Document:

Exhibit 10.1

 

AMENDMENT NO. 1

 

This AMENDMENT NO. 1, dated as of April 9,
2010 (this “Amendment”), to the Credit Agreement (as defined below),
among BALLY TECHNOLOGIES, INC., a Nevada corporation (the “Borrower”),
the Lenders party hereto and Bank of America, N.A., as administrative agent for
the Lenders (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower, the Lenders from time to
time party thereto, the Administrative Agent, Wells Fargo Bank, N.A., as
Syndication Agent and The Bank of Nova Scotia and Wachovia Bank, N.A., as
Documentation Agents, are parties to the Credit Agreement, dated as of September 26,
2008 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”);

 

WHEREAS, certain Lenders have agreed to
provide a new revolving facility to the Borrower as set forth in this
Amendment;

 

WHEREAS, the Lenders that have consented to
this Amendment constitute the Required Lenders under the Credit Agreement;

 

NOW, THEREFORE, the parties hereto hereby
covenant and agree as follows:

 

ARTICLE
I

DEFINITIONS

 

SECTION 1.1. 
Certain Definitions.  The
following terms when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

 

“Administrative Agent” is defined in
the preamble.

 

“Amendment” is defined in the
preamble.

 

“Amendment Effective Date” is defined
in Article III.

 

“Borrower” is defined in the preamble.

 

“Credit Agreement” is defined in the
first recital.

 

SECTION 1.2. 
Other Definitions. 
Capitalized terms for which meanings are provided in the Credit
Agreement (as amended hereby) are, unless otherwise defined herein, used in
this Amendment with such meanings.

 

Amendment No. 1

to Credit Agreement

 

1

 

ARTICLE
II

AMENDMENTS TO CREDIT AGREEMENT

 

Upon the occurrence of the Amendment
Effective Date, the provisions of the Credit Agreement referred to below are
hereby amended in accordance with this Article II.

 

SECTION 2.1. 
Section 1.01 of the Credit Agreement is hereby amended by inserting
the following definitions in the appropriate alphabetical order:

 

“Fronting Exposure” means, at any time
there is a Defaulting Lender, (a) with respect to the L/C Issuer, such
Defaulting Lender’s Applicable Revolving Credit Percentage of the outstanding
L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s
participation obligation has been Cash Collateralized in accordance with the
terms hereof, and (b) with respect to the Swing Line Lender, such
Defaulting Lender’s Applicable Revolving Credit Percentage of Swing Line Loans
other than Swing Line Loans as to which such Defaulting Lender’s participation
obligation has been Cash Collateralized in accordance with the terms hereof.

 

“Revolving A Credit Commitment” means,
as to each Revolving A Credit Lender, its obligation to (a) make Revolving
A Credit Loans to the Borrower pursuant to Section 2.01(b), (b) purchase
participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Revolving A Credit Commitment” or opposite such caption in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

 

“Revolving A Credit Facility” means,
at any time, the aggregate amount of the Revolving A Credit Lenders’ Revolving
A Credit Commitments at such time, which is $75,000,000 as of the Amendment
Effective Date.

 

“Revolving A Credit Lender” means, at
any time, any Lender that has a Revolving A Credit Commitment at such time.

 

“Revolving A Credit Loan” means a
Revolving Credit Loan made by a Revolving A Credit Lender pursuant to its
Revolving A Credit Commitment.

 

“Revolving A Credit Note” means a
promissory note made by the Borrower in favor of a Revolving A Credit Lender evidencing
Revolving A Credit Loans or Swing Line Loans, as the case may be, made by such
Revolving A Credit Lender, substantially in the form of Exhibit C-2.

 

“Revolving B Credit Commitment” means,
as to each Revolving B Credit Lender, its obligation to (a) make Revolving
B Credit Loans to the Borrower pursuant to Section 2.01(b), (b) purchase
participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time 

 

2

 

outstanding not to exceed
the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Revolving B Credit Commitment” or opposite such caption in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

 

“Revolving B Credit Facility” means,
at any time, the aggregate amount of the Revolving B Credit Lenders’ Revolving
B Credit Commitments at such time, which is $75,000,000 as of the Amendment
Effective Date.

 

“Revolving B Credit Lender” means, at
any time, any Lender that has a Revolving B Credit Commitment at such time.

 

“Revolving B Credit Loan” means a
Revolving Credit Loan made by a Revolving B Credit Lender pursuant to its
Revolving B Credit Commitment.

 

“Revolving B Credit Note” means a
promissory note made by the Borrower in favor of a Revolving B Credit Lender
evidencing Revolving B Credit Loans or Swing Line Loans, as the case may be,
made by such Revolving B Credit Lender, substantially in the form of Exhibit C-3.

 

SECTION 2.2.The definition of “Applicable Fee
Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended
and restated in its entirety as follows:

 

“Applicable Fee Rate” means, at any
time, in respect of the Revolving Credit Facility, the applicable percentage
per annum set forth below determined by reference to the Consolidated Total
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.02(b):

 

	
  Pricing

  Level

  	
   

  	
  Consolidated Total

  Leverage Ratio

  	
   

  	
  Applicable Fee

  Rate

  	
   

  
	
  1

  	
   

  	
  < 1.0:1

  	
   

  	
  0.250%

  	
   

  
	
  2

  	
   

  	
  < 1.5:1 but ≥ 1.0:1

  	
   

  	
  0.375%

  	
   

  
	
  3

  	
   

  	
  < 2.0:1 but ≥ 1.5:1

  	
   

  	
  0.375%

  	
   

  
	
  4

  	
   

  	
  < 2.5:1 but ≥ 2.0:1

  	
   

  	
  0.500%

  	
   

  
	
  5

  	
   

  	
  ≥ 2.5:1

  	
   

  	
  0.500%

  	
   

  

 

Any increase or decrease in
the Applicable Fee Rate resulting from a change in the Consolidated Total
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to Section 6.02(b);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then, upon the request of
the Required 

 

3

 

Revolving Lenders, Pricing
Level 5 shall apply as of the first Business Day after the date on which such
Compliance Certificate was required to have been delivered and shall remain in
effect until the date on which such Compliance Certificate is delivered.  Notwithstanding anything to the contrary
contained in this definition, the determination of the Applicable Fee Rate for
any period shall be subject to the provisions of Section 2.10(b).”

 

SECTION 2.3. 
The definition of “Applicable Rate” set forth in Section 1.01 of
the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“Applicable Rate” means, in respect of
the Term Facility, the Revolving A Credit Facility and the Revolving B Credit
Facility, the applicable percentage per annum set forth below determined by
reference to the Consolidated Total Leverage Ratio as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

 

	
  Pricing

  Level

  	
   

  	
  Consolidated
  Total

  Leverage
  Ratio

  	
   

  	
  Eurodollar
  Rate

  (Letters
  of Credit)

  	
   

  	
  Base

  Rate

  
	
  1

  	
   

  	
  < 1.0:1

  	
   

  	
  2.25%

  	
   

  	
  1.25%

  
	
  2

  	
   

  	
  < 1.5:1 but ≥ 1.0:1

  	
   

  	
  2.50%

  	
   

  	
  1.50%

  
	
  3

  	
   

  	
  < 2.0:1 but ≥ 1.5:1

  	
   

  	
  2.75%

  	
   

  	
  1.75%

  
	
  4

  	
   

  	
  < 2.5:1 but ≥ 2.0:1

  	
   

  	
  3.00%

  	
   

  	
  2.00%

  
	
  5

  	
   

  	
  ≥ 2.5:1

  	
   

  	
  3.25%

  	
   

  	
  2.25%

  

 

Any increase or decrease in
the Applicable Rate resulting from a change in the Consolidated Total Leverage
Ratio shall become effective as of the first Business Day immediately following
the date a Compliance Certificate is delivered pursuant to Section 6.02(b);
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then, upon the request of
the Required Term Lenders and the Required Revolving Lenders, Pricing Level 5
shall apply in respect of the Term Facility, the Revolving A Credit Facility
and the Revolving B Credit Facility as of the first Business Day after the date
on which such Compliance Certificate was required to have been delivered and in
each case shall remain in effect until the date on which such Compliance
Certificate is delivered. 
Notwithstanding anything to the contrary contained in this definition, the
determination of the Applicable Rate for any period shall be subject to the
provisions of Section 2.10(b).”

