section 2.11  Security.


 


(a)                                  Security Documents. The Obligations and the Guarantor Obligations
shall be secured by the Liens on the Collateral granted by the Borrower and the
Guarantors, respectively, under the Security Agreement, subject to the terms
and provisions thereof.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES


 


To
induce the Lender to enter into this Agreement and the other Loan Documents,
and to make Advances and issue Letters of Credit hereunder, the Borrower
represents and warrants to the Lender that:


 


Section 3.1  Existence and Qualification; Power;
Compliance With Laws.


 


(a)                                  The
Borrower and each Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the Nation and is duly 


 


34

















 


licensed or qualified to
transact business in all jurisdictions where the character of the property
owned or leased or the nature of the business transacted by it makes such
licensing or qualification necessary except as would not result in a Material
Adverse Effect.  The Borrower and each
Guarantor has all requisite power and authority to conduct its business, to own
its properties and to execute and deliver, and to perform all of its
obligations under, the Loan Documents to which it is a party.  The Borrower’s and each Guarantor’s chief
executive office and principal place of business is located at its respective
address set forth in Schedule 3.1, and all of the Borrower’s and the Guarantors’
records relating to the Gaming Business and the Gaming Assets are kept at such
locations.  The Borrower and each Guarantor is a nontaxable entity for purposes of
federal and state income taxation, and the gaming and other revenues of the
Borrower and the Guarantors are exempt from federal and state income taxation.


 


(b)                                 The
Borrower is wholly owned by the Nation and no other Person holds any rights to
acquire an ownership interest in the Borrower. 
Each Guarantor is wholly owned by the Borrower and no other Person holds
any rights to acquire an ownership interest in any Guarantor.


 


(c)                                  The Borrower and each Guarantor is in
compliance in all material respects with (i) all Laws and Requirements of
Law applicable to its existence, Gaming Business and Gaming Assets (including
all Gaming Laws) and (ii) each of its Contractual Obligations (nor is
there any waiver in effect which, if not in effect, would result in such a
violation or default), where noncompliance with such Law, Requirement of Law or
Contractual Obligation, either individually or in the aggregate, may reasonably
be expected to have a Material Adverse Effect.


 


(d)                                 The
Gaming Business of each Guarantor is conducted exclusively by such Guarantor
(and no other Person).


 


(e)                                  Neither
this Agreement nor any of the other Loan Documents, taken individually or as a
whole, constitute “management contracts” or “management agreements” within the
meaning of Section 12 of IGRA, or deprive the Nation of the sole
proprietary interest and responsibility for the conduct of gaming activity at
the Facilities and the parties hereto acknowledge that the Nation retains sole
regulatory responsibilities over its gaming activities pursuant to the Gaming
Ordinance.


 


Section 3.2  Authority; Compliance with Other
Agreements and Instruments and Government Regulations. The
execution, delivery and performance by the Borrower and each Guarantor of the
Loan Documents to which it is a party and the borrowings and issuance of
Letters of Credit from time to time hereunder have been duly authorized by all
necessary action and do not and will not (i) require any authorization,
consent or approval by, or registration, declaration or filing with, or notice
to, the Nation or any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any third party, except such
authorization, consent, approval, registration, declaration, filing or notice
as has been obtained, accomplished or given prior to the date hereof; (ii) violate
any 


 


35

















 


provision of any law, rule or regulation or of
any order, writ, injunction or decree presently in effect having applicability
to the Borrower or any Guarantor or of the Borrower’s or any Guarantor’s
Constituent Documents; (iii) result in a breach of or constitute a default
under any material Contractual Obligation to which the Borrower or any
Guarantor is a party or by which it or its properties may be bound or subject;
or (iv) result in, or require, the creation or imposition of any Lien
(other than the Security Interest) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower or any Guarantor.


 


Section 3.3  Gaming Laws and Permits. The Borrower,
each Guarantor and the Gaming Business are in material compliance with all
applicable Gaming Laws. More particularly:


 


(a)                                  Class III Gaming May Be Conducted on the
Gaming Business Real Property. All sites on which the Borrower
conducts Class III Gaming are located on Indian Lands of the Borrower.


 


(b)                                 Effectiveness of Compact and Gaming Ordinance.
The Compact and the Gaming Ordinance comply in all material respects with IGRA,
and each is in effect under IGRA.  The
Compact has been deemed approved by or on behalf of the Secretary of the
Interior, proper notice related to approval of the Compact has been duly
published in the Federal Register, and the Compact is a valid and binding
agreement of the Nation, enforceable in accordance with its terms.


 


(c)                                  Compliance. The Gaming Business is
in compliance with the requirements of IGRA in all material respects. No
equipment used in connection with Gaming Business is being operated in
contravention of the Compact. Each employee of the Gaming Business is properly
licensed to the extent required by the Gaming Ordinance, the Compact and IGRA.


 


(d)                                 Gaming Permits. All Permits that are necessary to the
operation of the Gaming Business or ownership, use, or possession of the Gaming
Assets, have been duly obtained and are in full force and effect without any
known conflict with the rights of others, except where any such failure to
obtain such Permit or any such conflict or restriction could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. Neither the Borrower nor any Guarantor 
has received any written notice or other written communication from any
Governmental Authority regarding (i) any revocation, withdrawal,
suspension, termination or modification of, or the imposition of any material
conditions with respect to, any such Permit, or (ii) any other limitations
on the conduct of business by the Borrower, except where any such revocation,
withdrawal, suspension, termination, modification, imposition or limitation
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.


 


Section 3.4  No Violation of Gaming Ordinance or
Revenue Allocation Plan. No application of Gaming Revenues permitted or
contemplated herein or in any other Loan Document, and no enforcement of rights
in accordance with the terms hereof or any Security 


 


36

















 


Document, violates any
restriction or requirement as to the application of Gaming Revenues, whether
contained in a “plan of allocation” as referred to in 25 U.S.C. §2710(c) or
otherwise.


 


Section 3.5  No Licensure Required. The Lender is
not required to register with, give notice to any Person or receive any Permit
from any Gaming Agency or other Governmental Authority by reason of any Gaming
Laws or other Laws of the Nation in connection with entering into any Loan
Document, receipt of the Note or the performance or observance of any
obligation of any party under any Loan Document.


 


Section 3.6  Legal Agreements.  This Agreement constitutes and, upon due
execution by the Borrower and the Guarantors that are parties thereto, the
other Loan Documents will constitute the legal, valid and binding obligations
of the Borrower and the Guarantors, enforceable against the Borrower and the
Guarantors in accordance with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law) and except as the ability to waive exhaustion of tribal court remedies
may be limited by applicable law.


 


Section 3.7  Subsidiaries.  Except for the Guarantors and Seneca
Massachusetts Gaming Corporation, the Borrower has no Subsidiaries.


 


Section 3.8  Financial Condition; No Adverse Change.  The Borrower has furnished to the Lender (a) its
consolidated audited financial statements for its fiscal year ended September 30,
2007, and (b) quarterly financial statements for the periods ending December 31,
2007 and March 31, 2008, and those statements fairly present the Borrower’s
and Guarantors’ consolidated financial condition on the dates thereof and the
results of operations and cash flows for the periods then ended and were
prepared in accordance with generally accepted accounting principles (provided,
however, that the quarterly financial statements described in clause (b) have
been prepared in accordance with generally accepted accounting principles for
interim financial information, and accordingly do not include all the financial
information and footnotes required by generally accepted accounting principles
for complete financial statements and are subject to year end adjustments).  Since March 31, 2008, there has been no
change in the Borrower’s and Guarantor’s, as a whole, business, properties or
condition (financial or otherwise) which has had a Material Adverse Effect.


 


Section 3.9  Litigation.  Except as disclosed in the Borrower’s Form 10-K
for the year ended September 30, 2007, as updated by each subsequent Form 10-Q
quarterly report, there are no actions, suits or proceedings pending or, to the
Borrower’s knowledge, threatened against or affecting the Borrower or any
Guarantor or the properties of the Borrower or any Guarantor before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which, if determined adversely to the
Borrower or any Guarantor, would have a Material Adverse Effect.


 


37

















 


Section 3.10  Regulation U.  Neither the Borrower nor any Guarantor is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance or Letter of Credit will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.


 


Section 3.11  Taxes. 
The Borrower and the Guarantors have paid or caused to be paid to the
proper authorities when due all federal, state, tribal and local taxes required
to be paid by each of them.  The Borrower
and Guarantors have filed all federal, state, tribal and local tax returns
which to the knowledge of the officers of the Borrower, are required to be
filed, and the Borrower and Guarantors have paid or caused to be paid to the
respective taxing authorities all taxes as shown on said returns or on any
assessment received by any of them to the extent such taxes have become due or
are contesting such taxes in good faith.


 


Section 3.12  Titles and Liens.  The Borrower or a Guarantor, as the case may
be, has good and absolute title to all Collateral free and clear of all Liens
other than Permitted Liens.  No financing
statement naming the Borrower as debtor is on file in any office except to
perfect Permitted Liens.


 


Section 3.13  ERISA. 
Except as disclosed to the Lender in writing prior to the date hereof,
neither the Borrower nor any Guarantor is subject to the requirements of ERISA.


 


Section 3.14  Default.  The Borrower is in compliance with all
provisions of all agreements, instruments, decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or
default of which may reasonably be expected to have a Material Adverse Effect.


 


Section 3.15  Environmental
Matters.


 


(a)                                  Except
as disclosed on Schedule 3.15, there are not present in, on or under the
Facilities any Hazardous Substances in such form or quantity as to create any
material liability or obligation for any of the Borrower, any Guarantor or the
Lender under the common law of any jurisdiction or under any Environmental Law,
and no Hazardous Substances have ever been stored, buried, spilled, leaked,
discharged, emitted or released in, on or under the Facilities in such a way as
to create any such material liability.


 


(b)                                 Except
as disclosed on Schedule 3.15, neither the Borrower nor any Guarantor has
disposed of Hazardous Substances in such a manner as to create any material
liability under any Environmental Law.


 


(c)                                  Except
as disclosed on Schedule 3.15, there have not existed in the past, nor are
there any threatened or impending requests, claims, notices, investigations,
demands, administrative proceedings, hearings or litigation relating in any way
to the Facilities, the Borrower or any Guarantor, alleging material liability 


 


38

















 


under, violation of, or
noncompliance with any Environmental Law or any license, permit or other
authorization issued pursuant thereto.


 


(d)                                 Except
as disclosed on Schedule 3.15, the Borrower’s and Guarantors’ business is and
has in the past always been conducted in accordance with all Environmental Laws
and all licenses, permits and other authorizations required pursuant to any
Environmental Law and necessary for the lawful and efficient operation of such
business are in the Borrower’s or a Guarantor’s possession and are in full
force and effect, nor has Borrower or any Guarantor been denied insurance on
grounds related to potential environmental liability.  No permit required under any Environmental
Law is scheduled to expire within 12 months and there is no threat that any
such permit will be withdrawn, terminated, limited or materially changed.


