First Bank
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
February 28, 1998
Powerhouse Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxxxxx
Dear Xxx:
We refer to that certain Credit Agreement dated as of February 16, 1995,
among VIDEO LOTTERY TECHNOLOGIES, INC., N/K/A POWERHOUSE TECHNOLOGIES, INC., a
Delaware corporation (the "Borrower") and FIRST BANK NATIONAL ASSOCIATION, as
administrative bank (the "Administrative Bank"), and FIRST BANK NATIONAL
ASSOCIATION as the sole Bank party (the "Bank") as amended by that certain
Amendment No. I to Credit Agreement and Waiver dated as of June 26, 1995, Second
Amendment to Credit Agreement dated as of March 4, 1996, Third Amendment to
Credit Agreement dated as of April 30, 1996, Waiver and Fourth Amendment to
Credit Agreement dated as of August 19, 1996 and Consent and Fifth Amendment to
Credit Agreement dated as of January 30, 1997 (as so amended, the "Credit
Agreement"). Capitalized terms not otherwise expressly defined herein shall have
the meanings set forth in the Credit Agreement.
Although neither the Borrower or the Administrative Bank believe that the
Transaction (as defined below) requires any approval or waiver of any term or
terms of the Credit Agreement by the Administrative Bank and the Bank, the
Borrower has requested that the Administrative Bank and the Bank waive the
Borrower's compliance with any provision of the Credit Agreement which would be
contravened by the Borrower's registration and sale (collectively the
"Transaction") of: (a) approximately 1,468,026 shares (the "Xxxxx Shares") of
the Borrower's stock controlled by Xx. Xxxxxxx Xxxxx (the "Selling
Shareholders") and the Selling Shareholders' retention of the proceeds of such
sale; and (b) approximately 220,204 shares of the Borrower's stock for the
Borrower's own account (the "Borrower Shares") as an over allotment option as
required by the underwriters of the offering. In connection with such request,
the Borrower has represented and warranted to the Administrative Bank and the
Bank that:
1. neither the Borrower nor any of its Subsidiaries will purchase the
Xxxxx Shares;
Powerhouse Technologies, Inc.
February 28, 1998
Page 2
2. none of the Borrower's or any of its Subsidiaries' assets will otherwise
be paid to any of the Selling Shareholders except for the payment of expenses
incidental to the Transaction and any amounts owed to Xx. Xxxxx in connection
with his status as a member of the Board of Directors of the Borrower; and
3. no Change of Control will result from the consummation of the
Transaction.
In addition, the Borrower has requested that the Administrative Bank and
the Bank to waive their rights (the "Bank Registration Rights") they may claim
under Section 1.b. of the Stock Agreement dated as of January 30, 1997 (the
"Stock Agreement") to require the Borrower to include the "PB Shares" (as
defined in the Stock Agreement) in the above described registration. It is noted
that for purposes of that Section 1.b of the Stock Agreement that there has not
been any foreclosure on the Pledged Shares as provided in that provision;
provided, however, that the Borrower hereby agrees with the Administrative Bank
and the Banks that the parenthetical clause beginning in the 7th line of Section
1 (b) of the Stock Agreement is amended in its entirety to read as follows:
"(all such Common Shares being referred to as the 'PB Subject Shares';
and together with the DR Subject Securities being sometimes hereinafter
referred to as the 'Subject Securities')."
Based on the above representations and warranties, the Administrative Bank
and the Bank hereby waive:
1. any Default or Event of Default that would arise under the Credit
Agreement as a result of the consummation of the Transaction so long
as no Change of Control results therefrom; and
2. the Bank Registration Rights in connection with such Transaction.
The waiver granted herein is limited to the Transaction and is not
intended, and shall not be construed, to be a general waiver of any term or
provision of the Credit Agreement or a waiver of any other existing or future
Default or Event of Default or of any other waiver of the Bank Registration
Rights.
Notwithstanding anything to the contrary contained in this letter waiver,
the Administrative Bank's and the Bank's waivers set forth herein are hereby
subject in all respects to the full and complete truth and accuracy of all of
the Borrower's representations and warranties contained and set forth herein,
irrespective of the occurrence or nonoccurence of any due diligence or other
inquiry
Powerhouse Technologies, Inc.
