Document:

EX-10.2

 

EXHIBIT 10.2

EXECUTION VERSION

SHORT FORM DISTRIBUTION AGREEMENT

Dated as of December __, 2007 (the “Effective Date”)

The Parties:

Infogrames Entertainment SA, Atari Interactive Inc. and Atari Europe SAS
(collectively, “Publisher”)

And:

Atari Inc., a Delaware corporation, having its registered office at 417 5th
Avenue, New York 10016, United States of America (“Distributor”).

This binding short form distribution agreement (this “Short Form Distribution Agreement”)
sets forth the principal terms and conditions agreed to by the parties under which, among other
things, Distributor shall have the exclusive right to sell and distribute in the Territory (as such
term is defined below) during any applicable Game Term (as such term is defined below) all
interactive entertainment software games developed by or on behalf of the Publisher or its
affiliates, the rights to which are owned by or licensed to the Publisher or its Affiliates, or to
which the Publisher or its Affiliates acquire rights (collectively, the “Games”), and for
which the parties shall have completed and executed a separate appendix in the form attached hereto
as Exhibit A (each a “Game Details Appendix”), with each Game to be distributed
during the applicable Game Term specified in the applicable Game Details Appendix. The parties
shall enter into good faith negotiations and enter into a long form distribution agreement on or
before January 18, 2008 encompassing the terms set forth in this Short Form Distribution Agreement
and such other business and legal terms and conditions (including, without limitation, customary
mutual representations, warranties, indemnities, limitations of liability and confidentiality
obligations.) upon which the parties hereto may mutually agree (such long form distribution
agreement being referred to herein as the “Long Form Distribution Agreement”). In
connection therewith: (a) on or before December 12, 2007, Publisher shall provide Distributor with
the first draft of the Long Form Distribution Agreement; and (b) on or before December 19, 2007,
Distributor shall provide Publisher with the second draft of the Long Form Distribution Agreement
that contains Distributor’s revisions thereto.

Subject to the foregoing, it is our intention that the Long Form Distribution Agreement would
contain the following principal terms:

	1.	 	Replacement of Prior Distribution Agreements:
	 
	 	 	With respect to all Games commercially released before the Effective Date, the following
two (2) distribution agreements (collectively, with any all amendments and addenda thereto,
the “Prior Distribution Agreements”) shall remain in full force and effect: (a)
Distribution Agreement between Publisher and Distributor dated December 16, 1999 and (b)
Distribution Agreement between Publisher and Distributor dated October 2, 2000. With
respect to all Games commercially released on or after the Effective Date, this Short Form
Distribution Agreement supersedes, replaces and terminates the Prior Distribution
Agreements. A symmetrical long form distribution agreement, with the same terms and
conditions as those in this Short Form Distribution Agreement (with the exception of
Section 9), where Atari Inc. is the Publisher and where Infogrames Entertainment SA, Atari
Interactive Inc. and Atari Europe SAS collectively

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	 	 	are the Distributor shall also be negotiated in good faith between the parties during the
same period.
	 
	2.	 	Grant of Rights:
	 
	 	 	Exclusivity: During the Term of Exclusivity (as hereinafter defined in Section 4),
Distributor shall have the exclusive right to contract with Publisher for the Distribution
Rights (as such term is defined below) in the Territory for all Games that are released in
the Packaged Media Format during the Term of Exclusivity. With respect to any Game for
which Distributor fails to respond to Publisher within ten (10) days following receipt of
information relating thereto or for which, following negotiations with respect to a Game
Details Appendix as provided herein, the Publisher and Distributor do not enter into a Game
Details Appendix, Publisher shall be free to negotiate with any third party(ies) other than
Affiliates (as hereinafter defined) regarding the distribution of such Game in the Physical
Media Format and/or Digital Download Format in the Territory. Publisher shall not accept
any offer from any such third party(ies) without first giving Distributor ten (10) days
following receipt by the Distributor of all information that Publisher provided to such
third party(ies) with respect to the Game and such offer in order to match such offer. If
Distributor fails to respond or does not agree to match such offer within such ten (10) day
period, Publisher is then free to enter into an agreement with such third party(ies) on the
terms of such offer. If Distributor exercises its right to match such offer, then Publisher
and Distributor shall promptly execute a Game Details Appendix that contains the terms and
conditions of such offer. If neither Distributor nor such third party(ies) agree to the
terms and conditions of such offer, the matching rights set forth in this paragraph will
continue in full force and effect upon the terms contained herein with respect to any other
offer that Publisher receives for such Game regardless of whether such offer is from such
third party or another third party. As used in this Short Form Distribution Agreement, an
“Affiliate” of any person means any other person controlling, under common control
with, or controlled by the referenced person. An person shall be deemed to control another
person if such person owns, directly or indirectly, thirty-three percent (33%) or more of
the voting stock of the second person (provided that such percentage shall be 50% or more
for purposes of the first paragraph of this Short Form Distribution Agreement), has the
right to elect or nominate a majority of the board of directors or other governing body of
such person, or otherwise has the power, whether by contract or otherwise, to control or
direct the policies or management of such person.
	 
