EXHIBIT 10.64
December 20, 2002
Interplay Entertainment Corp.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Attention: Legal Department
Re: LETTER AGREEMENT AND AMENDMENT #4 (OEM & BACK-CATALOG) TO VIDEO
GAME DISTRIBUTION AGREEMENT DATED AUGUST 9, 2002.
Dear Sir or Madam:
This letter will serve as the fourth amendment ("AMENDMENT #4") to confirm
the agreements we have reached in connection with the Video Game Distribution
Agreement dated August 9, 2002, between Vivendi Universal Games, Inc. ("VUG")
and Interplay Entertainment Corp. ("INTERPLAY"), as amended by (i) that Letter
of Intent dated August 9, 2002 (the "LOI"), (ii) that Letter Agreement and
Amendment #2 dated August 29, 2002 ("AMENDMENT #2"), and (iii) that Letter
Agreement and Amendment dated September 12, 2002 ("AMENDMENT #3") (collectively,
the "NEW DISTRIBUTION AGREEMENT"). The provisions contained herein shall serve
to amend the New Distribution Agreement only as stated herein, and all other
terms and conditions contained in those agreements shall remain in full force
and effect. All capitalized terms used herein and not otherwise defined shall
have the meaning ascribed to them in the New Distribution Agreement.
1. ADDITION OF OEM RIGHTS TO THE NEW DISTRIBUTION AGREEMENT.
x. XXXXX OF OEM RIGHTS. Subject to the terms of this Amendment #4, and
notwithstanding anything to the contrary in the New Distribution
Agreement, VUG's License under SECTION 2.1 of the New Distribution
Agreement shall hereby be modified to include OEM Rights for the Term.
"OEM RIGHTS" shall mean the right to authorize third parties to
distribute Partner Products with third-party software (for purposes of
being bundled with third-party hardware) and/or hardware in the form
of a single combined product (which shall be deemed to include,
without limitation, a sale of the Partner Product to an original
hardware purchaser on a one-time basis within a reasonable time after
the purchase of such hardware - i.e., "soft bundles") and selling such
combined products within the Licensed Territory (as such definition is
modified below for OEM Rights purposes), and as a premium to augment
the value of non-computer related products and so-called
"covermounts", or as otherwise may be approved by Interplay in
writing. OEM Rights transactions shall hereinafter be referred to as
"OEM TRANSACTIONS"; and OEM Transactions that are approved by
Interplay in accordance with PARAGRAPH 1.VIII below shall hereinafter
be referred to as "APPROVED OEM TRANSACTIONS".
*** 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.
For purposes of clarification, (i) the OEM Rights shall not include,
and Interplay hereby expressly reserves, all rights to distribute the
Partner Products for use on any coin-operated or token-operated or pay
per play arcade, location based or other amusement devices, any
electronic transmission rights (including, without limitation, cable,
the internet and any on-line services), and merchandising rights
(including, without limitation, toys and motion pictures), (ii)
Interplay shall maintain the right to directly authorize Sony (and any
other Game Hardware Platform Licensors with respect to any similar
bundling products which they may create) to distribute and bundle for
retail and direct-to-consumer sales Partner Products in its "Jam
Packs", and Interplay maintains the right to receive all proceeds
therefrom, and (iii) Interplay maintains the right to all proceeds in
connection with and for the duration of any and all deals involving
OEM Rights that exist as of the date of this Amendment #4.
ii. "PARTNER PRODUCTS" REDEFINED FOR PURPOSES OF OEM RIGHTS. Solely for
purposes of and with respect to OEM Rights, the definition of Partner
Products is hereby amended to include all computer and/or video game
software products developed by or on behalf of Interplay and to which
(and to the extent to which and for the term of which) Interplay
possesses OEM Rights to such product. For purposes of clarification,
and subject to the restrictions herein, VUG's OEM Rights shall include
rights to Interplay's "back-catalog" products, as well as to all new
Partner Products delivered under the New Distribution Agreement.
