-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MpwcZbnkyZ+f3SYQUsVsFB0A4vCoDdT5j+b60nmsCp6EzmNS1eRezegr7hPzjdN1 6c31wuemlf2cGvLTUsZ1kQ== 0000898430-99-002206.txt : 19990623 0000898430-99-002206.hdr.sgml : 19990623 ACCESSION NUMBER: 0000898430-99-002206 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990524 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERPLAY ENTERTAINMENT CORP CENTRAL INDEX KEY: 0001057232 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 330102707 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-54323 FILM NUMBER: 99632828 BUSINESS ADDRESS: STREET 1: 16815 VON KARMAN AVE CITY: IRVINE STATE: CA ZIP: 92606 BUSINESS PHONE: 9495536655 MAIL ADDRESS: STREET 1: 16815 VON KARMAN AVE CITY: IRVINE STATE: CA ZIP: 92606 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TITUS INTERACTIVE S A CENTRAL INDEX KEY: 0001082183 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: PARC DE L'ESPLANADE 12 RUE ENRICO FERMN STREET 2: ST THIBAULT DE VIGNES CITY: 77 400 FRANCE MAIL ADDRESS: STREET 1: TITUS SOFTWARE CORP STREET 2: 20432 CORISCO ST CITY: CHATSWORTH STATE: CA ZIP: 91311 SC 13D/A 1 SCHEDULE 13-D AMENDMENT # 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* INTERPLAY ENTERTAINMENT CORP. (Name of Issuer) Common Stock, par value $.001 per share (Title of Class of Securities) 460615107 (CUSIP Number) Titus Interactive SA c/o Titus Software Corporation 20432 Corisco Street Chatsworth, California 91311 Attention: Mr. Herve Caen, President (818) 709-3692 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 12, 1999 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See (S)240.13d-7(d) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act --- but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ----------------------- CUSIP NO. 460615107 - ----------------------- - ------------------------------------------------------------------------------ NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Titus Interactive SA - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 France - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 7,180,016, subject to adjustment; see Item 5 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 0 ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 7,180,016, subject to adjustment; see Item 5 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 0 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 7,180,016, subject to adjustment; see Item 5 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 34.5% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON 14 CO - ------------------------------------------------------------------------------ ITEM 1. SECURITY AND ISSUER. This Schedule 13D relates to the Common Stock, par value $.001 per share (the "Common Stock"), of Interplay Entertainment Corp., a Delaware corporation ------------ (the "Issuer"). The principal executive offices of the Issuer are located at ------ 16815 Von Karman Avenue, Irvine, California 92606. ITEM 2. IDENTITY AND BACKGROUND. This Schedule 13D is filed on behalf of Titus Interactive SA, a French corporation (the "Reporting Person"). The Reporting Person's principal business ---------------- is developing and publishing games for personal computers and video game console systems. The address of the Reporting Person's principal business and principal office is Parc de L'Esplanade, 12 rue Enrico Fermi, Saint Thibault des Vignes 77462 France. The names and business addresses of each director and executive officer of the Reporting Person is set forth below. The business address of each of the individuals named below is Parc de L'Esplanade, 12 rue Enrico Fermi, Saint Thibault des Vignes 77462 France. Each of the individuals named below is a French citizen. Name Title - ---- ----- Herve Caen President and Chairman of the Board of Directors Eric Caen Vice President and Director Michel Henri Vulpillat Director Andree Caen Director Leon Aaron Ben Yaya Director The principal occupation or employment of each of the aforementioned persons, except for Michel Henri Vulpillat, is his or her position of director and/or executive officer of the Reporting Person, as described above. Michel Henri Vulpillat's principal occupation or employment is serving as the sole owner and President of Edge Consulting, a company whose principal business is general business consulting and whose address is 27846 Palos Verdes Drive East, Rancho Palos Verdes, California 90275. During the last five years, neither the Reporting Person nor, to the best knowledge of the Reporting Person, any of the executive officers or directors of the Reporting Person has been convicted in a criminal proceeding, nor were any of the foregoing a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source of the consideration for the consummated purchases reported hereon was the working capital of the Reporting Person. The amount of funds used or to be used by the Reporting Person is described in Item 4. ITEM 4. PURPOSE OF THE TRANSACTION. The Reporting Person has acquired the shares of Common Stock of the Issuer for investment purposes and for the purposes described below. On February 24, 1999, the Reporting Person acquired 21,800 shares of Common Stock through open-market purchases on NASDAQ-NMS. The price per share for such shares was equal to $2.006. On March 18, 1999, the Reporting Person consummated the transactions contemplated by the Stock Purchase Agreement, dated March 18, 1999, by and among the Issuer, the Reporting