EXHIBIT 10.2
SECURITY AGREEMENT
SECURITY AGREEMENT ("Agreement") dated as of April 30, 2002 by and between
Interplay Entertainment Corp, as debtor (Debtor"), and Warner Bros., a division
of Time Warner Entertainment Company, L.P., as secured party ("Secured Party").
WHEREAS, the Debtor will issue and the Secured Party will acquire from the
Debtor that certain Secured Convertible Promissory Note ("Note") dated as of the
date hereof.
WHEREAS, it is a condition precedent to the obligations of the Secured
Party to purchase and acquire the Note that the obligations of the Debtor in
respect of the Note be secured by a Security Interest (as defined below) in, and
lien upon, certain assets of the Debtor described herein;
WHEREAS, in furtherance of the foregoing, the Debtor and Secured Party are
entering into this Agreement for purposes of creating, perfecting, and
administering the Security Interest in, and lien upon, the assets of the Debtor
to be granted to the Secured Party, all as contemplated by the foregoing.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Terms defined in the Note and not otherwise defined
herein have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following meanings:
"ACCOUNT" means an "account" (as defined in UCC Section 9-102).
"CHATTEL PAPER" means "chattel paper" (as defined in UCC Section 9-102).
"CLOSING" shall have the meaning set forth in the Stock Purchase Agreement.
"COLLATERAL" shall mean the Initial Collateral or the Remaining Collateral,
as the case may be.
"COLLATERAL DOCUMENTS" means this Agreement, each Deposit Account Control
Agreement, each Intellectual Property Security Agreement, and all other
supplemental or additional security agreements, control agreements, mortgages,
deeds of trust, deeds to secure the Secured Obligations or similar instruments
delivered pursuant hereto or thereto.
"COMMERCIAL TORT CLAIM" means a "commercial tort claim" (as defined in UCC
Section 9-102).
"COPYRIGHT LICENSE" means any agreement now or hereafter in existence
granting to the Debtor, or pursuant to which the Debtor grants to any other
Person, any right to use, copy, reproduce, distribute, prepare derivative works,
display, or publish any records or other materials on which a Copyright is in
existence or may come into existence, including, without limitation, any
agreement identified in Schedule 1 to any Copyright Security Agreement.
"COPYRIGHTS" means all the following: (i) all copyrights under the laws of
the United States or any other country (whether or not the underlying works of
authorship have been published), all registrations and recordings thereof, all
copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including, without limitation, registrations, recordings, and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, including, without limitation, those described in
Schedule 1 to any Copyright Security Agreement, (ii) all renewals of any of the
foregoing, (iii) all claims for, and rights to xxx for, past or future
infringements of any of the foregoing, and (iv) all income, royalties, damages,
and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"COPYRIGHT SECURITY AGREEMENT" means a Copyright Security Agreement,
substantially in the form of Exhibit A hereto, executed and delivered by the
Debtor in favor of the Secured Party for the benefit of the Secured Parties, as
amended from time to time.
"CURRENT RATIO" shall mean the Debtor's current assets divided by the
Debtors current liabilities and determined in accordance with GAAP.
"DEBTOR" means Interplay Entertainment Corp., a Delaware
corporation and its permitted successors and assigns.
"DEPOSIT ACCOUNT" means a "deposit account" (as defined in UCC Section
9-102).
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means a Deposit Account Control
Agreement substantially in the form of Exhibit C hereto.
"EFFECTIVE TIME" has the meaning set forth in Section 3.
"ELIGIBLE CASH FLOW" shall mean an amount of cash equal to the amount of
current assets of the Debtor in excess of current assets necessary for the
Debtor to have a Current Ratio of 0.9.
"EQUIPMENT" means "equipment" (as defined in UCC Section 9-102), but
excluding fixtures (as defined in UCC Section 9-102) located on any real
property.
"EQUITY INTEREST" means (i) in the case of a corporation, any shares of
its capital stock, (ii) in the case of a limited liability company, any
membership interest therein, (iii) in the case of a partnership, any partnership
interest (whether general or limited) therein, (iv) in the case of any other
business entity, any participation or other interest, in the equity or profits
thereof, (v) any warrant, option, or other right to acquire any Equity Interest
described in the foregoing clauses
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(i), (ii), (iii) and (iv), or (vi) any Security Entitlement (as defined in the
UCC) in respect of any Equity Interest described in the foregoing clauses (i),
(ii), (iii), (iv), and (v).
"GAAP" shall mean Generally Accepted Accounting Principals applicable in
the United States and applied consistently with the historical practices of the
Debtor.
"GENERAL INTANGIBLES" means "general intangibles" (as defined in UCC
Section 9-102), including, without limitation, with respect to the Debtor, (A)
all its Intellectual Property, goodwill, trade names, service marks, trade
secrets, permits and licenses, (B) all its rights and claims in respect of
refunds for taxes paid, (C) all its rights in respect of any pension plan or
similar arrangement maintained for employees, and (D) all its rights to any
goods, services, or other property arising in connection with its Accounts or
Inventory (including rights to returned or repossessed goods and unpaid seller's
rights of rescission, replevin, reclamation and rights to stoppage in transit).
"INITIAL COLLATERAL" shall mean all the following property, whether now
owned or existing or hereafter acquired or arising and regardless of where
located:
(i) All Accounts;
(ii) All Chattel Paper;
(iii) All Commercial Tort Claims;
(iv) All Deposit Accounts;
(v) All Equipment;
(vi) All General Intangibles;
(vii) All Instruments;
(viii) All Intellectual Property;
(ix) All Inventory;
(x) All Investment Property;
(xi) All rights and privileges of the Debtor with respect to
Equity Interests in other persons, and all dividends, distributions,
and other payments with respect to such Equity Interests;
(xii) All indebtedness owed to the Debtor by its subsidiaries and
affiliates, all its rights and privileges with respect to such
indebtedness and all interest, distributions, and other payments with
respect thereto,
(xiii) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts, and other
computer materials and records) of the Debtor pertaining to any
Initial Collateral; and
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(xiv) All Proceeds of the Initial Collateral described in the
foregoing clauses (i) through (xiii);
PROVIDED that the following property is excluded from the Security Interest: (i)
motor vehicles the perfection of a security interest in which is excluded from
the Uniform Commercial Code in the relevant jurisdiction, (ii) Equipment leased
by the Debtor under a lease that prohibits the granting of a Security Interest
or lien on such Equipment, and (iii) any general intangibles or other rights
arising under any contract, instrument, license, or other document if (but only
to the extent that) the grant of a Security Interest therein would constitute a
material violation of a valid and enforceable restriction in favor of a third
party, unless and until all required consents shall have been obtained. The
Debtor shall use all reasonable efforts to obtain any such required consent that
is reasonably obtainable.
