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The Trademark License Agremeent is an agreement between Bethesda Softworks and Interplay Entertainment regarding the sale of the Fallout franchise to Bethesda. Its alleged breaches are now the subject of lawsuits between the two companies.

Document start icon The following is the original document or a transcript thereof.

Text of the agreement

                            ASSET PURCHASE AGREEMENT


                               - BY AND BETWEEN -


                          INTERPLAY ENTERTAINMENT CORP.


                                     - AND -


                             BETHESDA SOFTWORKS LLC


                            DATED AS OF APRIL 4, 2007


<PAGE>


                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE  AGREEMENT (this "AGREEMENT") is entered into as of
April 4, 2007 (the "EFFECTIVE Date") between BETHESDA  SOFTWORKS LLC, a Delaware
limited liability company (the "PURCHASER"),  and INTERPLAY ENTERTAINMENT CORP.,
a Delaware  corporation  (the  "SELLER").  Purchaser  and  Seller are  sometimes
referred to herein individually as a "PARTY" and collectively as the "PARTIES."

                                    RECITALS:

         A. On June 29,  2004,  Seller and  Purchaser  entered into an Exclusive
Licensing Agreement, amended August 19, 2004 (as amended to date, the "EXCLUSIVE
LICENSING   AGREEMENT"),   whereby  Purchaser  acquired  exclusive,   worldwide,
perpetual unrestricted intellectual property rights in and to all future uses of
every kind to the brand and interactive entertainment software property known as
"FALLOUT" and to the "FALLOUT"  trademark,  to the extent expressly provided for
under  the  Exclusive  Licensing  Agreement.  Through  and  as a  result  of the
Exclusive Licensing  Agreement,  Purchaser has the unfettered right,  subject to
license royalties, to use and exploit the Fallout Intellectual Property (defined
below) and is prepared to purchase actual legal  ownership of all right,  title,
and  interest  in and to the  Fallout  Intellectual  Property  and in the  other
Acquired Assets (defined below).

         B. The Seller and Purchaser entered into arms' length  negotiations for
the sale of the Fallout Intellectual  Property which would eliminate risk to the
Seller concerning the timing and amount of any royalties,  if any, to be paid in
the future under the Exclusive Licensing  Agreement,  and provide the Seller the
fair value of the Fallout Intellectual Property to the extent Purchaser does not
already effectively have it under the Exclusive Licensing  Agreement,  and would
eliminate Purchaser's potential future royalty obligations to the Seller.

         C. On November 1, 2006, while the  negotiations  between the Seller and
Purchaser  were  ongoing,   four  petitioning  creditors  filed  an  involuntary
bankruptcy  petition under Chapter 7 of Title 11 of the United States Bankruptcy
Code (the "BANKRUPTCY CODE") against Seller (the "INVOLUNTARY  PETITION") in the
United States Bankruptcy Court for the Central District of California,  Case No.
06-11994 TA (the "BANKRUPTCY  CASE"),  and on November 30, 2006, Seller answered
the  Involuntary  Petition in the Bankruptcy Case by filing an Answer of Alleged
Debtor To Involuntary Petition seeking to dismiss the Bankruptcy Case.

         D. The Seller desires,  based on the fair value of the Acquired Assets,
to monetize  the  benefit of its  bargain  with  Purchaser  under the  Exclusive
Licensing  Agreement by converting the possibility of contingent future payments
from  Purchaser  into  certain  amounts to be paid to the Seller by Purchaser as
provided in this Agreement.  Seller  recognizes the  uncertainties  of receiving
further  advances  and/or future game  royalties  under the Exclusive  Licensing
Agreement,  and Purchaser is willing to acquire from Seller,  as permitted under
Sections 303(f) and 549(b) of the Bankruptcy Code, all right, title and interest
in such Acquired Assets, for the cash consideration  described herein, which the
Parties agree represent the fair value of the Acquired Assets.

         E. Purchaser and Seller enter into this Agreement in good faith and for
bona fide business reasons and purposes.

                                   AGREEMENT:

         NOW,  THEREFORE,  in consideration of the promises and mutual covenants
and agreements set forth in this Agreement, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         Capitalized terms used but not otherwise defined in this Agreement have
the respective meanings given thereto in EXHIBIT A to this Agreement.


                                       2
<PAGE>


                                   ARTICLE II
                           PURCHASE AND SALE; CLOSING

         2.1 ACQUIRED  ASSETS.  Upon the terms and subject to the  conditions of
this  Agreement,  and  effective  upon  the  Closing  Date,  (x)  Seller  hereby
irrevocably sells, assigns, transfers,  conveys and delivers to Purchaser on the
Closing Date,  and (y)  Purchaser  hereby  purchases,  acquires and accepts from
Seller,  all of Seller's right, title and interest in and to all of the Acquired
Assets. As used herein, the term "ACQUIRED ASSETS" shall mean, collectively, the
Purchased  Intellectual Property, the other Assets identified on PART 2.1 OF THE
DISCLOSURE SCHEDULE, and the Enforcement Rights.

         2.2 ASSUMED  LIABILITIES.  Upon and  subject to the terms,  conditions,
representations,  and  warranties  of Seller  contained  herein,  and subject to
SECTION 2.3, Purchaser agrees,  effective at the time of Closing, to assume only
the following liabilities (collectively,  the "ASSUMED LIABILITIES"): all filing
fees for transferring ownership of the Fallout Intellectual Property arising and
accruing on and after the Closing and for  maintaining  and continuing to pursue
for  Purchaser's  benefit  any  registrations  or  applications  relating to the
Fallout Intellectual Property.

         2.3  EXCLUDED  LIABILITIES.   Notwithstanding  any  provision  in  this
Agreement or anything herein or otherwise to the contrary, Purchaser is assuming
only  the  Assumed  Liabilities  and is not  assuming,  nor  will  Purchaser  be
obligated to pay,  perform,  or discharge  any other  liability or obligation of
Seller or any Affiliate of Seller or of any  predecessor  stockholder,  or other
owner of all or part of Seller or any  Affiliate  of Seller  (collectively,  the
"SELLER GROUP"),  of any kind or nature whatsoever,  whether direct or indirect,
known or unknown, absolute or contingent,  presently in existence or accrued, or
arising  or  asserted  after  the  date  hereof  or  on  or  after  the  Closing
(collectively,  the "EXCLUDED LIABILITIES").  Any and all such other liabilities
and obligations  shall be retained by and remain  obligations and liabilities of
the Seller Group.

         2.4 CLOSING.  The consummation of the purchase and sale of the Acquired
Assets  in  accordance  with  this  Agreement  and  the  closing  of  the  other
transactions  provided for hereunder (the  "CLOSING")  shall take place at 10:30
a.m., local time, at the offices of DLA Piper US LLP, 1775 Wiehle Avenue,  Suite
400,  Reston,  Virginia  20190 on APRIL 6, 2007, or at such other later time and
place  as  the  Parties  shall  agree  in  writing,  subject  in  each  case  to
satisfaction  or waiver by the  Seller  and  Purchaser,  as  applicable,  of the
conditions  precedent  to closing  set forth in  SECTION  6.1 and  SECTION  6.2,
respectively.  The  actual  date of the  Closing  shall  be  referred  to as the
"CLOSING DATE" and the Closing shall be deemed effective as of 12:01 a.m. on the
Closing Date. The Parties hereby agree to deliver at the Closing such documents,
certificates  of officers and other  instruments  as are set forth  elsewhere in
this  Agreement and as may  reasonably be required to effect the transfer by the
Seller of the Acquired  Assets to the Purchaser and to vest full title in and to
the Acquired  Assets in Purchaser,  free and clear of any and all  Encumbrances.
All  events  which  shall  occur  at  the  Closing  shall  be  deemed  to  occur
simultaneously.

