Document:

Exhibit 10.1

  

   

    

  Execution copy 

   

  

  
    WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

    

    

    This WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),

        dated as of May 6, 2019 (the “Second Amendment Date”), is made between GALAXY GAMING, INC., a Nevada corporation (the “Borrower”), and ZIONS BANCORPORATION, N.A. dba NEVADA STATE BANK, a Nevada state banking corporation (the “Lender”).

     

      

    RECITALS

     

      

    A.          The Lender and the Borrower entered into a Credit
        Agreement, dated as of April 24, 2018, as amended by the First Amendment to Credit Agreement, dated as of April 22, 2019 (as further amended, restated, or otherwise modified, the “Credit

            Agreement”), pursuant to which the Lender agreed to extend credit to the Borrower.

     

      

    B.          The Borrower desires to amend certain provisions of the
        Credit Agreement, and the Lender has agreed to make such amendments, subject to the terms of this Amendment.

     

      

    AGREEMENT

    

    

    NOW, THEREFORE, for good and valuable
        consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows.

     

      

    Section 1.            Capitalized Terms. Capitalized terms not defined shall have the meanings assigned to them in the Credit
          Agreement, unless the context shall otherwise require.

     

      

    Section 2.            Waiver and Forbearance.

     

      

    2.1         Definitions.

     

        

    “Restructuring Period”: The six-month
        period commencing on the Second Amendment Date.

     

      

    “Subordinated Debt (Restructuring)”:
        Indebtedness of the Borrower in an aggregate principal amount of no more than $40,000,000, with a maturity date no later than the end of the Restructuring Period, which Indebtedness shall provide that, upon a Default or Event of Default under this
        Agreement, the Borrower shall cease making all interest payments under the Subordinated Debt (Restructuring).

     

      

    “Subordinated Debt (Take-Out)”:
        Indebtedness of the Borrower in an aggregate principal amount of no more than $10,000,000, with a maturity date that is later than the Term Loan B Maturity Date, which Indebtedness shall (a) provide that, upon a Default or Event of Default under
        this Agreement, the Borrower shall cease making all interest payments under the Subordinated Debt (Take-Out) and (b) be subject to a Subordination Agreement.

     

      

    “Subordination Agreement”: A subordination
        agreement by the lender under the Subordinated Debt (Take-Out), as applicable, in favor of the Lender, which subordinates all Indebtedness under the Subordinated Debt (Take-Out), as applicable, to the Borrower’s Obligations under this Credit
        Agreement.

    

    

    
      
        

    

    2.2         Specified Defaults. The Borrower wishes to incur the Subordinated
        Debt (Restructuring) and the Subordinated Debt (Take-Out) in connection with the repurchase of stock of the Borrower held by Triangulum Partners, LLC as of the Second Amendment Date (collectively, the “Repurchase Transaction”). The Borrower has requested that, on the Second Amendment Date, the Lender waive (a) any violation of the negative covenants in Section 6.12 (Indebtedness) and Section 6.16 (Leverage
        Ratio) of the Credit Agreement, and (b) the prepayment requirements, if any, of Section 2.6(a)(ii) of the Credit Agreement with respect to clause (d) of the definition of “Prepayment
            Event” that have resulted or would result from the Repurchase Transaction and which together could constitute Events of Default pursuant to Section 7.1(a), (c), or (d) of the Credit Agreement (collectively, the “Specified Defaults”).

     

      

    2.3         Waiver of Specified Defaults. On the Second Amendment Date, subject
        to the other terms and conditions of this Amendment, the Lender waives the Specified Defaults and any other Event of Default that would result from the Repurchase Transaction as of the Second Amendment Date.

     

      

    2.4         Forbearance of Specified Defaults. From the Second Amendment Date
        and continuing during the Restructuring Period, subject to the other terms and conditions of this Amendment, the Lender forbears with respect to the negative covenant in Section 6.16(b) (Total Leverage Ratio) of the Credit Agreement and will not
        test such covenant until the fiscal quarter ending on December 31, 2019. In consideration of such forbearance, the Borrower agrees to deliver to the Lender any agreements, documents, or other information relating to the Repurchase Transaction
        reasonably requested by the Lender.

