Production Services Agreement - Infogrames Entertainment SA and Atari Inc.
PRODUCTION SERVICES AGREEMENT
PRODUCTION SERVICES AGREEMENT dated as of March 31, 2006 between
Infogrames Entertainment SA, at 1 Place Verrazzano, 69252 Lyon cedex 09, France
acting on behalf of itself and of its affiliates (other than Atari, Inc.) and
Atari, Inc. ("ATARI"), at 417 Fifth Avenue, New York, NY 10016 (this
"Agreement").
WITNESSETH:
WHEREAS, IESA and Atari are affiliated entities active in the field of
digital entertainment and interactive games.
WHEREAS, Atari has developed highly-recognized know-how and experience in
the production of interactive games and has agreed to provide production
services to IESA and its affiliates (together "IESA").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
PRODUCTION SERVICES TO BE PROVIDED
1.01. Performance of PRODUCTION SERVICES.
(a) Subject to the terms and conditions set forth herein and on
Schedule I hereto, as may be amended from time to time ("Schedule I"), Atari or
its subsidiaries, as applicable, shall provide IESA with the services set forth
on Schedule I (the "PRODUCTION SERVICES"). The PRODUCTION SERVICES shall consist
of the services listed on Schedule 1. Atari or IESA may at any time amend
Schedule I with the prior written consent of the other party. The PRODUCTION
SERVICES will be provided to IESA to the extent that the conduct of its business
during the Term undergoes no significant change that would materially expand
Atari's obligations hereunder as they exist at the beginning of the Term.
(b) Except as specifically provided in Schedule I , Atari or its
subsidiaries, as applicable, shall provide each of the PRODUCTION SERVICES
listed in Schedule I for a term commencing on the date hereof and ending on
March 31, 2011, unless earlier terminated by IESA or Atari in accordance with
Section 2.01 hereof (collectively, the "PRODUCTION SERVICES Period" or "Term.")
(c) Atari or its subsidiaries, as applicable, shall provide the
PRODUCTION SERVICES to IESA and/or its affiliates promptly with that degree of
skill, attention and care that Atari exercises and has heretofore exercised with
respect to furnishing comparable services to itself and its affiliates.
(d) Representatives of Atari and IESA, or IESA's designee, shall
meet, at least, on a semi-annual basis to review the performance of the
PRODUCTION SERVICES.
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(e) Unless otherwise specified in Schedule I, all employees and
representatives of Atari or its subsidiaries, as applicable (other than Bruno
Bonnell), providing the PRODUCTION SERVICES hereunder to IESA during the Term of
this Agreement (collectively, the "PRODUCTION SERVICES Employees") shall be
deemed for all purposes (including compensation and employee benefits) to be
employees or representatives solely of Atari and not to be employees or
representatives of IESA or to be independent contractors thereof. In performing
their respective duties hereunder, all such employees and representatives of
Atari shall be under the direction, control and supervision of Atari and Atari
shall have the sole right to exercise all authority with respect to the
employment (including termination of employment), assignment and compensation of
such employees and representatives, subject to compliance with the terms and
provisions contained in this Agreement including, without limitation, the
provision of the PRODUCTION SERVICES.
1.02. Billing and Payment for the PRODUCTION SERVICES.
(a) The Parties agree that the effective date of this Agreement
shall be July 1, 2005. For a period of six months following the Effective Date,
Atari shall bill IESA for the PRODUCTION SERVICES at cost with no upcharge,
except for quality assurance services which shall continue to be billed at cost
plus 10%, and, thereafter, at cost plus 6%, except for quality assurance
services which shall continue to be billed at cost plus 10%, or as otherwise
agreed upon in writing by Atari and Infogrames Entertainment SA. Atari will
provide an estimated budget of such Production Services no later than 15 days
prior to the end of the fiscal year.
(b) Beginning on April 1, 2006, IESA and Atari shall review the
costs of the PRODUCTION SERVICES on a yearly basis and shall use commercially
reasonable efforts to mutually agree to changes to the PRODUCTION SERVICES by no
later than the last day of the fiscal year during which such annual review
occurs.
(c) Atari shall, on a quarterly basis, submit to IESA its billing
invoice in US Dollars (the "PRODUCTION SERVICES Invoice") setting out detailed
itemized costs in connection with each production project. Payment by IESA in
respect of any such invoice shall be made in US Dollars within 45 days after the
date of IESA's receipt of the PRODUCTION SERVICES Invoice. Atari will use its
commercial best efforts to use the actual costs incurred as the basis of the
invoices. To the extent that adjustments from the invoices should be made prior
to its due date, such adjustments will be communicated to IESA promptly prior to
such date.
(d) Atari acknowledges that Infogrames Entertainment SA currently
provides, and is expected to provide management and services to Atari upon the
terms and conditions set forth in the management and services agreement of even
date hereof (the "Management and Services Agreement"). IESA and Atari expressly
agree that each party shall have the right throughout the term of this Agreement
to offset such payments as are owed under this Agreement against payments due
under the Management and Services Agreement and/or the service agreement to
certain subsidiaries of Infogrames Entertainment SA between Atari and Infogrames
Entertainment SA dated as of the date hereof.
