Document:

Exhibit
10.(b)

 

CONSENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the
use in this Registration Statement on Form N-4 (File No. 33-70984) of
our report dated March 30, 2009, relating to the consolidated financial
statements and financial statement schedules of Protective Life Insurance
Company and subsidiaries, which appears in such Registration Statement.  We also consent to the use in this
Registration Statement on Form N-4 (File No. 33-70984) of our report
dated April 24, 2009, relating to the financial statements of Protective
Variable Annuity Separate Account, which appears in such Registration
Statement.  We also consent to the
reference to us under the heading “Experts” in such Registration Statement.

 

 

PricewaterhouseCoopers
LLP

Birmingham, Alabama

April 29, 2009Exhibit 10.1

 

TERM LOAN AGREEMENT

 

This
Term Loan Agreement (the “Agreement”) is made and entered into by and between the undersigned borrower (the “Borrower”)  and the undersigned bank (the
“Bank”)  as of the date set forth on the last page of this Agreement.

 

ARTICLE I. LOANS

 

1.1 Terms for
Advance(s). [Choose One:]

 

	
  x

  	
  Single Advance Term Loan. As of the date hereof, the
  Borrower has obtained a term loan from the Bank in the amount of $500,000.00 (the “Loan Amount”). The term loan is evidenced by a
  single promissory note of the Borrower to the order of the Bank in the
  principal amount of the Loan Amount and dated as of the date hereof (the “Note”).

  
	
   

  	
   

  
	
  o

  	
  Multiple Advance Term Loan. Prior to n/a or the earlier termination hereof, the Borrower may
  obtain advances from the Bank in an aggregate amount not exceeding $ n/a (the “Loan Amount”).  The term loans will be
  evidenced by a single promissory note of the Borrower to the Bank in the
  principal amount of the Loan Amount and dated as of the date hereof (the “Note”). Although the
  Note will be expressed as payable in the full Loan Amount, the Borrower will
  be obligated to pay only the amounts actually disbursed hereunder, together
  with accrued interest on the outstanding balance at the rates and on the
  dates specified therein and such other charges provided for herein.

  

 

1.2
Advances and Paying Procedure. The Bank is authorized and directed to credit any of the Borrower’s accounts
with the Bank (or to the account the Borrower designates in writing) for all
loans made hereunder, and the Bank is authorized to debit such account or any
other account of the Borrower with the Bank for the amount of any principal, interest
or expenses due under the Note or other amount due hereunder on the due date
with respect thereto. If,  upon any request by the
Borrower to the Bank to issue a wire transfer, there is an inconsistency
between the name of the recipient of the wire and its identification number as
specified by the Borrower, the Bank may, without liability, transmit the payment
via wire based solely upon the identification number.

 

1.3 Closing Fee. The Borrower
will pay the Bank a one-time closing fee of $ n/a
contemporaneously with execution of this Agreement. This fee is in addition to all other fees, expenses and other amounts due hereunder.

 

1.4
Compensating Balances. The Borrower will maintain on
deposit with the Bank in non-interest bearing accounts average daily collected
balances, in excess of that required to support account activity and other
credit facilities extended to the Borrower by the Bank, an amount at least
equal to the sum of (i) $ n/a
and (ii) n/a % of the Loan Amount as
computed on a monthly basis. If the Borrower fails to keep and
maintain such balances, it will pay a deficiency fee, payable
within five days after receipt of a statement therefor calculated on the amount
by which the Borrower’s average daily balances are less than the requirements
set forth above, computed at a rate equal to the rate set forth in the Note.

