EXHIBIT 10.1
DISTRIBUTION AGREEMENT
This Distribution Agreement (this "Agreement") is made as of August 23,
2001 (the "Effective Date") by and between Vivendi Universal Interactive
Publishing North America ("Universal"), a Delaware corporation with offices at
0000 Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000 , and INTERPLAY ENTERTAINMENT
CORP. ("Interplay"), a Delaware corporation with offices at16815 Xxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Universal and Interplay are both in the business of creating,
publishing, manufacturing, marketing and distributing interactive entertainment
software for a variety of hardware platforms.
B. Interplay desires to deliver to UNIVERSAL, and UNIVERSAL
desires to receive from Interplay on a consignment basis, certain Products (as
defined herein) published by Interplay for sale and distribution by UNIVERSAL.
UNIVERSAL also desires to provide marketing and other services for the Products
which UNIVERSAL distributes on behalf of Interplay hereunder.
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
The following terms will have the following meanings as used in this
Agreement:
1.1 "Baldur's Gate: Dark Alliance" means the interactive
entertainment software game currently known as Baldur's Gate:
Dark Alliance for the Playstation 2 platform and currently in
development by Interplay.
1.2 "Scheduled Title" means the entertainment software products
(including, but not limited to, all sequels, updates,
subsequent versions, spin-offs and derivative works arising
therefrom) that Interplay publishes or is planning to publish
in the regular course of its business in the Territory (or
that Interplay otherwise has the right to market and
distribute in the Territory) during the Term, including but
not limited to those titles listed on Exhibit B. Those
Scheduled Titles specifically listed in Exhibit B shall be
referred to as the "Named Title(s)."
1.3 "Product" means each of the software products listed in
Exhibit A attached hereto under the heading "Products", plus
Baldur's Gate: Dark Alliance, plus any Named Titles as
provided in Section 1.1 above, plus any Scheduled Title, on
all Platforms on which Interplay, in its reasonable
discretion, decides to publish the Product.
1.4 "Escrow Instructions" means the Escrow Instructions executed
by the parties and attached hereto as Exhibit C.
1.5 "SKU" means a version of a Product designed to operate on a
particular Platform. An example of a SKU is a version of a
Product designed to play on the Sony PlayStation 2 platform.
1.6 "Platform" means each of the following: personal computers
(regardless of manufacturer or operating system), XxxxXxxxxxx,
XxxxXxxxxxx 0, X00, XxxxXxxx, Game Boy, Game Boy Color, Game
Boy Advance and Xbox.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
1.7 "Loan Agreement" means that certain Loan and Security
Agreement between Interplay and LaSalle Business Credit, Inc.
dated April 11, 2001.
1.8 "Territory" means the United States and its possessions and
Canada.
1.9 "Term" means the period beginning on the Effective Date and
ending on the earlier to occur of (i) December 31, 2003 or
(ii) the termination of this Agreement pursuant to Section
11.1 or 11.2. Notwithstanding the foregoing, in the event that
a Named Title is released within one year of December 31,
2003, then the Term with respect to such Title shall be one
(1) year from the date of such Named Title's release.
1.10 "Third Party Licensor" means any licensors or owner (other
than Interplay or UNIVERSAL) of intellectual property that is
used in any Product.
1.11 "Third Party License" means any license by a Third Party
Licensor of intellectual property that is used in any Product.
2. DISTRIBUTION RIGHT
2.1 Grant of Option/Distribution Rights.
-----------------------------------
(a) Interplay hereby grants to UNIVERSAL, and UNIVERSAL hereby
accepts from Interplay, the exclusive distribution rights in
the Territory to Baldur's Gate: Dark Alliance.
(b) Subject to the disbursement of the Funds (as defined in
Section 13.17 of this Agreement) to Interplay, Interplay
hereby grants to UNIVERSAL, and UNIVERSAL hereby accepts from
Interplay, the first option to obtain exclusive distribution
rights in the Territory to each Scheduled Title. In regard to
Named Titles Interplay hereby grants to UNIVERSAL, and
UNIVERSAL hereby accepts from Interplay the exclusive
distribution rights in the Territory to each Named Title.
Interplay shall present to UNIVERSAL, for UNIVERSAL's review
and comment, the Alpha Version of each Scheduled Title. The
"Alpha Version" of an Scheduled Title is a complete, running
software program containing all the features of the Scheduled
Title with all software modules integrated and working
together in a usable and testable fashion, but not necessarily
including the title screen or demonstration mode. With respect
to each such Alpha Version of each such Scheduled Title,
UNIVERSAL shall have the right at any time during the *** days
following UNIVERSAL's receipt of such Alpha Version to
exercise its option to distribute all, but not less than all,
SKUs of such Scheduled Title in the Territory, and shall
inform Interplay in writing of its decision. If UNIVERSAL
fails to provide any written notice to Interplay within such
*** day period, UNIVERSAL shall be deemed to have exercised
its option to distribute all SKUs of such Scheduled Title in
the Territory. If UNIVERSAL elects to exercise it's right to
distribute a particular Scheduled Title in the Territory
hereunder, then such Scheduled Title will be considered a
Product for the purposes of this Agreement. If UNIVERSAL
declines to distribute the Scheduled Title, then UNIVERSAL
will have no further rights whatsoever in the Scheduled Title
and such Scheduled Title will not become a "Product" under
this Agreement. Notwithstanding the foregoing, UNIVERSALagrees
to exercise its option to obtain exclusive distribution rights
in the Territory to each Scheduled Title submitted by
Interplay which is of reasonable quality. Interplay agrees to
deliver written reports to UNIVERSAL on a regular monthly
basis setting forth the identity and the projected release
dates for Scheduled Titles then in development. For clarity,
in the event the Funds are not disbursed to Interplay for any
reason whatsoever, except as provided in Section 2.1(a) above,
UNIVERSAL shall have no rights whatsoever with respect to any
Scheduled Titles, Named Titles or any other entertainment
software products (including, but not limited to, all sequels,
updates, subsequent versions, spin-offs and derivative works
arising therefrom) that Interplay publishes or is planning to
publish.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
2.2 Grant of Rights in Products.
---------------------------
(a) Marketing and Distribution Rights. Interplay hereby
grants to UNIVERSAL the exclusive (except as
expressly set forth in Sections 2.5 and 2.6 below)
right and license to market (including through public
performance and display), distribute and sell the
Products on behalf of Interplay on an individual-unit
(i.e., non-bundled), packaged-goods basis in the
Territory and during the Term to wholesalers,
dealers, subdistributors, online resellers, direct
marketers, retailers and/or other customers (and on a
non-exclusive basis, directly to the public) on terms
that are reasonable and customary in the interactive
entertainment software industry. UNIVERSAL may use
subcontractors (in each case acting on UNIVERSAL's
behalf) in exercising the foregoing rights.
(b) Manufacturing Rights. Interplay hereby grants to
UNIVERSAL the exclusive (except as set forth in
Section 2.5 and 3.10 below) right and license to
copy, reproduce and otherwise manufacture the
Products (including each of the component parts that
go into a final, fully packaged Product unit) on
behalf of Interplay. The parties will mutually agree
on the number of units of each SKU that will be
manufactured in each manufacturing run of Product
units. UNIVERSAL may use subcontractors (in each case
acting on UNIVERSAL's behalf) in exercising the
foregoing rights. Notwithstanding the foregoing, with
regard to the manufacture of PC Products only, and
following the initial manufacturing run, UNIVERSAL
shall not be required to receive the consent of
Interplay as to the number of units of each SKU that
will be manufactured, provided, however, if Interplay
objects to the number of units of each SKU being
manufactured, UNIVERSAL shall be required to receive
Interplay's consent on all subsequent manufacturing
runs.
2.3 License to Use Product Trademarks. Interplay hereby grants
UNIVERSAL a non-exclusive, non-transferable license within the
Territory and during the Term to use (i) the trademarks
associated with the Products (collectively, the "Product
Marks"), and (ii) the Interplay name and logo and other
Interplay publishing brands as designated by Interplay
(collectively, the "Interplay Marks"), solely in connection
with UNIVERSAL's exercise of the rights granted in Section 2.2
above.
2.4 Approval by Licensors. Notwithstanding any other provision of
this Agreement to the contrary, UNIVERSAL's rights and
obligations under this Agreement with respect to each Product
will be conditioned upon such Product having been approved for
distribution in the Territory by the appropriate platform
licensor (e.g., Sony, Microsoft or Nintendo) if any, and by
any applicable content licensors (including any Third Party
Licensors) and other entities whose approval is legally or
contractually required to allow the distribution by UNIVERSAL
of the Products, and use by UNIVERSAL of the Product Marks, in
the Territory as set forth in this Section 2. Interplay will
use its diligent good faith efforts to secure such necessary
approvals so that the Products may be marketed and distributed
as provided in this Agreement.
