FLOATING EURODOLLAR NOTE (Non-Revolving)
TAX
I.D.
NO._20-0678696_
(Non-Revolving)
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$600,000
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Detroit,
Michigan
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December
5, 2006
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On
or
before December 5, 2007 (herein called the “Maturity Date”), FOR VALUE RECEIVED,
the undersigned, NEW
MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED, an Irish
corporation
(herein
called “Borrower”), promises to pay to the order of COMERICA BANK, a Michigan
banking corporation (herein called “Bank”), in lawful currency of the United
States of America, the principal sum of SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($600,000), together with interest thereon as hereinafter set
forth.
Subject
to the terms and conditions of this Note, the unpaid principal balance from
time
to time outstanding under this Note during an applicable Monthly Period shall
bear interest at a per annum rate equal to the Eurodollar Rate applicable to
such Monthly Period. For purposes of this Note, the Eurodollar Rate for an
applicable Monthly Period shall be determined as of the Interest Reset Date
which is the first day of such Monthly Period, and (subject to the terms and
conditions of this Note) such interest rate shall remain and continue as the
Applicable Interest Rate for the entire unpaid principal balance from time
to
time outstanding under this Note at any time during such Monthly Period, until
the next-occurring Interest Reset Date, at which time, the Eurodollar Rate
shall
again be determined and recalculated in accordance with the foregoing for the
next-occurring Monthly Period.
This
is a
Note pursuant to which Xxxxxxxx may make multiple advances, provided there
is no
Event of Default hereunder, but sums repaid may not be readvanced. A request
for
advance shall be submitted in writing to Bank.
Accrued
and unpaid interest hereunder shall be payable monthly, in arrears, on the
first
(1st) Business Day of each month commencing January 1, 2007, until maturity
(whether as stated herein, by acceleration, or otherwise). Interest accruing
hereunder shall be computed on the basis of a year of 360 days, and shall be
assessed for the actual number of days elapsed, and in such computation, to
the
extent applicable, effect shall be given to any change in the Applicable
Interest Rate as a result of any change in the Prime Rate on the date of each
such change in the Prime Rate. A late payment charge equal to 5% of each late
payment may be charged on any payment not received by the Bank within 10
calendar days after the payment due date, but acceptance of payment of this
charge shall not waive any Default under this Note.
The
Applicable Interest Rate and the amount and date of any repayments shall be
noted on Bank’s records, which records shall be conclusive evidence thereof,
absent manifest error; provided, however, any failure by Bank to make any such
notation, or any error in any such notation, shall not relieve Borrower of
its
obligations to repay Bank all amounts payable by Borrower to Bank under or
pursuant to this Note, when due in accordance with the terms
hereof.
Borrower
may prepay all or part of the outstanding balance of this Note at any time
without penalty or premium; provided, however, Borrower shall not be permitted
to reborrow any amounts so prepaid.
In
the
event that any payment under this Note becomes due and payable on any day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day, and, to the extent applicable, interest shall continue
to accrue and be payable thereon during such extension at the rates set forth
in
this Note.
All
payments to be made by Borrower to Bank under or pursuant to this Note shall
be
in immediately available funds, without setoff or counterclaim, and in the
event
that any payments submitted hereunder are in funds not available until
collected, said payments shall continue to bear interest until collected.
Borrower hereby authorizes Bank to charge any account of Borrower with Bank
for
all sums due hereunder when due in accordance with the terms
hereof.
Borrower
acknowledges and agrees that if Bank shall designate a Eurodollar Lending Office
which maintains books separate from those of the rest of Bank, Bank shall have
the option of maintaining all or any part of the Indebtedness under this Note
on
the books of such Eurodollar Lending Office.
If
Bank
determines that, (a) by reason of circumstances affecting the foreign exchange
and interbank markets generally, deposits in eurodollars in the applicable
amounts or for the relative maturities are not being offered to Bank, or (b)
if
the rate of interest referred to in the definition of "Eurodollar Rate" does
not
accurately or fairly cover or reflect the cost to Bank of making or maintaining
the Indebtedness hereunder at the Eurodollar Rate, then Bank shall forthwith
give notice thereof to the Borrower. Thereafter, until Bank notifies Borrower
that such conditions or circumstances no longer exist, the Indebtedness from
time to time outstanding hereunder shall bear interest at the Prime-based
Rate.
