Document:

exv10w35

 

Exhibit 10.35

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of April 3, 2006, by and
between GAMETECH INTERNATIONAL, INC., a Delaware corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).

RECITALS

     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of
April 2, 2005, as amended from time
to time (“Credit Agreement”).

     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in
the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

     1. Section 1.1
(a) is hereby amended by deleting “April 2, 2006” as the last day on which
Bank will make advances under the Line of Credit, and by substituting for said date “April
2, 2007,” with such changes to be effective upon the execution and delivery to Bank of a
promissory note dated as of April 3, 2006 (which promissory note shall replace and be
deemed the Line of Credit Note defined in and made pursuant to the Credit Agreement) and
all other contracts, instruments and documents required by Bank to evidence such change.

     2. Section 1.1 (b) is hereby renumbered as Section 1.1 (c) and the following is hereby
added to the Credit Agreement as the new Section 1.1 (b):

      “(b) Letter
of Credit Subfeature. As a subfeature under the Line of Credit, Bank agrees from
time to time during the term thereof to issue or cause an affiliate to issue commercial and/or
standby letters of credit for the account of Borrower to finance the
purchase of inventory from overseas (each, a “Letter of
Credit” and collectively,“Letters of Credit”);
provided however, that the aggregate undrawn amount of all outstanding Letters of Credit shall
not at any time exceed Two Million Five Hundred Thousand Dollars
($2,500,000.00). The form and
substance of each Letter of Credit shall be subject to approval by Bank, in its sole
discretion. Each Letter of Credit shall be issued for a term not to exceed three hundred
sixty-five (365) days, as designated by Borrower; provided however, that no Letter of Credit
shall have an expiration date more than ninety (90) days beyond the maturity date of the Line
of Credit. The undrawn amount of all Letters of Credit shall be
reserved under the Line of
Credit and shall not be available for borrowings thereunder. Each Letter of Credit shall be
subject to the additional terms and conditions of the Letter of
Credit agreements, applications and any related documents required by
Bank in connection with the
issuance thereof. Each drawing paid under a Letter of Credit shall be deemed an advance under
the Line of Credit and shall be repaid by Borrower in accordance with the terms

-1-

 

and conditions
of this Agreement applicable to such advances; provided however, that if advances under the
Line of Credit are not available, for any reason, at the time any drawing is paid, then
Borrower shall immediately pay to Bank the full amount drawn, together with interest thereon
from the date such drawing is paid to the date such amount is fully repaid by Borrower, at the
rate of interest applicable to advances under the Line of Credit. In such event Borrower
agrees that Bank, in its sole discretion, may debit any account maintained by Borrower with
Bank for the amount of any such drawing.”

     3. Section 1.2 (a) is hereby deleted in its entirety, and the following substituted
therefor:

      “(a) Foreign
Exchange Facility. Subject to the terms and conditions of this Agreement, Bank hereby
agrees to make available to Borrower a facility (the “Foreign Exchange Facility”) under which
Bank, from time to time up to and including April 2, 2007, will enter into foreign exchange
contracts for the account of Borrower for the purchase and/or sale by Borrower in United States
dollars of foreign currencies designated by Borrower; provided however, that the maximum amount of
all outstanding foreign exchange contracts shall not at any time exceed an aggregate of One Million
United States Dollars (US$1,000,000.00). No
foreign exchange contract shall be for a term which extends beyond April 2, 2007. Borrower shall
have a “Delivery Limit” under the Foreign Exchange Facility not to exceed at any time
the aggregate principal amount of Two Hundred Thousand United States Dollars (US$200,000.00),
which Delivery Limit reflects the maximum principal amount of Borrower’s foreign exchange contracts
which may mature during any two (2) day period. All foreign exchange transactions shall be subject
to the additional terms of a Foreign Exchange Agreement dated as of April 3, 2006 (“Foreign
Exchange Agreement”), all terms of which are incorporated herein by this reference.”

     4. Section 4.3
(d) is hereby deleted in its entirety, without substitution.

     5. Section 4.9
(d) is hereby deleted in its entirety, without substitution.

     6. Section 5.3
is hereby deleted in its entirety, and the following substituted
therefor:

      “SECTION 5.3 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other
entity; make any substantial change in the nature of Borrower’s business as conducted as of the
date hereof; acquire all or substantially all of the assets of any other entity which shall require
cash consideration in excess of $2,500,000.00; nor sell, lease, transfer or otherwise dispose of
all or a substantial or material portion of Borrower’s assets except in the ordinary course of its
business.”

