EXHIBIT 10.47
November 30, 2001
Xx. Xxxxx Xxxx
President & CEO
Interplay Entertainment Corp.
Re: SECURED ADVANCE AND AMENDMENT #2 TO DISTRIBUTION AGREEMENT
Dear Mr. Caen:
We refer to that certain Distribution Agreement, dated as of August 23,
2001, by and between Vivendi Universal Interactive Publishing North America,
Inc. ("VUIPNA") and Interplay Entertainment Corp. ("IEC"), as amended by that
certain Amendment #1, dated as of September 14, 2001 (the "Distribution
Agreement"), pursuant to which IEC agreed to deliver certain videogames produced
by IEC for publishing, marketing, sale and distribution by VUIPNA.
This letter agreement (this "Agreement") will serve to confirm and
memorialize our understanding and agreement with respect to (i) the making,
pursuant to this Agreement, by VUIPNA of further advance payments of amounts
owed or anticipated to be owed to IEC arising under the Distribution Agreement,
(ii) the granting of a security interest to VUIPNA by IEC in all of its assets
in order to secure certain of IEC's obligations to VUIPNA. Capitalized terms
used herein and not defined herein shall have the meanings ascribed to such
terms in the Distribution Agreement.
1. ADVANCE.
(a) On or before November ___, 2001, VUIPNA shall advance to IEC, subject
to the terms and conditions hereof, the amount of One Million Five Hundred
Thousand Dollars ($1,500,000) (the "New Advance").
(b) Notwithstanding the provisions of Section 6.4 of the Distribution
Agreement limiting the amounts that may be deducted from the Interplay Proceeds
to 20% thereof, the New Advance shall be recoupable against the Interplay
Proceeds to be paid to Interplay as follows: unless and until VUIPNA recoups the
New Advance, VUIPNA shall be entitled to deduct from the monthly amounts payable
to Interplay (in addition to and not in lieu of amounts otherwise deducted
pursuant to Section 6.4 of the Distribution Agreement) an amount equal to 100%
of the Interplay Proceeds. The Distribution Agreement is hereby amended to this
effect.
2. USE OF PROCEEDS. IEC agrees that the proceeds from the New Advance shall be
used for disbursements as set forth in Exhibit A attached hereto.
3. GRANT OF SECURITY INTEREST. As security for the payment of the New Advance
and Alternative Transaction Fee (as defined below) by VUIPNA to IEC hereunder
and for the
payment or other satisfaction of all other obligations of IEC to VUIPNA,
including without limitation the Advance under the Distribution Agreement, IEC
hereby assigns, pledges and grants to VUIPNA a continuing security interest in
all of IEC's right, title and interest in and to the following property of EIC,
whether now or hereafter owned, existing, acquired or arising and wherever now
or hereafter located:
(a) All equipment, fixtures, goods, inventory (including without
limitation, raw materials, work in process, finished goods and materials used or
consumed in IEC's business) and software;
(b) All accounts, chattel paper, commercial tort claims, documents, general
intangibles, instruments (whether negotiable or non-negotiable),
letter-of-credit rights, money, payment intangibles, promissory notes,
supporting obligations and other rights to payment of any kind;
(c) All certificated securities, commodity accounts, commodity contracts,
deposit accounts, financial assets, investment property, letter-of-credit
rights, securities accounts, securities entitlements and uncertificated
securities;
(d) All other personal property whether or not subject to the California
Commercial Code;
(e) All of IEC's intellectual property, including, without limitation,
patents, patent applications, copyrights, copyright applications, rights and
interests in copyrights and works protectable by copyright, trademarks,
trademark applications, trade names, service marks and service xxxx applications
and other indicia of origin, and rights in and the right to xxx for all past,
present and future infringements of, the foregoing patents, patent applications,
copyrights, copyright applications, rights and interests in copyrights and works
protectable by copyright, trademarks, trademark applications, trade names,
service marks and service xxxx applications and other indicia of origin,
technical knowledge and processes, formal or informal licensing arrangements,
blueprints, technical specifications, computer software, trade secrets and other
confidential information relating to the business of IEC owned by IEC or held by
IEC pursuant to licenses, to the extent permitted by such licenses;
(f) All books, records, files, computer programs, tapes, disks and related
data processing software that at any time evidence or contain information
relating to any of the property described in clause (a) through (e) above or are
otherwise necessary or helpful in the collection thereof or the realization
thereon; and
(g) Proceeds, products, additions, accessions to and replacements and
substitutions for of any of the foregoing.
4. FURTHER ASSURANCES. IEC shall promptly execute and deliver any instrument,
document or notice as may be necessary, desirable or which VUIPNA may reasonably
require in order to create, perfect and preserve the perfection and the priority
of the security interests granted or purported to be granted under Section 3
above. IEC hereby authorizes VUIPNA to file one or more financing or
continuation statements, copyright mortgages, trademark mortgages and amendments
thereto (or similar instruments and documents required by any laws of any
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application jurisdiction), relating to all or any portion of the collateral
described in Section 3 above, IEC irrevocably hereby makes, constitutes and
appoints VUIPNA (and all Persons designated by either for that purpose) as IEC's
true and lawful attorney and agent-in-fact to execute such financing statements,
copyright mortgages, trademark mortgages, documents and other agreements and
instruments and do such other reasonable acts and things may be necessary to
create, perfect and preserve the perfection and the priority of the security
interests granted or purported to be granted under Section 3 above.