     

      

    Section 3.            Amendments to Credit Agreement. The Credit Agreement shall be amended to read as shown in the conformed copy of the Credit Agreement through this Amendment attached as Exhibit A. A redline of the conformed copy of the Credit Agreement through this Amendment against the conformed copy of the Credit Agreement through the First Amendment to
        Credit Agreement, dated as of April 22, 2019, is attached as Exhibit B.

     

      

    Section 4.            Effectiveness of Amendments. This Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following:

     

      

    4.1         Documents. The Lender shall have received the following:

     

      

    (a)          This Amendment executed by a duly
        authorized officer of the Borrower.

     

      

    (b)          A secretary’s certificate for the
        Borrower certifying as of the date of this Amendment (i) to a copy of the corporate resolutions of the Borrower authorizing the execution, delivery, and performance of this Amendment and any other agreement, instrument, or document (with this
        Amendment, the “Amendment Documents”), executed and delivered by the Borrower in connection herewith or therewith, (ii) that there has been no change to the Articles of
        Incorporation of the Borrower from the copy of such Articles of Incorporation and all amendments thereto delivered to the Lender with a secretary’s certificate of the Borrower, dated April 24, 2018, or if there has been a change thereto, certifying
        to a copy thereof and all amendments thereto, (iii) that there has been no change to the Amended and Restated By-Laws of the Borrower from the copy of such Amended and Restated By-Laws and all amendments thereto delivered to the Lender with a
        secretary’s certificate of the Borrower, dated April 24, 2018, or if there has been a change thereto, certifying to a copy thereof and all amendments thereto, and (iv) to the names and titles and bearing the signatures of the officers of the
        Borrower authorized to execute this Amendment and any other Amendment Documents and to request Loans.

     

      

     
    Waiver and Second Amendment to Credit Agreement

    

    

    
      
        

    

    (c)          A certificate of good standing for
        the Borrower in the jurisdiction of its incorporation, certified by the appropriate governmental officials as of a date not more than 30 days prior to the date hereof.

     

      

    4.2         Fees and Expenses. The Lender shall have received all fees and
        other amounts due and payable by the Borrower on or prior to the date hereof, including the reasonable fees and expenses of counsel to the Lender payable pursuant to Section 8.2 of the Credit Agreement.

     

      

    4.3         Other Matters. All corporate and legal proceedings relating to the
        Borrower and all instruments and agreements in connection with the transactions contemplated by this Amendment shall be satisfactory in scope, form and substance to the Lender and its counsel, and the Lender shall have received all information and
        copies of all documents including records of corporate proceedings, as the Lender or its counsel may reasonably have requested in connection therewith, such documents where appropriate to be certified by proper corporate or governmental
        authorities.

     

      

    Section 5.            Representations, Warranties, Authority.

     

      

    5.1         Reassertion of Representations and Warranties, No Default. The
        Borrower hereby represents that on and as of the date hereof and after giving effect to this Amendment all of the representations and warranties contained in the Credit Agreement and the other Loan Documents are true, correct and complete in all
        material respects as of the date hereof as though made on and as of such date, except (i) for changes permitted by the terms of the Credit Agreement as amended by this Amendment and (ii) to the extent such representation or warranty relates to an
        earlier specified date, in which case such representation or warranty is reaffirmed as true and correct in all material respects as to such date and there will exist no Default or Event of Default under the Credit Agreement as amended by this
        Amendment on such date which has not been cured or waived by the Lender.