Unless otherwise required by any OEM deal existing as of the date of
this Amendment #4 (e.g., an OEM licensee's unilateral right to extend
the term of their OEM license), Interplay hereby agrees not to extend
the terms of any OEM deals existing as of the date of this Amendment
#4, without VUG's written consent in VUG's sole discretion.
iii. INTERPLAY'S "RESERVED RIGHTS" AMENDED. The last sentence of SECTION
2.6 of the New Distribution Agreement is hereby deleted in its
entirety.
iv. OEM TERM. For purposes of clarification, the Term of VUG's OEM Rights
license shall coincide with the Term of the New Distribution
Agreement.
v. OEM TERRITORY. Solely for purposes of and with respect to the OEM
Rights, VUG shall have the right to enter into Approved OEM
Transactions with third parties located within the Licensed Territory,
regardless of the geographic location of the distribution of the
bundled Partner Products (subject, of course, to Interplay's approval
rights in PARAGRAPH 1.VIII below, any OEM licenses existing as of the
date of this Amendment #4 which would prohibit the proposed OEM
Transaction in any non-North American territory, and any applicable
Third Party License restrictions and/or Third Party Licensor
consents). For example, and subject to the terms herein, VUG shall
have the right to enter into an Approved OEM Transaction with Dell USA
for bundled distribution of a Partner Product on a worldwide basis
(subject to any existing rest-of-world OEM licenses); however, VUG
would not have the right to enter into such a deal with Dell-Europe
because the contract would not be entered into between VUG and a
United States-based entity.
*** 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.
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vi. LANGUAGE REQUIRED TO BE INCLUDED IN VUG'S OEM DEALS. VUG shall use
commercially reasonable good-faith efforts include substantially the
following language in all OEM contracts with third parties: "If VUG's
publisher/licensor discontinues developing, producing, licensing, or
distributing the licensed product(s) and requires VUG to do the same
or if VUG's publisher/licensor modifies, replaces or adds to the
licensed product(s) at any time, a mutually agreed upon substitution
will be made and if the parties cannot agree to a substitution in good
faith this agreement may be terminated."
vii. OEM DEALS ARE SUBJECT TO INTERPLAY'S THIRD PARTY LICENSOR APPROVAL.
For purposes of clarification and without limitation, VUG's OEM Rights
shall be subject to all applicable Third Party Licensors' consents as
provided in SECTION 2.8 of the New Distribution Agreement.
viii.OEM APPROVAL PROCEDURE. With respect to each proposed OEM
Transaction, VUG shall transmit to Interplay for review and approval
(which approval Interplay shall not unreasonably withhold or delay),
in substantially in the form attached hereto as ATTACHMENT 1 (or any
similar OEM form customarily utilized by VUG, subject to Interplay's
reasonable approval thereof) (an "OEM SPEC SHEET"), a summary of the
proposed OEM Transaction along with such additional information and
materials as may reasonably be requested by Interplay to evaluate the
proposed OEM Transaction. Interplay shall use its best efforts to
either approve or reject in writing the proposed OEM Transaction
within *** business days (subject to extension for the length of time
it takes Interplay to obtain any applicable Third Party Licensor
consent) following receipt of an OEM Spec Sheet; provided, however, in
no event shall a proposed OEM Transaction be deemed approved without
VUG's receipt of an OEM Spec Sheet approved in writing by Interplay.
In the event an OEM Spec Sheet is so approved by Interplay, Interplay
agrees to deliver to VUG the gold master disc of the Partner
Product(s) named therein (and any required Related Assets specified in
the OEM Spec Sheet) in accordance with the provisions of the proposal,
and VUG shall take commercially reasonable efforts to negotiate,
prepare and execute a definitive agreement (a "BUNDLING AGREEMENT") on
such approved terms with such customer.
2. ADDITION OF CERTAIN "BACK-CATALOG" PRODUCTS TO THE NEW DISTRIBUTION
AGREEMENT.
i. SECTION 3 of EXHIBIT B to the New Distribution Agreement shall be
modified by adding the following Partner Products (the "BACK CATALOG
PARTNER PRODUCTS") to the New Distribution 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.
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TITLE Platform: Submission Date(s) Approved Gold
for delivery of the Master Delivery
Gold Candidate: Date:
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*** PC N/A N/A
****** PC N/A N/A
*** PC N/A N/A
*** PC N/A N/A
*** PC N/A N/A
*** PC N/A N/A
*** PC N/A N/A
*** PC N/A N/A
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ii. NO VUG DEVELOPMENT APPROVALS REQUIRED. VUG acknowledges that the Back
Catalog Partner Products have previously been commercially released,
and shall be deemed to be Approved Gold Masters (and therefore shall
not be subject to VUG's approval rights under SECTION 3 of the New
Distribution Agreement).
iii. SELL-OFF TO CONTINUE UNDER OLD DISTRIBUTION AGREEMENT. VUG and
Interplay agree that VUG shall be entitled to continue to sell off any
existing inventory of the Back Catalog Partner Products which VUG may
have in its possession as of December 31, 2002 in accordance with the
sell-off provisions and under the terms of that certain Distribution
Agreement dated August 23, 2001, as amended, between VUG and Interplay
(the "OLD DISTRIBUTION Agreement"). All newly-manufactured units of
the Back Catalog Partner Products sold by VUG shall be subject to the
New Distribution Agreement, as amended by this Amendment #4.