 

1.5 Expenses and
Attorneys’ Fees. Upon demand, the Borrower will immediately
reimburse the Bank and any participant in the Obligations (defined below) (“Participant”)  for all
attorneys’ fees and all other costs, fees and out-of-pocket disbursements
incurred by the Bank or any Participant in connection with the preparation, execution,
delivery, administration, defense and enforcement of this Agreement or any of
the other Loan Documents (defined below), including attorneys’ fees and all
other costs and fees (a) incurred before or after commencement of
litigation or at trial, on appeal or in any other proceeding, (b) incurred
in any bankruptcy proceeding and (c) related to any waivers or amendments
with respect thereto (examples of costs and fees include but are not limited to
fees and costs for: filing, perfecting or confirming the priority of the Bank’s
lien, title searches or insurance, appraisals, environmental audits and other
reviews related to the Borrower, any collateral or the loans, if requested by the Bank). The Borrower will also reimburse the Bank and
any Participant for all costs of collection, including all attorneys’ fees, before
and after judgment, and the costs of preservation and/or liquidation of any
collateral.

 

1.6
Conditions to Borrowing. The Bank will
not be obligated to make (or continue to make) advances hereunder unless (i) the
Bank has received executed originals of the Note and all
other documents or agreements applicable to the loans described herein, including
but not limited to the documents specified in Article III (collectively
with this Agreement the “Loan Documents”), in form and content satisfactory to the Bank; (ii) if
the loan is secured, the Bank has received confirmation satisfactory to it that
the Bank has a properly perfected security interest, mortgage or lien, with the
proper priority; (iii) the Bank has received certified copies of the
Borrower’s governance documents and certification of entity status satisfactory
to the Bank and all other relevant documents; (iv) the Bank has received a
certified copy of a resolution or authorization in form and content
satisfactory to the Bank authorizing the loan and all acts contemplated by this
Agreement and all related documents, and confirmation of proper authorization
of all guaranties and other acts of third parties contemplated hereunder; (v) if
required by the Bank, the Bank has been provided with Opinion of the Borrower’s
counsel in form and content satisfactory to the Bank
confirming the matters outlined in Section 2.2 and such other matters as
the Bank requests; (vi) no default exists
under this Agreement or under any other Loan Documents, or under any other
agreements by and between the Borrower and the Bank; and (vii) all
proceedings taken in connection with the transactions contemplated by this
Agreement (including any required environmental assessments), and all
instruments, authorizations and other documents applicable thereto, are
satisfactory to the Bank and its counsel.

 

	
  1129A        ©us
  bancorp 2001

  	
  4/06

  

 

1

 

ARTICLE II. WARRANTIES AND COVENANTS

 

While
any part of the credit granted to the Borrower under this Agreement or the
other Loan Documents is available or any obligations under any of the Loan
Documents are unpaid or outstanding, the Borrower continuously warrants and
agrees as follows:

 

2.1
Accuracy of Information. All
information, certificates or statements given to the Bank pursuant to this
Agreement and the other Loan Documents will be true and complete when given.

 

2.2
Organization and Authority; Litigation. This
Agreement and the other Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with their terms. The execution, delivery and performance of this Agreement and
all other Loan Documents to which the Borrower is a party (i) are within
the borrower’s power; (ii) have been duly authorized by all appropriate
entity action; (iii) do not require the approval of any governmental
agency; and (iv) will not violate any law, agreement or restriction by
which the Borrower is bound. If the Borrower is not an individual, the Borrower
is validly existing and in good standing under the laws of its state of
organization, has all requisite power and authority and possesses all licenses
necessary to conduct its business and own its properties. There is no
litigation or administrative proceeding threatened or pending against the
Borrower which would, if adversely determined, have a material adverse effect
on the Borrower’s financial condition or its property.

 

2.3
Existence; Business Activities; Assets; Change
of Control. The Borrower will (i) preserve its existence, rights
and franchises; (ii) not make any material change in the nature or manner
of its business activities; (iii) not liquidate, dissolve, acquire another
entity or merge or consolidate with or into another entity or change its form
of organization; (iv) not amend its organizational documents in any manner
that may conflict with any term or condition of the Loan Documents; and (v) not
sell, lease, transfer or otherwise dispose of all or substantially all of its
assets. Other than the transfer to a trust beneficially controlled by the
transferor, no event shall occur which causes or results in a transfer of
majority ownership of the Borrower while any Obligations are outstanding or
while the Bank has any obligation to provide funding to the Borrower.

