THIRD AMENDMENT TO
CREDIT AGREEMENT
This Third Amendment to Credit Agreement (the "Amendment") is entered
into this 31st day of May, 2001, 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, as amended by the Second Amendment to Credit
Agreement dated April 12, 2001 (as amended, the "Agreement");
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.
(a) Section 2, Subsections 2.1(a), (c) and (g) of the Agreement
are hereby amended and restated in their entirety as follows:
2.1. Revolving Loans. (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 (i) Letter of Credit Liabilities and
less (ii) the Swap Reserve (as defined in this paragraph); 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, and less (v) the Swap Reserve. 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. Additionally, Bank shall create and maintain a
reserve, taken in connection with the potential liability of
Bank under the Indemnity Agreement in the amount of $150,000,
which amount may be increased at any time as Bank in its sole
discretion elects (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 Five Million Dollars ($30,000,000.00) less the
Letter of Credit Liabilities, and less the Swap Reserve. If
the amount of Revolving Loans outstanding at any time under
the Facility 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.
(c) On the execution of the Amendment, Borrower shall duly
issue and deliver to Bank an amended and restated Revolving
Note in the form of Exhibit 2.1 attached to the Amendment (the
"Revolving Note") in the principal amount of $30,000,000.00
bearing interest as set forth in the Revolving Note.
(g) The term of the Facility will expire on May 31, 2004 (the
"Termination Date") and the Revolving Note will become payable
in full on that date.
(b) Section 2, Subsection 2.2(f) is hereby amended and restated
as follows:
(f) Borrower shall have the right to prepay the Revolving
Loans in whole at any time, or in part from time to time,
provided that, at any time when a Pricing Option is in effect,
no prepayment of such portion of the principal amount of the
Revolving Loans as is subject to such Pricing Option shall be
made except on the last day of the applicable Interest Period
unless such prepayment shall include all fees and costs
relating to such prepayment including but not limited to break
funding fees. Each notice of prepayment shall be irrevocable
and shall obligate Borrower to prepay the amount stated
therein on the date stated therein. Notwithstanding the
foregoing, in the event that Borrower prepays the Revolving
Loans in full on or before May 31, 2002, Borrower shall pay a
prepayment penalty equal to 1.5% of the face amount of the
Revolving Note. In the event that Borrower prepays the
Revolving Loans in full after May 31, 2001, but on or before
May 31, 2003, Borrower shall pay a prepayment penalty equal to
1.0% of the face amount of the Revolving Note. In no other
event shall any prepayment penalty be applicable.
(c) Section 2, Subsection 2.10 (b) is hereby amended in its
entirety as follows:
2.10(b) Unused Facility Fee. So long as this Agreement is in
effect, Borrower will pay to Bank an unused facility fee at an
annual rate in an amount equal to a) the Facility Fee Margin
multiplied by b) an amount equal to that portion of the
Facility that is not outstanding on each day (the "Unused
Facility Fee"), which will be payable on the first (1st) day
of each calendar quarter in arrears for the previous calendar
quarter with a final payment due on the termination of this
Agreement.