	 	 	Distribution Rights. Publisher grants Distributor the exclusive right to distribute
and sell the Games for which the parties enter into a Game Details Appendix (the
“Selected Games”) during the Term in the Territory in the Packaged Media Format (as
hereinafter defined) and in the Digital Download Format (provided such digital rights were
granted to Publisher for the Territory) (the “Distribution Rights”). The
foregoing Distribution Rights regarding the Digital Download Format shall automatically
revert to Publisher if: (a) during the first year of the Term of Exclusivity, the gross
revenues that Distributor receives from its exploitation of such rights is less than X
percent (X%) (such percentage to be defined in the Long Form Distribution Agreement) of
Distributor’s total gross revenues during such period; or (b) during any year thereafter,
the gross revenues that Distributor receives from its exploitation of such rights is less
than Y percent (Y%) (such percentage to be defined in the Long Form Distribution Agreement)
of Distributor’s total gross revenues during such period. As used in this term sheet:
“Packaged Media Format” shall mean the distribution of Games via a physical,
packaged media in general use during the Term for the storage and distribution to end users
of interactive software games for a Platform (as defined in the applicable Game Details
Appendix); and “Digital Download Format” shall mean the distribution of any Game via
a digital download of the Packaged Media Format thereof only. All other rights which are
not expressly granted to Distributor for example,

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	 	 	inter alia, subscription sales and management, community management, virtual property sales
and management, virtual and physical game card sales, are excluded from this Short Form
Distribution Agreement and are exclusively reserved for Publisher.
	 
	 	 	MMOGs, Casual Games and Online Games. Notwithstanding any other provisions of this
Short Form Distribution Agreement, with respect to any MMOG, Casual Game or Online Game
(each, as hereinafter defined) that Publisher makes available in the Packaged Media Format
and subject to Publisher and Distributor entering into a Game Details Appendix with respect
thereto, Distributor shall have the exclusive right to distribute and sell such MMOG, Casual
Game or Online Game in the Packaged Media Format and Digital Download Format.
	 
	 	 	As used in this Short Form Distribution Agreement:

	 	•	 	“MMOG” shall mean any Game that is accessible primarily via the Internet
(with or without the use of video game discs) or other network through personal
computers and/or other electronic hardware platforms and in which (a) the Game is
playable simultaneously by more than one hundred (100) users, and (b) the users are
able to interact with other users (e.g., via in-game avatars) in a Persistent manner.
As used herein, “Persistent” shall mean that one or more aspects of the state
of the Game setting (e.g., the characters, world and/or universe) is maintained and
developed continually in a manner that allows the user experience to continually
evolve over time.
	 
	 	•	 	“Casual Game” shall mean any Game (a) whose primary play pattern provides
users with activities involving very low degree of skill (mental or physical); (b)
that is targeted at the mass market with very simple rules making them easy to learn
and play; (c) that requires no long term commitment or special skills; and (d) that
has a simplistic play pattern and often is playable using a one-button mouse or
cellphone keypad. Casual Games usually utilize one or both of the following (2) two
business models: (i) downloadable games, primarily available on PC, with limited
trials, i.e., try before you buy, for a relatively low price and/or (ii) free on-line
or free to download and try (but may generate revenue through in-game advertising).
	 
	 	•	 	“Online Game” shall mean any Game that is played through an Internet
browser.

	 	 	For purposes of clarification: (x) Distributor shall not have the foregoing right to
distribute and/or sell any MMOG, Casual Game or Online Game that Publisher does not make
available in the Packaged Media Format; and (y) Publisher shall have the exclusive online
exploitation right to MMOGs, Casual Games and Online Games.
	 
	 	 	Marketing Rights. Publisher grants Distributor the non-transferable right to
market, advertise and promote the Packaged Media Format version and the Digital Download
Format version of each Selected Game in the Territory during the applicable Game Term
(excluding the any sell-off period). Subject to the terms and conditions of this Short Form
Distribution Agreement, Publisher hereby grants to Distributor, under Publisher’s trademark
rights, a non-transferable, non-exclusive, license to display and reproduce the Infogrames
trademark (and any other trademarks owned or controlled by the Publisher and its Affiliates
and agreed to by the Publisher and the Distributor in the Long Form Distribution Agreement)
to market, advertise and promote the Packaged Media Format version and the Digital Download
Format version of each Selected Game in the Territory during the applicable Game Term
(excluding the any sell-off period set forth in the applicable Game Details Appendix)
subject to Publisher’s approval thereof, which approval shall not be unreasonably withheld.

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	 	 	Sublicensing; Subcontracting. The sublicensing and/or subcontracting by Distributor
of any rights relating to each Game shall be expressly subject to the prior written approval
of Publisher; such approval may not be unreasonably withheld.
	 
	 	 	Rights Not Granted. Any and all rights which are not expressly granted to
Distributor pursuant to this Short Form Distribution Agreement are deemed to be reserved by
Publisher.
	 
	3.	 	Territory: The “Territory” is the United States of America, Canada and
Mexico; provided, however, if the Net Receipts that Publisher actually receives from
Distributor’s exploitation of the Distribution Rights for the Selected Games in Mexico during
a given year of the Term of Exclusivity is less than the target therefor agreed upon by the
parties, the Distribution Rights in Mexico automatically shall revert to Publisher at the end
of the relevant year of the Term of Exclusivity, subject to the rights under any existing Game
Details Appendix. The parties promptly shall meet after the execution of this Short Form
Distribution Agreement and discuss in good faith and agree before December 19, 2007 on such
“target” for the first year of the Term of Exclusivity. With respect to each year of the Term
of Exclusivity after the first year, the parties shall agree on the applicable “target” on or
before the date that if thirty (30) days before the commencement of such year.
	 
