EXHIBIT 10.4
Interplay(TM)
AMENDED & RESTATED
AMENDMENT NUMBER 1 TO
PRODUCT AGREEMENT
(Hunter: The Reckoning
For
Xbox and PS2)
This AMENDED & RESTATED AMENDMENT NUMBER 1 TO PRODUCT AGREEMENT
("AMENDMENT") is effective as of March 5, 2002, by and between INTERPLAY
ENTERTAINMENT CORP., a Delaware corporation ("INTERPLAY") and HIGH VOLTAGE
SOFTWARE, INC., an Illinois corporation ("Developer").
RECITALS
A. Interplay and Developer previously entered into a Product Agreement
dated January 25, 2001 (the "ORIGINAL AGREEMENT"), providing for Developer's
development of the Interplay Product entitled "Hunter: The Reckoning" for the
Microsoft Xbox platform (hereinafter, the "XBOX PRODUCT").
B. Interplay and Developer subsequently entered into that certain Amendment
Number 1 to Product Agreement dated September 2001 (the "FIRST AMENDMENT"),
pursuant to which, among other things, the parties: (i) amended the Xbox Product
Milestone descriptions, delivery dales and mounts set forth in Schedule C to the
Agreement ("Schedule C"); and (ii) modified the royalty rates applicable to the
Xbox Product and conversions thereof.
C. Prior to execution of this Amendment, (i) Developer has performed and
Interplay has accepted the Xbox Product milestones #1 through #1lb of the
Agreement, all as set forth in Schedule C to the First Amendment, and (ii)
Interplay has paid Developer in full for the Xbox Product milestones #1 through
#11a (less an outstanding current balance of $85,000).
D. Interplay and Developer now desire to amend and restate the First
Amendment in order to, among other things: (i) amend and restate the Xbox
Product milestone descriptions, delivery dates and amounts set forth in Schedule
C., and (ii) provide for Developer's development of a conversion of the Xbox
Product to the Sony PlayStation 2 platform with a working title of "***"
(hereinafter, the "PS2 PRODUCT").
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Interplay and Developer, intending
to be legally bound, have agreed and do hereby agree as follows:
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*** 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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1. INCORPORATION. This Amendment is incorporated into the Original
Agreement by this reference, and all references hereinafter to the "AGREEMENT"
shall include references to the Original Agreement as amended hereby. The First
Amendment shall be of no further force or effect. Unless Otherwise defined
herein, thc words and phrases in this Amendment shall have thc same respective
definitions given in the Original Agreement. Unless the context otherwise
dictates, all references in the Original Agreement to the term "Product" shall
hereinafter refer to the Xbox Product and the PS2 Product.
2. DEVELOPMENT OF PS2 PRODUCT.
(a) AMENDMENT TO XBOX PRODUCT MILESTONES. SCHEDULE C to the Agreement
is hereby deleted in its entirety and replaced with the SCHEDULE C attached
hereto as ATTACHMENT 1.
3. DEVELOPMENT OF PS2 PRODUCT.
(a) ADDITION OF PS2 PRODUCT. The terms and conditions of thc Original
Agreement, as mended hereby, shall hereby be extended to include the PS2
Product.
(b) MILESTONE SCHEDULES. Developer shall develop thc PS2 Product, and
Interplay shall pay royalty advance milestone payments to Developer, in
accordance with the Initial Milestone Schedule set forth in ATTACHMENT 2 hereto
("SCHEDULE C-1"). Subject to and upon completion of these initial PS2 Product
milestones to the satisfaction of Interplay, and subject to Section 9.01 of the
Agreement, Developer and Interplay shall mutually agree upon a detailed PS2
Product milestone and payment schedule for completion of the PS2 Product (the
"FINAL PS2 PRODUCT MILESTONE SCHEDULE"), and Developer and Interplay shall
incorporate such schedule into the Agreement. As with the Xbox Product
milestones payments, all milestone payments set forth in the Initial and Final
PS2 Milestone Schedules shall be (1) subject to Interplay's acceptance (which
acceptance may be conveyed to Developer by Interplay via e-mail or by writing)
of such milestone in accordance with the guidelines set forth in the Agreement,
and (2) considered recoupable advances against royalties. Without limitation,
the Final PS2 Product Milestone Schedule shall include third-party licensor
(e.g., Sony and White Wolf) final approval milestones which must be satisfied
before further milestone payments are due.