 

2.4
Use of Proceeds; Margin Stock; Speculation. Advances
by the Bank hereunder will be used exclusively by the Borrower for the purposes
represented to the Bank. The Borrower will not, without the prior written
consent of the Bank, redeem, purchase, or retire any of the capital stock or
declare or pay any dividends, or make any other payments or distributions of a
similar type or nature including withdrawal distributions. The Borrower will
not use any of the loan proceeds to purchase or carry “margin” stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System). No part of any of the proceeds will be used for speculative investment
purposes, including, without limitation, speculating or hedging in the
commodities and/or futures market.

 

2.5
Environmental Matters. Except as
disclosed in a written schedule attached to this Agreement (if no schedule is
attached, there are no exceptions), there exists no uncorrected violation by
the Borrower of any federal, state or local laws (including statutes, regulations,
ordinances or other governmental restrictions and requirements) relating to the
discharge of air pollutants, water pollutants or process waste water or
otherwise relating to the environment or Hazardous Substances as hereinafter
defined, whether such laws currently exist or are enacted in the future (collectively
“Environmental Laws”). The term “Hazardous
Substances” will mean any hazardous or toxic wastes, chemicals or
other substances, the generation, possession or existence of which is
prohibited or governed by any Environmental Laws. The Borrower is not subject
to any judgment, decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceeding, which asserts that the Borrower (i) has
violated any Environmental Laws; (ii) is required to clean up, remove or
take remedial or other action with respect to any Hazardous Substances (collectively
“Remedial Action”); or (iii) is required to pay
all or a portion of the cost of any Remedial Action, as a potentially
responsible party. Except as disclosed on the Borrower’s environmental
questionnaire provided to the Bank, there are not now, nor to the Borrower’s
knowledge after reasonable investigation have there ever been, any Hazardous
Substances (or tanks or other facilities for the storage of Hazardous
Substances) stored, deposited, recycled or disposed of on, under or at any real
estate owned or occupied by the Borrower during the periods that the Borrower
owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To the Borrower’s knowledge, there are no proposed or pending
changes in Environmental Laws which would adversely affect the Borrower or its
business, and there are no conditions existing currently or likely to exist
while the Loan Documents are in effect which would subject the Borrower to
Remedial Action or other liability. The Borrower currently complies with and
will continue to timely comply with all applicable Environmental Laws; and will
provide the Bank, immediately upon receipt, copies of any correspondence, notice,
complaint, order or other document from any source asserting or alleging any
circumstance or condition which
requires or may require a financial contribution by the Borrower or Remedial
Action or other response by or on the part of the Borrower under Environmental
Laws, or which seeks damages or civil, criminal or punitive penalties from the
Borrower for an alleged violation of Environmental Laws.

 

2.6
Compliance with Laws. The Borrower
has complied with all laws applicable to its business and its properties, and
has all permits, licenses and approvals required by such laws, copies of which
have been provided to the Bank.

 

2.7
Restriction on Indebtedness. The Borrower will not create, incur, assume
or have outstanding any indebtedness for borrowed money (including capitalized
leases) except (i) any indebtedness owing to the Bank and its affiliates, and
(ii) any other indebtedness outstanding on the date hereof, and shown on
the Borrower’s financial statements delivered to the Bank prior to the date
hereof, provided that such other indebtedness will not be increased.

 

2.8
Restriction on Liens. The Borrower
will not create, incur, assume or permit to exist any mortgage, pledge, encumbrance or other lien or levy
upon or security interest in any of the Borrower’s property now owned or hereafter
acquired, except (i) taxes and assessments which are either not delinquent
or which are being contested in good faith with adequate reserves provided; (ii) easements,
restrictions and minor title irregularities which do not, as a practical matter,
have an adverse effect upon the ownership and use of the affected property; (iii) liens
in favor of the Bank and its affiliates; and (iv) other liens disclosed in
writing to the Bank prior to the date hereof.

 

2

 

2.9
Restriction on Contingent Liabilities.  The Borrower will not
guarantee or become a surety or otherwise contingently liable for any
obligations of others, except pursuant to the deposit and collection of checks
and similar matters in the ordinary course of business.