	4.	 	Term of Exclusivity of this Short Form Distribution Agreement:
	 
	 	 	The “Term of Exclusivity” shall be the three (3) year period commencing on the Effective
Date, unless earlier terminated in accordance with the terms thereof; provided, however, if
the Net Receipts that Publisher actually receives from Distributor’s exploitation of the
Distribution Rights for the Selected Games in the Territory during the first year of the
Term of Exclusivity is less than eighty percent (80%) of the target therefor agreed upon by
the parties, the Term of Exclusivity shall be reduced to two (2) years (provided that the
quality of the Games and release dates will be comparable to the expected ones). The
parties promptly shall meet after the execution of this Short Form Distribution Agreement
and discuss in good faith and agree before December 19, 2007 on such “target” for the first
year of the Term of Exclusivity. For the avoidance of doubt, any termination of the Term of
Exclusivity shall not affect the duration of the Game Term for any Selected Games.
	 
	 	 	The Term of Exclusivity shall automatically extend for consecutive one (1) year periods on
its anniversary date unless either party delivers to the other party a written notice of
non-extension not less than one (1) year prior to the then scheduled expiration date of the
term.
	 
	 	 	Game Terms:
	 
	 	 	The Game Term for each Game shall be provided in the applicable Game Details Appendix on a
game-by-game basis.
	 
	5.	 	Game Detail Appendix: Publisher shall notify Distributor when Publisher has acquired
the rights to a Game or establishes a plan to develop a new Game or an updated version or
expansion of an existing Game. Such notice shall include a description of the Game, the
expected development schedule (including, without limitation, the estimated delivery date of
the gold master(s) and the estimated initial commercial release date thereof). Within thirty
(30) days following receipt of this information, Distributor shall provide Publisher with a
unit sales plan (“Unit Sales Plan”) setting forth sales projections for each Platform
for which such Game is being developed, which unit sales plan(s) shall be agreed to and
approved in writing by Publisher. The parties shall execute, on a Game by Game basis, the Game
Details Appendix for each Selected Game. Publisher shall notify Distributor of any potential
material delay in the delivery of the gold master of any Selected Game and, if such a delay is
expected to exceed three

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	 	 	(3) months (or thirty (30) days for any Selected Game that Distributor is going to
commercially release in Q4 of any calendar year), the parties shall, in good faith,
renegotiate the Unit Sales Plan and the marketing plan therefor. Such Unit Sales Plan and
marketing plan could also be renegotiated in case the quality of any Selected Game is lower
than the expected quality as defined in the corresponding Game Detail Appendix.
	 
	 	 	The Game Details Appendix for each Selected Game shall, among other things, include the
following commitments on the part of Distributor:
	 
	 	 	Initial Order: The number of units of such Game, allocated by Platform, to be
manufactured by (or on behalf of) Distributor as well as the estimated initial commercial
release date therefor in the Territory.
	 
	 	 	Minimum Guarantee: The minimum number of such units, allocated by Platform,
inclusive of the Initial Order, that Distributor shall be obligated to manufacture (or have
manufactured) and pay Publisher a royalty in connection therewith during the applicable Game
Term.
	 
	 	 	Royalty: The parties shall agree on a Royalty on a Game-by-Game basis in the
corresponding Game Details Appendix that will either be: (a) a flat per-unit fee per
manufactured unit or (b) a percentage of the corresponding Net Receipts (as hereinafter
defined), less only the Distribution Fee (as hereinafter defined) and COGs. As used herein,
(x) “Net Receipts” shall mean all gross receipts from the sale of the Game less only
Chargebacks (as hereinafter defined), plus net licensing receipts; (y) “Distribution
Fee” shall mean the fee paid to Distributor for distributing the Selected Game which
shall be equal to thirty percent (30%) of the Net Receipts; and (z) “Chargebacks”
shall mean price protections, returns, co-op, MDF and other customary deductions and
discounts granted to customers in connection with the distribution of any Game. Chargebacks
shall be capped, in the aggregate, at twenty-five percent (25%) of the gross receipts.
	 
	 	 	Marketing Commitment: With respect to each Selected Game, the Games Detail Appendix
shall specify the minimum amount required to be invested by Distributor for marketing and
promoting such Selected Game (the “Marketing Commitment”). Each Marketing
Commitment shall be in line with the projections set forth in applicable Unit Sales Plan,
provided, that with respect to any Selected Game where the Publisher has commitments to
third parties with respect to minimum marketing expenditures, such Marketing Commitment
shall comply with such minimum marketing expenditures. All marketing costs are included in
the Distribution Fee and shall be solely borne by Distributor.
	 
