EXHIBIT 10.44
AMENDMENT NUMBER 2 OF INTERNATIONAL DISTRIBUTION AGREEMENT
This Amendment Number 2 of International Distribution Agreement (this
"Amendment") is entered into as of January 1, 2000, by Interplay Entertainment
Corp., a Delaware corporation ("Interplay") and Virgin Interactive Entertainment
Limited, a corporation formed under the laws of England and Wales ("Virgin"),
with reference to the following facts:
A. The parties have entered into that certain International
Distribution Agreement dated February 10, 1999, subsequently amended under that
certain Amendment Number 1 of International Distribution Agreement dated July 1,
1999 (collectively, the "Agreement"), under which Virgin obtained from Interplay
the right to distribute Interplay products in certain territories.
B. The parties desire to amend the Agreement.
Therefore, the parties agree as follows:
I. Section 5(e) of the Agreement is deleted in its entirety and replaced
with the following:
"(e) NO RESERVES. Virgin shall not deduct or retain
reserves from payments due to Interplay under this Agreement.
Within ten business days after the date of this Amendment,
Virgin shall pay to Interplay any reserves that Virgin
currently retains, to the extent that such currently-retained
reserves exceed the amount of markdown allowances, returns,
or credits as of December 31, 1999, that have not already
been accounted for through a deduction from the amount of
Virgin's payments owed or paid to Interplay."
II. Section 5(f) of the Agreement is deleted in its entirety and replaced
with the following:
"(f) RETURNS. Virgin may not grant any markdown
allowance, price protection or other credit for Products
without the prior written consent of Interplay, not to be
unreasonably withheld or delayed. For any calendar month
during the term of this Agreement, the amount of any
Interplay-approved markdown allowances and returns resulting
from Virgin's distribution of Products may be deducted by
Virgin from its payments to Interplay under EXHIBIT `B' for
that month; PROVIDED, HOWEVER, that (i) any allowances and
returns so deducted shall have been processed by Virgin
during that month, and (ii) Virgin shall provide Interplay
with a statement of any such markdown allowances and returns,
itemized by Product and customer."
III. Section 13 (a) of the Agreement is deleted in its entirety and replaced
with the following:
"(a) TERM. This Agreement shall become effective on
the date hereof, and unless sooner terminated pursuant to the
terms of this Agreement, shall continue in full force and
effect until February 10, 2007, on which date this Agreement
shall expire."
IV. Section 1 of Exhibit "B" of the Agreement is deleted in its entirety
and replaced with the following:
"1. VIRGIN SALES TARGETS AND PAYMENTS TO INTERPLAY.
(a) For each calendar year, Virgin and Interplay
shall agree upon a target amount of Net Sales (as defined
below) for the year. Such target amount of Net Sales shall be
referred to herein as the 'Base Plan Net Sales' and shall be
set forth on Schedule `B-1' attached hereto.
(b) Virgin shall pay to Interplay, in the time and
manner set forth in subsection (c) below, a percentage of Net
Sales (such payment to Interplay shall be referred to herein
as the 'Pass-Through Amount') based upon whether, and to what
extend, Virgin has exceeded the Base Plan Net Sales for the
year. The Pass- Through Amount shall be calculated as
follows:
THE PASS-THROUGH AMOUNT
FOR NET SALES IN A CALENDAR YEAR THAT ARE: SHALL BE:
--------------------------------------------------------------------------------
100% of BPNS* or less 85% of such Net Sales
In excess of 100% of BPNS but not more
than 105% of BPNS 84% of such Net Sales
In excess of 105% of BPNS but not more
than 110% of BPNS 83% of such Net Sales
In excess of 110% of BPNS but not more
than 115% of BPNS 82% of such Net Sales
In excess of 115% of BPNS but not more
than 120% of BPNS 81% of such Net Sales
In excess of 120% of BPNS 80% of such Net Sales
*'BPNS' means the Base Plan Net Sales for the applicable year.
(c) Within 50 days after the end of each calendar
month during the term of this Agreement, Virgin shall pay
Interplay the Pass-Through Amount for Net Sales during the
month.
