Document:

ex_10-2.htm

    

    SECOND
      AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     

    THIS
      SECOND AMENDMENT (the
“Amendment”), dated June 29, 2007, is entered into by and between WELLS GARDNER
      ELECTRONICS CORPORATION, an Illinois corporation (“Wells Gardner”) and AMERICAN
      GAMING & ELECTRONICS, INC., a Nevada corporation (“American”), Wells Gardner
      and American, each a Borrower are hereinafter, unless referenced individually,
      collectively referred to as (the “Borrower”), and WELLS FARGO BANK, NATIONAL
      ASSOCIATION (the “Lender”), acting through its Wells Fargo Business Credit
      operating division.

    

    RECITALS

    

    The
      Borrower and the Lender are parties
      to a Credit and Security Agreement dated August 21, 2006 (as amended from time
      to time, the “Credit Agreement”). Capitalized terms used in these recitals have
      the meanings given to them in the Credit Agreement unless otherwise
      specified.

    

    The
      Borrower has requested that certain
      amendments be made to the Credit Agreement, which the Lender is willing to
      make
      pursuant to the terms and conditions set forth herein.

    

    NOW,
      THEREFORE, in consideration of the
      premises and of the mutual covenants and agreements herein contained, it is
      agreed as follows:

    

    1.           Terms
      used in this Amendment, which are defined in the Credit Agreement shall have
      the
      same meanings as defined therein, unless otherwise defined herein.

     

    2.    The
      Credit
      Agreement is hereby amended and modified as follows:

     

     

    (a)           Section
      6.2 (d) Intercompany Balances shall be deleted in its
      entirety.

     

               
      3.           No Other
      Changes. Except as explicitly amended by this Amendment, all of the terms
      and conditions of the Credit Agreement shall remain in full force and effect
      and
      shall apply to any advance or letter of credit thereunder.

    

    4.           Conditions
      Precedent. This Amendment shall be effective when the Lender shall have
      received an executed original hereof, together with each of the following,
      each
      in substance and form acceptable to the Lender in its sole
      discretion:

    

    (a)           Such
      other matters as the Lender may require.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

    5.           Representations
      and Warranties. The Borrower hereby represents and warrants to the Lender as
      follows:

    

    (a)           The
      Borrower has all requisite power and authority to execute this
      Amendment and any other agreements or instruments required
      hereunder and to perform all of its obligations hereunder, and this
      Amendment and all such other agreements and instruments
      has been duly executed and delivered by the Borrower and constitute the legal,
      valid and binding obligation of the Borrower, enforceable in accordance with
      its
      terms.

    

    (b)           The
      execution, delivery and performance by the Borrower of this
      Amendment and any other agreements or instruments required
      hereunder have been duly authorized by all necessary corporate action and do
      not
      (i) require any authorization, consent or approval by any governmental
      department, commission, board, bureau, agency or instrumentality, domestic
      or
      foreign, (ii) violate any provision of any law, rule or regulation or of
      any order, writ, injunction or decree presently in effect, having applicability
      to the Borrower, or the articles of incorporation or by-laws of the Borrower,
      or
      (iii) result in a breach of or constitute a default under any indenture or
      loan or credit agreement or any other agreement, lease or instrument to which
      the Borrower is a party or by which it or its properties may be bound or
      affected.

    

    (c)           All
      of the representations and warranties contained in Article V of the Credit
      Agreement are correct on and as of the date hereof as though made on and as
      of
      such date, except to the extent that such representations and warranties relate
      solely to an earlier date.

    

    6.           References.  All
      references in the Credit Agreement to “this Agreement” shall be deemed to refer
      to the Credit Agreement as amended hereby; and any and all references in the
      Security Documents to the Credit Agreement shall be deemed to refer to the
      Credit Agreement as amended hereby.

    

    7.           No
      Waiver. The execution of this Amendment and the acceptance
      of all other agreements and instruments related hereto
      shall not be deemed to be a waiver of any Default or Event of Default under
      the
      Credit Agreement or a waiver of any breach, default or event of default under
      any Security Document or other document held by the Lender, whether or not
      known
      to the Lender and whether or not existing on the date of this
      Amendment.