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ARTICLE II
MISCELLANEOUS
2.01. Termination.
(a) Either party may terminate this Agreement upon written notice to
the other party at least 90 days prior to the end of each fiscal year during the
Term.
(b) Either party may terminate this Agreement upon written notice in
the event of a material breach by the other party of the terms of this Agreement
and such breach is not cured within thirty days of notice thereof.
(c) Either party may terminate this Agreement, in its sole and
absolute discretion, upon 90 days written notice to the other party in the event
that Infogrames Entertainment SA and its subsidiaries hold less than 25% of the
voting stock of Atari.
(d) The Agreement may be terminated by mutual agreement of Atari and
Infogrames Entertainment SA.
2.02. Indemnification of Atari by IESA. IESA hereby releases, indemnifies
and agrees to hold harmless Atari and its subsidiaries from and against any and
all losses and/or damages which arise out of the PRODUCTION SERVICES, other than
such losses and/or damages which arise out of Atari's or its subsidiaries' gross
negligence or willful misconduct.
2.03. Certain Agreements and Indemnities to Survive Termination of
Agreement. The obligations of the parties under Sections 2.02, 2.04 and 2.08
hereof shall survive any expiration or termination of this Agreement as shall
IESA's payment obligation with respect to PRODUCTION SERVICES rendered prior to
the termination date. All other obligations hereunder shall terminate as of the
date of expiration or termination of this Agreement in accordance with Section
2.01.
2.04. Governing Law. Jurisdiction This Agreement shall be interpreted
under the laws of the state of New York, and the parties submit to the exclusive
jurisdiction of the courts of the state and federal courts located within New
York, New York without regard to its choice-of-law rules.
2.05. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE
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BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
2.06. No Third Party Beneficiaries. No provision of this Agreement shall
create any third party beneficiary rights in any person or entity, including any
employee or former employee of the parties or any affiliate or associate thereof
(including any beneficiary or dependent thereof).
2.07. Relationship of Parties. Nothing herein contained shall be deemed or
construed by IESA or Atari or for any other party as creating the relationship
of principal and agent or of partnership, joint employers or joint venture by
the parties hereto.
2.08. Remedies; Specific Performance. Without prejudice to any rights or
remedies otherwise available to any party hereto, IESA and Atari hereby
acknowledge that damages would be an inadequate remedy for any breach of the
provisions of this Agreement by IESA or Atari and agree that the obligations of
IESA or Atari, as the case may be, shall be specifically enforceable.
2.09. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given (a) if personally
delivered, when so delivered, (b) if mailed, five business days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below, (c) if given
by telex or telecopier, once such notice or other communication is transmitted
to the telex or telecopier number specified below and the appropriate answer
back or telephonic confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (b) above or (d) if sent through an overnight delivery service in
circumstances to which such service guarantees next day delivery, the day
following being so sent:
if to IESA, to:
Infogrames Entertainment SA
1 Place Verrazzano
Lyon 69252 Lyon Cedex 09
France
Attention: Chief Operating Officer
Telephone: (+33) 4 37 64 37 64
Telecopy: (+33) 4 37 64 30 95
Attention: General Counsel
Telephone: (+33) 4 37 64 37 64
Telecopy: (+33) 4 37 64 30 95
if to Atari, to:
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Atari, Inc.
417 Fifth Avenue
New York, New York 10016
Attention: General Counsel
Telephone: (212) 726-6500
Telecopy: (212) 726-6590
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
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IN WITNESS WHEREOF, the parties to this Agreement have caused it to be
duly executed by their respective authorized representatives on the day and year
first above written.
INFOGRAMES ENTERTAINMENT SA
By: /s/ Thomas Schmider
------------------------
Name: Thomas Schmider
Title: DGD
ATARI, INC.
By: /s/ Bruno Bonnell
------------------------
Name: Bruno Bonnell
Title: CEO
[SIGNATURE PAGE TO PRODUCTION SERVICES AGREEMENT]
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SCHEDULE I
PRODUCTION SERVICES
1. Production Management Services
- provision of executive producer services
- manage all internal producers
- coordinate with external developers and manage projects, including
review of milestones, conduct and coordinate due diligence, and coordinate
localization efforts
- conduct due diligence on a worldwide basis for developer selection
2. Production Support Services
- provide portfolio reporting and tracking on a worldwide basis
- manage and coordinate worldwide quality control services
- coordinate strategic relations with manufacturers in the US
- manage product submittals and certification with manufacturers in the US
3. New Business and Portfolio Planning Services
- manage third party product development and acquisition
- coordinate greenlight process
- perform new business development activities
4. Content Management or Administrative Services
- supervision of worldwide content management services
- operational, financial and administrative services for worldwide product
development
5. Online - Casual Gaming
- establish online business opportunities
6. Quality Assurance Services (engineering and mastering)