February 28, 1998
Page 3
by the Administrative Bank or the Bank with respect thereto. Upon and in the
event of any misrepresentation or breach of warranty by the Borrower with
respect to any matter set forth herein, this letter waiver shall be deemed null
and void and of no effect ab initio.
If this letter waiver accurately sets forth the Administrative Bank's and
the Bank's agreements with the Borrower as to waivers described herein, please
execute the enclosed copy of this letter and return it to the undersigned.
Very truly yours,
FIRST BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Its: Vice President
------------------------------
POWERHOUSE TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Title: CFO
--------------------------
First Bank
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
February 28, 1998
Powerhouse Technologies, Inc.
231 0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxxxxx
Dear Xxx:
We refer to that certain Credit Agreement dated as of February 16, 1995,
among VIDEO LOTTERY TECHNOLOGIES, INC., N/K/A POWERHOUSE TECHNOLOGIES, INC., a
Delaware corporation (the "Borrower") and U.S. BANK NATIONAL ASSOCIATION, as the
successor by merger with First Bank National Association, as administrative bank
(the "Administrative Bank"), and U.S. BANK NATIONAL ASSOCIATION, as the
successor by merger with First Bank National Association, as the sole Bank party
(the "Bank") as amended by that certain Amendment No. I to Credit Agreement and
Waiver dated as of June 26, 1995, Second Amendment to Credit Agreement dated as
of March 4, 1996, Third Amendment to Credit Agreement dated as of April 30,
1996, Waiver and Fourth Amendment to Credit Agreement dated as of August 19,
1996 and Consent; Waiver and Fifth Amendment to Credit Agreement dated as of
January 30, 1997 (as so amended, the "Credit Agreement"). Capitalized terms not
otherwise expressly defined herein shall have the meanings set forth in the
Credit Agreement.
A. Amendment to Credit Agreement.
On the "Effective Date" (as defined below), the Administrative Bank and the
Bank hereby agree with the Borrower to amend the definition of "Termination
Date" appearing in ARTICLE I of the Credit Agreement by changing the date
"February 28, 1998" appearing therein to the date "August 31, 1998".
B. Waiver re Xxxxx Transaction.
Although neither the Borrower or the Administrative Bank believe that the
Transaction (as defined below) requires any approval or waiver of any term or
terms of the Credit Agreement by the Administrative Bank and the Bank, the
Borrower has requested that the Administrative Bank
Powerhouse Technologies, Inc.
February 28, 1998
Page 2
and the bank waive the Borrower's compliance with any provision of the Credit
Agreement which would be contravened by the Borrower's registration and sale
(collectively the "Transaction") of: (a) approximately 1,468,026 shares (the
"Xxxxx Shares") of the Borrower's stock controlled by Xx. Xxxxxxx Xxxxx (the
"Selling Shareholders") and the Selling Shareholders' retention of the proceeds
of such sale; and (b) approximately 220,204 shares of the Borrower's stock for
the Borrower's own account (the "Borrower Shares") as an over allotment option
as required by the underwriters of the offering. In connection with such
request, the Borrower has represented and warranted to the Administrative Bank
and the Bank that:
1. neither the Borrower nor any of its Subsidiaries will purchase the
Xxxxx Shares;
2. none of the Borrower's or any of its Subsidiaries' assets will
otherwise be paid to any of the Selling Shareholders except for the
payment of expenses incidental to the Transaction and any amounts owed
to Xx. Xxxxx in connection with his status as a member of the Board of
Directors of the Borrower; and
3. no Change of Control will result from the consummation of the
Transaction.
Based on the above representations and warranties, the Administrative Bank
and the Bank hereby waive:
1. any Default or Event of Default that would arise under the Credit
Agreement as a result of the consummation of the Transaction so long
as no Change of Control results therefrom; and
2. the Bank Registration Rights in connection with such Transaction.