         2.5 SELLER'S CLOSING DELIVERIES. At the Closing, Seller will deliver to
Purchaser (in addition to a duly executed copy of this Agreement,  together with
all final  exhibits,  annexes,  and schedules  hereto) the  following,  with all
documents  and  instruments  below  to be  duly  executed  by the  Seller  where
appropriate and notarized where indicated in the exhibits, annexes, or schedules
to this Agreement:

                  (a) the  Trademark  License  Agreement,  in the form  attached
         hereto as EXHIBIT B-1 (the "LICENSE BACK Agreement");

                  (b) the Special Rules System  License  Agreement,  in the form
         attached hereto as EXHIBIT B-2 (the "SPECIAL RULES LICENSE AGREEMENT");

                  (c) the bill of sale, in the form  attached  hereto as EXHIBIT
         B-3 (the "BILL OF SALE");

                  (d) the instrument of assignment and  assumption,  in the form
         attached  hereto as EXHIBIT  B-4 (the  "INSTRUMENT  OF  ASSIGNMENT  AND
         ASSUMPTION");

                  (e) the  applicable  assignment  agreements  designated by the
         Purchaser,  in the forms attached hereto as EXHIBIT C-1 and EXHIBIT C-2
         (the "ASSIGNMENTS"), respectively;


                                       3
<PAGE>


                  (f) a power of attorney in the form attached hereto as EXHIBIT
         C-3;

                  (g) all tangible  embodiments  of the  Purchased  Intellectual
         Property, including, without limitation, the Software and Documentation
         included in the Purchased  Intellectual  Property,  but with respect to
         Third Party Intellectual  Property Rights only to the extent Seller has
         the right in connection therewith to provide same;

                  (h) all other tangible and intangible property included in the
         Purchased  Intellectual  Property,  but with  respect  to  Third  Party
         Intellectual Property Rights only to the extent Seller has the right in
         connection therewith to provide same;

                  (i) an officer's and secretary's  closing  certificate in form
         and substance acceptable to Purchaser;

                  (j) the  Escrow  Agreement,  in the form  attached  hereto  as
         EXHIBIT D; and

                  (k)  such  other  instruments,   documents,  certificates  and
         closing deliverables as Purchaser may reasonably request or may require
         in connection  with this  Agreement and the  transactions  provided for
         herein.

         2.6  PURCHASER'S  CLOSING  DELIVERIES.  At the Closing,  Purchaser will
deliver to the Seller (in addition to a duly  executed  copy of this  Agreement,
together with all final exhibits,  annexes, and schedules hereto) the following,
with all  documents and  instruments  below to be duly executed by the Purchaser
where  appropriate  and notarized where  indicated in the annex,  schedules,  or
exhibits to this Agreement:

                  (a) the License Back Agreement;

                  (b) the Special Rules License Agreement;

                  (c) the Bill of Sale;

                  (d) the Instrument of Assignment and Assumption;

                  (e) the Trademark Assignment Agreement;

                  (f) the Copyright Assignment Agreement;

                  (g) the Escrow Agreement; and

                  (h) the First  Installment,  payable  upon the  Closing  under
         SECTION 2.7 below.

         2.7  PURCHASE  PRICE.  In  addition  to the  Assumed  Liabilities,  the
purchase price for the Acquired Assets (together, the "PURCHASE PRICE") shall be
Five Million Seven Hundred Fifty  Thousand and 00/100  Dollars  ($5,750,000.00),
payable in three installments as provided herein,  upon the terms and conditions
set forth in this Agreement and in reliance on the representations,  warranties,
covenants  and  agreements  of  Seller.  At the  Closing,  the  Acquired  Assets
automatically  will be transferred to, and all right, title and interest therein
immediately vested in, the Purchaser.

                  (a) FIRST INSTALLMENT.  The Purchaser shall deliver the sum of
         TWO MILLION AND 00/100  DOLLARS  ($2,000,000.00)  of the Purchase Price
         (the   "FIRST    INSTALLMENT")    in    immediately    available   U.S.
         dollar-denominated  funds by wire transfer as follows:  (i) TWO HUNDRED
         THOUSAND AND 00/100 DOLLARS ($200,000.00) to an account as specified on
         the Payment Schedule attached hereto and (ii) ONE MILLION EIGHT HUNDRED
         THOUSAND AND 00/L00 DOLLARS  ($1,800,000.00)  to a separate  segregated
         escrow account ("ESCROW  ACCOUNT")  established  pursuant to the Escrow
         Agreement (at EXHIBIT D), as specified in the PAYMENT SCHEDULE attached
         hereto,  with  said  funds  to be  used to  obtain  full  and  complete
         releases,  releases of liens,  satisfactions of judgments or discharges
         of  liabilities  (in the form of the  releases  attached  to the Escrow
         Agreement) as to all of the  Encumbrances  listed in PART 2.7(A) OF THE
         DISCLOSURE  SCHEDULE as promptly as  practicable  following the Closing
         Date.

                  (b)  SECOND  INSTALLMENT.  Upon  entry  by  the  court  in the
         Bankruptcy  Case  of  a  conditional  order  of  dismissal  in  a  form
         reasonably  satisfactory to the Purchaser  ("CONDITIONAL  ORDER"),  the
         Purchaser  shall  deliver  the sum of TWO  MILLION  AND 00/100  DOLLARS
         ($2,000,000.00)  of the  Purchase  Price the "SECOND  INSTALLMENT")  in
         immediately available U.S. dollar-denominated funds by wire transfer to
         the


                                       4
<PAGE>


         Escrow Account,  with said funds to be used to satisfy the requirements
         of the  Conditional  Order.  In the  event the  Bankruptcy  Case is not
         dismissed  pursuant to a final,  non-appealable  order (FINAL DISMISSAL
         ORDER")  within  ninety  (90)  days  from the date of  issuance  of the
         Conditional  Order,  any funds  remaining in the Escrow  Account  shall
         thereafter  be  distributed  only  as  directed  by  the  court  in the
         Bankruptcy Case.

                  (c) THIRD  INSTALLMENT.  The balance of the Purchase  Price in
         the sum of ONE  MILLION  SEVEN  HUNDRED AND FIFTY  THOUSAND  AND 00/100
         DOLLARS  ($1,750,000.00)  shall be due, owing,  and payable ninety (90)
         days following issuance of a Final Dismissal Order ("THIRD  INSTALLMENT
         DATE") on  condition  that (i) the Seller  provided  written  evidence,
         reasonably  satisfactory to Purchaser,  that the Encumbrances listed in
         PART 2.7(A) OF THE DISCLOSURE SCHEDULE have been released, satisfied or
         discharged in full and releases of liens and satisfactions of judgments
         have been filed with all  applicable  courts,  Secretaries  of State or
         other  entities,  (ii)  no new  bankruptcy  or  insolvency  proceedings
         against Seller have been filed,  (iii) no Encumbrances or challenges of
         any kind exist or have arisen with respect to  Purchaser's  clear title
         and ownership of the Acquired Assets,  and (iv) the Seller then remains
         in compliance  with all of its covenants  under this  Agreement and all
         related   agreements.   If  such  conditions  are  met  to  Purchaser's
         satisfaction,  then the  Purchaser  shall  deliver  ONE  MILLION  SEVEN
         HUNDRED  FIFTY   THOUSAND  AND  00/100   DOLLARS   ($1,750,000.00)   in
         immediately available U.S. dollar-denominated funds by wire transfer as
         specified  on  the  Payment   Schedule   attached  hereto  (the  "THIRD
         INSTALLMENT").  Whether  or not the  contingent  Third  Installment  is
         earned,  paid or  released,  if at any  time  any  Encumbrances  or any
         challenges  to  Purchaser's  clear  title and  ownership  of any of the
         Acquired  Assets  arise after the Third  Installment  Date,  the Seller
         shall take immediate action to resolve and fully discharge and cause to
         be released any and all such Encumbrances  and/or challenges and ensure
         to  Purchaser's   satisfaction   that  there  are  no  Encumbrances  on
         Purchaser's  clear title to and unencumbered  ownership of the Acquired
         Assets.

         2.8  EXCLUSIVE  LICENSING  AGREEMENT.   Effective   automatically  upon
Closing,  Purchaser shall have no obligations to pay any consideration under the
Exclusive  Licensing  Agreement,  and the Exclusive Licensing Agreement shall be
deemed  superseded by this  Agreement and in the event of a conflict of meaning,
the  terms  of this  Agreement  shall  control;  PROVIDED,  HOWEVER,  that if in
connection  with or as the result of any bankruptcy  proceeding or  liquidation,
dissolution,  or in connection with any other insolvency proceeding,  fraudulent
conveyance claim, or other claim or action, any court,  bankruptcy  trustee,  or
other applicable Person causes this Agreement and the transactions  hereunder to
be voided,  nullified,  or otherwise  unwound or overturned for any reason under
federal or state law, then  notwithstanding  anything herein or otherwise to the
contrary, (x) all of Purchaser's licenses, rights and other privileges under the
Exclusive Licensing  Agreement  automatically shall be reinstated and deemed for
all  purposes  to have  remained  in full  force and effect and not to have been
superseded or otherwise  impacted in any way by this Agreement,  and (y) any and
all payments made under this Agreement  automatically  shall be deemed to be and
constitute  royalty  payments  that may become due and payable to the Seller and
advance  payments  recoverable  against  and  applied  to any  and  all  payment
obligations  of  Purchaser  to the  Seller  in  accordance  with  the  Exclusive
Licensing Agreement.  With respect to such advance payments,  Purchaser shall be
deemed  to be and  constitute  a secured  creditor  of the  Seller  and shall be
entitled to a first priority lien over all of the Fallout Intellectual  Property
and entitled  hereby to make such security  interest  filings  under  applicable
federal or state law (including but not limited to with the United States Patent
and Trademark Office and Copyright Office and with any and all  corresponding or
similar  bodies  outside of the United  States) with  respect to all  registered
Fallout Intellectual Property as it may deem necessary or appropriate to perfect
such security interests.  Without limiting the foregoing,  any obligation by the
Purchaser to pay  royalties or any other  monies under the  Exclusive  Licensing
Agreement if  reinstated  is void. To the fullest  extent  possible,  the Seller
shall  waive all claims to  royalties  or any other  monies that ever may be due
under the Exclusive  Licensing  Agreement  and hereby  accepts the payments made
under this Agreement to constitute full payment of royalties or other monies due
thereunder.