If,
after
the date hereof, the introduction of, or any change in, any applicable law,
rule
or regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by Bank (or its Eurodollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, shall make it unlawful or impossible for the Bank (or its Eurodollar
Lending Office) to make or maintain any Indebtedness hereunder with interest
at
the Eurodollar Rate, Bank shall forthwith give notice thereof to Borrower.
Thereafter, until Bank notifies Borrower that such conditions or circumstances
no longer exist, the right of Borrower to have the Indebtedness hereunder bear
interest at the Eurodollar Rate shall be suspended, and the entire principal
amount outstanding under this Note shall bear interest at the Prime-based
Rate.
2
If
the
adoption after the date hereof, or any change after the date hereof in, any
applicable law, rule or regulation of any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by Bank (or its Eurodollar Lending Office) with any request or
directive (whether or not having the force of law) made by any such authority,
central bank or comparable agency after the date hereof:
| (a) |
shall
subject Bank (or its Eurodollar Lending Office) to any tax, duty
or other
charge with respect to this Note or any Indebtedness hereunder or
shall
change the basis of taxation of payments to Bank (or its Eurodollar
Lending Office) of the principal of or interest on this Note or any
other
amounts due under this Note in respect thereof (except for changes
in the
rate of tax on the overall net income of Bank or its Eurodollar Lending
Office imposed by the jurisdiction in which Bank’s principal executive
office or Eurodollar Lending Office is located);
or
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| (b) |
shall
impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal
Reserve
System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by Bank (or
its
Eurodollar Lending Office) or shall impose on Bank (or its Eurodollar
Lending Office) or the foreign exchange and interbank markets any
other
condition affecting any Indebtedness under this
Note;
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and
the
result of any of the foregoing is to increase the cost to Bank of maintaining
any part of the Indebtedness hereunder or to reduce the amount of any sum
received or receivable by Bank under this Note by an amount deemed by the Bank
to be material, then Borrower shall pay to Bank, within fifteen (15) days of
Borrower’s receipt of written notice from Bank demanding such compensation, such
additional amount or amounts as will compensate Bank for such increased cost
or
reduction. A certificate of Bank, prepared in good faith and in reasonable
detail by Bank and submitted by Bank to Borrower, setting forth the basis for
determining such additional amount or amounts necessary to compensate Bank
shall
be conclusive and binding for all purposes, absent manifest error in
computation.
In
the
event that any applicable law, treaty, rule or regulation (whether domestic
or
foreign) now or hereafter in effect and whether or not presently applicable
to
Bank, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by Bank with any guideline, request or directive of any such
authority (whether or not having the force of law), including any risk-based
capital guidelines, affects or would affect the amount of capital required
or
expected to be maintained by Bank (or any corporation controlling Bank), and
Bank determines that the amount of such capital is increased by or based upon
the existence of any obligations of Bank hereunder or the making or maintaining
any Indebtedness hereunder, and such increase has the effect of reducing the
rate of return on Bank’s (or such controlling corporation's) capital as a
consequence of such obligations or the making or maintaining of such
Indebtedness hereunder to a level below that which Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy), then Borrower
shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written
notice from Bank demanding such compensation, additional amounts as are
sufficient to compensate Bank (or such controlling corporation) for any increase
in the amount of capital and reduced rate of return which Bank reasonably
determines to be allocable to the existence of any obligations of the Bank
hereunder or to the making or maintaining any Indebtedness hereunder. A
certificate of Bank as to the amount of such compensation, prepared in good
faith and in reasonable detail by the Bank and submitted by Bank to Borrower,
shall be conclusive and binding for all purposes absent manifest error in
computation.
3
This
Note
and any other indebtedness and liabilities of any kind of Borrower to Bank,
and
any and all modifications, renewals or extensions thereof, whether joint or
several, contingent or absolute, direct or indirect, now existing or later
arising, and however evidenced (collectively the “Indebtedness”), are secured by
and Bank is granted a security interest in all items at any time deposited
in
any account of Borrower with Bank and by all proceeds of these items (cash
or
otherwise), all account balances of Borrower from time to time with Bank, by
all
property of Borrower from time to time in the possession of Bank, and by any
other collateral, rights and properties described in each and every mortgage,
security agreement, pledge, assignment and other security or collateral
agreement which has been, or will at any time(s) later be, executed by Borrower
or others to or for the benefit of Bank (collectively the “Collateral”).