 


(e)                                  Except
as disclosed on Schedule 3.15, no part of the Facilities is or ever has been
listed on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar federal, state or
local list, schedule, log, inventory or database.


 


(f)                                    The
Borrower has delivered to the Lender all environmental assessments, audits,
reports, permits, licenses and other documents describing or relating in any
way to the Facilities or the Borrower’s and Guarantors’ business.


 


Section 3.16  Submissions to Lender.  All financial and other information provided
to the Lender by or on behalf of the Borrower in connection with the Borrower’s
request for the credit facilities contemplated hereby (i) is true and
correct in all material respects, (ii) does not omit any material fact
necessary to make such information not misleading and, (iii) as to
projections, valuations or proforma financial statements, present a good faith
opinion as to such projections, valuations and proforma condition and results
as of the date such projections, valuations or proforma financial statements
were prepared.


 


Section 3.17  Rights to Payment.  Each right to payment and each instrument,
document, and chattel paper constituting or evidencing Collateral is (or, in
the case of all future Collateral, will be when arising or issued) the valid,
genuine and legally enforceable obligation, subject to no defense, setoff or
counterclaim, of the account debtor or other obligor named therein or in the
Borrower’s or Guarantor’s records pertaining thereto as being obligated to pay
such obligation.


 


Section 3.18  Gaming Accounts.  Schedule 3.18 lists each Gaming Account
maintained by the Borrower and each Guarantor as of the Closing Date.


 


39

















 


ARTICLE IV


 


AFFIRMATIVE COVENANTS 

(OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)


 


So
long as any Obligations remain unpaid or unperformed, or any portion of the
Revolving Commitment remains in force, unless the Lender otherwise consents,
the Borrower shall, and shall cause each Guarantor to:


 


Section 4.1  Payment of Taxes and Other Potential Liens.
Pay and discharge promptly all applicable taxes and other Governmental Charges
imposed upon the Borrower or any Guarantor or its Property or any part thereof,
upon its income or profits or any part thereof or any applicable tax
assessment, and any Governmental Charges imposed upon any right or interest of
the Lender under any Loan Document, except that the Borrower shall not be
required to pay or cause to be paid any tax, assessment or Governmental Charge
that is not yet delinquent, or is being contested in good faith by appropriate proceedings,
so long as the Borrower has established and maintained adequate reserves for
the payment of the same and by reason of such nonpayment and contest no
material item or portion of the Gaming Assets is in jeopardy of being seized,
levied upon or forfeited.


 


Section 4.2  Maintenance of Properties. Maintain,
preserve and protect, and cause each Guarantor to maintain, preserve and
protect all of the Gaming Assets and all other Property that is integral to the
operation of the Gaming Business (such as roadways, electrical, water and power
or related Property) in good order and condition, subject to wear and tear in
the ordinary course of business, and not permit any waste of such Properties,
except that the failure to maintain, preserve and protect a particular item of
Property that is not of significant value, either intrinsically or to the
operations of the Gaming Business, shall not constitute a violation of this
covenant, and maintain its ownership of all intellectual property and licenses
thereof necessary for the operation of the Gaming Business.


 


Section 4.3  Maintenance of Insurance.


 


(a)                                  Maintenance of Insurance.  The Borrower shall secure, pay for and
maintain, and cause each Guarantor to secure, pay for and maintain all
insurance required by the Compact and, in any event, the Borrower shall secure,
pay for and maintain for all Gaming Assets, without interruption, at its own
expense, policies of insurance with responsible insurance companies covering
such risks, and with such policy limits, deductibles and endorsements as are
customary for the responsible conduct of businesses similar to the Gaming
Business in size and operation in the State, and in any event, (a) all
legally-required workers’ compensation insurance, (b) comprehensive
general liability insurance with minimum limits of $1,000,000 per occurrence, (c) umbrella
liability insurance providing excess liability coverage over and above the
foregoing underlying insurance policies up to a minimum limit of $4,000,000, (d) business
interruption insurance of not less than $50,000,000, (e) property
insurance protecting Gaming Assets and the Gaming Business for possible damage
by fire, lightning, wind-storm other damage, vandalism, riot, 


 


40

















 


earthquake, civil
commotion, terrorism, malicious mischief, hurricane and such other risks and
hazards as are from time to time covered by an “all risk” policy or a property
policy covering “special” causes of loss, (f) builders all-risk insurance
with respect to any improvements or expansion of Gaming Assets where it is
reasonbly prudent to obtain such insurance, and (g) in any event, such
insurance with respect to Gaming Business and Gaming Assets as is maintained as
of the Closing Date as described in Schedule 4.3.  The insurance described in clause (e) shall
provide coverage of not less than the greater of (a) the amount of all of
the Obligations or (b) 100% of actual replacement value (as determined at
each policy renewal based on the F.W. Dodge Building Index or some other
recognized means) of any improvements with a deductible no greater than 2% of
the overall value.


 


(b)                                 Companies. All policies
aforementioned shall be written with insurance companies licensed and admitted
to do business in the State where the Borrower is operating and shall be rated
no lower than “A XII” in the most recent edition of A.M. Best’s and “AA”
in the most recent edition of Standard & Poor’s, or such other carrier
reasonably acceptable to the Lender.  All
such policies discussed above shall be endorsed to provide that in the event of
a cancellation, non-renewal or material modification, the Lender shall receive
thirty (30) days’ prior written notice thereof. The Borrower shall furnish the
Lender with certificates of insurance executed by an authorized agent of each
carrier evidencing compliance with all insurance provisions discussed above on
an annual basis.  The Borrower shall also
furnish a copy of the declaration page of each policy required by this Section 4.3
and policy endorsements evidencing the appropriate status of the Lender (as
loss payee, additional insured, etc.) under each policy. Certificates of
insurance executed by an authorized agent of each carrier providing insurance
evidencing continuation of all coverages shall be provided on the Closing Date
and annually on or before ten (10) days prior to expiration of each
policy.  All certificates and other
notices related to the insurance program shall be delivered to the Lender
concurrently with the delivery of such certificates or notices to such carrier
or to the Borrower, as applicable.


 


(c)                                  Other. The Borrower shall maintain,
and cause the Guarantors to maintain, any other insurance reasonably requested
by the Lender in such amount and covering such risks as may be reasonably
requested.  Approval of any insurance by
the Lender shall not be a representation of the solvency of any insurer or the
sufficiency of any coverage required under this Agreement.


 


Section 4.4  Compliance With Laws. Comply, and
cause each Guarantor to comply, with all Requirements of Law (including all
Gaming Laws) in all material respects.


 


Section 4.5  Preservation of Permits. Preserve and
maintain, and cause each Guarantor to preserve and maintain, all Permits from
any Governmental Authority that are material and necessary for the transaction
of the business of the Borrower and Guarantors, and qualify and remain
qualified to transact business in each jurisdiction in which such qualification
is necessary in view of the business of the Borrower and Guarantors or the
ownership or leasing of Gaming Assets except where the failure to preserve and
maintain any 


 


41

















 


such Permits or to so qualify
or remain qualified would not constitute a Material Adverse Effect.


 


Section 4.6  Inspection Rights. Upon notice to
Borrower or the affected Guarantor, at any time during regular business hours
and as often as requested (and so long as no Event of Default exists, but not
so as to unreasonably interfere with the business of the Borrower or any
Guarantor, and subject to compliance with all policies, procedures and
regulatory requirements), permit the Lender, or any authorized employee, agent
or representative thereof, to examine, audit and make copies and abstracts from
the records and books of account of, and to visit and inspect any part of the
Facilities and any other Gaming Assets, and to discuss the affairs, finances
and accounts of the Borrower and Guarantors with any of the Borrower’s
officers, key employees, and external accountants, and, upon request, furnish
promptly to the Lender true copies of all financial information made available
to the senior management of the Borrower. 
To the extent an Event of Default exists, all reasonable inspections
pursuant to this Section 4.6 shall be at the Borrower’s expense.


 


Section 4.7  Keeping of Records and Books of Account.
Keep, and cause each Guarantor to keep, adequate records and books of account
reflecting all financial transactions in conformity with GAAP and in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over the Borrower.


 


Section 4.8  Compliance With Agreements. Promptly
and fully comply, and cause each Guarantor to comply, in all material respects,
with all material agreements, indentures, leases and instruments to which it is
a party.


 


Section 4.9  Use of Proceeds. Use the
proceeds of the Advances and any Letters of Credit for any purposes related to
the Gaming Business.


 


Section 4.10  Environmental Laws. Keep and
maintain, and cause each Guarantor to keep and maintain, the Gaming Business
Real Estate and each parcel thereof in compliance in all material respects with
all applicable Environmental Laws and promptly advise the Lender in writing of (a) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing pursuant to any
applicable Environmental Laws, (b) any and all claims made or threatened
in writing, and received by the Borrower or any Guarantor, by any third party
against the Borrower or any Guarantor relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Substances
and (c) discovery by any Senior Officer of the Borrower of any occurrence
or condition on any real property adjoining or in the vicinity of any Gaming
Business Real Estate that could cause the Gaming Business Real Estate or any
part thereof to be subject to any restrictions on occupancy or use under any
applicable Environmental Laws.


 


Section 4.11  Compliance with Bank Secrecy Act and USA
Patriot Act. With respect to the Gaming Business, (i) in compliance
with 31 CFR § 103.21 (the “Reporting Regulation”), report any transaction
relevant to a possible violation of law or regulation so long as such
transaction is conducted or attempted by, at, or through Gaming Assets, and 


 


42

















 


involves or aggregates at least
$5,000 in funds or other assets, and, within the meaning of the Reporting
Regulation, the Borrower knows, suspects, or has reason to suspect that the
transaction (or a pattern of transactions of which the transaction is a part)
is a suspicious transaction described in subsection (a)(2) of the
Reporting Regulation, and (ii) in compliance with 31 CFR § 103.64,
establish and maintain an anti-money laundering compliance program, with
appropriate testing.


 


ARTICLE V


 


NEGATIVE COVENANTS 

(OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)


 


So
long as any Obligations remain unpaid or unperformed, or the Revolving
Commitment remains in force, unless the Lender otherwise consents, the Borrower
shall not, and shall not permit any Guarantor to:


 


Section 5.1  Disposition of Property; Sale of Assets.
Make or allow any Disposition of any Gaming Assets whether now owned or
hereafter acquired, other than:


 


(a)                                  in the ordinary course of business;


 


(b)                                 for
purposes which directly or indirectly benefit the Gaming Business, including,
without limitation, the repayment of Indebtedness, the payment of Contractual
Obligations, payment of costs related to expansion projects, and the payment of
all operating expenses incurred in connection with the Gaming Business;


 


(c)                                  the sale of Gaming Assets in the ordinary
course of business for not less than fair market value;


 


(d)                                 Distributions permitted under Section 5.3
and Investments permitted under Section 5.2; and


 


(e)                                  Dispositions
of Cash Equivalents.


 


Section 5.2  Investments. Make any Investment with
Gaming Assets or the proceeds thereof, or make any Acquisition with any Gaming
Assets or the proceeds thereof, except:


 


(a)                                  Permitted
Investments (as defined in the Senior Notes Indenture, other than the
Investments referenced in clauses (10) and (11) thereof); and


 


(b)                                 Investments in Cash or Cash Equivalents.