Person and Brian Fargo ("Fargo"), an individual, and ----- the Chief Executive Officer and Chairman of the Board of the Issuer. Such Stock Purchase Agreement, as amended by the Letter Agreement (as defined below), shall be referred to herein as the "Purchase Agreement." Pursuant to the Purchase ------------------ Agreement, the Reporting Person agreed to purchase up to 5,000,000 shares of Common Stock. A total of 2,500,000 shares of Common Stock were received by the Reporting Person at the closing under the Purchase Agreement on March 18, 1999. The aggregate purchase price paid to the Issuer consisted of a cash payment of $10,000,000. Up to an additional 2,500,000 shares of Common Stock may be acquired by the Reporting Person pursuant to the Purchase Agreement without additional payment, pursuant to an adjustment mechanism described in Item 5. As a condition to the closing of the transactions contemplated by the Purchase Agreement, the Reporting Person entered into an agreement with Universal Studios, Inc. ("Universal") and the Issuer, dated March 18, 1999, --------- giving the Reporting Person the option (the "Option") to purchase all (but not ------ less than all) shares of Common Stock held by Universal at a price per share equal to the higher of (i) the average of the closing price of the Common Stock as reported on the NASDAQ-NMS for the ten (10) trading days preceding the date of the first public announcement of the closing of the purchase of the Common Stock by the Reporting Person pursuant to the Purchase Agreement (equal to $2.43 per share) or (ii) if during the term of the Option, the Reporting Person or an affiliate of the Reporting Person 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 the Issuer ("Merger ------ Agreement"), the price paid to the Issuer's public shareholders pursuant to such - --------- tender offer or Merger Agreement. On March 18, 1999, in consideration of Universal's grant of the Option, the Reporting Person paid Universal $500,000 cash, which would be applied to the exercise price in the event the Reporting Person exercised the Option. The Option shall be exercisable at any time between the closing and the date which is 180 days thereafter. At the closing, Universal holds 4,658,216 shares of Common Stock. Pursuant to Section 13.1 of the Purchase Agreement, during the Restricted Period (defined below), the Reporting Person has the right of first refusal to purchase all (or part) of the equity securities that the Issuer may propose to sell and issue from time to time, other than (i) any shares of Common Stock issued in accordance with the stock option plans and warrants currently reserved for issuance to employees, directors and advisors of the Issuer, (ii) shares of Common Stock issued as consideration to third parties for product development services or publishing or distribution rights, not to exceed 500,000 shares, (iii) shares of Common Stock issued in connection with any stock split, stock dividend or reverse stock split, and (iv) shares of Common Stock issued in connection with acquisitions of other entities by way of merger, share exchange, sale of assets or otherwise. Pursuant to Section 4.4 of the Purchase Agreement, each of the Issuer and the Reporting Person have agreed that, except as otherwise provided in the or contemplated by the Purchase Agreement, including the exercise of the Option as described above, between March 18, 1999 and December 31, 1999, neither party, nor any of its majority-owned subsidiaries will, without the prior written consent of the other party: (i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect rights to acquire any voting securities of the other party or any subsidiary thereof, or of any successor to or person or entity in control of the other party, or any assets of the other party or any subsidiary or division thereof or of any such successor or controlling person or entity; (ii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are used in the rules of the Commission) to vote, or seek to advise or influence any person or entity with respect to the voting of, any voting securities of the other party; or (iii) make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any merger, business combination, recapitalization, restructuring, liquidation or other extraordinary transaction involving the other party or its securities or assets; provided, however, the foregoing restrictions shall not -------- ------- preclude the Reporting Person from (A) acquiring the shares of Common Stock contemplated by the Purchase Agreement or the Option, (B) pursuing and consummating a Permitted Transaction (as defined below), (C) filing a Schedule 13D in connection with the transactions contemplated by the Purchase Agreement, (D) voting its shares of Common Stock within its discretion on any matter submitted for a vote or consent of the Issuer's stockholders, or (E) taking any other action contemplated by the Purchase Agreement; provided, further, that the -------- ------- restrictions on the Reporting Person in Section 4.4 shall lapse automatically to the extent any person other than the Reporting Person takes any action with respect to the matters described in clauses (ii) and (iii) above. Pursuant to Section 8.16 of the Purchase Agreement the Issuer and Reporting Person will use their respective commercially reasonable efforts to effect a transaction approved by the Issuer's board of directors (including Fargo unless he abstains, in which case such abstention