Exhibit 10.1


 


INVESTOR AGREEMENT


 


THIS INVESTOR AGREEMENT, dated as of July 9, 2008 (this “Agreement”),
is between VIVENDI S.A., a societe anonyme organized under the laws of France (“Vivendi”),
VGAC LLC, a Delaware limited liability company (“VGAC LLC”; and together
with Vivendi, the “Vivendi Stockholders”), VIVENDI GAMES, INC., a
Delaware corporation and wholly owned subsidiary of VGAC LLC (“Games”),
and ACTIVISION BLIZZARD, INC. a Delaware corporation (the “Company”).


 


RECITALS


 


WHEREAS, Vivendi, VGAC LLC, Games, the
Company and Sego Merger Corporation, a Delaware corporation and wholly owned
subsidiary of the Company, entered into a Business Combination Agreement (the “Combination
Agreement”), dated as of December 1, 2007 (the “Effective Date”),
which provides for, among other things, the combination of the respective
businesses of the Company and Games upon the terms and subject to the
conditions set forth therein;


 


WHEREAS, following the consummation of the
transactions contemplated by the Combination Agreement, the Vivendi
Stockholders collectively will own a majority of issued and outstanding shares
of common stock, par value $0.000001 per share (“Common Stock”), of the
Company;


 


WHEREAS, the parties desire to set forth in
this Agreement certain terms and conditions upon which the Vivendi Stockholders
will hold shares of Common Stock; and


 


WHEREAS, the execution and delivery of this
Agreement is a condition to the parties’ willingness to consummate the
transactions contemplated under the Combination Agreement.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, the parties agree as follows:


 


1.
Definitions.


 


(a)           For purpose of this
Agreement, the following terms shall have the meanings set forth elsewhere in
this Agreement or set forth below:


 


“Affiliate” shall have the meaning set forth in rule 12b-2
under the Exchange Act.


 


“Applicable Securities” means, with respect to any Registration
Statement, the Registrable Securities identified in the Demand Notice or
Piggyback Notice relating to such Registration Statement and any Registrable
Securities which any other Holder is entitled to, and requests, be included in
such registration statement within 20 days after receiving such notice.


 

















 


“beneficial owner” has the meaning attributed to it in Rules 13d-3
and 13d-5 under the Exchange Act, whether or not applicable, except that a “person”
shall not be deemed to have “beneficial ownership” of any shares that any such
person has the right to acquire, whether or not such right is exercisable
immediately or within sixty (60) days after the date as of which such
determination is being made (the term “beneficial ownership” shall have a
correlative meaning to the term “beneficial owner”).


 


“BMC” means the tax scheme
recognized and authorized by the French Ministry of the Economy and Finance
known as “corporate taxation on global profits” (or, bénéfice mondial
consolidé).


 


“Cash-Settled Equity Awards” means
stock appreciation rights and/or restricted stock units, in each case, in
respect of the common stock of Vivendi that were awarded to Games Employees
prior to the Closing Date under the Vivendi Equity Plans.


 


“Closing Date” means the date on which the transactions
contemplated in the Combination Agreement are consummated.


 


“Commission” means the Securities and Exchange Commission.


 


“Control Block Sale” means a sale or transfer by Vivendi
or any of its Controlled Affiliates to an unaffiliated third party in a privately
negotiated transaction (and not pursuant to a registration statement or trades
on a national securities exchange or The Nasdaq Stock Market) of ownership of a
number of shares of Common Stock that would, upon consummation of such
transaction, result in such unaffiliated third party (or any “group” (within
the meaning of Section 13(d) or 14(d) of the Exchange Act) of
which it is a member) becoming the beneficial owner of (i) more than 50%
of the then-outstanding shares of Common Stock or (ii) a percentage of the
then-outstanding Common Stock that exceeds Vivendi’s Voting Interest after
giving effect to such transaction.


 


“Controlled Affiliate” of a person shall mean an
Affiliate controlled, directly or indirectly, by such person.


 


“Demand Notice” means a notice given by a Holder pursuant to Section 5.1(a).


 


“Demand Registration” means a registration under the Securities
Act of an offer and sale of Registrable Securities effected pursuant to Section 5.1
hereof.


 


“Demand Registration Statement” means a registration statement
filed under the Securities Act by the Company pursuant to the provisions of Section 5.1
hereof, including the Prospectus contained therein, any amendments and
supplements to such registration statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such
registration statement.


 


“Effectiveness Period” means, with respect to any Registration
Statement, the period during which such Registration Statement is effective.


 


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“Effective Time” means, with respect to any Registration
Statement, the date on which the Commission declares such Registration
Statement effective or on which such Registration Statement otherwise becomes
effective under the Securities Act.


 


“Electing Holder” means, with respect to any Registration, each
Holder that is entitled and elects to sell Registrable Securities pursuant to
such Registration and this Agreement.


 


“Exchange Act” means the Securities Exchange Act of 1934, as
amended.


 


“Games Employees” means current or
former employees of Games or any of its Subsidiaries.


 


“Holder” means (i) Vivendi, (ii) any of its Controlled
Affiliates and (iii) each holder of Registrable Securities that acquires
from Vivendi or any of its Affiliates a number of shares of Common Stock that,
as of the time of such acquisition, constitutes 10% or more of the aggregate
number of issued and outstanding shares of Common Stock.


 


“Ineligible Nominees” means any individual who (a) is a former
director, officer or employee of Vivendi or any of its Controlled Affiliates, (b) is
an officer or director of any Person who is a competitor of Vivendi or any of
its Controlled Affiliates, (c) is an officer or director of any Person
that is or was a party to any material action, suit or proceeding, claim or
arbitration in which Vivendi or any of its Controlled Affiliates is or was an
adverse party or (d) does not qualify as an “independent director” as such
term is defined in Rule 4200(15) of the rules promulgated by The
Nasdaq Stock Market, Inc. which apply to issuers whose common stock is
listed on the Nasdaq Global Market (or any successor rules as may be
promulgated from time to time, or, if the Company’s Common Stock is listed on a
different national securities exchange, the comparable “independent director”
requirements of such other exchange).


 


“JFG Employment Agreement” means that certain employment
agreement, dated as of January 12, 2004, between Vivendi and Jean-Francois
Grollemund, as amended from time to time.


 


“NASD” means the National Association of Securities Dealers, Inc.


 


“NASD Rules” means the Rules of the NASD, as amended from
time to time.


 


“Person” means any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, Governmental Entity or
other entity of any kind or nature.


 


“Piggyback Demand Registration” means a registration under the
Securities Act of an offer and sale of Registrable Securities effected pursuant
to Section 5.2 hereof.


 


“Prospectus” means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part
of an effective Registration Statement in reliance upon Rule 430A under
the Act) included in a Registration Statement, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the 


 


3

















 


Applicable Securities covered by a Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.


