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MICROPROSE ANNOUNCES AGREEMENT ON TERM SHEET WITH SPECTRUM HOLOBYTE

 HUNT VALLEY, Md., June 17 /PRNewswire/ -- MicroProse, Inc. (NASDAQ: MPRS) today announced agreement on a term sheet with Spectrum HoloByte, Inc., a privately held company. The term sheet, which is non- binding, contemplates a merger of the two companies preceded by a cash infusion of $10 million by Spectrum HoloByte into MicroProse.
 Both companies develop, publish and market entertainment software. Spectrum HoloByte, Inc. is a privately held company specializing in computer, video, virtual reality and multimedia interactive entertainment software.
 Under the term sheet, Spectrum HoloByte today advanced MicroProse $1 million and will invest an additional $9 million by June 21, 1993, in exchange for a $10 million subordinated note due 1998. In connection with the $10 million subordinated note investment, the number of directors in MicroProse's board will increase from four to eight with Spectrum HoloByte appointing four new members. John W. Stealey, Sr., MicroProse's co-founder and principal stockholder, will resign as president and CEO, and Spectrum HoloByte will have the right to appoint a replacement acceptable to MicroProse. Mr. Stealey will remain as chairman until the merger is complete.
 The term sheet contemplates that MicroProse and Spectrum HoloByte would negotiate and enter into a merger agreement by June 30, 1993 which would provide for the merger of Spectrum HoloByte with MicroProse with each share of Spectrum HoloByte common stock outstanding being exchanged for .6 shares of MicroProse common stock. The merger would be subject to customary closing conditions, including the receipt by MicroProse of a fairness opinion from its investment bankers. Upon completion of the merger, the stockholders of Spectrum would own, in the aggregate, approximately 60 percent of the outstanding common stock of MicroProse.
 If the merger of the two companies does not occur, the $10 million subordinated note would be convertible into MicroProse common stock at a conversion price of the lower of $4.125 per share or the average of closing bid prices of the MicroProse common stock for the ten trading days commencing June 11, 1993. The note may not be converted prior to the merger and would be canceled without conversion upon consummation of the merger. Additionally, Spectrum HoloByte would receive from MicroProse a warrant for up to 1,666,666 shares of MicroProse common stock, exercisable at a price per share of 150 percent of the conversion price of the note in the event the merger of the two companies does not occur. The warrant may not be exercised prior to the merger and would be canceled upon consummation of the merger.
 In connection with the $10 million subordinated note investment the term sheet contemplates that Mr. Stealey will grant Spectrum HoloByte a limited proxy to vote his shares of MicroProse common stock in favor of the transaction and on certain other matters. In addition, he will grant Spectrum HoloByte an option to purchase his shares of MicroProse common stock at $5.25 per share under certain circumstances.
 The company's agreement with its domestic lender to forbear temporarily and to fund certain operating expenses of the company continues in effect.
 Consummation of the financing and the merger would require favorable resolution of issues with lenders and creditors of MicroProse and other parties, execution of definitive agreements and satisfaction of other conditions.
 The company cannot predict whether or when it may successfully complete their merger or financing transactions.
 MicroProse is a worldwide entertainment software company with over 350 employees in offices in the United States, Europe and Japan. The company, celebrating its 10th anniversary, is best know for simulation and strategy games such as F-15 Strike Eagle(R) III, F-19 Stealth Fighter(R) and Civilization(TM). This year the company entered the 16 bit video game market with Super Strike Eagle for the Super Nintendo Entertainment System(R) and announced its first 3DO(TM) Interactive Multiplayer(TM) product, C.P.U. Bach(TM), a new concept in interactive music composition. MicroProse and Spectrum HoloByte entered into a European distribution agreement in December, 1991 for MicroProse to use its distribution network for the sale of Spectrum HoloByte products in Europe.
 Most popular among Spectrum HoloByte products are Tetris and Falcon, the ultra-realistic F-16 jet fighter simulation. Spectrum HoloByte is the exclusive software entertainment licensee of Star Trek: The Next Generation for computer, Super Nintendo and 3DO entertainment systems. Spectrum HoloByte recently acquired Bullet-Proof Software, USA, whose most recent game is Yoshi's Cookies for the Super Nintendo Entertainment System. The members of the senior management team of Spectrum HoloByte are Chief Executive Officer, Patrick S. Feely, former president of Tonka Toys-USA, President, Barry James Folsom, former president of Radius, Inc. and Chairman, Gilman Louie, founder of Spectrum HoloByte. Current stockholders of Spectrum HoloByte include Kleiner Perkins Caulfield & Byers, AT&T Ventures, Paramount Communications, Chancellor Capital Management, Integral Capital Partners, and Vertex Management Partners.
 -0- 6/17/93
 /CONTACT: Ronald J. Bueche, vice president and CFO, 410-771-6718, or Fax, 410-785-8963, or Gerard R. Blair, vice president - marketing, 410-771-6720 or Fax, 410-785-8963, both of MicroProse/
 (MPRS)


CO: MicroProse, Inc. ST: Maryland IN: CPR SU:

MP-LR -- NY021 -- 2937 06/17/93 09:15 EDT
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Date:Jun 17, 1993
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