-----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, MdE77dCpj74GXuU+KeDbHqy5jaghBFM08rFGTSF2j2Nh3uBKB/yibS3jZrJe7Mqd PmgLLtaMuvcVzd0tj/4QsQ== 0001170918-08-000642.txt : 20081119 0001170918-08-000642.hdr.sgml : 20081119 20081119155316 ACCESSION NUMBER: 0001170918-08-000642 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080930 FILED AS OF DATE: 20081119 DATE AS OF CHANGE: 20081119 FILER: 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24363 FILM NUMBER: 081201003 BUSINESS ADDRESS: STREET 1: 100 NORTH CRESCENT DRIVE #324 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3104321958 MAIL ADDRESS: STREET 1: 100 NORTH CRESCENT DRIVE #324 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 10-Q 1 fm10q-093008.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 0-24363 INTERPLAY ENTERTAINMENT CORP. (Exact name of the registrant as specified in its charter) DELAWARE 33-0102707 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 N. CRESCENT DRIVE, BEVERLY HILLS, CALIFORNIA 90210 (Address of principal executive offices) (310) 432-1958 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Smaller reporting company [ ] Indicate by check mark whether the registrant is shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. CLASS ISSUED AND OUTSTANDING AT SEPTEMBER 30, 2008 ----- -------------------------------------------- Common Stock, $0.001 par value 105,855,634 As of September 30, 2008, 105,855,634 shares of Common Stock of the Registrant were issued and outstanding. This includes 4,658,216 shares of Treasury Stock INTERPLAY ENTERTAINMENT CORP. AND SUBSIDIARIES FORM 10-Q SEPTEMBER 30, 2008 TABLE OF CONTENTS -------------- Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007 3 Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2008 and 2007 (unaudited) 4 Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2008 and 2007 (unaudited) 5 Notes to Condensed Consolidated Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk 15 Item 4T. Controls and Procedures 16 PART II. OTHER INFORMATION Item 1. Legal Proceedings 16 Item 3. Default Upon Senior Securities 17 Item 6. Exhibits 17 SIGNATURES 18 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INTERPLAY ENTERTAINMENT CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, ASSETS 2008 2007 ------------- ------------- Current Assets: (unaudited) Cash ...................................... $ 5,000 $ 1,138,000 Trade receivables ......................... 2,000 26,000 Inventories ............................... 1,000 1,000 Deposits .................................. 7,000 4,000 Prepaid expenses .......................... 20,000 10,000 Other receivables ......................... 17,000 13,000 ------------- ------------- Total current assets ................. 52,000 1,192,000 Property and equipment, net .................. 51,000 9,000 ------------- ------------- Total assets ................................. $ 103,000 $ 1,201,000 ============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Account payable ........................... $ 1,013,000 $ 911,000 Accrued royalties ......................... 0 200,000 Deferred income ........................... 796,000 595,000 Note Payable .............................. 0 1,045,000 Note Payable to officer and directors ..... 519,000 729,000 ------------- ------------- Total current liabilities ....... 2,328,000 3,480,000 ------------- ------------- Commitments and contingencies Stockholders' Deficit: Preferred stock, $0.001 par value 5,000,000 shares authorized; no shares issued or outstanding, Common stock, $0.001 par value 300,000,000 shares authorized; 105,855,634 shares issued and outstanding ............... 106,000 104,000 Paid-in capital ........................... 122,247,000 121,976,000 Accumulated deficit ....................... (124,561,000) (124,349,000) Accumulated other comprehensive (loss) .... (17,000) (10,000) Treasury stock of 4,658,216 shares ........ 0 0 ------------- ------------- Total stockholders' deficit .......... (2,225,000) (2,279,000) ------------- ------------- Total liabilities and stockholders' deficit .. $ 103,000 $ 1,201,000 ============= ============= See accompanying notes. 3 INTERPLAY ENTERTAINMENT CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ------------------------------ 2008 2007 2008 2007 ------------- ------------- ------------- ------------- (In thousands, except per share amounts) Revenues ................................... $ 1,083,000 $ 47,000 $ 1,187,000 $ 5,940,000 ------------- ------------- ------------- ------------- Cost of goods sold ......................... -- 15,000 3,000 21,000 ------------- ------------- ------------- ------------- Gross profit ............................ 1,083,000 32,000 1,184,000 5,919,000 Operating expenses: Marketing and sales ..................... -- 55,000 -- 245,000 General and administrative .............. 313,000 266,000 982,000 859,000 Product Development ..................... 90,000 -- 253,000 -- ------------- ------------- ------------- ------------- Total operating expenses ............. 403,000 321,000 1,235,000 1,104,000 ------------- ------------- ------------- ------------- Operating income (loss) .................... 680,000 (289,000) (51,000) 4,815,000 Other income (expense): Interest expense ........................ (7,000) (9,000) (24,000) (50,000) Other (Reversal of certain prior years accruals and accounts payable in 2007) (49,000) 795,000 (137,000) 1,427,000 ------------- ------------- ------------- ------------- Income before benefit for income taxes ..... 624,000 497,000 (212,000) 6,192,000 Income taxes ............................... -- -- -- -- ------------- ------------- ------------- ------------- Net income ................................. $ 624,000 $ 497,000 $ (212,000) $ 6,192,000 ============= ============= ============= ============= Net income (loss) per common share: Basic ............................ $ 0.01 $ 0.01 $ (0.00) $ 0.06 ============= ============= ============= ============= Diluted .......................... $ 0.01 $ 0.00 $ (0.00) $ 0.06 ============= ============= ============= ============= Shares used in calculating net income (loss) per common share: Basic ............................ 101,198,000 99,197,000 101,198,000 99,197,000 ============= ============= ============= ============= Diluted .......................... 101,264,000 102,116,000 101,198,000 102,116,000 ============= ============= ============= =============
See accompanying notes. 4 INTERPLAY ENTERTAINMENT CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
NINE MONTHS ENDED SEPT 30, -------------------------- 2008 2007 ----------- ----------- Cash flows from operating activities: Net (loss) income .................................... $ (212,000) $ 6,192,000 Adjustments to reconcile net (loss) income to cash (used) provided by operating activities: Depreciation and amortization ..................... 6,000 2,000 Additional Paid in capital - Option Expense ....... 273,000 2,000 Reversal of prior years recorded liabilities ...... 0 (1,234,000) Changes in Operating assets and liabilities: Trade receivables, net ............................... 24,000 (1,567,000) Inventories ....................................... 0 0 Deposits .......................................... (3,000) 0 Prepaid expenses .................................. (10,000) 0 Other current assets, net ......................... (4,000) (5,000) Other assets ...................................... 0 10,000 Accounts payable .................................. 107,000 (3,153,000) Accrued royalties ................................. (200,000) 30,000 Note Payable Officer and Directors ................ (210,000) 0 Note Payable ...................................... 0 33,000 Note Payable obligation exchanged for intellectual property .......................... (1,050,000) 0 Advances from distributors ........................ 201,000 (36,000) Accumulated other compensation income ............. (7,000) 83,000 ----------- ----------- Net cash provided by (used in) operating activities (1,085,000) 357,000 Cash Flow from investing activities: Purchase of property and equipment ................... (48,000) 0 ----------- ----------- Net cash used in investing activities ............. (48,000) 0 ----------- ----------- Cash flows from financing activities: Repayment of debt .................................... 0 (389,000) Issuance of stock to reduce debt ..................... 0 0 ----------- ----------- Net cash provided by (used in) financing activities 0 (389,000) ----------- ----------- Effect of exchange rate changes on cash Net increase (decrease) in cash ................... (1,133,000) (32,000) Cash, beginning of period ............................... $ 1,138,000 $ 50,000 ----------- ----------- Cash, end of period ..................................... $ 5,000 $ 18,000 =========== =========== Supplemental cash flow information: Cash paid for: Interest .......................................... $ 0 $ 0 =========== ===========
See accompanying notes. 5 INTERPLAY ENTERTAINMENT CORP. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2008 (Unaudited) NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Interplay Entertainment Corp. (which we refer to as the "Company" in these Notes) and its subsidiaries reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim period in accordance with instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. The balance sheet at December 31, 2007 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 as filed with the U.S. Securities and Exchange Commission ("SEC"). FACTORS AFFECTING FUTURE PERFORMANCE AND GOING CONCERN STATUS The Company's independent public accountant included a "going concern" explanatory paragraph in his audit report on the December 31, 2007 consolidated financial statements which were prepared assuming that the Company will continue as a going concern. The Company continues to seek external sources of funding including, but not limited to, a private placement or public offering of the Company's capital stock, the sale of selected assets, the licensing of certain product rights in selected territories, selected distribution agreements, and/or other strategic transactions sufficient to provide short-term funding, and potentially achieve the Company's long-term strategic objectives. Although the Company has had some success in licensing certain of its products in the past, no assurance can be given that the Company will do so in the future. The Company expects that it will need to obtain additional financing or income. However, no assurance can be given that alternative sources of funding can be obtained on acceptable terms, or at all. These conditions, combined with the Company's historical operating losses and its deficits in stockholders' equity and working capital, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that might result from the outcome of this uncertainty. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the condensed consolidated financial statements include, among others, sales returns and allowances, cash flows used to evaluate the recoverability of prepaid licenses and royalties, channel exposure and long-lived assets. PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of Interplay Entertainment Corp. and its wholly-owned subsidiaries, Interplay Productions Limited (U.K.), Interplay OEM, Inc., Interplay Co., Ltd., (Japan) the business of which was closed during the 4th quarter 2006 (immaterial to consolidated results) and Games On-line. All significant inter-company accounts and transactions have been eliminated. 6 NOTE 2. NOTE PAYABLE On July 24, 2008, the Company entered into an Option Exercise Agreement (the "Agreement") with Atari Interactive, Inc. ("Atari Interactive"). Under the Agreement, Atari Interactive and the Company settled outstanding disputes among them, including in connection with an existing Promissory Note dated August 19, 2004 of the Company in favor of Atari Interactive (the "Note"). Pursuant to the Agreement, Atari Interactive exercised an existing option to purchase, and purchased, from the Company intellectual property rights developed by the Company in connection with the Dungeons & Dragons games. The balance of all amounts due from the Company to Atari Interactive under the Note of approximately $1,050,000.00 was cancelled and terminated and was recognized as revenue. NOTE 3. NOTE PAYABLE TO OFFICER AND DIRECTORS The Company issued on October 2, 2006 to the following officer and directors Herve Caen, Eric Caen and Michel Welter conditional demand notes which have since become demand notes (due to the change in control resulting from Financial Planning and Development SA's acquisition of approximately 56% of the Company's outstanding stock) bearing a 5% annual interest rate. The demand notes were issued for the earned but unpaid directors' fees to Herve Caen for $50,000, to Eric Caen for $50,000, to Michel Welter for $85,000, and for earned but unpaid salary to Herve Caen in the amount of $500,000. A total of $519,000 in principal and interest remains outstanding under the demand notes as of September 30, 2008. Interest accrued on the demand notes as of September 30, 2008 was $24,000. NOTE 4. ADVANCES FROM DISTRIBUTORS AND LICENSEES WHICH ARE CONSIDERED DEFERRED INCOME Non refundable advances received for future distribution and license rights as of September 30, 2008 amounted to $796,000. NOTE 5. SEGMENT AND GEOGRAPHICAL INFORMATION The Company operates in one principal business segment, which is managed primarily from the Company's U.S. headquarters. Net revenues, exclusive of the "Fallout" intellectual property during 2007 and "Atari" note cancelation and termination in 2008, by geographic regions were as follows:
