EXHIBIT 99.2
AMENDMENT TO LINE OF CREDIT LOAN
AND SECURITY AGREEMENT
THIS AMENDMENT TO LINE OF CREDIT LOAN AND SECURITY AGREEMENT
("Amendment" or "Agreement") dated September 28th, 1999, by and between eGames,
Inc. ("Borrower") and Sovereign Bank ("Bank").
BACKGROUND
Borrower executed and delivered to Bank a certain Amended and Restated
Line of Credit Note of even date herewith in the stated principal sum of One
Million Five Hundred Thousand ($1,500,000.00) Dollars, evidencing an extension
of a Line of Credit ("Loan").
To further evidence and secure the Loan, Borrower is executing this
Agreement which amends in certain respects, the Line of Credit Loan and Security
Agreement ("Original Loan Agreement") executed and delivered to Bank on March
10, 1999.
The Borrower and the Bank have agreed to modify such terms and
conditions of the Original Loan Agreement as hereinafter set forth. All
capitalized terms used but not defined herein have the meanings defined in the
Original Loan Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto intending to be
legally bound hereby, agree as follows:
1. Paragraph 2.1.0.1. of the Original Loan Agreement is hereby
amended by:
A. Deleting the word "One Million ($1,000,000.00) Dollars"
and replacing it with "One Million Five Hundred Thousand
($1,500,000.00) Dollars"; and
B. Deleting the date "October 31, 1999" and replacing it with
"October 31, 2000".
2. Paragraph 2.1.0.4 of the Original Loan Agreement is hereby
amended by:
A. Deleting the date "October 31, 1999" and replacing it with
"October 31, 2000"; and
B. Deleting the date "June 30, 1999" and replacing it with
"June 30, 2000".
3. Paragraph 2.2.0.1 of the Original Loan Agreement is hereby
amended by deleting the number "One Million ($1,000,000.00)
Dollars" and replacing it with the number "One Million Five
Hundred Thousand ($1,500,000.00) Dollars.
4. Paragraph 2.2.0.3 of the Original Loan Agreement is hereby
amended by deleting the date "March 30, 1999" and replacing it
with the date "September 30, 1999".
5. Paragraph 2.2.0.4 of the Original Loan Agreement is hereby
amended by deleting the date "October 31, 1999" and replacing
it with the date "October 31, 2000".
6. Paragraph 2.2.0.7 of the Original Loan Agreement is hereby
deleted in its entirety.
7. Paragraph 2.2.0.9 is hereby amended by adding at the end of
the paragraph the following:
"Borrower represents and warrants that there will be no
material change from the draft of its financial statement
dated June 30, 1999 which has been delivered to the Bank and
the final audited financial statement of Borrower dated June
30, 1999."
8. Article 5 of the Original Loan Agreement is hereby amended by
adding at 5.8:
"Fee: Borrower shall pay to Bank an annual line of credit
commitment fee of .25%, which fee is presently Three Thousand
Seven Hundred Fifty ($3,750.00) Dollars".
9. Paragraph 6.1.1.1. of the Original Loan Agreement is hereby
amended by adding the following:
"As soon as available, and in any event not later than 60 days
after the close of each fiscal year of Borrower beginning with
the fiscal year ending June 30, 2000, the annual consolidating
report of Borrower containing a balance sheet of Borrower as
of the end of such fiscal year and related statements of
income, shareholders' equity and changes in financial position
of Borrower for such fiscal year, setting forth in each case
in comparative form the corresponding figures of the previous
annual audit report, all in reasonable detail, prepared in
accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods involved,
compiled by the chief financial officer of Borrower."
10. Paragraph 6.1.1.2 of the Original Loan Agreement is hereby
amended by adding the following:
"As soon as available, and in any event not later than 30 days
after the close of each three-month period of each fiscal year
of Borrower, the consolidating, balance sheet and profit and
loss statement of Borrower as of the end of such quarter and
related statements of income, shareholders' equity and changes
in financial position of Borrower for such three-month period
and for the period from the beginning of the current fiscal
year to the end of such three-month period, setting forth in
each case in comparative form the corresponding figures for
the corresponding periods of the preceding fiscal year, all in
reasonable detail, prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved, and compiled by an
independent certified public accountant or the chief financial
officer of Borrower."
11. Article 6 is hereby amended by adding as paragraph 6.1.5 the
following:
"Monthly Accounts Receivable. Within 15 days of the preceding
month's end, Borrower shall furnish an accounts receivable aging
report of the preceding month's end prepared by the chief
financial officer of Borrower."
12. Article 6 is amended by adding as paragraph 6.19 the following:
"Minimum Net Income;
"During the term of the Loan, Borrower will maintain a minimum net
income as follows:
6/30/99 to 9/30/99 - no losses.
6/30/99 to 12/31/99 - Five Hundred Thousand ($500,000.00)
Dollars.
6/30/99 to 3/31/2000 - One Million ($1,000,000.00) Dollars.
6/30/99 to 6/30/2000 - One Million Five Hundred Thousand
($1,500,000.00) Dollars."
Borrower's compliance with this covenant shall be verified at
the close of each fiscal quarter of Borrower in accordance
with Paragraphs 6.1.1.1 and 6.1.1.2 of the Original Loan
Agreement as amended hereby."
13. Paragraph 9.2 of the Original Loan Agreement is hereby amended
by deleting the name "Xxxxx X. Xxxxxxxx" and replacing it with
"Xxxxxx X. XxXxxxx".
14. Paragraph 9.14 of the Original Loan Agreement is hereby amended by
adding the following:
"Borrower represents to Bank that it maintains its Collateral
at the locations listed on Schedule 9.14 attached hereto and
made a part hereof. Borrower further represents and warrants
that it shall have executed and filed, if appropriate, any and
all instruments, documents, certificates, opinions and
assurances ("Documents") required by Bank to evidence, secure,
perfect or in any other manner protect Bank's first lien
position in the Collateral. Borrower shall have executed,
filed and returned to Bank all such Documents within ten (10)
business days of Bank's request for such documentation.
Failure by Borrower to timely perform this covenant shall be
an immediate Event of Default without the requirement of Bank
to give notice or opportunity to cure such default before Bank
pursues its remedies under the Loan Agreement. This Paragraph
shall further be a Condition for Lending, as defined in
Article 5 of the Loan Agreement."
15. Except as expressly modified hereby, the terms and conditions
of the Original Loan Agreement shall remain unmodified and in
full force and effect. Any reference in the Loan Documents to
the Loan Agreement shall mean such document as modified by
this Amendment.
IN WITNESS WHEREOF, the parties each intending to be legally bound
hereby have executed this Amendment the day and year first above written.
ATTEST: eGAMES, INC
By: /s/ Xxxxx Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------- ------------------------
Corporate Seal
SOVEREIGN BANK
By: /s/ Xxxxxx X. XxXxxxx
---------------------------------
Xxxxxx X. XxXxxxx, Vice President
