EXHIBIT 10.2
XXXXX INTERACTIVE SA
c/x Xxxxx Software Corporation
00000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
March 18, 1999
Universal Studios, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Interplay Entertainment Corp.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
This letter agreement (this "Agreement") sets forth the terms of a
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prospective transaction (the "Option Transaction") between Universal Studios,
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Inc. ("Universal") and the undersigned ("Xxxxx") with respect to the purchase by
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Xxxxx or its nominee from Universal of all of the common stock, par value $.001
per share (the "Common Stock") of Interplay Entertainment Corp. ("Interplay")
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held by Universal, comprised of 4,658,216 shares of Common Stock (the "Option
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Stock"). Xxxxx has entered into a Stock Purchase Agreement with Interplay dated
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March 18, 1999 (the "Stock Purchase Agreement"), whereby Xxxxx has agreed to
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purchase up to 5,000,000 shares of Common Stock (the "New Shares") from
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Interplay. As a condition to the closing of the transactions contemplated by
the Stock Purchase Agreement (the "Interplay Closing"), Xxxxx requires that
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Universal and Interplay countersign this Agreement where indicated below
evidencing the mutual agreement of Universal and Xxxxx regarding the Option
Transaction, and certain waivers by Interplay.
1. Grant of Option.
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(a) Upon the Interplay Closing and for a period of one hundred
eighty (180) days after the Interplay Closing (the "Option Period"), Xxxxx shall
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have the unconditional right and option (the "Option") to purchase all of the
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Option Stock. The exercise price per share of the Option Stock (the "Option
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Price") shall be equal to the higher of (i) the average of the closing price of
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the Common Stock as reported on the
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 2
NASDAQ-NMS for the ten (10) trading days preceding the date of the first public
announcement of the Interplay Closing or (ii) if during the Option Period, Xxxxx
or an affiliate of Xxxxx initiates a tender offer for the Common Stock or
otherwise executes an agreement for the merger, consolidation or acquisition of
all or substantially all of the issued and outstanding shares of Common Stock,
or all or substantially all of the assets of Interplay ("Merger Agreement"), the
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price paid to the Company's public shareholders pursuant to such tender offer or
Merger Agreement. If the Option Closing takes place at the price set forth in
clause (i) above and a tender offer or Merger Agreement is subsequently made or
executed during the Option Period, the difference between the price paid
pursuant to clause (i) above and the price paid pursuant to the tender offer or
Merger Agreement, if higher, shall be promptly paid by Xxxxx to Universal.
(b) In consideration of Universal's grant of the Option, Xxxxx
hereby agrees to pay Universal $500,000 (the "Option Payment"), payable the date
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of the Interplay Closing, by wire transfer to an account specified by Universal.
The Option Payment shall be credited against the Option Price in the event Xxxxx
exercises the Option. In the event Xxxxx does not exercise the Option, the
Option Payment shall be retained by Universal.
2. Exercise of Option.
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(a) Option Closing. The Option shall be exercisable at any time
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during the Option Period. The Option shall be exercised by Xxxxx' giving
written notice (the "Option Exercise Notice") signed by an officer of Xxxxx to
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Universal. Upon delivery of the Option Exercise Notice, upon the terms and
subject to the conditions contained herein (including without limitation Section
4 hereof), Xxxxx shall become obligated to purchase from Universal, and
Universal shall become obligated to sell to Xxxxx, the Option Stock for cash at
the Option Price at the Option Closing. The Option Price (net of the Option
Payment) shall be paid by wire transfer to an account specified in writing by
Universal, at a closing (the "Option Closing") on the date (the "Option Closing
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Date") specified in the Option Exercise Notice (which date shall be within the
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Option Period and no later than five (5) days after the date of the Option
Exercise Notice), or such later date as may be required to comply with the HSR
Act (as defined below), but in no event shall the Option Closing occur after
December 31, 1999. In the event that the Option has been exercised, but the
Option Closing has not occurred on or before the Option Period because the
condition set forth in Section 2(c) hereof has not been satisfied then, upon the
expiration of the Option Period, Xxxxx shall deposit with an escrow agent the
Option Price (net of the Option Payment) to be held in an escrow account until
the
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 3
earlier of (i) the satisfaction of the condition set forth in Section 2(c)
hereof and (ii) December 31, 1999, pursuant to written escrow instructions
mutually agreed upon by Xxxxx and Universal.