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, ---------------------------------------- ---------------------------------------- 2008 2007 2008 2007 ---------------------------------------- ---------------------------------------- AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT ------- ------- ------- ------- ------- ------- ------- ------- (Dollars in thousands) North America ......... $ 1 3% $ 1 2% $ 1 1% $ 5 3% International ......... 32 97% 46 98% 136 99% 185 97% OEM, royalty &licensing 0 0% 0 0% 0 0% 0 0% ------- ------- ------- ------- ------- ------- ------- ------- $ 33 100% $ 47 100% $ 137 100% $ 190 100% ======= ======= ======= ======= ======= ======= ======= =======
7 NOTE 6. COMMON STOCK AND EMPLOYEE STOCK OPTIONS STOCK-BASED COMPENSATION The Company utilizes SFAS No. 123(R), "SHARE-BASED PAYMENT" ("SFAS 123R"), which requires the measurement and recognition of compensation cost at fair value for all share-based payments, including stock options and restricted stock awards. At September 30, 2008, the Company has one stock-based employee compensation plan. 800,000 options were granted on May 20, 2008 to Eric Caen and Michel Welter respectively as Directors. Each was granted 250,000 options in lieu of cash compensation for directors' fees and 150,000 options for directors' fees. Such options have an exercise price of $0.175 and are exercisable consistently with the Company's stock option plan. On May 20, 2008 various employees received a total of 950,000 stock incentive options. Such options have an exercise price of $0.175 and are exercisable consistently with the Company's stock option plan. 5,000,000 10 year warrants were issued on May 20, 2008 at an exercise price of $0.175 to Herve Caen, the Chief Executive Officer and Interim Chief Financial Officer, to reduce his compensation to $250,000 through May 15, 2009. Stock-based employee compensation cost approximated $165,000 as reflected in net income (loss) for the three and nine months ended September 30, 2008. EXERCISE OF WARRANTS On June 30, 2008, Herve Caen, Chief Executive Officer and Interim Chief Financial Officer, exercised 2,000,000 warrants issued in 2006 at an exercise price of 0.0279. These shares were paid for by reducing the balance due from the Company to Herve Caen including accrued interest. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAUTIONARY STATEMENT Interplay Entertainment Corp., which we refer to in this Report as "we," "us," or "our," is a developer, publisher and licensor of interactive entertainment software and intellectual properties for both core gamers and the mass market. The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2007, as amended, and presumes that readers have access to, and will have read, the "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K, as amended. This Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and such forward-looking statements are subject to the safe harbors created thereby. For this purpose, any statements contained in this Form 10-Q, except for historical information, may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "should," "estimate" or "continue" or the negative or other variations thereof or comparable terminology are intended to help identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties, as well as on certain assumptions. For example, any statements regarding future cash flow, revenue or expense expectations, including those forward-looking statements in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", financing activities, future cash flows, cash constraints, sales or mergers and cost reduction measures are forward-looking statements and there can be no assurance that we will effect any or all of these objectives in the future. Specifically, the forward-looking statements in this Item 2 assume that we will continue as a going concern. Risks and Uncertainties that may affect our future results are discussed in more detail in the section titled "Risk Factors" in Item 1A of Part I of our Form 10-K. Assumptions relating to our forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, our industry, business 8 and operations are subject to substantial risks, and the inclusion of such information should not be regarded as a representation by management that any particular objective or plans will be achieved. In addition, risks, uncertainties and assumptions change as events or circumstances change. We disclaim any obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances occurring subsequent to the filing of this Form 10-Q with the SEC or otherwise to revise or update any oral or written forward-looking statement that may be made from time to time by us or on our behalf. MANAGEMENT'S DISCUSSION OF CRITICAL ACCOUNTING POLICIES Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including, among others, those related to revenue recognition, prepaid licenses and royalties and software development costs. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. RESULTS OF OPERATIONS The following table sets forth certain selected consolidated statements of operations data, segment data and platform data for the periods indicated in dollars and as a percentage of total net revenues: 9 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED SEPTEMBER 30, --------------------------------------------------- 2008 2007 ----------------------- ----------------------- (Dollars in thousands) % OF NET % OF NET AMOUNT REVENUES AMOUNT REVENUES --------- --------- --------- --------- NET REVENUES ............................. $ 1,083 100% $ 47 100% COST OF GOODS SOLD ....................... -- 0% 15 32% --------- --------- --------- --------- GROSS PROFIT ........................ 1,083 100% 32 68% OPERATING EXPENSES: MARKETING AND SALES ................... -- 0% 55 117% GENERAL AND ADMINISTRATIVE ............ 313 29% 266 566% PRODUCT DEVELOPMENT ................... 90 8% -- 0% --------- --------- --------- --------- TOTAL OPERATING EXPENSES ........... 403 37% 321 683% --------- --------- --------- --------- OPERATING INCOME (LOSS) .................. 680 63% (289) (615)% OTHER INCOME (EXPENSES): OTHER INCOME .......................... (56) (5)% 786 1,672% INCOME TAXES .......................... -- -- -- -- --------- --------- --------- --------- NET INCOME ............................ $ 624 58% $ 497 1,057% ========= ========= ========= ========= NET REVENUE BY GEOGRAPHIC REGION EXCLUSIVE OF THE SALE OF "FALLOUT" IN 2007 AND ATARI IN 2008: NORTH AMERICA ............................ 1 3% 1 2% INTERNATIONAL ............................ 32 97% 46 98% OEM, ROYALTY & LICENSING ................. -- 0% -- 0% --------- --------- --------- --------- $ 33 100% $ 47 100% ========= ========= ========= ========= NET REVENUE BY PLATFORM EXCLUSIVE OF THE SALE OF "FALLOUT" IN 2007 AND ATARI IN 2008: PERSONAL COMPUTERS ....................... 33 100% 40 85% VIDEO GAME CONSOLE ....................... 0 0% 7 15% OEM, ROYALTY & LICENSING ................. 0 0% 0 0% --------- --------- --------- --------- $ 33 100% $ 47 100% ========= ========= ========= ========= NINE MONTHS ENDED SEPTEMBER 30 -------------------------------------------------- 2008 2007 ----------------------- ---------------------- (Dollars in thousands) % OF NET % OF NET AMOUNT REVENUES AMOUNT REVENUES --------- --------- --------- --------- NET REVENUES ............................. $ 1,187 100% $ 5,940 100% COST OF GOODS SOLD ....................... 3 0% 21 0% --------- --------- --------- --------- GROSS PROFIT ........................ 1,184 100% 5,919 100% OPERATING EXPENSES: MARKETING AND SALES ................... -- 0% 245 4% GENERAL AND ADMINISTRATIVE ............ 982 83% 859 14% PRODUCT DEVELOPMENT ................... 253 21% -- 0% --------- --------- --------- --------- TOTAL OPERATING EXPENSES ........... 1,235 104% 1,104 18% --------- --------- --------- --------- OPERATING INCOME (LOSS) .................. (51) (4)% 4,815 82% OTHER INCOME (EXPENSES): OTHER INCOME .......................... (161) (14)% 1,377 23% INCOME TAXES .......................... -- -- -- -- --------- --------- --------- --------- NET INCOME ............................ $ (212) (18)% $ 6,192 105% ========= ========= ========= ========= NET REVENUE BY GEOGRAPHIC REGION EXCLUSIVE OF THE SALE OF "FALLOUT" IN 2007 AND ATARI IN 2008: NORTH AMERICA ............................ 1 1% 5 3% INTERNATIONAL ............................ 136 99% 185 97% OEM, ROYALTY & LICENSING ................. -- 0% -- 0% --------- --------- --------- --------- $ 137 100% $ 190 100% ========= ========= ========= ========= NET REVENUE BY PLATFORM EXCLUSIVE OF THE SALE OF "FALLOUT" IN 2007 AND ATARI IN 2008: PERSONAL COMPUTERS ....................... 131 96% 169 89% VIDEO GAME CONSOLE ....................... 6 4% 21 11% OEM, ROYALTY & LICENSING ................. -- 0% -- 0% --------- --------- --------- --------- $ 137 100% $ 190 100% ========= ========= ========= =========
10 NET REVENUES North American, International and OEM, Royalty and Licensing Net Revenues Exclusive of the sale of "Fallout" Intellectual Property in 2007 and "Atari" note cancelation and termination in 2008. Geographically, our net revenues for the three and nine months ended September 30, 2008 and 2007 break down as follows: (in thousands) Three Months Ended September 30, 2008 2007 Change % Change - -------------------------------- -------- -------- -------- -------- North America .................. $ 1 $ 1 $ 0 0% International .................. 32 46 (14) (30%) OEM, Royalty & Licensing ....... 0 0 0 0% -------- -------- -------- -------- Net Revenues ................... 33 $ 47 $ (14) (30%) Nine Months Ended September 30, 2008 2007 Change % Change - -------------------------------- -------- -------- -------- -------- North America ................... $ 1 $ 5 $ (4) (80%) International ................... 136 185 (49) (26%) OEM, Royalty & Licensing ........ 0 0 0 0% -------- -------- -------- -------- Net Revenues .................... $ 137 $ 190 $ (53) (28%) Net revenues for the three months ended September 30, 2008 were $33,000 a decrease of 30% compared to the same period in 2007. This decrease resulted from a 30% decrease in International net revenues. Net revenues for the nine months ended September 30, 2008 were $137,000, a decrease of 28% compared to the same period in 2007. This decrease resulted from a 80% decrease in North America net revenues and a 26% decrease in International net revenues due to the decrease in back catalog sales. North American net revenues for the three months ended September 30, 2008 were $1,000. There was no change in North American net revenues in 2008. North America net revenues for the nine months ended September 30, 2008 were $1,000. A decrease in North American net revenues in 2008 was mainly due to an 80% decrease in back catalog sales. International net revenues for the three months ended September 30, 2008 were $32,000. The decrease in International net revenues for the three months ended September 30, 2008 was mainly due to 30% decrease in back catalog sales. International net revenues for the nine months ended September 30, 2008 were $136,000. The decrease in International net revenue for the nine months ended September 30, 2008 was mainly due to a 26% decrease in back catalog sales. 11 PLATFORM NET REVENUES Our platform net revenues for the three and nine months ended September 30, 2008 and 2007 break down as follows exclusive of the sale of "Fallout" Intellectual Property and "Atari" note cancelation and termination: (in thousands) Three Months Ended September 30, 2008 2007 Change % Change - --------------------------------- -------- -------- -------- -------- Personal Computer ............... $ 33 $ 40 $ (7) (18%) Video Game Console .............. 0 7 (7) (100%) OEM, Royalty & Licensing ........ 