UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
ATARI CORPORATION
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
046515102
(CUSIP Number)
Peter R. Haje, Esq., General Counsel
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
(212) 484-8000
(Name, Address and Telephone Number of Person Authorized to Receive Notice
and Communications)
March 24, 1994
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box / /.
Check the following box if a fee is being paid with the statement &. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for the other parties to
whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
<PAGE>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TIME WARNER INC.
IRS NO. 13-1388520
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a / /
b / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,500,000
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 14,270,000 (See Item 5)
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,500,000
10 SHARED DISPOSITIVE POWER
14,270,000 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
15,770,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 26.8%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WARNER COMMUNICATIONS INC.
IRS NO. 13-2696809
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a / / b / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
NOT APPLICABLE
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 14,720,000 (See Item 5)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 10 SHARED DISPOSITIVE POWER
14,270,000 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON
14,270,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 24.3%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
The Schedule 13D of Time Warner Inc., a Delaware corporation
("Time Warner") and Warner Communications Inc., a Delaware corporation
("WCI") (collectively, the "Reporting Persons"), relating to the Common
Stock of Atari Corporation is hereby amended and restated in its
entirely as set forth below. Pursuant to Rule 13D-1(f) under the
Securities Exchange Act of 1934, the Reporting Persons have agreed to
file one statement with respect to their ownership of Common Stock of
the Issuer. The joint Schedule 13D of the Reporting Persons, as
amended and restated, is hereinafter referred to as the "Statement".
Item 1. Security and Issuer.
The Statement relates to the Common Stock, $.01 par value
("Atari Common Stock"), of Atari Corporation ("Atari"), a Nevada
corporation, whose principal executive offices are located at 1196
Borregas Avenue, Sunnyvale, California 94086.
Item 2. Identity and Background.
This Statement is being filed by Time Warner Inc. ("Time
Warner"), a Delaware corporation, having its principal executive
offices at 75 Rockefeller Plaza, New York, New York 10019 and Warner
Communications Inc. ("WCI"), a Delaware corporation, having its
principal office at 75 Rockefeller Plaza, New York, New York 10019.
WCI is a direct wholly owned subsidiary of Time Warner.
Time Warner is the largest media and entertainment company
in the world. Its businesses are carried on in three principal groups:
Publishing, Music and Entertainment. The Publishing group consists
principally of the publication and distribution of magazines and books;
the Music group consists principally of the production and distribution
of recorded music and the ownership and administration of music
copyrights; and the Entertainment group consists principally of the
production and distribution of motion pictures and television
programming, the distribution of video cassettes, the ownership and
operation of retail stores and theme parks, the production and
distribution of pay television and cable programming, and the operation
of cable television systems. These businesses are conducted throughout
the world through numerous wholly owned, and in certain cases less than
wholly owned, subsidiaries and affiliates. Time Warner Entertainment
Company, L.P. ("TWE"), a limited partnership conducts substantially all
of the Entertainment businesses of Time Warner. Subsidiaries of Time
Warner are the general partners of TWE (the "TW Partners") and
collectively own a 63.27% pro rata priority capital and residual equity
interest in TWE, a subsidiary of US WEST holds 25.51%, and subsidiaries
of ITOCHU Corporation and Toshiba Corporation hold the remainder.
The business of WCI (other than its interest in TWE) primarily
consists of substantially all of the vertically-integrated
worldwide recorded music and music publishing business of Time Warner
under the umbrella name Warner Music Group.
The name, business address, present principal occupation or
employment (and the name, principal business and address of any
corporation or other organization in which such employment is
conducted) of each director and executive officer of Time Warner and
WCI is set forth in Annexes A and B hereto and is incorporated herein
by reference.
None of the Reporting Persons nor, to the best knowledge of
the Reporting Persons, any of the persons listed in Annexes A or B, has
been convicted during the last five years in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which any such corporation or person was or
is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any violation with respect
to such laws.
Each of the persons listed in Annexes A and B hereto is a
United States citizen.
Item 3. Source and Amount or Funds or Other Consideration.
In July 1984, Atari acquired from WCI and certain
associated entities of WCI (collectively sometimes referred to
hereinafter as "WCI"), certain assets comprising the home computer and
home video game business of WCI, and assumed certain related
obligations and liabilities.
Between July 1984 and June 30, 1986, WCI advanced or
otherwise funded to Atari approximately $24.7 million that, to WCI's
knowledge, was used to satisfy certain liabilities assumed in the 1984
asset acquisition.
The consideration given by Atari in the 1984 asset
acquisition was subject to adjustment based upon Atari's and WCI's
subsequent evaluation of the assets acquired and the related
obligations and liabilities. In August 1986, Atari and WCI completed
that evaluation and, pursuant to a Memorandum of Agreement dated as of
August 29, 1986 (the "1986 Agreement"), agreed that, in consideration
for: the net assets Atari acquired in the 1984 transaction; accrued
interest on the purchase obligation at 17%; and the repayment of WCI's
$24.7 million advanced to Atari, including accrued interest thereon at
10.5%, Atari would issue to WCI 7,100,000 shares of Atari Common Stock,
and would pay to WCI approximately $36.1 million, upon consummation of
a public offering of Atari Common Stock (the "Public Offering"). In
addition, all other securities held by WCI, on the one hand, and Atari,
on the other hand, were canceled in connection with this transaction.
The Atari Public Offering was consummated on November 17,
1986, and WCI thereupon beneficially acquired 7,100,000 shares of Atari
Common Stock and received approximately $36.1 million.
On June 19, 1987, a 2-for-1 split of Atari Common Stock was
effected in the form of a 100% common stock dividend distributed to all
Atari shareholders.
On October 17, 1988 and October 18, 1988, the associated
entities of WCI (comprised of AIL Holdings Limited, AIL Ireland
Limited, Atari International Hong Kong Ltd. ("AIHK"), WEA Musik Neue
Medien and Elektronik GmbH ("WEA Musik") and Atari Holdings, Inc.,
formerly known as Atari, Inc.) declared a dividend to WCI of 14,200,000
shares of Atari Common Stock, which shares were to be transferred as
soon as practicable. Thereafter, on December 13, 1988, WCI contributed
the 14,200,000 shares of Common Stock of Atari held by it to Warner
Communications Investors, Inc., a Delaware corporation and wholly owned
subsidiary ("Investors").
Subsequently said shares held by Investors were contributed
to TW Investment Corp., a Delaware corporation and a wholly-owned
indirect subsidiary of WCI. As a result of the merger of TW Investment
Corp. with and into WCI on June 29, 1992, the 14,200,000 shares of
Atari Common Stock are now held by WCI.
On March 24, 1994 Time Warner and Atari entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to
which Time Warner or a wholly-owned subsidiary of Time Warner will
acquire 1,500,000 shares of Atari Common Stock at $8.50 per share for
an aggregate of $12,750,000, subject to certain conditions. Under the
Stock Purchase Agreement, Atari has agreed to issue Time Warner up to
an additional 150,000 shares of Atari Common Stock upon the occurrence
of certain events. In addition, the Stock Purchase Agreement grants
Time Warner an option to purchase up to 1,500,000 shares of Atari
Common Stock upon the occurrence of certain events prior to October 1,
1994. The consideration for all the purchases will be from working
capital of Time Warner or in the event the shares are acquired by a
wholly-owned subsidiary, from the working capital of such subsidiary.
Concurrently with the execution and delivery of the Stock
Purchase Agreement, Atari and Atari Games Corporation, a Delaware
corporation and majority-owned indirect subsidiary of Time Warner
("Games") entered into a Stock Purchase Agreement (the "Games Stock
Purchase Agreement") pursuant to which Games will acquire 70,000 shares
of Atari Common Stock in exchange for the forgiveness of certain
royalty obligations owed by Atari to Games pursuant to certain software
license agreements.
Concurrently with the execution of Stock Purchase Agreement
and the Games Stock Purchase Agreement, Atari Games and Atari
Corporation settled certain pending patent, copyright and antitrust
litigation with Nintendo of America Inc.