 


“Registrable Securities” means (a) any Common Stock or
other securities acquired by Vivendi or any of its Controlled Affiliates pursuant
to the Combination Agreement or otherwise from the Company, (b) any
securities issued or distributed with respect to, or in exchange for, any such
Common Stock or securities (whether directly or indirectly or in one or a
series of transactions) pursuant to any reclassification, merger,
consolidation, reorganization or other transaction or procedure and (c) any
securities issued or distributed with respect to, or in exchange for, any
securities described in clause (b) or this clause (c) (whether
directly or indirectly or in one or a series of transactions) pursuant to any
reclassification, merger, consolidation, reorganization or other transaction or
procedure, other than, in the case of each of clauses (a), (b) and (c),
any such securities that are Unrestricted Securities.


 


“Registration” means a Demand Registration or Piggyback
Registration.


 


“Registration Expenses” means all expenses incident to the
Company’s performance of its obligations in respect of any Registration of
Registrable Securities pursuant to this Agreement, including but not limited to
all registration, filing and NASD fees, fees of any stock exchange upon which
the Registrable Securities are listed, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants, including
the expenses of any special audits or “comfort” letters required by or incident
to such performance and compliance, premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out of the public
offering of Registrable Securities being registered; provided, however,
that notwithstanding the foregoing Registration Expenses shall not include any
fees and disbursements of counsel retained by any Holders, underwriters,
selling brokers or similar professionals or any transfer taxes or underwriting
discounts, fees or commissions relating to the sale of the Registrable
Securities.


 


“Registration Statement” means a registration statement filed by
the Company with the Commission under the Securities Act pursuant to the
provisions of Section 5.1 or 5.2 hereof, including the Prospectus
contained therein, any amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.


 


“Rules and Regulations” means the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.


 


“Securities Act” means the Securities Act of 1933, as amended.


 


“Stock-Settled Equity Awards” means
stock options and/or restricted stock, in each case, in respect of the common
stock of Vivendi that were awarded to Games Employees prior to the Closing Date
under the Vivendi Equity Plans.


 


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“Tax
Contest” means any audit, assessment of tax, other examination by any
Taxing Authority, or any proceeding or appeal of such proceeding.


 


“Tax Return”
means each tax return required to be filed by the Company or any of its
Subsidiaries by applicable Law.


 


“Taxing
Authority” means any Governmental Entity having jurisdiction over the
imposition, determination, assessment, or collection of any tax.


 


“Termination Event” means the
disposition by Vivendi and its Controlled Affiliates of beneficial ownership of
common stock of the Corporation which disposition has the effect of causing
Vivendi’s Voting Interest falling and remaining below 10% for ninety (90)
consecutive days.


 


“Unrestricted Security” means any
Registrable Security that (a) has been offered and sold pursuant to a
registration statement that has become effective under the Securities Act, (b) has
been transferred in compliance with Rule 144 under the Securities Act (or
any successor provision thereto) under circumstances after which such
Registrable Securities became freely transferable without registration under
the Securities Act and any legend relating to transfer restrictions under the
Securities Act has been removed or (c) is transferable pursuant to
paragraph (k) of Rule 144 (or any successor provision thereto).


 


“Vivendi Equity Plans” means those stock
option and other equity-based plans set forth on Schedule 1 attached hereto.


 


“Vivendi’s Voting Interest” means
the percentage of the outstanding Common Stock beneficially owned by Vivendi
and its Controlled Affiliates.


 


(b)           For purposes of this
Agreement, capitalized terms used and not defined herein shall have the
respective meanings ascribed to them in the Combination Agreement.


 


2. Vivendi Equity Awards.


 


2.1.
Reimbursement for Stock-Settled Equity Award Expenses.  On or prior to February 15th
and August 15th of each year, Vivendi shall provide the Company
and Games with a statement (the “Equity Expense Statement”) setting
forth, in reasonable detail, the amount of the equity-based compensation
expense recorded by Vivendi and/or its Controlled Affiliates (other than the
Company and its Subsidiaries) during the preceding six month periods ended December 30th
and June 30th, respectively, in respect of grants of
Stock-Settled Equity Awards to Games Employees that were made after January 1,
2004 and prior to the Closing Date (such amount, a “Periodic Grant Expense”),
which shall be calculated in a manner consistent with Vivendi’s consolidated
financial statements. Within ten (10) business days after the Company’s
receipt of an Equity Expense Statement, the Company or Games shall pay to
Vivendi an amount in cash equal to the amount of the Periodic Grant Expense set
forth therein.


 


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2.2. Payment of Cash-Settled Equity Awards.


 


(a)           Promptly
following the exercise of any Cash-Settled Equity Award, (i) Vivendi shall
provide the Company and Games with a statement (an “Exercise Statement”)
setting forth, in reasonable detail, (A) the name of the exercising party,
(B) the number, type and exercise price (if any) of the Cash-Settled
Equity Award(s) exercised by such person and (C) the aggregate amount
payable to such person with respect to such exercised Cash-Settled Equity Award
(the “Aggregate Exercise Payment”).


 


(b)           Games
shall be responsible for all payments in respect of the exercise of
Cash-Settled Equity awards and, promptly following receipt of each Exercise
Statement, the Company or Games shall pay to the applicable exercising party
the amount of the Aggregate Exercise Payment set forth in such Exercise Statement,
less any applicable tax withholdings required to be made by the Company or
Games with respect to such payment.


 


2.3.
Reimbursement for Certain Social Security Contributions.  Games shall be responsible for all salary,
bonus and other compensation and benefits required to be paid or provided under
the JFG Employment Agreement.  In
addition, within thirty (30) days after the end of each quarterly period, Vivendi
shall provide the Company and Games with a statement (a “JFG Retirement
Statement”) setting forth, in reasonable detail, the amount of the
contributions made by Vivendi or any of its Controlled Affiliates (other than
the Company and its Subsidiaries) in such quarterly period to the French social
security system in respect of the employment of Jean-Francois Grollemund.
Within ten (10) business days after the Company’s receipt of a JFG
Retirement Statement, the Company or Games shall pay to Vivendi an amount in
cash equal to the amount of the social security contributions set forth therein
(but in no event in excess of the maximum amount of the social security
contributions required under applicable law).


 


2.4.
Use of Transaction Proceeds.  The
Vivendi Stockholders hereby acknowledge and agree that resolution and finality
with respect to pending litigation involving the Company confers a benefit upon
the Vivendi Stockholders and the Company. 
Accordingly, the Vivendi Stockholders hereby acknowledge and agree that
the cash consideration paid by the Vivendi Stockholders to the Company pursuant
to the Combination Agreement may be used by the Company (to the extent not
otherwise required to be used under the terms of the Combination Agreement) for
its general corporate purposes, including payment of any fees or expenses in
connection with the settlement of the legal proceedings with respect to
the Company’s historical stock option grant practices that are described in the
first two paragraphs of Item 3 (Legal Proceedings) of the Company’s Form 10-K
for the fiscal year ended March 31, 2007.


