EXHIBIT 10.45
AMENDMENT TO INTERNATIONAL DISTRIBUTION AGREEMENT
This Amendment to International Distribution Agreement (this
"AGREEMENT"), is entered into as of April _, 2001, by and between INTERPLAY
ENTERTAINMENT CORP., a Delaware corporation whose principal place of business is
at 16815 Von Karman Avenue, Irvine, California 92606 (hereinafter "INTERPLAY"),
and VIRGIN INTERACTIVE ENTERTAINMENT LIMITED, a corporation formed under the
laws of England and Wales whose principal place of business is at 74A Charlotte
St., London, England, W1P 1LR (hereinafter "VIRGIN"), with respect to the
following recitals:
RECITALS
A. Interplay and Virgin are parties to that certain Settlement
and Release Agreement, dated as of the date hereof (the "SETTLEMENT AGREEMENT"),
which Settlement Agreement provides for the execution and delivery of this
Agreement as a condition precedent to the consummation of the parties'
respective obligations there under.
B. Pursuant to SECTION 14(B) of that certain International
Distribution Agreement, entered into effective February 10, 1999 (the "ORIGINAL
AGREEMENT"), between Virgin and Interplay, Virgin and Interplay are amending the
Original Agreement as set forth herein. All capitalized terms used in this
Agreement and not defined herein shall have the meanings given such terms in the
Original Agreement,
C. The parties intend this Agreement to be an amendment,
effective as of the date first set forth above, of the Original Agreement, and
not a novation.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements and promises set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. PAYMENTS. Subject to Section 2 below, Exhibit B to the
Original Agreement is hereby amended as follows:
1.1 THE MINIMUM MONTHLY OVERHEAD FEE. Section 3 of
Exhibit B of the Original Agreement is hereby amended as follows:
1.1.1 Interplay shall pay to Virgin an aggregate
Minimum Monthly Overhead Fee of $1,500,000 for the period from April 1, 2001
through June 30, 2002, which amount shall be paid by Interplay to Virgin as
follows:
(a) $1,000,000 shall be payable in nine
(9) consecutive equal monthly installments of $111,111.11 each on the fifteenth
(15th) day of the month, with the first installment payable on the later of (i)
April 15, 2001 and (ii) the "Closing" (as defined in the Settlement Agreement);
and
(b) $500,000 shall be payable in six
(6) consecutive equal monthly installments of $83,333.33 each on the fifteenth
(15th) day of the month, with the first installment payable on January 15, 2002.
1.1.2 Notwithstanding SECTION 1.1.1 to the
contrary, if the Original Agreement is terminated by either party for any
reason, including as of a result of breach by either party, all unpaid amounts
provided for in SECTION 1.1.1, in addition to any other amounts that may be
payable by Interplay as a result of such termination, shall be immediately due
and payable, without notice, as of the date of such termination.
1.1.3 For the period from July 1, 2002 through
termination or expiration of the Original Agreement, no Minimum Monthly Overhead
Fee shall be payable by Interplay to Virgin, and Section 3 of Exhibit B of the
Original Agreement shall cease to have any further force or effect.
1.2 RIGHT OF OFFSET. Each of Virgin and Interplay shall
have the right to set off against any amounts payable by one such party (the
"First Party") to the other such party (the "Second Party") under the Original
Agreement all or any portion of any amounts then payable by the Second Party to
the First Party under the Original Agreement, as amended by this Agreement,
including, without limitation, the Minimum Monthly Overhead Fee.
1.3 ADJUSTMENT OF THE MINIMUM MONTHLY OVERHEAD FEE.
Section 4 of Exhibit B of the Original Agreement is hereby deleted in its
entirety. The parties agree that any prior purported amendments to the
Distribution Agreement are void.
1.4 MINIMUM DISTRIBUTION FEE. Section 5 of Exhibit B of
the Original Agreement is hereby deleted in its entirety.
2. MARKETING. The Original Agreement, including, without
limitation, Section 4 and Sections 5(b), (c), (d) and (j), is hereby amended to
the maximum extent necessary to provide that from and after July 1, 2001,
Interplay shall be solely responsible for and shall provide all marketing,
advertising, promotion, localization and testing (of packaging, Products and
advertising) of the Products in the Territory.