2.5 OEM Rights. Without limiting the generality of Section 2.7
below, Interplay specifically reserves the right to authorize
third parties to distribute Products with third-party software
and/or hardware in the form of a single combined product and
selling such combined products in or outside of the Territory
and as a premium to augment the value of non-computer related
products and so-called "covermounts" in and outside the
Territory ("OEM Licenses"). Interplay agrees that it will not
grant any OEM Licenses with respect to any Product that
authorize distribution of any combined product that includes
such Product to commence earlier than *** following the first
commercial distribution of such Product by UNIVERSAL
hereunder, without the prior written approval of UNIVERSAL.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
2.6 Interplay Direct Sales. Interplay shall be entitled to sell
Products directly to customers through Interplay's own direct
sales program, including offering the Products for sale direct
to consumers through Interplay's direct mailing programs,
Interplay's telemarketing programs, Interplay's websites and
Interplay's on-line stores; provided, that Interplay will only
sell directly itself, and will not engage third parties to
sell directly to customers on Interplay's behalf, although
Interplay may engage third-party subcontractors to fulfill
orders that Interplay has itself received directly from
consumers.
2.7 Reserved Rights. All rights not expressly granted to UNIVERSAL
in this Agreement, including all rights outside the Territory,
any electric transmission rights (such as through cable, the
Internet and any on-line services), and all other
merchandizing rights of any kind whatsoever, are specifically
excluded from this Agreement and are retained and reserved by
Interplay. Interplay also reserves the right to publish
trailers and demos of the Products (which trailers and demos
will be made available to UNIVERSAL for its use hereunder in
marketing the Products) in combination with other
entertainment software products that are not Products under
this Agreement. Any use by Interplay of such reserved rights,
including the use or authorization of other to use or exploit
the Products, the Product Marks and/or the Interplay Marks, or
any portion thereof, for the purpose of Interplay's reserved
rights, shall not be deemed unfair competition, nor
interference with nor infringement of UNIVERSAL's rights
hereunder.
3. OBLIGATIONS OF UNIVERSAL
3.1 Marketing and Sales Efforts. UNIVERSAL will use commercially
reasonable, good-faith efforts, but in no event less than
efforts substantially equivalent to those employed by
UNIVERSAL in the marketing and distribution of
UNIVERSAL-published products of like sales potential and
demographic target, to market and distribute the Products, and
solicit and support sales of the Products, throughout the
Territory.
3.2 Marketing. UNIVERSAL will create a marketing plan, and will
design all packaging and Product-specific marketing materials,
for each Product. All such marketing plans, packaging and
Product-specific marketing materials will be subject to the
prior approval of Interplay, which approvals will not be
unreasonably withheld or delayed by Interplay. UNIVERSAL will
include the Products in UNIVERSAL's general sales and
marketing literature and direct mail marketing materials on a
reasonably consistent basis with other UNIVERSAL-published
products of similar sales potential and demographic target.
Subject to Interplay's approval in each case (which approvals
will not be unreasonably withheld or delayed by Interplay),
UNIVERSAL will secure all media-buys for Product advertising.
UNIVERSAL will be entitled to distribute up to *** of each SKU
to its marketing contacts and customers as demonstration
copies (on a not-for-resale basis) without owing Interplay any
Interplay Proceeds (as defined in Section 6.1 below) for such
units; provided that such maximum number of units may be
increased by UNIVERSAL on a SKU-by-SKU basis subject to the
approval of Interplay, which approval will not be unreasonably
withheld or delayed.
3.3 Branding and Packaging. On Product packaging, in
Product-specific marketing materials and in any specific
reference to a Product in any other UNIVERSAL sales or
marketing literature, Interplay's name or other designated
brand shall appear more prominently than UNIVERSAL's or any
third party's, name, logo or brand. The front of the outside
packaging of the Products will include information as to
machine, medium and other operating requirements (such as
memory) necessary for the effective use of the Products by
consumers. The design of such packaging will also include all
relevant bar code information. At UNIVERSAL's option,
UNIVERSAL may incorporate artwork (to be subject to
Interplay's approval) that shows UNIVERSAL's or a wholly-owned
subsidiary or parent company of UNIVERSAL, provided such
wholly-owned subsidiary or parent company of UNIVERSAL is in
the interactive entertainment software business ("UNIVERSAL
Subsidiary") name and
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
logo (which is intended to inform customers that UNIVERSAL is
the distributor of the Products) in the design of the back of
the outside packaging of the Products, provided that such
artwork does not obscure the title of the Product, or
Interplay's name or logo, and is reasonable in size compared
to the size of the packaging. UNIVERSAL will also be entitled
to include the URL of UNIVERSAL's online store and web site on
the Product packaging.
3.4 Reports and Forecasts. To the extent, and with the frequency,
that UNIVERSAL routinely compiles or receives sales
information reports with respect to UNIVERSAL-published
products on an account-by-account basis, UNIVERSAL will
provide Interplay with such reports, to the same extent and
frequency, with respect to each Product. Such reports will
provide such information as UNIVERSAL's current inventory of
each Product, a summary of all unit sales of each Product sold
during the prior period, and whatever competitive product and
market analysis information as may be available to UNIVERSAL
and which UNIVERSAL may disclose without breaching any
confidentiality obligation to any third party. UNIVERSAL will
provide Interplay with weekly sell-through and inventory
reports, to the extent that such reports are routinely
compiled by UNIVERSAL for UNIVERSAL-published products. Any
reports provided to Interplay hereunder shall be deemed to be
the property of Interplay and Confidential Information of
Interplay (as provided in Section 12 below); provided,
however, that Interplay agrees to abide by any confidentiality
restrictions imposed on UNIVERSAL by third parties furnishing
any information in such reports, when such restrictions have
been communicated to Interplay. UNIVERSAL will also provide
Interplay on a monthly basis with a three-month rolling
forecast of UNIVERSAL's sales of Products, by SKU. In
addition, UNIVERSAL shall provide a preliminary sales forecast
for each Product within *** days after Interplay approves that
marketing plan for such Product. Such forecast shall be based
on the anticipated marketing spend and strategy for the
Product, UNIVERSAL's assessment of the sales potential of that
Product (based on the Alpha Version), and such other factors
and information as UNIVERSAL reasonably uses in its
forecasting practices. All such forecasts are provided by
UNIVERSAL to Interplay solely for its internal planning
purposes and will not be taken or relied-upon by Interplay as
a representation or warranty as to UNIVERSAL's future orders
or sales of the Products. Without limiting UNIVERSAL's other
obligations hereunder, Interplay acknowledges that UNIVERSAL
is under no obligation whatsoever to order or sell any
particular amount of any Products. In addition to the
foregoing and subject to the Confidentiality provisions set
forth in Section 9 below, with reasonable promptness,
UNIVERSAL shall provide such other business or financial data,
reports, and projections as Interplay may reasonably request
in order to comply with regulatory reporting, tax reporting,
and compliance with other contractual obligations of
Interplay.
3.5 Consumer/Trade Shows. For consumer/trade shows at which
UNIVERSAL decides to maintain a display booth and for which
Interplay gives UNIVERSAL a timely written request to display
its Products at UNIVERSAL's display booth, subject to
available space as reasonably determined by UNIVERSAL and
subject to the parties agreeing on the apportionment of the
costs, UNIVERSAL will provide a reasonable amount of space in
its booth for Interplay to display its Products; provided,
that, for any given consumer/trade show, Interplay shall
receive rates no less favorable than those accorded any other
similar party for whom UNIVERSAL provides distribution
services, taking into account the amount of space at issue and
the number of Products being displayed. The parties shall
discuss in good faith the apportionment of costs for any
display space dedicated to Interplay. All travel,
accommodation, equipment, and other expenses incurred by
Interplay will be at Interplay's sole expense. Special signage
(if any) must be approved by UNIVERSAL, and will be at the
expense of Interplay. In the event Interplay does not desire
to display its Products at the UNIVERSAL display booth, or
UNIVERSAL determines that there is not enough available space
for Interplay to display its Products, UNIVERSAL will display
and promote the Products as UNIVERSAL deems appropriate on a
non-dedicated space basis at UNIVERSAL's expense.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
3.6 Packaging, Warranties, Etc. UNIVERSAL will distribute the
Products with packaging, warranties and disclaimers intact as
shipped from Interplay. UNIVERSAL will not alter, erase,
deface or overprint any notice on any item provided by
Interplay.
3.7 Compliance with Laws. UNIVERSAL will comply in all material
respects with all applicable international, national, state,
provincial, regional and local statutes and regulations in
distributing the Products and in performing its duties
hereunder.
3.8 Infringement. UNIVERSAL will promptly notify Interplay in
writing of any known infringement of Interplay's proprietary
rights in the Products which comes to UNIVERSAL's attention.
UNIVERSAL agrees to cooperate, at Interplay's expense, with
reasonable requests for assistance from Interplay in
connection with Interplay's reasonable, good-faith efforts to
protect its proprietary rights in the Products.
3.9 Interplay's Involvement in UNIVERSAL's Sales Activities.
UNIVERSAL will make all reasonable, good faith efforts to keep
Interplay's sales team apprised of UNIVERSAL's sales force
efforts and level of success in selling the Products..