The waiver granted herein is limited to the Transaction and is not
intended, and shall not be construed, to be a general waiver of any term or
provision of the Credit Agreement or a waiver of any other existing or future
Default or Event of Default or of any other waiver of the Bank Registration
Rights. Notwithstanding anything to the contrary contained in this letter, the
Administrative Bank's and the Bank's waivers set forth herein are hereby subject
in all respects to the full and complete truth and accuracy of all of the
Borrower's representations and warranties contained and set forth herein,
irrespective of the occurrence or nonoccurrence of any due diligence or other
inquiry by the Administrative Bank or the Bank with respect thereto. Upon and in
the event of any misrepresentation or breach of warranty by the Borrower with
respect to any matter set forth herein, this letter waiver shall be deemed null
and void and of no effect ab initio.
C. Amendment to Stock Agreement and Waiver.
Powerhouse Technologies, Inc.
February 28, 1998
Page 3
In addition, the Borrower has requested that the Administrative Bank and
the Bank waive their rights (the "Bank Registration Rights") they may claim
under Section 1.b. of the Stock Agreement dated as of January 30, 1997 (the
"Stock Agreement") to require the Borrower to include the "PB Shares" (as
defined in the Stock Agreement) in the above described registration. It is noted
that for purposes of that Section 1.b of the Stock Agreement that there has not
been any foreclosure on the Pledged Shares as provided in that provision;
provided, however, that the Borrower hereby agrees with the Administrative Bank
and the Banks that the parenthetical clause beginning in the 7th line of Section
1 (b) of the Stock Agreement is amended in its entirety to read as follows:
"(all such Common Shares being referred to as the 'PB Subject Shares;'
and together with the DR Subject Securities being sometimes hereinafter
referred to as the 'Subject Securities')."
If this letter accurately sets forth the Administrative Bank's and the
Bank's agreements with the Borrower as to amendments and waivers described
herein, please execute the enclosed copy of this letter and return it to the
undersigned.
This letter amendment shall be effective as of the date first above stated
on the date (the "Effective Date") on which the Administrative Bank receives a
copy of this letter amendment executed by the Borrower together with the
following:
(a) name change amendments to the UCC Financing Statements naming the
Borrower in a form provided by the Administrative Bank appropriately completed
and duly executed by the Borrower;
(b) a Consent and Acknowledgment in the form provided by the Administrative
Bank appropriately completed and duly executed by each Guarantor;
(c) such other documents, instruments or certificates as the Administrative
Bank may request.
By executing this letter amendment, the Borrower represents and warrants to
the Administrative Bank and the Bank that:
(a) The execution, delivery and performance by the Borrower of this letter
amendment and any other documents to which the Borrower is a party have been
duly authorized by all necessary corporate or partnership action, do not require
any approval or consent of, or any registration, qualification or filing with,
any government agency or authority or any approval or consent of any other
person (including, without limitation, any stockholder or partner), do not and
will not conflict with, result in any violation of or constitute any default
under, any provision of the Borrower's articles
Powerhouse Technologies, Inc.
February 28, 1998
Page 4
of incorporation or bylaws, any agreement binding on or applicable to the
Borrower or any of its property, or any law or governmental regulation or court
decree or order, binding upon or applicable to the Borrower or of any of its
property and will not result in the creation or imposition of any security
interest or other lien or encumbrance in or on any of its property pursuant to
the provisions of any agreement applicable to the Borrower or any of its
property except pursuant to the documents required to be executed and delivered
pursuant hereto;
(b) The Credit Agreement as amended by this letter amendment and the other
Loan Documents to which any Loan Party is a party are the legal, valid and
binding obligations of each Loan Party which is a party thereto and are
enforceable in accordance with their respective terms, subject only to
bankruptcy, insolvency, reorganization, moratorium or similar laws, rulings or
decisions at the time in effect affecting the enforceability of rights of
creditors generally and to general equitable principles which may limit the
right to obtain equitable remedies;
(c) Before and after giving effect to this letter amendment, the
representations and warranties in ARTICLE VII of the Credit Agreement shall be
true and correct as though made on the date hereof except for changes that are
permitted by the terms of the Credit Agreement and for changes that are required
by the terms of this Letter amendment. The execution by the Borrower of this
letter amendment shall be deemed a representation that the Borrower has complied
with the foregoing condition.
