Document:

CREDIT AGREEMENT

                                 BY AND BETWEEN

                          INTERLOTT TECHNOLOGIES, INC.

                                       AND

                                FIFTH THIRD BANK

                          DATED AS OF JANUARY 25, 2001

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                                TABLE OF CONTENTS

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Section 1. .......................................................................................Definitions      1

Section 2...............................................................................................Loans      1
         2.1      Revolving Loans...........................................................................1
         2.2      Interest on Revolving Loans...............................................................3
         2.3      Maximum Interest Rate.....................................................................4
         2.4      Termination of LIBOR Pricing Option.......................................................4
         2.5      Illegality of Funding.....................................................................4
         2.6      Increased Costs, Etc......................................................................4
         2.7      Payments..................................................................................5
         2.8      Accounting................................................................................5
         2.9      Costs.....................................................................................6
         2.10     Fees......................................................................................6
         2.11     Field Audit...............................................................................6
         2.12     Letters of Credit.........................................................................7

Section 3......................................................................Representations And Warranties      9
         3.1      Organization and Qualification............................................................9
         3.2      Due Authorization.........................................................................9
         3.3      Litigation................................................................................9
         3.4      Margin Stock..............................................................................9
         3.5      Business..................................................................................9
         3.6      Licenses, etc.............................................................................9
         3.7      Laws and Taxes...........................................................................10
         3.8      Financial Condition......................................................................10
         3.9      Title....................................................................................10
         3.10     Defaults.................................................................................10
         3.11     Environmental Laws.......................................................................11
         3.12     Subsidiaries and Partnerships............................................................11
         3.13     ERISA....................................................................................11

Section 4...............................................................................Affirmative Covenants      11
         4.1      Books and Records........................................................................11
         4.2      Financial Statements.....................................................................12
         4.3      Condition and Repair.....................................................................13
         4.4      Insurance................................................................................13
         4.5      Taxes....................................................................................13
         4.6      Existence; Business......................................................................13
         4.7      Compliance with Laws.....................................................................14
         4.8      Notice of Default........................................................................14

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         4.9      Costs....................................................................................14
         4.10     Depository/Banking Services..............................................................14
         4.11     Other Amounts Deemed Loans...............................................................14
         4.12     Assignment of Lease Proceeds.............................................................15
         4.13     Leases...................................................................................15
         4.14     Intellectual Property....................................................................15

Section 5..................................................................................Negative Covenants      15
         5.1      Indebtedness.............................................................................15
         5.2      Prepayments..............................................................................15
         5.3      [Intentionally Omitted]..................................................................15
         5.4      [Intentionally Omitted]..................................................................15
         5.5      Pledge or Encumbrance of Assets..........................................................15
         5.6      Guarantees and Loans.....................................................................15
         5.7      Share Interest; Distributions............................................................16
         5.8      [Intentionally Deleted]..................................................................16
         5.9      Merger Purchase of Assets; Disposition of Assets.........................................16
         5.10     Transactions with Affiliates.............................................................16
         5.11     Investments..............................................................................16
         5.12     Indebtedness to Tangible Net Worth.......................................................17
         5.13     Minimum Tangible Net Worth...............................................................17
         5.14     Interest Coverage Ratio..................................................................17

Section 6......................................................................Events of Default and Remedies      17
         6.1      Events of Default........................................................................17
         6.2      Remedies.................................................................................19
         6.3      Setoff...................................................................................19
         6.4      Default Rate.............................................................................19
         6.5      [Intentionally Deleted]..................................................................19
         6.6      No Remedy Exclusive......................................................................19
         6.7      Effect of Termination....................................................................19
         6.8      [Intentionally Deleted]..................................................................20

Section 7................................................................................Conditions Precedent      20
         7.1      Conditions to Initial Loans..............................................................20
         7.2      Conditions to Each Revolving Loan........................................................21

Section 8............................................................................Miscellaneous Provisions      22
         8.1      Miscellaneous............................................................................22
         8.2      Waiver by Borrower.......................................................................22
         8.3      Binding Effect...........................................................................22
         8.4      Subsidiaries.............................................................................22
         8.5      Security.................................................................................22
         8.6      Survival.................................................................................23
         8.7      Delay or Omission........................................................................23

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         8.8      Notices..................................................................................23
         8.9      No Partnership...........................................................................23
         8.10     Indemnification..........................................................................24
         8.11     Governing Law; Jurisdiction..............................................................24

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                                CREDIT AGREEMENT

         This Credit Agreement (the  "Agreement") is entered into as of the 25th
day of January,  2001, by and between INTERLOTT  TECHNOLOGIES,  INC., a Delaware
Corporation,  ("Borrower")  and FIFTH THIRD BANK,  an Ohio banking  corporation,
located at 38 Fountain Square Plaza, Cincinnati, Ohio 45263 ("Bank").

Section 1.        Definitions.

         Certain  capitalized  terms  have the  meanings  set forth on Exhibit 1
hereto or in the Security Agreement.  All financial terms used in this Agreement
but not  defined on Exhibit 1 or in the  Security  Agreement  have the  meanings
given to them by generally accepted accounting  principles.  All other undefined
terms have the meanings given to them in the Ohio Uniform Commercial Code.

Section 2.        Loans.

         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) Twenty Five Million  Dollars  ($25,000,000.00)  less
Letter of  Credit  Liabilities,  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) Three  Million Five Hundred  Thousand
Dollars  ($3,500,000.00) plus (iii) 70% of the net amount of Borrower's Eligible
Lease  Payments  less (iv)  Letter of Credit  Liabilities.  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.  Borrower  may borrow,  prepay  (without  penalty or  charge),  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 Twenty Five
Million Dollars  ($25,000,000.00) less the Letter of Credit Liabilities.  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.

                  (b) Bank will make  Revolving  Loans by  crediting  the amount
thereof to Borrower's  Operating  Account (as hereinafter  defined) at the Bank.
Revolving  Loan proceeds  will be used for the  refinance of Borrowers  existing
credit facility with Firstar Bank,  N.A., for general working capital  purposes,

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for  Acquisitions,  to pay off Indebtedness of Borrower  permitted under Section
5.1 of this  Agreement  or to make  dividends  or  redemptions  permitted  under
Section 5.7 of this Agreement.

                  (c)   On the date hereof, Borrower will duly issue and deliver
to Bank a Revolving  Note in the form of  Exhibit  2.1 as  amended  from time to
time (the "Revolving  Note"),  in the  principal  amount of Twenty  Five Million
Dollars ($25,000,000.00) bearing interest as specified in this Agreement.

                  (d)  Borrower  shall  maintain  Lock Box Account No. 2678 with
Bank (the "Lock Box").  Borrower shall direct all Debtors to pay all amounts due
to Borrower  and the  proceeds  of all  Collateral  (as defined in the  Security
Agreement)  to the Lock Box which amounts  Borrower  shall cause to be deposited
into the Collection  Account No. 70498115 with Bank (the "Collection  Account").
As long as the Revolving  Loans shall be  outstanding,  the  Collection  Account
shall be the property of Bank to be applied in accordance with the terms of this
Agreement.  If any proceeds of any  Collateral  are  received by  Borrower,  the
Borrower  shall hold such proceeds in trust for Bank and not commingle them with
such  Borrower's  other funds,  and shall  promptly  deliver them to Bank.  When
proceeds of the Collateral are deposited into the Collection Account,  they will
be  credited  by Bank on the day  which  such  funds  have  cleared  and  become
collected funds (the "Hold Period"), against the outstanding principal amount of
the Revolving  Loans.  All such credits shall be conditional  credits subject to
collection.  Any item not finally  paid shall be charged to Borrower  whether or
not the item is returned.

                  (e) Bank will apply funds in the Collection Account on a daily
basis to the payment of the Revolving  Loans  automatically  and without notice,
request  or demand by  Borrower,  in  accordance  with  Bank's  automatic  sweep
program.  However,  in no event will the principal amount of the Facility exceed
the amount  provided for in clause (a) of this Section.  Bank reserves the right
to reasonably change the provisions and mechanics of its automatic sweep program
in a separate  writing to Borrower  and such change need not be  reflected by an
amendment to this Agreement in order to be effective.

                  (f) Borrower shall  maintain  Operating  Account No.  99945230
with Bank (the "Operating  Account").  The Operating Account shall be maintained
as a controlled disbursement account whereby Revolving Loans shall automatically
be made by Bank in amounts necessary to make disbursements by Borrower provided,
however such Revolving  Loans shall not exceed the limits of the facility as set
forth in Section  2.1(a) of this Agreement and such  automatic  Revolving  Loans
shall not be subject to a Pricing Option unless the notice hereinafter set forth
is given by Borrower.  Borrower must give Bank written or  telephonic  notice of
its  intention to borrow under this  Agreement  not later than 12:00 noon on the
Business Day of the proposed borrowing date for Revolving Loans that are subject
to a Pricing  Option.  Bank is authorized to make  Revolving  Loans subject to a
Pricing  Option based on the  telephonic  or other  instructions  received  from
anyone purporting to be an authorized representative of Borrower. Bank will make
Revolving  Loans by crediting  the amount  thereof to the  Operating  Account of
Borrower at the Bank.

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                  (g) The term of the Facility  will expire on December 31, 2003
(the  "Termination  Date") and the Revolving Note will become payable in full on
that date.

         2.2      Interest on Revolving Loans.

                  (a)    Subject to the terms and conditions of this  Agreement,
the Revolving Loans shall bear interest as follows:

                         (i)     on amounts subject to a Pricing Option,  at an
annual rate equal to the  LIBOR  Rate plus the Applicable Revolver LIBOR Margin,
each as in effect on the first day of the relevant LIBOR Interest Period; and

                         (ii)    on amounts not subject to a Pricing Option,  at
an annual rate equal to the Prime Rate plus the Applicable Revolver Prime Margin
in effect on each date.

                  (b)  Subject to the terms and  conditions  of this  Agreement,
Borrower may from time to time elect to have a Pricing Option apply to a portion
of the principal  amount  outstanding  on the Revolving  Loans,  as specified by
Borrower,  for a  permissible  LIBOR  Interest  Period  specified  by  Borrower.
Borrower  shall make each such  election by giving notice (which notice shall be
irrevocable)  to Bank in the manner and by the  deadline  specified in paragraph
2.1 hereof.

                 (c)  Borrower's right to elect a Pricing Option for any portion
of outstanding Revolving Loans is subject to the following  limitation:  (i) the
total number of Pricing Options outstanding at any one time under this Agreement
shall not exceed four;  (ii)  Borrower may not elect a Pricing  Option at a time
when an Event of Default has occurred and the Event of Default is Continuing and
has not been  waived;  (iii) no LIBOR  Interest  Period shall end later than the
maturity date of the  Revolving  Note  evidencing  the borrowing of the relevant
principal  amount;  (iv) the  principal  amount that can be subject to a Pricing
Option is  $500,000.00  or  multiples  of  $100,000.00  above such amount or the
entire  outstanding amount of the Revolving Loans; and (v) once a Pricing Option
has been selected for a portion of the Revolving  Loans, no other Pricing Option
may apply to such portion  until the  expiration  of the LIBOR  Interest  Period
applicable to the first Pricing Option.

                  (d)  Interest  on the  principal  amount  subject to a Pricing
Option  is  payable  on the  last day of the  relevant  LIBOR  Interest  Period.
Interest on the principal amount of the Revolving Loans not subject to a Pricing
Option is payable in arrears on the first  Business Day of each calendar  month.
In  addition,   all  accrued  interest  is  payable  at  maturity   (whether  by
acceleration, notice of intention to prepay or otherwise).

                  (e) Interest on the  Revolving  Loans shall be computed on the
basis of a 360-day year and charged for the actual number of days involved.  The
interest  rate  applicable  to amounts not subject to any Pricing  Option  shall
change  automatically upon each change in the Prime Rate. Upon the occurrence of
an Event of Default and the Event of Default is Continuing,  the Revolving Loans
shall bear  interest at the  Borrower  Default  Rate;  this  provision  does not
constitute  a waiver of any Event of Default or an agreement by Bank or Banks to
permit any late payments whatsoever.

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                  (f)  Borrower  shall  have the right to prepay  the  Revolving
Loans in whole at any time,  or in part from time to time,  without a prepayment
penalty,  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.

         2.3 Maximum  Interest  Rate.  In no event shall the  interest  rate and
other charges  hereunder exceed the highest rate permissible under any law which
a  court  of  competent  jurisdiction  shall,  in a  final  determination,  deem
applicable  hereto.  In the event that a court determines that Bank has received
interest and other charges  hereunder in excess of the highest  permissible rate
applicable hereto, such excess shall be deemed received on account of, and shall
automatically be applied to reduce,  the principal  balance of the Loans and the
provisions hereof shall be deemed amended to provide for the highest permissible
rate.  If there are no  Obligations  outstanding,  Bank shall refund to Borrower
such excess.

         2.4  Termination of LIBOR Pricing Option.  Borrower's  right to elect a
LIBOR Pricing Option shall be terminated  automatically  if Eurodollar  deposits
which have a maturity corresponding to the proposed LIBOR Interest Period, in an
amount  equal to the  amount  requested  by  Borrower  to be  subject to a LIBOR
Pricing Option, are not readily available in the London Inter-Bank  Eurocurrency
Market, or that, by reason of circumstances  affecting such market, adequate and
reasonable methods do not exist for ascertaining the interest rate applicable to
such deposits for the proposed LIBOR Interest  Period and Bank, by telephonic or
telegraphic or other written notice, notifies Borrower of the same.

         2.5 Illegality of Funding. Notwithstanding anything herein contained to
the  contrary,  if at any time any  change in any law,  regulation  or  official
directive,  or in the  interpretation  thereof,  by an governmental body charged
with the administration  thereof, shall make it unlawful, or any central bank or
other governmental  authority shall assert that it is unlawful, for Bank to fund
or maintain its funding in Eurodollars of any portion of the principal amount of
the  Revolving  Loans or  otherwise  to give  effect  to Bank's  obligations  as
contemplated  hereby,  (i) Bank may by facsimile or other written notice thereof
to Borrower declare Bank's obligations in respect of the LIBOR Pricing Option to
be terminated forthwith, and (ii) all LIBOR Pricing Options then in effect shall
forthwith cease to be in effect,  and interest shall from and after such date be
calculated at the interest rate applicable to amounts to which no Pricing Option
applies; and (iii) Borrower's right to elect LIBOR Pricing Options is terminated
until Bank  notifies  Borrower  that  Borrower's  right to elect  LIBOR  Pricing
Options is reinstated.

         2.6      Increased Costs, Etc.

                  (a) If, due to either (i) the introduction of or any change in
or in the  interpretation  of any law or regulation or (ii) the compliance  with
any guideline or request from any central bank or other  governmental  authority

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(whether  or not having the force of law),  there  shall be any  increase in the
cost to Bank of  agreeing  to make or of  making,  funding  or  maintaining  the
Facility  subject  to the LIBOR  Pricing  Option,  then from time to time,  upon
written demand by Bank, Borrower shall pay to Bank additional amounts sufficient
to compensate Bank for such increased cost if similar costs are actually charged
by Bank to all other  borrowers  similarly  situated.  A  certificate  as to the
amount of such  increased cost submitted to Borrower by Bank shall be conclusive
and binding for all purposes, absent manifest error.