3.10 Manufacturing of Products.
-------------------------
(a) Approval to Manufacture. UNIVERSAL and Interplay will
together use reasonable commercial efforts to obtain
the approval of any Third Party Licensor(s) whose
approval is necessary for UNIVERSAL to be able to
manufacture finished-goods Product units hereunder.
SKUs for which no such Third Party Licensor approval
is required, or for which all necessary Third Party
Licensor consents and approvals have been obtained,
will be referred to as "UNIVERSAL Manufactured SKUs".
Console SKUs for which UNIVERSAL and Interplay are
unable to obtain the necessary Third Party Licensor
consent(s) or approval(s) for UNIVERSAL to
manufacture finished-goods Product units will be
referred to as "Interplay Manufactured SKUs". For
clarity UNIVERSAL shall be responsible for the
manufacturing all PC SKU's.
(b) UNIVERSAL Manufactured SKUs. UNIVERSAL will be
responsible for manufacturing all units of UNIVERSAL
Manufactured SKUs to be distributed by UNIVERSAL
hereunder (and to be distributed by Interplay
pursuant to Section 2.6 above), including all
component parts thereof, and for assembly of
finished-goods Product units of UNIVERSAL
Manufactured SKUs, and for securing delivery of such
finished-goods Product units to UNIVERSAL's
distribution center (or to Interplay's distribution
center in the case of units distributed by Interplay
pursuant to Section 2.6 above). All such activities
undertaken by UNIVERSAL shall be on behalf of
Interplay. UNIVERSAL and Interplay shall mutually
agree in the number of units of UNIVERSAL
Manufactured SKUs to be manufactured in each
production run. Subject to reimbursement as provided
in Section 6.1 below, (i) UNIVERSAL will pay all
costs of manufacturing the units of UNIVERSAL
Manufactured SKUs to be distributed pursuant to this
Agreement, including costs of CD- and DVD-pressing,
platform licensor royalties, printing of packaging
and inserts and pack-out ("Manufacturing Costs"); and
(ii) UNIVERSAL will also pay all costs of shipping
completed units of UNIVERSAL Manufactured SKUs to be
distributed pursuant to this Agreement to UNIVERSAL's
distribution center, and to Interplay's distribution
center ("Shipping Costs").
(c) Interplay Manufactured SKUs. Interplay will be
responsible for manufacturing all units of Interplay
Manufactured SKUs to be distributed by UNIVERSAL
hereunder (and to be distributed by Interplay
pursuant to Section 2.6 above), including all
component parts thereof, and for assembly of
finished-goods Product units of Interplay
Manufactured SKUs, and for securing delivery of such
finished-goods Product units to UNIVERSAL's
distribution center (or to Interplay's distribution
center in the case of
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
units distributed by Interplay pursuant to Section
2.6 above). Subject to reimbursement as provided in
Section 6.1 below, (i) UNIVERSAL will advance
Interplay the out-of-pocket (paid to third parties
not owned or controlled by Interplay) Manufacturing
Costs incurred by Interplay in manufacturing units of
the Interplay Manufactured SKUs to be distributed by
UNIVERSAL pursuant to this Agreement; and (ii)
UNIVERSAL will also advance Interplay the
out-of-pocket (paid to third parties not owned or
controlled by Interplay) Shipping Costs incurred by
Interplay in shipping completed units of Interplay
Manufactured SKUs to be distributed by UNIVERSAL
pursuant to this Agreement to UNIVERSAL's
distribution center. UNIVERSAL will advance such
amounts to Interplay, or pay such amounts directly to
the third party performing such services or who is
otherwise owed such payments, promptly upon
Interplay's presentation to UNIVERSAL (or UNIVERSAL's
presentation to Interplay and Interplay's approval)
of a valid and correct invoice or purchase order
specifying the amount owed and the services being
provided. UNIVERSAL shall have a right of prior
approval (which will not be unreasonably withheld of
delayed) over the quantity of each manufacturing
order for Product units (or components thereof)
intended for distribution pursuant to this Agreement.
By way of clarification, UNIVERSAL will not be
required to advance Interplay the costs or expenses
of manufacturing or shipping units of any Interplay
Manufactured SKUs that are not intended for
distribution by UNIVERSAL pursuant to this Agreement;
provided, however, that if UNIVERSAL agrees to
advance Interplay any such costs, UNIVERSAL will be
entitled to reimbursement of such costs as
Manufacturing Costs or Shipping Costs (as applicable)
pursuant to Section 6.1 below.
3.10 Press Relations. UNIVERSAL will be responsible for all
media-relations and press-relations activity and publicity
with respect to the Products. UNIVERSAL mayl include
demonstration copies of the Products, or sample Product units,
in periodic mailings to public relations contacts that
UNIVERSAL has developed, in a manner that is consistent with
UNIVERSAL's standard business practices. UNIVERSAL may work
closely with Interplay's marketing and development personnel
to make sure that UNIVERSAL's media-relations and
press-relations activities are coordinated with, and enhance,
Interplay's marketing and development efforts for the
Products.
3.11 Timely Distribution. UNIVERSAL agrees to use its best efforts
to commercially release the Products in a timely manner.
Subject to UNIVERSAL's receipt of all necessary Interplay and
Third Party approvals, in no event shall UNIVERSAL release the
Product later than: (i) with respect to PC Products, UNIVERSAL
agrees to release the Products for commercial distribution
within *** days of UNIVERSAL's possession of a gold master
version of the Product; (ii) with respect to UNIVERSAL
Manufactured SKU"s which are console platforms, UNIVERSAL
shall cause such Product(s) to commence the manufacturing
process within *** days of UNIVERSAL's possession of a gold
master version of the Products and upon receipt of finished
goods UNIVERSAL shall release the Products for commercial
release within *** days of receipt of such finished goods; and
(iii) with respect to Interplay Manufactured SKU"s which are
console platforms, UNIVERSAL shall release the Products for
commercial release within *** days of receipt of such finished
goods.
4. OBLIGATIONS OF INTERPLAY
Interplay represents to UNIVERSAL that it is able to and intends to
publish, and be the consignor of, the Products and to manufacture or cause to be
manufactured the Products, and that, as between Interplay and UNIVERSAL,
Interplay is solely responsible for all obligations attendant upon such roles
(except as set forth in Section 3.10 above). Accordingly, Interplay represents,
covenants and agrees as follows:
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
4.1 Product Quality. The Products: (a) are marketable and have
been prepared and developed with reasonable diligence and
skill; (b) are and will continue to be of high quality in all
material respects and will be free of defects (minor bugs
generally acceptable within industry standards shall not be
considered a defect under this Agreement) in material and
workmanship in all material respects and (c) will conform in
all material respects to the functional and other descriptions
contained in the written materials accompanying them and in
all advertising and promotional materials produced, released
or approved by Interplay.
4.2 Product Delivery. Except as otherwise expressly stated in this
Agreement, Interplay will be responsible for, and will pay all
costs associated with, shipment and insurance of Products to
UNIVERSAL, and from UNIVERSAL to Interplay.
4.3 Marketing Support. Interplay will provide UNIVERSAL with
reasonable, good faith cooperation and support in UNIVERSAL's
efforts to market the Products. In addition, subject to
UNIVERSAL's approval, not to be unreasonably withheld or
delayed, Interplay may provide supplemental marketing for the
Products in the Territory, at Interplay's expense.
4.4 Product Testing and Approvals At Interplay's cost, Interplay
agrees to use reasonable, good faith efforts to test and
ensure that each Product runs in the different hardware and
software configurations in which the Product is designed to
run and with all peripherals with which the Product is
designated to work in a manner that is consistent with the
Product's documentation, advertising material and normal user
expectations. Interplay is responsible for making timely
submissions to, and obtaining all necessary approvals from,
all platform licensors, content licensors and any other
entities whose approval or acceptance are necessary in order
that the Products may be published, marketed and distributed
hereunder.
4.5 Financial Reporting. Interplay shall provide UNIVERSAL with
copies of all Interplay financial reports that are filed with
the Securities and Exchange Commission (the "SEC"), at the
time they are filed. *** All information disclosed by
Interplay to UNIVERSAL under this Section will be Confidential
Information pursuant to Section 9 below, except to the extent
such information is subject to the exceptions set forth in
Section 9.3.
4.6 Co-op Advertising. Interplay will fund (through the General
Reserve as Deductions in the calculation of Interplay Proceeds
as set forth in Section 6.3(c) below) and assist in managing
such cooperative advertising with UNIVERSAL's third-party
resellers, as is mutually agreed upon by UNIVERSAL and
Interplay.
4.7 Support. At Interplay's cost, Interplay will provide warranty
replacement services to consumers of the Products located in
the Territory in a timely manner to at least high industry
standards. Interplay will also provide consumer support
regarding the operation and play of the Products (via phone
and email during Interplay's normal business hours) in
accordance with high industry standards. The documentation for
each Product will specify contact information for Interplay
regarding warranty replacement support, and will specify
Interplay's customer support phone number and/or Internet site
address for all other customer support inquiries.
