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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ATARI CORPORATION
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
04651510
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(CUSIP Number)
Douglas Evans
Sega Holdings U.S.A., Inc.
255 Shoreline Drive, Suite 510
Redwood City, CA 94065
Telephone: (415) 802-3809
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 17, 1994
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(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 this statement [x].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
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 the Act (however, see
the Notes).
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1. NAME OF REPORTING PERSON Sega Holdings U.S.A., Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
94-3212012
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS AF, WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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NUMBER OF 7. SOLE VOTING POWER 4,705,883
SHARES --------------------------------------------------------
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER none
EACH -------------------------------------------------------
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER 4,705,883
WITH --------------------------------------------------------
10. SHARED DISPOSITIVE POWER none
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 4,705,883
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 7.4%
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14. TYPE OF REPORTING PERSON CO
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Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is
the common stock, par value $.01 per share ("Shares"), of Atari Corporation, a
Nevada corporation, 1196 Borregas Avenue, Sunnyvale, California 94089 (the
"Issuer").
Item 2. Identity and Background.
This statement is being filed by Sega Holdings U.S.A., Inc. ("Sega
Holdings"), a Delaware corporation, 255 Shoreline Drive, Suite 510, Redwood
City, California 94065. Sega Holdings, with its operating subsidiary, Sega of
America, Inc., is an interactive media entertainment company which manufactures
and markets interactive computer and video games and programs.
(a), (b), (c) and (f): 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) and
the citizenship of each of the executive officers and directors of Sega
Holdings are set forth below:
Directors (including executive officers who are directors)
1. Hayao Nakayama, Chairman, Sega Holdings
Representative Director, President and Chief Executive Officer
Sega Enterprises, Ltd.
2-12, Haneda 1-chome
Ohto-ku
Tokyo 144, Japan
Japanese citizen
2. Isao Okawa
President and Chairman
CSK Corporation
ARK Mori Building, 31st Floor
1-12-32 Akasaka, Minato-ku
Tokyo 107, Japan
Japanese citizen
3. David Rosen, Co-Chairman, Sega Holdings
Co-Chairman
Sega of America, Inc.
255 Shoreline Drive, Suite 510
Redwood City, California 94065
U.S. citizen
4. Shoichiro Iramajiri
Executive Managing Director
Sega Enterprises, Ltd.
2-12, Haneda 1-chome
Ohto-ku
Tokyo 144, Japan
Japanese citizen
5. Shinobu Toyoda, Chief Financial Officer, Sega Holdings
Executive Vice President
Sega of America, Inc.
255 Shoreline Drive, Suite 510
Redwood City, California 94065
Japanese citizen
6. Thomas Kalinske
President
Sega of America, Inc.
255 Shoreline Drive, Suite 510
Redwood City, California 94065
U.S. citizen
Executive Officer (who is not a director)
Takaharu Utsunomiya, Secretary, Sega Holdings
Group Vice President, Finance
Sega of America, Inc.
255 Shoreline Drive, Suite 510
Redwood City, California 94065
Japanese citizen
(d) and (e): During the last five years, neither Sega Holdings nor
any of its executive officers or directors has
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been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding 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.
Item 3. Source and Amount of Funds.
The 4,705,883 Shares referred to Item 5(a) below were purchased by
Sega Holdings with $40,000,000 in cash from available working capital of Sega
Holdings. Such working capital was contributed to Sega Holdings by its
affiliate, Sega Enterprises, Ltd., to be used to purchase the Shares pursuant
to the transaction described in Item 4 below.
Item 4. Purpose of the Transaction.
The purchase of Shares was pursuant to the settlement of litigation
between the Issuer and certain affiliates of Sega Holdings. Sega Holdings
does not have any plan which relates to or would result in (i) the acquisition
by any person of additional securities of the Issuer, or the disposition of
securities of the Issuer, (ii) an extraordinary corporate transaction such as
a merger, reorganization or liquidation, involving the Issuer or any of its
subsidiaries, (iii) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries, (iv) any change in the present board
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of directors or management of the Issuer, including any plans or proposals to
change the number of directors or to fill any existing vacancies on the board,
(v) any material change in the present capitalization or dividend policy of the
Issuer, (vi) any other material change in the Issuer's business or corporate
structure, (vii) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person, (viii) causing a class of securities of
the Issuer to be delisted from a national securities exchange, (ix) a class of
equity securities of the Issuer becoming eligible for termination for
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended, or (x) any action similar to those enumerated above.