 


3. Voting of Company Shares.


 


(a)           Prior to the first
occurrence of a Termination Event, the Vivendi Stockholders agree to vote, and
to cause to be voted, all shares of Common Stock owned by each of them and
their respective Controlled Affiliates (i) in favor of (A) the nominees
proposed for election as directors of the Company by the Independent Nominating
Committee (as defined in the 


 


6

















 


Organizational Documents), other than any Ineligible Nominees, and (B) the
nominees proposed for election as directors of the Company by the Executive
Nominating Committee (as defined in the Organizational Documents), in each
case, so long as such nominees are nominated in accordance with the
Organizational Documents and (ii) against any and all proposals to remove
any Independent or Executive Directors other than in the event of malfeasance.


 


(b)           As promptly as
practicable (but not later than three business days) after the closing of the
Combination Transactions (as defined in the Combination Agreement), at the
Company’s request, the Vivendi Stockholders shall execute a written consent,
pursuant to Section 2.13 of the Amended and Restated Bylaws of the
Company, pursuant to which the Vivendi Stockholders will (A) vote in favor
of, approve and ratify all actions taken by the stockholders of the Company at
the Company’s annual stockholders meeting held on September 27, 2007 (the “2007
Annual Meeting”), as described in the Company’s definitive proxy statement
filed on July 30, 2007 (the “Proposals”) (i.e., vote in favor of Proposal Nos. 1, 2,
3 and 5), and (B) vote against all Proposals not approved by the Company’s
stockholders at the 2007 Annual Meeting (i.e.,
vote against Proposal No. 4).  The
Vivendi Stockholders, with respect to all shares of Common Stock owned by each
of them and their respective Controlled Affiliates, hereby agree to, and to
cause each of their respective Controlled Affiliates to, (A) vote in favor
of, approve and ratify all actions taken by the stockholders of the Company at
the 2007 Annual Meeting (i.e.,
vote in favor of Proposal Nos. 1, 2, 3 and 5), and (B) vote against all
Proposals not approved by the Company’s stockholders at the 2007 Annual Meeting
(i.e., vote against Proposal No. 4).  Each of the Vivendi Stockholders shall use
reasonable efforts (i) to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or advisable in their
capacities as stockholders of the Company under applicable laws and regulations
to consummate and make effective, in the most expeditious manner practicable,
the actions contemplated in this Section 3(b), including, without
limitation, by preparing and filing as soon as practicable all forms,
registrations, information statements and notices required to be filed or
disseminated, if any, by the Vivendi Stockholders in accordance with Regulation
14C promulgated under the Securities and Exchange Act of 1934, as amended, Section 228(e) of
the Delaware General Corporate Law and Rule 4350(i)(6) of the NASDAQ
Listing Rules and (ii) to assist and cooperate with the Company in
doing, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, in the most expeditious manner
practicable, the actions contemplated in this Section 3(b), including,
without limitation, by assisting the Company in its preparation and filing as
soon as practicable of all forms, registrations, information statements and
notices required to be filed or disseminated by it in accordance with
Regulation 14C promulgated under the Securities and Exchange Act of 1934, as
amended, Section 228(e) of the Delaware General Corporate Law and Rule 4350(i)(6) of
the NASDAQ Listing Rules; provided, that all costs and expenses related
to the actions described in this Section 3(b) shall be borne by the
Company and the Company shall promptly reimburse each of the Vivendi
Stockholders with respect to any such reasonable and documented costs or
expenses incurred directly by such Vivendi Stockholder.


 


7

















 


4. Financial Statements; Access to
Information, Audit and Inspection.


 


4.1. Financial Statements.


 


(a)           In order to facilitate Vivendi’s
consolidation of the Company for financial reporting purposes, the Company will
provide to Vivendi the Company’s quarterly consolidated financial statements
through, and use its reasonable best efforts to comply with, Vivendi’s
consolidation and financial reporting process.


 


(b)           Unless Vivendi is no longer eligible
to utilize the BMC, the Company shall provide to Vivendi such financial and
tax-related information with respect to the Company and its Subsidiaries as is
reasonably necessary in order for Vivendi to comply with its reporting
obligations with respect to the BMC, including providing to Vivendi:


 


(i)            within 120 days
following the end of each calendar year:


 


(A)          separate
statutory accounts for the Company and each of its Subsidiaries, each prepared
on a standalone basis, in compliance with French generally accepted accounting
principles and consistent with Vivendi’s instructions;


 


(B)           reports
of independent auditors on the statutory accounts for each of the Company’s
Subsidiaries that is located in a jurisdiction where such reports is required;
and


 


(C)           a
letter, in a form to be provided by Vivendi, signed by the Company and each of
its Subsidiaries, that authorizes Vivendi to consolidate such statutory
accounts.


 


(ii)           promptly following
the payment by the Company or any of its Subsidiaries of any corporate income
tax paid by in any jurisdiction, proof of such payments.


 


(c)           To the extent required to enable
Vivendi to comply with applicable French tax or regulatory requirements,
including those with respect to the BMC, the Company shall provide Vivendi with
a draft copy of each tax return required to be filed by the Company or any of
its Subsidiaries by applicable Law (each, a “Designated Tax Return”) at
least 40 Business Days prior to the due date (including any extensions of such
due date) of the filing of such Designated Tax Return. From time to time, as
may be necessary, Vivendi shall provide written notice to the Company
indicating which category of tax return (e.g. Federal income tax return on Form 1120)
shall constitute a Designated Tax Return for purposes of French tax or
regulatory compliance.


 


(d)           In the event any
material Tax Contest is initiated by any Taxing Authority pertaining to any
Designated Tax Return, the Company shall (i) promptly notify Vivendi in
writing of the existence of such Tax Contest and (ii) to the extent
required to enable Vivendi to comply with applicable French tax or regulatory
requirements as indicated in a written request from Vivendi, (x) keep
Vivendi reasonably informed of the material issues arising during the 


 


8

















 


course of such Tax Contest and (y) furnish to Vivendi a copy of
all written communications, documents, and other material writings as specified
in such request.


 


(e)           Vivendi agrees that it shall
reimburse the Company for the actual and reasonably documented out-of-pocket
expenses (including reasonable fees of attorneys, accountants and consultants)
incurred by the Company and its Subsidiaries in connection with providing to
Vivendi the materials described in Section 4.1(b) above; provided
that such expenses are previously approved by Vivendi (which approval shall not
be unreasonably withheld, conditioned or delayed).


 


(f)            The provisions of this Section 4.1
shall remain operative until the first occurrence of a Termination Event;
provided, however, the requirements of Section 4.1(a) shall continue
following a Termination Event if the Company is no longer required to file
periodic reports pursuant to the Exchange Act.


