Document:

EX-10.3

 

Exhibit 10.3

General Intellectual Property and Proprietary Rights (Other Than Trademark Rights) License

Of The Test Drive Franchise

November 8, 2007

The following terms and conditions establish the agreement (the “License”) between Infogrames
Entertainment S.A. (“Licensee”) and Atari, Inc. (“Licensor”) with respect to the Franchise (as
defined below) until such time as superseded by the long-form agreement with respect to the subject
matter hereof that is contemplated by the parties.

	 	 	 
	1. Franchise:

	 	“Franchise” collectively shall mean the series
of interactive computer and video games known
as “Test Drive” and “Test Drive Unlimited”
(including, but not limited to, all written
expressions of the Licensor-published retail
and other versions of such games, expansion
packs, add-on products, and manuals,
including, without limitation, as the
foregoing are set forth on Exhibit A hereto
(the Catalogue Titles”), subject to any
license limitations or restrictions thereon
(which shall be handled in accordance with
Section 7 of this License), and all
intellectual property and proprietary rights
owned or controlled by Licensor therein,
including, without limitation, all
programmers’ notes and development tools used
to develop any such games, source code and
object code of such games, copyrights, moral
rights, inventions, patents, patent
applications, trade secrets, design rights,
domain names, logos, trademarks, service
marks, and trade names owned or controlled by
Licensor, and specifically including, but not
limited to, those rights and elements
(trademark registrations and applications,
copyright registrations and applications, and
domain names,) which are listed on Exhibit A1
hereto. Exhibit A includes Exhibit A1 and
Exhibit A2. Exhibit A1 includes all of the
elements of the Franchise that are owned or
controlled by Licensor. All of the elements
of the Franchise not owned or controlled by
Licensor are listed in Exhibit A2.
	 
	 	 
	2. Licensed Products:

	 	The products set forth in Exhibit B hereto
	 
	 	 
	3. Territory:

	 	Worldwide
	 
	 	 
	4. Effective Date:

	 	November 8, 2007
	 
	 	 
	5. Term:

	 	“Term” shall mean the seven (7) year period
commencing on the Effective Date. Licensee’s
rights are exclusive during the Term. Upon
the expiration or earlier termination of the
Term, Licensee shall have a non-exclusive, six
(6) month sell-off period. Notwithstanding
the fact that Licensee’s rights are exclusive
during the Term, commencing on the sixth
(6th) anniversary of the Effective
Date, Licensor may meet with third parties
that desire to exploit Licensed Products
incorporating, based on, or otherwise derived
from any element(s) of the Franchise and grant
such third parties licenses therein; provided
that Licensor shall not grant any such

 

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	 	third parties a right or license to publish, promote, market,
advertise, distribute, and otherwise exploit (other than the
right to develop or manufacture) Licensed Products
incorporating, based on, or otherwise derived from any
element(s) of the Franchise prior to the expiration or earlier
termination of the Term. Notwithstanding the foregoing,
commencing on the sixth (6th) anniversary of the
Effective Date, Licensor may take all other actions necessary to
be in a position to publish, promote, market, advertise,
distribute, and otherwise exploit the Franchise upon the
expiration or earlier termination of the Term provided that all
such actions must be conducted on a confidential, non-public
basis and kept out of the public domain.
	 
	 	 
	6. Nature of license:

	 	Exclusive
	 
	 	 
	7. License

	 	Subject to receipt by Licensor of the Royalty
Advance described below, and subject to the
exceptions and restrictions expressly set
forth in this License, Licensor hereby grants
to Licensee the exclusive (even as to
Licensor) right and license, under Licensor’s
intellectual and proprietary rights other
than Licensor’s trademark rights, to create,
develop, produce, publish, promote, market,
advertise, manufacture, distribute, and
otherwise exploit, during the Term, Licensed
Products incorporating, based on, or
otherwise derived from any element(s) of the
Franchise. With respect to any third-party
properties included in games or otherwise
that are part of the Franchise (including, by
way of illustration but not limited to,
vehicle names and likenesses, music, actor
name and likenesses, and third party software
tools) that are listed on Exhibit A2,
Licensee acknowledges that such properties
are not part of the license grant hereunder.
Licensor shall transfer or sublicense all
licenses executed with such third parties
which are transferable or sublicensable
provided that any such transfer or sublicense
does not impair Licensor’s ability to publish
any of the Catalog Titles. However, Licensor
shall not object to or prevent Licensee from
licensing such materials from any such third
parties (including, but not limited to, the
waiving of exclusivity rights, if any) and
shall, at Licensee’s request, offer
reasonable assistance in facilitating any
such third party licensing (including, but
not limited to, offering introductions,
contacts, and copies of third party contracts
where not prohibited by confidentiality
provisions). Additionally, Licensor shall
provide a copy of any other documentation,
including, but not limited to, relevant
correspondences and file memorandums, bills,
notices of breaches, disputes, that are
material to the License in order to inform
Licensee of the status of such contractual
relationships between Licensor and such third
parties.
	 
	 	 
	 

	 	The parties agree that the rights granted to Licensee hereunder,
including, without limitation, those rights granted in this
Section 7, are rights in “intellectual property” within the
scope of Section 101 (or its successors) of the United States
Bankruptcy Code (“Bankruptcy Code”). Licensee shall have the
rights set forth herein

 

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	 	with respect to the Franchise when and as developed or created.
In addition, Licensee, as a licensee of intellectual property
rights hereunder, shall have and may fully exercise all rights
available to a licensee under the Bankruptcy Code, including,
without limitation, under Section 365(n) or its successors. In
the event of a case under the Bankruptcy Code involving
Licensor, Licensee shall have the right to obtain (and Licensor
or any trustee for Licensor or its assets shall, at Licensee’s
written request, deliver to Licensee ) a copy of all embodiments
(including, without limitation, any work in progress) of any
intellectual property rights granted hereunder, including,
without limitation, embodiments of the Franchise or any other
intellectual property necessary or desirable for Licensee to use
or exploit the Franchise or any Licensed Product or to exercise
its rights hereunder.
	 
	 	 
	 

	 	The Licensed Products created by or on behalf of Licensee or its
sublicensees shall include a proper trademark and/or copyright
notices indicating Licensor’s ownership in the elements and
rights licensed to Licensee under this License and contained in
any such Licensed Products in a form to be provided by Licensor,
provided that the failure to include any such notice shall not
be deemed to be a material breach of this License by Licensee
where Licensee’s endeavors to promptly and prospectively correct
such error.
	 
	 	 
	 

	 	No later than five (5) days after the Effective Date, Licensor
shall deliver or otherwise make available to Licensee all of the
items set forth on Exhibit D and Exhibit D1
hereto.
	 