"INSTRUMENT" means an "instrument" (as defined in UCC Section 9-102),
including (but not limited to) promissory notes, drafts, bills of exchange, and
trade acceptances.
"INTELLECTUAL PROPERTY" means (i) Patents, (ii) Patent Licenses, (iii)
Trademarks, (iv) Trademark Licenses, (v) Copyrights, and (vi) Copyright
Licenses, and all rights in or under any of the foregoing.
"INTELLECTUAL PROPERTY FILING" means (i) with respect to any Patent,
Patent License, Trademark or Trademark License, the filing of the applicable
Patent Security Agreement or Trademark Security Agreement with the United States
Patent and Trademark Office, together with an appropriately completed
recordation form, and (ii) with respect to any Copyright or Copyright License,
the filing of the applicable Copyright Security Agreement with the United States
Copyright Office, together with an appropriately completed recordation form, in
each case sufficient to record the Security Interest granted to the Secured
Party in such intellectual Property.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Copyright Security
Agreement, a Patent Security Agreement, or a Trademark Security Agreement.
"INVENTORY" means "inventory" (as defined in UCC Section 9-102).
"INVESTMENT PROPERTY" means "investment property" (as defined in UCC
Section 9-102).
"NOTE" has the meaning set forth in the Introduction hereto, together with
any replacement or substitution therefor.
"EVENT OF DEFAULT" has the meaning specified in Section 7.
"PARTIALLY RELEASED COLLATERAL" shall mean the Initial Collateral other
than the Remaining Collateral.
"PARTNERSHIP INTEREST" means a partnership interest, whether general or
limited.
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"PATENT LICENSE" means any agreement now or hereafter in existence
granting to the Debtor, or pursuant to which the Debtor grants to any other
Person, any right to practice (x) any invention in any Patent or (y) any
invention now or hereafter in existence, whether patentable or not, whether a
patent or application for patent is in existence on such invention or not, and
whether a patent or application for patent on such invention may come into
existence or not, including, without limitation, any agreement identified in any
Patent Security Agreement.
"PATENTS" means (i) all letters patent and design letters patent of the
United States or any other country and all applications for letters patent or
design letters patent of the United States or any other country, including,
without limitation, applications in the United States Patent and Trademark
Office or in any similar office or agency of any other country, including,
without limitation, those described in any Patent Security Agreement, (ii) all
reissues, divisions, continuations, continuations in part, revisions, and
extensions of any of the foregoing, (iii) all claims for, and rights to xxx for,
past or future-infringements of any of the foregoing, and (iv) all income,
royalties, damages and payments now or hereafter due or payable with respect to
any of the foregoing, including, without limitation, damages and payments for
past or future infringements thereof.
"PATENT SECURITY AGREEMENT" means a patent security agreement executed and
delivered by the Debtor in favor of the Secured Party, as amended from time to
time.
"PAYMENT INTANGIBLE" means "payment intangible" (as defined in UCC Section
9-102).
"PERMITTED SECURITY INTERESTS" has the meaning set forth in Section 4.
"PLEDGED DEPOSIT ACCOUNT" shall mean that certain Deposit Account
established at a financial institution designated by Secured Party and
reasonably acceptable to Debtor and subject to the Deposit Account Control
Agreement.
"POST-PETITION INTEREST" means any interest that accrues after the
commencement of any case, proceeding, or other action relating to the
bankruptcy, insolvency, or reorganization of the Debtor (or would accrue but for
the operation of applicable bankruptcy or insolvency laws), whether or not such
interest is allowed or allowable as a claim in any such proceeding.
"PROCEEDS" means all proceeds of, and all other profits, products, rents,
or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing, or other disposition of, or other realization
upon, any Collateral, including without limitation all claims of the Debtor
against third parties for loss of, damage to, or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of insurance in
respect of, any Collateral, and any condemnation or requisition payments with
respect to any Collateral, in each case whether now existing or hereafter
arising.
"REMAINING COLLATERAL" shall mean all the following property, whether now
owned or existing or hereafter acquired or arising and regardless of where
located: (i) the Pledged Deposit Account; (ii) all Copyrights and Copyright
Licenses of the Debtor in respect of the Subject Titles; (iii) all Trademark and
Trademark Licenses of the Debtor in respect of Subject Titles; and (iv) all
Proceeds of the Remaining Collateral described in the foregoing clauses (i)
through (iii).
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"SECURED OBLIGATIONS" means, the principal of the Note, outstanding from
time to time, all interest (including Post-Petition Interest) on such principal
amount, and all other amounts (including fees and disbursements of counsel) now
or hereafter payable by the Debtor pursuant to the Note, this Agreement, or any
other Collateral Document.
"SECURED PARTY" means Warner Bros., a division of Time Warner Entertainment
Company, L.P., and its successor and assigns.
"SECURITY INTEREST" means a security interest, pledge, assignment, charge,
mortgage, encumbrance, or other lien (i) granted by the Debtor to the Secured
Party; or (ii) granted under any other agreement or instrument with respect to
any present or future assets, property, contract rights, or revenues in order to
secure the payment of indebtedness of the party referred to in the context in
which the term is used.
"STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase Agreement
dated as of April 23, 2002, between and among Debtor, Infogrames, Inc., Shiny
Entertainment, Inc., Shiny Group, Inc., and Xxxxx Xxxxx.
"SUBJECT TITLES" shall mean the Debtor's right, title, and interest in, to,
and under the following Intellectual Property titles "Icewind Xxxx XX",
"Hunter", and "Run Like Hell", or such other Collateral of equal or greater
value substituted by Debtor and reasonably acceptable to Secured Party.
"SUPPORTING OBLIGATION" means "supporting obligation" (as defined in UCC
Section 9-102).
"TRADEMARK LICENSE" means any agreement now or hereafter in existence
granting to the Debtor, or pursuant to which the Debtor grants to any other
Person, any right to use any Trademark, including, without limitation, any
agreement identified in Schedule 1 to any Trademark Security Agreement.
"TRADEMARKS" means: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and all other
source or business identifiers, and all general intangibles of like nature, and
the rights in any of the foregoing which arise under applicable law, (ii) the
goodwill of the business symbolized thereby or associated with each of them,
(iii) all registrations and applications in connection therewith, including,
without limitation, registrations and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof, or any other country or any political subdivision thereof,
including, without limitation, those described in Schedule 1 to any Trademark
Security Agreement, (iv) all renewals of any of the foregoing, (v) all claims
for, and rights to xxx for, past or future infringements of any of the
foregoing, and (vi) all income, royalties, damages, and payments now or
hereafter due or payable with respect to any of the foregoing, including,
without limitation, damages and payments for past or future infringements
thereof.