(d) Section 2, Subsection 2.12 (f) is hereby amended and restated
in its entirety as follows:
2.12(f). Letter of Credit Fees. (i) As to commercial Letters
of Credit, Borrower shall pay to Bank a letter of credit fee
equal to the Bank's standard Letter of Credit fees as to
commercial Letters of Credit (which are currently as set forth
on Exhibit. 2.12 (f)) payable upon issuance of such Letter of
Credit(s) ("Commercial Letter of Credit Fee") with respect to
the stated amount of each such Letter of Credit. Borrower
shall also be responsible for fees customarily charged by the
Bank in connection with the issuance, drawings or transfers of
a commercial Letter of Credit. All computations of interest
and fees shall be made by Bank; interest and all fees stated
as an annual rate shall be calculated on the basis of a year
of 360 days, and charged in each case for the actual number of
days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable. Each determination by Bank of an interest rate or fee
hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(ii) As to standby Letters of Credit, Borrower shall pay to
Bank a per annum letter of credit fee in an amount equal to a)
the Applicable Revolver LIBOR Margin in effect at the issuance
of, and at each one year's anniversary of, each standby Letter
of Credit, multiplied by b) the face amount of each such
standby Letter of Credit, payable upon issuance of, and upon
each one year anniversary of, each such standby Letter of
Credit, in advance, prorated for any partial year (the
"Standby Letter of Credit Fee"). Notwithstanding the
foregoing, for purpose of the calculating the Standby Letter
of Credit Fee on the existing standby Letter of Credit issued
by Bank in favor of Firstar Bank, N.A. in the amount of Three
Hundred Fifty Thousand Dollars ($350,000) the Standby Letter
of Credit Fee shall be 1.50% per annum of the face amount of
such standby Letter of Credit payable annually in advance
through its current expiration date. Borrower shall also be
responsible for fees customarily charged by Bank in connection
with the issuance, drawings or transfers of a standby Letter
of Credit. All computations of interest and fees shall be made
by Bank; interest and fees as an annual rate shall be
calculated on the basis of a year of 360 days, and charged in
each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by
Bank of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error. As used
in this Agreement, "Letter of Credit Fees" shall mean the
Commercial Letter of Credit Fees and the Standby Letter of
Credit Fees.
(e) Section 2 is hereby amended to add the following
Subsection 2.12:
2.12 Hedge Agreements.Borrower shall by not later than June
30, 2001 enter into and continuously maintain throughout the
term of this Agreement, one or more Hedge Agreements in form
reasonably acceptable to Bank in which Borrower maintains at
least an amount equal to 50% of the face amount of the
Facility. Borrower's $10,000,000 Swap Agreement with Firstar
Bank. N.A., shall be credited toward Borrower's compliance
with this covenant. For purposes of this Subsection 2.12,
"Hedge Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar
agreement, or similar agreements or arrangement designed to
protect against interest rate exposure or interest rate
fluctuations, with a financial institution or institutions
reasonably acceptable to Bank and which conforms to ISDA (or
any successor) standards.
(f) Section 4, Subsection 4.2 is hereby amended to add the
following Subsection 4.2(j):
(j) Borrower shall within fifteen days of the close of each
fiscal quarter complete, execute and deliver to Bank a
certificate evidencing its Funded Debt to EBITDA Ratio in form
to be supplied by Bank and reasonably acceptable to Borrower.
(g) Section 4, Subsection 4.10 is hereby amended and restated in
its entirety as follows:
4.10 Depository/Banking Services. So long as this Agreement is
in effect, Bank will be the principal depository in which a
majority of Borrower's funds are deposited (excepting de
minimus accounts for the Borrower's convenience provided that
Borrower gives Bank notice of the existence of any such
accounts within thirty (30) days of being opened)), and the
principal bank account of Borrower, as long as this Agreement
is in effect, and Borrower will maintain in its principal bank
account at all times collected funds in a minimum amount equal
to .875% of the face amount of the Facility and shall grant
Bank the first opportunity to provide any corporate banking
services required by Borrower and its Affiliates, including,
without limitation, payroll, cash management, treasury
management, and employee benefit plan services.
(h) Section 4.12 of the Agreement is hereby amended and restated
in its entirety as follows:
4.12 Assignment of Lease Proceeds. Borrower shall use its best
efforts to deliver to Bank no later than August 1, 2001
original fully executed Assignment of Lease Proceeds for all
of Borrower's Leases outstanding as of January 25, 2001.
Borrower shall use its best efforts to deliver to Bank
Assignment of Lease Proceeds for all of Borrower's Leases
executed after such date within sixty (60) days of the
execution of any such Leases. Borrower shall use its best
efforts to deliver to Bank Assignments of Lease Proceeds for
all Leases acquired by Borrower from On Point within ninety
(90) days of the date such Leases are acquired. All
Assignments of Lease Proceeds shall be in the form set forth
in Exhibit 7.1 (g) or with such minor variations therefrom as
reasonably approved by Bank. In the event that any Assignment
of Lease Proceeds is not delivered to Bank within the time
periods set forth herein, the revenue generated by such Leases
shall be excluded from the definition of Eligible Lease
Payments in determining Borrower's availability under the
Facility.