 

SECTION 2.4. 
The parenthetical in the definition of “Interest Payment Date” in Section 1.01
of the Credit Agreement is hereby amended and restated in its entirety as
follows:  “(with Swing Line Loans being
deemed made under the Revolving Credit Facility and, prior to the Maturity Date
with respect to Revolving A Credit Loans, on a pro  rata basis
between the 

 

4

 

Revolving A Credit Facility and the Revolving B Credit
Facility, for purposes of this definition).”

 

SECTION 2.5. 
The following definitions set forth in Section 1.01 of the Credit
Agreement are hereby amended and restated in their entireties as follows:

 

“Agreement” means this Credit
Agreement, as the same may be supplemented, modified, amended, restated or
extended.

 

“Availability Period” means in respect
of the Revolving A Credit Facility, the period from and including the Closing
Date and in respect of the Revolving B Credit Facility, the period from and
including the Amendment Effective Date, in either case to the earliest of (i) the
Maturity Date for such Revolving Credit Facility, (ii) the date of
termination of the Revolving Credit Commitments pursuant to Section 2.06,
and (iii) the date of termination of the commitment of each Revolving
Credit Lender to make Revolving Credit Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Defaulting Lender” means any Lender
that, as determined by the Administrative Agent, (a) has failed to perform
any of its funding obligations hereunder, including in respect of its Loans or
participations in respect of Letters of Credit or Swing Line Loans, within
three Business Days of the date required to be funded by it hereunder, in any
case unless the subject of a good faith dispute, (b) has notified the
Borrower or the Administrative Agent that it does not intend to comply with its
funding obligations or has made a public statement to that effect with respect
to its funding obligations hereunder or under other agreements in which it
commits to extend credit, (c) has failed, within three Business Days after
request by the Administrative Agent, to confirm in a manner satisfactory to the
Administrative Agent that it will comply with its funding obligations, or (d) has,
or has a direct or indirect parent company that has, (i) become the
subject of a proceeding under any Debtor Relief Law, (ii) had a receiver,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or a
custodian appointed for it, or (iii) taken any action in furtherance of,
or indicated its consent to, approval of or acquiescence in any such proceeding
or appointment; provided that a Lender shall not be a Defaulting Lender
solely by virtue of the ownership or acquisition of any equity interest in that
Lender or any direct or indirect parent company thereof by a Governmental
Authority.

 

“Facility” means the Term Facility,
the Revolving Credit Facility, the Revolving A Credit Facility or the Revolving
B Credit Facility, as the context may require.

 

“Letter of Credit Expiration Date”
means the day that is seven days prior to the Maturity Date then in effect for
the Revolving B Credit Facility (or, if such day is not a Business Day, the
next preceding Business Day).

 

“Maturity Date” means (a) with
respect to the Term Facility and the Revolving A Credit Facility, September 26,
2012 and (b) with respect to the Revolving B Credit 

 

5

 

Facility, March 31,
2014; provided, however, that, in each case, if such date is not
a Business Day, the Maturity Date shall be the next preceding Business Day.

 

“Revolving Credit Commitment” means,
as to each Revolving Credit Lender, its Revolving A Credit Commitment and its
Revolving B Credit Commitment.

 

“Revolving Credit Facility” means,
collectively, the Revolving A Credit Facility and the Revolving B Credit
Facility.

 

“Revolving Credit Loan” means a
Revolving A Credit Loan or a Revolving B Credit Loan, as the context requires.

 

SECTION 2.6. 
Section 2.01 of the Credit Agreement is hereby amended by adding
new clauses (c) and (d) thereto as follows:

 

“(c)         Revolving
Credit Loans on the Amendment Effective Date.  On the Amendment Effective Date each
Revolving B Credit Lender shall make a new Revolving B Credit Loan to the
Borrower, and the Borrower shall repay the Revolving A Credit Loans of each
Revolving A Credit Lender, in such amounts so that, after the making of each
such Revolving B Credit Loan and the repayment of each such Revolving A Credit
Loan, each Revolving Credit Lender shall hold its Applicable Revolving Credit
Percentage of each outstanding Revolving Credit Loan.

 

(d)           Revolving
Credit Loans on the Maturity Date for Revolving A Credit Loans.  On the Maturity Date with respect to the
Revolving A Credit Facility, the Revolving A Credit Commitments shall be
terminated and the Revolving A Credit Loans shall be repaid in full; provided,
that if the Borrower requests a Revolving Credit Borrowing consisting of
Revolving B Credit Loans to be made on the Maturity Date with respect to the
Revolving A Credit Facility, the Administrative Agent shall apply the proceeds
of such Revolving Credit Borrowing to the repayment of the Revolving A Credit
Loans (and any interest and fees payable with respect thereto) on such date to
the extent applicable; provided, further, that after giving effect to
any Revolving Credit Borrowing to be made on the Maturity Date with respect to
the Revolving A Credit Facility and application of the proceeds of such
Revolving Credit Borrowing to the repayment of the Revolving A Credit Loans, (i) the
Total Revolving Credit Outstandings shall not exceed the Revolving B Credit
Facility, and (ii) the aggregate Outstanding Amount of the Revolving B
Credit Loans of any Lender, plus such Revolving B Credit Lender’s Applicable
Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations,
plus such Revolving B Credit Lender’s Applicable Revolving Credit Percentage of
the Outstanding Amount of all Swing Line Loans, in each case after giving
effect to the repayment in full of the Revolving A Credit Loans and the termination
of the Revolving A Credit Commitments, shall not exceed such Revolving B Credit
Lender’s Revolving B Credit Commitment.”

 

SECTION 2.7. 
The first sentence Section 2.03(g) of the Credit Agreement is
hereby amended and restated in its entirety by the following two
sentences:  “Upon the request of the
Administrative Agent or the L/C Issuer (i) if the L/C Issuer has honored
any full or partial 

 

6

 

drawing request under any Letter of Credit and such
drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of
Credit Expiration Date, any L/C Obligation for any reason remains outstanding,
the Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. 
At any time that there shall exist a Defaulting Lender, immediately upon
the request of the Administrative Agent, the L/C Issuer or the Swing Line
Lender, the Borrower shall deliver to the Administrative Agent Cash Collateral
in an amount sufficient to cover all Fronting Exposure attributable to such
Defaulting Lender (after giving effect to any Cash Collateral provided by the
Defaulting Lender).”

 

SECTION 2.8. 
Clause (i) of Section 2.03(i) of the Credit Agreement is
hereby amended and restated in its entirety as follows:  “(i) due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Maturity Date with respect to the Revolving A Credit
Facility, on the Letter of Credit Expiration Date and thereafter on demand and”.