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"TRADEMARK SECURITY AGREEMENT" means a Trademark Security Agreement,
substantially in the form of Exhibit B hereto, executed and delivered by the
Debtor in favor of the Secured Party, as amended from time to time.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Delaware; PROVIDED that, if perfection or the effect of perfection
or non-perfection or the priority of any Security Interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than Delaware, "UCC" means the Uniform Commercial Code as in effect from time to
time in such other jurisdiction for purposes of the provisions hereof relating
to such perfection, effect of perfection, or non-perfection or priority.
"VIVENDI SECURITY INTEREST" shall mean the Security Interests the Debtor
granted to Vivendi Universal Interactive Publishing North America, Inc. pursuant
to that certain Secured Advance and Amendment #2 to Distribution Agreement
letter agreement dated November 20, 2001 and that certain Secured Advance and
Amendment #3 to Distribution Agreement letter agreement dated December 13, 2001.
SECTION 2. THE SECURITY INTERESTS.
(a) At the Effective Time, in order to secure the full and punctual payment
of the Secured Obligations, the Debtor grants and pledges to the Secured Party a
continuing Security Interest in all the Initial Collateral.
(b) Notwithstanding subparagraph (a) above, upon the release of the Vivendi
Security Interest, the Partially Released Collateral shall be automatically
released from the Security Interest granted hereunder; the Security Interest
granted hereunder shall continue in the Remaining Collateral; and upon receipt
by Secured Party of documents in form reasonably satisfactory to Secured Party
evidencing the release of the Vivendi Security Interest, Secured Party shall
promptly execute such documents and instruments as Debtor shall reasonably
require to evidence the release of the Partially Released Collateral from the
Security Interest granted hereunder at Debtor's sole cost and expense (provided
that all such documents and instruments shall expressly provide that the
Security Interest granted hereunder continues in the Remaining Collateral).
(c) Notwithstanding subparagraphs (a) and (b) above, the Security Interest
granted hereunder shall continue in the Initial Collateral or the Remaining
Collateral, as the case may be, only to the extent the amounts deposited into
the Pledged Deposit Account in accordance with Section 5(e), shall be
insufficient to pay all principal and interest due and payable under the Note;
and Secured Party shall promptly execute such documents and instruments as
Debtor shall reasonably require to evidence the partial release or releases of
the Collateral in accordance with this subparagraph (c) from the Security
Interest granted hereunder at Debtor's sole cost and expense (provided that all
such documents and instruments shall expressly provide that the Security
Interest granted hereunder continues in any remaining portion of the Initial
Collateral or the Remaining Collateral, as the case may be, to the extent
amounts deposited into the Pledged Deposit Account shall be insufficient to pay
all principal and interest due and payable under the Note).
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(d) With respect to each right to payment or performance included in the
Collateral from time to time, the Security Interest granted therein includes a
continuing Security Interest in (i) any Supporting Obligation that supports such
payment or performance and (ii) any Security Interest, mortgage, or other lien
that secures (x) such right to payment or performance or (y) any such Supporting
Obligation.
(e) The Security Interests are granted as security only and shall not
subject the Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of the Debtor with respect to any of the Collateral or
any transaction in connection therewith.
SECTION 3. EFFECTIVENESS. This Agreement shall become effective only after
the time ("EFFECTIVE TIME") that all the following conditions shall have been
satisfied:
(a) the Closing for the Stock Purchase Agreement shall have occurred;
(b) the Secured Party shall have received from the Debtor a counterpart
hereof signed by the Debtor or facsimile or other written confirmation
satisfactory to the Secured Party that the Debtor has signed a counterpart
hereof;
(c) the Secured Party shall have received from the Debtor the original
executed Note; and
(d) the Secured Party shall have received all other documents it may
reasonably request relating to any matters relevant hereto, all in form and
substance reasonably satisfactory to the Secured Party.
SECTION 4. GENERAL REPRESENTATIONS AND WARRANTIES. The Debtor represents
and warrants that:
(a) The Debtor is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware.
(b) The exact corporation name and Identification Number of the Debtor as
appears in its certificate of incorporation is as follows:
CORPORATE NAME IDENTIFICATION NUMBER
Interplay Entertainment Corp. 00-0000000
(c) The Debtor has not changed its name since its organization.
(d) The Debtor has not changed its corporate structure in any way within
the past five years.
(e) The chief executive office of the Debtor is located at the following
address:
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COUNTY MAILING ADDRESS STATE
Los Angeles Interplay Entertainment Corp. California
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
(f) The Debtor has good and marketable title to all its Collateral, free
and clear of any Security Interest other than any Security Interest permitted by
the Secured Party, including without limitation, the Vivendi Security Interest
("PERMITTED SECURITY INTERESTS").
(g) The Debtor has not performed any acts that could reasonably be expected
to prevent the Secured Party from enforcing any of the provisions of the
Collateral Documents or that would limit the Secured Party in any such
enforcement. No financing statement, security agreement, mortgage, or similar or
equivalent document or instrument covering all or any part of the Collateral
owned by the Debtor is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect or record a Security Interest
on such Collateral, except financing statements, mortgages, or other similar or
equivalent documents with respect to Permitted Security Interests. After the
Effective Time, no Collateral owned by the Debtor will be in the possession or
under the control of any Person asserting any claim thereto or Security Interest
therein, other than a Permitted Security Interest of a warehouseman, bailee, or
agent.
(h) The Security Interests in all Collateral owned by the Debtor (i) have
been validly created, (ii) will attach to each item of such Collateral at the
Effective Time (or, if the Debtor first obtains rights thereto on a later date,
on such later date), and (iii) when so attached will secure all of the Secured
Obligations.
(i) When UCC financing statements describing the Collateral have been filed
in the Delaware Secretary of State's Office the Security Interest will
constitute a perfected security interests in the Collateral owned by the Debtor
to the extent that a security interest therein may be perfected by filing
pursuant to the UCC, prior to all Security Interests and rights of others
therein except Permitted Security Interests. When, in addition to the filing of
such UCC financing statements, the applicable Intellectual Property Filings have
been made with respect to all or a portion of the Debtor's Intellectual Property
(including any future filings required pursuant to Section 5(a)), the Security
Interests will constitute perfected security interests in all right, title, and
interest of the Debtor in such Intellectual Property to the extent that security
interests therein may be perfected by such filings, prior to all Security
Interests and rights of others therein except Permitted Security Interests.
