Document:

Exhibit 4.2

 

Sutherland Asset Management Corporation

 

as Issuer

 

U.S. Bank National Association

 

as Trustee

 

Second Supplemental Indenture

 

Dated as of April 27, 2018

 

to the Indenture

 

Dated as of August 9, 2017

 

6.50% Senior Notes due 2021

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 1
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEFINITIONS   AND OTHER PROVISIONS OF GENERAL APPLICATION
    	
 
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Scope of Supplemental   Indenture
    	
1
    
	
Section 1.02
    	
Definitions
    	
1
    
	
Section 1.03
    	
References to Principal
    	
5
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 2
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   SECURITIES
    	
 
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Title and Terms;   Payments
    	
6
    
	
Section 2.02
    	
Forms
    	
6
    
	
Section 2.03
    	
Transfer and Exchange
    	
7
    
	
Section 2.04
    	
Payments on the   Securities
    	
9
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 3
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
OPTIONAL   REDEMPTION
    	
 
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Applicability of   Article III of the Base Indenture
    	
10
    
	
Section 3.02
    	
No Sinking Fund
    	
10
    
	
Section 3.03
    	
Redemption
    	
10
    
	
Section 3.04
    	
Notice of Redemption;   Selection of Securities
    	
10
    
	
Section 3.05
    	
Payment of Securities   Called for Redemption
    	
11
    
	
Section 3.06
    	
Restrictions on   Redemption
    	
12
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 4
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PARTICULAR   COVENANTS OF THE COMPANY
    	
 
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Payment of   Principal, Interest, Change of Control Payment and Redemption Price
    	
12
    
	
Section 4.02
    	
Maintenance of Office   or Agency
    	
12
    
	
Section 4.03
    	
Appointments to Fill   Vacancies in Trustee’s Office
    	
12
    
	
Section 4.04
    	
Provisions as to Paying   Agent
    	
12
    
	
Section 4.05
    	
Reports
    	
13
    
	
Section 4.06
    	
Statements as to   Defaults
    	
14
    
	
Section 4.07
    	
Limitation on Liens to Secure   Payment of Company Borrowings
    	
14
    
	
Section 4.08
    	
Limitation on Unsecured   Borrowings or Guaranty of Unsecured Borrowings by Subsidiaries
    	
14
    
	
Section 4.09
    	
Offer to Repurchase   Upon a Change of Control Repurchase Event.
    	
14
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 5
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
REMEDIES
    	
 
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Amendments to the Base   Indenture
    	
15
    
	
Section 5.02
    	
Events of Default
    	
16
    

 

i

 

	
Section 5.03
    	
Acceleration;   Rescission and Annulment
    	
17
    
	
Section 5.04
    	
Waiver of Past Defaults
    	
17
    
	
Section 5.05
    	
Control by Majority
    	
17
    
	
Section 5.06
    	
Limitation on Suits
    	
17
    
	
Section 5.07
    	
Collection of   Indebtedness; Suit for Enforcement by Trustee
    	
18
    
	
Section 5.08
    	
Trustee   May Enforce Claims Without Possession of Securities
    	
18
    
	
Section 5.09
    	
Trustee May File   Proofs of Claim
    	
18
    
	
Section 5.10
    	
Restoration of Rights   and Remedies
    	
18
    
	
Section 5.11
    	
Rights and Remedies   Cumulative
    	
18
    
	
Section 5.12
    	
Delay or Omission Not a   Waiver
    	
19
    
	
Section 5.13
    	
Priorities
    	
19
    
	
Section 5.14
    	
Undertaking for Costs
    	
19
    
	
Section 5.15
    	
Waiver of Stay,   Extension and Usury Laws
    	
19
    
	
Section 5.16
    	
Notices from the   Trustee
    	
19
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 6
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SATISFACTION   AND DISCHARGE
    	
 
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Inapplicability of   Provisions of Base Indenture; Satisfaction and Discharge of the Indenture
    	
20
    
	
Section 6.02
    	
Deposited Monies to Be   Held in Trust by Trustee
    	
20
    
	
Section 6.03
    	
Paying Agent to Repay   Monies Held
    	
20
    
	
Section 6.04
    	
Return of Unclaimed   Monies
    	
20
    
	
Section 6.05
    	
Reinstatement
    	
20
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 7
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUPPLEMENTAL   INDENTURES
    	
 
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Supplemental Indentures   Without Consent of Holders
    	
21
    
	
Section 7.02
    	
Supplemental Indentures   With Consent of Holders
    	
21
    
	
Section 7.03
    	
Notice of Amendment of   Supplement
    	
22
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 8
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SUCCESSOR   COMPANY
    	
 
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Consolidation, Merger   and Sale of Assets
    	
22
    
	
Section 8.02
    	
Company   May Consolidate, Etc. on Certain Terms
    	
23
    
	
Section 8.03
    	
Successor Corporation   to Be Substituted
    	
23
    
	
Section 8.04
    	
Opinion of Counsel to   Be Given to Trustee
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
ARTICLE 9
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Effect on Successors   and Assigns
    	
24
    
	
Section 9.02
    	
Governing Law
    	
24
    
	
Section 9.03
    	
No Security Interest   Created
    	
24
    
	
Section 9.04
    	
Trust Indenture Act
    	
24
    
	
Section 9.05
    	
Benefits of   Supplemental Indenture
    	
24
    
	
Section 9.06
    	
Calculations.
    	
24
    
	
Section 9.07
    	
Execution in   Counterparts
    	
24
    
	
Section 9.08
    	
Notices
    	
24
    
	
Section 9.09
    	
Ratification of Base   Indenture
    	
25
    

 

ii

 

	
Section 9.10
    	
No Recourse Against   Others.
    	
25
    
	
Section 9.11
    	
The Trustee
    	
25
    
	
Section 9.12
    	
Submission to   Jurisdiction
    	
25
    
	
Section 9.13
    	
Applicable Tax Law
    	
25
    

 

EXHIBIT

 

Exhibit A                                             Form of Security

 

iii

 

SECOND SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of April 27, 2018, between Sutherland Asset Management Corporation, a Maryland corporation (the “Company”), and U.S. Bank National Association (the “Trustee”), as trustee under the Indenture dated as of August 9, 2017, between the Company and the Trustee (as amended or supplemented from time to time in accordance with the terms thereof, the “Base Indenture”).

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company executed and delivered the Base Indenture to the Trustee to provide, among other things, for the issuance, from time to time, of the Company’s senior unsecured debt Securities, in an unlimited aggregate principal amount, in one or more series to be established by the Company under, and authenticated and delivered as provided in, the Base Indenture;

 

WHEREAS, Section 9.01(c) of the Base Indenture provides for the Company and the Trustee to enter into supplemental indentures to the Base Indenture to establish the form and terms of Securities of any series as contemplated by Article II of the Base Indenture;

 

WHEREAS, the Board of Directors has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture;

 

WHEREAS, pursuant to the terms of the Base Indenture, the Company has authorized the creation and issuance under this Supplemental Indenture of its 6.50% Senior Notes due 2021 (the “Securities”), the form and substance of such Securities and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Supplemental Indenture; and

 

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture, and that all requirements necessary to make (i) this Supplemental Indenture a valid instrument in accordance with its terms, and (ii) the Securities, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company have been performed, and the execution and delivery of this Supplemental Indenture have been duly authorized in all respects.

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Securities by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders, as follows:

 

ARTICLE 1
  
 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01                             Scope of Supplemental Indenture. The changes, modifications and supplements to the Base Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall govern only the terms of (and only the rights of the Holders and the obligations of the Company with respect to), the Securities, which may be issued from time to time, and shall not apply to any other securities that may be issued under the Base Indenture (or govern the rights of the Holders or the obligations of the Company with respect to any such other securities) unless a supplemental indenture with respect to such other securities specifically incorporates such changes, modifications and supplements. The provisions of this Supplemental Indenture shall, with respect to the Securities, supersede any corresponding provisions in the Base Indenture. Subject to the preceding sentence, and except as otherwise provided herein, the provisions of the Base Indenture shall apply to the Securities and govern the rights of the Holders of the Securities and the obligations of the Company and the Trustee with respect thereto.

 

Section 1.02                             Definitions. For all purposes of the Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

 

(1)                                 the terms defined in this Article 1 shall have the meanings assigned to them in this Article 1 and include the plural as well as the singular; and

 

(2)                                 all words, terms and phrases defined in the Base Indenture (but not otherwise defined herein) shall have the same meanings as in the Base Indenture.

 

“Agent Members” has the meaning specified in Section 2.02(c) hereof.

 

“Applicable Procedures” means, with respect to any matter at any time, the policies and procedures of the Depository, if any, that are applicable to such matter at such time.

 

“Applicable Tax Law” has the meaning specified in Section 9.13 hereof.

 

“Base Indenture” has the meaning specified in the first paragraph of this Supplemental Indenture, as such instrument may be supplemented from time to time by one or more indentures supplemental thereto, including this Supplemental Indenture, entered into pursuant to the applicable provisions of the Base Indenture, including, for all purposes of the Base Indenture, this Supplemental Indenture and any such other supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Base Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.

 

“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.

 

“Business Day” means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, any day other than a Saturday, a Sunday or a day on which banking institutions in New York City or the location of the corporate trust office of the Trustee are authorized or required by law, regulation or executive order to close.

 

“Capital Stock” means, with respect to any entity, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting), including partnership or limited liability company interests, whether general or limited, in the equity of such entity (including without limitation all warrants, options, derivative instruments, or rights of subscription or conversion relating to or affecting Capital Stock), whether outstanding on the issue date of the Securities or issued thereafter.

 

“Change of Control Offer” has the meaning specified in Section 4.09(a) hereof.

 

“Change of Control Payment” has the meaning specified in Section 4.09(b) hereof.

 

“Change of Control Payment Date” has the meaning specified in Section 4.09(b) hereof.

 

“Change of Control Repurchase Event” means (A) the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of the Capital Stock entitling that person to exercise more than 50% of the total voting power of all the Capital Stock entitled to vote generally in the election of the Company’s directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and (B) following the closing of any transaction referred to in subsection (A), neither the Company nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange, the NYSE Amex Equities, or the NYSE Amex, or the Nasdaq Stock Market, or listed or quoted on an exchange or quotation system that is a successor to the New York Stock Exchange, the NYSE Amex or the Nasdaq Stock Market.

 

2

 

“Close of Business” means 5:00 p.m., New York City time.

 

“Company” has the meaning specified in the first paragraph of this Supplemental Indenture, and subject to the provisions of Section 8.02, shall include its successors and assigns.

 

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at 60 Livingston Avenue St. Paul, MN 55107, Attention: Global Corporate Trust Services.

 

“Custodian” means the Trustee, as custodian with respect to the Securities (so long as the Securities constitute Global Securities), or any successor entity

 

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

 

“Event of Default” has the meaning, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, specified in Section 5.02 hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 1 to the Form of Security attached hereto as Exhibit A.

 

“GAAP” means generally accepted accounting principles in the United States applied consistently from time to time.

 

“Global Security” means a Security which is executed by the Company and authenticated and delivered to the Depository or its nominee, all in accordance with the Indenture and pursuant to a Company Order, which shall be registered in the name of the Depository or its nominee and which shall represent the amount of uncertificated Securities as specified therein.

 

“Guarantee” means, any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any indebtedness of any other Person, including any such obligation, direct or indirect, contingent or otherwise, of such Person:

 

(1)                                 to purchase or pay (or advance or supply funds for the purchase or payment of) such indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keepwell, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

 

(2)                                 entered into primarily for purposes of assuring in any other manner the obligee of such indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part).

 

“Holder” means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, the Person in whose name a Security is registered in the Register’s books.

 

“incur” mean to, directly or indirectly, create, incur, assume, guarantee or otherwise become liable for payment of.

 

“Indenture” means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, the Base Indenture, as originally executed and as supplemented by this Supplemental Indenture, each as may be amended or supplemented from time to time.

 

3

 

“Interest Payment Date” means, with respect to the payment of interest on the Securities and notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, each January 30, April 30, July 30 and October 30, beginning on July 30, 2018.

 

“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).

 

“Maturity Date” means, with respect to any Security and the payment of the principal amount thereof, April 30, 2021.

 

“Note Guarantor” means any Subsidiary of the Company that Guarantees the Securities, until such Guarantee is released in accordance with the terms of this Indenture.

 

“Open of Business” means 9:00 a.m., New York City time.

 

“Operating Partnership” means Sutherland Partners, L.P., a Delaware limited partnership.

 

“Optional Redemption” has the meaning specified in Section 3.03(a).

 

“Outstanding” means, with respect to the Securities, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, any Securities authenticated by the Trustee except (i) Securities cancelled by it, (ii) Securities delivered to it for cancellation and (iii)(A) Securities replaced pursuant to Section 2.09 of the Base Indenture, on and after the time such Security is replaced (unless the Trustee and the Company receive proof satisfactory to them that such Security is held by a bona fide purchaser), (B) any and all Securities, as of the Maturity Date, if the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all of the Securities then payable, and (C) any and all Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor, except that in determining whether the Trustee shall be protected in relying upon any request, demand, authorization, direction, notice, consent or waiver or other action that is to be made by a requisite principal amount of Outstanding Securities, only such Securities which a Responsible Officer of the Trustee knows to be so owned shall be disregarded.

 

“Paying Agent” has the meaning set forth in the Base Indenture and shall be the person authorized by the Company to pay the principal amount of, interest on, Change of Control Payment of or Redemption Price of, any Securities on behalf of the Company.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity.

 

“Physical Securities” means any non-Global Security issued pursuant to Section 2.03 hereof that is in definitive, fully registered form, without interest coupons.

 

“Preliminary Prospectus Supplement” means the Preliminary Prospectus Supplement of the Company, dated April 23, 2018, to the Prospectus of the Company dated July 27, 2017, relating to the offering and sale of the Securities.

 

“Redemption Date” has the meaning specified in Section 3.04(a).

 

“Redemption Notice” has the meaning specified in Section 3.04(a).

 

“Redemption Price” has the meaning specified in Section 3.03(a).

 

4

 

“Regular Record Date” means, with respect to any Interest Payment Date, the January 15, April 15, July 15 and October 15 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.

 

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of such person’s knowledge of and familiarity with the particular subject and who shall, in each case, have direct responsibility for the administration of this Indenture.

 

“Security” or “Securities” has the meaning specified in the fourth paragraph of the Recitals of this Supplemental Indenture, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture.

 

“Significant Subsidiary” means, with respect to any person, a Subsidiary of such person that would constitute a “significant subsidiary” as such term is defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as in effect on the original date of issuance of the Securities.

 

“Subsidiary” means, with respect to any Person and at any time, any other Person if more than 50% of the total combined voting power of all of such other Person’s outstanding Voting Stock is at the time owned, directly or indirectly, by such referent Person and/or one or more other Subsidiaries of such referent Person. For purposes of clarity, it is understood and agreed that, anything in this Indenture to the contrary notwithstanding, variable interest entities (within the meaning of GAAP) shall not be deemed to be Subsidiaries of any Person.

 

“Successor Company” has the meaning specified in Section 8.02(a) hereof.

 

“Supplemental Indenture” has the meaning specified in the first paragraph hereof, as such instrument may be supplemented from time to time by one or more indentures supplemental thereto, entered into pursuant to the applicable provisions of the Base Indenture and the Supplemental Indenture, including, for all purposes of this Supplemental Indenture and any such other supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Base Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.

 

“Total Stockholders’ Equity” means, with respect to any Person as of any determination date, the total stockholders’ equity (or, if such Person is not a corporation, the total equity interests of its partners, members or other equity owners) of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Supplemental Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of the Base Indenture and this Supplemental Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

 

“U.S.” or “United States” means the United States of America.

 

Section 1.03                             References to Principal.

 

(a)                                 Unless the context otherwise requires, any reference to the principal of, or the principal amount of, any Security or Note in the Base Indenture or this Supplemental Indenture shall be deemed to include the Redemption Price and/or the Change of Control Payment, if, in such context, the Redemption Price and/or Change of Control Payment (as applicable) is, was or would be payable in accordance with Article 3 or Section 4.09, as applicable.  Unless the context otherwise requires, any express mention of the Redemption Price or the Change of Control Payment in any provision hereof shall not be construed as excluding the Redemption Price or the Change of Control Payment, as applicable, in those provisions hereof where such express mention is not made.

 

5

 

ARTICLE 2
  
 THE SECURITIES

 

Section 2.01                             Title and Terms; Payments.

 

(a)                                 Establishment; Designation. Pursuant to Section 2.02 of the Base Indenture, there is hereby established and authorized a new series of Securities under the Indenture, which series of Securities shall be designated the “6.50% Senior Notes due 2021.”

 

(b)                                 Initial Issuance. Subject to Section 2.01(c) hereof, the aggregate principal amount of Securities that may initially be authenticated and delivered under the Indenture is limited to $57,500,000. In addition, the Company may execute, and the Trustee may authenticate and deliver, in each case, in accordance with Section 2.04 of the Base Indenture, an unlimited aggregate principal amount of additional Securities upon the transfer, exchange, purchase of Securities pursuant to Sections 2.08, 2.09 and 2.11 of the Base Indenture and Article III and Section 4.09(d) hereof.

 

(c)                                  Further Issues. The Company may, without the consent of the Holders, issue additional Securities under the Indenture with the same terms and the same CUSIP number as the Securities initially issued under the Indenture in an unlimited aggregate principal amount; provided, that the Company may issue such additional Securities only if they are part of the same issue as the Securities initially issued hereunder for United States federal income tax purposes. Any such additional Securities will, for all purposes of the Indenture, including waivers, amendments and offers to purchase, be treated as part of the same series as the Securities initially issued under the Indenture.

 

(d)                                 Purchases. The Company and its Subsidiaries may from time to time purchase Securities in open market purchases in negotiated transactions or otherwise without giving prior notice to or obtaining any consent of the Holders. Any Securities purchased by the Company or any of its Subsidiaries pursuant to the foregoing sentence or otherwise will be retired and will no longer be Outstanding under the Indenture.

 

(e)                                  Denominations. Pursuant to Section 2.02 of the Base Indenture, and notwithstanding Section 2.03 of the Base Indenture, the Securities will be issued only in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof.

 

Section 2.02                             Forms.

 

(a)                                 In General. Pursuant to Section 2.01 of the Base Indenture, the Securities will be substantially in the forms set forth in Exhibit A hereto, and may include such insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities.

 

Notwithstanding Section 2.08 of the Base Indenture, each Security will bear a Trustee’s certificate of authentication substantially in the form included in Exhibit A hereto. Each Security will also bear the Form of Assignment and Transfer.

 

Any Security that is a Global Security will bear a legend substantially in the form of the legend set forth in Exhibit A hereto and shall also bear the “Schedule of Increases and Decreases of Global Security” set forth in Annex A to Exhibit A hereto.

 

The terms and provisions contained in the Securities will constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the

 

6

 

extent that any provision of any Security conflicts with the express provisions of the Indenture, the provisions of this Indenture will govern and control.

 

(b)                                 Initial and Subsequent Form of Securities. The Company hereby initially appoints The Depository Trust Company as the Depository for the Securities, which initially shall be issued in the form of one or more Global Securities (i) registered in the name of Cede & Co., as nominee of the Depository, and (ii) delivered to the Trustee as custodian for the Depository.

 

So long as the Securities are eligible for book-entry settlement with the Depository, unless otherwise required by law, and except to the extent provided in Section 2.03(c)(1) through (3) hereof, all Securities will be represented by one or more Global Securities.

 

(c)                                  Global Securities. Each Global Security will represent the aggregate principal amount of the then Outstanding Securities endorsed thereon and provide that it represents such aggregate principal amount of the then Outstanding Securities, which aggregate principal amount may, from time to time, be reduced or increased to reflect transfers, exchanges, or purchases by the Company.

 

Only the Trustee, or the Custodian holding such Global Security for the Depository, at the direction of the Trustee, may endorse a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount of the then Outstanding Securities represented thereby, and whenever the Holder of a Global Security delivers instructions to the Trustee to increase or decrease the aggregate principal amount of the then Outstanding Securities represented by a Global Security in accordance with the Indenture and the Applicable Procedures, the Trustee, or the Custodian holding such Global Security for the Depository, at the direction of the Trustee, will endorse such Global Security to reflect such increase or decrease in the aggregate principal amount of the then Outstanding Securities represented thereby. None of the Trustee, the Company or any agent of the Trustee or the Company will have any responsibility or bear any liability for any aspect of the records relating to or payments made on account of the ownership of any beneficial interest in a Global Security or with respect to maintaining, supervising or reviewing any records relating to such beneficial interest.

 

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under the Indenture with respect to any Global Security held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Security, and Cede & Co., or such other person designated by the Depository as its nominee, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder.

 

Section 2.03                             Transfer and Exchange.

 

(a)                                 In General. Notwithstanding anything to the contrary in Article II of the Base Indenture, the Company is not required to transfer or exchange any Securities or portions thereof that have been surrendered for purchase in accordance with Section 4.09 hereof (unless the related Change of Control Offer is withdrawn) or that have been called for redemption in accordance with the provisions of Article 3 hereof, and a written form of transfer substantially in the form of the Form of Assignment and Transfer will be deemed to be a written instrument of transfer satisfactory to the Company and the Registrar.

 

At such time as all interests in a Global Security have been purchased, cancelled or exchanged for Securities in certificated form, such Global Security shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between the Depository and the Custodian for the Global Security. At any time prior to such cancellation, if any interest in a Global Security is purchased, cancelled or exchanged for Securities in certificated form, the principal amount of such Global Security shall, in accordance with the standing procedures and instructions existing between the Depository and the Custodian for the Global Security, be appropriately reduced, and an endorsement shall be made on such Global Security, by the Trustee or the Custodian for the Global Security, at the direction of the Trustee, to reflect such reduction.

 

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(b)                                 Global Securities. Notwithstanding anything to the contrary in Section 2.08 of the Base Indenture, every transfer and exchange of a beneficial interest in a Global Security will be effected through the Depository in accordance with the Applicable Procedures and the provisions of the Indenture, and each Global Security may be transferred only as a whole and only (A) by the Depository to a nominee of the Depository, (B) by a nominee of the Depository to the Depository or to another nominee of the Depository, or (C) by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

 

(c)                                  Holders Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any interest (subject to Section 2.13 of the Base Indenture) on such Security at the Maturity Date, in connection with a Change of Control Offer, for distribution of notices to such Holders or solicitations of their consent, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Notwithstanding anything to the contrary in Section 2.08 of the Base Indenture:

 

(1)                                 Each Global Security will be exchanged for Physical Securities if the Depository delivers notice to the Company that the Depository is unwilling, unable or no longer permitted under applicable law to continue to act as Depository, and, in each case, the Company promptly delivers a copy of such notice to the Trustee and the Company fails to appoint a successor Depository within 90 days after receiving notice from the Depository.

 

(2)                                 If an Event of Default has occurred and is continuing, any owner of a beneficial interest in a Global Security may exchange such beneficial interest for Physical Securities by delivering a written request to the Registrar.

 

(3)                                 If the Company notifies the Trustee that it wishes to terminate and exchange all or part of a Global Security for Physical Securities and the beneficial owners of the majority of the principal amount of such Global Security (or portion thereof) to be exchanged consent to such exchange, the Company may exchange all beneficial interests in such Global Security (or portion thereof) for Physical Securities by delivering a written request to the Registrar.

 

In the case of an exchange for Physical Securities under clause (1) above:

 

(A)                               each Global Security will be deemed surrendered to the Trustee for cancellation;

 

(B)                               the Trustee will cause each Global Security to be cancelled in accordance with the Applicable Procedures; and

 

(C)                               the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a request of the Company, the Trustee, in accordance with Section 2.04 of the Base Indenture, will promptly authenticate and deliver, for each beneficial interest in each Global Security so exchanged, an aggregate principal amount of Physical Securities equal to the aggregate principal amount of such beneficial interest, registered in such names and in such authorized denominations as the Depository specifies, and bearing any legends that such Physical Securities are required to bear under this Indenture.

 

In the case of an exchange for Physical Securities under clause (2) above:

 

(A)                               the Registrar will deliver notice of such request to the Company and the Trustee, which notice will identify the owner of the beneficial interest to be exchanged, the aggregate principal amount of such beneficial interest and the CUSIP of the relevant Global Security, in each case if and as such information is provided to the Registrar by the Depository;

 

(B)                               the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a request of the Company, the Trustee, in accordance with Section 2.04 of the Base

 

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Indenture, will promptly authenticate and deliver to such owner, for the beneficial interest so exchanged by such owner, Physical Securities registered in such owner’s name having an aggregate principal amount equal to the aggregate principal amount of such beneficial interest and bearing any legends that such Physical Securities are required to bear under this Indenture; and

 

(C)                               the Registrar, in accordance with the Applicable Procedures, will cause the principal amount of such Global Security to be decreased by the aggregate principal amount of the beneficial interest so exchanged. If all of the beneficial interests in a Global Security are so exchanged, such Global Security will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Security to be cancelled in accordance with the Applicable Procedures.