	6.	 	Payment Terms:
	 
	 	 	Payments to Publisher: The corresponding Royalty for the Initial Order for any
Selected Game shall be paid by Distributor to Publisher as follows: (a) with respect to any
SKU of a Selected Game that is on a proprietary platform (i.e., any platform for which the
platform owner (e.g., Sony, Microsoft, Nintendo) must approve and manufacture (or control
manufacturing of) the Selected Game), Distributor shall make such payment no later than
thirty (30) calendar days following the date on which such platform owner approves the gold
master of such Selected Game; and (b) with respect to all other SKUs of any Selected Games,
thirty (30) days following the delivery of the gold master(s) therefor. Before
manufacturing (or having manufactured) any additional units thereof, Distributor shall pay
the applicable Royalty to Publisher with respect to such additional units.
	 
	 	 	Accounting Statements. Distributor will provide Publisher no later than thirty (30)
calendar days following the end of each month, an accurate and detailed accounting statement
in a format to be

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	 	 	determined by Publisher in its reasonable discretion relating to the sale of all Selected
Games in the Territory.
	 
	 	 	Audit Rights. During the Term, and for a period of thirty-six (36) months
thereafter, Publisher may itself or through any independent U.S. accounting firm upon
reasonable advance written notice of at least ten (10) days to Distributor, audit the
records relevant to the subject matter of this Short Form Distribution Agreement during
normal business hours and in such a manner as not unreasonably interfere with the normal
business activities of Distributor. Such auditor shall be independent of the Publisher and
its affiliates and shall be engaged on a flat fee basis with respect to such audit. All
corresponding audit costs shall be at Publisher’s expense unless such audit reveals at least
a five percent (5%) shortfall in amounts owing to Publisher, in which case, Distributor
shall reimburse Publisher for the costs of such audit.
	 
	7.	 	Publisher’s Obligations:
	 
	 	 	Minimum Products. Publisher shall use commercially reasonable efforts to make
available to Distributor at least 20 SKUs (including all SKUs of the “Humongous Games”) per
year of the Term of Exclusivity for distribution in the Territory by Distributor in
accordance with the provisions of this Short Form Distribution Agreement. In particular,
Publisher shall use commercially reasonable efforts to make available the SKUs set forth on
Exhibit B, being agreed that this list is only tentative, non-binding and may be
modified.
	 
	8.	 	Distributor’s and Publisher’s Obligations:
	 
	 	 	Orders. Distributor shall place and manage orders with platform manufacturers in
accordance with applicable Game Details Appendix and shall make appropriate payments to such
platform manufacturers.
	 
	 	 	Customer Support by Distributor: Distributor shall provide customer support to all
sub-distributors, retailers and end-user customers in the Territory up to the generally
accepted industry-standard level support in the entertainment software industry in the
Territory. The Publisher shall provide second-level customer support in the Territory up to
the generally accepted industry-standard level support in the entertainment software
industry in the Territory.
	 
	 	 	Marketing Obligations: For each Selected Game, the parties shall agree upon a
marketing plan that shall be in line with the projections set forth in applicable Unit Sales
Plan.
	 
	 	 	Distribution Obligations. To be supplemented in the Long Form Distribution
Agreement and notably:

	 	(a)	 	When manufacturing (or having manufactured) finished goods units,
Distributor warrants that it shall commence distribution for each such Game at
the same time as Publisher or no later than two (2) months after receipt of the
Gold Master for such Game, if no distribution of the Game is undertaken by
Publisher in the rest of the world.
	 
	 	(b)	 	Distributor shall spend, at a minimum, the Marketing Commitment
and is not entitled to any repayment of any and all marketing costs.

	9.	 	Online Rights: For the avoidance of doubt, Distributor will have the exclusive
right to distribute and sell in the Territory during the applicable Game Terms the Selected
Games in the Digital Download Format for which the parties entered into a Game Details
Appendix (provided such digital rights were granted to Publisher for the Territory).
Notwithstanding the foregoing,

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	 	 	Publisher shall have the exclusive right to distribute in the Digital Download Format in the
Territory all Games other than those Selected Games for which Publisher granted Distributor
such digital distribution right. In connection with Publisher’s distribution of such Games
in the Digital Download Format, Distributor hereby grants Publisher a trademark license to
use Publisher’s trademarks in connection therewith and Publisher shall pay Distributor a
royalty equal to eight percent (8%) of the Online Net Revenues that Publisher receives from
the distribution of such Games in the Territory via the Online Platform. The Long Form
Distribution Agreement shall include a minimum guarantee relating to the amount of royalties
that Publisher shall pay Distributor for the foregoing trademark license. As used herein,
“Online Net Revenues” shall mean gross receipts, less duties, taxes, commissions,
chargebacks, MDF and returns. 
	 
	 	 	Atari.com Internet Site: Notwithstanding the terms and conditions of that certain
Trademark License Agreement dated September 4, 2003 entered into by and between Infogrames
Entertainment SA, Atari Interactive Inc. and Atari Inc., the parties hereby agree that,
commencing as of February 1, 2008, Publisher shall have the sole and exclusive right to
operate the Atari.com Internet site. Publisher shall place a link from the Atari.com
Internet site to Distributor’s Internet site where the Selected Games are distributed in the
Digital Download Format. On or before December 19, 2007, the parties shall negotiate and
enter into a separate agreement that shall, among other things, define the terms and
conditions of the transfer and management and operating responsibilities of the Atari.com
Internet site.
	 
	10.	 	Intellectual Property Rights: Publisher does not grant to Distributor, any right,
title or interest in or to: the Games; any trademarks of Publisher; and/or any modifications,
enhancements and/or derivative works of any Game or any Intellectual Property Rights embodied
therein and related thereto.
	 
