MORTGAGE OF INTELLECTUAL PROPERTY


         THIS MORTGAGE OF  INTELLECTUAL  PROPERTY  (this  "Mortgage") is entered
into as of the 25th day of January, 2001 by and between INTERLOTT  TECHNOLOGIES,
INC., a Delaware  corporation  having its principal office and place of business
at 7697 Innovation Way, Mason,  Ohio 45040-9695  ("Mortgagor"),  and FIFTH THIRD
BANK, an Ohio banking  corporation  whose  address is 38 Fountain  Square Plaza,
Cincinnati, Ohio 45263 ("Mortgagee"), under the following circumstances:


                              W I T N E S S E T H:
                               -------------------

         WHEREAS,  Mortgagor  and  Mortgagee  are  parties  to a certain  Credit
Agreement dated as of January 25, 2001 (which Credit Agreement,  as the same may
be  renewed,  supplemented,  amended  and/or  restated  from  time to  time,  is
hereinafter  referred  to as the "Credit  Agreement"),  which  Credit  Agreement
provides for Mortgagee to extend credit to Mortgagor; and

         WHEREAS,  Mortgagor  and  Mortgagee  are parties to a certain  Security
Agreement  dated as of January 25, 2001 (which Security  Agreement,  as the same
may be renewed,  supplemented,  amended  and/or  restated  from time to time, is
hereinafter referred to as the "Security  Agreement"),  which Security Agreement
provides for the grant by  Mortgagor to Mortgagee of a security  interest in and
lien against Mortgagor's assets, including,  without limitation,  its intangible
assets;

         NOW,  THEREFORE,  in consideration of the premises set forth herein and
for other good and valuable consideration,  the receipt and sufficiency of which
are hereby acknowledged, Mortgagor agrees as follows:

         1. Incorporation of Credit Agreement and Security Agreement. The Credit
Agreement and Security Agreement and the terms and provisions thereof are hereby
incorporated herein in their entirety by this reference thereto. For purposes of
this  Mortgage,  "Obligations"  shall have the same  meaning as  provided in the
Credit Agreement. For purposes of this Mortgage, satisfaction of the Obligations
shall  occur  when  (i) the  Obligations  have  been  paid in full  and (ii) the
financing   arrangements  between  Mortgagee  and  Mortgagor  under  the  Credit
Agreement have been terminated.



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<PAGE>

         2. Mortgage of Patents,  Copyrights,  Trade  Secrets and  Licenses.  To
secure the satisfaction of the  Obligations,  Mortgagor hereby grants a security
interest in, mortgages, and collaterally assigns to Mortgagee all of Mortgagor's
rights,  title  and  interest  in and to all of its now  owned or  existing  and
hereafter created or acquired:

                  (i) patents and patent applications,  in the United States and
elsewhere,  and the inventions and  improvements  described and claimed therein,
including, without limitation, those patents listed on Exhibit A attached hereto
and  made a  part  hereof,  and  (a)  the  reissues,  divisions,  continuations,
renewals,   extensions  and  continuations-in-part   thereof,  (b)  all  income,
royalties,  damages and payments now and hereafter due and/or  payable under and
with respect thereto,  including,  without limitation,  damages and payments for
past or future infringements thereof, (c) the right to sue for past, present and
future  infringements   thereof,  and  (d)  all  rights  corresponding   thereto
throughout the world (all of the foregoing  patents and  applications,  together
with  the  items  described  in  clauses  (a)-(d),  are  sometimes   hereinafter
individually and/or collectively referred to as the "Patents"); and

                  (ii)  copyrights,   copyright   registrations   and  copyright
applications,  used in the  United  States  and  elsewhere,  including,  without
limitation,  the copyright  registrations and copyright  applications  listed on
Exhibit B attached hereto and made a part hereof, and (a) renewals or extensions
thereof, (b) all income,  royalties,  damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation,  damages and
payments  for past or  future  infringements  thereof,  (c) the right to sue for
past, present and future infringements thereof, and (d) all rights corresponding
thereto  throughout  the  world  (all  of the  foregoing  copyrights,  copyright
registrations and copyright  applications,  together with the items described in
clauses (a)-(d),  are sometimes  hereinafter  individually  and/or  collectively
referred to as the "Copyrights"); and

                  (iii)  all  trade  secrets,  formulas,   processes,   devices,
know-how,  or compilations of information  (including technical  information and
non-technical   information  such  as  customer  lists  and  marketing   plans),
collectively referred to as trade secrets, which are not available to others and
which are maintained as confidential by Mortgagor, including without limitation,
the trade secrets  generally  described on Exhibit C, attached hereto and made a
part  hereof,  and  the  right  to  prevent  misappropriation  and  unauthorized
disclosures  thereof and all rights  corresponding  thereto throughout the world
(all  of the  foregoing  trade  secrets  and  associated  rights  are  sometimes
hereinafter   individually  and/or  collectively   referred  to  as  the  "Trade
Secrets"); and