 

SECTION 2.9.  Section 2.03 of the Credit Agreement is
hereby amended by adding new clauses (m) and (n) thereto as follows:

 

“(m)        Letter
of Credit Participations on the Amendment Effective Date.  On the Amendment Effective Date the Revolving
B Credit Lenders shall purchase from the Revolving A Credit Lenders risk
participations in Letters of Credit and L/C Borrowings held at such time by the
Revolving A Credit Lenders in such amounts so that, after each such purchase,
each Revolving Credit Lender’s risk participation in each Letter of Credit and
L/C Borrowing is equal to the product of each such Revolving Credit Lender’s
Applicable Revolving Credit Percentage times the amount of each such Letter of
Credit and L/C Borrowing.

 

(n)           Letter
of Credit Participations on the Maturity Date for Revolving A Credit Loans.  On the Maturity Date with respect to the
Revolving A Credit Facility, the Revolving B Credit Lenders shall purchase from
the Revolving A Credit Lenders any risk participations in Letters of Credit and
L/C Borrowings held at such time by the Revolving A Credit Lenders in such
amounts so that, after each such purchase, each Revolving B Credit Lender’s
risk participation in each Letter of Credit and L/C Borrowing is equal to the
product of each such Revolving B Credit Lender’s Applicable Revolving Credit
Percentage (after giving effect to the termination of the Revolving A Credit
Commitments) times the amount of each such Letter of Credit and other
L/C Borrowing.”

 

SECTION 2.10. 
Section 2.07(b) and (c) of the Credit Agreement are
hereby amended and restated in their entireties as follows:

 

“(b)         Revolving
Credit Loans.  The Borrower shall
repay (i) to the Revolving A Credit Lenders on the Maturity Date for the
Revolving A Credit Facility the aggregate principal amount of all Revolving A
Credit Loans outstanding on that date as set forth in Section 2.01(d) and
(ii) to the Revolving B Credit Lenders on the Maturity Date for the
Revolving B Credit Facility the aggregate principal amount of all Revolving B
Credit Loans outstanding on that date.

 

7

 

(c)           Swing
Line Loans.  The Borrower shall repay
each Swing Line Loan on the earlier to occur of (i) the date ten Business
Days after such Loan is made and (ii) the Maturity Date (x) with
respect to the Revolving A Credit Facility if such Swing Line Loan was made
prior to such date or (y) with respect to the Revolving B Credit Facility
if such Swing Line Loan was made on or after the Maturity Date with respect to
the Revolving A Credit Facility.”

 

SECTION 2.11. 
Section 2.09(a) of the Credit Agreement is hereby amended by
replacing the reference therein to “on the last day of the Availability Period
for the Revolving Credit Facility” with a reference to “on the last day of the
Availability Period for each Revolving Credit Facility.”

 

SECTION 2.12. 
Each of Section 2.14(a) and Section 2.15(a) of the
Credit Agreement is hereby amended by replacing the reference therein to “$50,000,000”
with a reference to “$100,000,000”.  Each
of Section 2.14(e) and Section 2.15(e) of the Credit
Agreement is hereby amended by deleting the “and” at the end of clause (ii)(A) in
the first sentence therein, and by inserting a comma and a new clause (ii)(C) at
the end of clause (ii)(B) thereof, as follows:

 

“and
(C) if the Borrower or any of its Subsidiaries then has secured
Indebtedness (or commitments therefor) (other than the Obligations) outstanding
(after giving pro  forma effect to the application of proceeds of
Loans to be made upon the effectiveness of such increase of such Facility), the
ratio of (1) the sum of (A) the aggregate principal amount of such
secured Indebtedness (or commitments therefor), plus (B) the
aggregate amount of the Obligations outstanding at such time (after giving
effect to such increase of such Facility), plus (C) the aggregate
undrawn portions of the Revolving Credit Commitments at such time (after giving
effect to any increase of the Revolving Credit Facility), to (2) Consolidated
EBITDA of the Borrower and its Subsidiaries on a consolidated basis for the
Measurement Period most recently ended as of such date, does not exceed 1.50 to
1.0.”

 

SECTION 2.13. 
Section 7.01 of the Credit Agreement is hereby amended by deleting
the “and” at the end of clause (p) thereto, by replacing the period at the
end of clause (q) thereto with “; and” and by inserting a new clause (r) thereto
as follows:

 

“(r)          Liens securing
Indebtedness incurred pursuant to Section 7.02(m), provided
that, to the extent that such Liens encumber Collateral, such Liens shall rank pari
passu with the Liens securing the Obligations, and the holders of such
Indebtedness shall hold a security interest in the Collateral on an equal and
ratable basis with the Administrative Agent, all pursuant to an intercreditor
agreement or other documentation reasonably acceptable to the Administrative
Agent.”

 

SECTION 2.14. 
Section 7.02(i) of the Credit Agreement is hereby amended by
replacing the reference therein to “$150,000,000” with a reference to “$300,000,000”.

 

SECTION 2.15. 
Section 7.02 of the Credit Agreement is hereby amended by deleting
the “and” at the end of clause (k) thereto, by replacing the period at the
end of clause (l) thereto with “; and” and by inserting a new clause (m) thereto
as follows:

 

8

 

“(m)        after such time as the
Term Loans and the Revolving A Credit Loans have been repaid in full and the
Revolving A Credit Commitments have been terminated, other secured Indebtedness
(or commitments therefor) of the Borrower in an aggregate principal amount such
that, at the time of the effectiveness of such facility (and after giving pro
forma effect to any such Indebtedness or commitments thereunder and
application of the proceeds thereof), the ratio of (1) the sum of (A) the
aggregate principal amount of such Indebtedness or commitments to be incurred, plus
(B) the aggregate outstanding principal amount of all other secured
Indebtedness or unused commitments (other than the Obligations) of the Borrower
and its Subsidiaries at such time, plus (C) the aggregate amount of
the Obligations outstanding at such time, plus (D) the aggregate
undrawn portions of the Revolving Credit Commitments at such time, to (2) Consolidated
EBITDA of the Borrower and its Subsidiaries on a consolidated basis as of such
date, does not exceed 1.50 to 1.0.”

 

SECTION 2.16. 
Section 7.03(g)(iv) of the Credit Agreement is hereby amended
and restated in its entirety as follows: “[Intentionally Omitted].”

 

SECTION 2.17.  Section 7.03(m) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“(m)        Investments
consisting of loans to customers so long as the aggregate principal amount of
any such loans made after the Amendment Effective Date does not exceed
$60,000,000 at any time or $20,000,000 per property of any such customer; and”

 

SECTION 2.18.  Section 7.06(e) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“(e)         so
long as no Default shall have occurred and be continuing at the time of any
action described below or would result therefrom, the Borrower may (i) declare
or pay cash dividends to its stockholders and (ii) purchase, redeem or
otherwise acquire for cash Equity Interests issued by it (x) if the pro
forma Consolidated Total Leverage Ratio is less than 1.0, without limitation, (y) if
the pro forma Consolidated Total Leverage Ratio is 1.0 or greater but less than
1.5, so long as after giving effect thereto the aggregate amount of such
dividends, purchases, redemptions, retirements and acquisitions paid or made
during any fiscal year would be less than or equal to $75,000,000, and (z) if
the pro forma Consolidated Total Leverage Ratio is 1.5 or greater, so long as
after giving effect thereto the aggregate amount of such dividends, purchases,
redemptions, retirements and acquisitions paid or made during any fiscal year
would be less than or equal to $50,000,000.”