 

In the case of an exchange for Physical Securities under clause (3) above:

 

(A)                               the Company will deliver notice of such request to the Registrar and the Trustee, which notice will identify each owner of a beneficial interest to be exchanged, the aggregate principal amount of each such beneficial interest and the CUSIP of the relevant Global Security;

 

(B)                               the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a request of the Company, the Trustee, in accordance with Section 2.04 of the Base Indenture, will promptly authenticate and deliver to each such beneficial owner, Physical Securities registered in such beneficial owner’s name having an aggregate principal amount equal to the aggregate principal amount of its exchanged beneficial interest and bearing any legends that such Physical Securities are required to bear under this Indenture and any applicable law; and

 

(C)                               the Registrar, in accordance with the Applicable Procedures, will cause the principal amount of each relevant Global Security to be decreased by the aggregate principal amount of the beneficial interests so exchanged. If all of the beneficial interests in a Global Security are so exchanged, such Global Security will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Security to be cancelled in accordance with the Applicable Procedures.

 

In each of the cases described in clauses (1), (2) and (3) above, the Company may rely on the Depository to provide all names of beneficial owners and their respective principal amounts beneficially owned and may issue Physical Securities registered in the names and amounts so provided by the Depository.

 

(d)                                 Physical Securities. Except to the extent otherwise provided in Section 2.03(a) hereof, Physical Securities may be transferred or exchanged in accordance with Section 2.08 of the Base Indenture.

 

Section 2.04                             Payments on the Securities.

 

(a)                                 In General. Each Security will accrue interest at a rate equal to 6.50% per annum from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, April 27, 2018. Interest on a Security will cease to accrue upon the earliest of the Maturity Date, subject to the provisions of Article 3 hereof, any Redemption Date for such security and, subject to the provisions of Section 4.09 hereof, any Change of Control Payment Date. Interest on any Security will be payable quarterly in arrears on each Interest Payment Date, beginning July 30, 2018, to the Holder of such Security as of the Close of Business on the Regular Record Date immediately preceding the applicable Interest Payment Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

The Securities will mature on the Maturity Date, and on the Maturity Date, each Holder of a then Outstanding Security will be entitled on such date to receive $25.00 in cash for each $25.00 in principal amount of then Outstanding Securities held, together with accrued and unpaid interest to, but not including, the Maturity Date on such then Outstanding Securities.

 

Notwithstanding anything to the contrary, if the Maturity Date or any Interest Payment Date, Redemption Date, or any Change of Control Payment Date falls, or if any payment, delivery, notice or other action by the

 

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Company is otherwise due, on a day that is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the immediately following Business Day with the same force and effect as if taken on the original due date date. Such payment will not result in a Default and no additional interest will accrue and no Default shall occur on account of such delay.

 

(b)                                 Method of Payment. The Company will pay the principal of, the Change of Control Payment for, and the Redemption Price for, with respect to, any Physical Security to the Holder of such Security in cash at the designated office of the Paying Agent in Saint Paul, Minnesota prior to 10:00 a.m. on the relevant payment date. The Company will pay any interest on any Physical Security to the Holder of such Security (i) if such Holder holds $2,000,000 or less aggregate principal amount of Securities, by check mailed to such Holder’s registered address, and (ii) if such Holder holds more than $2,000,000 aggregate principal amount of Securities, (A) by check mailed to such Holder’s registered address or, (B) if such Holder delivers to the Registrar a written request that the Company make such payments by wire transfer to an account of such Holder within the United States, for each interest payment corresponding to each Regular Record Date occurring during the period beginning on the date on which such Holder delivered such request and ending on the date, if any, on which such Holder delivers to the Registrar a written instruction to the contrary, by wire transfer of immediately available funds to the account specified by such Holder.

 

The Company will pay the principal of, interest on, the Change of Control Payment for and the Redemption Price for, any Global Security to the Depository by wire transfer of immediately available funds on the relevant payment date in accordance with Applicable Procedures.

 

(c)                                  Defaulted Payments. The Company shall pay any interest on the Securities that is payable, but is not punctually paid or duly provided for, on the applicable Interest Payment Date, in accordance with Section 2.13 of the Base Indenture.

 

ARTICLE 3
  
 OPTIONAL REDEMPTION

 

Section 3.01                             Applicability of Article III of the Base Indenture.

 

(a)                                 Article III of the Base Indenture shall not apply to the Securities. Instead, the provisions of this Article 3 shall, with respect to the Securities, supersede in its entirety Article III of the Base Indenture.

 

Section 3.02                             No Sinking Fund.

 

(a)                                 Article XI of the Base Indenture shall not apply with respect to the Securities.

 

Section 3.03                             Redemption.

 

(a)                                 The Securities shall not be redeemed by the Company prior to April 30, 2019. On or after April 30, 2019, the Company may redeem the Securities (an “Optional Redemption”) for cash, in whole or from time to time in part, at the Company’s option, at a redemption price (the “Redemption Price”), prior to April 30, 2020 equal to 101% of the principal amount of the Securities to be redeemed, and on or after April 30, 2020 equal to 100% of the principal amount of the Securities to be redeemed, in each case plus accrued and unpaid interest thereon to but excluding, the redemption date.

 

Section 3.04                             Notice of Redemption; Selection of Securities.

 

(a)                                 If the Company wishes to exercise its right to redeem all or, as the case may be, any part of the Securities pursuant to Section 3.03, it shall fix a date for redemption (each, a “Redemption Date”), and it or, at its written request received by the Trustee not less than five calendar days prior to the date of the Redemption Notice (or such shorter period of time as may be acceptable to the Trustee), the Trustee, in the name of and at the expense of the Company, shall provide notice of such redemption (a “Redemption Notice”) not less than 30 nor more than

 

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60 calendar days prior to the Redemption Date by mail or electronic delivery to each Holder of Securities so to be redeemed as a whole or in part at its last address as the same appears on the books of the Registrar. The Redemption Date must be a Business Day.

 

(b)                                 The Redemption Notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such Redemption Notice by mail or any defect in the Redemption Notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security.

 

(c)                                  Each Redemption Notice shall specify:

 

(1)                                 the Redemption Date;

 

(2)                                 the Redemption Price;

 

(3)                                 that on the Redemption Date, the Redemption Price will become due and payable upon each Security to be redeemed, and that interest thereon, if any, shall cease to accrue on and after the Redemption Date;

 

(4)                                 the place or places where such Securities are to be surrendered for payment of the Redemption Price;

 

(5)                                 the CUSIP and ISIN or other similar numbers, if any, assigned to such Securities; and

 

(6)                                 in case any Security is redeemed in part only, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender of such Security, a new Security in principal amount equal to the unredeemed portion thereof shall be issued.

 

(d)                                 A Redemption Notice shall be irrevocable.

 

(e)                                  If fewer than all of the outstanding Securities are to be redeemed, the Securities shall be selected for Optional Redemption (in principal amounts of $25.00 or multiples thereof) on a pro rata basis or such other method the Trustee deems fair and appropriate and as is required by the Depository pursuant to the Applicable Procedures, provided that such method complies with the rules of any securities exchange on which the Securities are listed.

 

(f)                                   In the event of any redemption in part, the Company shall not be required to register the transfer of or exchange any Security so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

Section 3.05                             Payment of Securities Called for Redemption.

 

(a)                                 If any Redemption Notice has been given in respect of the Securities in accordance with Section 3.04, the Securities shall become due and payable on the Redemption Date at the place or places stated in the Redemption Notice and at the applicable Redemption Price. On presentation and surrender of the Securities at the place or places stated in the Redemption Notice, the Securities shall be paid and redeemed by the Company at the applicable Redemption Price.

 

(b)                                 Prior to the Open of Business on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company or a Subsidiary of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 3.06 of the Base Indenture an amount of cash (in immediately available funds if deposited on the Redemption Date), sufficient to pay the Redemption Price of all of the Securities to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent, payment for the Securities to be redeemed shall be made on the Redemption Date for such Securities. The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price.

 

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Section 3.06                             Restrictions on Redemption.

 

(a)                                 The Company may not redeem any Securities on any date if the principal amount of the Securities has been accelerated in accordance with the terms of the Indenture, and such acceleration has not been rescinded, on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Securities).

 

ARTICLE 4
  
 PARTICULAR COVENANTS OF THE COMPANY

 

Section 4.01                             Payment of Principal, Interest, Change of Control Payment and Redemption Price. This Section 4.01 shall replace Section 4.01 of the Base Indenture in its entirety.

 

The Company covenants and agrees that it will cause to be paid the principal of (including the Change of Control Payment and the Redemption Price, if applicable), and accrued and unpaid interest, if any, on each of the Securities at the places, at the respective times and in the manner provided herein and in the Securities.

 

Section 4.02                             Maintenance of Office or Agency. This Section 4.02 replaces Section 2.05 of the Base Indenture in its entirety and references in the Base Indenture to Section 2.05 of the Base Indenture shall be deemed replaced with references to this Section 4.02.

 

The Company will maintain an office of the Paying Agent, an office of the Registrar and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee.

 

The Company may also from time to time designate coregistrars one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The term “Paying Agent” includes any such additional or other offices or agencies, as applicable.

 

The Company hereby initially designates the Trustee as the Paying Agent, Registrar and Custodian, and the Corporate Trust Office, which shall be in the continental United States, shall be considered as one such office or agency of the Company for each of the aforesaid purposes.

 

With respect to any Global Security, the Corporate Trust Office of the Trustee or any Paying Agent shall be the place of payment where such Global Security may be presented or surrendered for payment or for registration of transfer or exchange, or where successor Securities may be delivered in exchange therefor; provided, however, that any such payment, presentation, surrender or delivery effected pursuant to the Applicable Procedures of the Depository for such Global Security shall be deemed to have been effected at the place of payment for such Global Security in accordance with the provisions of this Indenture.

 

Section 4.03                             Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.08 of the Base Indenture, a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 4.04                             Provisions as to Paying Agent. This Section 4.04 shall replace Section 7.07 of the Base Indenture in its entirety and references in the Base Indenture to Section 7.07 of the Base Indenture shall be deemed replace with references to this Section 4.04.

 

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(a)                                 If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:

 

(1)                                 that it will hold all sums held by it as such agent for the payment of the principal of, accrued and unpaid interest, if any, on, the Change of Control Payment for, and the Redemption Price for, the Securities in trust for the benefit of the holders of the Securities;

 

(2)                                 that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal of, accrued and unpaid interest, if any, on, the Change of Control Payment for, or the Redemption Price for, the Securities when the same shall be due and payable; and

 

(3)                                 that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

 

The Company shall, on or before each due date of the principal of, accrued and unpaid interest, if any, on, Change of Control Payment for, and the Redemption Price for, the Securities, deposit with the Paying Agent a sum sufficient to pay such principal, accrued and unpaid interest, Change of Control Payment or Redemption Price, as the case may be, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action, provided that, if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.

 

(b)                                 If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, accrued and unpaid interest, if any, on, Change of Control Payment for or Redemption Price for, the Securities, set aside, segregate and hold in trust for the benefit of the holders of the Securities a sum sufficient to pay such principal, accrued and unpaid interest, if any, on, Change of Control Payment or Redemption Price, as the case may be, so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal of, accrued and unpaid interest on, Change of Control Payment for or Redemption Price for, the Securities when the same shall become due and payable.

 

(c)                                  Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.

 

Section 4.05                             Reports. This Section 4.05 will replace Section 4.02 of the Base Indenture in its entirety.

 

The Company will file with the Trustee, within 15 days after it files the same with the SEC, copies of the quarterly and annual reports and of the information, documents and other reports, if any, that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, and to otherwise comply with Section 314(a) of the Trust Indenture Act. Any such report, information or document that the Company files with the Commission through the EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee for the purposes of this Section 4.05 at the time of such filing through the EDGAR system (or such successor thereto); provided, however, that the Trustee shall have no obligation whatsoever to determine whether or not such filing has occurred.

 

Delivery of any such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

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Section 4.06                             Statements as to Defaults. The Company shall deliver to the Trustee, as soon as possible, and in any event within thirty days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officers’ Certificate setting forth the details of such Default or Event of Default, its status and the action that the Company proposes to take with respect thereto. Such Officers’ Certificate shall also comply with any additional requirements set forth in Section 4.04 of the Base Indenture.

 

Section 4.07                             Limitation on Liens to Secure Payment of Company Borrowings. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur or suffer to exist any Lien that secures obligations under any indebtedness of the Company (other than Guarantees of indebtedness of its Subsidiaries) on any of its or its Subsidiaries’ assets or property, unless the Securities and any Guarantee of the Securities are equally and ratably secured with the obligations secured by such other Lien. Any Lien created for the benefit of the Holders pursuant to this Section 4.07 may provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Lien that gave rise to the obligation to so secure the Securities.

 

Section 4.08                             Limitation on Unsecured Borrowings or Guaranty of Unsecured Borrowings by Subsidiaries(b)            .

 

(a)                                 The Company will not permit any of its Subsidiaries to incur any unsecured indebtedness or Guarantee the payment of, assume or in any other manner become liable with respect to any unsecured indebtedness of the Company or any of its Subsidiaries (other than (1) a mirror note issued by the Operating Partnership to the Company in connection with the incurrence by the Company of an unsecured borrowing, (2) other indebtedness issued by the Operating Partnership that ranks equal in right of payment with the mirror note issued on the date hereof to the Company in connection with the offering of the Securities described in the Preliminary Prospectus Supplement, (3) other indebtedness in an aggregate outstanding principal amount which when taken together with the principal amount of all other indebtedness incurred, Guaranteed, assumed or for which a Subsidiary has become liable for pursuant to this clause (3) and then outstanding will not exceed the greater of (a) $25.0 million and (b) 5.0% of the Company’s Total Stockholders’ Equity or (4) intercompany loans or other indebtedness where the borrower and lender are both Subsidiaries of the Company, provided that if a future Note Guarantor is the obligor on any such intercompany indebtedness which is owed to a Subsidiary which is not a Note Guarantor, the intercompany indebtedness will be expressly subordinated in right of payment to the Guarantee of the Securities), unless prior to incurring, Guaranteeing, assuming or becoming liable with respect to such indebtedness, such Subsidiary executes and delivers a supplemental indenture providing for a Guarantee of the obligations under Securities and this Indenture in the same or higher ranking as, and otherwise be on terms comparable or better than, such unsecured indebtedness or Guarantee provided by such Subsidiary of such other unsecured indebtedness.

 

(b)                                 The Company may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Note Guarantor to become a Note Guarantor.  Any Guarantee will be limited as necessary to prevent such Guarantee from constituting a fraudulent conveyance under applicable law.

 

(c)                                  A Note Guarantor will be released from its obligations under its Guarantee upon the release or discharge of any other indebtedness or Guarantee in respect of other indebtedness that resulted in the issuance of the Guarantee of the Securities.

 

Section 4.09                             Offer to Repurchase Upon a Change of Control Repurchase Event.

 

(a)                                 If a Change of Control Repurchase Event occurs, unless the Company has provided notice of the redemption of the Securities pursuant to Section 3.04 hereof, each holder of Securities will have the right to require the Company to purchase some or all (in minimum principal amounts of $25.00 or an integral multiple of $25.00 in excess thereof) of such Holder’s Securities pursuant to the offer described below (the “Change of Control Offer”).

 

(b)                                 Any Change of Control Offer will include a cash offer price of 101% of the principal amount of any Securities purchased plus accrued and unpaid interest to, but not including, the date of purchase (the “Change of Control Payment”). If a Change of Control Offer is required, within 30 days following a Change of Control Repurchase Event or at the Company’s option, prior to any Change of Control Repurchase Event, but after the public announcement of a Change of Control Repurchase Event, the Company will deliver a notice in a manner provided in

 

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Section 3.04 herein to each Holder (with a copy to the Trustee and the Paying Agent, if other than the Trustee) describing the Change of Control Repurchase Event and offering to repurchase Securities on a specified date (the “Change of Control Payment Date”). The Change of Control Payment Date will be no earlier than 30 days and no later than 60 days from the date the notice is sent. The Change of Control Offer shall, if given prior to the date of consummation of the Change of Control Repurchase Event, state that the offer to purchase is conditioned on the Change of Control Repurchase Event occurring on or prior to the Change of Control Payment Date specified in the Change of Control Offer.

 

(c)                                  On the Change of Control Payment Date, the Company will, to the extent lawful:

 

(1)                                 accept for payment all Securities properly tendered and not withdrawn pursuant to the Change of Control Offer;

 

(2)                                 deposit the Change of Control Payment with the Paying Agent in respect of all Securities so accepted; and

 

(3)                                 deliver to the Trustee the Securities accepted and an Officers’ Certificate stating the aggregate principal amount of all Securities purchased by the Company and requesting that such Securities be cancelled.

 

(d)                                 The Paying Agent will promptly send to each Holder of Securities properly tendered the Change of Control Payment for such Securities, and the Trustee will promptly authenticate and send, or cause to be transferred by book entry, to each Holder a new Security in principal amount equal to any unpurchased portion of the Securities surrendered; provided that each new Security will be in a minimum principal amount of $25.00 and integral multiples of $25.00 in excess thereof.

 

(e)                                  The Company will comply with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations to the extent those laws and regulations are applicable to any Change of Control Offer. If the provisions of any of the applicable securities laws or securities regulations conflict with the provisions of this Section 4.09, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the covenant described above by virtue of that compliance.

 

(f)                                   The Company shall not be required to make a Change of Control Offer upon a Change of Control Repurchase Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer or if notice of redemption has been given pursuant to Section 3.04 hereof (and all of the Securities are redeemed on or prior to the Redemption Date specified in such notice). Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control Repurchase Event, subject to one or more conditions precedent, including, but not limited to, the consummation of such Change of Control, if a definitive agreement is in place for the transaction that will give rise to a Change of Control Repurchase Event at the time the Change of Control Offer is made.

 

ARTICLE 5
  
 REMEDIES

 

Section 5.01                             Amendments to the Base Indenture.

 

(a)                                 The Holders shall not have the benefit of Article VI of the Base Indenture and, with respect to the Securities, this Article 5 supersedes Article VI of the Base Indenture in its entirety.

 

(b)                                 Each reference in the Base Indenture to Section 6.04 is, with respect to the Securities, hereby deemed replaced by a reference to Section 5.04 hereof.

 

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(c)                                  Each reference in the Base Indenture to Section 6.05 is, with respect to the Securities, hereby deemed replaced by a reference to Section 5.05 hereof.

 

(d)                                 Section 7.01(c) of the Base Indenture will be amended to delete “, or its willful misconduct,”.

 

Section 5.02                             Events of Default. Each of the following events (and only the following events) shall be an “Event of Default” wherever used with respect to the Securities:

 

(a)                                 default in any payment of interest on any Security when due and payable, and the default continues for a period of thirty days;

 

(b)                                 default in the payment of the principal of or of any premium of any Security (including the the Redemption Price) when due and payable on the Maturity Date, upon Optional Redemption, upon declaration of acceleration or otherwise;

 

(c)                                  failure by the Company to comply with its obligations under Article 8 hereof;

 

(d)                                 default in tendering payment for the notes upon a Change of Control Repurchase Event, when such payment remains unpaid sixty days after issuance of the requisite notice;

 

(e)                                  default in the performance of any other obligation of the Company contained in this Supplemental Indenture or the Securities (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 5.02 specifically provided for or which does not apply to the notes), which continues for ninety days after written notice from the Trustee or the Holders of more than 25% of the aggregate outstanding principal amount of the Securities;

 

(f)                                   an event of default, as defined in any bond, note, debenture or other evidence of debt of the Company or any Significant Subsidiary in excess of $35,000,000 singly or in aggregate principal amount of such issues of such persons, whether such debt exists now or is subsequently created, which becomes accelerated so as to be due and payable prior to the date on which the same would otherwise become due and payable and such acceleration(s) shall not have been annulled or rescinded within thirty days of such acceleration or the failure to make a principal payment at the final (but not any interim) fixed maturity and such defaulted payment shall not have been made, waived or extended within thirty days of such payment default; provided, however, that if such event of default, acceleration(s) or payment default(s) are contested by the Company, a final and non-appealable judgment or order confirming the existence of the default(s) and/or the lawfulness of the acceleration(s), as the case may be, shall have been entered;

 

(g)                                  a final and non-appealable judgment or order for the payment of $35,000,000 singly, or in the aggregate (excluding any amounts covered by insurance) for all such final judgements or orders against all such persons: (i) shall be rendered against the Company or any Significant Subsidiary and shall not be paid or discharged and (ii) there shall by any period of sixty consecutive days following the entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such person to exceed $35,000,000 during which a stay of enforcement of such final judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

 

(h)                                 the Company or any Significant Subsidiary of the Company shall commence a voluntary case or other proceeding seeking the liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of the Company’s or such Significant Subsidiary of the Company’s property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

 

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(i)                                     an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary of the Company seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary of the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty consecutive days.

 

Section 5.03                             Acceleration; Rescission and Annulment. If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 5.02(h) or Section 5.02(i) with respect to the Company (and not solely with respect to a Significant Subsidiary of the Company)), unless the principal of all of the Securities shall have already become due and payable, either the Trustee or the holders of at least 25% in aggregate principal amount of the Securities then Outstanding, by notice in writing to the Company (and to the Trustee if given by the Holders), may declare 100% of the principal of, and premium if any, and accrued and unpaid interest, if any, on all the Securities to be due and payable immediately. If an Event of Default specified in Section 5.02(h) or Section 5.02(i) with respect to the Company (and not solely with respect to a Significant Subsidiary of the Company) occurs and is continuing, the principal of, and accrued and unpaid interest, if any, on all Securities shall be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of outstanding Securities.  At any time after the Trustee or the Holders have accelerated the repayment of the principal, premium, if any, and all unpaid interest on the Securities, but before the Trustee has obtained a judgment or decree for payment of money due, the Holders of a majority in aggregate principal amount of Outstanding Securities may rescind and annul that acceleration and its consequences, provided that all payments and/or deliveries due, other than those due as a result of acceleration, have been made and all Events of Default have been remedied or waived.

 

Section 5.04                             Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Securities then Outstanding, by written notice to the Company and to the Trustee, may waive (including by way of consents obtained in connection with a repurchase of, or tender or exchange offer for, the Securities) all past Defaults or Events of Default with respect to the Securities (other than a Default or an Event of Default resulting from nonpayment of principal or interest or any other provisions that requires the consent of each affected Holder to amend).

 

Section 5.05                             Control by Majority. At any time, the Holders of a majority of the aggregate principal amount of the then Outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or for exercising any trust or power conferred on the Trustee with respect to the Securities, provided that (i) such direction is not in conflict with any rule of law or the Indenture, (ii) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction and (iii) the Trustee need not take any action that might involve it in personal liability or be unduly prejudicial to the Holders not joining therein. Before proceeding to exercise any right or power under the Indenture at the direction of the Holders, the Trustee is entitled to receive from those Holders security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which it might incur in complying with any direction.

 

Section 5.06                             Limitation on Suits. A Holder will have the right to institute a proceeding with respect to the Indenture for any remedy under the Indenture if:

 

(a)                                 such Holder or Holders of not less than 25% in principal amount of the Outstanding Securities have given to the Trustee written notice of a continuing Event of Default with respect to the Securities;

 

(b)                                 such Holder or Holders have offered the Trustee indemnification or security reasonably satisfactory to the Trustee against the costs, expenses and liabilities incurred in connection with such written request;

 

(c)                                  the Trustee has not received from the Holders of a majority in principal amount of the Outstanding Securities a written direction inconsistent with the request within sixty days; and

 

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(d)                                 the Trustee fails to institute the proceeding within the sixty days.

 

Notwithstanding the foregoing, the Holder has the right, which is absolute and unconditional, to receive payment of the principal of and interest on its Securities on the Interest Payment Dates or Maturity Date, as applicable (or, in the case of Optional Redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment and such rights shall not be impaired without the consent of such Holder. A Holder may not use this Indenture to prejudice the rights of any other Holder or to obtain a preference or priority over any other Holder, it being understood that the Trustee does not have any affirmative duty to ascertain whether any usage of this Indenture by a Holder is unduly prejudicial to such other Holders.

 

Section 5.07                             Collection of Indebtedness; Suit for Enforcement by Trustee. If an Event of Default specified in Section 5.02(a) or 5.02(b)  hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, interest on, Change of Control Payment for, Redemption Price for, as the case may be, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as well as any other amounts that may be due under Section 7.07 of the Base Indenture.

 

Section 5.08                             Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.

 

Section 5.09                             Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, will be entitled to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.10 of the Base Indenture. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.10 of the Base Indenture out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a lien on, and is paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained will be deemed to authorize the Trustee to authorize or consent to, or to accept or to adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 5.10                             Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 5.11                             Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.09 of the Base Indenture, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or

 

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otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.12                             Delay or Omission Not a Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 5 or by law to the Trustee or to the Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.

 

Section 5.13                             Priorities. If the Trustee collects any money pursuant to this Article 5, it will pay out the money in the following order:

 

FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.07 of the Base Indenture, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

SECOND: to the Holders, for any amounts due and unpaid on the principal of, accrued and unpaid interest on, Change of Control Payment for, Redemption Price for, without preference or priority of any kind, according to such amounts due and payable on all of the Securities; and

 

THIRD: the balance, if any, to the Company or to such other party as a court of competent jurisdiction directs.

 

The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section 5.13. If the Trustee so fixes a record date and a payment date, at least fifteen days prior to such record date, the Company will deliver to each Holder and the Trustee a written notice, which notice will state such record date, such payment date and the amount of such payment.

