EXHIBIT 99.2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of August 9, 2000 by and between
eGames, Inc., a Pennsylvania corporation with an address at 0000 Xxxxx Xxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (referred to herein as the Borrower), and
SUMMIT BANK, a Pennsylvania state banking corporation maintaining offices at
0000 Xxxxxx Xxxxx Xxxx, Xxxx Xxxxxxxxxx, XX 00000-0000 (hereinafter referred to
as Lender).
RECITALS
A. The capitalized terms used in these Recitals and this Security
Agreement shall have the meanings stated in Section 1 unless the context shall
otherwise require.
B. The Borrower has executed and delivered to the Lender: (i) a Loan
Agreement; (ii) a note evidencing a line of credit loan to Borrower in the
principal amount not to exceed Two Million Dollars ($2,000,000.00) (referred to
herein as the Note), of even date herewith, and collateral documents pursuant
thereto dated as of even date herewith.
C. The Note and all collateral documents pursuant thereto (including
but not limited to this Security Agreement) are collectively referred to as the
Loan Documents.
D. The Loan Documents are secured by, among other items, the accounts,
accounts receivable, inventory, work in progress, equipment, furniture, fixtures
and machinery owned by the Borrower.
E. All of the requirements of law have been fully complied with and all
other acts and things necessary to make this Security Agreement a valid, binding
and legal instrument for the security of the Note have been done and performed.
NOW, THEREFORE, in order to secure the payment of the principal of and
interest and other charges on the Note according to its tenor and effect, and to
secure the payment of all other indebtedness hereby secured and the performance
and observance of all the covenants and conditions in the Note, in this Security
Agreement and in the Loan Documents contained, and to declare the terms and
conditions on which the Note is secured, the Borrower does hereby grant to the
Lender, its successors and assigns, a security interest in and to the following
described Properties (hereinafter sometimes referred to as the Collateral):
Division I
All furniture, fixtures, equipment, work in progress and inventory now
owned or hereafter acquired by the Borrower with or without the use of borrowed
funds and by way of replacement, renewal, substitution, addition or otherwise
(the Equipment), together with all accessories, equipment, parts and
appurtenances appertaining or attached to any of such Equipment, whether now
owned or hereafter acquired, and all additions, improvements, accessions and
accumulations to, any and all of said Equipment, together with all the proceeds,
products, offspring, rent, issues, income, profits and avails thereof and there
from.
Division II
All Chattel Paper now owned or hereafter acquired by the Borrower,
including, but not limited to, all writings evidencing a monetary obligation and
a security interest in all leases of specific goods and all Chattel Paper. When
a transaction is evidenced either or both by a security agreement and/or lease
of personal property and by instrument or series of instruments, such group of
writings individually or taken together constitutes Chattel Paper.
Division III
All General Intangibles now owned or hereafter acquired by the
Borrower, including, but not limited to, chooses in action, contract rights,
licensing agreements, royalty payments, corporate or other business records
(including without limitation customer lists, tenant lists, correspondence,
advertising materials, computer programs, printouts and other computer materials
and records), inventions, designs, copyrights, logos, patents and patent
applications, and the inventions and improvements described and claimed therein,
trademarks, trademark applications, service marks, registered service marks and
service xxxx applications, together with the goodwill connected with and
symbolized by any of the foregoing, trade names, secrets, registrations,
licenses, sublicenses, permits, franchises, warranties, rights and claims
against third parties including carriers and shippers, rights to indemnification
(including tax and liability indemnifications), leasehold and subleasehold
interest in personal property, plans, specifications, drawings, appraisals,
reports, security interests and security held by or granted to the Borrower, tax
refunds, tax refund claims, awards resulting from claims arising from adverse
condemnation proceedings, royalty and product rights, rights to the retrieval
from third parties of electronically processed and recorded data pertaining to
any Collateral, partnership and joint venture interests, goodwill, whether or
not associated with any of the foregoing.