The Stock Purchase Agreement and the Games Stock Purchase
Agreement are hereinafter referred to as the "Transactions".
Item 4. Purpose of Transaction.
Upon the consummation of the Transactions, Time Warner will
beneficially hold an aggregate of 15,770,000 shares of Atari Common
Stock. 14,200,000 of the shares beneficially held by Time Warner are
held in the name of WCI. Games will hold 70,000 shares and Time Warner
or a wholly-owned subsidiary will have direct ownership of 1,500,000
shares. All of such shares are to be held for the purpose of
investment.
Time Warner, WCI and Games intend to review and evaluate
their investment in Atari from time to time. On the basis of such
review and evaluation, Time Warner, WCI and Games may acquire
additional Atari securities from time to time in market transactions or
otherwise or may dispose of some or all of their holdings of Atari
securities from time to time in market transactions or otherwise.
Neither Time Warner, WCI or Games has any current plans or
proposals that relate to or would result in (i) the acquisition or
disposition of securities of Atari (except as provided in the Stock
Purchase Agreement as described in Items 3 and 6 herein); (ii) an
extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving Atari or any of its subsidiaries; (iii) a
sale or transfer of a material amount of assets of Atari or any of its
subsidiaries; (iv) any change in the present board of directors or
management of Atari, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies on the
board; (v) any material change in the present capitalization or
dividend policy of Atari; (vi) any other material change in Atari's
business or corporate structure; (vii) changes in Atari's charter, by-
laws or instruments corresponding thereto or other actions which may
impede the acquisition of control of Atari by any person; (viii)
causing a class of securities of Atari to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association; (ix) causing a class of equity securities of Atari to
become eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any
action similar to any of those enumerated in clauses (i) through (ix)
of this sentence.
Item 5. Interest in Securities of the Issuer.
On October 17, 1988, each of AIHK, AIL Ireland Limited, AIL
Holdings Limited and WEA Musik approved the transfer of the 14,200,000
shares of Atari Common Stock to Atari Holdings, Inc. On October 18,
1988, Atari Holdings, Inc. declared a dividend of the 14,200,000 shares
of Atari Common Stock to its parent WCI.
On December 13, 1988, WCI contributed the 14,200,000 shares
of Atari Common Stock held by it to Investors, a Delaware corporation
and wholly owned subsidiary of WCI. The subsequent transfer of
ownership of the shares of Atari Common Stock is fully set forth in
Item 3 herein.
On July 24, 1989, pursuant to a tender offer, Time Warner
acquired a majority of the outstanding stock of WCI. On January 10,
1990, a wholly owned subsidiary of Time Warner merged with and into
WCI, which thereby become a wholly owned subsidiary of Time Warner. As
a result Time Warner is deemed to have shared power to direct the
voting and the disposition of the 14,200,000 shares of Atari Common
Stock held by WCI.
According to Atari, at December 31, 1993, there were
outstanding on such date 57,214,587 shares of Atari Common Stock. Upon
the issuance of 1,500,000 and 70,000 shares of Atari Common Stock to
Time Warner and Games, respectively, there will be approximately
58,784,587 shares of Atari Common Stock outstanding. The 15,770,000
shares of Atari Common Stock beneficially owned by Time Warner will
constitute approximately 26.8% of the outstanding Atari Common Stock.
The 14,200,000 and 70,000 shares of Atari Common Stock held by WCI and
Games will constitute, respectively, 24.1% and 0.12% of the outstanding
Atari Common Stock.
Time Warner or a wholly-owned subsidiary will have the sole
power to vote and subject to the restrictions as set forth in Item 6
hereto, the sole power to dispose of the 1,500,000 shares of Atari
Common Stock to be acquired pursuant to the Stock Purchase Agreement.
Time Warner and WCI have the sole power to vote and, subject to the
restrictions described in Item 6, the sole power to dispose of the
14,200,000 shares of Atari Common Stock registered in the name of WCI
and owned beneficially by Time Warner. Time Warner, WCI and Games have
the sole power to vote and subject to the restrictions as set forth in
Item 6 hereto, the power to dispose of the 70,000 shares of Atari
Common Stock to be acquired by Games pursuant to the Games Stock
Purchase Agreement and owned beneficially by WCI and Time Warner.
Neither Time Warner, WCI or Games is aware of any
beneficial ownership of, or any transaction within 60 days before the
filing of this Statement on Schedule 13D in, any shares of Atari Common
Stock by Time Warner, WCI, Games or any person listed on Annex A or
Annex B hereto.
Items (d) and (e) are not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
In connection with the 1984 asset acquisition, Atari (then
known as Tramel Technology, Ltd.), Atari, Inc. (then a subsidiary of
WCI) and Jack Tramiel, Chairman of the Board and Chief Executive
Officer of Atari, entered into an Agreement dated July 1, 1984, which
agreement, as modified by the Memorandum of Agreement dated as of
August 29, 1986 (hereinafter referred to as the "Securityholders
Agreement"). Pursuant to the Securityholders Agreement, WCI, Atari,
Inc. and/or their transferees were granted certain rights and are
subject to certain obligations with respect to the securities of Atari.
Pursuant to a Letter Agreement dated March 24, 1994 (the "Letter
Agreement"), Time Warner, Games and Atari agreed that the shares of
Atari Common Stock to be acquired by Time Warner and Games shall have
the same registration rights afforded to WCI under the Securityholders
Agreement (referred to in the Letter Agreement as the "Tramel
Agreement"). Furthermore, Atari shall have the same obligations to
Time Warner and Games as Atari has to WCI under the Securityholders
Agreement.
The principal terms of the Securityholders Agreement as it
relates to registration rights of the shares of Atari Common Stock held
by Time Warner, WCI or Games (hereinafter referred to as the "Parties")
are set forth below. The following discussion is qualified in its
entirety by reference to the Securityholders Agreement and the 1986
Memorandum of Agreement previously filed as Exhibits to the original
Schedule 13D.
At their own expense, the Parties may from time to time
request Atari to register under the Securities Act of 1933 the proposed
sale by it of the 15,770,000 shares of Atari Common Stock pursuant to
an underwritten public offering subject to the following conditions:
(i) requests for registration shall not be made more
frequently than once every twelve months; and
(ii) no more than five such requests in the aggregate shall
be made;
(iii) no such request shall be made without the
consent of Atari unless the shares of Atari Common Stock to which it
applies represents either 5% or more of the total outstanding voting
power of Atari or all of the shares of Atari Common Stock beneficially
owned by the Parties (and all persons who may have acquired shares of
Atari Common Stock from the Parties).
The Parties are also entitled to include the shares of
Atari Common Stock beneficially owned in any registration statement
filed by Atari subsequent to the Public Offering, unless such
registration statement is (a) a registration of any employee stock
ownership, stock option, stock purchase or other employee incentive
plan or arrangement adopted in the ordinary course of business, or (b)
a registration of securities to be issued in exchange for securities or
assets of, or in connection with a merger or consolidation with,
another corporation. All costs and expenses incurred in connection
with such registration statements (except underwriting commissions and
discounts and fees and disbursements of any separate counsel and any
other expenses directly attributable to such shares) shall be borne by
Atari.
Pursuant to the terms of the Transactions, consummation of
the acquisition of the shares of Atari Common Stock is subject to the
expiration of the waiting period under the Hart Scott Rodino Antitrust
Notification Act, including any extension thereof and the approval from
the American Stock Exchange for the listing of the 1,570,000 shares of
Atari Common Stock to be issued pursuant to these agreements.
Except as described in this Item 6, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) on
the part of Time Warner, WCI or Games, or the best of their knowledge,
on the part of their respective officers or directors or between such
persons and any persons with respect to the securities of Atari.
Item 7. Materials to be filed as Exhibits.
Exhibit 1. Agreement between Time Warner Inc. and Warner
Communications Inc. with respect to joint filing of the
Restated Statement on Schedule 13D.