*** 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.
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iv. BACK CATALOG PARTNER PRODUCTS ARE SUBJECT TO INTERPLAY'S THIRD PARTY
LICENSOR APPROVAL. For purposes of clarification and without
limitation, VUG's right to distribute the Back Catalog Partner
Products (as compilations or otherwise) shall be subject to all
applicable Third Party Licensors' consents as provided in SECTION 2.8
of the New Distribution Agreement. In the event that any applicable
Third Party Licensor's consent cannot be obtained with respect to any
Back Catalog Partner Products, Interplay shall substitute for VUG's
benefit another mutually agreeable Interplay "back-catalog" product.
In addition, Interplay hereby agrees to work in good faith with VUG to
add additional VUG-requested Interplay "back-catalog" products to the
Back Catalog Partner Products for distribution by VUG hereunder.
3. The following provisions shall be added to SECTION 4 of EXHIBIT B:
"OEM AND BACK-CATALOG MINIMUM GUARANTEE. VUG shall, immediately upon the
complete execution of this Amendment #4, pay Interplay a total Minimum
Guarantee with respect to the OEM Rights and the Back Catalog Partner
Products in the amount of ***(the "OEM/BACK-CATALOG MINIMUM GUARANTEE).
"OEM DISTRIBUTION FEE MODIFIED. Solely with respect to Approved OEM
Transactions, VUG's Distribution Fee shall be ***percent (***%) of Net
Sales. Solely for purposes of the Approved OEM Transactions, "Net Sales"
shall mean all monies actually received by VUG from OEM Transactions, less
only ***costs of the Partner Products duplicated by VUG. ***(). For
purposes of clarification, VUG shall not take a General Reserve or any
deductions other than ***in calculating Interplay Proceeds with respect to
Approved OEM Transactions."
"GENERAL RESERVE MODIFIED FOR "BACK CATALOG PARTNER PRODUCTS". Solely with
respect to Back Catalog Partner Products, in calculating Interplay Proceeds
VUG's General Reserve shall be ***Percent (***%), rather than ***% (and
SECTION 3 of EXHIBIT A is hereby modified accordingly."
The remainder of SECTION 4 of EXHIBIT B shall be unchanged in all aspects.
4. SECTION 1.3 of EXHIBIT A and SECTION 20.14 are modified as follows solely
with respect to OEM Transactions and Back Catalog
Partner Products:
i. RECOUPMENT. Notwithstanding anything to the contrary in the New
Distribution Agreement, the OEM/Back-Catalog Minimum Guarantee shall
be recoupable only from Interplay Proceeds with respect to Approved
OEM Transactions and sales of Back Catalog Partner Products, and as
follows: unless and until VUG recoups the OEM/Back-Catalog Minimum
Guarantee, VUG shall be entitled to deduct ***% from the Interplay
Proceeds with respect to Approved OEM Transactions and sales of Back
Catalog Partner Products.
*** 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.
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ii. CROSS-COLLATERALIZATION. Interplay expressly acknowledges and agrees
that until such time as VUG has fully recouped the OEM/Back-Catalog
Minimum Guarantee, VUG shall have the right to withhold Interplay
Proceeds with respect to all Approved OEM Transactions as a set-off
against VUG's obligation to pay Interplay Proceeds in respect of
Back-Catalog Partner Products (and vice-versa).
5. GOOD FAITH EFFORTS. VUG and Interplay agree to work together in good faith
to carry out the intent of this Amendment #4, and the parties shall work
together to modify any remaining provisions of the New Distribution
Agreement to the extent reasonably necessary for purposes of the OEM Rights
and Back Catalog Partner Products.
If you agree to the provisions set forth in this letter agreement, please so
indicate by signing the enclosed copy and returning it to me via facsimile,
followed by an original copy in the mail. As stated herein, nothing contained in
this letter shall affect the terms and conditions stated in the New Distribution
Agreement, except as specifically stated herein.
Sincerely yours,
/s/ Xxxx X'Xxxx
-----------------------------------
Xxxx X'Xxxx
President, Partner Publishing Group
Vivendi Universal Games, Inc.
I agree to the provisions of this letter agreement.
12/20/02 /s/ Xxxx Xxxxxx
Dated: ________________ ____________________________________
Name: Xxxx Xxxxxx
Title: Chief Operating 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.
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Attachment 1
OEM Spec Sheet
*** 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.
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