(b) Limited Waiver of Section 2.4. Universal hereby agrees
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that, notwithstanding the other provisions of Section 2.4 of the Shareholders'
Agreement (defined below), upon its receipt of the Option Exercise Notice, it
shall be obligated to sell to Xxxxx the Option Stock at any time after Xxxxx'
exercise of the Option. Interplay and Universal hereby waive any notice
provisions in the Shareholders' Agreement which would otherwise preclude the
immediate exercise by Xxxxx of the Option at any time during the Option Period.
(c) Xxxx-Xxxxx-Xxxxxx Compliance. As a condition to the
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exercise of the Option, any applicable waiting period under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall
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have expired or been terminated. To the extent either Universal or Xxxxx is
required in connection with the transactions contemplated hereby to file a
notification and report form in compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, or the rules and regulations promulgated
thereunder, each party agrees to fully cooperate with such other party to enable
such other party to promptly make such filing and to respond to any requests for
additional information in connection therewith.
(d) Additional Consideration. In the event that, on or before
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December 31, 1999, Xxxxx xxxxx all of the New Shares it acquires at the
Interplay Closing and all the Option Stock it then holds (collectively, the
"Block") in a single transaction or series of related transactions to a
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purchaser (or purchasers who are affiliated with one another) who is
unaffiliated with Xxxxx (a "Block Sale"), whether or not in connection with a
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sale of Interplay, then, within five business days of the closing of such
transaction, Xxxxx will remit to Universal, for each share of Option Stock
included in the Block, as additional purchase price for the Option Stock, an
amount equal to twenty-five percent (25%) of the excess, if any, of the price
per share received by Xxxxx in the Block Sale over the Option Price. Such
additional payment to Universal shall only be due, if at all, for a Block Sale,
and shall not apply to any other disposition of the Option Stock, including
ordinary public sales or private re-sales to multiple unaffiliated purchasers.
3. Restrictions on Transfer During Option Period. During the Option
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Period, Universal covenants and agrees that it shall not sell, assign, pledge,
mortgage or otherwise dispose of or transfer any shares of the Option Stock, or
any other securities of
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 4
Interplay, whether now owned or hereafter acquired, or agree to do any of the
foregoing, except to Xxxxx.
4. Concurrent Transactions. Prior to the execution of this
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Agreement:
(a) The Board of Directors of Interplay shall have approved this
Agreement and the Stock Purchase Agreement and the transactions contemplated
hereby and thereby.
(b) Xxxxx Xxxxx shall have waived in writing his right of first
refusal and other rights under Section 2.4 of the Shareholders Agreement with
respect to this Agreement, and the transactions contemplated hereby.
5. Representations and Warranties of Universal. Universal
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represents and warrants to, and covenants and agrees with, Xxxxx as follows:
(a) Universal has all requisite power and authority to execute,
deliver and perform this Agreement, and all corporate acts and proceedings
required for the authorization, execution and delivery of this Agreement and the
performance of this Agreement have been lawfully and validly taken or will have
been so taken prior to the Option Closing.
(b) This Agreement constitutes the legal, valid and binding
obligation of Universal and is enforceable against Universal in accordance with
its terms, except as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally.
(c) Universal has good and marketable title to all of the Option
Stock, free and clear of any lien or restriction on transfer (except for the
Option), and upon the payment by Xxxxx to Universal of the Option Price as
contemplated hereby, Xxxxx will acquire good and marketable title to the Option
Stock, free and clear of all liens and encumbrances.
(d) Universal has been advised that, to the extent the Option is
exercised by Xxxxx, Xxxxx has granted to Interplay an option to acquire from
Xxxxx up to one-half (1/2) of the Option Stock for a price per share equal to
the Option Price.
(e) Universal acknowledges and agrees that upon the
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 5
consummation of the Option Closing, all of its rights under the Shareholders'
Agreement shall be terminated except as provided in Section 6.2 of the
Shareholders' Agreement with respect to indemnification by Interplay of
directors and officers of Interplay.