                                       5
<PAGE>


                                  ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to the Purchaser that, on and as of the Effective
Date and as of the  Closing,  the  statements  contained in sections 3.1 through
3.22 of this  ARTICLE  III are true and correct in all  respects,  except as set
forth in the  Seller's  Disclosure  Schedule  attached  hereto (the  "DISCLOSURE
SCHEDULE").

         3.1 DUE INCORPORATION.  Seller is a corporation duly organized, validly
existing  and in  good  standing  under  the  applicable  laws of the  State  of
Delaware.  Seller has all requisite  corporate power and authority to own, lease
and operate its properties and to carry on and operate its business, operations,
and affairs as now conducted and to enter into this Agreement and all agreements
and  instruments  to be entered  into or delivered  under this  Agreement by the
Seller (collectively,  the "ANCILLARY  AGREEMENTS") and to perform and discharge
its  obligations  hereunder and under all Ancillary  Agreements.  Seller is duly
licensed or qualified as a foreign  corporation in good standing in the State of
California.

         3.2 AUTHORITY; NO VIOLATION; BINDING OBLIGATION.

                  (a) All corporate actions necessary to authorize the execution
         and delivery by Seller of this  Agreement and the Ancillary  Agreements
         and the  performance of its  obligations  hereunder and thereunder have
         been duly taken.

                  (b) The execution, delivery, and performance of this Agreement
         and the Ancillary  Agreements and the performance of Seller's covenants
         and  agreements  herein and therein  contained  do not and will not (i)
         contravene  or conflict with or constitute a violation of any provision
         of  applicable  law binding upon or  applicable to the ownership of the
         Acquired Assets or the Seller's business; (ii) conflict with, result in
         a breach of,  constitute  a default  under or give rise to any right of
         termination, cancellation or acceleration of any right or obligation of
         Seller relating to the Acquired  Assets or Assumed  Liabilities or to a
         loss  of  any  benefit  relating  to the  Acquired  Assets  or  Assumed
         Liabilities  to which  Seller is entitled  under any  provision  of any
         agreement,  contract  or other  instrument  or  relating  to any of the
         Acquired  Assets;  (iii)  result in the creation or  imposition  of any
         Encumbrance on any Acquired Asset; or (iv) conflict with or violate any
         provision of the articles of incorporation,  bylaws, or other governing
         documents of the Seller as in effect immediately prior to the Closing.

                  (c) This  Agreement and each of the Ancillary  Agreements  are
         legal, valid and binding obligations of Seller.

                  (d) Seller has not received any notice of  non-compliance  not
         previously  corrected  with  respect to the  Acquired  Assets under any
         applicable law.

         3.3  LITIGATION.  Except  for  the  Bankruptcy  Case  and  Encumbrances
identified  in PART  2.7(A)  OF THE  DISCLOSURE  SCHEDULE,  there  are no  Legal
Proceedings  pending,  or to the knowledge of the Seller,  threatened against or
relating to the Seller in connection  with this Agreement or any of the Acquired
Assets, whether at law, in equity, or before any governmental authority,  nor is
there a basis for any of the  foregoing.  Seller is not, in connection  with the
Acquired Assets, in default with respect to any judgment,  injunction,  order or
decree of any court or any governmental authority,  instrumentality, or court by
which it or any of the Acquired Assets is bound or subject.

         3.4 TITLE TO ACQUIRED ASSETS. Except for the Encumbrances identified in
PART 2.7(A) OF THE DISCLOSURE SCHEDULE,  Seller has good and marketable title to
the Acquired  Assets,  free and clear of any  Encumbrances,  and at the Closing,
Purchaser will receive good and marketable  title to the Acquired  Assets,  free
and clear of any  Encumbrances,  except for the Encumbrances  identified in PART
2.7(A) OF THE DISCLOSURE SCHEDULE.

         3.5 INSURANCE CLAIMS.  There are no pending insurance claims for losses
related to the Acquired Assets.

         3.6  OWNERSHIP.  The Seller  owns or  otherwise  has valid and  legally
enforceable rights by license to use the Purchased  Intellectual  Property.  The
Seller is the sole owner of all of the Purchased Intellectual Property.


                                       6
<PAGE>


         3.7  INBOUND  LICENSES  AND  RIGHTS.  Set  forth  in  PART  3.7  OF THE
DISCLOSURE  SCHEDULE  is a  list  and  brief  description  of  all  Third  Party
Intellectual  Property Rights used in connection  with the Fallout  Intellectual
Property as of the Closing Date, and identifies any licenses or other agreements
relating thereto,  true,  correct and complete copies of which licenses or other
agreements  are annexed to PART 3.7 OF THE DISCLOSURE  SCHEDULE.  The Seller has
not breached any of the licenses or other agreements  governing such Third Party
Intellectual  Property  Rights,  and, to the  knowledge of the Seller,  no other
party to  those  agreements  has  breached  those  agreements.  No  Third  Party
Intellectual  Property  of any  kind  or  nature  is as of the  Closing  Date or
historically  has  been  used by the  Seller  in  connection  with  the  Fallout
Intellectual  Property. No part of the Purchased  Intellectual Property has been
placed in (or is otherwise  subject to) any escrow  arrangement  of any kind for
the benefit of any third party.

         3.8 NO RESTRICTIONS. Other than under the Exclusive Licensing Agreement
and the Encumbrances  identified in PART 2.7(A) OF THE DISCLOSURE SCHEDULE,  the
Purchased Intellectual Property is free of any and all royalty and other payment
obligations  and  other  Claims  or  Encumbrances   and,  without  limiting  the
generality of the foregoing,  is not subject to any  limitations or restrictions
on Seller's use. There is no Legal Proceeding, order, agreement or other similar
arrangement  that prohibits or restricts the Seller (x) from using the Purchased
Intellectual  Property  or  developing,  licensing,  transferring  or  otherwise
exploiting  any Software,  properties,  or other assets  relating to the Fallout
Intellectual Property anywhere in the world or (y) from any use of the Purchased
Intellectual  Property anywhere in the world (except that this representation is
made only to the Seller's  knowledge  with  respect to Third Party  Intellectual
Property Rights). No Person has any rights in the Fallout Intellectual  Property
or in any of the other  Purchased  Intellectual  Property  that could  cause any
reversion  or renewal of rights in favor of that  Person or  termination  of the
Seller's  or,  following  the  Closing,  the  Purchaser's  rights in the Fallout
Intellectual Property or in any of the other Purchased Intellectual Property.

         3.9 EFFECT OF CLOSING.  Upon and after the Closing,  the Purchaser will
be the sole owner of, and will have valid and marketable title to, the Purchased
Intellectual Property, and will have the full right to use, license and transfer
the  Purchased  Intellectual  Property  in the same manner and on the same terms
that the Seller had immediately prior to the Closing.  The Seller is not legally
bound by any agreements or obligations under which the occurrence of the Closing
would (i)  obligate the Seller or the  Purchaser  to license or otherwise  grant
rights to any other  Person in any Fallout  Intellectual  Property (in any case,
whether owned or used by the Seller or Purchaser),  (ii) entitle any Person to a
release  of any  source  code  escrow,  (iii)  result  in  any  Claim  or  other
Encumbrance on the Purchased Intellectual Property,  (iv) give rise to any right
of any third party to  terminate,  or impair in any material  manner,  any Third
Party  Intellectual  Property  Rights  included  in the  Purchased  Intellectual
Property or otherwise contravene or conflict with Purchaser's right to enjoy the
benefit  of the Third  Party  Intellectual  Property  Rights,  or (v)  otherwise
increase any burdens or decrease any rights relating to the Fallout Intellectual
Property or any of the other  Purchased  Intellectual  Property in any  material
manner.

         3.10  PERFECTION  OF  OWNERSHIP  RIGHTS.  With  respect to the  Fallout
Intellectual Property:

                  (a)  ASSIGNMENTS.   PART  3.10  OF  THE  DISCLOSURE   SCHEDULE
         separately  lists all other  written  assignments,  if any,  Seller has
         obtained to  establish  the  Seller's  ownership  rights in the Fallout
         Intellectual Property.