	11.	 	Expiration/Termination of the Short Form Distribution Agreement: Publisher may
terminate this Short Form Distribution Agreement: (i) in the event that the Distributor
materially breaches this Short Form Distribution Agreement and such breach continues for a
period of thirty (30) days following notice of such breach from the Publisher; (ii) the
Distributor files a voluntary bankruptcy case or becomes the subject of an involuntary
bankruptcy case and such case is not dismissed within 90 days; (iii) the Distributor files,
has filed or otherwise seeks an assignment for the benefit of its creditors; and/or (iv) the
Distributor files, has filed or otherwise seeks the appointment of a receivership for its
assets. Distributor may terminate this Short Form Distribution Agreement (i) in the event
that the Distributor materially breaches this Short Form Distribution Agreement and such
breach continues for a period of thirty (30) days following notice of such breach from the
Publisher. Each party may terminate any particular Game Details Appendix in the event that
the other party materially breaches such Game Details Appendix and such breach continues for a
period of thirty (30) days following notice of such breach from the other party. In the Long
Form Distribution Agreement, Publisher shall have an additional right to terminate the Long
Form Distribution Agreement for multiple breaches of the Game Details Appendices by
Distributor – the details of this termination right shall be determined by the parties
pursuant to good faith negotiations.
	 
	12.	 	Assignment: Publisher may assign this Short Form Distribution Agreement and/or any of
its obligations and/or its rights under the same, in whole or in part, to any person. Except
as expressly authorized thereunder, Distributor may not assign its obligations and/or rights
under this Short Form Distribution Agreement to any person whatsoever and any such purported
assignment or other disposition by Distributor shall be null and void. Distributor may
sublicense its rights to any affiliate that is controlled directly or indirectly by
Distributor or its corporate parent, Publisher.

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	13.	 	Time is of the Essence/Computation of Time Periods: Time shall be of the essence for
the purpose of the performance by the parties hereto under this Short Form Distribution
Agreement.
	 
	14.	 	Governing Law: This Short Form Distribution Agreement will be governed by and
interpreted in accordance with the laws of New York. The parties hereby agree that any action
arising out of this Agreement will be brought solely under the relevant courts located in New
York, New York and irrevocably submit to the exclusive jurisdiction of any such court and
waive any objection that either party may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agree not to plead or claim the same.

[The Next Page Is The Signature Page]

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IN WITNESS WHEREOF, the duly authorized representatives of each of the parties hereto have executed
this Agreement as of the day and year first written above.

	 	 	 	 	 	 	 	 	 	 	 
	Infogrames Entertainment SA	 	 	 	Atari Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Patrick Leleu
 

	 	 
	 	By:
	 	/s/ Curtis G. Solsvig
 

	 	 
	 

	 	(Signature) 
	 	 	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Patrick Leleu
 

	 	 	 	Name:
	 	Curtis Solsvig
 

	 	 
	 

	 	(Print)
	 	 	 	 	 	(Print)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Chairman and CEO
 

	 	 	 	Title:
	 	Chief Restructuring Officer
 

	 	 
	 

	 	(Print)
	 	 	 	 	 	(Print)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Atari Europe SAS	 	 	 	Atari Interactive Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Patrick Leleu
 

	 	 	 	By:
	 	/s/ Hastefort
 

	 	 
	 

	 	(Signature)
	 	 	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Patrick Leleu
 

	 	 	 	Name:
	 	Hastefort
 

	 	 
	 

	 	(Print)
	 	 	 	 	 	(Print)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Representing Infogrames
 

	 	 	 	Title:
	 	CEO
 

	 	 
	 

	 	(Print)
	 	 	 	 	 	(Print)	 	 

9

 

EXHIBIT A

FORM OF GAME DETAILS APPENDIX

10

 

APPENDIX NO. [     ] 

TO EXHIBIT A

GAME: “                    ”

     This Appendix No. [___] to Exhibit A (“Appendix”) is made and entered into as
of [Distribution Pick-up Date (as defined in the Agreement] by and between [•]
(“Publisher”) and [•] (“Distributor”) pursuant to that certain Short Form
Distribution Agreement by and between Publisher and Distributor dated as of [                    ], 2007
(the “Agreement”). All capitalized terms not defined herein shall have the meaning given
them in the Short Form Distribution Agreement.

     The parties hereby acknowledge, agree and confirm that as of Effective Date of this Appendix,
the interactive entertainment software product(s) listed below are Game(s) subject to the terms and
conditions of the Agreement.

	 	 	 
	1. Game(s)

	 	[                                                            ].
	 
	 	 
	2. Platform(s)

	 	[                                                            ].
	 
	 	 
	3. Manufacturer(s)

	 	[SCEA, Microsoft and/or Nintendo;
replicator(s) for PC CD-ROM/DVD-ROM
version(s)
	 
	 	 
	4. Anticipated Gold Master
Delivery Date

	 	[Date for each Platform version].
	 
	 	 
	5. Expected Quality of the Game

	 	[                                                            ].
	 
	 	 
	6. Language(s)

	 	[                                                            ].
	 
	 	 
	7. Game Term

	 	From the Distribution Pick-Up Date
for the Distributed Game referenced
above to [                    , 20___].
	 