shall be deemed an approval) in which the Reporting Person and the Issuer would merge or effect another business combination involving both corporations (a "Permitted --------- Transaction"). - ----------- Pursuant to Section 8.17 of the Purchase Agreement, if a Permitted Transaction is not consummated prior to the earlier to occur of (i) August 31, 1999, and (ii) the consummation of a Permitted Transaction or a definitive agreement with respect to a Permitted Transaction (the "Restricted Period"), ----------------- and the Issuer enters into a transaction for the acquisition of the Issuer by merger or otherwise on or prior to September 30, 1999, then the Issuer shall pay to the Reporting Person, upon consummation of such transaction, in immediately available funds a breakup fee in an amount equal to three percent (3%) of the Enterprise Value of all such transactions. "Enterprise Value" for any transaction shall mean the sum of (i) all consideration received or deemed received by the Issuer or the selling shareholder or shareholders of the Issuer in connection with such transaction, including without limitation all consideration for covenants not to compete, employment agreements, and consulting agreements, plus (ii) the principal amount of all indebtedness for borrowed money outstanding as of the closing of such transaction. Pursuant to Section 8.6 of the Purchase Agreement, during the Restricted Period, the Reporting Person has the right to cause up to two officers or other representatives of the Reporting Person (the "Designees") to attend as observers --------- all meetings of the Issuer's board of directors and all meetings of committees of the Issuer's board. The Reporting Person and the Designees shall also receive during the Restricted Period copies of all minutes of board and committee meetings and other proceedings, all board and other committee actions by written consents without a meeting, and all minutes and written consents relating to action taken by the shareholders of the Issuer. At any time during the Restricted Period at the Reporting Person's election, the Issuer shall use its best efforts to cause one of the Designees to be elected to the Issuer's board. In such event, Fargo has agreed to vote all of shares of Common Stock owned by him in favor of the election of such Designee to the Issuer's board. Pursuant to Section 8.14 of the Purchase Agreement, during the Restricted Period, the Issuer will not, directly or indirectly, through any officer, director, employee, agent, 5% stockholder, partner or otherwise, solicit or initiate, or participate in discussions or negotiations with, or encourage the submission of bids, offers or proposals by (or commence negotiations with or provide any information to), any person or entity with respect to an acquisition of the Issuer, its business or assets, or any interest therein, other than the Reporting Person. Notwithstanding the foregoing, the Issuer may entertain a written unsolicited bid or proposal from, and provide non-public information to, any party who delivers such a written bid or proposal with respect to an acquisition of the Issuer, its business or assets, but only if and so long as the Issuer's board of directors determines in good faith by a majority vote (with the written concurring and concurrent advice from outside legal counsel) that failing to entertain such written bid or proposal would constitute a breach of the fiduciary duties of the Issuer's board of directors under applicable law. Furthermore, pursuant to Section 8.15 of the Purchase Agreement, during the Restricted Period, Fargo will not sell, assign, pledge, mortgage or otherwise dispose of or transfer his Common Stock, or any other securities of the Issuer, whether now owned or hereafter acquired, or agree to do any of the foregoing, except to the Reporting Person. On May 12, 1999, the Reporting Person, the Issuer and Fargo entered into a Letter of Intent (the "Letter Agreement"). The Letter Agreement is non-binding, ---------------- except with respect to certain amendments to the Purchase Agreement and the payment by the Reporting Person of the Deposit in exchange for the Issuer's issuance of the Note (each as defined below). Pursuant to Section 1 of the Letter Agreement, the Issuer and the Reporting Person agreed that the Issuer and the Reporting Person would enter into an agreement whereby the Issuer would issue 6,250,000 shares of Common Stock to the Reporting Person at a price of $4.00 per share, for aggregate consideration of $25,000,000 (the "Additional Purchase"). Such agreement would be on ------------------- substantially the same terms and conditions as the Purchase Agreement. Pursuant to Section 3 of the Letter Agreement, the Reporting Person and Fargo agreed that Fargo would enter into an agreement whereby Fargo would exchange 2,000,000 shares of Common Stock owned by him for shares of the Reporting Person's common stock (the "Exchanged Shares") at an exchange rate ---------------- determined by dividing $10,000,000 (based upon a per share price for Fargo's shares of Common Stock of $5.00) by the average of the closing price per share of the Reporting Person's common stock for the ten (10) trading days ended the date before the date hereof. Pursuant to Section 4 of the Letter Agreement, unless otherwise mutually agreed by the Issuer, Fargo and the Reporting Person, Fargo would be the Chief Executive Officer of the Issuer, and Herve Caen would be the President of