SECTION 5. FURTHER ASSURANCES; GENERAL COVENANTS. The Debtor covenants as
follows:
(a) Subject to the other provisions of this Agreement, the Debtor will,
from time to time, at its expense, execute, deliver, file, and record any
statement, assignment, instrument, document, agreement, or other paper and take
any other action (including, without limitation, any Intellectual Property
Filing and any filing of financing or continuation statements under the UCC)
that from time to time may be (i) necessary, or that the Secured Party may
reasonably request, in order to create, preserve, perfect, confirm, or validate
the Security Interests in the Collateral; and (ii) necessary, and that the
Secured Party may reasonably request, in order to:
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(A) enable the Secured Party to obtain the full benefits of the Collateral
Documents; or (B) enable the Secured Party to exercise and enforce any of its
rights, powers, and remedies with respect to any of the Collateral; PROVIDED
that the Secured Party shall not seek an assignment of any Trademark except in
the exercise of its remedies hereunder.
The Debtor hereby constitutes the Secured Party its attorney-in-fact to
execute and file all Intellectual Property Filings and any recording or filing
of any financing or continuation statements or other filings required or so
requested for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; and such power, being coupled with an interest, shall be
irrevocable until all of the Debtor's Collateral is released pursuant to Section
12. With respect to any action it is permitted to take pursuant to the power of
attorney contained in this paragraph, the Secured Party will notify the Debtor
thereof (i) unless an Event of Default shall have occurred and be continuing,
prior to taking such action and (ii) if an Event of Default shall have occurred
and be continuing, promptly after taking such action. The Debtor will pay the
costs of, or incidental to, any Intellectual Property Filings and any recording
or filing of any financing or continuation statements or other documents
recorded or filed pursuant hereto.
(b) The Debtor will not (i) change its name or corporate structure, or (ii)
change its location (determined as provided in UCC Section 9-307) unless it
shall have given the Secured Party at least 10 days' prior written notice
thereof.
(c) Other than as provided in Section 6, the Debtor will not sell, lease,
exchange, assign, or otherwise dispose of, or grant any option with respect to,
any of its Collateral.
(d) The Debtor will, promptly upon request, provide to the Secured Party
all information and evidence concerning the Collateral that the Secured Party
may reasonably request from time to time to enable it to enforce the provisions
of the Collateral Documents.
(e) Commencing with respect to the Debtor's fiscal quarter ending June 30,
2002 and continuing each quarter thereafter, within 5 business days following
the release of the Debtor's quarterly report on Form 10Q or earnings release for
the applicable quarter, the Debtor shall deposit in the Pledged Deposit Account
all Eligible Cash Flow until such time as the amount in the Pledged account
shall be sufficient to pay all principal and interest due and payable under the
Note.
SECTION 6. ORDINARY COURSE TRANSACTIONS. Unless an Event of Default shall
have occurred and be continuing and the Secured Party shall have notified the
Debtor that its right to do so is terminated, suspended, or otherwise limited in
accordance with the terms hereof, the grant of Security Interests in the
Collateral, including without limitation, the Intellectual Property, pursuant
hereto and the Collateral Documents shall not preclude the Debtor from entering
into any Copyright License or Trademark License or, subject to Section 5, from
managing or maintaining, including selling, exchanging, assigning, or otherwise
disposing of, the Collateral, including without limitation, the Intellectual
Property, in a manner that is in the ordinary course of the Debtor's business
and consistent with the Debtor's historical practices; provided however that
Debtor shall not be entitled to dispose of any or all of the Remaining
Collateral unless Secured Party has consented (which consent shall not be
unreasonably
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withheld) and Debtor has granted Secured Party a security interest of equal or
greater priority in Collateral of equal or greater value than the Collateral
disposed of by Debtor.
SECTION 7. EVENTS OF DEFAULT. The occurrence of any of the following events
or conditions shall constitute an event of default (each an "EVENT OF DEFAULT")
under this Agreement:
(a) The occurrence and continuation of an Event of Default under the Note;
(b) The Debtor fails to make, when due, any transfer, delivery, pledge,
assignment or grant of Collateral required to be made by it under the Collateral
Documents and that failure continues unremedied for five business days after
notice of that failure is given to the Debtor;
(c) The failure or refusal by the Debtor to perform, or the breach or
violation of; any of the terms, obligations, covenants, or warranties of this
Agreement, the Note, or any Collateral Document and that failure or refusal
continues unremedied for five business days after notice of such failure or
refusal is given to the Debtor;
(d) (i) a court having jurisdiction in the premises enters a decree or
order for relief in respect of the Debtor 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 the Debtor 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
the Debtor 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 the Debtor 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 the Debtor, and, in
the case of any event described in this clause (ii), such event will have
continued for 90 days unless dismissed, bonded, or discharged;
(e) at any time after the date hereof, the Note, any Collateral Document,
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 Debtor contests the
validity or enforceability of this Agreement, the Note, any Collateral Document,
or any other document delivered pursuant hereto or thereto; or
(f) any representation, warranty, or statement made by the Debtor in this
Agreement, the Note, any Collateral Document, 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.
SECTION 8. REMEDIES UPON EVENT OF DEFAULT. (a) If an Event of Default shall
have occurred and be continuing, the Secured Party may exercise (or cause its
agents or co-agents, if
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any, to exercise) any or all of the remedies available to it (or to such agents
or co-agents) under the Collateral Documents.
(b) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, the Secured Party may exercise
all the rights of a secured party under the UCC with respect to any Collateral
and, in addition, the Secured Party may, without being required to give any
notice, except as herein provided or as may be required by mandatory provisions
of law, withdraw all cash held in the Pledged Deposit Account and apply such
cash as provided in Section 11 and, if there shall be no such cash or if such
cash shall be insufficient to pay all the Secured Obligations in full, sell,
lease, license, or otherwise dispose of the Collateral or any part thereof at
public or private sale for cash, upon credit or for future delivery, and at such
price or prices as the Secured Party shall deem satisfactory. The Secured Party
may be the purchaser of Collateral so sold or otherwise disposed of at any
public disposition (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private disposition). The Debtor agrees that
it will execute and deliver such documents and take such other action as the
Secured Party deems necessary or advisable in order that any such sale or other
disposition may be made in compliance with law. Each purchaser at any such sale
shall hold the Collateral so sold to it absolutely and free from any claim or
right of whatsoever kind, including any equity or right of redemption of the
Debtor that may be waived, and the Debtor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay, or appraisal that it
has or may have under any law now existing or hereafter adopted. Notice of any
such sale or other disposition shall be given to the Debtor as required by
Section 13. The Secured Party shall not be obligated to make any such
disposition pursuant to any such notice. The Secured Party may, without notice
or publication, adjourn any public or private disposition or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
the disposition, and such disposition may be made at any time or place to which
the same may be so adjourned.