 


4.2.
Access to Information, Audit and Inspection.  Vivendi and its Representatives shall
have (and the Company shall cause its Subsidiaries to provide Vivendi and its
Representatives with) access at reasonable times and during normal business
hours to all pertinent books and records of the Company and its Subsidiaries
and their respective businesses (including those books and records pertaining
to periods prior to the Closing Date (but excluding any materials provided by
advisors to the Company with respect to the Combination Agreement and the
transactions contemplated thereby)), including the right to examine and audit
any of such books and records and to make copies and extracts therefrom.  Vivendi shall bear all expenses incurred by
it or its Representatives in making any such examination or audit and will
reimburse the Company for all reasonable out-of-pocket expenses incurred by it
or its Subsidiaries in connection therewith. 
The Company shall, and shall cause each of its Subsidiaries to, make
arrangements for Vivendi and its Representatives to have prompt access at
reasonable times and during normal business hours to its officers, directors
and employees to discuss the business and affairs of the Company and its
Subsidiaries and the books and records pertaining thereto; provided that
Vivendi shall coordinate all requests for access to such officers, directors
and other personnel through the Company’s Chief Executive Officer.  The provisions of this Section 4.2 shall
continue to apply to the Company and its Subsidiaries and be enforceable by
Vivendi after a Termination Event, but only to the extent, in each case, that
such books and records and such access to officers, directors and other
employees are reasonably requested by Vivendi in connection with any pending or
threatened litigation, proceeding or investigation instituted by a third party
involving Vivendi or any of its Affiliates insofar as such matter relates to
the business or affairs of the Company or such Subsidiary (including any
matters relating to the business and affairs of any predecessor businesses, and
including relating to periods prior to the Closing Date).


 


5. Registration Rights.


 


5.1.  Demand
Registration.


 


(a)           Commencing
120 days after the Closing Date, each Holder shall have the right, subject to
the terms of this Agreement, to require the Company to register for offer and
sale under the Securities Act all or a portion of the Registrable Securities
then owned 


 


9

















 


by such Holder subject to the requirements and limitations in this Section 5.1.
In order to exercise such right, the Holder (the “Demanding Holder”)
must give written notice to the Company (a “Demand Notice”) requesting
that the Company register under the Securities Act the offer and sale of
Registrable Securities (i) having a market value on the date the Demand
Notice is received (the “Demand Date”) of at least $500 million
based on the then prevailing market price, or (ii) representing at least
10% of the outstanding Common Stock (on a fully diluted basis) or (iii) as
to Vivendi and its Controlled Affiliates, representing all of the Registrable
Securities then held by Vivendi and its Controlled Affiliates. Upon receipt of
the Demand Notice, the Company shall (i) promptly notify the other
Holders, as well as any other Person that is entitled to sell securities
pursuant to such Registration and this Agreement, of the receipt of such Demand
Notice, (ii) prepare and file with the Commission as soon as practicable
and in no event later than 90 days after the Demand Date a Demand
Registration Statement relating to the offer and sale of the Applicable
Securities on any available form agreed to by the Demanding Holder and the
Company for which the Company then qualifies (which may include a “shelf”
Registration Statement under Rule 415 promulgated under the Securities Act
solely for use in connection with delayed underwritten offerings under Rule 415
promulgated under the Securities Act) and (iii) use reasonable efforts to
cause such Demand Registration Statement to be declared effective under the
Securities Act as promptly as practicable. The Company shall use reasonable
efforts to have each Demand Registration Statement remain effective until the
earlier of (i) one year (in the case of a shelf Demand Registration
Statement) or 60 days (in the case of any other Demand Registration
Statement) from the Effective Time of such Registration Statement and (ii) such
time as all of the Applicable Securities have been disposed of by the Electing
Holders.


 


(b)           The
Company shall have the right to postpone (or, if necessary or advisable,
withdraw) the filing, or to delay the effectiveness, of a Registration
Statement or offers and sales of Applicable Securities registered under a shelf
Demand Registration Statement if a majority of the Independent Directors
(as defined in the Company’s bylaws) of the Company determines in good
faith that the sale of Registrable Securities covered by such Registration
Statement (i) would interfere with any pending financing, acquisition,
corporate reorganization or other corporate transaction involving the Company
or any of its Subsidiaries, (ii) would require disclosure of any event or
condition that such directors determine would be disadvantageous for the
Company to disclose and which the Company is not otherwise required to disclose
at such time, or (iii) would otherwise be materially detrimental to the
Company and its Subsidiaries, taken as a whole, and furnishes to the Electing
Holders a copy of a resolution of the such Independent Directors setting forth
such determination; provided, however, that no single
postponement shall exceed 120 days in the aggregate. The Company shall
advise the Electing Holders of any such determination as promptly as
practicable.


 


(c)           Notwithstanding
anything in this Section 5.1, the Company shall not be obligated to take
any action under this Section 5.1:


 


(i)            with
respect to more than four (4) Demand Registration Statements relating to
underwritten offerings which have become effective and which covered all the
Registrable Securities requesting to be included therein; or


 


10

















 


(ii)           with
respect to more than two (2) Demand Registration Statements which have
become and remained effective as required by this Agreement in a twenty-four
month period.


 


(d)           The
Company may include in any registration requested pursuant to Section 5.1(a) hereof
other securities for sale for its own account or for the account of another
Person, subject to the following sentence. 
In connection with an underwritten offering, if the managing underwriter
advises the Company and the Electing Holders that in its good faith view the
number of securities requested to be registered exceeds the maximum number
which can be sold in such offering without materially adversely affecting the
pricing, timing or likely success of the offering (with respect to any
offering, the “Maximum Number”), the Company shall include such Maximum
Number in such Registration Statement as follows: (i) first, the
Applicable Securities requested to be registered by the Demanding Holder, (ii) second,
the Applicable Securities requested to be included by any other Electing
Holders, if any, (iii) third, any securities proposed to be included by
the Company and (iv) fourth, any other securities requested to be included
in such Registration Statement.  For
purposes of this Agreement, an “underwritten offering” shall be an offering
pursuant to which securities are sold to a broker-dealer or other financial
institution or group thereof for resale by them to investors.


 


(e)           The
Demanding Holder shall have the right to withdraw its Demand Notice (in which
case such Demand Notice shall be deemed never to have been given for purposes
of Section 5.1(a) or Section 5.1(c)) (i) at any time prior
to the time the Demand Registration Statement has been declared or becomes
effective if the Demanding Holder reimburses the Company for the reasonable
out-of-pocket expenses incurred by it prior to such withdrawal in effecting
such Registration, (ii) upon the issuance by the Commission or any court
or other governmental agency or authority of a stop order, injunction or other
order which prohibits or interferes with such Registration, (iii) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied
other than as a result of default by the Demanding Holder, or (iv) if the
Company exercises any of its rights under Section 5.1(b) of this
Agreement. If the Holders withdraw a Demand Notice pursuant to this Section 5.1(e) and
the Company nevertheless decides to continue with the Registration as to
securities other than the Applicable Securities, then the Holders shall be
entitled to participate in such Registration pursuant to Section 5.2
hereof, but in such case the Intended Offering Notice must be given to the
Holders at least 10 business days prior to the anticipated filing date of the
Registration Statement and the Holders shall be required to give the Piggyback
Notice no later than five business days after the Company’s delivery of such
Intended Offering Notice.