	 	 
	8. Reserved Rights:

	 	Except for the Licensed Products created by or on behalf of Licensee,
Licensor hereby reserves the sole and exclusive ownership of the Franchise. Subject to the
distribution agreement referenced below in Section 15 and notwithstanding the exclusive
license grant described in Section 7, Licensor reserves the exclusive right to continue to
distribute during the Term all of the Catalog Titles released prior to the Effective Date.
This license is also subject to the existing licenses specified in Exhibit C hereto and to
existing licenses relating to the Franchise granted by Licensee or its affiliates (other than
Licensor and Licensor’s subsidiaries). All rights not expressly granted in this License are
reserved by Licensor. As between Licensor and Licensee, Licensee shall be sole and exclusive
owner of the Licensed Products created by or on behalf of Licensee excluding those elements
or rights contained therein that are (x) in a Catalog Title and owned by Licensor or a third
party or (y) set forth in Exhibit A. Except for Licensee’s ownership of the Licensed
Products created by or on behalf of Licensee: (a) nothing contained in this License shall be
construed as an assignment or grant to Licensee of any ownership right in or to the
Franchise, or any other right, title, or interest in or to the Franchise, except as expressly
set forth herein; (b) all uses of the Franchise shall inure to the benefit of Licensor; and
(c) Licensee recognizes the value of the good will associated with the Franchise and
acknowledges that the Franchise,

 

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	 	and all rights therein and the good will pertaining thereto,
belong exclusively to Licensor.
	 
	9. Wireless Platform

	 	Notwithstanding the license grant described in Section 7 above, Licensee’s
right with respect to Licensed Products playable on wireless devices, including, but not
limited to, personal digital assistants and mobile, cell and satellite phones (the “Wireless
Platform”) is limited, during the two (2) year period following the Effective Date, to the
right to sublicense such right to an appropriate and qualified third party wireless game
publisher on reasonable market terms. Licensee shall enter into such sublicense and cause
the first Wireless Platform Licensed Product to be released in all major markets (i.e.,
United States and the major countries of the European Union) not later than six months after
release of TDU2 (as hereinafter defined). Failure by Licensee to timely satisfy this
commitment shall result in a reversion to Licensor of all rights with respect to Licensed
Products on the Wireless Platform.
	 
	 	 
	 

	 	After the expiration of the two year period commencing on the
Effective Date, Licensee may, with respect to Licensed Products
playable on the Wireless Platform, either sublicense its right
to an appropriate and qualified third party wireless game
publisher on reasonable market terms and with no obligation as
to the markets of release, or publish itself, or together with
an appropriate and qualified third party partner, such Licensed
Products.
	 
	 	 
	10. Advance Royalty:

	 	Licensee shall pay to Licensor a non-refundable
fully recoupable advance against Royalties
otherwise payable hereunder in the amount of One
Million Dollars (USD) ($1,000,000.00) (the
“Advance Royalty”). The Advance Royalty shall be
paid to Licensor within 5 (five) business days
after signature of this License. The Advance
Royalty shall accrue interest at a yearly rate
of fifteen percent (15%) throughout the Term
(the Advance Royalty, as increased by interest,
compounded annually, the “Cumulative Advance
Amount”). The Cumulative Advance Amount shall
be fully recoupable by Licensee from Royalties
earned by and otherwise due to Licensor as per
this License. Notwithstanding anything to the
contrary set forth herein, the Licensor shall be
required to repay any unrecouped portion of the
Cumulative Advance Payment as part of the
Liquidated Damages (as such term is defined in
Section 20).
	 
	 	 
	11. Royalties:

	 	Licensee shall pay Licensor a base royalty rate
of 1.8% of Net Revenue actually received by
Licensee from the sale of the Licensed Products
created by or on behalf of Licensee.
	 
	 	 
	 

	 	Notwithstanding the foregoing, Licensee shall pay to Licensor,
in lieu of the foregoing royalties, a royalty on Net Revenue
actually received by Licensee from the exploitation of Licensed
Products on the Wireless Platform created by or on behalf of its
sublicensees in the amount of ten percent (10%) of Net Revenue.

 

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	12. Net Revenue:

	 	All revenue received in connection with
Licensed Products created by or on behalf of
Licensee or its sublicensees less: (a)
Chargebacks (as defined below) incurred by
Licensee; (b) freight, taxes, insurance,
duties, customs and brokerage fees incurred
by Licensee; and (c) in the case of
sublicenseing, agency fees, IP registration
and protection and enforcement costs.
“Chargebacks” are defined as price
protections, returns, co-op, MDF and other
customary deductions and discounts, taken or
granted by Licensee to its customers
specifically in connection with Licensed
Products created by or on behalf of Licensee
or its sublicensees, plus, except with
respect to sublicensing revenue, an
additional three percent (3%) of gross
receipts deducted in order to reflect
retailer-level deductions taken for early
payment, volume discounts, and similar items,
but excluding marketing expenses.
	 
	 	 
	13. Performance Clause:

	 	(A) Release Commitment. Licensee shall
develop (and/or have developed) and
commercially release (and/or have
commercially released) in all major markets
(i.e., United States and the major countries
of the European Union): (i) one (1)
interactive software game based on the
Franchise (“TDU2”) for at least one Major
Platform (as defined below) and the PC
Platform within twenty (20) months of the
Effective Date; and (ii) at least one
additional interactive software game based on
the Franchise (“TDU3”) for at least one Major
Platform and the PC Platform within 60 months
of the Effective Date. A “Major Platform”
shall mean Xbox 360, PS3, Wii, or the
successors to any of the foregoing. Each of
the two (2) above-mentioned interactive
software games satisfying the minimum
commitment must be a new stand-alone game and
not a port, expansion pack or episodic
content.
	 
	 	 
	 

	 	(B) Distribution Commitment. Licensee shall make and
maintain commercially reasonable arrangements for the
manufacture, distribution, sale and timely delivery of
sufficient quantities of each Licensed Product to distributors
and retailers in all major markets (i.e., United States and the

major countries of the European Union) to meet the demands of
the marketplace, and its obligations to distributors and
retailers consistent with commercially sound business practices.
	 
	14. Premiums

	 	No license is granted for the manufacture, sale or distribution of
Licensed Products whose purpose is to be used exclusively as promotional
items, in “advergaming,” or as “Premiums,” meaning any Licensed Products
used exclusively for the purposes of increasing the sale of another item;
promoting or publicizing any product or service; fundraising or as
giveaways to motivate a sales force, merchant, consumer or any other person
to perform a specific act; or acting as a tie-in.

 

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	15. Distribution
of Catalog Titles:

	 	For the duration of the present License,
Licensor hereby grants to Licensee the exclusive right to distribute
throughout the Territory (excluding the US, Canada, Mexico and their
possessions) all the Catalog Titles. The terms and conditions of such
distribution by Licensee will be the same as the existing ones in the
distribution agreement dated December 16, 1999 between Licensee and
Licensor (the “Distribution Agreement”). Nothing in this License shall
affect the rights and obligations of Licensor and Licensee under the
Distribution Agreement, the terms of which shall remain in full force and
effect.
	 
