Service Agreement

SERVICE AGREEMENT
relating to


ACCLAIM ENTERTAINMENT LIMITED (1)


RODNEY PETER COUSENS (2)


DATE


26 February 1999


PARTIES


(1) ACCLAIM ENTERTAINMENT LIMITED (no 2616245) whose registered office is
at Moreau House 112 - 120 Brompton Road, Knightsbridge, London,
SW3 1JJ ("the Company")


(2) RODNEY PETER COUSENS of The Glebe House, Pettworth Road, Chiddingfold,
Godalming, Surrey, GU8 4US ("the Executive")


INTERPRETATION


(1) In this Agreement, unless the context otherwise requires, the
following expressions have the meanings set out below:


the Acclaim Board the directors for the time being of
Acclaim Entertainment Inc. present at a
duly convened meeting for the directors;


Acclaim Entertainment, Inc. a company incorporated under the laws of
Delaware and registered with IRS
Employment Identification Number
38-2698904;


Acclaim International the international division of the
Acclaim Group which represents the
business of Acclaim Entertainment, Inc.
outside the US;


the Acclaim Group Acclaim Entertainment, Inc. and its
subsidiaries engaged in the business of
selling and exploiting video and
computer games, including the Company;


the Appointment the employment of the Executive pursuant
to this Agreement;


the Board the directors for the time being of the
Company present at a duly convened and
quorate meeting of the directors or of a
committee of the directors duly
appointed for the purpose in question;


the Commencement Date 1 January 1998;


the Compensation Committee a committee of the Acclaim Board which
determines the annual salary, any
bonuses and other remuneration payable
to the Executive and other members of
the Acclaim Board and of which a
majority consists of non-executive
directors;


Confidential Information all information which may be imparted in
confidence or be of a confidential
nature relating to the business or
prospective business, current or
projected plans or internal affairs of
the Company or any Group Company and, in
particular, but not limited to all
Know-how, Marketing Information, trade
secrets, unpublished information
relating to the Company's or any Group
Company's intellectual property and any
other commercial, financial or technical
information relating to the business or
prospective business of the Company or
any Group Company or to any customer or
potential customer or supplier or
potential supplier, licensee, officer or
employee of the Company or any Group


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Company or to any member or person
interested in the share capital of the
Company or any Group Company. In this
definition "prospective business" means
business in respect of which the Company
or any Group Company is engaged in
negotiations with third parties;


Documents documents, disks, memory, notebooks,
tapes or any other medium, whether or
not eye-readable, on which information
(whether confidential or otherwise) may
from time to time be referred to,
written or recorded;


the ERA the Employment Rights Act 1996;


Group all companies being any of a subsidiary
or subsidiary undertaking of the Company
or a holding company or parent
undertaking of the Company or a
subsidiary or subsidiary undertaking of
any such holding company or parent
undertaking which company is engaged in
the sale and exploitation of video and
computer games;


Group Company any company within the Group and
references to the "Group Companies"
shall be construed accordingly;


Key Employee any employee of the Company or any Group
Company who is or was (in the period of
12 months prior to the Termination Date)
employed to the knowledge of the
Executive;


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(a) at management grade; or


(b) in a senior capacity; or


(c) in a capacity in which he has access
to or obtained Confidential
Information and in respect of whom
the Executive exercised control or
had managerial responsibility.


Know-how information (including without
limitation that comprised in formulae,
specifications, designs, drawings,
component lists, databases, software (or
pre-cursor documents), databases,
manuals, instructions and catalogues
held in whatever form relating to the
creation, production or supply of any
products or services by the Company or
any Group Company, or by or to any of
the suppliers, customers, partners or
joint ventures of such company;


Marketing Information information relating to the marketing
or sales of any products or services of
the Company or any Group Company,
including lists of customers' and
suppliers' names, addresses and
contacts, sales targets and statistics,
market share and pricing statistics,
marketing surveys, research and reports
and advertising and promotional
material; and


Termination Date the date of termination or expiration of
the Appointment.