4.8 Costs of Development, Payment of Content License Royalties.
Interplay shall be responsible for all costs and expenses
associated with the development of the Products. This shall
include, but not be limited to, any royalties, fees or other
compensation that is owed to Third Party Licensors as a result
of the development, manufacture, marketing, distribution or
sale of the Products, other than amounts owed to Sony,
Nintendo or Microsoft due to the manufacturing and
distribution of SKUs designed for play on game machines
marketed by those companies (which amounts are subject to the
provisions of Section 3.10 above).
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
5. ORDER PROCEDURE, TITLE AND RISK OF LOSS
5.1 Interplay Manufactured SKUs. The following terms will be
applicable for all units of Interplay Manufactured SKUs to be
distributed by UNIVERSAL pursuant to this Agreement.
Conversely, the following terms will not apply to units of
UNIVERSAL Manufactured SKUs distributed by UNIVERSAL
hereunder.
(a) Form of Order. All orders will be placed by UNIVERSAL
using its then-standard order form(s), provided,
however, the terms of such order form shall not
contain any terms and conditions which are in
addition to, different from and/or inconsistent with
this Agreement. No order placed by UNIVERSAL shall be
effective unless and until accepted by Interplay in
writing. No reference to such form(s) being a
"purchase order" or any other term or reference in
such form to "purchase" of Products will cause the
order and sale of any Products by UNIVERSAL to be
construed to be on any basis other than a "sale or
return" basis with all sales made on Interplay's
behalf by UNIVERSAL. Subject to the foregoing, any
terms included on such order form will govern such
order, provided that if any such terms conflict with
the terms of this Agreement, this Agreement will
control. Any terms included on the order form
regarding cancellation of an order will be deemed to
be in addition to, and not in lieu of, the terms in
this Agreement. In no event will the terms of any
Interplay acknowledgment, sales order or other
written or oral response to an order from UNIVERSAL
govern the order, and Interplay agrees that all such
terms will be null and void, unless acknowledged in
writing by UNIVERSAL.
(b) Partial Deliveries. UNIVERSAL is not obligated to
accept partial delivery of any order of any shipments
of any Product. In the event UNIVERSAL accepts a
partial delivery of a shipment of Product, the
portion of the shipment not delivered will be deemed
a separate order.
(c) Incoming Inspection. UNIVERSAL has the right to
inspect incoming inventory of Product units. Such
inspection must be performed within ten (10) days of
UNIVERSAL's receipt of such Product units and
UNIVERSAL is obligated to promptly inform Interplay
of any defects UNIVERSAL discovers. UNIVERSAL may
return an entire shipment of Product units to
Interplay for replacement in cases where UNIVERSAL's
inspection indicates defect rates above two percent
(2%). If an inspected Product unit is found to be
correct, UNIVERSAL will repackage it, at UNIVERSAL's
expense, and Interplay will provide to UNIVERSAL
whatever stickers or other parts are required for
such repackaging, at UNIVERSAL's expense. Interplay
acknowledges that such inspection does not relieve
Interplay of any responsibilities of its warranty to
UNIVERSAL of Product quality.
5.2 UNIVERSAL Manufactured SKUs. Regardless of the fact of
UNIVERSAL's responsibility for manufacturing and shipping
units of UNIVERSAL Manufactured SKUs, and regardless of any
statement or provision in any forms or correspondence relayed
between the parties relating to UNIVERSAL's manufacturing and
shipping of units of the UNIVERSAL Manufactured SKUs, the
units of such UNIVERSAL Manufactured SKUs will be deemed to be
provided by Interplay, and received by UNIVERSAL, hereunder on
a "sale or return" basis with all manufacturing, shipping and
sales of such units made on Interplay's behalf by UNIVERSAL.
5.3 Title and Risk of Loss. As between UNIVERSAL and Interplay,
title to all Product units (whether Interplay Manufactured
SKUs or UNIVERSAL Manufactured SKUs) shall at all times remain
with Interplay.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
5.4 Interplay Direct Sales of UNIVERSAL Manufactured SKU's .
Solely with respect to any UNIVERSAL Manufactured SKU's being
ordered by Interplay for its Direct Sales activities, as set
out in Section 2.6, such units shall be provided to Interplay
on a form and in a manner to be agreed upon, but consistent
with the normal business practices of UNIVERSAL and Interplay
the cost of such UNIVERSAL Manufactured SKU's shall be
deducted from the Interplay Proceeds as set forth in Section
6.1(iii)..
6. PRICE; PAYMENT
6.1 Price. The proceeds payable by UNIVERSAL to Interplay for
units of any Product distributed by UNIVERSAL (the "Interplay
Proceeds") shall be the price at which UNIVERSAL sells such
Product units to its customers (the "Price"), less the
following amounts only:
***
The balance shall be payable to Interplay as Interplay
Proceeds.
Interplay will have the right to determine the Price for each
Product in its sole discretion (which will include UNIVERSAL's
standard Included Fees and Charges as specified by UNIVERSAL),
and may revise the Price for any Product by customer from time
to time, subject to the provisions of Section 6.5 below. At
the time of the first commercial shipment of each Product, in
order to convey to consumers the high quality of the Product,
Interplay will set the Price within the range of then-standard
dealer price levels for "front-line" interactive entertainment
software products of comparable quality and sales potential.
Any change in the Price of any Product will become effective
as to UNIVERSAL *** days after the date of Interplay's written
notice to UNIVERSAL of the Price change or earlier as may be
mutually agreed upon by the parties. UNIVERSAL will
incorporate a change in Price of a Product in UNIVERSAL's next
published price list.
6.2 Distribution Fee. The "Distribution Fee" is the fee charged by
UNIVERSAL for distribution of the Products and is calculated
by multiplying the Price, less the General Reserve, by the
applicable percentage set forth in Exhibit A under the heading
"Distribution Fee Percentage."
6.3 Advance. UNIVERSAL shall pay Interplay non-refundable (except
as otherwise provided herein), recoupable (as set forth in
Section 6.4 below), advance, as follows: (i) One Million
Dollars ($1,000,000) within two days following the full
execution of this Agreement and approval and ratification of
this Agreement by Interplay's Board of Directors (ii) Four
Million Dollars ($4,000,000) in accordance with Section 13.17
and (iii) Five Million Dollars ($5,000,000) within two days
of Interplay's delivery to UNIVERSAL of Baldur's Gate: Dark
Alliance. All amounts paid to Interplay by UNIVERSAL
pursuant to this Section 6.3 shall be referred to as the
"Advance".
6.4 Recoupment of Advance. The Advance shall be recoupable by
UNIVERSAL against amounts earned by UNIVERSAL by the
Distribution Fee and as follows: (i) unless and until
UNIVERSAL recoups the Advance the Distribution Fee shall be
increased by five percent (5%) and (ii) unless and until the
Advance is recouped by UNIVERSAL, UNIVERSAL shall be entitled
to deduct from monthly amounts payable to Interplay an amount
equal to *** percent (***%) of the Interplay Proceeds.
Notwithstanding the foregoing, Interplay shall have right at
any time during the term to pre-pay or otherwise reimburse
UNIVERSAL the Advance without penalty of any kind whatsoever.
For clarity, upon recoupment of the Advance (either by
pre-payment of Interplay or recoupment by UNIVERSAL) the
Distribution Fee shall be as set forth on Exhibit A and
UNIVERSAL shall no longer be entitled to deduct from monthly
amounts payable to Interplay an amount equal to *** percent
(***%) of the Interplay Proceeds. When the aggregate amount of
this Section 6.4(i) and (ii) equal the Advance the Advance
shall be fully recouped. ***
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
6.5 Deductions. "Deductions" means the following amounts
attributable to each Product:
(a) Price Protection and Post-Sale Markdowns. *** percent
(***%) of any price protection or post-sale markdown
deductions granted to UNIVERSAL's customers with
respect to units of the Products. Interplay will
determine the extent of any price protection or
post-sale markdown deductions extended to any
Products. UNIVERSAL will be entitled to a Deduction
equal to *** percent (***%) of any price protection
or post-sale markdown deductions granted to
UNIVERSAL's customers with respect to units of the
Products that were not originally distributed by
UNIVERSAL.
(b) Co-op Advertising. Amounts approved by Interplay in
writing for all co-op advertising. If any co-op
advertising program includes other UNIVERSAL products
in addition to Products, and the expenses of such
co-op advertising program are not billed separately
by the customer for each Product and other UNIVERSAL
products in the program, then the amount of the
Deduction will be based on a valid and signed
insertion order in which the combined deduction for
the multiple titles can be separated. Interplay will
fund an amount of support with respect to each Named
Product of *** percent (***%) of Net Sales for direct
marketing costs, and no less than *** percent (***%)
of Net Sales with respect to each Named Product for
MDF/COOP expenses. "Net Sales" shall be defined as
the Price less the General Reserve.
(c) Return of Goods. UNIVERSAL will return to Interplay
all returned Products by such means as Interplay
directs at Interplay's sole option and expense. If
Interplay does not direct UNIVERSAL as to a method of
return within *** days after written notice from
UNIVERSAL, UNIVERSAL may return such Products to
Interplay by any means deemed reasonable by UNIVERSAL
and may, at UNIVERSAL's option, debit the costs of
returning such Products against amounts otherwise due
Interplay (as a Deduction) or require Interplay to
reimburse UNIVERSAL for such costs. UNIVERSAL shall
provide to Interplay documentary evidence of
UNIVERSAL's costs incurred pursuant to this Section.