                  (b) If compliance  with any law or regulation or any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital  required
or expected to be maintained  by Bank or any  corporation  controlling  Bank and
that the amount of such  capital is  increased  by the  existence of such Bank's
commitment  to lend  hereunder  and  other  commitments  of such  type or by the
existence of outstanding  Revolving Loans (or similar  obligations),  then, upon
written  demand  by  Bank,  Borrower  shall  pay to Bank,  from  time to time as
specified by Bank, additional amounts sufficient to compensate Bank in the light
of such  circumstances,  to the  extent  that Bank  reasonably  determines  such
increase in capital to be allocable to the existence of Bank's  Revolving  Loans
or  commitment to lend  hereunder  and if similar costs are actually  charged by
Bank to all other borrowers similarly situated. A certificate as to such amounts
submitted to Borrower by Bank shall be conclusive  and binding for all purposes,
absent manifest error.

                  (c) If,  with  respect to any LIBOR  Pricing  Option the LIBOR
Rate for any LIBOR Interest Period will not adequately  reflect the cost to Bank
of making the Revolving  Loans subject to the relevant  LIBOR Pricing Option for
such LIBOR Interest Period,  Bank shall forthwith so notify Borrower in writing,
whereupon  Borrower's right to elect any LIBOR Pricing Option shall be suspended
until the circumstances causing such suspension no longer exist.

         2.7 Payments. Each payment, including each prepayment, of principal and
interest  on the Notes shall be made by Borrower to Bank at its office set forth
in paragraph 8.8 hereof by 2:00 p.m.,  Cincinnati time, on the due date for such
payment.  The failure of Borrower to make any such  payment by noon,  Cincinnati
time,  shall not constitute a default  hereunder,  provided that such payment is
made on such due date, but any such payment made after noon, Cincinnati time, on
such due date shall be deemed to have been made on the next Business Day for the
purpose of  calculating  interest on amounts  outstanding  on the Notes.  If any
payment  hereunder or under the Notes shall be due and payable on a day which is
not a Business Day the maturity thereof shall,  except as otherwise  provided in
the definition of LIBOR Interest  Period,  be extended to the next Business Day,
and interest  shall be payable at the applicable  rate  specified  herein during
such extension.

         2.8      Accounting.  After the end of each calendar month, Bank will:

                  (a) if Bank so elects,  charge  Borrower's  account for any or
all amounts due to Bank under this Agreement for interest, expenses and the like
and notify Borrower of such charges; and

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                  (b) render to Borrower a statement of Borrower's  loan account
with Bank hereunder,  which  statement  shall be considered  correct and to have
been accepted by Borrower and,  absent  manifest  error,  shall be  conclusively
binding  upon  Borrower  unless  Borrower   notifies  Bank  in  writing  of  any
discrepancy within thirty (30) days from the mailing of such statement.

         2.9  Costs.   Borrower  shall  pay  to  Bank  its  costs  and  expenses
(including,  without  limitation,   reasonable  attorneys'  fees,  court  costs,
litigation  and  other  expense)  incurred  or  paid  by  Bank  in  negotiating,
documenting,  administering  and enforcing this Agreement and the Loan Documents
and in  establishing,  maintaining,  protecting,  perfecting or enforcing any of
Bank's rights or Borrower's Obligations,  including, without limitation, any and
all such costs and expenses  incurred or paid by Bank in defending  Bank's title
or  right  to the  Collateral  or in  collecting  or  enforcing  payment  of the
Collateral  and all  costs of  filing  financing,  continuation  or  termination
statements  with respect to the  Collateral.  Notwithstanding  the foregoing the
attorney  fees with  respect  to the  preparation  and  negotiation  of the Loan
Documents shall not exceed $11,500.00.

         2.10     Fees.

                  (a)  Collateral  Management Fee:  So long as this Agreement is
in effect,  Borrower will pay to Bank a Collateral  Management  Fee at a rate of
$1,000.00  a month  which  shall be  payable  on the first day of each  month in
arrears for the previous calendar month.

                  (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 equal
to .125% of 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.

         2.11 Field Audit.  Bank shall have the right to perform field audits of
Borrower as requested  by Bank and as long as no Event of Default  exists and no
Event of Default is Continuing such field audits shall be during normal business
hours and upon three (3) days prior notice.  Borrower shall fully cooperate with
Bank in regards to such field  audit and shall give Bank access to all books and
records and Borrower's  facilities  for such field audit during normal  business
hours.  Borrower  shall pay Bank a field audit fee of $400.00  per diem  payable
within ten (10) days of the conclusion of the field audit.  Notwithstanding  the
foregoing during said period in which no Event of Default exists and no Event of
Default is Continuing, Bank shall endeavor to limit the field audits to not more
than one field audit per calendar year and in said event of only one field audit
per  calendar  year the field  examination  fee shall not exceed  $1,200.00  per
calendar year.

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         2.12  Letters of Credit.  (a) Bank  agrees on the terms and  conditions
hereinafter  set forth,  to issue  letters of credit for the account of Borrower
from time to time on any  Business  Day during the period from the Closing  Date
until 90 days before the Termination Date (the "Letters of Credit"),  subject to
the conditions that (i) the aggregate Available Amount for all Letters of Credit
outstanding  at any point in time does not  exceed at any time the  Standby  and
Commercial  Letter of Credit  Commitment and (ii) the Available  Amount for each
such Letter of Credit plus the outstanding  principal  amount of Revolving Loans
does not exceed maximum  principal  amounts of Revolving  Loans  permitted under
Section 2.1(a) of this  Agreement.  No Letter of Credit shall have an expiration
date  (including all rights of Borrower or the  beneficiary to require  renewal)
later  than the  Termination  Date.  Subject to the  limits  referred  to above,
Borrower  may  request  the  issuance  of Letters of Credit  under this  Section
(herein  referred  to as the "Letter of Credit  Facility"),  repay any Letter of
Credit Advances  resulting from drawings  thereunder and request the issuance of
additional Letters of Credit under this section.

         (b) The  payment  of Bank of a draft  drawn  under any Letter of Credit
shall  constitute for all purposes of this  Agreement an irrevocable  request by
Borrower for Revolving Loans in the amount of such draw, bearing interest at the
rate then  applicable  to Revolving  Loans to which no Pricing  Option  applies.
However,  if for any reason the conditions to the making of Revolving  Loans are
not  satisfied  on the date  payment of such draft is made or Bank  cannot  make
Revolving Loans for any other reason, the payment by Bank of a draft drawn under
any Letter of Credit shall instead constitute for all purposes of this Agreement
the making by Bank of a Letter of Credit Advance  ("Letter of Credit  Advance"),
in the amount of such draft.  Letter of Credit  Advances  shall bear interest at
the Borrower Default Rate until paid pursuant to this Agreement.

         (c) The  obligations  of Borrower under this  Agreement,  any Letter of
Credit,  any application for a Letter of Credit (an "Application") and any other
agreement  or  instrument  relating  to any Letter of Credit or Letter of Credit
Advance  (collectively,  the  "Letter  of Credit  Related  Documents")  shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of such  Letter  of  Credit  Related  Document  under  all  circumstances,
including, without limitation, the following circumstances:

                  (i)      any lack of validity or  enforceability of any of the
Letter of Credit Related Documents;

                  (ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the  Obligations  of  Borrower in respect of
any Letter of Credit Related Document or any other amendment or waiver of or any
consent to departure from all or any of the Letter of Credit Related Documents;

                  (iii) the  existence of any claim,  set-off,  defense or other
right that any  Borrower  may have at any time  against any  beneficiary  or any
transferee  of a Letter of Credit (or any Persons for whom any such  beneficiary
or any such  transferee  may be acting),  Bank or any other  Person,  whether in
connection  with the  transactions  contemplated by the Letter of Credit Related
Documents or any unrelated transaction;
                  (iv) any  statement or any other  document  presented  under a
Letter of Credit proving to be forged,  fraudulent,  invalid or  insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

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                  (v)  payment  by  Bank  under  a  Letter  of  Credit   against
presentation  of a draft or  certificate  that does not comply  with the term of
such Letter of Credit,  unless such  noncompliance is evident on the face of the
documents presented to Bank;

                 (vi)  any exchange, release or non-perfection of any Collateral
or other collateral; or

                  (vii) any other circumstance or happening whatsoever,  whether
or not similar to any of the foregoing, including, without limitation, any other
circumstance  that  might  otherwise  constitute  a defense  available  to, or a
discharge of, Borrower or a guarantor.

         (d) If any Letter of Credit are  outstanding on the  Termination  Date,
Borrower shall deposit with Bank cash or other liquid  collateral  acceptable to
Bank,  in an amount at least equal to the  Available  Amount of all  outstanding
Letters of Credit,  to be held by Bank pursuant to a cash  collateral  agreement
acceptable to Bank in its reasonable discretion.

         (e) If Bank  determines  that  compliance with any law or regulation or
any guideline or request from any central bank or other  governmental  authority
(whether or not having the force of law)  affects or would  affect the amount of
capital  required  or  expected  to be  maintained  by Bank  or any  corporation
controlling  Bank  and that the  amount  of such  capital  is  increased  by the
existence of Bank's  commitment to lend or issue Letters of Credit hereunder and
other  commitments  of such type or by the  existence of  outstanding  Revolving
Loans or Letters of Credit (or similar  obligations),  then, upon written demand
by Bank,  Borrower  shall pay to Bank from  time to time as  specified  by Bank,
additional   amounts  sufficient  to  compensate  Bank  in  the  light  of  such
circumstances,  to the extent that Bank  reasonably  determines such increase in
capital to be allocable to the existence of Bank's Revolving Loans or commitment
to lend hereunder or to the issuance or maintenance of any Letters of Credit.  A
certificate as to such amounts submitted to Borrower by Bank shall be conclusive
and binding for all purposes, absent manifest error.

         (f)  Borrower  shall pay to Bank a letter  of  credit  fee equal to the
Bank's  standard  Letter of Credit  fees  (which are  currently  as set forth on
Exhibit.  2.12 (f))  payable upon  issuance of Letter of  Credit(s)  ("Letter of
Credit  Fee")  with  respect  to the  stated  amount of each  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 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.

                                       8
<PAGE>

Section 3.        Representations And Warranties.

         Except as disclosed on the Disclosure  Schedule  attached as Exhibit 3,
Borrower hereby warrants and represents to Bank the following:

         3.1  Organization  and  Qualification.  Borrower  is a duly  organized,
validly  existing  corporation  in good standing  under the laws of the State of
Delaware,  has the power and authority (corporate and otherwise) to carry on its
business and to enter into and perform this  Agreement,  the Notes and the other
Loan Documents, is qualified and licensed to do business in each jurisdiction in
which  failure to be so  qualified  or  licensed  would have a material  adverse
effect on the  Borrower.  All  information  provided  by  Borrower  to Bank with
respect to  Borrower  and its  operations  is true and  correct in all  material
respects.

         3.2. Due  Authorization.  The  execution,  delivery and  performance by
Borrower of this Agreement, the Security Agreement, the Notes and the other Loan
Documents have been duly authorized by all necessary  corporate action, and will
not contravene any law or any governmental rule or order binding on Borrower, or
the  certificate  of  incorporation  or  bylaws of  Borrower,  nor  violate  any
agreement or  instrument by which  Borrower is bound except any  anti-assignment
clause in a Lease or other  contract with any lottery (if any) nor result in the
creation  of a Lien on any assets of  Borrower  except the Lien  granted to Bank
herein.  Borrower has duly executed and delivered this  Agreement,  the Security
Agreement, the Notes and the other Loan Documents and they are valid and binding
obligations of Borrower  enforceable  according to their respective terms except
as limited by equitable principles and by bankruptcy, insolvency or similar laws
affecting  the  rights of  creditors  generally.  No notice to or consent by any
governmental  body is  needed  in  connection  with the  transaction,  except as
required by any Lease or other contract with any lottery.

         3.3.     Litigation.  There  are  no  suits  or  proceedings  pending
or threatened against Borrower,  and no proceedings before any governmental body
are pending or threatened against Borrower.

         3.4  Margin  Stock.  No part of the Loans will be used to  purchase  or
carry,  or to reduce or retire or refinance  any credit  incurred to purchase or
carry,  any margin stock (within the meaning of Regulations U and X of the Board
of Governors of the Federal  Reserve  System) or to extend  credit to others for
the purpose of purchasing  or carrying any margin  stock.  If requested by Bank,
Borrower will furnish to Bank statements in conformity with the  requirements of
Federal Reserve Form U-1.

         3.5 Business. Borrower is not a party to or subject to any agreement or
restriction  which in the  opinion  of  Borrower's  management  is so unusual or
burdensome that it might have a material adverse effect on Borrower's  business,
properties or prospects.

         3.6  Licenses,  etc..  Borrower  has  obtained  any and  all  licenses,
permits,   franchises,   governmental   authorizations,   patents,   trademarks,
copyrights or other rights necessary for the ownership of its properties and the

                                       9
<PAGE>

advantageous  conduct of its business.  Borrower  possesses  adequate  licenses,
patents, patent applications,  copyrights,  trademarks,  trademark applications,
and trade names to continue to conduct its  business as  currently  conducted by
it,  without any conflict with the rights of any other person or entity.  All of
the  foregoing  are in full force and effect  and none of the  foregoing  are in
known conflict with the rights of others.

         3.7  Laws  and  Taxes.  Borrower  is in  material  compliance  with all
material laws, regulations, rulings, orders, injunctions, decrees, conditions or
other  requirements  applicable to or imposed upon Borrower by any law or by any
governmental  authority,  court or agency.  Borrower  has filed all required tax
returns and reports that are now required to be filed by it in  connection  with
any federal,  state and local tax,  duty or charge  levied,  assessed or imposed
upon Borrower or its assets,  including unemployment,  social security, and real
estate taxes.  Borrower has paid all taxes which are now due and payable  except
for the current Arizona privilege tax dispute in which the disputed amount shall
not exceed  $250,000.00.  No taxing  authority  has  asserted  or  assessed  any
additional tax liabilities against Borrower which are outstanding on the date of
this  Agreement,  and Borrower  has not filed for any  extension of time for the
payment of any tax or the filing of any tax return or report.

         3.8 Financial Condition. All financial information relating to Borrower
which has been or may  hereafter  be  delivered  by Borrower or on its behalf to
Bank fairly  reflects  the  financial  conditions  or results of  operations  of
Borrower and has been prepared in accordance with generally accepted  accounting
principles   consistently  applied  except  for  internally  prepared  financial
information shall not include footnotes or year end adjustments. Borrower had at
the date of such financial  statement no material  obligations or liabilities of
any kind not  disclosed  in that  financial  information,  and there has been no
material adverse change in the financial  condition of Borrower nor has Borrower
suffered any material damage,  destruction or loss which has adversely  affected
its  business  or assets  since the  submission  of the most  recent  Borrower's
financial statement by Borrower to Bank.