 

Section 5.14                             Undertaking for Costs. All parties to this Indenture agree, and each Holder, by such Holder’s acceptance of a Security, shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section 5.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Securities then Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, accrued and unpaid interest, if any, on, Change of Control Payment for, or Redemption Price for, any Security on or after the due date expressed or provided for in this Indenture.

 

Section 5.15                             Waiver of Stay, Extension and Usury Laws. The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company, to the extent that it may lawfully do so, hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will instead suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 5.16                             Notices from the Trustee. Notwithstanding anything to the contrary in the Base Indenture, including Section 7.05 of the Base Indenture, whenever a Default occurs and is continuing and is actually known to the Trustee, the Trustee must deliver notice of such Default to the Holders within 90 days after the date on which such Default first occurred. Except in the case of a Default in the payment of the principal of, interest on, Change of Control Payment for or Redemption Price for, any Security or of a Default in the payment or delivery, as the case

 

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may be, the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders.

 

ARTICLE 6
  
 SATISFACTION AND DISCHARGE

 

Section 6.01                             Inapplicability of Provisions of Base Indenture; Satisfaction and Discharge of the Indenture. The provisions set forth in this Article 6 shall, with respect to the Securities, supersede in their entirety Article VIII of the Base Indenture.

 

When (a) the Company shall deliver to the Registrar for cancellation all Securities theretofore authenticated (other than any Securities that have been destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Securities not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable (whether on the Maturity Date, any Redemption Date, on any Change of Control Payment Date or otherwise) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as applicable, an amount of cash sufficient to pay all amounts due on all of such Securities (other than any Securities that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest due, accompanied, except in the event the Securities are due and payable solely in cash at the Maturity Date or upon an earlier Redemption Date or Change of Control Payment Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional reasonably satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) rights hereunder of Holders to receive all amounts owing upon the Securities and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (ii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities.

 

Section 6.02                             Deposited Monies to Be Held in Trust by Trustee. Subject to Section 6.04 hereof, all monies deposited with the Trustee pursuant to Section 6.01 hereof shall be held in trust for the sole benefit of the Holders, and such monies shall be applied by the Trustee to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the Holders of the particular Securities for the payment or settlement of which such monies have been deposited with the Trustee, of all sums or amounts due and to become due thereon for principal and interest, if any.

 

Section 6.03                             Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

 

Section 6.04                             Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee for payment of the principal of or interest, if any, on the Securities and not applied but remaining unclaimed by the Holders of the Securities for two years after the date upon which the principal of or interest, if any, on such Securities, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand, and all liability of the Trustee shall thereupon cease with respect to such monies; and the Holder shall thereafter look only to the Company for any payment or delivery that such Holder may be entitled to collect unless an applicable abandoned property law designates another person.

 

Section 6.05                             Reinstatement. If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 6.02 by reason of any order or judgment of any court or governmental authority enjoining,

 

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restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 6.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 6.02; provided, however, that if the Company makes any payment of interest on, principal of or payment or delivery in respect of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money, if any, held by the Trustee or Paying Agent.

 

ARTICLE 7
  
 SUPPLEMENTAL INDENTURES

 

Section 7.01                             Supplemental Indentures Without Consent of Holders. Section 9.01 of the Base Indenture shall not apply with respect to the Securities, and this Section 7.01 shall replace Section 9.01 of the Base Indenture in its entirety.

 

Without the consent of any Holder, the Company (when authorized by a Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(a)                                 to conform the terms of this Indenture or the Securities to the description thereof in the Preliminary Prospectus Supplement, as supplemented by the issuer free writing prospectus related to the offering of the Securities filed by the Company with the Commission pursuant to Rule 433 under the Securities Act of 1933 on April 25, 2018;

 

(b)                                 to evidence the succession by a Successor Company and to provide for the assumption by a Successor Company of the Company’s obligations under the Indenture;

 

(c)                                  to add guarantees with respect to the Securities and to remove guarantees in accordance with the terms of this Indenture and the Securities;

 

(d)                                 to secure the Securities;

 

(e)                                  to add to the Company’s covenants such further covenants, restrictions or conditions for the benefit of the Holders (or any other holders) or surrender any right or power conferred upon the Company by the Indenture;

 

(f)                                   to cure any ambiguity, omission, defect or inconsistency in this Indenture or the Securities, including to eliminate any conflict with the Trust Indenture Act, so long as such action will not materially adversely affect the interests of Holders;

 

(g)                                  to make any change that does not adversely affect the rights of any Holder;

 

(h)                                 to provide for a successor Trustee;

 

(i)                                     to comply with the Applicable Procedures of the Depository; or

 

(j)                                    to comply with any requirement of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act.

 

Section 7.02                             Supplemental Indentures With Consent of Holders. Section 9.02 of the Base Indenture shall not apply with respect to the Securities, and this Section 7.02 shall replace Section 9.02 of the Base Indenture in its entirety.

 

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities affected by such supplemental indenture, including without limitation, consents obtained in connection

 

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with a purchase of, or tender or exchange offer for, Securities and by act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby:

 

(a)                                 reduce the percentage in aggregate principal amount of Securities Outstanding necessary to waive any past Default or Event of Default;

 

(b)                                 reduce the rate of interest on any Security or change the time for payment of interest on any Security;

 

(c)                                  reduce the principal of any Security or the amount payable upon Optional Redemption of any Security or change the Maturity Date;

 

(d)                                 change the place or currency of payment on any Security;

 

(e)                                  make any change that impairs or adversely affects the conversion rights of any Securities;

 

(f)                                   reduce the Change of Control Payment of any Security or amend or modify in any manner adverse to the rights of the Holders of the Securities the Company’s obligation to pay the Change of Control Payment, whether through an amendment or waiver of provisions in the covenants, definitions related thereto or otherwise;

 

(g)                                  impair the right of any Holder of Securities to receive payment of principal of, and interest, if any, on, its Securities, or to institute suit for the enforcement of any such payment with respect to such Holder’s Securities;

 

(h)                                 modify the ranking provisions of this Indenture in a manner that is adverse to the rights of the Holders of the Securities; or

 

(i)                                     make any change to the provisions of this Article 7 that requires each Holder’s consent or in the waiver provisions in Section 5.04 of this Supplemental Indenture if such change is adverse to the rights of Holders of the Securities.

 

It shall not be necessary for any act or consent of Holders under this Section 7.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such act or consent shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that, unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

 

Section 7.03                             Notice of Amendment or Supplement. After an amendment or supplement under this Article 7 becomes effective, the Company shall mail to the Holders a notice briefly describing such amendment or supplement. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the amendment or supplement.

 

ARTICLE 8
  
 SUCCESSOR COMPANY

 

Section 8.01                             Consolidation, Merger and Sale of Assets.

 

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(a)                                 The provisions in Articles V of the Base Indenture shall not apply with respect to the Securities, and this Article 8 supersedes the entirety thereof.

 

Section 8.02                             Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 8.04, the Company shall not amalgamate or consolidate with, merge with or into or convey, transfer or lease its properties and assets substantially as an entirety to another Person, unless:

 

(a)                                 the Company shall be the surviving Person or the resulting, surviving or transferee Person (the “Successor Company”), if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company under the Securities and this Indenture as applicable to the Securities; and

 

(b)                                 immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture.

 

Section 8.03                             Successor Corporation to Be Substituted. In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of (including any Change of Control Payment or Redemption Price), accrued and unpaid interest, if any, on all of the Securities and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company under this Indenture, such Successor Company shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if it had been named herein as the party of the first part. Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Securities that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Securities that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. In the event of any such amalgamation, consolidation, merger, conveyance or transfer (but not in the case of a lease), the Person named as the “Company” in the first paragraph of this Indenture or any successor that shall thereafter have become such in the manner prescribed in this Article 8 may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Securities and from its obligations under this Indenture.

 

In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

Section 8.04                             Opinion of Counsel to Be Given to Trustee. In the case of an such amalgamation, merger, consolidation, conveyance, transfer or lease the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel stating that any such amalgamation, consolidation, merger, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Article 8.

 

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ARTICLE 9
  
 MISCELLANEOUS

 

Section 9.01                             Effect on Successors and Assigns. Notwithstanding Section 12.12 of the Base Indenture, all agreements of the Company, the Trustee, the Registrar and the Paying Agent in this Indenture and the Securities will bind their respective successors.

 

Section 9.02                             Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE SECURITIES, INCLUDING WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B)

 

Section 9.03                             No Security Interest Created. Nothing in this Indenture or in the Securities, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

Section 9.04                             Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

Section 9.05                             Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture or in the Securities, expressed or implied, will give to any Person, other than the parties hereto, any Paying Agent, any Registrar or their successors hereunder or the Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

 

Section 9.06                             Calculations. Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under the Securities. These calculations include, but are not limited to, determinations of accrued interest payable on the Securities. The Company shall make all calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders of Securities. The Company shall provide a schedule of its calculations to each of the Trustee, and the Trustee is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations as provided to the Trustee to any Holder upon the written request of that Holder at the sole cost and expense of the Company.

 

Section 9.07                             Execution in Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

Section 9.08                             Notices. The Company or the Trustee, by notice given to the other in the manner provided in Section 3.02 of the Base Indenture, may designate additional or different addresses for subsequent notices or communications.

 

Notwithstanding anything to the contrary in Section 3.02 of the Base Indenture, whenever the Company is required to deliver notice to the Holders, the Company will, by the date it is required to deliver such notice to the Holders, deliver a copy of such notice to the Trustee, the Paying Agent and the Registrar. Each notice to the Trustee, the Paying Agent and the Registrar shall be sufficiently given if in writing and mailed, first-class postage prepaid to the address most recently sent by the Trustee, the Paying Agent and the Registrar, as the case may be, to the Company.

 

The Trustee agrees to accept and act upon instructions or directions from the Company pursuant to this Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods, provided, however, that the Trustee shall have received an incumbency certificate listing persons designated to give

 

24

 

such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions. The Company agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

 

Section 9.09                             Ratification of Base Indenture. The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein provided. For the avoidance of doubt, each of the Company and each Holder of Securities, by its acceptance of such Securities, acknowledges and agrees that all of the rights, privileges, protections, immunities and benefits afforded to the Trustee under the Base Indenture are deemed to be incorporated herein, and shall be enforceable by the Trustee hereunder, in each of its capacities hereunder as if set forth herein in full.

 

Section 9.10                             No Recourse Against Others. No recourse for the payment of the principal of, premium, if any, or interest on any of the Securities or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company’s in this Indenture or the Securities or because of the creation of any indebtedness represented thereby, shall be had against any director, officer, employee, incorporator, stockholder or controlling person of the Company or of any successor person thereof. Each Holder, by accepting a Security, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

 

Section 9.11                             The Trustee. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Base Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Securities and of this Supplemental Indenture as fully and with like effect as set forth in full herein.

 

Section 9.12                             Submission to Jurisdiction. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.

 

Section 9.13                             Applicable Tax Law. In order to enable the Trustee to comply with its obligations under applicable tax laws, rules and regulations (including directives, guidelines and interpretations promulgated by competent authorities) in effect from time to time (“Applicable Tax Law”), the Company agrees (i) to provide to the Trustee, following written request from the Trustee delivered to the Company in accordance with Section 9.08 of this Indenture, such information concerning the Holders of the Securities as the Trustee may reasonably request in order to determine whether the Trustee has any tax-related obligations under Applicable Tax Law with respect to the payments made to Holders of the Securities under this Indenture, but only to the extent (a) such information is in the Company’s possession, (b) such information is not subject to any confidentiality or similar agreement or undertaking or otherwise deemed by the Company to be confidential and (c) providing such information to the Trustee does not, in the judgment of the Company, breach or violate or constitute a default under any applicable law, rules or regulations or any instrument or agreement to which the Company or any of its Subsidiaries is a party or by which any of them is bound, and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments made to Holders of Securities under this Indenture to the extent necessary to comply with the Trustee’s obligations under Applicable Tax Law. Each Holder of Securities by accepting a Security shall be deemed to have agreed to the foregoing provisions of this Section 9.13 and to provide to the Trustee or the Company such information concerning such Holder as the Trustee or the Company may reasonably request in order to determine whether the Trustee or the Company has any tax-related obligations under Applicable Tax Law with respect to the

 

25

 

payments made to such Holder under this Indenture; and such agreement by each Holder is part of the consideration for the issuance of the Securities.

 

[Remainder of the page intentionally left blank]

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first above written.

 

 

	
 
    	
SUTHERLAND ASSET MANAGEMENT   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas E. Capasse
    
	
 
    	
 
    	
Name: Thomas E.   Capasse
    
	
 
    	
 
    	
Title: Chairman and Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Prokosch
    
	
 
    	
 
    	
Name: Richard   Prokosch
    
	
 
    	
 
    	
Title: Vice President
    

 

 

(1)                                 [Do not delete - this paragraph generates the automatic page number]

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

[For Global Securities, include the following legend:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

 

	
No.:
    	
 
    	
[                 ]
    
	
CUSIP:
    	
 
    	
86933F 701
    
	
ISIN:
    	
 
    	
US86933F7015
    

 

Principal Amount $[                 ]
 [as revised by the Schedule of Increases
 and Decreases in the Global Security attached hereto](1)

 

Sutherland Asset Management Corporation
 6.50% Senior Notes due 2021

 

Sutherland Asset Management Corporation, a Maryland corporation, promises to pay to [                 ] [include “Cede & Co.” for Global Security] or registered assigns, the principal amount of $[                ] on April 30, 2021 (the “Maturity Date”).

 

Interest Payment Dates: January 30, April 30, July 30 and August 30, beginning on July 30, 2018.

 

Regular Record Dates: January 15, April 15, July 15 and August 15.

 

Additional provisions of this Security are set forth on the other side of this Security.

 

(1)  Include for Global Securities only.

 

1-1

 

IN WITNESS WHEREOF, SUTHERLAND ASSET MANAGEMENT CORPORATION has caused this instrument to be duly signed.

 

 

	
 
    	
 
    	
SUTHERLAND ASSET MANAGEMENT   CORPORATION.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

1-2

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

U.S. Bank National Association, as Trustee, certifies that this is one of the Securities referred to in the within-mentioned Indenture.

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    

 

1-3

 

[FORM OF REVERSE OF SECURITY]

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

6.50% Senior Notes due 2021

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued under an Indenture dated as of August 9, 2017 (herein called the “Base Indenture”), and as further supplemented by the Second Supplemental Indenture, dated as of April 27, 2018 (herein called the “Supplemental Indenture” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”) by and between the Company and U.S. Bank National Association, herein called the “Trustee”, and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

 

The Securities shall not be redeemed by the Company prior to April 30, 2019. As provided in and subject to the provisions of the Indenture, on or after April 30, 2019, the Company may redeem the Securities for cash, in whole or from time to time in part, at the Company’s option, at a redemption price, prior to April 30, 2020 equal to 101% of the principal amount of the Securities to be redeemed, and on or after April 30, 2020 equal to 100% of the principal amount of the Securities to be redeemed, in each case plus accrued and unpaid interest thereon to but excluding, the redemption date, and upon the occurrence of certain conditions specified in the Indenture.

 

As provided in and subject to the provisions of the Indenture, upon the occurrence of a Change of Control Repurchase Event, the Company will make an offer purchase this Security, or any portion of this Security such that the principal amount of this Security that is not purchased equals $25.00 or an integral multiple of $25.00 in excess thereof, on the Change of Control Payment Date at a price equal to the Change of Control Payment for such Change of Control Payment Date.  As provided in and subject to the provisions of the Indenture, the Company will make all payments in respect of a Change of Control Payment for, and the principal amount of, this Security to the Holder that surrenders this Security to the Paying Agent to collect such payments in respect of this Security. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities to be effected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Security, the Holders of not less than 25% in principal amount of the Securities at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal of (including the Change of Control Payment or the Redemption Price) and interest on this Security at the time, place and rate, and in the coin and currency, herein prescribed.

 

1-4

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities are issuable only in registered form without coupons in denominations of $25.00 and integral multiples of $25.00 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

All defined terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. If any provision of this Security limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

 

1-5

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face of this Security, shall be construed as though they were written out in full

 

	
TEN COM
    	
 
    	
Tenants in common
    
	
TEN ENT
    	
 
    	
Tenants by the entireties
    
	
JT TEN
    	
 
    	
Tenants with right of Survivorship and not as   tenants in common
    
	
CUST
    	
 
    	
Custodian
    
	
U/G/M/A
    	
 
    	
Uniform Gift to Minors Act
    

 

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

 

1-6

 

ANNEX A

 

[Include for Global Security]

 

SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY

 

Initial principal amount of Global Security:

 

	
Date
    	
 
    	
Amount of
   Increase in
   principal
   amount of
   Global Security
    	
 
    	
Amount of
   Decrease in
   principal
   amount of
   Global Security
    	
 
    	
Principal
   amount of
   Global Security
   after Increase
   or Decrease
    	
 
    	
Notation by
   Security
   Registrar or
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

1-7

 

ATTACHMENT 1

 

[FORM OF ASSIGNMENT AND TRANSFER]

 

For value received                 hereby sell(s), assign(s) and transfer(s) unto                 (Please insert social security or Taxpayer Identification Number of assignee) the within Security, and hereby irrevocably constitutes and appoints                      to                      transfer the said Security on the books of the Company, with full power of substitution in the premises.

 

 

	
 
    	
 
    
	
 
    	
Signature(s)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature(s) must be   guaranteed by an institution which is a member of one of the following   recognized signature Guarantee Programs:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(i) The Securities   Transfer Agent Medallion Program (STAMP); (ii) The New York Stock   Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion   Program (SEMP); or (iv) another guarantee program
    

 

1-8Exhibit 10.1

 

Execution
copy

 

CREDIT
AGREEMENT

 

This
CREDIT AGREEMENT, dated as of April 24, 2018 is made between Galaxy
Gaming, Inc., a Nevada corporation (the “Borrower”), and ZB,
N.A. dba Nevada State Bank, a Nevada state banking corporation (the “Lender”).

 

Article
I

DEFINITIONS AND ACCOUNTING TERMS

 

Section
1.1       Defined Terms. As used in this Agreement, the following terms shall have the following respective meanings (and
such meanings shall apply equally to both the singular and plural forms of the terms defined, as the context requires).

 

“Affiliate”:
When used with reference to any Person, (a) each Person that, directly or indirectly, controls, is controlled by or is under common
control with, the Person referred to, (b) each Person that beneficially owns or holds, directly or indirectly, 25% or more
of any class of voting Equity Interests of the Person referred to, (c) each Person, 25% or more of the voting Equity Interests
of which is beneficially owned or held, directly or indirectly, by the Person referred to, and (d) each of such Person’s
officers, directors, joint venturers, and partners. The term control (including the terms “controlled by” and “under
common control with”) means the possession, directly, of the power to direct or cause the direction of the management and
policies of the Person in question.

 

“Agreement”:
This Credit Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time.

 

“Anti-Corruption
Laws”: All laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time
to time concerning or relating to bribery or corruption.

 

“Applicable
Margin”: When the Borrower’s Leverage Ratio as set forth in the most recent Compliance Certificate received by
the Lender pursuant to Section 5.1(c) is (a) greater than or equal to 2.00 to 1.00, 4.00% and (b) less than 2.00 to 1.00, 3.50%.

 

Adjustments,
if any, to the Applicable Margin shall be effective from and after the first day of the first fiscal month immediately following
the date on which the delivery of a Compliance Certificate is required pursuant to Section 5.1(c) until the first day of the first
fiscal month immediately following the next such date on which delivery of a Compliance Certificate is so required. If the Borrower
fails to deliver a Compliance Certificate to the Lender at the time required pursuant to Section 5.1(c), then the Applicable Margin
shall be the highest Applicable Margin set forth above until five (5) days after such Compliance Certificate is so delivered.
Notwithstanding the foregoing, clause (b) of the definition of Applicable Margin shall be deemed to be applicable until the Lender’s
receipt of the applicable Compliance Certificate for the Borrower’s first full fiscal quarter ending after the Closing Date,
and adjustments to the Applicable Margin then in effect shall thereafter be effected in accordance with the preceding sentence.

 

     

     

    

 

“Availability”:
As of any date of determination, (a) the Revolving Commitment Amount minus (b) the aggregate unpaid principal balance of
Revolving Loans outstanding on such date.

 

“Board”:
The Board of Governors of the Federal Reserve System or any successor thereto.

 

“Borrower”:
As defined in the opening paragraph hereof.

 

“Borrowing
Request”: A Borrowing Request in the form of Exhibit A.

 

“Business
Day”: Any day (other than a Saturday, Sunday, or legal holiday in the State of Nevada) on which banks are permitted
to be open in Las Vegas, Nevada.

 

“Capital
Expenditures”: For any period of determination and any Loan Party, the sum of all amounts that would, in accordance
with GAAP, be included as additions to property, plant, and equipment on a consolidated statement of cash flows of such Loan Party
during such period, in respect of (a) the acquisition, construction, improvement, replacement, or betterment of land, buildings,
machinery, equipment, or any other fixed assets or leaseholds, (b) to the extent related to and not included in (a) above, materials
or contract labor (excluding expenditures properly chargeable to repairs or maintenance in accordance with GAAP), and (c) other
capital expenditures and other uses recorded as capital expenditures or similar terms having substantially the same effect; provided
that “Capital Expenditures” shall not include the fixed assets of such Loan Party that are deployed at a customer
location.

 

“Capitalized
Lease”: A lease of (or other agreement conveying the right to use) real or personal property with respect to which at
least a portion of the rent or other amounts thereon constitutes Capitalized Lease Obligations.

 

“Capitalized
Lease Obligations”: As to any Loan Party, the obligations of such Loan Party to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real or personal property which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Loan Party under GAAP, and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

 

“Cash
Equivalents”: Without duplication, (a) short-term obligations of, or fully guaranteed by, the United States of America,
(b) commercial paper rated “A-1” or better by S&P or “P-1” or better by Moody’s, (c) demand
deposit accounts maintained in the ordinary course of business, (d) certificates of deposit issued by and time deposits with commercial
banks (whether domestic or foreign) having capital and surplus in excess of $500,000,000; provided in each case that the same
provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest, (e) shares of money market mutual funds that are rated at least “AAAm”
or “AAAG” by S&P or “P-1” or better by Moody’s, and (f) any of the foregoing with the Lender
or the Lender’s parent company.

 

“Cash
Management Obligations”: The liabilities, indebtedness, and obligations with respect to any Cash Management Services.

 

    2 

     

    

 

“Cash
Management Services”: Any banking services provided to the Borrower or any Subsidiary by the Lender or any Lender Affiliate,
including without limitation (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase
cards, (e) stored value cards, (f) automated clearing house or wire transfer services, and (g) treasury management,
including, without limitation, collections, depository, and disbursement services.

 

“Change
in Law”: Any of (a) the adoption of any law, rule, or regulation after the date of this Agreement, (b) any
change in any law, rule, or regulation or in the interpretation or application thereof by any Governmental Authority after the
date of this Agreement, or (c) compliance by the Lender with any request, guideline, or directive (whether or not having
the force of law) of any Governmental Authority that is applicable to the Borrower or is of general applicability and that is
made or issued after the date of this Agreement. Notwithstanding the foregoing for purposes of this definition, all requests,
rules, guidelines, or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed
to be a Change in Law regardless of the date enacted, adopted, or issued and all requests, rules, guidelines, or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority),
or the United States financial regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a Change in Law
regardless of the date adopted, issued, promulgated, or implemented.

 

“Change
of Control”: An event or series of events by which: (a) any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of
such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator
of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such
person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such
right, an “option right”)), directly or indirectly, of 35% or more of the Equity Interests of the Borrower entitled
to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to acquire pursuant to any option right); (b) during
any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of
the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first
day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred
to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that
board or equivalent governing body; or (c) except following a transaction permitted by Section 6.1 or 6.2, the Borrower ceasing
to own and control, directly or indirectly through one or more other Subsidiaries, 100% of the Equity Interests or 100% of the
voting power of each Subsidiary (in each case other than de minimis Equity Interests or voting power required by local
law of any foreign Subsidiary to be held by local officers and Equity Interests or voting power of a Subsidiary owned or held
by employees by virtue of a stock option, restricted share, or other employee stock plan so long as such Equity Interests or voting
power does not exceed 10% with respect to the Subsidiary) entitled to vote in the election of the board of directors (or other
similar body) of such Subsidiary.

 

    3 

     

    

 

“Closing
Date”: April 24, 2018.

 

“Code”:
The Internal Revenue Code of 1986, as amended, reformed, or otherwise modified from time to time.

 

“Commitments”:
The Revolving Commitment and the Term Loan Commitment.

 

“Commodity
Exchange Act”: The Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and
any successor statute.

 

“Compliance
Certificate”: As defined in Section 5.1(c).

 

“Constituent
Documents”: With respect to any Loan Party, as applicable, such Loan Party’s certificate of incorporation, articles
of incorporation, bylaws, certificate of formation, articles of organization, limited liability company agreement, management
agreement, operating agreement, shareholder agreement, partnership agreement, or similar documents or agreements governing such
Loan Party’s existence, organization, or management or concerning the disposition of Equity Interests of such Loan Party
or voting rights among such Loan Party’s owners.

 

“Contingent
Obligation”: With respect to any Loan Party at the time of any determination, without duplication, any obligation, contingent
or otherwise, of such Loan Party guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person
(the “primary obligor”) in any manner, whether directly or otherwise: (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any
direct or indirect security therefor, (b) to purchase property, securities, Equity Interests or services for the purpose of assuring
the owner of such Indebtedness of the payment of such Indebtedness, (c) to maintain working capital, equity capital or other financial
statement condition of the primary obligor so as to enable the primary obligor to pay such Indebtedness or otherwise to protect
the owner thereof against loss in respect thereof, or (d) entered into for the purpose of assuring in any manner the owner of
such Indebtedness of the payment of such Indebtedness or to protect the owner against loss in respect thereof; provided, that
the term “Contingent Obligation” shall not include endorsements for collection or deposit, in each case in the ordinary
course of business.

 

“Control
Agreement”: A control agreement for deposit accounts, sweep accounts, securities accounts or other investment accounts,
granting to the Lender control over such accounts, in each case in form and substance reasonably satisfactory to the Lender.

 

“Default”:
Any event that, with the giving of notice or lapse of time, or both, would constitute an Event of Default.

 

“Domestic
Subsidiary”: Any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof
or the District of Columbia.

 

    4 

     

    

 

“EBITDA”:
For any period of determination, (a) net income for such period, plus, without duplication (b) to the extent deducted in
determining net income for such period, the sum of the following for such period: (i) Interest Expense (including cash interest
expense and amortization of debt discount and debt issuance costs relating to the closing of this Agreement), (ii) income tax
expense, (iii) depreciation and amortization expense, (iv) non-cash expenses related to stock based compensation, (v) foreign
currency exchange loss, (vi) loss on extinguishment of Indebtedness, (vii) net mark-to-market changes related to any Hedging Transactions,
(viii) losses on sales of asset, (ix) other non-recurring losses and non-cash charges (other than any such non-cash charge to
the extent it represents an accrual of or reserve for cash expenditures in any future period, other than such accruals that result
from a change in accounting method), minus, without duplication (c) to the extent included as income in determining such
net income for such period, the sum of the following for such period: (i) non-recurring gains, (ii) interest income, (iii) foreign
currency exchange gain, (iv) gain on sale of asset, and minus (d) cash expenditures made during such period to the extent an accrual
resulting from a change in accounting method with respect to such cash expenditures was added to net income in determining EBITDA
for any prior period. Pro forma credit shall be given for the EBITDA of any acquired Person as if owned on the first day of the
applicable period and Persons (or identifiable business units or divisions of such Persons) sold, transferred, or otherwise disposed
of during any period will be treated as if not owned during the entire applicable period.

 

“Equity
Interests”: All shares, interests, participation or other equivalents, however designated, of or in a corporation or
limited liability company, whether or not voting, including but not limited to common stock, member interests, warrants, preferred
stock, convertible debentures, and all agreements, instruments and documents convertible, in whole or in part, into any one or
more of the foregoing.

 

“ERISA”:
The Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.

 

“ERISA
Affiliate”: Any trade or business (whether or not incorporated) that is a member of a group of which the Borrower is
a member and that is treated as a single employer under Section 414 of the Code.

 

“ERISA
Event”: Any of (a) any Reportable Event; (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in § 412 of the Code or § 302 of ERISA), whether or not waived; (c) the filing
pursuant to § 412(d) of the Code or § 303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any
Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower
or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any
notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of withdrawal liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

    5 

     

    

 

“Event
of Default”: Any event described in Section 7.1.

 

“Excluded
Taxes”: Any (a) Taxes imposed on or measured in whole or in part by revenue, net income, capital, or net worth
of the Lender and franchise or other Taxes imposed in lieu thereof by any jurisdiction in which the Lender is organized or incorporated,
maintains its principal office, or is doing business, and (b) any branch profits Taxes imposed by the United States or any
similar Tax imposed by any other jurisdiction in which the Lender is located.

 

“Federal
Funds Rate”: For any day, the interest rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
the Lender on such day on such transactions as determined by the Lender.

 

“Financials”:
As defined in Section 4.5.

 

“Financial
Covenant”: As defined in Section 7.1(c).

 

“Fixed
Charge Coverage Ratio”: As of the last day of each fiscal quarter for the four consecutive fiscal quarters ending on
such date, subject to the following provisions of this definition, the ratio of the following, in each case calculated without
duplication and on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP:

 

		(a)	trailing
                                         twelve months EBITDA, minus (i) income taxes paid in cash during such period,
                                         minus (ii) Restricted Payments paid during such period, minus (iii) Maintenance
                                         Capital Expenditures paid in cash (net of any amounts financed or funded with capital
                                         contributions to the extent such capital contributions are included in EBITDA) during
                                         the trailing twelve-month period,

 

to

 

		(b)	the
                                         sum, without duplication, of Interest Expense paid in cash during the trailing twelve-month
                                         period, plus the aggregate amount of all scheduled principal payments made during
                                         the trailing twelve-month period with respect to Total Liabilities, including the principal
                                         portion of scheduled payments made with respect to Capitalized Lease Obligations, but
                                         excluding any principal payments made pursuant to Section 2.6(a). The foregoing computed
                                         sum is herein referred to as “Fixed Charges.”

 

    6 

     

    

 

Notwithstanding
the foregoing, for the purpose of computing the Fixed Charge Coverage Ratio for the three fiscal-quarter periods ending June 30,
2018, September 30, 2018, and December 31, 2018, Fixed Charges shall not be computed on the basis of applicable payments made
during the trailing twelve-month period, but, instead, (i) for the fiscal-quarter ending June 30, 2018, Fixed Charges shall be
equal to the total amount of such payments made during the period from April 1, 2018 through June 30, 2018, multiplied
by four (4); (ii) for the fiscal-quarter ending September 30, 2018, Fixed Charges shall be equal to the total amount of such payments
made during the period from April 1, 2018 through September 30, 2018, multiplied by two (2); and (iii) for the fiscal-quarter
ending December 31, 2018, Fixed Charges shall be equal to the total amount of such payments made during the period from April
1, 2018 through December 31, 2018, multiplied by four-thirds (4/3).

 

“GAAP”:
Generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, that
are applicable to the circumstances as of any date of determination.

 

“Gaming
Authority”: Collectively, the Nevada Gaming Control Board, the Nevada Gaming Commission, the California Gambling Control
Commission, the California Bureau of Gambling Control and any other Governmental Authority that holds regulatory, licensing or
permitting authority over gaming ownership, distribution, sale, lease or manufacturing activities of gaming products, gaming devices,
associated equipment or other gaming equipment conducted by the Borrower or any Subsidiary within its jurisdiction.

 

“Gaming
Laws”: All laws pursuant to which any Gaming Authority possesses regulatory, licensing or permitting authority over
gaming distribution or manufacturing activities conducted by the Borrower or any Subsidiary within its jurisdiction.

 

“Gaming
Licenses”: Any finding of suitability, registration, license, qualification, franchise or other approval or authorization
issued by any Gaming Authority and required (a) to develop gaming products or gaming devices, (b) to own or lease gaming equipment
or devices or (c) to engage in the manufacture, sale, lease or distribution of gaming products, gaming devices, associated equipment
or other gaming equipment, or (d) to engage in any other gaming activities, including ownership or management of gaming facilities
in any location in which the Borrower or any of its Subsidiaries conduct business.

 

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

 

“Guarantor”:
Any Subsidiary of Borrower that is required to enter into a guaranty and join the Security Agreement pursuant to Section 5.11(b).

 

    7 

     

    

 

“Guaranty”:
A guaranty in form and substance satisfactory to the Lender entered into by a Subsidiary pursuant to Section 5.11(b).

 

“Hedging
Transaction”: Any transaction now existing or hereafter entered into between the Borrower and the Lender which is a
rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of these transactions) or any combination thereof whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial measures, including the interest rate hedging transactions
entered into pursuant to the Hedging Transaction Documents.

 

“Hedging
Transaction Documents”: Any ISDA Master Agreement and Schedule thereto between the Borrower and the Lender, and all
Confirmations (as such term is defined in such ISDA Master Agreement) between the Borrower and the Lender, executed in connection
with any Hedging Transactions entered into between the Borrower and the Lender, now or in the future, together with all renewals
of, extensions of, modifications of, consolidations of and substitutions for any of the foregoing.

 

“Hedging
Transaction Obligations”: The liabilities, indebtedness and obligations of the Borrower to the Lender under any Hedging
Transaction Document.

 

“Immediately
Available Funds”: Funds with good value on the day and in the city in which payment is received.

 

“Indebtedness”:
With respect to any Loan Party at the time of any determination, without duplication: (a) all obligations of such Loan Party for
borrowed money (including non-recourse obligations), (b) all obligations of such Loan Party evidenced by debentures, notes or
other similar instruments, (c) all obligations of such Loan Party upon which interest charges are customarily paid or accrued,
(d) all obligations of such Loan Party under conditional sale or other title retention agreements relating to property purchased
by such Loan Party, (e) all obligations of such Loan Party issued or assumed as installment purchases of property or the deferred
purchase price of property or services in respect of which such Loan Party is liable, contingently or otherwise, as obligor or
otherwise (including all earn-out or like obligations), (f) all obligations of others secured by any Lien on property owned or
acquired by such Loan Party, whether or not the obligations secured thereby have been assumed, (g) all Capitalized Lease Obligations
of such Loan Party, (h) all net obligations of such Loan Party in respect of interest rate swap agreements, cap or collar agreements,
interest rate futures or option contracts, currency swap agreements, currency futures or option agreements and other similar contracts
(i) all obligations of such Loan Party, actual or contingent, as an account party in respect of letters of credit or bankers’
acceptances, (j) all obligations of any partnership or joint venture as to which such Loan Party is or may become personally liable
and (k) all mandatory redemption, repurchase, put option or dividend obligations of such Loan Party under any Equity Interests
issued by such Loan Party, and (l) all Contingent Obligations of such Loan Party.

 

    8 

     

    

 

“Indemnitee”:
As defined in Section 8.13.

 

“Interest
Expense”: For any period of determination and any Loan Party, the aggregate consolidated amount, without duplication,
of interest paid, accrued or scheduled to be paid in respect of any Indebtedness of such Loan Party, including (a) all but the
principal component of payments in respect of conditional sale contracts, Capitalized Leases and other title retention agreements,
(b) commissions, discounts and other fees and charges with respect to letters of credit and bankers’ acceptance financings
and (c) net costs under interest rate protection agreements, in each case determined in accordance with GAAP.

 

“Interest
Period”: A period of one month, during which the entire outstanding principal balance of the Loans bears interest determined
in relation to the LIBOR Rate, with the understanding that (a) the initial Interest Period shall commence on the date of the initial
Loans and shall be in effect until the last day of the calendar month of the initial Loans, (b) each successive Interest Period
shall commence automatically, and without notice to or consent from the Borrower, on the first day of the calendar month following
the date on which the immediately preceding Interest Period matures, and (c) if, on the first day of the last Interest Period
applicable hereto the remaining term of the Loans having the latest final scheduled maturity date is less than one month, such
Interest Period shall be in effect only until the scheduled maturity date hereof.

 

“Investment”:
The acquisition, purchase, making or holding of any Equity Interests or other security, any loan, advance, contribution to capital,
extension of credit (except for trade and customer accounts receivable for inventory sold or services rendered in the ordinary
course of business and payable in accordance with customary trade terms), any acquisitions of real or personal property (other
than real and personal property acquired to be utilized in the business operations of Borrower or a Subsidiary in the ordinary
course of its business) and any purchase or commitment or option to purchase Equity Interests, securities or other debt of or
any interest in another Person or any integral part of any business or the assets comprising such business or part thereof and
the formation of, or entry into, any partnership as a limited or general partner or the entry into any joint venture. The amount
of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, less all cash returns,
cash dividends, and cash distributions (or the fair market value of any non-cash returns, dividends, and distributions) received
by such Person, less all liabilities expressly assumed by another Person in connection with the sale of such Investment, and all
loans and advances shall be taken at the principal amount thereof then remaining unpaid.

 

“Lender”:
As defined in the opening paragraph hereof.

 

“Lender
Affiliate”: (a) each Person that, directly or indirectly, controls, is controlled by or is under common control with,
the Lender, (b) each Person that beneficially owns or holds, directly or indirectly, 10% or more of any class of voting Equity
Interests of the Lender, (c) each Person, 25% or more of the voting Equity Interests of which is beneficially owned or held, directly
or indirectly, by the Lender, and (d) each of the Lender’s officers, directors, joint venturers, and partners. The term
control (including the terms “controlled by” and “under common control with”) means the possession, directly,
of the power to direct or cause the direction of the management and policies of the Person in question.

 

    9 

     

    

 

“Leverage
Ratio”: As of the last day of any fiscal quarter for the 12 consecutive fiscal months ending on such date, the ratio
of Total Funded Debt to EBITDA for the four fiscal quarters ending on such date, in each case calculated for the Borrower and
its Subsidiaries in accordance with GAAP.

 

“LIBOR
Rate”: As of any date of determination and for each Interest Period relevant to the Loans, the greater of (a) zero percent
(0%) and (b) the rate per annum reported at 11 a.m. on the Business Day that is two Business Days prior to the first day of such
Interest Period on Reuters Screen LIBOR01 Page (or any successor or substitute page on such screen) as the London Interbank Offered
Rate for United States dollar deposits for a period equal to the Interest Period, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation, such rate rounded up to the nearest 1/16 of 1% (or, if such page
shall cease to be publicly available or, if the information on such page, in the Lender’s reasonable judgment, ceases to
accurately reflect such London Interbank Offered Rate, such rate as reported by any publicly available recognized source of similar
market data selected by the Lender that, in the Lender’s reasonable judgment, accurately reflects such London Interbank
Offered Rate). Notwithstanding the foregoing or anything else to the contrary in this Credit Agreement, at all times a Hedging
Transaction (as defined in the Credit Agreement) is in effect with respect to the Term Note, the portion of the principal amount
outstanding under the Term Loan which is equal to the notional amount of such Hedging Transaction shall not be subject to a minimum
LIBOR Rate of zero percent (0%).

 

Lender’s
LIBOR rate is to be strictly interpreted and is not intended to serve any other purpose other than providing an index to determine
the interest rate used herein. Lender’s LIBOR rate may not necessarily be the same as the quoted offer side in the Eurodollar
time deposit market by any particular institution or service applicable to any interest period. NOTICE: Under no circumstances
will the interest rate on any Note be more than the maximum rate allowed by applicable law. Whenever increases occur in the interest
rate, Lender at its option, may do one or more of the following: (A) increase Borrower’s payments to ensure Borrower’s
loan will pay off by its original final maturity date, (B) increase Borrower’s payments to cover accruing interest, (C)
increase the number of Borrower’s payments, and (D) continue Borrower’s payments at the same amount and increase the
Borrower’s final payment.

 

“Lien”:
With respect to any Person, any security interest, mortgage, pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device (including the interest of each lessor under any Capitalized Lease), in, of or on any assets or properties
of such Person, now owned or hereafter acquired, whether arising by agreement or operation of law.

 

“Loan”:
A Revolving Loan or a Term Loan.

 

“Loan
Documents”: This Agreement, the Notes, the Security Agreement, Hedging Transaction Documents, the Guaranty and any other
document or instrument given by any Person in favor of the Lender to secure or guaranty all or any portion of the Obligations,
in each case as such document or instrument may be amended, restated, supplemented, or otherwise modified from time to time.

 

    10 

     

    

 

“Loan
Party”: Each of the Borrower and any Guarantor.

 

“Maintenance
Capital Expenditures”: Capital Expenditures for the maintenance, repair or refurbishment of the Borrower’s fixed
assets but excluding any Capital Expenditure that adds to or further improves such fixed assets.

 

“Material
Adverse Occurrence”: Any occurrence of whatsoever nature (including any adverse determination in any litigation, arbitration,
or governmental investigation or proceeding) that could reasonably be expected to materially and adversely affect (a) the financial
condition or operations of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party, or any writing executed pursuant thereto, or (c) the validity, collectability
or enforceability of any of the Loan Documents or the rights or remedies of the Lender under the Loan Documents.

 

“Moody’s”:
Moody’s Investors Service, a division of Moody’s Corporation.

 

“Multiemployer
Plan”: A multiemployer plan, as such term is defined in Section 4001(a)(3) of ERISA, that is maintained (on the Closing
Date, within the five years preceding the Closing Date, or at any time after the Closing Date) for employees of the Borrower or
any ERISA Affiliate.

 

“Note”:
The Term Note or the Revolving Note.

 

“Obligations”:
All unpaid principal of and accrued and unpaid interest on the Loans, all Cash Management Obligations, all Hedging Transaction
Obligations, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for any of the
foregoing, all accrued and unpaid fees, and all expenses, reimbursements, indemnities and other obligations of any Loan Party
to the Lender or any indemnified party arising under the Loan Documents, in all cases whether now existing or hereafter arising
or incurred, whether it is direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated
or unliquidated, or sole, joint, several or joint and several, and together with all renewals, modifications, extensions, increases,
substitutions or replacements of any such obligations or liabilities.

 

“OFAC”:
The U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.

 

“Other
Taxes”: As defined in Section 2.13(b).

 

“PATRIOT
Act”: The USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001, codified as 31 U.S.C. Section
5318)), as amended from time to time, and any successor statute.

 

“PBGC”:
The Pension Benefit Guaranty Corporation, established pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or
to the functions thereof.

 

    11 

     

    

 

“Permitted
Acquisition”: As defined in Section 6.11(e).

 

“Permitted
Liens”: Liens permitted by Section 6.13.

 

“Person”:
Any natural person, corporation, partnership, limited partnership, limited liability company, joint venture, firm, association,
trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting
in an individual, fiduciary or other capacity.

 

“Plan”:
Each employee benefit plan (whether in existence on the Closing Date or thereafter instituted), as such term is defined in Section
3 of ERISA, maintained for the benefit of employees, officers or directors of the Borrower or of any ERISA Affiliate.

 

“Prepayment
Event”: Each of the following:

 

(a)       any
sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan
Party, other than dispositions described in clauses (a), (b) and (d) of Section 6.2;

 

(b)       any
casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of,
any property or asset of any Loan Party, but only to the extent that the net proceeds therefrom have not been applied, or committed
pursuant to an agreement (including any purchase orders) to be applied, to repair, restore or replace such property or asset within
180 days after such event;

 

(c)       any
Subsidiary of Borrower ceases to be a direct or indirect wholly owned Subsidiary of Borrower (excepting those circumstances as
are described as exceptions to the 100% provisions in the definition of “Change of Control” clause (iv)); or

 

(d)       the
incurrence by any Loan Party of any Indebtedness, other than Indebtedness permitted by Section 6.12.

 

“Prohibited
Activities”: As defined in Section 6.21(a).

 

“Prohibited
Transaction”: The respective meanings assigned to such term in Section 4975 of the Code and Section 406 of ERISA.

 

“Reportable
Event”: A reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect
to a Plan, excluding, however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding
standard of Section 412 of the Code and Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any waiver
in accordance with Section 412(d) of the Code. A Reportable Event shall also include an event under Section 4062(e) of ERISA and
an event requiring notice to the PBGC under Section 4010 of ERISA, excluding any such event as to which the PBGC has waived the
notice required under Section 4010 of ERISA.

 

    12 

     

    

 

“Restricted
Payment”: Any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity
Interest in any Loan Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests
in any Loan Party or any option, warrant or other right to acquire any such Equity Interest in any Loan Party.

 

“Revolving
Commitment”: With respect to the Lender, the agreement of the Lender to make Revolving Loans to the Borrower in an aggregate
principal amount outstanding at any time not to exceed the Revolving Commitment Amount upon the terms and subject to the conditions
and limitations of this Agreement.

 

“Revolving
Commitment Amount”: As of the Closing Date, $1,000,000 as the same may be reduced from time to time pursuant to Section
2.7.

 

“Revolving
Loan”: As defined in Section 2.1(a).

 

“Revolving
Loan Date”: The date of the making of any Revolving Loan.

 

“Revolving
Loan Maturity Date”: The earliest of (a) the first anniversary of the Closing Date, (b) the date on which the Revolving
Commitments are terminated pursuant to Section 7.2, and (c) the date on which the Revolving Commitments are reduced to zero or
terminated pursuant to Section 2.7.

 

“Revolving
Note”: The promissory note of the Borrower in the form of Exhibit B, evidencing the obligation of the Borrower
to repay the Revolving Loans.

 

“Risk-Based
Capital Guidelines”: As defined in Section 2.14(b).

 

“S&P”:
Standard & Poor’s Financial Services LLC, a division of S&P Global Inc.

 

“Sanctioned
Country”: At any time, any country or territory which is itself the subject or target of any comprehensive Sanctions.

 

“Sanctioned
Person”: At any time, (a) any Person or group listed in any Sanctions-related list of designated Persons maintained
by OFAC or the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, (b) any
Person or group operating, organized or resident in a Sanctioned Country, (c) any agency, political subdivision or instrumentality
of the government of a Sanctioned Country, or (d) any Person 50% or more owned, directly or indirectly, by any of the foregoing
entities.

 

“Sanctions”:
Economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European
Union or Her Majesty’s Treasury of the United Kingdom.

 

“Security
Agreement”: Collectively, all pledge or security agreements of the Borrower that grant a security interest to the Lender
to secure the Obligations, including without limitation an Intellectual Property Security Agreement and pledged equity certificates
and the associated transfer powers, as amended, restated, supplemented, or otherwise modified from time to time, each in form
and substance acceptable to the Lender.

 

    13 

     

    

 

“Security
Documents”: Collectively, the Security Agreement, the Control Agreements, the UCC financing statements and each other
agreement, instrument and document executed by any Loan Party to secure the Obligations, as amended, amended, restated, supplemented,
or otherwise modified from time to time.

 

“Security
Documents Collateral”: Collectively, all real or personal property pledged, assigned, mortgaged or otherwise conveyed
to the Lender pursuant to the Security Documents as security for the Obligations.

 

“Subsidiary”:
As to any Person, any corporation, limited liability company or other entity of which Equity Interests having ordinary voting
power for the election of a majority of the board of directors or other Persons performing similar functions are owned by such
Person either directly or through one or more Subsidiaries. Except as the context otherwise requires, the term “Subsidiaries”
in this Agreement refers to direct and indirect Subsidiaries of the Borrower.

 

“Swap
Contract”: Any of (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond
or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction
is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any
such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations
or liabilities under any Master Agreement.

 

“Taxes”:
Any and all present or future taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto.

 

“Term
Loan”: As defined in Section 2.1(b).

 

“Term
Loan Commitment”: The agreement of the Lender to make a Term Loan to the Borrower in the Term Loan Commitment Amount
upon the terms and subject to the conditions of this Agreement.

 

“Term
Loan Commitment Amount”: $11,000,000.

 

“Term
Loan Maturity Date”: The earlier of (a) the fifth anniversary of the Closing Date and (b) the date on which the Commitments
are terminated pursuant to Section 7.2.

 

    14 

     

    

 

“Term
Note”: The promissory note of the Borrower in the form of Exhibit C, evidencing the obligation of the Borrower
to repay the Term Loan.

 

“Total
Funded Debt”: At the time of any determination, without duplication, (a) all Indebtedness for borrowed money, (b) Capitalized
Lease Obligations, (c) notes payable and draws against extensions of credit, (d) any obligations owed for all or any part of the
deferred purchase price of property or services (excluding trade payables incurred in the ordinary course of business and insurance
premiums paid over time), (e) all Indebtedness secured by any Lien on any property of any Loan Party even though such Loan Party
has not assumed or become liable for the payment of such Indebtedness, provided that for purposes of this clause (e) the amount
of such Indebtedness shall be limited to the greater of (i) the amount of such Indebtedness as to which there is recourse to the
Borrower and (ii) the fair market value of the property subject to the Liens, and (f) Contingent Obligations.

 

“Total
Liabilities”: At the time of any determination, the amount, on a consolidated basis, of all items of Indebtedness of
any Loan Party referred to that would constitute “liabilities” for balance sheet purposes in accordance with GAAP.

 

“Total
Revenues”: With respect to any period of determination, the consolidated total revenues of the Loan Parties for such
period, as determined in accordance with GAAP.

 

Section
1.2       Accounting Terms and Calculations. Except as may be expressly provided to the contrary herein, all accounting terms
used herein shall be interpreted and all accounting determinations hereunder shall be made on a consolidated basis for the Borrower
and the Subsidiaries and in accordance with GAAP. To the extent any change in GAAP affects any computation or determination required
to be made pursuant to this Agreement, such computation or determination shall be made as if such change in GAAP had not occurred
unless the Borrower and the Lender agree in writing on an adjustment to such computation or determination to account for such
change in GAAP.

 

Section
1.3       Computation of Time Periods. In this Agreement, in the computation of a period of time from a specified date to
a later specified date, unless otherwise stated the word “from” means “from and including” and the words
“to” or “until” each mean “to but excluding.”