Notwithstanding the foregoing, (a) to the extent that any portion of the
Indebtedness is a consumer loan, that portion shall not be secured by any deed
of trust or mortgage on or other security interest in any of Borrower’s
principal dwelling or in any of Borrower’s real property which is not a purchase
money security interest as to that portion, unless expressly provided to the
contrary in another place, and (b) if Borrower has given or gives Bank a deed
of
trust or mortgage covering California real property, that deed of trust or
mortgage shall not secure this Note or any other Indebtedness of Borrower,
unless expressly provided to the contrary in another place.
If
(a)
Borrower or any guarantor under a guaranty of all or any part of the
Indebtedness (a “guarantor”) fail(s) to pay this Note, or any part thereof, or
any of the Indebtedness when due, by maturity, acceleration or otherwise, or
fail(s) to pay any Indebtedness owing on a demand basis upon demand; or (b)
Borrower or any guarantor fail(s) to comply with any of the terms or provisions
of any agreement between Borrower or any guarantor and Bank; or (c) Borrower
or
any guarantor become(s) insolvent or the subject of a voluntary or involuntary
proceeding in bankruptcy, or a reorganization, arrangement or creditor
composition proceeding, (if a business entity) cease(s) doing business as a
going concern, (if a natural person) die(s) or become(s) incompetent, (if a
partnership) dissolve(s) or any general partner of it dies, becomes incompetent
or becomes the subject of a bankruptcy proceeding, or (if a corporation) is
the
subject of a dissolution, merger or consolidation; or (d) any warranty or
representation made by Borrower or any guarantor in connection with this Note
or
any of the Indebtedness shall be discovered to be untrue or incomplete in any
material respect; or (e) there is any termination, notice of termination, or
breach of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the Indebtedness; or (f) there is any failure
by
Borrower or any guarantor to pay, when due, any of its indebtedness (other
than
to Bank) or in the observance or performance of any term, covenant or condition
in any document evidencing, securing or relating to such indebtedness; or (g)
Bank deems itself insecure, believing in good faith that the prospect of payment
or performance of this Note or any of the Indebtedness is materially impaired
or
shall fear deterioration, removal or waste of any of the Collateral; or (h)
there is filed or issued a levy or writ of attachment or garnishment or other
like judicial process upon Borrower or any guarantor or any of the Collateral,
including, without limit, any accounts of Borrower or any guarantor with Bank,
then Bank, upon the occurrence and at any time during the continuance or
existence of any of these conditions or events (each a “Default”), may at its
option and without prior notice to Borrower, declare any or all of the
Indebtedness to be immediately due and payable (notwithstanding any provisions
contained in the evidence of it to the contrary), sell or liquidate all or
any
portion of the Collateral, set off against the Indebtedness any amounts owing
by
Bank to Borrower, charge interest at the default rate provided in the document
evidencing the relevant Indebtedness, and exercise any one or more of the rights
and remedies granted to Bank by any agreement with Borrower or which are granted
to Bank under applicable law, or otherwise.
4
Notwithstanding
anything to the contrary set forth in this Note, upon the occurrence and during
the continuance or existence of any Default hereunder, the Indebtedness
outstanding hereunder shall bear interest at a per annum rate equal to the
rate
of interest otherwise prevailing under this Note plus 3% per annum (but in
no
event in excess of the maximum rate permitted by law), which interest shall
be
payable upon demand.
Borrower
waives presentment, demand, protest, notice of dishonor, notice of demand or
intent to demand, notice of acceleration or intent to accelerate, and all other
notices, and agrees that no extension or indulgence to Borrower, or release,
substitution or nonenforcement of any security, or release or substitution
of
any guarantor or any other party, whether with or without notice, shall affect
the obligations of Borrower. Borrower waives all defenses or right to discharge
available under Section 3-605 of the Uniform Commercial Code and waives all
other suretyship defenses or right to discharge. Xxxxxxxx agrees that Bank
has
the right to sell, assign, or grant participations, or any interest, in any
or
all of the Indebtedness, and that, in connection with such right, but without
limiting its ability to make other disclosures to the full extent allowable,
Bank may disclose all documents and information which the Bank now or later
has
relating to Borrower and the Indebtedness.
