Amended and Restated Loan and Security Agreement



 Exhibit 10.13 
  

  
 MGAM SYSTEMS, INC. and MEGABINGO, INC. 
  
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
  








 This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into as of November 16, 2005, by and between COMERICA
BANK (“Bank”) and MGAM SYSTEMS, INC., a Delaware Corporation, and MEGABINGO, INC., a Delaware Corporation (collectively, “Borrower”). 
  
 RECITALS 
  
 A. Borrower and Bank entered into that certain Loan and Security Agreement, dated June 25, 2003, as amended from time to time, including but not
limited to that certain First Amendment to Loan and Security Agreement dated as of December 22, 2003, that certain Second Amendment to Loan and Security Agreement dated as of March 4, 2004, that certain Third Amendment to Loan and Security
Agreement dated as of October 23, 2004, that certain Fourth Amendment to Loan and Security Agreement dated as of November 23, 2004, that certain Fifth Amendment to Loan and Security Agreement dated as of December 28, 2004, that
certain Sixth Amendment to Loan and Security Agreement dated as of June 29, 2005, and that certain Seventh Amendment to Loan and Security Agreement dated as of July 21, 2005 (collectively, the “Original Agreement”), providing for
loans to be made to Borrower from time to time by Bank as more particularly described therein. 
  
 B. Borrower and Bank now desire to amend and restate the Original Agreement in its entirety. In consideration of the mutual covenants and agreements contained herein, Borrower and Bank hereby agree that the Original
Agreement is hereby amended and restated in its entirety to be and read as follows: 
  
 AGREEMENT 
  
 The parties agree as follows:

  
 1. DEFINITIONS AND CONSTRUCTION. 
  
 1.1 Definitions. As used in this Agreement, all capitalized terms
shall have the definitions set forth on Exhibit A. Any term used in the Code and not defined herein shall have the meaning given to the term in the Code. 
  

1.2 Accounting Terms. Any accounting term not specifically defined on Exhibit A shall be construed in accordance with GAAP and all
calculations shall be made in accordance with GAAP. The term “financial statements” shall include the accompanying notes and schedules. 
  
 2. LOAN AND TERMS OF PAYMENT. 
  
 2.1 Credit Extensions. 
  
 (a) Promise to Pay. Borrower, jointly and severally, promises to pay to Bank, in lawful money of the United States of America, the aggregate
unpaid principal amount of all Credit Extensions made by Bank to Borrower, together with interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof. 
  
 (b) Revolving Advances. 
  
 (i) Amount. Subject to and upon the terms and conditions of this
Agreement (1) Borrower may request Advances in an aggregate outstanding amount not to exceed the Revolving Line, minus the aggregate face amount of any outstanding Letters of Credit, and (2) amounts borrowed pursuant to this
Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable. Except as set forth in the Addendum hereto, Borrower
may prepay any Advances without penalty or premium. 
  
 (ii)
Form of Request. Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or telephone no later than 3:00 p.m. Pacific time, on the Business Day that the Advance is to be made. Each such notification shall be
promptly confirmed by a Payment/Advance Form in 

  

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substantially the form of Exhibit C. Bank is authorized to make Advances under this Agreement, based upon instructions received from a
Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any
telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank will
credit the amount of Advances made under this Section 2.1(b) to Borrower’s deposit account. 
  
 (c) Capital Expenditure Advances. 
  
 (i) Pursuant to the terms of the Original Agreement, Bank made Capital Expenditure Advances to Borrower under Tranche A, Tranche B and
Tranche C. 
  
 (ii) Interest shall accrue from the date of
each Capital Expenditure Advance at the rate specified in Section 2.3(a), and shall be payable in accordance with Section 2.3(c). The Capital Expenditure Advances under Tranche A shall be payable in 36 equal monthly installments of
principal, plus all accrued interest, beginning on November 1, 2003, and continuing on the same day of each month thereafter through the Capital Expenditure Maturity Date, at which time all amounts due in connection with Tranche A Capital
Expenditure Advance made under this Section 2.1(c) shall be immediately due and payable. Any Capital Expenditure Advances that are outstanding under Tranche B on the Tranche B Availability End Date shall be payable in 30 equal monthly
installments of principal, plus all accrued interest, beginning on February 1, 2004, and continuing on the same day of each month thereafter through the Capital Expenditure Maturity Date, at which time all amounts due in connection with
Tranche B Capital Expenditure Advance made under this Section 2.1(c) shall be immediately due and payable. Any Capital Expenditure Advances that are outstanding under Tranche C on the Tranche C Availability End Date shall be
payable in 24 equal monthly installments of principal, plus all accrued interest, beginning on July 1, 2005, and continuing on the same day of each month thereafter through the Tranche C Maturity Date, at which time all amounts due in
connection with Tranche C Capital Expenditure Advances made under this Section 2.1(c) shall be immediately due and payable. Capital Expenditure Advances, once repaid, may not be reborrowed. Borrower may prepay any Capital Expenditure
Advances without penalty or premium. Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to be applied to any Capital Expenditures Advances, after payment of accrued but unpaid
interest thereon, on a “first-in-first-out” basis so that the Capital Expenditures Advances shall be repaid in the chronological order the Borrower borrowed the Capital Expenditure Advances. 
  
 (d) Letters of Credit. 
  
 (i) Subject to the availability under the Revolving Line, and in reliance
on the representations and warranties of Borrower set forth herein, at any time and from time to time from the date hereof through the Business Day immediately prior to the Revolving Maturity Date, Bank shall issue for the account of Borrower such
Letters of Credit as Borrower may request by delivering to Bank a duly executed letter of credit application on Bank’s standard form; provided, however, that the outstanding and undrawn amounts under all such Letters of Credit (i) shall
not at any time exceed the Letter of Credit Sublimit, and (ii) shall be deemed to constitute Advances for the purpose of calculating availability under the Revolving Line. Any drawn but unreimbursed amounts under any Letters of Credit shall be
charged as Advances against the Revolving Line. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s form of standard application and letter of
credit agreement (the “Application”), which Borrower hereby agrees to execute, including Bank’s standard fee equal to three quarters of one percent (0.75%) per annum of the face amount of each Letter of Credit. Borrower will pay any
standard issuance and other fees that Bank notifies Borrower it will charge for issuing and processing Letters of Credit. Prior to the Revolving Maturity Date, Borrower shall secure in cash all obligations under any outstanding Letters of Credit on
terms acceptable to Bank. 
  