Division IV
All instruments, including, without limitation, all drafts, checks,
certificates of deposit, notes, bills of exchange, certificated securities,
uncertificated securities and all other writings which evidence a right to the
payment of money by delivery with any necessary endorsement or assignment and
all of the documents of title issued by field warehousemen now owned or
hereafter acquired by the Borrower.
Division V
All Accounts, Accounts Receivable, royalty and licensing payments,
Deposits and Deposit Accounts whether now owned or hereafter acquired by the
Borrower however arising including, but not limited to, those Accounts and
Accounts Receivable by or resulting from the sale, financing or lease of
Inventory or Equipment or arising by reason of goods sold, financed or leased or
arising by reason of the performance of services.
Division VI
To the extent related to any Property described in Divisions I through
V above, all books, correspondence, credit files, records, invoices, bills of
lading and other computer runs and other papers and documents in the possession
or control of the Borrower or any computer bureau service agency or other
representative from time to time acting for the Borrower and to the extent
related to any Property described in Divisions I through V above and payments
under any policies of insurance including claims of rights to payments
thereunder and proceeds therefrom.
Division VII
All proceeds, rents or profits, issues, income and avails of the
Collateral including but not limited to cash and insurance proceeds.
Division VIII
All products and offspring of the Collateral.
The Loan Agreement between Borrower and Lender contains a negative
pledge restricting Borrower's rights to grant junior security interests in the
collateral described herein.
The security interests granted pursuant hereto are intended to be both
first priority security interests as such term is defined in Article 9 of the
Uniform Commercial Code as of the date hereof, and, to the extent applicable, a
first priority post-petition security interest as such term is defined in 11 USC
'552(b) should Borrower file for relief pursuant to the Bankruptcy Code.
SECTION 1. DEFINITIONS AND OTHER PROVISIONS.
The following terms shall have the following meanings for all purposes
of this Security Agreement:
Accounts and Accounts Receivable, Chattel Paper, Documents, Equipment,
General Intangible, Goods, Instruments and Inventory shall have the meanings set
forth in the Uniform Commercial Code of Pennsylvania.
Borrower shall mean eGames, Inc., a Pennsylvania corporation and any
individual, partnership, firm, not-for-profit corporation or corporations which
succeeds thereto by merger or consolidation or which acquires all or
substantially all of the assets thereof.
Collateral shall have the meaning stated in the Granting Clauses of
this Security Agreement, or such broader definition as may be provided for under
the Uniform Commercial Code as enacted and then in effect in the Commonwealth of
Pennsylvania.
Default shall mean the occurrence and continuance of an Event of
Default or an event which, after notice or lapse of time or both, would become
an Event of Default under any of the Loan Documents.
Default Rate shall mean the Default Rate as defined in the Note.
Equipment shall have the meaning stated in the Granting Clauses of this
Security Agreement.
Event of Default shall mean any event specified as such herein or in
the Loan Documents.
Event of Loss with respect to any Collateral shall mean either: (1) the
total loss of such Collateral, which shall include damage to an extent that in
the sole reasonable judgment of the Lender the repair of such Collateral is
rendered impractical or uneconomical, or (2) the theft, disappearance,
condemnation, confiscation or seizure of, or requisition of title to or use of,
such Collateral.
Indebtedness Hereby Secured shall mean the indebtedness evidenced by
the Note and/or the Loan Documents and by the other documents executed pursuant
thereto, or pursuant to any other loan between Lender and Borrower whether now
existing or entered into at a later date, together with all principal thereof
and interest and all additional amounts and other sums at any time due and owing
from or required to be paid by the Borrower to Lender, under the terms of the
Note, this Security Agreement, the other Security Documents, or the Loan
Documents, and any extensions, renewals or modifications thereof or other
document evidencing a loan from Lender to Borrower whether now existing or
entered into at a later date.
