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EXHIBIT 10.3
AMENDMENT NUMBER TWO TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT, dated as of
March 2, 1999 (this "Amendment"), amends that certain Loan and Security
Agreement, dated as of April 23, 1998 (as amended from time to time, the "Loan
Agreement"), by and between MAI SYSTEMS CORPORATION, a Delaware corporation
GAMING SYSTEMS INTERNATIONAL, a Nevada corporation, and HOTEL INFORMATION
SYSTEMS, INC, a Delaware corporation ( each a "Borrower" and collectively
"Borrowers"), on the one hand, and COAST BUSINESS CREDIT, a division of Southern
Pacific Bank, a California corporation ("Coast"), on the other hand. All
initially capitalized terms used in this Amendment shall have the meanings
ascribed thereto in the Loan Agreement unless specifically defined herein.
RECITALS
WHEREAS, Borrower and Coast wish to amend the Loan Agreement pursuant to
the terms and provisions set forth in this Amendment; and
NOW, THEREFORE, the parties hereto agree as follows:
AMENDMENT
Section 1. AMENDMENT TO SECTION 2 OF THE SCHEDULE TO THE LOAN
AGREEMENT. Section 2 of the Schedule to the Loan Agreement is hereby replaced in
its entirety with the following language:
"Loans in a total amount at any time outstanding not to exceed the
lesser of (i) a total of Five Million Dollars ($5,000,000) (the "Maximum
Dollar Amount"), or (ii) an amount not to exceed 2 times Borrowers'
aggregate monthly collections received by Coast, measured on a trailing
12 month average, arising out of Receivables generated from Borrowers'
software and hardware service and maintenance contracts, subject to
audit, appraisal and a review of such contracts."
Section 2. AMENDMENT TO SECTION 8.1 OF THE SCHEDULE TO THE LOAN
AGREEMENT. Section 8.1 of the Schedule to the Loan Agreement, is hereby amended
by adding the following language after the second paragraph:
"Borrowers shall show a monthly pre-tax profit of no less than Two
Hundred Thousand Dollars and a quarterly pre-tax profit of no less than
Seven Hundred Fifty Thousand Dollars ($750,000) (both excluding
severance payments to discharged employees)."
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Section 3. AMENDMENT TO SECTION 9.1 OF THE SCHEDULE TO THE LOAN
AGREEMENT. Section 9.1 of the Schedule to the Loan Agreement, is hereby amended
in its entirety with the following language;
"April 30, 2002, subject to automatic renewal as provided in Section 9.1
of the Agreement, and early termination as provided in Section 9.2 of
the Agreement."
Section 4. AMENDMENT FEE. In connection with this Amendment, Borrowers
shall pay Coast an amendment fee (the "Amendment Fee") in the amount of
Twenty-Five Thousand Dollars ($25,000) on or before February 26, 1999.
Section 5. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon the receipt by Coast of (i) an executed copy hereof
by Borrowers and (ii) the Waiver Fee.
Section 6. ENTIRE AGREEMENT. The Loan Agreement, as amended hereby,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof, Borrower represents, warrants and agrees that in entering into
the Loan Agreement and consenting to this Amendment, it has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, Coast or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Agreement, as amended hereby.
Section 7. CONFLICTING TERMS. In the event of a conflict between the
terms and provisions of this Amendment and the terms and provisions of the Loan
Agreement, the terms of this Amendment shall govern. In all other respects, the
Loan Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
Section 8. MISCELLANEOUS. This Amendment shall be governed by and
construed in accordance with the laws of the State of California. This Amendment
may be executed in any number of counterparts, all of which taken together shall
constitute
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one agreement, and any party hereto may execute this Amendment by signing such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWERS:
MAI SYSTEMS CORPORATION,
a Delaware corporation
By /s/ [SIGNATURE ILLEGIBLE]
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Title EVP & COO/CFO
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By
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Title
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HOTEL INFORMATION SYSTEMS, INC.,
a Delaware corporation
By /s/ [SIGNATURE ILLEGIBLE]
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Title Director
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By
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Title
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GAMING SYSTEMS INTERNATIONAL,
a Nevada corporation
By /s/ [SIGNATURE ILLEGIBLE]
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Title Director, Secretary & Treasurer
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COAST:
COAST BUSINESS CREDIT,
a division of Southern Pacific Bank
By /s/ [SIGNATURE ILLEGIBLE]
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Title Vice President
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