 (ii) The obligation of Borrower to
reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, the Application, and such Letters of Credit, under all
circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys’ fees, arising out of or in connection with any Letters
of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct. 
  

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 (e) Reducing Revolving Advances. 
  
 (i) Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Reducing Revolving Advances under
the Reducing Revolving Line to Borrower in an aggregate outstanding amount not to exceed the lesser of (1) the Reducing Revolving Line or (2) the Borrowing Base; in each case, less any amounts outstanding under the Initial Reducing
Revolving Advance Sublimit. At no time shall the aggregate outstanding amount of Reducing Revolving Advances used for the acquisition of software exceed ten percent (10%) of the aggregate outstanding amount of Reducing Revolving Advances.
Amounts borrowed pursuant to this Section 2.1(e)(i) may be repaid and reborrowed at any time prior to the Reducing Revolving Maturity Date, at which time all Reducing Revolving Advances under this Section 2.1(e)(i) shall be immediately due
and payable. Borrower may prepay any Reducing Revolving Advances under the Reducing Revolving Line without penalty or premium. 
  
 (ii) Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Reducing Revolving Advances under the Initial Reducing Revolving
Advance Sublimit to Borrower in an aggregate outstanding amount not to exceed the lesser of (1) the Initial Reducing Revolving Advance Sublimit or (2) the Initial Reducing Revolving Advance Borrowing Base. Amounts borrowed pursuant to this
Section 2.1(e)(ii) may be repaid and reborrowed at any time prior to the Reducing Revolving Maturity Date, at which time all Reducing Revolving Advances under this Section 2.1(e)(ii) shall be immediately due and payable. Borrower may
prepay any Reducing Revolving Advances under the Initial Reducing Revolving Advance Sublimit without penalty or premium. 
  
 (iii) Whenever Borrower desires a Reducing Revolving Advance, Borrower shall deliver to Bank for its reasonable approval either (1) a Capital
Expenditure Report or (2) a copy of the Qualified Development Agreement and a Qualified Development Agreement Summary. After such Capital Expenditure Report and/or Qualified Development Agreement summary is approved by Bank, Borrower shall
notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three Business Days before the day on which the Reducing Revolving Advance is to be made. Such notice shall be
substantially in the form of Exhibit C. The notice shall be signed by a Responsible Officer or its designee and include the necessary capital expenditure report. 
  
 (iv) Interest shall accrue from the date of each Reducing Revolving Advance at the rate specified in Section 2.3(a),
and shall be payable in accordance with Section 2.3(c). Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to be applied to any Reducing Revolving Advances, after payment
of accrued but unpaid interest thereon, on a “first-in-first-out” basis so that the Reducing Revolving Advances shall be repaid in the chronological order Borrower borrowed the Reducing Revolving Advances. 
  
 2.2 Overadvances. If the aggregate amount of the outstanding Reducing
Revolving Advances exceeds the lesser of the Revolving Line or the Borrowing Base at any time, in each case less any amounts outstanding under the Initial Reducing Revolving Advance Sublimit, Borrower shall within one (1) Business Day pay to
Bank, in cash, the amount of such excess. If the aggregate amount of the outstanding Reducing Revolving Advances under the Initial Reducing Revolving Advance Sublimit, exceeds the lesser of the Initial Reducing Revolving Advance Sublimit or
the Initial Reducing Revolving Advance Borrowing Base at any time, Borrower shall within one (1) Business Day pay to Bank, in cash, the amount of such excess. 
  

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 2.3 Interest Rates, Payments, and Calculations. 
  
 (a) Interest Rates. Except as set forth in Section 2.3(b), the
Advances, the Capital Expenditure Advances and the Reducing Revolving Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the LIBOR Addendum to Loan & Security Agreement attached hereto as Annex I.

  
 (b) Late Fee; Default Rate. If any payment is not made
within 10 days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All
Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to 5 percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

  
 (c) Payments. Interest hereunder shall be due and
payable on the first (1st) calendar day of each month during the term hereof. During the existence of an Event
of Default, Bank may, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Committed Revolving Line, in which case those amounts shall thereafter accrue
interest at the rate then applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. 
  
 (d) Computation. In the event the Prime Rate is changed from time to
time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days elapsed. 
  
 2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies,
except that to the extent Borrower uses the Advances or the Reducing Revolving Advances to purchase Collateral, Borrower’s repayment of the Advances or the Reducing Revolving Advances, as applicable, shall apply on a
“first-in-first-out” basis so that the portion of the Advances or the Reducing Revolving Advances, as applicable, used to purchase a particular item of Collateral shall be paid in the chronological order the Borrower purchased the
Collateral. After the occurrence of an Event of Default, the receipt by Bank of any wire transfer of funds, check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or
payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be
due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such
extension. 
  
 2.5 Fees. Borrower shall pay to Bank the
following: 
  
 (a) Revolving Line. With respect to the
Revolving Line, the Borrower shall pay to Bank a commitment fee for the period from June 25, 2003, to and including the Revolving Maturity Date at a rate per annum equal to .125%, payable in arrears, such commitment fee to be computed (on the
basis of the actual number of days elapsed in a year composed of 360 days) on each day and based on the excess of the Revolving Line for such day over the aggregate amount of the outstanding Advances on such day. Such commitment fee shall be payable
on the 20th day of each September, December, March and June prior to the Revolving Maturity Date and on the
Revolving Maturity Date; and 
  
 (b) Bank Expenses. On the
Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and when they become due. 
  
 2.6 Term. This Agreement shall become effective on the Closing Date and, subject to Section 13.7, shall continue in full force and effect for
so long as any Obligations remain outstanding or Bank has 

  

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any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make
Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default. 
  