Lien shall mean a security interest, mortgage, lien, charge,
encumbrance on, or pledge of, the Collateral, other than Permitted Encumbrances
or the security interest created by this Security Agreement.
Loan Document(s) means any Loan Agreement, Note, Surety Agreement,
Security Agreement, Mortgage or any other document heretofore, now or hereafter
executed by or on behalf of Borrower to Lender, together with all modifications,
extensions and/or renewals thereof.
Officer's Certificate means a certificate of the Borrower signed by the
President or any Vice President of the Borrower.
Payment Date means any date on which a payment of principal or interest
is due on the Note.
Permitted Encumbrance shall mean purchase money security interests and
finance leases as such term is defined in the Uniform Commercial Code and
consented to by Lender.
Property or Properties shall mean any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or intangible.
Security Agreement means this Security Agreement (including the
Schedules, if any,) as amended or modified from time to time.
Any capitalized terms used herein and not defined herein shall have the
meaning attributed to such term in the Loan Documents.
SECTION 2. COVENANTS AND WARRANTIES OF THE BORROWER.
The Borrower represents, covenants, warrants and agrees for the benefit
of the Lender as follows:
Section 2.1. Borrower's Performance of Loan Documents, Security Documents, Etc.
Each and all of the terms, provisions, restrictions, covenants,
representations and agreements set forth in the Loan Documents, the Note and all
other security documents, and in each and every supplement thereto or amendment
thereof which may at any time or from time to time be executed and delivered by
the parties thereto or their successors and assigns, including, but not limited
to, any document evidencing a loan to Borrower from Lender whether now existing
or entered into at a later date, are incorporated herein by reference to the
same extent as though each and all of said terms, provisions, restrictions,
covenants and agreements were fully set out herein. The Borrower does hereby
covenant and agree well and truly to abide by, perform and be governed and
restricted by each and all of the matters provided for by the Loan Documents,
the Note and each other security document or other documents issued pursuant to
the Loan Documents so incorporated herein to the same extent and with the same
force and effect as if each and all of said terms, provisions, restrictions,
covenants, representations, warranties and agreements so incorporated herein by
reference were set out and repeated herein at length. Without limiting the
foregoing, the Borrower covenants and agrees to pay all taxes, assessments and
governmental charges or levies imposed upon this Security Agreement or the Note
or any other Indebtedness Secured Hereby.
Section 2.2. Warranty of Title.
The Borrower has good and valid title to, and is in possession of, the
Collateral, free of Liens (except for Permitted Encumbrances) and has, and
covenants that it will continue to have, full power and lawful authority to
grant a security interest in the Collateral to the Lender for the uses and
purposes herein set forth. The Borrower will warrant and defend the title to the
Collateral against all claims and demands of all Persons whomsoever and
howsoever arising. There is no financing statement in which the Borrower is
named, or which the Borrower has signed, as debtor, on file on the date of this
Security Agreement in any public office covering any of the Collateral except as
required or contemplated by the Loan Documents and this Security Agreement and
financing statement with respect to indebtedness of Borrower that will be
satisfied with a portion of the proceeds of the Loan.
Section 2.3. Further Assurances.
The Borrower will, at its own expense, do, execute, acknowledge and
deliver all and every further act, deed, conveyance, transfer and assurance
necessary or proper for the perfection of the security interest herein provided
for in the Collateral, whether now owned or hereafter acquired.
Section 2.4. After-acquired Property.
Except as otherwise permitted pursuant to the Loan Documents any and
all Property described or referred to in the granting clauses of this Security
Agreement which is hereafter acquired shall without any further conveyance,
assignment or act on the part of the Borrower or the Lender become and be
subject to this Security Agreement as though specifically described herein.
Section 2.5. Recordation and Filing.
