EXHIBIT 10.2
EXECUTION COPY
DEMAND NOTE
$250,000 November 26, 2003
FOR VALUE RECEIVED, the undersigned, iGAMES ENTERTAINMENT, INC., a Nevada
corporation with its chief executive office and principal place of business at
000 Xxxxxx Xxxx, Xxxxx 0000, Xxxx Xxxxx, XX 00000 (the "BORROWER"), promises to
pay to the order of Mercantile Capital, L.P., with offices located at 000 X.
Xxxxxxxxx Xxx., Xxxxx 000, Xxxxxxxxx, XX 00000-0000 (the "LENDER"), upon written
DEMAND of Lender: (y) after January 31, 2004, and (z) upon five days written
notice to the Borrower, the principal sum of Two Hundred Fifty Thousand Dollars
($250,000) or, if less, the aggregate outstanding principal balance of all
advances made by the Lender to the Borrower, along with all of the Obligations,
pursuant to the Credit Facility created under the Loan and Security Agreement
dated of even date between Borrower and Xxxxxx (the "AGREEMENT"), together with
Interest, from the date of wire pursuant to this note ("NOTE"), in like money,
at said office of the Lender, at the time and at rates per as provided in the
Agreement (capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Agreement).
1. NOTE, INTEREST RATE AND DEFAULT.
(a) This Note is issued pursuant to the Agreement and is the Note
referred to in the Agreement. Interest shall accrue on the
outstanding Loan Amounts from the date of wire at a rate per
annum equal to Wilmington Trust of Pennsylvania's "prime rate"
plus 10%, floating with daily resets, calculated on the basis
of a 360-day year counting the actual number of days elapsed
(provided, however, that such Interest Rate shall, in no
instance, be below 14.5%).
(b) Upon the occurrence of any Event of Default, as set forth in
the Agreement, the entire unpaid balance of principal and
accrued Interest of this Note and all other Obligations due
under the Agreement shall be immediately due and payable
without presentment, demand, protest or notice of any kind,
all of which are expressly waived.
2. PAYMENT SCHEDULE.
(a) Loan Amounts may be drawn down from the Credit Facility, as
set forth in the Agreement. Interest along with the Collateral
Management Fee with respect to the Loan Amount from the period
from the Closing Date through January 31, 2004, as set forth
in the initial Draw-Down Certificate tendered at Closing,
shall be due and payable upon the Closing Date, and may be
debited from such initial Loan Amount. After the Initial Term,
Interest payments and Collateral Management Fee payments shall
be received monthly in arrears within five (5) Business Days
after the end of the previous calendar month.
(b) All principal and remaining interest due and owing under this
Note shall be paid on the earlier of: (i) DEMAND, in
accordance with the pre-amble of this Note, or (ii) the
occurrence of an Event of Default, as set forth in the
Agreement.
(c) In an Event of Default, interest on any outstanding
Obligations shall immediately accrue and is payable at the
Interest Rate plus five percent (5%).
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3. MISCELLANEOUS.
(a) Time is of the essence of this Note. All payments of principal
and interest shall be made in full in lawful money of the
United States of America, without set-off, counterclaim,
deduction or withholding for any reason whatsoever, at the
offices of the Lender, or at such other place as may be
directed by the Lender.
(b) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE BORROWER
IRREVOCABLY AUTHORIZES THE PROTHONOTARY OR ANY ATTORNEY OF ANY
COURT OF RECORD IN PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST THE BORROWER FOR ANY AND ALL AMOUNTS
UNPAID ON THIS NOTE AND UNDER THE AGREEMENT, INCLUDING
INTEREST THEREON TO DATE OF PAYMENT (SUCH AMOUNT AND THE
OCCURRENCE OF SUCH EVENT OF DEFAULT TO BE AS EVIDENCED BY A
COMPLAINT OR AN AFFIDAVIT SIGNED BY AN OFFICER OF THE LENDER)
TOGETHER WITH FEES OF COUNSEL, DISBURSEMENTS AND COSTS OF
SUIT, AS SET FORTH BELOW, RELEASING ALL ERRORS AND WAIVING
RIGHTS OF APPEAL. IF A COPY OF THIS NOTE, VERIFIED BY
AFFIDAVIT, SHALL HAVE BEEN FILED IN SUCH PROCEEDING, IT SHALL
NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF
ATTORNEY. THE BORROWER WAIVES THE RIGHT TO ANY STAY OF
EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OR
HEREAFTER IN EFFECT. NO SINGLE EXERCISE OF THIS WARRANT AND
POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO EXHAUST THIS
POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY
COURT TO BE INVALID, VOIDABLE OR VOID, BUT THIS POWER SHALL
CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE LENDER SHALL ELECT UNTIL THIS NOTE AND ALL
SUMS DUE UNDER THIS NOTE AND THE AGREEMENT SHALL HAVE BEEN
PAID IN FULL.
(c) If the Lender should engage legal counsel in the course of
collection of this Note upon the occurrence of an Event of
Default, the Borrower shall pay to the Lender all fees and
disbursements reasonably incurred by such counsel and all
costs of suit. If judgment should be entered against the
Borrower in any collection proceeding, the Borrower shall pay
the Lender, in addition to principal, interest, and other
recoverable sums then due, attorneys' fees equal to ten
percent (10%) of the amount of such judgment (but not less
than $10,000.00), together with disbursements of counsel and
costs of suit, such sums to be included in, and recovered as a
part of, such judgment.
(d) This Note is being executed and delivered in the Commonwealth
of Pennsylvania and shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
Except where the context otherwise requires, the term "Lender"
shall be deemed to include any subsequent holder of this Note.
For the purpose of any suit, action or proceeding arising out
of or relating to this Agreement or any of the Loan Documents,
Borrower hereby irrevocably consents and submits to the
exclusive jurisdiction and venue of either the Court of Common
Pleas of Xxxxxxxxxx County, Pennsylvania or the United States
District Court for the Eastern District of Pennsylvania,
regardless of the convenience of either such forum.
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Xxxxxxxx further agrees and consents to accept and acknowledge
all service of process carried out by means of registered
mail, return receipt requested, in connection with any such
matter. The provisions of this Section shall not limit or
otherwise affect the right of Lender to institute and conduct
action in any other appropriate manner, jurisdiction or court.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, BOTH OF THE PARTIES
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE,
OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION
WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY
WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT
TO LENDER TO ENTER INTO THIS AGREEMENT. THE PARTIES AGREE THAT
THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR
AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE
PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT
OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED
TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY,
THIS NOTE.
(f) Borrower understands that Lender may from time to time
transfer and assign its rights under this Note, in whole or in
part, to one or more assignees. Borrower hereby consents to
these transfers and assignments by Xxxxxx to one or more
assignees. Borrower hereby consents that any such assignee may
exercise the rights of the Lender hereunder. Borrower further
hereby consents and acknowledges that any and all defenses,
claims or counterclaims that it may have against the Lender
shall be limited to, and may only be brought against, Xxxxxx,
its successors and assigns, and may not extend to any assignee
of this Agreement. Borrower and Lender intend that any and all
direct or indirect assignees of the Lender of the type set
forth above shall be the only third party beneficiaries of
this Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, has duly
executed this Note this 26th day of November, 2003
ATTEST: iGAMES ENTERTAINMENT, INC.
________________________ By: ______________________________(SEAL)
Name: Name: Xxxxxx Xxxxx
Title: Title: President and CEO
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