 3. CONDITIONS OF LOANS. 
  
 3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to Bank, the following (it is understood and agreed that certain of these items were previously delivered in connection with the Original Agreement): 
  
 (a) this Agreement; 
  
 (b) an officer’s certificate of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Agreement; 
  
 (c) a financing statement (Form UCC-1); 
  
 (d) an
Unconditional Guaranty executed by each of the Guarantors; 
  
 (e) an Affirmation and Amendment of Guaranty to be executed by Guarantors; 
  
 (f) an officer’s certificate of each of the Guarantors with respect to incumbency and resolutions authorizing the execution and delivery of the Affirmation and Amendment of Guaranty and other related loan
documents; 
  
 (g) LIBOR Addendum to Amended and Restated Loan
and Security Agreement; 
  
 (h) an Amended and Restated
intellectual property security agreement for MGAM Systems, Inc.; 
  
 (i) an Amended and Restated intellectual property security agreement for MegaBingo, Inc.; 
  
 (j) an Amended and Restated intellectual property security agreement for Multimedia Games, Inc.; 
  
 (k) agreement to provide insurance; 
  
 (l) payment of the fees and Bank Expenses then due specified in
Section 2.5; 
  
 (m) current SOS Reports indicating that
except for Permitted Liens, there are no other security interests or Liens of record in the Collateral; 
  
 (n) an audit of the Collateral, the results of which shall be satisfactory to Bank; 
  
 (o) current financial statements; 
  

(p) a lock-box agreement executed by Borrower and Bank, containing terms reasonably acceptable to Bank, pursuant to which all account debtors are
required to make payment of any Accounts to an account maintained with Bank and pursuant to which Bank may apply such amounts in such account to Obligations at any time during the existence of any Event of Default; 
  

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 (q) originals of all agreements of the Borrower with any users or operators of gaming devices or other
equipment, to the extent such agreements constitute chattel paper, including without limitation all agreements giving rise to any Eligible Accounts to the extent such agreements constitute chattel paper; 
  
 (r) an opinion of counsel for Borrower, opining that Borrower’s Real
Time Bingo game constitutes a “class II gaming” device under the Indian Gaming Regulatory Act, and otherwise in form and substance reasonably acceptable to Bank; and 
  
 (s) such other documents or certificates, and completion of such other matters, as Bank may reasonably deem necessary or
appropriate. 
  
 3.2 Conditions Precedent to all Credit
Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions: 
  

(a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and 
  
 (b) the representations and warranties contained in Section 5 shall be
true and correct in all material respects on and as of the date of such Payment/Advance Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be
continuing, or would exist after giving effect to such Credit Extension (provided, however, that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date).
The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2. 
  
 4. CREATION OF SECURITY INTEREST. 
  
 4.1 Grant of Security Interest. Borrower grants and pledges to Bank a
continuing security interest in the Collateral to secure prompt repayment of any and all Obligations and to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Schedule, such
security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral. Notwithstanding any termination, Bank’s
Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding. 
  
 4.2 Perfection of Security Interest. Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that describe the Collateral and to describe the
Collateral as all assets of Borrower of the kind pledged hereunder and which contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment,
including whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower, if applicable. Any such financing statements may be signed by Bank on behalf of Borrower, as provided in the
Code, and may be filed at any time in any jurisdiction whether or not Revised Article 9 of the Code is then in effect in that jurisdiction. Borrower shall from time to time execute and deliver to Bank, at the request of Bank, all Negotiable
Collateral and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue perfected Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated
under the Loan Documents. Borrower shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing
statement. Where Collateral is in possession of a third party bailee, Borrower shall take such steps as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in form and substance satisfactory to Bank, of the bailee that the bailee
holds such Collateral for the benefit of Bank, (ii) obtain “control” of any Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items and the term
“control” are defined in Revised Article 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form and substance satisfactory to Bank. Borrower will not create
any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel paper and delivering the originals of such chattel paper to Bank. 
  

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 4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the
right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof
and to check, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral. 
  
 5. REPRESENTATIONS AND WARRANTIES. 
  
 Each Borrower represents and warrants as follows: 
  
 5.1 Due Organization and Qualification. Borrower and each other Subsidiary is a corporation or limited liability
company, as applicable, duly existing under the laws of the Borrower State and qualified and licensed to do business in the State of Texas. Multimedia Games, Inc. is a corporation duly existing under the laws of the State of Texas and qualified and
licensed to do business in the State of Texas. If Bank reasonably determines that the failure of Borrower, any other Subsidiary or Multimedia Games, Inc. to qualify to do business in any state is likely to have a Material Adverse Effect, Borrower
will qualify to do business, and will cause each other Subsidiary and Multimedia Games, Inc. to so qualify to do business, in each such state. 
  
 5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been
duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Articles of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement by which Borrower is
bound. Borrower is not in default under any agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material Adverse Effect. 
  
 5.3 Collateral. Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is
free and clear of Liens, adverse claims, and restrictions on transfer or pledge except for Permitted Liens. All Collateral is located solely in the Collateral States. The Accounts are bona fide existing obligations. The property or services giving
rise to such Accounts has been delivered or rendered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has not received notice of actual or imminent Insolvency Proceeding of any
account debtor. All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of the Collateral
is maintained or invested with a Person other than Bank or Bank’s affiliates. 
  
 5.4 Intellectual Property Collateral. Borrower is the sole owner of the Intellectual Property Collateral, except for licenses granted by Borrower to its customers in the ordinary course of business. To the best
of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and, except as set forth in the
Schedule, no claim has been made to Borrower that any part of the Intellectual Property Collateral violates the rights of any third party except to the extent such claim would not reasonably be expected to cause a Material Adverse Effect. Except as
set forth in the Schedule, Borrower’s rights as a licensee of intellectual property do not give rise to more than 10% of its gross revenue in any given quarter, including without limitation revenue derived from the sale, licensing, rendering or
disposition of any product or service. 
  
 5.5 Name; Location
of Chief Executive Office. Except as disclosed in the Schedule, Borrower has not done business under any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph of this
Agreement. The chief executive office of Borrower is located in the Chief Executive Office State at the address indicated in Section 10 hereof. 
  
 5.6 Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against Multimedia Games, Inc., Borrower or
any other Subsidiary before any court or administrative agency in which a likely adverse decision would reasonably be expected to have a Material Adverse Effect, or a material adverse effect on Borrower’s interest or Bank’s security
interest in the Collateral. 
  

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 5.7 No Material Adverse Change in Financial Statements. All consolidated financial statements
related to Multimedia Games, Inc., Borrower and any other Subsidiary that are delivered by Borrower to Bank fairly present in all material respects the consolidated financial condition as of the date thereof of Multimedia Games, Inc., Borrower and
each other Subsidiary, and the consolidated results of operations for the period then ended. There has not been a material adverse change in the consolidated financial condition of such parties since the date of the most recent of such financial
statements submitted to Bank. 
  