 

SECTION 2.19.  Section 7.11(a) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“(a)         Consolidated
Total Leverage Ratio.  Permit the
Consolidated Total Leverage Ratio at the end of any fiscal quarter of the
Borrower to be greater than 3.00 to 1.0.”

 

9

 

SECTION 2.20. 
Section 7.11(b) of the Credit Agreement is hereby amended by
adding the following sentence at the end thereof: “For purposes of calculating
Consolidated Fixed Charge Coverage Ratio for the Measurement Period which
includes September 26, 2012, the scheduled payment of principal of the
Term Loans for September 26, 2012 shall be deemed to be in the amount of
$11,250,000 (unless, on or before such date, the Term Loans shall have been
repaid in full, in which case such figure shall be zero).”

 

SECTION 2.21. 
The last sentence of the penultimate paragraph of Section 10.01 of
the Credit Agreement is hereby amended and restated in its entirety as follows:
“Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that (x) the Commitment of such Lender may not be
increased or extended without the consent of such Lender and (y) the
principal amount of any Loan or L/C Borrowing or any fees or other amounts
payable to such Lender hereunder or under any other Loan Document may not be
reduced or forgiven without the consent of such Lender.”

 

SECTION 2.22. 
Schedule 2.01 to the Credit Agreement is hereby amended and restated in
its entirety as set forth on Schedule 2.01 hereto.

 

SECTION 2.23. 
The Credit Agreement is hereby amended by amending and restating Exhibit C-2
thereto in its entirety as set forth on Exhibit C-2 hereto and by
adding a new Exhibit C-3 thereto as set forth on Exhibit C-3
hereto.

 

ARTICLE
III

CONDITIONS TO EFFECTIVENESS

 

The amendments set forth in Article II
shall become effective on the date (the “Amendment Effective Date”) when
all of the conditions set forth in this Article III have been
completed to the reasonable satisfaction of the Administrative Agent.

 

SECTION 3.1. 
The Administrative Agent shall have received counterparts hereof
executed on behalf of the Borrower, all Lenders and the Administrative Agent.

 

SECTION 3.2. 
The Administrative Agent shall have received an affirmation of the
Guaranty from each of the Guarantors in substantially the form of Exhibit A
hereto.

 

SECTION 3.3. 
Each Person that is not a Lender that is to become a Revolving B Credit
Lender (each of which shall be an Eligible Assignee) shall have executed a
joinder agreement in form and substance satisfactory to the Administrative Agent,
the Borrower and their respective counsel.

 

SECTION 3.4. 
The Administrative Agent shall have received, for the account of each
Lender that shall have consented to this Amendment by not later than 5:00 p.m.
(New York time) on April 9, 2010, a non-refundable amendment fee in
the amount of 0.15% of each such Lender’s aggregate Commitments in effect
immediately prior to the Amendment Effective Date.

 

10

 

SECTION 3.5. 
The Administrative Agent shall have received, for the account of each
Revolving B Credit Lender, a non-refundable up front fee in the amount agreed
between the Borrower and each such Revolving B Credit Lender.

 

SECTION 3.6. 
The Administrative Agent shall have received legal opinions substantially
in the form of Exhibit B hereto.

 

SECTION 3.7. 
The Administrative Agent shall have received such certificates of
resolutions or other action, incumbency certificates and/or other certificates
of Responsible Officers of each Loan Party as the Administrative Agent may
reasonably require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Amendment.

 

SECTION 3.8. 
The Administrative Agent (on behalf of the Lenders) shall be reasonably
satisfied that it continues to have a valid and perfected first priority lien
and security interest in the Collateral to the same extent as prior to the
Amendment Effective Date.

 

SECTION 3.9. 
The Administrative Agent shall have received revised forecasts prepared
by management of the Borrower, in form reasonably satisfactory to the
Administrative Agent, of balance sheets, income statements and cash flow
statements on a quarterly basis for fiscal year 2010 and on an annual basis
thereafter during the term of the Facilities.

 

SECTION 3.10. 
There shall not have occurred since June 30, 2009 any event or
condition that has had or could be reasonably expected, either individually or
in the aggregate, to have a Material Adverse Effect.

 

SECTION 3.11. 
The Borrower shall have paid all fees, charges and disbursements of
counsel to the Administrative Agent (directly to such counsel if requested by
the Administrative Agent) to the extent invoiced prior to or on the Amendment
Effective Date, plus such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges
and disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative Agent).

 

ARTICLE
IV

RETENTION OF RIGHTS, ETC.

 

SECTION 4.1. 
Limitation to its Terms. 
This Amendment strictly shall be limited to its terms.

 

SECTION 4.2. 
Retention of Rights. 
Without limiting the generality of Section 4.1, neither the
execution, delivery nor effectiveness of this Amendment shall operate as a
waiver of (or forbearance with respect to) any present or future Default or
Event of Default or as a waiver of (or forbearance with respect to) the ability
of the Administrative Agent or the other Lenders to exercise any right, power,
and/or remedy, whether under any Loan Document and/or under any applicable law,
in connection therewith.  As provided in Section 10.03
of the Credit Agreement, no failure on the part of any Lender or the
Administrative Agent to exercise, and no delay in 

 

11

 

exercising, any right under the Credit Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of
any other right.

 

SECTION 4.3. 
Full Force and Effect; Limited Amendment.  Without limiting the generality of Section 4.1,
except as expressly amended hereby, all of the representations, warranties,
terms, covenants, conditions and other provisions of the Credit Agreement shall
remain unchanged and shall continue to be, and shall remain, in full force and
effect in accordance with their respective terms.  Without limiting the generality of Section 4.1,
the amendments set forth herein shall be limited precisely as provided for
herein to the provision expressly amended herein and shall not be deemed to be
amendments to, waivers of, consents to or modifications of any other term or
provision of the Credit Agreement or of any transaction or further or future
action on the part of Borrower which would require the consent of the Lenders
under the Credit Agreement.

 

ARTICLE
V

MISCELLANEOUS

 

SECTION 5.1. 
Representations and Warranties. 
The Borrower represents and warrants the following:

 

(a)           before and after
giving effect to this Amendment, no Default or Event of Default is continuing;

 

(b)           after giving effect
to this Amendment, the representations and warranties contained in Article V
of the Credit Agreement are true and correct on and as of the Amendment
Effective Date as though made on that date (or, if stated to have been made as
of an earlier date, was true and correct as of such earlier date); and

 

(c)           this Amendment has
been duly authorized by the Borrower, there is no action pending or any order,
judgment, or decree in effect that is likely to restrain, prevent, or impose
materially adverse conditions upon the performance by the Borrower or any of
its Subsidiaries under the Credit Agreement or any of the other Loan Documents,
and this Amendment constitutes the valid, binding and enforceable obligation of
the Borrower in accordance with its terms, except as enforcement may be limited
by Debtor Relief Laws, Gaming Laws or equitable principles relating to the
granting of specific performance and other equitable remedies as a matter of
judicial discretion; and

 

(d)           The execution,
delivery and performance by the Borrower of this Amendment does not and will
not conflict with, or constitute a violation or breach of, or result in the
imposition of any Lien upon the property of Borrower or any of its
Subsidiaries, by reason of the terms of (i) any contract, mortgage, lease,
agreement, indenture, or instrument to which the Borrower or any of its
Subsidiaries is a party or which is binding upon it, (ii) any requirement
of law applicable to the Borrower or any of its Subsidiaries, or (iii) the
certificate or articles of incorporation or by-laws or the limited

 

12

 

liability company
or limited partnership agreement, or analogous organizational document, of
Borrower or any of its Borrower’s Subsidiaries except, in the case of clauses (i) and
(ii), as would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.2. 
Loan Document.  This
Amendment is a Loan Document and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement.

