EXHIBIT 10.87
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PROMISSORY NOTE
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$3,000,000.00 Dallas, Texas February 23, 2001
FOR VALUE RECEIVED, the undersigned, Digital: Convergence Corporation, a
Delaware corporation ("Maker"), hereby unconditionally promises to pay to the
order of NeoMedia Technologies, Inc., a Delaware Corporation ("Payee"), at 0000
Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000., or at such other address
given to Maker by Payee, the principal sum of Three Million Dollars
($3,000,000.00), or so much thereof as may be outstanding at maturity, in lawful
money of the United States of America, together with interest (calculated on the
basis of actual days elapsed in a 365-day year) on the unpaid principal balance
from day-to-day remaining, computed from the date hereof until maturity or
repayment at the rate per annum which shall from day-to-day be equal to the
lesser of (a) the Maximum Rate, or (b) ten percent (10%) (the "Contract Rate").
This Note is being issued in connection with a separate Letter Agreement dated
February 23, 2001, between Maker and Payee (the "Letter Agreement"), the terms
of which being expressly incorporated into this Note.
Section 1. DEFINITIONS.
As used herein, the term "Business Day" shall mean a day when the Payee is
open for business.
As used herein, the term "Event of Default" shall mean the occurrence of
any Event of Default as defined in Section 4 of this Note.
As used herein, the term "Maximum Rate" shall mean, on any day, the highest
non-usurious rate of interest (if any) permitted by applicable law on such day.
As used herein, the term "Past Due Rate" shall mean the lesser of (a) the
Prime Rate in effect from day to day, plus four percent (4.0%), or (b) the
Maximum Rate.
Section 2. PAYMENT. Principal and interest shall be due and payable as
follows: The entire unpaid balance of this Note, including all unpaid principal
and any accrued but unpaid interest, shall be due and payable on the earlier of
(a) the date upon which Maker shall complete an equity or debt financing (or
combination thereof) aggregating in excess of $25,000,000, or (b) April 24, 2001
(the "Maturity Date").
Should the principal of, or any installment of the principal of or interest
upon, this Note become due and payable on any day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day, and
interest shall be payable with respect to such extension. All payments of
principal and interest on this Note shall be made by Maker to Payee in
immediately available funds. Payments made to Payee by Maker hereunder shall be
applied first to accrued interest and then to principal.
All past due principal of and, to the extent permitted by applicable law,
interest upon this Note shall bear interest at the Past Due Rate.
Section 3. WAIVER. Except as otherwise provided, Maker and each surety,
endorser, guarantor and other party ever liable for payment of any sums of money
payable upon this Note, jointly and severally waive presentment, protest, notice
of protest and non-payment, or other notice of default, notice of acceleration
and intention to accelerate, and agree that their liability under this Note
shall not be affected by any renewal or extension in the time of payment hereof,
or in any indulgences, or by any release or change in any security for the
payment of this Note, and hereby consents to any and all renewals, extensions,
indulgences, releases or changes, regardless of the number of such renewals,
extensions, indulgences, releases or changes.
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No waiver by Payee of any of its rights or remedies hereunder or under any
other document evidencing or securing this Note or otherwise, shall be
considered a waiver of any other subsequent right or remedy of Payee; no delay
or omission in the exercise or enforcement by Payee of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Payee; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Payee.
Section 4. EVENT OF DEFAULT.
4.1 Each of the following occurrences shall constitute an Event of
Default:
(a) The Maker shall fail to pay on the Maturity Date any principal or
interest on the Note.
(b) The Maker or any subsidiary shall commit an act of bankruptcy under
the United States Bankruptcy Act (as now or hereafter amended); or shall file or
have filed against it, voluntarily or involuntarily, a petition in bankruptcy or
for reorganization or the adoption of an arrangement under the United States
Bankruptcy Act (as now or hereafter amended); or shall initiate or have
initiated against it, voluntarily or involuntarily, any act, process, or
proceeding for liquidation, dissolution, arrangement, composition, or
reorganization or under any insolvency law or other statute or law providing for
a modification or adjustment of the rights of creditors.