	 	 
	16. Warranties:

	 	Licensor warrants and represents that:
	 
	 

	 	- it has power and authority to enter into this License and that
it has not entered and shall not enter into any other agreement
that restricts or impairs, or could restrict or impair its
ability to carry out in whole or in part the provisions of this
License and the rights granted herein;
	 
	 

	 	- it is the sole and unconditional owner of all right, title and
interest in and to those elements and rights of the Franchise
listed on Exhibit A1;
	 
	 

	 	- except as otherwise expressly set forth on Exhibit A2, it was
granted all the exploitation rights necessary to use those
elements and rights of the Franchise in the manner in which the
Franchise was exploited (other than by Licensee or Eden Studios)
immediately prior to the Effective Date and has the authority to
make the grant specified in Section 7 hereof;
	 
	 

	 	- except as otherwise expressly set forth on Exhibit A2, it has
obtained all the necessary consents to make the grant of rights
covered by this License including, without limitation, from any
persons performing services or granting rights in connection with
the Franchise and that Licensee shall not be responsible for any
report, charge, fee, royalty or any other payment to any person
or entity in connection with the exploitation of the rights
granted hereunder;
	 
	 

	 	- the granting of the rights granted hereunder does not and will
not violate or otherwise constitute a material breach of the
terms and conditions of any other agreement entered into by
Licensor that has not otherwise been waived;
	 
	 

	 	- to Licensor’s Knowledge (as hereinafter defined), other than as
set forth on Exhibit A1, there are no current or threatened
claims, lawsuits, proceedings and/or other judicial or government
actions anywhere in the world concerning the scope, validity,
enforceability, ownership, infringement, misappropriation, use or
misuse of any of the rights and/or licenses granted to Licensee
under this License. “Licensor’s Knowledge” means the actual
knowledge of Licensor after reasonable inquiry of the employees
of Licensor at the level of vice president or higher, including,
without limitation, Licensor’s officers;
	 
	 

	 	- the exercise by Licensee or any of its affiliates,
subsidiaries, directors, representatives, employees and agents of
the rights granted hereunder does not and shall not infringe,
misappropriate or otherwise violate any third party’s
intellectual property or proprietary rights;

 

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	 	- it shall not act, nor cause any third party to act, in such
manner as to disturb or interrupt, directly or indirectly, the
quiet enjoyment by Licensee of the rights granted in this
License;
	 
	 

	 	- the information set forth on Exhibit A1 (other than
those elements owned or controlled as of the date hereof by
Licensee or Eden Studios) and Exhibit C (other than those
existing licenses relating to the Franchise granted by Licensee
or its affiliates (other than Licensor and Licensor’s
subsidiaries)) is complete and accurate in all material respects;
	 
	 

	 	- to Licensor’s Knowledge, the information set forth on
Exhibit A2 (other than those elements owned as of the
date hereof by Licensee or its affiliates (other than Licensor or
Licensor’s subsidiaries)) and Exhibit D1 is complete and
accurate in all material respects;
	 
	 

	 	- Licensor has paid all advances, royalties and other sums due to
any third party pursuant to any agreement that Licensor is
transferring to Licensee in accordance with the above provisions
of Section 7;
	 
	 

	 	- it shall indemnify and hold harmless Licensee, its affiliates,
subsidiaries, assignees, directors, representatives, employees
and agents, from and against any claim(s) of any third party
whatsoever arising from a breach or alleged breach of any of
Licensor’s representations or warranties hereunder; and
	 
	 

	 	- it shall, at its own expense, proceed with the filings with the
appropriate governmental bodies and bear the costs of
registration and renewals of protection of the trademarks and
copyrights included in the Franchise in such territories where
any such trademarks and copyrights are registered (or where an
application has been filed for such trademarks and copyrights) by
Licensor as of the Effective Date.
	 
	 

	 	Licensee represents and warrants that:
	 
	 

	 	- it has power and authority to enter into this License and that
it has not entered and shall not enter into any other agreement
that restricts or impairs, or could restrict or impair its
ability to carry out in whole or in part the provisions of this
License and the rights granted herein;
	 
	 

	 	- it shall not infringe or misappropriate Licensor’s intellectual
property or proprietary rights in the Franchise or knowingly aid
or abet anyone else in doing so;
	 
	 

	 	- it shall defend, indemnify and hold harmless Licensor, its
affiliates, subsidiaries, assignees, directors, representatives,
employees and agents, from and against any claim(s) of any third
party whatsoever arising from (i) a breach or alleged breach of
any of Licensee’s representations or warranties hereunder; or
(ii) infringement of such third-party’s intellectual property
rights arising from any Licensed Product created by or on behalf
of Licensee or any advertising or promotional materials used by
Licensee in connection therewith (except to the extent that such
infringement arises from any of those elements or rights of the
Franchise listed on Exhibit A1 or any part of any such elements);
or (iii) failure by Licensee to comply with any applicable law or
regulation in the exercise by Licensee of the rights granted
hereunder.

 

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	 	The representations and warranties of Licensor and Licensee
shall survive any termination or expiration of this License.
	 
	 	 
	17. Reporting; Reserve,
Payment:

	 	Licensee shall provide a detailed
statement of royalties and shall pay to Licensor all Royalties due
within forty-five (45) days after the end of each calendar quarter
during the Term. Licensee may establish a Reserve Basket but in no
event shall the Reserve Basket exceed Twenty five Percent (25%) of the
Royalty otherwise due to Licensor during each calendar quarter.
Reserves shall be withheld every quarter and liquidated within the
next 2 (two) subsequent calendar quarters. Licensor shall upon
reasonable notice to Licensee, and in any event not less than thirty
(30) days notice, have all customary audit rights, including, but not
limited to, the right to access all records relating to the
calculation of Royalties hereunder, at Licensee’s headquarters at any
reasonable time during or within two years of the conclusion of the
Term.
	 
	 	 
	18. Governing law and venue:

	 	Any controversy of claim arising out of
or relating to the construction or
applications of any term, provision, or
condition of this License shall comply
with and be governed in accordance with
the laws of the state of New York as
applicable to contracts made and
performed entirely within the state of
New York and shall be settled by final
and binding arbitration, in New York,
New York, under the Commercial
Arbitration Rules of the American
Arbitration Association. The number of
arbitrators shall be one. The cost of
arbitration shall be borne by the losing
party or in such proportion as the
arbitrator shall decide. Judgment on
the award rendered by the arbitrator may
be entered in any court in the world
having jurisdiction.
	 
	 	 
	19. Confidentiality:

	 	Each party acknowledges that
Confidential Information (as defined
below) may be disclosed to the other
party during the course of this License.
Each party agrees that it will take
reasonable steps, at least substantially
equivalent to the steps it takes to
protect its own proprietary information,
during the term of the License, and for
a period of three years following
expiration or termination of the
License, to prevent the duplication or
disclosure of Confidential Information
of the other party, other than by or to
its employees or agents who must have
access to such Confidential Information
to perform such party’s obligations
hereunder and/or to exploit such party’s
rights granted to it hereunder, who will
each agree to comply with this section.
	 