 

SECTION 5.3. 
Reaffirmation of Obligations. 
The Borrower hereby acknowledges that the Loan Documents (as amended by
this Amendment) and the Obligations constitute the valid and binding
Obligations of the Borrower enforceable against Borrower in accordance with
their respective terms, and the Borrower hereby reaffirms its Obligations under
the Loan Documents (as amended by this Amendment).  The Administrative Agent’s and any Lender’s
entry into this Agreement or any of the documents referenced herein, the
Administrative Agent’s and any Lender’s negotiations with any party with
respect to any Loan Document, the Administrative Agent’s and any Lender’s
acceptance of any payment from the Borrower, any Guarantor or any other party
of any payments made to the Administrative Agent or any Lender prior to the
date hereof, or any other action or failure to act on the part of the
Administrative Agent or any Lender shall not constitute (a) a modification
of any Loan Document (except to the extent of the specific amendments contained
herein), or (b) a waiver of any Default or Event of Default under the Loan
Documents, or a waiver of any term or provision of any Loan Document.

 

SECTION 5.4. 
Successors and Assigns.  This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and to the Credit Agreement and their respective successors and permitted
assigns.

 

SECTION 5.5. 
Execution in Counterparts. 
This Amendment may be executed by the parties hereto in several
counterparts, each of which shall be an original and all of which shall
constitute together but one and the same agreement.

 

SECTION 5.6. 
Integration.  This
Amendment represents the agreement of the Borrower, the Administrative Agent
and each of the Lenders (through the Required Lenders’ consenting hereto) with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

 

SECTION 5.7. 
Governing Law and Waiver of Jury Trial.  The terms of Sections 10.14 (Governing Law;
Jurisdiction; Etc.) and 10.15 (Waiver of Jury Trial) of the Credit Agreement
are incorporated herein as though set forth in full.

 

13

 

IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Amendment as of the date first above written.

 

	
   

  	
  BALLY
  TECHNOLOGIES, INC.,

  
	
   

  	
  a
  Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

The undersigned Lender
consents to all of the terms and provisions of the attached Amendment No. 1.

 

 

	
   

  	
  [NAME
  OF LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

EXHIBIT A

 

CONSENT

 

This Consent (this “Consent”) is delivered
with reference to the Credit Agreement (the “Credit Agreement”) dated as of September 26,
2008, as amended, among Bally Technologies, Inc., a Nevada corporation
(the “Borrower”), the Lenders referred to therein, Bank of America, N.A., as
Administrative Agent (“Administrative Agent”), Wells Fargo Bank, N.A., as
Syndication Agent and The Bank of Nova Scotia and Wachovia Bank, N.A., as
Documentation Agents.  Capitalized terms
used but not defined herein are given the meanings set forth for those terms in
the Credit Agreement.

 

Each of the undersigned hereby consents to
the execution, delivery and performance by the Borrower, the Lenders and
Administrative Agent of the proposed Amendment No. 1 to the Credit
Agreement (the “Amendment”), substantially in the form of the most recent draft
presented to the undersigned, and agrees that nothing contained therein shall
diminish, alter, amend or otherwise affect any of the undersigned’s obligations
under the Loan Documents.

 

In connection therewith, each of the
undersigned expressly and knowingly reaffirms its respective liability under
each of the Loan Documents to which it is a Party and expressly agrees (a) to
be and remain liable under the terms of each such Loan Document, and (b) that
it has no defense, offset or counterclaim whatsoever against the Administrative
Agent or the Lenders with respect to any such Loan Document.

 

The undersigned further agrees that each Loan
Document to which it is a party shall remain in full force and effect and is
hereby ratified and confirmed.  The
undersigned further agrees that the execution of this Consent is not necessary
for the continued validity and enforceability of any Loan Document to which it
is a party but is executed to induce the Administrative Agent and the Lenders
to approve of and otherwise enter into the Amendment.

 

[Signature pages to
follow]

 

 

IN WITNESS WHEREOF, each of the undersigned
intending to be legally bound hereby, has caused this Consent to be executed as
of
              ,
2010.

 

	
   

  	
  [GUARANTORS]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

EXHIBIT B

 

FORM OF LEGAL OPINIONS

 

 

EXHIBIT C-2

 

REVOLVING A CREDIT NOTE

 

 

EXHIBIT C-3

 

REVOLVING B CREDIT NOTE

 

 

SCHEDULE 2.01

 

REVOLVING A CREDIT
COMMITMENTS 

REVOLVING B CREDIT COMMITMENTS

AND

TERM COMMITMENTSExhibit 4.1

 

CERTIFICATE OF DETERMINATION

OF

6% MANDATORY CONVERTIBLE CUMULATIVE

PREFERRED STOCK, SERIES A

OF

COMMUNITY VALLEY BANCORP

 

Pursuant to Section 401 of
the Corporations Code of the State of California:

 

We, Gayle J. Lee, Vice
President, and John F. Coger, Chief Financial Officer of Community Valley
Bancorp, organized under the laws of the State of California (hereinafter
called the “Corporation”), do hereby certify as follows:

 

1.                                       On December 8,
2009, the Board of Directors of the Corporation adopted a resolution
designating 240,000 shares of Preferred Stock as “6% Mandatory Convertible
Cumulative Preferred Stock, Series A.”

 

2.                                       No shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A have been
issued.

 

3.                                       Pursuant to the
authority conferred upon the Board of Directors by the Articles of
Incorporation of the Corporation, the following resolution was duly adopted by
the Board of Directors on December 8, 2009 creating the series of
Preferred Stock designated as “6% Mandatory Convertible Cumulative Preferred
Stock, Series A”:

 

WHEREAS, the Articles of Incorporation of the Corporation provide for a
class of shares known as Preferred Stock, issuable from time to time in one or
more series; and

 

WHEREAS, the Board of Directors of the Corporation is authorized to
determine or alter the voting power, preferences, limitations, restrictions and
relative rights granted to or imposed upon any wholly unissued series of
Preferred Stock, to fix the number of shares constituting any such series, and
to determine the designation thereof, or any of them; and

 

WHEREAS, the Board of Directors of the Corporation desires, pursuant to
its authority as aforesaid, to determine and fix the voting power, preferences,
limitations, restrictions and relative rights relating to, the 6% Mandatory
Convertible Cumulative Preferred Stock, Series A and the number of shares
constituting and the designation of said series;

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes
and determines the designation of, the number of shares constituting, and the
voting power, preferences, limitations, restrictions and relative rights
relating to the 6% Mandatory Convertible Cumulative Preferred Stock, Series A
as follows:

 

 

(a)            Name.  The initial series of shares of Preferred
Stock shall be designated the “6% Mandatory Convertible Cumulative Preferred
Stock, Series A,” shall consist of 240,000 shares and shall be offered at
$5.00 per share.

 

(b)           Voting Rights.

 

(1)            General.  The holders of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A shall be entitled to vote, in person
or by proxy, at a special or annual meeting of shareholders on all matters
entitled to be voted on by holders of shares of Common Stock voting together as
a single class with shareholders of Common Stock (and with other shares
entitled to vote thereon), including, without limitation, the election of all
of the directors of the Corporation.