Interplay will pay all transportation and shipping
charges associated with such returns.
(d) Other Agreed Deductions. Other deductions mutually
agreed upon in writing by UNIVERSAL and Interplay,
amounts owed by Interplay to UNIVERSAL pursuant to
Sections 7.2 and 7.3 below, and other penalties or
additional charges assessed against UNIVERSAL by any
UNIVERSAL customer(s) as a result of an Unacceptable
Delivery by Interplay. "Unacceptable Delivery" means
(i) Interplay's failure to deliver a Product order
(accepted by Interplay hereunder) to UNIVERSAL
on-time such that UNIVERSAL is either (A) unable to
ship the goods to its customer(s) on or before a date
required by such customer(s) or (B) is required to
use a more expensive shipping means than employed by
UNIVERSAL in its regular course of business (in which
event the Deduction shall equal the increase in
shipping costs); or (ii) Interplay's delivery of
defective, improperly packaged or improperly labeled
Product units which are then rejected by UNIVERSAL's
customer(s). The deductions described in this
subsection (d) may be measured on a
Product-by-Product basis, or prorated from
UNIVERSAL's total expenses, depending on UNIVERSAL's
standard accounting practices.
6.6 Payment. UNIVERSAL will provide a report to Interplay on a
monthly basis within *** days after the close of each of
UNIVERSAL's fiscal months showing (a) the aggregate Price (by
SKU) for all Product units shipped by UNIVERSAL to its
customers during such fiscal month, (b) the totals of all ***
incurred or advanced by
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
UNIVERSAL during such fiscal month, (c) the amount of each of
the deductions taken by UNIVERSAL pursuant to clauses 6.1(i)
through 6.1(v) above in such fiscal month; (d) the amount of
each category of Deductions taken by UNIVERSAL in such fiscal
month; (e) the amount of Monthly Gross Payables, the Target
Reserve Balance and the amount withheld in or paid out from
the General Reserve for such fiscal month (as such terms are
defined in Section 6.8 below); and (f) the amount of Interplay
Proceeds owed to Interplay for such fiscal month. At the time
UNIVERSAL delivers such report to Interplay each month,
UNIVERSAL will pay Interplay the total of the Interplay
Proceeds owed to Interplay for such fiscal month. All
Interplay Proceeds not paid when due shall bear interest
accruing at *** % per year from the date payment is first due.
6.8 General Reserve.
---------------
(a) Accrual of the General Reserve. UNIVERSAL shall be
entitled to accumulate and maintain a cash reserve in
the amounts set forth below in this Section 6.8(a)
(subject to the provisions of paragraphs (b) and (c)
below) which reserve shall be deducted from the
amounts UNIVERSAL owes to Interplay and held by
UNIVERSAL in dedicated account (the "General
Reserve"). The General Reserve will be applied by
UNIVERSAL to recover undisputed amounts owed to
UNIVERSAL pursuant to Section 6.5 inclusive during
the Term (and upon the expiration or termination of
this Agreement). From September 1, 2001, through
September 1, 2002 UNIVERSAL's will be entitled to set
aside in the General Reserve *** percent (***%) of
Monthly Gross Sales (as defined below) accrued in
such fiscal months and *** % of the of Monthly Gross
Sales accrued in such fiscal months thereafter until
the expiration or termination of this Agreement.
"Monthly Gross Sales" means the aggregate Price of
all Products ties units shipped by UNIVERSAL during
such fiscal month.
(b) *** Review and Partial Disbursement of General
Reserve. *** months after each *** month period
beginning with the *** month period endidng March 31,
2002 the accumulated General Reserve will be compared
to the undisputed Deductions owed to UNIVERSAL
pursuant to Section 6.5 and the net amount will be
settled out the Distribution Fee applicable during
the period. If the General Reserve exceeds net of
actual and undisputed amounts owed to UNIVERSAL,
UNIVERSAL will pay such excess to Interplay within
*** days. In the event the amounts actually owed to
UNIVERSAL pursuant to Section 6.5 exceed the General
Reserve for the given period, UNIVERSAL shall be
entitled to deduct the difference from Interplay
Proceeds then due and payable.
(c) Disputes Regarding Withdrawals from the General
Reserve. In the event Interplay in good faith
disputes UNIVERSAL's right hereunder to make a
particular withdrawal from the General Reserve (or
the amount of such withdrawal): (ia) UNIVERSAL shall
immediately re-deposit the disputed amount into the
General Reserve, and (iib) the parties shall resolve
such dispute as expeditiously as possible.
(d) Repayment if General Reserve Is Not Fully Used After
Expiration or Termination. The process described in
paragraph (b) above will continue for a period of ***
months following the expiration or earlier
termination of this Agreement. To the extent that the
General Reserve is not fully used to offset amounts
otherwise due from Interplay to UNIVERSAL following
the expiration or earlier termination of this
Agreement, UNIVERSAL will pay to Interplay the amount
left in the General Reserve *** months after the date
of expiration or termination of this Agreement and
any applicable sell-off periods as provided in
Section 11.7(b) or extensions provided in Sections
1.6 and 11.10. To the extent the General Reserve is
less than amounts owed to UNIVERSAL hereunder
following expiration or earlier termination of this
Agreement Interplay shall pay such defecit to
UNIVERSAL within *** days following the date of
expiration or termination
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
of this Agreement and any applicable sell-off periods
as provided in Section 11.7(b) or extensions provided
in Sections 1.6 and 11.10.
6.9 ***
6.10 Collections and Bad Debt. Interplay will be responsible for
all risk of collection of amounts owed by the following
UNIVERSAL customers as a result of UNIVERSAL's activities
under this Agreement: ***.
With respect to all other UNIVERSAL customers, UNIVERSAL will
be responsible for all risk of collection of amounts owed by
UNIVERSAL's customers as a result of UNIVERSAL's activities
under this Agreement, and UNIVERSAL will not deduct any bad
debt expenses or associated write-offs incurred as a result of
its activities under this Agreement. ***
7. RETURNS AND PRODUCT RECALLS/AUDIT
7.1 Right to Return. Interplay understands and acknowledges that
UNIVERSAL receives Product units from Interplay hereunder on a "sale or return"
basis and Interplay is the ultimate responsible party for all Products, subject
to the provisions of this Agreement . UNIVERSAL has the right to return to
Interplay at any time any Product units held by UNIVERSAL, subject to the
provisions of this Agreement.
7.2 Product Recall. Without prejudice to the foregoing, in the
event of an Interplay-authorized recall based solely on errors
in the program code for which Interplay has developed
corrections, Interplay will pay all costs associated with the
recall, including but not limited to Handling Charges,
customer notification costs, Product replacement costs, and
all freight costs. The term "Handling Charges" will mean ***.
7.3 Audit. Interplay will have the right, *** per calendar year,
to have reputable, experienced auditors examine UNIVERSAL's
relevant books, records and accounts for the purpose of
verifying the accuracy of payments made by UNIVERSAL as
required by this Agreement. Each audit will be conducted at
UNIVERSAL's place of business (or another place agreed to by
Interplay and UNIVERSAL) during UNIVERSAL's normal business
hours with at least *** business days prior written notice to
UNIVERSAL. Each audit may cover any period of the Term that
has not previously been audited by Interplay. If an audit
discloses a shortfall in UNIVERSAL's payments to Interplay:
(a) UNIVERSAL will within *** days pay the amount of such
shortfall to Interplay; Interplay will pay the fees and
expenses of the auditors for the examination; except that, if
any examination discloses a shortfall in the payments due
Interplay of more than *** percent (***%) in any one-year
period, then UNIVERSAL will pay the fees and expenses of the
auditor for that examination. Furthermore, solely in the event
of such *** percent (***%) shortfall, Interplay shall be
entitled to conduct an additional follow-up audit within the
twelve (12) month period following the first audit, without
otherwise affecting Interplay's audit rights for the calendar
year in which the follow-up audit is conducted
8. INTELLECTUAL PROPERTY PROTECTION
8.1 Protection of Intellectual Property. The parties agree to use
commercially reasonable efforts to protect the intellectual
property associated with the Products. Immediately upon
discovery of any infringement of such intellectual property,
the discovering party shall notify the other party of such
infringement, and the parties shall cooperate in prosecuting
any action to stop or otherwise mitigate the infringement.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
8.2 Prevention of Greymarket Activity. The parties shall each use
commercially reasonable efforts to prevent greymarket
activity. "Greymarket" includes (i) the sale, outside of the
Territory, of units of the Products licensed hereunder for
distribution within the Territory; and (ii) the sale, in the
Territory, of units of the Products other than those licensed
for distribution in the Territory. Immediately upon discovery
of any such Greymarket activity, the discovering party shall
notify the other party, and the parties shall cooperate in
prosecuting any action to stop or otherwise mitigate the
activity.