         3.9  Title.  Borrower  has good  and  marketable  title  to the  assets
reflected on the most recent  balance  sheet  submitted to Bank,  free and clear
from all liens and  encumbrances  of any kind,  except  for  (collectively,  the
"Permitted  Liens"):  (a) current taxes and assessments not yet due and payable,
(b) liens and encumbrances,  if any, reflected or noted on such balance sheet or
notes thereto,  (c) assets disposed of in the ordinary  course of business,  (d)
any security  interests,  pledges,  assignments or mortgages  granted to Bank to
secure the repayment or performance of the Obligations,  (e) normal easements or
rights of way or similar  restrictions  on real property  which do not adversely
affect  Borrower's  use of said real  estate,  (f) ordinary  arms length  market
leases of  Borrower's  assets to third  parties  as  reflected  or noted on such
balance sheet or notes thereto,  and (g) purchase  money  security  interests or
capital leases permitted pursuant to Section 5.1 of this Agreement.

         3.10 Defaults. Borrower is in material compliance in the aggregate with
all  material  agreements  applicable  to it and  there  does not now  exist any
material in the  aggregate  default or  violation by Borrower of or under any of
the terms,  conditions or obligations of (a) its Certificate of Incorporation or
Bylaws,  or (b) any  material  indenture,  mortgage,  deed of trust,  franchise,
permit, contract,  agreement or other material instrument to which Borrower is a
party  or by  which  it is  bound,  and  the  consummation  of the  transactions
contemplated by this Agreement will not result in such default or violation.

                                       10
<PAGE>
         3.11  Environmental  Laws.  (a)  Borrower  has  obtained  all  material
permits, licenses and other authorizations or approvals which are required under
Environmental  Laws and Borrower is in compliance in all material  respects with
all terms and conditions of the required permits,  licenses,  authorizations and
approvals,  and is also in  compliance  in all material  respects with all other
limitations,  restrictions,  conditions, standards, prohibitions,  requirements,
obligations, schedules and timetables contained in the Environmental Laws.

         (b) Borrower is not aware of, and has not received notice of, any past,
present or future  events,  conditions,  circumstances,  activities,  practices,
incidents,  actions or plans which may interfere  with or prevent  compliance or
continued  compliance,  in any material respect, with Environmental Laws, or may
give rise to any material common law or legal  liability,  or otherwise form the
basis of any material claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing, distribution,
use,  treatment,  storage,  disposal,  transport  or handling  or the  emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic or hazardous substance or waste.

         (c) There is no civil,  criminal or administrative action suit, demand,
claim, hearing,  notice or demand letter, notice of violation,  investigation or
proceeding  pending  or  threatened  against  Borrower,  relating  in any way to
Environmental Laws.

         3.12     Subsidiaries  and  Partnerships.  Borrower has no subsidiaries
and is not a party to any partnership agreement or joint venture agreement.

         3.13 ERISA.  Borrower and all  individuals or entities which along with
Borrower  would be  treated as a single  employer  under  ERISA or the  Internal
Revenue Code of 1986,  as amended (an "ERISA  Affiliate"),  are in compliance in
all  material  respects  with  all of their  obligations  to  contribute  to any
"employee  benefit plan" as that term is defined in Section 3(3) of the Employee
Retirement  Income  Security  Act  of  1974,  and  any  regulations  promulgated
thereunder  from  time  to  time  ("ERISA").  Borrower  and  each  of its  ERISA
Affiliates  are in  compliance in all material  respects  with ERISA,  and there
exists no event described in Section 4043(b) thereof ("Reportable Event").

Section 4.        Affirmative Covenants.

         4.1 Books and Records.  Borrower will maintain  proper books of account
and records and enter therein  complete and accurate  entries and records of all
of its transactions in accordance with generally accepted accounting  principles
and  give  representatives  of Bank  access  thereto  at all  reasonable  times,
including permission to examine, copy and make abstracts from any such books and
records and such other  information which might be helpful to Bank in evaluating
the status of the Loans as it may reasonably request from time to time. Borrower
will  give  Bank  reasonable  access to the  Collateral  and the other  property
securing the Obligations for the purpose of performing  examinations thereof and
to verify its condition or existence.

                                       11
<PAGE>
         4.2      Financial  Statements.   Borrower   will  maintain  a standard
and modern system for accounting and will furnish to Bank:

                  (a) Within forty-five (45) days after the end of each month, a
copy of Borrower's  internally prepared financial  statements for that month and
for the  year to date in a form  reasonably  acceptable  to Bank,  prepared  and
certified as complete and correct,  subject to changes  resulting  from year-end
adjustments, by the principal financial officer of Borrower;

                  (b) Within ninety (90) days after the end of each fiscal year,
a copy of  Borrower's  financial  statements  for that year audited by a firm of
independent  certified public  accountants  acceptable to Bank (which acceptance
will not be unreasonably withheld),  and accompanied by a standard audit opinion
of such accountants without qualification;

                  (c) All of the  statements  referred  to in (a) and (b)  above
shall be in conformance with generally  accepted  accounting  principles  except
that in regard to financial  statements  delivered  under 4.2(a) such  financial
statements shall not have footnotes or year end adjustments;

                  (d) With the statements  submitted  under (a) and (b) above, a
certificate  in the form as set forth in Exhibit 4.2 (d) signed by the principal
financial  officer of Borrower,  (i) stating he is familiar  with all  documents
relating to Bank and that no Event of Default  specified in this Agreement,  nor
any event which upon notice or lapse of time, or both would  constitute  such an
Event of Default,  has  occurred,  or if any such  condition or event existed or
exists,  specifying it and describing what action Borrower has taken or proposes
to take with respect thereto,  and (ii) setting forth, in summary form,  figures
showing  the   financial   status  of  Borrower  in  respect  of  the  financial
restrictions contained in this Agreement;

                  (e) Prior to the end of each fiscal year,  a projected  income
statement and projected  statement of cash flow for the  subsequent  fiscal year
prepared  in  accordance   with   generally   accepted   accounting   principles
consistently applied;

                  (f) Immediately upon any CFO, CEO, COO or other senior officer
that deals with the  Credit  Agreement  and or the Loan  Documents  of  Borrower
("Responsible  Officer of  Borrower")  obtaining  knowledge of any  condition or
event which  constitutes or, after notice or lapse of time or both,  constitutes
an Event of Default,  a  certificate  of such person  specifying  the nature and
period of the existence thereof, and what action Borrower has taken or is taking
or proposes to take in respect thereof;

                  (g) Upon  request,  copies  of all  federal,  state  and local
income tax returns and such other  information as Bank may  reasonably  request,
including but not limited to, a listing of all  transactions  with affiliates of
Borrower;

                                       12

<PAGE>

                  (h) On the date hereof and within  forty-five  (45) days after
the end of each  calendar  month,  Borrower  will  deliver to Bank a  Collateral
Report in the form as set forth in Exhibit 4.2(h) and Account  Receivable  Aging
Reports in the form regularly used by Bank's commercial loan customers  provided
however if Borrower's  monthly  availability  on average for the prior  calendar
month is on average less than  $1,000,000.00  then Bank may require and Borrower
shall provide  Collateral  Reports more frequently (but not more frequently than
weekly) as requested by Bank; and

                  (i)  With  all  financial  statements  delivered  to  Bank  as
provided  in (a) and (b) above,  Borrower  shall  deliver  to Bank a  Compliance
Certificate in the form attached hereto as 4.2(d) confirming, in addition to the
other  information  set  forth  therein,  the  Borrower's  compliance  with  the
financial covenants set forth herein and that no Event of Default has occurred.

         If at any time  Borrower  has any  additional  subsidiaries  which have
financial  statements  that could be  consolidated  with those of Borrower under
generally accepted accounting  principles,  the financial statements required by
subsections  (a) and (b) above will be the financial  statements of Borrower and
all such subsidiaries prepared on a consolidated basis.

         4.3  Condition  and Repair.  Borrower  will maintain its assets in good
repair and  working  order  (normal  wear and tear  excepted)  and will make all
appropriate  repairs and  replacements  thereof  except for  obsolete  assets or
assets no longer used in Borrower's business.

         4.4 Insurance. Borrower will insure its properties and business against
loss or damage of the kinds and in the amounts  customarily  insured  against by
corporations  with  established  reputations  engaged  in the  same  or  similar
business as Borrower.  All such policies will (a) be issued by financially sound
and  reputable  insurers,  (b) name Bank as an  additional  insured  and,  where
applicable,  as loss payee under a lender loss  payable  endorsement  reasonably
satisfactory  to Bank,  and (c) will provide for thirty (30) days written notice
to Bank before such policy is altered or canceled all of which will be evidenced
by a  Certificate  of  Insurance  delivered  to Bank by  Borrower on the date of
execution of this Agreement.

         4.5 Taxes. Borrower will pay when due all taxes,  assessments and other
governmental charges imposed upon it or its assets, franchises, business, income
or  profits  before any  penalty or  interest  accrues  thereon,  and all claims
(including,  without  limitation,  claims for  labor,  services,  materials  and
supplies)  for sums  which  by law  might  be a lien or  charge  upon any of its
assets,  provided  that  (unless any  material  item or property  would be lost,
forfeited  or  materially  damaged as a result  thereof) no such charge or claim
need be paid if it is  being  diligently  contested  in good  faith,  if Bank is
notified  in advance of such  contest and if  Borrower  establishes  an adequate
reserve or other appropriate provision required by generally accepted accounting
principles .

         4.6      Existence;  Business.      Borrower   will  (a)  maintain  its
existence, and (b) engage primarily in business of the same general character as
that now conducted.

                                       13
<PAGE>
         4.7 Compliance with Laws. Borrower will comply with all federal,  state
and local  laws,  regulations  and orders  applicable  to Borrower or its assets
including but not limited to all Environmental Laws, in all respects material to
Borrower's business, assets or prospects and will immediately notify Bank of any
violation of any material rule,  regulation,  statute,  ordinance,  order or law
relating  to the  public  health  or the  environment  and of any  complaint  or
notifications  received by Borrower  regarding to any material  environmental or
safety and health rule, regulation, statute, ordinance or law.

         4.8 Notice of  Default.  Borrower  will,  within  three (3) days of its
knowledge  thereof,  give written  notice to Bank of: (a) the  occurrence of any
event or the existence of any condition which would be, after notice or lapse of
applicable  grace  periods,  an Event of Default,  and (b) the occurrence of any
event or the  existence of any  condition  which would  prohibit  Borrower  from
continuing to make the representations set forth in this Agreement.

         4.9  Costs.  Borrower  will pay to Bank its fees,  costs  and  expenses
(including, without limitation, reasonable attorneys' fees, other professionals'
fees, appraisal fees, environmental assessment fees (including Phase I and Phase
II  assessments),  expert  fees,  court  costs,  litigation  and  other  expense
(collectively,  "Costs")  incurred  or  paid  by Bank  in  connection  with  the
negotiating,  documenting (the cost of negotiating and documenting being subject
to the  limitations set forth in Section 2.9 of this  Agreement),  administering
and enforcing the  Facility,  the Loans and the Loan  Documents and the defense,
preservation and protection of Bank's rights and remedies thereunder,  including
without  limitation,  its  security  interest  in the  Collateral  or any  other
property   pledged  to  secure  the  Loans,   whether  incurred  in  bankruptcy,
insolvency,  foreclosure or other  litigation or  proceedings or otherwise.  The
Costs will be due and payable upon demand by Bank. If Borrower  fails to pay the
Costs  when upon such  demand,  Bank is  entitled  to  disburse  such sums as an
advance  under the Facility.  Thereafter,  the Costs will bear interest from the
date  incurred or  disbursed  at the highest  rate set forth in the Notes.  This
provision will survive the termination of this Agreement and/or the repayment of
any amounts due or the performance of any Obligation.

         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,  and the principal bank of 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 of at least .75% of the total amount of the
Facility  and shall  grant Bank the first and last  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.

         4.11 Other  Amounts  Deemed  Loans.  If Borrower  fails to pay any tax,
assessment, governmental charge or levy or to maintain insurance within the time
permitted or required by this  Agreement,  or to discharge  any Lien  prohibited
hereby,  or to comply  with any  other  Obligation,  Bank may,  but shall not be
obligated  to,  pay,  satisfy,  discharge  or bond the same for the  account  of
Borrower,  and to the extent  permitted  by law and at the  option of Bank,  all
monies  so  paid by Bank  on  behalf  of  Borrower  will  be  deemed  Loans  and
Obligations.

                                       14
<PAGE>

         4.12 Assignment of Lease Proceeds.  Borrower shall use its best efforts
to deliver to the Bank original fully executed  Assignment of Lease Proceeds for
all of Borrower's  Leases executed by Borrower and all lessees within sixty (60)
days of the Closing  Date or for Leases  executed  after the Closing Date within
sixty (60) days of the execution of the Lease. 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.

         4.13 Leases. Borrower shall make available for review by Bank copies of
all  Borrower's  Leases  executed by Borrower and all lessees at the Closing and
shall  deliver  copies of all new Leases  executed by Borrower and lessees after
the Closing within five (5) days of execution.

         4.14  Intellectual  Property.  Borrower shall,  within ten (10) days of
request  by Bank,  execute  and  deliver  to Bank  such  security  documents  as
reasonably  requested by Bank to perfect a first priority  security  interest in
the  intellectual  property  of  Borrower  including  but  not  limited  to  the
Borrower's trademarks and patents.

Section 5.        Negative Covenants.

         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 performance bonds required to be
obtained in connection with lottery Leases.

         5.2 Prepayments.  Borrower will not voluntarily prepay any Indebtedness
owing by Borrower  prior to the stated  maturity date thereof other than (i) the
Obligations  and (ii)  Indebtedness to trade creditors where the prepayment will
result in a  discount  on the amount  due or is paid in the  ordinary  course of
business.

         5.3      [Intentionally Omitted]

         5.4      [Intentionally Omitted]

         5.5 Pledge or  Encumbrance of Assets.  Other than the Permitted  Liens,
Borrower will not create,  incur, assume or permit to exist, arise or attach any
Lien in any present or future asset, except for Liens to Bank, Liens existing on
the date of this Agreement which have been disclosed to and approved by Bank and
Liens imposed by law which secure amounts not at the time due and payable.

         5.6  Guarantees  and Loans.  Borrower will not enter into any direct or
indirect  guarantees  other than by  endorsement  of checks for deposit or other

                                       15
<PAGE>

than in the ordinary  course of business nor make any advance or loan other than
in the ordinary course of business as presently  conducted,  including,  without
limitation,  loans and advances to employees,  officers or directors of Borrower
except  for (i)  advances  to  employees,  officers  or  directors  for  travel,
entertainment and similar expenses in amounts  outstanding at any given time not
to exceed $500,000.00,  (ii) a presently outstanding loan to Edmund Turek in the
amount of $280,000  which may be increased  by not more than  $350,000 and which
shall be paid off at such time as Borrower makes the Preferred Share  Redemption
and,  (iii) other loans to  officers,  directors  or employees in amounts in the
aggregate outstanding at any one time not to exceed $500,000.

         5.7 Share Interest; Distributions. Borrower will not (a) declare or pay
any distributions  excepting dividends to equity shareholders  (provided however
dividends  to  equity  shareholders  may not be made at such time as there is an
Event of Default and an Event of Default is  Continuing  or where such  dividend
shall  cause an  Event of  Default)  (b)  make any  payments  of any kind to its
shareholders (including, without limitation, debt repayments, payments for goods
or services or otherwise, but excluding ordinary salary payments to shareholders
employed by Borrower and dividends to  shareholders) or (c) redeem any shares of
its equity  interests in any fiscal year except the redemption on or about April
1, 2001 or at any time  thereafter of all the issued and  outstanding  preferred
stock of Borrower for redemption  price of  $1,350,000.00  (the "Preferred Share
Redemption").

         5.8      [Intentionally Deleted]

         5.9      Merger Purchase of Assets;  Disposition of Assets.    Borrower
will  not (a)  merge or  consolidate  with any  corporation,  including  but not
limited to affiliates except in regards to an Acquisition or (b) sell,  transfer
or  otherwise  dispose of all or  substantially  all of its assets,  whether now
owned or hereafter acquired .

         5.10  Transactions  with  Affiliates.  Borrower  will  not  (except  as
permitted  under  Section  5.6  hereof) (a)  directly  or  indirectly  issue any
guarantee for the benefit of any of its  Affiliates,  (b) directly or indirectly
make any loans or advances to or investments in any of its Affiliates, (c) enter
into any transaction with any of its Affiliates, other than transactions entered
into on an arm's length basis in the normal  course of Borrower's  business,  or
(d) divert (or permit anyone to divert) any of its business opportunities to any
Affiliate  or any other  corporate or business  entity in which  Borrower or its
shareholders hold a direct or indirect interest.

         5.11  Investments.  Borrower will not purchase or hold beneficially any
stock,  securities or evidences of  indebtedness  of, or make any  investment or
acquire any  interest  in, any other firm,  partnership,  corporation  or entity
other than in regards to an Acquisition  and/or short term investments of excess
working capital in one or more of the following: (a) investments (of one year or
less) in direct or guaranteed  obligations of the United States, or any agencies
thereof; and (b) investments (of one year or less) in certificates of deposit of
banks or trust  companies  organized  under the laws of the United States or any
jurisdiction thereof, provided that such banks or trust companies are insured by
the  Federal  Deposit  Insurance  Corporation  and have  capital  in  excess  of
$25,000,000.

                                       16
<PAGE>

         5.12  Indebtedness to Tangible Net Worth.  Borrower will not permit its
ratio of  Indebtedness  to  Tangible  Net Worth as  measured  at the end of each
calendar  quarter to exceed  1.50:1.00 at any one time provided  however at such
time as Borrower has redeemed all of its issued and outstanding  preferred stock
the maximum ratio shall automatically change to 1.60:1.00.

         5.13 Minimum Tangible Net Worth.  Borrower will not permit its Tangible
Net  Worth to be less  than  $18,500,000.00  as of the  calendar  quarter  ended
September  30,  2000 and for each  calendar  quarter  thereafter  the  Borrowers
Tangible Net Worth shall not be less than said amount  increased by  $125,000.00
for each such calendar quarter thereafter provided however the minimum amount of
Borrower's  Tangible  Net  Worth  will be  decreased  by the  dollar  amount  of
Borrower's  redemption of all of Borrowers preferred stock on or before April 1,
2001 or thereafter.

         5.14 Interest Coverage Ratio. Borrower shall maintain at all times on a
twelve (12) month trailing basis of no less than a 5.00:1.00  ratio with respect
to the (a) EBITDA to (b) the sum of interest  expense of Borrower  plus  Current
Maturities of Long Term Debt plus  dividends to  shareholders  of Borrower.  The
Interest  Coverage  Ratio shall be measured at the end of each calendar  quarter
commencing December 31, 2000 for the trailing twelve (12) calendar month period.

Section 6.        Events of Default and Remedies.

         6.1      Events of Default.   Any  of the  following  events will be an
Event of Default ("Event of Default"):

         (a) any representation or warranty made by Borrower herein or in any of
the  Loan   Documents   is   incorrect   when  made  or   reaffirmed   and  such
misrepresentations and/or breached warranties in the aggregate are material; or

         (b)      Borrower defaults in the payment of any  principal or interest
on any  Obligation  for two (2)  business  days  after  such  payment is due and
payable, by acceleration or otherwise; or

         (c)  Borrower  fails to observe or perform any  covenant,  condition or
agreement herein and fails to cure such default within 30 days of the earlier of
(i) written notice thereof from Bank to Borrower if such default is not known by
a Responsible  Officer of Borrower or (ii) knowledge of a Responsible Officer of
such  default,  provided  that such 30 day grace  period will not apply to (i) a
breach of any covenant which in Bank's good faith judgment is incapable of cure,
(ii) any failure to maintain insurance or permit inspection of the Collateral or
of the books and records of Borrower,  (iii) any breach in any negative covenant
set forth in  Section 5 hereof,  or (iv) any  breach of any  covenant  which has
already occurred; or

         (d) a court  enters a decree  or  order  for  relief  with  respect  to
Borrower in an involuntary case under any applicable  bankruptcy,  insolvency or
other similar law then in effect, or appoints a receiver, liquidator,  assignee,

                                       17
<PAGE>

custodian,  trustee, sequestrator (or other similar official) of Borrower or for
any  substantial  part of its property,  or orders the wind-up or liquidation of
its  affairs;  or a  petition  initiating  an  involuntary  case  under any such
bankruptcy,  insolvency  or similar law is filed and is pending  for  forty-five
(45) days without dismissal; or

         (e)  Borrower   commences  a  voluntary   case  under  any   applicable
bankruptcy,  insolvency  or other  similar  law in effect,  or makes any general
assignment for the benefit of creditors,  or fails generally to pay its debts as
such debts become due, or takes  corporate  action in  furtherance of any of the
foregoing; or

         (f)  Borrower  defaults  under the terms of any  Indebtedness  or lease
involving  obligations  of the Borrower in the aggregate of  $100,000.00 or more
and such  default  gives any  creditor  or lessor  the right to  accelerate  the
maturity of any such indebtedness or lease payments which right is not contested
by Borrower or is determined by any court of competent jurisdiction to be valid;
or

        (g)  final judgment of the payment of money is rendered against Borrower
and remains  undischarged  for 10 days during which execution is not effectively
stayed; or

         (h) the  dissolution of Borrower; or

         (i) the commencement of any foreclosure proceedings, proceedings in aid
of execution,  attachment  actions,  levies against, or the filing by any taxing
authority of a lien which is not  discharged  within ten (10) days of Borrower's
knowledge  thereof  against any of the  Collateral or any property  securing the
repayment of any of the Obligations; or

         (j) the loss,  theft or  substantial  damage to the  Collateral  or any
property securing the repayment of the Obligations which is not fully covered by
insurance (subject to a reasonable  deductible) if the result of such occurrence
will be, in Bank's reasonable judgment,  the failure or inability of Borrower to
continue  substantially normal operation of its business within thirty (30) days
of the date of such occurrence; or

         (k) (i) the validity or  effectiveness  of any of the Loan Documents or
its transfer, grant, pledge, mortgage, or assignment by the party executing such
Loan Document is impaired;  (ii) any party  executing any of the Loan  Documents
asserts  that any of such  Loan  Documents  is not a legal,  valid  and  binding
obligation of the party thereto  enforceable in accordance with its terms; (iii)
the  security  interest  or Lien  purporting  to be  created  by any of the Loan
Documents  will for any reason (other than as a result of Bank's fault) cease to
be a valid,  perfected lien subject to no other liens other than Liens permitted
by the  terms  of  this  Agreement;  or  (iv)  any  Loan  Document  is  amended,
hypothecated,  subordinated,  terminated  or  discharged,  or if any  person  is
released  from  any  of its  covenants  or  obligations  under  any of the  Loan
Documents except as permitted by Bank in writing; or

         (l)  Bank has  called  for  additional  security   from  the  assets of
Borrower and the Borrower has not furnished such additional  security on demand;
or

                                       18
<PAGE>
         (m) a Reportable Event (as defined in ERISA) occurs with respect to any
employee  benefit plan  maintained  by Borrower for its  employees  other than a
Reportable  Event  caused  solely by a decrease in  employment;  or a trustee is
appointed by a United States  District Court to administer any employee  benefit
plan; or the Pension  Benefit  Guaranty  Corporation  institutes  proceedings to
terminate any of Borrower's employee benefit plans; or

         (n)  the filing of  any lien or charge  against  the  Collateral or any
part thereof which is not removed to the satisfaction of Bank within a period of
30 days thereafter; or

         (o)  the  abandonment  by  Borrower of all or  any material part of the
Collateral.

         6.2 Remedies.  If any Event of Default  occurs and the Event of Default
is Continuing,  Bank may (i) cease advancing money  hereunder,  (ii) declare all
Obligations to be immediately due and payable,  whereupon such  Obligations will
immediately  become  due and  payable,  (iii)  exercise  any and all  rights and
remedies  provided by  applicable  law and the Loan  Documents,  (iv) proceed to
realize upon the Collateral or any property securing the Obligations, including,
without limitation,  causing all or any part of the Collateral to be transferred
or  registered  in its  name  or in  the  name  of any  other  person,  firm  or
corporation,  with or without  designation of the capacity of such nominee,  all
without presentment,  demand,  protest, or notice of any kind, each of which are
hereby expressly waived by Borrower. Borrower shall be liable for any deficiency
remaining  after  disposition  of any  Collateral,  and waives all valuation and
appraisement laws.

         6.3 Setoff.  If any Event of Default occurs and the Event of Default is
Continuing, Bank is authorized,  without notice to Borrower, to offset and apply
to all or any part of the Obligations all moneys,  credits and other property of
any nature whatsoever of Borrower now or at any time hereafter in the possession
of, in transit to or from,  under the control or custody of, or on deposit  with
(whether held by Borrower  individually  or jointly with another  party),  Bank,
including but not limited to certificates of deposit.

         6.4 Default Rate.  After the  occurrence of an Event of Default and the
Event of Default is Continuing,  all amounts of principal  outstanding as of the
date of the  occurrence  of such Event of Default  will  accrue  interest at the
Default  Rate,  in Bank's sole  discretion,  without  notice to  Borrower.  This
provision  does not constitute a waiver of any Events of Default or an agreement
by Bank to permit any late payments whatsoever.

         6.5      [Intentionally Deleted]

         6.6 No Remedy Exclusive. No remedy set forth herein is exclusive of any
other  available  remedy or remedies,  but each is cumulative and in addition to
every other remedy available under this Agreement,  the Loan Documents or as may
be now or hereafter  existing at law, in equity or by statute.  Borrower  waives
any  requirement of marshaling of assets which may be secured by any of the Loan
Documents.

         6.7 Effect of  Termination.  The termination of this Agreement will not
affect  any  rights of either  party or any  obligation  of either  party to the

                                       19
<PAGE>

other,  arising  prior  to the  effective  date  of  such  termination,  and the
provisions  hereof shall continue to be fully operative  until all  transactions
entered into,  rights created or Obligations  incurred prior to such termination
have been fully  disposed of,  concluded or liquidated.  The security  interest,
lien and rights  granted to Bank  hereunder  and under the Loan  Documents  will
continue  in full force and  effect,  notwithstanding  the  termination  of this
Agreement or the fact that no Loans are  outstanding  to Borrower,  until all of
the Obligations, have been paid in full.

         6.8      [Intentionally Deleted]

Section 7.        Conditions Precedent.

         7.1 Conditions to Initial  Loans.  Bank will have no obligation to make
or advance any Revolving  Loan until Borrower has delivered to Bank at or before
the closing date, in form and substance satisfactory to Bank:

                  (a)      Executed  versions of  the Revolving Note in the form
of Exhibit 2.1 attached hereto.

                  (b)      A  Certificate  of Borrower  in  the  form of Exhibit
7.1(b) and all attachments thereto.

                  (c)      A   favorable   opinion   of   counsel  to  Borrower,
substantially  in the form of  Exhibit  7.1(c) attached hereto.

                  (d) An executed version of the Security  Agreement in the form
of Exhibit 8.5  attached  hereto  along with a  completed  version on Schedule I
attached thereto entitled "Specific Representations".

                  (e) All  appropriate  financing  statements  (Form  UCC-1) and
consents or waivers of landlords,  warehousemen and mortgagees,  as requested by
Bank.

                  (f) A letter to each lessee  under the Leases  executed by the
Borrower in the form as set forth as Exhibit  7.1(f)  directing the lessee under
the Lease to send payments or proceeds from the Lease to the Lock Box.

                  (g) All executed  Assignment of Lease Proceeds received by the
Borrower  as  of  the  Closing  Date  from  the  lessees  under  the  Leases  in
substantially the form as set forth in Exhibit 7.1(g) attached hereto.

                  (h) UCC searches, tax lien and litigation searches,  insurance
certificates,  notices or other  documents  which Bank may  require to  reflect,
perfect or protect  Bank's first  priority lien in the  Collateral and all other
property  pledged  to  secure  the  Obligations  and to  fully  consummate  this
transaction.

                                       20
<PAGE>
                  (i) All requisite  releases of liens,  termination  statements
and  satisfactions of mortgages  necessary to release all liens and encumbrances
against the Collateral  and any other  property  pledged to secure the Loans and
all requisite  waivers and subordination  agreements,  in a form satisfactory to
Bank, to be executed and delivered by Borrower's  landlords and mortgagees which
are  necessary to grant Bank a first lien in the  Collateral,  including but not
limited to all Inventory and Equipment of Borrower.

                  (j)  Borrower  will  pay to Bank  all out of  pocket  expenses
incurred  by Bank in  connection  with the  preparation  of this  Agreement  and
accompanying  documents and the  consummation of the  transactions  contemplated
hereby subject to the limitation set forth in Section 2.9 of this Agreement.

                  (k)  A Certificate of Insurance as described in Section 4.4
hereof.

                  (l)  A Collateral Report in the form as set forth in Exhibit
4.2(h).

                  (m)  A Mortgage of Intellectual Property of Borrower in a form
reasonably acceptable to Bank.

                  (n)  A  Pay off  Letter  executed  by Firstar, N.A., in a form
acceptable to Bank.

                  (o) Bank shall have completed to its  reasonable  satisfaction
an audit of the books and records of Borrower,  including the Collateral.  It is
understood, however, that any such audit by Bank will in no respect waive Bank's
rights to pursue remedies upon an Event of Default.

                  (p) Such  additional  information  and  materials  as Bank may
reasonably request.

         7.2      Conditions to Each Revolving Loan.    On   the  date  of  each
Revolving  Loan, the following  statements will be true:

                  (a)    All of  the  representations  and warranties  contained
herein and in the Loan  Documents  will be correct in all  material  respects as
though made on such date;

                  (b)   No event will have occurred and be  continuing, or would
result from such Revolving Loan, which constitutes an Event of Default, or would
constitute an Event of Default but for the  requirement  that notice be given or
lapse of time or both;

                  (c) The  aggregate  unpaid  principal  amount of the Revolving
Loans after giving  effect to such  Revolving  Loan will not violate the lending
limits set forth in Section 2.1 of this Agreement.

                  The  acceptance by Borrower of the proceeds of each  Revolving
Loan will be deemed to constitute a representation and warranty by Borrower that

                                       21
<PAGE>

the conditions in Section 7.2 of this Agreement, other than those that have been
waived in writing by Bank, have been satisfied.

Section 8.        Miscellaneous Provisions.