                  (b)  EFFECT OF  ASSIGNMENTS.  In each case in which the Seller
         has acquired ownership of any material  Intellectual  Property from any
         Person,  other than a license of the Third Party Intellectual  Property
         Rights,  the Seller has  obtained  a valid and  enforceable  assignment
         sufficient  to  irrevocably  transfer  the  applicable  rights  in that
         Intellectual  Property  to the  Seller.  If the Seller has so  acquired
         Registered  Intellectual  Property,  the Seller has,  when  required by
         applicable  law,  duly  recorded  each of  these  assignments  with the
         appropriate  governmental  agency, and listed these assignments in PART
         3.10(B) OF THE DISCLOSURE SCHEDULE.


                                       7
<PAGE>


         3.11  REGISTERED  INTELLECTUAL  PROPERTY.  PART 3.11 OF THE  DISCLOSURE
SCHEDULE  separately  lists (x) all Registered  Intellectual  Property  included
within the Purchased  Intellectual  Property,  as well as (y) certain additional
Fallout Intellectual Property.

                  (a)  FEES  AND  APPLICATIONS.   All  necessary   registration,
         maintenance,  renewal, and annuity fees and taxes due as of the Closing
         Date,  have been paid, and all necessary  documents have been filed, in
         connection  with the Registered  Intellectual  Property.  In connection
         with the Registered  Intellectual  Property,  all  registrations are in
         force and all  applications  for the same are pending in good standing,
         and no actions for reissuance,  reexamination or opposition are pending
         or  threatened  with  respect  to any issued  registrations  or pending
         applications.

                  (b)  LIST  OF  MAINTENANCE   ACTIONS.   PART  3.11(B)  OF  THE
         DISCLOSURE  SCHEDULE  accurately and completely lists all actions that,
         as of the Closing Date, must be taken within ninety (90) days after the
         date of this Agreement  relating to the payment of any fees or taxes or
         the filing of any  documents  necessary  or  appropriate  to  maintain,
         perfect or renew any Registered  Intellectual Property with an official
         office (e.g., patent or trademark office).

         3.12 VALIDITY. All registered copyrights, trademarks, and service marks
(and all applications  related to any of the foregoing)  included in the Fallout
Intellectual  Property are subsisting  and valid under  applicable law for those
respective  categories  of  Intellectual   Property.   There  are  no  facts  or
circumstances  that would  render  any of the  Purchased  Intellectual  Property
invalid  or  unenforceable,   except  that  with  respect  to  the  Third  Party
Intellectual  Property,  this  representation  is  made  only  to  the  Seller's
knowledge.

         3.13 OUTBOUND LICENSES AND RIGHTS. PART 3.13 OF THE DISCLOSURE SCHEDULE
lists all  agreements,  if any, under which the Seller has licensed or otherwise
granted rights in any of the Purchased Intellectual Property to any Person. PART
3.13 OF THE  DISCLOSURE  SCHEDULE  also lists  separately  any of the  following
related to the Fallout Intellectual  Property:  (i) any exclusive rights granted
to any third  Person;  (ii) any source  code escrow or other form of delivery or
disclosure of any source code to or for the benefit of any Person;  or (iii) any
other agreements to which Seller is a party that give other Persons the right to
use,  market  or  otherwise   exploit  or  commercialize   any  of  the  Fallout
Intellectual Property or related products or services.

         3.14  INDEMNITY  AGREEMENTS.  The Seller  has not agreed to  indemnify,
defend or  otherwise  hold  harmless  any other  Person with  respect to Damages
resulting or arising from any of the  Purchased  Intellectual  Property,  except
under those  agreements  summarized or described in PART 3.14 OF THE  DISCLOSURE
SCHEDULE.

         3.15 NO  VIOLATION  OF THE  SELLER'S  RIGHTS.  To the  knowledge of the
Seller,  no  Person  has  infringed  or  misappropriated   any  of  the  Fallout
Intellectual  Property,   except  for  fan  websites,   blogs  and  other  sites
referencing  nominally  one of the FALLOUT  games without the consent of Seller.
Immediately  after the  Closing  (subject  to making any  filings  necessary  to
perfect  rights),  the  Purchaser  will have sole  rights to bring  actions  for
infringement  or  misappropriation  of the Fallout  Intellectual  Property.  The
Seller has not commenced or  threatened  any Legal  Proceeding,  or asserted any
allegation or claim,  against any Person for infringement or misappropriation of
the Purchased  Intellectual  Property or breach of any  agreement  involving the
Purchased  Intellectual  Property,  except  as  indicated  in  PART  3.15 OF THE
DISCLOSURE SCHEDULE.

         3.16 NO VIOLATION OF THIRD PARTY RIGHTS.  The Seller's  creation,  use,
sale, license, or other transfer of the Purchased Intellectual Property does not
infringe or misappropriate any other Person's  Intellectual Property and, to the
Seller's  knowledge,  after  the  Closing,  Purchaser's  use  of  the  Purchased
Intellectual Property (including, without limitation, the development,  license,
transfer,  or other  exploitation of any Software,  properties,  or other assets
relating to the Fallout  Intellectual  Property  anywhere in the world) will not
infringement or misappropriate  any other Person's  Intellectual  Property.  The
Seller has not  received  notice (in  writing or  otherwise)  of any  pending or
threatened  Legal  Proceeding  or any written  allegation  or claim in which any
Person alleges that the Seller, any of the Purchased  Intellectual  Property, or
any use, sale, license, transfer, development, or other exploitation thereof has
violated any Person's  Intellectual  Property rights and, to Seller's knowledge,
no basis for any such actual or threatened Legal Proceeding, claim or allegation
exists.  There are no pending or threatened  disputes between the Seller and


                                       8
<PAGE>


any other Person relating to the Purchased Intellectual Property.

         3.17 PROPRIETARY INFORMATION AND CONFIDENTIALITY.  The Seller has taken
commercially  reasonable and appropriate steps to protect and preserve its trade
secrets and all other  confidential  information  included in or relevant to the
Purchased Intellectual Property. To the Seller's knowledge,  none of its (or any
Affiliate's) current or former employees, consultants,  independent contractors,
or other agents have any rights in or to the Fallout Intellectual Property.

         3.18 NO SPECIAL ADVERSE CIRCUMSTANCES. None of the Fallout Intellectual
Property was developed using any government or university funding or facilities,
nor was it obtained from a governmental entity or university.  The Seller is not
a member  of, and is not  obligated  to license  or  disclose  any  Intellectual
Property to, any official or de facto standards setting or similar  organization
or to any organization's  members. None of the Fallout Intellectual Property (or
any of the other  Purchased  Intellectual  Property  embedded or contained in or
linking to any of the Fallout Intellectual Property includes any Software of the
type commonly referred to as "open source software,"  "freeware" or "shareware,"
or that is subject to any form of "GNU,"  "Mozilla," or other public  license or
open source license, rights or other obligations.

         3.19 NO BROKERS OR FINDERS.  No person, firm or corporation has or will
have as a result of any action of Seller or Seller's officers, employees, agents
or representatives,  any right, interest or valid claim for any commission,  fee
or other  compensation  as a finder or  broker,  or for  acting  in any  similar
capacity in connection with this Agreement or any of the  transactions  provided
for herein or in any of the Ancillary Agreements.

         3.20  ACCURACY  OF  MATERIAL  FACTS.  No  representation,  warranty  or
covenant  of  Seller  contained  in this  Agreement  or in any of the  Ancillary
Agreements,  or  the  attached  exhibits,   annexes,  or  schedules  or  in  any
certificate furnished or to be furnished to Purchaser pursuant to this Agreement
or any of the  Ancillary  Agreements  or in  connection  with  the  transactions
contemplated  hereby  or  thereby,  when  read  together,  contains  any  untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements contained herein and therein, taken as a whole, not
misleading in light of the circumstances under which such statements were made.

3.21 INTENT.  The transactions  provided for herein are being undertaken in good
faith and are not being undertaken with any intent to hinder, delay, defraud, or
mislead any past, present, or future creditors of the Seller. The Purchase Price
for the Acquired Assets represents fair value and was negotiated at arms' length
between the Seller and Purchaser.

         3.22 RELIANCE. The foregoing representations and warranties are made by
the Seller with the  knowledge  and  expectation  that  Purchaser is  materially
relying  thereon  in  connection  with  the  transactions  provided  for in this
Agreement, including, without limitation, the purchase of the Acquired Assets.

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Seller that, on and as of the Effective
Date and as of the  Closing,  the  statements  contained in section 3.23 of this
ARTICLE III are true and correct in all respects.

         3.23 AUTHORITY; NO VIOLATION; BINDING OBLIGATION.

                  (a) All corporate actions necessary to authorize the execution
         and  delivery  by  Purchaser  of  this   Agreement  and  the  Ancillary
         Agreements  and  the  performance  of  its  obligations  hereunder  and
         thereunder have been duly taken.

