EXHIBIT 10.2
July 28, 1997
GameTek, Inc.
c/o Northern Blue, L.L.P.
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Re: GameTek, Inc. and Affiliates (collectively,
"GameTek") and Ocean Bank (the "Bank")
Gentlemen:
When countersigned below by an authorized
officer of GameTek and returned to the Bank by telefax by
July 29, 1997, this letter will constitute our agreement
concerning the satisfaction of GameTek's obligations to
the Bank under various loan, security and other
agreements, guaranties, pledge agreements and promissory
notes heretofore executed and delivered among GameTek and
the Bank. This Letter Agreement also implements certain
of the understandings set forth in our letter agreement of
July 25, 1997, a copy of which is attached.
The Bank understands that GameTek is in the
process of concluding the sale of its GameTek (UK) Ltd.
("UK") and Alternative Reality Technologies, Inc. ("ARTS")
subsidiaries and certain other assets to Take Two
Interactive Software, Inc. ("Take Two") pursuant to an
Asset and Stock Purchase Agreement that is expected to
close today. The Bank also understands that it is a
condition precedent to the execution and closing of the
Asset and Stock Purchase Agreement that the stock of UK
and ARTS and the other assets to be sold to Take Two be
free and clear of all liens, claims and encumbrances in
favor of the Bank. Finally, we understand that the Boards
of Directors of GameTek and its affiliates have authorized
GameTek's entry into and performance of this Letter
Agreement.
In consideration of the promises and covenants
contained in this Letter Agreement, and subject to the
receipt by the Bank of Take Two's promissory note to the
order of the Bank (the "Note"), in the form attached
hereto, and 22,257 unregistered shares of the common stock
of Take Two (the "Restricted Stock") promptly following
the closing under the Asset and Stock Purchase Agreement,
the Bank hereby (i) releases its security interest in the
assets and stock to be sold under the Asset and Stock
Purchase Agreement, and (ii) releases GameTek and each of
its affiliates and subsidiaries, including, without
limitation, Xxxxx Resources, Inc. ("BRI") from any and all
claims, liabilities, obligations, agreements and causes of
action of every kind and nature whatsoever which the Bank
has or had at any time prior to the date hereof against
GameTek, its subsidiaries and affiliates and BRI and their
respective shareholders, officers, directors, agents and
employees. The number of shares of Restricted Stock has
been calculated by dividing the average closing price of
Take Two common stock over the period July 21-25, 1997,
into $175,000. Nothing in this Letter Agreement shall be
deemed to affect any of the Bank's rights arising under
this Letter Agreement, the Note, or with respect to the
Restricted Stock. The Bank understands that the Note and
Restricted Stock represent part of the purchase price
under the Asset and Stock Purchase Agreement and that they
are being issued directly to the Bank, rather than to
GameTek and then to the Bank, solely as a ministerial act
and as an accommodation to the parties.
In connection with the transactions contemplated
by this Letter Agreement and to induce Take Two to issue
the Note and the Restricted Stock to the Bank, the Bank
acknowledges that, as of the date hereof, (a) the
Restricted Stock has not been registered under the
Securities Act of 1933, as amended (the "Act"), based upon
an exemption from such registration requirements; (b) the
Restricted Stock to be received is "restricted
securities," as said term is defined in Rule 144 of the
General Rules and Regulations promulgated under the Act;
(c) the Restricted Stock to be received may not be sold or
otherwise transferred unless it has first been registered
under the Act and applicable state securities law or an
exemption from the registration provisions of the Act and
applicable state securities laws as are available with
respect to the proposed sale or transfer; (d) the
certificate evidencing the Restricted Stock will bear a
legend to the effect that the transfer thereof is
restricted; (e) stop transfer instructions will be placed
with the transfer agent for the Restricted Stock and (f)
the Bank is an "accredited investor" as said term is
defined in the General Rules and Regulations promulgated
under the Act.
GameTek hereby agrees that the Bank shall
participate pro rata with GameTek in any piggy-back
registration rights afforded to GameTek under a
Registration Rights Agreement between GameTek and Take Two
or otherwise. To the extent a mechanism for that
participation is not set out in the Registration Rights
Agreement or in this Letter Agreement, GameTek and the
Bank will cooperate with each other, in good faith, to
enable the Bank fully to participate pro rata in any such
piggy-back registration of the Restricted Stock to the
extent the Bank elects to do so.
In the event that Take Two defaults in payment
of its obligations under the Note and the Bank is unable
to collect interest and/or principal payable thereunder
despite its reasonable efforts to do so, BRI will assign
to the Bank the first right of recovery against the assets
of GameTek upon any foreclosure by BRI of its security
interest in the assets of GameTek. From the proceeds of
any such foreclosure and prior to BRI receiving any
payment of any kind from GameTek from such proceeds, the
Bank will be paid the amount of any defaulted amounts of
principal and unpaid interest due under the Note. Upon
such payment to the Bank, the Bank shall assign to BRI its
rights under the Note. In the event that GameTek
liquidates prior to the payment of the final installment
due under the Note, GameTek agrees that it will escrow an
amount of Take Two stock equal to the principal amount due
on the Note as of the date of the liquidation of GameTek
and such escrowed stock, or a portion thereof, shall be
assigned and delivered to the Bank by the escrow agent in
the event that Take Two fails to pay the principal and/or
interest due pursuant to the Note.
The Bank understands that Take Two will close
under the Asset and Stock Purchase Agreement as promptly
as possible following its receipt of a signed copy of this
Letter Agreement and the satisfaction of the other
conditions to closing, in part, in reliance upon the
agreements and representations of the Bank set forth
herein, including, without limitation, the Bank's
agreement to execute and deliver to GameTek (and file with
the appropriate offices of record) UCC-3 Termination
Statements with respect to any Financing Statement filed
by the Bank at any time prior to the date hereof with
respect to the assets of GameTek or any of its
subsidiaries or affiliates and the Bank hereby agrees to
prepare and file such statements with the governmental
filing offices with which the Financing Statements being
terminated thereby were heretofore filed. Such filing
shall be effected within 10 days after the Bank's receipt
of the Note and certificate for the Restricted Stock which
will be sent to the Bank immediately following the closing
under the Asset and Stock Purchase Agreement by Federal
Express for priority next business day delivery. The Bank
will provide GameTek with copies of such Termination
Statements simultaneously with their transmittal to the
governmental filing offices and will deliver to GameTek
all of the original promissory notes and guaranties
heretofore delivered to the Bank by GameTek and its
affiliates within 10 days of date.
Each of us agrees at the request of the other to
take any further steps and to execute any other
instruments as either party may reasonably request to
document, effectuate and carry out each of the
transactions contemplated by this Letter Agreement.
Please confirm GameTek's agreement to the
foregoing by signing and returning to the undersigned by
telefax as soon as possible a duplicate copy of this
Letter Agreement. Each of the signatories hereto hereby
confirms his authority to execute and deliver this Letter
Agreement as the binding obligation of the entity on
behalf of which he signed.
Very truly yours,
OCEAN BANK, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Senior Vice President
Agreed to
GAMETEK, INC. for itself and its
subsidiaries and affiliates referred to herein
By: /s/ Xxxxxx X. Xxxxxxxxx
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Authorized Signer