the Issuer. Prior to the closing of the transactions contemplated by the Letter Agreement (the "Additional Closing"), the parties would agree on the relative ------------------ roles and duties of Fargo and Herve Caen, it being understood and agreed that certain significant operating decisions would require the joint approval of Fargo and Herve Caen. Pursuant to Section 5 of the Letter Agreement, the Issuer, the Reporting Person and Fargo would enter into a Voting Agreement whereby after the Additional Closing, the Reporting Person and Fargo would each vote their shares to elect to the Issuer's board of directors (a) three (3) individuals nominated by Fargo, (b) three (3) individuals nominated by the Reporting Person and (c) two (2) individuals not affiliated with either the Issuer or the Reporting Person who are mutually agreed upon by the Issuer and the Reporting Person. On May 12, 1999, pursuant to Section 9 of the Letter Agreement, the Issuer issued to the Reporting Person a Convertible Promissory Note (the "Note") in the ---- principal amount of $5,000,000 (the "Deposit"). Unless earlier accelerated or ------- converted in accordance with the terms of the Note, the Deposit, along with interest of six percent (6%) per annum from the date of issuance, shall be due and payable in full on the earlier of (a) August 31, 1999 or (b) the date upon which the Issuer and the Reporting Person mutually agree not to consummate the transactions contemplated by the Letter Agreement (in any case, the "Maturity -------- Date"). The Deposit shall be used by the Issuer only for the purposes permitted - ---- under the Purchase Agreement. In the event the transactions contemplated by the Letter Agreement are not consummated on or before August 31, 1999 for any reason, then the Deposit, together with accrued interest, shall be refunded by the Issuer to the Reporting Person in full or, at the election of the Reporting Person, on or after the Maturity Date, may be converted into shares of Common Stock (the "Conversion Stock") at a price per share based upon the average of ---------------- the closing price per share of the Issuer's Common Stock for the ten (10) trading days immediately preceding the effective date of registration of the Common Stock in accordance with the terms of the Purchase Agreement. In the event the transactions contemplated by the Letter Agreement are consummated on or before August 31, 1999, the Deposit, without interest, shall be credited against the purchase price paid by the Reporting Person for the Additional Purchase. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Including 4,658,216 shares of Common Stock subject to the Option, the Reporting Person currently beneficially owns up to 7,180,016 shares of Common Stock, or up to approximately 34.5% of the shares of Common Stock outstanding (based upon 20,808,861 shares of Common Stock issued and outstanding as of May 7, 1999). The Reporting Person may be entitled to up to an additional 2,500,000 shares of Common Stock (the "Additional Shares") for no additional ----------------- payment, pursuant to an adjustment mechanism for the price per share of the Common Stock acquired in the Purchase Agreement, as set forth in Sections 3.3 through 3.5 of the Purchase Agreement. The Reporting Person may be entitled to additional shares of Common Stock, if and when the Note is converted into Conversion Stock in accordance with its terms. The Additional Shares, if any, would be issued as follows: on June 30, 1999 (the "Interim Valuation Date"), the Reporting Person would receive an additional ---------------------- number of shares of Common Stock (the "Interim Additional Shares") equal to the ------------------------- difference, if any, between (i) the quotient of (a) $10,000,000 divided by (b) the price per share on the Interim Valuation Date, less (ii) the 2,500,000 shares of Common Stock issued at the closing (the "Initial Shares"); and on -------------- August 20, 1999 (the "Final Valuation Date"), the Reporting Person would receive -------------------- shares of Common Stock (the "Final Additional Shares") equal to the difference, ----------------------- if any, between (i) the quotient of (a) $10,000,000 divided by (b) the price per share on the Final Valuation Date, less (ii) the Initial Shares. If the number of Interim Additional Shares is less than the number of Final Additional Shares, the Reporting Person shall receive the difference between the Final Additional Shares and the Interim Additional Shares; if the number of Interim Additional Shares is greater than the number of Final Additional Shares, the Reporting Person shall promptly return to the Issuer the Interim Additional Shares in exchange for the Final Additional Shares. Notwithstanding the foregoing, in no event shall the issuance of the Interim Additional Shares or the Final Additional Shares result in the Reporting Person purchasing a number of shares (including the Initial Shares) from the Issuer in excess of 19.99% of the issued and outstanding shares of Common Stock immediately prior to the issuance of the Initial Shares, unless such issuance has been approved by vote of the Issuer's stockholders in accordance with Delaware law prior to the date of such issuance. In addition, each of Fargo and Universal have granted an irrevocable proxy to the Reporting Person with respect to voting in favor of or consenting to the issuance of 20% or more of the issued and outstanding shares of Common Stock to