-2-

 

     7. Section 5.6 is hereby deleted in its entirety, and the following substituted therefor:

     “SECTION 5.6 DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash,
stock or any other property on Borrower’s stock now or hereafter outstanding, nor redeem, retire,
repurchase or otherwise acquire any shares of any class of Borrower’s stock now or hereafter
outstanding, except stock repurchase pursuant to Borrower’s stock repurchase plan announced on or
about May 28, 1998 and August of 2000, up to a maximum amount of $12,500,000.00”

     8. The following is hereby added to the Credit Agreement as Section 5.8:

     “SECTION 5.8 CAPITAL EXPENDITURES. Make any additional investment in fixed assets in any fiscal
year in excess of an aggregate of $15,000,0000.00.”

     9. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain
in full force and effect, without waiver or modification. All terms defined in the Credit Agreement
shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.

     10. Borrower hereby remakes all representations and warranties contained in the Credit Agreement
and reaffirms all covenants set forth therein. Borrower further certifies that as of the date of
this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any
condition, act or event which with the giving of notice or the passage of time or both would
constitute any such Event of Default.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and
year first written above.

	 	 	 	 	 	 	 	 	 
	GAMETECH INTERNATIONAL, INC.	 	WELLS FARGO BANK, 
NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jay Meilstrup
	 	By:
	 	/s/ Mary Yount	 	 
	 

	 	 

Jay Meilstrup
	 	 	 	 

Mary Yount
	 	 
	 

	 	Chief Executed Officer
	 	 	 	Relationship Manager	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ James Wilson	 	 	 	 	 	 
	 

	 	 

James Wilson
	 	 	 	 	 	 
	 

	 	Chief Financial Officer	 	 	 	 	 	 

-3-exv10w36

 

Exhibit 10.36

			
	 	 	 
	WELLS FARGO
	 	REVOLVING LINE OF CREDIT NOTE
	 	 	 
	$2,500,000.00
	 	Reno Nevada
	 
	 	April 3, 2006

FOR VALUE RECEIVED, the undersigned GameTech International, Inc. (“Borrower”) promises to pay to
the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Nevada RCBO-Reno, 5340
Kietzke Lane, Suite 102, Reno, NV 89511, or at such other place as the holder hereof may designate,
in lawful money of the United States of America and in immediately available funds, the principal
sum of $2,500,000.00 or so much thereof as may be advanced and be outstanding, with interest
thereon, to be computed on each advance from the date of its disbursement as set forth herein.

1. DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after each, and any other
term defined in this Note shall have the meaning set forth at the place defined:

1.1 “Business Day” means any day except a Saturday, Sunday or any other day on which commercial
banks in Nevada are authorized or required by law to close.

1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2 or 3
months, as designated by Borrower, during which all or a portion of the outstanding principal
balance of this Note bears interest determined in relation to LIBOR; provided however, that no
Fixed Rate Term may be selected for a principal amount less than $500,000.00; and provided
further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If
any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.

1.3 “LIBOR” means the rate per annum (rounded upward, if necessary to the nearest whole 1/8 of
1%) determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR Reserve
Percentage.

(a) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by
Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is
quoted by Bank for the purpose of calculating effective rates of interest for loans making
reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said
date for a period of time approximately equal to the number of days in such Fixed Rate
Term and in an amount approximately equal to the principal amount to which such Fixed Rate
Term applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited
to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

(b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities”
(as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank
for expected changes in such reserve percentage during the applicable Fixed Rate Term.

1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at
its principal office as its Prime Rate, with the understanding that the Prime Rate is one of
Bank’s base rates and serves as the basis upon which effective rates of interest are calculated
for those loans making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

2. INTEREST:

2.1 Interest. The outstanding principal balance of this Note shall bear interest (computed
on the basis of a

 

 

360-day year, actual days elapsed) either (a) at a fluctuating rate per annum equal to the Prime
Rate in effect from time to time, or (b) at a fixed rate per annum determined by Bank to be
2.00000% above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is
determined in relation to the Prime Rate, each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank. With respect to each
LIBOR selection option selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on
Bank’s books and records (either manually or by electronic entry) and/or on any schedule attached
to this Note, which notations shall be prima facie evidence of the accuracy of the information
noted.