Borrower
agrees to reimburse Bank, or any other holder or owner of this Note, for any
and
all costs and expenses (including, without limit, court costs, legal expenses
and reasonable attorneys’ fees, whether inside or outside counsel is used,
whether or not suit is instituted, and, if suit is instituted, whether at the
trial court level, appellate level, in a bankruptcy, probate or administrative
proceeding or otherwise) incurred in collecting or attempting to collect this
Note or the Indebtedness or incurred in any other matter or proceeding relating
to this Note or the Indebtedness.
Xxxxxxxx
acknowledges and agrees that there are no contrary agreements, oral or written,
establishing a term of this Note and agrees that the terms and conditions of
this Note may not be amended, waived or modified except in a writing signed
by a
duly authorized officer of Bank expressly stating that the writing constitutes
an amendment, waiver or modification of the terms of this Note. If any provision
of this Note is unenforceable in whole or part for any reason, the remaining
provisions shall continue to be effective. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
This
Note
shall bind Borrower and Xxxxxxxx’s respective successors and
assigns.
For
the
purposes of this Note, the following terms shall have the following
meanings:
5
“Applicable
Interest Rate” shall mean, in respect of the Indebtedness outstanding under this
Note at any time, the Eurodollar Rate or the Prime-based Rate, as determined
in
accordance with the terms and conditions of this Note.
“Business
Day” shall mean any day, other than a Saturday, Sunday or holiday, on which Bank
is open for all or substantially all of its domestic and international business
(including dealings in foreign exchange) in Detroit, Michigan, and, in respect
of notices and determinations relating to the Eurodollar Rate, also a day on
which transactions in the interbank eurodollar market are
conducted.
“Eurodollar
Rate” shall mean, in respect of any applicable Monthly Period, a per annum
interest rate, calculated as of the Interest Reset Date which is the first
day
of such Monthly Period, and which shall be the Applicable Interest Rate under
this Note for such Monthly Period, which is equal to the sum of the Eurodollar
Margin plus the quotient of the following (which amount shall be rounded
upwards, if necessary, to the nearest 1/16th of 1%):
| (a) |
the
per annum interest rate at which Bank's Eurodollar Lending Office
offers
deposits to prime banks in the eurodollar market for a period of
time
equal to such Monthly Period at or about 11:00 a.m. (Detroit, Michigan
time) (or as soon thereafter as practical) on each such Interest
Reset
Date;
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divided
by
| (b) |
a
percentage (expressed as a decimal) equal to 1.00 minus the maximum
rate
during such Interest Period at which Bank is required to maintain
reserves
on "Euro-currency Liabilities" as defined in and pursuant to Regulation
D
of the Board of Governors of the Federal Reserve System or, if such
regulation or definition is modified, and as long as Bank is required
to
maintain reserves against a category of liabilities which includes
eurodollar deposits or includes a category of assets which includes
eurodollar loans, the rate at which such reserves are required to
be
maintained on such category.
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“Eurodollar
Lending Office” shall mean Bank’s office located in the Cayman Islands, British
West Indies, or such other branch of Bank, domestic or foreign, as it may
hereafter designate as its Eurodollar Lending Office by notice to
Borrower.
“Eurodollar
Margin” shall mean two and one half percent (250 basis points) per
annum.
“Interest
Reset Date” shall mean the first (1st) Business Day of each succeeding calendar
month.
“Monthly
Period” shall mean a period of time commencing on a respective Interest Reset
Date (i.e., the first (1st) Business Day of a calendar month), and ending on
the
next-occurring Interest Reset Date (i.e., the first (1st) Business Day of the
next calendar month).
“Prime
Rate” shall mean the per annum interest rate established by Bank as its prime
rate for its borrowers, as such rate may vary from time to time, which rate
is
not necessarily the lowest rate on loans made by Bank at any such
time.
6
“Prime-based
Rate” shall mean a per annum interest rate equal to the Prime Rate.
No
delay
or failure of Bank in exercising any right, power or privilege hereunder shall
affect such right, power or privilege, nor shall any single or partial exercise
thereof preclude any further exercise thereof, or the exercise of any other
power, right or privilege. The rights of Bank under this Agreement are
cumulative and not exclusive of any right or remedies which Bank would otherwise
have, whether by other instruments or by law.
XXXXXXXX
AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,
BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY,
AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT
OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS NOTE OR THE INDEBTEDNESS HEREUNDER.
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NEW
MEDIA LOTTERY SERVICES (INTERNATIONAL) LIMITED, an Irish
corporation
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By:
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Its:
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and
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By:
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Its:
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7