 


Section 5.3  Distributions. Declare or make any
Distribution, whether from capital, income or otherwise, and whether in Cash or
other Gaming Assets, regardless of the characterization of such Distributions,
except that the Borrower may declare and make 


 


43

















 


Distributions  if,  both  immediately  before  and  after  giving  effect  to  any  such  declaration  or  payment,  no  Default  or  Event  of  Default  exists  or  would  result  therefrom  (on  an  actual  and  pro  forma  basis).  Notwithstanding  the  foregoing,  the  following  Distributions  shall  be  permitted  regardless  of  whether  or  not  a  Default  or  Event  of  Default  exists:  (a)  reimbursement  of  Regulatory  and  Shared  Services  Expenses  (as  defined  in  the  Distribution  Agreement);  (b)  Compact  Exclusivity  Fee  Payments  (as  defined  in  the  Distribution  Agreement);  (c)  Operating  Lease  Payments  (as  defined  in  the  Distribution  Agreement)  to  the  extent  permitted  under  the  Senior  Notes  Indenture,  provided,  however,  that  upon  an  occurrence  and  during  the  continuation  of  an  Event  of  Default,  there  shall  be  no  increases  in  the  amount  that  the  Borrower  or  any  of  the  Guarantors  is  obligated  to  pay  as  Operating  Lease  Payments  (as  defined  in  the  Distribution  Agreement);  (d)  Distributions  pursuant  to  permitted  Affiliate  Transactions  set  forth  in  Sections  4.13(A)  and  4.13(C)  of  the  Senior  Notes  Indenture,  (e)  Distributions  pursuant  to  transaction  undertaken  under  contractual  obligations  with  Seneca  Management  Construction  Corporation  related  to  the  Facilities,  now  existing  or  hereafter  entered  into  and  as  thereafter  amended;  provided,  that,  each  such  Affiliate  Transaction  is  permitted  under  the  Senior  Notes  Indenture;  and  (f)  Permitted  Investments  referenced  in  item  (8)  of  the  Senior  Notes  Indenture  definition  of  “Permitted  Investments”  (the  foregoing  are  collectively  referred  to  as  the  “Excluded  Distributions”  and,  as  such,  shall  not  be  deemed  Distributions  for  purposes  of  the  Loan  Documents).


 


Section 5.4  Business of the Borrower. Make any
fundamental change to the nature of the Gaming Business, if the same is
reasonably likely to result in a Material Adverse Effect.


 


Section 5.5  Permitted Liens. Except for Permitted
Liens, create, incur, assume or suffer to exist any Lien of any nature upon or
with respect to any Gaming Assets; or suffer to exist any Negative Pledge with
respect to any Gaming Assets; or engage in any sale and leaseback transaction
with respect to any Gaming Assets.


 


Section 5.6  Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness if the holder has Recourse against any Gaming
Assets, except Permitted Indebtedness.


 


Section 5.7  Transactions with Affiliates. Enter
into any transaction of any kind with any Affiliate of the Borrower other than
transactions with Affiliates permitted under the Senior Notes Indenture.


 


Section 5.8  Expenditures. Use any of the Gaming
Assets for a purpose which is not related to the Gaming Business except as
otherwise permitted by this Agreement, expend any Gaming Revenues for any
purpose which does not directly or indirectly benefit the Gaming Business
except as otherwise permitted by this Agreement, or make any Capital
Expenditure using Gaming Revenues or any other Gaming Assets, except for
expansion projects benefiting Gaming Business or to improve, maintain, repair,
restore or refurbish the Gaming Assets (subject to the limitations set forth in
this Agreement). Nothing herein shall be construed to restrict Excluded
Distributions, or to restrict Investments, Dispositions or Distributions that
are otherwise permitted by this Agreement.


 


44
















 


Section 5.9  Leverage
Ratio. Permit the Leverage Ratio on any Covenant Calculation Date to exceed
4.0 to 1.0.


 


Section 5.10  Senior Secured Leverage Ratio.  Permit the Senior Secured Leverage Ratio on any Covenant Calculation Date
to exceed 1.0 to 1.0.


 


Section 5.11  Fixed
Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio on any
Covenant Calculation Date to be less than 1.10 to 1.


 


Section 5.12  Minimum
EBITDA. Permit EBITDA on any Covenant
Calculation Date to be less than $160,000,000.


 


Section 5.13  Creation
of Subsidiaries. Establish, create or acquire any Subsidiaries to carry on
any portion of the business of the Gaming Business or to hold any Gaming Assets
without making such Subsidiary a Guarantor, unless such Subsidiary is an
immaterial Subsidiary with nominal economic impact.  For the avoidance of doubt, any transactions
between the Borrower or a Guarantor, on the one hand, and a Subsidiary of the
Borrower or a Guarantor which is not a Guarantor on the other, will be subject
to Sections 5.1, 5.2, 5.3, 5.7 and 5.8 hereof.


 


Section 5.14  Gaming
Accounts. Fail to execute and deliver to the Lender, or permit any
Guarantor to fail to execute and deliver, a Control Agreement with respect to
each Gaming Account within ten days of creation or establishment thereof, or
within ten days following the Closing Date in the case of any Gaming Account
maintained by the Borrower or a Guarantor as of the Closing Date.


 


Section 5.15  Sovereign
Immunity; Jurisdiction and Venue. Assert that the provisions of Article IX
is not valid, binding and legally enforceable against the Borrower and the
Borrower shall reaffirm in writing upon request the valid, binding and
enforceable nature of the provisions of Article IX.


 


Section 5.16  Daily
Cash Deposits. Fail, or permit any Guarantor to fail, to (a) cause all
Gaming Revenues consisting of Cash, other than Cash reasonably required to be
maintained at the Facilities (such as cage cash, petty cash and other similar
amounts), to be (i) deposited each Business Day in and remitted to a
Gaming Account subject to a Control Agreement in favor of the Lender and (ii) maintained
in a Gaming Account or (b) cause Gaming Revenues consisting of instruments
and writings that evidence a right to payment arising out of the use of a
credit or charge card to be converted within two Business Days into Cash which
is thereafter applied as provided in clause (a).


 


Section 5.17  Segregation
of Gaming Assets.


 


(a)           Fail, or permit any Guarantor to fail, to segregate all Gaming Assets,
including all funds and bank accounts, from the Non-Gaming Assets; or


 


(b)           Commingle, or permit any Guarantor to commingle, any Non-Gaming Assets
(including any Cash, Securities or accounts) with any Gaming Assets.


 


45

















 


Section 5.18  Accounting
Changes. Change (a) its fiscal year or (b) its accounting
practices except as required by GAAP.


 


Section 5.19  Joint
Ventures. Enter into, or permit any Guarantor to enter into, or agree to
enter into any Joint Venture relating to Class III gaming at the
Facilities.


 


Section 5.20  Ownership
of the Gaming Assets; Conduct of Gaming Business. Not create or acquire or
permit to be created or acquired any Person other than a Guarantor that
directly or indirectly owns any Gaming Assets or any interest therein, or which
conducts all or any portion of the Gaming Business.


 


ARTICLE VI


 


INFORMATION AND REPORTING REQUIREMENTS


 


Section 6.1  Financial
and Business Information. So long as any Obligations remain unpaid or
unperformed, or the Revolving Commitment remains in force, the Borrower shall,
unless the Lender otherwise consents, deliver or caused to be delivered to the
Lender, at the Borrower’s sole expense:


 


(a)           Quarterly  Statements.  As  soon  as  available,  and  in  any  event  within  45  days  after  the  end  of  each  Fiscal  Quarter  (i)  the  consolidated  balance  sheet  of  the  Borrower  and  the  Guarantors  as  of  the  end  of  such  Fiscal  Quarter,  and  (ii)  the  consolidated  statements  of  income,  retained  earnings,  fund  balances  and  of  cash  flow  of  the  Borrower  and  the  Guarantors  as  of  the  end  of  such  Fiscal  Quarter  and  for  the  portion  of  the  Fiscal  Year  then  ended,  all  in  reasonable  detail  and  setting  forth  in  each  case  in  comparative  form  the  corresponding  current  quarter  and  year-to-date  figures  for  the  corresponding  period  in  the  preceding  Fiscal  Year.  Such  Financial  Statements  shall  be  certified  by  a  Senior  Officer  as  fairly  presenting  the  financial  condition,  results  of  operations  and  changes  in  financial  position  or  cash  flows  of  the  Borrower  and  the  Guarantors  in  accordance  with  GAAP  (other  than  any  requirement  for  footnote  disclosures)  consistently  applied,  as  of  such  date  and  for  such  periods,  subject  only  to  normal  year-end  accruals  and  audit  adjustments;


 


(b)           Annual Statements. As soon as available
and in any event within 90 days after the end of each Fiscal Year of the
Borrower, and prepared in accordance with
GAAP, consistently applied, (i) the audited consolidated balance sheet of
the Borrower and the Guarantors as of the end of such Fiscal Year, and (ii) the
audited consolidated statements of income, retained earnings, fund balances and
of cash flow of the Borrower and the Guarantors as of the end of such Fiscal
Year, all in reasonable detail and setting forth in each case in comparative
form the corresponding period in the preceding Fiscal Year; together with (A) a
report and opinion of independent public accountants of recognized national
standing selected by the Borrower and satisfactory to the Lender, which report
shall be based on an audit conducted in accordance with generally accepted
auditing standards as of such date, and which opinion shall be an unqualified
opinion without additional explanatory or nonstandard 


 


46

















 


wording
and with no limitation as to the scope of their audit and such Financial
Statements, and (B) any
management letters of such accountants addressed to the Borrower;


 


(c)           Projections. As soon as
practicable, and in any event not later than 45 days after the close of each
Fiscal Year, projected consolidated financial statements for the Borrower and
Guarantors for the succeeding Fiscal Year, which shall include (i) a
projected consolidated balance sheet, (ii) projected consolidated
statements of income and retained earnings, (iii) a projected consolidated
statement of cash flow, (iv) projected Capital Expenditures, (v) projected
Distributions expected to be permitted under the terms hereof (that do not
otherwise constitute an expense or Capital Expenditure of the Borrower and the
Guarantors), and (vi) quarterly projections of the Borrower’s compliance
with the covenants set forth in Sections 5.9, 5.10, 5.11,
and 5.12 (for each Fiscal Year, the “Projections”).


