Interplay Promissory Note - Infogrames Inc., Shiny Entertainment Inc., Interplay Entertainment Corp., Shiny Group Inc. and David Perry
INTERPLAY PROMISSORY NOTE
$10,809,076 APRIL 30, 2002
FOR VALUE RECEIVED, and pursuant to that certain Stock Purchase
Agreement dated as of April 23, 2002 by and among INFOGRAMES, INC., a Delaware
corporation ("BUYER"), Shiny Entertainment, Inc., INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation ("INTERPLAY"), Shiny Group, Inc. and David Perry ("STOCK
PURCHASE AGREEMENT"), Buyer unconditionally promises pursuant to this Promissory
Note ("NOTE") to pay to Interplay in the manner, and on the dates and place
hereinafter provided, a sum equal to a principal amount of $10,809,076
(representing the sum of $10,682,076 plus $127,000, which is the decrease in the
Closing Date Adjustment of $811,938 as compared to the projected $938,938, per
the Stock Purchase Agreement), subject to further adjustment pursuant to Section
7 below.
Section 1. NO INTEREST. The unpaid principal amount will not bear
interest.
Section 2. PAYMENTS.
(a) Buyer will pay the principal amount of this Note on the dates
set forth on Schedule A (the date of the last such payment being the
"MATURITY DATE"), subject to modification as provided in Section 7 below.
Buyer will also pay any costs, expenses, or other amounts due and payable
hereunder on the Maturity Date.
(b) All payments of principal, costs, expenses and other amounts due
and payable in respect of this Note will be delivered to Interplay at
16815 Von Karman Avenue, Irvine, California 92606, or at such other
address as Interplay may in writing notify Buyer, or to BioWare Corp.
("BioWare"), a Canadian corporation, pursuant to Section 6.10 of the Stock
Purchase Agreement and Section 2(c) of this Note. If payment on this Note
is stated to be due on a day that is not a Business Day (as defined
below), such payment will instead be made on the next Business Day.
"BUSINESS DAY" means any day other than a Saturday, Sunday or legal
holiday under the laws of the State of California or any other day on
which banking institutions located in such state are authorized or
required by law or other governmental action to close. Each payment made
prior to the Maturity Date hereunder will be credited first to any fees,
costs, or other amounts due and payable to Interplay hereunder, and the
remainder of such payment will be credited to principal. Each of Interplay
and any subsequent holder of this Note agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder;
provided, however, that the failure to make a notation of
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any payment made on this Note will not limit or otherwise affect the
obligation of Buyer hereunder with respect to payments of principal on
this Note.
(c) Pursuant to Section 6.10 of the Stock Purchase Agreement,
Interplay has irrevocably instructed Buyer to pay certain amounts owed by
Interplay to BioWare out of amounts due to Interplay under this Note. Any
such payments made by Buyer will be in full satisfaction of an amount of
the principal amount owed to Interplay by Buyer under this Note equal to
the amount of such payment made to BioWare, and upon any such payment, the
principal amount of this Note will be reduced by the amount of such
payment to the same extent as though paid directly to Interplay.
Section 3. VOLUNTARY PREPAYMENTS. Buyer will have the right at any
time and from time to time prior to the Maturity Date to prepay the principal of
this Note in whole or in part, without premium or penalty. Any prepayment
hereunder will be accompanied by any fees, costs, or other amounts due and
payable to Interplay hereunder.
Section 4. SECURITY. This Note is being delivered by Buyer in
connection with the Payment Guaranty of even date herewith ("GUARANTY") of
Buyer's parent company, Infogrames Entertainment SA ("GUARANTOR").