	 	 
	 

	 	“Confidential Information” means any information relating to or
disclosed in the course of negotiating and implementing the
License, which is, or should be reasonably understood to be,
confidential or proprietary to the disclosing party, including,
but not limited to, the content of negotiations between the
parties, the material terms of the License, information about
source code, product designs, sales, cost and other unpublished
financial information, product and business plans, projections
and marketing data. “Confidential Information”

 

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	 	shall not include information (a) already lawfully known to or
independently developed by the receiving party, (b) disclosed in
published materials, (c) generally known to the public, (d)
lawfully obtained from any third party not bound by a
confidentiality obligation to the disclosing party or (e)
required or reasonably advised to be disclosed by law.
	 
	20. License Termination:

	 	In the event that Licensee (i) fails to timely satisfy the release
commitments set forth in Section 13(A) of this License; or (ii) fails to make timely payment
of the Advance Royalty to Licensor as set forth in Section 10 of this License; or (iii) fails
to pay Royalties to Licensor on a timely basis as set forth in Section 17 of this License;
and any such breach set forth in the immediately preceding clauses (i), (ii) and/or (iii) is
not cured within thirty (30) days of the receipt by Licensee of written notice thereof, then
the Licensor shall have the right to terminate this License, in whole or in part, immediately
upon a second written notice to the Licensee, in addition to any other rights or remedies
Licensor may have. In the event that Licensor materially breaches this License, and such
breach is not cured within thirty (30) days of the receipt by Licensor of written notice
thereof, then Licensee shall have the right to terminate this License, in whole or in part,
immediately upon a second written notice to Licensor, in addition to any other rights or
remedies Licensee may have.
	 
	 	 
	

	 	Upon Licensee’s termination of the License in accordance with
the immediately preceding paragraph, or in the event Licensee
loses the benefit of the license granted hereunder or such
license is otherwise terminated for any reason other than for
the reasons in clauses (i), (ii) and/or (iii) set forth in the
immediately preceding paragraph, the Licensor and Licensee agree
to the following liquidated damages which Licensor shall pay to
Licensee. The liquidated damages will be the sum of (a) the
Cumulative Advance Amount then outstanding which has not been
recouped by Licensee in accordance with Section 10, (b) all
costs and expenses incurred by Licensee, including, but not
limited to, research and development costs, in connection with
the development of TDU2 and TDU3 which has not been amortized by
Licensee, and (c) any indemnity which Licensee shall be entitled
to under Section 16 (collectively, the “Liquidated Damages”).
Licensee and Licensor acknowledge that the Liquidated Damages
are reasonable under the circumstances existing on the Effective
Date and reasonably approximate the amount of damages that would
be sustained by Licensee as a consequence of Licensor’s material
breach of this License and that it is impracticable or extremely
difficult to determine the actual damages that would be
sustained by Licensee as a result of Licensor’s material breach.
The Liquidated Damage amounts provided for herein are not
intended to constitute a forfeiture or penalty, but are instead
intended to reflect Licensor’s and Licensee’s best estimate of
Licensee’s actual damages.

 

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	 	The terms and conditions of the following Sections will survive
Licensor’s termination of this License or the rejection of the
License in a Licensor bankruptcy case under the Bankruptcy Code:
	 

	 	Sections 16, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29 and
30. In addition, the termination or expiration of this
Agreement shall not relieve either party of any liability that
accrued prior to such termination or expiration.
	 
	21. Grant of Security Interest:

	 	 As security for the payment and
performance of Licensor’s obligations
under the License, including, but not
limited to, the payment of the
Liquidated Damages (collectively, the
“Licensor Obligations”), Licensor has
granted Licensee a second priority
security interest in accordance with
the terms and conditions of the
Trademark License of Test Drive
Franchise between Licensor and
Licensee of even date herewith.
	 
	 	 
	22. Limitation of Liability:

	 	EXCEPT TO THE EXTENT (i) THAT A PARTY
IS OBLIGATED TO INDEMNIFY THE OTHER
PARTY FOR THIRD PARTY CLAIMS OF
INTELLECTUAL PROPERTY INFRINGEMENT OR
MISAPPROPRIATION, OR (ii) LICENSOR IS
OBLIGATED FOR LIQUIDATED DAMAGES (AS
SUCH TERM IS DEFINED IN SECTION 20),
IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER FOR INCIDENTAL,
SPECIAL OR CONSEQUENTIAL OR PUNITIVE
DAMAGES OF ANY KIND, OR FOR THE LOSS
OF ANTICIPATED PROFITS, EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES AND REGARDLESS OF WHETHER ANY
REMEDY SET FORTH HEREIN FAILS OF ITS
ESSENTIAL PURPOSE.
	 
	 	 
	23. Entire Agreement:

	 	This License constitutes the entire
agreement between the parties with
respect to the subject matter hereof.
Any modification of this License must
be in writing and signed by both
parties hereto.
	 
	 	 
	24. Assignment & Sublicensing:

	 	Licensee shall not assign any or all
of the rights granted hereunder
without the written approval of
Licensor (which approval Licensor
shall not unreasonably withhold,
delay or condition), except that
Licensee may, upon written notice to
Licensor, assign or sublicense its
rights and duties under this
Agreement to any corporate entity
that controls, is controlled by or is
under the common control of Licensee.
Except as set forth above, Licensee
shall not have the right to
sublicense all or any of the rights
granted hereunder without the written
approval of Licensor (which approval
Licensor shall not unreasonably
withhold, delay or condition), except
that (a) Licensee shall have the
right to sublicense the right to
publish and distribute the Licensed
Products on the Wireless Platform as
set forth in Section 9 and (b)
Licensee may grant third parties the
right to exercise the rights granted
to Licensee hereunder for the
development, manufacturing,
distribution, publishing,
advertising, marketing and/or sale of
the Licensed Products; provided,
however,

 

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	 	if any such grant constitutes a de facto assignment, Licensee
must obtain Licensor’s approval of such grant in accordance with
the foregoing provisions of this Section; provided further that
Licensee shall not grant any sublicenses to any third party to
develop Licensed Products based on the Franchise for such third
party’s benefit as publisher; and provided further that Licensee
shall not be relieved of its responsibility hereunder and any
such third party shall be bound by the terms of this License in
performing its obligations. Any assignment or sublicense by
Licensee hereunder shall not relieve Licensee of its obligations
to Licensor. This License shall be binding upon and shall inure
to the benefit of the respective successors and assigns of each
party.
	 
	 	 
	25. Binding Agreement:

	 	The present License is intended to create a
legally binding relationship between the
parties.
	 
	 	 
	26. Interpretation:

	 	Section headings are included in this License
solely for convenience and are not intended to
affect interpretation of any provision of this
License.
	 