Exhibit 2. Stock Purchase Agreement as of March 24, 1994 between
Atari Corporation and Time Warner Inc.
Exhibit 3. Stock Purchase Agreement as of March 24, 1994 between
Atari Corporation and Atari Games Corporation
Exhibit 4. Registration Rights Letter Agreement dated
March 24, 1994 among Time Warner Inc., Atari Games
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the knowledge
and belief of the undersigned, the undersigned certify that the
information set forth in this statement is true, complete and correct.
Date: March 28, 1994 TIME WARNER INC.
By /s/ Peter R. Haje
Name: Peter R. Haje
Title: Executive Vice Preside
WARNER COMMUNICATIONS INC.
By /s/ Peter R. Haje
Name: Peter R. Haje
Title: Executive Vice President
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
Exhibit 1. Agreement between Time Warner Inc. and Warner *
Communications Inc. with respect to joint filing of the
Restated Statement on Schedule 13D.
Exhibit 2. Stock Purchase Agreement as of March 24, 1994 between *
Atari Corporation and Time Warner Inc.
Exhibit 3. Stock Purchase Agreement as of March 24, 1994 between *
Atari Corporation and Atari Games Corporation
Exhibit 4. Registration Rights Letter Agreement dated *
March 24, 1994 among Time Warner Inc., Atari Games
Corporation and Atari Corporation.
*Incorporated by Reference
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
Time Warner Inc. and Warner Communications Inc. each hereby
agrees in accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended, that the Restated Statement on Schedule 13D
filed herewith and any amendments thereto relating to the acquisition
of shares of Common Stock, par value $0.01 per share of Atari
Corporation, is filed jointly on behalf of each such person.
Dated: March 28, 1994 TIME WARNER INC.
By /s/ Peter R. Haje
Name: Peter R. Haje
Title: Executive Vice President
WARNER COMMUNICATIONS INC.
By /s/ Peter R. Haje
Name: Peter R. Haje
Title: Executive Vice President
<PAGE>
ANNEX A
The following is a list of the directors and executive officers
of Time Warner Inc. ("Time Warner"), setting forth the business address
and present principal occupation or employment (and the name, principal
business and address of any corporation or organization in which such
employment is conducted) of each such person. To the best knowledge of
Time Warner, each person is a citizen of the United States of America.
Principal Occupation or
Name Office Employment and Address
Merv Adelson Director Chairman,
East-West Capital Associates
1111 Santa Monica Blvd.
Los Angeles, CA 90025
(private investment company)
Timothy A. Boggs Senior Vice Senior Vice President
President Time Warner*
800 Connecticut Avenue, NW
Suite 800
Washington, DC 20006
Lawrence B. Director Partner,
Buttenwieser Rosenman & Colin
575 Madison Avenue
New York, NY 10022
(attorney)
Hugh F. Director Partner,
Culverhouse Culverhouse, Botts & Story
1408 North West Shore Blvd.
Tampa, FL 33607
(attorney)
Edward S. Director Chairman,
Finkelstein Finkelstein
Associates Inc.
712 Fifth Avenue
New York, NY 10019
(consulting)
Beverly Sills Director Chairman-Elect, Lincoln
Greenough Center for the Performing Arts
211 Central Park West
New York, NY 10024
(entertainment)
David R. Haas Senior Vice Senior Vice President
President and and Controller, Time Warner*
Controller
Peter R. Haje Executive Vice Executive Vice President,
President, Secretary and General Counsel,
Secretary and Time Warner*
General Counsel
Carla A. Hills Director Chairman and Chief Executive
Officer, Hills & Company
1200 Nineteenth Street, NW
Washington, D.C. 20036
(international trade
consultants)
Geoffrey W. Holmes Senior Vice Senior Vice President,
President Time Warner*
Tod R. Hullin Senior Vice Senior Vice President,
President Time Warner*
David T. Kearns Director Senior University Fellow,
Harvard University,
Graduate School of Education
Appian Way
Gutman Library
Cambridge, MA 02138
Gerald M. Levin Director, Chairman, Chief Executive
Chairman, Officer and President,
Chief Executive Time Warner*
Officer and
President
Philip R. Senior Vice Senior Vice President,
Lochner, Jr. President Time Warner*
Henry Luce, III Director Chairman and Chief Executive
Officer, The Henry Luce
Foundation, Inc.
720 Fifth Avenue
New York, NY 10019
(private foundation)
Reuben Mark Director Chairman and Chief Executive
Officer,
Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022
J. Richard Munro Director Chairman of the Executive
Committee, Time Warner*
Richard D. Parsons Director Chairman and Chief Executive
Officer,
Dime Savings Bank
589 Fifth Avenue
New York, NY 10017
(banking)
Donald S. Perkins Director Former Chairman,
Jewel Companies Inc.
Suite 2700
One First National Plaza
Chicago, IL 60603
(retailing)
Raymond S. Troubh Director Financial Consultant and
Director of Various Companies,
10 Rockefeller Plaza
New York, NY 10020
(financial consultant)
Bert W. Wasserman Executive Executive Vice President
Vice and Chief Financial Officer,
President Time Warner*
and Chief
Financial Officer
Francis T. Director Former Commissioner of
Vincent, Jr. Major League Baseball,
Culbro Corporation
387 Park Avenue South
New York, NY 10016
* The business address of Time Warner is 75 Rockefeller Plaza, New York,
New York 10019
<PAGE>
ANNEX B
Directors and Executive Officers of
Warner Communications Inc.
Name Office Principal Occupation or
Employment and Address
David R. Haas Senior Vice Senior Vice President and
President Controller, Time Warner*
Peter R. Haje Director and Executive Vice President,
Executive Vice Secretary and General Counsel,
President Time Warner*
Geoffrey W. Holmes Director Senior Vice President,
Time Warner*
Tod R. Hullin Director Senior Vice President,
Time Warner*
Deane F. Johnson Office of the Office of the President,
President Warner Communications Inc.,
1271 Avenue of the Americas
New York, NY 10020
Gerald M. Levin Director, Chairman, President and Chief
President and Executive Officer,
Chief Executive Time Warner*
Officer
Bert W. Wasserman Director and Executive Vice President and
Executive Vice Chief Financial Officer,
President Time Warner*
* The business address of Time Warner is 75 Rockefeller Plaza, New York
New York 10019
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") made and entered
into as of the 24th day of March, 1994, by and between ATARI CORPORATION,
a Nevada corporation (the "Company"), and TIME WARNER INC., a Delaware
corporation (the "Purchaser").
The Company desires to sell and Purchaser desires to purchase
an aggregate of 1,500,000 shares (the "Shares") of the Common Stock, par
e "Purchaser").
The Company desires to sell and Purchaser desires to purchase
an aggregate of 1,500,000 shares (the "Shares") of the Common Stock, par
value $.01 per share (the "Common Stock") of the Company, subject to the
conditions and for the consideration set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing
premises, the mutual promises, agreements and covenants hereinafter set
forth, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Purchase and Sale of the Shares. Subject to the terms
and conditions of this Agreement, at the Closing (as hereinafter
defined), the Company shall sell and deliver the Shares to the Purchaser,
and the Purchaser shall purchase the Shares from the Company at a
purchase price of $8.50 per Share (the aggregate consideration for the
Shares hereinafter referred to as the "Share Purchase Price").
2. The Closing.
(a) The closing of the sale of the Shares (the
"Closing") will, subject to the satisfaction or waiver of all conditions
to the parties' obligations hereunder, take place on such date (the
"Closing Date") as shall be five business days following the expiration
of any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and regulations promulgated
thereunder (the "HSR Act"), or such other date as the parties shall
mutually agree.
(b) At the Closing, the Company will deliver to the
Purchaser or its assignee(s) a certificate or certificates evidencing the
Shares in form and substance reasonably acceptable to the Purchaser or
its assignee(s), against payment of the Share Purchase Price to the
Company as specified below.
(c) At the Closing, the Purchaser shall pay the Share
Purchase Price to the Company in immediately available funds, such funds
to be delivered by wire transfer to an account specified by the Company
to the Purchaser on the Closing Date.
