EXHIBIT 10.7
AGREEMENT
This agreement ("Agreement") is made this 19th day of April, 2002 by and between
Vivendi Universal Games Inc. (formerly Vivendi Universal Interactive Publishing
North America, Inc.) ("VIVENDI"), a Delaware corporation with offices at 0000
Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, and INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation with offices at 00000 Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000 ("INTERPLAY"), and Shiny Entertainment, Inc., a California
corporation ("SHINY" and, together with Interplay, the "SELLER PARTIES," and
together with Vivendi, the "PARTIES").
The Parties expect to enter into a more formal agreement with respect to
distribution in the form of an amended and restated version of that certain
Distribution Agreement, dated August 23, 2001, between Seller and Vivendi, as
amended (the "DISTRIBUTION AGREEMENT"), which will be mutually satisfactory to
both Interplay and Vivendi (collectively, the "DEFINITIVE AGREEMENT").
Notwithstanding the foregoing or anything else to the contrary, this Agreement
shall be deemed valid and legally binding, irrespective of whether or not the
Definitive Agreement is ever entered into between the parites. In such event,
the Distribution Agreement dated August 23, 2001, shall remain in full force and
effect except to the extent that agreement is expressly modifed herein. Unless
otherwise defined herein, terms used herein shall bear the same respective
meanings ascribed to such terms in the Distribution Agreement.
The parties' agreement to the terms set forth herein is expressly subject
to any and all conditions set forth herein and is expressly conditioned on the
Interplay's sale of Shiny and Closing (as defined herein) on or before April 30,
2002.
In consideration of the mutual terms, conditions and covenants hereinafter
set forth, the Parties agree as follows:
CONDITION PRECEDENT The obligations of the Parties contained
herein are conditioned on: (i) the sale of Shiny
such that Interplay's current ratio as defined
per GAAP (including but not limited to, accruals
for litigation fees, claims, assessments and
loss contingencies) immediately following
closing of the sale of Shiny (the "Closing")
(including any and all payments to be made by
Interplay to any third parties out of proceeds
of the sale of Shiny) being equal to or greater
than 1.0, (the "CURRENT RATIO"); (ii) receipt of
the Closing Payment (as defined below) by
Vivendi at Closing; (iii) the delivery to
Vivendi of a fully executed Request for
Dismissal by Interplay with prejudice as to all
parties of its Cross-Complaint (as defined
below); and (iv) the delivery to Interplay of a
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fully executed Request for Dismissal by Vivendi
with prejudice as to all parties of the
Universal Action (as defined below)
(collectively, the "Condition(s) Precedent").
PAYMENT TO VIVENDI AT CLOSE $6,500,000, to be paid to Vivendi at the Closing
(the "CLOSING PAYMENT"). For the avoidance of
doubt, in the event that all funds provided
herein are not released from escrow to Vivendi
or if Vivendi does not receive such funds for
any reason, then Interplay expressly
acknowledges and agrees that this agreement
shall be null and void and the Distribution
Agreement (including Vivendi's rights and claims
with respect to Shiny, the Shiny Assets, and the
Matrix) shall remain in full force and effect.
The Closing Payment will be treated as a
recoupment of Advances paid by Vivendi to
Interplay under the Distribution Agreement.
Vivendi will retain its existing security
interest in the assets of Interplay until it has
recouped 100% of the Advances paid to Interplay
in connection with the Distribution Agreement,
but will, simultaneously with the satisfaction
of the Conditions Precedent stated herein,
release any and all of Vivendi's claims and
security interests in and as to (a) Interplay's
equity interest in Shiny, (b) all assets owned,
licensed to or developed by Shiny as of the
Closing, (c) the titles "Matrix" in all forms
and formats and for all platforms, (d) the
character engine identified as the Messiah
tessellation engine developed for the video
gamed titled "Messiah" (the "MESSIAH ENGINE")
and the character engine derived from the
Messiah Engine for the video game entitled
"Sacrifice," each used by Shiny and Interplay
(and transferred by Interplay to Shiny), (e) the
interactive computer software and video games
entitled "Wild 9", "R/C Stunt Copter",
"Messiah", "Sacrifice", "MDK", "MDK2",
"Earthworm Xxx", "Earthworm Xxx 2", "Earthworm
Xxx 2: Menace 2 The Galaxy" and "Earthworm Xxx
3D," in all forms and formats and for all
platforms, and (f) all tools, engines,
copyrights, trademarks,
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patents, graphics, code, documentation,
licenses, or other programs or intellectual
property rights related to the foregoing items
(a) through (f) (collectively, the "SHINY
ASSETS").