the Reporting Person pursuant to the Purchase Agreement. In each of the calculations of the Interim Additional Shares and the Final Additional Shares, the number of shares to be issued to the Reporting Person is based upon the average closing price of the Common Stock on NASDAQ-NMS for the 10 trading days ending the day before the applicable valuation date; provided, that in the event the price per share of Common Stock as so calculated would be less than $2.00 per share, the price per share in any event shall be deemed to be $2.00; and in the event the price per share of Common Stock as so calculated would be more than $4.00 per share, the price per share in any event shall be deemed to be $4.00. On February 24, 1999, the Reporting Person acquired 21,800 shares of Common Stock through open-market purchases on NASDAQ-NMS. The price per share for such shares was equal to $2.006. Including 4,658,216 shares of Common Stock subject to the Option, the Reporting Person currently has sole power to vote or to direct the vote, and sole power to dispose or to direct the disposition of, 7,180,016 shares of Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The responses to Items 4 and 5 are incorporated herein by this reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description of Exhibit - ------- ---------------------- 99.1 Stock Purchase Agreement dated March 18, 1999 by and among the Issuer, the Reporting Person and Fargo. (1) 99.2 Letter Agreement dated March 18, 1999 by and among the Issuer, the Reporting Person and Universal. (1) 99.3 Irrevocable Proxy dated March 18, 1999 by Fargo to the Reporting Person. (1) 99.4 Irrevocable Proxy dated March 18, 1999 by Universal to the Reporting Person. (1) 99.5 Letter of Intent dated May 12, 1999 by and among the Issuer, the Reporting Person and Fargo. 99.6 Convertible Promissory Note dated May 12, 1999 issued by Fargo to the Reporting Person.
(1) Previously filed as an exhibit to the Schedule 13D filed on March 29, 1999 (File No. 000-24363), which exhibit is incorporated herein by this reference. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 24, 1999 TITUS INTERACTIVE SA, a French corporation By: /s/Herve Caen ------------------------------------------- Herve Caen, President EX-99.5 2 LETTER OF INTENT EXHIBIT 99.5 May 12, 1999 Mr. Herve Caen Chairman and Chief Executive Officer Titus Interactive SA c/o Titus Software Corporation 20432 Corisco Street Chatsworth, CA 91311 Mr. Brian Fargo 16815 Von Karman Ave. Irvine, CA 92606 Gentlemen: The purpose of this letter (the "Letter of Intent") is to express the intentions and, in certain respects, agreement of Interplay Entertainment Corp., a Delaware corporation ("Interplay"), Titus Interactive SA, a French corporation ("Titus"), and Brian Fargo, an individual, with respect to the transactions described herein. The transactions include the following key elements: 1. Sale of Stock. Interplay and Titus would enter into an agreement ------------- whereby Interplay would issue 6,250,000 shares of Common Stock to Titus at a price of $4.00 per share, for aggregate consideration of $25,000,000 (the "Additional Purchase"). Such agreement would be on substantially the same terms and conditions as the Initial Stock Purchase Agreement (as defined below). 2. Amendment of Stock Purchase Agreement. The Stock Purchase Agreement ------------------------------------- dated March 18, 1999 and entered into by and among Interplay, Titus and Brian Fargo (the "Initial Stock Purchase Agreement") is hereby amended or will be amended as follows: a. Effective upon the Additional Closing (as defined below), Section 10.3 of the Initial Stock Purchase Agreement is deleted in its entirety, and Interplay would have no further rights with respect to the shares referred to therein. b. Effective upon the execution of this Letter of Intent, Section 8.14 of the Initial Stock Purchase Agreement is hereby amended by replacing "(i) ninety (90) days from the Closing Date hereof" with "(i) August 31, 1999." c. Effective upon the execution of this Letter of Intent, Section 8.15 of the Initial Stock Purchase Agreement is hereby amended by replacing "During the Restricted Period" with "On or before August 31, 1999." d. Effective upon the execution of this Letter of Intent, Section 11.1 of the Initial Stock Purchase Agreement is hereby amended by including the Conversion Stock (as defined below) in the definition of the term "Registrable Stock." For all purposes of the Initial Stock Purchase Agreement, the term "Registrable Stock" shall include the Conversion Stock. 3. Exchange of Shares with Brian Fargo. Titus and Brian Fargo would ----------------------------------- enter into an agreement whereby Mr. Fargo will exchange 2,000,000 shares of Interplay Common Stock owned by him for shares of Titus Common Stock (the "Exchanged Shares") at an exchange rate determined by dividing Ten Million Dollars ($10,000,000) (based upon a per share price for Fargo's shares of Interplay Common Stock of $5.00) by the average of the closing price per share of Titus Common Stock for the ten (10) trading days ended the date before the date hereof. Under the terms of such Agreement, (a) Mr. Fargo would agree not to sell, transfer or otherwise dispose of, or pledge, collateralize or hypothecate any of the Exchanged Shares, or enter into any contract, option, or other arrangement with respect to any of the foregoing (each, a "Transfer") for a period of two hundred seventy (270) days following