	 	 
	8. Initial Order

	 	[                                                            ]
	 
	 	 
	9. Minimum Guarantee /MG Payment
Schedule

	 	[                                                            ]
	 
	 	 
	10. Royalty

	 	[                                                            ]
	 
	 	 
	11. Marketing Commitment

	 	X % of the projected Net Receipts for
such Game as indicated in the Unit
Sales Plan with a minimum of
US$                    
	 
	 	 
	12. Territory

	 	The fifty (50) states of the United
States of America, the District of
Columbia and Puerto Rico, Mexico and
Canada, and the respective
territories, possessions and
commonwealths of the United States of
America, Mexico and Canada (including
the U.S. Virgin Islands and Guam),
Bermuda, any territory subject to the
jurisdiction of an Indian tribe or
band, or Alaskan village, which is
recognized by U.S., Mexican or
Canadian federal law or formally
acknowledged by a state of the United
States or Mexico or province of
Canada, ships and aircraft registered
in and/or flying the flag of the
United States, Mexico or Canada
marine installations including oil
rigs serviced from any jurisdiction
comprising part of the territory as
described above, military
installations wherever situated at
which armed forces of the United
States, Mexico or Canada are
stationed, and any other governmental
installations of the United States,
Mexico or Canada wherever situated
throughout the universe.

11EX-10.3

 

EXHIBIT 10.3

QA SERVICES AGREEMENT

     QA SERVICES AGREEMENT (the “Agreement”) dated as of December ___, 2007 between Infogrames
Entertainment SA (“IESA”), at 1 Place Verrazzano, 69252 Lyon cedex 09, France, Atari Interactive,
Inc. (“Atari Interactive”) and Humongous, Inc. (“Humongous” and collectively with IESA and Atari
Interactive, the “IESA Parties”) and Atari, Inc. (“Atari” and collectively with IESA, Atari
Interactive and Humongous, the “Parties”), at 417 Fifth Avenue, New York, NY 10016, and effective
on December ___, 2007 (the “Effective Date”).

WITNESSETH:

     WHEREAS, the Parties are affiliated entities that are active in the field of digital
entertainment and interactive games; and

     WHEREAS, Atari has agreed to directly or indirectly provide certain software game
quality-assurance related services to the IESA Parties.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein,
the parties hereto agree as follows:

ARTICLE I

SERVICES TO BE ROVIDED

     1.01. Performance of Services.

          (a) Subject to the terms and conditions set forth herein and on Schedule I hereto, as may be
amended from time to time (“Schedule I”), Atari, either directly or through engagement of third
party vendors (its “Vendors”), shall provide the IESA Parties with the services set forth on
Schedule I with respect to the Production Titles (as defined in Schedule I) (the “Services”). Atari
or IESA may at any time amend Schedule I with the prior written consent of the other party.

          (b) Except as specifically provided in Schedule I, Atari or its Vendors shall provide each of
the Services listed in Schedule I for a term commencing on the Effective Date and ending on March
31, 2008, unless earlier terminated by IESA and/or Atari in accordance with Section 3.01 hereof
(the “Services Period” or “Term.”).

          (c) Atari or its Vendors shall provide the Services promptly with that degree of skill,
attention and care that Atari exercises and has heretofore exercised with respect to furnishing
comparable services to itself and its affiliates. Atari shall be under no obligation to hire
additional Vendors or employees in order to provide the services. Notwithstanding the foregoing,
if, after the Effective Date, one or several Services Employees leave Atari or if, for any reason,
the Vendors can not provide the Services, Atari will promptly inform IESA and the parties will work
together in order to find a replacement solution enabling the execution of the Services.

          (d) Representatives of Atari and IESA, or IESA’s designee, shall meet at

Page 1 of 8

 

least on a monthly basis to review the Services. These meetings will take place in Atari’s
office in New York or via teleconference or video conference. These meetings will be arranged by
IESA and the costs of such meetings will be borne by IESA.

          (e) Unless otherwise specified in Schedule I, all employees of Atari providing the Services
hereunder to the IESA Parties during the Term (collectively, the “Services Employees”) and all
Vendors shall be deemed for all purposes (including compensation and employee benefits, as
applicable) to be employees or Vendors solely of Atari and not to be employees or Vendors of the
IESA Parties or to be independent contractors thereof. In performing their respective duties
hereunder, all such employees or Vendors of Atari shall be under the direction, control and
supervision of Atari and Atari shall have the sole right to exercise all authority with respect to
the employment (including termination of employment) (as applicable), retention of independent
contractor/Vendor relationship, assignment and compensation of such employees or Vendors. Atari
shall be solely responsible for (i) the acts and omissions of the Services Employees and (ii) any
breaches of this Agreement committed by any Services Employee, in connection with their provision
of the Services. During the Term, the IESA Parties shall not solicit the Services Employees, except
with the consent and cooperation of Atari.

     1.02. Outsourcing. The IESA Parties acknowledge that Atari currently outsources a
portion of its QA functionality to its Vendors and intends to continue to do so during the Term on
substantially similar conditions to the extent materially feasible.