4.2 Upon the occurrence of an Event of Default or at any time thereafter
until such Event of Default is waived in writing pursuant to Section 4.3, Payee
at its sole option may exercise one or more or all of the following rights and
remedies:
(a) Declare the debt evidenced by this Note to be immediately due and
payable, and the same shall thereupon be immediately due and payable, without
notice or presentment or other demand, and Payee thereupon may exercise and
enforce all rights and remedies available to it to collect the debt evidenced by
any Note;
(b) Without notice to or demand upon the Maker or any other person, offset
any debt then owed by Payee to the Maker, whether or not such debt is then due,
against the debt evidenced by any Note (including, without limitation, debt
transferred by Xxxxx to a third party by participation, assignment, succession,
or otherwise) and any other debt then owed by the Maker to Payee, whether or not
then due, and exercise any and all other rights of set-off or application
available to Payee by law or agreement; and
(c) Without notice to or demand upon the Maker or any other person,
declare Maker to be in default of that certain license agreement between Maker
and Payee dated October 18, 2000 (the "License Agreement") and exercise any
remedy it is entitled to thereunder.
4.3 Any Event of Default may be waived in writing by Xxxxx, but not
otherwise; and the failure to exercise the rights and remedies referred to in
Section 4.2 shall not operate as a waiver or otherwise preclude enforcement of
such rights and remedies. A waiver shall be effective only in the specific
instance and for the specific purpose given. The rights and remedies of Payee
shall be cumulative and the exercise or enforcement of any one right or remedy
shall neither be a condition to nor bar the exercise and enforcement of any
other.
Section 5. NOTICE. Whenever this Note requires or permits any notice,
approval, request or demand from one party to another, the notice, approval,
request or demand must be in writing and shall be deemed to have been given when
personally served, sent by a nationally recognized overnight express delivery
service or when deposited in the United States mails, registered or certified,
return receipt requested, addressed to the party to be notified at the following
address (or at such other address as may have been designated by written
notice):
Payee: NeoMedia Technologies, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
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Maker: Digital: Convergence Corporation
0000 X. Xxxxxxx Xxxxxxxxxx
0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Section 6. PREPAYMENT. Maker reserves the right to prepay the outstanding
principal of this Note, in whole or in part, at any time and from time to time,
without premium or penalty, upon not less than two (2) Business Days' prior
written notice to Payee.
Section 7. USURY LAWS. Regardless of any provisions contained in the Note,
Payee shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Note any amount in excess of the Maximum
Rate, and, in the event Payee ever receives, collects or applies as interest any
such excess, such amount which would be excessive interest shall be deemed to be
a partial prepayment of principal and treated hereunder as such, and, if the
principal balance of the Note is paid in full, any remaining excess shall
forthwith be paid to Maker. In determining whether or not the interest paid or
payable under any specific contingency exceeds the Maximum Rate, Maker and Payee
shall, to the maximum extent permitted by applicable law, (i) characterize any
non-principal payments (other than payments which are expressly designated as
interest payments hereunder) as an expense, fee, or premium, rather than as
interest, (ii) exclude voluntary prepayments and the effect thereof, and (iii)
amortize, prorate, allocate and spread, in equal parts, the total amount of
interest throughout the entire contemplated term of the indebtedness so that
interest paid by Maker does not exceed the Maximum Rate; provided that, if the
Note is paid and performed in full prior to the end of the full contemplated
term thereof, and if the interest received for the actual period of existence
thereof exceeds the Maximum Rate, Payee shall refund to Maker the amount of such
excess or credit the amount of such excess against the principal amount of the
Note and, in such event, Payee shall not be subject to the penalties provided by
any laws for contracting for, charging, taking, reserving or receiving interest
in excess of the Maximum Rate.
Section 8. COSTS. If this Note is placed in the hands of an attorney for
collection, or if it is collected through any legal proceeding at law or in
equity, or in bankruptcy, receivership or other court proceedings, Maker agrees
to pay all costs of collection, including, but not limited to, court costs and
reasonable afforneys' fees, including all costs of appeal.
Section 9. APPLICABLE LAW. This Note is being executed and delivered, and
is intended to be performed in the State of Texas. Except to the extent that the
laws of the United States may apply to the terms hereof, the substantive laws of
the State of Texas shall govern the validity, construction, enforcement and
interpretation of this Note. In the event of a dispute involving this Note or
any other instruments executed in connection herewith, the undersigned
irrevocably agrees that venue for such dispute shall lie in any court of
competent jurisdiction in Dallas County, Texas.
DIGITAL:CONVERGENCE CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: EVP
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