2.2
Selection of Interest Rate Options. At any time any portion of this Note bears interest
determined in relation to LIBOR, it may be continued by Borrrower at the end of the Fixed Rate Term
applicable thereto so that all or a portion thereof bears interest determined in relation to the
Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion of
this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a
portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select
a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest rate option
selected by Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR selection,
the length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such
other electronic method as Bank may permit) so long as, with respect to each LIBOR selection, (i)
if requested by Bank, Borrower provides to Bank written confirmation thereof not later than 3
Business Day after such notice is given, and (ii) such notice is given to Bank prior to 10:00 a.m.
on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at
its sole option but without obligation to do so, accepts Borrower’s notice and quotes a fixed rate
to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted
rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate. If no specific designation of interest is
made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or the principal
amount to which such Fixed Rate Term applied.

2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in
addition to any other amounts due or to become due hereunder, any and all (a) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to LIBOR, and (b)
future, supplemental emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by
any domestic or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are not included in
the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.

2.4 Payment of Interest. Interest accrued on this Note shall be payable on the
2nd day of each month, commencing May 2, 2006.

2.5 Default Interest. From and after the maturity date of this Note, or such earlier date
as all principal owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest until paid in full at an increased
rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to 4% above the
rate of interest from time to time applicable to this Note.

3. BORROWING AND REPAYMENT:

3.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note
borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions of

 

 

this Note and of the Credit Agreement between Borrower and Bank defined below; provided
however, that the total outstanding borrowings under this Note shall not at any time exceed the
principal amount stated above. The unpaid principal balance of this obligation at any time shall be
the total amounts advanced hereunder by the holder hereof less the amount of principal payments
made hereon by or for any Borrower, which balance may be endorsed hereon from time to time by the
holder. The outstanding principal balance of this Note shall be due
and payable in full on April 2,
2007.

3.2 Advances. Advances hereunder, to the total amount of the principal sum available
hereunder, may be made by the holder at the oral or written request of (a) Ann McKenzie, Jay
Meilstrup, James Wilson, any one acting alone, who are authorized to request advances and direct
the disposition of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (b) any person, with respect to advances
deposited to the credit of any deposit account of any Borrower, which advances, when so deposited,
shall be conclusively presumed to have been made to or for the benefit of each Borrower regardless
of the fact that persons other than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by any Borrower.

3.3 Application of Payments. Each payment made on this Note shall be credited first, to any
interest then due and second, to the outstanding principal balance hereof. All payments credited to
principal shall be applied first, to the outstanding principal
balance of this Note which bears interest determined in relation to
the Prime Rate, if any, and second, to the outstanding principal balance of this
Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest
Fixed Rate Term first.

4.
PREPAYMENT :

4.1 Prime Rate. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to the Prime Rate at any time, in any amount and without penalty.

4.2
LIBOR. Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of $500,000.00; provided
however, that if the outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if any such portion of this
Note shall become due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand
a fee which is the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each
such month:

(a) Determine the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained outstanding until the last
day of the Fixed Rate Term applicable thereto.

(b)
Subtract from the amount determined in (a) above the
amount of interest which would
have accrued for the same month on the amount prepaid for the remaining term of such Fixed Rate
Term at LIBOR in effect on the date of prepayment for new loans made
for such term and in a principal
amount equal to the amount prepaid.

(c) If the result obtained in (b) for any month is greater than zero, discount that difference by
LIBOR used in (b) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank incurring additional
costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment
costs, expenses and/or liabilities of Bank. If

 

 

Borrower
fails to pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime Rate in effect from
time to time (computed on the basis of a 360-day year, actual days elapsed). Each change in the
rate of interest on any such past due prepayment fee shall become effective on the date each Prime
Rate change is announced within Bank.

5.
EVENTS OF DEFAULT:

     This Note is made pursuant to and is subject to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of April 2, 2005, as amended from time to time
(the “Credit Agreement”). Any default in the payment or performance of any obligation under this
Note, or any defined event of default under the Credit Agreement, shall constitute an “Event of
Default” under this Note.

6. MISCELLANEOUS:

6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the
holder’s option, may declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall immediately cease
and terminate. Each Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s
in-house counsel), expended or incurred
by the holder in connection with the enforcement of the holder’s rights and/or the collection of
any amounts which become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to any Borrower or any other person or entity.

6.2 Obligations Joint and Several. Should more than one person or
entity sign this Note as
a Borrower, the obligations of each such Borrower shall be joint and several.

6.3 Governing Law. This Note shall be governed by and construed in
accordance with the laws
of the State of Nevada.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

	 	 	 	 	 
	GameTech
	 	International, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jay Meilstrup
 

Jay Meilstrup, Chief Executive Officer
	 	 
	 
	 	 	 	 
	By:

	 	/s/ James Wilson
 

James Wilson, Chief Financial Officer

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