4. AMENDMENT TO ROYALTY PAYMENTS. Subparagraphs (1), (2) and (3) of
Paragraph E of SCHEDULE A to the Agreement ("PAYMENTS: ROYALTY") are hereby
deleted in their entirety and replaced with the following:
"(1) With respect to the sale or license of the Xbox Product (including OEM
sales), a royalty equal to *** percent (***%) of net receipts (as defined below)
for retail units ***; *** percent (***%) of net receipts for retail units ***;
*** percent (***%) of net receipts for retail units ***; *** percent (***%) of
net receipts for retail units ***; and *** percent (***%) of net receipts for
retail units *** and above.
(2) Developer shall receive the following royalty payments for conversions
and derivatives of the Xbox Product:
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*** 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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(a) Except for PC conversions, Developer shall receive a royalty in an
amount equal to *** for any exploitation of conversions or derivatives of the
Xbox Product (including the PS2 Product) for which Developer performs the
development services for Interplay.
(i) Developer shall receive a royalty equal to *** percent (***%) of net
receipts for retail units *** and *** percent (***%) of net receipts for retail
units *** and above for any exploitation of conversions of the Xbox Product to
the PC for which Developer performs the development services for Interplay.
(b) Developer shall receive a royalty equal to *** of the royalty rate set
forth in subparagraph (1) for the exploitation of conversions or derivatives for
which Developer does not perform the development services but Interplay utilizes
the Developer's Game Engine. In such event Interplay shall pay to Developer the
mutually agreed upon fee and Developer agrees such amount shall be an advance
against any royalty payments to be paid Developer pursuant to this subsection
E(2)(b).
(c) Developer shall receive a royalty equal to *** of the royalty rate set
forth in subparagraph (1) for the exploitation of conversions or derivatives for
which Developer does not perform the development services and Interplay does not
utilize the Developer's Game Engine."
5. CROSS-COLLATERALIZATION. Developer acknowledges and agrees that the
royalty advance milestone payments made by Interplay to Developer in connection
with the Xbox Product and the PS2 Product shall be cross-collateralized.
6. MILESTONE #11B PAYMENT. Interplay agrees to pay Developer the milestone
#1lb payment, in the amount of $***, within *** days following the mutual
execution and delivery of this Amendment.
7. EFFECT OF DELAY OF MILESTONE # 13. Without limitation, in the event that
the Developer fails to timely deliver to Interplay's satisfaction the Xbox
Product Milestone 13 deliverables, Interplay thereafter shall incur no further
development costs whatsoever associated with the Xbox Product, and any
additional development work necessary to achieve final Xbox Milestone 13
deliverables shall be performed and funded solely by Developer.
8. DEVELOPMENT AND DEBUG EQUIPMENT LOAN FOR PS2 PRODUCT. To the extent
permitted by Sony Computer Entertainment America, Inc. ("SONY"), Interplay shall
provide to Developer the use of four (4) Sony PlayStation 2 development
stations, which are valued at *** each, and *** Sony PlayStation 2 "debug"
stations, which are valued at *** each, for an aggregate total of *** in Sony
equipment (the "PS2 EQUIPMENT"). Upon receipt of the PS2 Equipment, Developer
shall provide Interplay with the serial numbers for the PS2 Equipment. Developer
hereby represents and warrants that it has executed all agreements required by
Sony to allow delivery to Developer of the PS2 Equipment and is in full
compliance with the terms of all such agreements. Developer also agrees to the
following: (i) Developer shall use the PS2 Equipment solely for the development
of the PS2 Product and not for any other
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*** 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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project or purpose; (ii) Developer shall maintain the PS2 Equipment in a safe
and secure manner and insure the PS2 Equipment in an amount sufficient to cover
the replacement cost of all PS2 Equipment in the event of loss or damage, naming
Interplay as the insured on such insurance policy or policies; (iii) Developer
shall not loan the PS2 Equipment, or any portion thereof, nor provide the PS2
Equipment, or any portion thereof, to any subcontractor without the prior
written consent of Interplay or its designated representative, which consent
shall be at Interplay's sole discretion; and (iv) Developer shall consent to
inspection of the PS2 Equipment by Interplay, Sony, or their designated
representative(s), which inspection shall be at Interplay's and Sony's sole
discretion (as applicable), without announcement or prior notice to Developer.