(i) Section 5, Subsection 5.1 is hereby amended and restated in
its entirety as follows:
5.1 Indebtedness. Borrower will not incur, create, assume or
permit to exist any additional Indebtedness for borrowed money
(other than the Obligations) or Indebtedness on account of
deposits, advances or progress payments under contracts,
notes, bonds, debentures or similar obligations or other
indebtedness evidenced by notes, bonds, debentures,
capitalized leases or similar obligations in excess of
$750,000.00 in the aggregate in any calendar year without the
written consent of Bank in its sole discretion, except that
the limitation contained herein shall not apply to: (a)
performance bonds required to be obtained in connection with
lottery Leases, and (b) the Subordinated Debt.
(j) Section 5, Subsection 5.12 of the Agreement is deleted in its
entirety.
(k) Section 5, Subsection 5.13 of the Agreement is hereby amended
and restated in its entirety as follows:
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
5/31/01 $15,953,000
9/30/01 $16,617,000
12/31/01 $18,142,000
3/31/02 $18,151,000
6/30/02 $18,738,000
9/30/02 $19,365,000
12/31/02 $19,221,000
3/31/03 $19,726,000
6/30/03 $19,968,000
9/30/03 $20,000,000
12/31/03 $20,000,000
3/31/04 $20,000,000
(l) Section 5, Subsection 5.14 of the Agreement is deleted in its
entirety.
(m) Section 5, Subsection 5.15 is hereby added to the Agreement
as follows:
5.15 Funded Debt / EBITDA Ratio. Borrower will not at any time
permit its Funded Debt to EBITDA ratio to exceed the ratio set
forth below for Funded Debt as calculated on the date below
and for EBITDA calculated based on a trailing twelve month
period from the date set forth below:
Determination Date Ratio
6/30/01 3.00 : 1
9/30/01 3.10 : 1
12/31/01 3.00 : 1
3/31/02 3.00 : 1
6/30/02 2.50 : 1
9/30/02 2.50 : 1
12/31/02 2.25 : 1
3/31/03 2.25 : 1
6/30/03 2.00 : 1
9/30/03 2.00 : 1
12/31/03 1.75 : 1
3/31/04 1.75 : 1
6/30/04 1.75 : 1
(n) Section 5, Subsection 5.16 is hereby added to the Agreement
as follows:
5.16 Indebtedness to EBITDA Ratio. Borrower will not at any
time permit its Indebtedness to EBITDA ratio to exceed the
ratio set forth below for Indebtedness as calculated on the
date below and for EBITDA calculated based on a trailing
twelve month period from the date set forth below:
Determination Date Ratio
6/30/01 3.50 : 1
9/30/01 3.50 : 1
12/31/01 3.50 : 1
3/31/02 3.50 : 1
6/30/02 3.25 : 1
9/30/02 3.25 : 1
12/31/02 3.00 : 1
3/31/03 3.00 : 1
6/30/03 2.75 : 1
9/30/03 2.75 : 1
12/31/03 2.50 : 1
3/31/04 2.50 : 1
6/30/04 2.50 : 1
(o) Section 5, Subsection 5.17 is hereby added to the Agreement
as follows:
5.17 Maximum Annual Capital Expenditures. Borrower will not
make any capital expenditure, or any commitment therefore, or
obtain equipment subject to a purchase money security
interest, trust deed or lease, in an amount exceeding $500,000
in the aggregate in any calendar year, without the written
consent of Bank in its sole discretion.
.