	 	 
	27. Waiver, Remedies:

	 	No waiver by any party of any term or
condition of this License shall be construed
to be a waiver of such term or condition in
the future, or of any preceding or subsequent
breach of the same or any other term or
condition of this License or any other
agreement, nor shall any such waiver be
binding unless written. All remedies, rights,
undertakings, obligations and agreements
contained in this License shall be cumulative,
and none of them shall be in limitation of any
other remedy, right, undertaking, obligation
or agreement of any party to this License.
	 
	 	 
	28. Severability:

	 	Any provision of this License that is found by
a court of competent jurisdiction to be void,
invalid or unenforceable shall be curtailed
and limited only to the extent necessary to
bring such provision within the requirements
of the law, and such finding and curtailment
shall not affect the validity or
enforceability of any other provision of this
License.
	 
	29. Revival and Reinstatement
of the Licensor Obligations:

	 	If the incurrence or payment of Licensor Obligations by the
Licensor or the transfer to the Licensee of any property should for any reason subsequently
be declared to be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of property
(collectively, a “Voidable Transfer”), and if the Licensee is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the
Licensee is required or elects to repay or restore, and as to all reasonable costs, expenses,
and attorneys fees of the Licensee related

 

- 12 -

	 	 	 
	 

	 	thereto, the liability of the Licensor and the grant of security
under the Trademark License of Test Drive Franchise between
Licensor and Licensee of even date herewith, automatically shall
be revived, reinstated, and restored and shall exist as though
such Voidable Transfer had never been made.
	 
	 	 
	30. Notices:

	 	All notices, statements and other documents, and all approvals or consents that any
party is required or desires to give to any other party, shall be given in writing and shall
be served in person, by express mail, by certified mail, by overnight delivery, or by
facsimile at the respective addresses set forth below, or at such other addresses as may be
designated by such party.
	 
	 	 
	 

	 	If to Licensor
	 
	 	 
	 

	 	     Atari, Inc.
	 

	 	     417 Fifth Avenue
	 

	 	     New York, New York 10016
	 

	 	     Attention: Legal Affairs
	 

	 	     Fax: 212.726.4214
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	     Milbank, Tweed, Hadley & McCloy LLP
	 

	 	     1 Chase Manhattan Plaza
	 

	 	     New York, New York 10005
	 

	 	     Attention: Thomas C. Janson
	 
	 	 
	 

	 	     Facsimile: (212) 530-5219
	 
	 

	 	If to Licensee
	 
	 	 
	 

	 	      Infogrames Entertainment SA
	 

	 	     1 Place Verrazzano
	 

	 	     69252 Lyon Cedex 09
	 

	 	     France
	 

	 	     Attention: Legal Affairs
	 
	 	 
	 

	 	     Fax: +33 (0)4 37 64 30 95
	 
	 	 
	 

	 	With a copies to:
	 
	 	 
	 

	 	      VEIL JOURDE
	 

	 	     38, Rue de Lisbonne
	 

	 	     75008 Paris
	 

	 	     France
	 

	 	     Attention: Emmanuel Rosenfeld

 

- 13 -

	 	 	 
	 

	 	     Fax: +33 (0)1 53 53 94 94
	 
	 	      
	 

	 	and
	 
	 	      
	 

	 	     Morrison & Foerster LLP
	 

	 	     1290 Avenue of the Americas
	 

	 	     New York, New York 10104-0050
	 

	 	     United States
	 

	 	     Attention: Michael B. Miller
	 
	 	      
	 

	 	     Fax: (212) 468-7900
	 
	 	      
	 

	 	Delivery shall be deemed conclusively made (i) at the time of
service, if personally served, (ii) five days after deposit in
the United States mail, properly addressed and postage prepaid,
if delivered by express mail or certified mail, (iii) upon
confirmation of delivery by the private overnight deliverer, if
served by overnight delivery, and (iv) at the time of electronic
transmission (with successful transmission confirmation),
provided a copy is mailed within 24 hours after such
transmission.

[The Next Page Is The Signature Page]

 

- 14 -

AGREED TO AND ACCEPTED:

	 	 	 	 	 	 	 	 	 
	ATARI, INC.	 	 	 	INFOGRAMES ENTERTAINMENT S.A.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Curtis G. Solsvig
	 	 	 	By:
	 	/s/ Patrick Leleu
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:
	 	Leleu Patrick
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:
	 	CEOexv10w1

 

Exhibit 10.1

FOURTH AMENDMENT AND EXHIBIT ACKNOWLEDGEMENT TO MASTER

FORMATION AND CONTRIBUTION AGREEMENT

     This FOURTH AMENDMENT AND EXHIBIT ACKNOWLEDGEMENT TO MASTER FORMATION AND CONTRIBUTION
AGREEMENT (this “Amendment”), dated as of November 9, 2007, is entered into by and between, ARIZONA
LAND INCOME CORPORATION, an Arizona corporation (together with any successor by merger, “AZL”), and
POP VENTURE, LLC, a Delaware limited liability company (“POP”).

     A. The parties hereto have entered into that certain Master Formation and Contribution
Agreement, dated as of October 3, 2006, that certain Amendment and Exhibit Acknowledgement to
Master Formation and Contribution Agreement dated November 2, 2006, that certain Second Amendment
and Exhibit Acknowledgement to Master Formation and Contribution Agreement dated December 9, 2006
and that certain Third Amendment and Exhibit Acknowledgement to Master Formation and Contribution
Agreement dated March 27, 2007 (such agreement, as so amended, the “Master Agreement”).

     B. Capitalized terms used but not otherwise defined in this Amendment shall have the meanings
respectively ascribed to them in the Master Agreement.

     C. The parties hereto have agreed to certain changes in the composition of properties
contributed and consideration paid in the contemplated transactions and certain other material
changes.

     D. The parties hereto desire to amend and modify the Master Agreement in accordance with the
terms and subject to the conditions set forth in this Amendment. As amended and modified by this
Amendment, the Master Agreement may be referred to as the “Agreement.”

     NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

     1. Amendment to Certain Terms in Section 2 of the Master Agreement. The following
terms contained in Section 2 of the Master Agreement are hereby deleted and replaced in their
entirety with the following, respectively:

““Contribution Agreements” shall mean all of the Contribution Agreements (each in a form
reasonably agreed among AZL, POP and the executing POP Members (if different than POP))
executed between AZL and POP, or the POP Members designated by POP, within thirty (30) days
after the execution of this Agreement, each as amended by the Master Amendment to
Contribution Agreements dated as of even date herewith; and each Contribution Agreement
shall relate to the particular POP Property that is owned, directly or indirectly, fully or
in part and whether in fee simple or through a ground lease, by the POP Affiliate in which
such POP Member(s) own membership interests. AZL shall be
an intended third party beneficiary to each Contribution Agreement.

 

 

“Contribution Agreement” shall mean any one (1) of the Contribution Agreements.