3. ADDITIONAL AUDIT RIGHTS. In addition to the rights and
obligations of the parties provided for in Section 6(c) of the Original
Agreement, a certified public accountant (or the European equivalent thereof)
appointed by Interplay may, at Interplay's expense and to Interplay's
satisfaction, examine Virgin's books and records for the purpose of verifying
the accuracy of any charges made by Virgin to Interplay for reimbursement of
expenses incurred by Virgin on Interplay's behalf. These additional audit rights
shall be subject to the other terms and conditions of Section 6(c).
Additionally, Section 6(c) is hereby amended to provide that, if Virgin
disagrees with the results of any audit conducted pursuant to Section 6(c),
Interplay shall have the right to obtain copies of all relevant backup documents
prepared or reviewed by the auditors in connection with the audit only to the
extent such documents relate to the Products. Additionally, the parties agree to
cooperate in any audit conducted pursuant to Section 6(c).
4. RETURNS; ETC. Sections 5(e) and (f) of the Original Agreement
are hereby amended to provide that Virgin shall not have the right to retain
from the payments due to Interplay under the
Original Agreement any reserve against Returns. Interplay shall, however, be
responsible for actual Returns, which amounts shall be determined on a monthly
basis during the Term and credited against any payments thereafter due to
Interplay under the Original Agreement if during the term of this Agreement, and
paid by Interplay to Virgin upon demand if such amount exists at or after
termination of the Original Agreement.
5. PAYMENTS BY THE PARTIES.
5.1 By Virgin. Section 1 of Exhibit B to the Original
Agreement is hereby amended to provide that all payments to be made by Virgin to
Interplay pursuant to Section 1 of Exhibit B shall be paid within fifty (50)
days after the end of the month in which the Products with respect to which such
payments relate are invoiced by Virgin to its customers. If Virgin fails to pay
any amounts due under this Section 1 when due, Interplay may withhold such
amounts from payments due under Section 2 of Exhibit B for the duration of such
non-payment by Virgin.
5.2 By Interplay. Section 2 of Exhibit B to the Original
Agreement is hereby amended to provide that, in lieu of Virgin deducting the
amounts provided for in such section from the amounts payable by Virgin to
Interplay under Section 1 of Exhibit B, Interplay shall pay such amounts to
Virgin within sixty (60) days after the date of the invoice for such obligation.
Notwithstanding the immediately preceding sentence to the contrary, if Virgin is
required to pay any amount set forth in Section 2 of Exhibit B before the sixty
(60) day period referred to above, Interplay shall pay Virgin such amount on or
before the day such invoice is payable by Virgin. If Interplay fails to pay any
amounts when due, Virgin may withhold such amounts from the payments due
Interplay under Section 1 of Exhibit B for the duration of such non-payment by
Interplay.
6. CONSOLE PRODUCTS. Section 5(k)(C) of the Original Agreement is
hereby amended to provide that, with respect to Products on video game console
systems (e.g., PlayStation, N64, Dreamcast), Interplay shall be responsible for
ordering the Products from the system licensor and the payment of the cost of
goods and royalties to such system licensors. Interplay shall not have any right
to utilize Virgin's line of credit with any of the system licensors to
facilitate ordering Products from such system licensors. If requested by
Interplay, Virgin shall have the right, at its option (and without the
obligation to do so), to order Products on video game console systems from the
system licensors and pay any amounts to the system licensors agreed to by
Interplay and Virgin, and otherwise arrange for the production and delivery of
such Products to Virgin's facilities. If Virgin orders such Products at
Interplay's request, Virgin shall have the right to set off against any amounts
due Interplay by Virgin the full cost and expense incurred by Virgin in
connection with the order by Virgin of such console Products, including, without
limitation, any cost of goods and royalties paid to such system licensors and
all shipping costs, taxes and other amounts incurred in the delivery of such
Products to Virgin.
7. MISCELLANEOUS. Except as expressly set forth in this
Agreement, all of the terms of the Original Agreement shall remain in full force
and effect. This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts made in, and to be
performed within, said state.
8. CONDITION TO EFFECTIVENESS. This Agreement shall become
effective upon, and not before the "Closing" (as defined in the Settlement
Agreement.), and if such Closing does not occur on or prior to April 30, 2001,
this Agreement shall be void and of no effect ab initio*
IN WITNESS WHEREOF, this Agreement has been made and entered into as of
the day and year first set forth above.
INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation
By: /S/ BRIAN FARGO
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Brian Fargo
Its: Chief Executive Officer
VIRGIN INTERACTIVE ENTERTAINMENT LIMITED,
a corporation formed under the laws of
England and Wales
By:
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Its: