Exhibit 10.1
SIXTH AMENDMENT
TO CREDIT AGREEMENT
This Sixth Amendment to Credit Agreement (this "Amendment") is entered
into this 23rd day of October, 2002, by and between FIFTH THIRD BANK, an Ohio
banking corporation (the "Bank"), and INTERLOTT TECHNOLOGIES, INC., a Delaware
corporation (the "Borrower").
WHEREAS, Bank and Borrower entered into that certain Credit Agreement
dated as of January 25, 2001, as amended by the First Amendment to Credit
Agreement dated January 25, 2001, the Second Amendment to Credit Agreement dated
April 12, 2001, the Third Amendment to Credit Agreement dated May 31, 2001, the
Fourth Amendment to Credit Agreement dated October 3, 2001, and the Fifth
Amendment to Credit Agreement dated March 21, 2002 (as amended, the
"Agreement"); and
WHEREAS, Bank and Borrower desire to amend the Agreement, pursuant to
the terms and conditions set forth herein.
NOW THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
1. Amendments.
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(a) Section 2.1(a) of the Agreement is hereby amended and restated
in its entirety as follows:
(a) Subject to the terms and conditions hereof, Bank hereby
extends to Borrower a line of credit facility (the "Facility")
under which Bank will make loans (the "Revolving Loans") to
Borrower at Borrower's request from time to time during the
term of this Agreement in amounts not exceeding the lesser of
(A) Thirty Million Dollars ($30,000,000.00) less Letter of
Credit Liabilities or (B) the sum of (i) 85% of the net amount
of Borrower's Eligible Accounts plus (ii) the lesser of (a)
50% of the net amount of Borrower's Eligible Inventory or (b)
Four Million Five Hundred Thousand Dollars ($4,500,000.00)
plus (iii) 70% of the net amount of Borrower's Eligible Lease
Payments (subject to Section 4.12 hereof) less (iv) Letter of
Credit Liabilities. Notwithstanding the foregoing, Bank may
create and maintain reserves taken as reductions of Revolving
Loan availability (the "Reserves") from time to time based on
such credit and collateral considerations as Bank may
commercially reasonably deem appropriate, including but not
limited to a reserve taken in connection with the potential
liability of Bank arising out of any interest rate swap
agreements with Borrower (the "Swap Reserve"). Subject to the
foregoing, Borrower may borrow, prepay, and reborrow under the
Facility, provided that the principal amount of all Revolving
Loans outstanding at any one time under the Facility will not
exceed Thirty Million Dollars ($30,000,000.00) less the Letter
of Credit Liabilities, and less the Swap Reserve, if any. If
the amount of Revolving Loans outstanding at any time under
the Facility
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exceeds the limits set forth above, Borrower will immediately
pay the amount of such excess to Bank in cash, provided
however if the excess results from the Bank taking Reserves
which had not been previously taken or from Bank deeming
previously Eligible Accounts, Eligible Inventory or Eligible
Lease Payments to be no longer eligible, then Borrower will,
within two (2) days of written notice from Bank, pay the
amount of the excess to Bank in cash. In the event Borrower
fails to pay such excess, Bank may, in its discretion, setoff
such amount against Borrower's accounts at Bank.
(b) Section 5.7 of the Agreement is hereby amended and restated in
its entirety as follows:
5.7 SHARE INTEREST; DISTRIBUTIONS. Except as
otherwise permitted below, Borrower will not (a) declare or
pay any distributions excepting dividends to equity
shareholders (provided however dividends to equity
shareholders may not be made at such time as there is an Event
of Default and an Event of Default is Continuing or where such
dividend shall cause an Event of Default), (b) make any
payments of any kind to its shareholders (including, without
limitation, debt repayments, payments for goods or services or
otherwise, but excluding ordinary salary payments to
shareholders employed by Borrower and dividends to
shareholders), or (c) redeem any shares of its equity
interests in any fiscal year except for the redemption on or
about April 1, 2001 or at any time thereafter of all the
issued and outstanding preferred stock of Borrower for a
redemption price of $1,350,000.00 (the "Preferred Share
Redemption"). Notwithstanding anything to the contrary in this
Agreement or in any of the other Loan Documents, Borrower
shall be permitted to redeem or otherwise purchase or acquire
any of its shares of equity interests, and to make payments
therefor, as long as: (i) such payments do not exceed
$2,000,000.00 in the aggregate; (ii) no Event of Default is
Continuing; (iii) no Event of Default would result from the
payment by Borrower for such shares; and (iv) Borrower's
available credit under the Facility (measured as of the last
day of each of the three months preceding the date on which
the proposed payment is to be made and measured immediately
before such payment as of the date on which the proposed
payment is to be made) equals or exceeds $2,000,000.00 plus
the amount of such payment (subject to any adjustment in such
sum now or hereafter agreed to by Bank and Borrower).