                  (b) The execution, delivery, and performance of this Agreement
         and  the  Ancillary  Agreements  and  the  performance  of  Purchaser's
         covenants and agreements  herein and therein  contained do not and will
         not  conflict  with  or  violate  any  provision  of  the  articles  of
         incorporation, bylaws, or other governing documents of the Purchaser as
         in effect immediately prior to the Closing.

                  (c) This  Agreement and each of the Ancillary  Agreements  are
         legal, valid and binding obligations of Purchaser.


                                       9
<PAGE>


                                   ARTICLE IV
                          INDEMNIFICATION AND SURVIVAL

         4.1  SURVIVAL  OF   OBLIGATIONS.   All   representations,   warranties,
covenants,  and obligations of the Parties contained in this Agreement or in any
of the  Ancillary  Agreements  shall,  except as otherwise  expressly  set forth
elsewhere in this  Agreement or in any of the  Ancillary  Agreements,  remain in
full force and effect following the Closing Date.

         4.2 INDEMNIFICATION.

                  (a) The Seller agrees to  indemnify,  defend and hold harmless
         the Purchaser and all of the Purchaser's Affiliates,  and each of their
         respective parents, stockholders,  members, directors, officers, agents
         and employees  (collectively,  the "INDEMNITEES")  from and against any
         action  brought  against  any of the  Indemnitees  with  respect to any
         claim,  demand,  cause of  action,  Liability,  Claim  or  Encumbrance,
         including,    without    limitation,    reasonable    attorneys'   fees
         (collectively, "LOSSES"), to the extent (x) such Losses are based upon,
         connected  with,  or arise  out of (x) any  actual or  alleged  breach,
         violation,  or  contravention  of,  or  inaccuracy  in, in each case as
         applicable, any of the Seller's representations, warranties, covenants,
         agreements,  or  undertakings  in or under this  Agreement,  any of the
         Ancillary Agreements, or any certificate,  exhibit, annex, or schedule;
         or (y) any Excluded Liabilities.

                  (b) With respect to the Seller's  indemnification  obligations
         hereunder,  each  party  agrees  to:  (i) give the other  party  prompt
         written notice of any claim,  action,  suit or proceeding for which the
         first party is seeking  indemnity;  and (ii) reasonably  cooperate with
         the other party with respect to the defense of the action.  A party may
         participate,  at its own cost,  in the defense and  settlement  of such
         action through counsel of its choice. In no event may the Seller settle
         any such  action  in a manner  that  adversely  affects  the  rights of
         Purchaser or any of the Indemnitees,  without Purchaser's express prior
         written consent.

                  (c) No  Indemnitee  (other  than the  Purchaser)  may make any
         claim for  indemnification  hereunder without the prior approval of the
         Purchaser,  in its sole discretion.  The  representations,  warranties,
         covenants,  and  obligations  of the  Seller on the one  hand,  and the
         rights and remedies  (including the  indemnification and other remedies
         described  in this  ARTICLE  IV) of, or that may be  exercised  by, any
         Indemnitee on the other hand, will not be limited or otherwise affected
         by  or  as  a  result  of,  any   information   furnished  to,  or  any
         investigation   made  by  or  knowledge  of,  such  Indemnitee  or  any
         Indemnitee's  representatives or agents. The  indemnification  remedies
         (and all other remedies  available to Purchaser and the  Indemnitees at
         law or in equity) contained in this Agreement shall be non-exclusive.

                  (d) In  addition  to any  rights  of  offset  or  setoff  that
         Purchaser  may have at common  law or  otherwise,  any  indemnification
         obligations   hereunder  of  the  Seller  to  Purchaser  or  any  other
         Indemnitee  may,  in the sole  discretion  of  Purchaser,  be offset or
         setoff by Purchaser  against (x) any other amount otherwise  payable to
         the Seller or any of the Seller's  Affiliates  by Purchaser  under this
         Agreement,  any Ancillary Agreement, or any other agreement between the
         Seller and Purchaser or (y) any other monetary  obligation of Purchaser
         to the Seller or any of the Seller's Affiliates.

                                    ARTICLE V
                                    COVENANTS

         5.1  FURTHER  ASSURANCES.  In  addition  to  the  Seller's  obligations
elsewhere   herein,   following  the  Closing,   the  Seller,   without  further
consideration  of any kind,  shall execute and deliver,  or cause to be executed
and  delivered,  such other  instruments,  and take, or cause to be taken,  such
other action, as shall reasonably be requested by Purchaser or its Affiliates to
effectively  carry  out  the  other  terms  and  provisions  of  this  Agreement
benefiting the Purchaser  including,  without  limitation,  all  instruments and
actions necessary to remove, satisfy,  discharge and release any Encumbrances or
challenges  relating to the Acquired Assets as required in this Agreement and to
ensure that Purchaser has clear title to and  unencumbered  ownership of all the
Acquired  Assets.  Seller  shall use its best  efforts to assist  Purchaser  and
Purchaser's  Affiliates  in  effecting  a smooth  transition  in  ownership  and
operation of the Acquired Assets after the Closing Date,  without any obligation
by Seller  to make  payments  to any party in  connection  with  providing  such
assistance.


                                       10
<PAGE>


         5.2  TRANSITIONAL  MAINTENANCE  OF ASSETS.  To  provide an  appropriate
transition period for Purchaser to assume  responsibility for maintenance of the
Purchased  Intellectual  Property,  Seller  represents  and  warrants  that  all
official  office actions (E.G.,  copyright,  patent,  or trademark  offices) due
(without payment of extension fees) within 30 days of the Closing Date, of which
Seller is aware,  including,  without  limitation,  paying  maintenance  fees or
annuities and  responding to office  actions and other  correspondence  from any
applicable official office (E.G., copyright, patent, or trademark offices), have
been completed and filed  (including  payment of all applicable  fees) as of the
Closing Date.

         5.3 REGISTERED INTELLECTUAL PROPERTY.  Seller will provide to Purchaser
within a  reasonable  time  following a request  therefor  (but in any event not
later  than 30 days  following  the  Closing  Date,  unless  otherwise  agreed),
Seller's complete files (in any format or media now existing) for the Registered
Intellectual  Property  and any other  relevant  documents,  if any, in Seller's
possession  that  relate  to  obtaining  or  maintaining  any of  the  Purchased
Intellectual Property.

         5.4 ASSIGNMENT OF RIGHTS UNDER EMPLOYEE AGREEMENTS. In order to protect
Purchaser's  interest in the Acquired  Assets and under this  Agreement  and the
Ancillary Agreements, Seller hereby (x) sells, assigns, transfers and conveys to
Purchaser  all rights of Seller  under and to  enforce  the terms of any and all
third  party  confidentiality   undertakings  and  any  and  all  IP  assignment
obligations,  solely as they relate to or are connected with the Acquired Assets
or the Purchased  Intellectual  Property,  and (y) agrees to assist Purchaser in
any reasonable efforts to enforce such agreements, obligations, arrangements.

         5.5 TRANSFER TAXES. All excise, sales, value added, use,  registration,
stamp,  documentary,  transfer  and  similar  Taxes,  levies,  charges  and fees
(including  all real estate  transfer  Taxes)  incurred in connection  with this
Agreement  and the  transactions  contemplated  hereby  shall be paid  solely by
Seller.  Seller  shall  also be  solely  responsible  for the  filing of any Tax
returns with  respect to such  transfer and similar  Taxes,  and promptly  shall
provide  written  evidence of such  payments  and copies of all such  filings to
Purchaser.

         5.6 HOLD HARMLESS.  Seller  covenants and agrees that it will (and that
it will  cause the other  members  of the  Seller  Group  to)  promptly  pay and
discharge,  as they become due and payable,  and promptly  perform in accordance
with their respective terms, all and each of the Excluded Liabilities,  it being
expressly  understood  and agreed that  Purchaser is assuming no  liabilities or
obligations  of Seller or other  members  of the  Seller  Group  other  than the
Assumed  Liabilities  identified  herein and in the Instrument of Assignment and
Assumption.

         5.7  CONFIRMING  EFFECTIVE  DELIVERY  OF  THE  PURCHASED   INTELLECTUAL
PROPERTY.  Without  limitation  to the Seller's  obligations  under SECTION 5.1,
promptly after being  requested to do so by the Purchaser  either in preparation
for the Closing (in which case the Purchaser  agrees to hold items  delivered by
the Seller  solely for  delivery  pursuant  to the Closing or return them to the
Seller if the Closing does not occur) or after the Closing,  or both, the Seller
will:

                  (a) TITLE.  Sign and deliver and have  notarized all documents
         and instruments, and take all other actions required by this Agreement,
         for the purpose of (i) correcting or confirming  title to the Purchased
         Intellectual  Property  prior to the Closing in the name of the Seller,
         and/or  (ii)   enabling   the   Purchaser  to  file   applications   or
         registrations  on and after the Closing in the name of the Purchaser or
         Affiliates of the Purchaser with any  governmental  agency  relating to
         the Purchased Intellectual Property;

                  (b) INTERIM FEES AND FILINGS.  For period of 30 days after the
         Closing  Date,  take all actions,  if any,  requested by the  Purchaser
         without  being  liable for the payment of any fees to any  governmental
         agency,  filing or maintenance of  applications  or  registrations,  or
         other  actions  before  or  with  any  governmental  agency  concerning
         Registered   Intellectual  Property  or  other  Purchased  Intellectual
         Property for any actions that are within the scope of SECTION 5.1.