3. Representations, Warranties and Agreements of the
Purchaser. The Purchaser hereby represents and warrants to the Company
and agrees with the Company as follows:
(a) Due Authorization. This Agreement, and the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Purchaser. This Agreement
has been duly executed and delivered by the Purchaser, and constitutes
the legal, valid and binding obligation of the Purchaser, enforceable in
accordance with its terms.
(b) No Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby, by the Purchaser will (i) violate or result in any violation of
or be in conflict with or constitute a default under any term of the
Certificate of Incorporation or By-laws of the Purchaser or of any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Purchaser, or (ii) require that
the Purchaser obtain the consent or authorization of or waiver by or make
a filing with any governmental, administrative or self-regulatory body or
agency or any other person or entity, other than any such consent,
authorization, waiver or filing which has been duly and validly obtained
or made prior to the date hereof, other than a filing under the HSR Act
or (iii) require the satisfaction or termination of any waiting period
under any statute, rule or governmental regulation applicable to the
Purchaser, other than compliance with the HSR Act.
(c) Investment Representation. The purchase of the
Shares and any "Additional Shares" (as defined in Section 5 hereof) by
the Purchaser, will be for investment purposes only and for the sole
account of the Purchaser and not with a view to the redistribution or
resale of any or all of the Shares or Additional Shares. None of the
Shares or Additional Shares acquired pursuant to this Agreement will be
transferred except in a transaction registered or exempt from
registration under the Securities Act of 1933, as amended (the "'33
Act"). The Purchaser acknowledges that the certificates for the Shares,
and the Additional Shares shall bear a legend with respect to the
transfer or resale of such securities substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and such shares
may not be sold or transferred unless such sale or transfer will be
effected in accordance with the registration requirements of the
Securities Act of 1933, as at the time amended, or in conformity
with the limitations of Rule 144 promulgated under such Act or in
conformity with any other exemption from the registration
requirements of such Act which may then be available with respect
thereto".
4. Representations, Warranties and Agreements of the
Company. The Company hereby represents and warrants to the Purchaser and
agrees with the Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Nevada and is duly qualified to do business and in good standing
as a foreign corporation in the jurisdictions where it is required to
qualify to conduct its business as presently conducted. The Company has
the requisite corporate power and authority to own its property and to
carry on its business as now conducted.
(b) Due Authorization. The Company has full power
and authority to execute and deliver this Agreement and, as of the
Closing, will have full power and authority to perform this Agreement and
the transactions contemplated hereby including, without limitation, the
power and authority to issue and sell the Shares, and the Additional
Shares. The Company has duly taken all corporate and other actions
necessary to authorize the execution and delivery of this Agreement and,
as of the Closing, will have duly taken all corporate and other actions
necessary to authorize the performance of this Agreement, including,
without limitation, all actions necessary to authorize the issuance and
sale of the Shares and the Additional Shares. This Agreement has been
duly executed and delivered by the Company and this Agreement constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms.
(c) No Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby, by the Company will (i) violate or result in any violation of or
be in conflict with or constitute a default under any term of the
Certificate of Incorporation or By-laws of the Company or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to the Company, (ii) require that the Company
obtain the consent or authorization of or waiver by or make a filing with
any governmental, administrative or self-regulatory body or agency or any
other person or entity, other than any such consent, authorization,
waiver or filing which has been duly and validly obtained or made prior
to the date hereof, other than a filing under the HSR Act or (iii)
require the satisfaction or termination of any waiting period under any
statute, rule or governmental regulation applicable to the Company, other
than compliance with the HSR Act.
(d) Capitalization, Issuance of Shares. As of
December 31, 1993, the Company's authorized capital stock consists of
100,000,000 shares of Common Stock, par value $.01 per share, of which
57,214,587 shares were issued and outstanding, all of which are duly
authorized and have been validly issued and are fully paid and non-
assessable. Except as shown on Exhibit 4(d), the Company has not issued
any options, warrants or convertible or exchangeable securities and is
not a party to any other agreements, which require, or upon the passage
of time, the payment of money or the occurrence of any other event may
require, the Company to issue or sell any of its Common Stock. Upon
delivery to the Purchaser of the certificates evidencing the Shares
against receipt of the Share Purchase Price, the Shares will have been
duly authorized, validly issued, fully paid and nonassessable and will be
free of preemptive or similar rights and no personal liability will
attach to the ownership thereof. The Additional Shares when issued by
the Company, pursuant to Section 5 hereof, will have been duly
authorized, validly issued, fully paid and nonassessable and will be free
of preemptive or similar rights and no personal liability will attach to
the ownership thereof.
(e) On or before the Closing Date, the Company will
arrange for the listing or supplemental listing, as appropriate, on the
American Stock Exchange of (i) the Shares to be issued to the Purchaser
hereunder and (ii) all of the Additional Shares issuable pursuant to
Section 5 hereof, subject to official notification from the Company's
transfer agent regarding such issuance.
(f) SEC Reports and Financial Statements. The
Company has furnished to Purchaser copies of the following reports and
financial statements:
(i) the Annual Reports on Form 10-K of the
Company for the fiscal years ended December 31, 1991 and 1992;
(ii) the Quarterly Reports on Form 10-Q of
the Company for each of the three fiscal quarters ended during
1993; and
(iii) any Current Reports of the Company on
Form 8-K filed after January 1, 1993.
The Company has filed with the Securities and Exchange
Commission ("SEC") all reports ("SEC Reports") required to be filed by it
under the Securities Exchange Act of 1934, as amended (the "'34 Act").
All of the SEC Reports filed by the Company comply in all material
respects with the requirements of the '34 Act. None of the SEC Reports
contains, as of the respective dates thereof, any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made. The financial
statements referred to above and all financial statements contained in
the SEC Reports have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
indicated ("GAAP"). Each balance sheet presents fairly in accordance
with GAAP the consolidated financial position of the Company as at the
date of such balance sheet, and each statement of operations and of cash
flows presents fairly in accordance with GAAP the consolidated results of
operations and the consolidated cash flows of the Company for the fiscal
periods then ended.
(g) Additional Reports. No event has occurred
requiring, or which with the passage of time will require, the filing of
an SEC Report that has not heretofore been filed and furnished to the
Purchaser.
5. Contingent Issuance of Additional Shares.
(a) If, after the date hereof, and prior to October
1, 1994, the Company shall issue or enter into a definitive agreement to
issue any shares of Common Stock, at a price of less than $7.50 per
share, or any Securities convertible into or exercisable for shares of
Common Stock, at a conversion or exercise price of less than $7.50 per
share, in a "Qualified Issuance" (as defined below), it shall issue to
the Purchaser (or its assignee), provided that, the Closing hereunder
shall have been completed, that number of additional shares of Common
Stock that shall be equal to the amount by which (i) the quotient of
dividing the Share Purchase Price by the lowest per share sale price (the
"Low Price") in any Qualified Issuance (treating the conversion or
exercise price of any security convertible into or exercisable for Common
Stock as the sale price thereof for this purpose), exceeds (ii) 1,700,000
(such number being the number of shares issuable for the Share Purchase
Price, if the purchase price per share had been $7.50); provided,
however, that the number of shares issuable under this Section 5 shall
not exceed 150,000 shares. All of the foregoing amounts, other than the
Share Purchase Price, shall be subject to proportionate adjustment if, at
any time after the date hereof, and prior to the issuance of shares under
this Section 5, the Company shall have fixed a record date for the
payment of a dividend in shares of its Common Stock or for the
subdivision or combination of its outstanding Common Stock into a greater
or smaller number of shares or for the reclassification or other change
in the outstanding shares of Common Stock. The number of additional
shares of Common Stock, if any, that shall become issuable pursuant to
this Section 5 are referred to in this Agreement as the "Additional
Shares." As used in this Agreement, the term "Qualified Issuance" means
any issuance, after the date hereof and prior to October 1, 1994 (or
prior to January 1, 1995 if pursuant to a definitive agreement entered
into after the date hereof but before October 1, 1994), of shares of
Common Stock or securities exchangeable for or convertible into Common
Stock other than (x) shares of Common Stock issued to current or former
employees of the Company pursuant to a bona fide employee benefit plan
approved or adopted by the Board of Directors of the Company prior to
January 1, 1994 or issued pursuant to the exercise of conversion or
exchange rights of convertible or exchangeable securities of the Company
outstanding prior to January 1, 1994 and disclosed to the Purchaser
pursuant to Schedules to this Agreement and (y) any issuance in a single
transaction or series of related transactions, of less than 150,000
shares of Common Stock. The Company shall, not later than five business
days after the Low Price shall be determinable, deliver to the Purchaser
a certificate signed by the Chief Executive Officer or a Senior Vice
President of the Company, disclosing the Low Price and its computation
and the computation of the number of Additional Shares based thereon.