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In connection with the settlement of Civil Action No. C93-3781 (CW)
filed by the Issuer against certain affiliates of Sega Holdings in the United
States District Court for the Northern District of California alleging patent
infringement, the Issuer and Sega Holdings entered into that certain Stock
Purchase Agreement dated as of September 26, 1994. Pursuant to the Stock
Purchase Agreement, the Issuer agreed to sell and Sega Holdings agreed to
purchase 4,705,883 Shares. The aggregate purchase price paid to the Issuer
by Sega Holdings for the Shares was $40,000,000. The Shares were delivered
to Sega Holdings on November 17, 1994.
The purchase of the Shares by Sega Holdings is for investment purposes
only and for the sole account of Sega Holdings and not with a view to the
redistribution or resale of any or all of the Shares. None of the Shares
acquired pursuant to the agreement may be transferred except in a transaction
registered or exempt from registration under the Securities Act of 1933, as
amended. Sega Holdings has certain registration rights for the Shares under
the Stock Purchase Agreement.
Sega Holdings will monitor on a regular basis its investment in the
Shares and the Issuer's business affairs and financial position, as well as the
market value of the
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Shares, conditions in the securities markets and general economic and industry
conditions. Depending on the results of Sega Holding's ongoing review, Sega
Holdings may in the future take such actions in respect of its investment in
the Shares as it deems appropriate in light of circumstances existing from time
to time.
Item 5. Interest in Securities of the Issuer.
(a) As of November 28, 1994, Sega Holdings beneficially owned
4,705,883 Shares, approximately 7.4% of the 63,601,785 Shares outstanding as of
the date hereof (which number is the sum of 58,895,902 Shares outstanding as of
October 24, 1994, as reported in the Issuer's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994, plus 4,705,883 Shares issued to Sega
Holdings pursuant to the Stock Purchase Agreement).
To the best knowledge of Sega Holdings, no executive officer or
director of Sega Holdings owns or has a right to acquire any Shares.
(b) Sega Holdings has sole power to vote or to direct the vote and
sole power to dispose or direct the disposition of the Shares referred to in
Item 5(a) above.
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(c) Except as disclosed in Item 4 hereto, Sega Holdings has not
effected any transaction in Shares of the Issuer during the past 60 days. To
the best of the knowledge of Sega Holdings, no executive officer or director of
Sega Holdings has effected any transaction in Shares during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Except as may be contemplated by that certain Stock Purchase
Agreement, described in Item 4 hereto, Sega Holdings is not a party to any
contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer, including but not limited to the transfer or voting
of any of the securities of the Issuer, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
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Item 7. Materials to be Filed as Exhibits.
Exhibit 1 Stock Purchase Agreement
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of November 28, 1994. SEGA HOLDINGS U.S.A., INC.
By /s/ T. UTSUNOMIYA
_____________________________
T. Utsunomiya
Secretary
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SCHEDULE 13D
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
1 Stock Purchase Agreement
</TABLE>
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered
into as of September 26, 1994, by and between Atari Corporation (the
"Company"), a Nevada corporation, of 1196 Borregas Avenue, Sunnyvale,
California 94089, and Sega Holdings U.S.A., Inc. (the "Purchaser"), a Delaware
corporation, c/o Sega of America, Inc., 303 Twin Dolphin Drive, Suite 200,
Redwood City, California 94065.
RECITALS
A. The Company desires to sell and Purchaser desires to purchase an
aggregate of 4,705,883 shares (the "Shares") of the Company's common
stock, par value $.01 per share (the "Common Stock"), subject to the
conditions and for the consideration set forth herein.
