EXHIBIT 10.22
APPENDIX
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TO
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REPUBLISHING - MARKETING - DISTRIBUTION
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AGREEMENT
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Between
Sound Source Interactive, Incorporated
A Corporation, having its registered office in 00000 Xxxxxx Xxxx,
Xxxxx X, Xxxxxxxxx, XX 00000-0000, Xxxxxx Xxxxxx of America
Hereinafter "SSII"
And
TDK Recording, Media Europe S.A.
A company having its registered office in Z.1. Bornmelscheuer,
X-0000 Xxxxxxxxxx, Xxxxx-Xxxxx xx Xxxxxxxxxx
Hereinafter "TDK"
Whereas,
The parties decided to enter into a republishing - marketing - distribution
agreement ("Agreement"). In extension to the Agreement, SSII agreed to warrant
the manufacture and market of the "Articles" to TDK for the duration of the term
of the Agreement.
NOW, THEREFORE, it as been agreed as follows:
ARTICLE I - WARRANTY
With respect to the "Proprietary Subject Matter", SSII warrants that all
"Articles" are and shall continue to be under current and continuing license
from original Licensor and thereby available to TDK to manufacture and market
for the duration of the term of the Agreement.
ARTICLE 2 - BINDING CONDITION
This Appendix is an integral part of the republishing - marketing - -
distribution agreement signed between SSII and TDK and can not be executed
separately. The same binding obligations stipulated in the republishing -
marketing - distribution agreement governs this Appendix.
So done in duplicate, in Luxembourg, on 11, December 1998.
SIGNED for and behalf of Sound Source Interactive, Inc. "SSII"
SIGNED for and on behalf of TDK Recording Media Europe S.A. "TDK"
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ADDENDUM TO REPUBLISHING -
MARKETING - DISTRIBUTION AGREEMENT
This Addendum, made and entered into as of this first day of March, 1999, is by
and between;
Sound Source Interactive, Incorporated, a California Corporation, and carrying
on business at:
00000 Xxxxxx Xxxx, Xxxxx X
Xxxxxxxxx, XX 00000-0000
United States of America
Hereinafter referred as "SSII"
And
TDK Recording Media Europe S.A., a company located in the Grand Duchy of
Luxembourg and carrying on business at:
Z.1. Bommelscheuer
X-0000 Xxxxxxxxxx
Xxxxx-Xxxxx xx Xxxxxxxxxx
Hereinafter referred as "TDK"
WHEREAS,
SSII and TDK have entered on November 1st, 1998 into a Republishing -
Marketing - Distribution Agreement (the "Agreement") whereby SSII has appointed
TDK as its exclusive Licensee for various SSII software titles (hereinafter
called "Articles") in the Territory (as defined in Schedule "B" of the
Agreement).
The parties agreed in the Agreement that TDK had to guarantee SSII a total.
minimum royalty advance payment of nine hundred thousand US dollars ($900,000).
This minimum royalty advance payment has to be paid in accordance with a payment
schedule mentioned in the Agreement (as set forth in Article 4.A).
According to the initiative of SSII, SSII and TDK agreed to modify the
amount of the advance royalties and the payment schedule accordingly.
Furthermore, SSII decided to grant TDK a right of first refusal on new
software titles.
Considering the foregoing TDK agrees on limited exceptions to the
Agreement.
NOW, THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:
Article 1: Modification of advance royalties' amount and payment schedule:
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Pursuant to the payment schedule (as described in Article 4.A of the Agreement),
TDK already paid 40%, three hundred and sixty thousand US dollars ($360,000), of
the total minimum advance royalties. According to the payment schedule, the rest
of the total minimum advance royalties, five hundred and
2
forty thousand US; dollars ($540,000), shall be divided in two payments of two
hundred and seventy thousand US dollars ($270,000) each.
Due to the new proposal made by SSII, TDK agrees to pay immediately at the date
of signature of the Addendum a total minimum advance royalties' amount of five
hundred thousand US dollars ($500,000) instead of two payments of two hundred
and seventy thousand US dollars ($270,000). Therefore, SSII agrees to grant TDK
a discount of forty thousand US dollars ($40,000) on the total minimum advance
royalties mentioned in the Agreement.
Consequently, the total minimum advance royalties due by TDK to SSII shall be
eight hundred and sixty thousand US dollars ($860,000) instead of nine hundred
thousand US dollars ($900,000). The table below and the new total minimum
royalty advance payment agreed between the parties shall definitely replace the
table and the total minimum royalty advance payment mentioned in Article 4.A of
the Agreement.