8.3 Ownership. As between Interplay and UNIVERSAL, UNIVERSAL
agrees that Interplay shall own all copyright and other
proprietary rights, title and interest in the Products, and
all intellectual property rights embodied therein, including
all rights to the titles, names, trademarks, characters,
artwork and code, and all other materials (collectively, the
"Other Materials") which are created by or for UNIVERSAL for
the purpose of packaging, advertising, marketing and promoting
the Products, including all cartons, containers, packaging,
packing and wrapping material, tags, labels, ancillary
manuals, imprints or other devices, advertisements, press
releases and promotional literature. UNIVERSAL will not attack
the title of Interplay or its Third Party Licensors in and to
the Products or Other Materials, nor any copyright or
trademarks pertaining thereto, nor will UNIVERSAL attack the
validity of any Third Party Licenses. UNIVERSAL agrees that it
will neither apply for nor seek to obtain trademark
registration for the Products. If, for any reason, the Other
Materials do not qualify as a work made for hire under
applicable law, or UNIVERSAL may be entitled to claim any
ownership interest in the Products or Other Materials under
any applicable law, then UNIVERSAL hereby assigns and agrees
to assign exclusively to Interplay (or any designee of
Interplay), any and all of UNIVERSAL's right, title and
interest therein. Any assignment of copyright hereunder
includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or
referred to as "moral rights" (collectively "Moral Rights").
To the extent such Moral Rights cannot be assigned under
applicable law and to the extent the following is allowed by
the laws in the various countries where Moral Rights exist,
UNIVERSAL hereby waives such Moral Rights and consents to any
action of Interplay (or its designee) that would violate such
Moral Rights in the absence of such consent. Notwithstanding
the foregoing, UNIVERSAL shall retain ownership of any
intellectual property which is proprietary to UNIVERSAL and
which has been added to the Products packaging, provided,
however, UNIVERSAL shall grant Interplay a non-exclusive,
royalty-free, license to use such UNIVERSAL intellectual
property solely in connection with the Products in the
Territory and in accordance with the terms of this Agreement
and Interplay's rights thereunder.
9. CONFIDENTIALITY
9.1 Confidential Information Defined. For the purposes of this
Agreement, "Confidential Information" means all information
that can reasonably be construed to be confidential or
proprietary information of the disclosing party, including any
design elements, character profiles, unpublished copyrighted
material, release dates, marketing, sales and promotional
strategies, information about new products, properties and
characters, computer code (if any), data, manuals, formulae,
specifications, processes, methods, the terms and conditions
of this Agreement, and/or any other information or documents
of or relating to the business of the disclosing party.
9.2 Duty to Maintain Confidentiality. Except as expressly approved
by the disclosing party, the party receiving Confidential
Information from the disclosing party agrees: (i) to use the
Confidential Information solely for the purpose of performing
its obligations under this Agreement; (ii) to hold the
disclosing party's Confidential Information in strict
confidence as a fiduciary, and to take all reasonable
precautions to protect such Confidential Information; (iii)
not to divulge any such Confidential Information or any
information derived therefrom to any third person, other than
its directors, officers, employees, affiliates, attorneys,
auditors, financial advisors, consultants, or prospective
investors or lenders, and, in the case of
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
UNIVERSAL, third-party subcontractors pursuant to Section 2.2
above (collectively, the "Representatives"); provided, that in
each case such Representative shall be given access to the
Confidential Information only on a "need-to-know" basis and
shall expressly agree in writing to retain the Confidential
Information in strictest of confidence; (iv) not to make any
use whatsoever at any time of such disclosing party's
Confidential Information for the benefit of any person other
than the disclosing party or as expressly contemplated by the
disclosing party, and (v) not to copy, reproduce or directly
or indirectly reverse engineer all or any part of such
disclosing party's Confidential Information.
9.3 Exceptions. "Confidential Information" shall not include
information which: (i) at the time of disclosure, is in the
public domain or which, after disclosure, becomes part of the
public domain by publication or otherwise through no action or
fault of the receiving party; (ii) the receiving party can
show was in its possession at the time of disclosure and was
not acquired, directly or indirectly, from the other party;
(iii) was received from a third party having the legal right
to transmit the same; (iv) is independently developed,
conceived, or created without use of or reference to any
Confidential Information of the other party; (v) is disclosed
pursuant to valid court order, regulatory (including the SEC),
contractual requirement or other legal process. Further,
nothing in this Section 9 shall prevent either party from
making any disclosure required by a public stock exchange, the
Securities and Exchange Commission or similar governmental or
regulatory body.
9.4 Return or Destruction of Confidential Information. The
receiving party agrees to cease using the Confidential
Information upon the earlier of (i) expiration or earlier
termination of the Term of this Agreement, or (ii) receipt of
a written request to do so by the disclosing party, and, with
respect to such Confidential Information provided in writing
or in some other tangible form, to return it to the disclosing
party within three (3) business days after receipt of a
written request to do so. At the request of the disclosing
party, such receiving party will also destroy all written
material, memoranda, notes and other writings or recordings
whatsoever prepared by or for it based upon, containing or
otherwise reflecting any of the disclosing party's
Confidential Information. Nothing herein shall prevent either
party from using such Confidential Information with respect to
any claims brought by the parties following the expiration or
termination of the Term.
10. REPRESENTATIONS AND WARRANTIES; INDEMNITY
10.1 Interplay Representations and Warranties. Interplay makes the
following representations and warranties:
(a) Intellectual Property Rights. Interplay has the right
to grant to UNIVERSAL the licenses and rights granted
under this Agreement, and UNIVERSAL's use of such
licenses in accordance with the terms of this
Agreement will not infringe upon any third party's
copyright, patent, trademark or other intellectual
property rights.
(b) Authority. Subject to the Loan Agreement and Section
13.16 below, Interplay (and the officers executing on
its behalf) have the required authority and capacity
to enter into this Agreement and all documents
required to be entered into pursuant to this
Agreement. All corporate and other actions required
to be taken by Interplay to authorize the execution,
delivery and performance of this Agreement and all
transactions contemplated in this Agreement have been
duly and effectively taken. Upon the full execution
and delivery of this Agreement, this Agreement will
become a valid, binding and enforceable obligation
upon Interplay.
(c) No Conflicts. Except for the Loan Agreement,
Interplay's execution, delivery and performance of
this Agreement will not result in the breach of any
term or provision of, or constitute a default under,
any agreement by which Interplay is bound, nor will
such
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
actions, to the best of Interplay's knowledge result
in the violation of any obligation, law, ordinance,
regulation, order or decree applicable to Interplay.
(d) No Conflicting Agreements. So long as this Agreement
remains in effect, Interplay shall not commit any act
or enter into any agreement or understanding with any
third party which is inconsistent or in conflict with
this Agreement.
(e) Limitation. THE WARRANTIES STATED IN SECTION 4.1 AND
THIS SECTION 10.1 ARE INTERPLAY'S SOLE AND EXCLUSIVE
WARRANTIES PERTAINING TO THE PRODUCTS, AND INTERPLAY
HEREBY DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE.
(f) Compliance with Laws. Interplay will at all times
comply with all government laws and regulations,
including but not limited to, product safety and
other similar laws, relating or pertaining to the
manufacture, distribution, sale and advertising of
the Products.
(g) No Infringement. Assuming the truth of Section
10.1(a), Interplay's creation of the Other Materials
hereunder will not infringe upon any third party's
copyright, patent, trademark or other intellectual
property rights (and, Interplay hereby acknowledges
that no approval by UNIVERSAL of the Products shall
constitute an approval of any such infringement).
(h) Baldur's Gate: Dark Alliance. With respect to
Interplay's grant of rights under Section 2.1(a) of
this Agreement Interplay's execution, delivery and
performance under this Agreement will not result in
the breach of any term or provision of, or constitute
a default under the Loan Agreement
10.2 UNIVERSAL Representations and Warranties. UNIVERSAL makes the
following representations and warranties:
----------------------------------------
(a) Authority. UNIVERSAL (and the officers executing on
its behalf) have the required authority and capacity
to enter into this Agreement and all documents
required to be entered into pursuant to this
Agreement. All corporate and other actions required
to be taken by UNIVERSAL to authorize the execution,
delivery and performance of this Agreement and all
transactions contemplated in this Agreement have been
duly and effectively taken. Upon the full execution
and delivery of this Agreement, this Agreement will
become a valid, binding and enforceable obligation
upon UNIVERSAL.
(b) No Conflicts. UNIVERSAL's execution, delivery and
performance of this Agreement will not result in the
breach of any term or provision of, or constitute a
default under, any agreement by which UNIVERSAL is
bound, nor will such actions, to the best of
UNIVERSAL's knowledge result in the violation of any
obligation, law, ordinance, regulation, order or
decree applicable to UNIVERSAL.
(c) No Conflicting Agreements. So long as this Agreement
remains in effect, UNIVERSAL shall not commit any act
or enter into any agreement or understanding with any
third party which is inconsistent or in conflict with
this Agreement.