 


(f)            If
any Registration pursuant to this Section 5.1 shall relate to an
underwritten offering, each of the Demanding Holder and the Company shall
select a joint lead managing underwriter reasonably acceptable to the other
party, which consent shall not be unreasonably withheld, conditioned or
delayed, and the right of any other Holder to participate therein shall be
conditioned upon such Holder’s participation in the underwriting agreements and
arrangements required by this Agreement.


 


11
















 


5.2.  Piggyback Registrations.


 


(a)           Commencing
120 days after the Closing Date, if at any time the Company intends to file on
its behalf or on behalf of any holder of its securities a Registration
Statement under the Securities Act in connection with a public offering of any
securities of the Company (other than a registration statement on Form S-8
or Form S-4 or their successor forms), then the Company shall give written
notice of such intention (an “Intended Offering Notice”) to Vivendi and
to each other Holder (provided the Company shall not be obligated to provide an
Intended Offering Notice to any person (other than Vivendi and its Controlled
Affiliates) unless Vivendi or one of its Controlled Affiliates has provided
written notice to the Company that such other person qualifies as a “Holder” as
provided in this Agreement) at least 10 business days prior to the date such
Registration Statement is filed. Such Intended Offering Notice shall offer to
include in such Registration Statement for offer to the public the number or
amount of Registrable Securities as each such notified Holder may request,
subject to the conditions set forth herein, and shall specify, to the extent
then known, the number and class of securities proposed to be registered, the
proposed date of filing of such Registration Statement, any proposed means of
distribution of such securities, and any proposed managing underwriter or
underwriters of such securities. Any Holder that elects to have its Registrable
Securities offered and sold pursuant to such Registration Statement shall so
advise the Company in writing (such written notice from any such Holder being a
“Piggyback Notice”) not later than seven business days after the date on
which such Holder received the Intended Offering Notice, setting forth the
number of Registrable Securities that such Holder desires to have offered and
sold pursuant to such Registration Statement. Upon the request of the Company,
the Electing Holders shall enter into such underwriting, custody and other agreements
as shall be customary in connection with registered secondary offerings or
necessary or appropriate in connection with the offering. Each Holder shall be
permitted to withdraw all or part of its Applicable Securities from any
Registration pursuant to this Section 5.2 at any time prior to the sale
thereof (or, if applicable, the entry into a binding agreement for such sale).
If any Registration pursuant to this Section 5.2 shall relate to an
underwritten offering, the right of any Holder to participate therein shall be
conditioned upon such Holder’s participation in the underwriting agreements and
arrangements required by this Agreement.


 


(b)           In
connection with an underwritten offering, if the managing underwriter or
underwriters advise the Company that in its or their good faith view the number
of securities proposed to be registered exceeds the Maximum Number with respect
to such offering, the Company shall include in such Registration such Maximum
Number as follows: (i) first, the securities that the Company proposes to
sell, and (ii) second, the Applicable Securities requested to be included
in such Registration pro rata among
the Electing Holders and such other holders of securities of the Company who
have requested that their securities be included in such Registration Statement
and who hold contractual registration rights with respect to such securities,
based on the respective amount of Applicable Securities owned by them.


 


(c)           The
rights of the Holders pursuant to Section 5.1 hereof and this Section 5.2
are cumulative, and the exercise of rights under one such Section shall
not 


 


12

















 


exclude the subsequent exercise of rights under the other such Section (except
to the extent expressly provided otherwise herein). Notwithstanding anything
herein to the contrary, the Company may abandon and/or withdraw any
registration as to which rights under Section 5.2 may exist (or have been
exercised) at any time and for any reason without liability hereunder. In such
event, the Company shall notify each Holder that has delivered a Piggyback
Notice to participate therein. No Registration of Registrable Securities
effected pursuant to a request under this Section 5.2 shall be deemed to
be, or shall relieve the Company of its obligation to effect, a Registration
upon request under Section 5.1 hereof. The Company may enter into other
registration rights agreements; provided,  however, that the rights and benefits of a holder of
securities of the Company with respect to registration of such securities as
contained in any such other agreement shall not be inconsistent with, or
adversely affect, the rights and benefits of holders of Registrable Securities
as contained in this Agreement.


 


5.3.  Registration Procedures.  In connection with a Registration
Statement, the following provisions shall apply:


 


(a)           Each
Electing Holder shall in a timely manner (i) deliver to the Company and
its counsel a duly completed copy of any form of notice and questionnaire
reasonably requested by the Company and (ii) provide the Company and its
counsel with such other information as to itself as may be reasonably requested
by the Company in connection with the Company’s obligations under federal and
state securities laws.


 


(b)           The
Company shall furnish to each Electing Holder, prior to the Effective Time, a
copy of the Registration Statement initially filed with the Commission, and
shall furnish to such Electing Holders copies of each amendment thereto and
each amendment or supplement, if any, to the Prospectus included therein.


 


(c)           The
Company shall promptly take such action as may be reasonably necessary so that (i) each
of the Registration Statement and any amendment thereto and the Prospectus
forming part thereof and any amendment or supplement thereto (and each report
or other document incorporated therein by reference in each case), when it
becomes effective, complies in all material respects with the Securities Act
and the Exchange Act and the respective rules and regulations thereunder, (ii) each
of the Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) each of the Prospectus forming
part of the Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the period during which the Company is
required to keep a Registration Statement continuously effective under Section 5.1(a) (other
than any period during which it is entitled and elects to postpone offers and
sales under Section 5.1(b) (each, a “Postponement Period”))
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.


 


13

















 


(d)           The
Company shall, promptly upon learning thereof, advise each Electing Holder, and
shall confirm such advice in writing if so requested by any such Electing
Holder:


 


(i)            when
the Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective;


 


(ii)           of
any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus included therein or for additional information;


 


(iii)          of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for such
purpose;


 


(iv)          of
the receipt by the Company of any notification with respect to the suspension
of the qualification of the securities included in the Registration Statement
for sale in any jurisdiction or the initiation of any proceeding for such
purpose;


 


(v)           following
the effectiveness of any Registration Statement, of the happening of any event
or the existence of any state of facts that requires the making of any changes
in the Registration Statement or the Prospectus included therein so that, as of
such date, such Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact required
to be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to such Electing
Holders to suspend the use of the Prospectus until the requisite changes have
been made which instruction such Electing Holders agree to follow); and


 


(vi)          if
at any time any of the representations and warranties of the Company
contemplated by paragraph (l) below cease to be true and correct or will
not be true and correct as of the closing date for the offering.


 


(e)           The Company shall
use its commercially reasonable efforts to prevent the issuance, and if issued
to obtain the withdrawal, of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.


 


(f)            The Company shall
furnish to each Electing Holder, without charge, at least one copy of the
Registration Statement and all post-effective amendments thereto, including
financial statements and schedules, and, if such Electing Holder so requests in
writing, all reports, other documents and exhibits that are filed with or
incorporated by reference in the Registration Statement.


