Management and Services Agreement - Infogrames Entertainment SA and Atari Inc.
MANAGEMENT AND SERVICES AGREEMENT
MANAGEMENT AND SERVICES AGREEMENT dated as of March 31, 2006 between
Infogrames Entertainment SA ("IESA"), at 1 Place Verrazzano, 69252 Lyon cedex
09, France and Atari, Inc. ("ATARI"), at 417 Fifth Avenue, New York, NY 10016
(this "Agreement").
WITNESSETH:
WHEREAS, IESA is the majority shareholder of Atari and is involved in the
business of holding and managing investments in the field of digital
entertainment and video games in particular. Reference is made to the Service
Agreement by and between IESA and Atari (f/k/a, Infogrames, Inc.), effective as
of January 1, 2000, as amended (the "IESA SERVICES AGREEMENT") whereby IESA
agreed to provide services to Atari.
WHEREAS, in connection with the entering into a Production Services
Agreement (as defined below) between Atari and IESA of even date hereof, the
parties have agreed hereby to terminate the IESA Services Agreement and to enter
into this Agreement which, when executed by the parties, will govern the terms
and conditions of IESA's rendition of services to Atari.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
MANAGEMENT AND SERVICES TO BE PROVIDED
1.01. Performance of PARENT COMPANY 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"), IESA or
its affiliates (excluding Atari), as applicable, shall provide Atari with the
services set forth on Schedule I (the "PARENT COMPANY Services"). This
Agreement, including Schedule I, may be amended only by the prior written
consent of the parties. The PARENT COMPANY Services will be provided to Atari to
the extent that the conduct of its business during the Term undergoes no
significant change(s) that would materially expand IESA's obligations hereunder
as they exist at the beginning of the Term. For the purposes of this Agreement,
"affiliates" of IESA shall not include Atari.
(b) Except as specifically provided in Schedule I, IESA or its
affiliates, as applicable, shall provide each of the PARENT COMPANY Services
listed in Schedule I for a term commencing on the date hereof and ending on
March 31, 2011, unless earlier terminated by IESA and/or Atari in accordance
with Section 2.01 hereof (collectively, the "PARENT COMPANY Services Period" or
"Term.")
(c) IESA or its affiliates, as applicable, shall provide the
PRODUCTION SERVICES to Atari and/or its subsidiaries promptly with that degree
of skill, attention and care
<PAGE>
that IESA 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 PARENT
COMPANY Services.
(e) Unless otherwise specified in Schedule I, all employees and
representatives of IESA or its affiliates (other than Bruno Bonnell), as
applicable, providing the PARENT COMPANY Services hereunder to Atari during the
Term (collectively, the "PARENT COMPANY Services Employees") shall be deemed for
all purposes (including compensation and employee benefits) to be employees or
representatives solely of IESA and not to be employees or representatives of
Atari or to be independent contractors thereof. In performing their respective
duties hereunder, all such employees and representatives of IESA shall be under
the direction, control and supervision of IESA and IESA 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 PARENT
COMPANY Services.
(f) For the purpose of clarity, the parties agree that this
Agreement hereby terminates the IESA Services Agreement and such agreement is
replaced by this Agreement as of the date hereof.
1.02. Fees and Payment for PARENT COMPANY Services.
(a) Annual fees for the PARENT COMPANY Services shall be US
$3,000,000 as set forth on Schedule I or as otherwise agreed upon by Atari and
IESA. The parties shall review in good faith the services provided and the
annual fees on an annual basis and shall use commercially reasonable efforts to
agree to any change to such services or fees by no later than the last day of
the fiscal year during which such review takes place.
(b) IESA shall, on a quarterly basis, submit to Atari its billing
invoice in USD (the "PARENT COMPANY Services Invoice") showing VAT or similar
applicable taxes, as applicable, plus detailed itemized costs in connection with
each category of services. Additional itemization and further explanation and
substantiation of charges shall be supplied to Atari upon request. Payment by
Atari in respect of any such invoice shall be made within 30 days after the date
of Atari's receipt of the PARENT COMPANY Services Invoice.