Section 5. EVENTS OF DEFAULT. The occurrence of any of the following
events will constitute an "EVENT OF DEFAULT":
(a) failure of Buyer to pay any principal under this Note when due,
whether at stated maturity or otherwise, or other amount due and payable
under this Note within three days after the date due; or
(b) (i) a court having jurisdiction in the premises enters a decree
or order for relief in respect of Buyer in an involuntary case under Title
11 of the United States Code entitled "BANKRUPTCY" (as now and hereinafter
in effect, or any successor thereto, the "BANKRUPTCY CODE") or any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief
is granted under any applicable federal or state law; or (ii) an
involuntary case is commenced against Buyer under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Buyer or over all or a
substantial part of its property has been entered; or the involuntary
appointment of an interim receiver, trustee or other custodian of Buyer
for all or a substantial part of its property has occurred; or a warrant
of attachment, execution, or similar process will have been issued against
any substantial part of the property of Buyer, and, in the case of any
event described in this clause (ii), such event will have continued for 30
days unless dismissed, bonded or discharged; or
(c) an order for relief has been entered with respect to Buyer or
Buyer commences a voluntary case under the Bankruptcy Code or any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to
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the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law,
or consents to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property;
or Buyer makes an assignment for the benefit of creditors; or
(d) at any time after the date hereof, the Guaranty, or any other
document delivered pursuant hereto or thereto will cease to be in full
force and effect or will be declared null or void, or Buyer or Guarantor
contests the validity or enforceability of this Note, the Guaranty, or any
other document delivered pursuant hereto or thereto; or
(e) any representation, warranty or statement made by the Buyer
herein or by Guarantor in the Guaranty or any other document delivered
pursuant hereto or thereto will prove to have been untrue in any material
respect on the date as of which made or deemed made; or
(f) the Buyer or Guarantor will default in the due performance or
observance by it or them of any material term, covenant, or agreement
applicable to it or them contained in this Note, the Guaranty, or any
other document delivered pursuant hereto or thereto.
Section 6. INTERPLAY REMEDIES. Upon the occurrence of any Event of
Default specified pursuant to Section 5(b) or Section 5(c), the outstanding
principal amount of this Note, as well as any fees, costs, or other amounts due
and payable to Interplay hereunder, will become immediately due and payable,
without presentment, demand, notice, protest or other requirements of any kind
(all of which are hereby expressly waived by Buyer). Upon the occurrence of an
Event of Default pursuant to Sections 5(a), 5(d), 5(e) or 5(f) the outstanding
principal amount of this Note, as well as any fees, costs, or other amounts due
and payable to Interplay hereunder, will become immediately due and payable upon
written notice from Interplay to Buyer.
Section 7. ADJUSTMENT TO PRINCIPAL AMOUNT AND STATED MATURITY OF
PAYMENTS. The principal amount owed to Interplay under this Note and the stated
maturity of certain payments hereunder is to be adjusted upon the occurrence of
the following events:
(a) If, pursuant to the Stock Purchase Agreement a Final Adjustment
has been determined and (1) that Final Adjustment increases the Interplay
Purchase Price, the final payment on the principal amount owed to Interplay
under this Note will be increased by the amount of such increase to the
Interplay Purchase Price, or (2) that Final Adjustment decreases the Interplay
Purchase Price, the final payment on the principal amount owed to Interplay
under this Note (and, to the extent necessary, any earlier payments) will be
decreased by the amount of such decrease to the Interplay Purchase Price; or
(b) If, pursuant to the Stock Purchase Agreement, Buyer has
submitted a Final Balance Sheet that indicates a Final Adjustment that Interplay
has timely disputed (the amount of the Final Adjustment asserted by Buyer and so
disputed by Interplay being the
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"DISPUTED AMOUNT"), the principal amount owed to Interplay under this Note will
be increased or decreased, as the case may be, by the amount of any undisputed
portion of the Final Adjustment as asserted by Buyer (to be applied to the final
payment on the principal amount as described below). Further, the final payment
under this Note will be split into two payments, (1) the first of which will
equal the amount of the final payment, plus or minus the adjustment referenced
in the preceding sentence, and minus the Disputed Amount, and (2) the second of
which will equal the Disputed Amount, adjusted to reflect any increase or
decrease as a result of the final determination of the Final Adjustment. The
stated maturity date for the payment referenced in clause (1) above will be the
date set forth on Schedule A for the last payment under this note. The stated
maturity date for the payment referenced in clause (2) above will be five
business days after final determination of the Final Adjustment pursuant to the
Stock Purchase Agreement.