 

2.10
Insurance. The Borrower will maintain insurance to
such extent, covering such risks and with such insurers as is usual and
customary for businesses operating similar properties, and as is satisfactory
to the Bank, including insurance for fire and other risks insured against by
extended coverage, public liability insurance and workers’ compensation
insurance; and will designate the Bank as loss payee with a “Lender’s Loss
Payable” endorsement on any casualty policies and take such other action as the
Bank may reasonably request to ensure that the Bank will receive (subject to no
other interests) the insurance proceeds on the Bank’s collateral.

 

2.11
Taxes and Other Liabilities. The Borrower will pay and
discharge, when due, all of its taxes, assessments and other liabilities, except
when the payment thereof is being contested in good faith by appropriate
procedures which will avoid foreclosure of liens securing such items, and with
adequate reserves provided therefor.

 

2.12
Financial Statements and Reporting.  The financial statements and
other information previously provided to the Bank or provided to the Bank in
the future are or will be complete and accurate and prepared in accordance with
generally accepted accounting principles. There has been no material adverse
change in the Borrower’s financial condition since such information was
provided to the Bank. The Borrower will (i) maintain accounting records in
accordance with generally recognized and accepted principles of accounting
consistently applied throughout the accounting periods involved; (ii) provide
the Bank with such information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may request; and (iii) without
request, provide the Bank with such specific financial statements, certifications
and/or information as may be set forth in an addendum to this Agreement.

 

2.13
Inspection of Properties and
Records; Fiscal Year. The Borrower will permit representatives
of the Bank to visit and inspect any of the properties and
examine any of the books and records of the Borrower at any reasonable time and
as often as the Bank may reasonably desire. The Borrower will not change its
fiscal year.

 

2.14
Financial Status.  Financial Covenants, if any, will
be as set forth in an addendum to this Agreement.

 

ARTICLE III.  COLLATERAL AND GUARANTIES

 

3.1
Collateral.  This Agreement and the Note
are secured by any and all security interests, pledges, mortgages/deeds of
trust (except any mortgage/deed of trust expressly limited by its terms to a specific
obligation of Borrower to Bank) or lien’s now or hereafter in
existence granted to the Bank to secure indebtedness of the Borrower to the
Bank, including without limitation as described in the following documents:

 

	
  o

  	
  Real
  Estate Mortgage(s)/Deed(s) of Trust dated

  
	
   

  	
  covering
  real estate Located at

  
	
   

  	
   

  
	
  o

  	
  Security
  Agreement(s) dated

  
	
   

  	
   

  
	
  o

  	
  Possessory
  Collateral Pledge Agreement(s) dated

  
	
   

  	
   

  
	
  x

  	
  Other
   Limited Recourse Agreement by The Victor John
  Salerno Separate Property Trust dated 12/11/2001 dated December 31, 2008

  

 

3.2
Guaranties.  This Agreement and the Note are guarantied by
each and every guaranty now or hereafter in existence guarantying the
indebtedness of the Borrower to the Bank (except for any guaranty expressly
limited by its terms to a specific separate obligation of Borrower to the Bank)
including, without limitation, the following:

 

Victor J. Salerno Terina M. Salerno

 

3.3
Credit Balances; Setoff.  As additional
security for the payment of the obligations described in the Loan Documents and
any other obligations of the Borrower to the Bank of any nature whatsoever (collectively
the “Obligations”), the Borrower hereby grants to
the Bank a security interest in, a lien on and an express contractual right to set
off against all depository account balances, cash and any other property of the
Borrower now or hereafter in the possession of the Bank and the right to refuse
to allow withdrawals from any account (collectively “Setoff”). The Bank may, at any time
upon the occurrence of a default hereunder (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between the
Borrower and the Bank) Setoff against the Obligations whether
or not the Obligations (including future installments) are then due or have
been accelerated, all without any advance or contemporaneous notice or demand
of any kind to the Borrower, such notice and demand being expressly waived.

 

The
omission of any reference to an agreement in Sections 3.1 and 3.2 above will
not affect the validity or enforceability thereof. The rights and remedies of
the Bank outlined in this Agreement and the documents identified above are
intended to be cumulative.