    

    8.           Release.
      The Borrower hereby absolutely and unconditionally releases and forever
      discharges the Lender, and any and all participants, parent corporations,
      subsidiary corporations, affiliated corporations, insurers, indemnitors,
      successors and assigns thereof, together with all of the present and former
      directors, officers, agents and employees of any of the foregoing, from any
      and
      all claims, demands or causes of action of any kind, nature or description,
      whether arising in law or equity or upon contract or tort or under any state
      or
      federal law or otherwise, which the Borrower has had, now has or has made claim
      to have against any such person for or by reason of any act, omission, matter,
      cause or thing whatsoever arising from the beginning of time to and including
      the date of this Amendment, whether such claims, demands and causes of action
      are matured or unmatured or known or unknown.

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    9.           Costs
      and Expenses. The Borrower hereby reaffirms its agreement under the Credit
      Agreement to pay or reimburse the Lender on demand for all costs and expenses
      incurred by the Lender in connection with the Loan Documents, including without
      limitation all reasonable fees and disbursements of legal counsel. Without
      limiting the generality of the foregoing, the Borrower specifically agrees
      to
      pay all fees and disbursements of counsel to the Lender for the services
      performed by such counsel in connection with the preparation of this Amendment
      and the documents and instruments incidental hereto. The Borrower hereby agrees
      that the Lender may, at any time or from time to time in its sole discretion
      and
      without further authorization by the Borrower, make a loan to the Borrower
      under
      the Credit Agreement, or apply the proceeds of any loan, for the purpose of
      paying any such fees, disbursements, costs and expenses.

    

    10.           Miscellaneous.
      This Amendment may be executed in any number of counterparts, each of which
      when
      so executed and delivered shall be deemed an original and all of which
      counterparts, taken together, shall constitute one and the same
      instrument.

    

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

    

    
      	
               

              WELLS
                FARGO BANK,

                NATIONAL
                ASSOCIATION

              By
                __/s/ Brian T. Sprink_________________

              Brian
                T. Sprink

              Its:
                Vice
                President

            	
              WELLS
                GARDNER ELECTRONICS CORPORATION

              By
                _/s/ James F. Brace_________________

              James
                F. Brace

              Its:
                VP, Secretary, Treasurer
                and CFO

            
	 	
              AMERICAN
                GAMING & ELECTRONICS, INC.

              By
                _/s/ James F. Brace_________________

              James
                F. Brace

              Its:
                VP and
                CFO

            

    

    

     

    

    
      
        
        

      

      
        3ex_10-3.htm

    FIRST
      AMENDMENT TO INDUSTRIAL BUILDING LEASE

     

    THIS
      FIRST AMENDMENT TO INDUSTRIAL BUILDING LEASE (this “Amendment”) is made
      and entered into as of this 25th day of April, 2007, by and between WEST 55TH
      STREET INVESTORS LLC, a Delaware limited liability company (“Landlord”)
      and WELLS GARDNER ELECTRONICS CORPORATION, an Illinois corporation
      (“Tenant”).

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      Landlord's predecessor-in-interest, Centerpoint Realty Services Corporation,
      and
      Tenant entered into that certain Industrial Building Lease dated February 7,
      2001 (the “Current Lease”), pursuant to which Tenant leases certain
      premises (the “Premises”) consisting of 104,110 square feet in the
      building located at 9500 West 55th Street, Suite A, McCook, Illinois (the
“Building”), as more particularly set forth in the Current Lease;
      and

     

    WHEREAS,
      Landlord and Tenant desire to amend the Current Lease according to the terms
      hereof to, among other things, extend the Term of the Lease.

     

    NOW
      THEREFORE, for and in consideration of the covenants and agreements hereinafter
      set forth, and also in consideration of the sum of Ten Dollars ($10.00) and
      other good and valuable consideration, the receipt and sufficiency of which
      is
      hereby acknowledged, Landlord and Tenant hereby mutually agree as
      follows:

     

    1.  Controlling
      Language; Definitions; Deletions.  Insofar as the specific terms
      and provisions of this Amendment purport to amend or modify or are in conflict
      with the specific terms, provisions and exhibits of the Current Lease, the
      terms
      and provisions of this Amendment shall govern and control; in all other
      respects, the terms, provisions and exhibits of the Current Lease shall remain
      unmodified in full force and effect.  Capitalized terms used herein
      without definition shall have the meaning ascribed to such terms in the Current
      Lease.