 

Section
1.4       Other Definitional Terms. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision. References
to Sections, Exhibits, Schedules, and the like are to this Agreement unless otherwise expressly provided. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
The term “will” shall have the same mandatory meaning as the term “shall.” Unless the context otherwise
clearly requires, “or” has the inclusive meaning represented by the phrase “and/or.” All covenants, terms,
definitions or other provisions incorporated by reference to other agreements are so incorporated as if fully set forth herein,
and such incorporation shall include all necessary definitions and related provisions from such other agreements but include only
amendments thereto agreed to by the Lender, and shall survive any termination of such other agreements until the Obligations are
irrevocably paid in full and the Commitments are terminated. References to agreements or other contractual obligations shall,
unless otherwise specified, be deemed to refer to such agreements or contractual obligations as amended, restated, supplemented,
or otherwise modified from time to time.

 

    15 

     

    

 

Article
II

TERMS OF THE CREDIT FACILITIES

 

Part
A -- Terms of Lending 

 

Section
2.1        Lending Commitments. On the terms and subject to the conditions hereof, the Lender agrees to make the following
lending facilities available to the Borrower.

 

(a)       Revolving
Credit. A revolving credit facility available as loans (each, a “Revolving Loan” and, collectively, the
“Revolving Loans”) to the Borrower on a revolving basis at any time and from time to time from the Closing
Date to the Revolving Loan Maturity Date, during which period the Borrower may borrow, repay and reborrow in accordance with the
provisions hereof; provided, that no Revolving Loan will be made in any amount that, after giving effect thereto, would cause
the aggregate unpaid principal balance of Revolving Loans outstanding on such date to exceed the Revolving Commitment Amount.

 

(b)       Term
Loan. A term loan facility available as a loan (the “Term Loan”) from the Lender to the Borrower on a term
loan basis on the Closing Date, provided that the Term Loan will not be made in any amount if, after giving effect thereto, the
aggregate amount advanced upon the Term Loan would exceed the Term Loan Commitment Amount.

 

Section
2.2        Procedure for Loans.

 

(a)       Procedure
for Revolving Loans. Any request by the Borrower for Revolving Loans hereunder shall be in writing pursuant to a Borrowing
Request and must be given so as to be received by the Lender not later than 12:00 p.m. (Las Vegas, Nevada time) two Business Days
prior to the requested Revolving Loan Date. Each request for Revolving Loans shall be irrevocable and shall be deemed a representation
by the Borrower that on the requested Revolving Loan Date and after giving effect to the requested Revolving Loans the applicable
conditions specified in Article III have been and will be satisfied. Each request for Revolving Loans shall specify (i) the requested
Revolving Loan Date and (ii) the aggregate amount of Revolving Loans to be made on such date, which shall be in a minimum
amount of $100,000. Unless the Lender determines that any applicable condition specified in Article III has not been satisfied,
the Lender will make available to the Borrower at the Lender’s principal office in Las Vegas, Nevada in Immediately Available
Funds not later than 3:00 p.m. (Las Vegas, Nevada time) on the requested Revolving Loan Date the amount of the requested Revolving
Loans.

 

(b)       Procedure
for Term Loan. The request by the Borrower for the Term Loan shall be in writing pursuant to a Borrowing Request and must
be given so as to be received by the Lender not later than 12:00 p.m.. (Las Vegas, Nevada time) two Business Days before the Closing
Date. The request for the Term Loan shall be irrevocable and shall be deemed a representation by the Borrower that on the Closing
Date and after giving effect to the requested Term Loan the applicable conditions specified in Article III have been and will
be satisfied. The request for the Term Loan shall specify (i) the requested Term Loan date (which shall be the Closing Date) and
(ii) the aggregate amount of the Term Loan. Unless the Lender determines that any applicable condition specified in Article III
has not been satisfied, the Lender will transmit the proceeds of the requested Term Loan in accordance with wire instructions
provided by the Borrower not later than 3:00 p.m. (Las Vegas, Nevada time) on the Closing Date.

 

    16 

     

    

 

Section
2.3        Notes. The Revolving Loans shall be evidenced by a single Revolving Note payable to the order of the Lender in a
principal amount equal to the Revolving Commitment Amount originally in effect. The Term Loan shall be evidenced by a Term Note
payable to the order of the Lender in the principal amount equal to the Term Loan Commitment Amount. The Lender shall enter in
its ledgers and records the amount of each Term Loan and each Revolving Loan, the various Revolving Loans made, and the payments
made thereon, and, in all events, the principal amounts owing by the Borrower in respect of the Revolving Note shall be the aggregate
amount of all Revolving Loans made by the Lender less all payments of principal thereof made by the Borrower, and the principal
amount owing by the Borrower in respect of the Term Note shall be the aggregate amount of the Term Loan less all payments of principal
thereof made by the Borrower.

 

Section
2.4        Interest Rates, Interest Payments and Default Interest. Interest shall accrue and be payable on the Loans as follows:

 

(a)       Subject
to paragraph (b) below, each Loan shall bear interest on the unpaid principal amount thereof at a rate per annum equal to the
sum of (i) the LIBOR Rate in effect, and as reset on, the first day of each Interest Period, plus (B) the Applicable Margin.

 

(b)       Upon
the occurrence of any Event of Default, each Loan shall, at the option of the Lender, bear interest until paid in full at a rate
per annum equal to the sum of the interest rate otherwise applicable thereto plus 5.00%.

 

(c)       (i)
Interest with respect to the Revolving Loans shall be payable on the first day of each Interest Period, upon any permitted prepayment
(on the amount prepaid), and on the Revolving Loan Maturity Date, and (ii) interest with respect to the Term Loan shall be payable
as set forth in Section 2.5(b), upon any permitted prepayment (on the amount prepaid), and on the Term Loan Maturity Date; provided,
that with respect to any Loan, interest under paragraph (b) of this Section shall be payable on demand.

 

Section
2.5        Repayment.

 

(a)       Revolving
Loans. The unpaid principal balance of all Revolving Loans, together with all accrued and unpaid interest thereon, shall be
due and payable on the Revolving Loan Maturity Date; provided, that at any point following the initial draw, the Borrower
shall repay the Revolving Loans in full at least once during the period from the initial draw to the Revolving Loan Maturity Date.

 

    17 

     

    

 

(b)       Term
Loan. The unpaid principal balance and interest on the Term Loan shall be paid in (i) installments sufficient to amortize
the entire principal balance of and interest on the Term Loan over a seven-year period, as provided in the loan amortization schedule
attached as Schedule 1 to the Term Note, due and payable on the first day of each month to and including the Term Loan Maturity
Date, and (ii) an additional installment in an amount equal to all unpaid principal of, and interest upon, the Term Loan on the
Term Loan Maturity Date; provided, however, that if the aggregate principal amount outstanding under the Term Loan as of the date
any principal payment is due is less than the amount specified above in this sentence, then the principal amount payable on such
date shall be such amount outstanding. The Lender shall calculate the amounts payable under clause (i) above based on the LIBOR
Rate and the Applicable Margin in effect from time to time (which calculations shall be conclusive absent manifest error) and,
on or before the date hereof and promptly upon any change in such amounts, shall furnish to the Borrower a schedule setting forth
the amount of such installments.

 

Section
2.6        Prepayments.

 

(a)       Mandatory
Prepayments.

 

(i)       If
at any time the aggregate unpaid principal balance of Revolving Loans outstanding exceeds the Revolving Commitment Amount, the
Borrower shall immediately repay to the Lender the amount of such excess.

 

(ii)      If
at any time a Prepayment Event occurs, and without prejudice to any other rights the Lender may have in respect of the occurrence
of the Prepayment Event, the Borrower shall immediately pay to the Lender the net proceeds realized by such Prepayment Event.
Any such prepayments shall be applied first, to the Revolving Loan, and second, to any outstanding Term Loan. All
prepayments applied to the Term Loan shall be applied to the scheduled principal payments on the Term Loan in the inverse order
of their scheduled payment dates.

 

(b)       Optional
Prepayments. The Borrower may prepay Revolving Loans or the Term Loan, in whole or in part, at any time, without premium or
penalty, except if such prepayment is made on a day other than the first day of the then-current Interest Period, the Borrower
must also pay any indemnities payable pursuant to Section 2.16. The Borrower shall notify the Lender in advance no later than
12:00 p.m. (Las Vegas, Nevada time) two Business Days before the making of any prepayment. Any prepayment must be accompanied
by accrued and unpaid interest on the amount prepaid. Each partial prepayment shall be in a minimum aggregate amount of $50,000
(or, as to the Term Loan, $100,000) or an integral multiple thereof. Amounts prepaid on the Term Loan will be applied in inverse
order of maturity.

 

(c)       Effect
of Payments. Amounts paid (unless following an acceleration or upon termination of the Revolving Commitment in whole) or prepaid
on Revolving Loans may be reborrowed upon the terms and subject to the conditions and limitations of this Agreement. Amounts paid
or prepaid on the Term Loan may not be reborrowed.

 

    18 

     

    

 

Part
B -- General

 

Section
2.7       Reduction and Termination of Revolving Commitments. The Borrower may, at any time, upon not less than three Business
Days’ prior written notice from the Borrower to the Lender, reduce the Revolving Commitment Amount, with any such reduction
in an integral multiple of $500,000; provided, however, that the Borrower may not at any time reduce the Revolving Commitment
Amount below the aggregate unpaid principal balance of Revolving Loans outstanding at such time. The Borrower may, upon not less
than 10 Business Days’ prior written notice from the Borrower to the Lender, terminate the Revolving Commitment in its entirety.
Upon termination of the Revolving Commitment pursuant to this Section, the Borrower shall pay to the Lender the full amount of
all outstanding Revolving Loans, all accrued and unpaid interest thereon and all other unpaid Obligations.

 

Section
2.8       Fees. The Borrower shall pay to the Lender on the Closing Date an origination fee in an amount equal to the 0.75%
of the Commitments. Such origination fee shall be fully earned when paid and nonrefundable.

 

Section
2.9       Computation. Interest on the Loans shall be computed on the basis of actual days elapsed and a year of 360 days.

 

Section
2.10       Payments. Payments and prepayments of principal of, and interest on, the Notes and all fees, expenses and other
obligations under this Agreement payable to the Lender shall be made without setoff or counterclaim in Immediately Available Funds
not later than 12:00 p.m. (Las Vegas, Nevada time) on the dates called for under this Agreement and the Notes to the Lender at
its main office in Las Vegas, Nevada. Funds received after such time shall be deemed to have been received on the next Business
Day. Whenever any payment to be made hereunder or on the Notes is stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time, in the case of a payment of principal, shall be
included in the computation of any interest on such principal payment; provided, however, that if such extension would cause payment
of interest or principal to be made in the next following calendar month, such payment shall be made on the immediately preceding
Business Day.

 

Section
2.11       Use of Loan Proceeds. The proceeds of the Term Loan shall be used to (a) refinance outstanding Indebtedness
of the Borrower and redeem the associated outstanding warrants and (b) pay transaction and closing costs associated with the Loan
Documents. The proceeds of the Revolving Loan shall be used for short-term working capital and other general business purposes
(including to refinance outstanding Indebtedness of the Borrower and redeem the associated outstanding warrants and pay transaction
and closing costs associated with the Loan Documents) of the Borrower in a manner not in conflict with any of the Borrower’s
covenants in this Agreement. The Borrower will not request any Loan, and the Borrower shall not use, and the Borrower shall ensure
that its Subsidiaries, and its or their respective directors, officers, employees and agents shall not use, the proceeds of any
Loan (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Anti-Corruption Laws or (b) in any manner that would result in the violation
of any applicable Sanctions.

 

    19 

     

    

 

Section
2.12       Interest Rate Not Ascertainable, Etc. If, on or prior to the date for determining the LIBOR Rate in respect of
the Interest Period for any Loan, the Lender determines (which determination shall be conclusive and binding, absent manifest
error) that deposits in dollars (in the applicable amount) are not being made available to the Lender in the relevant market for
such Interest Period, the Lender shall forthwith give notice thereof to the Borrower of such determination, whereupon the obligation
of the Lender to make or continue any Loans at the LIBOR Rate shall be suspended until the Lender notifies the Borrower that the
circumstances giving rise to such suspension no longer exist. While any such suspension continues, all further Loans by the Lender
shall be made at an alternate floating rate reasonably quoted from time to time by the Lender plus the Applicable Margin. No such
suspension shall affect the interest rate then in effect during the applicable Interest Period for any Loan outstanding at the
time such suspension is imposed.

 

Section
2.13       Taxes.

 

(a)       Any
and all payments by the Borrower hereunder or under the Notes shall be made free and clear of and without deduction for any and
all present or future Taxes (excluding Excluded Taxes).

 

(b)       The
Borrower agrees to pay any present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, performing
under, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as “Other Taxes”).

 

(c)       The
Borrower shall indemnify the Lender for the full amount of Taxes or Other Taxes imposed on or paid by the Lender and any liabilities,
penalties, interest and expenses with respect thereto. Payments on this indemnification shall be made within 10 days after the
date the Lender makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrower
by the Lender shall be conclusive absent manifest error.

 

(d)       Within
10 days after the date of any payment of Taxes or Other Taxes, the Borrower shall furnish to the Lender, at its address referred
to on the signature page hereof, a certified copy of a receipt evidencing payment thereof. In the case of any payment hereunder
or under the Notes by or on behalf of the Borrower through an account or branch outside the United States or by or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower determines that no Taxes are payable in respect thereof,
the Borrower shall furnish or shall cause such payor to furnish, to the Lender, at such address, an opinion of counsel acceptable
to the Lender stating that such payment is exempt from Taxes. For purposes of this subsection (d), the terms “United States”
and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

 

(e)       If
the Borrower is required by law or regulation to make any deduction, withholding or backup withholding of any taxes, levies, imposts,
duties, fees, liabilities or similar charges of the United States of America, any possession or territory of the United States
of America (including the Commonwealth of Puerto Rico) or any area subject to the jurisdiction of the United States of America
from any payments to the Lender pursuant to any Loan Document in respect of the Obligations payable to the Lender then or thereafter
outstanding, the Borrower shall make such withholdings or deductions and pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law.

 

    20 

     

    

 

(f)       Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained
in this Section 2.13 shall survive the payment in full of the Obligations hereunder.

 

(g)       If
the Lender claims any additional amounts in respect of indemnifiable Taxes payable pursuant to this Section 2.13, it shall use
reasonable efforts (consistent with legal and regulatory restrictions and the Lender’s internal policies) (i) to file any
certificate or document reasonably requested by the Borrower, if the making of such a filing would avoid the need for or reduce
the amount of any such indemnifiable Taxes attributable to the Loans and would not, in the sole determination of the Lender, result
in any unreimbursed loss, cost or expense or otherwise be disadvantageous to the Lender, or (ii) to recover or obtain a reimbursement
or refund of any such indemnifiable taxes.

 

(h)       Nothing
contained in this Section 2.13 shall require the Lender to make available any of its tax returns or any other information that
it deems to be confidential or proprietary.

 

Section
2.14      Increased Costs; Capital Adequacy.

 

(a)       If
any Change in Law:

 

(i)       subjects
the Lender to any Taxes, or changes the basis of taxation of payments to the Lender in respect of its Loans (excluding Excluded
Taxes);

 

(ii)      imposes,
increases, modifies, or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, the Lender; or

 

(iii)     imposes
any other condition the result of which is to increase the cost to the Lender of making, funding or maintaining Loans, reduces
any amount receivable by the Lender in connection with the Loans, or requires the Lender to make any payment calculated by reference
to the amount of Loans or interest received by it, by an amount deemed material by the Lender in the exercise of its reasonable
discretion,

 

and
the result of any of the foregoing is to increase the cost to the Lender of making or maintaining its Loans or Commitments or
to reduce the return received by the Lender in connection with such Loans or Commitments, then the Borrower shall pay the Lender
such additional amount or amounts as will compensate the Lender for such increased cost or reduction in the amount received.

 

    21 

     

    

 

(b)       If
the Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate
of return on the Lender’s capital or on the capital of the Lender’s holding company, if any, as a consequence of this
Agreement or a Loan made by the Lender to a level below that which the Lender’s holding company could have achieved but
for such Change in Law (taking into consideration the Lender’s policies and the policies of the Lender’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to the Lender such additional amount or amounts
as will compensate the Lender’s holding company for any such reduction suffered. For purposes of this Section, (a) a “Change
in Law” includes (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as defined below)
or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation,
or directive (whether or not having the force of law) or in the interpretation, promulgation, implementation or administration
thereof after the date of this Agreement that affects the amount of capital required or expected to be maintained by the Lender
or any corporation controlling the Lender and (b) “Risk-Based Capital Guidelines” means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United States, including transition rules, and any amendments
to such regulations adopted prior to the date of this Agreement.

 

(c)       A
certificate of the Lender setting forth the amount or amounts necessary to compensate the Lender or its holding company, as the
case may be, as specified in subsections (a) and (b) above, the basis for calculating such amount(s) and the method of allocating
such amount(s) to the Borrower shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay to the Lender the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

 

(d)       Failure
or delay on the part of the Lender to demand compensation pursuant to this Section 2.14 shall not constitute a waiver of
the Lender’s right to demand such compensation; provided, however, that Borrower shall not be required to compensate the
Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that the Lender notifies the Borrower of the Change in Law and of its intent to claim compensation
as a consequence thereof.

 

Section
2.15       Illegality. Notwithstanding anything to the contrary in this Agreement, if the Lender determines (which determination
shall be conclusive and binding, absent error) at any time that it is illegal for the Lender to continue to charge interest on
the Loans based on the LIBOR Rate, then the Lender shall forthwith give notice thereof to the Borrower of such determination,
whereupon (subject to Section 2.4(b)) the Loans shall bear interest at an alternate floating rate reasonably quoted from time
to time by the Lender plus the Applicable Margin.

 

Section
2.16       Funding Losses; LIBOR Rate Advances. The Borrower shall compensate the Lender, upon its written request, for all
losses, reasonable expenses, and liabilities (including any interest paid by the Lender to lenders of funds borrowed by it to
make or carry Loans at the LIBOR Rate to the extent not recovered by the Lender in connection with the re-employment of such funds
and including loss of anticipated profits) that the Lender may sustain: (i) if for any reason, other than a default by the Lender,
a funding of a Loan at the LIBOR Rate does not occur on the date specified therefor in the Borrower’s request or notice
under Section 2.2, or (ii) if, for whatever reason (including, but not limited to, acceleration of the maturity of the Loans following
an Event of Default), any repayment of a Loan at the LIBOR Rate occurs on any day other than the first day of the Interest Period
applicable thereto. The Lender’s request for compensation shall set forth the basis for the amount requested and shall be
final, conclusive, and binding, absent error.

 

    22 

     

    

 

Article
III       

CONDITIONS PRECEDENT

 

Section
3.1           Conditions of Initial Transaction. The making of the Term Loan and the initial Revolving Loans on the Closing Date
shall be subject to the prior or simultaneous fulfillment of the following conditions:

 

(a)       
   Documents. The Lender shall have received the following.

 

		(i)	This
                                         Agreement, duly executed by the Borrower.

 

		(ii)	A
                                         Revolving Note and a Term Note drawn to the order of the Lender, duly executed by the
                                         Borrower.

 

		(iii)	The
                                         Security Documents, duly executed by the Borrower.

 

		(iv)	A
                                         certificate of the Secretary (or other appropriate officer) of each Loan Party, certifying
                                         as to the following:

 

		(A)	A
                                         true and accurate copy of the company resolutions of such Loan Party authorizing the
                                         execution, delivery and performance of the Loan Documents to which it is a party, the
                                         borrowing of the Loans, and the granting of the security interest in the Security Documents
                                         Collateral;

 

		(B)	The
                                         incumbency, names, titles, and signatures of the officers of such Loan Party authorized
                                         to execute the Loan Documents to which it is a party and request Loans;

 

		(C)	A
                                         true and accurate copy of the articles of incorporation, articles of organization, or
                                         equivalent charter document of such Loan Party with all amendments thereto, certified
                                         by the appropriate governmental official of the jurisdiction of its formation as of a
                                         date acceptable to the Lender; and

 

		(D)	A
                                         true and accurate copy of the bylaws, operating agreement, or equivalent governing document
                                         and any other Constituent Documents of such Loan Party.

 

    23 

     

    

 

		(v)	A
                                         certificate of good standing for each Loan Party in the jurisdiction of its formation
                                         and in each other jurisdiction in which the nature of its operations made such qualification
                                         necessary to the business, certified by the appropriate governmental officials as of
                                         a date acceptable to the Lender.

 

		(vi)	A
                                         certificate of the chief financial officer or treasurer of the Borrower certifying as
                                         to the matters set forth in Sections 3.2(a) and (b).

 

		(vii)	A
                                         legal opinion of the counsel to the Loan Parties, in a form reasonably acceptable to
                                         the Lender.

 

		(viii)	Property
                                         and liability insurance certificates demonstrating that the Borrower maintains the insurance
                                         required by Section 5.3, naming the Lender as an additional insured or loss payee (and
                                         with a lender’s loss payable endorsement) and stating that such insurance shall
                                         not be cancelled or revised without 30 days’ prior written notice from the insurer
                                         to the Lender.

 

		(ix)	UCC,
                                         tax, judgment and intellectual property lien searches for the Borrower reasonably satisfactory
                                         to the Lender.

 

		(x)	The
                                         Lender shall have received the annual audited financial statements of the Borrower and
                                         its Subsidiaries for the most recently ended fiscal year, certified by independent certified
                                         public accountants of recognized national standing selected by the Borrower and reasonably
                                         acceptable to the Lender, and other financial statements required by the Lender, together
                                         with any management letters, management reports, or other supplementary comments or reports
                                         to the Borrower or its board of directors furnished by such accountants.

 

		(xi)	Payoff
                                         letters duly executed by the holders of all Indebtedness of the Borrower that is to be
                                         paid off on the Closing Date, together with warrant cancellations, intellectual property
                                         lien releases, UCC-3 termination statements, and other applicable lien releases, each
                                         in form and substance reasonably acceptable to the Lender.

 

		(xii)	The
                                         Hedging Transaction Documents.

 

		(xiii)	Satisfactory
                                         completion of all business and legal due diligence by and credit approval from the Lender,
                                         together with such other documents and deliveries as may be reasonably requested by the
                                         Lender.

 

(b)      
    Opinion. The Borrower shall have its counsel prepare a written opinion addressed to the
Lender, in form and substance reasonably acceptable to the Lender.

 

    24 

     

    

 

(c)       Security
Documents. All Security Documents (or financing statements under the Uniform Commercial Code as in effect in the State of
Nevada) shall have been appropriately filed or recorded to the satisfaction of the Lender; any pledged Security Documents Collateral
shall have been duly delivered to the Lender; and the priority and perfection of the Liens created by the Security Documents shall
have been established to the satisfaction of the Lender and its counsel.

 

(d)       Fees
and Expenses. The Lender shall have received all fees and other amounts due and payable by the Borrower on or prior to the
Closing Date, including the reasonable fees and expenses of counsel to the Lender payable pursuant to Section 8.2.

 

(e)       Material
Adverse Occurrence. No Material Adverse Occurrence shall have occurred and be continuing.

 

(f)       Gaming
Approval. The Borrower shall have provided the Lender with evidence reasonably satisfactory to the Lender that the Borrower
and its Subsidiaries have received all necessary approvals, if any, for the Loan Documents from the Gaming Authorities.

 

Section
3.2       Conditions Precedent to All Loans. The obligation of the Lender to make any Loans (including the Term Loan and the
initial Revolving Loans on the Closing Date) shall be subject to the fulfillment of the following conditions:

 

(a)       Representations
and Warranties. The representations and warranties in Article IV shall be true and correct in all material respects on and
as of the Closing Date and on the date of each Loan, with the same force and effect as if made on such date.

 

(b)       No
Default. No Default or Event of Default shall have occurred and be continuing on the Closing Date and on the date of each
Loan or will exist after giving effect to the Loan made on such date.

 

(c)       Notices
and Requests. The Lender shall have received the Borrower’s request for such Loan as required under Section 2.2.

 

Article
IV       

REPRESENTATIONS AND WARRANTIES

 

To
induce the Lender to enter into this Agreement and to make the Loans, the Borrower represents and warrants to the Lender as follows.

 

Section
4.1       Organization, Standing, etc. Each of the Borrower and its Subsidiaries (a) is duly created and validly existing
and in good standing under the laws of its jurisdiction of organization and (b) has all requisite power and authority to carry
on its business as now conducted and enter into and perform its obligations under the Loan Documents to which it is a party. Each
of the Borrower and its Subsidiaries (x) holds all certificates of authority, licenses and permits necessary to carry on
its business as presently conducted (or contemplated to be conducted) in each jurisdiction in which it is carrying on such business,
except where the failure to hold such certificates, licenses or permits could not reasonably be expected to result in a Material
Adverse Occurrence and (y) is duly qualified and in good standing, or has applied for qualification, as a foreign corporation
(or other organization) in each jurisdiction in which the character of the properties owned, leased or operated by it or the business
conducted (or contemplated to be conducted) by it makes such qualification necessary, and the failure so to qualify would permanently
preclude such Person from enforcing its rights with respect to any material assets or could reasonably be expected to result in
a Material Adverse Occurrence.