“Net Asset Value” shall mean, for each POP Property (or Contributed Interest, in the case
of any POP Property for which the Contributed Interests are less than one hundred percent
(100%) of the ownership interests in such POP Property), the amount equal to (a) the
difference between (i) Gross Asset Value minus (ii) the amount, including accrued and
unpaid interest, of the POP Properties Indebtedness encumbering such POP Property at
Closing, as adjusted by (b) the net adjustments for the closing costs that POP elects, at
its discretion pursuant to Section 23.4, not to settle in cash.

“POP Properties Indebtedness” shall mean, for any POP Property, either or both, as the case
may be, (a) the unpaid mortgage debt secured by such POP Property (it being understood,
however, that the collateral for such indebtedness may, depending on the POP Property in
question, be a lien encumbering fee simple title, a leasehold estate or an ownership
interest in a condominium) and (b) the unpaid mezzanine debt secured by a collateral
assignment of indirect ownership interests in such POP Property; provided that, in the case
of any POP Property for which the Contributed Interests are less than one hundred percent
(100%) of the ownership interests in such POP Property, such amount shall reflect only that
percentage of the indebtedness equal to the percentage ownership represented by such
Contributed Interests relating to such POP Property. By way of example, the POP Properties
Indebtedness would equal $10 million if the POP Property was encumbered with $100 million
of indebtedness and the interest of the POP Affiliate was ten percent (10%) of the
ownership interests in such POP Property.”

“Surviving Corporation Common Stock” shall mean the common stock of the Surviving
Corporation, which shall be listed on an Exchange.

“Title Insurance Company” shall mean First American Title Insurance Company or one or more
additional title insurance companies with national operations.”

     2. Amendment to Section 2 of the Master Agreement. Section 2 of the Master Agreement
is hereby amended by adding to the end of the current text therein:

““Aggregate Contribution Value” shall mean the sum of (a) the aggregate Net Asset Values
plus (b) the amount, if any, pursuant to Section 23.6 of Escrowed Loan Reserves plus (c)
the Capital Investment Value.

“Capital Investment” shall mean any costs or expenses incurred or funded in connection with
or relating to the leasing (including but not limited to the costs and expenses described
in Schedule 2D to the Master Agreement) or improvement of, in or on any portion of a POP
Property where the cost or expense
so incurred or funded is required or permitted in accordance with GAAP to be capitalized
and to be depreciated or amortized over its useful life.

2

 

“Capital Investment Value” shall mean the aggregate of all Capital Investments incurred or
funded by, or on behalf of, the owner of a given POP Property from October 1, 2007 through
the Closing Date in connection with any Capital Investments at that POP Property.

“Exchange” shall mean any national securities exchange or any inter-dealer quotation system
of a registered national securities association within the meaning of the Exchange Act.

“GAAP” shall mean generally accepted accounting principles in the United States of America.

“Net Capital Investment Amount” shall mean the positive difference, if any, between (i)
the Aggregate Contribution Value minus (ii) $163,510,000. For the avoidance of doubt, the
difference shall be deemed to be zero if the difference between the Aggregate Contribution
Value minus $163,510,000 is a negative number.

“Second Special Dividend” shall mean a dividend with respect to AZL Common Stock in an
amount per share to be determined by AZL, in connection with, and subject to the approval
of POP, which amount shall not be less than the minimum amount necessary to enable AZL to
satisfy the requirements of Sections 857 and 4981 of the Code, and which dividend shall, to
the extent possible, constitute a “capital gain dividend” within the meaning of Section
857(b)(3)(C) of the Code.”

     3. Amendment to Section 4.3 of the Master Agreement. Section 4.3 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

“4.3 Agreed Value. AZL and POP have agreed that the aggregate Gross Asset Values,
including the value attributable to the Contributed Assets, is $562,955,000.”

     4. Amendment to Section 4.4 of the Master Agreement. Section 4.4 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

“4.4 Aggregate Consideration. As consideration for the contribution of the
Contributed Interests and the Contributed Assets to the UPREIT, POP shall receive, or
direct the issuance, in the aggregate, of the following:

	 	(x)	 	Common Units having a value equal to twenty five percent (25%), and Preferred
Units equal to seventy-five percent (75%), of an amount equal to the difference of (A)
the Aggregate Contribution Value minus (B) $12,000,000 minus (C) the Net Capital
Investment Amount, if any
	 
	 	(y)	 	a promissory note of the UPREIT (the “Principal Note”) in the principal
amount of $12,000,000 with the other material terms as set forth on Exhibit H
attached hereto and

3

 

	 	(z)	 	if the Net Capital Investment Amount exceeds zero, promissory notes of the
UPREIT (the “Investment Notes”) in an aggregate principal amount equal to the Net
Capital Investment Amount and with the other material terms as set forth on
Exhibit H attached hereto.

The Investment Notes shall be in individual principal amounts and shall be allocated in
proportion to the Capital Investment Value for any POP Property relative to the aggregate
Capital Investment Values. For the purposes of this Section, Common Units shall have a per
unit value equal to the Adjusted Per Share Value. For the purposes of this Section,
Preferred Units shall have a per unit value of $25.00.”

     5. Deletion of Section 4.5 of the Master Agreement. Section 4.5 of the Master
Agreement is hereby deleted in its entirety.

     6. Amendment to Section 4.6 of the Master Agreement. Section 4.6 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

“4.6 General Partner’s Contribution. Pursuant to the terms of this Agreement, at
Closing, AZL shall contribute to the UPREIT all of its assets as of the Closing Date
(including any AZL Assets that have not been sold prior to the Closing Date) except for any
cash reserved for the payment of the Second Special Dividend or any accrued liabilities of
AZL. In consideration for such contribution, AZL shall acquire a general partner interest
in the UPREIT and become the sole general partner of the UPREIT and shall be deemed to have
made a contribution to the UPREIT in an amount equal to the book value of the assets so
contributed. Thereafter, AZL shall have the rights, duties, privileges and obligations as
the holder of the general partner interest and as the general partner of the UPREIT and be
subject to the terms and conditions of the UPREIT Certificate and the UPREIT Agreement.
AZL’s general partner interest at any particular time shall be equal to the quotient
obtained by dividing (i) the total number of shares of Surviving Corporation Common Stock
and Surviving Corporation Class B Common Stock outstanding as of such time, by (ii) the sum
of (A) the total number of shares of Surviving Corporation Common Stock and Surviving
Corporation Class B Common Stock outstanding as of such time, plus (B) the total number of
shares of Surviving Corporation Common Stock into which Common Units outstanding as of such
time are exchangeable.”

     7. Amendment to Section 6.1 of the Master Agreement. Section 6.1 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

          “6.1 Sale of Assets. AZL shall not sell any of its assets (“AZL Assets”) on
or before the Closing Date without the prior consent of POP.”