Section 8. WAIVER OF SET OFF. Except as expressly provided in
Section 2(c) and Section 7 above, Buyer, to the fullest extent permitted
by law, hereby waives any right of set off, recoupment or similar remedies
that Buyer may now or hereafter have under applicable law.
Section 9. MISCELLANEOUS.
(a) Any notice or other communication provided for in this Note will
be in writing and sent, if to Interplay to its principal offices at the
address listed above or at such other address as Interplay may from time
to time in writing designate and if to Buyer at the address listed on the
signature page hereto or at such address as Buyer may from time to time in
writing designate. Each such notice or other communication will be
effective (i) if given by telecommunication, when transmitted to the
applicable number so specified in (or pursuant to) this Section 9(a) and a
verification of receipt is received, (ii) if given by mail, three days
after such communication is deposited in the mails, registered or
certified postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when actually delivered at such address.
(b) No failure or delay on the part of Interplay to exercise any
right, power, or privilege hereunder or under any document delivered
pursuant hereto will operate as a waiver of any default or an acquiescence
therein, nor will any single or partial exercise of any such right, power,
or privilege hereunder or under any document delivered pursuant hereto
preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege. The rights and remedies expressly
provided in this Note and any other document delivered pursuant hereto are
cumulative to, and not exclusive of, any rights or remedies that Interplay
would otherwise have.
(c) If any provision in or obligation under this Note will be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or
of such provision or obligation in any other jurisdiction, will not in any
way be affected or impaired thereby.
(d) This Note will be binding upon Buyer and Interplay and their
respective successors and assigns. None of the terms or provisions of this
Note may be waived,
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altered, modified or amended except in writing duly signed for and on
behalf of Interplay and Buyer. This Note may not be assigned by either
party without the prior written consent of the other party.
(e) Buyer will indemnify Interplay, its officers, directors,
employees, and representatives from and hold each of them harmless against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses, and disbursements, including
but not limited to the reasonable fees and disbursements of counsel,
incurred by any of them in connection with any collection on or
enforcement of this Note, including any action or proceeding by Interplay
seeking relief from the automatic stay in any Bankruptcy, insolvency, or
like proceeding instituted by or against Buyer (but excluding any such
liabilities, obligations and losses, to the extent incurred by reason of
the gross negligence or willful misconduct of Interplay or any other such
indemnified party).
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF BUYER AND INTERPLAY
HEREUNDER WILL BE GOVERNED BY, AND WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
Any legal action or proceeding against the Buyer or Interplay with
respect to this Note may be brought in the courts of the State of California
located in Los Angeles County or of the United States for the Central District
of California, and, by execution and delivery of this Note, the Buyer and
Interplay hereby irrevocably accept for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Nothing
herein will affect the right of Interplay or the Buyer to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Buyer or Interplay in any other jurisdiction.
The Buyer and Interplay hereby irrevocably waive any objection which
they may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Note brought in
the courts referred to above and hereby further irrevocably waive and agree not
to plead or claim in any such court that any such action or proceeding brought
in any such court has been brought in an inconvenient forum.
EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING HEREUNDER.
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IN WITNESS WHEREOF, Buyer has caused this Note to be executed and
delivered as of the day and year first above written.
INFOGRAMES, INC., as Buyer
By: /s/ Harry Rubin
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Name: Harry Rubin
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Its: Senior Executive Vice President
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Address: 417 Fifth Avenue, New York, NY 10016
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SCHEDULE A
TRANSACTIONS ON PROMISSORY NOTE*
Amount of Outstanding
Principal Principal Balance Notation
Date Paid This Date This Date Made By
May 15, 2002 $ 1,627,000 $9,182,076
June 1, 2002 $ 3,500,000 $5,682,076
June 15, 2002 0
July 1, 2002 $ 2,300,000 $3,382,072
July 15, 2002 $ 1,691,038* $1,691,038*
July 31, 2002 $ 1,691,038* $ 0
Total* $10,809,076
*Subject to reduction of principal amount and extension of maturity date in
accordance with Section 7 of this Note.