 

    25 

     

    

 

Section
4.2       Authorization and Validity. The execution, delivery and performance by each of the Borrower and its Subsidiaries
of the Loan Documents to which it is a party have been duly authorized by all necessary company action by of each such party.
The Loan Documents to which each of the Borrower and its Subsidiaries is a party, when executed, will constitute, the legal, valid
and binding obligations of each such party, enforceable against each such party in accordance with their respective terms, subject
to limitations as to enforceability that might result from bankruptcy, insolvency, moratorium and other similar laws affecting
creditors’ rights generally and subject to limitations on the availability of equitable remedies.

 

Section
4.3       No Conflict; No Default. The execution, delivery and performance of the Loan Documents will not (a) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment, injunction, decree, determination or award of
any court, governmental agency or arbitrator presently in effect having applicability to the Borrower or any Subsidiary, (b) violate
or contravene any provision of the Constituent Documents of the Borrower or any Subsidiary, (c) result in a breach of or
constitute a default under any indenture, loan or credit agreement or any other agreement, lease or instrument to which the Borrower
or any Subsidiary is a party or by which it or any of its properties may be bound (after giving effect to the transactions contemplated
on the Closing Date) or (d) result in the creation of any Lien thereunder other than Liens under the Loan Documents. Neither the
Borrower nor any Subsidiary is in default under or in violation of any such law, statute, rule or regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture, loan or credit agreement or other agreement, lease or instrument
in any case in which the consequences of such default or violation could reasonably be expected to result in a Material Adverse
Occurrence.

 

Section
4.4       Government Consent. No order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or authority is required on the part of the Borrower or any
Subsidiary to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, the Loan Documents to which it is a party, except for any necessary filing or recordation
of or with respect to any of the Security Documents.

 

Section
4.5       Financial Statements and Condition. The consolidated audited financial statements of the Borrower as of December
31, 2017 (the “Financials”), copies of each of which have been delivered to the Lender, have been consistently
prepared and accurately and fairly present the financial condition, cash flow and results of operations of the Borrower and the
Subsidiaries as at the respective dates thereof and for the periods therein referred to. The Financials reflect all material liabilities
of the Borrower and the Subsidiaries, whether absolute, accrued or contingent, as of the respective dates thereof of the type
required to be reflected or disclosed in a balance sheet (or the notes thereto) prepared in accordance with GAAP. As of the Closing
Date, the books, records and accounts of the Borrower and the Subsidiaries maintained with respect to their respective businesses
were true and accurate in all material respects, reflected the material transactions and the material assets and material liabilities
of the Borrower and the Subsidiaries, and were used as the basis to prepare the Financials.

 

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Section
4.6       Litigation. Except as disclosed on Schedule 4.6, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting Borrower, any Subsidiary
or the Security Documents Collateral that could reasonably be expected to result in a Material Adverse Occurrence or that seeks
to prevent, enjoin or delay the making of any Loans. Other than any liability incident to any litigation, arbitration or proceeding
that could not reasonably be expected to cause a Material Adverse Occurrence, neither the Borrower nor any Subsidiary has any
material Contingent Obligations not provided for or disclosed in the financial statements referred to in the Financials.

 

Section
4.7       Environmental, Health and Safety Laws. To the best of the Borrower’s knowledge, there does not exist any violation
by the Borrower or any Domestic Subsidiary of any applicable federal, state or local law, rule or regulation or order of any government,
governmental department, board, agency or other instrumentality relating to environmental, pollution, health or safety matters
that has, will or threatens to impose any liability on the Borrower or any Domestic Subsidiary or that has required or would require
any expenditure by the Borrower or any Domestic Subsidiary to cure. Neither the Borrower nor any Domestic Subsidiary has received
any notice to the effect that any part of its operations or properties is not in material compliance with any such law, rule,
regulation or order or notice that it or its property is the subject of any governmental investigation evaluating whether any
remedial action is needed to respond to any release of any toxic or hazardous waste or substance into the environment, which non-compliance
or remedial action could reasonably be expected to result in a Material Adverse Occurrence. Except as set out on Schedule 4.7,
neither the Borrower nor any Domestic Subsidiary has knowledge that the Borrower or any Domestic Subsidiary or the property of
the Borrower or any Domestic Subsidiary will become subject to environmental laws or regulations during the term of this Agreement,
compliance with which could reasonably be expected to require Capital Expenditures that could constitute a Material Adverse Occurrence.

 

Section
4.8       ERISA. Each Plan is in substantial compliance with all applicable requirements of ERISA and the Code and with all
material applicable rulings and regulations issued under the provisions of ERISA and the Code setting forth those requirements.
No Reportable Event has occurred and is continuing with respect to any Plan. All of the minimum funding standards applicable to
such Plans have been satisfied, and there exists no event or condition which would reasonably be expected to result in the institution
of proceedings to terminate any Plan under Section 4042 of ERISA. With respect to each Plan subject to Title IV of ERISA,
as of the most recent valuation date for such Plan, the present value (determined on the basis of reasonable assumptions employed
by the independent actuary for such Plan and previously furnished in writing to the Lender) of such Plan’s projected benefit
obligations did not exceed the fair market value of such Plan’s assets.

 

Section
4.9       Federal Reserve Regulations. Neither the Borrower nor any Subsidiary is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or carrying margin stock (as defined in Regulation
U of the Board). The value of all margin stock owned by the Borrower or any Subsidiary does not constitute more than 25% of the
value of the assets of such Person.

 

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Section
4.10       Title to Property; Leases; Liens; Subordination. The Borrower and each Subsidiary has (a) good and marketable
title to its real properties, if any, and (b) good and sufficient title to, or valid, subsisting and enforceable leasehold interest
in, its other material properties, including all real properties, other properties and assets, referred to as owned by such Person
in the most recent financial statement referred to in Section 5.1 (other than property disposed of since the date of such financial
statements in the ordinary course of business). None of such properties is subject to a Lien, other than Permitted Liens. The
Obligations are secured by valid, perfected, first-priority Liens (subject to Permitted Liens) in favor of the Lender, covering
and encumbering all Security Documents Collateral granted or purported to be granted by the Security Documents, to the extent
perfection has occurred by the filing of a UCC financing statement, or by continued possession or control (other than with respect
to Liens on collateral represented by a certificate of title). Neither the Borrower nor any Subsidiary has subordinated any of
its rights under any obligation owing to it to the rights of any other Person other than the Lender.

 

Section
4.11       Taxes. Each of the Borrower and its Subsidiaries has filed all federal and all state and local Tax returns required
to be filed and has paid or made provision for the payment of all taxes due and payable pursuant to such returns and pursuant
to any assessments made against it or any of its property and all other Taxes, fees and other charges imposed on it or any of
its property by any governmental authority (other than taxes, fees or charges the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided
on the books of the Borrower). No Tax Liens have been filed and no material claims are being asserted with respect to any such
taxes, fees or charges. The charges, accruals and reserves on the books of the Borrower in respect of Taxes and other governmental
charges are adequate, and the Borrower is not aware of any proposed material Tax assessment against the Borrower or any Subsidiary
or any basis therefor.

 

Section
4.12       Trademarks, Patents. Each of the Borrower and its Subsidiaries possesses or has the right to use all of the patents,
trademarks, trade names, service marks and copyrights, and applications therefor, and all technology, know-how, processes, methods
and designs used in or necessary for the conduct of its business, without known conflict with the rights of others.

 

Section
4.13       Burdensome Restrictions. Neither the Borrower nor any Subsidiary is a party to or otherwise bound by any indenture,
loan or credit agreement or any lease or other agreement or instrument or subject to any charter, corporate or partnership restriction
that could reasonably be expected to result in a Material Adverse Occurrence.

 

Section
4.14       Force Majeure. Since the date of the most recent financial statement referred to in Section 5.1, the business,
properties and other assets of the Borrower and the Subsidiaries have not been affected in any way as the result of any fire or
other casualty, strike, lockout, or other labor trouble, embargo, sabotage, confiscation, condemnation, riot, civil disturbance,
activity of armed forces or act of God, in any case that could reasonably be expected to result in a Material Adverse Occurrence.

 

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Section
4.15       Investment Company Act. Neither the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an investment company within the meaning of the Investment Company Act of 1940, as amended.

 

Section
4.16       Retirement Benefits. Except as required under Section 4980B of the Code, Section 601 of ERISA or applicable state
law, neither the Borrower nor any Domestic Subsidiary is obligated to provide material post-retirement medical or insurance benefits
with respect to employees or former employees.

 

Section
4.17       Full Disclosure. Subject to the following sentence, neither the financial statements referred to in Section 5.1
nor any other certificate, written statement, exhibit or report furnished by or on behalf of the Borrower or any of its Subsidiaries
in connection with or pursuant to this Agreement contains any untrue statement of a material fact or omits any material fact necessary
to make the statements therein not misleading. Certificates or statements furnished by or on behalf of the Borrower or any of
its Subsidiaries to the Lender consisting of projections or forecasts of future results or events have been prepared in good faith
and based on good faith estimates and assumptions of the management of each such party, and neither the Borrower nor any of its
Subsidiaries has any reason to believe that such projections or forecasts are not reasonable.

 

Section
4.18       Subsidiaries. Schedule 4.18 sets forth as of the Closing Date a list of all Subsidiaries and the number
and percentage of the shares of each class of Equity Interests owned beneficially or of record by the Borrower or any Subsidiary
therein, and the jurisdiction of incorporation of each Subsidiary. Except as described in the Constituent Documents as of the
Closing Date and on Schedule 4.18, there are no agreements among the Borrower’s Equity Interest holders with respect
to the voting and transfer of the Borrower’s Equity Interests.

 

Section
4.19       Labor Matters. There are no pending or threatened strikes, lockouts or slowdowns against the Borrower or any Subsidiary.
Neither the Borrower nor any Subsidiary has been or is in violation in any material respect of the Fair Labor Standards Act or
any other applicable federal, state, local or foreign law dealing with such matters that could reasonably be expected to constitute
a Material Adverse Occurrence. All material payments due from the Borrower or any Subsidiary on account of wages and employee
health and welfare insurance and other benefits (in each case, except for de minimis amounts) have been paid or accrued
as a liability on the books of such Person. The consummation of the transactions contemplated under the Loan Documents will not
give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound.

 

Section
4.20       Solvency. After the making of any Loan and after giving effect thereto, on a consolidated basis (a) the fair value
of the assets of the Borrower and its Subsidiaries will exceed its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of the Borrower and its Subsidiaries will be greater than the amount that
will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) neither the Borrower nor any Subsidiary intends to, or believes that
it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature; (d) the Borrower and
each Subsidiary will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (e) neither the Borrower nor any Subsidiary will have unreasonably small capital with which
to conduct the business in which it is engaged as such business is proposed to be conducted following the Closing Date.

 

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Section
4.21       Insurance. Each of the Borrower and its Subsidiaries maintains insurance coverage as required by Section 5.3.

 

Section
4.22       Compliance with Laws; Anti-Corruption Laws; PATRIOT Act. The Borrower and each Subsidiary is in compliance in all
material respects with the requirements of all applicable laws and all orders, writs, injunctions, and decrees applicable to it
or to its properties and possesses all licenses, permits, franchises, exemptions, approvals, and other governmental authorizations
necessary for the ownership of its property and the conduct and operation of its business, including Gaming Laws. The Borrower,
its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents,
are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of the Borrower, any Subsidiary
or, to the knowledge of the Borrower or such Subsidiary, any of their respective directors, officers or employees is a Sanctioned
Person. No Loan, use of the proceeds of any Loan or other transactions contemplated hereby will violate Anti-Corruption Laws or
applicable Sanctions. The Borrower and its Subsidiaries have all permits, licenses and approvals required by such laws, copies
of which have been provided to the Lender. The Borrower and its Subsidiaries are in compliance in all material respects with the
PATRIOT Act. Neither the making of any Loan nor the use of the proceeds thereof will violate the PATRIOT Act, the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statute thereto.

 

Section
4.23       Perfected Liens and Security Interests. The Obligations are secured by valid, perfected first-priority Liens in
favor of the Lender, covering and encumbering all collateral granted by the Security Documents, to the extent perfection has occurred
by the filing of a UCC financing statement or by continued possession or control or the filing or recording of the Security Documents
(other than with respect to security interests in any collateral not required to be perfected pursuant to the terms of the Security
Agreement).

 

Section
4.24       Business Locations. Schedule 4.24 sets forth as of the Closing Date a list of all of the real property owned
or leased by the Borrower or any Subsidiary, and each other business location of the Borrower and its Subsidiaries, indicating
in each case whether the respective property is owned or leased, and, if leased, the name and address of the landlord for such
business location.

 

Section
4.25       Accounts. The only deposit, checking, brokerage or other similar accounts maintained by the Borrower and any Subsidiary
with any bank, savings association, financial institution or similar financial intermediary are those listed on Schedule 4.25.

 

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Section
4.26       Broker’s or Finder’s Commissions. No broker’s or finder’s or placement fee or commission
will be payable to any broker or agent engaged by the Borrower or any of its Subsidiaries or any of their respective officers,
directors or agents with respect to the Loans, except for fees payable to the Lender.

 

Section
4.27       Licenses and Permits. To the best of the Borrower’s knowledge, all licenses (including all necessary Gaming
Licenses), permits, consents, authorizations and other similar rights required from any Governmental Authority for the ownership,
use or operation of the business or properties owned or operated by the Borrower or any of its Subsidiaries, which are material
to the Borrower or any of its Subsidiary’s businesses, are in full force and effect and each of the Borrower and its Subsidiaries
is in compliance, in all material respects, with all such licenses, permits, consents, authorizations and similar rights, and
none of such license, permits, consents, authorizations or similar rights is the subject of any pending, or, to the knowledge
of the Borrower, threatened revocation, cancellation, suspension or non-renewal. If the Borrower becomes aware of any such license,
permit, consent, authorization or other similar right that is required, but has not been obtained, the Borrower shall obtain or
cause its Subsidiary to obtain such license, permit, consent, authorization or similar right as soon as is reasonably possible
and comply, in all material respects, with all such licenses, permits, consents, authorizations and similar rights. There is no
license, permit, consent, authorization or similar right that the Borrower does not have, the absence of which would be material
to the Borrower’s business. As of the Closing Date, Schedule 4.27 sets forth a complete and accurate list of all
such licenses, permits, consents, authorizations and other similar rights necessary and appropriate for the operation of the Borrower’s
and its Subsidiaries’ business, and such schedule identifies the date by which an application for the renewal of such license,
permit, authorization, consent or similar right must be filed and status of each pending application.

 

Section
4.28       Material Adverse Occurrence. Since December 31, 2017, there has been no Material Adverse Occurrence.

 

Article
V

AFFIRMATIVE COVENANTS

 

Until
any obligation of the Lender to make the Term Loan and Revolving Loans has expired or been terminated and the Notes and all of
the other Obligations have been irrevocably paid in full, unless the Lender otherwise consents in writing:

 

Section
5.1       Financial Statements and Reports. The Borrower will furnish to the Lender:

 

(a)       As
soon as available and in any event within 120 days after the end of each fiscal year of the Borrower the audited consolidated
financial statements of the Borrower and its Subsidiaries consisting of at least statements of income, cash flow and changes in
shareholders’ equity, and a consolidated balance sheet as at the end of such year, setting forth in each case in comparative
form corresponding figures from the previous annual audit, certified without qualification by independent certified public accountants
selected by the Borrower and reasonably acceptable to the Lender, together with any management letters, management reports or
other supplementary comments or reports to the Borrower or its board of managers furnished by such accountants.

 

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(b)       Within
45 days after the close of the first three (3) quarterly periods of each of its fiscal years, for itself and its Subsidiaries,
unaudited consolidated balance sheets as at the close of each such period and consolidated profit and loss and reconciliation
of surplus statements (including sufficient detail for independent calculation of the financial covenants set forth in Sections
6.15 and 6.16) and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter,
all certified by its chief financial officer.

 

(c)       Contemporaneously
with the furnishing of the statements and reports under Sections 5.1(a) and (b), a compliance certificate in the form of Exhibit
D (the “Compliance Certificate”) signed by the chief financial officer, treasurer or controller of the
Borrower demonstrating in reasonable detail compliance (or noncompliance, as the case may be) with Sections 6.15 and 6.16
as of the end of the relevant reporting period, and Section 6.10 for the period ending at the end of each fiscal year, and
stating that as of the end of such period there did not exist any Default or Event of Default or, if any Default or Event of Default
existed, specifying the nature and period of existence thereof and what action the Borrower proposes to take with respect thereto.

 

(d)       As
soon as available, but in any event within 45 days after the beginning of each fiscal year of the Borrower, a copy of the detailed
consolidated operating budget of the Borrower and its Subsidiaries for such fiscal year.

 

(e)       Reasonably
promptly upon any officer of the Borrower becoming aware of any Default or Event of Default, a notice describing the nature thereof
and what action the Borrower proposes to take with respect thereto.

 

(f)       Reasonably
promptly upon any officer of the Borrower becoming aware of the occurrence, with respect to any Plan, of any Reportable Event
or any Prohibited Transaction, a notice specifying the nature thereof and what action the Borrower proposes to take with respect
thereto, and, when received, copies of any notice from PBGC of intention to terminate or have a trustee appointed for any Plan.

 

(g)       Reasonably
promptly upon any officer of the Borrower becoming aware of any matter that has resulted or is reasonably likely to result in
a Material Adverse Occurrence, a notice from the Borrower describing the nature thereof and what action the Borrower proposes
to take with respect thereto.

 

(h)       Reasonably
promptly upon any officer of the Borrower becoming aware of any pending or threatened revocation, cancellation, suspension or
non-renewal of any Gaming License or any other license, permit, consent, authorization or similar right that is material to the
operation of the Borrower’s or its Subsidiaries’ business, a notice from the Borrower describing the nature and status
thereof and what action the Borrower proposes to take with respect thereto.

 

    32 

     

    

 

(i)       Reasonably
promptly upon any officer of the Borrower becoming aware of (i) the commencement of any action, suit, investigation, proceeding
or arbitration before any court or arbitrator or any Governmental Authority affecting the Borrower or any Subsidiary or any property
of such Person, or to which the Borrower or any Subsidiary is a party (other than litigation where the insurance insures against
the damages claimed and the insurer has assumed defense of the litigation without reservation) and in which an adverse determination
or result could constitute a Material Adverse Occurrence; or (ii) any adverse development in any litigation, arbitration or governmental
investigation or proceeding previously disclosed by the Borrower or any Subsidiary that, if determined adversely to the Borrower
or any Subsidiary, would constitute a Material Adverse Occurrence, a notice from the Borrower describing the nature and status
thereof and what action the Borrower proposes to take with respect thereto.

 

(j)       Such
information and evidence of actions taken as reasonably requested by the Lender in order to assist the Lender in maintaining compliance
with the Patriot Act.

 

(k)       From
time to time, such other information regarding the business, operation and financial condition of the Borrower and the Subsidiaries
as the Lender reasonably requests, including copies of any Gaming Licenses.

 

Any
financial statement required to be furnished pursuant to Section 5.1(a) or (b) shall be deemed to have been furnished on the date
on which the Lender receives notice that the Borrower has filed such financial statement with the U.S. Securities and Exchange
Commission and is available on the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely
and readily available to the Lender without charge; provided that the Borrower shall give notice of any such filing to the Lender.
Notwithstanding the foregoing, the Borrower shall deliver paper or electronic copies of any such financial statement to the Lender
if the Lender requests that the Borrower furnish such paper or electronic copies until written notice to cease delivering such
paper or electronic copies is given by the Lender.

 

If
any information which is required to be furnished to the Lender under this Section 5.1 is required by law or regulation to be
filed by the Borrower with a Governmental Authority on an earlier date, then the information required hereunder shall be furnished
to the Lender at such earlier date.

 

Section
5.2       Existence. The Borrower will maintain, and cause each Subsidiary to maintain, its corporate existence in good standing
under the laws of its jurisdiction of organization and its qualification to transact business in each jurisdiction where failure
so to qualify could reasonably be expected to result in a Material Adverse Occurrence; provided, however, that nothing herein
shall prohibit the merger or liquidation of any Subsidiary allowed under Section 6.1.

 

Section
5.3       Insurance.

 

(a)       The
Borrower shall, and shall cause each Subsidiary to, secure, pay for and maintain for the Security Documents Collateral, without
interruption, at its own expense, insurance during the term of this Agreement of the types and in the amounts customarily carried
from time to time by others engaged in substantially the same business as the Borrower and its Subsidiaries and operating in the
same or similarly situated geographic area or areas as the Borrower and its Subsidiaries, including, but not limited to, fire,
public liability, and property damage. The Borrower shall deliver evidence of insurance complying with the requirements of this
Section 5.3, in each case for the Borrower, its Subsidiaries and the Security Documents Collateral. The Borrower shall, and shall
cause each Subsidiary to, name the Lender as an additional insured with respect to general liability insurance and as the lender
loss payee and mortgagee with respect to property and hazard insurance at all times and state that such insurance shall not be
cancelled or revised without 30 days’ prior written notice by the insurer to the Lender.

 

    33 

     

    

 

(b)       The
Borrower shall, and shall cause each Subsidiary to, furnish to the Lender, upon written request, full information as to the insurance
carried;

 

(c)       The
Borrower shall, and shall use its best efforts to cause each Subsidiary to, carry and maintain each policy for such insurance
with a company which is rated no lower than “A” by A.M. Best Company, Inc. and “AA” by S&P at the
time such policy is placed and at the time of each annual renewal thereof (or reasonably equivalent foreign rating where applicable);
and

 

(d)       The
Borrower shall, and shall cause each Subsidiary to, obtain and maintain endorsements acceptable to the Lender for such insurance
(including form 438BFU or equivalent), including lender’s loss payable and additional insured endorsements.

 

Section
5.4       Payment of Taxes and Claims. The Borrower shall file, and cause each Subsidiary to file, all federal and state and
local tax returns and reports that are required by law to be filed by it and will pay, and cause each Subsidiary to pay, before
they become delinquent all federal and state and local taxes, assessments and governmental charges and levies imposed upon it
or its property and all claims or demands of any kind (including but not limited to those of suppliers, mechanics, carriers, warehouses,
landlords and other like Persons) that, if unpaid, might result in the creation of a Lien upon its property; provided that the
foregoing items need not be paid if they are being contested in good faith by appropriate proceedings, and as long as the Borrower’s
or such Subsidiary’s title to its property is not materially adversely affected, its use of such property in the ordinary
course of its business is not materially interfered with and adequate reserves with respect thereto have been set aside on the
Borrower’s or such Subsidiary’s books in accordance with GAAP.

 

Section
5.5       Inspection. The Borrower shall permit any Person designated by the Lender, upon reasonable prior notice to the Borrower
(which notice shall not be required to be given during the continuation of an Event of Default), to visit and inspect any of the
properties, books and financial records of the Borrower and the Subsidiaries, to examine and to make copies of the books of accounts
and other financial records of the Borrower and the Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and the Subsidiaries with, and to be advised as to the same by, its officers at such reasonable times and intervals as the Lender
may designate. The expenses of the Lender for such visits, inspections and examinations shall be at the expense of the Lender,
provided, that any such visit, inspection, or examination shall be at the reasonable expense of the Borrower if such visit, inspection,
or examination (a) constitutes the Lender’s annual collateral audit or (b) is made while any Event of Default is continuing.

 

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Section
5.6       Maintenance of Properties. The Borrower will maintain, and cause each Subsidiary to maintain, its properties used
or useful in the conduct of its business in good condition, repair and working order, ordinary wear and tear excepted, and supplied
with all necessary equipment, and make all necessary repairs, renewals, replacements, betterments and improvements thereto, all
as may be reasonably necessary so that the business carried on in connection therewith may be properly and advantageously conducted
at all times.

 

Section
5.7       Books and Records. The Borrower will keep, and will cause each Subsidiary to keep, adequate and proper records and
books of account in which full and correct entries in all material respects will be made of its dealings, business and affairs.

 

Section
5.8       Compliance. The Borrower will, and will cause each Subsidiary to, (a) comply in all material respects with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation,
all Anti-Corruption Laws and applicable Sanctions, and (b) obtain and maintain in full force and effect all permits, licenses
(including Gaming Licenses), consents and authorizations required by law (including any Gaming Authority) for the ownership, use
or operation of the businesses and properties owned by the Borrower and its Subsidiaries, and comply, in all material respects,
with the provisions thereof.

 

Section
5.9       Environmental Matters; Reporting. The Borrower will observe and comply with, and cause each Subsidiary to observe
and comply with, all laws, rules, regulations and orders of any government or government agency relating to health, safety, pollution,
hazardous materials or other environmental matters to the extent non-compliance could result in a material liability or otherwise
could reasonably be expected to result in a Material Adverse Occurrence. The Borrower will give the Lender prompt written notice
of any violation as to any environmental matter by the Borrower or any Subsidiary and of the commencement of any judicial or administrative
proceeding relating to health, safety or environmental matters (a) in which an adverse determination or result could constitute
or result in a Material Adverse Occurrence or (b) that will or threatens to impose a material liability on the Borrower or such
Subsidiary to any Person or that will require a material expenditure by the Borrower or such Subsidiary to cure any alleged problem
or violation.