The Borrower will cooperate with Lender and cause this Security
Agreement and all financing and continuation statements at all times to be kept
recorded, registered and filed at its own expense in such manner and in such
places as may be required by law in order to preserve and protect the rights of
the Lender hereunder, and the Borrower will record, register and file all
financing and continuation statements which are necessary to preserve and
protect the rights of the Lender as a first priority secured creditor under this
Security Agreement as supplemented to the same extent provided on the date of
this Security Agreement and will re-record, register or re-file this Security
Agreement, each supplemental security agreement and continuation statements
prior to the final maturity date of the Note in order to preserve and protect
the rights of the Lender.
Section 2.6. Payment of Indebtedness.
The Borrower is justly indebted to the Lender for the full amount of
the Note, and the Borrower will promptly pay the Note and the other Indebtedness
Hereby Secured as and when the same or any part thereof becomes due (subject to
applicable grace and notice periods, whether by lapse of time, declaration,
acceleration, demand or otherwise).
Section 2.7. Payment of Taxes.
The Borrower will from time to time duly pay and discharge all taxes,
assessments, levies, fees and other governmental charges imposed on the
Collateral or any part thereof; provided that the Borrower shall have the right
to contest in good faith, by an appropriate proceeding promptly initiated and
diligently conducted, the validity, amount or imposition of any such tax,
assessment or charge, and upon such good faith contest to delay or refuse
payment thereof, if (a) the Borrower establishes adequate reserves to cover such
contested taxes, assessments or charges, if and to the extent required under
generally accepted accounting principles, and (b) such contest does not have a
material adverse effect on the financial condition of the Borrower, the ability
of the Borrower to make the payments due on the Note or the priority or value of
the Lender's security interest in the Collateral.
Section 2.8. Restrictions on Liens.
(a) Negative Pledge. Except and limited to the Liens created hereby,
Permitted Encumbrances, or otherwise consented to in advance and in writing by
Lender, the Borrower shall not create, incur, assume or suffer to exist any
liens on the Collateral or the interests of the Borrower therein and will
discharge and keep the Collateral free of any mortgage, pledge, lien charge,
encumbrance or claim on or with respect to the Collateral or title to any
thereof or any interest therein.
(b) Lender's Rights to Cure. The Lender may, but shall not be obligated
to, upon the occurrence of a Default or an Event of Default with or without the
prior written consent of the Borrower at its option, discharge any taxes, liens,
security interests or other encumbrances at any time levied or placed on the
Collateral and may pay for the maintenance and preservation of the Collateral
including the purchasing of insurance therefore and the Borrower will
immediately reimburse the Lender on demand for any payment made or any expenses
incurred by the Lender pursuant to the foregoing authority with interest at the
Default Rate. All such expenses and payments shall have the benefit of and be
secured by the security interest herein granted.
Section 2.9. Maintenance.
(a) Maintenance. The Borrower will, at its own expense, maintain,
service, clean and repair the Collateral in accordance with sound business
practices and to the same extent as the Borrower would in the prudent management
of its properties, maintain, service, clean and repair similar equipment owned
by the Borrower and in any event to the extent required to maintain such
Collateral in good operating condition and in compliance with (i) all
manufacturers' or other warranty covering the Collateral and (ii) any applicable
requirements of law or of any governmental authority having jurisdiction
(ordinary wear and tear excepted). The Borrower shall not permit the Collateral
to be used or operated in violation of (1) any law or any rule, regulation or
order or any governmental authority having jurisdiction; or (2) the terms of any
insurance policy in effect with respect to such Collateral; or (3) any
applicable manufacturer's or other warranty covering the Collateral. The
Borrower shall use the Collateral only for business or commercial purposes. In
addition, the Borrower covenants that it will not permit the Collateral to be
used for purposes other than their intended purposes or in such capacities which
exceed the design capacities of such Collateral, and further covenants to
maintain the Collateral in such condition as to keep the manufacturers'
warranties with respect to the Collateral in full force and effect.