 


14

















 


(g)           The Company shall,
during the period during which the Company is required to keep a Registration
Statement continuously effective under Section 5.1(a) or elects to
keep effective under Section 5.2(a), deliver to each Electing Holder and any
managing underwriter or agent, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Registration Statement
and any amendment or supplement thereto and other documents as they may
reasonably request to facilitate the distribution of the Registrable
Securities; and the Company consents (except during the continuance of any
event described in Section 5.3(d)(v) hereof) to the use of the
Prospectus, with any amendment or supplement thereto, by each of the Electing
Holders and any managing underwriter or agent in connection with the offering
and sale of the Applicable Securities covered by the Prospectus and any
amendment or supplement thereto during such period.


 


(h)           Prior to any
offering of Applicable Securities pursuant to the Registration Statement, the
Company shall (i) use reasonable efforts to cooperate with the Electing
Holders and their respective counsel in connection with the registration or
qualification of such Applicable Securities for offer and sale under any
applicable securities or “blue sky” laws of such jurisdictions within the
United States as any Electing Holder may reasonably request, (ii) use
reasonable efforts to keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers and sales in
such jurisdictions for the period during which the Company is required to keep
a Registration Statement continuously effective under Section 5.1(a) or
elects to keep effective under Section 5.2(a) and (iii) take any
and all other actions reasonably requested by an Electing Holder which are
necessary or advisable to enable the disposition in such jurisdictions of such
Applicable Securities; provided, however, that nothing
contained in this Section 5.3(h) shall require the Company to (A) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Section 5.3(h) or
(B) take any action which would subject it to general service of process
or taxation in any such jurisdiction if it is not then so subject.


 


(i)            The Company shall,
if requested by the Electing Holders, use commercially reasonable efforts to
cause all such Applicable Securities to be sold pursuant to the Registration
Statement to be listed on any securities exchange or automated quotation
service on which securities of the Company are listed or quoted.


 


(j)            The Company shall
cooperate with the Electing Holders to facilitate the timely preparation and
delivery of certificates representing Applicable Securities to be sold pursuant
to the Registration Statement, which certificates shall comply with the
requirements of any securities exchange or automated quotation service on which
any securities of the Company are listed and quoted, and which certificates
shall be free of any restrictive legends and in such permitted denominations
and registered in such names as Electing Holders or any managing underwriter or
agent may request in connection with the sale of Applicable Securities pursuant
to the Registration Statement.


 


(k)           Upon the occurrence
of any fact or event contemplated by Section 5.3(d)(v) hereof, the
Company shall promptly prepare a post-effective amendment or supplement to the
Registration Statement or the Prospectus, or any document incorporated therein
by reference, or file any other required document so that, after such amendment
or supplement, such Registration Statement and Prospectus do not contain an
untrue statement of a material fact and do not omit to 


 


15

















 


state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading; provided, however, that the Company shall not be required to take
any such action during a Postponement Period (but it shall promptly
thereafter). In the event that the Company notifies the Electing Holders of the
occurrence of any fact or event contemplated by Section 5.3(d)(v) hereof,
each Electing Holder agrees, as a condition of the inclusion of any of such
Electing Holder’s Applicable Securities in the Registration Statement, to
suspend the use of the Prospectus until the requisite changes to the Prospectus
have been made.


 


(l)            The Company shall,
together with all Electing Holders, enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering) and take all other reasonable and appropriate action in
order to expedite and facilitate the registration and disposition of the
Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially similar to those set forth in Section 5.5
hereof with respect to all parties to be indemnified pursuant to Section 5.5
hereof. In addition, in such agreements, the Company will make such
representations and warranties to the Electing Holder(s) and the
underwriters or agents, if any, in form, substance and scope as are customarily
made by issuers in primary equity offerings. The Electing Holder(s) shall
be party to such agreements and may, at their option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of the Electing Holders to the extent applicable. No
Electing Holder shall be required to make any representations or warranties to
or agreements with the Company or the underwriters or agents, other than
representations, warranties or agreements relating to such Electing Holder of
its Affiliates, its Registrable Securities (including ownership and title) and
its intended method of distribution or any other representations required by
law or reasonably requested by the underwriters in light of the Electing
Holders then current ownership and representation on the Company’s board of
directors.


 


(m)          If requested by the
managing underwriter in any underwritten offering, the Company and each Holder
(whether or not an Electing Holder) will agree to such limitations on sale,
transfer, short sale, hedging, option, swap and other transactions relating to
any securities of the Company or convertible or exchangeable for securities of
the Company (including any sales under Rule 144 of the Securities Act),
and public announcements relating to the foregoing as are then customary in
underwriting agreements for registered underwritten offerings; provided, however, that such limitations shall not continue
beyond the 90th day after the effective date of the Registration
Statement in question or, if later, the commencement of the public distribution
of securities to the extent timely notified in writing by the managing
underwriters.


 


(n)           The Company shall
use commercially reasonable efforts to:


 


(i)            (A) make
reasonably available for inspection by Electing Holders, any underwriter
participating in any disposition pursuant to the Registration Statement, and
any attorney, accountant or other professional retained by such Holders or any
such underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and (B) cause
the Company’s officers, 


 


16

















 


directors and employees to participate in road shows or other customary
marketing activities and to supply all information reasonably requested by such
Electing Holders or any such underwriter, attorney, accountant or professional
in connection with the Registration Statement as is customary for similar due
diligence examinations; provided, however, that all records,
information and documents that are designated by the Company, in good faith, as
confidential shall be kept confidential by such Holders and any such
underwriter, attorney, accountant or agent, unless such disclosure is required
in connection with a court proceeding after such advance notice to the Company
(to the extent practicable in the circumstances) so as to permit the Company to
contest the same, or required by law, or such records, information or documents
become available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided, further
that, the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of the Electing Holders and the other
parties entitled thereto by one counsel designated by and on behalf of the
Electing Holders and such other parties;


 


(ii)           in
connection with any underwritten offering, obtain opinions of counsel to the
Company (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the underwriters) addressed to the underwriters,
covering the matters customarily covered in opinions requested in secondary
underwritten offerings of equity securities, to the extent reasonably required
by the applicable underwriting agreement;


 


(iii)          in
connection with any underwritten offering, obtain “cold comfort” letters and
updates thereof from the independent public accountants of the Company (and, if
necessary, from the independent public accountants of any Subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each Electing Holder participating in
such underwritten offering (if such Electing Holder has provided such letter,
representations or documentation, if any, required for such cold comfort letter
to be so addressed) and the underwriters, in customary form and covering
matters of the type customarily covered in “cold comfort” letters in connection
with secondary underwritten offerings of equity securities;


 


(iv)          in
connection with any underwritten offering, deliver such documents and
certificates as may be reasonably requested by any Electing Holders
participating in such underwritten offering and the underwriters, if any,
including, without limitation, certificates to evidence compliance with any
conditions contained in the underwriting agreement or other agreements entered
into by the Company; and


 


(v)           use
its best efforts to comply with all applicable rules and regulations of
the Commission and make generally available to its security holders, as soon as
reasonably practicable (but not more than fifteen months) after the effective
date of the Registration Statement, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder.