     

      

    5.2         Authority, No Conflict, No Consent Required, Enforceability. The
        Borrower represents and warrants that the Borrower has the power and legal right and authority to enter into this Amendment and has duly authorized as appropriate the execution and delivery of the Amendment Documents by proper corporate action, and
        none of the Amendment Documents nor the agreements contained herein or therein contravenes or constitutes a default under any agreement, instrument or indenture to which the Borrower is a party or a signatory or a provision of the Borrower’s
        Articles of Incorporation, Bylaws or any other agreement or requirement of law, or results in the imposition of any lien on any of its property under any agreement binding on or applicable to the Borrower or any of its property except, if any, in
        favor of the Lender. The Borrower represents and warrants that no consent, approval or authorization of or registration or declaration with any Person, including but not limited to any governmental authority, is required in connection with the
        execution and delivery by the Borrower of the Amendment Documents or other agreements and documents executed and delivered by the Borrower in connection therewith or the performance of obligations of the Borrower therein described, except (a) for
        those which the Borrower has obtained or provided and as to which the Borrower has delivered certified copies of documents evidencing each such action to the Lender and (b) for those which the Borrower will make, obtain or provide upon the
        consummation of this Amendment and as to which the Borrower will promptly deliver certified copies of documents evidencing each such action to the Lender. The Borrower represents and warrants that the Amendment Documents constitute the legal, valid
        and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, subject to limitations as to enforceability which might result from bankruptcy, insolvency, moratorium and other similar laws affecting
        creditors’ rights generally and subject to limitations on the availability of equitable remedies.

     

      

     
    Waiver and Second Amendment to Credit Agreement

    

    

    
      
        

    

    5.3         No Adverse Claim. The Borrower warrants, acknowledges and agrees that no events have taken place and no circumstances exist at the date hereof which would
        give the Borrower a basis to assert a defense, offset or counterclaim to any claim of the Lender with respect to the obligations.

     

      

    Section 6.            Affirmation of Credit Agreement, Further References, Affirmation of Security Interest. The Lender and the Borrower each acknowledge and affirm that the Credit
          Agreement, as amended hereby, is hereby ratified and confirmed in all respects and all terms, conditions and provisions of the Credit Agreement and the other Loan Documents,
        except as amended by this Amendment, shall remain unmodified and in full force and effect. All references in any document or instrument to the Credit Agreement are hereby
        amended and shall refer to the Credit Agreement as amended hereby. The Borrower confirms to the Lender that the Obligations are and continue to be secured by the security
        interest granted by the Borrower in favor of the Lender under the Security Agreement and all of the terms, conditions, provisions, agreements, requirements, promises, obligations, duties, covenants and representations of the Borrower under such
        document and any and all other documents and agreements entered into with respect to the obligations under the Credit Agreement are incorporated herein by reference and are
        hereby ratified and affirmed in all respects by the Borrower.

     

      

    Section 7.            Merger and Integration, Superseding Effect. This Amendment, from and after the date hereof, embodies the entire agreement and understanding between the parties hereto and
        supersedes and has merged into this Amendment all prior oral and written agreements on the same subjects by and between the parties hereto with the effect that this Amendment shall control with respect to the specific subjects hereof and thereof.

     

    
    Waiver and Second Amendment to Credit Agreement

    

    

    
      
        

    

    Section 8.            Severability. Whenever possible, each provision of this Amendment and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or
        thereto shall be interpreted in such manner as to be effective, valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment or any other statement, instrument or transaction contemplated hereby or
        thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under the applicable law, such provision shall be ineffective in such jurisdiction only to the extent of such prohibition, invalidity or
        unenforceability, without invalidating or rendering unenforceable the remainder of such provision or the remaining provisions of this Amendment or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or
        thereto in such jurisdiction, or affecting the effectiveness, validity or enforceability of such provision in any other jurisdiction.

     

      

    Section 9.            Successors. This Amendment shall be binding upon the Borrower, the Lender and their
        respective successors and assigns, and shall inure to the benefit of the Borrower, and the Lender and their successors and assigns.

     

      

    Section 10.          Legal Expenses. As provided in Section 8.2 of the Credit Agreement, the Borrower agrees to reimburse the
        Lender upon demand for all reasonable out-of-pocket expenses (including filing and recording costs and fees, charges and disbursements of outside counsel to the Lender) incurred in connection with the negotiation, preparation, enforcement and
        collection of this Amendment and all other documents negotiated and prepared in connection with this Amendment.