 

Section
5.10       ERISA. The Borrower will maintain, and cause each Subsidiary to maintain, each Plan in compliance with all applicable
requirements of ERISA and of the Code and with all applicable rulings and regulations issued under the provisions of ERISA and
of the Code and will not, and will not permit any of the ERISA Affiliates to (a) engage in any transaction in connection with
which the Borrower or any of the ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code, (b) fail to make full payment when due of all amounts which, under
the provisions of any Plan, the Borrower or any ERISA Affiliate is required to pay as contributions thereto, or permit to exist
any accumulated funding deficiency (as such term is defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, with respect to any Plan or (c) fail to make any payments to any Multiemployer Plan that the Borrower or any of the ERISA
Affiliates may be required to make under any agreement relating to such Multiemployer Plan or any law pertaining thereto.

 

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Section
5.11       Further Assurances.

 

(a)       The
Borrower shall, and shall cause each other Loan Party to, promptly correct any defect or error that may be discovered in any Loan
Document or in the execution, acknowledgment or recordation thereof. Promptly upon request by the Lender, the Borrower also shall,
and shall cause each Loan Party to, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments, estoppel certificates, financing statements
and continuations thereof, notices of assignment, transfers, certificates, assurances and other instruments as the Lender reasonably
requires from time to time: (i) to carry out more effectively the purposes of the Loan Documents; (ii) to perfect and maintain
the validity, effectiveness and priority of any security interests intended to be created by the Loan Documents including, without
limitation, the delivery of a landlord waiver from the landlord of each location required by the Lender; and (iii) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm unto the Lender the rights granted now or hereafter intended
to be granted to the Lender under any Loan Document or under any other instrument executed in connection with any Loan Document
or that any Loan Party may be or become bound to convey, mortgage or assign to the Lender to carry out the intention or facilitate
the performance of the provisions of any Loan Document. The Borrower shall furnish to the Lender evidence satisfactory to the
Lender of every such recording, filing or registration.

 

(b)       In
addition to and not in limitation of the foregoing paragraph (a), upon the formation of any Domestic Subsidiary after the
Closing Date or upon the acquisition of any fee interests in domestic real property after the Closing Date by the Borrower or
any Subsidiary: (i)(A) such Person (other than the Borrower, and a Subsidiary, if already a Loan Party) shall join the Guaranty
and guaranty the Obligations, and (B) such Person shall grant to the Lender a security agreement as required by the Lender (and
permit the Lender to perfect such interest) in the real property of such Person, creating a first-priority mortgage or deed of
trust (subject to Permitted Liens) and deliver such other related documents and instruments as the Lender reasonably requests;
and (ii) the Borrower or the applicable Domestic Subsidiary shall, at the Borrower’s cost and expense, execute and
deliver to the Lender such documents and instruments reasonably deemed necessary by the Lender to effect the matters specified
in subclause (i).

 

(c)       Cash
Management. Within 90 days after the Closing Date, the Borrower and each of its Domestic Subsidiaries shall maintain all deposit
accounts and cash management accounts with the Lender (such accounts collectively, the “Primary Cash Management Accounts”).

 

Section
5.12       Compliance with Terms of Material Contracts. The Borrower shall, and shall cause each Subsidiary to, make all payments
and otherwise perform all material obligations of all material contracts, permits, licenses (including Gaming Licenses), consents
and authorizations to which the Borrower or such Subsidiary is a party.

 

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Section
5.13       Intellectual Property. The Borrower shall, and shall cause each Subsidiary to, maintain adequate licenses, patents,
patent applications, copyrights, service marks, trademarks, trademark applications, tradestyles and trade names to continue its
business as heretofore conducted by it or as hereafter conducted by it.

 

Section
5.14       Leaseholds. The Borrower will use commercially reasonable efforts to prevent the termination of, and to maintain
in full force and effect, each leasehold of the Borrower or any Subsidiary on any property leased by such Person, which is reasonably
necessary to the conduct of the business of the Borrower or Subsidiary, until its original or extended expiration date.

 

Section
5.15       Post-Closing. The Borrower will use commercially reasonable efforts to obtain, within 60 days after the Closing
Date, or such later date as the Lender, in its sole discretion, shall designate, (a) landlord waivers with respect to any leased
locations of the Loan Parties listed on Schedule 4.24, duly signed by the applicable landlord and attaching a copy of the applicable
lease, and (b) control agreements with respect to any deposit accounts or securities accounts listed on Schedule 4.25, in each
case, in form and substance reasonably satisfactory to the Lender.

 

Article
VI       

NEGATIVE COVENANTS

 

Until
any obligation of the Lender hereunder to make the Term Loan and Revolving Loans has expired or been terminated and the Notes
and all of the other Obligations have been paid in full, unless the Lender otherwise consents in writing:

 

Section
6.1       Merger. The Borrower will not merge or consolidate or enter into any analogous reorganization or transaction with
any Person or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) or permit any Subsidiary to do
any of the foregoing; provided, however, any Subsidiary may be merged with or liquidated into the Borrower or any wholly owned
Domestic Subsidiary of the Borrower (if the Borrower or such wholly owned Domestic Subsidiary of the Borrower is the surviving
entity).

 

Section
6.2       Disposition of Assets. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one transaction or a series of transactions) any property
(including accounts and notes receivable, with or without recourse) or enter into any agreement to do any of the foregoing, except:

 

(a)       dispositions
of inventory, or used, worn-out or surplus equipment, or abandonment of ownership of or rights incident to intellectual property,
all in the ordinary course of business;

 

(b)       the
sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are applied with reasonable promptness to the purchase price of such replacement equipment;

 

    37 

     

    

 

(c)      the
sale of any real property that is Security Documents Collateral to the extent that the sale of such property is pursuant to an
arm’s length transaction to a party other than an Affiliate of the Borrower or any Subsidiary, the purchase price of such
sale is the fair market value of such property, and the net proceeds of such sale (or such other amount as the Lender may agree
in its sole discretion) are paid to the Lender pursuant to Section 2.6(a)(ii); and

 

(d)      other
dispositions of property in any fiscal year during the term of this Agreement whose net book value in the aggregate does not exceed
10% of the Borrower’s total consolidated assets as shown on the balance sheet for the most recent prior fiscal year.

 

Section
6.3       Plans. The Borrower will not, nor will it allow any Subsidiary to, (a) enter into any new Plan or modify any existing
Plan so as to increase its obligations thereunder in any manner that could reasonably be expected to result in a Material Adverse
Occurrence, unless such modification is required by ERISA, the Code or other applicable law; (b) terminate any Plan under any
circumstances that would cause the Lien provided for in Section 4068 of ERISA to attach to any assets of the Borrower or any Subsidiary
or (c) enter into any agreement as a purchaser or as a seller of assets under Section 4204 of ERISA.

 

Section
6.4       Change in Nature of Business. The Borrower will not, nor will it permit any Subsidiary to, make any material change
in the nature of the business of the Borrower or any Subsidiary, as carried on at the Closing Date; provided, however, that the
foregoing shall not prohibit an expansion of the Borrower’s core business so long as such core business does not materially
change.

 

Section
6.5       Subsidiaries. The Borrower will not, nor will it permit any Subsidiary to, form or acquire any corporation, limited
liability company, or other entity that would thereby become a Subsidiary, unless the Borrower or such Subsidiary complies with
the provisions of Section 5.11.

 

Section
6.6       Subsidiary Restrictions. The Borrower will not, and will not permit any Subsidiary to, place or allow any restriction,
directly or indirectly, on the ability of such Person to (a) pay dividends or any distributions on or with respect to such Person’s
capital stock or (b) make loans or other cash payments to the Borrower.

 

Section
6.7       Restricted Payments. The Borrower will not, nor will it permit any Subsidiary to, make any Restricted Payment, except
that (i) any Subsidiary may declare and pay dividends or make distributions to the Borrower and (ii) the Borrower may make any
Restricted Payment, provided that no Default or Event of Default shall exist before or after giving effect to such Restricted
Payments.

 

Section
6.8       Transactions with Affiliates. The Borrower will not, and will not permit any Subsidiary to, enter into any transaction
with any of its Affiliates, except upon fair and reasonable terms no less favorable than the Borrower or such Subsidiary would
obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

 

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Section
6.9      Accounting Changes, etc. The Borrower will not, nor will it permit any Subsidiary to, (a) make any change in accounting
treatment or reporting practices, except as permitted by GAAP, or change its fiscal year or (b) amend, modify or change any
of its Constituent Documents in any manner that could reasonably be expected to be materially adverse in any respect to the rights
or interests of the Lender.

 

Section
6.10     Maintenance Capital Expenditures. For the fiscal year ending December 31, 2018 and each fiscal year thereafter,
the Borrower will not make Maintenance Capital Expenditures in an amount in excess of 5.00% of Total Revenues for the immediately
preceding fiscal year (aggregated with Maintenance Capital Expenditures of its Subsidiaries).

 

Section
6.11     Investments. The Borrower will not, and will not permit any Subsidiary to, acquire for value, make, have or hold
any Investments, except:

 

(a)       Investments
existing on the date of this Agreement and disclosed on Schedule 6.11;

 

(b)       Travel
advances to management personnel and employees in the ordinary course of business;

 

(c)       Cash
Equivalents;

 

(d)       Hedging
Transactions;

 

(e)       Investments
by the Borrower or any Domestic Subsidiary in the form of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of Equity Interests, assets or any combination thereof) of any other Person if such acquisition
has been approved in writing by the Lender (the “Permitted Acquisitions”), such approval not to be unreasonably
withheld or delayed;

 

(f)       Contingent
Obligations permitted by Section 6.12;

 

(g)       The
establishment or creation of Domestic Subsidiaries by the Borrower or a wholly owned Domestic Subsidiary of the Borrower after
the Closing Date if the Borrower and Subsidiaries have complied with the provisions of Section 5.11 in respect thereof and
no Default or Event of Default exists or otherwise would arise or result therefrom; and

 

(h)       Any
other Investment if the aggregate consideration therefor does not exceed $1,000,000.

 

Section
6.12       Indebtedness. The Borrower will not, nor will it permit any Subsidiary to, incur, create, issue, assume or suffer
to exist any Indebtedness, except:

 

(a)       the
Obligations;

 

    39 

     

    

 

(b)       current
liabilities, other than for borrowed money, incurred in the ordinary course of business;

 

(c)       Indebtedness
existing on the date of this Agreement and disclosed on Schedule 6.12, but not including any extension or refinancing thereof
in excess of the amount outstanding as of the Closing Date;

 

(d)       Hedging
Transaction Obligations;

 

(e)       Indebtedness
consisting of purchase money financing of equipment or other personal property fixed assets acquired after the Closing Date, if,
after giving effect to such Indebtedness, the Borrower is in pro forma compliance with the financial covenants set forth in Sections
6.15 and 6.16; and

 

(f)       additional
unsecured Indebtedness for borrowed money of up to $1,000,000 in the aggregate at any time outstanding incurred after the Closing
Date; provided that (i) at the time such Indebtedness is incurred no Default or Event of Default has occurred and is continuing,
(ii) copies of each document or instrument evidencing such Indebtedness are provided to the Lender and (iii) giving effect to
such Indebtedness, Borrower is in pro forma compliance with the financial covenants set forth in Section 6.15 and 6.16.

 

Section
6.13      Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any
Lien, or enter into, or make any commitment to enter into, any arrangement for the acquisition of any property through conditional
sale, lease-purchase or other title retention agreements, with respect to any property now owned or hereafter acquired by the
Borrower or any Subsidiary, except:

 

(a)       Liens
granted to the Lender under the Security Documents to secure the Obligations;

 

(b)       Liens
existing on the date of this Agreement and disclosed on Schedule 6.13;

 

(c)       Deposits
or pledges to secure payment of workers’ compensation, unemployment insurance, pensions or other social security obligations,
in the ordinary course of business of the Borrower or any Subsidiary;

 

(d)       Liens
for taxes, fees, assessments and governmental charges not delinquent or to the extent that payment therefor is not at the time
required to be made in accordance with Section 5.4;

 

(e)       Liens
of carriers, warehousemen, mechanics and materialmen, and other like Liens arising in the ordinary course of business, for sums
not due or to the extent that payment therefor is not at the time required to be made in accordance with Section 5.4; 

 

    40 

     

    

 

(f)       deposits
or pledges to secure performance of bids, trade contracts, leases, statutory obligations and other obligations of a like nature,
in each case in the ordinary course of business;

 

(g)       Liens
arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject to restriction against access by the Borrower or
any Subsidiary in excess of those set forth by regulations promulgated by the Board, and (ii) such deposit account is not intended
by the Borrower or any Subsidiary to provide collateral to the depository institution;

 

(h)       encumbrances
in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property and landlord’s
Liens under leases on the premises rented that do not materially detract from the value of such property or impair the use thereof
in the business of the Borrower or any Subsidiary; and

 

(i)       the
interest of any lessor under any Capitalized Lease entered into after the Closing Date or purchase money Liens on property acquired
after the Closing Date; provided, that, (i) the Indebtedness secured thereby is otherwise permitted by this Agreement and (ii)
such Liens are limited to the property acquired and do not secure Indebtedness other than the related Capitalized Lease Obligations
or the purchase price of such property.

 

Section
6.14     Deposit Accounts. Subject to Section 5.11(c), the Borrower and its Domestic Subsidiaries will not fail to maintain
all of their operating accounts with the Lender.

 

Section
6.15     Fixed Charge Coverage Ratio. Commencing with the fiscal quarter ending June 30, 2018, the Borrower will not permit
the Fixed Charge Coverage Ratio to be less than 1.25 to 1.00.

 

Section
6.16     Leverage Ratio. Commencing with the fiscal quarter ending June 30, 2018, the Borrower will not permit the Leverage
Ratio to be greater than 3.00 to 1.00.

 

Section
6.17     Loan Proceeds. The Borrower will not, and will not permit any Subsidiary to, use any part of the proceeds of any
Loan directly or indirectly, and whether immediately, incidentally or ultimately, (a) to purchase or carry margin stock (as defined
in Regulation U of the Board) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund
Indebtedness originally incurred for such purpose or (b) for any purpose that entails a violation of, or that is inconsistent
with, the provisions of Regulations U or X of the Board.

 

Section
6.18       Sale and Leaseback Transactions. The Borrower will not, and will not permit any Subsidiary to, enter into any arrangement,
directly or indirectly, whereby it sells or transfers any property, real or personal, and thereafter leases such property for
the same or a substantially similar purpose or purposes as the property sold or transferred.

 

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Section
6.19      Hedging Agreements. The Borrower will not, and will not permit any Subsidiary to, enter into any Swap Contracts
or transactions thereunder, other than any Hedging Transactions for the hedging of interest rates under this Agreement.

 

Section
6.20      Unlawful Use, Medical Marijuana, Controlled Substances and Prohibited Activities.

 

(a)       The
Borrower shall not, and shall not permit its Subsidiaries to, use, occupy, or permit the use or occupancy of any owned or leased
property or any lessee, tenant, licensee, permitee, agent, or any other Person in any manner that would be a violation of any
applicable federal, state or local law or regulation, regardless of whether such use or occupancy is lawful under any conflicting
law, including without limitation any law relating to the use, sale, possession, cultivation, manufacture, distribution or marketing
of any controlled substances or other contraband (whether for commercial, medical, or personal purposes), or any law relating
to the medicinal use or distribution of marijuana (collectively, “Prohibited Activities”). Any lease, license,
sublease or other agreement for use, occupancy or possession of any owned or leased property (collectively a “lease”)
with any third person (a “lessee”) shall expressly prohibit the lessee from engaging or permitting others to engage
in any Prohibited Activities. The Borrower shall upon demand provide Lender with a written statement setting forth its compliance
with this section and stating whether any Prohibited Activities are or may be occurring in, on or around such owned or leased
property. If the Borrower becomes aware that any lessee is likely engaged in any Prohibited Activities, the Borrower shall, in
compliance with applicable law, terminate the applicable lease and take all actions permitted by law to discontinue such activities.
The Borrower shall keep the Lender fully advised of its actions and plans to comply with this section and to prevent Prohibited
Activities.

 

(b)       This
Section 6.20 is a material consideration and inducement upon which the Lender relies in extending credit and other financial accommodations
to the Borrower. Failure by the Borrower to comply with this section shall constitute a material non-curable Event of Default.
Notwithstanding anything in this Agreement or the other Loan Documents regarding rights to cure Events of Default, the Lender
is entitled upon breach of this Section 6.200 to immediately exercise any and all remedies under this Agreement, the other Loan
Documents and by law.

 

(c)       In
addition and not by way of limitation, the Borrower shall indemnify, defend and hold the Lender harmless from and against any
loss, claim, damage, liability, fine, penalty, cost or expense (including attorneys’ fees and expenses) arising from, out
of or related to any Prohibited Activities at or on the owned property or property leased by such Person, Prohibited Activities
by the Borrower or any lessee of the owned or leased property, or the Borrower’s breach, violation, or failure to enforce
or comply with any of the covenants set forth in this Section 6.200. This indemnity includes any claim by any Governmental Authority,
any lessee, or any third person, including any governmental action for seizure or forfeiture of any owned or leased property (with
or without compensation to the Lender, and whether or not such real property is taken free of or subject to Lender’s lien
or security interest).

 

    42 

     

    

 

Article
VII

EVENTS OF DEFAULT AND REMEDIES

 

Section
7.1        Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default:

 

(a)       The
Borrower fails to make when due, whether by acceleration or otherwise, any payment of principal or interest on any Note or any
other Obligation required to be made to the Lender pursuant to this Agreement or any other Loan Document; provided, however, that
an inadvertent failure to make a mandatory prepayment pursuant to Section 2.6(a)(ii) of this Agreement shall not constitute an
Event of Default if a Prepayment Event occurs and Borrower cures the failure to make the mandatory prepayment within 30 calendar
days of the earlier of (i) the date that the Borrower becomes aware of such failure or (ii) the date that the Lender gives notice
of such failure to the Borrower.

 

(b)       Any
representation or warranty made by or on behalf of the Borrower or any of its Subsidiaries in this Agreement or any other Loan
Document or by or on behalf of any Loan Party in any certificate, statement, report or document furnished to the Lender pursuant
to this Agreement or any other Loan Document proves to have been false or misleading in any material respect on the date as of
which the facts set forth are stated or certified and which would constitute a Material Adverse Occurrence.

 

(c)       The
Borrower fails to comply with Section 2.11, 5.1, 5.2, 5.3, or any Section of Article VI; provided that, for purposes of determining
compliance with the financial covenants set forth in Sections 6.15 and 6.16 (each, a “Financial Covenant”),
any cash proceeds from an equity issuance, subordinated debt, or other cash contribution received by the Borrower in the 45 days
after the end of the most recent fiscal quarter shall, at the request of Borrower, be included in the calculation of EBITDA solely
for the purposes of determining compliance with such Financial Covenant at the end of such fiscal quarter and applicable subsequent
periods which include such fiscal quarter; provided, further, that the Borrower may exercise no more than two such Financial Covenant
cures during any 12-month period.

 

(d)       The
Borrower fails to comply with any other agreement, covenant, condition, provision or term in this Agreement (other than those
otherwise set forth in this Section 7.1 excepting Section 7.1(c) with respect to Section 5.3 (insurance)) and such failure to
comply continues for 30 calendar days after the earliest of (i) the date the Borrower gives notice of such failure to the Lender,
(ii) the date the Borrower should have given notice of such failure to the Lender pursuant to Section 5.1, and (iii) the date
the Lender gives notice of such failure to the Borrower.

 

(e)       The
Borrower or any Subsidiary becomes insolvent or generally does not pay its debts as they mature or applies for, consents to, or
acquiesces in the appointment of a custodian, trustee or receiver of the Borrower or any Subsidiary or for a substantial part
of the property thereof or, in the absence of such application, consent or acquiescence, a custodian, trustee or receiver is appointed
for the Borrower or any Subsidiary or for a substantial part of the property thereof and is not discharged within 45 days, or
the Borrower or any Subsidiary makes an assignment for the benefit of creditors.

 

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(f)       Any
bankruptcy, reorganization, debt arrangement or other proceedings under any bankruptcy or insolvency law is instituted by or against
the Borrower or any Subsidiary, and, if instituted against such Person, has consented to or acquiesced in by such Person or remains
undismissed for 45 days, or an order for relief has been entered against such Person.

 

(g)       Any
dissolution or liquidation proceeding not permitted by Section 6.1 is instituted by or against the Borrower or any Subsidiary,
and, if instituted against such Person, is consented to or acquiesced in by such Person or remains for 45 days undismissed.

 

(h)       A
final judgment or judgments for the payment of money in excess of the sum of $100,000 in the aggregate are rendered against the
Borrower or any Subsidiary and either (i) the judgment creditor executes on such judgment or (ii) such judgment remains unpaid
or undischarged for more than 45 days from the date of entry thereof or such longer period during which execution of such judgment
is stayed during an appeal from such judgment.

 

(i)       The
maturity of any material Indebtedness of any Loan Party (other than Indebtedness under this Agreement) is accelerated, or any
Loan Party fails to pay any such material Indebtedness when due (after the lapse of any applicable grace period) or, in the case
of such Indebtedness payable on demand, when demanded (after the lapse of any applicable grace period), or any event occurs or
condition exists and continues for more than any applicable grace period and causes, or permitting the holder of any such Indebtedness
or any trustee or other Person acting on behalf of such holder to cause, such material Indebtedness to become due prior to its
stated maturity or permits such holder to realize upon any collateral given as security therefor. For purposes of this Section,
Indebtedness shall be deemed “material” if it exceeds $100,000 as to any item of Indebtedness or in the aggregate
for all items of Indebtedness with respect to which any of the events described in this Section 7.1(i) has occurred.

 

(j)       Any
execution or attachment is issued whereby any substantial part of the property of the Borrower or any Subsidiary is taken or attempted
to be taken and such execution or attachment is not vacated or stayed within 30 days after the issuance thereof.

 

(k)       Any
default or event of default (however denominated) occurs under any other Loan Document and continues beyond any applicable grace
period.

 

(l)       Any
Guarantor repudiates or purports to revoke its guaranty, or the Guaranty for any reason ceases to be in full force and effect
or is judicially declared null and void, except in connection with a merger or disposition permitted hereunder.

 

(m)       Any
Security Document, at any time, ceases to be in full force and effect or is judicially declared null and void, or the validity
or enforceability thereof is contested by a Loan Party, or the Lender ceases to have a valid and perfected security interest having
the priority contemplated thereunder in all of the collateral described therein, other than by action or inaction of the Lender.

 

    44 

     

    

 

(n)       Any
Change of Control occurs.

 

(o)       Any
“event of default” or “termination event” (as such terms are defined in the swap arrangement documents)
under any Hedging Transaction Document.

 

(p)       Any
final nonmonetary judgment or order is rendered against the Borrower or any Subsidiary in excess of $250,000 and either (i) enforcement
proceedings have been commenced by any person upon such judgment or order, or (ii) there is any period of 45 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, is not in effect.

 

(q)       An
ERISA Event occurs that in the reasonable opinion of the Lender, when taken together with all other ERISA Events, could be expected
to be a Material Adverse Occurrence.

 

(r)       (i)
Any Gaming License material to the Borrower’s and its Subsidiaries’ business is suspended, revoked or terminated or
(ii) any application for a Gaming License material to the Borrower’s and its Subsidiaries’ business is terminated,
withdrawn with prejudice or denied by a Gaming Authority.

 

(s)       A
material adverse change occurs in Borrower’s financial condition, or the prospect of payment or performance of the Note
could reasonably be expected to be impaired.

 

Section
7.2       Remedies. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Loan Documents,
all commitments and obligations of the Lender under this Agreement or the Loan Documents or any other agreement immediately will
terminate (including any obligation to make further Loan advances or disbursements), and, at Lender’s option, all Indebtedness
immediately will become due and payable, all without notice of any kinds to Borrower, except that in the case of an Event of Default
of the type described in Section 7.1(f) above, such acceleration shall be automatic and not optional. In addition, Lender shall
have all the rights and remedies provided in the Loan Documents or available at law, in equity, or otherwise. Except as may be
prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a default
and to exercise its rights and remedies.

 

The
Lender may take any of the foregoing actions without presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Notes to the contrary notwithstanding.

 

Section
7.3       Right of Setoff. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s
accounts with Lender (whether checking, savings, or some other account.) This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, any trust
accounts for which setoff would be prohibited by law, or monies in any accounts that were received pursuant to the federal Social
Security Act, including, without limitation, retirement and survivors’ benefits, supplemental security income benefits,
and disability insurance benefits. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff
all sums owing on the debt against any and all such accounts, and, at Lender’s option, to administratively freeze all such
accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.

 

    45 

     

    

 

Such
right shall exist whether or not the Lender has made any demand hereunder or under any other Loan Document, whether or not the
Obligations, or any part thereof, is or are matured or unmatured, and regardless of the existence or adequacy of any collateral,
guaranty or any other security, right or remedy available to the Lender. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on the Lender to all rights of banker’s Lien, setoff and counterclaim available pursuant to
law.

 

Article
VIII

MISCELLANEOUS

 

Section
8.1       Modifications. Notwithstanding any provisions to the contrary herein, any term of this Agreement may be amended
with the written consent of the Borrower; provided, that no amendment, modification or waiver of any provision of this Agreement
or any other Loan Document or consent to any departure therefrom by the Borrower or other party thereto shall in any event be
effective unless in writing and signed by the Lender, and then such amendment, modification, waiver or consent shall be effective
only in the specific instance and for the purpose for which given.