(b) Any Additional Shares that shall become issuable
pursuant to Section 5(a) shall be issued to the Purchaser or its assignee
not later than ten business days after October 1, 1994, if the Low
Price shall be determinable by such date and, otherwise, not later than
January 6, 1995.
(c) If after the date hereof and prior to October 1,
1994, the Company shall enter into a definitive agreement to issue any
shares of its Common Stock (a "Definitive Agreement") in any transaction
other than one within the scope of clause (x) or clause (y) of Section
5(a), the Company will promptly notify the Purchaser of such event in
writing and provide the Purchaser with a copy of such Definitive
Agreement. The Purchaser will then have the irrevocable option (the
"Purchase Option") to purchase up to 1,500,000 shares of the Common Stock
at the same per share price as provided in such Definitive Agreement.
Such Purchaser's Option shall be exercisable by written notice (a
"Purchaser's Notice") to the Company given at any time within three
months after the date of the Company's Notice. Such Purchaser's Option
shall expire if such Purchaser's Notice is not timely given. If the
Purchaser shall timely exercise such Purchaser's Option, the closing of
such purchase shall be concurrent with the closing of the Definitive
Agreement, provided, however, that if such Definitive Agreement closing
shall occur less than ten business days after the date of the Purchaser's
Notice or before the Purchaser's Notice is exercised, the closing
hereunder shall occur on the tenth business day following the date of the
Purchaser's Notice; and provided further that such closing date shall be
appropriately extended for such additional time, if any, as may
reasonably be required for compliance with the HSR Act. Such sale to the
Purchaser shall be on all the same terms and conditions (including any
registration rights) contained in such Definitive Agreement, except for
the number of shares and the total purchase price and except as provided
below if the consideration in such Definitive Agreement is other than
cash. Until the Purchaser has exercised one or more Purchaser's Options
for an aggregate of 1,500,000 shares, the Company shall give the
Purchaser a Company Notice for each Definitive Agreement entered into
before October 1, 1994, and the Purchaser shall have a Purchaser's Option
with respect to each such Definitive Agreement; provided, however, that
the Purchaser shall not be entitled to purchase pursuant to this Section
5(c) more than an aggregate of 1,500,000 shares of Common Stock.
If the consideration to be paid for any shares of Common Stock
under any Definitive Agreement shall be other than cash, the Company's
Notice shall set forth the Company's good faith estimate of the per share
cash value of such consideration and, subject to the following
procedures, such amount shall be the Purchaser's per share purchase price
under this Section 5(c). Upon request, the Company shall promptly
provide the Purchaser with all information the Purchaser may reasonably
require to make its own evaluation of the per share cash value of such
consideration. If the Purchaser shall disagree with the Company's
estimate, it shall so notify the Company in writing within 15 business
days after receiving all requested information, stating the Purchaser's
estimate of such per share cash value. If the Purchaser fails to notify
the Company of any disagreement within such 15 days, the Company's
estimate shall become final. If the Purchaser does so notify the Company
of disagreement with the Company's estimate and the Company and the
Purchaser fail to agree upon the per share cash value of such
consideration within 15 days after the date of the Purchaser's estimate,
either party may refer such dispute to ENDISPUTE to arbitrate the dispute
pursuant to its procedures for single person arbitration (or by such
other alternative dispute resolution organization and procedure as the
parties may approve). The determination by such arbitration proceeding
shall be final and binding. In the event of any such dispute,
notwithstanding any other provision of this Section 5(c), the Purchaser's
Option with respect to such Definitive Agreement shall not expire until
10 business days after such determination of the per share cash value.
All share numbers and per share price provisions contained in this
Section 5(c) shall be subject to anti-dilution adjustment corresponding
to those set forth in Section 5(a) above.
6. Pre-merger Notification. Promptly, and in any event
not later than 5 days after execution of this Agreement, the Company and
Purchaser shall file or cause to be filed notification and report forms
with the Federal Trade Commission and the U.S. Department of Justice
under the HSR Act with respect to the Purchaser's purchase of the Shares
and the Additional Shares, if any.
7. Conditions to Closing.
(a) The obligation of the Company to sell, and the
obligation of the Purchaser to purchase, the Shares are subject to the
satisfaction or (to the extent permitted by law) waiver at or prior to
the Closing Date of the conditions that, on the Closing Date:
(i) the waiting period under the HSR Act,
including any extensions thereof, shall have expired or
terminated;
(ii) there shall be no effective injunction, writ
or preliminary restraining order or any order of any nature issued
by a court or governmental agency of competent jurisdiction
directing that the transactions contemplated hereby or any of them
not be consummated as herein provided, and immediately prior to
the Closing Date, no proceeding or lawsuit with respect
to the transactions contemplated hereby shall have been
commenced and be pending, or be threatened, by any
governmental or regulatory agency;
(iii) the Company shall have received
approval from the American Stock Exchange for the
listing or supplemental listing of the Shares to be
issued hereunder and all of the Additional Shares; and
(iv) Purchaser, the Company and Atari
Games Corporation shall have entered a Letter Agreement
relating to registration rights in the form attached
hereto as Exhibit A.
(b) The obligation of the Purchaser to
purchase the Shares on the Closing Date is subject to
the satisfaction or waiver at or prior to the Closing
Date of each of the following conditions:
(i) each of the representations and
warranties of the Company contained in Section 4 hereof
shall be true and correct in all respects as of the date
hereof and as of the Closing, with the same effect as if
made at and as of the time of Closing and the Company
shall have performed all obligations to be performed by
it hereunder as of such date and the Company shall
deliver a certificate dated that date and signed by the
Chief Executive Officer or a Senior Vice President of
the Company to that effect; and
(ii) Purchaser shall have been furnished
with an opinion of General Counsel of the Company, dated
the day of the Closing, addressed to Purchaser in such
customary form and with such customary provisions as
Purchaser and the Company shall agree to prior to the
Closing.
(c) The obligation of the Company to sell the Shares
on the Closing Date is subject to the condition that each of the
representations and warranties of the Purchaser contained in Section 3
hereof shall be true and correct in all respects as of the date and as of
the Closing Date, with the same effect as if made at and as of the time
of Closing and the Purchaser shall have performed all obligations to be
performed by it hereunder as of such date and shall deliver a certificate
dated that date signed by a Senior Vice President or Vice President of
the Purchaser to that effect.
8. Parties in Interest.
(a) This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors,
assigns and legal representatives.
(b) Except as provided in clause (c) of this Section
8, this Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
(c) The Purchaser may, at any time prior to the
Closing, assign any or all of its rights hereunder to one or more of the
Purchaser's wholly owned subsidiaries (which may be organized subsequent
to the date hereof) and any of such subsidiaries may assume any or all of
the Purchaser's obligations hereunder; provided that in the event of such
assumption, (i) the representations and warranties contained in Section 3
hereof shall be deemed to be given with respect to such subsidiary and
(ii) the Purchaser shall remain jointly and severally liable for such
obligations.
