EXHIBIT 10.9
Convertible Promissory Note
PROMISSORY NOTE AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
OTHER SECURITIES LAWS. NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE
HEREUNDER MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION
THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
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$3,500,000 April 26, 2002
Lagny sur Marne Cedex, France
FOR VALUE RECEIVED, Titus Interactive S.A., a French corporation ("BORROWER"),
located at Parc de l'esplanade, 12, rue Enrico Fermi, Sant Thibault des Vignes,
77462 Lagny sur Marne, Cedex, France, hereby unconditionally promises to pay to
the order of Interplay Entertainment Corp., a Delaware corporation ("HOLDER"),
the principal sum of Three Million Five Hundred Thousand Dollars ($3,500,000),
and any unpaid accrued interest thereon, as set forth below. The principle
amount of this Note, and any unpaid interest accrued thereon, shall be due and
payable in full on August 31, 2002 (the "MATURITY DATE") in the manner provided
for in SECTION 2 below.
1. INTEREST. Borrower agrees to pay simple interest on the unpaid principal
amount hereof. Interest shall accrue from the date hereof until this Note is
paid in full at a rate equal to six percent (6%) per annum. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months and the actual
number of days elapsed in the period during which it accrues.
2. PAYMENT. All payments of principal, interest and all other amounts
payable in respect of this Note shall be made, at Borrower's option, (i) in
lawful money of the United States of America in immediately available Federal
funds by cashier's check or by wire transfer to an account furnished to Borrower
in writing for that purpose or (ii) in shares of capital stock of Borrower as
provided for in SECTION 4 below, on the Maturity Date.
3. PREPAYMENT. Borrower may prepay, without penalty, this Note, in whole or
in part at any time prior to the Maturity Date. Any partial prepayment shall not
affect the obligation to continue to pay in full the amount of the payments
hereunder until the entire unpaid principal balance hereof and all accrued
interest hereon has been paid in full. Any such prepayment shall be applied
first to interest then to principal.
4. PAYMENT IN SHARES OF Capital STOCK. Borrower may pay any amounts due on
this Note by delivering to Holder, free and clear of any encumbrances, shares of
Borrower's common stock (Sicovam code number 5012) (the "SHARES") equal to the
amount due, which
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Shares shall be valued at a price per share equal to ninety percent (90%) of the
average closing price of such Shares on the primary stock exchange on which the
Shares then actively trade over the five (5) consecutive trading days
immediately preceding the payment date. Any Shares delivered to Holder in
payment on this Note must be freely tradable by Holder without restriction on
the primary stock exchange on which the Shares then actively trade, and must
have the same rights, preferences and public trading rights as the majority of
Borrower's other publicly traded shares of common stock.
5. TRANSFERS.
a) By acceptance hereof, the Holder acknowledges that this Note and the
Shares that may be issued as payment under this Note have not been registered
under the United States Securities Act of 1933, as amended (the "SECURITIES
ACT"), and the Holder agrees not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Note or Shares issued under this Note in
the United States of America in the absence of (i) an effective registration
statement under the Securities Act as to this Note or such securities and
registration or qualification of this Note or such securities under any
applicable Blue Sky or state securities laws then in effect, or (ii) an opinion
of counsel, reasonably satisfactory to Borrower, that such registration and
qualification are not required.
b) This Note may not be transferred by Holder without the prior written
consent of Borrower.
6. EVENTS OF DEFAULT; REMEDIES.
a) EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default hereunder:
(i) Default in the payment of the principal of or interest on the
indebtedness evidenced by this Note in accordance with the terms of
this Note;
(ii) Borrower shall be liquidated, dissolved, partitioned or
terminated, or the charter thereof shall expire or be revoked; or
(iii) Borrower (i) shall generally not pay or shall be unable to
pay its debts as such debts become due, or (ii) shall make an
assignment for the benefit of creditors or petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for
it or a substantial part of its assets, or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or (iv) shall have
had any such petition or application filed or any such proceeding
commenced against it that is not dismissed within thirty (30) days, or
(v) shall indicate, by any act or intentional and purposeful omission,
its consent to, approval of or acquiescence in any such petition,
application, proceeding or order for relief or the appointment of a
custodian, receiver or trustee for it or a substantial part of its
assets, or (vi)
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shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of thirty (30) days more.
b) ACCELERATION OF MATURITY; REMEDIES. Upon the occurrence of any Event of
Default described in SECTION 6(A), the indebtedness evidenced by this Note shall
be immediately due and payable in full; and upon the occurrence of any other
Event of Default described above, Holder at any time thereafter may at its
option accelerate the maturity of the indebtedness evidenced by this Note
without notice of any kind. Upon the occurrence of any such Event of Default and
the acceleration of the maturity of the indebtedness evidence by this Note:
(i) The Holder shall be immediately entitled to exercise any and
all rights and remedies possessed by the Holder pursuant to the terms
of this Note; and
(ii) The Holder shall have any and all other rights and remedies
that the Holder may now or hereafter possess at law, in equity or by
statute.
c) REMEDIES CUMULATIVE; NO WAIVER. No right, power or remedy conferred upon
or reserved to the Holder by this Note is intended to be exclusive of any other
right, power or remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder now or hereafter existing at law, in equity or by statue.
No delay or omission by the Holder to exercise any right, power or remedy
accruing upon the occurrence of any Event of Default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein, and every right, power and remedy
given by this Note to the Holder may be exercised from time to time and as often
as may be deemed expedient by the Holder.
7. NOTICES. Any notice required by the provisions of this Note to be given
to the Holder shall be delivered personally, telecopied, or sent by nationally
recognized courier service (such as Federal Express), addressed to the Holder at
the address appearing on the books of Borrower. The date of personal delivery or
telecopy or three (3) business days after the date of delivery to such courier
service, as the case may be, shall be the date of such notice.
8. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND SHALL BE GOVERNED BY, THE LAWS OF FRANCE, WITHOUT REGARD TO CONFLICT
OF LAW PRINCIPLES THEREOF.
9. WAIVERS. Borrower waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of protest of this
Note, and all other notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Note, and Borrower
agrees that its liability shall be unconditional, without regard to the
liability of any other party, and shall not be affected in any manner by any
indulgence, extension of time, renewal, waiver or modification granted or
consented to by the Holder.
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10. ATTORNEYS' FEES. Borrower promises to pay all reasonable costs and
expenses, including attorneys' fees, incurred in the collection and enforcement
of this Note, including without limitation, enforcement before any court and
including all appellate proceedings.
11. SEVERABILITY. Wherever possible each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or invalid under such
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note and shall be interpreted so as to be effective
and valid.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the
day and year and at the place first written above.
TITUS INTERACTIVE S.A.,
a French corporation
By: /S/ ERIC CAEN
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Name: Eric Caen
Title: Director General
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