(d) No Liens. UNIVERSAL will not cause or allow any liens
or encumbrances to be placed against, nor grant any
security interest in, the Products without
Interplay's prior consent in its sole discretion.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
(e) Compliance with Laws. UNIVERSAL will at all times
comply with all government laws and regulations,
including but not limited to, product safety and
other similar laws, relating or pertaining to the
manufacture, distribution, sale and advertising of
the Products.
(f) No Infringement. Assuming the truth of Section
10.1(a), UNIVERSAL's creation of the Other Materials
hereunder will not infringe upon any third party's
copyright, patent, trademark or other intellectual
property rights (and, UNIVERSAL hereby acknowledges
that no approval by Interplay of the Products or
Other Materials shall constitute an approval of any
such infringement).
10.3 Indemnification. Interplay and UNIVERSAL each agree to
indemnify and hold harmless the other from all claims, suits,
judgments, damages, costs and expenses (including costs of
suit and reasonable attorneys' fees) (collectively, "Claims")
as a result of indemnitor's breach or an allegation of
indemnitor's breach of any of its representations, warranties
and covenants made in this Agreement; provided, however, that
(i) the indemnitor shall have been provided with prompt
written notice of the assertion of any such claim and that the
indemnitor shall have the authority and power to control the
defense and/or settlement thereof, subject to the right of
indemnitee to participate in any such proceeding at its own
expense with counsel of its own choosing, and (ii) the
indemnitee shall not agree to the settlement of any such
claim, action or proceeding without the prior written consent
of the indemnitor, which consent shall not be unreasonably
withheld. The foregoing indemnity shall not extend to any
Claims to the extent they arise out of any matter against
which the party to be indemnified has received insurance
proceeds sufficient to cover such Claims.
10.4 Limitation of Liability. THE LIABILITY OF EITHER PARTY, IF
ANY, FOR DAMAGES FOR ANY CLAIM OF ANY KIND WHATSOEVER AND
REGARDLESS OF THE LEGAL THEORY, WITH REGARD TO THE LICENSE
GRANTED HEREUNDER, SHALL NOT INCLUDE COMPENSATION,
REIMBURSEMENT OR DAMAGES ON ACCOUNT OF THE LOSS OF PRESENT OR
PROSPECTIVE PROFITS, EXPENDITURES, INVESTMENTS OR COMMITMENTS,
WHETHER MADE IN ESTABLISHMENT, DEVELOPMENT OR MAINTENANCE OF
REPUTATION OR GOODWILL OR FOR ANY OTHER REASON WHATSOEVER. IN
NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL,
OR CONSEQUENTIAL DAMAGES.
11. DEFAULT AND REMEDIES
11.1 Default. A party hereto shall be in default ("Default") in the
following circumstances:
(a) if that party breaches any covenant, representation
or warranty it makes in this Agreement (other than a
payment obligation hereunder) or if any
representation or warranty is or becomes untrue, and
such breach or untruth is material, and such breach
or untruth is not cured within thirty (30) days after
receipt of written notice from the non-defaulting
party;
(b) if that party breaches a payment obligation under
this Agreement, and such breach is material, and such
breach is not cured within the following applicable
time period after receipt of written notice from the
non-defaulting party: (i) *** for the first or second
such breach by the breaching party, (ii) *** for the
third such breach by the breaching party and (iii)
*** for all successive breaches by the breaching
party;
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
(c) upon the institution by or against that party of
insolvency, receivership or bankruptcy proceedings
and such proceeding is not dismissed within thirty
(30) days of its being filed;
(d) upon that party's making of an assignment for the
benefit of creditors; or
(e) upon that party's dissolution or liquidation.
11.2 No Cure Right. Notwithstanding anything to the contrary
herein, UNIVERSAL shall immediately be deemed in Default
hereunder (and UNIVERSAL shall have no cure period) in the
event UNIVERSAL delivers or sells the Products outside the
Territory or knowingly sells Products to a third party who
UNIVERSAL knows intends to, or who UNIVERSAL reasonably should
suspect intends to, sell or deliver such Products outside the
Territory.
11.3 ***
11.4 ***
11.5 ***
11.6 Remedies Cumulative. Each right and remedy of the parties
provided for in this Agreement shall be cumulative and shall
be in addition to every other right or remedy provided for in
this Agreement or available at law or in equity, except as
otherwise expressly limited by this Agreement, and the
exercise or the beginning of the exercise by a party of any
one or more of the rights or remedies provided for in this
Agreement or available at law or in equity, except as
otherwise limited by this Agreement, shall not preclude the
simultaneous or later exercise by the party of any or all
other rights or remedies provided for in this Agreement or
available at law or in equity, except as otherwise limited by
this Agreement.
11.7 Effect of Expiration or Termination.
-----------------------------------
(a) Upon the expiration or termination of this Agreement
other than a termination by Interplay for a Default
by UNIVERSAL, UNIVERSAL may continue to sell-off, on
a non-exclusive basis, Product inventory remaining in
UNIVERSAL's possession as of the date of termination
or expiration, for a period of *** days after such
expiration or termination.
(b) To the extent UNIVERSAL does not return inventory to
Interplay, UNIVERSAL's customers will retain the
right to sell all of their inventory of the Products.
(c) Upon any termination of this entire Agreement or of
any specific Product by Interplay due to a Default by
UNIVERSAL, UNIVERSAL shall (i) immediately cease and
desist from all further distribution of such
Product(s) (and UNIVERSAL hereby expressly agrees
that Interplay shall have the right to enjoin
UNIVERSAL from conducting any further distribution
and marketing activities in connection with such
Product(s)), and (ii) within *** days thereafter, at
*** cost, return to Interplay all inventory of such
Product(s) then in UNIVERSAL's possession. In the
event UNIVERSAL tenders any Product units to
Interplay and Interplay does not accept such Product
units, UNIVERSAL may require that the carrier return
such inventory to UNIVERSAL's warehouse(s) and
Interplay will then owe UNIVERSAL, in addition to the
amount due for such Product units ***. UNIVERSAL will
not be obligated to retender any and all
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
Product units until Interplay pays in cash all
amounts then due UNIVERSAL under this Agreement, at
which time UNIVERSAL shall promptly retender such
Products.
(d) UNIVERSAL may retain and apply the General Reserve
against amounts owed to UNIVERSAL under this
Agreement, and UNIVERSAL will repay any unused
portions of the General Reserve, all as provided in
Section 6.8 above.
11.8 Partial Termination for Loss of Distribution Rights. In the
event that Interplay loses the right to grant to UNIVERSAL the
rights to distribute and sell any Product, then upon such loss
of rights, the Product will be deleted from coverage under
this Agreement. Any such partial termination will be treated
as an Interplay-authorized Product recall pursuant to the
terms of Section 7.3 above.
11.9 Surviving Provisions. The provisions of Sections, 2.4 , 6, 7,
8, 9, 10, 11.7, 11.8, 12 and 13 shall survive the expiration
or termination of this Agreement.
11.10 Ancillary Remedies. Notwithstanding the foregoing, in the
event that Interplay cancels more than *** of the *** Named
Titles or a month delay from the anticipated release date (as
noted in Exhibit B) with respect to *** or more of the Named
Titles occurs, then UNIVERSAL may elect one (and only one) of
the following remedies :
***
For the purposes of this section, the various marketing plans and forecasting
reports as provided herein shall be used to determine the value of such
cancelled or delayed titles. UNIVERSAL acknowledges and agrees that delays
and/or cancellations as provided herein shall not constitute a Default, as
provided herein.
12. ASSIGNMENT
Neither this Agreement, nor the parties' rights and obligations
hereunder, may be transferred, assigned or sublicensed to a third party, without
the prior written consent of the other party; provided, however, that either
party may transfer or assign its rights and/or obligations hereunder to any
person acquiring such party by merger or acquiring all or substantially all of
such party's assets without requiring the consent of the other party and
UNIVERSAL may assign this Agreement to a UNIVERSAL Subsidiary without the
consent of Interplay.
13. MISCELLANEOUS
13.1 Amendments and Modifications. No amendment or modification of
this Agreement shall be valid unless made in a writing
executed by all parties.
13.2 Binding Effect. Subject to Section 12 above, all provisions of
this Agreement shall inure to the benefit of, and be binding
upon, the parties and their successors-in-interest and
permitted assigns.
13.3 Further Documents. Each party shall execute and deliver all
such further instruments, documents and papers, and shall
perform any and all acts, necessary to give full force and
effect to all the terms and provisions of this Agreement.
13.4 Requests, Consents and Approvals. Unless otherwise specified
herein, any consents and/or approvals requested of either
party pursuant to this Agreement shall not be unreasonably
withheld, conditioned or delayed. Without limitation,
UNIVERSAL acknowledges and agrees that it shall be deemed
"reasonable" for Interplay to withhold its consent and/or
approval where necessary for Interplay to comply with the
terms of any Third Party Licenses.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
13.5 Interpretation. No uncertainty or ambiguity herein shall be
construed or resolved against any party, whether under any
rule of construction or otherwise; on the contrary, this
Agreement has been negotiated by all parties and shall be
construed and interpreted according to the ordinary meaning of
the words used so as to fairly accomplish the purposes and
intentions of the parties. Descriptive headings in this
Agreement are for convenience only and shall not control or
affect the meaning or construction of any provision of this
Agreement. The word "include" or "including" used in this
Agreement shall describe examples of the antecedent clause,
and shall not be construed to limit the scope of such clause.