     

      

    Section 11.          Headings. The headings of various sections of this Amendment have been inserted for reference only and shall not be deemed to be a part of this Amendment.

     

      

    Section 12.          Counterparts. This Amendment may be executed in several counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that
        all such counterparts shall be regarded as one and the same document, and any party to this Amendment may execute any such agreement by executing a counterpart of such agreement.

     

      

    Section 13.          Governing Law. THE AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF.

    

      Waiver and Second Amendment to Credit Agreement

      

      

    

    
      
        

    

    Section 14.          Acknowledgement and Release. IN ORDER TO INDUCE THE LENDER TO ENTER INTO THIS AMENDMENT, THE BORROWER: (A) REPRESENTS AND WARRANTS TO THE LENDER THAT NO EVENTS HAVE TAKEN PLACE AND
        NO CIRCUMSTANCES EXIST AT THE DATE HEREOF WHICH WOULD GIVE THE BORROWER THE RIGHT TO ASSERT A DEFENSE, OFFSET OR COUNTERCLAIM TO ANY CLAIM BY THE LENDER FOR PAYMENT OF THE OBLIGATIONS; AND (B) HEREBY RELEASES AND FOREVER DISCHARGES THE LENDER AND
        ITS SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND PARTICIPANTS FROM ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, PROCEEDINGS, DEBTS, SUMS OF MONEY, COVENANTS, CONTRACTS, CONTROVERSIES, CLAIMS AND DEMANDS, AT LAW OR IN EQUITY,
        WHICH THE BORROWER EVER HAD OR NOW HAS AGAINST THE LENDER OR ANY OF ITS SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, AGENTS, EMPLOYEES OR PARTICIPANTS BY VIRTUE OF THEIR RELATIONSHIP TO THE BORROWER IN CONNECTION WITH THIS AMENDMENT, THE CREDIT
        AGREEMENT, THE LOAN DOCUMENTS AND TRANSACTIONS RELATED THERETO.

     

      

    ***

     

      

    
      Waiver and Second Amendment to Credit Agreement

      

      

    

    
      
        

    

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

     

      

    	
            

            

          	
            BORROWER:

          
	 	 
	
            

            

          	
            GALAXY GAMING, INC.

          

    	 	 
	

          	By:	/s/ Harry C. Hagerty

    	
            

            

          	
            Name:

          	
            Harry C. Hagerty

          
	
            

            

          	
            Title:

          	
            Chief Financial Officer

          

    

    

    
      Waiver and Second Amendment to Credit Agreement

       

        

    

    
      
        

    

    	

          	
            LENDER:

          
	 	 
	
            

            

          	
            ZIONS BANCORPORATION, N.A. DBA NEVADA STATE BANK

          
	 	 

    	

          	By:	/s/ Jamie Gazza

    	
            

            

          	
            Name:

          	
            Jamie Gazza

          
	
            

            

          	
            Title:

          	
            Vice President and Senior Gaming Director

          

    
       

        

      Waiver and Second Amendment to Credit Agreement

       

        

    

    
      
        

    

    Exhibit A

    Conformed Copy of the Credit Agreement Through this Amendment

    

    

    (Attached)

    

    

    
      
        

    

    Exhibit B

    Redline

    

    

    (Attached)Exhibit

Amendment to the
Briggs & Stratton Corporation Supplemental Executive Retirement Plan
New subsection 1.3 is added to the Briggs & Stratton Corporation Supplemental Executive Retirement Plan to read as follows, and all subsequent subsections of Article I are renumbered accordingly: 
1.3    Compensation.  The term “Compensation” shall have the meaning set forth in the Pension Plan, except that effective for Plan Years beginning on and after January 1, 2019, Compensation shall not include any long-term incentive awards or payments, whether such awards or payments are in the form of cash or equity.

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