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Land Before Time 45,000 units $4.00 $180,000
Math Adventure
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Land Before Time 45,000 units $4.00 $180,000
Kindergarten Adv.
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Babe Pre-School 30,000 units $4.00 $120,000
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Babe Early Reader 30,000 units $4.00 $120,000
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Casper Early Reader 40,000 units $4.00 $160,000
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An American Tail 25,000 units $4.00 $100,000
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Total 215,000 units $4.00 $860,000
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The total minimum royalty advance payment shall be recoupable against royalty
payments due to SSII for the first two hundred and fifteen thousand (215,000)
units of the Articles sold anywhere in the Territory.
Article 2: New Software Titles:
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2.1) Right of first refusal:
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In addition to the modification of the Agreement, SSII grants to TDK a ninety
(90) day "right of first refusal" review period (as set forth in Article 1.G of
the Agreement) for the following titles:
Land Before Time;
Maisy;
King &, 1;
Lost in Space LA;
Lost in Space MA;
Bernstain Bears (1);
Bernstain Bears (2).
Since the review period already started in December 31, 1998 the review period
shall expire on March 31, 1999.
3
TDK may exercise its right of option on the titles which TDK judges as making
good commercial sense to market in the Territory.
TDK accepts to develop localized language versions of the new software titles,
which have been chosen by TDK (under the same conditions as set forth in the
Agreement).
2.2) License fee:
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The Republishing Fee due by TDK to SSII on the localized. language versions of
the new software titles shall be subject to the same conditions as stated in the
Agreement.
On titles that TDK exercised its right of option, TDK shall pay to SSII a
minimum royalty advance payment per title, as stated in the table below:
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Land Before Time 25,000 units $4.00 $100,000
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Maisy 25,000 units $4.00 $100,000
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King &, 1 25,000 units $4.00 $100,000
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Lost in Space 0 units $4.00 $.00
Learning Adv.
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Lost in Space Math Adv. 0 units $4.00 $.00
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Bernstain Bears (1) 6,250 units $4.00 $25,000.
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Bernstain Bears (2) 6,250 units $4.00 $25,000.
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Consequently, the total minimum royalty advance payment, which is the sum of the
minimum royalty advance payment per title chosen by TDK will be defined in
Schedule A and this Schedule A shall be regarded as a constituent part of this
Addendum.
This total minimum royalty advance payment shall be recoupable against royalty
payments due to SSII as described in Schedule A.
This total minimum royalty advance payment shall be paid in accordance with the
schedule mentioned below:
(a) Forty percent (40%) of the total advance for the titles chosen by TDK
upon execution of the option and in exchange for TDK's receipt of the
relevant Localization Kits.
(b) Thirty percent (30%) of the total advance for the localized version of
each SSII's new software title to be paid upon TDK's submission of the
Gold Master (first localized. version per title).
(c) Thirty percent (30%) of the total advance for each localized version
of each SSII's new software title to be paid within sixty (60) days
after first customer ship date of such localized version.
Article 3: Duration:
--------------------
3.1) Concerning the modification of the minimum royalty advance payment and
payment schedule (as set forth in Article I above), this Addendum shall
commence on the date set forth above and shall continue until the
expiration or termination of the Agreement, unless terminated in accordance
with Article 4 below.
4
3.2) Concerning the New Software Titles (as set forth in Article 2 above), this
Addendum shall commence on April 1st, 1999 and shall endure for a period of
thirty-six (36) months through March 31st, 2002 unless terminated in accordance
with Article 4 below.
Article 4: Termination:
-----------------------
TDK may terminate this Addendum with immediate effect by registered mail notice
addressed to SSII if SSII is declared insolvent or bankrupt or put under
receivership.
In case of termination of the Agreement or this Addendum due to SSII's
insolvency or bankruptcy or receivership of SSII, if SSIVS Original Licensors
authorize TDK to continue the republishing, marketing and distribution of the
Articles within the Territory, TDK shall not be entitled to claim the refund of
advance payments or Localization costs. On the contrary, if TD ' K's rights on
the Articles in the Territory expire after SSII's insolvency or bankruptcy or
receivership of SSII, SSII shall reimburse TDK (1) fifty percent (50%) of the
Localization costs spent till the date of termination, and (ii) hundred percent
(100%) of the advance payments less royalty amounts of the Articles sold within
the Territory before the termination date.
TDK may (without being bound) terminate the Addendum in the same circumstances
than specified in the Agreement.