the closing date of the transaction (the "Lock-Up Period"), (b) following the expiration of the Lock-Up Period, Mr. Fargo would have the right, from time to time, to elect, by written notice to Titus, to require Titus to arrange for the sale of all or any portion of such Exchanged Shares on Mr. Fargo's behalf (which sale could be to Titus, or to Herve Caen or Eric Caen if Titus so elects). After the expiration of the Lock-Up Period, each of Titus, Herve Caen and Eric Caen would have a right of first refusal to purchase the Exchanged Shares in the event that Mr. Fargo desires to Transfer any or all of such Exchanged Shares. If Titus is unable to arrange a sale of such Exchanged Shares within sixty (60) days following receipt of such notice, then Titus shall, at Fargo's option, either (x) repurchase such Exchanged Shares for cash at a purchase price equal to the average closing trading price per share of Titus Common Stock for the ten (10) trading days immediately preceding the date of such notice or (y) exchange such Exchanged Shares for shares of Interplay Common Stock at an exchange rate based upon the average closing trading price per share of Interplay Common Stock and Titus Common Stock for the ten (10) trading days immediately preceding the date of such notice. 4. Management of Interplay. Unless otherwise mutually agreed by ----------------------- Interplay, Mr. Fargo and Titus, Mr. Fargo would be the Chief Executive Officer of Interplay, and Herve Caen would be the President of Interplay. Prior to the Additional Closing (as defined below), the parties would agree on the relative roles and duties of Messrs. Fargo and Caen, it being understood and agreed that certain significant operating decisions would require the joint approval of Fargo and Caen. In addition, immediately after the closing of the transactions contemplated by this Letter of Intent (the "Additional Closing"), the parties would agree on an operating plan (the "Plan") for Interplay for the twelve (12) months following the Additional Closing, and Messrs. Fargo and Caen would operate Interplay in accordance with the Plan, except as may otherwise be approved by Interplay's Board of Directors. 5. Voting Agreement. Interplay, Titus and Mr. Fargo would enter into a ---------------- Voting Agreement whereby after the Additional Closing, Titus and Mr. Fargo would each vote their shares to elect to Interplay's Board of Directors (a) three (3) individuals nominated by Mr. Fargo, 2 (b) three (3) individuals nominated by Titus and (c) two (2) individuals not affiliated with either Interplay or Titus who are mutually agreed upon by Interplay and Titus. 6. Additional Financing. Titus would use its commercially reasonable -------------------- efforts to raise additional debt or equity financing in the European capital markets following the Additional Closing on terms and conditions reasonably acceptable to Titus (the "Titus Financing"). Thereafter, Titus would provide Interplay with an unsecured line of credit (the "Line of Credit") for a term of one year in an aggregate principal amount equal to the lesser of (a) thirty percent (30%) of the Titus Financing or (b) Fifteen Million Dollars ($15,000,000). The interest rate payable and other material terms with respect to such Line of Credit would be substantially the same as the Titus Financing; provided, however, that if the Titus Financing is solely in the form of equity, the Line of Credit would have an interest rate and other material terms substantially the same as the terms of any intercompany indebtedness between Titus and Titus Software Corporation. 7. Distribution Agreement. Interplay and Titus would enter into ---------------------- negotiations for an agreement whereby Titus would grant to Interplay (or a newly formed entity jointly owned by Titus and Interplay) exclusive rights to distribute all of its products related to console gaming systems in North America in exchange for a distribution fee to be mutually agreed upon by Titus and Interplay. The parties anticipate that such an agreement would be reached on or before the Additional Closing. 8. Representations and Warranties of Interplay. Interplay represents and ------------------------------------------- warrants to, and covenants and agrees with, Titus as follows: a. Interplay has all requisite corporate power and authority to execute, deliver and perform this Letter of Intent and the Note (as defined below), and all corporate acts and proceedings required for the authorization, execution and delivery of this Letter of Intent and the Note and the performance of this Letter of Intent and the Note have been lawfully and validly taken. b. To the extent provided in Section 9.e. hereof, this Letter of Intent and the Note constitute the legal, valid and binding obligations of Interplay and are enforceable against Interplay in accordance with their respective terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally. c. This Letter of Intent and the Note, and the terms hereof and thereof, have been approved by Greyrock Business Credit, and the execution, delivery and performance of this Letter of Intent and the Note will not violate or be in conflict with any other material agreement to which Interplay is a party. d. Since the date of the Initial Stock Purchase Agreement, Interplay has not experienced any event that would have a Material Adverse Effect (as defined in the Initial Stock Purchase Agreement) on Interplay. 