DISTRIBUTION AGREEMENT TO 1) Vivendi will continue to have exclusive
REMAIN UNCHANGED IN ALL distribution rights (excluding online
ASPECTS, EXCEPT AS FOLLOWS: rights), in the United States and its
possessions, Canada, South America,
South Africa, Korea Taiwan and Australia
(the "VIVENDI TERRITORIES") to three
titles: a) IceWind Xxxx 2 PC; b) Hunter
Xbox; c) RLH PS2; (each a "NEW SELECTED
TITLE" and collectively, the "NEW
SELECTED TITLES"). The term of Vivendi's
exclusive rights to each of these
products shall be reduced to
twelve-months from delivery of each New
Selected Title, which term shall include
a "sell-off" period of six-months for
inventory manufactured on or before the
expiration of such 12 month term.
2) With respect to the New Selected Titles
above, Vivendi's distribution rights
will remain in effect (and Interplay
will take all actions that are
reasonable and necessary to ensure such
rights remain in effect) in the event
Interplay directly or indirectly sells,
transfers, assigns, encumbers, or
licenses any of the New Selected Titles
or development studios holding such New
Selected Titles in any manner.
3) Vivendi will continue to have exclusive
rights to sell Interplay products
currently in distribution by Vivendi
(including Baldur's Gate: Dark Alliance
PS2, but not including the titles
included in the Shiny Assets)(the "BACK
CATALOG TITLES"). Vivendi will continue
to have exclusive distribution rights
(excluding online rights) in the Vivendi
Territories to the Back Catalog Titles
(including Baldur's Gate: Dark Alliance
PS2), per the terms of the existing
Distribution
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Agreement, as amended. The term of
Vivendi's distribution rights to the Back
Catalog Titles shall expire on December
31, 2002, plus an additional six
month "sell-off" period for inventory
manufactured on or before December 31,
2002, in accordance with the existing
Distribution Agreement.
4) Other than the New Selected Titles and
the Back Catalog Titles, Vivendi will
NOT retain any rights under the
Distribution Agreement to distribute any
Interplay products.
5) Vivendi will keep all Dark Alliance PS2
proceeds that would otherwise be paid to
Interplay commencing with the royalty
statement covering the period from
February 24, 2002 through March 30, 2002
("DARK ALLIANCE INTERPLAY PROCEEDS").
The Dark Alliance Interplay Proceeds
will be treated as a recoupment of
Advances paid by Vivendi to Interplay
under the Distribution Agreement. For
clarity, upon recoupment of 100% of the
Advances, all Dark Alliance Interplay
Proceeds shall be paid to Interplay in
accordance with Section 6 of the
Distribution Agreement. Interplay will
pay in a timely fashion all third party
royalties owed by Interplay or its
affiliates on such proceeds. Interplay
acknowledges and agrees that (as between
Interplay and Vivendi) Vivendi has no
responsibility with respect to such
third party royalties. Interplay shall
indemnify Vivendi with respect to any
and all losses or costs incurred by
Vivendi with respect to any claims made
by such third parties.
6) In the event that (1) any New Selected
Title is not timely delivered to Vivendi
or; (2) any Back Catalog Title is
terminated (by reason other than the
normal expiration of Interplay's rights
thereto under any third party license)
by
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a third party such that Vivendi is
precluded from distributing such Back
Catalog Title(s), then in addition to
all other rights and remedies Vivendi
may have pursuant to the Distribution
Agreement, at law or in equity and
without waiving any rights or claims,
Vivendi may deduct from the Interplay
Proceeds Vivendi's remaining unrecouped
Advances paid by Vivendi to Interplay
under the Distribution Agreement, in an
amount equal to Vivendi's projected
recoupment from such New Selected Title
or Back Catalog Title, as applicable,
with respect to such title. Throughout
the term(s) stated herein, Interplay
shall not have the right to terminate,
take any action the result of which
would be a termination of Vivendi's
rights, or otherwise preclude Vivendi
from its exclusive distribution rights
as set forth in the Distribution
Agreement, as amended with respect to
any New Selected Title or Back Catalog
Title.
VIVENDI SPECIAL RESERVE Vivendi will maintain a Special Reserve equal to
5% of Net Sales from Back Catalog Titles, which
amount will be returned to Interplay in full
within twenty (20) days following the date that
Vivendi recoups all Advances paid under the
Distribution Agreement. In the event that
Vivendi does not recoup the full amount of all
Advances paid under the Distribution
Agreement(s), as amended, then Vivendi shall
apply the Special Reserve against all unrecouped
amounts, and shall remit any remaining amounts
of the Special Reserve to Interplay within
thirty (30) days of the date that Vivendi
actually recoups the full amount of all
Advances.