Article 5: Miscellaneous:
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This Addendum must be read in conjunction with the Agreement. All provisions of
the Agreement not amended by this Addendum shall remain in full force and
effect.
IN WITNESS WHEREOF the parties hereto have caused this Addendum to be executed
the day and year as herein set forth at the effective date.
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Sound Source Interactive, Inc. TDK Recording Media Europe S.A.
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Xx. Xxxxxxx X. Xxxxxxx, CEO Xx. Xxxxxxxxx Xxxxxxxx, Executive Vice
President
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5
TDK RECORDING MEDIA EUROPE S.A.
Z.1. Bommelscheuer
X.X. Xxx 000
X-0000 XXXXXXXXXX
Xxxxx Xxxxx of Luxembourg
Tel.: 50 50 11
Fax: 00000000
Sound Source Interactive
00000 Xxxxxx Xxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxx Xxxxxx of America
Bascharage March 12, 1999
To the attention of Xx. Xxxxxxx XXXXXXX
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Subject: Addendum to Republishing - Marketing - Distribution Agreement.
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Dear Xx. Xxxxxxx,
Please find enclosed your copy of the Addendum to the republishing -
Marketing -Distribution Agreement signed between TDK and SSII.
Sincerely yours,
Xxxxxxxxx XXXX
6
ADDENDUM N. 2 TO REPUBLISHING -
MARKETING - DISTRIBUTION AGREEMENT
This Addendum N.2, made and entered into as of this 14day of April, 1999, is by
--
and between;
Sound Source Interactive, Incorporated, a California Corporation,
and carrying on business at:
00000 Xxxxxx Xxxx, Xxxxx X
Xxxxxxxxx, XX 00000-0000
United States of America
Hereinafter referred as "SSII"
And
TDK Recording Media Europe S.A., a company located in the Grand Duchy of
Luxembourg and carrying on business at:
Z.1. Bommelscheuer
X-0000 Xxxxxxxxxx
Xxxxx-Xxxxx xx Xxxxxxxxxx
Hereinafter referred as "TDK"
WHEREAS,
SSII and TDK have entered on November 1st, 1998 into a Republishing -
Marketing - Distribution Agreement (the "Agreement") whereby SSII has appointed
TDK as its exclusive Licensee for various SSI I software titles (hereinafter
called "Articles") in the Territory (as defined in Schedule "B" of the
Agreement).
SSII and TDK have entered on March 1st, 1999 into an Addendum to the
Agreement in which TDK agreed to modify the royalty advance payment and the
payment schedule. SSI1 agreed to grant TDK a right of first refusal for new
software titles.
TDK agrees to exercise its right of option on the titles hereinafter mentioned.
Since the agreed conditions mentioned in the Addendum signed on the 1st of March
1999 have been modified, the new conditions shall be stated in a new Addendum
("Addendum n.2").
Considering the foregoing SSI1 and TDK agree on limited exceptions to the
Agreement and to the Addendum.
NOW, THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:
Article 1: New Software Titles:
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1.1 Grant of rights:
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7
SSII hereby grants to TDK and TDK accepts the exclusive right to republish the
new software titles mentioned below for the purpose of creating localized
language versions of those new software titles and to republish, manufacture,
market, distribute, display and sell the localized language versions throughout
the Territory (* specified Schedule B, page 2 of the Agreement). The new
software titles licensed and approved by SSII to TDK are as follows:
Land Before Time (P/A)
Maisy (1)
Maisy (2)
King &, I (Thinking Adventure)
Berenstain Bears (1)
Berenstain Bears (2)
1.2) License fee:
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TDK shall pay SSII a Republishing Fee of four USD ($4.00) per unit for all units
of localized language versions of the new software titles sold by TDK such fee
based on total invoiced sales less returns. For the avoidance of doubt no
royalties shall be payable on review, advertising samples or other promotional
copies. Except as otherwise set forth in the Agreement, royalties shall be due
and payable within forty-five (45) days of the close of each calendar quarter.