 


(d)           Auditors’ Reports. Promptly following
receipt by the Borrower, copies of any security audits and detailed audit
reports or recommendations submitted to the Borrower by independent accountants
in connection with the accounts or books of the Borrower and the Guarantors or
any audit of the consolidated financial statements of Borrower and the
Guarantors;


 


(e)           Reports to Governmental Authorities.
Promptly, and in any event not later than five days after the occurrence
thereof, written notice of any failure by the Borrower to make in a timely
manner any filing, report or other document in respect of the Gaming Business
or any Gaming Assets to be made with any Governmental Authority, including any
report which the Borrower is required to file with the NIGC under
25 C.F.R. Part 514;


 


(f)            ERISA Reportable Events, Prohibited
Transactions. To the extent ERISA is applicable to the
Borrower or its employees, promptly upon a Senior Officer’s becoming aware, and
in any event within 30 Business Days after becoming aware, of the occurrence of
any (i) “reportable event” (as such term is defined in Section 4043
of ERISA) or (ii) “prohibited transaction” (as such term is defined in Section 406
of ERISA or Section 4975 of the Internal Revenue Code) in connection with
any Pension Plan or any trust created thereunder, written notice specifying the
nature thereof and specifying what action the Borrower is taking or proposes to
take with respect thereto, and, when known, any action taken by the Internal
Revenue Service with respect thereto;


 


(g)           Amendments to Material Documents.
As soon as practicable, and in any event not less than 30 days prior to the
proposed effective date thereof (or such lesser period as to which the Lender
may consent), written notice of any proposed amendment, modification, waiver,
termination or rescission (collectively, “Amendments”) of the terms and
provisions of any of the Material Documents to which the Borrower is a party
(and, if Borrower is not a party, it shall also provide notice of any such
Amendment to the extent it is aware of such Amendment);


 


47

















 


(h)          Events of Default.
As soon as practicable, and in any event within five Business Days after a
Senior Officer of the Borrower becomes aware of the existence of any condition
or event which constitutes a Default or Event of Default, written notice
specifying the nature and period of existence thereof and specifying what
action the Borrower is taking or proposes to take with respect thereto;


 


(i)           Claims. Promptly upon a
Senior Officer’s becoming aware that (i) any Person has commenced a legal
proceeding with respect to a claim against the Borrower or a Guarantor (where
it is likely that the Borrower or such Guarantor will be made a party to such
legal proceeding) that is, in the reasonable opinion of their independent legal
counsel, $1,000,000 or more in excess of the amount thereof that is fully
covered by reputable and solvent insurance companies with the financial
ability to pay the same and who have agreed in writing to cover such claim, (ii) any creditor or lessor under a
written credit agreement with respect to Indebtedness for borrowed money in
excess of $500,000 or lease involving unpaid rent in excess of $500,000 has
asserted a default thereunder on the part of the Borrower or a Guarantor, (iii) any
labor union has notified the Borrower or any Guarantor of its intent to strike
the Borrower or any Guarantor on a date certain, or (iv) any other event
or circumstance occurs or exists that could constitute a Material Adverse
Effect, in each case a written notice describing the pertinent facts relating
thereto and what action the Borrower is taking or propose to take with respect
thereto; and


 


(j)            Other Information. Such other data and
information regarding the Borrower or any Guarantor as from time to time may be
reasonably requested by the Lender.


 


Section 6.2  Compliance
Certificates. So long as any Obligations remain unpaid or unperformed, or
the Revolving Commitment remains in force, the Borrower shall deliver to the
Lender, at the Borrower’s sole expense, concurrent with the delivery of each
historic financial statement required by Section 6.1(a) or (b),
a Compliance Certificate signed by a Senior Officer of the Borrower.


 


ARTICLE VII


 


CONDITIONS TO LENDING


 


Section 7.1  Initial
Conditions Precedent. Unless waived by Lender in writing, the obligation of
the Lender to make the initial Advance and the obligation of the Issuer to
issue the initial Letter of Credit are subject to satisfaction of the
conditions precedent set forth in Section 7.2 or Section 7.3, as
applicable, and each of the following conditions precedent, each of which shall
be satisfied prior to the making of the initial Advance or issuance of the
initial Letter of Credit (unless the Lender, in its sole and absolute
discretion, shall agree otherwise):


 


(a)           Documents. The Lender shall have received all of the following, each of which
shall be an original (except where only evidence is required) unless 


 


48

















 


otherwise
specified, each duly executed and delivered by each party thereto, each dated
as of the Closing Date and each in form and substance satisfactory to the
Lender and its legal counsel (unless otherwise specified or, in the case of the
date of any of the following, unless the Lender otherwise agrees or directs):


 


(i)            four executed counterparts of this Agreement;


 


(ii)           the Note;


 


(iii)          four counterparts of the Guaranty executed by each of the Guarantors;


 


(iv)          four counterparts of the Security Agreement executed by the Borrower
and each of the Guarantors;


 


(v)           a Control Agreement for
each Gaming Account, executed by the Borrower or the appropriate Guarantor and
the depository or securities intermediary that holds such Gaming Account;


 


(vi)          the favorable written legal opinion of counsel to the Borrower and the
Guarantors (which counsel shall be satisfactory to the Lender), together with
copies of all factual certificates and legal opinions upon which such counsel
have relied;


 


(vii)         such documentation as the Lender may require to establish (A) federal
recognition of the Nation as an Indian tribe within the meaning of IGRA, (B) 
the Borrower’s and the Guarantors’ authority to execute, deliver and perform
the Loan Documents, and (C) the identity, authority and capacity of each
Senior Officer authorized to act on the Borrower’s and each Guarantor’s behalf,
including certified copies of the actions of the Borrower’s governing body,
incumbency certificates and the like;


 


(viii)        evidence that all Nation, Borrower and Guarantor actions have been
taken to permit the Borrower’s and each Guarantor’s limited waiver of sovereign
immunity, waiver of rights to tribal court, consent to federal and certain
state courts in the State, and arbitration of disputes, all as provided in this
Agreement and the other Loan Documents;


 


(ix)           certificates signed by the Secretary of the Borrower and each
Guarantor, and by the Clerk of the Nation, attaching true, correct and complete
copies of the applicable Approval and, in the case of the Nation, the
Constitution (including, in each case, any amendments or modifications of the
terms thereof entered into as of the Closing Date);


 


(x)            written confirmation in form and substance
satisfactory to the Lender from an insurance consultant for the Borrower (who
shall be 


 


49

















 


satisfactory
to the Lender) that the insurance requirements of Section 4.3 are
being met;


 


(xi)           evidence that the Lender has all Permits required by Law with respect
to the transactions contemplated in the Loan Documents; and


 


(xii)          such other assurances, certificates, documents, consents or opinions as
the Lender may reasonably require.


 


(b)           Perfection of Security Interests in Collateral.  The Lender shall hold a valid, perfected
first priority security interest in all Collateral (subject to Permitted
Liens).


 


(c)           Fee.  An
up-front fee of $7,500 shall have been paid.


 


(d)           Due Diligence. The Lender shall have completed its review of all business and credit
matters concerning the extension of credit hereunder, and the security
therefor, as the Lender deems appropriate.


 


(e)           Financial Statements. The Lender shall have received the
consolidated Financial Statements described in Section 3.8 hereof,
including the consolidated balance sheet, statements of income and retained
earnings and statement of cash flow of Borrower and the Guarantors.


 


(f)            Miscellaneous. Such other instruments, agreements, certificates, opinions,
statements, documents and information relating to the operations or condition
(financial or otherwise) of the Borrower, and compliance by the Borrower with
the terms of this Agreement and the other Loan Documents as the Lender may
reasonably request.


 


Section 7.2  Conditions
Precedent to each Advance. The obligation of the Lender to make any Advance
(including the initial Advance) is subject to the further conditions that:


 


(a)           The Borrower shall have delivered to the Lender a Funding Request in
compliance with Article II;


 


(b)           On the date such Advance is to be made and after giving effect to such
Advance, the following shall be true and correct:


 


(i)            the representations and warranties of the
Borrower set forth in Article III and in the other Loan Documents
are true and correct in all material respects as if made on such date (except
for representations and warranties expressly made as of a specified date, which
shall be true as of such date);


 


(ii)           no Default has occurred and is continuing and no Event of Default
exists or will result from such Advance; and


 


50

















 


(iii)          all of the Loan Documents are in full force and effect.


 


The
Borrower’s submission to the Lender of a Funding Request shall be deemed to be
a representation and warranty by the Borrower that each of the statements set
forth in this Section 7.2(b) is true and correct as of the
date of such notice.


 


Section 7.3  Conditions
Precedent to the Issuance of each Letter of Credit. The obligation of the
Issuer to issue any Letter of Credit (including the initial Letter of Credit)
is subject to the further conditions that:


 


(a)           The Borrower shall have delivered to the Issuer a Request for Letter of
Credit in compliance with Article II;


 


(b)           On the date such Letter of Credit is to be issued and after giving
effect to such Letter of Credit, the following shall be true and correct:


 


(i)            the representations and warranties of the
Borrower set forth in Article III and in the other Loan Documents
are true and correct in all material respects as if made on such date (except
for representations and warranties expressly made as of a specified date, which
shall be true as of such date);


 


(ii)           no Default has occurred and is continuing and no Event of Default
exists or will result from such Advance; and


 


(iii)          all of the Loan Documents are in full force and effect.


 


The
Borrower’s submission to the Issuer of a Request for Letter of Credit shall be
deemed to be a representation and warranty by the Borrower that each of the
statements set forth in this Section 7.3(b) is true and
correct as of the date of such notice.


 


Section 7.4  Covenant
to Deliver. The Borrower agrees (not as a condition but as a covenant) to
deliver to the Lender each item required to be delivered to the Lender as a
condition to the making of any Advance if such Advance occurs. The Borrower
further agrees that the making of any such Advance prior to the receipt by the
Lender of any such item shall not constitute a waiver by the Lender of the
Borrower’s obligation to deliver such item.


 


ARTICLE VIII


 


EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT


 


Section 8.1  Events
of Default. The existence or occurrence of any one or more of the following
events, whatever the reason therefor and under any circumstances whatsoever,
shall constitute an Event of Default and shall exist from the day it first
exists or occurs until the Lender has acknowledged in writing that it has been
cured or waived:


 


51

















 


(a)           The Borrower fails to pay any principal on any of the Advances, or any
portion thereof, when due; or


 


(b)           The Borrower fails to pay any interest on any Advance, or any of the
fees payable under Article II, or any portion thereof, within three
Business Days after the same becomes due; or


 


(c)           The
Borrower fails to pay the Issuer any amount required by Section 2.6(c),
within three Business Days after the same becomes due; or


 


(d)           The Borrower fails to pay any other amounts payable to the Lender under
any Loan Document, or any portion thereof, within three Business Days after the
same becomes due or, if there is no express due date, then the date three
Business Days after demand; or


 


(e)           Any
failure to comply with Section 6.1(h) that is materially adverse to
the interests of the Lender; or


 


(f)            The Borrower fails to perform or observe any of
the covenants or agreements contained in Article V or VI (other than the
covenant set forth in Section 6.1(h)); or


 


(g)           The Borrower or any Guarantor fails to perform or observe any covenant
or agreement contained in any Loan Document on its part to be performed or
observed (other than the covenants described in Subsection (e) above)
and such failure continues for a period of 30 days or such longer period, not
to exceed 60 additional days, as the Lender may determine is reasonably
necessary to cure such failure or the effects of such failure provided that the
Borrower or such Guarantor continues during such extended period to proceed
diligently with actions designed to cure such failure or the effects of such
failure;


 