 


17

















 


(o)           Not later than the
effective date of the applicable Registration Statement, the Company shall
provide a CUSIP number for all Registrable Securities and provide the
applicable transfer agent with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depository Trust
Company.


 


(p)           The Company shall
cooperate with each Electing Holder and each underwriter or agent participating
in the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD.


 


(q)           As promptly as
practicable after filing with the Commission of any document which is
incorporated by reference into the Registration Statement or the Prospectus,
the Company shall provide copies of such document to counsel for each Electing
Holder and to the managing underwriters and agents, if any.


 


(r)            The Company shall
provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by such Registration Statement from and after a
date not later than the effective date of such Registration Statement.


 


(s)           The Company shall
use reasonable best efforts to take all other steps necessary to effect the
timely registration, offering and sale of the Applicable Securities covered by
the Registration Statements contemplated hereby.


 


5.4.
Registration Expenses.  The
Company shall bear all of the Registration Expenses and all other expenses
incurred by it in connection with the performance of its obligations under this
Agreement. The Electing Holders shall bear all other expenses relating to any
Registration or sale in which such Electing Holders participate, including
without limitation the fees and expenses of counsel to such Electing Holders
and any applicable underwriting discounts, fees or commissions.


 


5.5. Indemnification and Contribution.


 


(a)           Upon the
Registration of Applicable Securities pursuant to Section 5.1 or Section 5.2
hereof, the Company shall indemnify and hold harmless each Electing Holder and
each underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Applicable Securities, and each of their
respective officers and directors and each person who controls such Electing
Holder, underwriter, selling agent or other securities professional within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such Person, an “Indemnified Person”) against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under
which such Applicable Securities are to be registered under the Securities Act,
or any Prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company hereby agrees to reimburse
such Indemnified Person for any reasonable and documented legal or other
expenses reasonably 


 


18

















 


incurred by them in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however,
that the Company shall not be liable to any such Indemnified Person in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement or
Prospectus, or amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Indemnified Person or its
agent expressly for use therein; and provided, further, that the Company
shall not be liable to the extent that any loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon the use of any Prospectus after such time as the Company has advised the
Electing Holder in writing that a post-effective amendment or supplement
thereto is required, except such Prospectus as so amended or supplemented.


 


(b)           Each Electing Holder
agrees, as a consequence of the inclusion of any of such Holder’s Applicable
Securities in such Registration Statement, and shall cause each underwriter,
selling agent or other securities professional, if any, which facilitates the
disposition of Applicable Securities to agree, as a consequence of facilitating
such disposition of Applicable Securities, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers and each person,
if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Registration Statement or Prospectus, or
any amendment or supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
underwriter, selling agent or other securities professional, as applicable,
expressly for use therein; provided, however, that
notwithstanding anything herein to the contrary the maximum aggregate amount
that any Electing Holder shall be required to pay pursuant to this Section 5.5
in respect of any Registration shall be the net proceeds received by such
Electing Holder from sales of Registrable Securities pursuant to such
Registration.


 


(c)           Promptly after
receipt by any Person entitled to indemnity under Section 5.5(a) or (b) hereof
(an “Indemnitee”) of any notice of the commencement of any action or
claim, such Indemnitee shall, if a claim in respect thereof is to be made
against any other person under this Section 5.5 (an “Indemnitor”),
notify such Indemnitor in writing of the commencement thereof, but the omission
so to notify the Indemnitor shall not relieve it from any liability which it
may have to any Indemnitee except to the extent the Indemnitor is actually
prejudiced thereby. In case any such action shall be brought against any
Indemnitee and it shall notify an Indemnitor of the commencement thereof, such
Indemnitor shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other Indemnitor similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such Indemnitee (which
shall not be counsel to the Indemnitor without the consent of the Indemnitee,
such consent not to be unreasonably withheld, conditioned or delayed). After
notice from the Indemnitor to such Indemnitee of its 


 


19

















 


election so to assume the defense thereof, such Indemnitor shall not be
liable to such Indemnitee under this Section 5.5 or otherwise for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such Indemnitee, in connection with the defense
thereof (other than reasonable costs of investigation) unless the Indemnitee
shall have been advised by counsel that representation of the Indemnitee by counsel
provided by the Indemnitor would be inappropriate due to actual or potential
conflicting interests between the Indemnitee and the Indemnitor, including
situations in which there are one or more legal defenses available to the
Indemnitee that are different from or additional to those available to
Indemnitor; provided, however, that the Indemnitor
shall not, in connection with any one such action or separate but substantially
similar actions arising out of the same general allegations, be liable for the
fees and expenses of more than one separate counsel at any time for all
Indemnitees, except to the extent that local counsel, in addition to their
regular counsel, is required in order to effectively defend against such
action. No Indemnitor shall, without the written consent of the Indemnitee,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnitee is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release
of the Indemnitee from all liability arising out of such action or claim and (ii) does
not include a statement as to, or an admission of, fault, culpability or a
failure to act, by or on behalf of any Indemnitee. No indemnification shall be
available in respect of any settlement of any action or claim effected by an
Indemnitee without the prior written consent of the Indemnitor, which consent
shall not be unreasonably withheld, conditioned or delayed.


 


(d)           If the
indemnification provided for in this Section 5.5 is unavailable or
insufficient to hold harmless an Indemnitee under Section 5.5(a) or Section 5.5(b) hereof
in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each Indemnitor shall contribute to the
amount paid or payable by such Indemnitee as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Indemnitor and the Indemnitee
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault of such Indemnitor
and Indemnitee shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnitor or by such Indemnitee, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.5(d) were
determined solely by pro rata allocation (even if the Electing Holders or any
underwriters, selling agents or other securities professionals or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the considerations referred to in
this Section 5.5(d). The amount paid or payable by an Indemnitee as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such Indemnitee in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Electing Holders and any underwriters, selling agents or other securities 


 


20

















 


professionals in this Section 5.5(d) to contribute shall be
several in proportion to the percentage of Applicable Securities registered or
underwritten, as the case may be, by them and not joint.


 


6.
Agreement Regarding Common Stock Purchases.  Each of the Vivendi Stockholders agrees that,
following the approval by a majority of the Company’s Board of Directors of any
program or plan with respect to the repurchase of Common Stock by the Company
(other than programs or plans that meet the requirements of Rule 10b5-1
promulgated under the Exchange Act) and during the period in which any such
programs or plans are in effect and are being actively utilized or implemented,
without the prior written consent of a majority of the Independent Directors
(as defined in the Company’s bylaws), neither such Vivendi Stockholder nor any
of its Controlled Affiliates shall, directly or indirectly, purchase any shares
of Common Stock pursuant to trades made on a national securities exchange or
The Nasdaq Stock Market or otherwise.