Upon request by Interplay, the PS2 Equipment shall be returned to Interplay, at
Interplay's expense, (i) in the same condition as provided to Developer,
reasonable wear and tear excepted, and (ii) within five (5) days of request by
Interplay. Interplay may withhold milestone payment(s) and/or other amounts
outstanding to Developer, but not to exceed two (2) times the value of the PS2
Equipment, at the time Interplay requests return of the PS2 Equipment until
receipt and acceptance by Interplay of the PS2 Equipment in its entirety.
Developer further acknowledges that Developer shall have no right, title or
interest in and to the PS2 Equipment. In the event Sony permits and Interplay
provides (in its sole discretion) Developer additional Sony PlayStation 2
development and/or debug stations, Developer acknowledges that it shall have no
right, title or interest in and to these additional Sony PlayStation 2
development and/or debug stations.
9. CAPITAL. Assuming Interplay's timely delivery of milestone payments in
accordance with the terms of the Agreement, Developer represents that it shall
continue to be sufficiently staffed and capitalized to undertake and timely
complete its development obligations contemplated by the Agreement.
10. INTEREST ON PAST OVERDUE PAYMENTS. Within ten (10) business days after
the mutual execution and delivery of this Amendment Interplay shall pay to
Developer a one-time additional payment of ***, such amount representing any and
all out-of-pocket interest expense incurred by Developer as a direct consequence
of milestone payments due to Developer but not timely paid by Interplay as of
the date of this Amendment. The Interest Reimbursement Payment shall not be
recoupable by Interplay against royalties due under the Agreement.
11. INTEREST ON FUTURE OVERDUE PAYMENTS. From and after the date of this
Amendment, Interplay agrees that in the event any milestone advance payments are
more than *** days overdue pursuant to the terms of the Agreement, then
Interplay shall pay Developer interest, at a rate of ***, on such overdue
amounts calculated from the date such milestone payments were due. No such
interest payments shall be recoupable by Interplay against royalties.
12. TERMINATION OF PRODUCT. In the event Interplay (or any division
thereof) or any successor-in-interest to the Product permanently terminates the
development of the Product, Developer shall ***; provided, however, that any
such use shall be subject to any and all necessary approvals of Interplay's
licensor White Wolf, Inc. at its sole and absolute discretion.
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*** 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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13. NO FURTHER MODIFICATIONS. Except as set forth above, the Original
Agreement remains in full force and effect without amendment or modification of
any kind.
IN WITNESS HEREOF, the parties hereto have executed this Amendment
effective as of the date first written above.
"INTERPLAY" "DEVELOPER"
INTERPLAY ENTERTAINMENT CORP. HIGH VOLTAGE SOFTWARE, INC.
By: /S/ XXXX XXXXXXXX By: /S/ XXXX X. XXXXXXX
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Name: XXXX XXXXXXXX Name: XXXX X. XXXXXXX
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Title: CHIEF FINANCIAL OFFICER Title: PRESIDENT
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By: /S/ HERVE CAEN By: /S/ XXXXX XXXXXXXX
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Name: HERVE CAEN Name: XXXXX XXXXXXXX
-------------------------------- ------------------------------
Title: CHIEF EXECUTIVE OFFICER Title: CHIEF EXECUTIVE OFFICER
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*** 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
SCHEDULE C
HUNTER XBOX MILESTONE SCHEDULE
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Attachment 2
SCHEDULE C-1
HUNTER PS2 INITIAL MILESTONE SCHEDULE
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