     8. Amendment to Section 6.3 of the Master Agreement. Section 6.3 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

4

 

          “6.3 Declaration of Special Dividend and Second Special Dividend.

	 	(a)	 	AZL, acting through its Board of Directors, shall, on December 1, 2006,
declare the Special Dividend of $1.00 per share in favor of and for the benefit of its
shareholders of record as of January 5, 2007, which Special Dividend shall (i) be paid
on January 26, 2007, (ii) constitute, to the extent possible, a “capital gain
dividend” within the meaning of Section 857(b)(3)(C) of the Code and (iii) be formally
designated in accordance with such section of the Code as being applicable to and
shall be first applied to entirely offset AZL’s net capital gain and other taxable
income (if any) arising from the Mortgage Prepayment and other taxable income for the
fiscal year ended December 31, 2006.

	 	(b)	 	AZL, acting through its Board of Directors, shall, on December 3, 2007,
declare the Second Special Dividend in favor of and for the benefit of its
shareholders of record as of December 28, 2007, which the Second Special Dividend
shall (i) be paid on January 15, 2008, (ii) constitute, to the extent possible, a
“capital gain dividend” within the meaning of Section 857(b)(3)(C) of the Code and
(iii) be formally designated in accordance with such section of the Code as being
applicable to and shall be first applied to entirely offset AZL’s net capital gain and
other taxable income (if any) for the fiscal year ended December 31, 2007.”

     9. Amendment to Section 6.4 of the Master Agreement. Section 6.4 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

          “6.4 Restrictions on Dividends. From and after the date hereof through the
Closing Date, other than the Special Dividend and the Second Special Dividend, AZL shall
not make, declare, pay or set aside for payment any dividend payable in cash, stock or
property on or in respect of, or declare or make any distribution on, any shares of its
capital stock, or directly or indirectly adjust, split, combine, reclassify, redeem,
purchase or otherwise acquire any shares of its capital stock.”

     10. Amendment to Section 9.1 of the Master Agreement. Section 9.1 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

          “9.1 Subscription. At the Closing, AZL shall sell to individual(s) or
entity(ies) designated by POP Common Units and Surviving Corporation
Common Stock, as elected by such individual(s) or entity(ies), for an aggregate
purchase price of $5,000,000 and a price per Common Unit or share of Surviving Corporation
Common Stock equal to $5.00; subject to adjustment in the event of the Reverse Stock Split
or any other change in the capitalization of AZL or the Surviving Corporation. The
purchase price shall be payable in immediately available funds at Closing.”

     11. Amendment to Section 9 of the Master Agreement. Section 9 of the Master Agreement
is hereby amended by adding to the end of the current subsections therein:

5

 

          “9.3 Subscription. At the Closing, AZL shall sell to individual(s) or
entity(ies) designated by POP Surviving Corporation Common Stock for an aggregate purchase
price of $1,350,000 and a price per share of Surviving Corporation Common Stock equal to
$7.50; subject to adjustment in the event of the Reverse Stock Split or any other change in
the capitalization of AZL or the Surviving Corporation. The purchase price shall be
payable in immediately available funds at Closing.”

     12. Amendment to Section 12.3 of the Master Agreement. Section 12.3 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

          “12.3 Listing Application. POP shall use its commercially reasonable efforts
to cause the shares of Surviving Corporation Common Stock to be listed for trading on an
Exchange.”

     13. Amendment to Section 14.9 of the Master Agreement. Section 14.9 of the Master
Agreement is hereby deleted and replaced in its entirety with the following: 

          “14.9 Listing Application. AZL shall use its commercially reasonable efforts
to cause the shares of Surviving Corporation Common Stock to be listed for trading on an
Exchange.”

     14. Amendment to Section 18.4 of the Master Agreement. Section 18.4 of the Master
Agreement is hereby deleted and replaced in its entirety with the following: 

          “18.4 Exchange Listing. The Surviving Corporation Common Stock shall have
been approved for listing on an Exchange subject only to consummation of the
Reincorporation.”

     15. Amendment to Section 21(h) of the Master Agreement. Section 21(h) of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

“An option (a) granted by POP (and all affiliates of POP, which shall be referred
to as POP for the purposes of this Section 21(h)) and (b) exercisable by the UPREIT
to cause POP to contribute to the UPREIT those parcels of real property (i)
identified as of the Closing as being the subject matter of a prospective or
completed acquisition by POP and (ii) as to which the closing of such acquisition
shall have been completed prior to
or after the Closing, but not later than June 30, 2008 (collectively, the “Option
Properties”). The foregoing option granted by POP to the UPREIT shall provide the
UPREIT with the right to acquire the Option Properties by the payment to POP of an
“Option Properties Contribution Value” equal to the net investment incurred by POP
in the acquisition and, if applicable, the financing, joint venturing and sale of
the Option Properties in question, inclusive of all transaction fees, costs and
expenses and associated tax liabilities incurred by POP allocable to the Option
Properties. The Option Properties Contribution Value shall be paid to POP, at the
option of the UPREIT, in cash or Common Units or shares of AZL

6

 

Common Stock (such
Common Units or Common Stock being each valued at an amount equal to the average
closing price per share of AZL Common Stock reported in the consolidated
transaction reporting system during the ninety (90) trading days immediately
preceding the applicable exercise of the option by the UPREIT). The remaining
terms of the contribution of any Option Property shall be substantially as set
forth in the Contribution Agreements, except that the UPREIT shall have thirty (30)
days following the exercise of its option with respect to any Option Property to
conduct a due diligence investigation and to terminate such agreement and option
without damages if the results of such due diligence investigation are not
satisfactory to the UPREIT in its sole discretion.

          The exercise by the UPREIT of its option as to any given Option Property
tendered by POP shall be made within a period of thirty (30) days following such
tender, and such tender shall be made by POP within thirty (30) days after the
later of (i) the date on which POP acquires the subject Option Property or (ii) the
Closing Date. In addition, prior to tendering any Option Property to the UPREIT,
POP shall be entitled to finance the Option Property with secured mortgage debt,
“sell-down” its equity position in the Option Property by forming a joint venture
with a financial partner, and/or sell or otherwise completely dispose of properties
acquired with Option Properties as a part of a portfolio acquisition (“Divested
Properties”). POP shall be entitled to tender its then existing equity ownership
interest in the Option Properties to the UPREIT subject to such mortgage financing
and/or such joint venture relationship and to tender Option Properties portfolios
to the UPREIT which have been diminished by the divestiture of Divested Properties.
Any net profit realized by POP on a cash basis in connection with an equity
sell-down of an Option Property or the sale of a Divested Property shall be
transferred to the UPREIT, in the form of a reduction of the contribution price.
Notwithstanding anything set forth above to the contrary, any exercise of the
option by the UPREIT shall require that the consummation of its acquisition of the
subject Option Property take place not later than sixty (60) days following such
exercise, unless and to the extent consummation is delayed through no fault of the
UPREIT. Notwithstanding anything herein contained or implied, any Option Property
that becomes subject to the option granted hereunder by virtue of having been
identified as of the Closing as a transaction in
process, but which has not actually been acquired by POP on or prior to June
30, 2008, shall, as of the close of business on June 30, 2008, cease to be subject
to the option described herein.”

