Promissory Note Executed By Simon Hosken

Exhibit 10.38 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED FOR VALUE ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL AND FROM ATTORNEYS REASONABLY ACCEPTABLE TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED PROMISSORY NOTE $300,000.00 New York, New York effective October 31, 2002 FOR VALUE RECEIVED , the undersigned, Simon Hosken , an individual residing in the United Kingdom, with an office located at Acclaim Entertainment Ltd., Moreau House, 112-120 Brompton Road, Knightsbridge, London SW3 1JJ, England (the " Borrower"), hereby promises to pay to Acclaim Entertainment, Inc., a Delaware corporation with offices at One Acclaim Plaza, Glen Cove, New York 11542, or its permitted assigns (the " Lender"), the principal amount of Three Hundred Thousand Dollars ($300,000.00), with interest thereon (the " Loan"), as set forth in this Secured Promissory Note (the " Note"). Section 1. Calculation and Payment of Principal and Interest (a) The principal amount of this Note shall be due and payable on the third anniversary of the date hereof: October 31, 2005 (the " Maturity Date"). (b) The principal amount of the Note shall bear interest at the rate of six percent (6%) per annum from the date of this Note until the principal amount and all interest accrued thereon shall have been paid in full. Interest on the unpaid principal amount hereof shall be due and payable on the Maturity Date, and shall be computed on the basis of a 360-day year of twelve 30-day months. Payment of the principal amount and interest on this Note shall be made in accordance with the terms and provisions of this Note, upon presentation of this Note to the Borrower at the address of the Borrower set forth above, or at such other address as the Borrower may indicate. Section 2. Security Interest/Mortgage . (a) As security for the prompt and complete (i) payment of all obligations of the Borrower now and hereafter existing under this Note, whether for principal, interest or otherwise, and (ii) performance of all covenants, undertakings and agreements by the Borrower contained in this Note (all such payment and other obligations, covenants, undertakings and agreements described in the foregoing clauses (i) and (ii) are hereinafter referred to collectively as the " Obligations"), the Borrower and such other record owner or owners of the real property which is the subject of the Mortgage (the " Mortgagors") hereby grant to Lender a certain mortgage (the " Mortgage"), of even date herewith, of which Lender is the mortgagee, for the real property owned in fee simple by the Mortgagors and located at 57 Park Road, London, W4 3EY (the " Collateral"). Subject to: (a) Obtaining without costs or liability for the Mortgagors, the consent and/or any waiver from any person who has a security or other interest in such property ("the Primary Chargee") in so far as such consent and/or waiver is necessary; (b) Any condition imposed by the Primary Chargee; (c) The interests of the Primary Chargee taking priority to the interests of the Lendor and the interests of the Lender being subordinated to those of the Primary Chargee; (d) The Mortgagors being free to substitute the Primary Chargee with another financier as part of the refinancing of indebtedness from time to time and such substitute financier being for the purposes of this clause deemed to be a Primary Chargee; (e) The Lender indemnifying the Mortgagors for any liability or cost incurred by any of the Mortgagors as a result of entering into these arrangements. In furtherance of the foregoing, the Mortgagors and the Lender agree from time to time, to execute and deliver all further instruments and documents, and to take all further action as may be necessary or appropriate or as may be reasonably requested by the Lender or the Primary Chargee in order to perfect the Mortgage and security interest granted by the Mortgagors to the Lender hereunder or to perfect the Lender's right in and to the Collateral, and to enable the Lender to exercise and enforce its rights and remedies hereunder with respect to the Collateral and to subordinate the Collateral to the interests of the Primary Chargee. Without limiting the generality of the foregoing, the Mortgagors agree to execute and file such Mortgage and security agreement and such other instruments and documents as may be necessary or appropriate, or as may be reasonably requested by the Lender or the Primary Chargee, in order to perfect and preserve the Mortgage and security interest granted herein by the Mortgagors to the Lender and perfect and preserve the priority of the Primary Chargee's interest, and the Mortgagors and Lender authorize the Lender and Primary Chargee to file any and all such instruments and documents in accordance therewith. Section 3. Forgiveness of Indebtedness, Termination of Employment . (a) The principal amount of and accrued interest on the Loan shall be forgiven by the Borrower

-2- in three installments. On May 25, 2003, one-half (1/2) of the total Loan amount, including accrued interest thereon, shall be forgiven by the Lender. On the second anniversary of the date hereof, one-quarter (1/4) of the total Loan amount, including accrued interest thereon, shall be forgiven by the Lender. On the Maturity Date, the remainder of the Loan amount, including all accrued interest thereon, and any and all other Obligations contained in this Note, shall be forgiven by the Lender. Provided, however, that , in the event that (i) Borrower shall voluntarily leave the employ of the Lender prior to the Maturity Date (other than as a result of constructive dismissal or a breach of the obligations of the Lender or a subsidiary of the Lender of the terms of the Borrower's employment or pursuant to any provision entitling the Borrower to resign his employment voluntarily prior to the maturity date pursuant to his employment agreement) or (ii) Borrower shall be terminated for cause (as defined in the Borrower's employment agreement with the Lender) by Lender prior to the Maturity Date, then fo ...