Sales Agency Agreement

SALES AGENCY AGREEMENT


This Sales Agency Agreement (this "Agreement") is effective as of November 16, 1999 ("Effective Date") by and between GT INTERACTIVE SOFTWARE CORP., a Delaware corporation ("AGENT") and INFOGRAMES NORTH AMERICA, INC., a California corporation ("Infogrames").


1. DEFINITIONS:


a. "Channels of Distribution" means all commercial channels of distribution, including without limitation, retail, direct response and direct mail.


b. "Customer" means any third party from whom orders for Titles are taken by AGENT or from whom orders are taken.


c. "Developer" means any person or entity who owns or controls rights including, without limitation, intellectual property rights, in a Title.


d. "Territory" means the U.S. and Canada.


e. "Titles" means those computer software or console products published by Infogrames during the Term.


f. "Unit" means one copy of a Title as embodied in the appropriate storage medium and in a finished product form, ready for shipment to Customers, together with all printed artwork, booklets, manuals, pamphlets or other materials which refer or relate to each respective Title.


2. RIGHTS GRANTED:


With respect to each Title published by Infogrames during the Term, AGENT shall have the non-exclusive right throughout the Territory during the Term, to act as the agent for Infogrames only for the purpose of soliciting orders for Units from Customers for subsequent sale in the Channels of Distribution. Infogrames shall be solely responsible for providing all other services, including advertising, shipping, billing and collection services.


3. DELIVERY:


AGENT shall promptly provide Infogrames with a written purchase order for each order solicited from Customers. 2 4. COMPENSATION:


AGENT shall receive three percent (3%) of Net Receipts (the "Limited Agency Fee") for each Unit shipped. Net Receipts means the amounts actually received by Infogrames for the Units shipped pursuant to the purchase orders provided by AGENT, less any taxes, and discounts, markdowns and other price protection actually given.


5. ACCOUNTING/AUDITING:


(a) Infogrames shall submit itemized statements along with payment of the Limited Agency Fee within the forty-five (45) days after the end of each calendar month. The statements shall contain the following: the number of Units shipped, actual receipts, taxes, returns, discounts, markdowns, price protection and any other costs or adjustments permitted to be deducted under the terms of this agreement. The statements shall show separately for each Title all calculations reasonably necessary for the computation of the Limited Agency Fee. In addition, in the event of a recall based solely on errors in the software code for any Titles for which Infogrames has developed corrections, and for which recall is authorized by Infogrames, Infogrames will pay all costs associated with the recall, including but not limited to, handling charges, end user notification costs, Unit replacement costs, and all freight costs.


(b) Infogrames shall keep true and accurate books and records of account containing all reasonable data necessary to calculate all sums due hereunder. AGENT may, upon reasonable notice and at its own expense, audit the applicable records at Infogrames' office, to verify statements rendered under this agreement. Any audit shall be conducted only by a certified public accountant or accounting professional, and take place during reasonable business hours and in a manner which will not interfere with Infogrames' normal business activities. All of the information contained in Infogrames' books and records shall be kept confidential, and AGENT agrees that information inspected or copied shall be used only for the purpose of determining the accuracy of the statements, and shall be revealed only to those officers, directors, employees, agents or representatives as shall be reasonably necessary to verify the accuracy of those statements. Each party shall be furnished with a copy of the auditor's report within thirty (30) days after its completion. In no event shall audits be made more frequently than once annually nor shall the records supporting any statement be audited more than once, nor shall any audit take place during the first three (3) weeks of a calendar quarter. Any inquiries or challenges with respect to any statement rendered must be received in writing within two (2) years from the date it is rendered or will be deemed approved. AGENT shall be solely responsible for the costs of its audit unless the audit reveals an underpayment of the total Limited Agency Fee of more than five percent (5%) in which


2 3 case Infogrames shall be responsible for the reasonable and actual documented costs of the audit up to the amount of the shortfall.


6. TECH SUPPORT:


All technical support shall be furnished by Infogrames.


7. REPRESENTATIONS AND WARRANTIES:


(a) Ownership of Intellectual Property Rights. Notwithstanding anything contained herein to the contrary and subject to the terms of this Agreement, all artwork, designs and computer software embodying the intellectual property embodied in the Titles, or any reproduction thereof, or any packaging or advertising materials, which are designed, developed and/or created by Infogrames hereunder (or any of its sublicensees, affiliates or subsidiaries), shall be, and remain Infogrames' (or its affected third party's, as the case may be) sole and exclusive property, inclusive of all copyrights and right to copyright therein and thereto.


(b) Ownership of marks. Subject to the terms of this Agreement, AGENT acknowledges and agrees that: All copyrights, trademarks and service marks and rights to same referred to in this Agreement in the name of and/or owned by and/or licensed to Infogrames shall be and remain the sole and complete property of Infogrames, or its affected third-party licensors, as the case may be; that all such copyrights, trademarks and service marks and rights to same in the name of or owned by any copyright proprietor other than AGENT or Infogrames shall be and remain the sole and complete property of such copyright proprietor; that all trademarks and service marks which, and/or the right to use which, arise out of the license hereby granted to use the intellectual property embodied in the Products shall be and remains the sole and complete property of Infogrames (or its affected third-party licensors, as the case may be); that AGENT shall not at any time acquire or claim any right, title or interest of any nature whatsoever in any such trademark or service mark by virtue of this Agreement or of AGENT's uses thereof in connection with the Produ ...