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<PAGE>

                  (iv) all license  agreements with respect to any or all of the
Patents, the Copyrights,  the Trade Secrets and/or the Trademarks (as defined in
Paragraph 3 below),  or any other  patent,  trademark,  tradename,  copyright or
trade secret, or any application or registration thereof,  between Mortgagor and
any other  party,  whether  Mortgagor  is a licensor or licensee  under any such
license agreement,  including,  without limitation,  any such license agreements
granting  the  right to  prepare  for sale,  sell and  advertise  for sale,  all
inventory now or hereafter  owned by Mortgagor  and now or hereafter  covered by
such license  agreements,  and the licenses  listed on Exhibit D attached hereto
and made a part hereof, and (a) renewals,  extensions or amendments thereof, (b)
all income,  damages and payments for past or future infringements  thereof, (c)
the right to sue for past, present and future infringements thereof, and (d) all
rights  corresponding  thereto  throughout  the  world  (all  of the  foregoing,
together with the items described in clauses (a)-(d), are sometimes  hereinafter
individually and/or collectively referred to as the "Licenses").

         3. Grant of Security Interest in Trademarks. To secure the satisfaction
of the Obligations,  Mortgagor hereby creates and grants to Mortgagee a security
interest in all of Mortgagor's  rights,  title and interest in and to all of its
now owned or existing and hereafter  created or acquired  trademarks,  trademark
registrations,  tradenames and trademark applications, used in the United States
and  elsewhere,   including,  without  limitation,  the  trademarks,   trademark
registrations,  tradenames  and  trademark  applications  listed  on  Exhibit  E
attached  hereto and made a part hereof and (a) renewals or extensions  thereof,
(b) all income,  royalties,  damages and payments now and  hereafter  due and/or
payable  with  respect  thereto,  including,  without  limitation,  damages  and
payments  for past or  future  infringements  thereof,  (c) the right to sue for
past, present and future  infringements  thereof,  (d) all rights  corresponding
thereto  throughout  the  world  (all  of the  foregoing  trademarks,  trademark
registrations, tradenames and applications, together with the items described in
clauses  (a)-(d),  are sometimes  hereinafter  individually  and or collectively
referred to as the "Trademarks")  and (e) the goodwill of Mortgagor's  business,
including,  but not by way of  limitation,  such  goodwill  connected  with  and
symbolized by the Trademarks.

         4. New Patents, Copyrights, Trade Secrets, Trademarks and Licenses. If,
before the  Obligations  shall have been  satisfied,  Mortgagor shall (i) obtain
rights to any new patentable inventions,  copyrights, trade secrets, tradenames,
trademarks,  trademark  registrations or trademark  applications;  (ii) become a
party to any license  agreement with respect to any patents,  copyrights,  trade
secrets or  trademarks;  or (iii) become  entitled to the benefit of any patent,
copyright or trademark, trademark application, trademark registration, copyright
registration,  copyright application, trade secret or license renewal, or patent
for   any   reissue,    division,    continuation,    renewal,    extension   or



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<PAGE>

continuation-in-part  of any  Patent  or any  improvement  on  any  Patent,  the
provisions  of this  Mortgage  shall  automatically  apply thereto and Mortgagor
shall  give  to  Mortgagee  prompt  written  notice  thereof.  Mortgagor  hereby
authorizes Mortgagee as its irrevocable attorney-in-fact to modify this Mortgage
by  amending  Exhibit A,  Exhibit  B,  Exhibit  C,  Exhibit D, and  Exhibit E as
applicable,  to include any future  patents,  patent  applications,  trademarks,
trademark   registrations,   trademark   applications,   copyrights,   copyright
registrations,  copyright applications,  tradenames,  trade secrets and licenses
which  are  rights  owned  by  Mortgagor  and  which  are  Patents,  Copyrights,
Trademarks,  Trade  Secrets or Licenses,  as  applicable,  under  Paragraph 2 or
Paragraph 3 above or under this Paragraph 4, and to file or refile this Mortgage
with the United States Patent and Trademark Office,  the United States Copyright
Office or other appropriate agency.

         5. Term;  Remedies.  The term of the  Mortgage  and  security  interest
granted  herein shall extend until the  Obligations  have been satisfied and the
Credit Agreement and the financing  arrangements between Mortgagee and Mortgagor
thereunder have been terminated. Upon the occurrence and during the continuation
of any "Event of Default" (as defined in the Credit Agreement), Mortgagor hereby
authorizes: (a) the Commissioner of Patents and Trademarks, United States Patent
and  Trademark  Office (or as  appropriate,  such  equivalent  agency in foreign
countries), to issue any and all Patents to Mortgagee as assignee of Mortgagor's
entire interest therein; (b) the Register of Copyrights, United States Copyright
Office (or as appropriate,  such  equivalent  agency in foreign  countries),  to
issue  any  and all  certificates  of  registration  or  renewal  for all of the
Copyrights to Mortgagee as assignee of Mortgagor's entire interest therein;  and
(c) the  Commissioner  of  Patents  and  Trademarks,  United  States  Patent and
Trademark  Office  (or  as  appropriate,   such  equivalent  agency  in  foreign
countries), to issue any and all certificates of registration or renewal for all
of the  Trademarks  to  Mortgagee  as assignee of  Mortgagor's  entire  interest
therein and in the goodwill of  Mortgagor's  business  connected  therewith  and
symbolized thereby.  Upon the occurrence and during the continuation of an Event
of Default  and  enforcement  of  Mortgagee's  rights  under this  Paragraph  5,
Mortgagee  shall be  entitled to use all  Patents,  Copyrights,  Trade  Secrets,
Trademarks  and  Licenses on a worldwide  basis and  without any  liability  for
royalties or other related charges from Mortgagee to Mortgagor.