 


7.
Notice of Control Block Sales. 
Each of the Vivendi Stockholders agrees that, at least five (5) business
days prior to execution of any agreement with respect to a Control Block Sale,
it shall provide the Board of Directors of the Company with (a) written
notice of its intention to enter into such agreement and (b) the identity
of the prospective purchaser(s) and the financial terms of such Control
Block Sale; provided, however, that, without the prior written
consent of Vivendi, no director shall make any public announcement with respect
to such potential Control Block Sale or otherwise disclose such information to
any Person, other than to those officers, directors, advisors and
representatives of the Company as may be reasonably necessary.


 


8.
Specific Performance. Each party hereto acknowledges that it will be
impossible to measure in money the damages to the other parties if a party
hereto fails to comply with any of the obligations imposed by this Agreement,
that every such obligation is material and that, in the event of any such
failure, the other parties will not have an adequate remedy at law or in
damages. Accordingly, each party hereto agrees that injunctive relief or any
other equitable remedy, in addition to remedies at law or in damages, is the
appropriate remedy for any such failure and will not oppose the granting of
such relief on the basis that the other party has an adequate remedy at law or
in damages. Each party hereto agrees that it will not seek, and agrees to waive
any requirement for, the securing or posting of a bond in connection with any
other party’s seeking or obtaining such equitable relief.


 


9.
Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the parties hereto and their respective
successors, assigns, heirs and devises, as applicable; and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement. This Agreement shall not be assignable without the written consent
of the other party hereto, except that the Vivendi Stockholders may assign, in
their sole discretion, all or any of their respective rights, interests and
obligations hereunder (other than under Section 3) to any of their
Controlled Affiliates and their respective rights and obligations under Section 5
to any Holder in connection with the transfer to such Holder of Registrable
Securities; provided that such Controlled Affiliates or other Holders, as the
case may be, execute a counterpart to this Agreement concurrent with such
assignment and, provided, further, that Vivendi shall be responsible if any its
Controlled Affiliates do not fulfill their obligations hereunder


 


21

















 


10.
Termination. This Agreement will terminate automatically, without any
action on the part of any party hereto, upon the occurrence of a Termination
Event; provided, however, that (a) the provisions of Section 5.5
shall survive the termination of this Agreement and (b) the provisions of
Sections 4.1 and 4.2 shall survive as provided in such Sections.


 


11.
Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.


 


12.
Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without regard to
the conflicts of laws provisions thereof.


 


13.
Jurisdiction; Waiver of Venue. Each of the parties hereto,
including its successors and permitted assigns, irrevocably agrees that any
legal action or proceeding arising out of or related to this Agreement or for
recognition and enforcement of any judgment in respect hereof brought by any
other party hereto or its successors or assigns may be brought and determined
in the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks jurisdiction, any appropriate state or federal court in
New Castle County in the State of Delaware), and each of the parties hereby
irrevocably submits to the exclusive jurisdiction of the aforesaid courts for
itself and with respect to its property, generally and unconditionally, with
regard to any such action or proceeding arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any action, suit or proceeding relating thereto except in such courts).  Each of the parties agrees further to accept
service of process in any manner permitted by such courts.  Each of the parties hereby irrevocably and
unconditionally waives, and agrees not to assert, by way of motion or as a
defense, counterclaim or otherwise, in any action or proceeding arising out of
or related to this Agreement or the transactions contemplated hereby, (i) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure lawfully to serve process, (ii) that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), (iii) to the fullest extent
permitted by law, that (A) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (B) the venue of such suit,
action or proceeding is improper or (C) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts and (iv) any right
to a trial by jury.


 


14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given or made by a
party hereto only upon receipt by the receiving party at the following
addresses (if mailed) or the following telecopy numbers (if delivered by
facsimile), or at such other address or telecopy number for a party as shall be
specified by like notice:


 


22

















 


(a)           if to Vivendi or VGAC LLC, to


 


Vivendi S.A.


42, avenue de Friedland  
 75380 Paris cedex 08  

Attention: Frédéric
Crépin


Telecopy: + 33 1 71 71 11
43


 


with a copy (which shall not
constitute notice) to:


 


Vivendi S.A.


800 Third Avenue, 5th
Floor


New York, New York 10022


Attention: George E.
Bushnell III, Esq.


Telecopy:
(212) 572-7496


 


and


 


Gibson, Dunn &
Crutcher LLP


2029 Century Park East


Los Angeles, California
90067


Attention: Ruth Fisher, Esq.


Telecopy:
(310) 552-7070


 


(b)           if to the Company, to


 


Activision Blizzard, Inc.


3100 Ocean Park Boulevard


Santa Monica,
California 90405


Attention: George L. Rose, Esq.


Telecopy: (310) 255-2152


 


with a copy (which shall not
constitute notice) to:


 


Skadden, Arps, Slate,
Meagher & Flom LLP


300 South Grand Avenue


Los Angeles, California
90071


Attention: Brian J. McCarthy, Esq.


Telecopy:
(213) 687-5600


 


15.
Severability. This Agreement shall be deemed severable; the invalidity
or unenforceability of any term or provision of this Agreement shall not affect
the validity or enforceability of the balance of this Agreement or of any other
term hereof, which shall remain in full force and effect. If any of the
provisions hereof are determined to be invalid or unenforceable, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible.


 


16.
Waiver. The parties hereto may, to the extent permitted by applicable
Law, subject to Section 18 hereof, (a) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (b) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any



 


23

















 


such
waiver shall be valid only if set forth in a written instrument signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver
of those rights.


 


17.
Modification. No supplement, modification or amendment of this Agreement
will be binding unless made in a written instrument that is signed by all of
the parties hereto and that specifically refers to this Agreement.


 


18. Enforcement of Company Rights.  Vivendi acknowledges and agrees that the Independent
Directors (as defined in the Company’s bylaws) of the Company shall,
unless and until there is a Termination Event, have the sole and exclusive
right to control (acting by a majority vote of such Independent Directors) (i) the
granting of all approvals, consents or waivers by the Company hereunder, (ii) the
giving of all notices by the Company hereunder, (iii) the approval (or
disapproval) of the Company’s entry into any amendment or supplement to this
Agreement, or (iv) the Company’s exercise of its rights and remedies
hereunder vis-à-vis Vivendi.


 


19.
Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when such counterparts have been signed by each of the parties and delivered to
the other parties, it being understood that all parties need not sign the same
counterpart.


 


20.
Headings. All Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.


 


[Signature Page Follows]


 


24

















 


IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first written above.


 


 


	
   

  	
  VIVENDI S.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jean-Bernard
  Lévy

  
	
   

  	
   

  	
  Name:

  	
  Jean-Bernard
  Lévy

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the
  Management Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VGAC LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George
  Bushnell III

  
	
   

  	
   

  	
  Name:

  	
  George Bushnell
  III

  
	
   

  	
   

  	
  Title:

  	
  President and
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VIVENDI GAMES,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce L.
  Hack

  
	
   

  	
   

  	
  Name:

  	
  Bruce L. Hack

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACTIVISION
  BLIZZARD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert A.
  Kotick

  
	
   

  	
   

  	
  Name:

  	
  Robert A. Kotick

  
	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
					



 


 


[Signature Page to Investor Agreement]