 5.8 Solvency, Payment of
Debts. Borrower is able to pay its debts (including trade debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; and Borrower is not left
with unreasonably small capital after the transactions contemplated by this Agreement. 
  
 5.9 Compliance with Laws and Regulations. Multimedia Games, Inc., Borrower and each other Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to
ERISA. No event has occurred resulting from any such party’s failure to comply with ERISA that is reasonably likely to result in any such party incurring any liability that could have a Material Adverse Effect. No such party is an
“investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. No such party is engaged principally, or as one of the important activities, in the
business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Each such party has complied in all material respects with all
the provisions of the Federal Fair Labor Standards Act. Each such party is in compliance with all environmental laws, regulations and ordinances except where the failure to comply is not reasonably likely to have a Material Adverse Effect. No such
party has violated any statutes, laws, ordinances or rules applicable to it, violation of which could have a Material Adverse Effect. Each such party has filed or caused to be filed all tax returns required to be filed, and have paid, or have made
adequate provision for the payment of, all taxes reflected therein except those being contested in good faith with adequate reserves under GAAP or where the failure to file such returns or pay such taxes would not reasonably be expected to have a
Material Adverse Effect. 
  
 5.10 Subsidiaries. Borrower
does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments. Multimedia Games, Inc. does not own any stock, partnership interest or other equity securities of any Person, except for
Subsidiaries existing on the date of this Agreement and Permitted Investments. 
  
 5.11 Government Consents. Multimedia Games, Inc., Borrower and each other Subsidiary have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to,
all governmental authorities that are necessary for the continued operation of business as currently conducted, except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect. 
  
 5.12 Inbound Licenses. Except as disclosed on the Schedule, Borrower
is not a party to, nor is bound by, any license or other agreement that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. 
  
 5.13 Full Disclosure. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank taken together with all such certificates and written statements furnished to Bank contains any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained in such certificates or statements not misleading, it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not to
be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results. 
  
 6. AFFIRMATIVE COVENANTS. 
  

Each Borrower covenants that, until payment in full of all outstanding Obligations, and for so long as Bank may have any commitment to make a Credit
Extension hereunder, it shall do all of the following and it shall cause each of Multimedia Games, Inc. and the other Subsidiaries to do all of the following: 
  

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 6.1 Good Standing and Government Compliance. Maintain its corporate existence and good standing in
the state of its organization, maintain qualification and good standing in each jurisdiction in which the failure to so qualify could have a Material Adverse Effect, and furnish to Bank the organizational identification number issued to Borrower by
the authorities of the state in which Borrower is organized. Meet the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA, except where the failure to meet such requirements would not reasonably be
expected to have a Material Adverse Effect. Comply in all material respects with all applicable Environmental Laws, and maintain all material permits, licenses and approvals required thereunder where the failure to do so could have a Material
Adverse Effect. Comply with all statutes, laws, ordinances and government rules and regulations to which it is subject, and maintain in force all licenses, approvals and agreements, the loss of which or failure to comply with which would reasonably
be expected to have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the Collateral. 
  
 6.2 Financial Statements, Reports, Certificates. Deliver to Bank: (a) as soon as available, but in any event within 50 days after the end of
each fiscal quarter, except the last quarter, a company prepared consolidated balance sheet, income statement and statement of cash flows for Multimedia Games, Inc. and all of its Subsidiaries, including without limitation Borrower, for operations
during such period, prepared in accordance with GAAP, consistently applied, in a form reasonably acceptable to Bank and certified by a Responsible Officer; (b) as soon as available, but in any event within 95 days after the end of the fiscal
year of Multimedia Games, Inc., audited consolidated financial statements of Multimedia Games, Inc. and all of its Subsidiaries, including without limitation Borrower, prepared in accordance with GAAP, consistently applied, together with an opinion
which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank (BDO Seidman, LLP being confirmed as currently reasonably acceptable to
Bank); (c) if applicable, copies of all statements, reports and notices sent or made available generally by Multimedia Games, Inc. or any of its Subsidiaries, including without limitation Borrower, to their respective security holders or to any
holders of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (d) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Multimedia Games,
Inc. or any of its Subsidiaries, including without limitation Borrower, that could result in damages or costs to Multimedia Games, Inc. or any of its Subsidiaries, including without limitation Borrower, of $100,000 or more; (e) such budgets,
sales projections, operating plans or other financial information generally prepared by Multimedia Games, Inc. or any of its Subsidiaries, including without limitation Borrower, in the ordinary course of business as Bank may reasonably request from
time to time; (f) within 50 days of the last day of each fiscal quarter, a report signed by Borrower, in form reasonably acceptable to Bank, listing any applications or registrations that Borrower or any Guarantor has made or filed in respect
of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations, as well as any material change in Borrower’s Intellectual Property Collateral, including but not limited to any subsequent ownership right
of Borrower in or to any Trademark, Patent or Copyright not specified in Exhibits A, B, and C of each of the Intellectual Property Security Agreement delivered to Bank by Borrower in connection with the Original Agreement; and
(g) as soon as available, but in any event no later than July 31 of each fiscal year, a company prepared pro-forma consolidated balance sheet and income statement for the next succeeding fiscal year for Multimedia Games, Inc. and all of
its Subsidiaries, including without limitation Borrower, containing good faith financial projections for the next succeeding fiscal year, prepared in accordance with GAAP, consistently applied, to the extent applicable, and otherwise in a form
reasonably acceptable to Bank and certified by a Responsible Officer. 
  
 (a) Within 50 days after the last day of each fiscal quarter, Borrower shall deliver to Bank with the quarterly financial statements, a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D
hereto with all information completed. Each Compliance Certificate shall be accompanied by a Covenant Calculation Worksheet as continuation pages to Exhibit D, appropriately completed with the information required to be certified to in such
Compliance Certificate. 
  
 (b) Promptly upon receipt, and in no
event more than 3 business day after receipt, Borrower shall (x) deliver to Bank a true, correct and complete copy of any Class III Advisory Letter; and (y) notify Bank of Borrower’s receipt of any adverse advisory letter (and
provide a copy of the same to Bank) or other similar regulatory action, which could reasonably be expected to have an adverse financial impact upon Borrower’s long term contracts and/or its ability to generate planned cash flow. 
  