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(2) The expressions "subsidiary" and "holding company" have the meanings
given to them by Sections 736 and 736A of the Companies Act 1985; the
expressions "parent undertaking" and "subsidiary undertaking" have the
meanings given to them by Sections 258, 259 and 260 of the Companies
Act 1985; and the expression "financial year" has the meaning given by
Section 223 of the Companies Act 1985.


(3) The provisions of Sections 324 and 328 of the Companies Act 1985 apply
in determining for the purpose of Clauses 8 and 9 whether the
Executive has an interest in any shares or other securities.


(4) References to Clauses, Parties and the Schedules are respectively to
Clauses of and the Parties and the Schedules to this Agreement.


(5) References to any enactment are to be construed as referring also to
any enactment or re-enactment thereof (whether before or after the
date hereof), and to any previous enactment which such enactment has
replaced (with or without amendment provided that the amendment does
not change the law as at the date hereof) and to any regulation or
order made thereunder.


(6) The clause headings are for ease of reference only and shall not
affect the interpretation of this Agreement.


OPERATIVE PROVISIONS


1 Job Title


1.1 The Company shall employ the Executive and the Executive shall serve
the Company as President and Chief Operating Officer of Acclaim
International or in such other capacity as the Board may reasonably
require.


1.2 The Executive shall be the third most senior employee within the Group
after the Chief Executive Officer and Co-Chairman of the Acclaim Board
and the Senior Executive Vice President & Co-Chairman of the Acclaim
Board and shall be remunerated commensurately with this position. The
Executive shall report directly to Greg Fischbach. Neither the Company
nor any Group Company shall appoint any other person to a position
more senior than, or equivalent in status to, that held


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by the Executive, or to act jointly with the Executive, without the
prior written consent of the Executive.


1.3 In the event that both Co-Chairmen of the Acclaim Board cease to be
employed by Acclaim Entertainment, Inc. the Executive may terminate
the Appointment by not less than six months' Notice in writing to the
Company to expire at any time and neither the Company nor any Group
Company shall have any claim for damages or otherwise against the
Executive in respect of the termination of the appointment under this
clause. The Executive will be notified by the Company as soon as
practicable and, in any event within two weeks, if both the
Co-Chairmen of the Acclaim Board shall for any reason cease to be
employed by Acclaim Entertainment, Inc. The Executive Shall exercise
his right to give notice under this Clause within three months of
being notified of the cessation of the employment of the Co-Chairmen
of the Acclaim Board or else he shall lose his entitlements under this
Clause.


2 Period of Employment


2.1 The Appointment shall be deemed to have commenced on the Commencement
Date and will continue until terminated in accordance with Clause 2.2
or Clause 11.


2.2 Either party may terminate this Agreement by giving to the other not
less than six months' prior written notice to expire at any time after
the third anniversary of the Commencement Date.


3 Duties


3.1 The Executive shall faithfully and diligently perform the duties of
President and Chief Operating Officer of Acclaim International. The
Executive shall be directly responsible for supervising and
co-ordinating the activities of the Group Companies within Acclaim
International and shall use his best efforts to facilitate the
generation of profits within those Group Companies. The Executive
shall also perform such additional or other duties consistent with his
position as President and Chief Operating Officer of Acclaim
International as may be reasonably assigned to or vested in him by the
Co-Chairman of the Acclaim Board. Subject to the approval of the
Acclaim Entertainment, Inc. shareholders, the Company shall procure
that the Executive is appointed as a director of the Acclaim Board,
following the appointment of an outside director.