 

(2)            6% Mandatory
Convertible Cumulative Preferred Stock, Series A Actions.  At any meeting of the holders of shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A held for the
purpose of voting upon any resolutions requiring the approval of the holders of
shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A, voting
as a separate class or series, the presence in person or by proxy of the
holders of a majority of the shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A then outstanding shall constitute a quorum of
the 6% Mandatory Convertible Cumulative Preferred Stock, Series A; the
holders of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
shall be entitled to cast one vote per share of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A; and such resolution shall be deemed
approved upon the affirmative vote of the holders of a majority of the
outstanding shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
present in person or represented by proxy at such meeting.

 

(3)            Action Without a
Meeting.  Any action required by the
California Corporations Code to be taken at any annual or special meeting of
holders of 6% Mandatory Convertible Cumulative Preferred Stock, Series A,
voting as a separate class or series, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding shares
of 6% Mandatory Convertible Cumulative Preferred Stock, Series A having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting of the holders of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A at which all shares entitled to vote
thereon are present and voted and shall be delivered (by hand, facsimile, U.S.
Postal Service or overnight delivery service) to the Corporation by delivery to
its registered office in the State of California, its principal place of
business, or any officer or agent of the Corporation having custody of the book
in which proceedings of meetings of the holders of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A are recorded.

 

Every written consent shall bear the date of signature of each holder of
6% Mandatory Convertible Cumulative Preferred Stock, Series A who signs
the consent.  Prompt notice of the taking
of the corporate action without a meeting by less than unanimous written
consent shall, to the extent, required by applicable law, be given to those
holders of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
who

 

2

 

have
not consented in writing, and who, if the action had been taken at a meeting,
would have been entitled to notice of the meeting if the record date for such
meeting had been the date that written consents signed by a sufficient number
of holders to take the action were delivered to the Corporation.

 

(4)            Major Actions.  Notwithstanding anything to the contrary set
forth in the Articles of Incorporation, as amended or the Bylaws, as amended of
the Corporation, the affirmative vote of the holders of a majority of the
outstanding shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
acting in accordance with paragraph (b)(2) or (b)(3), voting as a separate
class, shall be a prerequisite to:

 

(i)             any amendment to,
restatement of or waiver of the terms of the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A;

 

(ii)            the redemption of
any stock that is junior in ranking to the 6% Mandatory Convertible Cumulative
Preferred Stock, Series A;

 

(iii)           until the payment
of all dividends required to be paid as set forth in paragraph (c), any payment
upon liquidation, any distribution or payment of dividend (other than a stock
dividend paid with stock ranking junior to the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A) or other distribution to any stock
ranking junior to the 6% Mandatory Convertible Cumulative Preferred Stock, Series A;
and

 

(iv)           any amendment to
this paragraph b(4).

 

(c)            Dividends.  The holders of the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A shall be entitled to receive
dividends, semi-annually at the rate of 6% per annum of $5.00 ($0.15 per
dividend payment) per share, payable on June 15 and December 15 of
each year.  Dividends on the 6% Mandatory
Convertible Cumulative Preferred Stock, Series A shall (i) accrue on
each such share from the date of its original issuance and shall accrue day to
day, whether or not declared; (ii) be payable before any dividends on the
Corporation’s Common Stock are paid or declared and set apart; and (iii) be
cumulative, so that if dividends required to be paid under this clause on the
outstanding 6% Mandatory Convertible Cumulative Preferred Stock, Series A
have not been paid or set apart for any year or years after the date of
issuance of the 6% Mandatory Convertible Cumulative Preferred Stock, Series A,
the amounts of the deficiency shall be first fully paid or declared and set
apart for payment, but without interest, before any distribution, by dividend
or otherwise, payable other than in shares of the Corporation’s Common Stock,
is declared, paid on, or set apart for the shares of the Corporation’s Common
Stock.  “Distribution” in this paragraph (c) means
the transfer of cash or property without consideration, whether by way of
dividend or otherwise (except a dividend in shares of the Corporation which are
junior to the 6% Mandatory Convertible Cumulative Preferred Stock, Series A
as to dividends or assets) including any such transfer by a subsidiary of the
Corporation.  The time of any
distribution by way of dividend shall be the date of declaration thereof.  The payment of dividends on the 6% Mandatory
Convertible Cumulative Preferred Stock, Series A shall be made only after
all dividends have been paid or set apart for payment on any of the shares of
the Corporation’s Preferred Stock that have a dividend rights preference over
the 6% Mandatory Convertible Cumulative Preferred Stock, Series A.

 

3

 

(d)           Conversion
Rights.  The shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A shall have the following
rights of conversion.

 

(1)            Optional
Conversion.  Six months after the date of
issuance of the shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A,
any holder of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
shall have the right, at its option, provided that notice of conversion is
given by the holder of shares of 6% Mandatory Convertible Cumulative Preferred
Stock, Series A at least three business days prior to a conversion date (“Conversion
Date”) to convert, subject to the terms and provisions of this paragraph (d),
any or all of such holder’s shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A into such number of fully paid and nonassessable
shares of the Corporation’s Common Stock as is equal to the product of (i) the
number of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
being so converted multiplied by (ii) the quotient (“Conversion Rate”) of (x) the
sum of $5.00 plus any unpaid dividends on the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A after issuance divided by (y) $2.00
(subject to adjustment as provided in paragraph (d)(4) below).  The “Conversion Date” shall mean the first
business day on or after June 15, or December 15 in any calendar
year, at which time the Preferred Shares are effectively converted into shares
of the Corporation’s Common Stock.  Such
conversion right shall be exercised by the surrender of certificate(s) representing
the shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
to be converted to the Corporation at any time during usual business hours at
its principal place of business maintained by it (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the holders of shares of 6% Mandatory Convertible Cumulative Preferred
Stock, Series A), accompanied by written notice that the holder elects to
convert such shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
and specifying the name or names (with address) in which a certificate or
certificates for shares of the Corporation’s Common Stock are to be issued and
(if so required by the Corporation) by a written instrument or instruments of
transfer in form reasonably satisfactory to the Corporation duly executed by
the holder or its duly authorized legal representative and transfer tax stamps
or funds therefor, if required pursuant to paragraph (d)(9) below.  All certificates representing shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A surrendered for
conversion shall be delivered to the Corporation for cancellation and canceled
by it.  As promptly as practicable after
the applicable Conversion Date, the Corporation shall (subject to compliance
with the applicable provisions of federal and state securities laws) deliver to
the holder of such shares so surrendered certificate(s) representing the
number of fully paid and nonassessable whole shares of the Corporation’s Common
Stock into which such shares are entitled to be converted and cash in lieu of
any fractional share.  At the time of the
surrender of such certificate(s), the person or entity in whose name any
certificate(s) for shares of Common Stock shall be issuable upon such
conversion shall be deemed to be the holder of record of such shares of Common
Stock on such date, notwithstanding that the share register of the Corporation
shall then be closed or that the certificates representing such Common Stock of
the Corporation shall not then be actually delivered to such person or entity.

 

4

 

(2)            Termination of
Rights.  On the date of such optional
conversion pursuant to paragraph (d)(1) above all rights with respect to
the shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
so converted, including the rights, if any, to receive notices and vote, shall
terminate, except only the rights of holders thereof to (i) receive
certificates for the number of shares of the Corporation’s Common Stock into
which such shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
have been converted and (ii) exercise the rights to which they are
entitled as holders of the Corporation’s Common Stock.