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 (c) As soon as possible and in any event within 3 calendar days after becoming aware of the occurrence
or existence of an Event of Default hereunder, a written statement of a Responsible Officer setting forth details of the Event of Default, and the action which Borrower has taken or proposes to take with respect thereto. 
  
 (d) Bank shall have a right from time to time hereafter to audit and
appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more often than every 6 months unless an Event of Default has occurred and is continuing. 
  
 6.3 Inventory; Returns. Keep all Inventory in good and merchantable condition, free from all material defects except
for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist on the
Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims involving more than $100,000. 
  
 6.4 Taxes. Make due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by
law, including, but not limited to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability, and execute and deliver to Bank, on demand, proof satisfactory to Bank indicating that each such party has made such payments or
deposits and any appropriate certificates attesting to the payment or deposit thereof; provided that Multimedia Games, Inc. or any of its Subsidiaries, including without limitation Borrower, need not make any payment if the amount or validity of
such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by such party. 
  
 6.5 Insurance. 
  
 (a) At its expense, keep all Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in
such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where such party’s business is conducted on the date hereof. Maintain liability and other insurance in amounts and of a type that are
customary to businesses similar to Borrower’s. 
  
 (b) All
such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank. All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank,
showing Bank as an additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that the insurer must give at least 20 days notice to Bank before canceling its policy for any reason. Upon
Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance and evidence of all premium payments. If no Event of Default has occurred and is continuing, proceeds payable under any casualty policy will, at
Borrower’s option, be payable to Borrower to replace the property subject to the claim, provided that any such replacement property shall be deemed Collateral in which Bank has been granted a first priority security interest. If an Event of
Default has occurred and is continuing, all proceeds payable under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations. 
  
 6.6 Primary Depository. Maintain its primary depository, operating and investment accounts with Bank or Bank’s
affiliates. 
  
 6.7 Financial Covenants. Maintain, on a
consolidated basis of Multimedia Games, Inc. and its Subsidiaries, including without limitation Borrower, the following financial ratios and covenants, measured as of the last day of each calendar quarter unless stated otherwise: 
  
 (a) Indebtedness to EBITDA. A ratio of funded senior Indebtedness to
EBITDA (determined in accordance with GAAP; calculated on a trailing twelve (12) month basis) of not more than 1.50 to 1.00. 
  

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 (b) Total Liabilities to Tangible Net Worth. A ratio of Total Liabilities to Tangible Net Worth
of not more than 1.25:1.00. 
  
 (c) EBITDA. EBITDA
(determined in accordance with GAAP; calculated on a trailing twelve (12) month basis) of at least Sixty Million Dollars ($60,000,000). Notwithstanding the foregoing, Bank reserves the right to reset this Section 6.7(c) annually (or more
frequently upon an Event of Default) upon receipt and review of the financial projections and statements delivered in accordance with Section 6.2 of this Agreement. 
  
 (d) Capitalized Expenditures. Incur Capitalized Expenditures (including development loans and other related
advances), on a rolling four (4) quarter basis, not to exceed One Hundred Seventy Five Million Dollars ($175,000,000). Notwithstanding the foregoing, Bank reserves the right to reset this Section 6.7(d) annually (or more frequently upon an
Event of Default) upon receipt and review of the financial projections delivered in accordance with Section 6.2 of this Agreement. 
  
 Bank shall have the right, in its sole discretion, to reset any of the financial covenants as often as annually. 
  
 6.8 Registration of Intellectual Property Rights. 
  
 (a) Register or cause to be registered on an expedited basis (to the extent
not already registered) with the United States Patent and Trademark Office or the United States Copyright Office, as the case may be, those registerable intellectual property rights now owned or hereafter developed or acquired by any such party, to
the extent that such party, in its reasonable business judgment, deems it appropriate to so protect such intellectual property rights. 
  
 (b) Concurrently with the delivery of the Intellectual Property reports required under Section 6.2(f) above, give Bank written notice of any
applications or registrations of intellectual property rights filed during the applicable fiscal quarter with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any.

  
 (c) (i) Give Bank not less than 30 days prior written
notice of the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the
date such applications or registrations will be filed, and (ii) prior to the filing of any such applications or registrations by Borrower, execute such documents as Bank may reasonably request for Bank to maintain its perfection in such
intellectual property rights to be registered by Borrower, and upon the request of Bank, file such documents simultaneously with the filing of any such applications or registrations. Upon filing any such applications or registrations with the United
States Copyright Office, Borrower shall promptly provide Bank with (i) a copy of such applications or registrations, without the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Bank to be filed for Bank
to maintain the perfection and priority of its security interest in such intellectual property rights, and (iii) the date of such filing. 
  
 (d) Execute and deliver such additional instruments and documents from time to time as Bank shall reasonably request to perfect and maintain the priority
of Bank’s security interest in the Intellectual Property Collateral. 
  
 (e) (i) protect, defend and maintain the validity and enforceability of the trade secrets, Trademarks, Patents and Copyrights, (ii) use commercially reasonable efforts to detect infringements of the
Trademarks, Patents and Copyrights and promptly advise Bank in writing of material infringements detected and (iii) not allow any material Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the public without the
written consent of Bank, which shall not be unreasonably withheld. 
  
 (f) Allow Bank to audit Borrower’s Intellectual Property Collateral to confirm compliance with this Section 6.8, provided such audit may not occur more often than twice per year, unless an Event of Default has occurred and is
continuing. Bank shall have the right, but not the obligation, to take, at Borrower’s 

  

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sole expense, any actions that Borrower is required under this Section 6.8 to take but which Borrower fails to take, after 15 days’ notice to
Borrower. Borrower shall reimburse and indemnify Bank for all reasonable costs and reasonable expenses incurred in the reasonable exercise of its rights under this Section 6.8. 
  
 6.9 Consent of Inbound Licensors. Prior to entering into or becoming bound by any license or agreement:
(i) provide written notice to Bank of the material terms of such license or agreement with a description of its likely impact on such party’s business or financial condition; and (ii) in good faith use commercially reasonable efforts
to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for Borrower’s interest in such licenses or contract rights to be deemed Collateral and for Bank to have a security interest in it that might otherwise be
restricted by the terms of the applicable license or agreement, whether now existing or entered into in the future, provided, however, that the failure to obtain any such consent or waiver shall not constitute a default under this Agreement.