     

    2.  Term
      of the Lease.  The Term of the Lease is hereby extended for a
      period of five (5) years beginning on May 1, 2008 and ending on April 30, 2013,
      inclusive (the “Renewal Term”), on all the terms, covenants and
      conditions of the Current Lease, except as hereinafter set forth, and any
      reference in the Current Lease to the Term of the Lease shall be deemed to
      include the Renewal Term and apply thereto unless it is expressly provided
      otherwise.  Likewise, any reference in the Current Lease to the
      Termination Date of the Lease shall be deemed to mean April 30,
      2013.

     

    3.  Rent.  Tenant
      agrees to pay as rent to Landlord, the aggregate of the following, all of which
      are rent reserved under the Lease:

     

    A.           Monthly
      Base Rent.  Commencing on the date this Amendment is
      fully-executed, Tenant shall pay Landlord Base Rent for the Premises pursuant
      to
      the following schedule:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              Period

            	
              Annual

              Base
                Rent Per R.S.F.

            	
              Total
                Annual

              Base
                Rent

            	
              Monthly
                Installment

            
	
              Date
                this Amendment is fully-executed through April 30, 2008 (subject
                to Base
                Rent abatement provided below)

            	
              $4.50

            	
              $468,495.00

            	
              $39,041.25

            
	
              May
                1, 2008 through April 30, 2009

            	
              $4.61

            	
              $479,947.10

            	
              $39,995.59

            
	
              May
                1, 2009 through April 30, 2010

            	
              $4.73

            	
              $492,440.30

            	
              $41,036.69

            
	
              May
                1, 2010 through April 30, 2011

            	
              $4.85

            	
              $504,933.50

            	
              $42,077.79

            
	
              May
                1, 2011 through April 30, 2012

            	
              $4.97

            	
              $517,426.70

            	
              $43,118.89

            
	
              May
                1, 2012 through April 30, 2013

            	
              $5.09

            	
              $529,919.90

            	
              $44,159.99

            

    

    

    B.           Rent
      Adjustments.  Commencing on the date this Amendment is
      fully-executed and continuing during the Renewal Term, Tenant shall continue
      to
      pay Rent Adjustments in accordance with the terms of the Current
      Lease.

     

    C.           Base
      Rent Abatement.  So long as no event of default is continuing
      under the Lease, Base Rent shall abate for the first three (3) months after
      the
      date this Amendment is fully-executed.

     

    4.  Security
      Deposit.  As of the date this Amendment if fully-executed, the
      security deposit (which may be in the form of a letter of credit as specified
      in
      Section 31.2 of the Current Lease) shall be reduced to $150,000.00.

     

    5.  Condition
      of Premises.  Other than as provided below, Landlord is leasing
      the Premises to Tenant during the Renewal Term in its “as is” condition, without
      any promise of Landlord to alter, remodel or improve the Premises and without
      any representations or warranties made by Landlord or its agents to Tenant
      or
      Tenant’s agents with respect to the condition of the Premises including, without
      limitation, any express or implied warranties of merchantability, fitness or
      habitability, and Tenant has not relied on any such representations or
      warranties.

     

    6.  Termination
      Option.  (A) Subject to the satisfaction of the conditions set
      forth in this paragraph, Tenant shall have one option to terminate the Lease
      in
      its entirety (the “Termination Option”) effective as of April 30, 2009
      (the “Early Termination Date”) by providing written notice to Landlord
      (the “Termination Notice”) no later than April 30, 2008.  As a
      condition to Tenant's ability to exercise the Termination Option: (i) a law
      imposing a tax on gross receipts or other tax not based upon Tenant’s net income
      must have been enacted by the State of Illinois after the date of this Amendment
      and before April 30, 2008; (ii) according to Tenant’s reasonable projections,
      such tax would on an annual basis cost Tenant $150,000.00 or more; and (iii)
      Tenant provides Landlord with reasonable documentation or other information
      to
      substantiate such reasonable projections.