         5.8  CONFIDENTIALITY.  The  Seller  will  keep  confidential  and  not,
directly  or  indirectly,  disclose to anyone or use or  misappropriate  for the
Seller's own benefit or for the benefit or any other person, (a) all


                                       11
<PAGE>


trade secrets and other non-public  information or documents  included within or
relating  to  the  Purchased  Intellectual  Property,  and  (b)  any  non-public
information  about the  Purchaser  that the  Seller or its  representatives  may
obtain or may have obtained in the course of the  transactions  contemplated  by
this  Agreement.  The Seller agrees not to make any such  information  public or
otherwise  act or omit to act in a manner that would  reasonably  be expected to
impair in any  material  respect the intended  benefits of this  covenant to the
Purchaser.  This  covenant is in addition to, and does not limit,  the rights of
the Purchaser as the purchaser and owner of the Purchased  Intellectual Property
as of the Closing Date.  Notwithstanding  the foregoing,  this SECTION 5.8 shall
not restrict Seller from  maintaining any records or making any disclosures that
may be  required  and  mandated by  applicable  law or  governmental  authority,
provided,  however,  that prior to making any such disclosures,  the Seller will
provide  reasonable  advance  notice to Purchaser  so as to permit  Purchaser to
review the  proposed  form and  contents of such  disclosure  and, to the extent
deemed  appropriate  by  Purchaser,  to allow  Purchaser to seek an  appropriate
protective  order to  prevent  or limit  such  disclosure.  Notwithstanding  the
foregoing, this Agreement may be described in or filed with any required federal
securities filings of Seller.

         5.9 PROHIBITION ON FUTURE FILINGS AND REGISTRATIONS.  Nothing contained
in this  Agreement  shall be construed as providing the Seller with any retained
right, title, or other interest of any kind in or to any of the Acquired Assets.
Seller recognizes and acknowledges that the Purchased  Intellectual Property and
all rights therein and all goodwill  pertaining  thereto solely and  exclusively
belong to Purchaser  effective  automatically upon the Closing and that all uses
of the Purchased  Intellectual Property shall inure to the benefit of Purchaser.
In addition to its  obligations  under and of the Ancillary  Agreements or under
any other agreements,  Seller agrees (x) not to directly or indirectly attack or
impair the title of Purchaser to the any of the Purchased Intellectual Property,
the  validity  of  this  Agreement,  or any of  Purchaser's  current  or  future
registrations  or  applications  relating to any of the  Purchased  Intellectual
Property (or any derivates thereof) in any jurisdiction; and (y) not to file any
state,  federal,  or foreign  applications  to register (1) any of the Purchased
Intellectual  Property  constituting  trademarks,  trade names,  service  marks,
copyrights,  or the like,  in whole or in part, or (2) any  confusingly  similar
trademarks,  trade  names,  service  marks,  copyrights,  or  the  like,  in any
jurisdiction.

         5.10  MERCHANDISING  RIGHTS.  From and  after  the  Closing,  Purchaser
authorizes  Seller  to  exclusively  manufacture,  have  manufactured,  sell and
distribute the pre-existing  Fallout interactive  entertainment  software games,
"FALLOUT",   "FALLOUT  2",  "FALLOUT   TACTICS",   and  "BROTHERHOOD  OF  STEEL"
("PRE-EXISTING  FALLOUT GAMES"),  and Purchaser shall have no financial interest
in the sales of such Pre-existing  Fallout Games by or on behalf of Seller.  All
packaging,  advertising and promotional materials used by or on behalf of Seller
in connection with the  Pre-existing  Fallout Games shall be submitted by Seller
to Purchaser for Purchaser's written approval prior to its use, and Seller shall
not use or authorize the use of any such  packaging,  advertising or promotional
material unless Purchaser has approved in writing in advance such material, such
approval not to be unreasonably  withheld,  it being  understood and agreed that
all  packaging,  advertising  and  promotional  materials  for the  Pre-Existing
Fallout Games shall not use, refer to, trade upon,  reflect the look and feel of
or otherwise  exploit any of the Fallout  games or products,  including  but not
limited to their packaging,  advertising and promotional materials, developed by
or for the Purchaser or its licensees.

         5.11  MOTION TO DISMISS  BANKRUPTCY  CASE.  The  Seller  shall file the
motion to dismiss the Bankruptcy Case referenced in section 2.7 on or before May
1, 2007.

         5.12 PART 3.13 DISCLOSURE SCHEDULE.  If Purchaser is not satisfied with
the  disclosures  made in Part 3.13 of the  Disclosure  Schedule  by the Closing
Date,  Purchaser  shall be  entitled  to void  this  Agreement  and shall not be
required to proceed with the Closing.


                                       12
<PAGE>


                                   ARTICLE VI
                               GENERAL PROVISIONS

         6.1 CONDITIONS  PRECEDENT TO OBLIGATIONS OF PURCHASER.  The obligations
of  Purchaser to  consummate  the Closing are subject to the  following  express
conditions  precedent  (all or any of which may be waived in whole or in part by
Purchaser  in its sole  discretion),  having  been  fulfilled  on or before  the
Closing Date:

                  (a)  REPRESENTATIONS  AND WARRANTIES.  The representations and
         warranties of Seller  contained herein shall be true and correct in all
         respects on and as of the Closing Date.

                  (b) PERFORMANCE;  DELIVERIES.  Seller shall have performed and
         observed in all  respects all  covenants,  obligations  and  conditions
         herein  required to be  performed  or observed by Seller on or prior to
         the Closing  Date;  and Seller shall have  delivered  to Purchaser  all
         deliveries described, set forth or provided for SECTION 2.5.

                  (c) ABSENCE OF MATERIAL CHANGES. There shall not have been any
         material  adverse change affecting Seller or its business or any of the
         Acquired Assets.

                  (d) NO  LITIGATION.  No  Legal  Proceeding  or  Claim or other
         proceeding or investigation,  whether administrative or judicial, shall
         be  threatened  or pending  against  Seller or Purchaser  that,  in the
         reasonable  opinion of Purchaser or its counsel,  presents a reasonable
         possibility that the transactions  contemplated by this Agreement could
         be enjoined or  prevented,  or that the right of  Purchaser to acquire,
         retain  or use all of the  Acquired  Assets,  if and  when the same are
         acquired, without additional costs would be adversely affected

         6.2 CONDITIONS  PRECEDENT TO OBLIGATIONS OF THE SELLER. The obligations
of the Seller to consummate  the Closing  hereunder are subject to the following
express  condition  precedent  (all or any of which may be waived in whole or in
part by the Seller in its sole  discretion),  having been fulfilled on or before
the Closing Date:  Purchaser  shall have  performed and observed in all material
respects  all  covenants,  obligations  and  conditions  herein  required  to be
performed or observed by Seller on or prior to the Closing  Date;  and Purchaser
shall  have  delivered  to Seller  all  deliveries  provided  for  SECTION  2.6,
PROVIDED,  HOWEVER,  that the Purchase Price shall be  deliverable  upon and not
prior to the Closing.

                                   ARTICLE VII
                               GENERAL PROVISIONS

         7.1  SURVIVAL  OF   OBLIGATIONS.   All   representations,   warranties,
covenants,  and obligations of the Parties contained in this Agreement or in any
of the  Ancillary  Agreements  shall,  except as otherwise  expressly  set forth
elsewhere  in this  Agreement,  remain in full  force and  effect for five years
following the Closing Date.

         7.2  GOVERNING  LAW;  JURISDICTION;  VENUE.  This  Agreement  shall  be
governed by and construed in accordance with the  substantive  laws of the State
of Delaware,  USA,  without regard to principles of conflict of laws. Each party
agrees  that  sole and  exclusive  jurisdiction  and  venue  for any  action  or
litigation  arising from or relating to this  Agreement  shall be an appropriate
federal or state court located in the State of Maryland.  The U.N. Convention on
Contracts for the International  Sale of Goods shall not apply to this Agreement
or to any dispute arising out of this Agreement.

         7.3  ALL  AMENDMENTS  IN  WRITING.  No  supplement,   modification,  or
amendment of this Agreement  shall be binding,  unless  executed in writing by a
duly authorized  representative  of each party to this Agreement  intended to be
bound thereby.