(h)           Any representation or warranty made in any Loan Document or in any
certificate delivered pursuant to any Loan Document proves to have been
incorrect in any material respect when made; or


 


(i)            At any time the Borrower or any Guarantor (i) fails
to make any payment of principal or interest on any Indebtedness having
an unpaid principal balance of more than $5,000,000 when due (or within any stated grace period), whether at the stated
maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) 
fails to perform or observe any other term, covenant or agreement on its part
to be performed or observed, or suffers any event to occur, in connection with
any Indebtedness for borrowed money having an unpaid principal amount of
more than $5,000,000 if as a result of
such failure or sufferance (x) any holder or holders thereof (or an agent
or trustee on its or their behalf) has the right to declare such Indebtedness
for borrowed money due, or has the right to cause the Borrower or any Guarantor
to purchase, redeem or otherwise acquire such Indebtedness for borrowed money,
or (y) such Indebtedness for borrowed money automatically becomes due, 


 


52

















 


before
the date on which it otherwise would become due, or such Indebtedness for
borrowed money shall automatically become subject to purchase, redemption or
other acquisition; or


 


(j)            Any Loan Document, at any time after its
execution and delivery and for any reason other than satisfaction in full of
all the Obligations, ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or unenforceable
which, in any such event in the reasonable opinion of the Lender, is materially
adverse to the interests of the Lender; or the Borrower or any Guarantor denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind the same or any provision thereof; or


 


(k)           A judgment or arbitration award against the Borrower or any Guarantor
is entered for the payment of money in excess of $5,000,000 over the amount
thereof that is fully covered by reputable and solvent insurance companies
with the financial ability to pay the same and who have agreed in writing to
cover such claim (other than any such judgment or award in connection with the
eminent domain proceedings conducted by the Empire State Development
Corporation on the Borrower’s behalf, which relate to the property in Niagara
Falls, New York designated for ownership by the Nation in the Compact); or (i) a judgment or arbitration award
against the Borrower or any Guarantor is entered that could result in a
material Lien on any Gaming Assets; or (ii) any non-monetary final
judgment or arbitration award is entered against the Borrower or any Guarantor
which could have a Material Adverse Effect; or (iii) any delay in payment
of any judgment or arbitration award against the Borrower or any Guarantor that
could reasonably be expected to have a Material Adverse Effect and, absent
procurement of a stay of execution, any such judgment (under clause (i), (ii),
or (iii) remains unbonded or unsatisfied for 30 calendar days after the
date of entry of judgment (unless the Borrower has deposited the amount of the
monetary award associated with such judgment or arbitration award into a court
escrow pending determination of an appeal), or in any event later than 30 days
prior to the date of any proposed sale thereunder; or


 


(l)            The Borrower or any Guarantor institutes or
consents to any proceeding under a Debtor Relief Law relating to it or to all
or any material part of its Property, or is unable or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its Property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of the Borrower or a
Guarantor and the appointment continues undischarged or unstayed for sixty
calendar days; or any proceeding under a Debtor Relief Law relating to the
Borrower or any Guarantor or to all or any material part of the Gaming Assets
is instituted without the Borrower’s or such Guarantor’s consent and continues
undismissed or unstayed for sixty calendar days; or any judgment, writ, warrant
of attachment or execution or similar process is 


 


53

















 


issued
or levied against all or any material part of the Gaming Assets and is not
released, vacated or fully bonded within sixty calendar days after its issue or
levy; or


 


(m)          The Nation at any time ceases to be a federally recognized Indian
tribe; or


 


(n)           The
Borrower at any time ceases to be wholly owned by the Nation; or


 


(o)           The occurrence of a Termination Event with respect to any Pension Plan
related to the Gaming Business if the aggregate liability of the Borrower and
its ERISA Affiliates under ERISA as a result thereof exceeds $2,500,000; or the
complete or partial withdrawal by the Borrower or any of its ERISA Affiliates
from any Multiemployer Plan if the aggregate liability of the Borrower and its
ERISA Affiliates as a result thereof exceeds $2,500,000; or


 


(p)           The occurrence of an Event of Default (as such term is or may hereafter
be specifically defined in any other Loan Document) under any other Loan
Document (subject to any cure periods therefor provided in such other Loan
Document); or


 


(q)           The occurrence of any event or circumstance which results in the
failure of the Borrower and the Guarantors to operate any material portion (for
the avoidance of doubt, the Buffalo Creek temporary facility does not represent
a material portion of the Gaming Business) of the Gaming Business as it exists
on the date hereof for any reason for more than twenty consecutive days,
excluding, however, any such failure which arises primarily as a
result of a force majeure event if business interruption insurance provides
coverage for the Borrower’s or Guarantor’s lost income until the Borrower or
Guarantor is operating such Gaming Business again; or


 


(r)            The loss of any of the Borrower’s or any
Guarantor’s operating licenses or the prohibition of the Borrower or a
Guarantor to conduct Class III Gaming activities for a period in excess of
twenty consecutive days; or


 


(s)           The Borrower or any Guarantor shall amend, modify, or waive any term or
provision of any Material Document to which it is a party or consent to any
departure therefrom or agree to amend, modify, or waive any term or provision
of any Material Document to which it is a party or agree to consent to any
departure therefrom, or waive any rights thereunder in any respect which, as to
each of the foregoing, could reasonably be expected to be materially adverse to
the interests of the Lender, or consent to any amendment, modification, or
waiver of any term or provision of any Material Document to which it is a party
in any manner without thirty days’ prior written notice to the Lender; or


 


(t)            The Nation shall enact any bankruptcy or
similar law for the relief of debtors that would materially adversely affect
any of the rights and remedies of the Lender provided for in the Loan
Documents; or the Nation shall permit any of its representatives, political sub-units,
agencies, instrumentalities or Council to exercise any power of eminent domain
over the Facilities; or the Nation shall enact any statute, 


 


54

















 


law,
ordinance or rule that could reasonably be expected to have a Material
Adverse Effect and, as to each of the foregoing actions by the Nation, such
action shall remain unremedied for 15 consecutive days; or


 


(u)           The actual revocation, replacement, or change to any Gaming Law which
is materially adverse to the Borrower or the Lender; or


 


(v)           Any Change in Control occurs; or


 


(w)          Any vote is scheduled under the Constitution or any law of the Nation
for an initiative or referendum relating to any Loan Document, any Material
Document or any material transaction contemplated by any Loan Document or any
Material Document, the outcome of which could reasonably be expected to have a
Material Adverse Effect; and such scheduled vote shall remain so scheduled for
15 consecutive days or shall be taken and the matter formally approved by the
requisite vote, whichever occurs first.


 


Section 8.2  Remedies
Upon Event of Default. Without limiting any other rights or remedies of the
Lender provided for elsewhere in this Agreement (including, but not limited to
the right to submit claims or disputes to binding arbitration, if applicable,
as set forth in Section 9.3, or the other Loan Documents, or by
applicable Law, or in equity, or otherwise, but subject in each case to Section 10.20:


 


(a)           Events of Default Other than Debtor Relief. While any Event of Default exists other than
an Event of Default described in Section 8.1(k), the Lender may(i) terminate the Revolving
Commitment and/or (ii) declare all or any part of the Obligations to be
forthwith due and payable, whereupon the same shall become and be forthwith due
and payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by the Borrower.


 


(b)           Event of Default – Debtor Relief. Upon the occurrence of any Event of Default
described in Section 8.1(k):


 


(i)            the Revolving Commitment, and all other
obligations of the Lender and all rights of the Borrower under the Loan
Documents shall terminate without notice to or demand upon the Borrower, which
are expressly waived by the Borrower; and


 


(ii)           all Obligations shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind, all of
which are expressly waived by the Borrower.


 


(c)           Enforcement of Loan Documents. While an Event of Default exists, the Lender,
without notice to or demand upon the Borrower, which are expressly waived by
the Borrower, may proceed in accordance with applicable Laws to protect,
exercise and enforce the rights and remedies of the Lender under the Loan
Documents 


 


55

















 


against
the Borrower and such other rights and remedies as are provided by Law or
equity.


 


(d)           Application of Payments. The order and manner in which the Lender’s
rights and remedies are to be exercised shall be determined by the Lender in
its sole discretion, and all payments received in respect of the Obligations or
the Guarantor Obligations by the Lender while any Default or Event of Default
exists shall be applied in the following order (except as the Security
Agreement shall otherwise indicate):


 


(i)            First, to the Lender in an amount sufficient to pay in full the costs and
expenses of the Lender including, without limitation, attorneys’ fees and
costs;


 


(ii)           Second, to the Lender in an amount equal to accrued interest then due and
payable under this Agreement and the other Loan Documents;


 


(iii)          Third, to the Lender in an amount equal to the outstanding principal balance
of the Advances;


 


(iv)          Fourth, to the Lender in an amount equal to any other Obligations which are
then unpaid; and


 


(v)           Finally, upon payment in full of all of the Obligations, to the Borrower or
the Borrower’s representatives or as a court of competent jurisdiction may
direct.


 


(e)           Payments Do Not Cure Event of Default. No application of payments will cure any
Event of Default, or prevent acceleration, or continued acceleration, of
amounts payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Lender hereunder or thereunder or at law
or in equity.


 


ARTICLE IX


 


GOVERNING LAW;
ARBITRATION; LIMITED WAIVER OF SOVEREIGN IMMUNITY; JURISDICTION


 


Section 9.1  Governing
Law.  This Agreement shall be
governed by and construed in accordance with the substantive law of the State
of New York.


 


Section 9.2  Limited Waiver of Sovereign Immunity.


 


(a)           Retention
of Sovereign Immunity.  By
executing this Agreement the Borrower does not waive, limit or modify its
sovereign immunity from unconsented suit or judicial litigation, except as
provided herein.


 


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(b)           Waiver
of Sovereign Immunity/Scope of Waiver.  The
Borrower hereby grants to the Lender and its permitted successors and assigns
(each, a “Grantee”) an irrevocable limited waiver of sovereign immunity
from unconsented suit and consents to suit in accordance with, and subject to
the terms of, this Agreement solely and exclusively to:


 


(i)              interpret or enforce
the terms of this Agreement or the Note;


 


(ii)             compel arbitration
under the commercial arbitration rules of the American Arbitration
Association;


 


(iii)            enforce an arbitrator’s
decision with respect to arbitration under the commercial arbitration rules of
the American Arbitration Association;


 


(iv)            order amounts payable
under this Agreement and the Note to be paid in accordance with the terms of
this Agreement and the Note and, subject to the express limitation in Section 10.24
hereof, enforce the award of damages owing as a consequence of a breach of this
Agreement or the Note, whether such order or award is the product of litigation
or arbitration;


 


(v)             subject to the
limitations in this Agreement (including those set forth in Section 9.2(b)(iv) above),
order the exercise of any other remedy available generally in the State of New
York for judgment creditors;


 


(vi)            determine whether any
consent or approval of the Borrower has been improperly granted or unreasonably
withheld; and


 


(vii)           enforce any judgment or
arbitration decision prohibiting the Borrower from taking any action, or
mandating or obligating the Borrower to take any action.