In addition, TDK guarantees to SSII a total minimum royalty advance payment of
four hundred and fifty thousand USD ($450,000). The total minimum Republishing
fee advance payment shall be recoupable against royalty payments due to SSII for
the first hundred and twelve thousand five hundred (112,500) units sold anywhere
in the Territory. This total minimum royalty advance payment shall be paid in
accordance with the schedule mentioned below:
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Land Before Time 25,000 units $4.00 $100,000
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Maisy (1) 25,000 units $4.00 $100,000
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Maisy(2) 25,000 units $4.00 $100,000
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King & 1 25,000 units $4.00 $100,000
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Berenstain Bears (1) 6,250 units $4.00 $ 25,000
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Berenstain Bears (2) 6,250 units $4.00 $ 25,000
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Total 112,500 units $4.00 $450,000
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The total advances shall be paid by TDK with respect to each Localized Version
to SSII according to the following schedule:
(a) Thirty-five Percent (35%) of the total advance for the new software titles
upon execution of this Addendum n.2;
(b) Thirty-five percent (35%) of the total advance for the new software titles
in exchange for TDK's receipt of the each relevant Localization Kit. For
the avoidance of doubt, the payment shall be implemented on each individual
delivery of Localization kit and not by aggregated manner.
(c) Fifteen percent (15%) of the total advance for the localized version of
each SSII's new software title to bet paid upon TDK's submissions of the
Gold Master (each localized version per title). For the avoidance of doubt,
the payment shall be implemented on each individual submission of the Gold
Master and not by aggregated manner.
(d) Fifteen percent (15%) of the total advance for each localized version of
each SSII's new software title to be paid within sixty (60) days after
first customer ship date of each localized version. For
8
the avoidance of doubt, the payment shall be implemented on each individual
customer ship date of the title and not by aggregated manner.
(d) In the event, SSII fails to deliver the relevant localization kit(s)
by the end of April 2000, the relevant title(s) is deemed to be
cancelled and void from this addendum and SSII grants TDK to reimburse
the first Thirty-five percent (35%) of the total advance payment of
relevant title(s) to TDK in 30 days.
Article 3: Term:
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The Term for each new software title shall be as follows:
The Term shall commence at the delivery date of the Localization Kit and shall
continue for a period of thirty-six (36) months, unless terminated - in
accordance with Article 15 of the Agreement. The delivery date of each
Localization Kit shall be confirmed by TDK in Written.
Article 4: miscellaneous:
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4.1) Contents of Localization Kit:
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Each Localization Kit of the new software titles shall contain the complete
asset list.
4.2) Contractual link:
-----------------
Except as otherwise stipulated in this Addendum n.2, This Addendum n.2 must be
read in conjunction with the Agreement. All provisions of the Agreement not
amended by this Addendum shall remain in full force and effect.
IN WITNESS WHEREOF the parties hereto have caused this Addendum to be executed
the day and year as herein set forth at the effective date.
Sound Source Interactive, Inc. TDK Recording Media Europe S.A.
--------------------------------- --------------------------------
Xx. Xxxxxxx X. Xxxxxxx Xxxxxxxxx Xxxxxxxx
CEO Executive Vice President
9
ADDENDUM N0 3, TO REPUBLISHING -
MARKETING - DISTRIBUTION AGREEMENT
This Addendum n.3, made and entered into as of this first day of June, 1999, is
by and between;
Sound Source Interactive, Incorporated, a California Corporation, and carrying
on business at:
00000 Xxxxxx Xxxx, Xxxxx X
Xxxxxxxxx, XX 00000-0000
United States of America
Hereinafter referred as "SSII"
And
TDK Recording Media Europe S.A., a company located in the Grand Duchy of
Luxembourg and carrying on business at:
Z.1. Bommelscheuer
X-0000 Xxxxxxxxxx
Xxxxx-Xxxxx xx Xxxxxxxxxx
Hereinafter referred as "TDK"
WHEREAS,
SSII and TDK have entered on November 1st, 1998 into a Republishing -
Marketing - Distribution Agreement (the "Agreement") whereby SSII has appointed
TDK as its exclusive Licensee for various SSII software titles (hereinafter
called "Articles") in the Territory (as defined in Schedule "B" of the
Agreement).
SSII decided to publish Articles in PSX format and wishes to license the
rights to adapt such Articles for distribution to TDK (as specified in Article
1.G of the Agreement). However, no Articles are existing in PSX format for the
moment. It means that SSII will have to select some titles of the Articles in
the purpose to develop those titles in PSX format. Therefore, the parties agree
to co-operate in the selection of titles in PSX format.
Considering the foregoing SSII and TDK agree on limited exceptions to the
Agreement.
NOW, THEREFORE, IT HAS BEEN AGREED AS FOLLOWS:
Article 1: Grant of rights:
---------------------------
SSII hereby grants to TDK and TDK accepts the exclusive right to republish six
(6) titles of the Articles in PSX format for the purpose of creating localized
language versions of those six (6) titles and to republish, manufacture, market,
distribute, display and sell the localized language versions throughout the
Territory (as described in Article 4).