(c) IESA acknowledges that Atari currently provides, and is expected
to provide services to certain IESA subsidiaries upon the terms and conditions
set forth in the service agreement to IESA and certain of its subsidiaries (the
"Atari Service Agreement") and in the production services agreement (the
"Production Services Agreement"), each of even date hereof. 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 Atari Service Agreement and/or the Production Service
Agreement, as the case may be.
2
<PAGE>
(d) PARENT COMPANY Services do not include, and Atari shall not be
charged under this Agreement with, any service or expense which (i) primarily
arise in connection with IESA's management of its investment in Atari; (ii) is
already the topic of any arrangement, separate employment agreement or other
agreement for services between Atari and any of IESA, IESA's subsidiaries or
affiliates or any officer, director, employee or contractor thereof; or (iii)
any category of services not requested or authorized by Atari.
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) This Agreement may be terminated by the mutual consent of the
parties hereto.
2.02. Warranties and Indemnification.
(a) IESA covenants, represents and warrants that (i) it will render
the PARENT COMPANY Services in compliance with all applicable laws and
regulations and such services and the provision thereof will not violate any
rights of any third parties; and (ii) it, or its affiliates, shall provide the
PARENT COMPANY Services promptly, diligently and with at least that degree of
skill, attention and care that IESA exercises and has heretofore exercised with
respect to furnishing comparable services to its own business and assets and
those of its affiliates.
(b) Atari covenants, represents and warrants that the rendition of
the PARENT COMPANY services will not require IESA to violate the laws or rights
of any third parties.
(c) Atari hereby releases, indemnifies and holds harmless IESA and
its affiliates from and against any and all losses which arise out of the PARENT
COMPANY Services, other than such losses which arise out of IESA's or its
affiliates' gross negligence or willful misconduct.
3
<PAGE>
2.03. Certain Agreements and Indemnities to Survive Termination of
Agreement. The obligations of the parties under Sections 2.02, 2.04 and 2.07
hereof shall survive any termination of this Agreement as shall Atari's payment
obligation with respect to PARENT COMPANY Services rendered prior to the
termination date. All other obligations hereunder shall terminate as of the date
of termination of this Agreement in accordance with Section 2.01.
2.04. Governing Law. Jurisdiction This Agreement shall be construed in
accordance with and governed by the internal laws of France. All disputes, legal
actions, suits and proceedings arising out of or relating to this Agreement
shall be brought in the Tribunal de Grande Instance of Lyon, France. Each party
hereby consents to the jurisdiction of the Tribunal de Grande Instance of Lyon.
Each party hereby irrevocably waives all claims of immunity from jurisdiction
and any right to object on the basis that any dispute, action, suit or
proceeding brought in the Tribunal de Grande Instance of Lyon has been brought
in an improper or inconvenient venue or forum.
2.05. 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 Atari or any affiliate or associate thereof
(including any beneficiary or dependent thereof).
2.06. 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.
2.07. 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.
2.08. 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:
4
<PAGE>
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:
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.
5
<PAGE>
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 MANAGEMENT SERVICES AGREEMENT]
<PAGE>
SCHEDULE I
PARENT COMPANY SERVICES
NATURE DESCRIPTION OF SERVICES
--------------------- --------------------------------
General and Strategic - guidance as to publishing
Management policy
- guidance as to marketing and
advertising strategies
- group corporate and products
communication
Finance, treasury - participation in group
and accounting consolidation reporting/budget
process/accounting
Legal - intellectual property
sourcing
- negotiation of certain major
IP contracts and legal
engineering of group corporate
transactions
Management Information - providing group software
System (M.I.S.) applications and development
- assistance in group software
applications maintenance and
support, including royalties