Unless specifically stated otherwise, any reference to a
particular period of days herein shall be interpreted as
reference to calendar days; provided, however, that if such
period would otherwise end on a Saturday, Sunday or generally
recognized U.S. public holiday, then the period shall be
deemed to end on the next business day.
13.6 Applicable Law. California law, without regard to conflicts or
choice of laws principles, shall govern the interpretation of
this Agreement.
13.7 Legal Action. Should any litigation or arbitration occur
between the parties respecting or arising out of this
Agreement, the prevailing party shall be entitled to recover
its reasonable attorneys' fees and other costs in connection
with such litigation, including reasonable attorneys' fees
incurred after a judgment has been rendered by a court of
competent jurisdiction. Any judgment shall include an
attorneys' fees clause that shall entitle the judgment
creditor to recover attorneys' fees incurred to enforce a
judgment on this Agreement, which attorneys' fees shall be an
element of post-judgment costs; the parties agree that this
attorneys' fee provision shall not merge into any judgment.
13.8 Venue. The parties agree that all actions or proceedings
arising directly or indirectly from this Agreement shall be
arbitrated or litigated before arbitrators or in courts having
a situs within Orange County, California and hereby consent to
the jurisdiction of any local, state or federal court in which
such an action is commenced that is located in Orange County,
California. The parties agree not to disturb such choice of
forum. The parties waive the personal service of any and all
process upon them, and consent that all such service of
process may be made by certified or registered mail, return
receipt requested, addressed to the respective parties at the
address set forth above.
13.9 No Partnership or Joint Venture. This Agreement does not
create a partnership or joint venture between the parties, and
shall not be construed as doing so. This Agreement does not
create any right by either party to bind the other party.
13.10 No Third Party Beneficiaries. No person other than the parties
hereto and their permitted successors and assigns shall
receive any benefits of this Agreement.
13.11 Notices. All notices, statements and other documents, and all
approvals or consents that any party is required or desires to
give to any other party, shall be given in writing and shall
be served in person, by express mail, by certified mail, by
overnight delivery, or by facsimile at the respective
addresses set forth below, or at such other addresses as may
be designated by such party in accordance with this Section.
If to Interplay: with a copy to:
Interplay Entertainment Corp. Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
Attention: Chief Executive Officer 000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
00000 Xxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxx, Xxxxxxxxxx 00000 Attention: Xxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
If to UNIVERSAL: with a copy to:
Vivendi Universal Interactive Vivendi Universal Interactive
Publishing North America, Inc. Publishing North America, Inc.
Attention: Chief Executive Officer Attention: Corporate Counsel
0000 Xxxxxx Xxxxx 0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx, 00000 Xxx Xxxxxxx, Xxxxxxxxxx, 00000
Telephone: 000-000-0000 Telephone: 000-000-0000
Delivery shall be deemed conclusively made (i) at the time of
service, if personally served, (ii) five days after deposit in
the United States mail, properly addressed and postage
prepaid, if delivered by express mail or certified mail, (iii)
upon confirmation of delivery by the private overnight
deliverer, if served by overnight delivery, and (iv) at the
time of electronic transmission (with successful transmission
confirmation), provided a copy is mailed within 24 hours after
such transmission.
13.12 Severability. Any provision of this Agreement that is found by
a court of competent jurisdiction to be void, invalid or
unenforceable shall be curtailed and limited only to the
extent necessary to bring such provision within the
requirements of the law, and such finding and curtailment
shall not affect the validity or enforceability of any other
provision of this Agreement.
13.13 Entire Agreement. This Agreement (and all Exhibits attached
hereto and incorporated herein by this reference) constitute
the entire agreement among the parties with respect to the
subject matter hereof.
13.14 Counterparts; Delivery. This Agreement may be executed in
counterparts and delivered by facsimile.
13.15 Ordinary Course of Business. Interplay and UNIVERSAL each
acknowledge that any indebtedness created under this Agreement
shall be in the ordinary course of business and that the terms
of this Agreement are ordinary business terms between
Interplay and UNIVERSAL and are ordinary business terms for
the industry in which Interplay and UNIVERSAL participate.
13.16 UNIVERSAL and Interplay agree that a condition precedent to
the effectiveness of this Agreement is the approval and
ratification of the Agreement by Interplay's Board of
Directors.
13.17 Upon execution of this Agreement UNIVERSAL shall deposit Four
Million ($4,000,000) ("Funds") with the Agent (as defined
below) and the Funds shall be disbursed to Interplay in
accordance with the Escrow Instructions which shall be
executed concurrently with this Agreement and attached hereto
as Exhibit C ("Escrow Account"). The parties agree the escrow
agent shall be *** ("Agent"). Interplay shall pay the
administrative costs associated with the Escrow Account. In
the event the Funds are disbursed to UNIVERSAL in accordance
with the Escrow Instructions, Interplay shall pay interest on
the Funds at a rate of *** per annum.
13.18 Neither party will not be liable for any delay in any of its
obligations pursuant to this Agreement resulting from any
cause beyond a party's reasonable control or caused by acts of
God, acts of civil or military authorities, priorities, fires,
strikes, floods, epidemics, governmental rules or regulations,
war, riot, delays in transportation or shortages.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement by their duly
authorized representatives as set forth below.
VIVENDI UNIVERSAL INTERACTIVE
PUBLISHING NORTH AMERICA INTERPLAY ENTERTAINMENT CORP.
By: /s/ Xxxx X'Xxxx By: /s/ Xxxxx Xxxxx
------------------------------ --------------------------------
Name: Xxxx X'Xxxx Name: Xxxxx Xxxxx
---------------------------- ------------------------------
Title: Senior Vice President Title: Chief Executive Officer
--------------------------- -----------------------------
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT A
---------
PRODUCTS/DISTRIBUTION FEE
Products: ***
--------
Distribution Fee Percentage: 15%
---------------------------
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT B
---------
NAMED TITLES
For purposes of this Agreement the "Named Titles" are as follows:
Title of Games Currently Known as:
1. ***
2. ***
3. ***
4. ***
5. ***
6. ***
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
EXHIBIT C
---------
ESCROW INSTRUCTIONS
WHEREAS, Vivendi Universal interactive Publishing North America
("Universal") and Interplay Entertainment Corp. ("Interplay," and collectively
with Universal, the "Parties") have entered into that certain Distribution
Agreement of even date herewith (the "Agreement"); and
WHEREAS, in accordance with Sections 13.17 of the Agreement, the Parties
have agreed that Universal will deposit $4,000,000 (including interest thereon
the "Funds") with the escrow agent (the "Agent") named therein, to be disbursed
in accordance with the instructions provided herein.
NOW, THEREFORE, the Parties instruct the Agent as follows:
1. Agent shall receive and maintain the Funds in safe keeping, for
disbursement in accordance with these instructions.
2. Agent shall disburse the Funds to Interplay within *** business days of
Interplay's delivery to the Agent, prior to ***, of a written certification
(which may be by facsimile) executed by an authorized officer of Interplay
certifying any one or more of the following facts: (i) that Interplay has
obtained LaSalle Business Credit, Inc.'s consent and/or waiver of all conflicts
between the Agreement and the Loan and Security Agreement between Interplay and
LaSalle Business Credit, Inc. dated April 11, 2001 (the "Loan Agreement"); (ii)
that the *** ; or (iii) that Interplay has *** .
3. In the event that Interplay has not delivered a certification as
provided above prior to *** , upon written instructions from Universal (which
may be by facsimile) Agent shall disburse the Funds to Universal no later than
*** business days after receipt of such written instructions from Universal.
4. The Parties acknowledge and understand that the funds shall be held by
Agent in a trust account, and that only minimal interest will be earned on such
Funds.
5. Agent at its option shall be entitled to file an action of interpleader
requiring the Parties to answer and litigate any claims and rights among
themselves if in Agent's sole discretion a conflict, controversy or dispute
arises between the Parties. Agent is authorized to deposit with the clerk of
the court all documents and funds held in escrow, and the parties shall
indemnify Agent for, and hold it harmless against, any loss, liability, cost or
expense, including but not limited to reasonable attorneys' fees, reasonably
incurred on the part of Agent in connection with such action and in connection
with Agent's duties and obligations under this Agreement, as well as the
reasonable costs and expenses of defending against any claim or liability
relating to this Agreement. Upon initiating such action, Agent shall be fully
released and discharge of and from all obligations and liability imposed by the
terms of this Agreement.
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
We so instruct:
VIVENDI UNIVERSAL INTERACTIVE PUBLISHING NORTH AMERICA
By: __________________
Its: __________________
INTERPLAY ENTERTAINMENT CORP.
By: __________________
Its: __________________
We agree to comply with the above instructions:
"AGENT"
By: __________________
Its: __________________
*** Terms represented by this symbol are considered confidential. These
confidential terms have been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission ("SEC") and have been
filed separately with the SEC.