 

(3)            Mandatory
Conversion.  Any shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A that are outstanding on December 31,
2011 shall be mandatorily converted into such number of fully paid and
nonassessable shares of the Corporation’s Common Stock as is equal to the
product of (i) the number of shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A being so converted multiplied by (ii) the
quotient (“Conversion Rate”) of (x) the sum of $5.00 plus any unpaid
dividends on the 6% Mandatory Convertible Cumulative Preferred Stock, Series A
after issuance divided by (y) $2.00 (subject to adjustment as provided in
paragraph (d)(4) below).  Such
conversion shall be effected by the surrender by the respective holders of
certificate(s) representing the shares of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A to be converted to the Corporation at
any time during usual business hours at its principal place of business
maintained by it (or such other office or agency of the Corporation as the
Corporation may designate by a letter of transmittal specifying the name or
names (with address) in which a certificate or certificates for shares of the
Corporation’s Common Stock are to be issued and (if so required by the
Corporation) by a written instrument or instruments of transfer in form
reasonably satisfactory to the Corporation duly executed by the holder or its
duly authorized legal representative and transfer tax stamps or funds therefor,
if required pursuant to paragraph (d)(9) below.  All certificates representing shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A surrendered for
conversion shall be delivered to the Corporation for cancellation and canceled
by it.  As promptly as practicable after
the applicable Conversion Date, the Corporation shall (subject to compliance
with the applicable provisions of federal and state securities laws) deliver to
the holder of such shares so surrendered certificate(s) representing the
number of fully paid and nonassessable whole shares of the Corporation’s Common
Stock into which such shares are entitled to be converted and cash in lieu of
any fractional share.  At the time of the
surrender of such certificate(s), the person or entity in whose name any
certificate(s) for shares of Common Stock shall be issuable upon such
conversion shall be deemed to be the holder of record of such shares of Common
Stock on such date, notwithstanding that the share register of the Corporation
shall then be closed or that the certificates representing such Common Stock of
the Corporation shall not then be actually delivered to such person or
entity.  Also, upon such mandatory
conversion, all rights with respect to the shares of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A so converted, including the rights,
if any, to receive notices and vote, shall terminate, except only the rights of
holders thereof to (i) receive certificates for the number of shares of
the Corporation’s Common Stock into which such shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A have been converted and (ii) exercise
the rights to which they are entitled as holders of the Corporation’s Common
Stock.

 

5

 

(4)            (A)          Dividend,
Subdivision, Combination or Reclassification of Common Stock.  In the event that the Corporation shall at
any time or from time to time, prior to conversion of shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A (w) pay a dividend
or make a distribution on the outstanding shares of Common Stock payable in
capital stock of the Corporation, (x) subdivide the outstanding shares of
Common Stock into a larger number of shares, (y) combine the outstanding
shares of Common Stock into a smaller number of shares or (z) issue any
shares of its capital stock in a reclassification of the Common Stock (other
than any such event for which an adjustment is made pursuant to another clause
of this paragraph (d)(4)), then, and in each such case, the Conversion Rate in
effect immediately prior to such event shall be adjusted (and any other
appropriate actions shall be taken by the Corporation) so that the holder of
any share of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
thereafter surrendered for conversion shall be entitled to receive the number
of shares of Common Stock or other securities of the Corporation that such
holder would have owned or would have been entitled to receive upon or by
reason of any of the events described above, had such share of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A been converted
immediately prior to the occurrence of such event.  An adjustment made pursuant to this paragraph
(d)(4)(A) shall become effective retroactively (x) in the case of any
such dividend or distribution, to a date immediately following the close of
business on the record date for the determination of holders of Common Stock
entitled to receive such dividend or distribution or (y) in the case of
any such subdivision, combination or reclassification, to the close of business
on the day upon which such corporate action becomes effective.

 

(B)            Certain
Distributions.  In case the Corporation
shall at any time or from time to time, prior to conversion of shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A, distribute to
all holders of shares of the Common Stock (including any such distribution made
in connection with a merger or consolidation in which the Corporation is the
resulting or surviving entity and the Common Stock is not changed or exchanged)
cash, evidences of indebtedness of the Corporation or another issuer,
securities of the Corporation or another issuer or other assets (excluding cash
dividends in which holders of shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A participate; dividends payable in shares of
Common Stock for which adjustment is made under another subparagraph of this
paragraph (d); or the issuance by another entity of capital stock in
consideration of an acquisition that also provides adequate consideration to
the holders of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
approved by the Board of Directors) or rights or warrants to subscribe for or
purchase of any of the foregoing, then, and in each such case, the Conversion
Rate then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Corporation) by multiplying the Conversion Rate in effect
immediately prior to the date of such distribution by a fraction (x) the
denominator of which shall be the then current market price of the Common Stock
immediately prior to the date of distribution less the then fair market value
(as determined by the Board of Directors in the exercise of their fiduciary
duties) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such rights or warrants

 

6

 

applicable
to one share of Common Stock and (y) the numerator of which shall be the
then current market price of the Common Stock immediately prior to the date of
distribution (but such fraction shall not be applicable with respect to any
distribution of rights or warrants to subscribe for or purchase securities of
the Corporation if the holder of shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A would otherwise be entitled to receive such
rights or warrants upon conversion at any time of shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A into Common Stock.  Such adjustment shall be made whenever any
such distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of shareholders entitled to receive such distribution.

 

(C)            No Adjustment.  Notwithstanding anything herein to the
contrary, no adjustment under this paragraph (d)(4) need be made to the
Conversion Rate if the Corporation receives written notice from holders of a
majority of the outstanding shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A that no such adjustment is required.

 

(5)            Abandonment.  If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to shareholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then no adjustment in the Conversion Rate shall
be required by reason of the taking of such record.

 

(6)            Certificate as to
Adjustments.  Upon any adjustment in the
Conversion Rate, the Corporation shall maintain a detailed record of any and
all such adjustments setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and
specifying the increased or decreased Conversion Rate then in effect following
such adjustment.

 

(7)            Reorganization,
Reclassification.  In case of any merger
or consolidation of the Corporation or any capital reorganization,
reclassification or other change of outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value) (each, a “Transaction”), the holder of each share of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A shall have the
right to receive in such Transaction, in exchange for each share of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A, a security
identical to (and not less favorable than) the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A, and provision shall be made therefor
in the agreement, if any, relating to such Transaction.

 

(8)            Reservation of
Common Stock.  The Corporation shall at
all times reserve and keep available for issuance upon the conversion of shares
of 6% Mandatory Convertible Cumulative Preferred Stock, Series A, such
number of its authorized but unissued shares of Common Stock as will from time
to time be sufficient to permit the conversion of all outstanding shares of 6%
Mandatory Convertible Cumulative Preferred Stock, Series A, and shall take
all action to increase the authorized number of shares of Common Stock if at
any time there shall be insufficient authorized but unissued shares of Common
Stock to permit such reservation or to permit the conversion of all outstanding

 

7

 

shares
of 6% Mandatory Convertible Cumulative Preferred Stock, Series A;
provided, that the holders of shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A shall vote such shares in favor of any such
action that requires a vote of shareholders.

