EXHIBIT 10.4
AMENDMENT TO THE PRODUCT DISTRIBUTION AGREEMENT
BETWEEN
INTEGRITY INCORPORATED,
WORD ENTERTAINMENT, A DIVISION OF WORD MUSIC GROUP, INC.,
AND
WARNER MUSIC GROUP, INC.
DATED AS OF NOVEMBER 18, 2001
EXCLUDING CONFIDENTIAL PORTIONS
(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
INDEX TO THE CONFIDENTIAL PORTIONS
PAGE SECTION LINE(S)
2 2(a) 3, 6 and 9
WARNER MUSIC GROUP INC.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dated as of November 18 , 2001
INTEGRITY INCORPORATED
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain distribution agreement between you and Word
Entertainment, a division of Word Music Group, Inc. dated as of January 1, 2000
(the "Agreement"). Any capitalized terms which are used below and which are
defined in the Agreement shall have the same meanings and definitions as set
forth in the Agreement, unless otherwise indicated. This letter agreement, when
signed by you and us ("WMG") shall become effective upon the closing (the
"Acquisition Closing") of the transaction among ▇▇▇▇▇▇▇ Entertainment Company,
▇▇▇▇▇▇▇ Creative Group, Inc. ("Creative") formerly known as Idea Entertainment,
Inc. and an affiliate of WMG's, relating to the acquisition of the music
businesses of Creative by WMG's affiliate.
For good and valuable consideration, the sufficiency of which is hereby
acknowledged by each of the undersigned, the undersigned hereby agrees to the
following:
WMG hereby agrees that following the Acquisition Closing, during the Term, the
executive in change of distribution at Word Entertainment, a division of Word
Music Group, Inc. (currently, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇) shall report directly to senior
executive(s) at Warner-Elektra-Atlantic Corporation (or its successor(s)),
rather than directly to executive(s) at Word Music Group, Inc.
If the foregoing is acceptable, please acknowledge the same by signing in the
appropriate place below.
Very truly yours,
WARNER MUSIC GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Executive Vice President
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Agreed and Accepted:
INTEGRITY INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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WORD ENTERTAINMENT,
a division of WORD MUSIC GROUP, INC.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated: as of November 18 , 2001
INTEGRITY INCORPORATED
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain distribution agreement between you and us
dated as of January 1, 2000 (the "Agreement"). Any capitalized terms which are
used below and which are defined in the Agreement shall have the same meanings
and definitions as set forth in the Agreement, unless otherwise indicated. This
letter agreement, when signed by you and us, shall constitute our agreement to
modify the Agreement as hereinafter provided, which modifications shall become
effective upon the closing (the "Acquisition Closing") of the transaction among
▇▇▇▇▇▇▇ Entertainment Company ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ Creative Group, Inc.
("Creative") formerly know as Idea Entertainment, Inc. and an affiliate of
Warner Music Group Inc. ("WMG"), relating to the acquisition of the music
businesses of Creative by WMG's affiliate (the "Acquisition").
For good and valuable consideration, the sufficiency of which is hereby
acknowledged by each of the undersigned, the undersigned hereby agree to the
following:
1. The Term of the Agreement shall be extended until December 31, 2004.
The contract year of the Term commencing on January 1, 2004 and ending on
December 31, 2004, shall be referred to as the "Fifth Contract Year."
2. Effective as of January 1, 2002, subparagraph 10(a) of the Agreement
shall be deleted and replaced in its entirety as follows:
"(a) With respect to net sales of the Products in the Territory
(i.e., gross sales of the Products less returns, credits and rebates) by WORD,
and except as otherwise provided for herein, WORD will pay INTEGRITY [**](1)
percent ([**](1)%) of WORD's actual net selling price to its customers;
provided, however, that (i) with respect to Products distributed hereunder
licensed to INTEGRITY by Hillsong Music Australia (the "Hillsong Products") WORD
will pay INTEGRITY [**](1) percent ([**](1)%) of WORD's actual net selling price
to its customers of units of such Products (the "Distributed Labels Fee"); and
(ii) with respect to net sales of the Products (other than Hillsong Products)
during the Fifth Contract Year of the Term, WORD will pay INTEGRITY [**](1)
percent ([**](1)%) of WORD's actual net selling price to customers. If from time
to time during the Term, INTEGRITY wishes to distribute hereunder the products
of labels not owned by INTEGRITY (other than Hillsong Products) and wishes to
have the Distributed Labels Fee apply to the sales of such labels' products,
then INTEGRITY may send a notice to WORD requesting the same accompanied by any
relevant information that INTEGRITY desires WORD to consider in evaluating such
request. WORD shall consider any such request in good faith taking into account
the information supplied and having done so, if WORD declines such request, the
distribution fee
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(1) Indicates information which has been redacted pursuant to a request for
confidential treatment.
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set forth above which is then-currently in effect for the remainder of Products
hereunder shall apply to the sales of such labels' products."
3. Paragraph 24 of the Agreement shall be deleted and replaced in its
entirety as follows:
"24. No Assignment. Neither party may assign this Agreement, or any
part hereof, or any rights hereunder to any person without the written consent
of the other, except that either party may, without such consent, assign this
Agreement to its controlling shareholder or controlling shareholders, to a
parent, subsidiary or affiliated corporation. The foregoing notwithstanding, the
parties mutually agree that should the voting control of either company change
(the "Control Changing Company") during the Term hereof, the Control Changing
Company shall give written notice thereof to the other party (the "Control
Change Notice"). Within thirty (30) days following the Control Changing
Company's delivery to the other party of the Control Change Notice, the other
party shall have the right, upon four (4) months' written notice to the Control
Changing Company, so terminate this Agreement."
4. You hereby waive any and all rights that you may have pursuant to
paragraph 24 of the Agreement to terminate the Agreement as a result of the
Acquisition.
5. Subject to your existing contractual commitments, you and WMG hereby
agree, promptly after the date hereof, to negotiate in good faith with the view
of entering into an agreement with WEA providing for the exclusive distribution
of Products in the General Marketplace in the Territory, the term of which such
agreement would be co-terminous with the Term of the Agreement.
6. Subject to WMG's and Creative's existing contractual commitments, you
and WMG hereby agree, promptly after the date hereof, to negotiate in good faith
with the view of entering into: (a) an agreement with your Singapore office
("Integrity Singapore") pursuant to which Integrity Singapore would exclusively
distribute Word Music Group, Inc. recorded music products in Asia; and (b) an
agreement with your Australia office ("Integrity Australia") pursuant to which
Integrity Australia would exclusively distribute Word Music Group, Inc. recorded
music products in Australasia, the term of which such agreements would be
co-terminous with the Term of the Agreement.
7. Except as expressly modified in this letter agreement, all other terms
and conditions of the Agreement are hereby satisfied and confirmed and remain in
full force and effect.
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If the foregoing is acceptable please acknowledge the same by signing in the
appropriate place below.
Very truly yours,
WORD ENTERTAINMENT, a division of
WORD MUSIC GROUP INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President and Secretary
Agreed and Accepted:
INTEGRITY INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Accepted and agreed to insofar
as the foregoing applies to us:
WARNER MUSIC GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Executive Vice President
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