(b) Replacement of Parts. The Borrower will, at its own cost and
expense and in accordance with prudent management and sound business practices,
promptly replace all parts (including all appurtenances, accessories,
furnishings and other equipment of whatever nature) which may from time to time
be incorporated or installed in or attached to the Collateral and which may from
time to time become worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use for any reason
whatsoever. All replacement parts shall be free and clear of all Liens, and
shall be in as good operating condition as, and shall have a value, utility and
useful life at least equal to, the parts replaced, it being assumed for this
purpose that such replaced parts were in the condition and repair required to be
maintained by the terms hereof.
Section 2.10. Insurance.
(a) Insurance Against Loss or Damage. Borrower shall maintain casualty
insurance coverage with an insurance company on the Collateral in such amounts
and of such types as may be requested by Lender, and in any event, as are
ordinarily carried by similar businesses; and, in the case of all policies
insuring property in which Lender shall have a Security Interest of any kind
whatsoever, all such insurance policies shall provide that the proceeds thereof
shall name Lender as loss payee and additional insured and shall be payable to
Borrower and Lender, as their respective interests may appear; provided,
however, that in the event of a casualty loss less than Fifty Thousand Dollars
($50,000.00), the proceeds shall be payable to Borrower. If the proceeds of a
casualty loss exceed Fifty Thousand Dollars ($50,000.00), Lender shall retain
the right, in its sole discretion, to apply said proceeds to the satisfaction of
the Obligations. Borrower shall produce proof of payment of premiums for said
insurance policies as Lender may reasonably request. All said policies or
certificates thereof, including all endorsements thereof and those required
hereunder, shall be deposited with Lender; and such policies shall contain
provisions that no such insurance may be canceled or decreased or amended in
such manner and to such extent as prudent business would dictate. If Borrower
shall at any time or times hereafter fail to obtain and/or maintain any of the
policies of insurance required herein, or fail to pay any premium in whole or in
part relating to any such policies, Lender shall be notified within thirty (30)
days of any such failure to obtain and/or maintain said policies of insurance or
the failure to pay any premium when due, the Lender may, but shall not be
obliged to, obtain and/or cause to be maintained insurance coverage with respect
to the Collateral, including, at Lender's option, the coverage provided by all
or any of the policies of Borrower and pay all or any part of the premium
therefore, without waiving any Event of Default by Borrower, and any sums,
including reasonable attorney fees, court costs, expenses and other charges
related thereto, so disbursed by Lender shall be payable, on demand, by Borrower
to Lender and shall be an additional Obligation;
(b) Insurance Against Public Liability and Property Damage. The
Borrower will maintain in effect, with insurers reasonably satisfactory to the
Lender, insurance with respect to Public Liability and Property Damage which it
would, in the prudent management of its operations, maintain; provided, however,
that in no event shall the insurance maintained in accordance with this
subsection 2.10 (b) be less than $2,000,000 under a single limit liability for
each loss; and provided, further, that such insurance may provide for a
deductible amount not to exceed $5,000.00. The Borrower shall cause the insurers
with whom it maintains such insurance to advise the Lender in writing promptly
of any default in the payment of any premiums or any other act or omission on
the part of the Borrower of which they have knowledge and which might invalidate
or render unenforceable, in whole or in part, any such insurance. The Borrower
shall also cause such insurers to advise the Lender in writing, at least thirty
(30) days prior thereto, of the expiration or termination of any such insurance.
Section 2.11. Indemnification; Waiver of Offset.
(a) If the Lender is made a party defendant to any litigation commenced
by a third party concerning this Security Agreement, any other security
documents or the Collateral or any part thereof or interest therein, then the
Borrower shall indemnify, defend and hold the Lender harmless from any and all
liability by reason of said litigation, including reasonable attorneys' fees and
expenses incurred by the Lender in any such litigation, whether or not such
litigation is prosecuted to judgment.