  
 6.10 Further Assurances. At any time and from time to
time execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement. 
  

7. NEGATIVE COVENANTS. 
  
 Each Borrower covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations are paid in full or for
so long as Bank may have any commitment to make any Credit Extensions, no Borrower will do any of the following, nor will any Borrower permit Multimedia Games, Inc. or any of the other Subsidiaries to do any of the following, without Bank’s
prior written consent, which shall not be unreasonably withheld: 
  
 7.1 Dispositions. Convey, sell, lease, license, transfer or otherwise dispose of (collectively, to “Transfer”) all or any part of its business or property, other than Permitted Transfers. 
  
 7.2 Change in Name, Location or Executive Office, Change in Business;
Change in Fiscal Year; Change in Control. Change its name, the Borrower State, or relocate its chief executive office without 30 days prior written notification to Bank; engage in any business other than or reasonably related or incidental to
the businesses currently engaged in; change its fiscal year end, other than to December 31; have a Change in Control. 
  
 7.3 Mergers or Acquisitions. Merge or consolidate, with or into any other business organization (other than mergers or consolidations of a
Subsidiary into another Subsidiary or into Multimedia Games, Inc.), or acquire all or substantially all of the capital stock or property of another Person except where (i) such transactions do not in the aggregate exceed $100,000 and
(ii) no Event of Default has occurred, is continuing or would exist after giving effect to the transactions. 
  
 7.4 Indebtedness. Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, other than Permitted Indebtedness, or
prepay any Indebtedness or take any actions which impose an obligation to prepay any Indebtedness, except Indebtedness to Bank. 
  
 7.5 Encumbrances. Create, incur, assume or allow any Lien with respect to any of its property, or assign or otherwise convey any right to receive
income, including the sale of any Accounts, except for Permitted Liens, or covenant to any other Person that such party in the future will refrain from creating, incurring, assuming or allowing any Lien with respect to any of its property.

  
 7.6 Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase of any capital stock, except that Multimedia Games, Inc. may (i) repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event
of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase; (ii) repurchase the stock of former employees pursuant to stock repurchase agreements by the cancellation of indebtedness owed by such
former employees to Multimedia Games, Inc. regardless of whether an Event of Default exists; and (iii) without duplication with (i) or (ii) above, repurchase stock from existing cash reserves without Bank’s prior 

  

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written consent provided (a) Multimedia Games, Inc. retains the greater of (1) Five Million Dollars ($5,000,000) in Liquidity; or
(2) fifteen percent (15%) of the Obligations in Liquidity following such repurchases; and (b) no Event of Default has occurred prior to such repurchases and would result after giving effect to such repurchases. 
  
 7.7 Investments. Directly or indirectly acquire or own, or make any
Investment in or to any Person, other than Permitted Investments and Permitted Development Agreements, or maintain or invest any of its property with a Person other than Bank or Bank’s affiliates, other than pursuant to Permitted Development
Agreements, unless such Person has entered into a control agreement with Bank, in form and substance satisfactory to Bank, or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying
dividends or otherwise distributing property to Borrower; provided, however, that Permitted Development Agreements and investments thereunder shall only be permitted if, and shall otherwise constitute an Event of Default unless, (a) Borrower
and/or Multimedia Games have, and will continue to have after funding 100% of the investment under the proposed Permitted Development Agreement, in a form reasonably acceptable to Bank and certified by a Responsible Officer, which calculation shall
reflect that no default will occur under the Current Ratio requirements of this Agreement as a result of the funding of the investment under the proposed Permitted Development Agreement. 
  
 7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with
any Affiliate of such party except for transactions that are in the ordinary course of business, upon fair and reasonable terms that are no less favorable than would be obtained in an arm’s length transaction with a non-affiliated Person.

  
 7.9 Subordinated Debt. Make any payment in respect of
any Subordinated Debt, except in compliance with the terms of such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent.

  
 7.10 Inventory and Equipment. Store any of
Borrower’s Inventory or Equipment with a bailee, warehouseman, or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is
holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the ordinary course of business and
except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to
which Bank files a financing statement where needed to perfect its security interest. 
  
 7.11 No Investment Company. Become or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its
important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. 
  
 8. EVENTS OF DEFAULT. 
  
 Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement: 
  
 8.1 Payment Default. If Borrower fails to pay any of the Obligations
when due; 
  
 8.2 Covenant Default. 
  
 (a) If Borrower fails to perform any obligation under Section 6.2 or
Section 6.7 or violates any of the covenants or provisions contained in Article 7 of this Agreement; or 
  
 (b) Except as specifically provided in subsection (a) above, if Borrower fails to perform any other obligation under Article 6 or violates any other
provision of Article 6, and as to any default that can be cured, has failed to cure such default within 10 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; or 
  

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 (c) Except as specifically provided in subsections (a) and (b) above, if Borrower fails or
neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such
other term, provision, condition or covenant that can be cured, has failed to cure such default within 15 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by
its nature be cured within the 15 day period or cannot after diligent attempts by Borrower be cured within such 15 day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period
(which shall not in any case exceed 45 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made; 
  
 8.3 Defective Perfection. If Bank shall receive at any time following
the Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s security interest in the Collateral is not prior to all other security interests or Liens of record reflected in the report; 
  
 8.4 Material Adverse Change. If there occurs a material adverse change
in Borrower’s business or financial condition, or if there is a material impairment of the prospect of repayment of any portion of the Obligations or a material impairment of the value or priority of Bank’s security interests in the
Collateral; 
  
 8.5 Attachment. If any material portion of
Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within 10 days, or if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a
judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten days after Borrower receives notice thereof, provided that none of the foregoing shall constitute
an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Credit Extensions will be made during such cure period); 
  
 8.6 Insolvency. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed within 45 days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding);

  
 8.7 Other Agreements. If there is a default or other
failure to perform in any agreement to which Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of
$100,000 or that could have a Material Adverse Effect; 
  
 8.8
Subordinated Debt. If Borrower makes any payment on account of Subordinated Debt, except to the extent the payment is allowed under any subordination agreement entered into with Bank; 
  
 8.9 Judgments. If a judgment or judgments for the payment of money in
an amount, individually or in the aggregate, of at least $500,000 shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of 10 days (provided that no Credit Extensions will be made prior to the satisfaction or stay
of the judgment); or 
  
 8.10 Misrepresentations. If any
material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document. 
  

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 8.11 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty) ceases
for any reason to be in full force and effect, or any Guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under
any Guaranty Document or any Guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.5 through 8.9 occur with respect to any Guarantor. 
  