 

3

 

ARTICLE IV. DEFAULTS

 

4.1
Defaults. Notwithstanding any cure periods described
below, the Borrower will immediately notify the Bank in writing when the
Borrower obtains knowledge of the occurrence of any default specified below. Regardless of
whether the Borrower has given the required notice, the occurrence of one or
more of the following will constitute a default:

 

(a)          Nonpayment. The Borrower
shall fail to pay (i) any interest due on the Note or any fees, charges, costs
or expenses under the Loan Documents by 5 days after the same becomes due; or (ii) any
principal amount of the Note when due.

 

(b)          Nonperformance.
The Borrower or any guarantor of Borrower’s Obligations to the Bank (“Guarantor”)  shall fail to
perform or observe any agreement, term, provision, condition, or covenant (other
than a default occurring under (a), (c), (d), (e), (f) or (g) of this
Section 4.1) required to be performed or observed by the Borrower or any
Guarantor hereunder or under any other Loan Document or other agreement with or
in favor of the Bank.

 

(c)          Misrepresentation.
Any financial information, statement, certificate, representation or
warranty given to the Bank by the Borrower or any Guarantor (or any of their
representatives) in connection with entering into this Agreement or the other Loan
Documents and/or any borrowing thereunder, or required to be furnished under
the terms thereof, shall prove untrue or misleading in any material respect (as
determined by the Bank in the exercise of its judgment) as of the time when
given.

 

(d)          Default on
Other Obligations. The Borrower or any Guarantor shall be in default
under the terms of any loan agreement, promissory note, lease, conditional sale
contract or other agreement, document or instrument evidencing, governing or
securing any indebtedness owing by the Borrower or any Guarantor to the Bank or
any indebtedness in excess of $10,000 owing by the Borrower to any
third party, and the period of grace, if any, to cure said default shall have
passed.

 

(e)          Judgments. Any judgment
shall be obtained against the Borrower or any Guarantor which, together with
all other outstanding unsatisfied judgments against the Borrower (or such
Guarantor), shall exceed the sum of $10,000 and shall remain unvacated, unbonded
or unstayed for a period of 30 days following
the date of entry thereof.

 

(f)            Inability to
Perform; Bankruptcy/Insolvency. (i) The
Borrower or any Guarantor shall die or cease to exist; or (ii) any
Guarantor shall attempt to revoke any guaranty of the Obligations described
herein, or any guaranty becomes unenforceable in whole or in part for any
reason; or (iii) any bankruptcy, insolvency or receivership proceedings, or
an assignment for the benefit of creditors, shall be commenced under any
Federal or state law by or against the Borrower or any Guarantor; or (iv) the
Borrower or any Guarantor shall become the subject of any out-of-court
settlement with its creditors; or (v) the Borrower or any Guarantor is
unable or admits in writing its inability to pay its debts as they mature; or (vi) if
the Borrower is a limited Liability company, any member thereof shall withdraw
or otherwise become disassociated from the Borrower.

 

(g)         Adverse
Change; Insecurity. (i) There is a material adverse
change in the business, properties, financial condition or affairs of the
Borrower or any Guarantor, or in any collateral securing the Obligations; or (ii) the
Bank in good faith deems itself insecure.

 

4.2
Termination of Loans; Additional Bank Rights. Upon the
occurrence of any of the events identified in Section 4.1, the Bank may at
any time (notwithstanding any notice requirements or grace/cure periods under
this or other agreements between the Borrower and the Bank) (i) immediately
terminate its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;
and/or (iii) take such other steps to protect or preserve the Bank’s
interest in any collateral, including without limitation, notifying account
debtors to make payments directly to the Bank, advancing funds to protect any
collateral and insuring collateral at the Borrower’s expense; all without
demand or notice of any kind, all of which are hereby waived.