3 9. General. ------- a. The transactions described in this Letter of Intent will be accomplished, where applicable, pursuant to the terms of definitive agreements to be negotiated by the parties thereto. Subject to Section 1 hereof, such agreements would be in form and content mutually satisfactory to the parties and will include such terms and conditions as are customary in transactions of that type. b. Titus shall pay Interplay the amount of $5,000,000 concurrently with the execution of this Letter of Intent (the "Deposit"). Simultaneously therewith, Interplay shall execute the Convertible Promissory Note attached hereto as Exhibit A (the "Note"). The Deposit shall be used by Interplay only for the purposes permitted under the Initial Stock Purchase Agreement. In the event the transactions contemplated by this Letter of Intent are not consummated on or before August 31, 1999 for any reason, then the Deposit, together with interest at the rate of six percent (6%) from the date hereof until paid, shall be refunded by Interplay to Titus in full or, at the election of Titus, may be converted into shares of Common Stock of Interplay (the "Conversion Stock") at a price per share calculated in accordance with the terms of the Note. In the event the transactions contemplated by this Letter of Intent are consummated on or before August 31, 1999, the Deposit, without interest, shall be credited against the purchase price paid by Titus for the Additional Purchase. c. The parties to any agreements proposed to be entered into pursuant to the transactions described herein will negotiate in good faith and will use their commercially reasonable efforts to execute such agreements so as to enable these transactions to close no later than August 31, 1999. d. Interplay and Titus acknowledge that this Letter of Intent is covered by the terms of those certain Nondisclosure Agreements dated November 10, 1998, and March 3, 1999, between Interplay and Titus. e. Except as provided in Sections 2.b., 2.c., 2.d., 8, 9.b., 9.d., 9.f. and 9.g. hereof, this Letter of Intent is not intended to be a legally binding obligation of Interplay, Titus and Mr. Fargo. f. Interplay and Titus shall bear their own respective legal, accounting and other expenses in connection with the proposed transaction. g. Any public announcement of the transactions contemplated hereby must be approved in writing as to content and timing in advance by both Interplay and Titus; provided, however, that any party may make any announcement required by law, but only after such party makes a good faith effort to contact the other parties hereto prior to such announcement. 4 If the foregoing correctly reflects your understanding of our mutual intentions (and, as set forth in Section 9.e. hereof, agreements), please so indicate by signing and returning the enclosed copy of this letter. Very truly yours, INTERPLAY ENTERTAINMENT CORP. By: /s/ Brian Fargo --------------------------------- Brian Fargo, Chief Executive Officer and Chairman of the Board ACKNOWLEDGED AND AGREED TO AS OF THE DATE OF THIS LETTER: TITUS INTERACTIVE SA By:/s/ Herve Caen -------------------------------- Herve Caen, Chairman and Chief Executive Officer /s/ Brian Fargo - ----------------------------------- Brian Fargo, individually 5 EX-99.6 3 CONVERTIBLE PROMISSORY NOTE EXHIBIT 99.6 CONVERTIBLE PROMISSORY NOTE $5,000,000.00 May 12, 1999 Irvine, California The undersigned, Interplay Entertainment Corp. (the "Company"), hereby promises to pay to the order of Titus Interactive SA or its assignee (the "Holder") the principal amount of FIVE MILLION DOLLARS ($5,000,000.00) with interest on the unpaid principal balance at the rate of six percent (6.0%) per annum until principal and interest have been paid in full. Such interest shall accrue on the basis of actual days based on a 365-day year. Unless earlier accelerated or converted in accordance with the terms hereof, the entire amount of principal and interest shall be due and payable in full on the earlier of (a) August 31, 1999 or (b) the date upon which the Company and Holder mutually agree not to consummate the transactions contemplated by the Letter Agreement (as defined below) (in any case, the "Maturity Date"). Principal and interest shall be paid in lawful money of the United States. This Note may not be prepaid without the prior written consent of the Holder which may be granted or withheld in Holder's discretion. Each payment made pursuant to this Note shall be credited first on interest then due and the remainder on principal; and interest shall thereupon cease to accrue upon the principal so credited. This Note is issued to the Holder pursuant to that certain Letter of Intent of even date herewith among the Company, the Holder and Brian Fargo (the "Letter Agreement") and is entitled to the benefits thereof. "Event of Default" shall mean the occurrence or existence of any one or more of the following: (i) failure of the Company to make any payment when due of principal or interest on this Note; (ii) if the Company shall become insolvent or file a petition under any chapter of the United Sates Bankruptcy Code or a petition to take advantage of any other bankruptcy or insolvency law; (iii) if a custodian, receiver or trustee of all or any part of the Company's property shall be appointed and not be dismissed within 60 days; (iv) if any assignment for the benefit of the Company's creditors shall be made; (v) if the Company admits in writing its inability to pay its debts generally as they