(c) For the purpose of enforcing any and all rights and remedies under this
Agreement, the Secured Party may (i) require the Debtor to, and the Debtor
agrees that it will, at its expense and upon the reasonable request of the
Secured Party, forthwith assemble all or any part of its Collateral as directed
by the Secured Party and make it available at a place designated by the Secured
Party which is, in the Secured Party's opinion, reasonably convenient to the
Secured Party and the Debtor, whether at the premises of the Debtor or
otherwise, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premises where any
of the Collateral is or may be located, and without charge or liability to the
Secured Party seize and remove such Collateral from such premises, (iii) have
access to and use the Debtor's books and records relating to its Collateral, and
(iv) prior to the disposition of any Collateral, store or transfer it without
charge in or by means of any storage or transportation facility owned or leased
by the Debtor, process, repair, or recondition it or otherwise prepare it for
disposition in any manner and to the extent the Secured Party deems appropriate
and, in connection with such preparation and disposition, use without charge any
trademark, trade name, copyright, patent, or technical process used by the
Debtor. The Secured Party may also render any or all of such Collateral unusable
at the Debtor's premises and may dispose of such Collateral on such premises
without liability for rent or costs.
Page 12
(d) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing, then, after giving notice to the
Debtor:
(i) the Secured Party may license or sublicense, whether general,
special or otherwise, and whether on an exclusive or non-exclusive
basis, any Intellectual Property included in the Collateral throughout
the world for such term or terms, on such conditions and in such
manner as the Secured Party shall in its sole reasonable discretion
determine; PROVIDED that such licenses or sublicenses do not conflict
with any existing licenses;
(ii) the Secured Party may (without assuming any obligation or
liability thereunder), at any time and from time to time, in its sole
and reasonable discretion, enforce (and shall have the exclusive right
to enforce) against any licensee or sublicensee all rights and
remedies of the Debtor in, to, and under any of its Intellectual
Property and take or refrain from taking any action under any thereof,
and the Debtor releases the Secured Party from liability for, and
agrees to hold the Secured Party free and harmless from and against
any claims and expenses arising out of, any lawful action so taken or
omitted to be taken with respect thereto, except for claims and
expenses arising from the Secured Party's or such Secured Party's
gross negligence or willful misconduct; and
(iii) upon request by the Secured Party (which shall not be
construed as implying any limitation on the rights or powers of the
Secured Party), the Debtor will execute and deliver to the Secured
Party a power of attorney, in form and substance reasonably
satisfactory to the Secured Party, for the implementation of any sale,
lease, license, or other disposition of any Intellectual Property
owned by it or any action related thereto. In connection with any such
disposition, but subject to any confidentiality restrictions imposed
on the Debtor in any license or similar agreement, the Debtor will
supply to the Secured Party its know-how and expertise relating to the
relevant Intellectual Property or the products or services made or
rendered in connection with such Intellectual Property, and its
customer lists and other records relating to such Intellectual
Property and to the distribution of said products or services.
SECTION 9. FEES AND EXPENSES; INDEMNIFICATION. The Debtor will forthwith
upon demand pay to the Secured Party:
(i) the amount of any and all reasonable out-of-pocket expenses,
including reasonable fees and expenses of counsel, that the Secured
Party may incur in connection with (x) the administration or
enforcement of the Collateral Documents, including such expenses as
are incurred to preserve the value of the Collateral or the validity,
perfection, rank, or value of any Security Interest, and all expenses
of protecting, storing, warehousing, appraising, insuring, handling,
maintaining, and shipping any Collateral, (y) the collection, sale, or
other disposition of any Collateral, or (z) the exercise by the
Secured Party of any of its rights or powers under the Collateral
Documents; and
Page 13
(ii) the amount required to indemnify the Secured Party for, or
hold it harmless and defend it against, any loss, liability, or
expense (including the reasonable fees and expenses of its counsel)
incurred or suffered by the Secured Party in connection with the
Collateral Documents, except to the extent that such loss, liability,
or expense arises from the Secured Party's gross negligence or willful
misconduct or a breach of any duty that the Secured Party has under
this Agreement.
Any such amount not paid to the Secured Party on demand will bear interest for
each day thereafter until paid at a rate per annum equal to the rate applicable
to the Note for such day.
SECTION 10. LIMITATION ON DUTY OF SECURED PARTY IN RESPECT OF COLLATERAL.
Beyond the exercise of reasonable care in the custody and preservation thereof,
the Secured Party will have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
therefrom or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Secured Party will be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property, and will not be liable or
responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of any act or omission of any agent
or bailee selected by the Secured Party in good faith or by reason of any act or
omission by the Secured Party pursuant to instructions contained herein, except
to the extent that such liability arises from the Secured Party's gross
negligence or willful misconduct.
SECTION 11. APPLICATION OF PROCEEDS. If an Event of Default shall have
occurred and be continuing, the Secured Party may apply (i) the proceeds of any
sale or other disposition of all or any part of the Collateral and (ii) any cash
held in the Pledged Deposit Account, in the following order of priorities:
FIRST, to pay the expenses of such sale or other realization,
including reasonable compensation to counsel for the Secured Party, and
all expenses, liabilities, and advances incurred or made by the Secured
Party in connection with the Collateral Documents, and any other amounts
then due and payable to the Secured Party pursuant to Section 9 hereof and
any provision of the Note;
SECOND, to pay the unpaid principal of the Secured Obligations
ratably (or provide for the payment thereof), until payment in full of the
principal of all Secured Obligations shall have been made (or so provided
for);
THIRD, to pay ratably (i) all interest (including Post-Petition
Interest) on the Secured Obligations and (ii) all fees payable under the
Note, until payment in full of all such interest and fees shall have been
made; and
FINALLY, to pay to the Debtor or its successors or assigns, or as a
court of competent jurisdiction may direct, any surplus then remaining
from the proceeds of the Collateral owned by it.
Page 14
SECTION 12. TERMINATION OF SECURITY INTERESTS. When all outstanding Secured
Obligations shall have been paid in full, the Security Interests shall terminate
and all rights to each item of Collateral shall revert to the Debtor.
Upon any termination of Security Interests or release of Collateral in
accordance with the foregoing provisions of this Section, the Secured Party
will, at the expense of the Debtor, execute and deliver to the Debtor such
documents as the Debtor shall reasonably request to evidence the termination of
the relevant Security Interests or the release of the relevant Collateral, as
the case may be.