 


(c)           Procedural
Requirements.  The limited
waiver by the Borrower of its sovereign immunity as to unconsented suit set
forth in this Section 9.2 is effective if, and only if, each and every one
of the following conditions is met:


 


(i)              the claim is made by
a Grantee;


 


(ii)             the claim alleges a
breach by the Borrower under this Agreement or the Note;


 


(iii)            the claim seeks (A) payment
of a specified sum, some specific action, or discontinuance of some action by
the Borrower to bring the Borrower into full compliance with the duties and
obligations expressly assumed by the Borrower under this Agreement or the Note;
or (B) money damages for noncompliance with the terms and provisions of
this Agreement or the Note.


 


(iv)            the claim is made in a
detailed written statement to the Borrower stating the specific action or
discontinuance of action by the Borrower that would cure the alleged breach or
non-performance, or the sum of money claimed to be due 


 


57

















 


and owing to the Grantee
by reason of such specific breach or non-performance, and the Borrower shall
have seven calendar days to cure or cause the cure of such breach or
non-performance or to make such payment before judicial proceedings may be
instituted; provided, however, that this cure period may be reasonably extended
in the sole discretion of the Grantee for non-monetary matters as long as the
Borrower is making good faith efforts to cure such breach or non-performance);
and


 


(v)             with respect to any
claim authorized herein, initial suit as authorized herein, shall be commenced
within the later of three years after the claim accrues or is discovered upon
the exercise of due diligence, or such claim shall be forever barred.


 


The waiver granted herein
shall commence on the date hereof and shall continue for three years following
the date all Obligations have been paid in full and the Revolving Commitment
shall be terminated, except that the waiver shall remain effective for any
proceedings then pending and all appeals therefrom.


 


(d)           Recipient
of Waiver.  The recipients
of the benefit of this irrevocable waiver of sovereign immunity are limited to
the Grantees.


 


(e)           Enforcement.  The Borrower irrevocably waives its sovereign
immunity from a judgment or order consistent with the terms and provisions of
this Agreement, which is final because either the time for appeal thereof has
expired or the judgment or order is issued by a court having final appellate
jurisdiction over the matter.  The Borrower
consents solely to the jurisdiction of, to be sued in and accepts and agrees to
be bound by any order or judgment of any United States District Court for New
York or the New York State Supreme Court in and for New York County, New York,
and any federal or state court having appellate jurisdiction thereover,
consistent with the terms and provisions of this Agreement.  The Borrower irrevocably waives its sovereign
immunity as to an action by a Grantee solely in any United States District
Court for New York or the New York State Supreme Court in and for New York
County, New York, and any federal or state court having appellate jurisdiction
thereover, seeking injunctive and/or declaratory relief against the Borrower
based upon any attempt to revoke its irrevocable waiver of its sovereign immunity
under this Agreement, and as to enforcement in said United States District
Court or New York State Supreme Court in and for New York County, New York of
any such final judgment against the Borrower. 
Without in any way limiting the generality of the foregoing, the
Borrower expressly authorizes any governmental authorities who have the right
and duty under applicable law to take any action authorized or ordered by any
such court, to take such action to give effect to any judgment entered or order
granted in accordance with the terms of this Agreement.


 


(f)            Waivers.  The Borrower hereby expressly and irrevocably
waives:


 


(i)              its rights to assert
or demand that any dispute, controversy, suit, action or proceeding arising
under this Agreement be heard in any forum other than as set 


 


58

















 


forth in Section 9.2(e) hereof
whether or not such forum now exists or is hereafter created;


 


(ii)             its right to assert
any requirement that any remedies available in any court or other tribunal,
forum, council or adjudicative body of the Nation (a “Nation Forum”)
must be exhausted prior to the commencement of any dispute, controversy, suit,
action or proceeding in any court set forth in Section 9.2(e) hereof
even if any such Nation Forum would have concurrent jurisdiction over any such
dispute, controversy, suit, action or proceeding but for such waiver;


 


(iii)            its sovereign immunity
as to the action of a Grantee in any United States District Court for New York
or the New York State Supreme Court in and for New York County, New York, and
any federal or state court having appellate jurisdiction thereover seeking
injunctive and/or declaratory relief against the Borrower based upon an attempt
by it to revoke its irrevocable waiver of its sovereign immunity or other
waivers granted hereunder; and


 


(iv)            its sovereign immunity
from a judgment or order (including any appellate judgment or other order) and
post-judgment proceedings supplemental thereto consistent with the terms and
provisions hereof, which is final because either the time for appeal thereof
has expired or the judgment or an order is issued by the court having final
jurisdiction over the matter.


 


(g)           No
Revocation of Sovereign Immunity Waiver.  The Borrower agrees not to revoke or limit,
in whole or in part, its limited waiver of sovereign immunity contained in this
Section 9.2 or in any way to attempt to revoke or limit, in whole or in
part, such limited waiver of sovereign immunity.  In the event of any attempted revocation or
limitation, the parties hereto expressly recognize and agree that there would
remain no adequate remedy at law available to a Grantee, a Grantee would be
irreparably injured upon any such revocation or limitation, and the Borrower
hereby consents to the entry of appropriate injunctive relief consistent with
the terms and conditions of this Agreement. 
In the event of any attempted limitation or revocation of the limited
waiver of sovereign immunity granted herein, a Grantee may immediately seek
judicial injunctive relief as provided in this Section 9.2 without first
complying with any of the prerequisites contained herein to the limited waiver
of sovereign immunity granted herein; provided that any action seeking
injunctive relief hereunder shall be brought solely in one of the United States
District Courts for New York or the New York State Supreme Court in and for New
York County, New York, and the Borrower expressly consents to the jurisdiction
of, and agrees to be bound by, any order or judgment of such District Courts or
state court, and any federal or state court with appellate jurisdiction
thereover.


 


Section 9.3  Dispute Resolution.


 


(a)           Arbitration.  If, and only if, a dispute arises between the
parties over a matter for which the Borrower has provided a limited waiver of
sovereign immunity under this Agreement (the “Dispute”), and neither the
United States District Courts for New York 


 


59

















 


nor the New York State
Supreme Court in and for New York County, New York, can or is willing to hear
the Dispute, then either party hereto may request binding arbitration of such
Dispute in accordance with the procedures set forth herein.  To initiate binding arbitration of such
Dispute, a party shall notify the other party hereto in writing.  The Dispute shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, provided that judgment on the award rendered
by the arbitrator may be entered solely in the United States District Courts
for New York or the New York State Supreme Court in and for New York County,
New York.  One arbitrator shall preside
and shall be selected by the American Arbitration Association.


 


(b)           Restraining
Order/Preliminary Injunction. 
Either party, before or during any arbitration, may apply to a court
having jurisdiction as provided under Section 9.2(e) for a temporary
restraining order or preliminary injunction where such relief is necessary to
protect its interests pending completion of the dispute resolution proceedings.


 


(c)           Confidentiality.  Neither party nor the arbitrator may disclose
the existence or results of any arbitration hereunder, which shall be
considered confidential to the parties hereto, except:


 


(i)            with the express prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld or delayed;


 


(ii)           as required by
applicable law or the rules of any relevant stock exchange, by order or
decree of a court or other governmental authority having jurisdiction over such
party, or in connection with such party’s enforcement of any rights it may have
at law or in equity;


 


(iii)          on a “need to know”
basis to persons within or outside such party’s organization, such as
attorneys, accountants, bankers, financial advisors and other consultants; or


 


(iv)          after such information
has become publicly available without breach of this Agreement.


 


(d)           Fees and
Costs.  In the event of
arbitration, the prevailing party shall be entitled to all of its costs,
including reasonable attorneys’ fees and costs and expenses, from the
nonprevailing party.


 


(e)           Location of
Arbitration.  The arbitration
shall take place at a location in an agreed city in the State of New York or
such other place as the parties may jointly agree.  The arbitrator shall render an award within
45 days from the conclusion of the arbitration.


 


(f)            Enforcement
of Arbitration Decisions.  The
decision of the arbitrator will be final and binding and enforced with the same
force and effect as a decree of a court having competent jurisdiction as
provided under Section 9.2(e) hereof. 
For this purpose, should the losing party in any arbitration proceeding
pursuant to this Section 9.3 refuse to abide by the decision of the
arbitrator, the prevailing party may apply solely to any United 


 


60

















 


States District Court for
New York or the New York State Supreme Court in and for New York County, New
York to compel enforcement of the arbitrator’s award resulting from binding
arbitration.  In the sole event that
neither the United States District Courts of New York nor the New York State
Supreme Court in and for New York County, New York, takes jurisdiction over
such enforcement action, the prevailing party may apply to the courts of the
Nation for the enforcement of such action. 
Each party hereto consents to the jurisdiction of each such court for
this purpose.  The Borrower hereby expressly
and irrevocably waives its sovereign immunity with respect to the entry of
judgment on, and enforcement of, such award by such courts.


 


(g)           Designation
of Service Recipients.  In any
action or proceeding as to which the Borrower has waived its sovereign immunity
as set forth in Section 9.2 hereof, the Borrower consents and agrees that
process against it shall be effective if served on the President and CEO of the
Borrower; or by sending two copies of the process by registered or certified
mail to the President and CEO of the Borrower at the address set forth on the
signature page hereof.


 


Courtesy copies of any
such process shall also be provided to the Nation’s Department of Justice and
the Borrower’s Office of General Counsel at the addresses set forth on the
signature page hereof; provided, however, that the failure to provide such courtesy copies
shall not affect the validity of any process served on the Borrower.


 


(h)           Appointment
Irrevocable.  The Borrower
irrevocably appoints the person in the foregoing clauses and his successors in
said office from time to time, as agent for service of process made in
accordance herewith.


 


Section  9.4  Waiver  of  Jury  Trial.  THE  BORROWER  HEREBY  EXPRESSLY  AND  IRREVOCABLY  WAIVES  ANY  RIGHT  TO  TRIAL  BY  JURY  OF  ANY  CLAIM;  AND  HEREBY  AGREES  AND  CONSENTS  THAT  ANY  CLAIM  WILL  BE  DECIDED  BY  COURT  TRIAL  WITHOUT  A  JURY  (UNLESS  SUBJECT  TO  ARBITRATION  AS  PROVIDED  IN  THIS  AGREEMENT),  AND  THAT  EITHER  PARTY  MAY  FILE  AN  ORIGINAL  COUNTERPART  OR  A  COPY  OF  THIS  SECTION  WITH  ANY  COURT  AS  WRITTEN  EVIDENCE  OF  THE  CONSENT  OF  THE  SIGNATORIES  HERETO  TO  THE  WAIVER  OF  THEIR  RIGHT  TO  TRIAL  BY  JURY.