become due; (vi) the Company breaches any covenant contained herein (other than that covered by clause (i) above) or in the Letter Agreement or in any other agreement by which the Company is bound to the Holder, and the Company fails to cure such breach for a period of thirty (30) days after the Company receives notice of such breach from the Holder; (vii) any of the representations or warranties of the Company contained in the Letter Agreement were untrue in any material respect when made; (viii) the acceleration of the indebtedness outstanding pursuant to that certain Loan and Security Agreement dated June 16, 1997 between the Company and Greyrock Business Credit, as amended to date (the "Greyrock Indebtedness"); or (ix) any event which constitutes (or with the giving of notice or lapse of time or both would constitute) a default under any material indebtedness (defined as any indebtedness equal to $100,000 or more) of the Company owed to a bank, commercial lender or other financial institution (other than the Greyrock Indebtedness). Upon the occurrence of any Event of Default, the unpaid principal amount of and accrued interest on this Note shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Company. Principal and interest shall be paid in lawful money of the United States and shall be made to Holder c/o Titus Software Corporation, 20432 Corisco Street, Chatsworth, California 91311, or at such other place as Holder shall have designated to the Company in writing for such purpose. Until this Note has been paid in full, at any time on or after the Maturity Date, the unpaid balance of this Note may be converted, at the option of Holder, in whole or in part, into a number of fully paid and nonassessable shares of the Company's Common Stock (the "Common Stock") which shall equal the quotient of (a) the unpaid balance of this Note which Holder so elects to convert divided by (b) the price per share of Common Stock. The "price per share of Common Stock" shall be the average closing price (appropriately adjusted for stock dividends, stock splits or combinations) of the Common Stock on the NASDAQ National Market System, as reported in The Wall Street Journal or ----------------------- other nationally recognized publication or service that reports such data, for the ten (10) consecutive trading days immediately preceding the effective date of registration of the Common Stock in accordance with the terms of the Initial Stock Purchase Agreement (as defined in the Letter Agreement). The conversion of this Note into Common Stock may be effected at any time on or after the Maturity Date, on any business day prior to payment in full, by the Holder providing the Company with Holder's written irrevocable election to convert (such notice to be effective upon receipt by the Company, including by facsimile, at its principal executive offices), and thereupon the indebtedness owed under this Note which is so converted shall be extinguished. Holder shall be deemed the holder of record of the number of shares of Common Stock into which this Note is so converted as of the effective date of such notice. Promptly after its receipt of such notice, the Company shall notify its transfer agent of such conversion, and cause such transfer agent to issue a stock certificate therefor in the name of Holder as promptly as practicable, and in any event within fifteen (15) business days thereafter. The Company shall at all times reserve and keep available for issuance upon the conversion of the unpaid balance or any portion thereof of this Note such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the conversion in full of the unpaid balance of this Note. The Company agrees to pay all costs, including reasonable attorneys' fees, incurred by the Holder in enforcing payment or conversion hereof, or its other rights hereunder or under the Letter Agreement, and hereby waives to the full extent permitted by law, all rights to plead any statute of limitations as a defense to any action hereunder. -2- The Company will not, by amendment of its certificate of incorporation or through reorganization, consolidation, merger, dissolution, stock split, stock dividend, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Note against impairment. Without limiting the generality of the foregoing, the Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of the unpaid balance of this Note at the time outstanding. In case (1) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the conversion of the unpaid balance of this Note) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or (2) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or (3) of any voluntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to Holder a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the conversion of the unpaid balance of this Note) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be mailed at least thirty (30) days prior to the date therein specified. This Note shall be governed by, and construed and enforced in accordance with, the internal laws (and not the law of conflicts) of the State of California. -3- [CONVERTIBLE PROMISSORY NOTE SIGNATURE PAGE] IN WITNESS WHEREOF, the Company has caused this Note to be executed as of the day and year first written above. INTERPLAY ENTERTAINMENT CORP., a Delaware corporation /s/ Brian Fargo By: _____________________________ Name: Brian Fargo Title:Chief Executive Officer and Chairman of the Board -4- -----END PRIVACY-ENHANCED MESSAGE-----