(p) Section 5, Subsection 5.18 is hereby added to the Agreement
as follows:
5.18 Minimum Fixed Charge Coverage Ratio. Borrower will not at
any time permit its Fixed Charge Coverage Ratio to be less
than the ratio set forth below calculated based on a trailing
twelve month period from the date set forth below:
Determination Date Ratio
6/30/01 2.25 : 1
9/30/01 2.25 : 1
12/31/01 2.25 : 1
3/31/02 2.25 : 1
6/30/02 3.00 : 1
9/30/02 3.00 : 1
12/31/02 3.00 : 1
3/31/03 3.00 : 1
6/30/03 3.00 : 1
9/30/03 3.00 : 1
12/31/03 3.00 : 1
3/31/04 3.00 : 1
6/30/04 3.00 : 1
(q) Section 5, Subsection 5.19 is hereby added to the Agreement
as follows:
5.19 Cancelled Lease Units. Commencing on June 30, 2001, and
measured at the end of each subsequent fiscal quarter,
Borrower shall not permit lottery machines subject to Leases
to be unilaterally cancelled without a corresponding sale or
lease of replacement lottery machines during the preceding
twelve month period which exceeds a number equal to 15% of the
total number of lottery machines being leased by Borrower as
of the end of such fiscal quarter.
(r) Section 5, Subsection 5.20 is hereby added to the Agreement
as follows:
5.20 Subordinated Debt. Borrower shall make no payments upon
the Subordinated Debt, except that Borrower shall be
permitted to make the scheduled monthly interest payment
provided that: (i) Borrower is in compliance with all
covenants set forth in Section 5 of the Credit Agreement;
(ii) there is no Event of Default or breach of the Credit
Agreement or the Loan Documents (as defined therein), (iii)
payment of the proposed payment will not cause Borrower to be
in violation of the terms of the Credit Agreement or the Loan
Documents (as defined therein). Borrower shall further be
permitted to make one principal payment per fiscal quarter
provided that Borrower has met each of conditions (i), (ii),
and (iii) above, and further provided that Borrower shall
have maintained available credit under the Facility (as
defined in the Credit Agreement) of at least $2,000,000 plus
the amount of the proposed principal payment on a proforma
basis on each of: a) the last day of each month for the
fiscal quarter prior to the quarter in which the proposed
principal payment is to be made, and b) the last day of each
month for the fiscal quarter in which the payment is made.
(s) Exhibit A to the Agreement, paragraph 5 is hereby amended and
restated in its entirety as follows:
"Applicable Revolver Prime Margin" shall mean the Applicable
Revolver Prime Margin, expressed as a percentage, which shall
be .50% from June 1, 2001 until the next Calculation Date, and
thereafter determined based on the Funded Debt to EBITDA Ratio
of Borrower as follows:
Applicable Revolver Prime Margin Funded Debt to EBITDA Ratio
- .50% Less than 1.75:1.00
- .25% Equal to or greater than 1.75:1.00 but
less than 2.25 : 1.00
0% Equal to or greater than 2.25 : 1:00 but
less than 2.50 : 1.00
+.25% Equal to or greater than 2.50 : 1:00 but
less than 2.75 : 1.00
+.50% Equal to or greater than 2.75:1.00
The Funded Debt to EBITDA Ratio shall be calculated as set
forth in the definition of Funded Debt to EBITDA Ratio on each
Calculation Date.
(t) Exhibit A to the Agreement, paragraph 6 is hereby amended and
restated in its entirety as follows:
"Applicable Revolver LIBOR Margin", expressed as a percentage,
shall be 3.00% from June 1, 2001 until the next Calculation
Date and thereafter as determined based on the Funded Debt to
EBITDA Ratio of Borrower, as follows:
Applicable Revolver LIBOR Margin Funded Debt to EBITDA Ratio
2.0% Less than 1.75:1.00
2.25% Equal to or greater than 1.75:1.00 but
less than 2.25 : 1.00
2.50% Equal to or greater than 2.25 : 1:00 but
less than 2.50 : 1.00
2.75% Equal to or greater than 2.50 : 1:00 but
less than 2.75 : 1.00
3.00% Equal to or greater than 2.75:1.00
The Funded Debt to EBITDA Ratio shall be calculated as set
forth in the definitions of Funded Debt to EBITDA Ratio on each
Calculation Date.