         7.4 ENTIRE AGREEMENT. This Agreement (including the exhibits,  annexes,
and  schedules  hereto and other  documents  referred  to herein as having  been
delivered or furnished by either party to the other  hereunder)  constitutes the
entire  Agreement and supersedes all prior agreements and  understandings,  oral
and  written,  between the parties  hereto  with  respect to the subject  matter
hereof.


                                       13
<PAGE>


         7.5  ASSIGNMENT;  NO THIRD PARTY  BENEFICIARIES.  Purchaser  may freely
assign any of its rights or delegate or novate any of its obligations under this
Agreement to any  Affiliate or to any third party  without the prior  consent of
Seller. Seller may not assign this Agreement or any of its rights or obligations
under this Agreement without the prior written consent of Purchaser.  Nothing in
this Agreement, expressed or implied, is intended or will be construed to confer
upon any Person  other than the  Parties  and their  respective  successors  and
assigns  permitted  by this  SECTION 7.5 any right,  remedy or claim under or by
reason of this Agreement.

         7.6  SPECIFIC  PERFORMANCE;   INJUNCTIVE  RELIEF.  The  parties  hereto
expressly  acknowledge and agree that the Acquired Assets are special and unique
and that a breach of any of the terms or provisions of this Agreement in respect
to the sale and  purchase  thereof will result in  irreparable  injury for which
there is no adequate  remedy at law,  and  therefore,  notwithstanding  anything
herein or otherwise to the  contrary,  Purchaser  shall be entitled to equitable
relief and specific  performance  to compel  compliance  hereunder,  without the
requirement for posting any bond or security.

         7.7 WAIVER OF JURY TRIAL.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY  WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR
COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR THE  TRANSACTIONS
CONTEMPLATED HEREBY.

         7.8 NOTICES. All notices and other communications required or permitted
to be given under this Agreement  shall be in writing and delivered by overnight
courier or by  confirmed  facsimile  during the  regular  business  hours of the
recipient to the addresses or facsimile numbers set forth below or to such other
addresses specified by the applicable party:

         If to Purchaser:           Vlatko Andonov, President
                                    Bethesda Softworks LLC
                                    1370 Piccard Drive, Suite 120
                                    Rockville, MD 20850
                                    Fax: (301) 926-8010

                                    with a copy to:

                                    J. Griffin  Lesher  Executive Vice President
                                    -Legal   ZeniMax  Media  Inc.  1370  Piccard
                                    Drive,  Suite 120  Rockville,  MD 20850 Fax:
                                    (301) 990-7025

         If to the Seller:          Herve Caen, Chief Executive Officer
                                    Interplay Entertainment Corp.
                                    100 North Crescent Drive, Suite 324
                                    Beverly Hills, CA 90210
                                    Fax: (310) 432-1959

         7.9 EXPENSES.  Except where  otherwise  expressly  provided for in this
Agreement,  each Party hereto shall pay its own costs and  expenses,  including,
without  limitation,  the fees and  expenses  of its  respective  attorneys  and
accountants, in connection with this Agreement and the transactions contemplated
herein, whether or not the Closing takes place.

         7.10 WAIVER.  Any term or provision of this Agreement may be waived, or
the time for its performance may be extended,  by the Party or Parties  entitled
to the  benefit  thereof.  Any such  waiver  will be  validly  and  sufficiently
authorized  for the  purposes  of this  Agreement  if,  as to any  Party,  it is
authorized in writing by an authorized representative of such Party. The failure
of any Party hereto to enforce at any time any provision of this  Agreement will
not be construed to be a waiver of such provision,  nor in any way to affect the
validity  of this  Agreement  or any  part  hereof  or the  right  of any  Party
thereafter to enforce each and every such provision.  No waiver of any breach of
this  Agreement  will be held to  constitute a waiver of any other or subsequent
breach.


                                       14
<PAGE>


         7.11 ENTIRE AGREEMENT.  The parties have read this Agreement,  together
with the Ancillary  Agreements and all exhibits,  annexes,  and schedules hereto
(collectively,  the  "TRANSACTION  AGREEMENTS"),  and  further  agree  that they
collectively  constitute  the  complete  and  entire  agreement  of the  Parties
relating  to the sale,  assignment,  transfer,  conveyance  and  delivery of the
Acquired  Assets  (including,  without  limitation,  the Purchased  Intellectual
Property) from the Seller to Purchaser, and supersede all and merge all previous
communications,  agreements,  understandings or letters of intent (in each case,
oral or  written)  between  or among any of the  Parties  hereto  regarding  the
subject   matter   hereof.   No   representations,    warranties,    statements,
understandings,  agreements,  or  commitments of any kind made by any Party that
are not expressly stated herein (or in any other  Transaction  Agreements) shall
be binding on such Party.

         7.12 SEVERABILITY. In the event that any provision of this Agreement is
held invalid by a court with jurisdiction over the parties, such provision shall
be deemed to be restated  to be  enforceable,  in a manner  which  reflects,  as
nearly as possible,  the original  intentions of the parties in accordance  with
applicable  law. The remainder of this Agreement  shall remain in full force and
effect.

         7.13 CONSTRUCTION; INTERPRETATION.

                  (a) HEADINGS. Titles, captions, and other headings to sections
         in this Agreement have been inserted for  convenience of reference only
         and  are  not  intended  to be a part  of or to  affect  in any way the
         meaning, construction, or interpretation of this Agreement.

                  (b) EXHIBITS;  ANNEXES; SCHEDULES. This Agreement is deemed to
         include all of the  exhibits,  annexes,  and  schedules  hereto,  which
         expressly  are made a part hereof and  incorporated  herein and will be
         construed  with and as an integral  part of this  Agreement to the same
         extent as if they were set forth verbatim  herein.  Except as otherwise
         indicated, all references in this Agreement to "Sections," "Schedules,"
         "Annexes," and "Exhibits" are intended to refer to Sections, Schedules,
         Annexes, and Exhibits to this Agreement.

                  (c)  GENDER AND  NUMBER.  For the  purpose of this  Agreement,
         whenever the context  requires or permits:  the  singular  number shall
         include the plural,  and vice versa; the masculine gender shall include
         the feminine and neuter genders;  the feminine gender shall include the
         masculine and neuter  genders;  and the neuter gender shall include the
         masculine and feminine  genders.  As used in the  Agreement,  the words
         "include" and "including," and variations thereof,  shall not be deemed
         to be terms of limitation, but rather shall be deemed to be followed by
         the words "without limitation."

                  (d) MUTUAL DRAFTING. The Parties hereto agree that any rule of
         construction to the effect that  ambiguities are to be resolved against
         the  drafting  party  shall  not  be  applied  in the  construction  or
         interpretation  of this  Agreement,  it being  agreed  that all Parties
         participated jointly and equally in the drafting hereof.

         7.14  COUNTERPARTS.  This  Agreement  may be  executed  in one or  more
counterparts, including facsimile counterparts, each of which will be considered
an original  instrument,  but all of which will be  considered  one and the same
agreement,  and will  become  binding  when one or more  counterparts  have been
signed by each of the Parties hereto and delivered to each of the Parties.


                                    * * * * *


                                       15
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
ASSET  PURCHASE  AGREEMENT with legal and binding effect as of the date and year
first above written.


                  PURCHASER:        BETHESDA SOFTWORKS LLC

                                    By: /s/ Vlatko Andonov
                                        ----------------------------------------
                                        Printed Name: Vlatko Andonov
                                        Title: President


                  SELLER:           INTERPLAY ENTERTAINMENT CORP.

                                    By: /s/ Herve Caen
                                        ----------------------------------------
                                        Printed Name:  Herve Caen
                                        Title: Chief Executive Officer


                                       16
<PAGE>


                                    EXHIBIT A

                              CERTAIN DEFINED TERMS

         An  "AFFILIATE"  of any  Person  means any  other  Person  directly  or
indirectly  controlling,  controlled by or under common  control with such first
Person  within the meaning of the  Securities  Exchange Act of 1934, as amended.
"AFFILIATE" means

         "CLAIM"  means  any  claim,  security  interest,   encumbrance,   lien,
mortgage,  indenture,  security agreement, pledge, charge, escrow, option, right
of first refusal,  judgment, order or other Liability or restriction of any kind
(whether arising by contract or by operation of law).

         "COMMERCIALLY  AVAILABLE  TECHNOLOGY"  means third party  technologies,
products  and  services  that  are  commercially  available,  including  without
limitation, software that is subject to "shrinkwrap", "clickwrap", "open source"
or other standard or mass market license agreements.

         "DAMAGES" means any loss, damage,  injury,  Liability,  claim,  demand,
settlement,  judgment,  award,  fine,  penalty,  tax,  fee  (including,  without
limitation, fees and expenses of attorneys, accountants,  financial advisors and
other  experts  and other  expenses of  litigation),  charge,  costs  (including
reasonable costs of investigation) or expenses of any nature.