 

4.3
Acceleration of Obligations. Upon the
occurrence of any of the events identified in Sections 4.1(a) through 4.1(e) and
4.1(g), and the passage of any applicable cure periods, the Bank may at any
time thereafter, by written notice to the Borrower, declare the unpaid
principal balance of any Obligations, together with the interest accrued
thereon and other amounts accrued hereunder and under the other Loan Documents,
to be immediately due and payable; and the unpaid balance will thereupon be due
and payable, all without presentation, demand, protest or further notice of any
kind, all of which are hereby waived, and notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents. Upon the
occurrence of any event under Section 4.1(f), the unpaid principal balance
of any Obligations, together with all interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents, will thereupon be
immediately due and payable, all without presentation, demand, protest or
notice of any kind, all of which are hereby waived, and notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents.
Nothing contained in Section 4.1, Section 4.2
or this section will limit the Bank’s right to Setoff as provided in Section 3.3
or otherwise in this Agreement.

 

4.4
Other Remedies. Nothing in this Article IV
is intended to restrict the Bank’s rights under any of the Loan Documents or at
law, and the Bank may exercise all such rights and remedies as and when they
are available.

 

4

 

ARTICLE V. OTHER TERMS

 

5.1 Additional
Terms; Addendum/Supplements. The warranties, covenants, conditions
and other terms described in this Section and/or in the Addendum and/or
other attached document(s) referenced in this Section are
incorporated into this Agreement:

 

 

 

 

ARTICLE VI. MISCELLANEOUS

 

6.1
Delay; Cumulative Remedies. No delay on the
part of the Bank in exercising any right, power or privilege hereunder or under
any of the other Loan Documents will operate as a waiver thereof, nor will any
single or partial exercise of any right, power or privilege hereunder preclude
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein specified are cumulative and are not
exclusive of any rights or remedies which the Bank would otherwise have.

 

6.2
Relationship to Other Documents. The warranties, covenants
and other obligations of the Borrower (and the rights and remedies of the Bank)
that are outlined in this Agreement
and the other Loan Documents are intended to supplement each other. In the
event of any inconsistencies in any of the terms in the Loan Documents, all
terms will be cumulative so as to give the Bank the most favorable rights set
forth in the conflicting documents, except that if there is a direct conflict
between any preprinted terms and specifically negotiated terms (whether
included in an addendum or otherwise), the specifically negotiated terms will
control.

 

6.3
Successors. The rights, options, powers
and remedies granted in this Agreement
and the other Loan Documents shall be binding upon the Borrower and the Bank
and their respective successors and assigns, and shall inure to the benefit of
the Borrower and the Bank and the successors and assigns of the Bank, including
without limitation any purchaser of any or all of the rights and obligations of
the Bank under the Note and the other Loan Documents. The Borrower may not
assign its rights or obligations under this Agreement or any other Loan
Documents without the prior written consent of the Bank.

 

6.4
Disclosure. The Bank may, in connection
with any sale or potential sale of all or any interest in the Note and other
Loan Documents, disclose any financial information the Bank may have concerning
the Borrower to any purchaser or potential purchaser. From time to time, the
Bank may, in its discretion and without obligation to the Borrower, any
Guarantor or any other third party, disclose information about the Borrower and
this loan to any Guarantor, surety or other accommodation party. This provision
does not obligate the Bank to supply any information or release the Borrower
from its obligation to provide such information, and the Borrower agrees to
keep all Guarantors, sureties or other accommodation parties advised of its
financial condition and other matters which may be relevant to their obligations
to the Bank.

 

6.5 Indemnification.
Except for harm arising from the Bank’s willful misconduct, the Borrower
hereby indemnifies and agrees to defend and hold the Bank harmless from any and
all losses, costs, damages, claims and expenses of any kind suffered by or
asserted against the Bank relating to claims by third parties arising out of
the financing provided under the Loan Documents or related to any collateral (including,
without limitation, the Borrower’s failure to perform its obligations relating
to Environmental Matters described in Section 2.5 above). This
indemnification and hold harmless provision will survive the termination of the
Loan Documents and the satisfaction of the Obligations due the Bank.