0 0 0 0 -------- -------- -------- -------- Net Revenues .................... $ 33 $ 47 $ (14) (30%) Nine Months Ended September 30, 2008 2007 Change % Change - --------------------------------- -------- -------- -------- -------- Personal Computer ............... $ 131 $ 169 $ (38) (22%) Video Game Console .............. 6 21 (15) (72%) OEM, Royalty & Licensing ........ 0 0 0 0 - --------------------------------- -------- -------- -------- -------- Net Revenues .................... $ 137 $ 190 $ 53 (27)% PC net revenues for the three months ended September 30, 2008 were $33,000, a decrease of 18% compared to the same period in 2007. The decrease in PC net revenues in 2007 was primarily due to lower back catalog sales. Video game console net revenues were $0, a decrease of 100% for the three months ended September 30, 2008 compared to the same period in 2007, mainly due to lower back catalog sales. PC net revenues for the nine months ended September 30, 2008 were $131,000 a decrease of 22% compared to the same period in 2007. The decrease in PC net revenues in the nine months ended September 30, 2008 was primarily due to lower back catalog sales. Video Game console net revenues were $6,000 a decrease of 72% for the nine months ended September 30, 2008 compared to the same period in 2007, mainly due to lower back catalog sales. COST OF GOODS SOLD; GROSS PROFIT MARGIN EXCLUSIVE OF THE SALE OF "FALLOUT" AND "ATARI". Our net revenues exclusive of the sale of "Fallout" intellectual property and "Atari" note cancelation and termination, cost of goods sold and gross margin for the three and nine months ended September 30, 2008 and 2007 breakdown as follows: (in thousands) Three Months Ended September 30, 2008 2007 Change % Change - -------------------------------- -------- -------- -------- -------- Net Revenues .................... $ 33 $ 47 $ (14) (30%) Cost of Goods Sold .............. 0 15 (15) 100% -------- -------- -------- -------- Gross Profit Margin ............. $ 33 $ 32 $ 1 (3%) Nine Months Ended September 30, 2008 2007 Change % Change - --------------------------------- -------- -------- -------- -------- Net Revenues .................... $ 137 $ 190 $ (53) (28%) Cost of Goods Sold .............. 3 21 (18) (86%) -------- -------- -------- -------- Gross Profit Margin ............. $ 134 $ 169 $ (35) (21%) Three Months Ended September 30, 2008 2007 Change - ------------------------------------------- -------- -------- -------- Net Revenues .............................. 100% 100% 0% Cost of Goods Sold ........................ 0% 32% (32%) -------- -------- -------- Gross Profit Margin ....................... 100% 68% (32%) Nine Months Ended September 30, 2008 2007 Change - ------------------------------------------- -------- -------- -------- Net Revenues .............................. 100% 100% 100% Cost of Goods Sold ........................ 0% 11% (11%) -------- -------- -------- Gross Profit Margin ....................... 100% 89% 11% 12 Cost of goods sold related to PC and video game console net revenues represents the manufacturing and related costs of interactive entertainment software products, including costs of media, manuals, duplication, packaging materials, assembly, freight and royalties paid to developers, licensors and hardware manufacturers. Cost of goods sold related to royalty-based net revenues primarily represents third party licensing fees and royalties paid by us. Typically, cost of goods sold as a percentage of net revenues for video game console products is higher than cost of goods sold as a percentage of net revenues for PC based products due to the relatively higher manufacturing and royalty costs associated with video game console and affiliate label products. We also include in the cost of goods sold the amortization of prepaid royalty and license fees paid to third party software developers. We expense prepaid royalties over a period of six months commencing with the initial shipment of the title at a rate based upon the number of units shipped. We evaluate the likelihood of future realization of prepaid royalties and license fees quarterly, on a product-by-product basis, and charge the cost of goods sold for any amounts that we deem unlikely to realize through future product sales. Our cost of goods sold decreased 100% to $0 in the three months ended September 30, 2008 compared to the same period in 2007. Our cost of goods sold decreased 86% to $3,000 in the nine months ended September 30, 2008 compared to the same period in 2007 mainly due to lower back catalog sales. Our gross margin increased to 100% for the three months ended September 30, 2008. Our gross margin increased to 100% for the nine months ended September 30, 2008 period from 89% in the comparable 2007 period. MARKETING AND SALES Our marketing and sales expense for the three months and nine months ended September 30, 2008 and 2007 break down as follows: (in thousands) Marketing and Sales 2008 2007 Change % Change - ------------------------------ --------- --------- --------- --------- Three Months Ended September 30 .............. $ 0 $ 55 $ (55) (100%) Nine Months Ended September 30 .............. $ 0 $ 245 $ (245) (100%) Marketing and sales expenses primarily consist of advertising and retail marketing support, sales commissions, marketing and sales personnel, customer support services and other related operating expenses. Marketing and sales expenses for the three months ended September 30, 2008 were $0. Marketing and sales expenses for the nine months ended September 30, 2008 were $0 a 100% decrease as compared to the same period during 2007. PRODUCT DEVELOPMENT Our Product Development expense for the three months ended September 30, 2008 and 2007 breakdown as follows: (in thousands) Product Development 2008 2007 Change % Change - ------------------------------ --------- --------- --------- --------- Three Months Ended September 30 .............. $ 90 $ 0 $ 90 100% Nine Months Ended September 30 .............. $ 253 $ 0 $ 253 100% Product development expenses increased 100% to $90,000, an increase of 100% in the three months ended September 30, 2008 compared to the same period in 2007. This increase was mainly due to the hiring of a software development team in the first quarter of 2008. Our product development increased 100% to $253,000 for the nine months ended September 30, 2008 period compared to the same period in 2007. This increase was mainly due to the hiring of a software development team in the first quarter of 2008. 13 GENERAL AND ADMINISTRATIVE Our general and administrative expense for the three and nine months ended September 30, 2008 and 2007 break down as follows: (in thousands) General and Administrative 2008 2007 Change % Change - ------------------------------ --------- --------- --------- --------- Three Months Ended September 30 .............. $ 313 $ 266 $ 47 18% Nine Months Ended September 30 .............. $ 982 $ 859 $ 123 14% General and administrative expenses primarily consist of administrative personnel expenses, facilities costs, professional fees, bad debt expenses and other related operating expenses. General and administrative expenses for the three months ended September 30, 2008 were $313,000, an 18% increase as compared to the same period in 2007. The increase is mainly due to the increase in personnel costs and general expenses. General and administrative expenses for the nine months ended September 30, 2008 were $982,000 a 14% increase as compared to the same period in 2007. The increase is mainly due to increase in personnel costs and general expenses. OTHER EXPENSE (INCOME), NET Our other expense (income) for the three months and nine months ended September 30, 2008 and 2007 break down as follows: (in thousands) Other (Income) Expenses 2008 2007 Change % Change - ------------------------------ --------- --------- --------- --------- Three Months Ended September 30 .............. $ 56 $ (786) $ 842 1,073% Nine Months Ended September 30 .............. $ 161 $ (1,377) $ 1,538 1,117% Other expenses for the three months ended September 30, 2008 consists primarily interest expense on debt in the amount of $7,000, foreign currency exchange transactions gains and losses $2,000, California Franchise Tax for the year ending 2007 in the amount of $39,000, expensing of employee options in the amount of $7,000 and miscellaneous expenses in the amount of $7,000 and rental income in the amount of ($6,000). Other expenses for the nine months ended September 30, 2008 was $161,000, comprised of interest expense on debt in the amount of $24,000, foreign currency exchange transactions and losses and additional miscellaneous write offs ($11,000), California Franchise Tax for the year ending 2007 $39,000 and rental income in the amount of ($18,000), reversal of bad debts ($38,000), and expensing of employee options $165,000. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2008, we had a working capital deficit of approximately $2.3 million, and our cash balance was approximately $5,000. We cannot continue to fund our current operations without obtaining additional financing or income. We have sold "Fallout" to a third party and have obtained the License Back to allow us to create, develop and exploit "Fallout" MMOG. We are planning to exploit the License Back of "Fallout" MMOG and are reviewing the avenues for securing financing of at least $30 million to fund its production. We are now focused on a two-pronged growth strategy. While we are working to secure funding for the development of a MMOG based on the popular "Fallout" franchise, we are at the same time exploring ways to leverage our portfolio of gaming properties through sequels and various development and publishing arrangements. We are planning, to develop sequels to some of the most successful games, including Earthworm Jim, Dark Alliance, Descent and MDK. We have reinitiated our in-house game development studio, and have hired game developers. Initial funding for these steps will mainly derive from license arrangements or other financing that we may enter into. 14 We have entered into a Game Production Agreement with Interactive Game Group which provides for the financing of the development of games under certain conditions. We continue to seek external sources of funding, including but not limited to, private and public securities offerings, incurring debt, the selling of assets , licensing of certain product rights in selected territories, selected distribution agreements, and/or other strategic transactions sufficient to provide short-term funding, and achieve our long-term strategic objectives. Historically, we have funded our operations primarily from the sale of, or royalties generated by licensing of, our intellectual property rights and distribution fee advances of our products. Our operating activities used cash of $1,133,000 million during the nine months ended September 30, 2008. We expect in the remainder of 2008 to enter into license arrangements and to seek funding for the development of games. No assurance can be given that funding can be obtained by us on acceptable terms, or at all. These conditions, combined with our deficits in stockholders' equity and working capital, raise substantial doubt about our ability to continue as a going concern. OFF BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements under which we have obligations under a guaranteed contract that has any of the characteristics identified in paragraph 3 of FASB Interpretation No. 45 "Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others". We do not have any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets. We also do not have any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument. We have no obligations, including a contingent obligation arising out of a variable interest (as referenced in FASB Interpretation No. 46, Consolidation of Variable Interest Entities, as amended) in an unconsolidated entity that is held by, and material to, us, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us. CONTRACTUAL OBLIGATIONS The following table summarizes certain of our contractual obligations under non-cancelable contracts and other commitments at September 30, 2008, and the effect such obligations are expected to have on our liquidity and cash flow in future periods: (in thousands)
- --------------------------------------------------------------------------------------- Less than 1 - 3 3 - 5 More than CONTRACTUAL OBLIGATIONS Total 1 Year Years Years 5 Years - --------------------------------------------------------------------------------------- Lease Commitments (1) ..... $ 25 $ 25 $ 0 $ 0 $ 0 --------- --------- --------- --------- --------- Total ..................... $ 25 $ 25 $ 0 $ 0 $ 0 --------- --------- --------- --------- ---------