 

Section
8.2       Expenses. Whether or not the transactions contemplated hereby are consummated, the Borrower shall reimburse the
Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by the Lender (including filing and recording costs
and reasonable fees and expenses of counsel to the Lender) in connection with the negotiation, preparation, approval, review,
execution, delivery, administration, amendment, modification and interpretation of this Agreement and the other Loan Documents
and any commitment letters relating thereto. The Borrower shall also reimburse the Lender upon demand for all reasonable out-of-pocket
expenses (including reasonable expenses of legal counsel) paid or incurred by the Lender in connection with the collection and
enforcement of this Agreement and any other Loan Document. The obligations of the Borrower under this Section shall survive any
termination of this Agreement.

 

Section
8.3       Waivers, etc. No failure on the part of the Lender or the holder of a Note to exercise and no delay in exercising
any power or right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The
remedies herein and in the other Loan Documents provided are cumulative and not exclusive of any remedies provided by law.

 

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Section
8.4       Notices. Except when telephonic notice is expressly authorized by this Agreement, any notice or other communication
to any party in connection with this Agreement shall be in writing and shall be sent by manual delivery, facsimile transmission,
overnight courier or United States mail (postage prepaid) addressed to such party at the address specified on the signature page
hereof, or at such other address as such party specifies to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery if manually delivered, from the date of sending if sent by facsimile transmission, from the
first Business Day after the date of sending if sent by overnight courier, or from four days after the date of mailing if mailed;
provided, however, that any notice to the Lender under Article II shall be deemed to have been given only when received by the
Lender.

 

Section
8.5       Taxes. The Borrower agrees to pay, and save the Lender harmless from all liability for, any stamp or other taxes
that may be payable with respect to the execution or delivery of this Agreement or the issuance of the Notes, which obligation
of the Borrower shall survive the termination of this Agreement.

 

Section
8.6       Successors and Assigns; Participations; Purchasing Lenders.

 

(a)      This
Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender, all future holders of the Notes, and their
respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Lender.

 

(b)      The
Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell
to one or more lenders that are not natural persons (“Participants”) participating interests in any Loan or
other Obligation owing to the Lender, any Note held by the Lender, any Commitment of the Lender, or any other interest of the
Lender hereunder. In the event of any such sale by the Lender of participating interests to a Participant, (i) the Lender’s
obligations under this Agreement to the other parties to this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible for the performance thereof, (iii) the Lender shall remain the holder of any such Note for all purposes under this
Agreement, (iv) the Borrower and the Lender shall continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations under this Agreement, and (v) the agreement pursuant to which such Participant acquires
its participating interest herein shall provide that the Lender shall retain the sole right and responsibility to enforce the
Obligations, including, without limitation the right to consent or agree to any amendment, modification, consent or waiver with
respect to this Agreement or any other Loan Document. The Borrower agrees that if amounts outstanding under this Agreement, the
Notes, and the other Loan Documents are due and unpaid, or have been declared or have become due and payable upon an Event of
Default, each Participant shall be deemed to have, to the extent permitted by applicable law, the right of setoff in respect of
its participating interest in amounts owing under this Agreement and any Note or other Loan Document to the same extent as if
the amount of its participating interest were owing directly to it as the Lender under this Agreement or any Revolving Note, any
Term Note or other Loan Document. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections
2.13, 2.14, 2.15, 2,16 and 8.2 with respect to its participation in the Commitments and Loans; provided, that no Participant shall
be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred.

 

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(c)       The
Lender may, from time to time, assign to other lenders that are not natural persons (“Assignees”), all or part
of its rights or obligations hereunder or under any other Loan Document evidenced by any Note then held by that Lender, together
with equivalent proportions of its Commitment, pursuant to written agreements executed by the Lender and such Assignee(s); provided
that the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless an Event of
Default is continuing at the time of such assignment; provided that the Borrower shall be deemed to have consented to any such
assignment unless it objects thereto by written notice to the Lender within 5 Business Days after having received notice thereof,
where such written notice clearly states that a failure to object within 5 Business Days shall be deemed approval.

 

(d)       The
Borrower shall not be liable for any costs incurred by the Lender in effecting any participation under subparagraph (b) of this
subsection or by the Lender in effecting any assignment under subparagraph (c) of this subsection.

 

(e)       The
Lender may disclose to any Assignee or Participant and to any prospective Assignee or Participant any and all financial information
in the Lender’s possession concerning the Borrower or any of their Subsidiaries that has been delivered to the Lender by
or on behalf of any Loan Party pursuant to the Loan Documents or that has been delivered to the Lender by or on behalf of the
Borrower in connection with the Lender’s credit evaluation of the Borrower prior to entering into this Agreement, subject
to the provisions of Section 8.7.

 

(f)       Notwithstanding
any other provision in this Agreement, the Lender may at any time create a security interest in, or pledge, all or any portion
of its rights under and interest in this Agreement and any note held by it in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board or U. S. Treasury Regulation 31 C.F.R. § 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

 

Section
8.7       Confidentiality of Information. The Lender shall use reasonable efforts to assure that information about the Borrower
and its operations, affairs and financial condition not generally disclosed to the public or to trade and other creditors that
is furnished to the Lender pursuant to the provisions hereof is used only for the purposes of this Agreement and any other relationship
between the Lender and the Borrower and shall not be divulged to any Person other than the Lender, any Lender Affiliate and their
respective officers, directors, employees and agents, except: (a) to their attorneys and accountants; (b) in connection with the
enforcement of the rights of the Lender hereunder and under the Loan Documents or otherwise in connection with applicable litigation;
(c) in connection with assignments and participations and the solicitation of prospective assignees and participants referred
to in the Section 8.6; (d) if such information is generally available to the public other than as a result of disclosure by the
Lender; (e) to any direct or indirect contractual counterparty in any hedging arrangement or such contractual counterparty’s
professional advisor; (f) to any nationally recognized rating agency that requires information about the Lender’s investment
portfolio in connection with ratings issued with respect to the Lender; and (g) as may otherwise be required or requested by any
regulatory authority having jurisdiction over the Lender or by any applicable law, rule, regulation or judicial process, the opinion
of the Lender’s counsel concerning the making of such disclosure to be binding on the parties hereto. Lender shall not incur
any liability to the Borrower by reason of any disclosure permitted by this Section.

 

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Section
8.8          Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted
by federal law, the laws of the State of Nevada without regard to its conflicts of law provisions. This Agreement has been accepted
by Lender in the State of Nevada. Whenever possible, each provision of this Agreement and the other Loan Documents and any other
statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted so as to
be effective and valid under such applicable law, but if any provision of this Agreement, the other Loan Documents or any other
statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto is held to be prohibited or
invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement, the other Loan Documents or any other
statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto.

 

Section
8.9          Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction
of the courts of Clark County, State of Nevada; and the Borrower and the Lender consent to the jurisdiction and venue of any such
court and waive any argument that venue in such forum is not convenient.

 

Section
8.10          Dispute Resolution Provision. This Dispute Resolution Provision contains a jury waiver, a class action waiver,
and an arbitration clause (or judicial reference agreement, as applicable), set out in four sections. READ IT CAREFULLY.

 

(a)           General
Provisions Governing All Disputes.

 

		(i)	Prior
                                         Dispute Resolution Agreements Superseded. This Dispute Resolution Provision shall
                                         supersede and replace any prior “Jury Waiver,” “Judicial Reference,”
                                         “Class Action Waiver,” “Arbitration,” “Dispute Resolution,”
                                         or similar alternative dispute agreement or provision between or among the parties.

 

		(ii)	“Dispute”
                                         defined. As used herein, the word “Dispute” includes, without limitation,
                                         any claim by either party against the other party related to this Agreement, any Loan
                                         Document, and the Loan evidenced hereby. In addition, “Dispute” also includes
                                         any claim by either party against the other party regarding any other agreement or business
                                         relationship between any of them, whether or not related to the Loan or other subject
                                         matter of this Agreement. “Dispute” includes, but is not limited to, matters
                                         arising from or relating to a deposit account, an application for or denial of credit,
                                         warranties and representations made by a party, the adequacy of a party’s disclosures,
                                         enforcement of any and all of the obligations a party hereto may have to another party,
                                         compliance with applicable laws and/or regulations, performance or services provided
                                         under any agreement by a party, including without limitation disputes based on or arising
                                         from any alleged tort or matters involving the employees, officers, agents, affiliates,
                                         or assigns of a party hereto.

 

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If
a third party is a party to a Dispute (such as a credit reporting agency, merchant accepting a credit card, junior lienholder
or title company), each party hereto agrees to consent to including that third party in any arbitration or judicial reference
proceeding for resolving the Dispute with that party.

 

		(iii)	Jury
                                         Trial Waiver. Each party waives their respective rights to a trial before a jury
                                         in connection with any Dispute, and all Disputes shall be resolved by a judge sitting
                                         without a jury. If a court determines that this jury trial waiver is not enforceable
                                         for any reason, then at any time prior to trial of the Dispute, but not later than 30
                                         days after entry of the order determining this provision is unenforceable, any party
                                         shall be entitled to move the court for an order, as applicable: (A) compelling arbitration
                                         and staying or dismissing such litigation pending arbitration (“Arbitration Order”)
                                         under Section 8.10(b), or (B) staying such litigation and compelling judicial reference
                                         under Section 8.10(c) hereof.

 

		(iv)	Class
                                         Action Waiver. If permitted by applicable law, each party waives the right to litigate
                                         in court or an arbitration proceeding any Dispute as a class action, either as a member
                                         of a class or as a representative, or to act as a private attorney general.

 

		(v)	Survival.
                                         This Dispute Resolution Provision shall survive any termination, amendment or expiration
                                         of this Agreement, or any other relationship between the parties.

 

(b)          Arbitration
If Jury Waiver Unenforceable (Except California). If (but only if) a state or federal court located outside the state of California
determines for any reason that the jury trial waiver in this Dispute Resolution Provision is not enforceable with respect to a
Dispute, then any party hereto may require that said Dispute be resolved by binding arbitration pursuant to this Section 2 before
a single arbitrator. An arbitrator shall have no authority to determine matters (i) regarding the validity, enforceability, meaning,
or scope of this Dispute Resolution Provision, or (ii) class action claims brought by either party as a class representative on
behalf of others and claims by a class representative on either party’s behalf as a class member, which matters may be determined
only by a court without a jury. By agreeing to arbitrate a Dispute, each party gives up any right that party may have to a jury
trial, as well as other rights that party would have in court that are not available or are more limited in arbitration, such
as the rights to discovery and to appeal.

 

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Arbitration
shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, National Arbitration
Forum (“NAF”) or Judicial Arbitration and Mediation Service, Inc. (“JAMS”) (“Administrator”)
as selected by the initiating party. However, if the parties agree, arbitration may be commenced by appointment of a licensed
attorney who is selected by the parties and who agrees to conduct the arbitration without an Administrator. If NAF and JAMS both
decline to administer arbitration of the Dispute, and if the parties are unable to mutually agree upon a licensed attorney to
act as arbitrator with an Administrator, then either party may file a lawsuit (in a court of appropriate venue outside the state
of California) and move for an Arbitration Order. The arbitrator, howsoever appointed, shall have expertise in the subject matter
of the Dispute. Venue for the arbitration proceeding shall be at a location determined by mutual agreement of the parties or,
if no agreement, in the city and state where Lender or Bank is headquartered. The arbitrator shall apply the law of the state
specified in the agreement giving rise to the Dispute.

 

After
entry of an Arbitration Order, the non-moving party shall commence arbitration. The moving party shall, at its discretion, also
be entitled to commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely
prejudiced by electing not to commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions
for judgment on the pleadings, for failure to state a claim, or for full or partial summary judgment; (ii) will render a decision
and any award applying applicable law; (iii) will give effect to any limitations period in determining any Dispute or defense;
(iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard
to motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party
from (i) seeking and obtaining from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary
remedies including but not limited to injunctive relief, property preservation orders, foreclosure, eviction, attachment, replevin,
garnishment, and/or the appointment of a receiver, (ii) pursuing non-judicial foreclosure, or (iii) availing itself of any self-help
remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any
Dispute to arbitration.

 

Judgment
upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000,
any party shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if
the award (including Administrator, arbitrator, and attorney’s fees and costs) exceeds $4,000,000, the arbitrator will issue
a written, reasoned decision supporting the award, including a statement of authority and its application to the Dispute. A request
for de novo appeal must be filed with the arbitrator within 30 days following the date of the arbitration award; if such a request
is not made within that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall
review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring
in any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or,
if the Administrator has no such rules, then the JAMS arbitration appellate rules shall apply.

 

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Arbitration
under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act,
9 U.S.C. § 1 et seq. If the terms of this Section 2 vary from the Administrator’s rules, this Section 2 shall control.

 

(c)       Judicial
Reference If Jury Waiver Unenforceable (California Only). If (but only if) a Dispute is filed in a state or federal court
located within the state of California, and said court determines for any reason that the jury trial waiver in this Dispute Resolution
Provision is not enforceable with respect to that Dispute, then any party hereto may require that Dispute be resolved by judicial
reference in accordance with California Code of Civil Procedure, Sections 638, et seq., including without limitation whether the
Dispute is subject to a judicial reference proceeding. By agreeing to resolve Disputes by judicial reference, each party is giving
up any right that party may have to a jury trial. The referee shall be a retired judge, agreed upon by the parties, from either
the American Arbitration Association (AAA) or Judicial Arbitration and Mediation Service, Inc. (JAMS). If the parties cannot agree
on the referee, the party who initially selected the reference procedure shall request a panel of ten retired judges from either
AAA or JAMS, and the court shall select the referee from that panel. (If AAA and JAMS are unavailable to provide this service,
the court may select a referee by such other procedures as are used by that court.) The referee shall be appointed to sit with
all of the powers provided by law, including the power to hear and determine any or all of the issues in the proceeding, whether
of fact or of law, and to report a statement of decision. The parties agree that time is of the essence in conducting the judicial
reference proceeding set forth herein. The costs of the judicial reference proceeding, including the fee for the court reporter,
shall be borne equally by the parties as the costs are incurred, unless otherwise awarded by the referee. The referee shall hear
all pre-trial and post-trial matters (including without limitation requests for equitable relief), prepare a statement of decision
with written findings of fact and conclusions of law, and apportion costs as appropriate. The referee shall be empowered to enter
equitable relief as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that are binding
on the parties and rule on any motion that would be authorized in a trial, including without limitation motions for summary adjudication.
Only for this Section 3, “Dispute” includes matters regarding the validity, enforceability, meaning, or scope of this
Section, and (ii) class action claims brought by either party as a class representative on behalf of others and claims by a class
representative on either party’s behalf as a class member. Judgment upon the award shall be entered in the court in which
such proceeding was commenced and all parties shall have full rights of appeal. This provision will not be deemed to limit or
constrain Bank or Lender’s right of offset, to obtain provisional or ancillary remedies, to interplead funds in the event
of a dispute, to exercise any security interest or lien Bank or Lender may hold in property or to comply with legal process involving
accounts or other property held by Bank or Lender.

 

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Nothing
herein shall preclude a party from moving (prior to the court ordering judicial reference) to dismiss, stay or transfer the suit
to a forum outside California on grounds that California is an improper, inconvenient or less suitable venue. If such motion is
granted, this Section 3 shall not apply to any proceedings in the new forum. This Section 3 may be invoked only with regard to
Disputes filed in state or federal courts located in the State of California. In no event shall the provisions in this Section
3 diminish the force or effect of any venue selection or jurisdiction provision in this Agreement or any Related Document.

 

(d)       Reliance.
Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce a jury waiver,
class action waiver, arbitration provision or judicial reference provision in the event of suit, and (ii) acknowledges that it
and the other party have been induced to enter into this Agreement by, among other things, material reliance upon the mutual waivers,
agreements, and certifications in this Section (Dispute Resolution Provision).

 

Section
8.11       WAIVER OF DEFENSES AND RELEASE OF CLAIMS. The undersigned hereby (i) represents that neither the undersigned nor
any Affiliate or principal of the undersigned has any defenses to or setoffs against any Indebtedness or other obligations owing
by the undersigned, or by the undersigned’s Affiliates or principals, to Lender or any Lender Affiliate (the “Covered
Obligations”), nor any claims against Lender or any Lender Affiliate for any matter whatsoever, related or unrelated to
the Covered Obligations, and (ii) releases Lender and all Lender Affiliates, officers, directors, employees and agents from all
claims, causes of action, and costs, in law or equity, known or unknown, whether or not matured or contingent, existing as of
the date hereof that the undersigned has or may have by reason of any matter of any conceivable kind or character whatsoever,
related or unrelated to the Covered Obligations, including the subject matter of this Agreement. The foregoing release does not
apply, however, to claims for future performance of express contractual obligations that mature after the date hereof that are
owing to the undersigned by Lender or any Lender Affiliate. As used in this paragraph, the word “undersigned” does
not include Lender or any individual signing on behalf of Lender. The undersigned acknowledges that Lender has been induced to
enter into or continue the Obligations by, among other things, the waivers and releases in this paragraph.

 

Section
8.12       Survival. All representations, warranties, covenants and agreements made by the Borrower herein or in the other
Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement
or any other Loan Document shall be deemed to have been relied upon by the Lender and shall survive the making of the Loans and
the execution and delivery to the Lender by the Borrower of the Notes, regardless of any investigation made by or on behalf of
the Lender, and shall continue in full force and effect as long as any Obligation is outstanding and unpaid and so long as the
Commitments have not been terminated; provided, however, that the obligations of the Borrower under Sections 8.2, 8.5, 8.13 and
8.24 shall survive payment in full of the Obligations and the termination of the Commitments.

 

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Section
8.13       Indemnification. The Borrower hereby agrees to defend, protect, indemnify and hold harmless the Lender and all
Lender Affiliates and the directors, officers, employees, attorneys and agents and their respective Affiliates (each of the foregoing
being an “Indemnitee” and all of the foregoing being collectively the “Indemnitees”) from
and against any and all claims, actions, damages, liabilities, judgments, costs and expenses (including all reasonable fees and
disbursements of counsel that may be incurred in the investigation or defense of any matter) imposed upon, incurred by or asserted
against any Indemnitee, whether direct, indirect or consequential and whether based on any federal, state, local or foreign laws
or regulations (including securities laws, environmental laws, commercial laws and regulations), under common law or on equitable
cause, or on contract or otherwise:

 

(a)        by
reason of, relating to or in connection with the execution, delivery, performance or enforcement of any Loan Document, any Commitments,
or any transaction contemplated by any Loan Document; or

 

(b)        by reason of, relating to or in connection with any credit extended or used under the Loan Documents or any act done or omitted
by any Person, or the exercise of any rights or remedies thereunder, including the acquisition of any collateral by the Lender
by way of foreclosure of the Lien thereon, deed or bill of sale in lieu of such foreclosure or otherwise;

 

provided,
however, that no Borrower shall be liable to any Indemnitee for any portion of such claims, damages, liabilities and expenses
resulting from such Indemnitee’s gross negligence or willful misconduct. If this indemnity is unenforceable as a matter
of law as to a particular matter or consequence referred to herein, it shall be enforceable to the full extent permitted by law.

 

This
indemnification applies, without limitation, to any act, omission, event or circumstance existing or occurring on or prior to
the later of the Term Loan Maturity Date or the date of irrevocable payment in full of the Obligations, including specifically
Obligations arising under clause (b) of this Section. The indemnification provisions set forth above shall be in addition to any
liability the Borrower may otherwise have.

 

To
the fullest extent permitted by applicable law, no Borrower shall assert, and the Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof, unless such
claim arises as a consequence of such Indemnitee’s gross negligence or willful misconduct.

 

Without
prejudice to the survival of any other obligation of the Borrower hereunder, the agreements of the Borrower in this Section shall
survive the payment in full of the Obligations and the termination of the Commitments.

 

Section
8.14       Captions. The captions or headings herein and any table of contents hereto are for convenience only and in no way
define, limit or describe the scope or intent of any provision of this Agreement.

 

Section
8.15       Entire Agreement. This Agreement and the other Loan Documents embody the entire agreement and understanding between
the Borrower and the Lender with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements
and understandings relating to the subject matter hereof. Nothing in this Agreement or in any other Loan Document, expressed or
implied, is intended to confer upon any Persons other than the parties hereto any rights, remedies, obligations or liabilities
hereunder or thereunder.

 

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Section
8.16       Multiple Loan Agreements (Independent Loan Agreements). Borrower and Lender acknowledge that Borrower may have
more than one outstanding loan with Lender, and may be granted additional loans by Lender in the future. Borrower and Lender agree
that (a) the loan agreement executed in connection with each loan shall govern that particular loan; (b) execution or amendment
of a loan agreement for one loan shall not be interpreted to supersede or amend any loan agreement previously executed in connection
with another loan; and (c) any present or future loan for which no separate loan agreement is executed shall always be governed
by the most recently executed loan agreement then outstanding between Borrower and Lender, whether executed before or after the
granting of said loan. This section shall not diminish any cross-default or cross-collateralization term in any loan agreement,
promissory note or related loan document. (This section supersedes any contrary provision in this Agreement.)

 

Notwithstanding
the preceding paragraph of this section, every loan agreement between Borrower and Lender (together with all related loan documents
associated therewith) shall be deemed amended to adopt the dispute resolution provisions that are now or hereafter set forth in
the most recently executed loan agreement. In this paragraph, “dispute resolution provision” includes any provision,
or omission thereof, in the nature of a class action waiver, a jury trial waiver, or alternative dispute resolution term (such
as resolution by arbitration or judicial reference).

 

Section
8.17       Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute
one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

Section
8.18       Borrower Acknowledgements. The Borrower hereby acknowledges that (a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents, (b) the Lender has no fiduciary relationship to the Borrower,
the relationship being solely that of debtor and creditor, (c) no joint venture exists between the Borrower and the Lender, and
(d) the Lender undertakes no responsibility to the Borrower to review or inform the Borrower of any matter in connection with
any phase of the business or operations of the Borrower and the Borrower shall rely entirely upon its own judgment with respect
to its business, and any review, inspection or supervision of, or information supplied to, the Borrower by the Lender is for the
protection of the Lender and neither the Borrower nor any third party is entitled to rely thereon.

 

Section
8.19       Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable
to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law
(collectively, the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable
as a result of the operation of this Section shall be cumulated and the interest and Charges payable to the Lender in respect
of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Rate to the date of repayment, has been received by the Lender.

 

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Section
8.20       Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action
or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise
within the limitations of, another covenant shall not avoid an Event of Default or Default if such action is taken or condition
exists.

 

Section
8.21       Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Lender, or the
Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Lender
in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any bankruptcy
or insolvency law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not
occurred. The obligations of the Borrower and the Lender under this Section shall survive the irrevocable payment in full of the
Obligations and the termination of the Commitments.

 

Section
8.22       Electronic Signatures, Etc. The words “execution,” “signed,” “signature,” and
words of like import in Loan Document or in any amendment or other modification thereof (including waivers and consents) shall
be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case
may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National
Commerce Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

Section
8.23       Document Imaging. Lender shall be entitled, in its sole discretion, to image or make copies of all or any selection
of the agreements, instruments, documents, and items and records governing, arising from or relating to any of Borrower’s
loans, including, without limitation, this document and the Loan Documents, and Lender may destroy or archive the paper originals.
The parties hereto (i) waive any right to insist or require that Lender produce paper originals, (ii) agree that such images shall
be accorded the same force and effect as the paper originals, (iii) agree that Lender is entitled to use such images in lieu of
destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings,
and (iv) further agree that any executed facsimile (faxed), scanned, or other imaged copy of this document or any Loan Document
shall be deemed to be of the same force and effect as the original manually executed document.

 

    56 

     

    

 

Section
8.24       PATRIOT Act. The Lender is subject to the requirements of the PATRIOT Act and hereby notifies the Borrower that
pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other information that will allow the Lender to identify the
Borrower in accordance with the PATRIOT Act. The Borrower shall, promptly following a request by the Lender, provide all documentation
and other information that the Lender requests to comply with its ongoing obligations under applicable “know your customer”
and anti-money laundering rules and regulations, including the PATRIOT Act.

  

***

 

    57 

     

    

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

 

	 	BORROWER:
	 	 	 
	 	GALAXY GAMING, INC.
	 	 	 
	 	By: 	/s/ Harry Hagerty
	 	Name: Harry Hagerty
	 	Title:   CFO

 

Address:

Galaxy
Gaming, Inc.

6767
Spencer Street

Las
Vegas, NV 89119

Attn:      Harry
Hagerty, CFO

Fax:       (702)
939-3255

Email:    hhagerty@GalaxyGaming.com

 

    Credit Agreement

     

    

 

	 	LENDER:
	 	 	 
	 	ZB, N.A. DBA NEVADA STATE BANK
	 	 	 
	 	By: 	 /s/ Jamie Gazza
	 	Name: Jamie Gazza
	 	Title:   Vice President

  

Address:

ZB,
N.A. dba Nevada State Bank

1
W. Liberty St., 2nd Floor

Reno,
NV 89501

Attn:      Jamie
Gazza, Vice President

Fax:       (775)
688-6960

Email:    jamie.gazza@nsbank.com

 

    Credit Agreement

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