     16. Amendment to Section 22 of the Master Agreement. Section 22 of the Master
Agreement is hereby amended by adding to the end of the current text therein:

	 	(l)	 	The Principal Note, executed by the UPREIT.
	 
	 	(m)	 	The Investment Notes, each executed by the UPREIT.

7

 

	 	(n)	 	Options granted by AZL to individual(s) or
entity(ies) designated by POP, which shall be exercisable for a period
of three months following the Closing, to acquire up to 500,000 shares
of Surviving Corporation Common Stock in the aggregate at a price per
share of Surviving Corporation Common Stock equal to $7.50; subject to
adjustment in the event of the Reverse Stock Split or any other change
in the capitalization of AZL or the Surviving Corporation.

     17. Amendment of Section 23.6 of the Master Agreement. Section 23.6 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

          “23.6 The POP Members shall not be reimbursed for the balances remaining, as
of the Closing Date, in any escrows that exist, as of October 1, 2007, and are
maintained pursuant to the requirements of the POP Properties Indebtedness
(“Escrowed Loan Reserves”), and any Escrowed Loan Reserves shall be added to the
aggregate Net Asset Values; provided that the sum of Escrowed Loan Reserves and
Net Asset Values shall not exceed $163,510,000 in the aggregate and shall
otherwise be treated as Contributed Assets; provided further that, in the case of
any POP Property for which the Contributed Interests are less than one hundred
percent (100%) of the ownership interests in such POP Property, such amount shall
reflect only that percentage of the Escrowed Loan Reserves equal to the percentage
ownership represented by such Contributed Interests relating to such POP Property.
The Escrowed Loan Reserves are estimated by POP, to its knowledge, to have been
approximately $5,290,000 at September 30, 2007 in the aggregate for the eight
Contributed Properties the ownership interests in which are 100% owned by the POP
Members as of the date hereof.”

8

 

     18. Amendment to Section 25 of the Master Agreement. Section 25 of the Master
Agreement is hereby deleted and replaced in its entirety with the following:

     “25. NOTICES. All notices and other communications under this
Agreement shall be addressed as follows, shall be sent by a reputable national
overnight delivery service, given in person or sent by facsimile and shall be
deemed given one (1) business day after delivery and acceptance by such reputable
national overnight delivery service and be deemed given upon receipt if (b) given
in person; or (c) sent by facsimile for which the transmitting facsimile machine
generates evidence of complete transmission in each case addressed as follows:

     If to AZL:

Arizona Land Income Corporation

2999 N. 44th Street

Suite 100

Phoenix, Arizona 85018

Attention: Mr. Thomas Hislop

Facsimile: (602) 952-0924

with a copy to:

Squire, Sanders & Dempsey LLP

40 N. Central Avenue

Suite 2700

Phoenix, Arizona 85004

Attention: Joseph Richardson, Esq.

Facsimile: (602) 253-8129

     If to POP:

POP Venture, LLC

c/o The Shidler Group

841 Bishop Street

Suite 1700

Honolulu, Hawaii 96813

Attention: Mr. Jay H. Shidler

Facsimile: (808) 533-4700

and

POP Venture, LLC

c/o The Shidler Group

9 West 57th Street

Suite 1670

New York, New York 10019

Attention: Mr. Robert Denton

Facsimile: (212) 688-3473

9

 

with a copy to:

Barack Ferrazzano Kirschbaum

     & Nagelberg LLP

200 West Madison Street

Suite 3900

Chicago, Illinois 60606

Attention: Howard A. Nagelberg, Esq.

Facsimile: (312) 984-3150

     19. Amendments to Schedules 2A and 2B of the Master Agreement. Schedule 2A of the
Master Agreement is hereby amended to delete “POP / USB Partners, LLC, a Delaware LLC” from such
schedule. Schedule 2B of the Master Agreement is hereby amended to delete “U.S. Bank Center, 101
North First Avenue, Phoenix, Arizona 85003” from such schedule.

     20. Amendments to Exhibits and Schedules of the Master Agreement. The Exhibits and
Schedules of the Master Agreement are hereby amended to add Exhibit H of this Amendment as Exhibit
H of the Master Agreement and to add Schedule 2D of this Amendment as Schedule 2D of the Master
Agreement.

     21. Omnibus Amendment to Contribution Agreements. Each of the Contribution Agreements
is hereby amended, without the need for any further action by any party, to conform such agreements
to the provisions of this Agreement.

     22. Additional Terms.

     (i) The Agreement. All references in the Master Agreement to the term “Agreement”
shall be deemed to refer to the Agreement referenced in this Amendment.

     (ii) Amendment and the Master Agreement to be Read Together. This Amendment
supplements and is hereby made a part of the Master Agreement, and the Master Agreement and this
Amendment shall from and after the date hereof be read together and shall constitute the Agreement.
Except as otherwise set forth herein, the Master Agreement shall remain in full force and effect.

     (iii) Counterparts. This Amendment may be executed by facsimile and in one or more
counterparts, each of which shall be deemed an original and all of which taken together shall
constitute one and the same document.

*****

10

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth
above.

	 	 	 	 	 
	 	POP VENTURE, LLC, a Delaware limited liability company

 	 
	 	By:  	POP FUNDING, its managing member
 	 
	 	 	 
	 	By:  	       JHS MANAGER, LLC, its manager
 	 
	 	 	 
	 	By:  	       /s/ Jay H. Shidler
 	 
	 	 	Jay H. Shidler 	 
	 	 	Sole Member 	 
	 
	 
	 	ARIZONA LAND INCOME CORPORATION,

an Arizona corporation

 	 
	 	By:  	/s/ Thomas R. Hislop
 	 
	 	 	Name:  	Thomas R. Hislop 	 
	 	 	Title:  	Chairman of the Board, Chief Executive Officer
and Chief Financial Officer 	 

11

 

	 	 	 	 	 

Exhibit H

Material Terms of the Principal Note

	1.	 	interest of 7% per annum;
	 
	2.	 	quarterly payments of interest;
	 
	3.	 	UPREIT right to accrue any interest payment;
	 
	4.	 	five year maturity;
	 
	5.	 	UPREIT right to extend maturity for one additional year;
	 
	6.	 	maturity accelerates upon the consummation of a public offering of Surviving Corporation
Common Stock in an amount equal to or greater than $75,000,000;
	 
	7.	 	unsecured, full recourse;
	 
	8.	 	negotiable; and
	 
	9.	 	prepayable at any time without a prepayment fee.

12

 

Schedule 2D

Identified Capital Investment

All costs, expenses and reserves associated with the termination of the lease relating to the
Wallace Theater located at Waterfront Plaza.

13

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