 

(9)            No Conversion Tax
or Charge.  The issuance or delivery of
certificates for Common Stock upon the conversion of shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A shall be made without
charge to the converting holder of shares of 6% Mandatory Convertible
Cumulative Preferred Stock, Series A for such certificates or for any tax
in respect of the issuance or delivery of such certificates or the securities
represented thereby, and such certificates shall be issued or delivered in the
respective names of, or (subject to compliance with the applicable provisions
of federal and state securities laws) in such names as may be directed by, the
holders of the shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
converted; provided, however, that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the
holder of the shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
converted, and the Corporation shall not be required to issue or deliver such
certificate unless or until the person(s) or entity(ies) requesting the
issuance or delivery thereof shall have paid to the Corporation the amount of
such tax or shall have established to the reasonable satisfaction of the
Corporation that such tax has been paid.

 

(e)            Liquidation
Rights.  In the event of a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
holders of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
shall be entitled to receive out of the assets of the Corporation, whether such
assets are capital or surplus of any nature, an amount equal to $5.00 per share
of 6% Mandatory Convertible Cumulative Preferred Stock, Series A and a
further amount equal to any dividends accrued and unpaid thereon, as provided
in paragraph (c) above, to the date that payment is made available to the
holders of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A,
whether declared or not, and no more, before any payment shall be made or any
assets distributed to the holders of shares of the Corporation’s Common Stock
or any of the shares of the Corporation’s Preferred Stock that have a
liquidation rights preference over the 6% Mandatory Convertible Cumulative
Preferred Stock, Series A..

 

If, upon such liquidation, dissolution or winding up, the assets thus
distributed among the holders of shares of 6% Mandatory Convertible Cumulative
Preferred Stock, Series A shall be insufficient to permit the payment to
such shareholders of the full preferential amounts aforesaid, then the entire
assets of the Corporation to be distributed shall be distributed ratably among
the holders of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A.

 

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, subject to all of the preferential rights of the
holders of shares of 6% Mandatory Convertible Cumulative Preferred Stock, Series A
and the preferential rights of holders any of the other shares of the
Corporation’s Preferred Stock on distribution or otherwise, the holders of
shares of the Corporation’s Common Stock shall be entitled to receive, ratably,
all remaining assets of the Corporation.

 

8

 

A consolidation or merger of the Corporation with or into any other
corporation or corporations, or a sale of all or substantially all of the
assets of the Corporation, shall not be deemed to be a liquidation, dissolution
or winding up within the meaning of this paragraph (e).

 

(f)            Right of
Redemption.

 

(1)            The shares of the
6% Mandatory Convertible Cumulative Preferred Stock, Series A are not
redeemable at the option of the holder.

 

(2)            The shares of the
6% Mandatory Convertible Cumulative Preferred Stock, Series A are
redeemable at the option of the Corporation, subject to prior approval of the
Board of Governors of the Federal Reserve System, at a price of $5.25 per share
plus all outstanding and unpaid dividends with at least ten (10) days’
prior notice of redemption.

 

(g)           No Preemptive
Rights.  The shares of 6% Mandatory
Convertible Cumulative Preferred Stock, Series A shall not have any
preemptive rights.

 

RESOLVED FURTHER, that the Chairman of the Board, the President or any
Vice President, and the Secretary, the Chief Financial Officer, the Treasurer,
or any Assistant Secretary or Assistant Treasurer of the Corporation are each
authorized to execute, verify and file a Certificate of Determination in
accordance with California law.

 

4.                                       The authorized
number of shares of Preferred Stock of the Corporation is 10,000,000, and the
number of shares of Preferred Stock constituting the 6% Mandatory Convertible
Cumulative Preferred Stock, Series A, none of which has been issued, is
240,000.

 

We
further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.

 

	
  Date: December 22, 2009

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/: Gayle J Lee

  
	
   

  	
  Name:

  	
  Gayle J. Lee

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/: John F Coger

  
	
   

  	
  Name:

  	
  John F. Coger

  
	
   

  	
  Title:

  	
  EVP/Chief Financial Officer

  

 

9

 

TRANSFER OF THIS CERTIFICATE

IS RESTRICTED.

SEE LEGEND ON REVERSE SIDE

 

	
  6% Mandatory Convertible

  	
   

  	
   

  
	
  Cumulative Preferred Stock,

  	
   

  	
   

  
	
  Series A

  	
   

  	
   

  
	
  $5.00 Liquidation Value

  	
   

  	
   

  

 

	
  Certificate

  	
   

  	
   

  	
  Shares

  
	
  Number

  	
   

  	
  COMMUNITY VALLEY BANCORP

  
					

 

THIS CERTIFIES THAT

 

	
  IS THE OWNER OF

  	
  **

  	
   

  	
  **

  

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE 6% MANDATORY CONVERTIBLE
CUMULATIVE PREFERRED STOCK, SERIES A OF

 

Community Valley Bancorp
transferable in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.  This
certificate and the shares represented hereby are subject to the provisions of
the Articles of Incorporation, all amendments thereto and the Bylaws of the
Corporation, and to the rights, preferences and voting powers of the Preferred
Stock of the Corporation now or hereafter outstanding; the terms of all such
provision, rights, preferences and voting powers in the Certificate of
Determination for the Corporation’s Preferred Stock Series A being
incorporated herein by reference.

 

IN WITNESS THEREOF, Community
Valley Bancorp has caused this certificate to be executed by signatures of its
duly authorized officers.

 

	
   

  	
   

  	
  DATED DECEMBER      , 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  President

  	
   

  	
  Secretary

  

 

10

 

COMMUNITY
VALLEY BANCORP

 

THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

 

THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

 

THIS
INSTRUMENT IS ISSUED SUBJECT TO RIGHTS, PRIVILEGES, PREFERENCES AND
RESTRICTIONS IN THE CERTIFICATE OF DETERMINATION FILED WITH THE CALIFORNIA
SECRETARY OF STATE FOR THE COMPANY’S PREFERRED STOCK SERIES A.

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:

 

	
  TEN
  COM - as tenants in common

  	
  UNIF GIFT MIN ACT -                     
  Custodian                                      

  
	
   

  	
  (Cust)

  	
  (Minor)

  	
   

  
	
  TEN
  ENT - as tenants by the entireties

  	
   

  	
  under Uniform Gifts to Minors
  Act                    
  

  
	
   

  	
   

  	
  (State)

  	
   

  
	
  JT
  TEN        - as joint tenants with right
  of survivorship

  	
  UNIF TRF MIN ACT -                 
  Custodian (until age                     )

  
	
   

  	
  (Cust)

  
	
   

  	
   

  	
                        under Uniform
  Transfers to Minors Act                 
  

  
	
   

  	
   

  	
  (Minor)

  	
   

  	
  (State)

  	
   

  
											

 

Additional
abbreviations may also be used though not in the above list.

 

PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

For
value received,                                          hereby
sell, assign and transfer unto

 

 

	
  (PLEASE PRINT OR TYPEWRITE
  NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  shares 

  
	
  of the capital stock
  represented by the within Certificate, and do hereby irrevocably constitute
  and appoint

  	
   

  
	
   

  	
  Attorney

  
	
  to transfer the said stock on
  the books of the within named Corporation with full power of substitution in
  the premises.

  	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
  20

  	
   

  	
   

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
  Notice:

  	
  The signature to this
  assignment must correspond with the name

  
	
   

  	
   

  	
  as written upon the face of
  the certificate, in every particular,

  
	
   

  	
   

  	
  without alteration or
  enlargement, or any change whatever.

  
												

 

	
  Signature(s) Guaranteed:
  Medallion Guarantee Stamp

  	
   

  
	
  THE SIGNATURE(S) SHOULD
  BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers,
  Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN
  APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
  17Ad-15.

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