         6. Use While No Event of Default Exists. Prior to the occurrence of any
Event of Default and while no Event of Default is  continuing,  Mortgagor  shall
have the continued and unencumbered right to use the Patents,  Copyrights, Trade
Secrets, Trademarks and Licenses in the ordinary course of its business, subject
to the terms and covenants of the Credit Agreement and this Mortgage.


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<PAGE>

         7.  Documents.  At the request of  Mortgagee,  Mortgagor  shall pay the
costs of filing  and/or  recording  this  Mortgage in all public  offices  where
filing or  recording  is  necessary.  Mortgagor  shall  execute  and  deliver to
Mortgagee from time to time such supplemental  mortgages or other instruments as
may be necessary for confirming Mortgagee's interest in the Patents, Copyrights,
Trade Secrets, Trademarks and Licenses.

         8.  Mortgagee's  Right to Sue.  After the  occurrence  and  during  the
continuation of any Event of Default,  Mortgagee shall have the right, but shall
in no way be  obligated,  to bring  suit in its own  name  and,  in  Mortgagee's
discretion,  to join  Mortgagor  as a party  plaintiff,  to enforce the Patents,
Copyrights, Trade Secrets, Trademarks and Licenses.

         9.  Waivers.  No  course of dealing between Mortgagor and Mortgagee nor
any failure to exercise,  nor any delay in exercising,  on the part of Mortgagee
any right, power or privilege hereunder shall operate as a waiver thereof.

         10. Severability. The provisions of this Mortgage are severable, and if
any clause or provision shall be held invalid and  unenforceable  in whole or in
part in any jurisdiction,  then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction,  and shall
not in any manner affect such clause or provision in any other jurisdiction,  or
any other clause or provision of this Mortgage in any jurisdiction.

         11.  Modification. This Mortgage cannot be altered, amended or modified
in any way,  except  as  specifically  provided  in  Paragraph  4 hereof or by a
writing signed by the parties hereto.

         12. Cumulative  Remedies.  All of Mortgagee's  rights and remedies with
respect to the Patents,  Copyrights,  Trade  Secrets,  Trademarks  and Licenses,
whether  established  hereby  or  by  the  Credit  Agreement,  or by  any  other
agreements  or by law,  shall be cumulative  and may be exercised  singularly or
concurrently. Mortgagee shall have, in addition to all other rights and remedies
given it by the terms of this Mortgage and the Credit Agreement,  all rights and
remedies allowed by law and the rights and remedies of a secured party under the
Uniform  Commercial  Code as enacted in any  jurisdiction  in which the Patents,
Copyrights, Trademarks, Trade Secrets or Licenses may be located.

         13. Binding  Effect; Benefits.   This  Mortgage  shall be  binding upon
Mortgagor  and its  successors  and  assigns,  and shall inure to the benefit of
Mortgagee and its successors and assigns.

         14. Governing Law.  This Mortgage shall be governed by and construed in
accordance with the laws of the State of Ohio.


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<PAGE>

         15. Headings.   Paragraph headings used herein are for convenience only
and shall not modify the provisions which they precede.

         16. Release of Mortgage.  This Mortgage is made for collateral purposes
only.  Upon  satisfaction  of the  Obligations  and  termination  of the  Credit
Agreement,   Mortgagee  shall  execute  and  deliver  to  Mortgagor  all  deeds,
assignments and other instruments,  and shall take such other actions, as may be
necessary or appropriate to re-vest in Mortgagor the Patents,  Copyrights, Trade
Secrets,  Trademarks and Licenses,  subject to any disposition thereof which may
have been made by Mortgagee pursuant hereto or pursuant to the Credit Agreement.

         IN WITNESS  WHEREOF,  Mortgagor,  by its duly authorized  officer,  has
executed this Mortgage as of the date first above written.


                                  INTERLOTT TECHNOLOGIES, INC.


                                  By:   /s/ Dennis W. Blazer
                                  Name: Dennis W. Blazer
                                  Title: CFO



STATE OF OHIO              )
                                    )  SS:
COUNTY OF HAMILTON         )


     The foregoing Mortgage of Intellectual  Property was acknowledged before me
this  23rd day of  January,  2001,  by Dennis W.  Blazer,  the CFO of  Interlott
Technologies, Inc., a Delaware corporation, on behalf of the corporation.


                                  /s/ Laura Martin
                                  Notary Public







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<PAGE>



Accepted at Cincinnati, Ohio as of January 25, 2001:


FIFTH THIRD BANK


By:  /s/ Keith E. Goodpaster
Name: Keith E. Goodpaster
Title:   VP