 

6.6
Notice of Claims Against Bank; Limitation of Certain
Damages. In order to allow the Bank to mitigate any damages to
the Borrower from the Bank’s alleged breach of its duties under the Loan
Documents or any other duty, if any, to the Borrower, the Borrower agrees to
give the Bank immediate written notice of any claim or defense it has against
the Bank, whether in tort or contract, relating to any action or
inaction by the Bank under the Loan Documents, or the transactions related
thereto, or of any defense to payment of the Obligations for any reason. The
requirement of providing timely notice to the Bank represents the parties’ agreed-to
standard of performance regarding claims against the Bank. Notwithstanding any
claim that the Borrower may have against the Bank, and regardless of any notice
the Borrower may have given the Bank, the Bank
will not be liable to the Borrower for consequential and/or special damages
arising therefrom, except those damages arising from the Bank’s willful
misconduct.

 

6.7 Notices. Notice of any
record shall be deemed delivered when the record has been (a) deposited in
the United States Mail, postage pre-paid, (b) received by overnight
delivery service, (c) received by telex, (d) received by telecopy, (e) received
through the Internet, or (f) when personally delivered.

 

6.8 Payments. Payments due
under the Note and other Loan Documents will be made in lawful money of the
United States. All payments may be applied by the Bank to principal, interest
and other amounts due under the Loan Documents in any order which the Bank elects.

 

5

 

6.9
Applicable Law and Jurisdiction; Interpretation;
Joint Liability; Severability. This Agreement and all other Loan
Documents will be governed by and interpreted in accordance with the internal laws
of the State of Nevada, except to the extent
superseded by Federal law. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL
JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED, AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS,
CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, THE
COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR
ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will
affect the Bank’s rights to serve process in any manner permitted by law, or
limit the Bank’s right to bring proceedings against the Borrower in the
competent courts of any other jurisdiction or jurisdictions. This Agreement,
the other Loan Documents and any amendments hereto (regardless of when
executed) will be deemed effective and accepted only at the Bank’s offices, and
only upon the Bank’s receipt of the executed originals thereof. If there is
more than one Borrower, the liability of the Borrowers will be joint and
several, and the reference to “Borrower” will be deemed to refer to all
Borrowers. Invalidity of any provision of this Agreement shall not affect the
validity of any other provision.

 

6.10
Copies; Entire Agreement; Modification.
The Borrower hereby acknowledges the receipt of a copy of this Agreement and
all other Loan Documents. This Agreement is a “transferable record” as defined
in applicable law relating to electronic transactions. Therefore, the holder of
this Agreement may, on behalf of Borrower, create a microfilm or optical disk
or other electronic Image of this Agreement that is an authoritative copy as
defined in such law. The holder of this Agreement may store the authoritative
copy of such Agreement in its electronic form and then destroy the paper
original as part of the holder’s normal business practices. The holder, on its
own behalf, may control and transfer such authoritative copy as permitted by
such law.

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING
CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
THE TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN
AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT
AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY
OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH
OCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BY
ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDIT
AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.

 

6.11
Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK
HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS
THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING
THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO
THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

 

6.12
Attachments. All documents attached hereto,
including any appendices, schedules, riders, and exhibits to this Agreement,
are hereby expressly incorporated by reference.

 

IN
WITNESS WHEREOF, the undersigned have executed this TERM LOAN AGREEMENT as of MARCH 30,
2009.

 

	
  (Individual
  Borrower)

  	
   

  	
  American
  Wagering, Inc.

  
	
   

  	
   

  	
  Borrower
  Name (Organization)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a
  Nevada Corporation

  
	
   

  	
   

  	
   

  
	
  Borrower
  Name

  	
  N/A

  	
   

  	
  By

  	
  /s/
  Victor J. Salerno

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name
  and Title

  	
  Victor
  J. Salerno, President 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
  Borrower
  Name

  	
  N/A

  	
   

  	
  Name
  and Title

  	
   

  
	
   

  	
   

  	
  U.S.
  BANK N.A.

  	
  (Bank)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name
  and Title

  	
  Karal
  A. Presley, Vice President

  
									

 

	
  Borrower Address:

  	
  675 Grier Drive, Las Vegas, NV 89119

  
	
   

  	
   

  
	
  Borrower Telephone No.:

  	
   

  

 

6

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