 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1  Cumulative
Remedies; No Waiver. The rights, powers, privileges and remedies of the
Lender provided herein and in the other Loan Documents are cumulative and not
exclusive of any right, power, privilege or remedy provided by Law or
equity.  No failure or delay on the part
of the Lender in exercising any right, power, privilege or remedy may be, or
may be deemed to be, a waiver thereof; nor may any single or partial exercise
of any right, power, privilege or remedy preclude any other or further exercise
of the same or any other right, power, privilege or remedy.  The terms and conditions of Article VII
are 


 


61

















 


inserted for the sole benefit
of the Lender and the Issuer and may be waived in whole or in part, with or
without terms or conditions, in respect of any Advance without prejudicing the
Lender’s right to assert them in whole or in part in respect of any other
Advance.


 


Section 10.2  Amendments;
Consents. Any term, covenant, agreement or condition of this Agreement or
any other Loan Document may be amended or waived, and any consent under this
Agreement or any other Loan Document may be given, if such amendment, waiver or
consent is in writing and is signed by the Borrower and the Lender.


 


Section 10.3  No
Waiver. No failure or delay by the Lender in exercising any right under
this Agreement or any other Loan Document shall operate as a waiver thereof or
of any other right hereunder or thereunder nor shall any single or partial
exercise of any such right preclude any other further exercise thereof or of
any other right hereunder or thereunder. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.


 


Section 10.4  Costs,
Expenses and Taxes. The Borrower shall pay on demand the reasonable costs
and expenses of (a) the Lender in connection with the negotiation,
preparation, closing, execution and delivery of the Loan Documents, including
reasonable attorneys’ fees and disbursements, provided, however, that Lender
agrees to use its best efforts to limit such costs and expenses to no more than
$25,000 in the aggregate, and shall provide reasonable advance notice to
Borrower in the event Lender anticipates seeking repayment from Borrower for
costs and expenses in excess of $25,000 in the aggregate, for the purpose of
engaging in good faith discussions with Borrower to minimize such excess costs;
(b) the Lender in connection with each amendment, waiver or consent in
connection with any of the Loan Documents, and (c) the Lender in
connection with each refinancing, restructuring, reorganization (including a
bankruptcy reorganization) and enforcement or attempted enforcement of the Loan
Documents, and any matter related thereto, in each case including, filing fees,
recording fees, appraisal fees, search fees and other out-of-pocket expenses
and the reasonable fees and out-of-pocket expenses of any legal counsel,
independent public accountants and other outside experts retained by the
Lender, and including any costs, expenses or fees incurred or suffered by the
Lender in connection with or during the course of any bankruptcy or insolvency
proceedings of the Borrower. Any amount payable to the Lender under this Section shall
bear interest at a per annum rate
equal to the Default Rate.


 


Section 10.5  Survival
of Representations and Warranties. All representations and warranties
contained herein or in any other Loan Document, or in any certificate or other
writing delivered by or on behalf of any one or more of the parties to any Loan
Document, will survive the making of the Advances hereunder and the execution
and delivery of the Loan Documents, and have been or will be relied upon by the
Lender, notwithstanding any investigation made by the Lender or on their
behalf.


 


Section 10.6  Notices.
Except as otherwise expressly provided in the Loan Documents (a) all
notices, requests, demands, directions and other communications provided 


 


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for hereunder or under any
other Loan Document must be in writing and must be mailed, telegraphed,
telecopied, delivered or sent by recognized overnight courier service, to the
appropriate party at the address set forth on the signature pages of this
Agreement or other applicable Loan Document or, as to any party to any Loan
Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Loan Document in accordance with this
Section; and (b) any notice, request, demand, direction or other
communication given by telecopier or facsimile, must be confirmed within 48
hours by letter mailed or delivered to the appropriate party at its respective
address.  Except as otherwise expressly
provided in any Loan Document, if any notice, request, demand, direction or
other communication required or permitted by any Loan Document is given by mail
it will be effective on the earlier of receipt or the third Business Day after
deposit in the United States mail with first class or airmail postage prepaid;
if given by telegraph or cable, when delivered to the telegraph company with
charges prepaid; if given by telex or telecopier or facsimile, when sent; or if
given by personal delivery, when delivered. 
Notices given by the Borrower to the Lender under Article II
shall be deemed given on actual receipt.


 


Section 10.7  Execution
of Loan Documents. Unless the Lender otherwise specifies with respect to
any Loan Document, this Agreement and any other Loan Document may be executed
in any number of counterparts and any party hereto or thereto may execute any
counterpart, each of which when executed and delivered will be deemed to be an
original and all of which counterparts of this Agreement or any other Loan
Document, as the case may be, when taken together will be deemed to be but one
and the same instrument. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.


 


Section 10.8  Binding Effect; Assignments and
Participations.


 


(a)           Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any other attempted
assignment or transfer by the Borrower without such consent shall be null and
void).


 


(b)           Assignments by Lender. Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including such portion of the Revolving Commitment and the Advances at the
time owing to it); provided that:


 


(i)            with respect to each assignment, the sum of the
Revolving Commitment and the outstanding principal balance of the Advances
being assigned determined as of the date the assignment shall not be less than
$5,000,000, unless:


 


(A)          the
Assigned Amount constitutes the Lender’s entire remaining Revolving Commitment
and all Advances then owing to it;


 


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(B)           the
assignment is to an Affiliate of the Lender; or


 


(C)           the
Lender and, so long as no Event of Default exists, the Borrower, each otherwise
consent;


 


(ii)           each partial assignment shall be made as an assignment of a
proportionate part of all the Lender’s rights and obligations under this
Agreement with respect to the Advances and the Revolving Commitment assigned,
except that this clause (ii) shall not prohibit the Lender from
assigning all or a portion of its rights and obligations among Base Rate
Fundings and LIBOR Rate Fundings on a non-pro rata basis; and


 


(iii)          the parties to each assignment shall execute and deliver to the Lender
an assignment agreement in form and substance satisfactory to the Lender and
the assignee.


 


(c)           Effect of Assignment by Lender. From and after the effective date of each
assignment, the Eligible Assignee thereunder shall, to the extent of the
interest assigned, have the rights and obligations of the Lender under this
Agreement, and the Lender shall, to the extent of the interest assigned, be
released from its obligations under this Agreement. Any assignment or transfer
by the Lender of rights or obligations under this Agreement that does not
comply with Subsection (b) shall be treated for purposes of this
Agreement as a sale by the Lender of a participation in such rights and
obligations in accordance with Subsection (d).


 


(d)           Participations. The Lender may, without the consent of, or
notice to, the Borrower, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of the Lender’s rights
and obligations under this Agreement (including such portion of the Revolving
Commitment and the Advances owing to it); provided that (i) the
Lender’s obligations under this Agreement shall remain unchanged, (ii) the
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower shall continue to
deal solely and directly with the Lender in connection with the Lender’s rights
and obligations under this Agreement. Any agreement or instrument pursuant to
which the Lender sells such a participation shall provide that the Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that the Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
which would (A) extend the Maturity Date, or any other date upon which any
payment of money is due to the Lender, (B) reduce the rate of interest on
the Advances, any fee or any other monetary amount payable to the Lender, (C) reduce
the amount of any installment of principal due with respect to the Advances, or
(D) release any material portion of any collateral. Subject to Subsection
(e), the Borrower agrees that each Participant shall be entitled to the
benefits of Sections  2.8, and 2.9 to the same extent as if
it had acquired its interest by assignment pursuant to Subsection (b).  To the extent permitted by law, 


 


64
















 


each Participant also shall be
entitled to the benefits of Section 10.9 as though it were the
Lender.


 


(e)           Limitation on Participants’ Benefits.
A Participant shall not be entitled to receive any greater payment under Section 2.8
than the Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.


 


Section 10.9  Lien
on Deposits and Property in Possession of the Lender. Borrower  acknowledges that, pursuant to applicable
Law, Lender to the extent holding deposits of Borrower, may have a banker’s
lien or offset rights in respect of such deposits and it is agreed that such
lien and rights shall benefit the Lender. 
If an Event of Default exists, the Lender may, to the extent permitted
by applicable Laws, exercise any rights granted by applicable Laws with respect
to such lien and offset rights and apply any funds and any other Property of
the Borrower obtained in connection with the exercise of such rights against
the Obligations.


 


Section 10.10  Indemnity
by the Borrower. The Borrower agrees to indemnify, save and hold harmless
the Lender, the Issuer and their respective Affiliates, directors, officers,
agents, attorneys and employees (collectively the “Indemnitees”) from and
against: (a) any and all claims, demands, actions or causes of action that
are asserted against any Indemnitee by any third party, if the claim, demand,
action or cause of action directly or indirectly relates to a claim, demand,
action or cause of action that such Person asserts or may assert against the
Borrower (or, to the extent related to the Loan Documents or the transactions
contemplated thereby, any Affiliate of the Borrower or any officer of the
Borrower); (b) any and all claims, demands, actions or causes of action by
a third party if the claim, demand, action or cause of action arises out of or
relates to the Revolving Commitment, the Collateral, the use or contemplated
use of proceeds of any Advance, the relationship of the Borrower and the Lender
under this Agreement or any transaction contemplated by the Loan Documents; (c) any
administrative or investigative proceeding by any Governmental Authority
arising out of or related to a claim, demand, action or cause of action
described in clauses (a) or (b) above; and (d) any and all
liabilities, losses, costs (including settlement costs) or expenses (including
reasonable attorneys’ fees and disbursements and other professional services) that
any Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided, that no Indemnitee shall be
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct.  If any claim,
demand, action or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify the Borrower, but the failure so to promptly
notify the Borrower shall not affect the Borrower’s obligations under this Section unless
the Borrower is materially prejudiced thereby (and then only to the extent
prejudiced).  Each Indemnitee may contest
the validity, applicability and amount of such claim, demand, action or cause
of action with counsel selected by such Indemnitee.  Each Indemnitee is authorized to employ
counsel in enforcing its rights hereunder and in defending any claim, demand,
action or cause of action covered by this Section; provided, that each
Indemnitee shall endeavor in connection with any matter covered by this Section


 


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which also involves other Indemnitees, to use
reasonable efforts to avoid unnecessary duplication of effort by counsel for
all Indemnitees.  Any obligation or
liability of the Borrower to any Indemnitee under this Section shall
survive the expiration or termination of this Agreement and the repayment of
all Advances and the payment and performance of all other Obligations (other
than the obligations referenced in Sections 2.8(c) and 2.8(d)) owed to the
Lender; provided, however, that such obligations and liabilities shall not,
from and after the date on which the Obligations are fully paid and the
Revolving Commitment terminated, be deemed Obligations for any purpose under
the Loan Documents.