RELEASE OF CLAIMS AGAINST Immediately upon the satisfaction of the
INTERPLAY AND SHINY Conditions Precedent, Vivendi irrevocably and
unconditionally releases and forever discharges
Interplay and Shiny, and each of their
respective employees, directors,
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officers, subsidiaries, stockholders,
successors-in-interest, and assigns from any and
all claims and interests in or to or relating to
any Shiny Assets and from any and all, existing
and, to the extent arising from the actions of
the parties on or prior to the Closing, future
causes of action, claims, actions, rights,
judgments, obligations, damages, demands,
accountings or liabilities of whatever kind and
character, whether known or unknown, suspected
or unsuspected, existing as of the date hereof
and as at the date of the Closing (other than
claims arising under this Agreement, the
Distribution Agreement as amended hereby
(excluding claims arising under the Distribution
Agreement prior to the Closing), or the
Definitive Agreement), which Vivendi (and/or its
affiliates) has or may have against Interplay
and/or Shiny, or either of them, with respect to
the Distribution Agreement, the sale of Shiny,
the Shiny Assets, the Universal Action (as
defined below) or the Cross-Complaint (as
defined below). Vivendi hereby, for itself, its
affiliates, and for its attorneys, legal
representatives, agents, successors-in-interest
and assigns, expressly waives and relinquishes
all rights and benefits afforded by Section 1542
of the Civil Code of California and does so
understanding and acknowledging the significance
and consequences of such specific waiver of
Section 1542. Vivendi acknowledges that it is
familiar with the provision of California Civil
Code Section 1542, which provides as follows: A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR. Notwithstanding the foregoing, the
releases set forth herein shall expressly not
include a release of any claims arising under
this Agreement, or arising
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following the Closing under the Distribution
Agreement as amended hereby.
For the avoidance of doubt, immediately upon the
satisfaction of the Conditions Precedent,
Vivendi expressly acknowledges and agrees that
it (i) has no rights with respect to Shiny or
the Shiny Assets under the Distribution
Agreement; (ii) irrevocably and unconditionally
releases and forever discharges Shiny of all
obligations under the Distribution Agreement and
any and all other agreements to which Vivendi is
a party and by which Shiny or any of the Shiny
Assets are bound, or otherwise pledged as
collateral/security and (iii) releases any and
all liens, encumbrances and/or other security
interests held by it or any of its affiliates in
and to any portion of the Shiny Assets in
accordance with the terms below.
RELEASE OF CLAIMS AGAINST Immediately upon the satisfaction of the
VIVENDI Conditions Precedent, Interplay irrevocably and
unconditionally releases and forever discharges
Vivendi, and its respective employees,
directors, officers, subsidiaries, stockholders,
successors-in-interest, and assigns, from all
claims and interests relating to (i) Vivendi's
performance under the Distribution Agreement
prior to the Closing (excluding, however,
Vivendi's obligations to Interplay with respect
to accrued but unpaid proceeds due under the
Distribution Agreement) or (ii) the conduct of
Vivendi in connection with the sale of Shiny or
the Shiny Assets, and (iii) except for rights
described in the parentheses in the immediately
preceding clause (i) the performance of the
Distribution Agreement and the terms of this
Agreement, from any and all, existing and, to
the extent arising (directly or indirectly) from
the actions of the parties on or prior to the
Closing, future causes of action, claims,
actions, rights, judgments, obligations,
damages, demands, accountings or liabilities of
whatever kind and character, known and unknown,
suspected or unsuspected, existing as of the
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date hereof and as at the date of the Closing,
which Interplay (and/or Shiny) has or may have
against Vivendi, directly or indirectly, with
respect to the Distribution Agreement, the sale
of Shiny, the Shiny Assets, the Universal Action
or the Cross-Complaint. Interplay hereby, for
itself, its affiliates, and for its, attorneys,
legal representatives, agents,
successors-in-interest and assigns, expressly
waives and relinquishes all rights and benefits
afforded by Section 1542 of the Civil Code of
California and do so understanding and
acknowledging the significance and consequences
of such specific waiver of Section 1542.
Interplay acknowledges that it is familiar with
the provision of California Civil Code Section
1542, which provides as follows: A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Notwithstanding the foregoing, the releases set
forth herein shall expressly not include a
release of any claims arising under this
Agreement, or arising following the Closing
under the Distribution Agreement as amended
hereby.
ADDITIONAL COVENANTS 1. Immediately upon the satisfaction of the
Conditions Precedent, Vivendi hereby (i)
acknowledges and agrees that all liens,
encumbrances and/or other security interests
held by Vivendi or any of its affiliates in and
to any or all of the Shiny Assets, arising from,
related to or granted in connection with the
Distribution Agreement shall automatically
(without any further action by any person)
terminate, (provided, however, that as set forth
above, Vivendi shall retain, at all times, all
liens, encumbrances and/or security interests in
all
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other assets and property of Interplay), and
(ii) upon reasonable request by Interplay and at
Interplay's expense, acknowledges and agrees to
provide to Interplay, prior to the Closing, any
documents reasonably necessary to terminate all
liens, encumbrances and/or other security
interests held by Vivendi or any of its
affiliates in and to any portion of the Shiny
Assets.