(d) 'Net Sales' shall mean the gross wholesale price
of the Products invoiced or shipped by Virgin in the
distribution of the Products less:
(i) Any applicable taxes on the sale or
license of the Products, other than taxes based
solely on Virgin's income and tax withholdings to
the extent creditable by Virgin.
(ii) Any Interplay-authorized markdown
allowances and/or retroactive discounts and rebates,
on the terms set forth in Section 5(f) of this
Agreement.
(iii) Amounts for returns, such as credits
or defectives, on the terms set forth in Section
5(f) of this Agreement.
(iv) Agency commissions on Products sold in
Austria and Spain."
V. Section 2 of Exhibit "B" of the Agreement is deleted in its entirety
and replaced with the following:
"2. COGS AND MARKETING REIMBURSEMENT. Within 10 days after
the end of each calendar month during the term of this
Agreement, Virgin shall deliver to Interplay an itemized
statement of Virgin's cost of goods sold (including shipping,
handling and insurance) with respect to Products sold during
that month and marketing expenses paid during that month.
Within 60 days of Interplay's receipt of such statement,
Interplay shall either pay to Virgin the amount stated, or
state specific reasons for deduction or denial. If Interplay
states deductions or a denial Virgin may request an audited
verification under SECTION 6 of this Agreement. With the sole
exception of credits for returns and markdowns in accordance
with SECTION 5(F) of this Agreement, Virgin shall not deduct
from its payments to Interplay any of its costs, including,
without limitation, the cost of goods sold and marketing
costs."
VI. Section 3 of Exhibit "B" of the Agreement is deleted in its entirety
and replaced with the following: "Intentionally deleted."
VII. Section 4 of Exhibit "B" of the Agreement, is deleted in its entirety
and replaced with the following: "Intentionally deleted."
VIII. Section 5 of Exhibit "B" of the Agreement is deleted in its entirety,
and replaced with the following:
"5. As of the date of this Amendment, the
previously-applicable provision for Interplay's payment of
Minimum Distribution Fee is eliminated. For purposes of
clarification only, the provision applicable during 1999 for
a 4,5 million British Pound Minimum Distribution Fee is
prorated for the 46 weeks out of the 52 week year during
which Virgin performed distribution services for Interplay
under this Agreement, resulting in a Minimum Distribution Fee
for 1999 of 3.98 million British Pounds."
IX. Section 6 of Exhibit "B" of the Agreement is added, as follows:
"6. CREDIT FOR COMPENSATION CONTRIBUTION. Virgin
shall credit Interplay for any compensation contribution due
after December 31, 1999 under Section 16.4 of that certain
February 10, 1999 Amended and Restated Operating Agreement
between VIE Acquisition Holdings LLC and Interplay, as
amended."
X. MISCELLANEOUS. The Agreement and this Amendment constitute the entire
agreement between the parties on the subject matter hereof and thereof, and no
amendment of the terms
herein or therein shall be valid unless made in a writing signed by the parties.
California law shall govern the interpretation and enforcement of this Amendment
without regard to conflicts of laws principles. Unless otherwise defined herein,
terms used herein shall bear the same respective meanings ascribed to such terms
in the Agreement. Except as amended hereby, the Agreement remains in full force
and effect. This Amendment may be executed in counterparts.
Wherefore, the parties hereto have executed this Amendment as of the
date first written above.
'VIRGIN'
Virgin Interactive Entertainment Limited
BY: [Illegible]
------------------------
ITS:
"INTERPLAY"
INTERPLAY ENTERTAINMENT CORP.
BY: /S/ XXXXX XXXXX
------------------------
Xxxxx Xxxxx
ITS: CEO
Schedule B-1
BASE PLAN NET SALES
YEAR BPNS INTERPLAY SIGNATURE VIRGIN SIGNATURE
--------------------------------------------------------------------------------
2000 $48,000,000
2001 $____________
2002 $____________
2003 $____________
2004 $____________
2005 $____________
2006 $____________
2007 $____________
