WINWIN GAMING, INC. AMENDMENT TO AMENDED AND RESTATED SECURED PROMISSORY NOTE AND SECURITY AGREEMENT
WINWIN
GAMING, INC.
AMENDMENT
TO AMENDED AND RESTATED SECURED PROMISSORY NOTE AND SECURITY
AGREEMENT
This
AMENDMENT
TO AMENDED AND RESTATED SECURED PROMISSORY NOTE AND
SECURITY AGREEMENT
(this
“Amendment”)
is
dated as of April 21, 2006 and entered into by and between WinWin Gaming, Inc.,
a Delaware corporation (“Company”)
and
Solidus Networks, Inc., a Delaware corporation, ( “Solidus”)
for
lenders, and is made with reference to that certain Amended and Restated Secured
Promissory Note (the “Note”),
dated
as of January 17, 2006, and that Security Agreement (the “Security
Agreement”),
dated
as of September 30, 2005, by and between Company and Solidus. Capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Security Agreement.
RECITALS
WHEREAS,
Company
has requested that Solidus consent to the incurrence of subordinated debt to
Calico Capital Group, LLC and certain other holders of subordinated debt
(“Calico”)
in the
principal amount of up to $2,000,000 (collectively, the “Calico
Junior Loan”)
pursuant to the Secured Convertible Promissory Note and related loan documents
dated as of the date hereof as in effect on the date hereof (the “Calico
Loan Documents”)
and
that Solidus is willing to do so on the terms and conditions set forth in this
Amendment, including Calico and the other holders of subordinated debt entering
into the Intercreditor and Subordination Agreement by and among Calico, Solidus,
and the Company dated as of the date hereof (the “Intercreditor and
Subordination Agreement”).
NOW,
THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:
| Section 1. |
AMENDMENTS
TO THE NOTE AND SECURITY
AGREEMENT
|
| 1.1 |
Amendment
to Section 1 of Security Agreement:
Definition
|
A. Section
1
of the Security Agreement is hereby amended to add the following
definition:
"Indebtedness"
means
(i) all indebtedness for borrowed money; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments or
upon which interest payments are customarily made; (iii) all obligations
and liabilities, contingent or otherwise, of such Person, in respect of letters
of credit, acceptances and similar facilities; and (iv) all obligations
referred to in clauses (i) through (iii) of this definition of another
entity secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) a Lien upon property owned
by
such entity, even though such entity has not assumed or become liable for the
payment of such Indebtedness.
| 1.2 |
Amendment
to Section 1 of Note: Principal
Repayment
|
A. Section
1
of the Note is hereby deleted in its entirety and in lieu thereof the following
new Section 1 is inserted:
“1.
Principal Repayment.
The
outstanding principal amount of the Loan shall be due and payable in full on
June 13, 2006 (the “Maturity
Date”).”
| 1.3 |
Amendment
to Section 6 of Note: Events of
Default
|
A. Section 6
of the Note is hereby amended by adding thereto the following event as an Event
of Default:
(f) Borrower
shall fail to pay any principal of or interest or premium on any of its
Indebtedness (excluding Indebtedness evidenced by this Agreement), when due
and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness, or any other
default under any agreement or instrument relating to any such Indebtedness,
or
any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness.
| 1.3 |
Amendment
to “Permitted Lien” definition of Security
Agreement
|
A.
The
“Permitted Lien” definition is amended by adding the following as a Permitted
Lien:
(h) Liens
in
favor of Calico pursuant to the Calico Loan Documents, provided that such liens
shall not extend or attach to any shares of Solidus capital stock held by
Company.
| Section 2. |
COMPANY’S
REPRESENTATIONS, WARRANTIES AND
COVENANTS
|
In
order
to induce Solidus to enter into this Amendment and to amend the Note in the
manner provided herein, the Company represents and warrants to Solidus that
the
following statements are true, correct and complete:
A. Corporate
Power and Authority.
Such
party has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Amendment and Amended Agreement.
B. Authorization
of Agreements.
The
execution and delivery of this Amendment and the performance of the Amended
Agreement have been duly authorized by all necessary corporate action on the
part of such party.
C. No
Conflict.
The
execution and delivery by such party of this Amendment and the performance
by
such party of the Amended Agreement do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to such
party or any of its Subsidiaries, the Organizational Documents of such party
or
any of its Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on such party or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse
of
time or both) a default under any Contractual Obligation of such party or any
of
its Subsidiaries, (iii) result in or require the creation or imposition of
any Lien upon any of the properties or assets of such party or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in favor
of Solidus on behalf of Lenders), or (iv) except to the extent already
obtained in accordance with the terms hereof, require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of such party or any of its Subsidiaries.
D. Binding
Obligation.
This
Amendment has been duly executed and delivered by such party and this Amendment
and the Amended Agreement are the legally valid and binding obligations of
such
party, enforceable against such party in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by
equitable principles relating to enforceability.
E. Incorporation
of Representations and Warranties From Note.
The
representations and warranties of such party contained in the Amended Agreement
are and will be true, correct and complete in all material respects on and
as of
the Amendment Effective Date to the same extent as though made on and as of
that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete
in
all material respects on and as of such earlier date.
F. Absence
of Default.
After
giving effect to this Amendment, no event has occurred and is continuing or
will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
| Section 3. |
MISCELLANEOUS
|
A. Reference
to and Effect on the Note, Security Agreement, and the Other Loan Documents.
(i) On
and
after the Amendment Effective Date, each reference in the Note and Security
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Note, and each reference in the other loan documents
to
the “Note”, “Security Agreement”, “thereunder”, “thereof” or words of like
import referring to the Note and Security Agreement shall mean and be a
reference to the Amended Agreement.
(ii) Except
as
specifically amended by this Amendment, the Note and Security Agreement and
the
other loan documents shall remain in full force and effect and are hereby
ratified and confirmed.
(iii) The
execution, delivery and performance of this Amendment shall not, except as
expressly provided herein, constitute a waiver of any provision of, or operate
as a waiver of any right, power or remedy of Solidus under, the Note, Security
Agreement or any of the other loan documents (except to the extent such right
or
remedy was based upon existing defaults that will not exist after giving effect
to this Amendment).
B. Fees
and Expenses.
Each
party shall be responsible for its own costs and expenses incurred in connection
with the negotiation and other preparation of this Agreement.
C. Headings.
Section
and subsection headings in this Amendment are included herein for convenience
of
reference only and shall not constitute a part of this Amendment for any other
purpose or be given any substantive effect.
D. Applicable
Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
E. Counterparts;
Effectiveness.
This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by Company and Solidus
and
receipt by Company and Solidus of written or telephonic notification of such
execution and authorization of delivery thereof.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF,
the
parties hereto have caused this Amendment to be duly executed and delivered
by
their respective officers thereunto duly authorized as of the date first written
above.
| WINWIN GAMING, INC. | ||
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| By: | /s/ Xxxxxxx Xxxxxx | |
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| Name: | Xxxxxxx Xxxxxx | |
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| Title: | President & CEO | |
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LENDER:
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| SOLIDUS NETWORKS, INC., | ||
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| By: | /s/ Xxxxx Xxxxxx | |
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| Name: | Xxxxx Xxxxxx | |
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| Title: | Executive Vice President | |
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