(1) We have a lease commitment at our Beverly Hills office through April 2008. The Company is currently on a month to month lease arrangement. We also have a lease commitment in Irvine for our new development offices through May 31, 2009. We also have a lease commitment at our French representation office through February 28, 2011 with an option for an additional 3 years. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We do not have any derivative financial instruments as of September 30, 2008. However, we are exposed to certain market risks arising from transactions in the normal course of business, principally the risk associated with foreign currency fluctuations. We do not hedge our interest rate risk, or our risk associated with foreign currency fluctuations. 15 INTEREST RATE RISK Currently, we do not have a line of credit, but we anticipate we may establish a line of credit in the future. FOREIGN CURRENCY RISK Our earnings are affected by fluctuations in the value of our foreign subsidiary's functional currency, and by fluctuations in the value of the functional currency of our foreign receivables. We recognized gains of $2,000 and $35,000 during the nine months ended September 30, 2008 and 2007 respectively, primarily in connection with foreign exchange fluctuations in the timing of payments received on accounts receivable which have been from Interplay Productions Ltd. ITEM 4T. CONTROLS AND PROCEDURES As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and interim Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and interim Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in ensuring that information required to be disclosed is recorded, processed, summarized and reported within the time period specified in the SEC's rules and forms and in timely alerting him to material information required to be included in this report. There were no changes made in our internal controls over financial reporting that occurred during the quarter ended September 30, 2008 that have materially affected or are reasonably likely to materially affect these controls. Our management, including the Chief Executive Officer and Interim Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, our internal control system can provide only reasonable assurance of achieving its objectives and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, and/or by management. PART II - OTHER INFORMATION There have been no material changes to the risk factors disclosed in Item 1A to Part 1 of our Form 10-K for the fiscal year ended December 31, 2007. ITEM 1. LEGAL PROCEEDINGS On or about April 8, 2008 Glutton Creeper Games (GCG) filed a complaint against the Company in the Los Angeles Superior Court seeking damages in excess of $400,000 in connection with a non exclusive license agreement granting rights to GCG to develop a Pen and Paper game based on the pre-existing Fallout games. The complaint arose as a result of Bethesda and Zenimax sending cease and desist notices to GCG and the Company following their acquisition of certain of the Fallout property from the Company in 2007. On or about June 12, 2008, the Company filed a cross-complaint against Bethesda and Zenimax alleging causes of action for Tortuous Interference with an Existing Contract and Implied Indemnity. The Company claims that Bethesda and Zenimax improperly interfered with the Company's license agreement with GCG and are therefore liable for any and all damages that might be awarded to GCG. The court dismissed the cross-complaint without prejudice, due to lack of jurisdiction, allowing Interplay to pursue its claims against Bethesda and Zenimax in either Maryland or Delaware. Interplay continues to vigorously and aggressively defend GCG's claims against it, including conducting detailed discovery. Trial is set for March 11, 2009. 16 ITEM 3. DEFAULT UPON SENIOR SECURITIES See Note 2 to the Financial Information in Part I, which is incorporated herein by reference. ITEM 6. EXHIBITS (a) Exhibits - The following exhibits, other than exhibit 32.1 which is being furnished herewith, are filed as part of this report: EXHIBIT NUMBER EXHIBIT TITLE - ------- ------------------------------------------------------------------------ 3.1 Amended and Restated Certificate of Incorporation of the Company; (incorporated herein by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003). 3.2 Certificate of Designation of Preferences of Series A Preferred Stock, as filed with the Delaware Secretary of State on April 14, 2000; (incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999). 3.3 Certificate of Amendment of Certificate of Designation of Rights, Preferences, Privileges and Restrictions of Series A Preferred Stock, as filed with the Delaware Secretary of State on October 30, 2000; (incorporated herein by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003). 3.4 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on November 2, 2000; (incorporated herein by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003). 3.5 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on January 21, 2004; (incorporated herein by reference to Exhibit 3.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003). 3.6 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on July 2, 2008; 3.7 Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, as filed with the Delaware Secretary of State on July 2, 2008; 3.8 Amended and restated Bylaws of the Company 10.8 Form of option exercise agreement July 24, 2008 between Atari Interactive Inc. and the Company. 31.1 Certificate of Herve Caen, Chief Executive Officer of Interplay Entertainment Corp. pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended. 31.2 Certificate of Herve Caen, Interim Chief Financial Officer of Interplay Entertainment Corp. pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934, as amended. 32.1 Certificate of Herve Caen, Chief Executive Officer and Interim Chief Financial Officer of Interplay Entertainment Corp. pursuant to Rule 13a-14(b) of the Securities and Exchange Act of 1934, as amended. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERPLAY ENTERTAINMENT CORP. Date: November 19, 2008 By: /S/ HERVE CAEN ---------------------------------- Herve Caen, Chief Executive Officer and Interim Chief Financial Officer (Principal Executive and Financial and Accounting Officer) 18 EX-3.(I) 2 ex3-6.txt EX-3.6 EXHIBIT 3.6 CERTIFICATE OF AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF INTERPLAY ENTERTAINMENT CORP. The undersigned, Herve Caen, the Chief Executive Officer of Interplay Entertainment Corp. (the "Corporation"), a corporation organized and existing by virtue of the General Corporation Law (the "GCL") of the State of Delaware, does hereby certify pursuant to Section 103 of the GCL as to the following: 1. The name of the Corporation is Interplay Entertainment Corp. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 27, 1998. 2. Article 5(a) of the Amended and Restated Certificate of Incorporation of the Corporation, as amended, is hereby amended and restated, effective as of the date on which the number of directors first fell below seven (7), to read in its entirety as follows: "ARTICLE 5 (a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors and elections of directors need not be by written ballot unless otherwise provided in the Bylaws. The number of directors which shall constitute the whole Board of Directors of the Corporation shall be between three (3) and nine (9), unless such minimum and/or maximum number shall be changed by amendment to this Certificate of Incorporation. The exact number of directors constituting the whole Board of Directors may be changed from time to time by the Board of Directors, within the limits provided above, in accordance with the Bylaws of the Corporation." 3. The foregoing amendment of the Amended and Restated Certificate of Incorporation of the Corporation, as amended, has been duly adopted by the Corporation's Board of Directors and Stockholders in accordance with the provisions of Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Amended and Restated Certificate of Incorporation as of the 30 day of June 2008. /S/ HERVE CAEN -------------------------- Herve Caen Chief Executive Officer EX-3 3 ex3-7.txt EX-3.7 EXHIBIT 3.7 CERTIFICATE OF AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF INTERPLAY ENTERTAINMENT CORP. The undersigned, Herve Caen, the Chief Executive Officer of Interplay Entertainment Corp. (the "Corporation"), a corporation organized and existing by virtue of the General Corporation Law (the "GCL") of the State of Delaware, does hereby certify pursuant to Section 103 of the GCL as to the following: 1. The name of the Corporation is Interplay Entertainment Corp. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 27, 1998. 2. The first full sentence of Article 4 of the Amended and Restated Certificate of Incorporation of the Corporation, as amended, is hereby amended and restated to read in its entirety as follows: "ARTICLE 4 The total number of shares of all classes of stock which this Corporation shall have authority to issue is 305,000,000, of which (i) 300,000,000 shares shall be designated "Common Stock" and shall have a par value of $0.001 per share; and (ii) 5,000,000 shares shall be designated "Preferred Stock" and shall have a par value of $0.001 per share." 3. The foregoing amendment of the Amended and Restated Certificate of Incorporation of the Corporation, as amended, has been duly adopted by the Corporation's Board of Directors and Stockholders in accordance with the provisions of Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Amended and Restated Certificate of Incorporation as of the 30 day of June 2008. /S/ HERVE CAEN --------------------------- Herve Caen Chief Executive Officer EX-3.(II) 4 ex3-8.txt EX-3.8 EXHIBIT 3.8 AMENDED AND RESTATED BY-LAWS OF INTERPLAY ENTERTAINMENT CORP. Section 1. Law, Certificate of Incorporation and By-Laws 1.1 These by-laws are subject to the certificate of incorporation of the corporation. In these by-laws, references to law, the certificate of incorporation and by-laws mean the law, the provisions of the certificate of incorporation and the by-laws as from time to time in effect. Section 2. Stockholders 2.1 ANNUAL MEETING. The annual meeting of stockholders shall be held at 10:00 a.m. on the first Wednesday in June in each year, unless that day be a legal holiday at the place where the meeting is to be held, in which case the meeting shall be held at the same hour on the next succeeding day not a legal holiday, or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting. At such annual meeting the stockholders shall elect a board of directors, and shall transact such other business as has been set forth in the notice of the meeting or as may be required by law or these by-laws. 2.2 SPECIAL MEETINGS. A special meeting of the stockholders may be called at any time by the chairman of the board, if any, the president or the board of directors. A special meeting of the stockholders shall be called by the secretary, or in the case of the death, absence, incapacity or refusal of the secretary, by an assistant secretary or some other officer, upon application of a majority of the directors. Any such application shall state the purpose or purposes of the proposed meeting. Any such call shall state the place, date, hour, and purposes of the meeting, and the business transacted at any special meeting shall be limited to the purposes set forth in such call. 2.3 PLACE OF MEETING. All meetings of the stockholders for the election of directors or for any other purpose shall be held at such place within or without the State of Delaware as may be determined from time to time by the chairman of the board, if any, the president or the board of directors. Any adjourned session of any meeting of the stockholders shall be held at the place designated in the vote of adjournment. 2.4 NOTICE OF MEETINGS. Except as otherwise provided by law, a written notice of each meeting of stockholders stating the place, day and hour thereof and, in the case of an annual meeting, any business to be transacted at such annual meeting other than the election of directors, and, in the case of a special meeting, the purposes for which such special meeting is called, shall be given not less than ten nor more than sixty days before the meeting, to each stockholder entitled to vote thereat, and to each stockholder who, by law, by the certificate of incorporation or by these by-laws, is entitled to notice, by leaving such notice with him or at his residence or usual place of business, or by depositing it in the United States mail, postage prepaid, and addressed to such stockholder at his address as it appears in the records of the corporation, provided that the corporation may give such notice by relying on internet availability of proxy materials pursuant to Rule 14a-16 as promulgated under the Securities Exchange Act of 1934, as amended. Such notice, where applicable shall be given by the secretary, or by an officer or person designated by the board of directors, or in the case of a special meeting by the officer calling the meeting. As to any adjourned session of any meeting of stockholders, notice of the adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment was taken except that if the adjournment is for more than thirty days or if after the adjournment a new record date is set for the adjourned session, notice of any such adjourned session of the meeting shall be given in the manner heretofore described. No notice of any meeting of stockholders or any adjourned session thereof need be given to a stockholder if a written waiver of notice, executed before or after the meeting or such adjourned session by such stockholder, is filed with the records of the meeting or if the stockholder attends such meeting without objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders or any adjourned session thereof need be specified in any written waiver of notice. 