(c) Section 5.13 of the Agreement is hereby amended and restated
in its entirety as follows:
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5.13 MINIMUM TANGIBLE NET WORTH. Borrower will not
permit its Tangible Net Worth to be less than the amounts set
forth below on the dates set forth below:
Date Minimum Amount
9/30/02 $16,300,000
12/31/02 $16,657,000
3/31/03 $17,162,000
6/30/03 $17,404,000
9/30/03 $17,436,000
12/31/03 $17,436,000
3/31/04 $17,436,000
(d) The definition of "Funded Debt" at EXHIBIT 1 to the Agreement
is hereby amended and restated in its entirety as follows:
"Funded Debt" means the sum of Borrower's Obligations to Bank
or any other lender or financial institution for borrowed
money, including capitalized leases, and Subordinated Debt,
and the total amount of outstanding debt of Borrower incurred
in acquiring the assets of On-Point, as reflected on
Borrower's balance sheet.
(e) The definition of "Indebtedness" at EXHIBIT 1 to the Agreement
is hereby amended and restated in its entirety as follows:
"Indebtedness" means (a) all items (except items of capital
stock, of capital surplus, of general contingency reserves or
of retained earnings, deferred income taxes, and amount
attributable to minority interests, if any) which in
accordance with generally accepted accounting principles would
be included in determining total liabilities on a consolidated
basis as shown on the liability side of a balance sheet as at
the date as of which indebtedness is to be determined, (b) all
indebtedness secured by any mortgage, pledge, lien or
conditional sale or other title retention agreement to which
any property or asset owned or held is subject, whether or not
the indebtedness secured thereby will have been assumed
(excluding non-capitalized leases which may amount to title
retention agreements but including capitalized leases), and
(c) all indebtedness of others which Borrower or any
Subsidiary has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary
course of business), discounted or sold with recourse or
agreed (contingently or otherwise) to purchase or repurchase
or otherwise acquire, or in respect of which Borrower or any
Subsidiary has agreed to apply or advance funds (whether by
way of loan, stock purchase, capital contribution or
otherwise) or otherwise to become directly or indirectly
liable.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER. To
induce Bank to enter into this Amendment, Borrower represents
and warrants as follows:
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(a) The representations and warranties of Borrower contained in
Section 3 of the Agreement are deemed to have been made again
on and as of the date of execution of this Agreement, and are
true and correct as of the date of execution hereof; provided,
however, that the representations and warranties set forth in
Section 3.3 of the Agreement are hereby amended to incorporate
references to litigation involving the Borrower of which the
Borrower has advised Bank since the date of the Agreement.
(b) The person executing this Amendment is a duly elected and
acting officer of Borrower and is duly authorized by the Board
of Directors of Borrower to execute and deliver this Amendment
on behalf of Borrower.
3. GENERAL.
(a) Except as expressly modified hereby, the Agreement remains
unaltered and in full force and effect. Borrower acknowledges
that Bank has made no oral representations to Borrower with
respect to the Agreement and this Amendment thereto and that
all prior understandings between the parties are merged into
the Agreement as amended by this Amendment. All Loans
outstanding on the date of execution of this Amendment shall
be considered for all purposes to be Loans outstanding under
the Agreement as amended by this Amendment.
(b) Capitalized terms used and not otherwise defined herein will
have the meanings set forth in the Agreement.
(c) This Amendment shall be considered an integral part of the
Agreement, and all references to the Agreement in the
Agreement itself or any document referring thereto shall, on
and after the date of execution of this Amendment, be deemed
to be references to the Agreement as amended by this
Amendment.
(d) This Amendment will be binding upon and inure to the benefits
of Borrower and Bank and their respective successors and
assigns.
(e) All representations, warranties and covenants made by Borrower
herein will survive the execution and delivery of this
Amendment.
(f) This Amendment will, in all respects, be governed and
construed in accordance with the laws of the State of Ohio.
(g) This Amendment may be executed in one or more counterparts,
each of which will be deemed an original and all of which
together constitute one and the same instrument.
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IN WITNESS WHEREOF, Borrower and Bank have executed this Amendment by their duly
authorized officers as of the date first above written.
INTERLOTT TECHNOLOGIES, INC.
By:
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Its:
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FIFTH THIRD BANK
By:
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Its:
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