(b) The Borrower waives any and all right to claim or recover against
the Lender, its officers, employees, agents and representatives, for loss of or
damage to the Borrower, the Collateral, the Borrower's Property or the Property
of others under the Borrower's control from any cause insured against pursuant
to policies maintained by Borrower.
(c) All sums payable by the Borrower hereunder and under the Note shall
be paid without notice, demand, counterclaim (other than compulsory
counterclaims), set-off, deduction or defense (other than defense of payment)
and without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of the Borrower hereunder shall in no way be
released, discharged or otherwise affected (except as expressly provided herein)
by reason of: (1) any damage to or destruction of or any condemnation or similar
taking of the Collateral or any part thereof; (ii) any restriction or prevention
of or interference with any use of the Collateral or any part thereof; (iii) any
title defect or encumbrance on the Collateral or any part thereof by title
paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Lender, or any action taken with respect to this Security
Agreement by any trustee or receiver of the Lender, or by any court, in any such
proceeding; (v) any claim which the Borrower has or might have against the
Lender; (vi) any default or failure on the part of the Lender to perform or
comply with any of the terms hereof or of any other agreement with the Borrower;
or (vii) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing; whether or not the Borrower shall have notice or knowledge of any of
the foregoing. Except as expressly provided herein, the Borrower waives all
rights now or hereafter conferred by statute or otherwise to any abatement,
suspension, deferment, diminution or reduction of any of the indebtedness hereby
secured and payable by the Borrower.
Section 2.12. Chief Place of Business/Corporate Name.
(a) The Borrower's principal place of business and chief executive
office is located at 0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000.
The Borrower may not change such location without thirty (30) days prior notice
to Lender.
(b) The Borrower will not do business under any name other than eGames,
Inc., a Pennsylvania corporation without prior notice to the Lender.
Section 2.13. Location of Collateral.
(a) Location. The Borrower will not move any Collateral outside of the
Commonwealth of Pennsylvania without thirty (30) days prior notice to Lender
other than in connection with the sale of inventory in the ordinary course of
Borrower's business. Should any Collateral be located at any location other than
Borrower's principal place of business, Borrower shall notify Lender within ten
(10) days following such change of location.
(b) Collateral Not Part of Realty. The parties hereto intend that the
Collateral is and shall at all times be and remain personal property under the
law of any state wherein the Collateral may be located from time to time, and
each of them agrees that it will not take any action which would cause the
Collateral or any part thereof to be, or to be deemed to be, real property or an
accession to real property under the laws of the state wherein the Collateral
may be located from time to time, or real estate under the Federal bankruptcy
laws.
SECTION 3. POSSESSION, USE AND RELEASE OF COLLATERAL.
Section 3.1. Possession of the Collateral.
The Borrower, so long as no Event of Default has occurred and is
continuing, shall be suffered and permitted to remain in full possession,
enjoyment and control of the Collateral, and to manage, operate and use the same
and each part thereof with the rights and franchises appertaining thereto;
provided, however, always, that the possession, enjoyment, control and use of
the Collateral shall at all times be under and subject to this Security
Agreement.
SECTION 4. DEFAULTS AND REMEDIES.
Section 4.1. Events of Default.
The Borrower acknowledges and agrees that each and all of the terms and
provisions of the Loan Documents, including, but not limited to, provisions
relating to Events of Default and remedies of Lender, have been and are
incorporated into this Security Agreement by reference to the same extent as
though fully set forth herein. Furthermore, this Agreement shall be
cross-defaulted with the Note, each and every Loan Document and with all other
Loan Facilities between Borrower and Lender, whether now existing or entered
into at a later date.
Section 4.2. Lender's Additional Rights.