         8.1  Miscellaneous.  This  Agreement,  the  exhibits and the other Loan
Documents  are the complete  agreement of the parties  hereto and  supersede all
previous  understandings  relating to the subject matter hereof.  This Agreement
may be amended only in writing  signed by the party against whom  enforcement of
the amendment is sought. This Agreement may be executed in counterparts.  If any
part of this Agreement is held invalid, illegal or unenforceable,  the remainder
of this  Agreement  will not in any way be  affected.  This  Agreement is and is
intended to be a continuing  agreement  and will remain in full force and effect
until the Loans are finally  and  irrevocably  paid in full and the  Facility is
terminated.

         8.2 Waiver by Borrower. Borrower waives notice of non-payment,  demand,
presentment,  protest or notice of protest of any Accounts or other  Collateral,
and all other notices  (except those notices  specifically  provided for in this
Agreement);  consents to any renewals or extensions of time of payment  thereof.
Borrower  hereby waives all suretyship  defenses,  including but not limited to,
all  defenses  set forth in Section  3-605 of the Uniform  Commercial  Code,  as
revised in 1990 (the "UCC"). Such waiver is entered to the full extent permitted
by Section 3-605 (i) of the UCC.

         8.3 Binding  Effect.  This  Agreement will be binding upon and inure to
the benefit of the respective legal  representatives,  successors and assigns of
the parties  hereto;  however,  Borrower  may not assign or transfer  any of its
rights or delegate  any of its  Obligations  under this  Agreement or any of the
Loan  Documents,  by operation  of law or  otherwise.  Bank (and any  subsequent
assignee)  may  transfer  and assign any of its  rights or  delegate  any of its
duties  under this  Agreement  or may  transfer or assign  partial  interests or
participation  in  the  Loans  to  other  persons.  Bank  may  disclose  to  all
prospective and actual assignees and  participants  all financial,  business and
other information about a Borrower, which Bank may possess at any time.

         8.4  Subsidiaries.  If Borrower has any additional  Subsidiaries at any
time  during  the  term  of  this   Agreement,   the  term  "Borrower"  in  each
representation,  warranty  and  covenant  herein will mean  "Borrower"  and each
Subsidiary  individually  and in the  aggregate,  and  Borrower  will cause each
Subsidiary to be in compliance therewith.

         8.5 Security.  The Obligations are secured as provided herein,  in this
Agreement,  the  Security  Agreement,  in the Loan  Documents  and in each other
document or agreement which by its terms secures the repayment or performance of
the Obligations.  Notwithstanding  anything contained in the Credit Agreement or
the Loan Documents to the contrary,  to the extent of any prohibition in a Lease
applicable  thereto,  the  assignment  of the payments  and/or rights under each
Lease from  Borrower to Bank shall not be  effective  as to each Debtor  under a
Lease until such time as the  Assignment of Lease  Proceeds shall be executed by
such Debtor.

                                       22
<PAGE>

         8.6 Survival. All representations, warranties, covenants and agreements
made by Borrower herein and in the Loan Documents will survive the execution and
delivery of this Agreement, the Loan Documents and the issuance of the Notes.

         8.7  Delay or  Omission.  No delay or  omission  on the part of Bank in
exercising  any right,  remedy or power  arising  from any Event of Default will
impair any such right, remedy or power or any other right, remedy or power or be
considered  a waiver or any right,  remedy or power or any Event of Default  nor
will the action or omission to act by Bank upon the  occurrence  of any Event of
Default impair any right,  remedy or power arising as a result thereof or affect
any subsequent Event of Default of the same or different nature.

         8.8 Notices.  Any notices under or pursuant to this  Agreement  will be
deemed  duly  sent  when  delivered  in hand or when  mailed  by  registered  or
certified mail, return receipt requested, addressed as follows:

                To Borrower:              INTERLOTT TECHNOLOGIES, INC.
                                          7697 Innovation Way
                                          Mason, Ohio 45040-9695
                                          Attention:   Dennis W. Blazer

                With a copy to:           Jeffrey S. Schloemer, Esq.
                                          Taft, Stettinius & Hollister, LLP
                                          1800 Firstar Tower
                                          425 Walnut Street
                                          Cincinnati, Ohio 45202

                To Bank:                  Fifth Third Bank
                                          38 Fountain Square Plaza
                                          Cincinnati, Ohio 45263
                                          Attention: William D. Hummel

                With a copy to:           Jeffrey P. Harris, Esq.
                                          Statman, Harris, Siegel & Eyrich, LLC
                                          4100 Carew Tower
                                          441 Vine Street
                                          Cincinnati, Ohio 45202

         Either party may change such address by sending  written  notice of the
change to the other party.

         8.9 No  Partnership.  Nothing  contained  herein  or in any of the Loan
Documents is intended to create or will be construed to create any  partnership,
joint  venture or other  relationship  between Bank and  Borrower  other than as
expressly  set forth  herein or therein  and will not create any joint  venture,
partnership or other relationship.

                                       23
<PAGE>

         8.10 Indemnification. If after receipt of any payment of all or part of
the  Obligations,  Bank is for any reason compelled to surrender such payment to
any person or entity,  because such payment is determined to be void or voidable
as a preference,  impermissible  setoff, or diversion of trust funds, or for any
other reason, this Agreement will continue in full force and effect and Borrower
will be  liable  to,  and will  indemnify,  save and hold  Bank,  its  officers,
directors,  attorneys,  and  employees  harmless  of and from the amount of such
payment surrendered. The provisions of this Section will be and remain effective
notwithstanding  any  contrary  action  which  may  have  been  taken by Bank in
reliance on such payment,  and any such contrary action so taken will be without
prejudice to Bank's rights under this  Agreement and will be deemed to have been
conditioned upon such payment becoming final,  indefeasible and irrevocable.  In
addition,  Borrower will  indemnify,  defend,  save and hold Bank, its officers,
directors,  attorneys,  and employees  harmless of, from and against all claims,
demands,  liabilities,  judgments, losses, damages, costs and expenses, joint or
several (including all accounting fees and attorneys' fees reasonably incurred),
that Bank or any such indemnified party may incur arising out of this Agreement,
any of the Loan  Documents  or any act taken by Bank  hereunder  except  for the
willful misconduct or gross negligence of such indemnified party. The provisions
of this Section will survive the termination of this Agreement.

         8.11 Governing Law;  Jurisdiction.  This  Agreement,  the Notes and the
other Loan Documents will be governed by the domestic laws of the State of Ohio.
Borrower agrees that the state and federal courts in Hamilton  County,  Ohio, or
any other court in which Bank initiates proceedings have exclusive  jurisdiction
over all matters arising out of this  Agreement,  and that service of process in
any such  proceeding  will be  effective  if mailed to  Borrower  at its address
described in the Notices  section of this  Agreement.  BANK AND BORROWER  HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

         IN WITNESS  WHEREOF,  Borrower and Bank have executed this Agreement by
their duly authorized officers as of the date first above written.

                                  INTERLOTT TECHNOLOGIES, INC.

                                  By:  /s/Dennis W. Blazer
                                       -----------------------------

                                  Its:  Chief Financial Officer
                                       -----------------------------

                                  FIFTH THIRD BANK

                                  By:  /s/K.E. Goodpaster
                                       -----------------------------

                                  Its:  Vice President
                                       -----------------------------

                                       24
<PAGE>

                                    EXHIBIT 1

                                   DEFINITIONS

     1.   Accounts"  means all  accounts  (whether  or not  Eligible  Accounts),
          contract  rights,  instruments,  documents,  chattel  paper,  and  all
          obligations  in any form  arising out of the sale or lease of goods or
          the  rendition of services by  Borrower;  all  guaranties,  letters of
          credit  and  other  security  for any of the  above;  all  merchandise
          returned  to or  reclaimed  by  Borrower;  and all books  and  records
          (including  computer  programs,  tapes and data  processing  software)
          evidencing an interest in or relating to the above.

     2.   "Acquisitions"  means any  purchase  of assets  from a third  party or
          merger or consolidation with a third party (all of the foregoing being
          in the same business as Borrower)  which (i) requires a purchase price
          consisting  of cash  payments  at closing or  required  thereafter  in
          connection  with the closing plus assumed  liabilities  (in accordance
          with general  accepted  accounting  principles),  but exclusive of any
          contingent  obligations  that would not be treated as a  liability  in
          accordance with generally  accepted  accounting  principles and/or any
          contingent  liabilities  associated with earn out or deferred  payment
          provisions based on future performance, of not more than fifty percent
          (50%) of the average excess availability under the Revolving Loans for
          the thirty day period prior to the  acquisition  and (ii) Borrower has
          delivered to Bank at least  thirty (30) days prior to the  acquisition
          projected  proforma  financial  statements  for the  Borrower  for the
          period  after  the  acquisition  to  the  Termination  Date  in a form
          reasonably   acceptable  to  the  Bank  prepared  in  accordance  with
          generally accepted accounting principles and certified as complete and
          correct by an officer of Borrower  and  evidencing  future  compliance
          with the terms of the Agreement in a manner  reasonably  acceptable to
          Bank.

     3.   "Affiliate"  means,  as to Borrower,  (a) any person or entity  which,
          directly or indirectly, is in control of, is controlled by or is under
          common  control with,  Borrower,  or (b) any person who is a director,
          officer or employee (i) of Borrower or (ii) of any person described in
          the preceding clause (a). For purposes of this definition,  control of
          a person shall mean (a) the power, direct or indirect, (i) to vote ten
          percent (10%) or more of the securities  having  ordinary voting power
          for the  election  of  directors  of such  person or (ii) to direct or
          cause the  direction  of the  management  and  policies of such person
          whether by  contract or  otherwise,  or (b) the  ownership,  direct or
          indirect,  of ten  percent  (10%)  or  more  of any  class  of  equity
          securities of such person.

                                      25
<PAGE>

     4.   "Applicable  Margins" shall mean the Applicable  Revolver LIBOR Margin
          and the Applicable Revolver Prime Margin.

     5.   "Applicable  Revolver Prime Margin" shall mean the Applicable Revolver
          Prime Margin expressed as a percentage,  shall be - .25% from the date
          of execution of the Agreement  until the first  Calculation  Date, and
          thereafter  determined  based on the  Indebtedness  to EBITDA Ratio of
          Borrower as follows:

         Applicable Revolver Prime Margin     Indebtedness to EBITDA Ratio

                  - .25%                      Less than 1.50:1.00

                  - .25%                      Less than 1.75:1.00 but greater
                                              than or equal to 1.50:1.00

                  0%                          Greater than or equal to 1.75:1.00

         The  Indebtedness  to EBITDA Ratio shall be  calculated as set forth in
         the  definition  of  Indebtedness  to EBITDA Ratio on each  Calculation
         Date.

     6.   "Applicable  Revolver LIBOR Margin" shall mean the Applicable Revolver
          LIBOR  Margin or expressed  as a  percentage,  shall be 1.75% from the
          date of execution of this Agreement until the first  Calculation  Date
          and thereafter as determined based on the Indebtedness to EBITDA Ratio
          of Borrower, as follows:

         Applicable Revolver LIBOR Margin    Indebtedness to EBITDA Ratio

                           1.625%             Less than 1.50:1.00

                           1.75%              Less than 1.75:1.00 but greater
                                              than or equal to 1.50:1.00

                           2.00%              Greater than or equal to 1.75:1.00

         The  Indebtedness  to EBITDA Ratio shall be  calculated as set forth in
         the  definitions of  Indebtedness  to EBITDA Ratio on each  Calculation
         Date.

     7.   "Assignment of Lease  Proceeds" shall have the meaning as set forth in
          Section 7.1 (g) of the Agreement.

     8.   "Available  Amount" of any Letter of Credit  means,  at any time,  the
          maximum  amount  available  to be drawn under such Letter of Credit at
          such time  (assuming  compliance  at such time with all  conditions to
          drawing).

                                      26
<PAGE>
     9.   "Bank Affiliate"  means Bank,  Fifth Third Leasing Company,  and every
          other entity of which Fifth Third Bancorp is the majority owner.

     10.  "Business  Day" means any day on which U.S.  Federal  Reserve  Bank is
          open in Cincinnati,  Ohio for the transaction of its normal  business,
          and if the  applicable  day relates to LIBOR  matters,  a day on which
          dealings in U.S.  Dollar  deposits  are also  carried on in the London
          interbank market and banks are open for business in London.

     11.  "Calculation Date" means in regards to the calculation of Indebtedness
          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.

     12.  "Collateral"  has the meaning  assigned  to that term in the  Security
          Agreement.

     13.  "Collection  Account" has the meaning assigned to that term in Section
          2.1 of this Agreement.

     14.  "Current  Maturities  of Long Term  Debt"  means  that  portion of the
          principal  amount of Long Term Debt  which  must be repaid  during the
          period for which the determination is made.

     15.  "Debtors"  means  Borrower's  customers  and all other persons who are
          obligated or indebted to Borrower in any manner,  whether  directly or
          indirectly, primarily or secondarily,  contingently or otherwise, with
          respect to Accounts or General Intangibles.

     16.  "Default Rate" means three percent (3%) in excess of the interest rate
          otherwise in effect under amounts  outstanding  under the Notes. In no
          event will the interest rate accruing under such Notes be increased to
          be in excess of the maximum  interest  rate  permitted  by  applicable
          state or federal usury laws then in effect.

                                      27

<PAGE>

     17.  "EBITDA" means net income of Borrower before taxes,  interest expense,
          depreciation and amortization expenses for a given period.

     18.  "Eligible  Accounts"  means those  accounts  which are due and payable
          within  ninety (90) days from the invoice date, in which Bank has been
          granted a valid first priority  security  interest and strictly comply
          with all of Borrower's  warranties  and  representations  to Bank; but
          Eligible  Accounts will not include the following:  (a) Accounts which
          are due and have not been paid within  ninety (90) days of the invoice
          date;  (b) Accounts with respect to which the Debtor is a shareholder,
          officer,  employee or agent of Borrower, or a corporation more than 5%
          of the stock of which is owned by any of such persons or an affiliate;
          (c) Accounts with respect to which the Debtor is not a resident of the
          United  States  unless such account is supported by a letter of credit
          in a form reasonably acceptable to Bank which letter of credit and the
          proceeds  therefrom  have been assigned to the Bank; (d) Accounts with
          respect to which the Debtor is the  United  States or any  department,
          agency or  instrumentality  of the United States unless  Assignment of
          Claims Act has been complied  with or Bank has  expressly  waived that
          requirement  with respect to specific  receivables;  (e) Accounts with
          respect to which the Debtor is a subsidiary of, related to, affiliated
          or has common officers or directors with Borrower; (f) any Accounts of
          a  particular  Debtor only for the amount  that  Borrower is liable to
          that Debtor for goods sold or services rendered by that Debtor to such
          Borrower;  (g) any and all Accounts  owed by a particular  Debtor when
          50% or more of the total  Accounts of such Debtor are more than ninety
          (90) days unpaid from the invoice  date;  (h) any  Accounts  owed by a
          Debtor who does not meet  Bank's  standards  of  creditworthiness,  in
          Bank's  commercially  reasonable  credit  judgment  exercised  in good
          faith;  (i) any Accounts owed by any Debtor which has filed or has had
          filed against it a petition for bankruptcy, insolvency, reorganization
          or any other type of relief under  insolvency  laws;  (j) any Accounts
          owed by a Debtor  which  has made an  assignment  for the  benefit  of
          creditors;  (k) any Accounts  deemed to  ineligible by Bank based upon
          credit and collateral  considerations  as Lender may deem appropriate,
          in Bank's  commercially  reasonable  judgment exercised in good faith;
          (l) deposits;  (m) accrued rebates;  and (n) any Account which relates
          to a Lease and/or is included as an Eligible Lease Payment.