B. The Company, Sega of America, Inc., Sega Enterprises, Ltd., Sega
Enterprises, Inc. (U.S.A.), and Sumitomo Bank of California have
entered into an Escrow Agreement dated as of October 24, 1994 (the
"Escrow Agreement"), which specifies the method by which the Shares
will be paid for and delivered.
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"). The Shares shall
include all dividends and distributions referred to in Section 3, and the Share
Purchase Price shall not exceed $40,000,000.
2. THE CLOSING
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 as specified in the Escrow Agreement, on such date as the
Escrow Agent (as defined therein) is authorized to release the Funds (as
defined therein) to the Company and deliver the Shares to Purchaser (the
"Closing Date"). Provided, however, that if the Closing has not occurred by
December 15, 1994 (and such date has not been extended as provided by Section
4.3 of the Master Agreement), this Agreement shall be of no further force and
effect.
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3. DIVIDENDS AND DISTRIBUTIONS
(a) Atari will pay into the Escrow (as defined in the Escrow
Agreement) the equivalent value of any cash or other distribution (other than
stock) made with respect to its issued and outstanding shares of Common Stock
that Purchaser would have been entitled to receive had the Shares been issued
as of September 26, 1994.
(b) The Shares shall be appropriately adjusted for any stock
dividend, any subdivision or split of the outstanding common stock, any
combination of the outstanding common stock into a smaller number of shares, or
any issuance of capital stock in a recapitalization, reclassification of the
outstanding common stock of the Company, or a merger or consolidation of the
Company with or into another company, from September 26, 1994, through the
Closing Date.
4. REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
The Purchaser hereby represents and warrants to 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 (A)
any such consent, authorization, waiver or filing which has been duly and
validly obtained or made prior to the date hereof and (B) a filing under the
Hart-Scott-Rodino Antitrust Improvements Act ("HSR Act") and compliance with
the provisions of such Act, or (iii) require the termination of any waiting
period under any statute, rule or governmental regulation applicable to the
Purchaser, other than the waiting period under the HSR Act.
(c) Investment Representation. The purchase of the Shares 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. 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 (the "33 Act"). The Purchaser
acknowledges that the certificates for the Shares shall
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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."
(d) Brokers and Finders. The Purchaser has not dealt with any broker
or finder who would be entitled to any fee or commission, or to claim any fee
or commission, as a consequence of this Agreement or the transactions
contemplated hereby.
5. REPRESENTATIONS, WARRANTIES BY THE COMPANY
The Company hereby represents and warrants to 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. 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. Without
limitation to the foregoing, no approval by the holders of the outstanding
Shares of Common Stock of the Company is required in order for the Company to
sell and issue its Shares pursuant to this Agreement. 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
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the Articles 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 (x) any such consent, authorization, waiver or filing which has been
duly and validly obtained or made prior to the date hereof, (y) a filing under
the HSR Act and compliance with the provisions of such Act, and (z) approval
for listing of the Shares, upon official notice of issuance, on the American
Stock Exchange, or (iii) require the satisfaction or termination of any waiting
period under any statute, rule or governmental regulation applicable to the
Company, other than the waiting period under the HSR Act.
(d) Capitalization, Issuance of Shares. As of July 2, 1994, the
Company's authorized capital stock consisted of 100,000,000 shares of Common
Stock, par value $.01 per share, or which 58,796,662 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 5(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. The sale and issuance of
the Shares pursuant to this Agreement will not be an event which causes an
adjustment in any exercise or conversion price of any outstanding options,
warrants, or convertible or exchangeable securities. Subsequent to July 2,
1994, there has not been, and prior to the Closing Date and delivery of the
Shares to be purchased hereunder by Purchaser there will not be, any stock
dividend or distribution, stock split, recapitalization, recombination, or
exchange or other similar event by the Company generally relating to shares 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 non-assessable and will be
free of preeemptive or similar rights, and no personal liability will attach to
the ownership thereof.
(e) Listing of Shares. Promptly after execution of this Agreement, the
Company will arrange for the Shares to be listed on the American Stock
Exchange, 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 true and complete copies of the following reports and financial
statements:
(i) the Annual Report on Form 10-K of the Company for the fiscal
year ended December 31, 1993;
(ii) the Quarterly Reports on Form 10-Q of the Company for the
fiscal quarters ended March 31, 1994 and June 30, 1994; and
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(iii) all Current Reports of the Company on Form 8-K filed after
January 1, 1994.