Upon an Event of Default, the Lender shall, without limitation of any
other rights and remedies available pursuant to the Loan Documents, at law or in
equity, have the rights, options, duties and remedies of a secured party, and
the Borrower shall have the rights and duties of a debtor, under the Uniform
Commercial Code of Pennsylvania, and, without limiting the generality of the
foregoing, may exercise any one or more or all, and in any order, of the
remedies hereinafter set forth:
(a) The Lender may, by notice to the Borrower, declare the entire
unpaid principal of the outstanding Note to be immediately due and payable; and
thereupon all such unpaid principal, together with accrued interest thereon and
premium, if any, shall be and become immediately due and payable;
(b) The Lender shall have the right (subject to compliance with any
applicable mandatory legal requirements) to take immediate possession of the
Collateral, or any portion thereof, and for that purpose may pursue the same
wherever it may be found, and may enter any of the premises of the Borrower with
or without notice, demand, process of law or legal procedure, and search for,
take possession of, remove, keep and store the same, or use and operate or lease
the same until sold and may otherwise exercise any and all of the rights and
powers of the Borrower in respect thereof;
(c) The Lender may, if at the time such action may be lawful and always
subject to compliance with any mandatory legal requirements, either with or
without taking possession and either before or after taking possession, and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered or certified mail to the Borrower once at
least 10 days prior to the date of such sale, or such other notice which may be
required by law if said 10 days notice is insufficient, sell and dispose of the
Collateral, or any part thereof, at public auction or private sale to the
highest bidder, in one lot as an entirety or in separate lots, and either for
cash or on credit and on such terms as the Lender may determine, and at any
place (whether or not it be the location of the Collateral or any part thereof)
designated in the notice above referred to; and any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
notice, and the Lender may bid and become the purchaser at any such sale; and
(d) The Lender may proceed to protect and enforce this Security
Agreement, any other security document, the Loan Documents or the Note by
confession of judgment, suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or in aid of any power herein
granted; confession of judgment; or for foreclosure hereunder, or for the
appointment of a receiver or receivers for the Collateral or any part thereof,
or for the recovery of judgment for the Indebtedness Hereby Secured or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
Section 4.3. Waiver of Benefit of Laws by Borrower.
To the extent now or at any time hereafter enforceable under applicable
law, the Borrower covenants that it will not at any time insist upon or plead,
or in any manner whatsoever claim or take any benefit or advantage of, any stay
or extension law now or at any time hereinafter in force, nor claim, take nor
insist upon any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisement of the Collateral or any part
thereof, prior to any sale or sales thereof to be made pursuant hereto, or to
the decree, judgment or order of any court of competent jurisdiction; nor, after
such sale or sales, claim or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the Collateral so
sold or any part thereof, and hereby expressly waives for itself and on behalf
of each and every person, except decree or judgment creditors of the Borrower
acquiring any interest in or title to the Collateral or any part thereof
subsequent to the date of this Security Agreement, all benefit and advantage of
any such law or laws, and covenants that it will not invoke or utilize any such
law or laws or otherwise hinder, delay or impede the execution of any power
herein granted and delegated to the Lender, but will suffer and permit the
execution of every such power as though no such law or laws had been made or
enacted.
Any sale, whether under any power of sale herein given or by virtue of
judicial proceedings (including, but not limited to, sales pursuant to a
judgment obtained by confession), shall operate to divest all right, title,
interest, claim and demand whatsoever, either at law or in equity, of the
Borrower in and to the Collateral sold, and shall be a perpetual bar, both at
law and in equity, against the Borrower, its successors and assigns, and against
any and all Persons claiming the Collateral sold or any part thereof, under, by
or through the Borrower.
BORROWER AND LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY.
____TM____ ___DC___
Initial Initial
(Borrower) (Lender)
Section 4.4. Effect of Discontinuance of Proceedings.
In case the Lender shall have proceeded to enforce any right under this
Security Agreement by foreclosure, sale, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely, then and in every such case the Borrower and the
Lender shall be restored to their respective former positions, and their
respective rights hereunder with respect to the property subject to the lien of
this Security Agreement.
Section 4.5. Application of Sale Proceeds.