     1.03. Billing and Payment for the Services.

          (a) IESA shall pay Atari, as the sole and exclusive compensation hereunder, for the Services,
a fee in the amount of the costs actually incurred by Atari in connection with providing the
Services (including all costs and fees payable to its Vendors), plus 10 percent (10%) of such
costs. In addition, IESA shall pay Atari the following amounts: (i) 50% of the aggregate amount
payable as accrued vacation to the Services Employees that work directly on IESA Party projects or
are otherwise general QA support staff (i.e., 2 employees) if and when such Services Employees are
severed, even if those Services Employees are severed following expiration of the Term; (ii) 100%
of the aggregate amount payable as retention bonuses to the Services Employees that work directly
on IESA Party projects; and (iii) 15% of the aggregate amount payable as retention bonuses to the
Services Employees that are general QA support staff.

          (b) Following the Effective Date, Atari shall on a quarterly basis, submit to IESA its billing
invoice in US Dollars (the “Services Invoice”) setting out itemized costs in connection with the
Services, together with the calculation of the 10% premium charge. Additional itemization and
further explanation and substantiation of charges shall be supplied to IESA upon its reasonably
request. Payment by IESA in respect of any such invoice shall be made within 30 days after the date
upon which such Services Invoice is sent to IESA.

          (c) IESA acknowledges that Atari currently provides, and is expected to provide certain
services to IESA and/or its affiliates upon the terms and conditions set forth in various services
agreements (as they may be amended or superseded from time to time). IESA

Page 2 of 8

 

and Atari expressly agree that each Party and its respective affiliates shall have the right
throughout the term of this Agreement to offset such payments as are owed under this Agreement
against payments due under any services agreements then in effect between two or more of the
Parties.

ARTICLE II

CONFIDENTIAL INFORMATION

     2.01. Confidential Information. Atari understands that its work for the IESA Parties
will involve access to and creation of confidential, proprietary and trade secret information and
materials of the IESA Parties (or their affiliates, licensors, suppliers, vendors or customers)
(collectively, “Confidential Information”). Confidential Information includes, without limitation,
any (a) information, ideas or materials of a technical or creative nature, such as research and
development results, designs and specifications, computer source and object code, patent
applications, and other materials and concepts relating to the IESA Party’s products, services,
processes, technology or other intellectual property rights received by Atari solely in the course
of Atari’s rendering of Services to the IESA Parties and relating to the Production Titles set
forth on Schedule I; (b) information, materials of a business nature, such as non-public financial
information; information regarding profits, costs, marketing, purchasing, sales, customers,
suppliers, and contract terms; product development plans; and marketing and sales plans and
forecasts received by Atari solely in the course of Atari’s rendering of Services to the IESA
Parties and relating to the Production Titles set forth on Schedule I; and (c) all personal
property, including, without limitation, all books, manuals, records, reports, notes, contracts,
lists, blueprints and other documents or materials, or copies thereof, received by Atari solely in
the course of Atari’s rendering of Services to the IESA Parties and relating to the Production
Titles set forth on Schedule I (with respect to each of (a), (b) and (c) above).

     2.02. Restrictions on Use and Disclosure. Atari understands that Confidential
Information is extremely valuable to the IESA Parties and their affiliates, licensors, suppliers,
vendors and customers. Accordingly, Atari agrees during the Term and for a period of 2 years
thereafter that it (a) shall hold all Confidential Information in confidence and trust for the
benefit of the IESA Parties; (b) shall not copy or use (or allow any of its employees, contractors
or agents to copy or use) any Confidential Information, except as may be necessary to perform the
Services; (c) shall use the Confidential Information only for the benefit of the IESA Parties (and
not for the benefit of Atari or any third party, except for the IESA Parties’ affiliates,
licensors, suppliers, vendors and customers to which the Confidential Information relates); and (d)
shall not disclose or otherwise make available any such Confidential Information to any third party
except as authorized in writing and in advance by IESA. All Confidential Information is and shall
remain the sole property of the respective IESA Party.

     2.03. Exclusions. The foregoing restrictions on use and disclosure shall not apply to
any Confidential Information to the extent Atari can prove such Confidential Information (a) is or
has become generally known to the public through no unlawful act of Atari; (b) was known to Atari
at the time of its disclosure by the IESA Parties; (c) was independently developed by Atari without
any use of the Confidential Information; (d) becomes known to Atari from a source other than an
IESA Party without breach of this Agreement; (e) such disclosure is approved in advance and in
writing by IESA; or (f) Atari is legally compelled to disclose such Confidential Information,
provided that Atari shall give advance notice of such compelled disclosure to IESA, and shall
cooperate with IESA in connection with any

Page 3 of 8

 

efforts to prevent or limit the scope of such disclosure and/or use of the Confidential
Information.

ARTICLE III

MISCELLANEOUS

     3.01. Termination.

          (a) IESA or Atari may terminate this Agreement upon written notice in the event of a material
breach by the other party of the terms of this Agreement and such breach is not cured within thirty
days of notice thereof.

          (b) This Agreement may be terminated by the mutual agreement of Atari and IESA.

     3.02. Warranties and Indemnification.

          (a) Atari covenants, represents and warrants that (i) it will render the Services in
compliance with all applicable laws and regulations; and (ii) it, shall use its best efforts to
provide the Services promptly, diligently and with at least that degree of skill, attention and
care that Atari exercises and has heretofore exercised with respect to furnishing comparable
services to its own business and assets subject to the provisions of Section 1.01(c) above.