     19.  "Eligible  Inventory"  means  Inventory  owned by Borrower of finished
          goods or raw materials (but excluding work in progress)  valued at the
          lower of cost or fair market value on a first in, first out basis,  in
          accordance with generally accepted accounting principles  consistently
          applied,  and excluding (a) obsolete,  slow moving or unsalable items,
          (b) any Inventory not in the actual possession of Borrower at its 7697

                                      28
<PAGE>
          Innovation Way, Mason, Ohio location or such other locations for which
          Bank has a perfected security interest, (c) any Inventory subject to a
          Lien or  claim  of title of a  government  authority  under 32  C.F.R.
          Section  7-104.35(b)/FAR  52.232.16  and (d)  other  Inventory  deemed
          ineligible  by  Bank  based  on  commercially  reasonable  credit  and
          collateral  considerations  of Bank.  Inventory  which is deemed to be
          Eligible Inventory, but which subsequently fails to meet the foregoing
          criteria  for  Eligible  Inventory,  shall  immediately  cease  to  be
          Eligible  Inventory for the purpose of determining the total amount of
          Revolving Loans that may be made to Borrower hereunder.

     20.  "Eligible  Lease  Payments"  means those Lease  payments on Leases for
          lottery  equipment  due  from  Debtors  to  Borrower  from the date of
          calculation  to the  earlier  of (i) 24  months  or (ii)  the  date of
          completion of the Lease, excluding any option or renewal periods which
          have not been  exercised  in writing and  strictly  comply with all of
          Borrower's  warranties and representations to Bank; but Eligible Lease
          Payments  will not  include the  following:  (a) Any Lease and related
          Lease  payments  only for as long as and for which two or more monthly
          Lease  payments  have not been paid within thirty (30) days of the due
          date or have not been paid  within  ninety  (90)  days of the  invoice
          date;  (b)  Lease  payments  with  respect  to which  the  Debtor is a
          shareholder,  officer, employee or agent of Borrower, or a corporation
          more than 5% of the stock of which is owned by any of such  persons or
          an affiliate;  (c) Lease  payments with respect to which the Debtor is
          not a  resident  of the United  States  unless  such Lease  payment is
          supported  by a letter of credit in a form  reasonably  acceptable  to
          Bank  which  letter of credit  and the  proceeds  therefrom  have been
          assigned to the Bank;  (d) Lease  payments  with  respect to which the
          Debtor   is  the   United   States  or  any   department,   agency  or
          instrumentality  of the United States unless Borrower has assigned its
          interests  in  such  Lease   payments  to  Bank  pursuant  to  Federal
          Assignment of Claims Act or Bank has expressly waived that requirement
          with  respect to specific  Lease  payments;  (e) Lease  payments  with
          respect to which the  Debtor is any State of the United  States or any
          city,  town  municipality  or division  thereof  unless  Borrower  has
          assigned  its  interests  in such Lease  payments to Bank  pursuant to
          applicable  law or Bank has  expressly  waived that  requirement  with
          respect to specific Lease payments; (f) Lease payments with respect to
          which the Debtor is a subsidiary  of,  related to,  affiliated  or has
          common  officers or directors  with  Borrower;  (g) any Lease payments
          owed  by  a   Debtor   who  does  not   meet   Bank's   standards   of
          creditworthiness,  in Bank's  commercially  reasonable credit judgment
          exercised  in good faith;  (h) any Lease  payments  owed by any Debtor
          which has filed or has had filed against it a petition for bankruptcy,
          insolvency,   reorganization   or  any  other  type  of  relief  under
          insolvency  laws;  (i) any Lease  payments  owed by a Debtor which has
          made an  assignment  for  the  benefit  of  creditors;  (j) any  Lease
          payments deemed to ineligible by Bank based upon credit and collateral
          considerations as Lender may deem appropriate,  in Bank's commercially
          reasonable judgment exercised in good faith; and (k) Lease payments on

                                      29
<PAGE>

          Leases for which the Bank has not received fully  executed  Assignment
          of Lease  Proceeds  within  sixty (60) days of the Closing Date or for
          the Leases  executed  after the Closing Date within sixty (60) days of
          the execution of such Lease.

     21.  "Environmental Laws" means all federal,  state, local and foreign laws
          relating to pollution or protection of the environment, including laws
          relating to emissions,  discharges, releases or threatened releases of
          pollutants, contaminants, chemicals, or industrial, toxic or hazardous
          substances  or  wastes  into  the   environment   (including   without
          limitation  ambient air,  surface  water,  ground  water or land),  or
          otherwise relating to the manufacture,  processing, distribution, use,
          treatment,  storage,  disposal,  transport or handling of  pollutants,
          contaminants,  chemicals or industrial,  toxic or hazardous substances
          or wastes, and any and all regulations, codes, plans, orders, decrees,
          judgments,  injunctions,  notices or demand letters  issued,  entered,
          promulgated or approved thereunder.

     22.  "ERISA" means the Federal Employee  Retirement  Income Security Act of
          1974.

     23.  "Event(s)  of Default"  will have the meaning set forth in Section 6.1
          of the Agreement.

     24.  "Event of Default is  Continuing"  shall mean that an Event of Default
          has occurred and has not been cured by the Borrower,  provided however
          an Event of Default  cannot be cured in the  following  circumstances:
          (i) a breach of any  covenant  which in Bank's good faith  judgment is
          incapable  of  cure,  (ii)  any  failure  to  maintain   insurance  in
          accordance  with  the  terms of the  Agreement  or  related  documents
          (provided  however one breach of the  maintenance of insurance  during
          the term of this  Agreement  for a period of not more  than  three (3)
          business  days  prior to its cure shall be capable of cure) or failure
          to permit  inspection  of the  Collateral  or books and records of the
          Borrower, or (iii) more than two (2) breaches of Section 6.1(b) of the
          Agreement in any calendar year.

     25.  "Facility" will have the meaning set forth in Section 2.1 hereof.

     26.  "Indebtedness"  means (a) all items (except items of capital stock, of
          capital  surplus,  of  general  contingency  reserves  or of  retained
          earnings,  deferred income taxes, and amount  attributable to minority
          interests,  if  any)  which  in  accordance  with  generally  accepted
          accounting   principles   would  be  included  in  determining   total
          liabilities on a consolidated  basis as shown on the liability side of
          a  balance  sheet  as at the date as of  which  Indebtedness  is to be
          determined, (b) all indebtedness secured by any mortgage, pledge, lien
          or conditional  sale or other title  retention  agreement to which any
          property  or  asset  owned  or held  is  subject,  whether  or not the

                                      30
<PAGE>
          indebtedness   secured  thereby  will  have  been  assumed  (excluding
          non-capitalized  leases which may amount to title retention agreements
          but including  capitalized leases), and (c) all indebtedness of others
          which   Borrower  or  any   Subsidiary   has  directly  or  indirectly
          guaranteed,  endorsed (otherwise than for collection or deposit in the
          ordinary  course of  business),  discounted  or sold with  recourse or
          agreed  (contingently  or  otherwise)  to  purchase or  repurchase  or
          otherwise  acquire,  or in respect of which Borrower or any Subsidiary
          has agreed to apply or advance  funds  (whether by way of loan,  stock
          purchase,  capital  contribution  or otherwise) or otherwise to become
          directly or indirectly liable.

     27.  "Indebtedness to EBITDA" means the ratio of Borrower's Indebtedness to
          the  Borrower's  EBITDA.  The  Indebtedness  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 Indebtedness 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  December 31,
          2000.

     28.  "Indebtedness  to  Tangible  Net  Worth  Ratio"  means  the  ratio  of
          Borrower's total Indebtedness to Borrower's Tangible Net Worth.

     29.  "Issuing  Bank" means  Fifth  Third Bank,  as issuer of the Letters of
          Credit.

     30.  "Lease"  means  lease for  lottery  equipment  with the  lessor  being
          Borrower and lessee being third party Debtors.

     31.  "Letter(s) of Credit" means the standby or commercial letter of credit
          issued from time to time by the Bank as requested by Borrower pursuant
          to Section 2.12.

     32.  "Letter  of Credit  Advance"  means an advance  made by  Issuing  Bank
          pursuant to Section 2.12.

     33.  "Letter of Credit  Facility"  means the  arrangement  for  issuance of
          Letters of Credit set forth in Section 2.12.

     34.  "Letter of Credit  Liability"  means, as of any date of determination,
          all of the then-existing liabilities of Borrower to Bank in respect of
          Letters of Credit issued  pursuant to Section 2.12 of this  Agreement,
          whether such  liability is contingent  or fixed,  and shall consist of
          the sum of (a) the aggregate Available Amount of all Letters of Credit
          then outstanding, plus (b) the aggregate amount that has been paid by,
          and not been reimbursed to, Bank under Letters of Credit.

                                      31
<PAGE>

     35.  "Letter of Credit  Related  Documents"  has the meaning  specified  in
          Section 2.12.

     36   "LIBOR Interest  Period" means any 30, 60 or 90 day period selected by
          Borrower,  commencing on any Business Day. If a LIBOR Interest  Period
          so selected would otherwise end on a date which is not a Business Day,
          such LIBOR Interest Period shall instead end on the next Business Day,
          provided,  however,  that if such next  Business  Day shall  fall in a
          succeeding  month, such LIBOR Interest Period shall instead end on the
          preceding Business Day.

     37.  "LIBOR  Pricing  Option"  means the option  granted  pursuant  to this
          Agreement  to have all or a portion of the  interest on the  principal
          amount of the Revolving  Note  computed  with  reference to a Revolver
          LIBOR Rate.

     38.  "LIBOR Rate" means, as applied to any LIBOR Interest Period,  the rate
          (adjusted  for LIBOR  Reserves if Bank is  required to maintain  LIBOR
          Reserves  with respect to the relevant  loan) being asked on an amount
          of Eurodollar  deposits equal to the principal amount of the Revolving
          Note which is to be subject to a LIBOR Pricing Option, and which has a
          maturity  corresponding  to the LIBOR Interest Period in question,  as
          reported by the TELERATE rate reporting system (or any successor),  as
          determined  by Bank by noon of the date  upon  which a LIBOR  Interest
          Period is to commence.  Each  determination  by Bank of the LIBOR Rate
          shall be conclusive in the absence of manifest error.

     39.  "LIBOR  Reserves" mean, for any principal amount which is subject to a
          LIBOR Pricing Option for any LIBOR Interest Period therefor, the daily
          average  maximum  rate  (expressed  as a  decimal)  at which  reserves
          (including  any  marginal,  supplemental  or emergency  reserves)  are
          required to be maintained during such Interest Period under Regulation
          D established by the Board of Governors of the Federal  Reserve System
          (or any successor rule or  regulation)  by Bank against  "Eurocurrency
          Liabilities"  (as  such  term  is used in  Regulation  D) but  without
          benefit  of credit or  proration,  exemptions  or  offsets  that might
          otherwise be available to Bank from time to time under  Regulation  D.
          Without  limiting the effect of the  foregoing,  LIBOR  Reserves shall
          reflect any other reserves required to be maintained by a Bank against
          (1) any category of liabilities that includes deposits by reference to
          which the LIBOR  Interest Rate for loans is to be  determined;  or (2)
          any  category of  extension of credit or other assets that are subject
          to an interest rate based on the LIBOR Rate.

                                      32

<PAGE>
     40.  "Lien" means any security interest, mortgage, pledge, assignment, lien
          or other  encumbrance of any kind,  including  interests of vendors or
          lessors under conditional sale contracts and capitalized leases.

     41.  "Loan  Documents"  means  this  Agreement,  the  Revolving  Note,  the
          Security Agreement,  and every other document or agreement executed by
          any party evidencing,  guarantying or securing any of the Obligations;
          and "Loan Document" means any one of the Loan Documents.

     42.  "Loans" means the Revolving Loans.

     43.  "Lock Box" has the  meaning  assigned  thereto as set forth in Section
          2.1(d) hereof.

     44.  "Long Term Debt" means  Indebtedness  which either by its terms is not
          payable  in  full  within  one  year  from  the date  incurred, or the
          repayment of which may, at  the option of the obligor, be extended for
          a period of more than one year from the date incurred.

     45.  "Note" means the Revolving Note.

     46.  "Obligation(s)" means all loans, advances,  indebtedness,  liabilities
          and  obligations of Borrower owed to Bank or each of Bank Affiliate of
          every kind and description  whether now existing or hereafter  arising
          including  without  limitation,  those owed by  Borrower to others and
          acquired by Bank or any Bank  Affiliate,  by purchase,  assignment  or
          otherwise, and whether direct or indirect,  primary or as guarantor or
          surety, absolute or contingent, liquidated or unliquidated, matured or
          unmatured,  whether  or not  secured  by  additional  collateral,  and
          including   without   limitation  all  liabilities,   obligations  and
          indebtedness  arising  under this  Agreement,  the Notes and the other
          Loan Documents,  all obligations to perform or forbear from performing
          acts,  all amounts  represented  by letters of credit now or hereafter
          issued by Bank for the benefit of or at the request of  Borrower,  and
          all  expenses  and  attorneys'  fees  incurred  by Bank  and any  Bank
          Affiliate  under this  Agreement or any other  document or  instrument
          related to any of the foregoing.

     47.  "Operating  Account" has the meaning  assigned thereto as set forth in
          Section 2.1(f) hereof.

     48.  "Permitted  Liens" has the  meaning  assigned  thereto as set forth in
          Section 3.9 hereof.

                                      33
<PAGE>

     49.  "Person"  means any  individual,  Firm,  partnership,  joint  venture,
          corporation,  association,  business enterprise,  trust,  governmental
          body or other entity, whether acting in an individual,  fiduciary,  or
          other capacity.

     50.  "Pricing  Option" means a LIBOR  Pricing  Option or Prime Rate Pricing
          Option exercised by Borrower pursuant to the provisions hereof.

     51.  "Preferred Share  Redemption" has the meaning assigned to that term in
          Section 5.7 of this Agreement.

     52.  "Prime Rate" means the rate of interest per annum  announced to be its
          prime  rate  from  time to time by  Bank at its  principal  office  in
          Cincinnati,  Ohio  whether or not Bank will at times lend to borrowers
          at lower  rates of interest  or, if there is no such prime rate,  then
          its base rate or such other rate as may be substituted by Bank for the
          prime rate.

     53.  "Reserves"  has the  meaning  assigned  to that term in Section 2.1 of
          this Agreement.

     54.  "Responsible  Officer of  Borrower"  has the meaning  assigned to that
          term in Section 4.2(f) of this Agreement.

     55.  "Revolving Loans" has the meaning assigned to that term in Section 2.1
          of this Agreement.

     56.  "Revolving  Note" has the meaning assigned to that term in Section 2.1
          of this Agreement.

     57.  "Security  Agreement"  means  the  Security  Agreement  of  even  date
          herewith between Borrower and Bank, securing the Obligations.

     58.  "Standby and Commercial Letter of Credit Commitment" means One Million
          Dollars ($1,000,000.00).