SECTION 13. NOTICES. Each notice, request, or other communication given to
any party hereunder shall be in writing (which term includes facsimile or other
electronic transmission) and shall be effective (i) when delivered to such party
at its address specified below, (ii) when sent to such party by facsimile or
other electronic transmission, addressed to it at its facsimile number or
electronic address specified below, and such party sends back an electronic
confirmation of receipt, or (iii) ten days after being sent to such party by
certified or registered United States mail, addressed to it at its address
specified below, with first class or airmail postage prepaid:
(a) in the case of the Debtor, to it at:
Interplay Entertainment Corp.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) in the case of the Secured Party, to it at:
Warner Bros.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address or facsimile number for purposes of this
Section by giving notice of such change to the other Party in the manner
specified above.
SECTION 14. WAIVERS, REMEDIES NOT EXCLUSIVE. No failure on the part of the
Secured Party to exercise, and no delay in exercising, and no course of dealing
with respect to, any right or remedy under any Collateral Document shall operate
as a waiver thereof; nor shall any single or partial exercise by the Secured
Party of any right or remedy under Collateral Documents or
Page 15
the Note preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies specified in the Collateral
Documents or Note are cumulative and are not exclusive of any other rights or
remedies provided by law.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement is for the benefit of
the Secured Party and its successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights of the holder
thereof under the Collateral Documents, to the extent applicable to the
indebtedness so assigned, shall be transferred with such indebtedness. This
Agreement shall be binding on the Debtor and its respective successors and
assigns; PROVIDED that the Debtor may not assign or otherwise transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Secured Party.
SECTION 16. CHANGES IN WRITING. Any provision of this Agreement may be
amended, supplemented, modified, or waived if only if such amendment,
supplement, modification, or waiver is in writing and is signed by the Debtor
and the Secured Party.
SECTION 17. CHOICE OF LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of California without regard to
California's choice of law rules, and except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than the State of California are governed by the laws of
such jurisdiction. The parties hereto agree than any suit, action, or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Central District of
California or any court of the State of California sitting in Los Angeles
County, California, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action, or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any such suit, action, or proceeding in such court or that
any such suit, action, or proceeding which is brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 18. SEVERABILITY.If any provision of any Collateral Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, the other provisions of the Collateral Documents shall remain
in full force and effect in such jurisdiction; and the invalidity or
unenforceability of any provision thereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
[the remainder of this page intentionally left blank]
Page 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
Interplay Entertainment Corp.
as Debtor
By: /S/ HERVE CAEN
------------------------------------
Name: Herve Caen
Title: President and
Chief Executive Officer
Warner Bros., a division of
Time Warner Entertainment Company, L.P.,
as Secured Party
By: /S/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior VP Corporate
Business Development and
Strategy
Page 17
EXHIBIT A
TO SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT
(COPYRIGHTS, COPYRIGHT REGISTRATIONS, COPYRIGHT APPLICATIONS, AND
COPYRIGHT LICENSES)
WHEREAS, Interplay Entertainment Corp Inc., a Delaware corporation (herein
referred to as the "LIEN GRANTOR") owns, or in the case of licenses is a party
to, the Copyright Collateral (as defined below);
WHEREAS, Lien Grantor and Warner Bros., a division of Time Warner
Entertainment Company, L.P. ("SECURED PARTY"), are parties to the Convertible
Note dated as of April ___, 2002 (as amended and/or supplemented from time to
time, the "Note") pursuant to which the Lien Grantor issued the Note to the
Secured Party;
WHEREAS, pursuant to (i) that certain Security Agreement dated as of April
___, 2002 (as amended and/or supplemented from time to time, the "SECURITY
AGREEMENT") between Lien Grantor and Secured Party and (ii) certain other
collateral documents (including this Copyright Security Agreement), the Lien
Grantor has granted and/or is granting to the Secured Party a continuing
security interest in certain personal property of the Lien Grantor, including
all right, title, and interest of the Lien Grantor in, to, and under the
Copyright Collateral, to secure the Lien Grantor's Secured Obligations (as
defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lien Grantor grants to the
Secured Party, to secure the Lien Grantor's Secured Obligations, a continuing
Security Interest in all of the Lien Grantor's right, title, and interest in,
to, and under the following (all of the following items or types of property
being herein collectively referred to as the "Copyright Collateral"), whether
now owned or existing or hereafter acquired or arising:
(i) each Copyright (as defined in the Security Agreement) owned by the
Lien Grantor, including, without limitation, each Copyright referred to in
Schedule 1 hereto;
(ii) each Copyright License (as defined in the Security Agreement) to
which the Lien Grantor is a party, including, without limitation, each
Copyright License identified in Schedule 1 hereto; and
(iii)all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by the Lien
Grantor against third parties for past, present, or future infringement of
any Copyright owned by the Lien Grantor (including, without limitation, any
Copyright identified in Schedule 1 hereto) and all rights and benefits of
the Lien Grantor under any Copyright License (including, without
limitation, any Copyright License identified in Schedule 1 hereto).
The Lien Grantor irrevocably constitutes and appoints the Secured Party and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of the Lien
Grantor, the Secured Party, or otherwise, from time to time, in the Secured
Party's discretion, so long as any Event of Default shall have occurred and be
continuing, to take with respect to the Copyright Collateral any and all
appropriate action which the Lien Grantor might take with respect to the
Copyright Collateral and to execute any and all documents and instruments which
may be necessary or desirable to carry out the terms of this Copyright Security
Agreement and to accomplish the purposes hereof
Except to the extent expressly permitted in the Security Agreement or the
Note, the Lien Grantor agrees not to sell, license, exchange, assign, or
otherwise transfer or dispose of, or grant any rights with respect to, or
mortgage or otherwise encumber, any of the Copyright Collateral.
The foregoing security interest is granted in conjunction with the security
interests granted by the Lien Grantor to the Secured Party pursuant to the
Security Agreement. The Lien Grantor acknowledges and affirms that the rights
and remedies of the Secured Party with respect to the security interest in the
Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, the Lien Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
___ day of April, 2002.
Interplay Entertainment Corp
as Lien Grantor
By:
-------------------------------
Name:
Title:
Acknowledged:
Warner Bros., a division of
Time Warner Entertainment Company, L.P.,
as Secured Party
By:
-------------------------
Name:
Title:
Page 2
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
I, _____________, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, that___________, ________________of Interplay
Entertainment Corp, Inc. (the "COMPANY"), personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such
___________________, appeared before me this day in person and acknowledged that
he signed, executed, and delivered the said instrument as his own free and
voluntary act and as the free and voluntary act of said Company, for the uses
and purposes therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of April , 2002.
[Seal]
--------------------------------------
Signature of notary public
My Commission expires ________________
Page 3
SCHEDULE 1
TO COPYRIGHT
SECURITY AGREEMENT
INTERPLAY ENTERTAINMENT CORP.