2. Except as otherwise provided herein,
Interplay agrees that Interplay will use the
proceeds from the Shiny sale solely to make
payments (i) to third parties, including
Vivendi, in connection with or as may be
required by the various transactions comprising
and related to the Shiny sale, (ii) to pay
creditors, and (iii) to pay ordinary course
operating expenses, and that it will not use the
proceeds of the Shiny sale to redeem any equity
securities or to make any dividend until all
creditor claims that are beyond customary terms
as of the Closing have been satisfied or
scheduled for subsequent payment by agreement
with the applicable creditor and Interplay has
sufficient capital for its contemplated business
and to satisfy its obligations as they come due.
3. Interplay acknowledges that (i) the sale of
Shiny is conditioned on, among other things, the
release by Vivendi of its security interests and
claims in the Shiny Assets, (ii) it would not be
able to consummate a sale of Shiny without such
release, and (iii) Vivendi's security interests
in the Shiny Assets are valid, perfected and
enforceable. Interplay acknowledges that the
consideration being provided to Vivendi under
this Agreement, including, without limitation,
the Closing Payment, is on account of and
commensurate with this release.
LAWSUIT FILED FEBRUARY 7, Universal has filed a complaint against
2002 WITHDRAWN Interplay in the Superior Court of the State
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of California, County of Orange, Case No.
02CC02650 (hereinafter referred to as the
"UNIVERSAL ACTION"). Vivendi will (i) deliver at
Closing, and in satisfaction of the Conditions
Precedent, a fully executed Request for
Dismissal of the Universal Action, with
prejudice as to all parties, and thereafter
promptly cause same to be filed with the clerk
of the Superior Court. Within two (2) days
following the Closing, Vivendi will notify the
Superior Court to take the Motion (as defined
below) off calendar, with prejudice.
CROSS-COMPLAINT FILED Interplay has filed a cross-complaint against
MARCH 29, 2002 WITHDRAWN Vivendi in the Superior Court of the State of
California, County of Orange, Case No. 02CC02650
hereinafter referred to as the
"CROSS-COMPLAINT"). Interplay will deliver to
Vivendi at Closing, and in satisfaction of the
Conditions Precedent, a fully executed Request
for Dismissal to dismiss the Cross-Complaint,
with prejudice as to all parties, and thereafter
promptly cause same to be filed with the clerk
of the Superior Court.
VIVENDI TO AGREE TO TAKE Universal has filed a Notice Motion for a
APPLICATION FOR Preliminary Injunction (the "MOTION") against
INJUNCTION OFF CALENDAR. Interplay in the Superior Court of the State of
California, County of Orange, Case No. 02CC02650
which shall be withdrawn and taken off calendar
with prejudice as described above.
GOVERNING LAW; FORUM This Agreement and the Definitive Agreement will
SELECTION; CONSENT TO be governed by California law, and will provide
JURISDICTION that an arbitration in Los Angeles County,
California will be the sole and exclusive forum
for any litigation between the parties.
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ALTERNATIVE DISPUTE This Agreement and the Definitive Agreement
RESOLUTION provide for binding arbitration of any disputes,
to be held in Los Angeles County, California,
under the rules and procedures specified by CPR
Institute for Dispute Resolution, and before one
of its arbitrators.
ATTORNEYS' FEES This Agreement and the Definitive Agreement
provide for an award of actual attorneys' fee
and other expenses to the prevailing party in
any action/proceeding in connection with the
Definitive Agreement.
INTEGRATION The terms agreed upon herein together with the
Distribution Agreement, escrow agreement, escrow
instructions, and the Definitive Agreement
(including all schedules, exhibits attached
thereto) constitute the entire agreement between
the parties and supercedes all prior written and
oral agreements and understandings with respect
to the subject matter set forth herein. Subject
to the terms contained herein, both parties
acknowledge and agree that the terms and
conditions of the Distribution Agreement shall
remain in full force and effect.
INTERPLAY ENTERTAINMENT CORP. VIVENDI UNIVERSAL GAMES, INC.
By: /S/ HERVE CAEN By: /S/ XXXXXX XXXXXX
------------------------------- -----------------------------------
Herve Caen Xxxxxx Xxxxxx
Title: Chief Executive Officer Title: Chief Financial Officer
SHINY ENTERTAINMENT, INC.
By: /S/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx
Title: President
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