2.5 QUORUM OF STOCKHOLDERS. At any meeting of the stockholders a quorum as to any matter shall consist of a majority of the votes entitled to be cast on the matter, except where a larger quorum is required by law, by the certificate of incorporation or by these by-laws. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present. If a quorum is present at an original meeting, a quorum need not be present at an adjourned session of that meeting. Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of any corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. 2.6 ACTION BY VOTE. When a quorum is present at any meeting, a plurality of the votes properly cast for election to any office shall elect to such office and a majority of the votes properly cast upon any question other than an election to an office shall decide the question, except when a larger vote is required by law, by the certificate of incorporation or by these by-laws. No ballot shall be required for any election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. 2.7 ACTION WITHOUT MEETINGS. Unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken by stockholders for or in connection with any corporate action may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in Delaware by hand or certified or registered mail, return receipt requested, to its principal place of business or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Each such written consent shall bear the date of signature of each stockholder who signs the consent. No written consent shall be effective to take the corporate action 2 referred to therein unless written consents signed by a number of stockholders sufficient to take such action are delivered to the corporation in the manner specified in this paragraph within sixty days of the earliest dated consent so delivered. If action is taken by consent of stockholders and in accordance with the foregoing, there shall be filed with the records of the meetings of stockholders the writing or writings comprising such consent. If action is taken by less than unanimous consent of stockholders, prompt notice of the taking of such action without a meeting shall be given to those who have not consented in writing and a certificate signed and attested to by the secretary that such notice was given shall be filed with the records of the meetings of stockholders. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the General Corporation Law of the State of Delaware, if such action had been voted upon by the stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning a vote of stockholders, that written consent has been given under Section 228 of said General Corporation Law and that written notice has been given as provided in such Section 228. 2.8 PROXY REPRESENTATION. Every stockholder may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, objecting to or voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and, if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. The authorization of a proxy may but need not be limited to specified action, provided, however, that if a proxy limits its authorization to a meeting or meetings of stockholders, unless otherwise specifically provided such proxy shall entitle the holder thereof to vote at any adjourned session but shall not be valid after the final adjournment thereof. 2.9 INSPECTORS. The directors or the person presiding at the meeting may, but need not, appoint one or more inspectors of election and any substitute inspectors to act at the meeting or any adjournment thereof. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. Notwithstanding the foregoing, in the event that a stockholder seeks to nominate one or more directors pursuant to Section 3.3 of these by-laws, the directors shall appoint two inspectors, who shall not be affiliated with the Corporation, to determine whether a stockholder has complied with Section 3.3 of these by-laws. If the inspector shall determine that a stockholder has not complied with Section 3.3 of these by-laws, the inspectors shall direct the person presiding over the meeting to declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the by-laws; and the person presiding over the meeting shall so declare to the meeting and the defective nomination shall be disregarded. On request of the person presiding at the meeting, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. 3 2.10 LIST OF STOCKHOLDERS. The secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in his name. The stock ledger shall be the only evidence as to who are stockholders entitled to examine such list or to vote in person or by proxy at such meeting. Section 3. Board of Directors 3.1 NUMBER. The number of directors which shall constitute the whole board shall not be less than three (3) nor more than nine (9) in number. The exact number of directors shall be fixed from time to time by a resolution adopted by a unanimous vote of directors then serving. The number of directors may be decreased to any number permitted by the foregoing at any time by the directors by vote of a majority of the directors then in office, but only to eliminate vacancies existing by reason of the death, resignation or removal of one or more directors. Directors need not be stockholders. 3.2 TENURE. At each annual meeting of the stockholders, directors shall be elected to hold office for a term expiring at the next annual meeting of stockholders. The Secretary shall have the power to certify at any time as to the number of directors authorized. Except as otherwise provided by law, by the certificate of incorporation or by these by-laws, each director shall hold office until the successors of such directors are elected and qualified, or until he sooner dies, resigns, is removed or becomes disqualified. 3.3 NOMINATION. Nominations of persons for election to the board of directors may only be made by or at the direction of the board of directors or by any stockholder beneficially owning (as defined by Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of record at least one percent (1%) of the issued and outstanding capital stock of the corporation. Nominations of persons to be elected to the Board of Directors at any special meeting of stockholders shall be made pursuant to timely notice in writing to the Secretary. To be timely, a stockholder's notice (which shall only be required with respect to a special meeting of stockholders) shall be delivered to or mailed and received at the principal executive offices of the corporation not less than 45 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 55 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice (which shall only be required with respect to a special meeting of stockholders) shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the capital stock of the corporation which are beneficially owned by such person and (iv) any other information relating to such person that would be required to be disclosed in solicitations of proxies for election of directors, or would be 4 otherwise required, in each case pursuant to Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (including without limitation such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (B) as to the stockholder giving the notice (i) the name and address of such stockholder and (ii) the class and number of shares of the capital stock of the corporation which are beneficially owned (as defined by Rule 13d-3 of the Securities Exchange Act of 1934, as amended) by such stockholder. If requested in writing by the Secretary at least 15 days in advance of the annual meeting, a stockholder whose shares are not registered in the name of such stockholder on the corporation's books shall provide the Secretary, within ten days of such request, with documentary support for such claim of beneficial ownership. At the request of the board of directors, any person nominated by the board of directors for election as a director shall furnish to the Secretary that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. 3.4 POWERS. The business and affairs of the corporation shall be managed by or under the direction of the board of directors who shall have and may exercise all the powers of the corporation and do all such lawful acts and things as are not by law, the certificate of incorporation or these by-laws directed or required to be exercised or done by the stockholders. 3.5 VACANCIES. Vacancies and any newly created directorships resulting from any increase in the number of directors may be filled by vote of the stockholders at a meeting called for the purpose, or by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. When one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have resigned, shall have power to fill such vacancy or vacancies, the vote or action by writing thereon to take effect when such resignation or resignations shall become effective. The directors shall have and may exercise all their powers notwithstanding the existence of one or more vacancies in their number, subject to any requirements of law or of the certificate of incorporation or of these by-laws as to the number of directors required for a quorum or for any vote or other actions. 3.6 COMMITTEES. The board of directors may, by vote of a majority of the whole board, (a) designate, change the membership of or terminate the existence of any committee or committees, each committee to consist of one or more of the directors; (b) designate one or more directors as alternate members of any such committee who may replace any absent or disqualified member at any meeting of the committee; and (c) determine the extent to which each such committee shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, including the power to authorize the seal of the corporation to be affixed to all papers which require it and the power and authority to declare dividends or to authorize the issuance of stock; excepting, however, such powers which by law, by the certificate of incorporation or by these by-laws they are prohibited from so delegating. In the absence or disqualification of any member of such committee and his alternate, if any, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Except as the board of directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the board or such rules, its business shall be conducted as nearly as may be in the same manner as is provided by these by-laws for the conduct of business by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors upon request. 5 3.7 REGULAR MEETINGS. Regular meetings of the board of directors may be held without call or notice at such places within or without the State of Delaware and at such times as the board may from time to time determine, provided that notice of the first regular meeting following any such determination shall be given to absent directors. A regular meeting of the directors may be held without call or notice immediately after and at the same place as the annual meeting of the stockholders. 3.8 SPECIAL MEETINGS. Special meetings of the board of directors may be held at any time and at any place within or without the State of Delaware designated in the notice of the meeting, when called by the chairman of the board, if any, the president, or by one-third or more in number of the directors, reasonable notice thereof being given to each director by the secretary or by the chairman of the board, if any, the president or any one of the directors calling the meeting. 3.9 NOTICE. It shall be reasonable and sufficient notice to a director to send notice by mail, including by electronic mail at a director's last known electronic address provided by the director to the corporation, at least forty-eight hours or by facsimile at least twenty-four hours before the meeting addressed to him at his usual or last known business or residence facsimile number or to give notice to him in person or by telephone at least twenty-four hours before the meeting. Notice of a meeting need not be given to any director if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any director who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. Neither notice of a meeting nor a wavier of a notice need specify the purposes of the meeting." 