     59.  "Subsidiary"   means  any  corporation,   limited  liability  company,
          partnership,  or other entity of which Borrower directly or indirectly
          owns or controls at the time outstanding  stock, or ownership interest
          having under ordinary circumstances (not depending on the happening of
          a  contingency)  voting  power to  elect a  majority  of the  board of
          directors or shareholders of said corporation or other entity.

     60.  "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 in accordance with generally
          accepted  accounting  principles,  after eliminating all inter-company

                                      34
<PAGE>

          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.

     61.  "Termination Date" shall have the meaning set forth in Section 2.1.

                                      35
<PAGE>
                                   EXHIBIT 2.1

                                 REVOLVING NOTE

$25,000,000.00
                                                                Cincinnati, Ohio
                                                                January 25, 2001
                                                                (Effective Date)

         On  December  31,  2003,  INTERLOTT   TECHNOLOGIES,   INC.  a  Delaware
corporation  ("Borrower"),  for value  received,  hereby  promises to pay to the
order of FIFTH THIRD BANK,  an Ohio banking  corporation  (the  "Bank"),  at its
offices, located at 38 Fountain Square Plaza, Cincinnati,  Ohio 45263, in lawful
money of the United States of America and in immediately  available  funds,  the
principal  sum of Twenty Five Million  Dollars  ($25,000,000.00)  or such lesser
unpaid  principal amount as may be advanced by Bank pursuant to the terms of the
Credit  Agreement of even date herewith by and between Borrower and Bank, as the
same may be  amended  from time to time (the  "Agreement").  All  defined  terms
contained  herein but not defined  herein shall have the meaning as set forth in
the Agreement.

         The principal balance  outstanding  hereunder,  will bear interest from
the date of the first  advance  until paid the interest  rate as provided in the
Agreement.

          On December 31, 2003,  all  outstanding  principal and all accrued and
unpaid interest will be due and payable.  Interest will be calculated based on a
360-day  year and charged  for the actual  number of days  elapsed,  and will be
payable in arrears on the first day of each  calendar  month except for interest
subject  to a  Pricing  Option  which  shall  be  payable  as set  forth  in the
Agreement.  After maturity, whether by acceleration or otherwise, this Note will
bear  interest  (computed  and  adjusted in the same  manner,  and with the same
effect,  as interest hereon prior to maturity)  payable on demand, at a rate per
annum equal to the Default  Rate,  until paid,  and whether  before or after the
entry of judgment hereon.

         The Prime Rate means the rate of interest per annum announced to be its
Prime Rate from time to time by Bank at its principal  office  Cincinnati,  Ohio
whether or not Bank will at times lend to  borrowers at lower rates of interest,
or, if there is no such Prime Rate, then its base rate or such other rate as may
be substituted by Bank for the Prime Rate.

         The principal  amount of each loan made by Bank under this Note and the
amount of each  prepayment  made by Borrower under this Note will be recorded by
Bank  on the  schedule  attached  hereto  or in the  regularly  maintained  data
processing  records of Bank. The aggregate  unpaid principal amount of all loans
set forth in such  schedule or in such records will be  presumptive  evidence of
the principal amount owing and unpaid on this Note. However,  failure by Bank to

                                      36
<PAGE>

make any such entry will not limit or otherwise  affect  Borrower's  obligations
under this Note or the Agreement.

         All payments  received by Bank under this Note will be applied first to
payment of amounts  advanced  by Bank on behalf of  Borrower or which may be due
for insurance, taxes and attorneys' fees or other charges to be paid by Borrower
pursuant to the Agreement and the Loan Documents (as defined in the  Agreement),
then to accrued interest on this Note, then to principal which will be repaid in
the inverse order of maturity.

         This Note is the Revolving  Note referred to in the  Agreement,  and is
entitled  to the  benefits,  and is  subject  to the  terms,  of the  Agreement.
Capitalized  terms used but not otherwise  defined herein will have the meanings
attributed thereto in the Agreement. The principal of this Note is prepayable in
the  amounts  and  under the  circumstances,  and its  maturity  is  subject  to
acceleration  upon the terms,  set forth in the  Agreement.  Except as otherwise
expressly provided in the Agreement, if any payment on this Note becomes due and
payable on a day other than one on which Bank is open for  business (a "Business
Day"),  the  maturity  thereof  will be extended to the next  Business  Day, and
interest  will be payable at the rate  specified  herein  during such  extension
period.

         After the occurrence of an Event of Default and the Event of Default is
Continuing,  all  amounts  of  principal  outstanding  as of  the  date  of  the
occurrence  of such Event of Default will bear  interest at the Default Rate, in
Bank's sole  discretion,  without  notice to Borrower.  This  provision does not
constitute  a waiver of any Events of Default or an  agreement by Bank to permit
any late payments whatsoever.

         Any  prepayments  under this Note in advance of any amortized  payments
will be applied to reduce the outstanding  principal  amount of this Note in the
inverse chronological order of maturity.

         In no event will the interest rate on this Note exceed the highest rate
permissible  under any law which a court of competent  jurisdiction  will,  in a
final  determination,  deem  applicable  hereto.  In  the  event  that  a  court
determines that Bank has received  interest and other charges under this Note in
excess of the highest  permissible rate applicable  hereto,  such excess will be
deemed received on account of, and will  automatically  be applied to reduce the
amounts due to Bank from Borrower under this Note, other than interest,  and the
provisions hereof will be deemed amended to provide for the highest  permissible
rate.  If there are no such  amounts  outstanding,  Bank will refund to Borrower
such excess.

         Borrower and all  endorsers,  sureties,  guarantors  and other  persons
liable on this Note hereby  waive  presentment  for payment,  demand,  notice of
dishonor,  protest,  notice of  protest  and all other  demands  and  notices in
connection  with the delivery,  performance  and  enforcement  of this Note, and
consent to one or more renewals or extensions of this Note.

         This  Note may not be  changed  orally,  but only by an  instrument  in
writing.

                                      37
<PAGE>
         This Note is being  delivered  in, is intended to be performed in, will
be construed and enforceable in accordance with, and be governed by the internal
laws of, the State of Ohio  without  regard to  principles  of conflict of laws.
Borrower  agrees that the State and Federal courts in Hamilton  County,  Ohio or
any  other  court  in which  Bank  initiates  proceedings  will  have  exclusive
jurisdiction  over all  matters  arising out of this Note,  and that  service of
process in any such  proceeding  will be  effective if mailed to Borrower at its
address  described  in the Notices  section of the  Agreement.  BORROWER  HEREBY
WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS NOTE.

                                             INTERLOTT TECHNOLOGIES, INC.

                                             By: ____________________________
                                             Its: ___________________________

                                      38
<PAGE>

                                   EXHIBIT 8.5

                               SECURITY AGREEMENT

         THIS SECURITY  AGREEMENT is entered into as of the 25th day of January,
2001, by and between INTERLOTT  TECHNOLOGIES,  INC., a Delaware corporation (the
"Borrower") and FIFTH THIRD BANK, an Ohio banking corporation (the "Bank").

Section 1.        Definitions:

         1.1      Specific Definitions.  The following definitions will apply:

         (a)  "Accounts"  means  all  accounts,  accounts  receivable,  contract
rights, instruments,  documents,  chattel paper, and all obligations in any form
including  but not limited to those arising out of the sale or lease of goods or
the  rendition of services by Borrower;  all  guaranties,  letters of credit and
other security for any of the above; all merchandise returned to or reclaimed by
Borrower; and all books and records (including computer programs, tapes and data
processing software) evidencing an interest in or relating to the above.

         (b)  "Debtors"   means  Borrower's  customers  and  all  other  persons
obligated to Borrower on Accounts.

         (c)  "Equipment"  means  all  machinery,   machine  tools,   equipment,
fixtures,  office equipment,  furniture,  furnishings,  motors,  motor vehicles,
tools,  dies, parts,  jigs, goods (including,  without  limitation,  each of the
items of  equipment  set forth on any  schedule  which is  either  now or in the
future  attached  to  Bank's  copy of  this  Agreement),  and  all  attachments,
accessories, accessions, replacements, substitutions, additions and improvements
thereto, and all supplies used or useful in connection therewith.

         (d)  "General  Intangibles"  means all general  intangibles,  choses in
action, causes of action,  obligations or indebtedness owed to Borrower from any
source whatsoever,  and all other intangible personal property of every kind and
nature (other than Accounts) including without limitation  patents,  trademarks,
trade names,  service marks,  copyrights and  applications for any of the above,
and goodwill, trade secrets, licenses,  franchises, rights under agreements, tax
refund claims, and all books and records including all computer programs, disks,
tapes, printouts,  customer lists, credit files and other business and financial
records, and the equipment containing any such information.

         (e) "Inventory" means any and all goods, supplies,  wares, merchandises
and other tangible personal property,  including raw materials, work in process,
supplies and components,  and finished goods, whether held for sale or lease, or
furnished or to be furnished  under any contract for service,  or otherwise  and
also  including  products of and  accessions to inventory,  packing and shipping

                                      39
<PAGE>

materials,  and all documents of title,  whether  negotiable or  non-negotiable,
representing any of the foregoing.

         (f) "Lien" means any security interest,  mortgage,  pledge, assignment,
lien or other encumbrance of any kind, including interests of vendors or lessors
under conditional sale contracts or capital leases.

         (g) In  addition  to  the  foregoing,  the  definitions  of  the  terms
Accounts,  Inventory,  Equipment and General  Intangibles will have the meanings
attributed  thereto in the  applicable  version of the Uniform  Commercial  Code
adopted in the jurisdiction where Secured Party's principal place of business is
located,  as such  definitions  may be enlarged or expanded from time to time by
amendment or judicial decision.

                  1.2 Other  Definitions.  Capitalized  terms not defined herein
have the  meanings  set forth in the  Credit  Agreement  of even  date  herewith
between  Borrower and Bank (the "Credit  Agreement").  All other undefined terms
will have the meaning given to them in the Ohio Uniform Commercial Code.

Section 2.        Security.

         2.1 Security Interest of Bank. To induce Bank to make the Loans, and as
security for all Obligations,  Borrower hereby assigns to Bank as collateral and
grants to Bank a continuing first priority pledge and security interest, subject
only  to  Permitted   Liens,   in  the  following   property  of  Borrower  (the
"Collateral"),  whether now owned or existing or  hereafter  acquired or arising
and regardless of where it is located:

         (a)      all Accounts;

         (b)      all Inventory;

         (c)      all Equipment;

         (d)      all General Intangibles;

         (e) all proceeds  and  products of  Collateral  and all  additions  and
accessions  to,  replacements  of,  insurance or  condemnation  proceeds of, and
documents  covering  Collateral,  all tort or other claims against third parties
arising out of damage or destruction of Collateral, all property received wholly
or partly in trade or  exchange  for  Collateral,  all  fixtures,  all leases of
Collateral and all rents,  revenues,  issues,  profits and proceeds arising from
the sale, lease,  license,  encumbrance,  collection,  or any other temporary or
permanent disposition, of the Collateral or any interest therein; and

         (f) all instruments, chattel paper, documents, securities, money, cash,
letters of credit, warrants, dividends,  distributions,  contracts,  agreements,
contract rights or other property, owned by Borrower or in which Borrower has an
interest, which now or hereafter are at any time in the possession or control of
Bank or in transit by mail or carrier to or in the possession of any third party

                                      40
<PAGE>

acting on behalf of Bank,  without  regard to whether Bank  received the same in
pledge, for safekeeping, as agent for collection or transmission or otherwise or
whether Bank had conditionally  released the same, and the proceeds thereof, all
rights to  payment  from all  claims  against  Secured  Party,  and any  deposit
accounts of Borrower with Bank,  including  certificates of deposit, all demand,
time, savings, passbook or other accounts.

         2.2 Assignment of Lease Payments. As further security for the repayment
of the  Obligations,  Borrower hereby assigns to Bank all of the rents,  issues,
profits  or  payments  due or to come due  under any real or  personal  property
leases to which it is or may become a party as Lessor, including but not limited
to any and all  Leases of  lottery  equipment  by any third  party  lessee  (the
"Leases").  Bank may demand,  collect,  and  receive  from any lessee all rents,
issues,  profits charges, or other amounts of whatever nature due or to come due
under any such Lease,  endorse the name of Borrower on any checks,  notes, other
instruments  for the payment of money,  deposit the same in bank  accounts,  and
apply the proceeds in repayment of the Obligations, pursuant to the terms of the
Credit  Agreement.  Borrower shall execute such  Assignment of Lease Proceeds or
other documents  reasonably  requested by Bank necessary to cause the lessees on
any of the Leases to direct  payment to Bank.  Borrower shall notify Bank of any
new,  additional  or  replacement  Leases  within five (5) business  days of the
execution  thereof.  Borrower shall not in any material  respect,  without prior
written consent of Bank, amend, assign,  modify,  cancel or surrender any of the
Leases  provided  however the foregoing  does not prohibit  Borrower from making
immaterial amendments to Leases.  Notwithstanding the foregoing,  Bank shall not
be  responsible  for the  performance  of any  obligation of Borrower  under the
Lease,  which shall  remain the sole  obligation  of  Borrower.  Notwithstanding
anything  contained  in the  Credit  Agreement  or  the  Loan  Documents  to the
contrary,  to the extent of any prohibition in a Lease applicable  thereto,  the
assignment of the payments  and/or rights under each Lease from Borrower to Bank
shall not be  effective  as to each Debtor  under a Lease until such time as the
Assignment of Lease Proceeds shall be executed by such Debtor.

         2.3  Representations in Schedule I.  The representations and warranties
in Schedule I attached hereto entitled the Specific  Representation Schedule are
true and correct.  Except as otherwise  permitted  hereunder,  Borrower will not
change its name,  transfer executive offices or maintain records with respect to
Accounts at any  location  other than the present  locations  specified  in that
schedule.

         2.4  Provisions  Concerning  Accounts.   (a)  Borrower  represents  and
warrants that each Account reflected in Borrower's books and records and on each
Collateral  Report  submitted to Bank is, or at the time it arises will be owned
by  Borrower  free and clear of all Liens in favor of any third party other than
Bank,  will be a bona fide  existing  obligation  created  by the final sale and
delivery  goods or the  completed  performance  of  services  by Borrower in the
ordinary  course of its business,  will be for a liquidated  amount  maturing as
stated in the supporting data covering such transaction, and will not be subject
to  any  known  deduction,  offset,  counterclaim,  return  privilege  or  other

                                      41
<PAGE>

condition,  except as  reflected  on  Borrower's  books and  records  and on all
Collateral Reports delivered to Bank. Borrower will not redate any invoices. Any
allowances  between  Borrower and its customers  will be in accordance  with the
usual customary practices of Borrower, as they exist at this time.

         (b) Any officer,  employee or agent of Bank will have the right, at any
time  or  times  hereafter,  in the  name  of  Bank  or its  nominee  (including
Borrower),  to verify the validity,  amount or any other matter  relating to any
Accounts by mail,  telephone,  or  otherwise.  After an Event of Default and the
Event of Default is  Continuing,  Bank or its  designee  may at any time  notify
Debtors that Accounts have been assigned to Bank or of Bank's security  interest
therein,  and after default by Borrower  hereunder collect the same directly and
charge all collection costs and expenses to Borrower's account.