COPYRIGHTS
COPYRIGHTS
TITLE COUNTRY DATE OF CREATION
------------- ------------- ----------------------
COPYRIGHT REGISTRATIONS
TITLE REGISTRATION NO. DATE OF REGISTRATION
------------- ---------------- --------------------
COPYRIGHT APPLICATIONS
TITLE DATE OF APPLICATION
------------- -----------------------
COPYRIGHT LICENSES
PARTIES DATE OF
NAME OF AGREEMENT LICENSOR/LICENSEE AGREEMENT SUBJECT MATTER
----------------- ----------------- --------- --------------
Page 4
EXHIBIT B
TO SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS, TRADEMARK
APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, Interplay Entertainment Corp Inc., a Delaware corporation (herein
referred to as the "LIEN GRANTOR") owns, or in the case of licenses is a party
to, the Copyright Collateral (as defined below);
WHEREAS, Lien Grantor and Warner Bros., a division of Time Warner
Entertainment Company, L.P., ("SECURED PARTY") are parties to the Convertible
Note dated as of April ___, 2002 (as amended and/or supplemented from time to
time, the "Note") pursuant to which the Lien Grantor issued the Note to the
Secured Party;
WHEREAS, pursuant to (i) that certain Security Agreement dated as of April
___, 2002 (as amended and/or supplemented from time to time, the "SECURITY
AGREEMENT") between Lien Grantor and Secured Party and (ii) certain other
collateral documents (including this Trademark Security Agreement), the Lien
Grantor has granted and/or is granting to the Secured Party a continuing
security interest in certain personal property of the Lien Grantor, including
all right, title, and interest of the Lien Grantor in, to, and under the
Trademark Collateral, to secure the Lien Grantor's Secured Obligations (as
defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lien Grantor grants to the
Secured Party, to secure the Lien Grantor's Secured Obligations, a continuing
security interest in all of the Lien Grantor's right, title and interest in, to
and under the following (all of the following items or types of property being
herein collectively referred to as the "Trademark Collateral"), whether now
owned or existing or hereafter acquired or arising:
(i) each registered Trademark (as defined in the Security Agreement)
owned by the Lien Grantor, including, without limitation, each Trademark
registration and application referred to in Schedule 1 hereto, and all of
the goodwill of the business connected with the use of, or symbolized by,
each Trademark;
(ii) each Trademark License (as defined in the Security Agreement),
except for intercompany Trademark Licenses, to which the Lien Grantor is a
party, including, without limitation, each Trademark License identified in
Schedule 1 hereto, and all of the goodwill of the business connected with
the use of, or symbolized by, each Trademark licensed pursuant thereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by the Lien
Grantor against third parties for past, present or future unfair
competition with, or violation of Intellectual
Property Collateral rights in connection with or injury to, or infringement
or dilution of, any Trademark owned by the Lien Grantor (including, without
limitation, any, Trademark identified in Schedule 1 hereto), and all rights
and benefits of the Lien Grantor under any Trademark License (including,
without limitation, any Trademark License identified in Schedule 1 hereto),
or for injury to the goodwill associated with any of the foregoing.
The Lien Grantor irrevocably constitutes and appoints the Secured Party and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of the Lien
Grantor, the Secured Party, or otherwise, from time to time, in the Secured
Party's discretion, so long as any Event of Default shall have occurred and be
continuing, to take with respect to the Trademark Collateral any and all
appropriate action which the Lien Grantor might take with respect to the
Trademark Collateral and to execute any and all documents and instruments which
may be necessary or desirable to carry out the terms of this Trademark Security
Agreement and to accomplish the purposes hereof
Except to the extent expressly permitted in the Security Agreement or the
Note, the Lien Grantor agrees not to sell, license, exchange, assign, or
otherwise transfer or dispose of, or grant any rights with respect to, or
mortgage or otherwise encumber, any of the Copyright Collateral.
The foregoing security interest is granted in conjunction with the security
interests granted by the Lien Grantor to the Secured Party pursuant to the
Security Agreement. The Lien Grantor acknowledges and affirms that the rights
and remedies of the Secured Party with respect to the security interest in the
Trademark Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, the Lien Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
___ day of April, 2002.
Interplay Entertainment Corp
as Lien Grantor.
By:
-------------------------------
Name:
Title:
Acknowledged:
Warner Bros., a division of
Time Warner Entertainment Company, L.P.,
as Secured Party
By:
-------------------------
Name:
Title:
Page 2
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
I, ___________, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, ___________, ____________________of Interplay
Entertainment Corp. (the "Company"), personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such
__________________, appeared before me this day in person and acknowledged that
he signed, executed and delivered the said instrument as his own free and
voluntary act and as the free and voluntary act of said Company, for the uses
and purposes therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ____ day of April ___, 2002.
[Seal]
--------------------------------
Signature of notary public
My Commission expires
---------
Page 3
SCHEDULE 1 TO
TRADEMARK SECURITY AGREEMENT
INTERPLAY ENTERTAINMENT CORP.
UNITED STATES REGISTERED* TRADEMARKS
MARKS REGISTRATION NO. REGISTRATION DATE RENEWAL DATE CLASS
* REGISTERED = CURRENTLY ACTIVE MARKS FOR WHICH FEDERAL TRADEMARK REGISTRATIONS
HAVE ISSUED, EXCLUDING TRADEMARK REGISTRATIONS THAT HAVE PREVIOUSLY BEEN
ASSIGNED
SCHEDULE 1 TO
TRADEMARK SECURITY AGREEMENT
INTERPLAY ENTERTAINMENT CORP.
UNITED STATES USE BASED TRADEMARK APPLICATION
MARKS SERIAL NO. FILING DATE CLASS
Page 2
EXHIBIT C
DEPOSIT ACCOUNT CONTROL AGREEMENT
DEPOSIT ACCOUNT CONTROL AGREEMENT ( "AGREEMENT") dated as of April____,
2002 between and among Interplay Entertainment Corp. ( "DEBTOR"), Warner Bros.,
a division of Time Warner Entertainment Company, L.P., ( "SECURED PARTY") and
_____________ ( "DEPOSIT BANK").
PRELIMINARY STATEMENTS:
(A) The Debtor and the Secured Party have entered into that certain
Convertible Note dated as of April __, 2002 (as amended, modified, or
supplemented from time to time, the "Note") pursuant to which the Debtor issued
the Note to Secured Party.
(B) The Debtor and the Secured Party, have entered into that certain
Security Agreement dated as of April __, 2002 (as amended, modified, or
supplemented from time to time, the "SECURITY AGREEMENT").
(C) It is a condition of the Note and the Security Agreement that the
Debtor pledge certain collateral to the Secured Party.