(d) Before and after giving effect to this letter amendment, no Default or
no Event of Default shall have occurred and be continuing under the Credit
Agreement except for those expressly waived by the terms hereof. The execution
by the Borrower of this Letter amendment shall be deemed a representation that
the Borrower has complied with the foregoing condition.
(e) No events have taken place and no circumstances exist at the date
hereof which would give the Borrower the right to assert a defense, offset or
counterclaim to any claim by the Administrative Bank or any Bank for payment of
the Obligations
By executing this letter amendment, the Borrower further agrees with us that:
(a) upon the Effective Date, each reference in the Credit Agreement to
"this Agreement," "hereunder," "hereof," "herein" or words of like import
referring to the Credit Agreement, and each reference to the "Credit Agreement,"
"thereunder," "thereof," "therein" or words of like import referring to the
Credit Agreement in any other Loan Document shall mean and be a reference to the
Credit Agreement as amended hereby;
(b) the execution, delivery and effectiveness of this letter amendment
shall not, except as expressly provided herein or therein, operate as a waiver
of any of our rights, powers or remedies
Powerhouse Technologies, Inc.
February 28, 1998
Page 5
under the Credit Agreement or any other Loan Document, nor constitute a waiver
of any provision of the Credit Agreement or any such Loan Document; and
(c) the Borrower agrees to pay on demand all of our costs and expenses
incurred in connection with the preparation, reproduction, execution and
delivery of this letter amendment and the other documents to be delivered
hereunder or thereunder, including our reasonable attorneys' fees and legal
expenses.
Very truly yours,
U.S. BANK NATIONAL ASSOCIATION, as the
successor by merger to First Bank National Association
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------------
Its: Vice President
-------------------------------------------------
POWERHOUSE TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------
Title: CFO
-------------------------
CONSENT
Each of the undersigned, being a guarantor of the obligations of Video
Lottery Technologies, Inc. (the "Borrower") to U. S. Bank National Association,
as the successor by merger to First Bank National Association (the "Lender"),
pursuant to one of the Subsidiary Guaranties dated as of February 16, 1995 (the
"Guaranty"), hereby:
(i) consents to the Borrower's execution and delivery of that certain
letter amendment dated February 28, 1998 (the "Amendment"), further
amending that certain Credit Agreement dated as of February 16, 1995 among
the Borrower, First Bank National Association, as administrative bank (the
"Administrative Bank"), and First Bank National Association ("the Bank") as
the only Bank party thereto as amended by that certain Amendment No. 1 to
Credit Agreement and Waiver dated as of June 26, 1995, Second Amendment to
Credit Agreement dated as of March 4, 1996, Third Amendment to Credit
Agreement dated as of April 30,1996, Waiver and Fourth Amendment to Credit
Agreement dated as of August 19,1996 and Consent, Waiver and Fifth
Amendment to Credit Agreement dated as of January 30, 1997 (as so amended,
the "Credit Agreement")and the other documents required to be executed and
delivered pursuant to the Amendment;
(ii) ratifies and confirms that the Loan Documents to which such Loan Party
is a party remain in full force and effect; and
(iii)represents and warrants to the Administrative Bank and the Bank that
no events have taken place and no circumstances exist at the date hereof
which would give the undersigned the right to assert a defense, offset or
counterclaim to any claim by the Administrative Bank or the Bank for
payment of the Obligations.
Nothing in this Consent requires the Administrative Bank or the Bank to
obtain the consent of any of the undersigned to any future amendment,
modification or waiver to the Agreement or any other Loan Document except as
expressly required by the terms of the Loan Documents to which the undersigned
is a party.
This Consent may be executed in one or more counterparts, each of which
shall be deemed to be an original.
Dated as of February 28, 1998
Video Lottery Consultants, Inc.
By /s/ Xxxxx X. Xxxxx
------------------------------------------
Its Assistant Secretary
------------------------------------------
Automated Wagering International, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
------------------------------------------
Raven's D&R Music, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
Automatic Music Service of Billings, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
Automation First, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
United Wagering Systems, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
United Tote World Wide, Inc.
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
United Tote Company
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------------
Its Treasurer
-----------------------------------------