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 by the Purchaser.
(h) Broker and Finders. The Company has not dealt with any broker or
finder who would be entitled to any fee or commission, or to claim any fee or
commission, as a consequence of this Agreement or the transactions contemplated
hereby.
(i) Rule 144 Reporting. Until such time, if any, as the Purchaser is
able to sell all or any portion of the Shares pursuant to Rule 144(k) under the
'33 Act, the Company agrees to use its best efforts to file with the Securities
and Exchange Commission in a timely manner all reports and other documents
required of the Company under the Securities Exchange Act of 1934.
6. PRE-MERGER NOTIFICATION
Promptly, and in any event not later than five 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.
5
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7. REGISTRATION
(a) Piggyback Registration. If at any time the Company determines
to register any of its Common Stock for its own account under the '33 Act,
other than a registration relating solely to employee benefit plans or to a
transaction under Rule 145 under the '33 Act, the Company shall promptly give
Purchaser written notice of such registration and shall, subject to the
limitations set forth herein, include in such registration and in any
underwriting involved therein any of the Shares that Purchaser requests be so
included in a written request given to the Company within 10 days following the
date of the Company's notice to Purchaser. If the Shares are to be included in
an underwriting, Purchaser agrees to enter into an underwriting agreement and a
related custody agreement and power of attorney in customary form with the
managing underwriters selected by the Company for such underwriting.
Notwithstanding the foregoing, if the Company and the managing underwriters
determine that inclusion of the Shares in the underwriting would adversely
affect such offering or the timing thereof, the Company and managing
underwriters may limit the number of Shares to be included in such
registration. The number of Shares to be included by Purchaser in any such
registration shall be reduced prior to the reduction of shares of Common Stock
for the account of any other shareholder of the Company requesting inclusion of
shares in the underwriting. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 7(a) prior to the
registration. If Purchaser includes any Shares in a registration pursuant to
this Section 7(a) and such Shares are actually registered, it shall bear its
pro rata share (based on the number of Shares included and the total number of
shares registered pursuant to such registration) of all out-of-pocket direct
expenses incurred by the Company to effect such registration, including without
limitation all registration, qualification and filing fees, printing expenses,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by the inclusion
of the Shares in any such registration ("Registration Expenses"), as well as
all brokerage commissions, underwriting discounts and similar expenses
applicable to the sale of its Shares ("Selling Expenses").
(b) Request for Registration. At any time after one year from the
date of this Agreement, Purchaser may request that the Company register all or
any part of the Shares by filing a registration statement meeting the
requirements of the '33 Act. The Company shall not be obligated to so register
any of the Shares, but agrees to consider Purchaser's request in good faith.
In the event the Company agrees to register any of the Shares, Purchaser agrees
to bear all Registration Expenses and Selling Expenses.
(c) Information by Purchaser. Purchaser shall furnish to the
Company such information regarding Purchaser, the Shares and the distribution
proposed by Purchaser as the Company may request or as may be required in
connection with any registration, qualification or compliance pursuant to this
Section 7.
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(d) Indemnification. If Shares are sold pursuant to a registration
statement filed by the Company under the '33 Act, the Company will indemnify
the Purchaser, each of its officers and directors, and each person controlling
Purchaser within the meaning of Section 15 of the '33 Act, against all
liabilities arising from any untrue statement of material fact contained in the
registration statement or related prospectus or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
except that the Company shall not indemnify the Purchaser or such related
persons, and Purchaser shall indemnify the Company and its officers, directors
and controlling persons, with respect to any such untrue statement or omission
attributable to information furnished in writing by the Purchaser or its
related persons for use in connection with such registration statement or
prospectus.
Each party entitled to indemnification under this Section 7(d) (an
"indemnified party") shall give notice to the party required to provide
indemnification (an "indemnifying party") promptly after such indemnified party
has knowledge of any claim as to which indemnity may be sought, and shall
permit the indemnifying party to assume the defense of any such claim or any
litigation resulting therefrom. No indemnified party shall, except with the
consent of the indemnifying party (which consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement with
respect to such claim or litigation.