6. Representations and Warranties of Xxxxx. Xxxxx represents and
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warrants to, and covenants and agrees with, Universal as follows:
(a) Xxxxx has all requisite power and authority to execute,
deliver and perform this Agreement, and all corporate acts and proceedings
required for the authorization, execution and delivery of this Agreement and the
performance of this Agreement have been lawfully and validly taken or will have
been so taken prior to the Option Closing.
(b) This Agreement constitutes the legal, valid and binding
obligation of Xxxxx and is enforceable against Xxxxx in accordance with its
terms, except as such enforcement is limited by bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally.
(c) Xxxxx acknowledges that it has conducted and is continuing
to conduct an independent due diligence investigation of Interplay, including
but not limited to an investigation and verification of the financial condition,
results of operation, assets, liabilities, properties, prospects or projected
operations of Interplay. Xxxxx further acknowledges that, in making its
determination to acquire, or exercise, the Option contemplated by this
Agreement, Universal shall not have been deemed to have made to Xxxxx any
representation or warranty other than as expressly made by Universal in Section
5 hereof. Without limiting the generality of the foregoing, Universal makes no
representation or warranty to Xxxxx with respect to the financial condition,
results of operation, assets, liabilities, properties, prospects and projected
operations of Interplay or any other information or documents (financial or
otherwise) made available to Xxxxx or its counsel, accountants or advisers with
respect to Interplay.
(d) (i) Xxxxx is acquiring the Option and the Option Stock for
investment purposes only, for its own account, and not as nominee or agent for
any other person or entity, and not with the view to, or for resale in
connection with, any distribution thereof within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and (ii) Xxxxx is an "accredited
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investor" within the meaning of Regulation D of the Securities and Exchange
Commission under the Securities Act.
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 6
7. Miscellaneous.
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(a) Waivers and Amendments. Any provision of this Agreement may
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be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only by the
written consent of Universal and Xxxxx. Any amendment or waiver effected in
accordance with this Section 7(a) shall be binding upon Universal, Xxxxx and
their respective successors and assigns. No waiver by any party of the breach of
any term or provision contained in this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in the Agreement.
(b) Binding Agreement; Assignment of Rights. No party hereto
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may assign this Agreement or any of its rights hereunder to any third party,
except for transfers to an affiliate of the assigning party. Subject to the
foregoing, this Agreement and the rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding upon, their respective
successors, assigns, estates, heirs and legal representatives.
(c) Notices. All notices, requests, consents and other
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communications required or permitted hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
if to Universal to:
Universal Studios, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
if to Xxxxx to:
Xxxxx Interactive SA
c/x Xxxxx Software Corporation
00000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxx, Chairman and
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 7
Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
Telecopier: (000) 000-0000
or to such other address or telecopier number as such party may specify for the
purpose by notice to the other party or parties to this Agreement, as the case
may be. Any notice, request, consent or other communication hereunder shall be
deemed to have been given and received on the day on which it is delivered (by
any means including personal delivery, overnight air courier, United States
mail) or telecopied (or, if such day is not a business day or if the notice,
request, consent or communication is not telecopied during business hours of the
intended recipient, at the place of receipt, on the next following business
day).
(d) Choice of Law. It is the intention of the parties that the
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internal substantive laws, and not the laws of conflicts, of California should
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties.
(e) Counterparts. This Agreement may be executed in any number
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of counterparts and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
(f) Entire Agreement. This Agreement and any agreement,
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document or instrument referred to herein or therein, constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof, and supersede all other prior agreements or undertakings with respect
thereto, both written and oral.
Universal Studios, Inc.
Interplay Entertainment Corp.
March 18, 1999
Page 8
If the foregoing is acceptable to you, please indicate your acceptance
and approval by signing, or by causing to be signed on your behalf, the enclosed
copy of this Agreement and returning it to the undersigned.
Very truly yours,
XXXXX INTERACTIVE SA, a French
corporation
By: /s/ Herve Caen
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Herve Caen, Chairman and Chief
Executive Officer
ACCEPTED AND AGREED:
UNIVERSAL STUDIOS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Chief Executive Officer