(u) Exhibit A to the Agreement, paragraph 11 is hereby amended
and restated in its entirety as follows:
"Calculation Date" means in regards to the calculation of
Funded Debt to EBITDA Ratio the first day of the calendar
month following the month of receipt by Bank from Borrower of
Borrower's audited financial statement for any calendar year
end period or receipt from Borrower by Bank of Borrower's 10K
or 10Q for any other calendar quarter provided however if such
audited financial statement, 10K or 10Q is received in the
last three (3) business days of the month it shall be deemed
received in the next calendar month. Borrower shall deliver to
Bank its audited calendar year end financial statement within
5 days of its receipt by Borrower and its 10K or 10Q within
five (5) days of filing by the Borrower.
(t) Exhibit A to the Agreement, paragraph 17 is hereby amended and
restated in its entirety as follows:
"EBITDA" means net income of Borrower before taxes, interest
expense, depreciation and amortization expenses, plus
principal payments received from sales type lease payments,
and less extraordinary gains.
(t) Exhibit A to the Agreement, paragraph 58 is hereby amended and
restated in its entirety as follows:
"Standby and Commercial Letter of Credit Commitment" means Two
Million Five Hundred Thousand Dollars ($2,500,00.00).
(u) Exhibit A to the Agreement, paragraph 60 is hereby amended
and restated in its entirety as follows:
"Tangible Net Worth" means the total of the capital stock
(less treasury stock), paid-in surplus, general contingency
reserves and retained earnings (deficit) of Borrower, and
the value of all leases acquired from On Point, all as
determined and/or valued in accordance with generally
accepted accounting principles, after eliminating all
inter-company items and all amounts properly attributable to
minority interests, if any, in the stock and surplus of
any Subsidiary plus subordinated debt there to
----
Borrower's shareholders as a result of cash loans to the
Borrower, minus the following items (without duplication
-----
of deductions) if any, appearing on the consolidated balance
sheet of Borrower: (i) all deferred charges (less
amortization, unamortized debt discount and expense and
corporate organization expenses); (ii) the book amount of
all assets which would be treated as intangibles under
generally accepted accounting principles, including, without
limitation, such items as good-will, trademark applications,
trade names, service marks, brand names, copyrights,
patents, patent applications and licenses, and rights with
respect to the foregoing; (iii) the amount by which
aggregate net inventories or aggregate net securities
appearing on the consolidated balance sheet exceed the lower
of cost or market value (at the date of such balance sheet)
thereof; (iv) any subsequent write-up in the book amount of
any asset resulting from a revaluation thereof from the book
amount entered upon acquisition of such asset; and (v) any
outstanding stock warrants.
(v) Exhibit A to the Agreement, is hereby amended to add the
following definitions:
"Facility Fee Margin", expressed as a percentage, shall be
.50% from the date of execution of this Amendment until the
next Calculation Date and thereafter as determined based on
the Funded Debt to EBITDA Ratio of Borrower, as follows:
Facility Fee Margin Funded Debt to EBITDA Ratio
.125% Less than 1.75:1.00
.25% Equal to or greater than 1.75:1.00 but
less than 2.25 : 1.00
.25% Equal to or greater than 2.25 : 1:00 but
less than 2.50 : 1.00
.375% Equal to or greater than 2.50 : 1:00 but
less than 2.75 : 1.00
.50% Equal to or greater than 2.75:1.00
The Funded Debt to EBITDA Ratio shall be calculated as set
forth in the definitions of Funded Debt to EBITDA Ratio on
each Calculation Date
"Fixed Charges" means the sum of Borrower's scheduled
principal payments (including principal payments arising from
the acquisition of the assets of On-Point), interest,
dividends, income tax expense as reported on Borrower's profit
and loss statements, capital lease payments and unfinanced
capital expenditures (excluding Borrower's cost of lottery
machines subject to Leases) for the applicable measurement
period. Notwithstanding the foregoing, Fixed Charges shall not
include principal payments on the Subordinated Debt.