9. Specific Performance. The parties hereto acknowledge
that the benefits to them under this Agreement are unique, that they are
willing to enter into this Agreement only upon strict performance by each
other of all of their obligations hereunder and that monetary damage
above would not afford adequate remedy for failure to perform any such
obligations hereunder. Accordingly, the parties hereby consent to
specific performance of their obligations hereunder and waive any
requirement for securing or posting of any bond in connection with the
obtaining of any injunctive or other equitable relief to enforce their
rights hereunder.
10. Further Assurances. The parties shall make, execute,
acknowledge and deliver such other instruments and documents, and take
all such other actions, as may be reasonably required in order to
effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby. The parties, in connection with
entering into this Agreement, performing their obligations hereunder and
taking any and all actions relating hereto, shall comply with all
applicable laws, obtain all required consents and approvals and make all
required filings with any government and promptly provide the other with
all such information as the other may reasonably request in order to be
able to comply with the provisions of this sentence.
11. Termination.
(a) This Agreement may be terminated at any time
prior to the Closing Date,
(i) by mutual written agreement of the
Company and the Purchaser;
(ii) by either party hereto (A) if a
preliminary or permanent injunction or other order,
decree or ruling shall have been issued by a court of
competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, that would
enjoin, prohibit or materially interfere with the
consummation of this Agreement or the transactions
contemplated herein; or (B) if the Closing Date shall
not have occurred on or before May 31, 1994, unless such
party is in breach of the Agreement at such time;
(iii) by the Company, if there shall have
been a breach of the obligations, representations or
warranties of the Purchaser hereunder; or
(iv) by the Purchaser, if there shall
have been a breach of the obligations, representations
or warranties of the Company hereunder.
(b) In the event of termination of this Agreement by
either or both of the parties pursuant to clause (a) of this Section 11,
written notice thereof shall forthwith be given to the other party
hereto, this Agreement and the transactions contemplated hereby shall be
abandoned, and this Agreement, except for the provisions of this Section
and Section 11(d), shall forthwith become void and have no effect.
(c) Notwithstanding anything to the contrary in
clause (b) above, no termination of this Agreement shall release any
party hereto from any claim arising or derived from its breach of this
Agreement.
12. Miscellaneous.
(a) Amendments and Waivers. This Agreement cannot be
changed or terminated orally and no waiver of compliance with any
provision or condition hereof and no consent provided for herein shall be
effective unless evidenced by an instrument in writing duly executed by
the party hereto sought to be charged with such waiver or consent. No
waiver of any term or provision hereof shall be construed as a further or
continuing waiver of such term or provision or any other term or
provision.
(b) Governing Law; Severability. This Agreement,
together with the rights and obligations of the parties hereunder, shall
be governed by, construed and enforced in accordance with the internal
laws of the State of California. In the event any provision of this
Agreement or the application of any such provision to any party shall be
held by a court of competent jurisdiction to be contrary to law, the
remaining provisions of this Agreement shall remain in full force and
effect.
(c) Notices.All notices, requests, consents,
demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed effectively given upon
(x) personal delivery, (y) twenty-four hours after delivery to a courier
service which guarantees overnight delivery or (z) upon receipt of
confirmation after such notice is telecopied, addressed as follows:
(i) if to the Purchaser:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Attention: General Counsel
Telecopy No.: (212) 397-0657
(ii) if to the Company:
Atari Corporation
1196 Borregas Ave.
Sunnyvale, CA 94089
Attention: General Counsel
Telecopy No.: (408) 745-8800
or such other addresses as any party hereto shall have designated by notice
in writing to the other party hereto.
(d) Expenses. Each party hereto shall bear its own
expenses in connection with the entry into and effectuation of this
Agreement.
(e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) Captions. The captions and headings of this
Agreement are for convenience only and are not to be construed as defining
or limiting the scope or intent of any of the provisions hereof.
(g) Entire Agreement. This Agreement, constitutes the
entire agreement and understanding between the Company and the Purchaser
relating to the subject matter hereof, and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written
relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
ATARI CORPORATION
By:/s/Leonard Schrieber
Title: General Counsel, Director
and Authorized Signatory
TIME WARNER INC.
By:/s/Peter R. Haje
Title: Executive Vice President
<PAGE>
EXHIBIT A
SEE EXHIBIT 4 TO SCHEDULE 13-D/A
STOCK PURCHASE AGREEMENT (the "Agreement") made and entered
into this 24th day of March, 1994 between ATARI CORPORATION, a Nevada
corporation ("Atari") and ATARI GAMES CORPORATION, a Delaware Corporation
("Atari Games"). Capitalized terms used herein and not otherwise defined
shall have the meanings given to such terms in the Stock Purchase
Agreement by and between Atari and Time Warner Inc. ("TWI"), dated as of
the date hereof (the "Stock Purchase Agreement").
W I T N E S S E T H
WHEREAS, Atari desires to issue to Atari Games an aggregate
of 70,000 shares (the "Shares") of its Common Stock, par value $.01 per
share (the "Common Stock"), in settlement of certain amounts owing by
Atari to Atari Games and Atari Games is willing to accept the same,
subject to the terms and conditions and for the consideration set forth
herein.
NOW, THEREFORE, for and in consideration of the foregoing
premises, the mutual promises, agreements and covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Section 1. The Shares.
Subject to the terms and conditions of this Agreement, at the
Closing, Atari shall issue and sell to Atari Games and Atari Games shall
purchase from Atari, the Shares, represented by one or more stock
certificates, issued in the name of Atari Games.
Section 2. Consideration.
In consideration of the Shares, Atari Games shall deem the
royalty payments (the "Royalty Payments") owing to Atari Games from Atari
through December 31, 1993, under the software license agreements listed
on Schedule I hereto (the "License Agreements"), satisfied and fully
paid. The parties acknowledge and agree that the Shares are being issued
to Atari Games in settlement of amounts owing under the License
Agreements through December 31, 1993 and that from and after the Closing
Date, Atari shall have no further obligation or liability with respect to
the Royalty Payments for the period ending December 31, 1993.
Notwithstanding any provision contained herein to the contrary, the
parties agree that Atari shall continue to be liable to Atari Games for
royalty payments accuring under the License Agreements after December 31,
1993. The parties acknowledge and agree that the minimum guarantee
requirements under the License Agreements shall have no further force or
effect.
Section 3. Representations, Warranties and Agreements of
Atari Games.
Atari Games hereby represents and warrants to Atari and
agrees with Atari as follows:
(a) Due Authorization. This Agreement has been duly
authorized by all necessary corporate action on the part of Atari Games,
has been duly executed and delivered by Atari Games, and constitutes the
legal, valid and binding obligation of Atari Games, enforceable in
accordance with its terms.
(b) No Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby by Atari Games will (i) violate or result in any violation of or
be in conflict with or constitute a default under any term of the
Certificate of Incorporation or By-laws of Atari Games or of any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to Atari Games, or (ii) require that
Atari Games obtain the consent or authorization of or waiver or filing by
or make a filing with any governmental, administrative or self-regulatory
body or agency or any other person or entity, other than any such
consent, authorization, waiver which has been duly and validly obtained
or made prior to the date hereof, other than a filing under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act") or (iii) require the
satisfaction or termination of any waiting period under any application
statute, rule or governmental regulation applicable to Atari Games, other
than compliance with the HSR Act.
(c) Investment Representation. The acquisition of the
Shares by Atari Games will be for investment purposes only and for the
sole account of Atari Games and not with a view to the redistribution or
resale of any or all of the Shares. None of the Shares acquired pursuant
to this Agreement will be transferred except in a transaction registered
or exempt from registration under the Securities Act of 1933, as amended.
Atari Games acknowledges that any certificate for the Shares shall bear a
legend with respect to the transfer or resale of the Shares substantially
as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and such shares may not
be sold or transferred unless such sale or transfer will be
effected in accordance with the registration requirements of the
Securities Act of 1933, as at the time amended, or in conformity
with the limitations of Rule 144 promulgated under such Act or in
conformity with any other exemption from the registration
requirements of such Act which may then be available with respect
thereto."