3.10 QUORUM. Except as may be otherwise provided by law, by the certificate of incorporation or these by-laws, at any meeting of the directors a majority of the directors then in office shall constitute a quorum; a quorum shall not in any case be less than one-third of the total number of directors constituting the whole board. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. 3.11 ACTION BY VOTE. Except as may be otherwise provided by law, by the certificate of incorporation or by these by-laws, when a quorum is present at any meeting the vote of a majority of the directors present shall be the act of the board of directors. 3.12 ACTION WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the board of directors or a committee thereof may be taken without a meeting if all the members of the board or of such committee, as the case may be, consent thereto in writing, and such writing or writings are filed with the records of the meetings of the board or of such committee. Such consent shall be treated for all purposes as the act of the board or of such committee, as the case may be. 6 3.13 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members of the board of directors, or any committee designated by such board, may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other or by any other means permitted by law. Such participation shall constitute presence in person at such meeting. 3.14 COMPENSATION. In the discretion of the board of directors, each director may be paid such fees for his services as director and be reimbursed from his reasonable expenses incurred in the performance of his duties as director as the board of directors from time to time may determine. Nothing contained in this section shall be construed to preclude any director from serving the corporation in any other capacity and receiving reasonable compensation therefor. 3.15 INTERESTED DIRECTORS AND OFFICERS. (a) No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association, or other organization in which one or more of the corporation's directors or officers are directors or officers, or have a financial interest, shall be void or voidable, solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholder entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof, or the stockholders. (b) Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction. Section 4. Officers and Agents. 4.1 ENUMERATION; QUALIFICATION. The officers of the corporation shall be a president, a treasurer, a secretary and such other officers, if any, as the board of directors from time to time may in its discretion elect or 7 including without limitation a chairman of the board, one or more vice presidents and a controller. The corporation may also have such agents, if any, as the board of directors from time to time may in its discretion choose. Any officer may be but none need be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the board of directors to secure the faithful performance of his duties to the corporation by giving bond in such amount and with sureties or otherwise as the board of directors may determine. 4.2 POWERS. Subject to law, to the certificate of incorporation and to the other provisions of these by-laws, each officer shall have, in addition to the duties and powers herein set forth, such duties and powers as are commonly incident to his office and such additional duties and powers as the board of directors may from time to time designate. 4.3 ELECTION. The officers may be elected by the board of directors at their first meeting following the annual meeting of the stockholders or at any other time. At any time or from time to time the directors may delegate to any officer their power to elect or appoint any other officer or any agents. 4.4 TENURE. Each officer shall hold office until the first meeting of the board of directors following the next annual meeting of the stockholders and until his respective successor is chosen and qualified unless a shorter period shall have been specified by the terms of his election or appointment, or in each case until he sooner dies, resigns, is removed or becomes disqualified. Each agent shall retain his authority at the pleasure of the directors, or the officer by whom he was appointed or by the officer who then holds agent appointive power. 4.5 CHAIRMAN OF THE BOARD OF DIRECTORS, PRESIDENT AND VICE PRESIDENT. The chairman of the board, if any, shall have such duties and powers as shall be designated from time to time by the board of directors. Unless the board of directors otherwise specifies, the chairman of the board, or if there is none the chief executive officer, shall preside, or designate the person who shall preside, at all meetings of the stockholders and of the board of directors. Unless the board of directors otherwise specifies, the president shall be the chief executive officer and shall have direct charge of all business operations of the corporation and, subject to the control of the directors, shall have general charge and supervision of the business of the corporation. Any vice president shall have such duties and powers as shall be set forth in these by-laws or as shall be designated from time to time by the board of directors or by the president. 4.6 TREASURER AND ASSISTANT TREASURERS. Unless the board of directors otherwise specifies, the treasurer shall be the chief financial officer of the corporation and shall be in charge of its funds and valuable papers, and shall have such other duties and powers as may be designated from time to time by the board of directors or by the president. If no controller is elected, the treasurer shall, unless the board of directors otherwise specifies, also have the duties and powers of the controller. Any assistant treasurers shall have such duties and powers as shall be designated from time to time by the board of directors, the president or the treasurer. 8 4.7 CONTROLLER AND ASSISTANT CONTROLLER. If a controller is elected, he shall, unless the board of directors otherwise specifies, be the chief accounting officer of the corporation and be in charge of its books of account and accounting records, and of its accounting procedures. He shall have such other duties and powers and may be designated from time to time by the board of directors, the president or the treasurer. Any assistant controller shall have such duties and powers as shall be designated from time to time by the board of directors, the president, the treasurer or the controller. 4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all proceedings of the stockholders, of the board of directors and of committees of the board of directors in a book or series of books to be kept therefore and shall file therein all actions by written consent of stockholders or directors. In the absence of the secretary from any meeting, an assistant secretary, or if there be none or he is absent, a temporary secretary chosen at the meeting, shall record the proceedings thereof. Unless a transfer agent has been appointed the secretary shall keep or cause to be kept the stock and transfer records of the corporation, which shall contain the names and record addresses of all stockholders and the number of shares registered in the name of each stockholder. He shall have such other duties and powers as may from time to time be designated by the board of directors or the president. Any assistant secretaries shall have such duties and powers as shall be designated from time to time by the board of directors, the president or the secretary. Section 5. Resignations and Removals. 5.1 Any director or officer may resign at any time by delivering his resignation in writing to the chairman of the board, if any, the president, or the secretary or to a meeting of the board of directors. Such resignation shall be effective upon receipt unless specified to be effective at some other time, and without in either case the necessity of its being accepted unless the resignation shall so state. A director (including persons elected by directors to fill vacancies in the board) may be removed from office with or without cause by the vote of the holders of two-thirds of the shares issued and outstanding and entitled to vote in the election of directors. The board of directors may at any time remove any officer either with or without cause. The board of directors may at any time terminate or modify the authority of any agent. No director of officer resigning and (except where a right to receive compensation shall be expressly provided in a duly authorized written agreement with the corporation) no director or officer removed shall have any right to any compensation as such director or officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or by the year or otherwise; unless, in the case of a resignation, the directors, or, in the case of removal, the body acting on the removal, shall in their or its discretion provide for compensation. Section 6. Vacancies. 6.1 If the office of the president or the treasurer or the secretary becomes vacant, the directors may elect a successor by vote of a majority of the directors then in office. If the office of any other officer becomes vacant, any person or body empowered to elect or appoint that officer 9 may choose a successor. Each such successor shall hold office for the unexpired term, and in the case of the president, the treasurer and the secretary until his successor is chosen and qualified or in each case he sooner dies, resigns, is removed or becomes disqualified. Any vacancy of a directorship shall be filled as specified in Section 3.5 of these by-laws. Section 7. Capital Stock. 7.1 STOCK CERTIFICATES. Each stockholder shall be entitled to a certificate stating the number and the class and the designation of the series, if any, of the shares held by him, in such form as shall, in conformity to law, the certificate of incorporation and the by-laws, be prescribed from time to time by the board of directors. Such certificate shall be signed by the chairman or vice chairman of the board, if any, or the president or a vice president and by the treasurer or an assistant treasurer or by the secretary or an assistant secretary. Any of or all the signatures on the certificate may be a facsimile. In case an officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the time of its issue. 7.2 LOSS OF CERTIFICATES. In the case of the alleged theft, loss, destruction or mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms, including receipt of a bond sufficient to indemnify the corporation against any claim on account thereof, as the board of directors may prescribe. Section 8. Transfer of Shares of Stock. 8.1 TRANSFER ON BOOKS. Subject to the restrictions, if any, stated or noted on the stock certificate, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate therefor properly endorsed or accompanied by a written assignment and power of attorney properly executed, with necessary transfer stamps affixed, and with such proof of the authenticity of signature as the board of directors or the transfer agent of the corporation may reasonably require. Except as may be otherwise required by law, by the certificate of incorporation or by these by-laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to receive notice and to vote or to give any consent with respect thereto and to be held liable for such calls and assessments, if any, as may lawfully be made thereon, regardless of any transfer, pledge or other disposition of such stock until the shares have been properly transferred on the books of the corporation. It shall be the duty of each stockholder to notify the corporation of his post office address. 8.2 RECORD DATE AND CLOSING TRANSFER BOOKS. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and 10 which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no such record date is fixed by the board of directors, the record date for determining the stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no such record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by the General Corporation Law of the State of Delaware, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in Delaware by hand or certified or registered mail, return receipt requested, to its principal place of business or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. If no record date has been fixed by the board of directors and prior action by the board of directors is required by the General Corporation Law of the State of Delaware, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such payment, exercise or other action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. Section 9. Indemnification. 