However, it is impossible for SSII to deliver to TDK any titles of the Articles
in PSX format due to the fact that no titles of the Articles are available in
PSX format for the moment. It means that the six (6)
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titles of the Articles in PSX format shall be defined in a mutual negotiation
and co-operation. Consequently, SSII shall notify TDK in writing the six (6)
titles that SSII proposes to develop in PSX format for TDK. The parties shall
negotiate during a fifteen (15) day negotiation period commencing on the date
that TDK receives each notice in the purpose to select the six (6) titles of the
Articles in PSX format which have the most profitable interests for both
parties.
Each title of the Articles in PSX format chosen by SSII and TDK shall be subject
to a written agreement signed by both parties and shall regarded as a
constituent part of this Addendum and added by appendix hereto and incorporated
into the Addendum herein accordingly.
Article 2: License fee:
-----------------------
TDK shall pay SSI1 a Republishing Fee of two dollar and fifty cents ($2.50) per
unit for all units of localized language versions of the Articles in PSX format
sold by TDK such fee based on total invoiced sales less returns. For the
avoidance of doubt no republishing fees shall be payable on review, advertising
samples or other promotional copies. Except as otherwise set forth in the
Agreement, republishing fees shall be due and payable within forty-five (45)
days of the close of each calendar quarter. In addition, TDK guarantees to SSI1
a minimum republishing fee advance payment per title of five hundred thousand
USD ($500,000). The minimum non-refundable Republishing fee advance payment
shall be recoupable against republishing fee payments due to SSII for the first
two hundred thousand (200,000) units per title sold anywhere in the Territory.
Therefore, for six (6) titles the total minimum republishing fee advance payment
shall be as follows:
$500,000 x 6 titles = $3,000,000
Due to the fact that each title shall be defined during a negotiation process,
the payment of the minimum republishing fee advance payment shall be scheduled
and implemented in a title to title basis and not in an aggregated payment.
Therefore, the pay1ment schedule is as follows:
(a) Three hundred twenty-five thousand USD ($325,000) of the republishing fee
advance payment per title upon signature of each relevant Appendix (as
described in Article 1);
(b) Fifty thousand USD ($50,000) of the republishing fee advance payment per
title in exchange for TDK's receipt of each relevant alpha disc;
(c) Fifty thousand USD ($50,000) of the republishing fee advance payment per
title in exchange for TDK's receipt of each relevant beta disc;
(d) Seventy-five thousand USD ($75,000) of the republishing fee advance payment
per title in exchange for TDK's receipt of each Localization Kit.
In the event TDK rejects a title submission from SSII for any reason, SSII shall
be able to present such title to other distribution sources internationally.
Article 3: Language:
--------------------
The Articles in PSX format licensed and approved by SSII to be developed and
manufactured by TDK in the Localized Languages as set forth herein as follows:
Dutch, French, German, Italian, Japanese, Spanish, Swedish and UK English.
Article 4: Territory:
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SSII authorizes the Localized Language version of the Articles in PSX format to
be distributed for sale by TDK in the following countries, which constitute the
Territory as referred herein:
1) All nations mentioned in Schedule "B" of the Agreement;
2) Japan and Australia.
3) Cyprus, Iceland and Malta
Article 5: Term:
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The Term for each title of Articles in PSX format shall be as follows:
The Term shall commence at the first release date of the localized language
versions and shall continue for a period of thirty-six (36) months, unless
terminated in accordance with Article 15 of the Agreement, The delivery date of
each Localization Kit shall be confirmed by TDK in written. In the event TDK
does not localize and distribute at least one Localized Language Version within
180 days (one hundred and eighty) of receipt of each Localization Kit,
international rights as granted herein shall revert back to SSII.
Article 6: Miscellaneous:
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6.1) Contents of Localization Kit:
-----------------------------
Each Localization Kit of each title of the Articles in PSX format shall contain
the complete asset list and the Master disc.
6.2) Contractual link:
-----------------
Except as otherwise stipulated in this Addendum n.3, This Addendum n.3 must be
read in conjunction with the Agreement. All provisions of the Agreement not
amended by this Addendum shall remain in full force and effect.
IN WITNESS WHEREOF the parties hereto have caused this Addendum to be executed
the day and year as herein set forth at the effective date.
Sound Source Interactive, Inc. TDK Recording Media Europe S.A.
-------------------------------- ----------------------------------
Xx. Xxxxxxx X. Xxxxxxx Xx. Xxxxxxxxx Xxxxxxxx
CEO Executive Vice President
12
