Exhibit (10)(ff)(ii)
MODIFICATION
VIDEOTAPE DUPLICATION
MODIFICATION AGREEMENT (the "Modification Agreement") entered into as of
September 12, 1997 between ALLIED DIGITAL TECHNOLOGIES CORPORATION with offices
at 000 Xxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("ALLIED"), and ANCHOR BAY
ENTERTAINMENT [CORP.] with offices at 000 Xxxxx Xxxxxxxxx, Xxxx, Xxxxxxxx 00000,
("ANCHOR BAY") as set forth in this Agreement.
WHEREAS, the parties hereto entered into an agreement as of July 21,
1995 relating to the use of Allied's videotape duplication services (such
agreement, together with all Exhibits and Addendum thereto as amended to date,
being collectively referred to as the "Original Agreement"); and
WHEREAS, the parties desire to modify certain provisions of the
Original Agreement and settle certain differences and disputes arising out of or
relating to the Original Agreement or the performance or non-performance
thereof.
NOW THEREFORE, in consideration of the premises and the mutual promises
and agreements hereinafter contained, the parties hereto hereby agree as
follows:
I. Effective as of the commencement of the initial term of the Original
Agreement and for the remainder of such term and any and all renewals thereof,
unless otherwise hereafter agreed to by the parties, ANCHOR BAY shall have no
obligation to order any specific minimum number of units to be manufactured by
ALLIED during any year of the Original
Agreement; provided, however, the foregoing provision of this Section I shall
not amend or modify the provisions of paragraphs a)1 and a)2 of Section 11 of
the Original Agreement.
II. Each of the parties hereto waives and releases any and all claims for
damages, loss of profits, contractual or other penalties, rescission, specific
performance or any other remedy or relief it may have against the other party,
arising out of or relating to any claim of late delivery or failure to deliver
units, any claim of failure to order any minimum number of units and other
breaches or alleged breaches of the Original Agreement by such other party
occurring prior to the date of this Modification Agreement and which breach or
alleged breach has heretofore been asserted in writing, in general or specific
terms, by the party having such claim or by its servants, agents, employees or
attorneys.
III. To the extent that the number of units shipped in any calendar month
beginning October 1, 1997 at the instructions of ANCHOR BAY shall exceed one
hundred twenty (120%) percent of the number of units duplicated by ALLIED during
such month pursuant to the instructions of ANCHOR BAY, ALLIED will be entitled
to charge ANCHOR BAY Ten ($0.10) Cents per unit only on such excess number of
units over such one hundred twenty (120%) percent. The amount due with respect
to such excess units, if any, during a calendar month, shall be invoiced by
ALLIED during the following calendar month on the same payment terms as set
forth in Section2 of the Original Agreement.
IV. Effective July 15, 1995, the following provisions of paragraph d)i of
Section 11 of the Original Agreement are hereby deleted and shall be of no force
and effect from and after such date (without, however, modifying ALLIED'S
liability for any material breach of the
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Original Agreement by reason of its non-performance subsequent to the date of
this Modification Agreement):
"Penalties will apply if the performance standards are not met as
follows:
a) Up to five duplication orders (title/units) per month can exceed the
five-day window. On the sixth and subsequent orders, a penalty of
$.50/unit will apply for all units outside of the five-day window.
Minimum order quantity is 100 units or one pancake. Orders less than
100 units or one pancake will carry a $.50 per unit surcharge.
b) Up to 10 fulfillment order/month may exceed the 48 hours service
window. On the 11th and subsequent orders in any month exceeding 48
hours, then a penalty of $.50/unit will apply.
c) Up to 10 return authorizations may be outside of the 10-day service
window in any month. On the 11th and subsequent return orders in any
month exceeding the 10-day service window, then a penalty of
$.25/unit will apply. In years two through five, the service window
will be five days.
The penalty provisions as outlined above do not supersede the
provisions of the Force Majeure (11f)."
V. ALLIED agrees to execute and deliver to ANCHOR BAY simultaneously with
the execution and delivery of this Modification Agreement an Option Agreement in
the form of Exhibit (1) attached hereto and made a part hereof. Upon delivery of
such Option Agreement to ANCHOR BAY, the option granted to ANCHOR BAY pursuant
to Section
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2 of Addendum #3 of the Original Agreement, as heretofore amended, shall be and
be deemed to be surrendered and cancelled and of no further force and effect.
ANCHOR BAY represents that it has not heretofore sold, assigned, transferred,
mortgaged, pledged or otherwise disposed or encumbered such option or any part
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
Agreement to be executed as of the date first above written.
ALLIED DIGITAL TECHNOLOGIES ANCHOR BAY ENTERTAINMENT, INC.
CORPORATION
By: /s/ By: /s/
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[name, title & address] [name, title & address]
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