 


Section 10.11  No
Liability of Lender. The Borrower acknowledges and agrees that:


 


(a)           any
inspections of any Property of the Borrower made by or through the Lender are
for purposes of administration of the Loan Documents only and the Borrower is
not entitled to rely upon the same;


 


(b)           by
accepting or approving anything required to be observed, performed, fulfilled
or given to the Lender pursuant to the Loan Documents, the Lender shall not be
deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not constitute
a warranty or representation to anyone with respect thereto by the Lender;


 


(c)           the
relationship between the Borrower and the Lender is, and shall at all times
remain, solely that of a borrower and lender; the Lender shall not under any
circumstance be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with the Borrower or its Affiliates, or to owe any
fiduciary duty to the Borrower or its Affiliates; the Lender does not undertake
or assume any responsibility or duty to the Borrower or its Affiliates to
select, review, inspect, supervise, pass judgment upon or inform the Borrower
or its Affiliates of any matter in connection with their Property or the
operations of the Borrower or its Affiliates; the Borrower and its Affiliates
shall rely entirely upon their own judgment with respect to such matters; and
any review, inspection, supervision, exercise of judgment or supply of
information undertaken or assumed by the Lender in connection with such matters
is solely for the protection of the Lender and neither the Borrower nor any
other Person is entitled to rely thereon; and


 


(d)           the
Lender shall not be responsible or liable to any Person for any loss, damage,
liability or claim of any kind relating to injury or death to Persons or damage
to Property or other loss, damage, liability or claim caused by the actions,
inaction or negligence of the Borrower and its Affiliates and the Borrower
hereby indemnifies and holds the Lender harmless from any such loss, damage,
liability or claim.


 


Section 10.12  No
Third Parties Benefited. This Agreement is made for the purpose of defining
and setting forth certain obligations, rights and duties of the Borrower and
the Lender in connection with the Advances, and is made for the sole benefit of
the


 


66

















 


Borrower, the Lender, and any of their successors and
assigns.  Except as provided in Sections
10.10 and 10.14, no other Person shall have any rights of any nature hereunder
or by reason hereof.


 


Section 10.13  Confidentiality.
The Lender agrees to hold any confidential information that it may receive from
the Borrower or any Guarantor pursuant to this Agreement in confidence, except
for disclosure (a) to its own officers, directors, and employees; (b) to
legal counsel, accountants and other professional advisors to the Borrower, any
Guarantor or the Lender; (c) to regulatory officials having jurisdiction
over the Lender; (d) as required by Law or legal process or in connection
with any legal proceeding to which the Lender, on the one hand, and the
Borrower or any Guarantor, on the other, are adverse parties; (e) to
another financial institution in connection with a disposition or proposed
disposition to that financial institution of all or part of the Lender’s
interests hereunder or a participation interest; (f) to prospective
purchasers of any Collateral in connection with any disposition thereof; or (g) if
an Event of Default exists, to the extent that the Lender determines such
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under the Loan Documents. For purposes of
the foregoing, “confidential information” means (x) all historic or
projected financial data relating to the Gaming Business, the Borrower, the
Nation or any Guarantor and (y) all information concerning the Borrower,
the Nation or any Guarantor delivered to the Lender marked “Confidential” or in
another conspicuous manner which denotes its confidentiality, other than (i) information
previously filed with any Governmental Authority and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, the Lender, and (iii) information previously disclosed by the
Borrower or the Nation or a Guarantor to any Person not associated with the
Borrower or the Nation or a Guarantor without a written confidentiality
agreement.  Nothing in this Section shall
be construed to create or give rise to any fiduciary duty on the part of the
Lender to the Borrower or any Guarantor.


 


Section 10.14  Hazardous
Substances Indemnity. The Borrower hereby agrees to indemnify, hold
harmless and defend (by counsel reasonably satisfactory to the Lender) the
Lender and its directors, officers, employees, agents, successors and assigns
from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including, but not
limited to, reasonable attorneys’ fees and expenses), arising directly or
indirectly, in whole or in part, out of (i) the presence on or under the
Gaming Business Real Estate of any Hazardous Substances, or any releases or
discharges of any Hazardous Substances on, under or from the Gaming Business
Real Estate and (ii) any activity carried on or undertaken on or off the
Gaming Business Real Estate by the Borrower, any Guarantor or any of their
predecessors in title, whether prior to or during the term of this Agreement,
and whether by the Borrower, a Guarantor or any predecessor in title or any
employees, agents, contractors or subcontractors of the Borrower, a Guarantor
or any predecessor in title, or any third persons at any time occupying or
present on the Gaming Business Real Estate, in connection with the handling,
treatment, removal, storage, decontamination, cleanup, transport or disposal of
any Hazardous Substances at any time located or present on or under


 


67

















 


the Gaming Business Real Estate.  The foregoing indemnity shall further apply
to any residual contamination on or under the Gaming Business Real Estate, or
affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the generation, use, handling,
storage, transport or disposal of any such Hazardous Substances, and
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable Laws, but the foregoing indemnity shall not apply to
(i) Hazardous Substances on the Gaming Business Real Estate, the presence
of which is caused by the Lender or (ii) activities carried on or
undertaken by the Lender, in each case subsequent to its entry into the Gaming
Business Real Estate (but only to the extent that the same are not attributable
to the Borrower or any Guarantor).


 


Section 10.15  Further
Assurances. The Borrower shall, and shall cause each Guarantor to, execute
and deliver such further acts and documents as the Lender may reasonably
request, and to assume and confirm unto Lender the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Document:


 


Section 10.16  Integration.
This Agreement, together with the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof
(including any term sheets or commitment letters). In the event of any conflict
between the provisions of this Agreement and those of any other Loan Document,
the provisions of this Agreement shall control and govern; provided, that the
inclusion of supplemental rights or remedies in favor of the Lender in any
other Loan Document shall not be deemed a conflict with this Agreement.


 


Section  10.17  Severability  of  Provisions.  Any  provision  in  any  Loan  Document  to  which  Borrower  is  a  party  that  is  held  to  be  inoperative,  unenforceable  or  invalid  as  to  any  party  or  in  any  jurisdiction  shall,  as  to  that  party  or  jurisdiction,  be  inoperative,  unenforceable  or  invalid  without  affecting  the  remaining  provisions  or  the  operation,  enforceability  or  validity  of  that  provision  as  to  any  other  party  or  in  any  other  jurisdiction,  and  to  this  end  the  provisions  of  all  Loan  Documents  to  which  Borrower  is  a  party  are  declared  to  be  severable.


 


Section 10.18  Time
of the Essence. Time is of the essence of the Loan Documents.


 


Section 10.19  PURPORTED
ORAL AMENDMENTS. THE BORROWER AND THE
LENDER EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY
BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 10.2.  THE BORROWER AGREES THAT IT WILL NOT RELY ON
ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY
ANY REPRESENTATIVE OF THE LENDER THAT DOES NOT COMPLY WITH SECTION 10.2
TO EFFECT AN AMENDMENT, MODIFICATION,


 


68

















 


WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.


 


Section  10.20  LIMITATIONS.  NOTWITHSTANDING  ANY  OTHER  POSSIBLE  CONSTRUCTION  OF  ANY  PROVISION  HEREIN,  THE  LENDER  ACKNOWLEDGES  AND  AGREES  THAT  THE  LOAN  DOCUMENTS  DO  NOT  CREATE  (A)  ANY  RIGHTS  ON  THE  PART  OF  THE  LENDER  OR  ANY  INDEMNITEE  TO  MANAGE  THE  GAMING  BUSINESS,  OR  (B)  ANY  RIGHTS  ON  THE  PART  OF  THE  LENDER  OR  ANY  INDEMNITEE  TO  INTERFERE  WITH  THE  BORROWER’S  RIGHT  TO  DETERMINE  STANDARDS  OF  OPERATION  AND  EFFICIENT  MANAGEMENT  OF  THE  GAMING  BUSINESS  (INCLUDING,  BUT  NOT  LIMITED  TO,  OPERATING  BUDGETING  MATTERS  (TO  THE  EXTENT  CONSISTENT  WITH  THE  TERMS  OF  THIS  AGREEMENT)).  THE  LIENS  OF  THE  LENDER  ARE  LIMITED  TO  THE  COLLATERAL  SPECIFICALLY  REFERRED  TO  IN  THE  SECURITY  DOCUMENTS  DESCRIBED  HEREIN.


 


Section 10.21  25
U.S.C. § 81. Nothing herein is intended, nor shall it be deemed, to
create or convey any interest whatsoever in the Indian lands of the Nation or
its Affiliates.  This Agreement
accordingly shall not be construed to be subject to the requirements of 25
U.S.C. § 81.


 


Section 10.22  Usury
Laws; Governmental Approvals.


 


(a)           The
Borrower agrees (i) that the only usury laws that shall apply to any of
the transactions between the Borrower and the Lender contemplated by the Loan
Documents shall be the laws of the State, and (ii) that it will not assert
that its obligations to the Lender under the Loan Documents violate any law of
the Nation.


 


(b)           The
Borrower agrees not to assert in any suit, action or proceeding that any of the
Loan Documents is void, voidable, or otherwise invalid for failure to receive
the approval of the Chairman of the NIGC or the Secretary of the United States
Department of the Interior.


 


Section 10.23  Limitation
on Damages. The parties hereto agree that in the event of any legal or
arbitral action, suit or proceeding arising out of or relating to the Loan
Documents, the Revolving Commitment, the Collateral, the use or contemplated
use of proceeds of any Advance, the relationship of the Borrower and the Lender
under the Loan Documents or any transaction contemplated by the Loan Documents,
the prevailing party or parties shall not be entitled to an award of
incidental, consequential or punitive damages; provided, however,
that in no event shall reasonable attorneys’ fees and expenses be considered
incidental, consequential or punitive damages for purposes of this Section.


 


Section 10.24 
Recourse Limited. 
Notwithstanding anything in this Agreement or any other Loan Document to
the contrary, (a) with respect to the Obligations, Lender shall have no
recourse to any real property of the Borrower, and (b) with respect to


 


69

















 


each
Guarantor’s Guarantor Obligations, Lender shall have no recourse to any real
property of such Guarantor.


 


[Signature
Page Follows]


 


70

















 


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


 


	
  Address for Notices:

  
	
  345 Third Street

  	
  SENECA GAMING CORPORATION, as

  
	
  Seneca Office Building, 6th
  Floor

  	
  the Borrower

  
	
  Niagara
  Falls, NY 14303 (Niagara Territory)

  
	
   

  
	
  And for purposes of Section 9.2,
  with a copy

  	
  By:

  	
    /s/ E. Brian
  Hansberry

  
	
  to:

  	
  Name: E. Brian Hansberry

  
	
   

  	
  Title: President and CEO

  
	
  Nation’s Department of
  Justice

  
	
  Seneca Nation of Indians

  
	
  P.O. Box 231

  
	
  Salamanca, New York 14779
  (Allegany

  
	
  Territory)

  
	
   

  
	
  and

  
	
  Borrower’s Office of General
  Counsel

  
	
  345 Third Street

  
	
  Seneca Office Building, 6th
  Floor

  
	
  Niagara Falls, NY 14303 (Niagara
  Territory)

  
	
   

  
	
   

  
	
  Address for Notices:

  	
  KEYBANK NATIONAL
  ASSOCIATION, as

  
	
  KeyBank National Association

  	
  Lender

  
	
  202 North Main Street

  
	
  Jamestown, NY  14701

  
	
  Attention: Lyman N. Buck III

  	
  By:

  	
    /s/ Lyman N.
  Buck III

  
	
  Telephone: (716) 485-2524

  	
  Name: Lyman N. Buck III

  
	
  Telecopier: (716) 664-7751

  	
  Title: Senior Vice President

  



 


 


Signature Page to Loan
Agreement