 9. BANK’S RIGHTS AND REMEDIES. 
  
 9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its
election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower: 
  
 (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided
that upon the occurrence of an Event of Default described in Section 8.6, all Obligations shall become immediately due and payable without any action by Bank); 
  
 (b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other
agreement between Borrower and Bank; 
  
 (c) Settle or adjust
disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable; 
  
 (d) Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to
assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With
respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at
law, in equity, or otherwise; 
  
 (e) Set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank; 
  
 (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with
Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit; 
  
 (g) Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for
cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate. Bank may sell the
Collateral without giving any warranties as to the Collateral. Bank may specifically disclaim any warranties of title or the like. This procedure will not be considered 

  

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adversely to affect the commercial reasonableness of any sale of the Collateral. If Bank sells any of the Collateral upon credit, Borrower will be credited
only with payments actually made by the purchaser, received by Bank, and applied to the indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall be credited with the proceeds
of the sale; 
  
 (h) Bank may credit bid and purchase at any
public sale; 
  
 (i) Apply for the appointment of a receiver,
trustee, liquidator or conservator of the Collateral, without notice and without regard to the adequacy of the security for the Obligations and without regard to the solvency of Borrower, any Guarantor or any other Person liable for any of the
Obligations; and 
  
 (j) Any deficiency that exists after
disposition of the Collateral as provided above will be paid immediately by Borrower. 
  
 Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

  
 9.2 Power of Attorney. Effective only upon the
occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for
verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign
Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral;
(e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms
which Bank determines to be reasonable; (g) to modify, in its sole discretion, any intellectual property security agreement entered into between Borrower and Bank without first obtaining Borrower’s approval of or signature to such
modification by amending Exhibits A, B, and C, thereof, as appropriate, to include reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by Borrower after the execution hereof or to delete
any reference to any right, title or interest in any Copyrights, Patents or Trademarks in which Borrower no longer has or claims to have any right, title or interest; (h) to file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the signature of Borrower where permitted by law; and (i) to transfer the Intellectual Property Collateral into the name of Bank or a third party to the extent
permitted under the California Uniform Commercial Code; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents described in clauses (g), (h) and (i) above regardless of whether an Event of
Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Bank’s obligation to provide advances hereunder is terminated. 
  
 9.3 Accounts Collection. At any time after the occurrence and during the continuation of an Event of Default, Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds
and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the
account debtor, with proper endorsements for deposit into the lock-box account to be established under Section 3.1(k). Regardless of whether any Event of Default exists, Borrower will cause all amounts representing payment on Accounts to be
promptly deposited into such lock-box account or other account maintained with Bank. 
  
 9.4 Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of
the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under the Revolving Facility as Bank deems necessary to protect Bank from the exposure created by such failure;
or (c) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by 

  

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Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and
shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement. 
  
 9.5 Bank’s Liability for Collateral. Bank has no obligation to
clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. 
  
 9.6 No Obligation to Pursue Others. Bank has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable
for them and Bank may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Bank’s rights against Borrower. Borrower waives any right it may have to require Bank to pursue
any other Person for any of the Obligations. 
  
 9.7 Remedies
Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or
acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given. Borrower expressly
agrees that this Section 9.7 may not be waived or modified by Bank by course of performance, conduct, estoppel or otherwise. 
  
 9.8 Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of
any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable. 
  
 10. NOTICES. 
  
 Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below: 
  

			
	If to Borrower:	    	MGAM Systems, Inc. and MegaBingo, Inc.
	 	    	206 Wild Basin Road, Building B, 4th
Floor
	 	    	Austin, Texas 78746
	 	    	Attn: Mr. Craig Nouis
	 	    	FAX: (512) 334-7695
		
	If to Bank:	    	Comerica Bank
	 	    	75 East Trimble Road, M/C 4770
	 	    	San Jose, CA 95131
	 	    	Attn: Manager
	 	    	FAX: (408) 556-5091
		
	with a copy to:	    	Comerica Bank
	 	    	300 W. Sixth Street, Suite 1300
	 	    	Austin, Texas 78701
	 	    	Attn: Chad Neely
	 	    	FAX: (512)             

  

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 The parties hereto may change the address at which they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other. 
  
 11.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 
  
 This
Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and
Federal courts located in the County of Santa Clara, State of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW,
EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
ARISING OUT OF OR RELATED TO THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES. 
  
 12. REFERENCE PROVISION. 
  
 12.1 In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

  
 12.2 With the exception of the items specified in clause (c),
below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Amended and Restated Loan and Security Agreement or any other document, instrument or agreement between the undersigned
parties (collectively in this Section, the “Comerica Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure
(“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Comerica Documents,
venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise
appropriate under applicable law (the “Court”). 
  
 12.3
The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off),
(iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference
provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses
(iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein. 
  
 12.4 The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do
not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee
may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the
Presiding Judge of the Court (or his or her representative). 
  
 12.5 The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter
for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference
and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision. 
  

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 12.6 The referee will have power to expand or limit the amount and duration of discovery. The referee may
set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to
“priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding. 
  
 12.7 Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and
place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted
without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall
have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial. 
  
 12.8 The referee shall be required to determine all issues in accordance with
existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable
as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an
order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order
entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision. 
  
 12.9 If the enabling
legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall
apply to any such arbitration proceeding. 
  
 12.10 THE PARTIES
RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN
CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT OR THE OTHER COMERICA DOCUMENTS. 
  
 13. GENERAL PROVISIONS. 
  
 13.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties and shall bind all persons who become bound as a debtor to this Agreement;
provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without
the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder. 
  
 13.2 Indemnification. Borrower shall defend, indemnify and hold
harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by 

  

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any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred,
or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation
reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct. 
  