4. Representations, Warranties and Agreements of Atari.
Atari hereby represents and warrants to Atari Games and
agrees with Atari Games as follows:
(a) Organization. Atari is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Nevada and is duly qualified to do business and in good standing
as a foreign cor poration in the jurisdiction where it is required to
qualify to conduct its business as presently conducted. Atari has the
requisite corporate power and authority to own its property and to carry
on its business as now conducted.
(b) Due Authorization. Atari has full power and
authority to execute and deliver this Agreement and, as of the Closing
Date, has full power and authority to perform this Agreement, including,
without limitation, the power and authority to issue the Shares. Atari
has duly taken all corporate and other actions necessary to authorize the
execution and delivery of this Agreement and, as of the Closing Date, has
duly taken all corporate and other actions necessary to authorize the
performance of this Agreement, including, without limitation, all actions
necessary to authorize the issuance of the Shares. This Agreement has
been duly executed and delivered by Atari and this Agreement constitutes
the legal, valid and binding obligation of Atari enforceable in
accordance with its terms.
(c) No Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby by Atari will (i) violate or result in any violation of or be in
conflict with or constitute a default under any term of the Certificate
of Incorporation or By-laws of Atari or of any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to Atari, (ii) require that Atari obtain the consent or
authorization of or waiver by or make a filing with any governmental,
administrative or self-regulatory body or agency or any other person or
entity, other than any such consent, authorization, waiver or filing
which has been duly and validly obtained or made prior to the date
hereof, other than a filing under the HSR Act or (iii) require the
satisfaction or termination of any waiting period under any statute, rule
or governmental regulation applicable to Atari, other than compliance
with the HSR Act.
(d) Capitalization, Issuance of Shares. As of
December 31, 1993, Atari's authorized capital stock consists of
100,000,000 shares of Common Stock, par value $.01 per share, of which
57,214,587 shares were issued and outstanding, all of which are duly
authorized and have been validly issued and are fully paid and non-
assessable. Except as shown on Exhibit 4(d), Atari has not issued any
options, warrants or convertible or exchangeable securities and is not a
party to any other agreements, which require, or upon the passage of
time, the payment of money or the occurrence of any other event, may
require, Atari to issue or sell any of its Common Stock. Upon delivery
to Atari Games of the certificate or certificates evidencing the Shares
against the execution and delivery of this Agreement, the Shares will
have been duly authorized, validly issued, fully paid and nonassessable
and will be free of preemptive or similar rights and no personal
liability will attach to the ownership thereof.
(e) On or before the Closing Date, Atari will arrange
for the listing or supplemental listing of the Shares to be issued to
Atari Games hereunder, as appropriate, on the American Stock Exchange.
(f) SEC Reports and Financial Statements. Atari has
furnished to Atari Games copies of the following reports and financial
statements:
(i) the Annual Reports on Form 10-K of Atari
for the fiscal years ended December 31, 1991 and 1992;
(ii) the Quarterly Reports on Form 10-Q of
Atari for each of the three fiscal quarters ended during 1993; and
(iii) the Current Reports of Atari on Form 8-K
filed after January 1, 1993.
Atari has filed with the Securities and Exchange Commission
("SEC") all reports ("SEC Reports") required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "'34 Act"). None of the
SEC Reports contains, as of the respective dates thereof, any untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made. All
financial statements contained in the SEC Reports have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods indicated ("GAAP"). Each balance sheet
presents fairly in accordance with GAAP the consolidated financial
position of Atari as of the date of such balance sheet, and each
statement of operations and of cash flows presents fairly in accordance
with GAAP the consolidated results of operations and the consolidated
cash flows of Atari for the fiscal periods then ended.
(g) Additional Reports. No event has occurred
requiring, or which with the passage of time will require, the filing of
an SEC Report that has not heretofore been filed and furnished to Atari
Games.
5. Pre-merger Notification. Promptly, and in any event not
later than 5 days after execution of this Agreement, Atari and Atari
Games shall file or cause to be filed notification and report forms with
the Federal Trade Commission and the U.S. Department of Justice under the
HSR Act with respect to Atari Games' acquisition of the Shares.
6. Conditions to Closing.
(a) The obligation of Atari to issue and sell and
Atari Games to purchase the Shares, are subject to the satisfaction or
(to the extent permitted by law) waiver at or prior to the Closing Date
of the condition that, on the Closing Date:
(i) the waiting period under the HSR Act,
including any extensions thereof, shall have expired or terminated;
(ii) there shall be no effective injunction,
writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction
directing that the transactions contemplated hereby or any of them
not be consummated as herein provided, and immediately prior to the
Closing Date, no proceeding or lawsuit with respect to the
transactions contemplated hereby shall have been commenced and be
pending, or be threatened, by any governmental or regulatory
agency;
(iii) the Company shall have received
approval from the American Stock Exchange for the listing or
supplemental listing of the Shares to be issued hereunder; and
(iv) Atari, TWI and Atari Games shall have
executed and delivered the Letter Agreement relating to
registration rights dated as of even date herewith in the form
attached hereto as Exhibit A.
(b) The obligation of Atari Games to purchase, on the
Closing Date, is subject to the satisfaction or waiver at or prior to the
Closing Date of each of the following conditions:
(i) Each of the representations and
warranties of Atari contained in Section 4 hereof shall be true and
correct in all respects as of the date hereof and as of the Closing
Date and Atari shall have performed all obligations to be performed
by it hereunder as of such date and Atari shall deliver a
certificate dated that date and signed by the Chief Executive
Officer or a Senior Vice President of Atari, to that effect;
(ii) Atari Games shall have been furnished
with an opinion of General Counsel of Atari, dated the Closing Date
addressed to Atari Games in such customary form and with such
customary provisions as Atari Games and Atari shall agree to prior
to the closing of the transactions contemplated hereby.
(c) The obligation of Atari to issue the Shares on
the Closing Date is subject to the condition that each of the
representations and warranties of Atari Games contained in Section 3
hereof shall be true and correct in all respects as of the date hereof
and as of the Closing Date, with the same effect as if made at and as of
the time of the Closing and Atari Games shall have performed all
obligations to be performed by it hereunder as of such date and shall
deliver a certificate dated that date signed by a Senior Vice President
or Vice President of Atari Games to that effect.
7. Parties in Interest.
(a) This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors,
assigns and legal representatives.
(b) Except as provided in clause (c) of this Section
7, this Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
(c) Atari Games may, if it has assigned its rights
under the Stock Purchase Agreement, at any time prior to the Closing,
assign any or all of its rights hereunder to one or more of its wholly
owned subsidiaries (which may be organized subsequent to the date hereof)
and any such subsidiaries may assume any or all of Atari Games'
obligations hereunder; provided that in the event of such assumption, (i)
the representations and warranties contained in Section 3 shall be deemed
to be given with respect to such subsidiary and (ii) Atari Games shall
remain jointly and severally liable for such obligations.
8. Specific Performance. The parties hereto acknowledge
that the benefits to them under this Agreement are unique, that they are
willing to enter into this Agreement only upon strict performance by each
other of all of their obligations hereunder and that monetary damage
above would not afford adequate remedy for failure to perform any such
obligations hereunder. Accordingly, the parties hereby consent to
specific performance of their obligations hereunder and waive any
requirement for securing or posting of any bond in connection with the
obtaining of any injunctive or other equitable relief to enforce their
rights hereunder.
9. Termination.
(a) This Agreement may be terminated at any time prior
to the Closing Date,
(i) by mutual written agreement of Atari and
Atari Games;
(ii) by either party hereto (A) if a
preliminary or permanent injunction or other order, decree or
ruling shall have been issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or
commission, that would enjoin, prohibit or materially interfere
with the consummation of this Agreement or the transactions
contemplated herein; or (B) if the Closing Date shall not have
occurred on or before April 30, 1994, unless such party is in
breach of the Agreement at such time;
(iii) by Atari if there shall have been a
breach of the obligations, representations or warranties of Atari
Games hereunder; or
(iv) by Atari Games if there shall have been
a breach of the obligations, representations or warranties of Atari
hereunder.