     

    A.           If
      Tenant delivers the Termination Notice in accordance with the terms and
      conditions of this Paragraph 6, timely pays the Termination Fee (defined below)
      as provided in Paragraph 6C hereof, and the condition set forth above is
      satisfied, then as of the Early Termination Date, the Lease shall terminate,
      and
      Tenant shall be and remain liable for the payment to Landlord of all Rent and
      other sums due and/or accrued, and for the performance and keeping of all the
      covenants, agreements and obligations under the Lease to be performed, paid
      and
      kept by Tenant prior to such Early Termination Date.  Following
      Tenant's exercise of its Termination Option, if Tenant fails to vacate the
      Premises and surrender possession thereof to Landlord in accordance with the
      terms of the Lease on or prior to the Early Termination Date, such failure
      shall
      be treated as a holding over by Tenant and Landlord shall be entitled to all
      of
      its remedies under the Lease as set forth in the holdover section hereof until
      Tenant vacates.

     

    B.           Except
      for Tenant’s obligation to pay Rent and other charges due under the terms of the
      Lease through the Early Termination Date, Tenant’s sole monetary obligation with
      respect to such early termination shall be to pay Landlord a termination fee
      equal to $468,495.00 (the “Termination Fee”).  Tenant shall
      pay: (i) $312,633.33 of the Termination Fee with the delivery of the Termination
      Notice, and (ii) $155,861.67 of the Termination Fee at least thirty (30) days
      in
      advance of the Early Termination Date.  If Tenant fails to timely pay
      the Termination Fee, then at Landlord's sole election, the exercise of the
      Termination Option shall be null and void and the Lease shall continue in full
      force and effect as if Tenant had not exercised the Termination
      Option.  Acceptance by Landlord of the Termination Fee shall
      constitute a release of the Tenant from any and all of its obligations under
      the
      Lease accruing after the Early Termination Date, except any obligations which
      by
      their terms are intended to survive any early termination or expiration of
      the
      Lease (including, without limitation, the reconciliation of any Rent
      Adjustments).

     

    7.  Deletion
      of Certain Provisions.  As of the date of this Amendment, Article
      XXXIII (Renewal Option) and Article XXXV (Right of First Opportunity) are hereby
      deleted in their entirety and are of no further force or effect.

     

    8.  Real
      Estate Broker.  Tenant and Landlord each represent to the other
      that it has not dealt with any real estate broker with respect to this Amendment
      except for Nicolson Porter & List Inc. (“Nicolson”) and no other
      broker is in any way entitled to any broker’s fee or other payment in connection
      with this Amendment based upon its acts.  Landlord, at its sole cost
      and expense, shall pay any and all fees and compensation due and payable to
      Nicolson with respect to this Amendment, and shall indemnify and defend Tenant
      against any claims by Nicolson for any payment in connection with this
      Amendment.  Tenant shall indemnify and defend Landlord against any
      claims by any other broker or third party claiming through Tenant for any
      payment of any kind in connection with this Amendment arising from a breach
      by
      Tenant of the foregoing representation.  Landlord shall indemnify and
      defend Tenant against any claims by any other broker or third party claiming
      through Landlord for any payment of any kind in connection with this Amendment
      arising from a breach by Landlord of the foregoing representation.

     

    9.  Miscellaneous.  Landlord
      and Tenant hereby agree that (a) this Amendment is incorporated into and made
      a
      part of the Lease, (b) any and all references to the Lease hereinafter shall
      include this Amendment, and (c) the Lease and all terms, conditions and
      provisions of the Lease are in full force and effect as of the date hereof,
      except as expressly modified and amended hereinabove. This Amendment shall
      be
      governed by and construed under the laws of the State of Illinois, without
      regard to the conflicts of laws principles thereof.

     

    

    [Signatures
      On The Following Page]

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Amendment as of the date first
      above written.

     

    

    LANDLORD:

    

    WEST
      55TH
      STREET INVESTORS LLC, a Delaware limited liability company

    

    

    
      	
              By:

            	 	
              UBS
                Realty Investors, LLC, a Massachusetts limited liability company,
                its
                Manager

            
	 	 	 
	 	 	 
	 	 	
              By:  /s/
                J. Raymond Frazier

            
	 	 	
              Name:
                J. Raymond Frazier

            
	 	 	
              Title:
                Director

            

    

    

    

    TENANT:

    

    WELLS
      GARDNER ELECTRONICS CORPORATION, an Illinois corporation

    

    

    
      	
              By:

            	 	
              /s/
                James F. Brace

            
	
              Name:

            	 	
              James.
                F. Brace

            
	
              Title:

            	 	
              VP,
                Secretary, Treasurer & CFO

            

    

    

    

     

    #
      4382352_v4

    
      
        
        

      

      
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