          (b) Atari shall indemnify and hold harmless the IESA Parties and their affiliates, successors
and assigns (and its and their officers, directors, employees, sublicensees, customers and agents)
from and against any and all claims, losses, liabilities, damages, settlements, expenses and costs
(including, without limitation, attorneys’ fees and court costs) (collectively, “Damages”) which
arise out of or relate to any breach of Atari’s representations and warranties set forth above in
Section 3.02(a) and which arise out of the gross negligence or willful misconduct of Atari or its
Vendor.

          (c) Each of the IESA Parties hereby releases, indemnifies and agrees to hold harmless Atari
and its Vendors and their affiliates, successors and assigns (and its and their officers,
directors, employees, sublicensees, customers and agents) from and against any and all Damages
which arise out of the provision of the Services, other than such Damages which arise out of
Atari’s or its Vendor’s gross negligence or willful misconduct.

     3.03 Certain Agreements and Indemnities to Survive Termination of Agreement. The
obligations of the Parties under Article II hereof shall survive any termination of this Agreement
as shall IESA’s payment obligation under Section 1.03 with respect to Services rendered prior to
the termination date and Atari’s and the IESA Parties indemnity obligation under Sections 3.2(b)
and 3.02(c), respectively, and the Parties remedies obligation under Section 3.08 shall also
survive. All other obligations hereunder shall terminate as of the date of termination of this
Agreement in accordance with Section 3.01.

Page 4 of 8

 

     3.04 Governing Law. Jurisdiction This Agreement shall be interpreted under the laws of
the state of New York, and the parties submit to the exclusive jurisdiction of the courts of the
state and federal courts located within New York, New York without regard to its choice-of-law
rules.

     3.05 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO HE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     3.06 No Third Party Beneficiaries. No provision of this Agreement shall create any
third party beneficiary rights in any person or entity, including any employee or former employee
of the parties or any affiliate or associate thereof (including any beneficiary or dependent
thereof).

     3.07. Relationship of Parties. Nothing herein contained shall be deemed or construed
by the IESA Parties or Atari or for any other party as creating the relationship of principal and
agent or of partnership, joint employers or joint venture by the parties hereto.

     3.08. Remedies; Specific Performance. Without prejudice to any rights or remedies
otherwise available to any party hereto, the IESA Parties and Atari hereby acknowledge that damages
would be an inadequate remedy for any breach of the provisions of this Agreement by any of the IESA
Parties or Atari and agree that the obligations of any of the IESA Parties or Atari, as the case
may be, shall be specifically enforceable.

     3.09. Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly given (a) if personally delivered, when so delivered, (b) if mailed, five
business days after having been sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below, (c) if given by telex
or telecopier, once such notice or other communication is transmitted to the telex or telecopier
number specified below and the appropriate answer back or telephonic confirmation is received,
provided that such notice or other communication is promptly thereafter mailed in
accordance with the provisions of clause (b) above or (d) if sent through an overnight delivery
service in circumstances to which such service guarantees next day delivery, the day following
being so sent:

Page 5 of 8

 

if to any of the IESA Parties, to:

	 	 	 	 	 
	 	 	Infogrames Entertainment SA

1 Place Verrazzano

Lyon 69252 Lyon Cedex 09

France
	 
	 	 	 	 
	 

	 	Attention:
	 	Chief Operating Officer
	 

	 	Telephone:
	 	(+33) 437643764
	 

	 	Telecopy:
	 	(+33) 4 37 64 30 95
	 
	 	 	 	 
	 

	 	Attention:
	 	S.V.P Legal and Business Affairs
	 

	 	Telephone:
	 	(+33) 4 37 64 39 12
	 

	 	Telecopy:
	 	(+33) 437643095
	 
	 	 	 	 
	if to Atari, to:	 	 
	 
	 	 	 	 
	 	 	Atari, Inc.

417 Fifth Avenue

New York, New York 10016
	 
	 

	 	Attention:
	 	General Counsel

	 

	 	Telephone:
	 	(212) 726-6500
	 

	 	Telecopy:
	 	(212) 726-6590

Any party hereto may give any notice, request, demand, claim or other communication hereunder using
any other means (including ordinary mail or electronic mail), but no such notice, request, demand,
claim or other communication shall be deemed to have been duly given unless and until it actually
is received by the individual for whom it is intended. Any party hereto may change the address to
which notices, requests, demands, claims and other communications hereunder are to be delivered by
giving the other parties notice in the manner herein set forth.

[Signature Page Follows]

Page 6 of 8

 

     IN WITNESS WHEREOF, the parties to this Agreement have caused it to be duly executed by their
respective authorized representatives on the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	INFOGRAMES ENTERTAINMENT SA	 	 	 	ATARI, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	Name:

Title: 	 	Patrick Leleu 

Chairman and CEO
	 	 	 	Name:

Title:
	 	Curtis Solsvig

Chief Restructuring Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATARI INTERACTIVE, INC.	 	 	 	HUMONGOUS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Hastefort
	 	 	 	By:
	 	/s/ Hastefort	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

Title:	 	Hastefort

CEO
	 	 	 	Name:

Title:
	 	Hastefort

Chairman	 	 

Page 7 of 8

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