9.1 RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than such law permitted the corporation to provide prior to such 11 amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, that, except as provided in this Section 9.1 with respect to proceedings to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the corporation. The right to indemnification conferred in this Section 9.1 shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is not further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 9 or otherwise (hereinafter an "undertaking"). 9.2 RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 9.1 of these by-laws is not paid in full by the corporation within forty-five (45) days after a written claim has been received by the corporation, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or part in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking the corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware General Corporation Law. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right hereunder, or by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified or to such advancement of expenses under this Section 9 or otherwise shall be on the corporation. 12 9.3 NON-EXCLUSIVITY OF RIGHTS. The rights of indemnification and to the advancement of expenses conferred in this Section 9 shall not be exclusive of and shall not affect any other right which any person may have or thereafter acquire under any statue, provision of the Certificate of Incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise, and shall inure to the benefit of the heirs and legal representatives of such person. 9.4 INSURANCE. The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. 9.5 INDEMNIFICATION OF EMPLOYEES OR AGENTS OF THE CORPORATION. The corporation may, to the extent authorized from time to time by the board of directors, grant rights to indemnification and to the advancement of expenses, to any employee or agent of the corporation to the fullest extent of the provisions of this Section 9 with respect to the indemnification and advancement of expenses of directors or officers of the corporation. 9.6 INDEMNIFICATION CONTRACTS. The board of directors is authorized to enter into a contract with any director, officer, employee or agent of the corporation, or any person serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing for indemnification rights equivalent to or, if the board of directors so determines, greater than, those provided for in this Section 9. 9.7 EFFECT OF AMENDMENT. Any amendment, repeal or modification of any provision of this Section 9 by the stockholders or the directors of the corporation shall not adversely affect any right or protection of a director or officer of the corporation existing at the time of such amendment, repeal or modification. Section 10. Corporate Seal. 10.1 Subject to alteration by the directors, the seal of the corporation shall consist of a flat-faced circular die with the word "Delaware" and the name of the corporation cut or engraved thereon, together with such other words, dates or images as may be approved from time to time by the directors. Section 11. Execution of Papers. 11.1 Except as the board of directors may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts or other obligations made, accepted or endorsed by the corporation shall be signed by the chairman of the board, if any, the president, a vice president or the treasurer. Section 12. Fiscal Year. 12.1 THE FISCAL YEAR OF THE CORPORATION SHALL END ON DECEMBER 31. 13 Section 13. Amendments. 13.1 These by-laws may be adopted, amended or repealed by vote of a majority of the directors then in office (except that any amendment or repeal of Section 3.1, 3.3 or 13.1 of these bylaws shall be made only by unanimous vote of the directors then serving) or by vote of a majority of the stock outstanding and entitled to vote. Any by-law, whether adopted, amended or repealed by the stockholders or directors, may be amended or reinstated by the stockholders or the directors. 14 EX-10 5 ex10-8.txt EX-10.8 EXHIBIT 10.8 June 30, 2008 OPTION EXERCISE NOTICE AND AGREEMENT VIA FACSIMILE ((310) 432-1958), EMAIL AND FEDEX COURIER Interplay Entertainment Corp. 100 Crescent Drive Beverly Hills, CA 90210 Attn: CEO with a copy (via facsimile only) to: Interplay Entertainment Corp. Legal Department 310-432-1959 Re: EXERCISE OF PURCHASE OPTION Dear Sirs: This option exercise notice ("OPTION EXERCISE AGREEMENT"), dated effective on the date written above (the "EFFECTIVE DATE") shall serve to inform Interplay Entertainment Corp. ("INTERPLAY") that Atari Interactive, Inc. ("ATARI INTERACTIVE" and, collectively with Interplay, the "PARTIES") hereby elects to exercise its option to purchase intellectual property rights with respect to the D&D Game IP (the "OPTION") for the sum of One Million Fifty Thousand Dollars (the "PURCHASE PRICE") to be paid in the form of the Note Forgiveness (as defined hereinbelow) pursuant to the Option Agreement to Purchase Intellectual Property Rights dated November 11, 2005, including Amendments 1, 2 and 3 thereto, between Interplay and Atari Interactive (the "PURCHASE OPTION AGREEMENT"). Attached hereto as EXHIBIT A is a true and correct copy of said document. In connection with the foregoing option exercise, the Parties hereby agree as follows: 1. Notwithstanding the expiration of the Option Period, Interplay hereby (i) confirms and agrees that this Option Exercise Agreement constitutes a full, valid and effective exercise of the Option, (ii) to the extent required for a full, effective and valid exercise of the Option, consents to an automatic extension of the Option Period, and (iii) waives any objection or claim in connection with any (if any) untimeliness or deemed untimeliness in the exercise of the Option by Atari Interactive. 2. Reference is made to the letter dated March 14, 2008 (the "AITD LETTER") from Herve Caen, Interplay CEO, to Atari Interactive and certain of its affiliates regarding the forthcoming sequel to Alone in the Dark, working title "Alone in the Dark" (the "2008 AITD GAME"). Notwithstanding anything in the AITD Letter to the contrary, Interplay hereby waives any and all of its claims, rights, liens, encumbrances and causes of action with respect to any intellectual property rights or other rights in or to, or used in connection with (i) the 2008 AITD Game or (ii) the "Alone in the Dark" franchise. 3. Reference is made to the letter dated March 14, 2008 (the "SLA LETTER") from Herve Caen, Interplay CEO, to Atari Interactive and certain of its affiliates regarding November 3, 2005 Software License Agreement between and among Interplay, Atari Interactive and Atari Europe SASU with respect to the licensing of certain product provided on Appendix 1 thereof relating to Baldur's Gate, Baldur's Gate 2, Baldur's Gate Dark Alliance, Baldur's Gate Dark Alliance 2, Icewind Dale and Planescape (the "SLA"). Notwithstanding anything in the SLA Letter to the contrary, to the extent that the SLA Letter constitutes a notice from Interplay of any alleged breach of the SLA by Atari Interactive and/or Atari Europe SASU, Interplay hereby cancels, revokes and withdraws such notice of alleged breach of the SLA, with prejudice. In addition, Interplay hereby forever irrevocably waives, and releases Atari Interactive and its affiliates, including Atari Europe SASU, from, any and all claims, demands, causes of action and other liability arising under or in connection with or relating to the SLA. 4. For the avoidance of doubt, concurrent with the execution of this document, and as a condition to Atari Interactive's delivery of the Note Forgiveness, Interplay shall deliver the following items, each executed by a duly authorized officer of Interplay (collectively, the "INTERPLAY CLOSING DELIVERABLES"): a. an assignment and assumption agreement, in the form attached hereto as EXHIBIT B, with respect to the assignment by Interplay to Atari Interactive of the Assigned Contracts (as defined in Section 1(a) of the Purchase Option Agreement); b. a short-form assignment of trademarks in the form attached hereto as EXHIBIT C; and c. a short-form assignment of copyrights in the form attached hereto as EXHIBIT D. 5. Interplay represents and warrants that it has delivered to Atari Interactive all source codes, object codes, documentation, archival materials, a/v assets, and marketing 2 or other creative assets in Interplay's possession or control of, for or relating to any of the D&D Game IP (collectively, "D&D RELATED ASSETS"), and to the extent that any of the foregoing have not been delivered to Atari Interactive, they do not exist. Notwithstanding the foregoing representation and warranty, in the event that, subsequent to the Effective Date, Interplay identifies any D&D Related Assets that have not been delivered to Atari Interactive, Interplay shall promptly notify Atari Interactive thereof and Atari Interactive shall have the right to purchase each such item at a cost of One United States Dollar ($1.00). Interplay represents and warrants that none of the Assigned Contracts has been amended since the Effective Date of the Purchase Option Agreement (i.e., November 11, 2005). 6. Atari Interactive agrees and acknowledges that as between Atari Interactive and Interplay, Interplay is the sole owner of the trademark Dark Alliance (Trademark Application No. 77358969) and that Atari Interactive has no claim, either in trademark, copyright or otherwise, to the Dark Alliance trademark (as distinct from the BALDUR'S GATE DARK ALLIANCE trademark) and will not interfere with any efforts by Interplay to register said trademark. 7. Subject to receipt of the Interplay Closing Deliverables, concurrent with execution of this document Atari Interactive shall deliver the following item, each executed by a duly authorized officer of Atari Interactive: Atari Interactive shall deliver to Interplay a signed instrument reasonably acceptable to Interplay reflecting full and final forgiveness and cancellation by Atari Interactive of any balance due to Atari Interactive from Interplay pursuant to the Interplay Note dated August 19, 2004, a true and correct copy of the note of forgiveness which is attached hereto as EXHIBIT E (the "NOTE FORGIVENESS"). Interplay and Atari acknowledge and agree that the Purchase Price shall be deemed to be paid in full upon receipt by Interplay of the Note Forgiveness. 8. Subsequent to the Closing, and promptly upon reasonable request by Atari Interactive, Interplay will cooperate with Atari Interactive in obtaining the Console Manufacturer Authorization Letters. Atari Interactive shall be responsible for preparing any such authorization letter in a form reasonably acceptable to Interplay. 9. Atari Interactive hereby waives the requirement that Interplay deliver the Snowblind Consent or Bioware Consent upon Closing, provided that Interplay shall cooperate with Atari Interactive subsequent to Closing in obtaining such consents. 10. In the event of a conflict between this Option Exercise Agreement and the Purchase Option Agreement, the terms of the Purchase Option Agreement shall control. 11. The Closing shall be deemed completed upon execution of this document by both Parties. 3 12. Capitalized terms in this Option Exercise Agreement have the same meaning as given to them in the Purchase Option Agreement. The notice, governing law and jurisdictional provisions of the Purchase Option Agreement shall also apply to this Option Exercise Agreement, and are expressly incorporated herein. Sincerely, ATARI INTERACTIVE, INC. By: ----------------------------------- Frederic Armitano-Grivel Senior Vice President Legal Affairs Date signed: ACCEPTED AND AGREED: INTEPLAY ENTERTAINMENT CORP. By: ________________________________ Title: _____________________________ Date signed: _______________________ 4 EXHIBIT A TRUE AND CORRECT COPY OF PURCHASE OPTION AGREEMENT Attached. 5 EXHIBIT B SHORT-FORM ASSIGNMENT AND ASSUMPTION AGREEMENT Attached. 6 ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is made and entered into effective as of July 24, 2008 (the "Effective Date"), by and between Atari Interactive, Inc., a Delaware corporation ("Purchaser") and Interplay Entertainment Corp., a Delaware corporation ("Seller"). RECITALS A. Reference is made to the Option Agreement to Purchase Intellectual Property Rights between Seller and Purchaser, entered into as of November 11, 2005 (the "Purchase Option Agreement") and the option exercise agreement between Purchaser and Seller of even date herewith (the "Option Exercise Agreement"). B. Pursuant to the Purchase Option Agreement, Seller has agreed to assign to Purchaser the Assigned Contracts (among other purchased assets, including the D&D Game IP) and Purchaser has agreed to assume the Assigned Contracts (excluding any liabilities with respect to the period prior to the Effective Date) under such Purchase Option Agreement; and C. The parties desire to set forth their understandings in writing with respect to the assignment and assumption of such agreements, obligations and liabilities. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and in the Purchase Option Agreement and Option Exercise Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, Seller and Purchaser hereby agree as follows: 1) ASSIGNMENT AND POWER OF ATTORNEY. Seller hereby sells, assigns, conveys, transfers and sets over to Purchaser all of Seller's right, title and interest in and to the Assigned Contracts. Seller hereby irrevocably constitutes and appoints Purchaser, and its successors and assigns, as its attorney-in-fact, with full power of substitution, in its name or otherwise, on behalf of Seller for Purchaser's use, to claim, demand, collect, and receive at any time and from time to time any and all of the Assigned Contracts hereby sold, assigned and transferred. 2) ASSUMPTION OF CONTRACTS AND ASSUMED LIABILITIES. Purchaser hereby accepts the assignment to it of all of Seller's right, title and interest in and to the Assigned Contracts and Purchaser assumes and agrees to be bound by the Assigned Contracts and to keep, perform, discharge and fulfill each and all of the covenants, agreements, terms, provisions, conditions and obligations required to be kept, performed and fulfilled by Seller under the Assigned Contracts from and after the Effective Date, including without limitation the making of all payments under the Assigned Contracts with respect to the period from and after the Effective Date as and when the same are due and payable. Purchaser shall assume all liability related to the Assigned Contracts from the Effective Date onward, with the exception of the period from June 30, 2008 through July 24, 2008, for which time period Seller agrees to assume all liability, should any such liability arise. 7 3) DEFINED TERMS. Capitalized terms used in this Agreement, and not defined herein, shall have the meanings given them in the Purchase Option Agreement. 4) BINDING AGREEMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 5) PURCHASE OPTION AGREEMENT. Seller and Purchaser, by each of their execution of this Agreement, each hereby acknowledges and agrees that the terms and provisions of the Purchase Option Agreement and the Option Exercise Agreement shall apply to this Agreement, and the terms and conditions of this Agreement shall be construed consistently therewith. 6) EFFECTIVE DATE. This Agreement shall be deemed effective for all purposes as of the Effective Date. 7) GOVERNING LAW. This Agreement shall be interpreted in accordance with the substantive laws of the State of New York applicable to contracts made and to be performed wholly within said State. 8) COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and shall bind the signatory, but all of which shall constitute one and the same instrument. This Agreement may be executed via facsimile. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 8 IN WITNESS WHEREOF, the undersigned parties have executed this Assignment and Assumption Agreement as of the date first written above. ATARI INTERACTIVE, INC. ("PURCHASER") By:_________________________________ Its:_________________________________ INTERPLAY ENTERTAINMENT CORP. ("SELLER") By:_________________________________ Its:_________________________________ 9 EXHIBIT C SHORT-FORM ASSIGNMENT OF TRADEMARKS Attached. 10 UNITED STATES OF AMERICA SHORT FORM TRADEMARK ASSIGNMENT This Short Form Trademark Assignment is subject to all the terms and conditions of that certain Option Agreement to Purchase Intellectual Property Rights, between Atari Interactive, Inc., a Delaware corporation with its principal office located at 417 5th Avenue, New York, New York 10016 ("ATARI INTERACTIVE"), and Interplay Entertainment Corp., a Delaware limited liability company with its principal office located at 100 Crescent Drive, Beverly Hills, CA 90210 ("INTERPLAY") entered into as of November 11, 2005 (the "PURCHASE OPTION AGREEMENT") and the option exercise agreement between Atari Interactive and Interplay of even date herewith. In the event of a conflict between this Short Form Trademark Assignment and either the Purchase Option Agreement or the Option Exercise Agreement, the terms of the Purchase Option Agreement or the Option Exercise agreement, as the case may be, shall control. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Interplay hereby sells, assigns, grants, transfers and conveys to Atari Interactive all of Interplay's right, title and interest of every kind and nature throughout the universe in perpetuity in and to all of the Trademarks (as defined in the Purchase Option Agreement) set forth on SCHEDULE 1 attached hereto and incorporated herein by this reference. Interplay's sale, assignment, grant, transfer and conveyance of its rights in and to the Trademarks shall include, without limitation, all rights that may now or hereafter be vested in or controlled by Interplay or any Affiliate (as defined in the Assignment Agreement) of Interplay, together with all national, foreign and state registrations, applications for registration and renewals and extensions thereof and all common law rights; all goodwill associated therewith; and all benefits, privileges, causes of action, remedies and (with respect solely to the period as from the date of this Short Form Trademark Assignment) liabilities relating to any of the foregoing, whether before or hereafter accrued (including, without limitation, the exclusive rights to apply for and maintain all such applications, registrations, renewals and/or extensions; to sue for all past, present or future infringements or other violations of any rights in the Trademarks; and to settle and retain proceeds from any such actions), and any and all of Interplay's or any Affiliate of Interplay's other right, title and interest of every kind and nature whatsoever in and to the foregoing. IN WITNESS WHEREOF, a duly authorized officer of Interplay has executed this Short Form Trademark Assignment on July 24, 2008. INTERPLAY ENTERTAINMENT CORP. By: --------------------------------------- Name: -------------------------------------- Title: ------------------------------------- 11 Interplay Entertainment Corp. Option Exercise and Waiver July 24, 2008 Page 2 UNITED STATES OF AMERICA STATE OF ___________________________________ COUNTY OF ________________________________ On this ________________ day of ___________________, 2006, before me, - -----------------------------------------------------------------, (NAME, TITLE OF OFFICER - E.G., "JANE DOE, NOTARY PUBLIC") personally appeared __________________________________________________________ (NAME OF SIGNER) personally known to me - or proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ------------------------------------------------- (Signature of Notary) 12 SCHEDULE I TO ASSIGNMENT OF TRADEMARKS TRADEMARKS
- ---------------------------- ----------------- ----------- -------------- -------------- APPLICATION REGISTRATION TRADEMARK TERRITORY CLASS NUMBER NUMBER - ---------------------------- ----------------- ----------- -------------- -------------- Baldur's Gate Throne of USA 9 78066852 Bhaal - ---------------------------- ----------------- ----------- -------------- -------------- Baldur's Gate Dark Alliance USA 9 78050716 - ---------------------------- ----------------- ----------- -------------- -------------- Planetscape: Torment USA 9 76026377 - ---------------------------- ----------------- ----------- -------------- -------------- Throne of Bhaal USA 9 78066854 - ---------------------------- ----------------- ----------- -------------- --------------
13 EXHIBIT D SHORT-FORM ASSIGNMENT OF COPYRIGHTS Attached. 14 ASSIGNMENT OF COPYRIGHTS The undersigned, as the duly authorized agent and on behalf of Interplay Entertainment Corp., a Delaware corporation located and doing business at 100 Crescent Drive, Beverly Hills, CA 90210, which is the sole author of the works listed in the attached Schedule I incorporated herein by reference, for good and valuable consideration, receipt of which is hereby acknowledged, hereby sells, assigns, and sets over to Atari Interactive, Inc., a Delaware corporation with its principal place of business at 417 Fifth Ave., New York, NY 10016, all right, title and interest in and to the works, all copyrights inuring to the works, including all renewals and extensions of such rights that may be secured under the laws now or hereafter in force and effect in the United States of America or in any other country or countries, including the right to sue for past, present and future infringement. DATED this July 24, 2008. INTERPLAY ENTERTAINMENT CORP. By:_________________________________ Print Name: 15 State of [ ] ) ) ss. County of ________________) I certify that I know or have satisfactory evidence that ___________________________ is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument, and acknowledged it as the ______________________________ of INTERPLAY ENTERTAINMENT CORP. to be the free and voluntary act of such party for the uses and purposed mentioned in the instrument. Dated__________________________________________ ----------------------------------------------- Notary Public My appointment expires ________________________ 16 SCHEDULE I TO ASSIGNMENT OF COPYRIGHTS - ---------------------------------------------------------- -------------------- NAME REGISTRATION # - ---------------------------------------------------------- -------------------- Baldur's Gate (registered by Bioware) TX4-922-293 - ---------------------------------------------------------- -------------------- Baldur's Gate: Sword Coast (registered by Bioware) TX4-955-063 - ---------------------------------------------------------- -------------------- Icewind Dale PA 973-370 - ---------------------------------------------------------- -------------------- Planetscape: Torment TX5-085-749 - ---------------------------------------------------------- -------------------- 17 EXHIBIT E FORM OF NOTE FORGIVENESS Attached. 18 June 30, 2008 FORGIVENESS OF PROMISSORY NOTE VIA FACSIMILE ((310) 432-1958), EMAIL AND FEDEX COURIER Re: Option Agreement to Purchase Intellectual Property Rights dated November 11, 2005, including Amendments 1, 2 and 3 thereto, between Interplay Entertainment Corporation ("INTERPLAY") and Atari Interactive, Inc. ("ATARI INTERACTIVE") (the "PURCHASE OPTION AGREEMENT") Dear Sirs: Reference is made to the Purchase Option Agreement. Please be advised that, in accordance with the provisions of the Purchase Option Agreement, Atari Interactive hereby forgives, releases and forever discharges Interplay's Demand Promissory Note, dated August 19, 2004 and any obligations thereunder, issued in favor of Atari Interactive (the "INTERPLAY NOTE"), which Interplay Note is hereby deemed to be fully paid and satisfied as a result of the completion of the transactions contemplated by the Purchase Option Agreement, effective as of the date first written above. Sincerely yours, ATARI INTERACTIVE, INC. By: _______________________ Name: Title: Date signed: 19 EX-31 6 ex31-1s.txt EX-31.1 EXHIBIT 31.1 Certification of CEO Pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-14(e) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Herve Caen, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Interplay Entertainment Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 19, 2008 /S/ HERVE CAEN ----------------------- Herve Caen Chief Executive Officer EX-31 7 ex31-2s.txt EX-31.2 EXHIBIT 31.2 Certification of Interim CFO Pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-15(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Herve Caen, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Interplay Entertainment Corp.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 19, 2008 /S/ HERVE CAEN ------------------------------- Herve Caen Interim Chief Financial Officer EX-32 8 ex32-1s.txt EX-32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(b) AND 15d-14(b) AS ADOPTED PURSUANT SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE) Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of Interplay Entertainment Corp., a Delaware corporation (the "Company"), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarter ended September 30, 2008 as filed with the U.S. Securities and Exchange Commission (the "10-Q Report") that, to the best of the undersigned's knowledge: (1) the 10-Q Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 19, 2008 /S/ HERVE CAEN ----------------------------------------- Herve Caen Chief Executive Officer and Interim Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----