8. 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 and neither the DOJ
nor the FTC shall have failed, or refused, to allow any
Affiliation Agreement to be consummated in accordance with its
terms without modification and without any changes to the
business or operations of either Seller or Purchaser;
(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 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 or third party; and
(iii) the Company shall have received approval from the American
Stock Exchange for the listing of the Shares to be
issued hereunder.
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(b) The obligations of the Purchaser to purchase the Shares are
further subject to the satisfaction of (or, to the extent permitted by law,
waiver) at or prior to the Closing Date of the following additional conditions:
(i) All representations and warranties of the Company herein
shall be true in all material respects as of the date when
made and as of the Closing Date; and
(ii) The Purchaser shall have received the opinion of counsel to
the Company to the same effect as the warranties of the
Company set forth in Section 5(a) through (e); and
(iii) The Purchaser shall have received a written confirmation
from the Chief Financial Officer of the Company to the
effect that the warranties of the Company set forth in
Section 5(f) through (i) are true in all material respects
as of the Closing Date.
9. PARTIES IN INTEREST
(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respect successors, assigns and legal
representatives.
(b) This Agreement may not be assigned by either party hereto without
the prior written consent of the other party.
10. 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 damages 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.
11. 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
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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.
12. MISCELLANEOUS
(a) Entire Agreement. This document sets forth the entire Agreement
between the parties as to the subject matter hereof. This Agreement supersedes
all prior discussions, negotiations, agreements and understandings between the
parties on the subject matters set forth herein, which discussions,
negotiations, agreements and understandings shall be of no further force or
effect.
(b) Modification Waiver. This Agrement 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.
(c) Governing Law. This Agreement, together with all rights and
obligations of the parties hereunder, shall be construed and enforced under the
internal laws of the State of California, excluding any conflicts of law
principles which might otherwise subject this Agreement to the laws of another
jurisdiction.
(d) Invalidity. If any clause or provision of this Agreement is
declared illegal, invalid or unenforceable under present or future laws
effective during the term hereof, the remainder of this Agreement shall not be
affected thereby and shall remain in force and effect.
(e) 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:
Sega Holdings U.S.A., Inc.
c/o Sega of America, Inc.
255 Shoreline Drive, Suite 510
Redwood City, CA 941065
Attention: General Counsel
Telecopy No.: 415-802-3720
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(ii) if to the Company:
Atari Corporation
1196 Borregas Avenue
Sunnyvale, California 94089
Attention: General Counsel
Telecopy No.: (408) 745-8800
or to such other addresses as any party hereto shall have previously designated
by notice in writing to the other party hereto.
(f) Expenses. Each party hereto shall bear its own expenses in
connection with the entry into and effectuation of this Agreement.
(g) Attorneys' Fees. In the event of any dispute between the
parties arising under this Agreement, or with respect to this Agreement or to
its terms, the prevailing party in any court proceeding shall be entitled to an
award of its reasonable attorneys' fees and costs.
(h) Captions. Captions and paragraph headings used heein are for
convenience only and are not a part of this Agreement. They shall not be used
in construing the Agreement.
(i) Counterparts. This Agreement may be executed in couterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
ATARI CORPORATION
By /s/ SAM TRAMIEL
-------------------------
Sam Tramiel, President
SEGA HOLDINGS U.S.A., INC.
By /s/ T. UTSUNOMIYA
-------------------------
T. Utsunomiya, Secretary
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EXHIBIT 5 (D)
1. The Company has issued a 5-1/4% Convertible Subordinated Debenture due
2002. $43,454,000 of the bonds are outstanding and 2,664,255 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. As of July 2, 1994 the Company, under its 1986 Stock Option Plan as
amended, has an available pool of 2,771,589 share options of the Company's
Common Stock, of which 1,367,608 of these Stock Options have been granted and
are outstanding, in accordance with the terms and conditions of the Stock
Option Plan. The Company periodically grants these options based upon
employee's job performance and/or its hiring practices.
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