         (c) If Borrower becomes aware that a Debtor disputes liability or makes
any claim with respect to an Account in excess of $10,000 or that a receivership
petition or petition under any chapter of the federal bankruptcy act is filed by
or against a Debtor,  or that a Debtor  dissolves,  makes an assignment  for the
benefit of creditors,  becomes insolvent, fails or goes out of business, or that
any other event occurs which adversely  affects the value of any Account owed by
a debtor,  Borrower will  immediately  notify Bank of each such event where such
event is material in nature.  After an Event of Default and the Event of Default
is Continuing,  Borrower will not grant any  discounts,  credit or allowances to
any Debtor and will not accept  returns of merchandise  without Bank's  consent.
After an Event of  Default  and the Event of  Default  is  Continuing,  Bank may
settle disputes and claims directly with Debtors,  and in such cases,  Bank will
credit  Borrower's  account with the net amounts  collected  from such  disputed
Accounts, after expenses of collection.

         (d) Borrower  appoints Bank or Bank's designee as its  attorney-in-fact
to endorse  Borrower's  name on any checks,  notes,  acceptances,  money orders,
drafts  or other  forms of  payment  or  security  that  may  come  into  Bank's
possession; to sign Borrower's name on any invoice or bill of lading relating to
any  Accounts  or  Inventory,  on  drafts  against  Debtors,  on  schedules  and
assignments of Accounts or Inventory,  on notices of assignment and other public
records,  on verifications of Accounts and on notices to Debtors; to notify post
office  authorities to change the address for delivery of Borrower's  mail to an
address  designated by Bank, to receive and open all mail  addressed to Borrower
and to retain all mail  relating  to  Collateral  and  forward all other mail to
Borrower; to send requests for verification of accounts to customers or Debtors,
and to do all things necessary to carry out or enforce this Agreement.  Borrower
ratifies  and  approves   all  acts  of  Bank  as   attorney-in-fact.   Bank  as
attorney-in-fact will not be liable for any acts or omissions,  or for any error
of  judgment or mistake of fact or law except for bad faith.  This power,  being
coupled with an interest,  is irrevocable  until all Obligations have been fully
satisfied;  provided that Bank will not exercise this power until after an Event
of Default and the Event of Default is Continuing.

         (e) If any Accounts will arise out of a contract with the United States
of America or any department,  agency,  subdivision or instrumentality  thereof,
Borrower will promptly notify Bank and will perfect Bank's Lien in such Accounts
under the provisions of the Federal laws on assignment of claims.

                                      42
<PAGE>

         2.5 Provisions Concerning General Intangibles.  Borrower represents and
warrants  that Borrower owns all of the General  Intangibles  in which  Borrower
grants  Bank a Lien,  free and clear of any Liens in favor of any  person  other
than Bank.  Borrower will preserve all patents,  trademarks,  copyrights and the
like which are necessary or useful for the conduct of its business.

         2.6  Provisions  Concerning  Inventory.  (a)  Borrower  represents  and
warrants that each item of Inventory  will be valued by Borrower at the lower of
cost or market on a FIFO basis.  Borrower has informed Bank on Schedule I of all
places where Borrower maintains  Inventory other than machines on lease,  repair
parts held by field  representatives and demo machines loaned to state lotteries
or has maintained  Inventory other than machines on lease,  repair parts held by
field  representatives  and demo machines  loaned to state lotteries at any time
during the past four months, including,  without limitations,  facilities leased
and operated by Borrower  and  locations  neither  owned nor leased by Borrower.
Schedule I indicates  whether the premises are those of a warehouseman  or other
party.  No Inventory  other than  machines on lease,  repair parts held by field
representatives and demo machines loaned to state lotteries will be removed from
the current  locations or stored at locations  other than the current  locations
disclosed  to Bank on Schedule I, except (i) for the purpose of sale or lease in
the ordinary course of Borrower's  business or (ii) upon 30 days' written notice
to Bank, to such other  locations as to which all action required to perfect and
protect  Bank's lien in such  Inventory  has been taken.  Inventory may be moved
from one current location to another.

         (b) Borrower will keep all  Inventory  (except for obsolete and damaged
Inventory  no longer  necessary  for the business of Borrower) in good order and
condition and will maintain  full,  accurate and complete books and records with
respect to Inventory at all times.

         (c) Except during the continuance of an Event of Default,  Borrower may
sell Inventory in the ordinary  course of its business (which does not include a
transfer in full or partial satisfaction of indebtedness).

         (d) If any Inventory is stored with a bailee,  warehouseman  or similar
party at any time,  Borrower so storing such  Inventory will inform Bank of that
fact and will take all  steps  requested  by Bank so that  Bank  retains a first
priority perfected Lien in those assets.

         (e) Borrower has not purchased any of the Collateral in a bulk transfer
or in a  transaction  which was  outside  the  ordinary  course of the  seller's
business, except as set forth on an exhibit attached hereto.

         2.7  Provisions  Concerning   Equipment.   (a)  Borrower  warrants  and
represents that Borrower has informed Bank on Schedule I of all places where any
of  Borrower's  Equipment  is located or has been located at any time during the
past four months.  No Equipment  will be moved to any location not  disclosed to
Bank on Schedule I but Equipment may be moved from one such location to another.

                                      43
<PAGE>

In addition, Borrower may move Equipment from job site to job site provided that
Borrower  will provide Bank with prior written  notice if any  Equipment  with a
book value in excess of $50,000 is to be moved to and maintained at a particular
job site for a period in excess of three months.

         (b) Except for obsolete Equipment and Equipment no longer necessary for
the Borrower's  business,  Borrower will keep and maintain the Equipment in good
operating  condition  and repair,  make all necessary  replacements  so that its
value and  operating  efficiency  is  maintained  and  preserved.  Borrower will
immediately notify Bank of any material loss or damage to the Collateral.

         (c) Borrower will,  upon the request of Bank, if Borrower has more than
five (5)  vehicles,  immediately  deliver to Bank all  certificates  of title or
applications for title or the like for any vehicles,  ships or airplanes covered
by  certificates  of title.  Borrower  will take all steps  necessary to perfect
Bank's Lien in such assets.

         (d) Borrower  will not permit any item of Equipment to become a fixture
to real estate or accession to other  property and the Equipment is now and will
at all times  remain and be personal  property,  except  with the prior  written
consent of Bank. If any of the  Collateral is or may become a fixture,  Borrower
will obtain from all persons with an interest in the  relevant  real estate such
waivers or subordinations as Bank reasonably requires.

         2.8 Liens.  Borrower has good and  marketable  title to its  respective
Collateral,  and the Liens granted to Bank in this Agreement are fully perfected
first priority  Liens in the  Collateral  with priority over the rights of every
person  other  than  Borrower  and the  holders  of any  Permitted  Liens in the
Collateral.  Borrower is the owner of all personal  property in its  possession,
and all assets of Borrower are owned free,  clear and  unencumbered,  except for
the Lien of Bank and except for Liens  imposed by law which  secure  amounts not
yet due and payable and Permitted Liens.

         2.9 Further  Assurances.  (a) Borrower will execute and deliver to Bank
at Bank's request all financing  statements,  continuation  statements and other
documents that Bank may reasonably  request,  in form  satisfactory  to Bank, to
perfect and maintain perfected Bank's security interest in the Collateral and to
fully consummate all transactions  contemplated  under this Agreement.  Borrower
hereby  irrevocably  makes,  constitutes  and  appoints  Bank (and any of Bank's
officers,  employees or agents designated by Bank) as Borrower's true and lawful
attorney with power to sign the name of Borrower on any such documents.

         (b) If any  Collateral,  including  proceeds,  consists  of a letter of
credit, advice of credit, instrument, money, negotiable documents, chattel paper
or similar  property  (collectively,  "Negotiable  Collateral")  Borrower  will,
immediately upon receipt thereof,  endorse and assign such Negotiable Collateral
over to Bank and deliver actual physical possession of the Negotiable Collateral
to Bank.

         (c) Bank may  inspect  and verify  Borrower's  books and records at any
time or times  hereafter,  during usual business  hours,  in order to verify the
amount or  condition  of the  Collateral,  or any other  matter  relating to the
Collateral  or  Borrower's  financial  condition.  Borrower  will  promptly make
available to Bank copies of all books and records requested by Bank.

                                      44
<PAGE>

         2.10   Other Amounts  Deemed  Loans.  If Borrower fails to pay any tax,
assessment,  government charge or levy or to maintain  insurance within the time
permitted by this  Agreement or the Credit  Agreement,  or to discharge any Lien
prohibited  hereby, or to comply with any other  obligation,  Bank may, but will
not be required to, pay,  satisfy,  discharge or bond the same of the account of
Borrower, and to the extent permitted by law any and all monies so paid out will
be secured by the Collateral.

         2.11  Borrower  Remains  Liable.  Borrower will remain liable under any
contracts and agreements included in the Collateral to perform all of its duties
and obligations  thereunder to the same extent as if this Agreement had not been
executed,  and Bank  will  not  have any  obligation  or  liability  under  such
contracts and agreements by reason of this Agreement or otherwise.

         2.12  Insurance.  Borrower will insure the  Collateral  against loss or
damage  of  the  kinds  and  in  the  amounts  customarily  insured  against  by
corporations  with  established  reputations  engaged  in the  same  or  similar
business as Borrower.  All such policies will (a) be issued by financially sound
and  reputable  insurers,  (b) name Bank as an  additional  insured  and,  where
applicable,  as loss payee under a lender loss payable endorsement  satisfactory
to Bank, and (c) will provide for thirty (30) days written notice to Bank before
such  policy  is  altered  or  canceled  all of  which  will be  evidenced  by a
Certificate of Insurance  delivered to Bank by Borrower on the date of execution
of this Agreement.

Section 3         Events of Default and Remedies.

         3.1      Events of Default.   Any  of  the  following events will be an
Event of Default:

         (a) any representation or warranty made herein by Borrower is incorrect
when made or reaffirmed and such  misrepresentation  and/or breach of warranties
are material in the aggregate; or

         (b) Borrower fails to keep its assets insured as required  herein or in
the  Credit  Agreement,  or  material  uninsured  damage  to or  loss,  theft or
destruction of the Collateral occurs; or

         (c)  Borrower  fails to observe or perform any  covenant,  condition or
agreement  herein and the failure or  inability of Borrower to cure such default
within  30 days of the  earlier  of (i)  written  notice  thereof  from  Bank to
Borrower if such  default is not known by a  Responsible  Officer of Borrower or
(ii) knowledge of a Responsible  Officer of such default,  provided that such 30
day grace period will not apply to (i) a breach of any covenant  which in Bank's

                                      45
<PAGE>

good faith judgment is incapable of cure, (ii) any failure to maintain insurance
or permit  inspection of the Collateral or of the books and records of Borrower,
or (iii) any breach of any covenant which has already occurred; or

         (d) an Event of Default  occurs and the Event of Default is  Continuing
under the Credit  Agreement,  the Loan  Documents  or any  document or agreement
evidencing or securing the Obligations.

         3.2      Remedies.  If any Event of Default and the Event of Default is
Continuing, in addition to the remedies provided in the Credit Agreement:

         (a) Bank may resort to the rights and remedies of a secured party under
the  Uniform  Commercial  Code  including  the  right to enter any  premises  of
Borrower,  with or without legal process and take  possession of the  Collateral
and remove it and any records  pertaining thereto and/or remain on such premises
and use it for  the  purpose  of  collecting,  preparing  and  disposing  of the
Collateral;

         (b) Bank may ship, reclaim, recover, store, finish, maintain and repair
the  Collateral,  and may sell the  Collateral  at public or private  sale,  and
Borrower  will be credited with the net proceeds of such sale only when they are
actually  received  by Bank and any  requirement  of  reasonable  notice  of any
disposition  of the  Collateral  will be  satisfied  if such  notice  is sent to
Borrower 10 days prior to such disposition;

         (c)      Borrower will upon request of Bank assemble the Collateral and
any records  pertaining thereto and make them available at a place designated by
Bank; or

         (d) Bank may use, in connection with any assembly or disposition of the
Collateral,  any trademark,  trade name,  tradestyle,  copyright,  patent right,
trade secret or technical process used or utilized by Borrower.

         3.3 No Remedy Exclusive. No remedy set forth herein is exclusive of any
other  available  remedy or remedies,  but each is cumulative and in addition to
every other remedy given under this Agreement or the Credit  Agreement or now or
hereafter existing at law or in equity or by statute.

Section 4         Miscellaneous Provisions.

         4.1  Miscellaneous.  No delay or omission  to  exercise  any right will
impair any such right or be a waiver thereof,  and a waiver on one occasion will
be limited to that  particular  occasion.  This Agreement may be amended only in
writing signed by the party against whom enforcement of the amendment is sought.
This Agreement may be executed in counterparts. If any part of this Agreement is
held invalid, the remainder of this Agreement will not be affected thereby.

         4.2 Binding  Effect.  This  Agreement will be binding upon and inure to
the benefit of the respective legal  representatives,  successors and assigns of

                                      46
<PAGE>

the  parties  hereto;  however,  Borrower  may not  assign  any of its rights or
delegate any of its obligations  hereunder.  Bank (and any subsequent  assignee)
may  transfer  and assign this  Agreement  or may assign  partial  interests  or
participation in the Loans to other persons.

         4.3  Subsidiaries.  If Borrower has any additional  Subsidiaries at any
time  during  the  term  of  this   Agreement,   the  term  "Borrower"  in  each
representation,  warranty  and  covenant  herein  will mean  "Borrower  and each
Subsidiary  individually  and in the  aggregate,"  and Borrower  will cause each
Subsidiary to be in compliance therewith.

         4.4 Financing Statement. Borrower hereby authorizes Bank to file a copy
of this Agreement as a Financing  Statement  under the Uniform  Commercial  Code
with appropriate  county and state government  authorities  necessary to perfect
the Bank's security interest in the Collateral as set forth herein.

         4.5 Notices.  Any notices under or pursuant to this  agreement  will be
deemed  duly  sent  when  delivered  in hand or when  mailed  by  registered  or
certified mail, return receipt requested,  to the addresses then provided for in
the Notices section of the Credit Agreement.

         4.6 Governing Law; Jurisdiction. This Agreement will be governed by the
domestic laws of the State of Ohio.  Borrower  agrees that the state and federal
courts in  Hamilton  County,  Ohio or any other  court in which  Bank  initiates
proceedings  have exclusive  jurisdiction  over all matters  arising out of this
Agreement,  and that service of process in any such proceeding will be effective
if mailed to  Borrower at its address  described  in the Notices  section of the
Credit  Agreement.  BANK AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF
ANY  MATTERS  ARISING OUT OF THIS  AGREEMENT  OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY.

         IN WITNESS  WHEREOF,  Borrower  and Bank have  executed  this  Security
Agreement by their duly authorized officers as of the date first above written.

                                            INTERLOTT TECHNOLOGIES, INC.

                                            By: _____________________________
                                            Its: ____________________________

                                            FIFTH THIRD BANK

                                            By: _____________________________
                                            Its: ____________________________

                                      47MORTGAGE 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.

                                       1
<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

                                       2

<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

                                       3
<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.

                                       4
<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.

                                       5
<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

                                       6
<PAGE>

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

FIFTH THIRD BANK

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

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