"Fixed Charge Coverage Ratio" means the ratio of (a)
Borrower's EBITDA for the applicable measurement period to (b)
Borrower's Fixed Charges for the applicable measurement
period.
"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 (including but not limited
to the $9,000,000 seller note), as reflected on Borrower's
balance sheet.
"Funded Debt to EBITDA Ratio" means the ratio of Borrower's
Funded Debt to the Borrower's EBITDA. The Funded Debt to
EBITDA Ratio shall be calculated for each calendar quarter on
each Calculation Date and shall be effective from each
Calculation Date to the subsequent Calculation Date. The
calculation of the Funded Debt to EBITDA Ratio shall be based
upon Borrower's audited year end financial statement for the
year end calculation and upon applicable securities filing
forms 10Q or 10K for other calendar quarterly periods. The
calculation shall be made on a trailing twelve month basis.
The first calculation period shall commence for the twelve
month period ending March 31, 2001.
"On Point" means On-Point Technology Systems, Inc., a Nevada
corporation.
"Subordinated Credit Agreement" means that certain
Subordinated Credit Agreement between Bank and Borrower of
even date herewith.
"Subordinated Debt" means all Obligations of Borrower to Bank
under the Subordinated Credit Agreement.
2. Representations, Warranties and Covenants of Borrower. To
induce Bank to enter into this Amendment, Borrower represents
and warrants as follows:
(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 Amendment, and are
true and correct as of the date of execution hereof.
(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
and such note on behalf of Borrower.
3. Costs and Expenses. Upon execution of this Amendment
Borrower shall pay to Bank a commitment fee of $125,000, as
well as all of Bank's costs and expenses, including reasonable
attorney's fees, incurred in connection with this Amendment.
4. Conditions. Bank's obligations under this Amendment are
subject to the following conditions:
(a) Borrower has executed and delivered to Bank this Third Amendment
to Credit Agreement.
(b) Borrower has executed and delivered to Bank the Amended and
Restated Revolving Note attached hereto as Exhibit 2.1.
(c) Borrower shall have available credit under the Facility in the
minimum amount of $1,750,000.
(d) The representations and warranties of Borrower in Section 2
hereof shall be true and correct on the date of execution of this
Amendment.
(e) Borrower has paid the Commitment Fee in the amount of $125,000,
and has paid all expenses and attorneys' fees incurred by Bank in
connection with the preparation, execution and delivery of this
Amendment and related documents.
(f) Borrower has executed and delivered to Bank the Borrower's
Certificate attached hereto.
(g) Borrower has executed and delivered to Bank such security
documents as Bank may reasonably request, including but not
limited to such documents as are sufficient to provide Bank with
a first and best lien upon all assets acquired from On Point,
including but not limited to UCC-1 financing statements to be
filed in California, Illinois and Missouri, and mortgages upon
all patents and other intellectual property.
5. 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 writing. 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 benefit 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
will constitute one and the same instrument.
(h) Bank hereby consents to Borrower's acquisition of the assets of
On Point pursuant to the Asset Purchase Agreement by and between
Borrower and On Point dated February 23, 2001and the transactions
contemplated therein, and agrees that the execution of the Asset
Purchase Agreement and the effectuation of the transactions
contemplated thereby shall not constitute a breach of this
Agreement as amended herein.
(i) Bank acknowledges that Borrower shall or may establish an
additional place of business at San Marcos, California in
connection with the acquisition of assets from On Point, consents
to the establishment of such new place of business, and agrees
that such shall not constitute an Event of Default under the
Credit Agreement or the Loan Documents.
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:______________________________
Its:______________________________
FIFTH THIRD BANK
By:______________________________
Its:______________________________