The purchase money proceeds of any sale of all or any portion of the
Collateral and the proceeds of any remedy exercised hereunder, together with any
other moneys then held by the Lender hereunder as part of the Collateral, shall
be applied as follows:
(a) To the payment of costs and expenses of foreclosure or suit, if
any, and of all proper expenses, liability and advances, including reasonable
legal expenses and attorneys' and paralegal fees, incurred or made hereunder by
the Lender and of all taxes, assessments or Liens superior to the security
interest hereof, except any taxes, assessments or other superior Liens subject
to which said sale may have been made;
(b) To the payment of the whole amount then due, owing and unpaid upon
the outstanding balance of the Note for principal and interest; and in case such
proceeds shall be insufficient to pay in full the whole amount so due, owing or
unpaid upon the outstanding Note, then ratably according to the aggregate of
such principal and the accrued and unpaid interest with application on the
outstanding Note to be made, first, to the unpaid interest thereof and second,
to unpaid principal thereof and premium thereon; such application to be made
upon presentation of the Note, and the notation thereon of the payment, if
partially paid, or the surrender and cancellation thereof, if fully paid; and
(c) To the payment of the surplus, if any, to the Borrower or to the
person, persons or entities lawfully entitled to receive the same.
Section 4.6. Cumulative Remedies.
No delay or omission of the Lender to exercise any remedy arising from
any Event of Default, shall exhaust or impair any such remedy or prevent its
exercise during the continuance of such Event of Default. No remedy hereunder is
intended to be exclusive of any other remedy but each and every remedy shall be
cumulative and in addition to any and every other remedy given hereunder or
otherwise existing; nor shall the giving, taking or enforcement of any other or
additional security, collateral or guaranty for the payment of the indebtedness
hereby secured operate to prejudice, waive or affect the security of this
Security Agreement or any rights, powers or remedies hereunder, nor shall the
Lender be required to first look to, enforce or exhaust such other or additional
security, collateral or guaranty.
SECTION 5. MISCELLANEOUS.
Section 5.1. Successors and Assigns.
Whenever any of the parties hereto is referred to such reference shall
be deemed to include the successors and assigns of such party and all the
covenants, promises and agreements in this Security Agreement contained by or on
behalf of the Borrower or by or on behalf of the Lender shall bind and inure to
the benefit of the respective successors and assigns of such parties whether so
expressed or not.
Section 5.2. Amendment and Waiver.
This Security Agreement may be amended, and the observance of any term
of this Security Agreement may be waived only by written instrument signed by
the parties hereto.
Section 5.3. Partial Invalidity.
The unenforceability or invalidity of any provision or provisions of
this Security Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
Section 5.4. Communications.
All communications provided for herein shall be given in accordance
with the Loan Agreement.
Section 5.5. Discharge.
The Lender shall release this Security Agreement by proper instrument
or instruments upon presentation of satisfactory evidence that all indebtedness
hereby secured has been fully paid and discharged.
Section 5.6. Counterparts.
This Security Agreement may be executed and delivered in any number of
counterparts, each counterpart constituting an original, but together being only
one Security Agreement.
Section 5.7. Governing Law.
This Security Agreement and the Note shall be construed in accordance
with and governed by the internal laws (without regard to any choice of law
provisions) and decisions of the Commonwealth of Pennsylvania. The Borrower
consents to the jurisdiction of legal process within the Court of Common Pleas
of Bucks County and the Federal District Court for the Eastern District of
Pennsylvania.
Section 5.8. Headings.
The Section headings herein are for convenience only and shall not
affect the construction hereof.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Security Agreement to be executed all as of the date first above written.
eGames, Inc.
Attest:
/s/ Xxxxx Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------- ---------------------
Xxxxxx X. Xxxxxx
VP of Finance and CFO
SUMMIT BANK
/s/ Xxxxx Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------- ---------------------------------
Witness Xxxxx X. Xxxxxxxx, Vice President