(D) The Debtor has established with the Deposit Bank an account [DESCRIBE,
INCLUDING NUMBER AND TYPE] as a Deposit Account under the Security Agreement.
(E) The Deposit Bank has agreed to act in such capacity.
NOW THEREFORE, in consideration of the premises the parties hereto hereby
agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, all capitalized terms used
herein and defined in the Note and the Security Agreement shall be used herein
as therein defined.
2. PLEDGE. The Debtor hereby grants, pledges, and assigns to the Secured
Party, and hereby creates a continuing first priority lien and Security Interest
in favor of the Secured Party in, and transfers to the Secured Party all
dominion and control over, all of its right, title, and interest in and to an
account [DESCRIBE INCLUDING NUMBER AND TYPE] with the Deposit Bank, including,
without limitation, all documents, passbooks, and similar evidence representing
such account, together with all deposits made from time to time therein and all
funds and other property standing to the credit of such account from time to
time, all of which shall constitute a Deposit Account and Collateral under the
Security Agreement;
3. SECURITY FOR OBLIGATIONS; TERMS OF PLEDGE. The Collateral hereunder
secures the payment and performance of the Obligations in accordance with the
Security Agreement. The rights and obligations of the Secured Party and the
Debtor in respect of the Collateral hereunder shall be as provided in the
Security Agreement.
Page 1
4. REPRESENTATIONS AND WARRANTIES. The Debtor represents and warrants as
follows:
(a) The Debtor is the sole beneficial owner of the Collateral subject to
this Agreement and the Security Agreement, free and clear of any Security
Interest, lien, option, or other encumbrance except for the Security Interest
created by or set forth in this Agreement, the Security Agreement.
(b) The pledge of the Collateral pursuant to this Agreement and the
Security Agreement creates a valid and perfected Security Interest in the
Collateral, securing the payment and performance when due of the Obligations.
(c) The Debtor is a corporation duly organized under the Laws of the State
of Delaware, and is in good standing in each jurisdiction where the failure to
so be would have a material adverse effect on its business or properties.
(d) It has full power, authority, and legal right to pledge all the
Collateral pursuant to this Agreement and the Security Agreement.
(e) This Agreement, has been duly authorized, executed, and delivered by
the Debtor and constitutes a legal, valid, and binding obligation of the Debtor
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws generally
affecting creditors' rights and subject to general equitable principles
(regardless of whether such principles are considered in a proceeding in equity
or at law).
(f) No authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
pledge by the Debtor of the Collateral pursuant to this Agreement or the
Security Agreement or for the execution, delivery, or performance of this
Agreement by the Debtor.
(g) The execution, delivery, and performance of this Agreement will not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award, or decree of any court, arbitrator, or governmental
authority, domestic or foreign, applicable to the Debtor, or of the company
documents of the Debtor.
5. THE DEPOSIT BANK.
(a) The Deposit Bank acknowledges the lien and Security Interest hereunder
and under the Security Agreement. The parties hereto agree that the Deposit Bank
shall at all times comply only with instructions and orders originated by the
Secured Party with respect to any disbursements, transfers, withdrawals, or
other dispositions of funds from, or investments in, the Deposit Account and the
Collateral hereunder, in each case, without the further consent of the Debtor.
The parties hereto agree that the Deposit Bank shall not comply with any such
instructions or orders originated by the Debtor or any third party, except with
the written consent of the Secured Party. The Deposit Bank waives any right to
offset any claim which it might have against the Deposit Account or the
Collateral hereunder and subordinates any security interest it
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may have in the Deposit Account and the Collateral hereunder to the lien and
Security Interest granted to the Secured Party.
(b) The Deposit Bank may resign from its obligations under this Agreement
at any time after twenty (20) days prior written notice to the other parties
hereto, but in no event shall the Deposit Bank be released of its obligations
hereunder unless and until a substitute bank has been designated and assumed the
obligations hereunder of the Deposit Bank and all monies in the Deposit Account
and Collateral relating thereto have been transferred to the substitute bank in
compliance with written instructions from the Secured Party. The Secured Party
shall designate a substitute Deposit Bank, in its sole discretion, promptly
after receipt of notice of resignation by the Deposit Bank and shall take all
reasonable actions necessary to cause such designated successor promptly to
assume the obligations of the Deposit Bank hereunder.
(c) The Secured Party may terminate this Agreement at any time after thirty
(30) days prior written notice to the other parties hereto.
(d) The Deposit Bank agrees that it shall take all actions reasonably
necessary and shall cooperate with the Secured Party to facilitate any transfer
of its obligations, duties, and rights hereunder.
(e) The Deposit Bank represents and warrants that it has no knowledge of
any claim to, Security Interest in, or lien upon any of the Collateral
hereunder, other than the Security Interest hereunder and under or noted in the
Security Agreement.
(f) The Deposit Bank has not entered into, nor will it enter into, any
agreement with any third party regarding any of the Collateral hereunder or
agreed that it will comply with any instructions or orders concerning such
Collateral originated by any such third party, nor has the Deposit Bank entered
into, nor will it enter into, any arrangement with the Debtor or any third party
by which the Deposit Bank agrees to limit or qualify its undertakings to comply
with the instructions and orders of the Secured Party as set forth herein.
6. NOTICES. All notices and other communications provided for hereunder
shall be in writing addressed to the respective parties at their addresses as
specified with their signatures below or as to any party at such other address
as shall be designated by such party in a written notice to each other party.
All such notices and other communications shall be effective upon receipt.
7. GOVERNING LAW. This Agreement (including the establishment and
maintenance of the Deposit Account and all interests, duties, and obligations
related thereto) shall be governed by and construed in accordance with the laws
of the State of California without reference to its conflicts of laws
principles, and in furtherance thereof the parties agree that the jurisdiction
of the Deposit Bank for all matters relating to the Deposit Account, this
Agreement, and the Security Agreement shall be the State of California.
8. JURISDICTION. The parties hereto agree that any suit, action, or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District
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Court for the Central District of California or any court of the State of
California sitting in Los Angeles County, California, and each of the parties
hereby irrevocably consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action, or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of venue of any such suit,
action, or proceeding in such court or that any such suit, action, or proceeding
which is brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Debtor, the Secured Party and the Deposit Bank have
caused this Agreement to be duly executed and delivered as of the date first
above written.
Interplay Entertainment Corp.
as Debtor
By:
----------------------------------
Name:
Title:
Address for notices:
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Warner Bros., a division of Time Warner
Entertainment Company, L.P.,
as Secured Party
By:
----------------------------------
Name:
Title:
Address for notices:
[NAME]
as Deposit Bank
By:
----------------------------------
Name:
Title:
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