 13.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement. 
  
 13.4 Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. If more than one Person executes this Agreement as Borrower, each Person shall be fully and personally
obligated to keep all the promises made in the Agreement, including without limitation the obligation to pay the full amounts owed. 
  
 13.5 Amendments in Writing, Integration. All amendments to or terminations of this Agreement must be in writing. All prior agreements,
understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement, if any, are merged into this Agreement and the Loan Documents. 
  
 13.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 
  
 13.7 Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any Obligations remain outstanding. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2
shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run. 
  
 13.8 Confidentiality. In handling any confidential information, Bank and all employees and agents of Bank shall exercise the same degree of care
that Bank exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information
may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the Loans, provided that they have
entered into a comparable confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in
connection with the examination, audit or similar investigation of Bank and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided
Bank does not have actual knowledge that such third party is prohibited from disclosing such information. 
  
 14. CO-BORROWER PROVISIONS. Subject to and notwithstanding any of the terms and conditions of that certain Contribution Agreement by and among each
Borrower and the Related Obligors (as defined therein) dated as of June 25, 2003. 
  
 14.1 Primary Obligation. This Agreement is a primary and original obligation of each Borrower and shall remain in effect notwithstanding future changes in conditions, including any change of law or any
invalidity or irregularity in the creation or acquisition of any Obligations or in the execution or delivery of any agreement between Bank and any Borrower. Each Borrower shall be liable for existing and future Obligations as fully as if all of all
Credit Extensions were advanced to such Borrower. Bank may rely on any certificate or representation made by any Borrower as made on behalf of, and binding on, each Borrower, including without limitation Disbursement Request Forms, Borrowing Base
Certificates and Compliance Certificates. 
  

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 14.2 Enforcement of Rights. Each Borrower is jointly and severally liable for the Obligations and
Bank may proceed against one or more Borrower to enforce the Obligations without waiving its right to proceed against any other Borrower. 
  
 14.3 Borrowers as Agents. Each Borrower appoints the other Borrower as its agent with all necessary power and authority to give and receive
notices, certificates or demands for and on behalf of both Borrowers, to act as disbursing agent for receipt of any Credit Extensions on behalf of each Borrower and to apply to Bank on behalf of each Borrower for Credit Extensions, any waivers and
any consents. This authorization cannot be revoked, and Bank need not inquire as to each Borrower’s authority to act for or on behalf of Borrower. 
  
 14.4 Subrogation and Similar Rights. Notwithstanding any other provision of this Agreement or any other Loan Document, each Borrower irrevocably
waives all rights that it may have at law or in equity (including, without limitation, any law subrogating the Borrower to the rights of Bank under the Loan Documents) to seek contribution, indemnification, or any other form of reimbursement from
any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by the Borrower with respect to the Obligations in connection with the Loan Documents or otherwise and all
rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by the Borrower with respect to the Obligations in connection with the Loan Documents or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited under this Section 14.4 shall be null and void. If any payment is made to a Borrower in contravention of this Section 14.4, such Borrower shall hold such
payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured. 
  
 14.5 Waivers of Notice. Except as otherwise provided in this Agreement, each Borrower waives notice of acceptance hereof; notice of the existence,
creation or acquisition of any of the Obligations; notice of an Event of Default; notice of the amount of the Obligations outstanding at any time; notice of intent to accelerate; notice of acceleration; notice of any adverse change in the financial
condition of any other Borrower or of any other fact that might increase the Borrower’s risk; presentment for payment; demand; protest and notice thereof as to any instrument; default; and all other notices and demands to which the Borrower
would otherwise be entitled. Each Borrower waives any defense arising from any defense of any other Borrower, or by reason of the cessation from any cause whatsoever of the liability of any other Borrower. Bank’s failure at any time to require
strict performance by any Borrower of any provision of the Loan Documents shall not waive, alter or diminish any right of Bank thereafter to demand strict compliance and performance therewith. Nothing contained herein shall prevent Bank from
foreclosing on the Lien of any deed of trust, mortgage or other security instrument, or exercising any rights available thereunder, and the exercise of any such rights shall not constitute a legal or equitable discharge of any Borrower. Each
Borrower also waives any defense arising from any act or omission of Bank that changes the scope of the Borrower’s risks hereunder. 
  
 14.6 Subrogation Defenses. Each Borrower hereby waives any defense based on impairment or destruction of its subrogation or other rights against
any other Borrower and waives all benefits which might otherwise be available to it under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d
and 726, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter in effect. 
  
 14.7 Right to Settle, Release. 
  
 (a) The liability of Borrower hereunder shall not be diminished by (i) any agreement, understanding or representation that any of the Obligations is
or was to be guaranteed by another Person or secured by other property, or (ii) any release or unenforceability, whether partial or total, of rights, if any, which Bank may now or hereafter have against any other Person, including another
Borrower, or property with respect to any of the Obligations. 
  
 (b) Without affecting the liability of any Borrower hereunder, Bank may (i) compromise, settle, renew, extend the time for payment, change the manner or terms of payment, discharge the performance of, decline to enforce, or release all
or any of the Obligations with respect to a Borrower, (ii) grant other indulgences to a Borrower in respect of the Obligations, (iii) modify in any manner any documents relating to 

  

 -21- 








 
the Obligations with respect to a Borrower, (iv) release, surrender or exchange any deposits or other property securing the Obligations, whether pledged
by a Borrower or any other Person, or (v) compromise, settle, renew, or extend the time for payment, discharge the performance of, decline to enforce, or release all or any obligations of any guarantor, endorser or other Person who is now or
may hereafter be liable with respect to any of the Obligations. 
  
 14.8 Subordination. All indebtedness of a Borrower now or hereafter arising held by another Borrower is subordinated to the Obligations and the Borrower holding the indebtedness shall take all actions reasonably requested by Lender
to effect, to enforce and to give notice of such subordination. 
  
 IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 
  

			
	MGAM SYSTEMS, INC.
		
	By:	 	 /s/    Clifton E. Lind

	Title:	 	 President

	
	MEGABINGO, INC.
		
	By:	 	 /s/    Clifton E. Lind

	Title:	 	 President

	
	COMERICA BANK
		
	By:	 	 /s/    Chad Neely

	Title:	 	 Vice President



  

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