(b) In the event of termination of this Agreement by
either or both of the parties pursuant to clause (a) of this Section 9,
written notice thereof of shall forthwith be given to the other party
hereto, this Agreement and the transactions contemplated hereby shall be
abandoned, and this Agreement, except for the provisions of this Section
and Section 12(d), shall forthwith become void and have no effect.
(c) Notwithstanding anything to the contrary in clause
(b) above, no termination of this Agreement shall release any party
hereto from any claim arising or derived from its breach of this
Agreement.
10. Further Assurances. The parties shall make, execute,
acknowledge and deliver such other instruments and documents, and take
all such other actions, as may be reasonably required in order to
effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby. The parties, in connection with
entering into this Agreement, performing their obligations hereunder and
taking any and all actions relating hereto, shall comply with all
applicable laws, obtain all required consents and approvals and make all
required filings with any government and promptly provide the other with
all such information as the other may reasonably request in order to be
able to comply with the provisions of this sentence.
11. Miscellaneous.
(a) Amendments and Waivers. This Agreement cannot be
changed or terminated orally and no waiver of compliance with any
provision or condition hereof and no consent provided for herein shall be
effective unless evidenced by an instrument in writing duly executed by
the party hereto sought to be charged with such waiver or consent. No
waiver of any term or provision hereof shall be construed as a further or
continuing waiver of such term or provision or any other term or
provision.
(b) Governing Law; Severability. This Agreement,
together with the rights and obligations of the parties hereunder, shall
be governed by, construed and enforced in accordance with the internal
laws of the State of California. In the event any provision of this
Agreement or the application of any such provision to any party shall be
held by a court of competent jurisdiction to be contrary to law, the
remaining provisions of this Agreement shall remain in full force and
effect.
(c) Notices.All notices, requests, consents,
demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed effectively given upon
(x) personal delivery, (y) twenty-four hours after delivery to a courier
service which guarantees overnight delivery or (z) upon receipt of
confirmation after such notice is telecopied, addressed as follows:
(i) if to Atari Games:
Atari Games Corporataion
675 Sycamore Drive
Milpitas, California 95035
Attention: General Counsel
Telecopy No.:
with a copy to:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Attention: General Counsel
Telecopy No.: (212) 397-0657
(ii) if to Atari:
Atari Corporation
1196 Borregas Ave.
Sunnyvale, CA 94089
Attention: General Counsel
Telecopy No.: (408) 745-8800
or such other addresses as any party hereto shall have designated by notice
in writing to the other party hereto.
(d) Expenses. Each party hereto shall bear its own
expenses in connection with the entry into and effectuation of this
Agreement.
(e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) Captions. The captions and headings of this
Agreement are for convenience only and are not to be construed as defining
or limiting the scope or intent of any of the provisions hereof.
(g) Entire Agreement. This Agreement constitutes the
entire agreement and understanding between Atari and Atari Games relating
to the subject matter hereof, and supersedes all prior agreements,
understandings, negotiations and discussions,
whether oral or written relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
ATARI CORPORATION
By:/s/Leonard Schrieber
Name: Leonard Schrieber
Title: General Counsel, Director
and Authorized Signatory
ATARI GAMES CORPORATION
By:/s/Dennis Wood
Name: Dennis Wood
Title: Senior Vice President
<PAGE>
Atari Games Corporation - Atari Corporation License Agreements
LYNX TITLES DATE EXECUTED MARKETING DATE
Gauntlet 1/5/90 7/4/92
APB 2/8/90 8/8/91
Cyberball 2072 2/8/90 8/8/91
Klax 2/8/90 8/8/91
RoadBlasters 2/8/90 8/8/91
Vindicators 2/8/90 8/8/91
720 2/8/90 8/8/91
Paperboy 4/24/90 10/24/91
S.T.U.N. Runner 6/7/90 12/6/91
Xybots 6/11/90 12/10/91
Hydra 7/9/90 1/9/92
Pit-Fighter 8/28/90 2/28/92
Hard Drivin' 10/19/90 4/18/92
Rampart 7/24/91 1/23/93
Road Riot 4WD 8/19/91 2/19/93
Steel Talons 8/19/91 2/19/93
Relief Pitcher 3/31/92 9/30/93
Escape from the Planet 4/15/92 10/14/93
of Robot Monsters
<PAGE>
ST TITLES DATE EXECUTED MARKETING DATE
Steel Talons 8/19/91 2/19/93
Road Riot 4WD 8/19/91 2/19/93
Relief Pitcher UNSIGNED
7800 TITLES DATE EXECUTED MARKETING DATE
Klax 2/8/90 8/8/91
Pit-Fighter 9/11/90 3/10/92
Rampart 7/24/91 1/23/93
Steel Talons 8/20/91 2/20/93
Road Riot 4WD 8/21/91 2/21/93
2600 TITLES DATE EXECUTED MARKETING DATE
Klax 3/8/90 9/8/91
<PAGE>
EXHIBIT A
SEE EXHIBIT 4 TO SCHEDULE 13-D/A
March 24, 1994
Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019
Atari Games Corporation
675 Sycamore Drive
Milpitas, California 95035
Re: Registration Rights
Greetings:
This letter sets forth the agreement between our companies
regarding registration rights relating to shares of Common
Stock of Atari Corporation ("Atari Corp."), par value $.01 per
share (the "Common Stock") sold pursuant to:
(i) the Stock Purchase Agreement of even date
herewith by and between Time Warner Inc. ("Time Warner")
and Atari Corp. (the "Time Warner Stock Purchase
Agreement"); and
(ii) the Stock Purchase Agreement of even date
herewith by and between Atari Games Corporation ("Atari
Games") and Atari Corp. (the "Atari Games Stock Purchase
Agreement").
Capitalized terms used herein but not otherwise defined
shall have the meanings given to such terms in the Agreement
among Tramel Technology, Ltd. (now re-named Atari Corporation),
Atari Inc. (then a subsidiary of Warner Communications Inc.)
and Jack Tramiel dated July 1, 1984 (the "Tramel Agreement").
The parties hereto acknowledge and agree that all shares
of Common Stock of Atari Corp. that Time Warner and Atari Games
(or their permitted assignees) shall acquire pursuant to the
Time Warner Stock Purchase Agreement or the Atari Games Stock
Purchase Agreement (or by permitted assignment thereunder),
shall be deemed to be included in the Newco Shares covered by
the registration rights provisions contained in Section 3 of
the Tramel Agreement and Time Warner and Atari Games and their
permitted assignees shall be entitled to exercise such rights
as provided therein. All matters relating to any such
registration, including without limitation, allocation of
expenses and indemnification, shall be governed by the
provisions of Section 3 of the Tramel Agreement and Atari Corp.
acknowledges and agrees that it shall be subject to all
obligations of Newco under such Section 3 with respect to all
such Atari Corp. shares of Common Stock.
IN WITNESS WHEREOF, the parties hereto have caused this
Letter Agreement to be executed as of March 24, 1994.
ATARI CORPORATION
By:/s/Leonard Schrieber
Name: Leonard Schrieber
Title: General Counsel, Director
and Authorized Signatory
TIME WARNER INC.
By:/s/Peter R. Haje
Name: Peter R. Haje
Title: Executive Vice President
ATARI GAMES CORPORATION
By:/s/Dennis Wood
Name: Dennis Wood
Title: Senior Vice President
<PAGE>
EXHIBIT 4(D)
1. The Company has issued a 5-1/4% Convertible Subordinated
Debenture due 2002. $43,454,000 of the bonds are outstanding and
2,666,846 shares of Common Stock are issuable upon conversion under
the terms of the Indenture. The Company is currently
considering the conversion of the outstanding debentures into
Common Stock which may require the issuance of additional Common
Shares as a result of lower conversion price.
2. The Company has outstanding as of December 31, 1993
1,193,120 Stock Options under its Amended 1986 Stock Option Plan.