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3.2 During the term of the Appointment, the Executive shall have (in
addition to his implied duty of fidelity and his duties as a director
at law) the following duties and obligations:


(a) at all times to use all reasonable endeavours in the
performance of the duties of the Appointment to promote the
interests and welfare and maintain the goodwill of the
Company and any other Group Company and not to do and to
exercise all reasonable endeavours to prevent there being
done anything which may be prejudicial or detrimental to the
Company or any Group Company;


(b) to devote the whole of his time and attention and the full
benefit of his knowledge, expertise and skills in the proper
performance of his duties (unless on holiday as permitted by
this Agreement or prevented by ill-health or accident or as
permitted by Clause 7.2);


(c) to report to the Co-Chairmen of Acclaim Entertainment, Inc.
and to give (in writing if so requested) to the Board, or to
such person(s) as it may direct, such information and
explanations regarding the affairs of the Company or any
other Group Company or matters relating to the Appointment
as the Board may require;


(d) to comply with any applicable code relating to dealings in
securities of the Company and with all lawful directions
from time to time given to him by or under the authority of
the Acclaim Board and, save as inconsistent with the express
terms of this Agreement, all applicable rules and
regulations from time to time laid down by the Company
concerning its employees;


(e) to comply with the provisions of Schedule 2 (Copyright and
Inventions); and


(f) to prepare budgets and projections for Acclaim International
for approval by the Chief Executive Officer and the Acclaim
Board and, if approved, to implement the same.


3.3 The Executive shall attend and work at any of the places of business
of the Company and/or the Group within the UK as the Board may from
time to time reasonably determine and shall travel to and work at such
places (whether within or outside the United Kingdom) in the manner
and on the


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occasions reasonably required from time to time by the Board. The
Executive may only be required by the Board to re-locate outside the
United Kingdom with his prior written consent. The Board shall give
the Executive reasonable notice of any requirement to re-locate and
the proposed terms of his employment outside the United Kingdom
including additional allowances and benefits payable to the Executive
and conditions relating to the re-patriation of the Executive to the
United Kingdom in the event of termination of the overseas
appointment. The expenses incurred by the Executive, his spouse and
dependents in complying with any requirements to re-locate shall be
reimbursed by the Company in accordance with its policy determined
from time to time for meeting such expenses.


3.4 The hours of work of the Executive are not fixed but are the usual
working hours of the Company and such additional hours as may be
reasonably necessary to enable him properly to discharge his duties.


3.5 The Company shall maintain for the Executive directors' and officers'
insurance in respect of those liabilites which he may incur in or
about the discharge of his office as a director or officer of the
Company or as a director or officer of any Group Company for which
such insurance is normally available.


4. Pay and Expenses


4.1 The Company shall pay to the Executive for the proper performance of
his duties under this Agreement a fixed salary ("Fixed Salary") at the
rate of 366,000 pounds per annum (or such higher rate as the Company
may from time to time notify in writing to the Executive).


4.2 The Fixed Salary of the Executive will:


(a) accrue from day to day and be payable by equal monthly
installments in arrears by not later than the last working
day of each month;


(b) notwithstanding anything to the contrary contained in the
Articles of Association of the Company or of any other Group
Company, be inclusive of any other fees or remuneration of
any description which the Executive might be entitled to
receive from


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the Company or any Group Company or other company or
association in which he holds office as a nominee or
representative of the Company or any Group Company (and the
Executive shall, at the discretion of the Board, either
waive his right to any such remuneration or account to the
Company for the same forthwith upon receipt); and


(c) be paid by credit transfer to the account nominated by the
Executive from time to time.


4.3 On each anniversary of the Commencement Data the Fixed Salary shall be
increased by a minimum amount equal to ten per cent of the Fixed
salary at the rate payable on such anniversary.


4.4 The Executive hereby authorizes the Company to deduct from any
remuneration accrued and due to him under the terms of this Agreement
(whether or not actually paid during the appointment) or from any pay
in lieu of notice:


(a) any overpayment of salary or expenses or payment made to the
Executive by mistake or through any misrepresentation;


(b) any debt arising from terms agreed between the Executive and
the Company owed by the Executive to the Company or any
Group Company;


(c) any other sum or sums which the Executive has authorised
pursuant to Section 13 of the ERA; and


(d) any tax or Social Security contributions required by law to
be made in respect of remuneration or any other monies
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