         "DOCUMENTATION"  means,  as  applicable,  product,  technical,  repair,
marketing and user  documentation  and any succeeding  changes thereto as of the
Closing Date, including,  without limitation, all specifications as set forth in
Seller's product manuals; installation,  maintenance,  operating and customer or
end-user manuals, instructions and diagnostics; system administrative materials,
configuration guides, marketing and sales brochures and literature,  and product
guides and any similar or related documentation. When used to in connection with
the term Software the term "Documentation" means, as applicable, programming and
user documentation,  maintenance and test specification, system descriptions and
other similar  documentation  relating to the creation,  use or operation of the
Software.

         "ENCUMBRANCE" means any lien (including,  without limitation,  any tax,
mechanic's,  warehouseman's,  laborer's, or landlord's liens), mortgage,  claim,
pledge, charge,  security interest,  equitable interest,  right of use, right of
co-existence,  encumbrance, defects, claims, or conditions to or restrictions on
use, transfer or assignment, or any other restrictions of any kind.

         "ENFORCEMENT  RIGHTS" means any and all claims,  demands,  rights,  and
causes of action  for  infringement,  misappropriation,  or misuse of any of the
Purchased  Intellectual  Property,  past, present and future, and any and all of
the proceeds  and rights to proceeds  from the  foregoing,  in each case whether
existing,   accrued,  or  unpaid  or  whether  hereafter  arising,  coming  into
existence, or accruing.

         "FALLOUT INTELLECTUAL PROPERTY" means any and all Intellectual Property
in or  relating  or  connected  in any way with (and to all future uses of every
kind) the brand and  interactive  entertainment  software game property known as
"FALLOUT".  Without  limiting the generality of the foregoing,  the term Fallout
Intellectual Property includes,  without limitation, the "FALLOUT" trademark for
all  classes  and uses  worldwide,  any and all rights to any and all  "FALLOUT"
video games,  all  "FALLOUT"-related  characters,  and all uses of all "FALLOUT"
connected or related  trademarks  and brand  (subject  only to licensing  rights
granted under the License Back Agreement),  and including,  without  limitation,
the rights to all add-ons,  expansion packs and  combinations  of same,  however
packaged or sold, hint books and strategy guides, and any prequels,  sequels, or
derivative  products  of any of the  foregoing,  and any and all  rights  to the
"FALLOUT"  brand,   including,   without   limitation,   to  merchandising   and
sublicensing rights.

         "INTELLECTUAL  PROPERTY"  means all of the  following  anywhere  in the
world and all legal rights,  title,  or interest in the following  arising under
the laws of the United  States,  (including  any state),  and any other  country
(including any subdivision thereof), or international treaty regime,  whether or
not filed, perfected,  registered or recorded and whether now or later existing,
filed, issued or acquired, including all renewals:


                                       17
<PAGE>


                  (i) all  patents and  applications  for patents of all classes
         and  types  and  all  related  reissues,   reexaminations,   divisions,
         renewals, extensions, provisionals,  continuations and continuations in
         part;

                  (ii) all  copyrights,  copyright  registrations  and copyright
         applications, copyrightable works, and all other corresponding rights;

                  (iii)  all  trade  dress  and  trade  names,  logos,  Internet
         addresses and domain names,  trademarks  and service marks  (including,
         without  limitation,  any common law or prior use rights that may exist
         with respect related to any of the foregoing) and related registrations
         and   applications,   including   any   intent  to  use   applications,
         supplemental  registrations  and any renewals or extensions,  all other
         indicia  of  commercial  source  or  origin,  and all  goodwill  of the
         Seller's business associated with any of the foregoing;

                  (iv) all inventions  (whether patentable or not and whether or
         not reduced to practice),  invention disclosures,  invention notebooks,
         file histories,  know how,  technology,  technical data, trade secrets,
         confidential   business   information,   manufacturing  and  production
         processes  and  techniques,   research  and  development   information,
         financial,  marketing and business data,  pricing and cost information,
         business and marketing plans, and customer,  distributor,  reseller and
         supplier  lists and  information,  correspondence,  records,  and other
         documentation, and other proprietary information of every kind;

                  (vii) all Software;

                  (viii) all  databases and data  collections  and all rights in
         the same;

                  (ix) all  rights  of  paternity,  integrity,  disclosure,  and
         withdrawal,  and any other  rights  that may be known or referred to as
         "moral rights," in any of the foregoing;

                  (x) any rights  analogous to those set forth in the  preceding
         clauses  and  any  other  proprietary  rights  relating  to  intangible
         property;

                  (xi) all tangible embodiments of any of the foregoing,  in any
         form and in any  media,  in the  possession  of the  Seller  (or  other
         Persons engaged or retained by the Seller);

                  (xii)   all   versions,   releases,   upgrades,   derivatives,
         enhancements and improvements of any of the foregoing; and

                  (xiii) all statutory,  contractual and other claims,  demands,
         and causes of action for  royalties,  fees,  or other income  from,  or
         infringement,  misappropriation  or violation of, any of the foregoing,
         and all of the proceeds from the foregoing  that are accrued and unpaid
         as of, and/or accruing after, the date of this Agreement.

         ."LEGAL  PROCEEDING" means any action,  suit,  litigation,  arbitration
proceeding  (including any civil,  criminal,  administrative,  investigative  or
appellate proceeding),  hearing,  inquiry,  audit,  examination or investigation
threatened,  commenced,  brought,  conducted or heard by or before, or otherwise
involving  any  court  or  other  governmental   agency  or  any  arbitrator  or
arbitration panel.

         "LIABILITY" means any liability,  loss, debt, or obligation of any kind
(whether known or unknown,  whether asserted or unasserted,  whether absolute or
contingent,  whether accrued or unaccrued,  whether  liquidated or unliquidated,
and whether due or to become due).

         "PERSON"  means  any  individual,  corporation,   partnership,  limited
liability  company,  trust, other form of business or investment entity, and any
foreign, federal, state or local government or governmental agency of any kind.

         "PURCHASED INTELLECTUAL PROPERTY" means,  collectively:  (x) all of the
Fallout  Intellectual  Property  owned by,  created by, or licensed by or to the
Seller,  as  existing  as of the  Closing  Date,  and (y) all of the Third Party
Intellectual Property Rights.


                                       18
<PAGE>


         "REGISTERED  INTELLECTUAL PROPERTY" means Fallout Intellectual Property
that is the subject of an  application,  certificate,  filing,  registration  or
other  document  issued by,  filed  with,  or recorded  by any  governmental  or
quasi-governmental  agency or non-governmental  registrar (whether  provisional,
supplemental, or otherwise), anywhere in the world as of the Closing Date.

         "SOFTWARE"  means  computer  software  programs and  software  systems,
including, without limitation,  SOFTWARE compilations,  software implementations
of  algorithms,   software  tool  sets,  firmware,   development  tools,  files,
compilers,  and software  models and  methodologies  regardless  of the stage of
development  and all media on which any of the  foregoing  is  recorded  and all
media on which any of the foregoing are recorded and all related programming and
user  documentation,  including,  without  limitation,  all  records,  technical
drawings, and data relating to the foregoing, and in each and every case whether
in source  code,  object  or  executable  code or human  readable  form,  or any
translation or modification  thereof that  substantially  preserves its original
identity.  As used  herein,  the term  Software  does not  include  Commercially
Available Technology.

         "TAX" means any net income,  alternative  or add-on  minimum tax, gross
income, gross receipts, sales, use, ad valorem, value-added, franchise, capital,
paid-up capital, profits, greenmail, license, withholding,  payroll, employment,
excise,  severance,  stamp,  occupation,  premium,  property,  environmental  or
windfall profit tax, custom,  duty or other tax,  governmental fee or other like
assessment  or  charge  of any  kind or  nature  whatsoever,  together  with any
interest or any penalty,  addition to tax or  additional  amount  imposed by any
governmental  authority (domestic or foreign)  responsible for the imposition of
any such tax.

         "THIRD PARTY INTELLECTUAL  PROPERTY RIGHTS" means Intellectual Property
owned by any third party and licensed to Seller or any of its  Affiliates  as of
the  Closing  Date  for  use  in  connection  with  Fallout,  including  without
limitation  Commercially  Available  Technology and the third party Intellectual
Property  listed in the  Disclosure  Schedule.  With  respect to any Third Party
Intellectual  Property  Rights,  use of the term  "purchase"  or  "sale" in this
Agreement shall mean the purchase or sale of Seller's  interest  (E.G.,  through
transfer, assignment of a license, etc.) by Purchaser.


                                       19

See also

Bethesda Softworks LLC v. Interplay Entertainment Corporation

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