Document:

TERM NOTE

$5,000,000.00
                                                                Cincinnati, Ohio
                                                                    June 1, 2001

         INTERLOTT TECHNOLOGIES, INC., a Delaware corporation (the "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, the principal sum of Five Million Dollars ($5,000,000) together with
interest as set forth herein. Interest on the outstanding principal balance of
this Note will accrue at a rate per annum equal to 12% per annum. Interest will
be calculated on the basis of a year of 360 days and charged for the actual
number of days elapsed. Interest will be payable in immediately available funds
at the principal office of Bank on the first day of each calendar month
commencing July 1, 2001. 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.

         Accrued and unpaid interest will only be due and payable monthly
commencing on the 1st day of July, 2001 and continuing on the 1st day of each
month thereafter during the term hereof.

         The entire principal amount and all accrued and unpaid interest due and
of this Note will be due and payable on June 30, 2003.

         This Note is the Term Note referred to in the Credit Agreement between
Borrower and Bank of even date herewith, as it may be amended from time to time
(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 pre-payable 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 during the
extension period.

<PAGE>

         This Note is subject to all the terms and conditions of a Standby and
Subordination Agreement (as defined in the Credit Agreement).

         After the occurrence and during the continuation of an Event of
Default, 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. This provision does not constitute a waiver of any Events of Default
or an agreement by Bank to permit any late payments whatsoever.

         Prepayment. Borrower may prepay any portion of the Term Loan without
premium or penalty but only if: (a) Borrower is in full compliance with the
Senior Debt Credit Facility, and (b) all pre-payments are made in increments of
$500,000, and (c) all pre-payments are made not earlier than 40 days after the
close of each fiscal quarter, and not later than 50 days after the close of each
fiscal quarter, commencing on September 30, 2001.

         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 in the
inverse order of maturity, 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.

                                     Page 2

<PAGE>

         All payments received by Bank will be applied first to payment of
amounts advanced by Bank on behalf of Borrower, 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 herein), then to accrued
interest due on this Note, then to the principal, which will be repaid in the
inverse order of maturity.

         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 one
or more extensions and renewals of this Note.

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

         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, 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.

                                     Page 3
<PAGE>

WITNESSES:                               INTERLOTT TECHNOLOGIES, INC.

____________________________             By:      ____________________________

____________________________             Its:     ____________________________

                                     Page 4SECURITY AGREEMENT

         THIS SECURITY AGREEMENT is entered into as of the day of May, 2001, by
and between INTERLOTT TECHNOLOGIES, INC., a ______ 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, chooses 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
materials,  and all documents of title,  whether  negotiable or  non-negotiable,
representing any of the foregoing.

<PAGE>

     (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 pledge and security interest 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, which shall
be subject to the terms and conditions of the Subordination Agreement:

          (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

                                       2
<PAGE>

          (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 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  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.

          2.3  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,  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  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.  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.

                                       3
<PAGE>

          (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 default by Borrower  hereunder,  Borrower will not grant any
     discounts,  credit or allowances to any Debtor and will not accept  returns
     of merchandise without Bank's consent. After default by Borrower,  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.

          (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.

          2.4 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.

                                       4

<PAGE>

          2.5  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  or  has
     maintained  Inventory 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 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 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 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.

          2.6  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. 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) 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  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.

                                       5
<PAGE>

          (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.

          2.7 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 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.

          2.8 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
     deliver to Bank copies of all books and records requested by Bank.

          2.9 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 and all
     monies so paid out will be secured by the Collateral.

          2.10 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.

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<PAGE>

          2.11  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.

          2.12 Purchase Money Security  Interest.  Borrower may grant a purchase
     money security  interest in Equipment to the extent permitted by the Credit
     Agreement  ("Permitted  Purchase  Money Security  Interest"),  which may be
     superior  to the Bank's  security  interest  hereunder  and  after-acquired
     Equipment.

          2.13 Misc.  Except as otherwise  provided  herein,  Borrower  will not
     encumber,  pledge,  mortgage,  grant a security  interest in, assign,  sell
     (except for sales in the ordinary  course of business),  lease or otherwise
     dispose of or transfer  any of the  Equipment.  If any  Equipment  is sold,
     transferred  or  otherwise  disposed of and (i) (a) such sale,  transfer or
     disposition  is effected  without  replacement  of the  Equipment  so sold,
     transferred  or disposed of or (b) such  Equipment is replaced by Equipment
     leased by Borrower, then Borrower shall deliver all of the cash proceeds of
     any such sale, transfer or disposition to the Bank, which proceeds shall be
     applied to the  repayment  of the Loans,  or (ii) such  sale,  transfer  or
     disposition  is made  in  connection  with  the  purchase  by  Borrower  of
     replacement  Equipment,  Borrower  shall  use the  proceeds  of such  sale,
     transfer or  disposition to finance the purchase by Borrower of replacement
     Equipment  and shall  deliver to Bank  written  evidence  of the use of the
     proceeds for such purchase. The Bank shall release its security interest in
     any Equipment to permit  Borrower to dispose of the same in compliance with
     the terms of this paragraph.

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; 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

                                       7
<PAGE>

          (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 occurrence thereof, 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,  or (iii) any breach of any covenant which has already
     occurred; or

          (d) a default or breach occurs under the Credit Agreement,  the Senior
     Debt Credit  Facility,  the Loan  Documents  or any  document or  agreement
     evidencing or securing the Obligations.

          3.2 Remedies. If any Event of Default will occur and be 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.

                                       8
<PAGE>

          4.2 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 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.

             [The remainder of this page is intentionally left blank
                         with signature page to follow]

                                       9
<PAGE>

         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:________________________________

                                       10

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