5. AMENDMENT TO DISTRIBUTION AGREEMENT. IEC acknowledges that VUIPNA will invest
substantial time and resources and incur substantial expenses in conducting the
business, financial and legal due diligence investigation of EIC and in
negotiating and drafting the definitive documentation related to an
Extraordinary Transaction (as defined below) between the parties. To induce
VUIPNA to incur such expenses, to facilitate such Extraordinary Transaction and
in consideration of VUIPNA's willingness to make the New Advance, IEC hereby
agrees that the Distribution Agreement is hereby further amended to add section
6.4(a) and (b) as follows:
(a) In the event of an Extraordinary Transaction (as defined below) to
which UNIVERSAL is not a party, the New Advance plus the sum of Five Hundred
Thousand dollars ($500,000) (the "Alternative Transaction Fee") shall be
immediately due and payable and Interplay shall immediately repay the New
Advance and pay the Alternative Transaction Fee in full upon demand. In the
event that Interplay fails to repay the New Advance or fails to pay the
Alternative Transaction Fee upon demand, then in addition to all other rights
and legal, equitable or contractual remedies available to VUIPNA, VUIPNA may
deduct and offset the Alternative Transaction Fee from and against any and all
payments that would otherwise be owed by UNIVERSAL under the Distribution
Agreement.
(b) As used in this Agreement, "Extraordinary Transaction" means any tender
or exchange offer involving Interplay, any proposal for a merger, consolidation
or other business combination involving Interplay, any proposal or offer to
acquire in any manner a greater than 15% interest in Interplay of a majority
shareholder, any proposal or offer to acquire in any manner a greater than 15%
equity interest in, or a significant portion of the business or assets of,
Interplay, and any proposal or offer with respect to any other transaction
similar to any of the foregoing with respect to Interplay. The parties agree
that the Alternative Transaction Fee obligation described in clause (a) above
will terminate and will be of no further force and effect on the earliest to
occur of (i) December 7, 2001, (provided that neither an agreement to enter into
an Extraordinary Transaction nor an Extraordinary Transaction shall have
occurred or been entered into prior thereto); (ii) the date upon which both
parties agree in writing to a mutually-acceptable "no-shop" provision in a
subsequent agreement between the parties, or (iii) the date upon which VUIPNA
indicates in writing that it is no longer willing to negotiate the terms of a
possible $7.5 million loan to Interplay (including through the acquisition of
Interplay's existing debt to LaSalle Business Credit).
6. ACCESS TO INFORMATION. Commencing at noon on November 27, 2001, and
continuing for a period of not less than 14 days thereafter, IEC shall, and
shall cause each of the respective Representatives to, provide VUIPNA and its
respective Representatives with full access to IEC's
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facilities, books and records and Representatives, and such other information as
may be reasonably requested by VUIPNA.
7. PUBLIC ANNOUNCEMENTS. Except (a) as may be required by law and (b) for
disclosures by the parties hereto to their respective Representatives in
connection with the evaluation of the potential Acquisition, neither of the
parties hereto shall make any disclosure announcement to any third party
pertaining to the subject matter hereof without the prior written consent of the
other parties hereto.
8. REPRESENTATIONS AND WARRANTIES OF INTERPLAY.
(a) IEC is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization has the
corporate power and authority to own its property and assets and to execute and
deliver, and perform its obligations under, this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by IEC
and constitutes the legal, valid and binding obligation of IEC enforceable
against IEC in accordance with its terms.
(c) The execution, delivery and performance of this Agreement by IEC and
the consummation of the transactions contemplated hereby will not: (i) conflict
with or result in a breach of any of the terms and provisions of, or constitute
a default (or an event which with the giving of notice or the lapse of time or
both would constitute a default) under, any agreement, indenture, mortgage, deed
of trust, equipment lease, instrument or other document to which IEC is a party,
not taking into account that certain Loan and Security Agreement, dated as of
April 11, 2001, between IEC and LaSalle Business Credit, Inc.; or (ii) conflict
with any law, order, rule or regulation of any court or any federal or state
government, regulatory body or administrative agency, or any other governmental
body having jurisdiction over IEC or its properties.
9. MISCELLANEOUS. This letter shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to the choice of
law principles of the applicable State. This letter may be executed in
counterparts, each of which together shall constitute one and the same
instrument.
If you are in agreement with the terms set forth in this letter, please execute
this letter in the space indicated below and return a copy to us. If you have
any questions in the meantime, please feel free to give us a call. We look
forward to hearing from you.
Sincerely,
VIVENDI UNIVERSAL INTERACTIVE
PUBLISHING NORTH AMERICA, INC.
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By: /S/ ILLEGIBLE
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Its:
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Accepted and agreed as of November 30, 2001
INTERPLAY ENTERTAINMENT CORP.
By /S/ HERVE CAEN
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President
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